Gillett v Nelson

Judgment 1The plaintiff seeks a family provision order under the Succession Act 2006 in relation to the estate, or notional estate, of her late father Arthur Nelson ("the deceased"). The first three defendants are the executors of the estate, and the fourth defendant is the trustee of a family trust established by the deceased. 2At the commencement of the third day of the hearing, counsel for the plaintiff made a call for production of a document which is described as "a draft advice of Henry Davis York". The document is so described in an email dated 28 August 2008 which is in evidence. The email is referred to in the affidavits of two witnesses, namely, Mr Peter Stiles (the second defendant) and Mr Guersant Mellon (the third defendant). 3Although not entirely clear, it may be that the call for production of evidence extended to a further document referred to in the email, namely, a "supplementary advice" which was to be requested of Henry Davis York ("HDY"). 4Documents meeting these descriptions would, prima facie, be the subject of client legal privilege, but it was submitted by the plaintiff that any privilege had been lost by reason of the operation of either s121(1) or s122(2) of the Evidence Act 1995. 5No notice of the call had been given to the defendants. Senior counsel for the defendants requested some time to formulate a response. I adjourned the Court for an hour accordingly. After hearing further submissions following the resumption of the hearing, I informed the parties that I was not persuaded that there had been any loss of privilege as asserted by the plaintiff. In view of the need to proceed with the matter, particularly the giving of evidence by Mr Stiles, who was not available to give evidence after the third day, I indicated that I would give my reasons at a later stage of the trial. These are those reasons. 6Section 121(1) of the Evidence Act provides: "This Division does not prevent the adducing of evidence relevant to a question concerning the intentions, or competence in law, of a client or party who has died." 7Section 122 of the Evidence Act relevantly provides: "(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120. (3) Without limiting subsection (2), a client or party is taken to have so acted if: (a) the client or party knowingly and voluntarily disclosed the substance of the advice to another person; or (b) the substance of the evidence has been disclosed with the express or implied consent of the client or party." 8In relation to section 121(1), it was submitted on behalf of the plaintiff that the documents would be relevant to a question concerning the intentions of a client who has died, namely, Mr Arthur Nelson, who is the deceased in respect of which the plaintiff brings her application for a family provision order. The relevant question was said to be the question (which arises under section 80(2)(a) of the Succession Act 2006) whether the deceased entered into certain transactions with the intention, wholly or partly, of denying or limiting provision being made out of his estate for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order. 9In relation to section 122(2), it was submitted on behalf of the plaintiff that the defendants, particularly through the affidavits of Mr Stiles and Mr Mellon, have impliedly made assertions about the contents of one or other of the two documents. It was put that the defendants are impliedly asserting that advice given by HDY supports the contention that the deceased had a substantial potential liability under a personal guarantee, given in respect of a lease of premises in Waterloo where there were issues of contamination and a need for remediation. Counsel for the plaintiff referred to Standard Chartered Bank of Australia Limited v Antico (1993) 36 NSWLR 87 at 94-95 where Hodgson J stated: "If a party, by pleadings or evidence, expressly or impliedly makes an assertion about the content of confidential communications between that party and a legal adviser, then fairness to the other party may mean that this assertion has to be taken as a waiver of any privilege attaching to the communication." 10Reference was also made to Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 at [29] where it was stated: "What brings about the waiver is the inconsistency, which the Courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large." 11I was also referred to Archer Capital 4A Pty Ltd v Sage Group plc (No. 3) [2013] FCA 1160 at [9] - [13], and to Traderight (NSW) Pty Ltd v Bank of Queensland [2013] NSWSC 211 at [16] - [18]. 12The plaintiff also placed reliance upon s122(3), and submitted that the substance of the documents was knowingly and voluntarily disclosed by the defendants through their adducing of evidence of the 28 August 2008 email. 13Senior counsel for the defendants informed the Court that there was no "supplementary advice" to produce. In these circumstances it is not necessary to further consider the question of privilege in relation to any such advice. Senior counsel further informed the Court that there was "a draft advice of HDY", but submitted that, for a number of reasons, it was not shown that the privilege which would attach to the draft advice had been lost. 14First, the defendants submitted that the evidence did not permit a conclusion that the relevant client in relation to the draft advice was the deceased, as the only evidence on the question tended to establish that HDY was relevantly acting for Lawrence Dry Cleaners Pty Limited ("LDC"), a company associated with the deceased, and Jeffman Pty Limited, the lessee and lessor respectively of the allegedly contaminated site. Accordingly, it was put that the deceased was not relevantly "a client or party who has died" within the meaning of s121(1) of the Evidence Act and that therefore the provision had no operation in this instance. Reference was made in this respect to the decision of White J in d'Apice v Gutkovich [2010] NSWSC 1336, especially at [16]. Moreover, it was put that the deceased is not relevantly a client who, through his executors in their defence of these proceedings, has acted inconsistently for the purposes of s122(2). 15Secondly, it was submitted in relation to s121(1) that in circumstances where it was not shown that the draft advice of HDY was ever received, read or relied upon by the deceased, it would not be relevant to the question of intention raised under s80(2)(a) of the Succession Act. It was further submitted that, in any event, it should be inferred from the evidence, including from the terms of the 28 August 2008 email itself, that the draft advice of HDY did not address the question of the deceased's personal liability under the guarantee he gave. 16Thirdly, it was submitted that the evidence to be adduced by the defendants placed no reliance, whether expressly or impliedly, upon the content of any advice from HDY. 17Finally, on the question of whether the substance of any advice had been disclosed, the defendants referred me to the decision of Young CJ in Eq in Landmark Underwriting Agency Pty Limited v Kilborn [2006] NSWSC 1108 at [105] to [116]. 18In my view, client legal privilege in the draft advice of HDY has not been shown to have been lost as contended for by the plaintiff. 19As to s121(1), White J expressed the view in d'Apice v Gutkovich (supra) at [16] that the reference to "a client or party who has died" in s121(1), when read in the context of Division 1 of Part 3.10 of the Evidence Act, is a reference to a client or party who, before death, would have been entitled to object to the adducing of evidence on the grounds of a privilege arising under Division 1. Counsel for the plaintiff pointed out that that case was concerned with a different situation, but did not argue against the construction advanced by White J. 20Such evidence as there is suggests, as submitted by the defendants, that the deceased was not a client in relation to the draft advice (see, in particular, the affidavit of Mr Stiles at paragraph 59, the affidavit of Mr Mellon at paragraphs 78 to 80, and also the 28 August 2008 email itself, which, if anything, tends to suggest that LDC was the client). Accordingly, applying the construction favoured by White J, the deceased is not "a client or party who has died" within the meaning of s121(1) and the provision therefore does not operate in the present circumstances, regardless of whether the draft advice of HDY is relevant to a question concerning the deceased's intentions. 21As to s122(2), I would, similarly, regard the reference to a client or party as being directed to a client or party who would be entitled to assert client legal privilege in respect of a privileged communication or document. On that basis, the provision would have no application to the conduct of the defendants (the first three of which are successors of the deceased) unless the deceased was a client in relation to the draft advice. There was no suggestion that the fourth defendant was a client in relation to the draft advice. In any event, even if the deceased was such a client, I do not think that the defendants, by the evidence they have adduced and intend to adduce, have acted inconsistently with objecting to the adducing of evidence of the draft advice. 22The affidavit of Mr Stiles, particularly paragraphs 54 to 70, makes reference to the personal guarantee given by the deceased in relation to the Waterloo site, and to the email of 28 August 2008 "regarding, amongst other things, [the deceased's] personal liability under the Waterloo lease". The email itself refers to the Waterloo site and then goes on to state: "Paul, I have now read the draft advice of Henry Davis York. For the benefit of the meeting now proposed for Friday of next week, subject to confirmation of everyone's availability, it would be helpful if you could arrange for HDY to provide before our meeting a supplementary advice specifically addressing the perc issue and any other relevant issues in relation to: 1. AVN's personal liability (quantified as best as can be done) [and that of AVN's Estate] as guarantor of the Waterloo leases (past and current), the Belrose lease and all other retail leases personally guaranteed by AVN; ..." 23The reference to Paul in the email is a reference to Paul Nelson, the son of the deceased, who was involved in the management of LDC. The "perc issue" is a reference to the contamination issue. 24Mr Stiles also makes reference to a second email dated 28 August 2008 which states, in part, that: "...we should still have the Friday meeting but with Paul (only because time is marching on and the draft HDY advice took 2 months to surface). We can discuss the asset protection issues the following week." 25Mr Stiles further refers to a meeting held on 5 September 2008 which was attended by representatives of HDY although not attended by the deceased. No mention is made in Mr Stiles' affidavit of any advice being given at the meeting by HDY on the issue of the potential liability of the deceased under his personal guarantee. Similarly, the evidence Mr Stiles gives about a meeting later on 5 September 2008, which was attended by the deceased, makes no reference to any such advice having been given. The same point can be made about the further evidence of Mr Stiles concerning an email sent on 5 September 2008 (re-sent on 15 September 2008), a meeting with lawyers from Watson Mangioni on 3 October 2008, and subsequent conversations with the deceased. 26I have also considered the affidavit of Mr Mellon, particularly paragraphs 76 to 88. He gives evidence about his awareness of the deceased's personal guarantee, the emails of 28 August 2008, a discussion with Mr Stiles about the issue, the meeting on 5 September 2008 which was attended by representatives of HDY, the meeting held later that day attended by the deceased, the meeting with lawyers from Watson Mangioni on 3 October 2008, and a subsequent conversation with the deceased. Again, there is no mention of any advice being given by HDY on the issue of the potential scope of the deceased's personal liability under the guarantee. Indeed, in paragraph 80, Mr Mellon gives evidence (to which no objection was taken) to the effect that HDY had not considered the issue of the deceased's potential liability under the guarantee. 27I do not consider that the defendants, by adducing such evidence, are seeking to advance, whether expressly or impliedly, the contents of the draft advice, let alone doing so in a manner inconsistent with objecting to the disclosure of the content of that draft advice. The defendants are not in my view seeking to both approbate and reprobate in relation to the draft advice, and I see no unfairness in the defendants adducing the evidence of Mr Stiles and Mr Mellon while objecting to the disclosure of the draft advice (see Expense Reduction Analysts Group Limited v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46 at [31] - [32]). 28Neither do I consider (assuming that the deceased was a client for the purposes of section 122(2)) that the defendants must be taken to have acted inconsistently, within the meaning of section 122(2), on the basis that they have knowingly and voluntarily disclosed the substance of the draft advice. The references to the draft advice in the emails of 28 August 2008 disclose nothing of the reasoning of the advice, or the conclusion of the advice. No summary of the draft advice is given, whether expressly or impliedly. I do not think it is possible to even discern with any precision the topic with which the draft advice was concerned, save that it appears likely to have dealt in some way with LDC's liabilities in relation to the Waterloo site. 29In these circumstances, there has plainly been no disclosure of the substance of the advice (see Fenwick v Wambo Coal Pty Limited (No.2) [2011] NSWSC 353 at [12] to [22]; RinRim Pty Limited v Deutsche Australia Limited [2013] NSWSC 1654 at [26] - [45]). 30Accordingly, the arguments advanced by the plaintiff as to why client legal privilege has been lost have not been made out. It follows that the plaintiff is not entitled to inspect the draft advice.