Hodgson v Amcor Ltd; Amcor Ltd v Barnes & Ors

PRACTICE AND PROCEDURE - Orders 42, 42A of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) - Failure to provide subpoenaed documents directly to the Court by solicitor - Whether subpoenaed documents must be provided to the Court - Purpose of providing subpoenaed documents to Court prior to review - Subpoenaed documents received by practitioner referred to in an affidavit of documents - Conduct of the solicitor improper.

1 The issue before the Court in this ruling concerns whether or not a letter of advice from a solicitor, Mr Mark Dillman, who was a partner of Deacons at the time, to Mr James Hodgson, the plaintiff in the Hodgson proceeding, may be adduced in evidence. The letter of advice was dated 19 December 2000 (the "Advice")

2 The defendant in the Hodgson proceeding, ("Amcor"), and the plaintiffs in the Barnes proceeding ("the Amcor parties"), seek to put the Advice given to Mr Hodgson to him in cross-examination. A voir dire was conducted to determine the issue. It is common ground that the Advice is protected from being adduced in evidence pursuant to s 118 of the Evidence Act 2008 (the "Evidence Act") being a document created for the dominant purpose of a lawyer providing legal advice to his client.

3 It is also common ground that the Advice came into the hands of another party, Mr Trevor Barnes, who is the first defendant in the Barnes' proceeding.

4 The sole question for determination in this application is whether there has been a loss of the client legal privilege by operation of s 122 of the Evidence Act. Section 122(1) provides:

1. Loss of client legal privilege-consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(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 the 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 evidence to another person; or

(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4) The reference in subsection (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because-

(a) the substance of the evidence has been disclosed-

(i) in the course of making a confidential communication or preparing a confidential document; or

(ii) as a result of duress or deception; or

(iii) under compulsion of law; or

(iv) if the client or party is a body established by, or a person holding an office under, an Australian law-to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office held; or

(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing or is to provide, professional legal services to both the client and the other person; or

(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

(6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness's memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

5 Although the common law doctrine of legal professional privilege and its waiver lives alongside that provided for in the Evidence Act, and indeed exceeds the ambit of that provided by ss 118 and 122 of the Act,[1] argument before me was limited to the applicability of the statutory provisions. For this reason, I will not deal with the application of the common law to the facts before me, although I am satisfied that the result would not have been any different.

6 During the voir dire Mr Hodgson gave evidence and was cross-examined. He said that he was not aware that Mr Barnes had a copy of the Advice. He had no recollection of giving it to either Mr Barnes or any other person and he said he never discussed it with any other person.

7 Mr Barnes was called by the Amcor parties in the course of the voir dire. He too said that he had no recollection as to when or in what circumstances he received the Advice. However he gave evidence that on 4 January 2001, shortly after the date of the Advice, he attended a meeting with Mr Hodgson and some other persons with Mr Dillman of Deacons. Mr Dillman at that time was Mr Hodgson's solicitor. Mr Dillman in an affidavit dated 11 May 2011 says that during 2000 he was retained by Mr Hodgson to give him advice. Mr Dillman does not say that he was also retained by Mr Barnes or any other person who attended the meeting of 4 January 2001 to give them advice.

8 In the course of the voir dire Mr Barnes was examined and gave evidence on the following further matters: the structure of a proposed business was discussed at the meeting of 4 January 2001 and this structure later crystallised into the G5 agreement which was later executed by Mr Hodgson and Mr Barnes and others and is the subject of a major issue in the trial.

9 For the purpose of determining the question before me in the voir dire I ordered pursuant to s 133 of the Evidence Act that the Advice be produced to the Court for its inspection. I took this course because in the context of the evidence as to the date of the Advice, being 19 December 2000, and the subsequent meeting conducted shortly thereafter on 4 January 2001, and the evidence as to the subject matter of the discussions at the meeting, the content of the Advice may well have borne upon the likelihood or otherwise of the Advice having been disclosed by Mr Hodgson to Mr Barnes, who was an attendee at the meeting, at about that time. More particularly, the content of the Advice may well have borne upon the likelihood of that Advice having been either knowingly and voluntarily disclosed to Mr Barnes by Mr Hodgson, or expressly or impliedly being disclosed to Mr Barnes by Mr Hodgson at or about the time of the meeting.

10 Having examined the Advice, in general terms, it evidences the following matters of relevance:

(a) the subject matter of the Advice, in large part, was devoted to the possible structure which could be established for a proposed business venture; and

(b) it refers to a number of other parties who may have been involved in the enterprise. In particular, reference is made to paragraph 7, where the following is said as to the risks attendant upon the venture, "Whilst you are still employees of Amcor"; to paragraph 8, where reference is made to the position of the "directors"..."of a trustee company"; and to paragraph 9, where reference is made to a possible "partnership".

11 I infer that the Advice, at least in part, referred to the possible involvement of Mr Barnes, who was still an employee of Amcor, and was considering his involvement in the potential business, possibly as a director or possibly as one of the partners. The Advice was therefore relevant for Mr Barnes to consider at or about the time of the meeting of 4 January 2001.

12 The clear inference from these facts is that the Advice was given to Mr Barnes by Mr Hodgson on or about 4 January 2001, for him to consider, in conjunction with the advice given to be given by Mr Dillman at the meeting of that date. Further, the inference is that Mr Hodgson voluntarily supplied the Advice to Mr Barnes at or about this time, alternatively, expressly, or impliedly consented to this course. Conversely, it is inherently unlikely that Mr Barnes obtained the Advice by any other means, and no evidence has been adduced which supports such a finding.

13 Pursuant to s 122 of the Evidence Act, the burden of proof is on the party seeking to persuade the court that the privilege has been lost. It is therefore for that party to prove the circumstances in fact exist to justify such a finding. As Rein AJ observed in Sharjade Pty Ltd v RAAF Landings:[2] "The party claiming privilege does not bear the onus of excluding waiver of the privilege. Where it is alleged that privilege has been waived, the party alleging waiver carries the onus of establishing waiver". In support of this proposition, Nine Films & Television Pty Ltd v Ninox Television Pty Ltd,[3] and Rich v Harrington[4] were referred to. His Honour also referred to the observations of Campbell J in Re Doran Constructions Pty Limited (in Liquidation),[5] his Honour observed, "It is the party who asserts that there has been a waiver who bears the onus of satisfying the court about each of the elements in s 122(2)".

14 Although the thrust of authority to which I have referred places the burden of proof squarely upon the party asserting that the privilege has been lost pursuant to s 122(2) of the Evidence Act, it is to be noted that a different approach appears to have been taken by Sundberg J in Rio Tinto Ltd v Commissioner of Taxation[6] where his Honour noted:

Where a document which is privileged, or alleged to be privileged, in the hands of the client for whom it was prepared, is then provided to a third party, the party claiming privilege bears the burden of proving that the provision of that document to the third party did not waive privilege. That burden will be discharged by showing that the circumstances of the provision of the document to the third party were not such as to constitute "inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege.

His Honour then referred to Mann v Carnell,[7] being the judgment of Gleeson CJ, and Gaudron, Gummow and Callinan JJ. However, with respect to the observation of Sundberg J, the High Court, did not here analyse the burden of proof. His Honour cites no authority for the position that where the document in question passes to a third party the burden of proof shifts to the claimant of the privilege under s 122 or at common law. For these reasons I decline to follow Sundberg J's approach in Rio Tinto but prefer the approach taken in the cases referred to by Rein AJ in Sharjade Pty Ltd v RAAF Landings to which I have already referred.

15 The guiding principle governing the concept of the "burden of proof" is relatively simple. He who asserts a matter must prove it, but he who denies it need not prove it. Such a principle is of long standing. It can be traced back to Paulus, a Roman jurist of the Second Century AD and is expressed in the Latin maxim ei qui affirmat non ei qui negat incumbit probatio. In this case the legal or persuasive or ultimate burden of proof in respect of the matters provided in s 122(2) of the Evidence Act lies on the party who asserts that by the conduct alleged, the privilege has been lost. In this case that party is Amcor.

16 However it was submitted by Amcor that in relation to the matters referred to in s 122(5), if called in aid by the party claiming the privilege, the burden shifts to the claimant party to prove them.

17 The question then becomes do the qualifications expressed in sub-s (5) have the effect of casting the burden of proof upon the claimant to the privilege to establish one or other of the grounds referred to, or does the burden of proof remain with the party who asserts that the privilege has been lost, namely Amcor in this case, to establish these matters.

18 In some cases, on a true construction of an enactment, the burden of proof, although initially falling on one party, may shift to the other. This may typically occur where, for example, exculpatory conduct is provided for, or where an exception to the principal course of conduct governed by the provision is specified to arise in a particular circumstance. Where such an intention is manifested, it is not for the party which carries the initial or ultimate burden to make out these matters by proving that the excuse does not apply or that the exception arises. It falls on the other party to discharge the onus of proof in order to succeed on that matter.

19 Whether or not the burden shifts in relation to the matters referred to in s 122(5) Evidence Act hinges on the intention manifested by the statute. The principal provision relating to loss of client privilege is s 122(2), to which I have already referred. Following sub-s (2) a deeming provision is provided by sub-s (3), which provides for two sets of circumstances where a person is taken to have acted inconsistently with the maintenance of the privilege. Then follows a qualification to the concept of knowing and voluntary disclosure found in sub-s (3), which is provided in sub-s (4). Then follows a further set of qualifications in sub-s (5) to the following effect. "A client or a party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of evidence merely because" of a number of defined events which are set out.

20 In my opinion the intention of sub-s (5) is to shift the onus of proof to the claimant of the privilege. It does not remain with the party asserting the loss of privilege to disprove the qualifications expressed in the sub-section. This is because the matters referred to in paragraphs (a), )b) and (c) of sub-s (5) are likely to be matters in most cases which are solely known to the claimant of the privilege and would thereby fall uniquely within the province of proof of that party and the associates of that party. They are matters not likely to be known to the other party and, in the usual case, would not be likely be able to be controverted by the other party.

21 Take for example sub-s (5)(a)(i) where a party has not taken to have acted in a manner inconsistent with the party objecting to the adducing of the evidence merely because the substance of the evidence has been disclosed in the course of making a confidential communication or preparing a confidential document. The circumstances of the provision of the substance of the evidence to a third party are not likely to be known to or provable by the party who claims the privilege has been lost. Nor would that party be likely to be in a position to prove that the substance of the evidence had been disclosed to the third party in some other circumstance which is beyond the protection provided by sub-s (5)(a)(i).

22 For these reasons in my opinion the onus of proving the matters relied upon in sub-s (5) of s 122 shift to the claimant party in this case Mr Hodgson.

23 As to the standard of proof applicable to s 122 Evidence Act, as referred to and emphasised by Senior Counsel for Mr Hodgson, Mr Gunst QC, in submissions made on his behalf, legal professional privilege is an important privilege. It has a significant role in the administration of justice. In this respect reference is made to the recently decided case in this proceeding, Hodgson v Amcor Ltd (No.2).[8]

24 In my opinion once the privilege has been established, any question of waiver should be determined on the balance of probabilities on evidence which is sufficiently clear and unequivocal. In this regard, reference is made to the observations of Tamberlin J in Nine Films & Television Pty Ltd v Ninox Television Limited.[9]

25 The question then becomes whether or not the claimant party, in this case Mr Hodgson, has established that he falls within s 122(5) of the Evidence Act.

26 In my opinion that position is established on the balance of probabilities on the evidence called in the voir dire, when considered in combination with the Court's examination of the Advice in question. Indeed, two of the qualifications within s 122(5) have been made out, namely sub-paragraphs (a)(i) and paragraph (b).

27 The substance of the Advice of 19 December 2000 was likely to have been provided, as I have already found, by Mr Hodgson to Mr Barnes in the course of making a confidential communication to him in which the Advice was provided.

28 Information is protected by equity as confidential information when it is imparted in circumstances where it is reasonable for the provider to expect that the information will be kept confidential.

29 Usually information which is confidential information achieves this status because it is imparted in circumstances where expressly or impliedly a relationship of trust and confidence exists between the supplying party and the receiving party; or where the information provided is of a kind which attracts confidential status or could reasonably be expected to be afforded such confidential status; or where it is provided in any other circumstances where the providing party can reasonably expect that the confidential status of the information will be protected.

30 Section 117 of the Evidence Act defines confidential communication as follows: "Confidential communication means a communication made in such circumstances that, when it is made, (a) the person who made it, or (b) the person to whom it was made was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law".

31 In the present case, I inspected the Advice of 19 December 2000. The nature of the Advice was such that it raised very sensitive matters as far as Mr Hodgson personally was concerned. It also proffered advice in relation to Mr Hodgson's prospective partners and the manner in which they could proceed with a business venture, if they elected to progress the matter.

32 The nature of the Advice, in my opinion, was such that if it was imparted to any of Mr Hodgson's prospective partners or associates, it was likely to have been imparted in circumstances where there was an implied obligation on the part of the recipient or recipients not to disclose its contents beyond that circle of persons.

33 The confidential status of a document will not necessarily be lost because it is imparted to a number of persons within the circle of the provider. I was referred to three cases which, by analogy, are applicable, namely Talbot v NRMA Ltd,[10] Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allies Operations Pty Ltd,[11] and Lakatoi v Walker[12].

34 Perhaps the high watermark of this position is illustrated by Associated Newspapers Ltd v His Royal Highness The Prince of Wales, a decision of the Court of Appeal of the United Kingdom of 21 December 2006.[13] This case concerned an application by His Royal Highness the Prince of Wales, who was the claimant for summary judgment against Associated Newspapers Ltd, which was the defendant, for breach of confidence and infringement of copyright in respect of articles published by the defendant in The Mail newspaper on Sunday, 13 November 2005. The articles in question were based upon and contained extracts from a journal handwritten by Prince Charles on his visit to Hong Kong during the formal handover of Hong Kong to the Republic of China. His Royal Highness contended that the journal set out his private and personal thoughts, and that these matters were not in the public domain, at least prior to publication. They therefore constituted, it was argued, confidential information. The newspaper, the defendant argued, amongst other things, that the claimant could have no reasonable expectation that his journal would be kept from the public because he had previously authorised copies to be made and distributed to a number of selected recipients, which appeared to be some 50 to 75 in number, drawn from a wide range of professional groups including politicians, members of the media, journalists and actors.

35 However, the Court of Appeal, in dismissing the newspaper's defence, observed as follows at [42] in the course of considering the decision of the Judge at first instance:

...[it was correct to say that] those to whom Prince Charles sent his journals totalled 50-75, including politicians, media people, journalists and actors. The judge commented that the number and occupations of the recipients of the journals were of no significance in the absence of any suggestion that they would have felt free to publish the contents of the journals without Prince Charles's permission. To that we agree and again the significant fact is that over a period of some 30 years there is no evidence that any recipient of the journals breached the confidence under which they received them.

If it be the fact that the circulation of the journals was as wide as has been suggested, this cannot having regard to all the circumstances lead to a conclusion that Prince Charles could not reasonably expect that the contents of his journals and in particular the journal in question, to have been kept confidential.

36 Thus disclosure in certain circumstances, even to a wide circle of persons, may not necessarily give rise to a loss of the confidence. It depends in each case on the particular circumstances revealed by the evidence. Mr Hodgson also placed reliance upon s 122(5)(b) of the Evidence Act. In my opinion, the subsection applies.

37 As I have found, the Advice of 19 December 2000 was likely to have been given or made available by Mr Hodgson to Mr Barnes on or about 4 January 2001 at the time of the meeting with Mr Dillman. It was submitted this morning by Mr Houghton QC, who appeared as Senior Counsel for the Amcor parties, that the affidavit of Mr Dillman dated 11 May 2001 disclosed that there was no evidence that other than that Mr Hodgson had retained Mr Dillman as his solicitor at the time, and that neither Mr Barnes nor any other person connected with the proposed transaction was a client of Mr Dillman at the relevant time when the meeting was conducted on 4 January 2001. For this reason, it was submitted, s 122(5)(b) had no application.

38 However on a close reading of s 122(5)(b), it is not a prerequisite for its application that the 'other person' referred to needs to retain the lawyer in question in a contractual sense. What the sub-section focuses upon is the provision by the lawyer, either presently or prospectively, of legal services to both the client and the other person.

39 In the circumstances of this case, when Mr Barnes attended the meeting of 4 January 2001 with Mr Hodgson and Mr Dillman, he was clearly there to participate in being provided with professional legal services in the nature of advice and discussion concerning the prospective business enterprise. This was the case, even though on the evidence thus far available in the voir dire, he was not a client of Mr Dillman's in the sense of being a person who had formally retained Mr Dillman at the relevant time. Nevertheless, sub-s (5)(b) applies to the position of Mr Barnes in this case.

40 In my opinion the Advice of 19 December 2000 was disclosed by Mr Hodgson to Mr Barnes and concerned a matter in relation to which the same lawyer, namely Mr Dillman was providing or was to provide professional legal services to both Mr Hodgson who was the original client and remained the client, and to the other person in this case, Mr Barnes. The content of the Advice and the evidence in the voir dire as to the subject matter of the meeting of 4 January 2001 point inescapably to this conclusion.

41 For these reasons in my opinion Mr Hodgson has discharged the onus imposed upon him under s 122(5).

42 By way of conclusion as to the alleged waiver arising from Mr Hodgson providing a copy of the Advice to Mr Barnes, I am satisfied that Mr Hodgson did not act in a manner inconsistent with him objecting to the adducing of the Advice of 19 December 2000 into evidence. I am satisfied that he did so only in circumstances that are referred to in s 122(5)(1)(i) and (b).

43 I turn now to the issue as to whether or not Mr Hodgson waived his privilege by passing the document to Mr Hottes, who is now deceased. Pursuant to s 122(2) of the Evidence Act, in order for the privilege to be lost, I must be satisfied that the party seeking to maintain the privilege has acted in a way which is inconsistent with the maintenance of the privilege.

44 It is for the party asserting that the privilege has been lost to prove that ultimate fact.

45 It is common ground that the Advice of 19 December 2000 found its way into the possession of Mr Hottes. The evidence in the voir dire goes no further. No explanation is proffered as to how or when Mr Hottes came into possession of the document. Still less is there any evidence that the document found its way into his possession by any act or conduct of Mr Hodgson or by the act or conduct of any other person in which Mr Hodgson was in any way involved or had knowledge about.

46 I find that the fact that the Advice was in the possession of Mr Hottes did not result in any loss of the privilege presently claimed by Mr Hodgson in the document.

47 I turn to the issue of an alleged waiver arising from the failure on the part of Mr Hodgson and his lawyers to take any step on their receipt of a supplementary affidavit of documents sworn on behalf of Amcor dated 12 May 2011.

48 By a subpoena dated 28 April 2011 issued by Amcor addressed to Mrs Marlene Hottes in New South Wales, Mrs Hottes was directed to produce documents to the Court which were described in a schedule attached to the subpoena. She was also directed to attend court to give evidence.

49 The documents described in the schedule to the subpoena were directed to be produced to the Court on the first day of the trial, that is at 10.30 a.m., 16 May 2011. The documents sought were relevant to the claim made by Amcor in respect of the Service Packaging Business. Mrs Hottes received the subpoena. Mr Hodgson was served with a copy of the subpoena addressed to Mrs Hottes.

50 On receipt of the document, Mrs Hottes went to the attic of her house where her late husband's business records were stored. These appeared to answer the documents sought in the subpoena. She then delivered them or sent them to the solicitor for Amcor on Monday 9 May 2011. The documents received by Amcor's solicitors were not then immediately produced to the Court nor was Mrs Hottes advised of her obligation to produce them to the Court it seems. Rather the documents were examined by Amcor's solicitors and were listed in the supplementary affidavit of documents filed and served by the Amcor parties dated 12 May 2011.

51 This matter was raised by Senior Counsel for Mr Hodgson on the first day of the trial before the opening address of the Amcor parties had commenced.

52 I directed that the documents, the subject of the subpoena to Mrs Hottes be forthwith produced to the Court. Prior to this direction this step had not been taken. The Amcor parties in response to the direction of the Court immediately produced the documents as directed. I made a further direction pursuant to a request from Mr Hodgson's Senior Counsel for the subpoenaed documents to be made available to him for examination and if necessary copying and return to the Court. A similar facility was granted to the other parties.

53 At that point, not having seen the documents in question, the lawyers acting for Mr Hodgson were not in a position to claim privilege in respect of any of the documents produced by Mr Hottes to the Amcor solicitors.

54 It was submitted by the Amcor parties that, having been served with the supplementary affidavit of documents dated 12 May 2011 prior to the trial, and having taken no step to protect the privilege which may have attached to any of the documents listed, Mr Hodgson, through his lawyers inaction, has acted inconsistently with the maintenance of the privilege, and the privilege was thereby lost. This loss of privilege, it was said, applied in relation to the Advice of 19 December 2000, it being one of the documents listed in the schedule to Amcor's supplementary affidavit of documents, and before that, being one of the documents produced pursuant to the subpoena directed to Mrs Hottes.

55 The procedure for the issuing of a subpoena and compliance with the subpoena subsequent to its service is provided for in Order 42 of the Supreme Court (General Civil Procedure) Rules 2005 (the "Rules of Court"). Order 42.O6(4) provides as follows:

(4) The addressee shall comply with a subpoena to produce-

(a) by attending at the date, time and place specified for production or, if the addressee has received notice of a later date or time from the issuing party, at that later date or time, and producing the subpoena or a copy of it and the document or thing to the Court or to the person authorised to take evidence in the proceeding as permitted by the Court; or

(b) by delivering or sending the subpoena or a copy of it and the document or thing to the Prothonotary at the address specified for the purpose in the subpoena, so that they are received not less than three days before the day specified in the subpoena for attendance and production or, if the addressee has received notice of a later day from the issuing party, before that later day.

56 Of particular relevance is r.42.O9(3), which provides:

(3) Subject to this Rule, no person may inspect a document or thing produced unless the Court has granted leave and the inspection is in accordance with that leave.

57 These Rules of Court underpin the common law, which has been long applied by courts in relation to subpoenas. The basic rules relevant to the present matter are these:

(1) A person served with a subpoena to produce, requiring the production of specified documents, must attend at the place directed by the subpoena and produce such of the specified documents which he or she is able to produce, unless he or she can establish some good reason why the documents should not be produced.

(2) Production of documents under subpoena to produce means production to the court, not to a party.

(3) Upon the production of a document to the court, the court takes the document into its custody to use it for the temporary purpose of resolving disputed questions of fact. That power is essential to the proper administration of justice and prevails over private property rights.

(4) The court has a discretion to allow a party to inspect a document that appears to be relevant to the issues, whether or not it is in admissible form.

(5) A party having a legitimate forensic purpose in seeing a document will not ordinarily be denied inspection by the circumstance of the document not being admissible in evidence.

58 The procedure is summarised by the steps described by Moffat PA in Waind v Hill & National Employers Mutual,[14] where his Honour said as follows:

As Jordan CJ pointed out in Small's case, as appears in Birchett's case, there are at least two steps in the procedure of having a third party bring documents to court, and in their use thereafter. Indeed on a correct view there are three steps. The first is obeying the subpoena by the witness bringing the documents to the court and handing them to the judge. This step involves the termination of any objections of the witness to the subpoena or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents which includes whether or not permission should be given to a party or to parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part or the use of it in the process of evidence being put before the court by cross-examination or otherwise.

59 It is during the second step described in Waind's case that issues such as privilege are determined. If the document in issue is determined to be privileged, the document may not be released to other parties upon their request.

60 The seriousness with which the Court views these procedures is underlined by the sanctions that are open to be applied in the event of their breach. First, disobedience of a subpoena is a prima facie contempt of court. Second, procuring a person to disobey a subpoena is an interference with the administration of justice and is a contempt of court in itself. Third, a subpoena served in another State pursuant to the Service and Execution of Process Act 1992 (Commonwealth) under s 29, if not complied with, may be enforced by warrant of apprehension issued by the court of the place of issue of the subpoena, pursuant to s 37(1) of that Act.

61 In this case it was at the very least improper for the solicitors for Amcor to have inspected the documents the subject of the subpoena addressed to Mrs Hottes before obtaining any order from the Court permitting this to occur. It would also have been improper for the solicitors to have given the impression to Mrs Hottes that she should deliver the documents to them in the first instance if that in fact occurred, however I make no finding on that issue.

62 The proper advice to Mrs Hottes which ought to have been given by the solicitors for Amcor whether she sought it or not, was to have instructed her to deliver the subpoenaed documents to the Court on the due date for the return of the subpoena namely 16 May 2011. Alternatively, if the documents had been posted by Mrs Hottes to the Amcor solicitors, it was their duty to either return them to her with appropriate instructions as to how she should comply with the subpoena, or take immediate steps to have the documents delivered directly to the Court. In either case, and under no circumstances, it is permissible for solicitors or lawyers to examine the documents delivered to them produced on a subpoena or make use of them in any way, without first obtaining a court order to do so.

63 In this case it may have been open to the lawyers acting for Mr Hodgson to seek an order by way of an injunction in relation to the subpoenaed documents which had been improperly dealt with by the solicitors for Amcor. Reference in this regard is made to the observations of Slade LJ in Guinness Peat Properties v Fitzroy Robinson Partnership[15] with whom Woolf LJ and Sir George Waller agreed at pp.1045-1046. Slade LJ made the following observation:

I do not think that after inspection, that is of a privilege document, has taken place in the course of discovery the court is inevitably and invariably powerless to intervene by way of injunction in the exercise of the court's equitable jurisdiction exemplified by the cases of Ashburton, Goddard and Herbert Smith, if particular circumstances warrant it and such intervention is justified on equitable grounds.

64 However in this case no criticism can be levelled at Mr Hodgson's lawyers for not taking such a course. An injunction sought on equitable grounds is discretionary and there could have been no guarantee that it would have resulted in relief which would have been of practical benefit to Mr Hodgson in the circumstances. The documents in respect of which privilege is claimed namely the advice of 19 December 2000 had been inspected by the solicitors for Amcor. That would have been made plain to Mr Hodgson's lawyers following service upon them of Amcor's supplementary affidavit of documents dated 12 May 2011. This position could not be reversed by any court order.

65 In a practical sense an acceptable approach for Mr Hodgson's lawyers was for Mr Hodgson through his lawyers to object to the document being adduced in evidence through cross-examination. This is what he has done.

66 Still less in my opinion is the failure to take any step following the service of Amcor's supplementary affidavit of documents of 12 May 2011 to be taken as conduct which is inconsistent with the maintenance of the privilege over the 19 December Advice. I find that the privilege has not been lost for this reason.

67 I now turn to the failure on behalf of Mr Hodgson's lawyers to object to the opening of Amcor's counsel at the trial in the course of which the Advice was addressed upon.

68 Senior Counsel for Amcor commenced his opening of the Amcor case on 16 May 2011. During the course of his opening he referred to the Advice of 19 December 2000. Indeed he read the body of the Advice to the Court. Counsel for Mr Hodgson did not object to this course.

69 Although I probed Senior Counsel for Mr Hodgson during the course of argument in this matter as to why he did not take such a step, I am satisfied that he neither had any obligation to object to the opening nor was this axiomatic in the circumstances.

70 In exceptional circumstances, opposing counsel may object to aspects of the other party's opening in the course of its delivery. However, this is a course which is not to be encouraged. It should only be exercised where the situation clearly demands that this occur in the interests of justice. Further, if exercised, the objection remains under the direction and control of the court.

71 In the present case, the position with regard to the Advice of 19 December 2000 having improperly come into the possession of the Amcor parties and being examined by them could not, in a practical sense, be recovered even at the stage of the opening of Amcor's case.

72 The Amcor opening of the Advice, in the circumstances of this case, was an exceptional circumstance which would have justified counsel for Mr Hodgson objecting, if he had elected to do so. However, he had no duty to take the objection. It was equally open for him to make a tactical decision not to object during the opening, reserving his position to object to the document being adduced into evidence pursuant to s 118 of the Evidence Act, at a later time, if Amcor sought to take that step. This course has now been taken by Mr Hodgson's counsel, and properly taken in my view.

73 I have been referred to Grace v Grace[16] by Amcor in the course of its submissions as to the circumstances in which lawyers acting for a party may, by their conduct, waive legal professional privilege which would otherwise be available to the party. The case in essence turned on the conduct of a solicitor who through apparent inadvertence lost the privilege which otherwise attached to the disputed documents. The conduct in question which was in effect treated as conduct of the claiming party involve the following: the disclosure of the documents in issue in a verified list of documents; the making and delivery of copies of them by way of production for inspection; and the failure to assert the claim for privilege at any earlier stage. His Honour Brereton J considered that it was simply too late for the claim to privilege fairly to be made after these events had occurred in spite of being satisfied that the failure to claim the privilege was the result of a mistake. The privilege the was determined to have been lost by waiver arising from the solicitor's conduct.

74 However the cases referred to by Brereton J in his judgment in Grace illustrate another principle of relevance. In the course of his reasoning, his Honour referred to Meltend Pty Ltd & Rosenbaum v Restoration Clinics of Australia Pty Ltd & Marzola[17] where Justice Goldberg said as follows:

But once documents have been disclosed to an opposite party as part of the formal process of discovery and inspection, in circumstances involving no criticism of that party, I consider that fairness requires that that party be not disadvantaged in the use it can make of those documents.

75 Reference was also made by Brereton J in Grace to Biseja Pty Ltd v NSI Group Pty Ltd[18] at [14], where the following was said:

In the context of formal discovery, in the absence of obvious mistake apparent to an inspecting party or fraud, the position is that once inspection has been allowed of a document listed in that part of an affidavit or list in which privilege from inspection is not claimed, then any privilege attaching to that document is to be regarded as waived by being included in that part of the affidavit or list, and by being made available for inspection.

76 Further, in her work "Law of Privilege" at p.26, the learned author Susan McNicol makes the following observation: "What is important to note here, however, is that where the privileged document is stolen, obtained by a trick or wrongful or illegal act, or otherwise comes into the possession of a third party without the knowledge of the party possessing the privilege, there can be no question of waiver". Although this reference is to the common law, rather than to the statute, the approach serves to inform the approach to be taken to the Evidence Act. No discretion is provided for the court in s 122, whether or not evidence of a document may be adduced in the event that a privilege attaching to it has been lost by a strict application of s 122 to the facts of the case. Nevertheless, a circumscribed discretion remains available through the operation of s 138 which provides that evidence obtained improperly is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in this fashion. The section provides:

1. Exclusion of improperly or illegally obtained evidence

(1) Evidence that was obtained-

(a) improperly or in contravention of an Australian law; or

(b) in consequence of an impropriety or of a contravention of an Australian law-

is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.

(2) Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning-

(a) did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning; or

(b) made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission.

(3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account-

(a) the probative value of the evidence; and

(b) the importance of the evidence in the proceeding; and

(c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding; and

(d) the gravity of the impropriety or contravention; and

(e) whether the impropriety or contravention was deliberate or reckless; and

(f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and

(g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and

(h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.

77 ASIC v Lindberg[19] was relied upon by Amcor in the course of its submissions in the voir dire in support of the proposition that if the privileged document, or copy of it, has been obtained by the opposing party, by accident, trickery, or even by theft, it may be given in evidence although the party entitled to the privilege or his solicitor could not have been compelled to produce it. In particular, the judgment of Mandie JA at p. 407 [44] was cited. His Honour observed:

In Baker v Campbell, a number of members of the High Court said that this was the position. Gibbs CJ referred to the "rather remarkable" rule that if the privileged document, or copy of it, has been obtained by the opposing party, by accident, trickery, or even by theft, it may be given in evidence although the party entitled to the privilege or his solicitor could not have been compelled to produce it. Mason J said that, according to authority, it seemed that the availability of the claim for privilege was lost once the document passed into the possession of another who might then tender it in evidence. Dawson J said that there was authority for the proposition that the privilege might be lost if a document to which it attached came into the hands of someone other than the legal adviser or his client, even dishonestly, so that secondary evidence of it might be given. Brennan J and Deane J also referred to the rule, although not uncritically. [Footnotes omitted]

78 However, these observations made in ASIC v Lindberg as the common law do not apply to the Evidence Act which since has come into operation in this State. The authority is distinguishable. Section 118, and its counterpart s 119 in relation to the litigation privilege, do not concern the production of documents, they concern the adducing into evidence of the documents protected by privilege.

79 I take the view that in this case, where the document in issue has improperly come into the hands of the Amcor parties in the manner which I have described, there has been no loss of the privilege, merely because the document has been inspected by Amcor and its lawyers, and indeed, has been addressed upon by Amcor in opening.

80 Further, I consider in this case that fairness requires that Mr Hodgson not be disadvantaged by the improper conduct I have described. In this case, s 138 of the Evidence Act applies. The evidence in the form of the Advice was obtained improperly and is not to be admitted. I find against the position that the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in this fashion. In arriving at this conclusion, I take into account, amongst other things, the gravity of the impropriety described, being one of the factors which may be taken into account pursuant to s 138(3).

81 For these reasons, the privilege in the Advice of 19 December 2000 has not been lost. I uphold Mr Hodgson's objection to it being put to him in the course of his cross-examination.

[1] See: Mann v Carnell [1999] CLR 1 at [20] and [28ff].

[2] [2008] NSWSC 151 [at 3(h)].

[5] [2002] NSWSC 215, where at 117.

[6] [2006] FCA 1200 at [27].

[7] [1999] HCA 66 at p.13.

[8] [2011] VSC 204 at [14-16].

[9] [2005] FCA 356 at [21].

[10] [2000] NSWSC 602.

[11] [1988] 13 NSWLR 689.

[12] [1999] NSWSC 156.

[13] [2006] EWCA CIV1776. Leave to appeal this judgment to the House of Lords was subsequently refused.

[14] [1978] 1 NSWLR 372 at 381.

[15] [1987] 1 WR 1027.

[16] [2010] NSWSC 1514.

[17] [1997] 75 FCR 511.

[18] [2006] NSWSC 1497.

[19] [2009] VSCA 234; [2009] 25 VR 398.