Ingrid Jacobs v Robert Higgins & Ors

PARTIES : Ingrid Jacobs (Plaintiff) Robert Higgins, Stanislaus Carroll, John Michael O'Dea, Anthony James Baine, Howard Harrison, Peter Punch, Paul Carroll, Diana Farah, Michael Concannon, David de Carvalho t/as Carroll & O'Dea (Defendants)

COUNSEL : D Higgs SC and S Walsh (Plaintiff) D Priestley (Defendants)

SOLICITORS : Maurice Blackburn Cashman (Plaintiff) Ebsworth & Ebsworth (Defendants)

• 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PROFESSIONAL NEGLIGENCE LIST

JUDGMENT 1 HIS HONOUR: In 1996 the plaintiff was a primary school teacher. On 2 May 1996 she was severely injured at work when, in the course of her employment, she fell from a chair sustaining a fracture to her left leg. 2 At all relevant times the defendants were solicitors who carried on practice as such under a partnership styled Carroll & O'Dea. On about 10 October 1997 the plaintiff retained the defendants as her solicitors to act on her behalf with respect to such rights as she may have had to claim compensation for her injuries. 3 On 2 May 1999 the limitation period within which to bring proceedings at common law against the plaintiff's employer expired: see s 151D of the Workers Compensation Act 1987. 4 A Notice of Motion making an application for an extension of time to sue the plaintiff's employer for damages, together with a Statement of Claim, were filed by the defendants on behalf of the plaintiff on 14 August 2001. The application for extension of time was heard by Gibson DCJ on 20 June and 1 November 2002. Her Honour published her reasons for judgment on 31 July 2003 in which she dismissed the plaintiff's application. 5 An appeal against her Honour's decision was filed in the Court of Appeal. However, before that appeal was disposed of, the plaintiff's employer agreed to pay the plaintiff the sum of $150,000 plus $10,000 costs in settlement of all or any claims the plaintiff may have had against it with respect to the subject accident. The plaintiff, who had first contact with the defendants on or about 1 September 2003, had, by the time of the settlement proposal, become dissatisfied with the defendants as her legal representatives. She had not, however, terminated their retainer. Rather, the plaintiff had sought independent legal advice from her present solicitors. 6 On 13 February 2004, the employer's offer of settlement was accepted. The plaintiff provided instructions to the defendants to accept the employer's offer on her behalf. 7 The plaintiff commenced the present proceedings on 17 December 2004. Discussion 8 Some time prior to 6 October 2006 the defendants issued a subpoena directed to the plaintiff's solicitors. The relevant paragraphs of the subpoena required the production of: "1. All documents relating to or evidencing advice given to the plaintiff or instructions given by the plaintiff as to the prosecution of her entitlements arising from her injury that had been brought into existence from 1 September 2003 to 17 December 2004.

2. All diary notes, file notes, memos and correspondence generated by the plaintiff relating to or evidencing facts and circumstances of her injury that were brought into existence from 2 May 1999 to date.

3. All correspondence passing between the plaintiff and the defendants that was brought into existence from 2 May 1999 to date." 9 By a notice of motion filed 6 October 2006 the plaintiff sought to set that subpoena aside. The matter came before Hulme J on 3 November 2006. At that time his Honour was asked to deal only with the documents covered by paragraph 1 of the subpoena. His Honour dealt with that limited issue at page 3 of his reasons for judgment, which he delivered that day, in the following terms: - The principal issue before me, however, was whether any privilege had been waived in respect of the documents called for by paragraph 1. Prima facie the documents which would fall within that description are likely to be, at least initially, the subject of privilege. However, the plaintiff's claim against the defendants arises from what is said to be their inadequate prosecution of entitlements she had arising from injury. If the plaintiff has suffered damage in consequence of inadequacies in the defendants' prosecution of that claim, she is under an obligation to mitigate that damage. The documents which are sought by paragraph 1 seem to me calculated to bear on that topic of mitigation.

Accordingly, in my view they are no longer the subject of professional privilege and in these circumstances the notice of motion filed on 6 October seeking to set aside the subpoena should be dismissed. 10 On 6 November 2006 the solicitors for the defendants wrote to the plaintiff's solicitors. That letter confirmed that in accordance with the orders of Hulme J made on 3 November 2006, the plaintiff's solicitors would provide the defendants' solicitors with copies of all documents corresponding to the terms of paragraph 1 of the subpoena. The letter went on: - "We consider that this description includes all documents relating to or evidencing advice or instructions relating to your client's entitlements against her employer generally. We also consider that this will necessarily include, for example, file notes and correspondence relating to any advice or instructions whatsoever coming into existence prior to your client entering into the settlement agreement with her employer, because of the potential implications of such documents to the said entitlements.

If you do not concede this interpretation as correct, please advise immediately so we may consider what action to take." 11 By letter dated 9 November 2006 the solicitors for the plaintiff replied to that letter by which they clearly indicated that they did not concede as correct the interpretation contended for by the defendants' solicitors. The plaintiff's solicitors put in issue the meaning and effect of certain comments made by Hulme J in the course of his judgment dealing with the question of waiver of legal professional privilege by the plaintiff over certain of the documents in issue. In my view, it is unnecessary for me to decide what his Honour's comments meant for the purposes of the present application. I take this view for the reason that, whatever be the meaning of the preliminary comments made by his Honour as to whether the documents were prima facie likely to be the subject of a successful claim for privilege, his Honour appears in terms to have limited his decision to those documents which the plaintiff would be obliged to produce upon the more limited basis that they dealt with, and were relevant to, an issue in the proceedings - that is to say, the issue of mitigation of the plaintiff's loss. 12 The plaintiff's solicitor's letter then concluded as follows:- Thus, any documents that were generated for the dominant purpose of the plaintiff's professional negligence claim remained privileged.

As requested, we now enclose all correspondence, file notes and the like that related to any advice given to and/or instructions received by the plaintiff as to her " entitlements against her employer ".

There are sections in the material provided that the plaintiff continues to claim privilege [for], pursuant to Esso Australia Resources Ltd v Commission of Taxation of the Commonwealth of Australia [1999] HCA 67, which relate to her professional negligence case. 13 It was in these circumstances, therefore, that the defendants moved by Notice of Motion filed on 17 January 2007 for orders in the following relevant terms: - 1. General access be granted to the defendant[s] to documents produced informally by [the solicitors for the plaintiff] on 9 November 2006 pursuant to the subpoena for production issued by the defendant[s].

2. The plaintiff's claim of client legal privilege over any of the said documents be dismissed. 14 Mr Priestley of Counsel, who appeared for the defendants, argued that the plaintiff's claim for privilege had already been rejected by Hulme J or, alternatively, should now be separately considered and rejected. For the reasons briefly described by me in paragraph 11 above, I consider that his Honour did not, in his reasons for judgment of 3 November 2006, wholly reject the plaintiff's claim for privilege. It follows, therefore, that that claim should now be separately considered by me with respect to the documents that the plaintiff still has not yet produced.

15 For the purposes of the present application, those documents are to be found in each of two folders that I have marked as exhibits 1 and 2 respectively. Exhibit 1 is described as "DOCUMENTS PRODUCED CENSORED". Exhibit 2 is described as "DOCUMENTS PRODUCED UN-CENSORED". Exhibit 2 is identical to Exhibit 1 save that various portions of the documents contained in Exhibit 1, in respect of which a claim for client legal privilege is made, have been redacted. It was common ground between the parties that, in deciding the issues I am asked to decide in the present application, I should read, and compare, both exhibits. In doing so I note that each folder contains 33 pages numbered consecutively. Submissions

16 Mr Priestley provided written submissions in support of his application. At paragraph 3 of those submissions he helpfully set forth a series of categories that he gave as examples of the type of instruction or advice within which the plaintiff may have communicated with her solicitors. He submitted that if such documents did exist, they would be documents of the type to which his clients should have access. For sake of completeness, these categories are as follows: - (1) Instructions seeking advice as to whether to accept the proposed settlement;

(2) Instructions seeking advice as to what to do about the proposed settlement;

(3) Instructions seeking advice as to whether to follow Carroll & O'Dea's advice as to the proposed settlement;

(4) Advice as to whether to seek separate legal advice as to the proposed settlement;

(5) Advice as to the relevance of any professional negligence cause of action as it may relate to the proposed settlement;

(6) Advice as to the effect of the proposed settlement on any professional negligence cause of action;

(7) Advice as to the appropriateness of the proposed settlement;

(8) Advice as to whether advice would be given as to the appropriateness of the proposed settlement;

(9) Advice as to the reasons why advice would or would not be given as to the appropriateness of the proposed settlement;

(10) Advice as to what to do about the proposed settlement;

(11) Advice as to whether to follow Carroll & O'Dea's advice as to the proposed settlement.

17 Mr Priestley submitted, further, that the documents that had been produced to the defendants to date contain material arguably falling within these categories. He submitted that from the plaintiff's correspondence, and from the conduct of the earlier motion, the defendants were not satisfied that the masked or redacted material might not also fall within the terms of the subpoena, and the waiver. Mr Priestley was content for me to review the redacted material and determine the privilege claim.

18 Mr Higgs of Senior Counsel, who appeared with Ms Walsh, on behalf of the plaintiff, submitted that any implied waiver of privilege by the plaintiff only related to advice sought or given with respect to her accepting the offer of settlement in the Court of Appeal. He submitted that the waiver could only apply up to and including the date of settlement being 13 February 2004, rather than up to 17 December 2004 when the present proceedings were commenced. He submitted that upon a review of the confidential material contained in Exhibit 2, it is clear that none of the documents falls within any of the categories suggested by Mr Priestley listed in paragraph 16 above.

Conclusion 19 Upon my reading of the documents I have formed the view that each document, or in the case of a document over only part of which privilege is claimed, that part of the document, was generated for the dominant purpose of the plaintiff's professional negligence claim against the defendants. Allowing for the fact that the documents are by their very nature cryptic and dense, requiring a knowledge of what was in the writer's mind in order to achieve a full understanding, the documents are all in the form of, and appear to be, diary notes or records of meetings between the plaintiff and her legal advisers concerning, or with respect to, the seeking or obtaining of legal advice about what in due course became the present proceedings. They do not, in my opinion, deal with or intrude upon the question of whether or not the settlement, which was ultimately effected, was one that the plaintiff should have agreed to, or whether or not it was appropriate, or cognate notions. 20 Nor do the documents, in my opinion, refer to, or touch upon, any subject matter, such as mitigation of the plaintiff's loss, in a way that might arguably have generated an obligation to disclose them. They do not, to my observation, include "documents or information otherwise subject to privilege which are relevant to the issues between the parties and which it would be unfair to exclude" in the sense discussed by Farqharson LJ in Lillicrap v Nalder & Son [1993] 1 All ER 724 at 732. To my mind, the plaintiff has not put "in issue in the proceeding a matter which can not fairly be assessed without examination of relevant legal advice, if any, received by [her]": see Branson and Lehane JJ in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 166.

21 In my opinion the defendants' Notice of Motion filed 17 January 2007 should be dismissed with costs. Exhibit 2 should be returned to the plaintiff. Exhibit 1 should also be returned to the plaintiff and thereafter produced to the defendants by arrangement between the parties. **********

20/03/2007 - Date of decision added to cover sheet - Paragraph(s) Cover sheet

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