Lowe v Lang

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1082/96 MICHAEL CAMPBELL LOWE v BARRY A LANG & 1 ORS

JUDGMENT (See trancript page 638, line 38) HIS HONOUR: 1 This is an application by the defendants for access to documents which are "MFI 10" in these proceedings and at present contained in an envelope also marked MFI 10 and further marked "Privileged. Access Denied". The application arises in the following way. 2 Mr Bradford Stuart, solicitor, of Orange had undoubtedly acted for the plaintiff Mr Lowe in relation to the transaction the subject matter of these proceedings ("the transactions"). There was a suggestion at some stage that he had also acted for Mr Lang or the defendants, but that does not now seem to have been so. Certainly there is no dispute that on one occasion Mr Lang attended with Mr Lowe at Mr Stuart's office and the transaction was discussed among the three of them. When it was apparent that the matter was to come to court, Mr Lowe engaged Mr Carpenter of Baldock Stacy & Niven to act as his solicitor in relation to the proceedings, and that has continued to be the situation up to the present time. Mr Lowe, however, continued to regard Mr Stuart as his solicitor for other purposes. 3 Two affidavits by Mr Stuart concerning his dealings with Mr Lowe and Mr Lang and concerning the transaction generally were filed and served and have been read on behalf of the plaintiff in these proceedings. During preparation for the trial, some parts of Mr Stuart's file or files in relation to his activities regarding the subject transaction were produced to the defendants and have been inspected by them. When Mr Stuart came to be cross-examined, he was asked, in effect, whether the balance of his file or files concerning the matter were present at Court - that is, the portions that had not been produced for inspection by the defendants. He answered that they were, and upon the defendants' call, those documents were delivered into the custody of the Court as on subpoena. This course is provided for in s 36 of the Evidence Act 1995 ("the Evidence Act") which undoubtedly applies to the adducing of evidence in Court in these proceedings. 4 The documents were marked for identification 10. A claim for inspection has already been allowed over opposition in relation to a number of the documents on the basis that, upon my inspecting the documents at the invitation of the parties, those appeared to be documents which did not attract legal professional privilege at all. Others of the documents, which are now separately marked MFI 12, have had a claim of privilege upheld, because the evidence showed that they, being essentially a solicitor and a barrister's bills of costs, were delivered by Mr Lowe to Mr Stuart for the purpose of Mr Lowe obtaining Mr Stuart's advice concerning the appropriateness of the bills: Lowe v Lang [2000] NSWSC 302. 5 The balance of the documents continue under the mark MFI 10. For the purpose of determining the present application, I have inspected those documents fully at the invitation of both the plaintiff and the defendants. They fall, essentially, into three categories: correspondence between Mr Carpenter, the plaintiff's present solicitor, and Mr Stuart for the purpose of obtaining Mr Stuart's evidence; drafts of the two affidavits of Mr Stuart which have been read in the proceedings before me; and an advice obtained by Mr Carpenter from counsel concerning the conduct of these proceedings. The evidence before me on this application concerning how the advice came to Mr Stuart is that it was sent under cover of a fax in the plaintiff's name sent from the office of his wife, who is an accountant. The advice had been sent to Mr Lowe by Mr Carpenter under cover of a letter which suggested, "Perhaps you should speak to Brad Stuart about the necessity to obtain some more detail from him". 6 The application before me is, in effect, an application under Part 37 r 10 of the Rules for inspection of documents produced on subpoena and not admitted into evidence. The parties have argued the application on the basis that the law which applies is the common law. It was decided by the High Court in Northern Territory v GPAO (1999) 73 ALJR 470 that, even where the Evidence Act is in force, the provisions in that Act as to privilege relate only to the adducing of evidence and the law applicable to privilege in relation to subpoenaed documents remains the common law. This produces a situation which can be anomalous, because the tests of privilege and the circumstances in which privilege is waived under the common law and under the Evidence Act will, at times, be quite different. For instance, it may be that the concept of fairness which is central to the common law doctrine of waiver has no place in the operation of sub ss (2) and (4) of s 122 of the Evidence Act: Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 371; and see the joint judgment of Branson and Lehane JJ in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152. 7 Steps have been taken by amendment of the Rules of this Court to remove or reduce the anomaly. The recently promulgated amendments to Part 23 of the Rules (Amendment No 332) seek to incorporate the concept of privileged documents under the Evidence Act in the requirements as to inspection of documents and discovery generally under Part 23 of the Rules: see Pt 23 r 1 as now amended. That Amendment came into effect on 1 October 1999 and proceeds by reference to productions of documents made after its promulgation rather than to proceedings commenced after its promulgation. However, the completely new Part 23 which was so amended was introduced in 1996. The previous Part 23, to which no such amendment has been made, was preserved in operation in relation to proceedings commenced before 1 October 1996, and thus applies to these proceedings. For this reason, the recent amendment of the Rules has no application to the present proceedings and the parties have correctly proceeded on the basis that it is the common law which must govern the present application. 8 The ambit of the contest is comparatively narrow. A number of relevant matters are not in contention between the parties. It is not contended that privilege did not initially attach to the documents, MFI 10, as being communications passing either between the party and a third party with reference to the litigation with or without the request or suggestion of the party's solicitor for the purpose of being put before the solicitor with the object of enabling him to prosecute or defend an action, or communications directly between the solicitor and such a person: see per Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246. Secondly, there is no contest that the plaintiff, by putting into evidence Mr Stuart's account of his dealings with the plaintiff and Mr Lang, effected a waiver of the legal professional privilege relating to those communications, which undoubtedly vested in him. The question that was contested before me was not whether there was any waiver, which is conceded, but how far does the waiver go? 9 The plaintiff concedes that the waiver goes to all documents held by Mr Stuart relating to or reflecting upon his original dealings with the parties and the transaction, but says that it does not extend to documents created for the purpose of this litigation, to which what is loosely called "litigation privilege" attaches. And if that proposition be not generally correct, then it does not extend either to the documents in question, or not to any part of those documents that reveals confidential matters beyond the ambit of Mr Stuart's earlier dealings with the parties and the transaction. The plaintiff says that the documents should be divided up, document by document or, if necessary, even within a document, to exclude material relating to the conduct of the litigation, but not relating to Mr Stuart's relationship to or dealings with the parties. Mr Deakin, of Queen's Counsel for the defendants, on the other hand adopts the stand that, once privilege is waived by bringing forward the solicitor's evidence, then the waiver extends to any document that relates in any way to the dealings between Mr Stuart and the parties, or concerning the transaction, whether or not those documents would attract litigation privilege quite separately from the original advice privilege which they earlier had. What I say hereafter must be viewed in the light of that narrow ambit of the argument. 10 It is well established that at common law the guiding principle in deciding whether there should be a waiver of legal professional privilege, and the extent of the waiver, is what is required by fairness in all the circumstances. That is established by the decision of the High Court of Australia in Attorney-General (NT) v Maurice (1986) 161 CLR 475. That case concerned a claim book in an Aboriginal land claim which had been served when the claim first came before a Commissioner, but was not served when the claim, not determined by the first Commissioner, subsequently came before a second Commissioner for hearing. The claim book referred to documents in respect of which confidentiality was claimed, but apparently without setting out their contents. The claim book never went into evidence, either before the first Commissioner or the second Commissioner. The High Court ruled that the privilege in the confidential documents referred to in the claim book was not given away. The reasons given by the various of the Justices differ, to some degree, but all examine closely the circumstances of the case to determine what fairness required in the circumstances. 11 A statement underlying the basic principle of fairness that has been often quoted is that contained in 8 Wigmore on Evidence (McNaughton rev, 1961) par 2327. "What constitutes a waiver by implication ? Judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated in every waiver, ie, not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder."

A second most important statement as to the way this underlying principle operates was made by Gleeson CJ, when Chief Justice of this Court, in Benecke v National Australia Bank (1993) 35 NSWLR 110 at 111 - 112: "The rule that prevents an unauthorised disclosure of confidential communications between a client and a legal adviser, when such communications are for the purpose of obtaining legal advice, or for use in existing or anticipated litigation, constitutes a restriction upon the capacity of courts to ascertain the truth in certain circumstances. That restriction, however, is regarded as acceptable on the ground that it promotes the public interest and assists the administration of justice, by facilitating the representation of clients by legal advisers. It does this by encouraging uninhibited communication. Thus, in cases where the role operates, one aspect of the public interest is preferred against another (discovering the truth). It would be inconsistent with the reason for the existence of the privilege to permit it to operate in the manner for which the appellant contends. But for her own actions, the privilege would have enabled the appellant to insist that nobody should be able to give evidence of the confidential communications between the appellant and her senior counsel about the settlement of the first proceedings, without the consent of the appellant. However, it did not enable the appellant to make public her version of those communications and, at the same time, to enforce silence on the part of others who disagreed with that version. The law permits the search for the truth in legal proceedings to yield, in certain circumstances, to the public interest in preserving the secrecy of communications between lawyer and client. In the present case, however, the appellant herself lifted the veil of secrecy by giving her version of the communications. Thereafter, there was no reason in principle why the pursuit of the truth should not take its course, or why the court should be inhibited in seeking to ascertain the true facts concerning those communications. The circumstance that the appellant is aggrieved by the conclusion reached by Giles J as to where the truth lay in the matter is irrelevant to the question of legal principle involved."

See also per Gleeson CJ and Gaudron and Gummow JJ in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 74 ALJR 339 [35]. 12 Whilst counsel have put a good deal of authority to me in the course of argument, it was stated that there was no authority which went to the question of whether the waiver of advice privilege by leading in the case evidence as to the communications involved in seeking and getting that advice extended automatically to waive litigation privilege in respect of the same subject matter. That is not entirely correct. In Maurice itself Dawson J at 498 referred to the English decision of Geo Doland Ltd v Blackburn Robson Coates & Co [1972] 1 WLR 1338. In that case, rather similar to the present, Geoffrey Lane J, in the Queen's Bench Division of the High Court, ruled that all matter concerning the communications between solicitor and client had been waived in relation to material up to the time of the commencement or contemplation of proceedings. His Lordship, however, ruled that litigation privilege continued to apply to communications with the solicitor about the subject matter after that time. 13 The situation in England is, however, far from clear. His Lordship's approach was criticised by Hobhouse J in General Accident Fire & Life Assurance Corporation Ltd v Tanter (The Zephyr) [1984] 1 WLR 100. Hobhouse J appeared to take an approach similar to the "subject matter" view which has been espoused on behalf of the defendants before me. Both decisions were the subject of analysis and criticism in Phipson on Evidence (14th Ed, 1990) par 20-37, and in Derby & Co Ltd v Weldon (No 10) [1991] 1 WLR 660 Vinelott J ruled that both types of privilege had been waived but the decision in that case related to a single document which attracted both types of privilege. The production of the document constituting the waiver thus waived both types of privilege by the one act of production. His Lordship appeared to regard the view of Geoffrey Lane J, in the Doland case, as in general terms correct. The law in England is thus far from clear. In any event, what is of importance under authoritative decision in this country is, in my view, that the fairness of the situation be assessed upon the facts of each individual case. 14 The plaintiff has already conceded inspection of all documents other than communications with Mr Stuart as witness in contemplation of or after the commencement of the litigation. I do not take the view that the calling of Mr Stuart as a witness automatically waives all privilege of any type in relation to any communication that touches upon the subject matter. In saying this I bear in mind what was said by Gleeson CJ in Benecke. In my view, fairness does not demand the revelation of what passed between Mr Stuart as witness, and the present solicitor in the litigation, for the purpose of preparing Mr Stuart's evidence. It may be, fairness being the touchstone, there may be circumstances in which the litigation privilege ought not survive but, in my view, there would need to be particular circumstances that required that the litigation privilege ought also be waived. 15 As I have said, I do not see any indication that fairness requires that the litigation privilege be waived in this case. If I am wrong in that as a general proposition, I ought to add that I have, as indicated at the start, examined the documents at the invitation of both parties for the purpose of determining this application. It appears to me that the documents, in fact, contain no further information concerning what passed between the solicitor and the parties or relating to the solicitor's participation in the transaction than has already been revealed in documents in respect of which the plaintiff conceded that the privilege was waived. Some of them do, however, contain material relating to the conduct of the proceedings on the part of the plaintiff totally unrelated to Mr Stuart or his involvement in the transaction. Certainly it does not seem to me that fairness requires the affording of inspection of documents which do not contain additional material relevant to Mr Stuart's evidence, or participation in or knowledge of the transaction, but do contain other confidential material in respect of which the plaintiff has not done anything to render it unfair that the confidence should be retained. 16 The result of the foregoing is that I refuse the application for inspection of the documents MFI 10. The costs of the application are reserved. …oOo…

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