McCabe v British American Tobacco Australia Services Limited

All documents coming into existence in or after 1985 including but not limited to correspondence, correspondence between the defendant and its solicitors, internal memoranda and internal notes, relating to:

(1) the defendant's obligation in relation to discovery of documents in litigation concerning ill-health caused by smoking of cigarettes;

(2) the destruction of documents which may be the subject of discovery in litigation concerning ill-health caused by the smoking of cigarettes;

(3) the destruction of documents discovered or obtained by the defendant in the course of the Cremona litigation;

(4) the destruction of computer discs containing images of documents compiled during or after the Cremona litigation;

(5) the creation and maintenance of computer discs containing images of documents compiled during and after Cremona litigation.

14. As may be seen, the documents sought from the defendant on the relevant topics listed in the Notice to Produce and in the subpoenas are not confined to those which emanated from or were directed to the defendant's solicitors.

17. Likewise, the subpoenas to the solicitors seek production of documents relevant to the topics even if they were not the subject of legal advice to the defendant. The defendant has objected to the production by its solicitors or from itself of a range of documents under the subpoenas and the Notice to Produce, and has claimed legal professional privilege.

20. The defendant submits that privileged documents are not available for inspection merely because they might throw light on the strength or weakness of the case as to specific issues, or generally.

23. A range of documents to which no claim of privilege has been made have been produced.

26. As to those remaining documents, on which privilege is claimed, counsel for the plaintiff submits that by their description many of the documents do not relate to legal advice, in any event. However, insofar as privilege is properly open to be claimed, then, counsel submits, the privilege has been waived, impliedly, by the conduct of the defendant.

29. I have had lists provided to me by the defendant and the solicitors which identify the disputed documents, concerning the relevant topics listed in the Notice to Produce and subpoenas, by a brief description and date. I will address the issues concerning privilege on the basis that the description of the documents will, in the main, be sufficient for my purpose in resolving whether any claim to privilege might be open, and whether, if it is, the privilege in that document has been waived. I do not believe it will be necessary for me to examine many, if any, of the documents before ruling on their production.

32. I will first address the question of waiver. There was no substantial dispute between counsel as to the relevant legal principles. Mr Forrest QC, for the plaintiff, contended that there was implied waiver by virtue of the fact that annexed to the affidavit of Mr Maher (who at the relevant time, was in-house solicitor for the defendant) which was tendered by the defendant in opposition to this application, there were letters of advice delivered by Clayton Utz on 7 July 1992 and by Mallesons on 19 March 1998, as to the legal obligations of the defendant with respect to the retention and destruction of documents.

35. Additionally, Mr Maher exhibited his own letter to Mallesons dated 9 March 1998, in which he requested advice as to the defendant's obligations with respect to documents which might be relevant in any future legal proceedings. On 31 January and 1 February 2002 Mr Maher gave evidence before me and was cross-examined on the contents of his affidavit.

38. In my view, the affidavit and oral evidence of Mr Maher led before me on this application made use of the advices in order to establish or advance the following propositions: first, that the defendant had a document retention policy which was longstanding and which pre-dated the instigation of the Hold Order of November 1990; secondly, that the defendant acted upon legal advice as to the propriety of cancelling the Hold Order in March 1998, and applying such a policy after the Cremona and Harrison proceedings had come to an end.

41. The third proposition advanced by Mr Maher was that the destruction of documents which occurred upon the completion of the proceedings in Cremona and Harrison, was performed as a routine application of an appropriate commercial document handling process and was not conducted with the primary intention of destroying all documents which might prove damaging to the defendant in later litigation.

44. In emphasising the appropriateness of the course adopted, Mr Maher asserted that legal advice had been first sought, and was given. He rejected any suggestion that the decision to destroy documents was taken for the purpose of prejudicing later proceedings (with that purpose being sought to be masked by virtue of the receipt of legal advice, which was received in order to support a contention of innocent intention as to the destruction of documents).

47. Mr Maher's evidence was that the advice received from Mallesons in 1998 was consistent with legal advice that had been previously been received.

50. The evidence of Mr Maher will no doubt be relied on by the defendant in support of the contention that it was no part of the purpose of the destruction of documents to damage the prospects of a later litigant receiving a fair trial.

53. The defendant's position, as maintained by Mr Maher, is that the decision to lift the Hold Order in 1998 - almost immediately following the conclusion of then current proceedings - was merely the continuation of an approach to document management which had been in place, substantially, since the 1970s.

56. Having used the letters of advice in that way it is now disclosed that there were apparently many other instances of the defendant seeking and receiving legal advice as to its document retention policy.

59. Mr Forrest submits that, "ordinary notions of fairness", as discussed by Deane J and by Mason and Brennan JJ in Attorney-General of the Northern Territory v Maurice[1] dictate that the plaintiff have access to the balance of the collection of advices to the defendant on these topics, from which collection the two advices were selected by the defendant to support the contentions that the defendant made through Mr Maher.

62. Mr Middleton QC, for the defendant, submitted that if there was any waiver, which he denied, then it was only with respect to such advice on those topics as was given at or about the time in 1998 when the Hold Order ceased to operate and the document destruction took place pursuant to the policy. He cited General Accident Fire and Life Assurance Corporation Limited v Tanter & Ors[2], a decision cited by Gibbs CJ in Attorney-General v Maurice[3].

65. I accept that where there has been a waiver it is important to identify the issue or issues on which the waiver has arisen, and that access to documents should not be permitted beyond those issues. The waiver might, however, extend to related topics or to material which is associated with the identified topics.[4] The relevant question of fairness must be judged in the light of all the circumstances of the case[5].

68. The documents to which waiver might apply are not confined to those of precisely the same character as the documents which create the waiver - namely, in this case, letters formally requesting legal advice and letters of advice - but would extend to such related documents as might be indirectly relevant, in that they might provide insight into the content, circumstances and consistency of the advice which was requested and received at other times on those topics.[6]

71. In my view, there has been waiver as to the issues which I have identified, and as a matter of fairness the plaintiff should have access to other advices and documents relevant to advice which the defendant obtained, or relating to advice sought from its solicitors, and other documents as may bear upon such other advice concerning those issues.

74. The question then arises whether production of documents should be limited to those issues which originated only in a time frame related to the decision to cancel the Hold Order, in 1998. In my view it should not be so limited.

77. The two written legal advices which were produced were written in 1992 and 1998, and the production of the earlier advice was used by Mr Maher to suggest that it represented advice which was of continuing application throughout the period 1992 to 1998. The fact that such advice - and not different advice - was operative throughout that period is plainly regarded as important to the defendant's contention as to the course of action taken, and the reasons for the destruction of documents, in 1998.

80. Mr Forrest submitted that the evidence of Mr Maher makes it also relevant whether the defendant had a policy before 1992 as to document retention which was different to that adopted in 1998. If the documents showed that to be so then, he submitted, it would cast doubt on the denial that the destruction of documents in 1998 was for the primary purpose of prejudicing the prospects of a fair trial of later litigants.

83. The defendant's position, as asserted by Mr Maher, was that the program of document destruction which was implemented as soon as the Cremona and Harrison litigation concluded was merely undertaken as part of a sensible management program and was not conducted for the purpose of damaging the prospects of any future litigant by destroying evidence harmful to the defendant's cause.

86. In advancing that assertion Mr Maher emphasised that the document retention policy had been in place for many years prior to the Hold Order being introduced in November 1990, when the first Australian litigation concerning the defendant commenced. Mr Forrest submitted that privilege as to advice delivered before 1990 was, therefore, also waived. Furthermore, he submitted that advice delivered after the destruction took place in 1998 should also be open to inspection, as it may throw light on the assertions of Mr Maher as to the motives for what occurred in 1998.

89. As to the documents produced by the defendant, I have assumed that they are all subject to a proper claim of legal professional privilege, save where I otherwise specify, and I have so assumed primarily on the basis of the description given to the documents by those producing them.

92. It follows that if any of the documents are to be disclosed to the plaintiff's advisers, they must, first, be relevant to the issues which I have identified in advancement of which the defendant, through Maher, selectively produced the advices from Clayton Utz and Mallesons.

95. In assessing the question of fairness, in all the circumstances of the case, it seems to me that even if documents appear to address the issues on which I consider there has been waiver, production should not be ordered where they are too remote in time before the relevant debate on the issues with which the witness's evidence was concerned. But as I have said, the use of the documents by Maher certainly encompassed a period, in my view, from 1990 to 1998 and was not confined to circumstances, and advice, arising in 1998.

98. It is important to note that in his letter to Ms Chalmers of Mallesons dated 9 March 1998, Mr Maher stated that the defendant had received previous legal advice that there was no obligation to retain documents relevant to legal issues where no proceedings were on foot. In his affidavit Mr Maher, at paragraphs 11 to 18, also again suggests that there was such previous advice. That advice has not been disclosed.

101. In my view, the two legal advices having been produced in support of an assertion of continuity of legal advice consistent with that later given by Ms Chalmers in March 1998, and there being a denial that the true purpose of destruction of documents in or about March 1998 was to thwart later legal proceedings, the plaintiff's advisers should, in fairness, be able to examine such other advices and documents on those topics (and requests for advice) as might disclose whether or not the advice given by Ms Chalmers was not relied on, in fact, but was merely used to disguise the true purpose for the implementation of the program.

104. Similarly, unless any document, on its face, suggests otherwise (and allowing for a period from early 1990 and extending some months after the 1998 advice of Mallesons) in my view, fairness would not dictate that documents of advice, or other documents, outside those timeframes, on those topics, should be produced.

107. In my view, all documents relating to the issues which I have identified over a period from early 1990 to late 1998 should be produced. Documents outside those dates, in my view, are too remote from the specific issues on which there is waiver for them to be produced.

110. In the result, I conclude that the following documents in the defendant's list of documents should be produced. I will go through the list: numbers 1 through to 13, inclusive; that portion of document 14 which deals with discovery, and omitting all other topics; documents 15 to 17; document 18, but only insofar as that portion relates to discovery; documents 19 to 34; documents 125 to 142; documents 153 to 158. That is a total of 56 of the 174 documents listed by the defendant for which privilege was claimed.

113. As to the list of documents from Clayton Utz, applying the same principles and, once again, assuming from their description that unless specifically stated otherwise all the documents are subject to a proper claim of privilege, the waiver as to the relevant issues would mean that the following documents should be produced: documents 53 to 60; document 66.

116. As to the list produced by Mallesons the following documents should be produced: documents 1 to 3. As to documents 4 to 7, I cannot tell from their description whether they constitute legal advice and, if so, whether privilege is properly claimed and whether, assuming privilege has been appropriately claimed, the privilege has been waived by reference to the identified waiver issues. If these documents do not in fact constitute legal advice they may be relevant to one or more of the categories listed in the subpoena and, therefore, be liable to be produced. The other documents which should be produced are: documents 8 to 23; documents 30 to 33; documents 46 to 81.

119. With limited exceptions, to which I have referred, it seems unnecessary, in my view, for me to peruse any of the documents for the purpose of making an order of disclosure. It may be that the plaintiff's advisers will not press for production of those which I suggested might require perusal before I can make a final decision.

122. I propose to give counsel the opportunity to consider the documents which I have listed for production and to consider the process and timing for copying and inspecting of such documents prior to the cross-examination of Ms Chalmers and I will reserve the question of costs related to the resolution of this issue.

[1] [1986] HCA 80; (1986) 161 CLR 475 at 492-3, 497-8, respectively.

[2] (1984) 1 All E.R., 35, at 46-48 per Hobhouse J.

[4] See Attorney-General v Maurice per Gibbs CJ, at p. 481-483.

[5] See Goldberg v Ng (1995) 185 CLR p. 83, at 96.

[6] See R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 at 696.