National Australia Bank Ltd v C & O Voukidis Pty Ltd

Consideration

It cannot be a proper basis to suggest that privilege has not been waived simply because the only use to which the subpoenaed documents would be put would be to impugn the Fourth Defendant's credit. In Liristis v Gadelrabb [2009] NSWSC 441 Brereton J said at [5]: I do not understand it ever to have been a proper objection to a subpoena that it seeks documents relating only to credit. Indeed, one of the fundamental distinctions between the processes of subpoenas for production and discovery is that subpoenas, unlike discovery, may be used to obtain documents relevant only to questions of credit, for the purpose of assisting cross-examination as to credit. It is true that in Fried v National Australia Bank (2000) 175 ALR 194, Weinberg J in the Federal Court of Australia said that it was inappropriate to permit a subpoena to stand which does little more than to trawl for documents that may be used to impugn the credit of a particular witness. I do not disagree with that observation, but that is not to say that it is inappropriate to permit a subpoena to stand that seeks documents that may be used to impugn the credit of a particular witness, as distinct from merely trawling for such documents. The concept of "trawling" in this context is the same as that of "fishing". It is not fishing to seek documents when there are reasonable grounds to think that fish of the relevant type are in the pond or, as it has been expressed in other cases, that it is "on the cards" that relevant documents (even if they are relevant only to credit) will be elicited by the subpoena.
The Fourth Defendant relies on s 102 of the Evidence Act which provides that credibility evidence about a witness is not admissible. However, that does not take account of s 103 which provides that the credibility rule does not apply to evidence adduced in cross-examination of a witness if the evidence could substantially affect the assessment of the credibility of the witness. One of the matters to which the Court may have regard in sub-s(2) is whether the evidence tends to prove that the witness knowingly or recklessly made a false representation when the witness was under an obligation to tell the truth. That was certainly the position in the present case.
It may be accepted that the particular purpose for which the subpoena required the production of documents was what was said in the affidavit for the purpose of justifying leave to amend the Fourth Defendant's cross-claim. As I have noted, the Fourth Defendant accepts that it would have been unfair had she sought to rely on that affidavit. That concession impliedly accepts that privilege was waived in that regard. The question is, however, whether the privilege can be waived for one purpose but not another and whether once waived it remains waived. It is relevant to consider that matter in a context where none of the matters about which the Fourth Defendant seemingly made disclosure remain as issues at the final hearing.
In Mann v Carnell the joint judgment said at [29]: …What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
The joint judgment also referred to a number of English cases and noted at [32]: … in the circumstances of those cases, disclosure to a third party for a limited and specific purpose did not lead to a loss of the privilege as against a person opposed in litigation.
In Osland the appellant had been convicted of murdering her husband after enduring violence at his hands. After unsuccessful appeals, she petitioned the Governor for a pardon based on the prerogative of mercy. The Attorney-General, to whom the petition was referred, obtained advice from three Senior Counsel. The Attorney-General thereafter announced that the petition had been denied. He issued a press release saying (inter alia): I appointed a panel of three senior counsel, Susan Crennan QC, Jack Rush QC and Paul Holdenson QC, to consider Mrs Osland's petition. This week I received a memorandum of joint advice from the panel in relation to the petition. The joint advice recommends on every ground that the petition should be denied. After carefully considering the joint advice, I have recommended to the Premier that the Governor be advised to deny the petition.
The appellant argued that there had been a waiver of privilege with respect to the advice from the senior counsel.
The joint judgment said this at [48]: The evident purpose of what was said in the press release was to satisfy the public that due process had been followed in the consideration of the petition, and that the decision was not based on political considerations. The three eminent lawyers who gave the advice were appointed following consultation with the State Opposition. They were external to the Department. Their advice covered all the grounds upon which the petition was based. They recommended denial of the petition. Their advice was carefully considered, and the petition was denied. The Attorney-General was seeking to give the fullest information as to the process that had been followed, no doubt in order to deflect any criticism, while at the same time following the long-standing practice of not giving the reasons for the decision. This did not involve inconsistency; and it involved no unfairness to the appellant. If she had a legal right to reasons for the decision, then she still has it. If she had no such right, the press release did not deprive her of anything to which she was entitled. What the Attorney-General said did not prevent the appellant from making public her petition, or any part of it, as and when she desired.
They then went on to say: [49] Whether, in a given context, a limited disclosure of the existence, and the effect, of legal advice is inconsistent with maintaining confidentiality in the terms of advice will depend upon the circumstances of the case. …[Q]uestions of waiver are matters of fact and degree.
I accept in the present case that what was disclosed was disclosed to the opposing party. However, it was disclosed for a limited purpose in a particular context, namely, for the purpose of being allowed to amend a pleading to include causes of action on which the Fourth Defendant said she had received no advice. For other reasons the Fourth Defendant has been denied the opportunity to pursue those causes of action.
When considerations relating to waiver are based on inconsistency and relevant unfairness, it is difficult to see how privilege has been waived in the present case. There is no inconsistency for the issues in question remaining in the proceedings. It may be accepted that a subpoena can be issued to challenge credit alone. However, that credit is able to be challenged because of the clear and unqualified statement made by the Fourth Defendant's counsel on instructions that what was contained in the affidavit was wrong. Even if it is accepted as being unfair to the Bank not to have the precise documents to show why the statements in the affidavit were wrong, the issue is not concerned with an overriding principle of fairness operating at large. The enquiry is between the issue to be determined and the inconsistency of the maintenance of the privilege.
The position in the present case may be contrasted with that in Banksia Mortgages Ltd v Croker [2010] NSWSC 535. In that case the solicitor had sworn an affidavit to resist a summary judgment application against his client. In the affidavit he referred to what were privileged emails and discussions with his client, and said that what was set out in the affidavit was based on that material. The Plaintiff sought access to the emails at a later stage of the proceedings.
Schmidt J said: [35] The necessary consequence of the disclosure of part of the communications received from Mrs Croker by email, is that the maintenance of a claim for privilege in the emails at this stage of the proceedings, is inconsistent with that earlier disclosure. The result of the course taken is that as well as what is contained in the affidavit being disclosed, the privilege which attached to Mrs Croker's email communications with her solicitor as to those matters was also waived by the filing and service of Mr Mitry's affidavit. While the emails were confidential communications which were privileged and to which s 119 of the Evidence Act attached, once their contents were disclosed, or partially disclosed as they were, that privilege was lost. [36] It was argued for the defendants that it was relevant that the affidavit was not to be further relied on in the proceedings. That is not determinative of the question which lies between the parties. [37] At common law, the question of waiver of legal professional privilege is concerned with notions of fairness between the conduct of the client and the maintenance of the privilege (see Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1). Where there is conduct which is inconsistent with the maintenance of the privilege, it does not matter that the privilege holder did not subjectively intend to lose the benefit of the privilege (see Federal Cmr of Taxation v Rio Tinto Ltd [2006] FCAFC 86 ; (2006) 151 FCR 341 at [p 343]). … [39] The disclosure here in question was made by affidavit on which the defendants relied to their advantage in order to resist summary judgment. That was a voluntary disclosure. In terms of s 122(3) of the Evidence Act, there can thus be no question that there was knowing and voluntary disclosure of the communication and that none of the exceptions under s 122(5) arise in those circumstances. [40] While the defendants may themselves not wish to rely further on the affidavit, what was disclosed is plainly relevant to what remains in issue between the parties and that is material on which the plaintiff may wish to rely at the further hearing, even if the defendants do not. In these circumstances fairness could not permit the defendants to have partially revealed Mrs Croker's communication to their advantage and to now claim privilege in relation to the balance of the communication. … [42] Here there was disclosure by the lawyer of the client's email communications, on the instructions of the client, in order to achieve the benefit of resisting an order for summary judgment. It follows that as a matter of fairness between these parties, it may not now be asserted that this disclosure may be ignored, or that it did not constitute a waiver of the privilege lying in those email communications. (emphasis added)
In that case the privileged emails had been used for the purpose of resisting summary judgment. They were self-evidently relevant for the final hearing of the case, and it would have been unfair not to hold that privilege had been waived.
Similarly, in Weston (as special purpose liquidator of One.Tel Ltd) v News Ltd [2010] NSWSC 1288 Barrett J held that by the Plaintiff putting forward certain privileged documents before the Court to obtain an extension of time for service of the Statement of Claim, there had been a waiver of privilege although it was an ex parte application with no right of the Defendant to be heard. However, because the Defendant had the right to have any such order discharged, there was a well-founded expectation that the decision based on that material would become the subject of an interlocutory proceeding of an adversarial kind.
In both cases, the privileged material had been used to the party's advantage. In the present case it has not been used and it is not relevant to any remaining issue in the proceedings. I do not consider that its disclosure by the service of the affidavit brings about any inconsistency that results in waiver of the privilege.
In my opinion, privilege has not been waived.

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Judgment (7 paragraphs)

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Legislation Cited (2)

Cases Cited (20)

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