The documents as a whole cannot answer the description of documents that were brought into existence for the sole purpose of obtaining legal advice or communicating that advice.
Telstra's claim for privilege is put on the basis that parts of the document contain statements of legal advice which was communicated to Telstra by its senior counsel and solicitors in circumstances which attracted legal professional privilege. Telstra does not claim privilege for the whole of each document.
Most of the masked portions of the documents are said to record legal advice given to Telstra by its legal advisers.
It is well established that parts of documents may be masked so as to attract legal professional privilege to the masked portion: Grofam Pty Limited v Australia and New Zealand Banking Group Limited (1993) 43 FCR 408, a judgment of Heerey J.; and the earlier judgment of the Full Court of the Supreme Court of Queensland in Curlex Manufacturing Pty Limited v Carlingford Australia General Insurance Limited [1987] 2 QdR 335. See also Kettlewell v Barstow [1872] LR 7 Ch 686.
The question is whether passages in documents which are masked are properly the subject of a claim for legal professional privilege. I agree with Heerey J. in his judgment in Grofam that objection can be taken to production of part only of a document on the ground of legal professional privilege.
The masked portions of the documents for which legal professional privilege is claimed refer to advice given by Telstra's legal advisers either as to matters directly relevant to the present litigation or to Telstra's legal position generally. Doing the best I can, on the material before me, the masked portions are included in the documents for the sole purpose of conveying legal advice received by Telstra from its legal advisers. The documents as a whole are for mixed purposes, but the masked portions are not.
I uphold Telstra's claim that the masked portions of documents are immune from inspection on the ground of legal professional privilege.
Certain of the masked portions of document K7139 and K2224 are, however, conceded by Telstra to be not the subject of legal professional privilege; but Telstra contends that they are immune from disclosure to Optus because the masked portions are irrelevant. I accept the submission of counsel for Telstra that the masked portions in question are irrelevant. It is well established that it is permissible to mask irrelevant material in documents that are otherwise discoverable: Curlex; and G E Capital Corporate Finance Group Limited v Bankers Trust Co [1995] 1 WLR 172. Generally, masking on the ground of irrelevance is permissible only where that ground is deposed to in an affidavit from the party or the appropriate officer of a party if it is a corporation: see Curlex and G E Capital Corporate Finance Group Limited. But it is for the Court in the exercise of its discretion, to decide in a particular case whether this ground has been established.
The questions which arise for consideration in this motion have arisen in the course of an interlocutory skirmish preparatory to the hearing of a complex matter which is expected to take many weeks to hear. Doing the best I can on the material before me at this stage, I am satisfied that the objection taken by Telstra to inspection of parts of documents by Optus on the ground of irrelevance is established and I propose to uphold it.
It was not suggested in argument that the communications between Telstra and the Minister or the Department are to be regarded other than as communications between Telstra and a third person for the purposes of the law relating to third party communications. In other words, it was not suggested that the Court ought to regard the client, for the purposes of the rule relating to legal professional privilege, as including together Telstra and the Federal Government (the latter in particular being the Minister and the Department).
I turn then to the question whether the legal professional privilege of Telstra has been impliedly waived.
First, there is no absolute rule that disclosure of legal advice to a third party necessarily constitutes a waiver of privilege in respect of that advice: Goldberg v Ng [1994] 33 NSWLR 639 at 676.
Certain of the documents, namely, K2224 and K2907, were produced on discovery inadvertently. Optus does not assert that this in itself constitutes a waiver of legal professional privilege. Rather Optus asserts that, to the extent to which the documents convey legal advice received by Telstra, any privilege has been waived by disclosure of that material to the Commonwealth.
Whether there is an implied waiver of legal professional privilege turns generally upon whether there has been some conduct, on the part of the party asserting privilege, that renders it unfair to maintain that privilege against the opposite party in litigation: Attorney-General (N T) v Maurice (1986) 161 CLR 475 at 483, 487 and 493. The circumstances in which unfairness may arise will vary, but not uncommonly unfairness arises in circumstances where it is misleading or unfair to allow a party to refer to or use privileged material, and yet assert that the material itself (or material associated with it) is privileged from production. The
privilege may be waived, for example, if part of a document is read to the Court at a trial by counsel when the remainder is said to be privileged: Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529. It is unfair for a person asserting privilege to be allowed to abuse the privilege for the purpose of creating a false or inaccurate perception of the protected communication: Maurice at 488.
There are many cases where waiver of privilege occurs. In the case of a document that is made available to a third party to litigation, but where the disclosure is made for a specific and limited purpose without elements of unfairness to the opponent, waiver is not lightly implied: see British Coal Corporation v Dennis Rye Limited (No 2) [1988] 3 All ER 816 where a plaintiff delivered to the police privileged material which had been brought into existence for the purpose of civil proceedings in order to assist the police in their investigation into allegations of fraud; also Dingwall v Commonwealth of Australia (1992) 39 FCR 521 is an instance of privileged material being given by a party to proceeding to a potential expert witness, and privilege was not waived in that case.
Where a party to litigation discloses privileged material to a third party pursuant to a duty to do so, that generally will not be interpreted as implied waiver as it would be contrary to public policy if such disclosure was to have that consequence: British Coal Corporation at 822 and Goldberg at 651-2 and 675-6. Also, where a party asserting privilege in respect of a document makes a limited disclosure of it to a third party on the condition that privilege and confidentiality will be maintained, a condition which is accepted by the recipient, the inference of waiver will be even less readily drawn unless the privileged material has been used to the disadvantage of the other party to the litigation: Goldberg at 651 and 677.
The disclosure of the legal advice for which privilege is claimed by Telstra was made to the Minister and the Department in the four documents with which this motion is concerned for the purposes mentioned earlier. The disclosure was for specific, limited and defined purposes.
Nor is there any element of unfairness to Optus if it is not made aware of the contents of Telstra's legal advice. As was observed in Webb at 319 by Cooper J. the mere fact that a party is left in ignorance of the content of the legal advice cannot be said to be unfair because that is the inevitable consequence of the operation of the doctrine of legal professional privilege. Nor, it seems to me, does Optus suffer any evidentiary disadvantage from non-disclosure.
For these reasons, in my opinion Optus is not entitled to inspect the relevant documents or parts thereof for which legal professional privilege is claimed by Telstra.
There remains a question distinctly different from the questions of legal professional privilege and waiver. On 6 October 1993 another judge of the Court (Whitlam J.) made orders to the effect that inspection of documents be limited to counsel and solicitors for the parties who had first signed an undertaking not to disclose the contents of those documents to any person who had not signed a similar undertaking. Appropriate undertakings were subsequently given. Optus seeks to have the partners of the firm of solicitors retained by them, and solicitors employed by that firm, released from those undertakings in respect of three categories of documents, only one of which now remains in contention, namely, a category described as "The documents listed in the Schedule to the letter from Gilbert & Tobin to Mallesons Stephen Jaques dated 31 January 1995". That letter of 31 January 1995 is annexure "F" to the affidavit of Ms Halls sworn 13 February 1995 and the documents listed in the Schedule to the letter are reproduced in exhibit CAH3 to that affidavit. All the documents relate to what is described as Telstra's Strategic Partnership Tariff, which was discontinued in June 1994.
I am satisfied that there are issues in the proceedings as to whether the provision of telecommunication services in connection with the Strategic Partnership Tariff was
discriminatory within the meaning of s. 183(1) of the Telecommunications Act, or able to be "cost justified" under s. 185 of that Act.
Counsel and solicitors for Optus say that, in the absence of any release from the undertakings, the solicitors for Optus are in practical terms unable to advise Optus, or seek instructions from them, in relation to those issues. They say that if the documents truly remain commercially sensitive, that restriction would be appropriate, but on their face the documents remain only of historical interest.
Counsel for Telstra referred to a course of practice which has developed between the parties whereby, if dissemination of documents was desired beyond the legal representatives of the parties, it could be achieved upon appropriate undertakings being given by external consultants. This involved identifying the individuals to whom disclosure was required, and ascertaining whether there was any objection to the disclosure to those persons or not. I have been informed that this practice has worked fairly satisfactorily to date with the legal advisers and external consultants. It appears that the documents that concern the strategic partnership agreements relate to major customers of Telstra in long term agreements including pricing strategies, customer preferences, relativities and matters of this kind. They are said by Telstra to be still of an ongoing sensitive commercial
nature. Telstra has said that if a wider dissemination of the material is desired, and if the people are identified by Optus and appropriate undertakings are given, there may be no difficulty with those people being allowed to see the documents and therefore to instruct counsel and solicitors for Optus.
It is difficult for the Court to determine at this stage the extent to which the documents in the category mentioned above (those listed in the Schedule to the letter from the solicitors for Optus of 31 January 1995) are still properly the subject of a claim for confidentiality. Counsel for Telstra asserts that they are, and on the face of the documents as identified to the Court I am not persuaded that the documents are not of a commercially sensitive nature.
I urge the parties to try and resolve this matter within the existing framework of inspection of documents by legal advisers, experts and others. If a particular problem arises which is insoluble then it can be brought back to the Court for determination.
In conclusion, I see no reason to make specific orders at this stage with respect to the motion before the Court; but I am prepared, of course, to hear further submissions from counsel with respect to the matter at an appropriate time.