Plaintiff v Defendants

1. Mr Callaway was born on 7 April 1967. He was made a ward of the state in Victoria between October 1967 and January 1984 during which time he was placed in many institutions and homes. He has made a claim for damages for personal injuries sustained as a result of suffering physical, sexual and psychological abuse and neglect during his wardship. His placements include Baltara, Allambie and Turana managed by the State of Victoria and the Bayswater Youth Training Centre run by the Salvation Army, who are respectively the first and fourth defendants in the present proceeding. His claim also involves placements under the care of the third and fifth defendants.
2. Mr Callaway previously issued a proceeding in the County Court of Victoria against the first and fourth defendants (the prior claim) and entered into a Deed of Release dated 14 May 2009 (the Deed). The first and fourth defendants have filed defences relying on the Deed as a complete bar to the present proceeding.[1] Consequently Mr Callaway has brought an application by summons filed 4 July 2025 to set aside the Deed pursuant to s 27QD of the Limitation of Actions Act 1958 (Vic) (Limitation Act). The set aside application has not yet been heard.
3. The question in this discovery application is whether, by pleading the Deed as a bar to the current proceeding, the first and fourth defendants have by this conduct waived client legal privilege. The issue has no bearing on the other defendants against whom no prior claim has been made who did not participate in the application.
4. Before the set aside application was filed both the first and fourth defendant had served an affidavit of documents. In each, the deponent identified documents relevant to the prior claim including pleadings and other court documents, statements, psychological reports and the Deed itself. Each claimed privilege over all other documents concerning the prior claim. By correspondence the plaintiff sought all documents held by the first and fourth defendants concerning the prior claim including documents over which client legal privilege had been claimed on the basis that:

The First and Fourth Defendants cannot rely on the prior Deed of Release as a bar to these proceedings and also claim privilege over otherwise relevant documents. We consider that any legitimate claim of privilege thereto must be taken to be the subject of issue waiver.[2]

1. In subsequent correspondence the claims of privilege were maintained leading to the plaintiff filing this application by summons on 22 September 2025 seeking further and particular discovery pursuant to s 55 of the Civil Procedure Act 2010 (Vic) and Rules 29.05, 29.08 and 29.11 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) (Rules).[3]

1. Rule 29.03 of the Rules provides that a party is obliged to make discovery of documents upon which that party relies, or those that adversely affect its own or another party's case, or which support another party's case.[4] A party must make a reasonable search for documents fitting these categories.
2. Determining what documents within these categories are relevant is assessed by reference to the pleadings. The obligation to identify documents includes documents that are subject to client legal privilege, but a party making discovery of such documents is entitled to object to their production. Generally they are identified separately in an affidavit of documents and the objection is taken to production.[5]
3. Section 55 of the Civil Procedure Act reads:

(1) A court may make any order or give any directions in relation to discovery that it considers necessary or appropriate.

Subsection (2) provides an inclusive list of orders or directions that may be made, without limiting the breadth of subsection (1). It encompasses the manner in which discovery is to be made, including the power to waive, limit or require particular discovery, the timing of and mechanism for making discovery and providing for inspection of documents and modifying or regulating discovery. The section makes no reference to legal client privilege. No submission was directed to any particular use to be made of the powers in s 55 on this application.

1. Part 3.10 of the Evidence Act 2008 (Vic) (Evidence Act) deals with various privileges that prevent the compulsory disclosure of communication, information or documents in evidence. This includes client legal privilege. The provisions of Part 3.10 are applicable to any disclosure requirement by a court process or order, including pre-trial discovery.[6]
2. Relevantly client legal privilege is established for both legal advice and for litigation.[7] In the context of litigation s 119 provides that:

Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential document ( whether delivered or not) that was prepared -

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

1. Where an objection is made to disclosure because it would result in disclosure of the communication, document or other information, that objection must be determined by applying the provisions of Part 3.10.[8]
2. Client legal privilege may be lost or waived. Section 122 provides:

Loss of client legal privilege - consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or the party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of evidence because it would result in a disclosure of a kind referred to in section 118,119 or 120.

(3) Without limiting subsection (2), a client or party is taken to have so acted if-

(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or

(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

Subsection (5) lists circumstances where a client or party is not taken to have acted in a manner inconsistent with maintaining the privilege. None of those matters are relevant on this application.

1. While s 122 is concerned with adducing evidence, s 131A makes the privilege in ss 118, 119 and 120 applicable to the production of documents in pre-trial discovery.
2. Section 122, and in particular the test in s 122(2), provides a statutory codification that reflects the common law position in respect of waiver.
3. Mann v Carnell[9] sets out the statement of principle at common law concerning waiver of legal professional privilege by acting in a manner inconsistent with the maintenance of the privilege. It says:

At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. It has been observed that "waiver" is a vague term, used in many senses, and that it often requires further definition according to the context. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received.

Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. 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..[10]

1. In Cargill Aust Ltd v Viterra Malt Pty Ltd & Ors (No 7) Macaulay J summarised 12 principles concerning loss of privilege, informed by his survey of the relevant case law.[11] They bear repeating here:

(a) Legal professional privilege is an important common law right (not just a rule of evidence).

(b) That right is only destroyed if the right-holder acts inconsistently with the maintenance of the privilege: that is, the relevant inconsistent act needs to be the act of the right-holder, not some other person.

(c) It follows that the combination of the relevance of the confidential material to an issue in the case, and the forensic unfairness that may follow if the material is not made available to the other party, does not of itself bring about waiver: it is the inconsistent act of the right-holder that does that.

(d) Accordingly, the task for this Court is not to make a choice between one public interest or right over another, or to balance 'fairness and justice' against the right-holder's interest in the maintenance of confidentiality. Instead, the task is deciding whether the important common law right has been lost by the right-holder's act of waiver.

(e) The right can be waived even though the right-holder did not subjectively intend to waive it: that is, the waiver can be imputed objectively from the inconsistent acts of the right-holder.

(f) Inconsistency refers to a contradiction between the confidential nature of the communication, on the one hand, and the act of the privilege holder which necessarily lays open the communication to scrutiny, on the other: so inconsistency is the test for waiver because it exposes the contradictory act which effects the waiver.

(g) Relevant inconsistency is found in the making of an assertion (express or implied) or the bringing of a case either about the contents of a confidential communication or which necessarily lays open the confidential communication to scrutiny.

(h) In either event, it is the contents of the privileged communication which the assertion or the case must be about or which is necessarily laid open to scrutiny - not merely some 'state of mind' to which legal advice might be relevant.

(i) Putting a state of mind in issue, even together with a likelihood that legal advice was obtained that might be relevant to the issue (for example, by showing chronological coincidence), is not necessarily enough. The privileged communication must itself be 'central' to the case.

(j) An assessment of whether an act is in fact contradictory and inconsistent may involve questions of judgment and degree.

(k) Because it does not involve a 'balancing exercise' between competing public interests, the waiver of privilege is not determined by the application of a general test of fairness;

(l) Rather, as Mann v Carnell explains, where necessary, considerations of fairness may inform the Court's perception of the essential ingredient of inconsistency - it follows, considerations of fairness are subordinate to the essential test of inconsistency.[12]

1. The parties submissions rely on a number of cases concerning waiver. The parties submissions rely on a number of cases concerning waiver. I will set out the context of the disputes and the conclusions reached in those cases to inform my later summary of the parties' submissions and my conclusions in this case.

DSE (Holdings) Pty Ltd v Intertan Inc[13]

1. This case predated the introduction of the Evidence Act and the adoption of a uniform evidence code so concerns the common law position regarding implied waiver. The case was a dispute between the two parties over a share acquisition agreement. In their respective pleadings, the plaintiff alleged a common intention and the defendant denied such common intention. The issue, as identified by Allsop J, was whether by in its defence the defendant had put its state of mind in issue so as to waive legal professional privilege over the advice on which it relied to form that state of mind. His Honour concluded that there was no act of the defendant inconsistent with maintaining the confidentiality of legal advice.
2. Where the act of inconsistency asserted is the pleading of a matter in a claim or defence, Allsop J contemplated two ways that it might amount to inconsistent conduct - disclosure of the content of such information (disclosure waiver) and where, although not disclosing the content, the pleading necessarily 'lays open to scrutiny' that content because of the nature of the case that is brought (issue waiver). In a formulation often quoted his Honour said that waiver arises when:

...the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication.[14]

Esso Australia Resources Pty Ltd v BHP Billiton Petroleum (Bass Strait) Pty Ltd[15]

1. This case concerned a contract dispute over Esso's claim for reimbursement of legal expenses arising from the explosion and fire at Longford in September 1998. This case concerned a contract dispute over Esso's claim for reimbursement of legal expenses arising from the explosion and fire at Longford in September 1998. Esso sought to appeal the trial judge's ruling that it was bound to make discovery of documents over which it had claimed privilege because its pleaded claim was inconsistent with the maintenance of the privilege. It is an illustration of disclosure waiver. Esso's entitlement to reimbursement was dependent upon the nature and purpose of the claimed legal services. Esso had conceded before the trial judge that the privileged documents constituted its 'best and possibly only evidence' available to demonstrate its claim. However, it argued on appeal that by its statement of claim seeking reimbursement it had not made any 'election' or decision to waive privilege and it may elect not use the documents. The Court rejected this argument and, in refusing leave to appeal, said that the trial judge had correctly undertaken an orthodox application of the principle of inconsistency as enunciated in Mann v Carnell. The Court said:

That a party may waive privilege by the mere institution of proceedings is not in doubt.

...By making its claim for reimbursement, Esso made an assertion about the contents of the documents. Esso thereby laid the documents open to scrutiny.[16]

Vic Hotel Pty Ltd v DC Payments Australasia Pty Ltd[17]

1. In this case the Court of Appeal specifically considered the test under s 122 of the Evidence Act. It was concerned with the second way inconsistency might arise on the pleadings. DC Payments had commenced a proceeding naming a number of defendants including a customer, Vic Hotel, and a commercial competitor, Next Payments. A number of senior managers previously at DC Payments had subsequently been engaged to work for Next Payments. DC Payments alleged that Next Payments induced Vic Hotel to breach its contract with DC Payments. It sought to uphold its privilege in legal advice, the content of which was known to the senior managers from their time working at DC Payments. The state of mind and requisite knowledge of Next Payments was an element of the intentional tort pleaded by DC Payments. Vic Hotel successfully appealed against a decision upholding a claim of client legal privilege made by DC Payments.
2. The Court of Appeal concluded there was an inconsistency between the matters raised on the pleading and the maintenance of the privilege so that the privilege was lost. Dixon AJA observed that s 122 was introduced with the intention of importing the common law test for waiver. He said:

The test for waiver is not whether the pleadings made any express or implied assertions about the content of the privileged communications, pleaded either as a material fact or as a particular to any material fact, which might be inconsistent with maintenance of the privilege. Rather, it is whether the privilege holder, DC Payments, by its conduct in its pleading of the state of mind of Next Payments, acted in a way that was inconsistent with its objection to Next Payments adducing evidence that would result in disclosure of its knowledge of the privileged legal advice. Put another way, was DC Payments' conduct in pleading a state of mind of Next Payments inconsistent with the maintenance of confidentiality in communications relevant to that state of mind.[18]

1. The inconsistency identified that resulted in the loss of privilege was:

On its own pleading, it clearly emerges that DC Payments knew that senior management at Next Payments not only knew of the terms of the merchant contracts but has been informed of the legal advice. I accept the applicant's submission that DC Payments' allegations about Next Payments' state of mind created a situation where Next Payments, acting reasonably, could be expected to assert that it did not understand the contractual terms to be legally enforceable against Vic Hotel because of the communications to its senior management of the legal advice and that therefore it did not have the state of mind alleged against it.[19]

Viterra Malt Pty Ltd v Cargill Australia Ltd[20]

1. I have already set out the principles drawn by Macaulay J when the waiver of privilege dispute was determined in the Trial Division of this Court. That proceeding was an appeal from a decision by an Associate Justice that upheld Cargill's objection to production of privileged documents. His Honour found no error and would also have upheld the privilege. Viterra appealed this decision. In Viterra Malt Pty Ltd v Cargill Australia Ltd the Court of Appeal also concluded - again by reference to s 122 of the Evidence Act - that the relevant pleading had not resulted in the loss of the privilege. The Court of Appeal confirmed that the form of s 122 was adopted in order to reflect the common law test for implied waiver articulated in Mann v Carnell[21] but sounded two cautions. First, notwithstanding the statutory reflection of the common law test,

the question to be asked is the statutory test posed by s 122(2), namely whether the respondents, and in particular Cargill, have 'acted in a way that is inconsistent with ... objecting' to the production of the privileged documents sought.[22]

Second, there is no settled list or categories of the kind of actions that give rise to implied waiver and each case requires a fact-specific inquiry.

1. The pleading by Cargill alleged to amount to an implied waiver was a plea of reliance on representations made by Viterra. Reliance on those representations was an element of Cargill's cause of action. It was submitted that the pleading put in issue Cargill's state of mind. In doing so all relevant communications that inform that state of mind, including those attracting client legal privilege, were relevant. After considering the case law concerning implied waiver both before and after Mann v Carnell, the Court concluded that:

Notwithstanding the need for caution ... it can be said a pleading of reliance, without more, will not usually manifest inconsistency with the maintenance of client legal privilege in communications relevant to that state of mind. It can also be seen that the observation of Allsop J in DSE as to the circumstances in which privilege will be waived, while still a gloss on the statutory language, has commanded wide acceptance as a statement of the general operation of the principle.[23]

1. In Viterra Malt, the Court of Appeal observed:

It is entirely to be expected that a party pleading a misleading or deceptive conduct case arising from a commercial transaction will have received legal advice regarding the transaction before its consummation. The applicants' argument would suggest that privilege is waived by pleading such a case. The authorities show that something more is required.[24]

1. Viterra had argued that 'something more' was the inference that lawyers had provided advice that was material to forming Cargill's state of mind as to relevant matters. Cargill's position was distinguished from pleadings that did give rise to an inconsistency in Vic Hotel. The distinction was articulated this way:

...[t]he unusual circumstance that DC Payments was relying on part of the information that was made known to Next Payments, through its executives, but seeking to restrain Next Payments from disclosing other communications involving the same executives, where the relevant subject matter put in issue was their knowledge of the legal status of a contractual arrangement. In those circumstances, disclosure of legal advice on that subject,....was necessary to avoid inconsistency of the requisite kind.[25]

1. In Viterra Malt the Court concluded, as had the Associate Justice and the trial division judge, that no inconsistency arose on the pleading. It also said that the question it determined concerned only whether waiver of privilege was brought about by the pleading and not whether by its conduct of the trial, such documents or any particular communication may be affected.[26]

1. It is necessary therefore to begin with a fact-specific inquiry as to inconsistency by reference to the pleadings. The Statement of Claim makes no reference at all to any prior proceeding, or to the Deed.
2. The first defendant's defence pleads at [51] that:

(a) the Plaintiff is barred from instituting and maintaining this proceeding, or seeking the relief claimed as against the First Defendant, based on the clauses contained in the Deed of Release signed by the Plaintiff and representatives of the State and the Fourth Defendant on or about 14 May 2009 (the Deed of Release).

(b) Alternatively, says that by reason of the Deed of Release, the Plaintiff is specifically barred from seeking any relief for past or future medical and like expenses and/or economic loss.

(c) Further and alternatively, says that by reason of the Deed of Release, if the Plaintiff establishes an entitlement to damages, the First Defendant is entitled to set-off of the full, or any partial amount, of the settlement sum in relation to the first claim together with the impact of inflation.

Particulars

A copy of the Deed of Release is in the possession of the First and Fourth Defendant's solicitors and can be inspected upon request.[27]

1. The fourth defendant's defence pleads at [50]-[60]:

FURTHER OR ALTERNATIVELY to paragraphs 1-48 herein and by way of answer to the whole of the Plaintiff's claim against it, the Fourth Defendant says as follows:

During in or about 2008 and 2009, the Plaintiff made a claim for damages from The Salvation Army (Victoria) Property Trust (the Fourth Defendant) and the State of Victoria (the First Defendant) (Previous Claim).

The Previous Claim relates materially to the same facts and matters alleged by the Plaintiff in the present proceeding, including alleged sexual and physical abuse of the Plaintiff whilst he was a resident at the Bayswater Boys' Home No. 2 as well as in connection with other facilities operated by the First Defendant and personal injuries, loss and damage said to be consequent on such abuse, however, specifically excluding any claim for loss of earnings or loss of earning capacity.

The Previous Claim was a proceeding issued in the County Court of Victoria (Proceeding No. CI-08-04737).

On or about 14 May 2009, the Plaintiff entered into a Settlement Deed (Settlement Deed) with the Fourth Defendant and the First Defendant to resolve the Previous Claim.

There were terms of the Settlement Deed which included -

a) the First and the Fourth Defendant would pay the Plaintiff the sum of $95,000 including legal costs and disbursements (Settlement Sum) (Clause 1);

b) the Plaintiff acknowledged that the Settlement Sum was the full amount of the monetary consideration payable and that no further claim for additional sums could be made (Clause 1);

c) in consideration for the payment of the Settlement Sum, the Plaintiff provided the First and the Fourth Defendant with a full release from the Previous Claim, along with any claim he might have against the First and the Fourth Defendant (Clause 3);

d) the Plaintiff covenanted that he would not at any time thereafter assert a claim or commence or maintain proceedings in law or equity against the First and the Fourth Defendant in relation to the facts and circumstances giving rise to the Previous Claim (Clause 8).

A copy of the Settlement Deed is in the possession of the Fourth Defendant's lawyers, Nevett Ford and can be inspected upon request.

At the time of the Previous Claim and the Settlement Deed, the Plaintiff was legally represented and had the benefit of legal advice from solicitors, Ryan Carlisle Thomas Lawyers.

The Settlement Sum was paid by the First and the Fourth Defendants in accordance with the terms of the Settlement Deed.

The Settlement Deed is a settlement agreement as defined in section 27OA of the Limitation of Actions Act 1958 (Vic) (the Act).

The release, indemnity and bar to suit under Clauses 3, 5, and 8 of the Settlement Deed extend to the Fourth Defendant.

To the knowledge of the Fourth Defendant, no application has been made by the Plaintiff under section 27QD of the Act for the setting aside of the Settlement Deed.

The Fourth Defendant accordingly relies on the Settlement Deed as a complete accord and satisfaction by the Fourth Defendant of the Plaintiff's claims as contained in the Statement of Claim filed in the current proceeding.[28]

1. The plaintiff has not filed a reply.
2. In the application, the plaintiff relies on an affidavit in support by Ellen Fitzgerald, solicitor for the plaintiff, affirmed on 22 September 2025. That affidavit exhibits correspondence between lawyers seeking further discovery and the responding objection to waiving client legal privilege. The plaintiff's correspondence stated relevantly:

The First and Fourth Defendants cannot rely on the prior Deed of Release as a bar to these proceedings and also claim privilege over otherwise relevant documents. We consider that any legitimate claims of privilege thereto must be taken to be the subject of issue waiver.[29]

When a Defendant pleads a defence - and one that would have the effect of striking down a Plaintiff's claim entirely - it does so solemnly and understanding that to make good such a defence it must expose itself to proper scrutiny so that the Plaintiff (whose rights the Defendant is seeking to extinguish), and the Court, can be satisfied that the evidence supports that extreme proposition.[30]

1. This correspondence and the subsequent oral submissions of counsel on hearing the application make clear that there is no other conduct of the first or fourth defendant relied on, to establish an implied waiver.[31]

1. Before turning to the submissions of the parties, it is helpful to summarise the decision of Foley v The Roman Catholic Trusts Corporation for the Diocese of Sale (Foley).[32] The decision predated the High Court decision in DZY (a pseudonym) v Trustees of the Christian Brother (DZY).[33]
2. As in this case, the plaintiff in Foley argued that pleading the effect of a prior deed of settlement as a bar in a defence was conduct inconsistent with maintenance of client legal privilege over documents relating to the earlier claim. An application to set aside the prior deed pursuant to s 27QD of the Limitation Act was foreshadowed in Foley but not yet on foot when the discovery application was made.
3. The Judicial Registrar concluded that it was not inconsistent with the maintenance of privilege. He did so by reference to s 122 of the Evidence Act. As the parties differed on the identification of the relevant conduct, he began his analysis with this issue. The defendant had submitted that the pleaded terms of the Deed in defence was the only conduct. The plaintiff submitted the relevant conduct was wider than this because, in pleading the Deed in its defence, two consequences followed: the plaintiff was compelled to make an application to set aside the deed and to persuade the Court it is just and reasonable to do so. The Judicial Registrar rejected the wider approach.[34]
4. In detailed and careful reasons the Judicial Registrar accepted that in principle client legal privilege may be waived by a pleading alone. He considered the case law, noting this situation arises most commonly in matters where the state of mind of a party will be an element of the argument being pursued, notably undue influence or unconscionability arguments. He looked at the breadth of a court's powers under s 27QE to set aside a previously settled cause of action. He considered the decision of WCB v Roman Catholic Trusts Corporation for the Diocese of Sale (No 2) (WCB)[35] in which Keogh J determined it was just and reasonable to set aside the prior deed. The Judicial Registrar accepted that the documents would be relevant to the set aside application but did not accept that they were necessary for determination of that application. After stating the applicable test in s 122 he concluded:

[51] ...the situation in the present application is different from those discussed in the authorities referring to issue waiver situations, as [the first defendant]'s defence contains reference to the terms of the deed itself and certain other factual material that is not privileged. There is no reference to or requirement to consider any privileged communication or to the first defendant's state of mind in relation to the formation and execution of the deed.

[52] For the plaintiff's application to succeed, the first defendant's defence would need to necessarily lay open its privileged communication to scrutiny, notwithstanding that it has not expressly referred to or relied on any such material in its defence....

[53] I do not consider that the defence raised by the first defendant based upon the deed necessarily does so. The defence relies upon the undisputed terms of the deed, which says it may be pleaded as a bar to future claims arising from the same subject matter. This is a relatively straightforward argument involving the interpretation and application of the terms in accordance with the ordinary principles that apply to such contracts. There does not appear to be any aspect of this argument that necessarily requires consideration of the legal advice and other confidential communications received by the first defendant. Accordingly on this basis, no inconsistency would appear to arise between the first defendant's pleading and the maintenance of its privilege.[36]

1. He observed that WCB determined the s 27QD application with little evidence in relation to the previous County Court proceeding and the circumstances of the prior settlement, suggesting that a defendant's state of mind at the time of the previous settlement was not a necessary element of such an application. He accepted that where a defendant's conduct or state of mind at the time of prior settlement was put in issue in a particular application, s 122 may be enlivened.[37]

1. While a number of issues were in dispute on the exchange of written submissions, by the hearing these matters had been narrowed. First, the plaintiff accepted that discovery obligations arise on the pleadings and not from issues in the set aside application.[38] Second, the plaintiff accepts that at least some categories of documents over which privilege is claimed are likely to be both relevant and privileged. The plaintiff did not seek to contest the adequacy of the identification of privileged documents or whether the privilege was properly claimed in respect of any of them at this time. The argument therefore proceeded on the matter of principle: whether there has been an implied waiver of privilege by the defences pleaded.
2. The plaintiff's submission is that the effect of the positive defence pleaded is that the plaintiff's case is extinguished.[39] It is an inevitable consequence of raising the defence that a process must occur for leave to be given under s 27QE of the Limitation Act, without which the plaintiff's claim is defeated. The pleading therefore makes documents concerning the prior claim relevant.
3. The plaintiff accepts that DZY does not affect client legal privilege or change discovery obligations and submits that the defendants misconceive his submissions.
4. He submits that pleading the existence of the Deed raises a critical issue in dispute between the parties on the pleading.[40] This issue is whether or not the Deed is a complete bar to the plaintiff's claim. That issue is identified without reference to the particular facts and matters that might be put before the Court is any particular set aside application that would inevitably follow.[41]
5. The existence of a bar to the claim, the issue in dispute, can therefore only be determined by a court's consideration of whether or not to set aside the Deed. In turn, the matters that inform that consideration are 'of broad import' and properly include the conduct and state of mind of all parties to the Deed. The defence therefore invites inquiry of a nature that necessarily leads to an appreciation of the confidential communications between the defendant and its lawyers in reaching agreement resulting in the Deed. In doing so it 'necessarily lays open the confidential communication to scrutiny'. By reference to paragraph 58 of DSE, he submits that the pleaded Deed necessarily does so.
6. The inconsistency upon which the plaintiff's contention rests, lies in part in the nature of the civil case in question. This is not an orthodox application of the principle because it should be considered in light of the specific legislative regime that permits a prior Deed to be set aside.[42] This proceeding that concerns child sexual abuse is brought in the context of a unique and specific legislative regime.[43] It is within this specific context that the power to set aside the Deed may be exercised and which enlivens consideration of not only a plaintiff's conduct and state of mind but also that of a defendant.
7. He submits that a forensic unfairness is occasioned by the inconsistency where the defendants plead the deed 'purporting to terminate the Plaintiff's case altogether'.[44]
8. Finally, the plaintiff's oral submissions addressed the decision of Foley. Since 2022 there has been significant evolution in set aside applications, including that defendants routinely place in evidence otherwise privileged communications. Therefore, the conclusion in Foley that nothing in s 27QD or QE that expressly alters or abridges the maintenance of privilege[45] does not answer the question of implied waiver that arises.
9. Properly understood now, the defence does more than identify the terms of the Deed and rely upon it, because it raises a positive pleading that inevitably leads to identified consequences. He distinguishes the present case from Foley where an application under s 27QD was a potential consequence, not yet made and because it precedes the High Court decision that describes the approach to setting aside a prior deed where it is 'just and reasonable' to do so, as using words of 'wide import'. The plaintiff submits that the decision means that 'a court could never make a proper assessment of, and determination of that question, without considering all relevant evidence going to any and all factors that militate for or against determination of that test.'[46] The plaintiff therefore submits that maintenance of the privilege by a defendant would create the relevant unfairness described in DSE and subsequent cases.
10. The plaintiff submits that Foley pre-dates DZY where the High Court made clear for the first time that 'all manner of factors may be relevant in any given application'.[47]
11. The fourth defendant's submissions make the following points:

(a) The defence does not put the question of whether the Deed should be set aside in dispute. That only arises if the plaintiff makes application to set aside. That is not an act of the defendant privilege holder. A party is not obliged to discover documents relevant to whether it is just and reasonable to set aside a prior deed;

(b) The fact that an application to set aside the Deed has been made presumes that the existence of the Deed and its legal effect as a bar is not an issue in dispute that might occasion particular discovery, for example where a plaintiff disputes the terms of the document or its effect.

(c) DZY is not concerned with, and does not change orthodox principles of discovery or waiver of privilege. Foley represents a correct application of principle and no authority has emerged since it was decided which bears upon the question of whether pleading the existence of a prior deed is inconsistent with the maintenance of privilege.

1. The First defendant's submissions adopted those of the fourth defendant and made the following additional points:

(a) Client legal privilege is a substantive right and not a rule of evidence so is not lightly to be interfered with. The construction of a legislative provision in a way that interferes with such a fundamental right should not be imputed without clear legislative intent or necessary implication.[48]

(b) Foley, although predating DZY, determined waiver on the basis that the language in s 27QE of 'just and reasonable' is 'expressed broadly'[49] and so remains sound. The matters raised by the parties, and the factors that fall to be considered in determining whether it is 'just and reasonable' to set aside a prior deed are distinct matters that are not relevant to adjudication on the pleaded cause of action between the parties, if a prior deed is set aside.

1. Both defendants submit rely that Foley was decided by a proper application of s 122(2) of the Evidence Act. The plaintiff submits that Foley is not an entire answer to whether client legal privilege has been waived.[50]

1. The plaintiff's submission rests on the premise that the effect of pleading the Deed is to extinguish the plaintiff's case and this makes the circumstances of creating the Deed an issue in dispute. This premise is misconceived. It is not the pleading of the Deed that has the effect of extinguishing the plaintiff's current cause of action, but the historical fact of the Deed. As pointed out by the fourth defendant, the defences have had the consequence of the plaintiff making an application to set aside the Deed, thereby accepting the fact of the existence of the Deed and its legal consequence.[51]
2. The Deed is an agreement by the plaintiff that finalised his cause of action against the defendants by settlement upon payment of damages of an agreed sum. Whether or not the Deed has the legal effect as pleaded in the defence is simply a matter of construing the terms of the document itself, if its effect is disputed. If that legal effect is not a matter of dispute, and without the benefit of s 27QA, a defence of a prior deed of settlement would most likely prevent re-litigation of a cause of action and be unlikely to raise any question of implied waiver of privilege.
3. The plaintiff's present cause of action does not put in dispute the state of mind of the defendant in entering into the prior deed. It is an action seeking damages alleging negligence for acts or omissions of the relevant defendants in periods between 1967 and 1984. It is not analogous to an action where the legal advice provided to a party or their state of mind in light of that advice is relevant to the cause of action for determination. The submission that the effect, or inevitable consequence, of the defence is that an application to set aside the deed becomes necessary can be accepted. But a defendant's state of mind in entering into the prior deed, if relevant, is only relevant in the context of this consequence.
4. Even if I am wrong about this, and the Defence does put in issue the defendant's state of mind in the proceeding itself, the authorities discussed above demonstrate that a pleading that raises the state of mind of a party 'without more' is not inconsistent conduct. Nothing more is identified in this case.
5. The matters raised by the parties, and the factors that fall to be considered in determining whether it is 'just and reasonable' to set aside a prior deed are separate matters. They are irrelevant to adjudication on the pleaded cause of action between the parties if a prior deed is set aside. The making of the set aside application is not conduct of the privilege holder. The defence involves no conduct by the defendants inconsistent with the maintenance of their privilege.
6. Further, the plaintiff's submission advances an argument that a set aside application will be an adversarial contest. This is because:

[t]he Plaintiff exercises his statutory right to have the Prior Deed set aside because he says it should not be a bar to suit; whereas the Defendants claim the contrary.[52]

In my view, this approach is not to be presumed. On appreciating the circumstances and injustices that a particular plaintiff relies on, a defendant may choose to contest or concede the application in full or in particular aspects, or may seek to identify other injustices that might arise for it as a consequence of setting aside a deed.[53]

1. The specific statutory context provided for by Division 5 of the Limitation Act permits certain actions for personal injury to be revisited arising from physical or sexual abuse occurring when a person is a minor. This permits the legal finality created by a previously settled cause of action to be set aside where a court considers it is just and reasonable to do so. As the High Court has identified, the broad power to set aside a prior deed may respond to 'a variety of injustices'. The plurality quoted Fraser JA of the Queensland Court of Appeal as a 'useful description' of the Court's task:

...the legislative purpose encompasses account being taken of the interests of both parties to the settlement in deciding whether it is just and reasonable to set aside the settlement agreement , the relative significance or weight to be given to the material factors in that exercise depending on a judicial assessment of the particular circumstances of each case.[54]

1. In DZY the High Court noted that before the primary judge the parties agreed the factors that were potentially relevant on a re-opening application:

... the terms of the deed; whether the parties were legally represented at the time of settlement; the circumstances of the making of the deed (including any medical evidence and whether the settlement process was reasonable or whether there was undue pressure to settle); any prejudice to the respondent due to the lapse of time; and any disadvantage to the respondent (including financial disadvantage) as a result of the previous deed being set aside.[55]

... The text of s 27 QE simply does not prescribe the matters to which the court should have regard in determining whether to set aside a settlement agreement.

1. The reference of Fraser JA to the interest of both parties to the settlement does potentially raise matters for consideration going to the acts and motivations of all parties in entering into the settlement agreement. Clearly the conduct of a defendant and its state of mind are capable of being factors, as are the conduct and state of mind of a plaintiff, relevant to whether the legal finality of the agreement should be set aside. However, the broad import of the power to set aside does not require the Court to inquire as to all matters motivating entry into an agreement. It requires consideration of the interests of both parties. I reject the argument that a court could not make a proper assessment 'without going to any and all factors for and against'. It is for the person making an application to identify and set out the matters relied on, and for a respondent to set out any other matters that it relies on. It is in identifying those matters for the Court, for the specific purpose of the application, that each party may impliedly or explicitly waive privilege in accordance with s 122(2).
2. In my view there is nothing in the unique statutory context of claims permitting prior settlements to be set aside that would necessitate an implied waiver of privilege by pleading reliance on a deed.
3. In Foley, the Judicial Registrar considered the issue on the basis that the defendant's state of mind was relevant to the set aside application. This came about because of the argument that, in pleading the prior deed the relevant conduct extended to include the inevitable consequence of an application to set aside the deed. This led the Judicial Registrar to consider whether relevant, privileged communication would be necessary for determination of any set aside application in the event that he was wrong to confine conduct to the defence itself. He concluded that it was not necessary because:

The defence relies upon the undisputed terms of the deed, which says that it may be pleaded as a bar to future claims arising from the same subject matter. This is a relatively straightforward argument involving the interpretation and application of the terms in accordance with ordinary principles that apply to such contracts.

1. While the plaintiff in this case did not seek to argue that the inevitable consequence extended the relevant conduct of the defendant, he did maintain that the effect of pleading the Deed was a critical issue in dispute between the parties.[56] This argument nevertheless seeks to draw the issues that will or might arise on a set aside application as being raised by the pleading. The Judicial Registrar's approach understood the powers in a set aside application to be broad, consistent with the later authority of DZY, but determined the question on the same basis that was argued before me - whether the defence itself amounted to an implied waiver. I have reached the same conclusion in this case.
2. The plaintiff identified an 'unfairness' in allowing a defendant to rely on a prior deed without disclosing privileged information that goes to its state of mind. This argument rests in turn upon the submission that I have rejected: the Court can only properly consider whether it is just and reasonable to set aside a prior deed if appraised of the state of mind of all parties. The plaintiff asks rhetorically how could it be 'fair' for the plaintiff to waive privilege in order to assist the Court to determine his application to set aside the Deed but for the defendant not to do so.[57] The question is not whether 'fairness' dictates that the defendants do likewise. As Macaulay J said, it is not a balancing exercise, but subordinate to the question and essential test of inconsistency. The plaintiff's submission raises fairness to a consideration of what is generally appropriate considering the position of both parties and not, as it is correctly understood, for informing the Court's consideration of inconsistency.
3. Unlike the position in Vic Hotel, the first and fourth defendants who hold a client legal privilege, in raising the defence, are not attempting to rely on some matters that informed their entry into the Deed while protecting other matters from essential scrutiny. The extent to which a defendant's conduct, or the state of mind that informed that conduct, may become relevant is if raised by the privilege holder in an application to set the deed aside and raised in a way inconsistent with the maintenance of the confidentiality.
4. The present dispute is determined upon the application of s 122(2) in line with existing authority. The construction of 'just and reasonable', as articulated by the High Court in DZY - which is concerned with the test applicable on a set aside application - does not impinge upon the principles affecting implied waiver that arise from the pleading in this case. For these reasons I have not accepted the plaintiff's premise that the defence puts in issue circumstances in which the Deed was agreed so that the Court will necessarily have to scrutinise a defendant's state of mind or the legal advice that informed it. That said, where 'something more' is identified as an act inconsistent with the maintenance of privilege, an implied waiver may arise in the way the case is conducted.
5. Therefore, subject to hearing from the parties on the form of the orders and the consequential matters, it is appropriate to dismiss the plaintiff's summons seeking further and particular discovery.

[1] The fourth defendant by paragraph 60 of its defence filed 30 January 2025 and the first defendant by paragraph 51 of its defence filed 4 April 2025.

[2] Letter dated 8 September 2025 from plaintiff's solicitors to first and fourth defendant's solicitors, exhibited to affidavit of Ellen Fitzgerald affirmed 22 September 2025 ('8 September 2025 letter').

[3] The 2015 version of the Rules was relied on, since replaced by the time of hearing (without relevant change) by the 2025 revision of the Rules.

[4] Rule 29.03 of the Rules, subject to rr 29.05 and 29.07.

[5] This is how the First and Fourth Defendants have sworn or affirmed their affidavits of documents.

[7] Sections 118 and 119 of the Evidence Act and s 120 concerning unrepresented parties in a litigation context .

[8] Section 131A(1).

[9] [1999] HCA 66; (1999) 201 CLR 1 ('Mann v Carnell').

[10] Ibid [28]-[29], footnotes omitted.

[11] [2018] VSC 99 ('Cargill').

[13] DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499, [58] ('DSE')

[14] Ibid [58], (emphasis in original).

[15] Esso Australia Resources Pty Ltd v BHP Billiton Petroleum (Bass Strait) Pty Ltd [2007] VSCA 224.

[16] Ibid [14] and [18] per Maxwell ACJ and Chernov JA (emphasis in original).

[17] [2015] VSCA 101 ('Vic Hotel').

[20] [2018] VSCA 118 ('Viterra Malt').

[27] First defendant, 'Defence to Amended Statement of Claim' filed 19 December 2025 at [51].

[28] Fourth defendant, 'Fourth Defendant's Defence' filed 30 January 2025, [54]-[60].

[30] Letter dated 12 September 2025 from plaintiff's solicitors to first and fourth defendant's solicitors, exhibited to affidavit of Ellen Fitzgerald affirmed 22 September 2025 ('12 September 2025 letter').

[31] Transcript of Proceedings, Paul Callaway v The State of Victoria & Ors (Supreme Court of Victoria, Forbes J, 28 November 2025) ('T') 40.

[32] (Foley) Unreported ruling of Baker JR delivered on 17 June 2022.

[33] [2025] HCA 16; (2025) 422 ALR 372.

[35] [2020] VSC 639, and subsequently on appeal: Roman Catholic Trusts Corporation for Diocese of Sale v WCB [2020] VSCA 328; (2020) 62 VR 234.

[38] Plaintiff, 'Plaintiff Outline of Reply Submissions in Support of an Application for Further and Better Discovery' filed 20 November 2025 at [4] ('Plaintiff reply submissions'). T8.4.

[40] Plaintiff reply submissions, [5].

[44] Plaintiff, 'Plaintiff Outline of Submissions in Support of an Application for Further and Particular Discovery' filed 24 October 2025 at [22] ('Plaintiff submissions').

[46] Plaintiff reply submissions, [33].

[48] Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, 490-491; Coco v The Queen [1994] HCA 15; (1994) 179 CLR 427, 437.

[50] Plaintiff reply submissions, [17].

[51] Fourth defendant, 'Submissions of the Fourth Defendant' filed 10 November 2025 at [3(c)], [12].

[52] Plaintiff reply submissions, [5].

[53] For example, in DZY a concession was made as to setting aside the prior deed in respect of pain and suffering but contesting issues as to economic loss.

[54] DZY, [26] quoting TRG v Board of Trustees of the Brisbane Grammar School [2020] QCA 190; (2020) 5 QR 440 at [28].

[56] Plaintiff reply submissions, [5] and T 40.

[57] Plaintiff reply submissions, [15].