Plaintiffs v Defendant

Ashfield Municipal Council v. Roads and Traffic Authority of NSW, considered

Queensland Law Society Incorporated v. Albietz, considered

Australian Unity Health Ltd v. Private Health Insurance Administrative Council, considered

Multistar Pty Ltd v. Minister for Urban Affairs & Planning, considered

Temwood Holdings Pty Ltd v. Western Australian Planning Commission, considered

Nine Films & Television Pty Ltd v. Ninox Television Ltd, considered

1 The first defendant ("Multiemedia") is a publicly listed company. In this proceeding the plaintiffs seek damages from the defendants for alleged breaches of oral, written and implied agreements concerning, in substance, an alleged arrangement for the acquisition of interests in enterprises conducted by, or associated with, the plaintiffs.

2 By a summons filed 17 August 2005 the plaintiffs sought a variety of orders. All of the matters the subject of that summons have been resolved with the exception of an application by the plaintiffs for inspection of all documents constituting or recording legal advice referred to in an announcement by Multiemedia to the Australian Stock Exchange ("ASX") on 7 April 2005.

3 The statement made to the ASX by Multiemedia on 7 April 2005 concerned the plaintiffs' claim in this proceeding, amongst other things. It relevantly reads as follows:

The Board's lawyers have been instructed to vigorously defend the claim and have advised that the plaintiffs' claim will not succeed.

4 The plaintiffs submit that Multiemedia has waived privilege in relation to the advice which is the subject of the ASX announcement.

5 On 9 September 2005 I heard submissions on the application for inspection. Today I have heard the parties further in order to clarify one matter.

6 Counsel for the plaintiffs submitted that Multiemedia had expressly disclosed the substance of its lawyers' advice to the world at large. The plaintiffs submitted that the disclosure was deliberate and for a commercial purpose. Relying upon Bennett v. Chief Executive Officer of the Australian Customs Service[1] and Ampolex Ltd v. Perpetual Trustee Co (Canberra) Ltd,[2] counsel for the plaintiffs submitted that the disclosure through the ASX announcement entitled the plaintiffs to inspection of documents "which reveal the process of reasoning and the factual assumptions or instructions lying behind" the advice.

7 Counsel for Multiemedia submitted in summary:

The Court should be wary of too readily finding a waiver of privilege. In this respect British American Tobacco Australia Services Ltd v. Cowell[3] was referred to.

There is a clear distinction to be drawn between disclosing the existence of legal advice and disclosing its substance and content. British American Tobacco Australia Services Ltd v. Cowell[4] was again relied on. It was submitted that the statement here in essence fell into that category of statements which are to the effect that legal advice had been obtained, rather than that category of statements which disclose the content or substance of the advice.

Cases such as Bennett, Ampolex and Ashfield Municipal Council v. Roads and Traffic Authority of NSW[5] are distinguishable from the position here, as in each of those cases there was disclosure of the content of the legal advice given on discreet and defined questions, whereas here the statement was in the most general terms and without identification of the legal claim in question or reference to any particular issue.

The High Court decisions in Goldberg v. Ng,[6] Attorney-General for the Northern Territory v. Maurice,[7] and Mann v. Carnell[8] are authority for the proposition that the central question is whether fairness requires that the privilege shall cease. The submission was that it would be unfair to Multiemedia to force it to disclose the legal advice, because the statement to the ASX had been provoked and was justified by the actions of the plaintiffs, and because there was "no proper forensic purpose" to be served in disclosure as the advice would merely be the inadmissible opinion of Multiemedia's solicitors as to the outcome of the proceeding.

8 It is important to record that counsel for Multiemedia has confirmed that Multiemedia does not submit that the document sought, or documents sought, are not discoverable at all. I proceed on the basis that the document or documents are discoverable.

9 This is not a case where waiver was subjectively intended or expressly made. The submission is that there has been an implied or imputed waiver. Implied or imputed waiver may arise in a variety of circumstances. The circumstance in which it arises, or is said to arise here, is where a party seeks to fortify its position in some way by referring to its legal advice.

10 A number of authorities deal with such statements. The general principle to be applied is that set out by the majority of the High Court in Mann v. Carnell,[9] which was a case dealing with implied or imputed waiver in a different context.

11 The majority judgment in Mann v. Carnell explained that 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. It is this inconsistency which the courts, where necessary informed by considerations of fairness, perceive between the conduct and the maintenance of confidentiality which brings about the waiver. The majority judgment emphasised that fairness plays a role in assessing whether there is inconsistency, but there is "no overriding principle of fairness operating at large".[10]

12 Returning then to the specific context relevant here, each case must be decided on its own facts applying the general principle to which I have referred. Notwithstanding that, the cases which have dealt with like circumstances to those existing here seem to me to support the following general propositions:

A statement which reveals the contents of legal advice, even if it does so in a summary way or by reference only to a conclusion, will, or probably will, result in a waiver. In this respect I refer to: Ampolex in relation to the statement that the party "has legal advice supporting this position", and the subsequent judgment of Justice Kirby on the stay application;[11] Queensland Law Society Incorporated v. Albietz;[12] Australian Unity Health Ltd v. PHIAC,[13] in relation to the statement "legal advice supporting PHIAC'S view of this rule has been received";[14] Bennett v. CEO of Australian Customs Service;[15] and Ashfield Municipal Council v. RTA of NSW.[16]

A statement which refers to legal advice, even if it associates that advice with conduct undertaken or with a belief held by the client, will not, or probably will not, result in a waiver. In this respect I refer to Ampolex in relation to the statement "On the basis of legal advice received, Ampolex believes...";[17] Australian Unity Health Ltd v. PHIAC[18] in relation to the disclosure of the solicitor's letter as being part of the material acted upon by the council; Multistar Pty Ltd v. Minister for Urban Affairs & Planning;[19] British American Tobacco Australia Services Ltd v. Cowell;[20] Temwood Holdings Pty Ltd v. Western Australian Planning Commission;[21] and Nine Films & Television Pty Ltd v. Ninox Television Ltd.[22]

13 I am mindful of the fact that a number of these authorities were decided in the context of the Commonwealth and the New South Wales Evidence Act, but I do not perceive that matter to have relevantly affected the approach to be applied.

14 Multiemedia's counsel amplified their submissions, which I have earlier summarised. They submitted that there is a distinction to be drawn between revealing a conclusion reached by legal advisors on a particular specific issue and revealing a general conclusion as to the legal advisors' opinion on the ultimate outcome of litigation. They submitted that it cannot be that whenever a client says "I think I will win and my lawyer thinks so too" that privilege is waived. They submitted that, as a matter of fairness, waiver should not be found here as the statement was broad and general, Multiemedia had not sought any forensic advantage by the disclosure, and Multiemedia had made the statement in response to the revealing of information contained in correspondence between the respective solicitors on the internet and other conduct which it was submitted had provoked the disclosure.

15 I do not think that the general distinction sought to be drawn between a conclusion on an issue and a conclusion as to the outcome is tenable. Sometimes an issue must determine the outcome, as was the case in Ampolex. The particular disclosure which was held not to be a waiver in Ampolex itself concerned a statement as to the outcome rather than as to an issue, but Rolfe J's analysis does not support the proposition that there was any necessary distinction between the two statements on that basis.

16 The trial Judge in Bennett erroneously based his decision that there had been no waiver on the fact that the disclosure did "no more than state the conclusion from or logical result of the legal advice."[23] The Full Court of the Federal Court held this to be an error.[24]

17 It is important to emphasise that in each case the issue is whether, informed by considerations of fairness where necessary, the Court perceives inconsistency between the particular disclosure and maintenance of confidentiality.

18 My response to the submission that it cannot be a waiver whenever a client says his lawyer thinks he will win is that it all depends. If a client simply says what he believes his lawyer "thinks", that may be right. Further, not all such statements are intended to, or do disclose, confidential advice. There may be room in this context for something analogous to puffery. This issue does not arise here. The statement made here was not of that character.

19 The submission about the disclosure being prompted by material appearing on the internet and other conduct of the plaintiffs in my view is misconceived. There is no room for any general operation of a principle of fairness as the majority of the High Court has made clear in Mann v. Carnell.[25]

20 The issue is inconsistency. As Justice Emmett observed in Bennett:

It does not matter why the disclosure has occurred, it may be for the purpose of explaining or justifying the client's actions or for some other purpose. However considerations of fairness will be relevant to a determination of whether there is such inconsistency.[26]

21 Returning to the statement in issue here it seems to me that there was a clear and deliberate disclosure of the gist or the conclusion of legal advice received by Multiemedia from its lawyers about the outcome of the proceeding. I do perceive inconsistency between this statement and the maintenance of confidentiality of the advice to which it refers.

22 If fairness has a role to play it seems to me that the relevant unfairness arises from the inconsistency. It is unfair in this sense to permit Multiemedia to cast aside confidentiality of the advice in making the statement to the world at large so as to explain or justify its position and to then insist upon confidentiality when inspection is sought of an otherwise discoverable document.

23 Accordingly I find that there has been a waiver of privilege and I will order that Multiemedia produce for inspection the document or documents constituting or recording the advice referred to in its announcement to the Australian Stock Exchange of 7 April 2005.

[1] [2004] FCAFC 237; (2004) 140 FCR 101.

[2] [1996] NSWSC 7; (1996) 40 NSWLR 12.

[3] [2002] VSCA 197; (2002) 7 VR 524.

[4] Ibid.

[5] [2004] NSWSC 917.

[6] [1995] HCA 39; (1995) 185 CLR 83.

[7] [1986] HCA 80; (1986) 161 CLR 475.

[8] [1999] HCA 66; (1999) 201 CLR 1.

[9] Ibid.

[10] Ibid, [29] (Gleeson CJ, Gaudron, Gummow and Callinan JJ).

[11] [1996] NSWSC 7; (1996) 40 NSWLR 12, 15 and [1996] HCA 15.

[12] [2000] 1 QdR 621.

[13] [1999] FCA 1770.

[14] Ibid, [6].

[15] [2004] FCAFC 237; (2004) 140 FCR 101.

[16] [2004] NSWSC 917.

[17] [1996] NSWSC 7; (1996) 40 NSWLR 12, 14.

[18] [1999] FCA 1770.

[19] [2000] NSWLEC 231.

[20] [2002] VSCA 197; (2002) 7 VR 524.

[21] [2003] WASCA 112.

[22] [2005] FCA 356.

[23] [2003] FCA 53, [33].

[24] [2004] FCAFC 237; (2004) 140 FCR 101, and see in particular Tamberlin J at [13] and [14] and Giles J at [62] and [65].

[25] See also Giles J in Bennett, particularly at [68].

[26] [2004] FCAFC 237; (2004) 140 FCR 101, [35].