Raunio v Hills

THE COURT: 1 The Respondent to this application for leave to appeal ("Hills") is the plaintiff in proceedings commenced in the Supreme Court of the Australian Capital Territory for damages for severe spinal injuries sustained on 9 June 1995, when the motor cycle he was riding collided with a fence post. The First Applicant ("Raunio") was the owner of the motor cycle and the Second Applicant ("NRMA") was the third party insurer. Hills alleges two counts of negligence against Raunio, one concerning deficiency in the safety condition of the motor cycle at the time of the accident and the other concerning Raunio's failure to warn him of such deficiency. 2 On 27 and 30 November 1995, Hills' solicitors, Colquhoun Murphy, conducted telephone conversations with Raunio, whereof the solicitors made a file note. On 2 May 1996 and 21 June 1996, Raunio engaged in two further telephone conversations with Hills' solicitors, and once again a file note or notes were made by Colquhoun Murphy concerning the same. 3 On 5 September 1996, Hills commenced the subject proceedings, initially against Raunio alone. Difficulty was encountered in serving the initiating process upon Raunio, and in the result, substituted service was effected by Hills' solicitors upon NRMA, following upon the sending by them to NRMA of a letter of 9 October 1996, which, omitting formal parts, read as follows: "We advise that we are experiencing some difficulty in locating Mr Raunio. We understand that he has moved to Caloundra, but none of his acquaintances at his former address is able to say where he is now living. In the circumstances, rather than have the plaintiff incur the costs of an application for substituted service, we ask that you agree to accept service on behalf of Mr Raunio. In exchange for doing so, we would be willing to provide you with copies of the two statements which he has made in these proceedings." 4 The two statements referred to in the above letter had been made and signed by Raunio on 28 December 1995 and 1 July 1996, that is to say, subsequently to the telephone conversations referred to in [2] above. In the first of such statements, Raunio spoke of faulty brakes existing in relation to the motor cycle at the time of Hills' accident, and the absence of adequate repairs to and maintenance of the same at the time of the accident. The second statement contained admissions on Raunio's part as to the need for readjustment to the brakes immediately prior to the accident. 5 The same firm of solicitors, Abbott Tout, are acting for both Raunio and NRMA as defendants in the proceedings. They have been jointly retained by reason of Raunio's third party insurance cover held with NRMA in respect of the motor cycle at the time of Hills' unfortunate accident. 6 On 5 February 2001, the Master of the Supreme Court of the Australian Capital Territory held that Abbott Tout, as solicitors for Raunio and NRMA in the proceedings, were entitled to discovery of the file notes made by Hills' solicitors Colquhoun Murphy of their telephone conversations with Raunio on the occasions referred to in [2] above, upon the basis of implied waiver occasioned by the provision by Hills' solicitors to Abbott Tout of the two statements signed by Raunio, such implied waiver being said to have occurred by reason that such file notes constituted material preparatory to the making of those statements. 7 Subsequently on 28 June 2001, a judge of the Supreme Court of the Australian Capital Territory, to whom we shall refer as the primary judge, reversed the Master's decision. His Honour thought that the fact that legal proceedings were anticipated or contemplated by Hills at the time his solicitors made the file notes in question was not of itself determinative of the issue of legal professional privilege, but that in any event, the file notes recorded a communication relevant to contemplated litigation, and contained material that would assist the solicitors in the advice they would be giving to their client Hills in respect of the contemplated litigation. The issue therefore which the primary judge identified for resolution, with the concurrence of all parties, was whether by waiving privilege in respect of the two statements signed by Raunio, there had occurred a waiver by Hills of the privilege which appertained to the file notes of the conversations between Hills' solicitors, Colquhoun Murphy, and Raunio. 8 His Honour found that legal professional privilege had not been waived on behalf of Hills, for the following reasons in summary: (i) Although the preparation of the written statements and the forwarding of the same by Hills' solicitors to Raunio and NRMA may have been undertaken for the purposes of the litigation contemplated by Hills, it did not follow that the waiver of privilege thereby effected extended to the making of the file notes used in the preparation of such statements; (ii) It was not unfair to Raunio and NRMA for Hills to maintain claims to privilege, because the written statements did not purport, on their face, to represent the contentious file notes of Hills' solicitors or the communications between those solicitors and Raunio which may have given rise to them; (iii) The only use made by Hills and his solicitors of the written statements of Raunio, which were otherwise privileged, had been to disclose the same to Abbott Tout in order to encourage NRMA to accept substituted service on behalf of Raunio of Hills' initiating process; (iv) The written statements had not been used by Hills in a way that would make it unfair for Raunio and NRMA to be denied access to the file notes which may have been used in the preparation of such statements, and the point had not yet been reached where the conversation between Raunio and Colquhoun Murphy had become an issue, and in that regard his Honour distinguished Sevic v Roarty (1998) 44 NSWLR 287 at 297 per Sheller J. Generally in relation to the issue of fairness in the context of the law as to legal professional privilege, the primary judge placed reliance upon well known passages in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481-483 per Gibbs CJ, at 487 per Mason and Brennan JJ and at 493 per Deane J, being passages subsequently applied in Goldberg v Ng (1996) 185 CLR 83 at 96-97. 9 The course adopted by the Court on the hearing of the present application for leave to appeal was to receive full argument from both parties upon the issues which would be involved in the appeal if leave was to be granted, and thereafter to determine the leave application and the appeal together. That was because it soon became evident that an issue of importance in the law of legal professional privilege was involved. 10 Raunio and NRMA contended that no entitlement to legal professional privilege has arisen in relation to the file notes of Hills' solicitors because the same were never confidential in any sense recognised by the law of legal professional privilege. In Maurice at 487, Mason and Brennan JJ described the subject matter of legal professional privilege in terms of "communications made confidentially", and at 490, Deane J spoke of such principle as to confidentiality in the following terms: "It is a substantive general principle of the common law and not a mere rule of evidence that, subject to defined qualifications and exceptions, a person is entitled to preserve the confidentiality of confidential statements and other materials which have been made or brought into existence for the sole purpose of his or her seeking or being furnished with legal advice by a practising lawyer or for the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings…." In Heydon, Cross on Evidence (6th ed, 2000) at pars 25240 and 25255, the author emphasised the need for confidentiality in order to attract the privilege, whether the document in issue has been brought into existence at a time when litigation was in existence or reasonably contemplated, or has been brought into existence for the purpose of obtaining legal advice for that litigation or otherwise for the purpose of that litigation. 11 Therefore, so the submissions of Raunio and NRMA continued, the concepts of public interest and the administration of justice, upon which the common law principle of legal professional privilege is founded, should never require that a communication between a legal adviser of a party or of a prospective party to litigation, and another party or prospective party to the same litigation, be immune from disclosure under the principle of legal professional privilege, for the reason that there can be no confidentiality inherent in the communication. 12 Support for the position advocated by the applicants was said to reside in the decision of the Supreme Court of New South Wales in Jamison v The Government Insurance Office of New South Wales (1988) Aust Torts Reports 80-214 at 68,116. The plaintiff in that case was involved in two separate accidents while a pillion passenger on his girlfriend's motor cycle, allegedly because of her negligence. The plaintiff sued the Government Insurance Office of New South Wales, which was constituted as a defendant to the proceedings in accordance with s 14 of the Motor Vehicles (Third Party Insurance) Act 1942 (NSW). The injured plaintiff's solicitor had interviewed the girlfriend and had taken a statement from her. The defendant sought to restrain the plaintiff from calling the girlfriend as a witness, from adducing evidence from her in consequence of her interview with the plaintiff's solicitor, and from examining or cross-examining her about any statement she made in the course of that interview. When the summons for the injunctions came on for hearing, the defendant called upon the plaintiff's solicitor to produce the statements made to him by the girlfriend, the same having been earlier subpoenaed. The plaintiff sought to set aside the subpoena claiming confidentiality and legal professional privilege. In ordering production of the documents, Carruthers J held that there could never be any element of confidentiality in communications made between a legal adviser and a person opposed to that legal adviser's client, and therefore the claim to legal professional privilege was misconceived. At 68,119, Carruthers J said as follows: "… But the public interest could never require that a communication between the legal adviser of one party and the person who was opposed to his client be immune from disclosure, for there could never be any element of confidentiality in such a communication…." And further at 68,121, his Honour further said as follows: "… The law could not countenance a situation where an insurer liable to indemnify its insured could be denied access to a statement made by that insured to the party seeking to establish legal liability by the insurer…."