Temwell Pty Ltd v DKGR Holdings Pty Ltd

(i) Affidavit of 29 July 2003 - paragraph 4. 5 In this paragraph it is deposed; 'I wish to respond to the case now sought to be made against me as I understand that case from the third further amended statement of claim, the documents included in the court book under the heading which bears my name and the further affidavits, including in particular the affidavit of Mr Goldstein. To assist me in so doing, in addition to documents which were available to me at the time of swearing my second Affidavit, I have had regard to: (a) copies of documents produced on subpoena by Arnold Bloch Leibler ("ABL"); and (b) telephone and facsimile records relating to telephone and facsimile facilities customarily used by me (which documents have been discovered). A summary of such telephone and facsimile records has been prepared and is annexed and marked A.' 6 That passage was said to reflect a reference, for the purpose of refreshing the memory of the witness, to the whole of the ABL file and not merely the redacted portions which have previously been made available to the solicitors for Temwell as a result of the order of Registrar Efthim of 15 April 2003. However, Counsel for the mCom respondents have asserted that the only documents produced by ABL to which Mr Hains intended to refer were the detailed bills of costs, copies of which have already been supplied to the solicitors for Temwell. Unless that assertion were contradicted by Mr Hains in cross-examination, I would not consider the passage in his affidavit of 29 July 2003 to involve an attempt, unfair or otherwise, to bolster his evidence by reference to undisclosed privileged documents in the sense identified by the High Court in Attorney-General (N.T.) v Maurice (1986) 161 CLR 475 at 488.

(ii) Affidavit of 29 July 2003 - paragraph 35 7 This paragraph is in these terms; 'I have been referred to the allegation that I arranged for the solicitors for mCom Inc to send the letter dated 24 March 2000 (CB698). I do not recall seeing a copy of that letter before it was sent. The letter, as I read it, as indicated by its terms, was sent by ABL, solicitors, on behalf of their client mCom Inc. It was not a letter sent by me or on my behalf.' That passage, it is contended on behalf of Temwell, puts in issue Mr Hains' "role and the nature of his involvement." That much may be conceded but the statements in paragraph 35 just quoted do not, in terms, or by implication, suggest that any relevant state of mind of Mr Hains was informed by any communication with ABL. The deponent's lack of recollection of seeing a copy of the letter before it was sent is simply a statement of fact. Similarly, the assertion that the letter was sent by ABL on behalf of mCom Inc was apparently based on no more than Mr Hains' own interpretation of it. By contrast with the expressions of understanding by Mr Elbaum examined in my earlier ruling quoted at [3] above, there is no suggestion in this passage from Mr Hains' affidavit that either assertion was based on advice from ABL. Accordingly, there is, at present, no prospect that considerations of fairness would require disclosure of any presumptively privileged document to enable these assertions to be tested properly in cross-examination. 8 The requisite element of unfairness does not arise merely because there is evidence tending to establish close, lengthy and regular contact between a witness and a legal adviser. If that were sufficient, all professional privilege would be lost whenever the evidence disclosed contact of that kind. What is required, in my view, is partial disclosure, by evidence or pleadings, of advice given by, or other communication with, a legal adviser in a way which would make it unfair for the opposing party in litigation not to be apprised of the whole communication.

(iii) Affidavit of 29 July 2003 - paragraphs 26 to 29. 9 By these paragraphs, Mr Hains has deposed; '26. … … It is correct that I knew that it was necessary that Temwell consent to the assignment of rights of DDS under the transaction documents to the purchaser of its business, mCom. The prospect of obtaining consent to assignment of rights under the LRC Agreement was reflected in the 31 January 2000 Heads of Agreement (copy at CB2331) negotiated at a meeting for much of which I was present with Ian Kiefel and others. As to that meeting, I refer to paragraphs 37 and 38 of my first affidavit (CB2581). 27. I received a copy of the "consent letter" of 22 February 2000 (CB2421), I believe on or shortly after 23 February 2000 (CB3295). Upon its receipt I believed and proceeded on the basis that Temwell had agreed to DDS assigning its rights under the LRC Agreement and the 1998 Transaction Documents. 28. I was involved in communications with my son Richard and ABL in connection with the letter from Richard of 7 March 2000 on behalf of mCom Inc to Temwell (CB1421 and CB3421ff). I was aware that such letter was sent. So far as I am aware, until Fraid, Tauber and Temwell's solicitors sent a letter on 5 May 2000 (CB1130) there was never any suggestion made to me of "withdrawal" of such consent, assuming that were possible. 29. No question was raised at the meeting on 9 March 2000 about lack of consent to assignment. I believed at that time that Temwell had given its consent to assignment. In any matters in which I was involved after 22 February 2000 and again after 7 March 2000 I acted accordingly.' 10 These paragraphs are said to amount to a waiver of legal professional privilege because in them David Hains has deposed to his knowledge and belief "on the crucial issue of whether or not the Applicant had consented or objected to the assignment …… in circumstances where [he was] clearly in receipt of legal advice on such matters." It is true that in the paragraphs just quoted David Hains has deposed to his state of mind or belief on the matter of consent between 31 January and 5 May 2000 and what he did as a result of his possession of that state of mind or belief. However, it does not emerge, in terms or by necessary implication, from those paragraphs that his state of mind or belief was formed, or his conduct was engaged in, as a result of legal advice. Rather, the paragraph suggests that he formed his own appreciation of the effect of the Transaction Documents and the letters of 22 February, 7 March and 5 May and based his state of mind or belief on that appreciation and the absence of any contrary indication from Temwell (especially on 9 March) before 5 May 2000. If this understanding of the relevant paragraph be later contradicted by Mr Hains' asserting that his state of mind or belief had been based on legal advice, I consider that he should then be compelled to disclose that advice.

(iv) Affidavit of 24 July 2002 - paragraph 52. 11 This paragraph from the earlier affidavit of David Hains is in these terms; 'I refer to paragraph 27(e) of Mr Tauber's Affidavit. Assignment was not discussed. It was not an issue. I believed consent had been given. That was what the letter of 22 February 2002 [sic] had been about. There was no threat or suggestion they were withdrawing that consent.' 12 As with the paragraph discussed at [9]-[10] above, paragraph 52 of the affidavit of 24 July 2002 describes David Hains' state of mind or belief. In its context, it asserts what that fact was at the time of a meeting with Tauber and Enriquez at David Hains' office on 7 March 2000. To the extent that any basis is indicated for David Hains' then state of mind or belief, it is his understanding of the letter of 22 February 2000. For the reasons explained above in relation to paragraphs 27 to 29 of the affidavit of 29 July 2003, I do not consider that the present state of the evidence embodied in this paragraph permits the imputation that there has been a waiver by David Hains of legal professional privilege attaching to any identifiable communication.

(i) Affidavit of 18 July 2002. 13 In paragraphs 18 to 21 of his affidavit, Richard Hains has deposed; '18. Arnold Bloch Leibler were acting on behalf of DragonVentures and mCom Inc. I have been referred to the copy memorandum from Jonathan Wenig to Stephen Sharp of Arnold Bloch Leibler dated 7 February 2000. A copy of that memorandum is annexed and marked "C". That memorandum was forwarded with a view to obtaining the consent that Achi Racov and I regarded as critical to any decision to proceed with the purchase of DDS' business. On 22 February 2000 Temwell gave notice in writing of what I interpreted as its consent to the sale of the assets and business of DDS and also confirmed that the rights which DDS had to repurchase the application software could be transferred to the purchaser if a sale went ahead. 19. After receipt of the 22 February letter I proceeded on the basis that the consent necessary from Temwell had been obtained. The letter was unclear as to the amount which Temwell would require be paid to it in the event the option to repurchase was exercised. I asked my father to make enquiries to see whether some certainty could be arrived at in relation to that issue and that figure. In the Heads of Agreement a ceiling price of $4m. had been put on the price to repurchase the application software. In the draft Sale of Business Agreement prepared by Jonathan Wenig, $3.5m. had been put as the ceiling on the repurchase price. 20. The letter of 22 February 2000 had responded in terms consenting to the purchase of the assets and business of DDS, including its rights under the Licence & Commercialisation Agreement in favour of DragonVentures.com Limited. The letter also confirmed that at any time during the term of the Call Option, DragonVentures or its nominee as purchaser would be entitled to purchase the application software at an agreed price in accordance with the Call Option Agreement. In the meantime mCom Solutions Inc. had been substituted as the party to the formal Sale Agreement. Some of the assets of DDS were proposed to be owned by mCom Solutions Australia as a wholly owned subsidiary of mCom Solutions Inc. On 7 March 2000 I sent a letter to Temwell noting, as was the case, that we were proceeding to invest further funds and had done so in reliance on the 22 February letter. Further, that we had signed the 1 March 2000 agreement as the basis of that letter . 21. At all times between receipt of the 22 February 2000 letter from Temwell and receipt of a letter from Meerkin & Apel on its behalf dated 22 May 2000, I proceeded and acted as director of DragonVentures and mCom Inc. on the basis of Temwell's letter of 22 February 2000. Relying on that letter we lent money to DDS prior to settlement. We paid the purchase price and agreed to the allotment of shares at settlement in accordance with the Sale of Business Agreement. Because our plan was to immediately pursue the commercialisation and development of the product and to as soon as possible list the company in no circumstances would I have agreed to proceed either to put in more money after 22 February 2000 or complete the purchase if I had any doubt that Temwell's consent had not been obtained. The physical arrangements for payment of moneys after 22 February 2000 and for payment of moneys at settlement were attended to by Ian Kiefel of The Portland House Group on behalf of mCom Inc. and on behalf of DragonVentures (as well as operational payments on behalf of mCom Aust).' 14 Reference is made in these paragraphs to a communication from Jonathan Wenig of ABL to Stephen Sharp of the same firm, who had previously acted for Temwell and was requested by Wenig to convey the communication to Temwell and to Wenig's preparation of a draft Sale of Business Agreement. However, the assertion of a state of mind or belief by Richard Hains (and Achi Racov) is not predicated on legal advice from Wenig or anybody else. Similarly, Richard Hains appears to assert only his own unaided interpretation of the letter from Temwell on 22 February 2000 and what he did on the basis of that interpretation. For the reasons explained at [10] above, I am unable, on the evidence contained in these paragraphs of Richard Hains' affidavit, to uphold Temwell's contention that they constitute an implied waiver of legal professional privilege.

(ii) Affidavit of 24 July 2003. 15 In paragraph 27 of this affidavit Richard Hains has sworn; 'I have been referred to paragraph 10 of the third further amended statement of claim from which it is clear Temwell now asserts that it had rights to and ownership of the PIMPOS operating system and the source code for the PIMPOS operating system. If that is so, then mCom Inc bought from DDS that which it had previously sold to Temwell. I do not believe that to be the case. I refer to the Sale of Business Agreement of 1 March 2000 executed by me on behalf of mCom Inc as purchaser and Mr Elbaum on behalf of DDS as vendor (CB1012ff). The assets which mCom Inc purchased from DDS and which DDS sold to it (clause 3.1, CB1031) are the assets as defined in the agreement (definition at CB1018-1019) to include all of the intellectual property as defined (at CB1022) including registered intellectual property (see definition at CB1024) including the items particularised in schedule 8 to the agreement. Schedule 8 refers to other intellectual property held by DDS (not registered) being: ……' 16 There is then set out a list of software licences and software for the MTD contained in Schedule 8. 17 This paragraph seems to amount to no more than a tendentious assertion of the contrasting legal effect of the Sale of Business Agreement on the one hand, and the Transaction Documents between Temwell and DDS on the other. I have serious reservations about the admissibility of this paragraph. However, if admissible, it does not invoke any legal advice as the foundation of Richard Hains' belief and cannot amount to the generalised waiver of legal professional privilege for which Temwell contends. 18 Similar considerations apply to paragraph 28 of the same affidavit which recites; 'I had no doubt when mCom executed the sale of business agreement and I still have no doubt that mCom purchased the PIMPOS operating system from DDS and that DDS owned and had the right to sell it. Neither mCom Inc nor any of the respondents to this proceeding were parties to the 1998 transaction documents upon which Temwell seeks to rely in this proceeding. Whilst at the time of the 2000 purchase I had read some of those documents I did not, and having read them subsequently do not, believe that they include any right on the part of Temwell to ownership of the PIMPOS operating system or of the source code to the PIMPOS operating system whether for the MTD2000 or the MTD3000 products.'

(i) Affidavit of 29 July 2003 - paragraphs 15 and 16. 19 In these paragraphs this deponent has sworn; 'So far as the allegation there was no consent is concerned, from my direct involvement in the events of 22 March and earlier I was in no doubt that Temwell had consented to the assignment by DDS of its rights under the Licence Research and Commercialisation Agreement ("LRC Agreement"). At the meeting on 22 March there was no issue about consent. The question was raised whether mCom Inc was prepared to buyout Fraid and Temwell then and there. If mCom Inc had agreed to do so there would have been no need for Temwell to consent just as there was no need for mCom Inc to buyout Temwell because it had Temwell's consent to the assignment of DDS's rights under the LRC Agreement and the Call Option Agreement. As far as I am aware the allegation in (b) of the particulars is correct. That is, that after 22 March no consent to assignment was sought. No consent was sought because it had already been given and, furthermore, no issue as to consent was raised by Mr Fraid at the 22 March meeting. His only reason for attending, he said, was to receive a cheque for the sale of Application Software, to mCom, a matter that was not contemplated as forming part of the settlement.' 20 I regard this evidence as relevantly indistinguishable from that of David Hains discussed at [10] above and that of Richard Hains considered at [14] above. It represents Kiefel's own belief about the existence of consent and about why no consent was sought after 22 March 2000. Kiefel's contemplation about what would or would not form part of the settlement on 22 March, if relevant, does not purport to have been prompted by any legal advice. For these reasons, in accordance with the principles already explained, these paragraphs, if they continue to represent Kiefel's evidence on the issue of consent, cannot support an imputed waiver of privilege. It is true that Kiefel has deposed to having done certain acts in reliance on his belief when he swore in an earlier affidavit of 26 July 2002 that; 'As a director of MSI, I would not have provided the cheques or agreed to the settlement proceeding had I not believed that Temwell had given its consent ……….' 21 That assertion may give rise to cross-examination as to whether the acts said to have been done in reliance on a belief alleged to have been induced by representations by Temwell had been done on legal advice. However, merely because Counsel may choose to test an assertion of reliance in that way does not entail that there has been an implied waiver of privilege by the deponent.

(ii) Affidavit of 29 July 2003 - paragraphs 8 to 10; 22 These paragraphs are directed to the issue of whether Temwell was known to have rights to the PIMPOS system as well as the Application Software. In them, Mr Kiefel has deposed; 8. I have read paragraph 10 of the further amended statement of claim and the particulars to that paragraph. As I read the document, Temwell now seeks to make claim to the PIMPOS operating system in addition to a claim in relation to application software. I refer to the sale of business agreement dated 1 March 2000 (CB5809). The information contained in the schedules to the agreement was provided to me by DDS, with both Mr Cattanach and Mr Van Zanten providing such information. In the case of schedule 8, which makes a clear distinction between the application software and the operating system (CB1084), as best I can recall the schedule contains not only information provided to me by DDS but the document itself was a DDS generated document. A clear distinction is made in the schedule between application software which was licensed by Temwell to DDS and Operating System owned by DDS, and which DDS sold. During the course of my preliminary due-diligence of DDS Danial Elbaum and Rob van Zanten explained, by reference to a software "pyramid", similar to CB5185, the differences between the Temwell Application Software and the other layers of MTD software including the PIMPOS operating system. I was advised that there was a clear distinction between the application software, as licenced from Temwell, and the PIMPOS operating system, the latter which I recall being told was more fundamental to the operation of the MTD, as it contained the unique security elements to the MTD unit. Until amendments were made to the statement of claim in this proceeding I was not aware of any claim that Temwell had any rights to the operating system. I have always proceeded on the basis that the operating system was the property of DDS to sell and DDS sold it to mCom as appears from the Sale of Business Agreement and schedule 8. 9. As appears from my first affidavit, I was involved in carrying out financial due diligence in relation to the proposed purchase of DDS. In the course of that due diligence I had a number of meetings with representatives of the proposed vendor, DDS, Mr Elbaum, Mr Van Zanten and Mr Cattanach. On 19 January 2000 I provided a progress report in relation to that financial due diligence (CB3264). On 21 January 2000 or shortly afterward I read a memorandum from David Hains, then I believe in London, to myself, Michael Hains, Andrew Bigelow and Garry Weatherly (CB2863). I made handwritten notes on that document, most of the matters for further investigation being matters to which I was to attend and to which I did attend. One of those matters was item 2, "what technology was sold to Temwell?". On 25 January 2000 I prepared a further memorandum to file which reported upon my further due diligence enquiries (CB3271). Item 2 dealt with what was sold to Temwell, namely "the module forming the application software". Prior to the memo I had discussions with the representatives of DDS and which formed the basis of that memo. In neither the 19 January nor 25 January memos which I prepared did I mention the PIMPOS operating system as something which was not the property of DDS to sell or as something to which Temwell had a claim or in which it was interested. I was never provided with any information by any representative of DDS including Daniel Elbaum, Robert Van Zanten or Ken Cattanach with whom I had numerous conversations to the effect that the PIMPOS operating system was an asset of any party other than an asset of DDS which DDS, subject to the rights of its secured creditors, could sell. At no time was I told by Mr Elbaum, Mr Van Zanten or Mr Cattanach that the application software included the PIMPOS operating system or that the definition of application software in the 1998 transaction documents was wide enough to include whether actually or even arguably the PIMPOS operating system. Similarly, in discussions that I had with Mr Fraid and Mr Enriquez which are referred to in my first affidavit, there was never any suggestion, assertion or claim by them or either of them on behalf of Temwell or on their own behalf concerning the PIMPOS operating system. 10. As far as I am aware, the assertion by Temwell that it had an entitlement for the PIMPOS operating system is a new and recent claim, first made when the statement of claim was further amended. It is certainly not a claim of which I was aware at any time prior to the settlement of the purchase of the DDS business on 24 March 2000. What I understood was then being sold by DDS is reflected in schedule 8 to the Sale Agreement. It expressly includes the PIMPOS operating system.' 23 In their context, those paragraphs embody no more than Kiefel's own understanding of the Sale of Business Agreement and his perception of the relevant technology. That perception, according to him, was derived from discussions with van Zanten, Elbaum and Cattanach. Like the corresponding evidence of Richard Hains discussed at [17] above, these paragraphs do not purport to be based on any legal advice. Accordingly, there is no relevant communication which fairness, in the sense used in the authorities, compels to be disclosed to Temwell.

(i) Affidavit of 29 July 2002 - paragraph 27 24 In this final paragraph of his first affidavit, Mr Wenig, who was at all relevant times a solicitor with Arnold Bloch Leibler ("ABL") acting for the mCom respondents, has deposed; 'I had some further involvement in the matter when on 9 May 2000 I responded on behalf of the purchaser parties to a letter from Meerkin & Apel dated 5 May 2000. Copies of those letters are annexed and marked 'G1' and 'G2'. Until the letter of 5 May 2000 from Meerkin & Apel, I had no notice of any issue being taken by the Temwell parties to the assignment.' 25 That paragraph is clearly confined to matters coming to Wenig's notice in his capacity as solicitor for the entities which were purchasing the DDS business. It does not, in my view, purport to refer to matters with which he became acquainted by reason of communications made to him, or any other solicitor at ABL, for the purpose of obtaining legal advice for the mCom respondents. In this respect, this passage from Wenig's evidence is similar to paragraph 28 of the affidavit of David Hains discussed at [9] and [10] of these reasons. Accordingly, it cannot support an imputed waiver of privilege attaching to the undisclosed documents in the ABL file. 26 Counsel for Temwell referred, apparently in the same context, to an email sent at 11.06 a.m. on 22 March 2000 by Wenig to van Zanten, then of DDS, stating "Attached is the warranty which we will be seeking from DDS at completion because the Temwell situation has not yet been sorted out." The attached document was a draft amendment to the Sale of Business Agreement which provided for DDS to indemnify mCom Solutions in the event that it was required to pay more on the exercise of the Call Option Agreement than an amount calculated by application of the relevant formula to a Purchase Price of $3 million. The draft also provided for retention from the Purchase Price of an unspecified amount as security for performance of the indemnity to be granted by DDS. Similarly, it was noted that, in a facsimile message at 2.58 pm on 22 March 2000 from Wenig to Kiefel, Wenig enclosed "settlement details (still subject to finalising Temwell dispute)." The attached settlement statement provided for payments out of the purchase moneys to discharge various liabilities of DDS including those to Palicave, the Australian Tax Office and the ANZ Bank. The only reference to Temwell was a provision for payment to it of $37,013.47 on account of arrears of royalties which had accrued but remained unpaid. 27 As I understand it, these matters are pointed to as indicating that Wenig was, as late as 22 March 2003, in a state of doubt or uncertainty as to whether Temwell had consented to the assignment to Dragonventures or mCom Solutions of its rights under the Transaction Documents in respect of the Application Software. Access is then sought to the undisclosed parts of the ABL file in the hope that records of otherwise privileged communications will tend to confirm that state of doubt or uncertainty in the mind of Wenig. In my view, that would be impermissible unless Wenig had sought to reinforce his assertion of certainty about Temwell's consent by claiming that it is borne out by one or more records in the undisclosed part of the ABL file. As already indicated, no such claim can be identified in paragraph 27.

(ii) Affidavit of 29 July 2002 - paragraph 19 28 This paragraph recites; 'The letter of 22 February 2000 from Temwell specifically referred in paragraph 1 to a consent to assignment only in favour of Dragonventures. Paragraph 2 of that letter referred to the call option being exercisable either by Dragoventures [sic] or its nominee.' 29 In support of their reliance on paragraph 19, Counsel for Temwell have submitted; 'By this evidence, Wenig purports to offer an explanation of the legal reasoning behind why the draft Deed of Consent was sent, a critical issue in this case.' 30 I accept that analysis of the effect of the passage. However, it does not follow that, because a deponent exposes his own "legal reasoning", otherwise privileged documents which may tend to support or contradict that reasoning become discoverable to an opposing party to litigation.

(iii) Affidavit of 28 August 2002 - paragraph 9 31 In this paragraph, Mr Wenig has deposed; '…… I made it clear to Mr Fraid that whilst I would have liked him to sign the deed, the basis upon which mCom had been acting and was continuing to act was they did not require that deed to be signed as consent had already been provided.' 32 That paragraph, it is said on behalf of Temwell, is inconsistent with the statement in paragraph 25 of Wenig's earlier affidavit that "There was no discussion at the meeting [of 22 March 2000] regarding the Deed of Consent to Assignment which I had faxed out that day." Counsel for the mCom respondents dispute that there is any inconsistency between the two statements. The resolution of that dispute may turn on what the deponent meant by "no discussion" in the passage last quoted. In any event, an inconsistency between two statements by the same witness does not create a waiver of legal professional privilege unless an attempt is made by the witness or the party entitled to the privilege to resolve or explain the inconsistency by some selective or incomplete reference to a privileged communication. I can discern no such attempt in relation to the statements by Wenig to which attention has been drawn.

(iv) Other passages in Wenig's affidavits. 33 It was next contended on behalf of Temwell that in certain other passages in his two affidavits, "Wenig directly deposes to the substance of instructions he or his firm received and the advice it gave on matters. The disclosures he makes are about important and contentious issues in the case, and intended to bolster the case of the Respondents." Some extracts from the affidavit of 29 July 2002 were said to "go to the nature and role of David Hains and whether or not Richard Hains and/or 'Dragonventures' were the motivating force behind the mCom respondents' involvement." 34 The mere fact that a solicitor discloses "instructions" in the sense of what he or she was asked to do, or the identity of the client from whom the instructions came, would not normally make it fair for the opposing party to be apprised of all communications passing between the solicitor and the client in the course of carrying out the retainer. Often "instructions" in that sense, or even advice given, can be gleaned by inference from what the solicitor does or from documents prepared by the solicitor and provided to third parties. In the present case, "instructions" of that kind given to, and acted upon by, ABL can be inferred from the firm's detailed bills of costs which have already been discovered to Temwell. Privilege on the other hand attaches to confidential communications between a party and a legal adviser; see eg Trade Practices Commission v Sterling (1979) 36 FLR 244 where Lockhart J observed, at 245; 'Legal professional privilege extends to various classes of documents including the following: (a) Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them. See Wheeler v. Le Marchant (1881) 17 Ch. D. 675; Smith v. Daniell (1874) L.R. 18 Eq. 649; Bullivant v. Attorney-General for Victoria [1901] A.C. 196; Jones v. Great Central Railway Co. [1910] A.C. 4, and O'Rourke v. Darbishire [1920] A.C. 581.' It is only partial disclosure of a confidential communication in that sense that makes it fair, in the way explained in Attorney-General (N.T.) v Maurice (supra), for the party claiming privilege to be compelled to disclose the whole communication. Even then it would be rare for the partial disclosure to be of such a nature as to make it fair to compel disclosure of every privileged communication in a solicitor's file. In my view, none of the passages in paragraphs 2, 3, 4, 5 or 6 of Mr Wenig's affidavit of 29 July 2002 amounts to partial disclosure of a confidential communication between ABL and its client or clients in the sense just indicated. Similarly, instructions indicating issues of concern to David Hains and Ian Kiefel of which ABL was to take account in finalising the Heads of Agreement on 31 January 2000 to which Mr Wenig has deposed in paragraph 8 of the same affidavit lack the requisite character of confidential communications. 35 The same can be said of the comment claimed to have been made by David Hains to Wenig and Kiefel to which the former has deposed in paragraph 24 of his affidavit of 29 July 2002. If Wenig is to be believed, that comment was made for the purpose, not of obtaining legal advice, but of conveying to the meeting of 22 March 2000 the stance taken by Dragonventures or mCom Inc on the question of Temwell's consent. According to Wenig, he conveyed that stance to Mr Fraid in the manner described in paragraph 9 of the same affidavit discussed at [31]above. 36 Similar considerations apply to the expressions of "view" or "the basis on which mCom Inc had been acting and was continuing to act" contained respectively in paragraph 26 of Wenig's affidavit of 29 July 2002 and paragraph 6 of his affidavit of 28 August 2002. They were statements of the results of Wenig's own legal reasoning or of a similar process which he imputed to those controlling mCom Inc. In that sense, they were to the same effect as the statement in paragraph 19 of the affidavit of 29 July discussed at [29]-[30] above. They do not, expressly or by implication, constitute partial disclosure of confidential communications passing between those controlling mCom Inc and ABL or any other legal adviser. 37 It is not to the point that Wenig, as Counsel for Temwell have contended, "was a personal actor in the key events bearing on whether or not consent was given, or if given withdrawn. His involvement was more than just that of a legal advisor." Illustrations of Wenig's acting in that different role are said to be his participation in discussions concerning the Application Software licence and in the abortive settlement meeting of 22 March 2000. As suggested at [34]of these reasons, a solicitor's retainer not infrequently contemplates that he or she will undertake negotiations, or attend settlements or other meetings on behalf of the client. Whether or not what Wenig did in this case was within or outside the purview of a normal retainer, the mere adducing of evidence of what he said, did or heard when so acting cannot have the consequence that all confidential communications to or by ABL for the purpose of that firm's giving advice in the course of its retainer should be opened up to Temwell.

Conclusion 38 It will be apparent from my review of the specific passages from the evidence of David Hains, Richard Hains, Kiefel and Wenig that a substantial obstacle to Temwell's successfully contending that there has been an implied waiver of privilege has been the width of Category 1 documents to which the contention has been directed. In my ruling of 12 September 2003 I inferred that Mr Elbaum's "understanding" of the effect of the 1998 assignment to Temwell was based on advice from Deacons. Accordingly, I ruled at [14]: 'To the extent that the understanding there referred to was based on advice from Deacons, I consider that privilege in any document by which the advice was sought by DDS or conveyed to it has been waived, and such document should be made available to the legal advisers to the mCom respondents. I have been unable to identify any such document from among those described in the schedule. However, if there is a dispute about whether a particular document answers the description just given, I shall resolve it by inspecting the document for myself.' 39 In the present case, I have been unable to draw the necessary inference that any passage of evidence relied on was based on advice from ABL. Accordingly, it has been unnecessary to undertake the task of inspecting for myself documents in the ABL file. Moreover, Counsel for Temwell, although armed with the redacted version of the ABL file and a full copy of the detailed bill of costs rendered by ABL to the mCom respondents, have not sought to identify any document which might be inspected for the purpose of applying the "fairness test" to the claim for disclosure of allegedly relevant advice or other information. 40 I acknowledge that a Full Court of this Court in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 has held by majority that a party, by putting in issue his or her state of mind, as for example by pleading reliance on some conduct of the other party, is to be taken as having consented to the use of relevant privileged material. That material may include "relevant legal advice, if any" received by the party asserting reliance; see per Branson and Lehane JJ at 166-167. I share the reservations about that proposition in its full width which have been expressed by Allsop J in DSE (Holdings) Pty Limited v InterFan Inc [2003] FCA 384. Nevertheless I agree with his Honour that a single Judge of this Court is bound, as another Full Court of this Court held in Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925, to apply the principle expressed by the majority in Telstra v BT. That obligation is qualified only to the extent that subsequent High Court authority has precluded or limited the application of the principle in a particular case. 41 The only relevant later High Court authority to which I have been referred is Mann v Carnell (1999) 201 CLR 1. In the joint judgment in that case it was observed, at 13: '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" eg, Goldberg v Ng [(1995) 185 CLR 83 at 95]. 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 [(1993) 35 NSWLR 110], 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.' 42 Their Honours went on to point out, at 15: '… … Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect. Depending upon the circumstances of the case, considerations of fairness may be relevant to a determination of whether there is such inconsistency. The reasoning of the majority in Goldberg [v Ng (1995) 185 CLR 83 at 101-102] illustrates this.' 43 I do not understand the majority in Mann v Carnell to have held that the putting in issue of reliance or some other state of mind does not in every case amount to a waiver of privilege attaching to legal advice relevant to the formation of reliance or other state of mind. As already indicated, I personally doubt the correctness of the principle so generally stated and the likelihood of its surviving in that form authoritative scrutiny. However, I would remain bound at present to apply it in an appropriate case. As outlined above, the obstacle in the way of its application in the present case is the impossibility of identifying any relevant legal advice within the ABL file which the principle operates to require to be disclosed to Temwell. For these reasons, I declined to require production to Temwell of the ABL file in its unredacted form. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Ruling herein of the Honourable Justice Ryan.

Associate: Dated: 13 November 2003 Counsel for the Applicant Mr C D Golvan SC with Mr W Rothnie and Cross Respondents:

Solicitors for the Applicant Meerkin & Apel and Cross Respondents:

Counsel for the mCom Respondents Mr J L Sher QC with Mr J Delany and Cross-Claimants:

Solicitors for the mCom Respondents Minter Ellison and Cross-Claimants:

Date of Hearing: 10 November 2003

Date of Ruling: 13 November 2003