Did Maurice Blackburn act in a way inconsistent with the claim of privilege?
56This motion raises the question whether Maurice Blackburn, in acting for Mr Mills, have acted, according to subs (2), in a way that is inconsistent with his objecting to the adducing of evidence of the communications recorded in Mr Wubbeling's documents because it would result in the disclosure of a kind referred to in s118 or s119.
57In Mann v Carnell [1999] HCA 66; 201 CLR 1 Gleeson CJ, Gaudron, Gummow and Callinan JJ said at [28], [29]:
[28] 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.
[29] 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.
58In Attorney General for the Northern Territory v Maurice & Ors , an unreported judgment of the High Court of Australia, Gibbs CJ said this:
The rule which recognises legal professional privilege goes back at least to the time of Elizabeth I (see Wigmore on Evidence, McNaughton rev, vol VIII, para 2290) but that does not mean that it is archaic, technical or outmoded. Without the privilege, no one could safely consult a legal practitioner and the administration of justice in accordance with the adversary system which prevails at common law would be greatly impeded or even rendered impossible. This has been recognised in many cases: see, for example, Grant v Downs (CLR) at p 685; R v Bell,; Ex parte Lees (1980) 146 CLR 141 at 152 ; 30 ALR 489; Baker v Campbell (1983) 153 CLR 52 at 66, 94, 114 ; 49 ALR 385. In the last-mentioned case, the majority of the court described the rule as fundamental or essential (see (CLR) at pp 88, 95, 116-17, 131-2) and held that it was not confined to judicial or quasi-judicial proceedings. However, like every privilege properly so called it can be waived, although only by the person entitled to claim it, that is the client, and not the client's legal representative.
There was of course no express waiver in the present case and there is nothing to suggest that the claimants had any actual intention to waive privilege in the source documents. The principle applicable in these circumstances seems to me to be well stated in Wigmore , op cit, para 2327:
In deciding it, regard must be had to the double elements that are predicted in every waiver, ie, not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final.
59In the present case there was no express waiver and the question is whether waiver was implied or imputed by any inconsistency with which Mr Mills' case was conducted. There is no voluntary waiver of privilege where disclosure of documents is made in compliance with an enforceable legal obligation: Akins & Ors v Abigroup Limited (1998) 43 NSWLR I39. Ryan Carlisle Thomas were no longer acting as Mr Mills' solicitors and produced their file only under the compulsion of the subpoena. Their disclosure did not therefore constitute a voluntary waiver of privilege.
60By s122(2) it is the client or party concerned whose action may be held inconsistent with the claim of client legal privilege. The client or party concerned was Mr Mills. He would have been bound by the actions of Maurice Blackburn as his agent: see para (b) of the definition of "client" in s117. But Ryan Carlisle Thomas was not Mr Mills' agent and had no authority to waive privilege.
61Counsel referred the court to a number of decided cases dealing with loss and asserted loss of privilege. In Guinness Peat Properties Limited & Anor v Fitzroy Robinson Partnership [1987] 1WLR 1027 the defendants served on the plaintiff a list of documents as required by rules of court. The list separated the documents over which privilege was claimed from those over which there was no claim. A privileged letter, over which the defendants intended to claim privilege, was identified in the wrong part of the list and the result was that the letter came unintentionally into the hands of the plaintiff, who read it. It was held on appeal to the English Court of Appeal that the plaintiff's solicitors must have realised when they inspected the letter that it was by mistake that the letter had been discovered without a claim of privilege. The law did not encourage parties or their solicitors to take advantage of obvious mistakes made in the course of the process of discovery. Slade LJ said this at 1045:
(1) Where solicitors for one party to litigation have, on discovery, mistakenly included a document for which they could properly have claimed privilege in Part 1 of Schedule 1 of a list of documents without claiming privilege, the court will ordinarily permit them to amend the list under R.S.C., Ord. 20, r. 8, at any time before inspection of the document has taken place.
(2) However, once in such circumstances the other party has inspected the document in pursuance of the rights conferred on him by R.S.C., Ord. 24, r.9, the general rule is that it is too late for the party who seeks to claim privilege to attempt to correct the mistake by applying for injunction relief. Subject to what is said in (3) below, the Briamore decision [1986] 1 W.LR. 1429 is good law.
(3) If, however, in such a last mentioned case the other party or his solicitor either (a) has procured inspection of the relevant document by fraud, or (b) on inspection, realises that he has been permitted to see the document only by reason of an obvious mistake, the court has the power to intervene for the protection of the mistaken party by the grant of an injunction in exercise of the equitable jurisdiction illustrated by the Ashburton, Goddard and Herbert smith cases. Furthermore, in my view it should ordinarily intervene in such cases, unless the case is one where the injunction can properly be refused on the general principles affecting the grant of a discretionary remedy, for example, on the ground of inordinate delay: see Goddard's case [1986] 3 W.L.R. 734, 745E-F per Nourse L.J.
62In Meltend Pty Limited v Restoration Clinics of Australia Pty Limited (1997) 75 FCR 511 the Federal Court of Australia was concerned with a document listed in the wrong part of the list of documents made on discovery. The solicitor for the opposing party inspected the document and then asked for a copy to be supplied. That request was refused and a belated claim of privilege was made. It was not obvious on the face of the letter discovered that it was privileged. The inspecting party moved the court for an order that it be provided with a copy of the document. Goldberg J found that the applicant's solicitor did not on inspection realise that she had been allowed to see the letter only because of an obvious mistake. His Honour found that there had been a mistake. However, it lay not in inadvertently identifying the document in the wrong part of the list but, with knowledge of the contents of the document, in deciding not to claim privilege. There was simply an error of judgment. So the solicitor for the opposing party read the letter with the consent of the party discovering it.
63After extensive reference to decided cases, including to Guinness Peat Properties Limited v Fitzroy Robinson Partnership , his Honour held that there was an express waiver and alternatively an imputed waiver. Since the disclosure was voluntary, there was no obvious mistake apparent to the inspecting party and there was no fraud, and since inspection had been allowed, his Honour held that the inspecting party ought to be allowed to use the document and to have a copy.
64In Unsworth v Tristar Steering and Suspension Australian Limited [2007] FCA 1081 Gyles J was concerned with the inadvertent disclosure of privileged documents during an urgent and complicated process of discovery. A solicitor handed over two privileged documents, believing that they formed part of a group of documents for which privilege could not be claimed. His Honour was referred to Meltend Pty Limited v Restoration Clinics of Australia Pty Limited and other authorities. His Honour dealt with the decision of Hunt CJ at CL in Director of Public Prosecutions v Kane (1997) 140 FLR 468 which, Gyles J said, provided support for the view that a document sent mistakenly or advertently would not be disclosed voluntarily within the meaning of s122, particularly if the hypothetical reasonable solicitor would have realised that it had been sent by mistake. His Honour referred to the judgment of Sackville J in BT Australasia Pty Limited v State of New South Wales (No.8) (1998) 154 AL 202 at 208 - 209 as supporting the same view. His Honour found that disclosure was inadvertent and that those inspecting the documents must have appreciated, as soon as they appreciated the nature of the documents, the probability of their having been included in the draft bundle by mistake. His Honour held that privilege had not been lost.
65In Sovereign Motor Inns Pty Limited v Bevillesta Pty Limited [2000] NSW SC 521 a solicitor discovering documents prepared a list. Part 2 described by category about 370 documents claimed to be privileged. It did not individually specify those documents. Disclosure of a privileged document occurred not in the list but on the production of documents for inspection. The inspecting solicitor was given access to various boxes and binders. During inspection the solicitor tagged a number of documents for copying, including a letter of advice which fell into a category of documents for which privilege had been claimed but which had been left inadvertently in one of the ring binders produced for inspection. The plaintiff's solicitor said that if he had realised that the document had been left in the binder he would have removed it. Austin J held that there had been an intention to claim privilege which had inadvertently not been put into effect. His Honour found that the solicitor reading the letter must have realised that it was privileged. His Honour held that the letter had not been knowingly and voluntarily disclosed.
66It was submitted by Mr Williams that the very production of the documents without a claim of privilege constituted an implied waiver, being inconsistent with any intention to rely on privilege. I asked counsel whether there were authority to that effect, but none was put forward. The cases show, and Meltend Pty Limited v Restoration Clinics of Australia Pty Limited is merely an example, that while the privilege is that of the party for whom a solicitor acts, there are circumstances in which it is within the ostensible authority of a solicitor to waive privilege: at 523D-E, and see the cases there cited.
67The reported cases almost all deal with documents produced by solicitors under rules of court or by orders of judges. Those cases all concern lists prepared by or under the supervision of solicitors of documents seen by solicitors or under their supervision. So in those cases the solicitors, as agents having the power to claim and waive privilege (notwithstanding what Gibbs CJ said in Attorney General for the Northern Territory v Maurice & Ors ), have actual knowledge of the documents produced and inspected. They show that privilege may be regarded by the court as waived or lost, depending on the circumstances attending each case. I conclude that a statement that the production of a document by a solicitor without claiming privilege necessarily waives privilege is too wide.
68Only one case, Tim Barr Pty Limited v Narui Gold Coast Pty Limited [2008] NSWSC 1070 involved production by a third party. It is of no assistance, however, as production was made with the knowledge and approval of the person claiming privilege.
69The present case is quite different, because the documents were produced by a third party without the knowledge of the owner of the privilege or his solicitors.
70As far as the evidence goes, all Ryan Carlisle Thomas did was produce to the court the subpoena and the documents described in it. They were not Mr Mills' solicitors and had no ostensible authority to waive privilege. All they could have done, in my opinion, and what they should have done, was foreshadow to the Court on production that a claim of privilege might be made and inform Maurice Blackburn that they had produced their duplicate file, which contained documents likely to be the subject of a claim of privilege.
71They did not tell Mr Mills what they were doing. They do not appear to have foreshadowed to the Court that Mr Mills might claim privilege or to have told Maurice Blackburn that they were producing privileged documents.
72Mr Mills, whose privilege it was, did not know that the documents had been produced. His solicitor did not know that they had been produced.
73It was common ground on the hearing of the motion that the documents recorded communications that would ordinarily be regarded as privileged. It was not suggested that a claim of privilege made at the time of production would not have been upheld. Mr Leonard gave this evidence at T23:
Q. Once you read the documents, it became quite obvious to you, didn't it, they were privileged?
A. I would have claimed privilege over the documents, yes.
Q. And once you saw them, you realised that they were privileged?
A. Well, as I said, I would have claimed privilege over the documents.
Q. My question is this: Once you read those documents, you realised at least some of them, including the statement or record of interview we are talking about here, was privileged; you were in no doubt about that, were you?
A. Well, for the document to have been privileged, they would have had to have claimed privilege over the document. What I'm saying is that they didn't claim privilege over the document.
...
Q. You don't suggest that privilege doesn't exist unless it is claimed, do you? Is that how you practised at that time?
A. I wouldn't have thought it existed if it was waived.
Q. Mr Leonard, my question is this: When you read those documents, you knew they were privileged, didn't you?
A. That the documents that I would have claimed privilege over, I would have considered privileged.
74And at T24:
Q. No, my question is, when you read those documents, you knew they were privileged, didn't you?
A. I didn't think they could be privileged if no claim for privilege had been made over them.
Q. Is that your serious answer?
A. I thought a decision had been made not to claim privilege over the documents.
Q. You mean to waive privilege?
A. Yes.
Q. Do you mean the privilege existed, but it had been waived, is that what you thought?
A. Yes.
Q. So they were privileged?
A. Yes.
Q. But you thought privilege had been waived?
A. Yes.
Q. So when you read the documents, you knew they were privileged, but you thought that privilege had been waived?
A. Yes.
Q. And you thought that privilege had been waived because they had been produced without a claim for privilege, is that right?
A. Yes.
Q. And once you read the documents and it became clear in your mind that they were privileged, did you not think it would have been appropriate to contact the plaintiff's solicitor and tell them that you held these documents, but that you would, if privilege were to be claimed, immediately return them unread and you would not rely upon them. Have you not been aware of that sort of practice amongst solicitors in Sydney for many years?
A. I didn't think it was necessary.
75In my opinion the circumstances in which the documents were produced without a concurrent claim of privilege did not imply waiver. Those producing them did so under compulsion. They were not Mr Mills' solicitors. It should have been obvious to Mr Leonard that the documents were privileged. Any reasonable person knowing the contents of the documents would have been struck by the lack of a claim of privilege and would have suspected an oversight.
76It is not clear what Mr Leonard believed about privilege. If, as he said at first, it was that there was no privilege until a claim was made, he was wrong. If it was that the absence of a concurrent claim of privilege amounted to a waiver, he was, with respect and for the reasons that I have given, wrong.
77It was not by accident that Mr Leonard served the subpoena on the former solicitors but not on the current solicitors. There was this evidence at T18 and 19:
Q. You didn't address a subpoena to Maurice Blackburn to produce their file, did you?
A. No.
...
Q. But you chose to issue a subpoena to the plaintiff's previous solicitors?
A. Yes.
Q. Was that on advice?
A. Yes.
Q. Of senior counsel?
A. Yes.
Q. And your hope was, wasn't it, that there may be some erroneous production by that firm of the file, because they no longer acted?
A. I would have expected that the file would have been produced, but that there may have been a claim for privilege made over the file.
Q. Mr Leonard, you would have expected with a very high degree of certainty that any competent solicitor producing a file for an ex-client would produce, as required, but then claim privilege?
A. That solicitor or the current solicitors.
78Mr Leonard gave this evidence at T26:
Q. Mr Leonard, in your practice to date, although you may from time to time either issue or receive subpoenas aimed at the production of a solicitor's file, you would confidently expect a claim for privilege to be made over the contents of the file or over the privileged contents of the file?
A. I would generally expect a claim for privilege to be made over the file, yes.
Q. And that's why you didn't subpoena Maurice Blackburn?
A. Yes.
79In my opinion the high likelihood that Mr Mills, by his solicitors, would, when they realised the documents had been produced, raise a claim of privilege, and the high probability that such a claim would be sustained, made it necessary for Mr Leonard to adopt a cautious approach.
80At the conclusion of his affidavit Mr Leonard said this:
At no time was I notified by the plaintiff's present or former solicitor, of a claim for privilege. Had I been notified of such a claim, I would not have arranged for copies of the documents to be obtained...
81All the evidence was given on affidavit. The affidavits were read and objections were dealt with. Mr Leonard was called to be cross-examined. Mr Williams sought leave to adduce oral evidence in chief going to the question of whether it would have been obvious to Mr Leonard that the failure to claim privilege was an obvious mistake. Mr Williams foreshadowed that Mr Matkovich might also be called to give evidence. He had not provided an affidavit. Leave was opposed. It was then early in the day and the hearing of the motion was expected to take the rest of the day. I granted leave on condition that a further affidavit of Mr Leonard and, if desired, an affidavit of Mr Matkovich, first be produced. Mr Williams said that he anticipated that Mr Leonard would "give a satisfactory answer to the proposition". He did not then press the application for leave.
82Mr Leonard said this in cross-examination, commencing at T24:
Q. Are you aware of such a practice whereby, if a solicitor discovers that he has in his hands privileged documents and where he thinks that it is highly likely that a claim for privilege would succeed, then he would have the courtesy to contact his opposite number, tell that person that they were holding these documents and would they like to come and collect them? Are you not aware of such a practice in Sydney for at least the last 30 or 40 years?
A. If I believe that it had been done by mistake and it had been accidental, I would certainly contact the other side and advise them of what I believed to be a mistake, but if it is a situation that I didn't think there was a mistake or that they considered there to be a mistake, then I wouldn't think it would be necessary.
Q. Mr Leonard, you took advantage of an opportunity that presented itself to you because there had been no claim for privilege, didn't you?
A. I wouldn't say I took advantage of the situation. No claim for privilege had been made over the documents. Copies were obtained and I looked at them.
Q. You, yourself, realised that those documents may be useful in advancing your client insurer's cause?
...
A. I only have a general recollection about the documents at this stage, but I think that's probably a fair assessment that they weren't detrimental to my client's position.
Q. They were not detrimental?
A. No, no.
Q. The production and failure to claim privilege for those documents, you would have viewed as quite a windfall for your client, wouldn't you?
A. I don't know whether I would have viewed it as a windfall. I would have viewed it as, that we'd obtained some useful information and again that, just a summary of probably what my thoughts would have been, without being able to - without reading the documents and fully knowing the file at the time, I can't recall all the details of the file and what information I had before me.
Q. And may I suggest to you that your view was that it was too valuable a windfall for your client to throw it away by letting the plaintiff's solicitor know that some privileged documents had been produced, without a claim for privilege? That's the true position, isn't it?
A. No. As I said, I can't remember now the process that went on, but I'm sure I felt confident at the time that they were aware of the subpoena and whether they had, you know, obtained their own copies of the documents or not, I don't know.
...
Q. Mr Leonard, in your practice to date, although you may from time to time either issue or receive subpoenas aimed at the production of a solicitor's file, you would confidently expect a claim for privilege to be made over the contents of the file or over the privileged contents of the file?
A. I would generally expect a claim for privilege to be made over the file, yes.
Q. And that's why you didn't subpoena Maurice Blackburn?
A. Yes.
Q. You had no communication from Ryan Carlisle Thomas to suggest that they had any instructions to waive privilege?
A. I don't think so, no.
Q. And you certainly had no information from the plaintiff's solicitors to the effect that it was all right for you to go ahead and look at the documents that had been produced, did you?
A. No.
Q. You didn't ask them, did you?
A. I didn't ask them specifically, no.
Q. And you know what the answer would have been if you had asked, don't you?
A. I can't say what the answer would have been.
Q. Mr Leonard, if you had asked Maurice Blackburn whether they would waive privilege on a previous solicitor's file so that you could look at it, would you be at all optimistic that they would allow you to do that?
A. I wouldn't be optimistic, no.
Q. So you didn't ask them, because you knew they would object?
A. No, I didn't ask them, because I didn't think it was necessary at the time. They were aware of the subpoena.
83There was this evidence in re-examination at T27:
Q. You were asked some questions about whether you were aware of a practice of returning material to another solicitor that was apparently delivered by mistake or without a claim for privilege. Have you been involved in instances such as that yourself before 2006?
A. No, no, I haven't.
Q. Since that time, have you?
A. No.
Q. Have you ever been in a situation where you have received material that you thought had been produced by mistake?
A. No. I have received material that has intentionally - well, I consider it intentionally provided to me that I have been surprised about receiving, but as I have been satisfied that there is an intent to provide me with that information, I have assumed that, you know, there's no claim for privilege over the information or no objection to me having that information. If it was a situation where someone sent me a letter of advice or something by mistake, I would certainly contact them and let them know and I wouldn't read that advice.
84There was no further application to adduce oral evidence from Mr Leonard. Mr Matkovich did not give evidence.
85In the event, it does not matter what Mr Leonard or Mr Matkovich might have thought about the matter. The question is what the reasonable solicitor would have thought. In my opinion it would have been obvious to a reasonable solicitor in Mr Leonard's position that Mr Wubbeling's documents recorded confidential communications between Mr Mills and his lawyer and between Mr Mills' lawyer and others made for the dominant purposes of Mr Mills' being provided with legal advice and professional legal services: ss118, 119 Evidence Act.
86In the circumstances that the documents had not been produced by Mr Mills' solicitor and in the absence of clear knowledge that Mr Mills' solicitor knew that the documents had been produced, and of their nature, any reasonable solicitor would in my opinion have concluded either that Mr Mills' solicitor did not know that such documents had been produced or that, knowing it, had mistakenly omitted to make a claim of privilege. Such a solicitor would not, in my view, have inspected or used the documents without first telling the solicitors for Mr Mills what his former solicitors had produced and giving them an opportunity to raise a claim of privilege.
87In my opinion there was no waiver of privilege. The use by the insurer of Mr Wubbeling's documents was unfair.