Tsapatolis v Fuji Xerox Australia Ltd

REASONS FOR JUDGMENT 1 The hearing of this proceeding is pending. The applicant has sought various remedies arising from the termination of her employment by the respondent ("Fuji"). 2 By interlocutory application the applicant has sought the production of legal advice given to Fuji and leave to deploy that advice at trial. The application has been made on the basis that Fuji has waived client legal privilege which would otherwise have protected the advice from production. 3 Fuji denies that any waiver has occurred. 4 The parties agreed that the applications should be determined by the Court on the basis of written submissions filed by them. 5 The background to the making of the applications may shortly be explained. In separate proceedings the applicant made a claim for compensation for workplace injuries under the Victorian WorkCover scheme. The applicant made a statement in support of her claim which led to further statements being taken from some other Fuji employees who had had dealings with the applicant relating to health and other issues. Those employees were the Chief People Officer of Fuji, Ms Beth Winchester and Ms Eileen Morris who is a Business Partner in Fuji's personnel management section. 6 Ms Winchester provided a statement on 2 July 2014 relating to some of her dealings with the applicant. The applicant had made a number of complaints to Ms Winchester who gave Ms Morris the task of investigating and dealing with the complaints. On a number of occasions it was necessary for Ms Morris to respond in writing to matters raised by the applicant. Before responding Ms Morris sometimes consulted Ms Winchester. In her statement Ms Winchester said that: "Eileen [Morris] consulted with me about the responses, and as matters escalated, with an increase in the scope of issues raised by [the applicant], we sought legal advice, which was taken into account in our responses." 7 It was this statement which, the applicant contended, gave rise to a waiver of privilege. 8 Privilege may be waived in many and varied circumstances. The underlying principle was explained by Gleeson CJ, Gaudron, Gummow and Callinan JJ in Mann v Carnell (1999) 201 CLR 1 at 13. Their Honours said that: "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." Later their Honours said: "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." 9 In order for a waiver to occur it is not necessary that the precise terms of the advice be disclosed in a witness statement or other document filed or prepared on behalf of the party in whom the privilege inheres. It will be sufficient if the substance or gist of the advice is disclosed and used by the party: see Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 at 104 (Tamberlin J). Even then, however, waiver will not be found to have occurred unless "the requisite inconsistency exists, between the disclosure on the one hand and the maintenance of confidentiality on the other": Secretary, Department of Justice v Osland (2007) 95 ALD 380 at 394 (Maxwell P). Matters of fact and degree will, invariably, arise. On the other hand the mere revelation of the existence of legal advice without disclosure of the substance of that advice will not constitute waiver: see Ampolex Limited v Perpetual Trustee Co (Canberra) Ltd (1996) 137 ALR 28 at 34. 10 The authorities were recently reviewed by Almond J in Lactalis Jindi Pty Ltd v Jindi Cheese Pty Ltd [2013] VSC 475, an authority relied on by the applicant. In that case the plaintiffs had pleaded, in their statement of claim, that they had "obtained a legal opinion from senior counsel … that [the first plaintiff] has reasonable prospects of successfully prosecuting a claim for breaches of the Warranties … and the indemnities [which had been identified elsewhere in the statement of claim]." His Honour held that this pleading disclosed the substance of counsel's opinion and that there was sufficient disclosure to attract the operation of s 122(3)(a) of the Evidence Act 2008 (Vic) which is in the same terms as s 122(3)(a) of the Evidence Act 1995 (Cth). That paragraph provided that a party will be taken to have acted inconsistently with the assertion of privilege if the party "knowingly and voluntarily disclosed the substance of the evidence to another person …". 11 This decision is plainly distinguishable from the circumstances of the present case. Ms Winchester's statement does not descend, in the slightest detail, to expose the content of the legal advice to which she referred even by way of paraphrasing the conclusions reached in the advice. 12 In my view no waiver has occurred by reason of what Ms Winchester said in her witness statement. She did no more than disclose the fact that the advice had been provided to Fuji and that, in some unstated manner, she had taken it into account when corresponding with the applicant. She had not disclosed the terms or substance of the advice or sought to deploy it in a way that would be forensically unfair to the applicant. 13 The applications must be refused. 14 Fuji submitted that, if it were successful in resisting the application, the applicant should be required to pay its costs. Fuji acknowledged that such an order would normally be precluded by s 570(1) of the Fair Work Act 2009 (Cth) but contended that the making of the application was unreasonable and that, accordingly, the exception provided for in s 570(2)(b) applied. 15 Section 570(2)(b) provides that a party may be ordered to pay costs only if the Court is satisfied that one party has caused another to incur costs by reason of some unreasonable act or omission. The discretion conferred on the Court, by s 570(2), must be exercised cautiously and only in a clear case: see Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J). 16 The applications were made on legal advice and were supported by submissions prepared by senior counsel. Although the legal basis for the applications was, at best, tenuous I do not put them in the category of "hopeless" or "unarguable". I do not consider that, in making the applications, the applicant acted unreasonably. 17 There should be no order as to costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.