Tynan Motors Pty Ltd v Mazda Australia Pty Ltd

Tynan Motors Pty Ltd v Mazda Australia Pty Ltd - [2003] NSWIRComm 146 - NSWIRComm 1997 case summary — Zoe

[12]

7 It is now necessary to discuss the principles which apply to the circumstances in which privilege is deemed to have been waived, as relevant to these particular proceedings. A convenient starting point is the discussion of Gibbs CJ in the High Court of Australia in Attorney General (NT) v Maurice (1986) 161 CLR 475. At 481 his Honour said: "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., par 2327. 'In deciding it, regard must be had to the double elements that are predicated 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.' The decisions in which this question has been considered seem to me to be particular applications of the rule that in a case where there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production. Thus it has been held that the privilege in respect of a document is not waived by the mere reference to that document in pleadings ( Roberts v Oppenheim (1884) 26 Ch.D 724; Buttes Oil Co v Hammer [No 3] [1981] QB 223 at pp 252,268) or in an affidavit ( Lyell v Kennedy (1884) 27 Ch.D 1 at p 24; Infields, Ltd v P Rosen & Son [1938] 3 All ER 591 at 597; Tate & Lyle "International Co Ltd v Government Trading Corporation", The Times, 24 October 1984), although the position will be different if the document is reproduced in full in the pleading or affidavit: Buttes Oil Co v Hammer [No 3] [1981] QB at p 252. These cases may be explained by saying that it is not unfair or misleading to refer to a document in a pleading or affidavit which is not put into evidence but that if the document is set out in full the privilege is waived. A fortiori, of course, privilege in respect of materials used in drawing a pleading or an affidavit and not referred to therein, would not lose their privilege because they had been used in that way."

[13]

8 A more recent formulation by the High Court is to be found in Mann v Carnell (1999) 201 CLR 1. In a joint judgment Gleeson CJ, Gaudron, Gummow and Callinan JJ when dealing with waiver of privilege at common law said: "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. ( Ross T Smyth & Co Ltd v T D Bailey, Son & Co [1940] 3 All ER 60 at 70; Larratt v Bankers & Traders Insurance Co Ltd (1941) 41 SR (NSW) 215 at 226; The Commonwealth v Verwayen (1990) 170 CLR 394 at 406, 422, 467, 472). 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. ( Cross on Evidence (5th Aust ed (1996) par 25005; Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 497-498). 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 ( Benecke v National Australia Bank (1993) 35 NSWLR 110), 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. ( Lillicrap v Nalder & Son (a firm) [1993] 1 WLR 94; [1993] 1 All ER 724). 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 , 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."

[17]

12 In their joint judgment Branson and Lehane JJ considered a number of High Court authorities and concluded that: "…. The law implies a consent to the use of the privileged material, or, what is in reality the same thing, a waiver of the privilege, if by reason of some conduct of the party otherwise entitled to the privilege, it would be unfair to the other party, in a way which goes to the integrity of the legal process, for the privilege to be maintained." (at ALR 647). Their Honours continued: "The quality of any particular legal advice, and the extent, if any, to which it was causative of loss and damage, can only properly be assessed once it is placed in the context of the totality of legal advice received by the client. The client, by bringing the proceeding, is taken to have consented to the use of the privileged material, or to have waived reliance on the privilege which would otherwise attach to such material. Reliance on the privileged nature of the material would, in the circumstances, be unjust and would inhibit the proper functioning of the legal process. Where, as in this case, a party pleads that he or she undertook certain action "in reliance on" a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action. The court will be required to determine what was the factor, or what were factors, which influenced the mind of the party so as to induce him or her to act in that way. That is, the party puts in issue in the proceeding a matter which can not fairly be assessed without examination of relevant legal advice, if any, received by that party. In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract. " (at p 647).

[25]

20 After discussing relevant principles Bleby J said: "In my opinion the cases show that it is not sufficient merely to demonstrate that a party's state of mind or knowledge is in issue in order to succeed on an application that documents privileged from production on the ground of professional privilege be produced. If that were the case, privilege would almost always be waived in cases of misrepresentation, negligence and misleading and deceptive conduct where questions of a plaintiff's reliance or state of mind was in issue, and a list of documents showed that at or about the relevant time the plaintiff had some sort of legal advice which might have had some bearing on the plaintiff's state of mind. There must be something more from which it can be shown that the legal advice in question was relevant in the formation of that state of mind or belief or that the advice itself in some way becomes an issue in the action. This may be apparent from the pleadings or from some other document which has been produced in the course of discovery; it may be revealed by answers to interrogatories, or it may be self-evident from the description of the document in question contained in the list of documents. In some cases it may not become apparent until a witness is giving evidence at the trial. In this case, it is clear from the Chief Justice's analysis of the Statement of Claim that the state of mind of SECL concerning the adequacy of the accounts is a relevant issue. However, mere exposure to scrutiny of the corporate state of mind as to a belief in the existence or otherwise of a profit, and whether the accounts truly and fairly stated the position, does not necessarily assume the existence of legal advice as to the nature of the various transactions or that such advice could have had any bearing on the relevant state of the corporate mind. There is nothing in the pleadings or in any other information placed before this Court to suggest that relevant legal advice existed which could have had a bearing on that state of mind. The only information before the Court comprises the several lists of documents themselves which, whilst identifying particular documents and their date, give no indication as to which of the many transactions they might relate, or whether they contain the sort of information which could be at all relevant in informing the corporate mind. In my opinion, something more than that is needed before a court can impute waiver of the substantive right to privilege that SECL has. That is not to say, of course, that some of the documents listed may not have been relevant and may not yet be the subject of an imputed waiver of legal professional privilege. However, in my opinion there is insufficient information before the Court to justify the order for production that is sought, and I would therefore dismiss the appeal. It may well be, however, that some of the documents in question were relevant to the formation of the corporate state of mind. Where a party has in fact had access to privileged legal advice in forming its state of mind or belief, it will not always be apparent from the pleadings or other material that it has done so. Sometimes it may not be revealed until cross-examination of a witness at the trial. It could, of course, make a crucial difference to the outcome, and it is better that such matters be revealed at an early stage rather than at trial. Revelation at trial will cause surprise, and possibly substantial disruption to the trial in a variety of possible ways. In order to prevent that occurring it behoves a party claiming privilege to disclose or describe documents properly according to the exigencies of the issues raised on the pleadings or through other documents."

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