Van Zonneveld v Seaton

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

1672/02 JOHN CORNELIUS JOSEPH VAN ZONNEVELD v BIRTHE KRISTINE ADSBOL SEATON JUDGMENT - Ex Tempore (On admissibility of letter of advice to plaintiff) - Revised and expanded 13 October 2004 1 HIS HONOUR: The case I am in the process of trying is an application under the Property (Relationships) Act 1984 brought by a man against his former de facto partner. 2 The principal claim which he makes, is that he has contributed substantially to her assets by carrying out extensive building work on her house, which improved it. 3 In the course of the evidence, there has been examination, as frequently happens in cases of this sort, of the entire course of the relationship between the parties. One matter which has come to light in this way concerns the fact that the plaintiff was formerly married, that his wife committed suicide, that the plaintiff brought some litigation against Royal North Shore Hospital connected with her death, and that that litigation was settled while the relationship with which this present case is concerned was still on foot. 4 There is a significant issue in the present case about whether the plaintiff has exaggerated the amount of work which he performed on the house. He has been cross-examined with a view to showing that he has exaggerated in this way. There has also been some cross-examination relating to the circumstances in which he came to settle the claim which he had against Royal North Shore Hospital. The forensic aim of this cross-examination, so far as I can tell at the moment, seems to be twofold - one, to show that he was not as capable of working on the defendant's house as his evidence would require, the other, as part of a general attack on his credit. 5 In an affidavit which he swore on 19 August 2003, he replied to an affidavit of the defendant. The defendant had, in para 65 of her affidavit, said that apart from a period of about four months when the plaintiff had employment, from the commencement of cohabitation until April 2001 he did not work full-time. That affidavit, in its form as originally sworn, then went on to recount a conversation between the plaintiff and the defendant in which the plaintiff said that his lawyer and his psychiatrist had told him that he can claim loss of income from the insurance company concerning the Royal North Shore Hospital; and that the plaintiff also told the defendant that because his tax return in the four years prior to his wife's death was only around $10,000, he would not be able to claim loss of income because he had lost nothing. That conversation was objected to and rejected. 6 In para 65 of his affidavit in reply, the plaintiff denied what appears to be the totality of that paragraph of the defendant's affidavit. Para 65 went on to say: "The reason that I did not work full time between 1998 and 2001, was that I was working on a full time basis renovating the Defendant's property. I was advised by my lawyer at the time that with respect to my claim against the Royal North Shore, Hospital there would not be a claim for economic loss because I was working full time on the Defendant's property. For that reason, the claim was settled on the basis of nervous shock only."

That paragraph of the plaintiff's affidavit in reply was not objected to, and in consequence is in evidence in its entirety, even though a large part of the paragraph it replies to is not in evidence. 7 It appears that there is a letter of advice from the lawyer who acted for the plaintiff in connection with his claim against Royal North Shore Hospital, giving advice about settling that claim. That letter was, it seems, faxed to the house where the plaintiff and the defendant were then living and in that context the defendant came to see it, and has been able to provide it to her counsel. There is now an application to tender the letter. 8 The letter is clearly one to which client legal privilege prima facie applies, under section 118 of the Evidence Act 1995. The argument before me has centred on whether any of the exceptions to client legal privilege contained in section 122 apply. The exceptions particularly relied upon were those in subsection (1), subsection (2) and subsection (4). 9 Section 122 provides, so far as is now relevant: "(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: (a) in the course of making a confidential communication or preparing a confidential document, or (b) as a result of duress or deception, or (c) under compulsion of law, or (d) if the client or party is a body established by, or a person holding an office under, an Australian law - to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held. (3) Subsection (2) does not apply to a disclosure by a person who was, at the time, an employee or agent of a client or party or of a lawyer unless the employee or agent was authorised to make the disclosure. (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party, or (b) if the client or party is a body established by, or a person holding an office under, an Australian law - the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held." 10 It has been established in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 that the "consent" that section 122(1) speaks of is not only a consent expressly given, but can also sometimes be either an implied or an imputed consent. Relevant to the question of whether a consent should be imputed are matters which go to the integrity of the legal process. 11 The decision in Telstra Corporation Ltd v BT Australasia Pty Ltd has been followed by numerous judges: see Wayne Lawrence Pty Limited v Hunt [1999] NSWSC 1044 per Hodgson CJ in Eq; Garratt's Ltd v Thanga Thangathurai [2002] NSWSC 39 at [51] per Bergin J; Ford Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 per Hely J; Perpetual Trustees Victoria Limited v Richard Kingsley Sheehan [2004] NSWSC 294 at [20] per Dunford J; Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380 per McDougall J; Gordian Run-Off v Price [2004] NSWSC 600 per McDougall J; ASIC v Rich [2004] NSWSC 923 at [12] per Austin J; and Travel Compensation Fund v John Harvey Blair [2004] NSWSC 501 per McDougall J. However, when the High Court has expressly said, in Mann v Carnell (1999) 201 CLR 1 at 11, [23], that "the provisions of s.122 as to the circumstances in which privilege may be lost are not identical to the corresponding common law principles", it would only be after full argument that I would be willing to decide whether section 122(1)'s concept of consent operated identically to the common law concerning waiver of legal professional privilege. Deciding that question would also involve considering whether the common law concerning waiver of legal professional privilege continues to depend on considerations of fairness, as laid down by Attorney-General (for the Northern Territory) v Maurice (1986) 161 CLR 475 and Goldberg v Ng (1995) 185 CLR 83, or whether Mann v Carnell has substituted a test which looks at whether there is inconsistency between maintaining the privilege and the act said to amount to a waiver of it: see DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 per Allsop J. 12 In my decision in United Rural Enterprises v Lopmand [2002] NSWSC 1142 I noted how the ratio decidendi of Telstra Corporation Ltd v BT Australasia Pty Ltd was one which was confined to a situation where a state of mind was in dispute, as one of the elements of a cause of action. In the present case, the state of mind which is in dispute is the reason for settling the litigation against Royal North Shore Hospital. It is not an element in the present cause of action. 13 As Hodgson CJ in Eq held in Wayne Lawrence Pty Limited v Hunt [1999] NSWSC 1044, the question of whether the advancing of evidence about a person's state of mind is to be taken as consenting to the giving of evidence of confidential communication is a matter of degree in each case. The list of factors which his Honour gave as contributing to that question included what was the significance of the state of mind to the case as a whole. 14 I shall assume, without deciding, that the notion of imputed consent can, at least sometimes, be used under section 122(1), as a means of preventing abuse of process, when a litigant gives evidence about a state of mind that is not an element in a cause of action. Even making that assumption, it is not every time that a person makes a statement about having legal advice that they have received that there is a risk of an abuse of process occurring, if that statement were to be wrong, and the Court were to be deprived of the means of it being demonstrated that the statement is wrong. The legal process is not so fragile. 15 In the present case, I have not been asked to look at the advice in question. However, what I take to be its substance was put to Mr Van Zonneveld in cross-examination, when it was put to him: "I suggest to you that your lawyers suggested to you that there may well be concern that the matter would be referred to the Commissioner of Taxation for investigation?"

Mr Van Zonneveld's evidence was that he could not remember receiving that advice. 16 I do not accept that I can infer, as a matter of fact, that by including para 65 in his affidavit in reply Mr Van Zonneveld was consenting to the entire topic of his advice about settlement of the claim against Royal North Shore Hospital being opened up. In reaching that conclusion I bear in mind that the drafting, swearing and serving of the affidavit was a considered act done with the benefit of legal advice. 17 The question of whether he should be imputed with such an intention because the imputation is necessary to avoid an abuse of process is, as Hodgson CJ in Eq said in Wayne Lawrence Pty Limited v Hunt [1999] NSWSC 1044, a matter of degree. Given the comparatively peripheral role which the evidence in question plays in the case, I am not satisfied that it is necessary to make that imputation. Thus, section 122(1) does not permit the letter to be tendered. 18 This is not the time to try to resolve what is the relationship between the exception to client legal privilege created by section 122(2), and the exception created by section 122(4): cf Telstra Corporation v Australis Media Holdings [No 2] (1997) 41 NSWLR 346 at 350-1. Whatever that relationship may be, each of section 122(2) and (4) requires the substance of the evidence to which the privilege attaches to have been disclosed, before the privilege ceases to be available. The disclosure which is made by para 65 of the plaintiff's affidavit, is not a disclosure of the substance of advice of the kind which was put to him in cross-examination. Thus, neither section 122(2) or (4) permit the letter to be tendered. 19 For those reasons, I reject the tender of the document. **********

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