Appeal - production of documents - legal professional privilege - implied or imputed waiver of privilege.

[1] This is an appeal, for which leave is required, by BlueScope Steel Limited (BlueScope) against a decision and direction made by Commissioner Tolley on 15 August 2005. [1] The direction was made in proceedings brought by a Mr W. Brown for relief in relation to the termination of his employment by BlueScope. In those proceedings a preliminary issue arose concerning the production of a document provided by a firm of solicitors, Mallesons Stephen Jaques (Mallesons), to BlueScope. BlueScope claimed that the document was subject to legal professional privilege. The Commissioner found the document was not subject to privilege and ordered BlueScope to produce it to Mr�Brown's legal advisers by midday on 22 August 2005. On 19 August 2005 the President issued an order staying the operation of the Commissioner's direction pending the termination of this appeal or further order.[2]

[2] Mr Brown was dismissed by BlueScope on 15 March 2005. On 17 March he filed an application pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) seeking relief in relation to the termination. On the same day BlueScope informed Mr Brown and his wife that the dismissal would be the subject of an independent review. At about the same time both Mr Brown and his wife made representations to the chief executive officer of BlueScope seeking his assistance in relation to Mr�Brown's dismissal. On 21 March 2005 BlueScope wrote to Mr Brown and told him that "[a]ll of the circumstances involved in the dismissal decision will be reviewed". On 24 March 2005, Mr Barron, BlueScope's chief legal officer, instructed Mallesons to conduct an investigation into the termination of Mr Brown's employment for the purpose of providing advice in writing concerning Mr Brown's claim. BlueScope contacted Mr Brown again about a week later and indicated that the review would be conducted by an external company.

[3] Mr Brown subsequently attended an interview with a solicitor from Mallesons at BlueScope's request. On 18 April 2005 Mallesons provided a written report to BlueScope. On 2 May 2005 Mr Brown attended a meeting with BlueScope's Vice President Human Resources and External Affairs and its Senior Employee Relations Officer. At the meeting Mr Brown was handed a letter in these terms:

"I am writing to inform you that Janine Young of Mallesons Stephen Jaques has completed the independent review of the termination of your employment. We would first of all like to thank you for your involvement in that review process. As the results of the review are confidential and privileged it would be inappropriate for us to quote or refer to it and we do not do so.

We re-affirm our decision to terminate your employment due to the following factors:

• You were issued a final warning in March 2004 after a personal control stop breach.

• On 27 February 2005, you climbed onto a glass hood to clean a moving roll with an ingoing nip by hand while the line was running, putting yourself at extreme risk of serious or fatal injury.

• The Company is not satisfied that you are consistently able to operate in a safe manner as indicated by your demonstrated patterns of behaviour.

• Given your demonstrated patterns of behaviour, we must exercise our duty of care for you and other employees. The company has given consideration to its duty of care to both you and its other employees at Western Port.

After further consideration, we offer the following as support to you in this difficult time.

• An ex-gratia payment equivalent to two (2) months pay. This payment is in addition to the four (4) weeks pay you received in lieu of notice at the time of dismissal.

• Outplacement assistance with sourcing a new position. This assistance would be provided by an organisation used by BlueScope Steel from time to time and include − discussions to highlight suitable roles, resume development, interview skills and job search assistance.

• Employee Assistance Program for you and your family to assist in the transition. You may contact them at 1300360364.

This is put as a genuine attempt to help you transition to a new career.

I can be contacted on 59796130 should you wish to discuss any aspects of this matter.

[4] The Commissioner did not deal in detail with the question of privilege. He noted that Mr Brown had participated in the interview with Mallesons under the impression that it was part of an independent review and that he did so without the benefit of legal or union advice. In the circumstances he thought it was consistent with a "fair go all round" [3] that the report should be made available to Mr Brown. He made a direction accordingly, as we have already noted.

[5] The sole question on the appeal is whether Mallesons' report is the subject of legal professional privilege. Counsel for BlueScope contended that although the question concerns procedure it is also one of jurisdiction, it being submitted that an order purporting to compel production of a document which is in law subject to privilege is a nullity. In the alternative it was submitted that the direction under appeal was made in error and should be quashed.

[6] The relevant law is succinctly summarised in the following passage from The Daniels Corporation International Pty Ltd And Another v Australian Competition And Consumer Commission:

"It is now settled that legal professional privilege is a rule of substantive law [Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 490, per Deane J] which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings." [4]

[7] It is clear that a document is privileged if its production would reveal communications between lawyer and client made for the dominant purpose of giving or obtaining legal advice. The chief legal officer's instructions to Mallesons were to provide legal advice "in respect of the merits of Mr Brown's unfair dismissal claim." If that was the sum of the evidence as to the purpose of obtaining the advice the privilege would clearly be established. There is other evidence, however, which is potentially in conflict with Mr Barron's evidence as to the purpose for which Mallesons were engaged.

[8] The evidence given by Mr Brown and his wife raises a clear inference that Mallesons had been engaged to carry out an independent review of the termination of Mr Brown's employment. Representations to that effect were made by BlueScope and, no doubt in reliance on those representations, Mr Brown attended an interview with a solicitor from Mallesons. Mr Brown's evidence also suggests that he was led to believe that if he cooperated with Mallesons the decision might be reversed. While this was true, Mr Brown was entitled to be told the full story. In particular, he was entitled to be told that the purpose of the inquiry was to provide advice to BlueScope in relation to Mr Brown's application and that BlueScope would treat the report as privileged.

[9] Despite the representations made to Mr Brown and his wife we think the best guide to the nature of the advice sought is the evidence of the chief legal officer as to the instructions he gave to Mallesons. On the basis of Mr Barron's evidence, which was not directly controverted, we are satisfied that BlueScope sought advice from Mallesons for the dominant purpose of giving legal advice in relation to the proceedings. Whether Mallesons' advice was privileged raises the issue of implied or imputed waiver.

[10] It was submitted by Mr Smith, counsel for Mr Brown, that if the report was privileged, the privilege had been waived by BlueScope through the representations it made to Mr Brown. It was submitted on behalf of BlueScope that the possibility of waiver can only arise after the privileged document has come into existence. Alternatively, BlueScope submitted that the circumstances do not give rise to an implied waiver.

[11] While waiver may be express, for obvious reasons cases of express waiver rarely give rise to controversy. Cases in which it is alleged that the privilege has been waived by imputation are more difficult. Most cases of imputed waiver involve a partial voluntary disclosure of privileged material: see, for example, Attorney-General (NT) v Maurice [5] and Goldberg v Ng[6]. In this case, the circumstances relied upon as giving rise to the imputation occurred before the material for which privilege is claimed came into existence. That distinction apart, it is clear that considerations of fairness are the cornerstone of the doctrine of imputed waiver.[7] The relevant principles are set out in the following passage from Mann v Carnell:

"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] HCA 39; (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. … 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." [8]

[12] Waiver of the privilege will be imputed where in the court's judgment the client's conduct is inconsistent with the maintenance of confidentiality. In this case representations were made to Mr Brown that he was participating in an "independent inquiry" when in fact BlueScope had retained Mallesons to advise it concerning its prospects in the litigation initiated by Mr Brown. There is a very real difference between an independent inquiry and the provision of legal advice to a client. It is almost inconceivable that Mr Brown, properly advised, would have allowed himself to be interviewed by the legal advisors to the opposing party in his s.170CE application. At the least it is likely he would have sought to have an advisor of some kind attend the interview with him.

[13] The fact that the conduct relied upon to found the imputation occurred before the report came into existence is relevant and significant. It is to be inferred that BlueScope, and probably Mallesons, took the view that the quality of the legal advice would be enhanced if Mr�Brown's own version of the relevant events was taken into account. For that reason the representations can be seen to have given BlueScope an advantage.

[14] The Commissioner did not make an express finding on the privilege question. His decision was directed more to what he perceived to be the unfairness of withholding the report from Mr Brown given the representations that had been made to him. We agree with that sentiment. The representations should not have been made. Mr Brown should have been told the true purpose for which he was to be interviewed. It is quite likely that if he had known the true purpose the course of events might have been different.

[15] We have concluded that according to ordinary concepts of fairness BlueScope's representations to Mr�Brown are inconsistent with the maintenance of confidentiality. When the privilege was first claimed, in BlueScope's letter of 2 May 2005, it was already too late to do so.

[16] We have reached the same conclusion as Commissioner Tolley. While the true purpose for which Mallesons was engaged was to provide legal advice, by its subsequent conduct BlueScope waived the right to claim privilege in relation to Mallesons' eventual report. In the circumstances we shall grant leave to appeal but confirm the substance of the Commissioner's order.

[17] In due course there may be an issue as to whether the report should be admitted into evidence. That is a matter with which the Commissioner can deal based on the circumstances if and when the issue arises. We note that no particular objection was taken to the form of the Commissioner's direction. Nevertheless we think that one change is required. The date for production of the document should be 14 days from the date of our decision. We shall vary the direction accordingly. Our order is issued separately.

F Parry SC with N Harrington of counsel for BlueScope Steel Pty Ltd.

[4] [2002] HCA 49; (2002) 213 CLR 543 at 552, para 9 per Gleeson CJ, Gaudron, Gummow and Hayne JJ.

[5] [1986] HCA 80; (1986) 161 CLR 475.

[6] [1995] HCA 39; (1995) 185 CLR 83.

[7] Attorney-General (NT) v Maurice at 481 per Gibbs CJ; Goldberg v Ng at 95−96 per Deane, Dawson and Gaudron JJ.

[8] [1999] HCA 66; (1999) 201 CLR 1 at 13, para 29 per Gleeson CJ, Gaudron, Gummow and Callinan JJ.

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