Western Developments Pty Limited v Orange City Council

Ashfield Municipal Council v RTA [2004] NSWSC 917; Attorney-General of the Northern Territory v Maurice (1986) 161 CLR 475; Australian Securities and Investments Commission v Rich [2004] NSWSC 923; Baker v Campbell (1983) 153 CLR 52; CASES CITED: Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101; Mann v Carnell (1999) 201 CLR 1 ; Novus Australia Energy Co Pty Ltd v Gulf Petroleum (Australia) Pty Ltd [2001] NSWSC 579; NRMA Ltd v Morgan (No 2) [1999] NSWSC 694; Seven Network Limited v News Limited (No 12) [2006] FCA 348; Terry Street Pty Ltd v Leichhardt Municipal Council (2005) 145 LGERA 137

APPLICANT Mr M Wright SOLICITOR LEGAL REPRESENTATIVES: King-Christopher Carpenter RESPONDENT Mr P Clay SOLICITOR McIntosh McPhillamy & Co

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10018 of 2007 Western Developments Pty Limited v Orange City Council

JUDGMENT ON SUBPOENA 1 Her Honour: This is a Class 1 appeal against a development consent issued by the Council on 4 May 2006 for a 115 lot subdivision at 20 Farrell Road Orange, DA 227/2005. The Applicant has served a subpoena seeking the production of a document containing legal advice prepared by the Council's solicitor on or about 22 September 2006. The Council claims legal professional privilege in relation to this.

2 At issue in the proceedings are two conditions of consent as follows "Prior to the issue of a subdivision certificate": ( 2) A Certificate of Compliance, from Orange City Council under Division 5 of Part 2 of Chapter 6 of the Water Management Act 2000, is to be submitted to the Principal Certifying Authority prior to the issuing of a Subdivision Certificate. Orange City Council will require the payment of contributions for water, sewer and drainage works prior to the issuing of a Certificate of Compliance. In accordance with Council policy, the contributions are currently $5,874.00 per lot (114 lots) for water supply headworks and $3,240.85 per lot (115 lots) for sewerage headworks. Contributions are indexed in accordance with Council's Management Plan current at the time of the issuing of a Subdivision Certificate. … (10) The payment of $1,189,488.20 shall be made to Council in accordance with Section 94 of the Act and Waratah Development Contributions Plan 2005 towards the provision of the following public facilities …

3 In particulars provided by the Council's solicitors in a letter dated 15 March 2007 to the Applicant's solicitors the following answers are provided:

1. Does the Council say that each of these conditions was imposed in the exercise of its powers under the EPA Act? If so, please identify the specific section of the EPA Act upon which the Council relied in imposing each of these conditions. Response Properly construed, the first paragraph in each of the conditions referred to is the imposition of the condition. (This refers to condition 2 above) The second paragraph is advisory information identifying as it does a contribution arising under a separate statutory power and it does not amount to the imposition of a condition. The power to impose the condition (ie. The first paragraph of the enumerated item) arises pursuant to s 80A Environmental Planning & Assessment Act ("EPA Act").
2. Were these conditions imposed pursuant to the Waratah Development Contributions Plan 2005 adopted by the Council in August 2005? Response No.
3. Does the Council say that these conditions were imposed in the exercise of its power as a water authority under the WMA? If so, please identify the specific provisions of the WMA pursuant to which the Council says it was entitled to impose these conditions of the Consent. Response No, the conditions were imposed as set out in the response to #1 above. The power exercised by Council as a Water Supply Authority under the WMA was in the imposition of a pre-condition to the granting of a Certificate of Compliance under s 306 WMA.
4. Does the Council say it is empowered under Chapter 6 Part 2 Division 5 of the WMA to impose conditions upon a development consent granted under the EPA Act? If so, how? Response No. … 12 Please explain how it is that receipts issued by the Council to the Applicant for the payment of contributions are said to constitute a certificate or certificates of compliance under section 307 of the WMA? Response It is a matter of procedure that Council acknowledges compliance with the imposition of the condition by the issuing of the receipt for payment of money required to be paid pursuant to s 306 WMA and thereby evidencing certification under s 307.

4 The evidence relied on in the proceedings included an affidavit of Mr King-Christopher dated 28 February 2007. This annexes a detailed letter from the Council to its solicitors dated 20 July 2006 seeking advice on two issues, indexation of s 94 contributions under a development consent and the Council's ability to impose additional conditions for water augmentation works. This was discovered to the Applicant. A letter dated 7 November 2006 from the Council's Director Development Services to the Applicant's consultant states: I have been requested to respond to issues raised in your correspondence and associated discussions regarding contributions for public amenities as raised in previous correspondence and various discussions, with particular emphasis on water charges. I apologise for the delay in replying. In the interim, Council has sought further advice and is now in a position to respond.

The following paragraph also appears: Contributions for water and sewer operate differently to other contributions. Water and sewer are addressed under section 64 of the Local Government Act, which references the Water Management Act. Council is empowered under the Water Management Act to impose a contribution at the point were [sic] a certificate of compliance is required.

The additional contribution for water boosting is therefore lawful. It is acknowledged that the late notification of the charge has affected your clients; however as stated previously, this can be an unintended consequence of selling lots "off the plan" in a developing area.

5 The issues raised by the parties' arguments are whether there is a legitimate forensic purpose served by the production of this legal advice and whether any claim of legal professional privilege has been waived. Applicant's submissions 6 The Applicant argued that in these Class 1 proceedings the legal advice sought does bear on issues relevant to the proceedings. The relevant principles set out by Jagot J in Terry Street Pty Ltd v Leichhardt Municipal Council (2006) 145 LGERA 137 at [11] -[16] should be applied. (I note this decision was not dealing with legal professional privilege.) In Class 1 proceedings the Court can inform itself of all relevant matters and this suggests access should be granted. 7 There has been waiver of privilege as the substance of the legal advice is contained in the letter of 7 November 2006 from the Council's Director of Development Services and the letter from the Council to its solicitor dated 20 July 2006 seeking legal advice was discovered.

Respondent's submissions 8 The Council argued that no issue has yet been raised in these Class 1 proceedings which can give rise to a finding that a legitimate forensic purpose is served by the production of the Council's legal advice. Nor has there been any waiver of legal professional privilege. The letter of 7 November 2006 does not disclose the substance of any advice. Finding Legitimate forensic purpose 9 The parties agreed that the issue of whether there was a legitimate forensic purpose served by the document sought must be determined so I will deal with that issue first. This s 97 appeal is a merit appeal against the Council's decision to impose certain development consent conditions. In circumstances where the Court will form its own opinion of whether particular conditions should be imposed, the content of legal advice received by the Council after the grant of development consent as in the case of the subpoenaed document is usually irrelevant. The Council's own "state of mind" and the advice it obtained in forming its views, particularly "after the event", are not material. 10 Having said that, it appears from the development consent conditions in issue and the particulars provided by the Council's solicitor, which are not completely clear in my view, that there may be legal issues concerning condition 2 in particular in relation to the Council's role as a Water Supply Authority under the Water Management Act 2000. Whether this is an issue which will ultimately arise in these proceedings is as yet undetermined. 11 Under directions made by the Registrar the Applicant was to have filed a Statement of Issues in these proceedings on 19 March 2007 but has not yet done so. No criticism is intended of the Applicant but the situation remains that in the absence of that Statement of Issues the legal issues, if any, which may arise in these Class 1 proceedings are not yet specified. It is not presently possible to determine if the production of the subpoenaed document is of "sufficient" or "apparent" relevance (Terry Street at [13]) to the issues in these proceedings to suggest access ought be granted. Has there been waiver? 12 Legal professional privilege or client legal privilege attaches to legal advice obtained. There is no disagreement here that the legal advice is privileged. The disagreement is whether or not that privilege has been waived. 13 As observed by Jagot J in Jacobsen and Anor v Ballina Shire Council (2006) 146 LGERA 1 the Evidence Act 1995 does not apply in Class 1 proceedings in this Court so that the common law doctrine of legal professional privilege is relevant: see [18] where her Honour refers to Baker v Campbell (1983) 153 CLR 52. 14 In Mann v Carnell (1999) 201 CLR 1 the High Court (Gleeson CJ, Gaudron, Gummow and Callinan JJ) held at [28] - [29]: 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. 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.

15 Unless there is waiver the Council is entitled to claim privilege over the legal advice. The fact these are Class 1 proceedings does not suggest any different approach to the issue of waiver should be adopted. The issue as identified in Mann v Carnell is whether there is inconsistency between the maintenance of the confidentiality and the Council's conduct. The Applicant argued there had been a waiver of privilege because the Council's letter seeking advice was discovered and the letter of 7 November 2006 discloses the substance of the advice, relying on Seven Network Limited v News Limited (No 12) [2006] FCA 348 and Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101. In Bennett at [62] Gyles J considered that the primary judge was in error where he: drew a distinction between the conclusion expressed in legal advice on the one hand and the reasons for that conclusion on the other, and took the view that disclosure of the conclusion does not involve disclosure of the reasons". At [65] his Honour held that "the voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice. 16 The Applicant also relied on the decision of Barrett J in Ashfield Municipal Council v RTA [2004] NSWSC 917 where his Honour also applied the findings of Gyles J in Bennett (at [17] - [19]. His Honour notes at [20] that Tamberlin J agreed with Gyles J and made his own observations referring particularly to Deane J in Attorney-General of the Northern Territory v Maurice (1986) 161 CLR 475 in distinguishing between disclosure of the existence of advice and disclosure of part of its contents. 17 The Council argued to the contrary that the letter of 20 November 2006 did not disclose the substance of legal advice obtained. It relied on Hunter J in Novus Australia Energy Co Pty Ltd v Gulf Petroleum (Australia) Pty Ltd [2001] NSWSC 579 at [24], [34] - [36], where his Honour also applied Mann v Carnell. In the circumstances of that case, Hunter J held the letter in issue contained the views of a party and did not disclose the contents of any legal advice.

18 Disclosure of the fact that legal advice has been obtained does not amount to a waiver of privilege (see Austin J in Australian Securities and Investments Commission v Rich [2004] NSWSC 923) at [7] referring to NRMA Ltd v Morgan (No 2) [1999] NSWSC 694 at [9]). Here however the Council has discovered the detailed request for legal advice to the Applicant. I also consider that the letter from the Council's Director Development Services discloses the substance of the advice received. This conduct on the Council's part is inconsistent with the maintenance of confidentiality in the legal advice. I adopt the Applicant's arguments as set out at par 15 - 16. I therefore consider the Council has waived its legal professional privilege in the legal advice the subject of the subpoena. 19 That is not the end of the matter as I have held in par 11 above that there is not presently any legitimate forensic purpose able to be identified in these proceedings to which the subpoenaed document could be relevant. The Applicant should have the opportunity to determine what issues it wishes to raise in these Class 1 proceedings. Once it has filed its statement of issues the question of access to the subpoenaed document should be revisited. A timetable to achieve this should be discussed by the parties and submitted to the Court.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.