Ziade v Randwick City Council

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1 This is an application brought by the defendant to prevent the plaintiff from having access to documents produced pursuant to a notice to produce. 2 In the main proceedings the plaintiff challenges the validity of certain of the defendant's resolutions, relating to parking arrangements around and near the plaintiff's property and business which is the Ritz Cinema at Randwick. There were previous proceedings in the Land and Environment Court the subject of judgment by the Chief Judge of that Court in late November 1999. 3 On 7 December 1999 after the judgment of the Land and Environment Court, the Council resolved to change the parking arrangements by reducing the two hour limit on certain streets to one hour (the December resolution). There were five streets involved and the plaintiff claims these changes directly affected his business at the Ritz. 4 When the plaintiff became aware of the resolution of 7 December 1999 he approached the Supreme Court and obtained an injunction on 22 December 1999, by which the defendant was restrained from physically implementing any change to the parking arrangements in those five streets the subject of the December resolution. That injunction was in force up to and including 31 January 2000. On 31 January by consent the injunction was continued until further order. 5 On 1 February 2000 the defendant rescinded the resolution of 7 December 1999 (the February resolution). The Council resolved that the parking arrangements then in place in an area known as The Spot were to be retained pending a further review but, once again resolved to reduce the two hour parking limit to one hour, on the five streets the subject of the December resolution. 6 The February resolution had an almost identical effect as the December resolution but for a portion of one of the streets, St Paul's Street. After that resolution, the plaintiff once again approached this Court and Bryson J granted an interim injunction on 22 February restraining the defendant from implementing the February resolution. 7 On 3 March 2000 Bryson J granted an injunction pending final disposition of these proceedings and restrained the defendant from implementing the parking arrangements in the December resolution and in the February resolution. One of the conditions of the injunction granted by Bryson J was that the plaintiff was to pursue the proceedings expeditiously. That was done. 8 The matter came before me in my expedition list and subject to the directions it was expedited and given a hearing date on 31 July 2000 for three days. 9 On 18 April 2000 the Council resolved on a without prejudice basis pursuant to "legal advice", to undertake a further survey of residences and businesses in the area known as The Spot in relation to changing the two hour residents' preferential parking scheme to a one hour parking scheme in the five streets to which I have referred earlier (the April resolution). 10 The transcript of the discussion at the April meeting relating to the proposed review records that a member present at that meeting had said that there had been an injunctive proceedings in which the Council was not allowed to put up signs but the Council was not prevented from researching all the views. The Mayor is noted in the transcript as saying that: "You might recall that you cannot actually rescind any decision until the further Court hearing". 11 Notwithstanding that statement, on 23 May 2000 the Council received a report from the Director of Asset and Infrastructure Services (the Director), relating to The Spot precinct parking scheme, ( Ex A(2) Tab 57). The report deals with a number of issues, but in particular, surveys of the five streets the subject of these proceedings. 12 There are references to the response rate to the survey, two in each case in respect of each of the five streets. The Director of Asset and Infrastructure Services recommended to the Council that the reduction in parking limits from 2 hours to 1 hour in three only of the five streets the subject of the December and February resolutions should be implemented. 13 On 23 May 2000 the Council resolved that "subject to the concurrence of the Randwick traffic committee and the outcome of the current proceedings in the Supreme Court," the parking arrangements recommended by the Director in respect of three streets be implemented (the May resolution). 14 On 3 July 2000, the plaintiff applied for the vacation of the trial date. The Court was informed of the May resolution and was also informed that Council elections had occurred and that there was a newly constituted Council. The Court was also provided with a copy of a motion to Randwick Council giving notice that the May resolution be rescinded which was listed for hearing at the Council meeting on 18 July 2000. 15 Although Mr Newton who appeared for the Council ably sought to keep the trial date I was satisfied that in all the circumstances it was appropriate to vacate the trial date and to keep the matter in the expedition list to ensure that it be given a hearing date as soon as the plaintiff was in a position to meet the new circumstances that had arisen by reason of the May resolution. 16 On 8 August 2000, the Council met again. It is documents created from and presented at that meeting which are the subject of the defendant's application to preclude the plaintiff from having access on the basis of client legal privilege. At this meeting the Council rescinded the May resolution (the August resolution).

17 It is necessary to say something about the issues in this case. The plaintiff's further Amended Summons seeks a declaration that the May resolution if effective, rescinded the February resolution. The plaintiff also seeks a declaration that the August resolution if effective, rescinded the May resolution, if that was effective. Other declarations are sought in respect of the February resolution. 18 The plaintiff seeks a declaration that to the extent that the August resolution purported to revive the February resolution by rescinding the May resolution, it is invalid. Particulars relied upon for this declaration are that the decision of the Council in the August resolution to rescind the May resolution, with the object of reviving the February resolution, was based on legal advice associated with these proceedings, with the consequence that the decision amounted to: (i) the exercise of power for an improper purpose, namely, acting upon tactical considerations relating to these proceedings rather than acting solely upon relevant parking considerations in seeking to revive an earlier resolution which no longer represented the considered view of the defendant; (ii) the taking into account of irrelevant considerations, namely, the tactical considerations relating to these proceedings; and (iii) Wednesbury unreasonableness.

19 The defendant defends the claims against it and in paragraph 26 of its Contentions states that the Council rescinded the May resolution at its meeting of 8 August 2000. The defendant claims that, as Council rescinded the May resolution in the August resolution, the only pressing issue was whether the February resolution is void.

20 The parties are of course at issue as to the effect of each of the resolutions and their validity. Part of the directions given for the preparation of the trial anticipate that there may have been claims of client legal privilege made in the proceedings.

21 On 13 October, there was a direction in relation to the discovery of documents and on 31 October, the Council filed a list of documents. The direction in relation to privilege was that any files or documents in respect of which a privilege claim was made, were to be the subject of an affidavit setting out of the facts which supported that claim.

22 The list of documents filed 6 November, 2000 identified two items in part 2 of schedule 1, being number 5, a confidential report of Mark Hummerston dated 7 August 2000 to Council's extraordinary meeting of 8 August concerning consideration of legal advice concerning litigation; and No 6, tape recordings of the Council meeting in closed session of 8 August considering confidential legal advice concerning litigation.

23 The affidavit to the list of documents was sworn by Mr Hummerston. There was no affidavit setting out the grounds upon which the particular claims were made. Documents 5 and 6 were requested by the plaintiff it seems, but not produced on the grounds of the claim of privilege.

24 During the course of debate on the first day of the trial, Mr Galasso, counsel for the defendant, reviewed the documents produced to which access had been opposed and at 2pm produced a document which was in edited form, which became Ex A on the application. That document is a report by the Director of Governance and Management Support, Mr Hummerston, which commences: This matter is considered to be CONFIDENTIAL under section 10A(2)(g), of the Local Government Act, advice concerning litigation, or advice that would otherwise be privileged from production in legal proceedings on the grounds of legal professional privilege. 25 During the course of the hearing of this application yesterday, Mr Hummerston was called to give evidence. The report, Ex A, refers to the history of the various resolutions to which I have referred and to additional matters of fact. On page 6 the report refers to the May resolution as follows: This decision had the effect of replacing the 1 February decision of Council. Mr Ziade sought leave in the Supreme Court to amend his points of claim to challenge the 23 May resolution and lodge further evidence. Further, Council did not go to the same extent of notifying Mr Ziade the matter would be considered at the 23 May meeting, although Mr Ziade was aware that following the survey a report would be presented to Council. At this time Council sought advice from its barrister, Adrian Galasso, in respect of Council's position and likelihood of success in this matter. While the complete advice is attached to this report, the relevant sections are highlighted below:

Council officers and legal advisers have met with Mr Ziade and his lawyer, in an effort on a (edited portion) "without prejudice" basis, to find a compromise and settle the matter. To a considerable extent the 23 May decision already represented a compromise on the decisions of Council on 1 February.

However, the "without prejudice" discussion and subsequent exchanges of letters has not eventuated in a settlement offer Council officers could recommend to Council. Not even the compromise represented by the 23 May decision has resulted in a settlement offer that could be considered as acceptable to Council, but instead resulted in Mr Ziade expanding his points of claim to challenge that decision. In the absence of being able to recommend a settlement, Council appears to have no option but defend its ability to make decisions in respect of parking at The Spot, for the good of the whole community and not just sectional interests.

On 1 February 2000 Council sought to amend the parking arrangements at The Spot in order to ensure that residents had reasonable access to parking outside their homes. This was to be achieved by limiting parking to one hour, for other than residents with car parking permits issued by Council. A compromise offered by Council's decision of 23 May has effectively been rejected by Mr Ziade, and there seems little purpose in Council maintaining that compromise given that the decision is now being challenged by Mr Ziade, at the likely expense of residents (in not having sufficient parking).

That this report and the attached advice from Counsel be received and noted. 26 I adjourned the application to hear further submissions this morning in relation to item 6 in the List of Documents, which is the tape recording of the Council meeting of 8 August 2000. That was done because Mr Galasso required time to have the tape transcribed and to make a decision whether any parts of it were not the subject of the application to preclude access. 27 The transcript was produced overnight and an edited version was provided to the plaintiff this morning. It became Ex B, on the application.

28 Ex B has a number of areas which are edited. The portion which is the part of the meeting which was in closed session pursuant to section 10A(2)(g) of the Local Government Act, commences at page 13 of the transcript. It appears to run to the end of the transcript at page 34.

29 The defendant claims that the edited portions in both Ex. A and B. and the advice provided by Mr Galasso fall within the description of the communications referred to in either section 118 or section 119 of the Evidence Act 1995. The defendant submitted that it is clear that the advice was produced for the dominant purpose of the lawyer providing legal advice to the client, the defendant. That much is not so controversial.

30 The plaintiff relies upon three grounds to claim that it is entitled to access to these documents in this hearing. He claims that it would be unfair in the circumstances, having regard to the contents of Ex A and Ex B and the issues in the case. He also submitted that Council's advice has become an issue in the proceedings, having regard to the particulars to which I have already referred, and also the intrinsic intertwining of that advice in the course of the discussion and deliberations of the Council in passing the August resolution. There is also a claim that the privilege has been waived.

31 There is no doubt that a litigant can waive privilege directly through intentionally disclosing protected material. A litigant can also lose that protection through a waiver by implication: Attorney General (NT) v Maurice (1986) 161 CLR 475. When an act or omission of a litigant gives rise to a question of imputed waiver, the governing consideration is whether fairness requires that the privilege will cease, whether that is the intended result or not: Goldberg v Ng (1995) 185 CLR 83.

32 Part of the plaintiff's claim relies upon s 126 of the Evidence Act which provides: Loss of client legal privilege: related communications and documents 126 If, because of the applications of ss 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is necessary to enable a proper understanding of the communication or document. 33 It is necessary to turn to the transcript which is exhibit B which has been produced this morning. A relevant portion appears on page 16. It records the following statement by the Mayor: In February of this year we had a rescission motion before us which we to rescind the December decision. Council elected to rescind that decision. It also elected to reinstate part of the decision - in other words, remake the decision. Effectively what that did is it knocked out the basis for an injunction. The injunction, as you will read in the report especially counsel's opinion - Then there is an edited portion over which privilege is claimed. The next statement is, "So we substitute motions"? This seems to suggest the content of what was in the portion over which privilege is claimed. 34 The plaintiff relied upon a decision of Rolfe J in Ampolex Ltd v Perpetual Trustee (1996) 40 NSWLR 12, in particular at 18 and 19 where his Honour said: Mr Goldberg's submission necessarily rested upon the proposition that it is not sufficient to constitute the substance of the advice to say what the conclusion is for that, so the submission ran, is nothing more than giving the effect of the advice. The logical extension of that submission is that all the reasoning behind the conclusion must be exposed before it can be said there is a disclosure of the substance. I do not agree essentially for the reasons I have given. In my opinion the substance of the advice may well be disclosed in the ultimate conclusion, without the supporting reasoning process, is revealed. At that stage there has been, in my opinion, a disclosure of the substance of the advice, that is, what the advice is. 35 The transcript exhibit B, deals with the February resolution as follows: You will recall that after the February decision - part of the February decision - there was an amendment moved that went to a further survey. We did that further survey and that survey was reported back in May. We actually amended the February decision by the May decision. Our lawyers are now telling us that (blank - privilege is claimed). I'll let Mr ?? go into some detail. But the essential thing that we're trying to do tonight is to make sure that we don't prejudice our case. The lawyers have said (blank). A question was then asked: "What was the essence of the May amendment?" It is apparent from that question that the May amendment has been the topic of discussion within the privileged portion. 36 At the bottom of page 17 the Mayor is recorded as saying: We'll take some advice but there may be another mechanism for ?? into some sort of motion. What the lawyers are saying is that (blank - claim for privilege) The transcript continues: "And why not? He can wipe that off. We can't". Another Councillor says: I'm still confused. Once we rescind the May decision, in the proceedings, what are back with, the February decision? The Mayor responds: "Yes. In February 2000 Council rescinded the December 1999 decision" and on page 25: Council's moved expeditiously and indeed one of the concerns for us tonight is to make sure that we don't add any further delays of our own making and the way to do that is to rescind this motion because if we don't rescind it, Jack can open ?. and on page 25: If the rescission is carried there'll be no further work on that at this point in time until the court case is resolved and….. and on page 26: Yeah, but it should follow this sort of procedure and we'll just make sure that the procedure followed doesn't get us in the same problem.

37 A question is asked: "Well, what procedure are we alleged to have not followed?" after which there is a large edited portion over which privilege is claimed followed immediately by: If he loses and we seek costs, he will have to argue that the time and effort spent - we spent defending that silly allegation shouldn't be paid for by him. It doesn't necessarily follow that the costs. Next submission: That's right. The court can award costs in a slightly different way if we lose the substantive ??. And then Council could then properly make a subsequent decision to achieve the same end.

And what will he do? Protest that as well? He'll be running out of money by then. What we want to do - what the legal advice is (blank - privilege claimed). The second part of all this is that (blank - privilege claimed). I think we ought to park our garbage trucks out the front.

The transcript continues on page 28: The other expectation of this that if we fight on the basis of the February decision which counsel advise that (blank - privilege claimed). Because at some stage in the future council will consider the issue of paid parking meters and Mr Ziade has already said he intends to challenge that decision if council ever arrives at it.

And page 29: The court had ordered that he be expeditious in pursuing the matter but the May decision has given him an opportunity to delay the matter. If we can rescind the May decision and go back to February we can then go back to court and say you've already ordered expedition on this matter. There are no new issues to be argued, all of the evidence has already been taken by way of affidavit. We should be listing and getting a hearing. We're absolutely sure that rescinding the motion tonight isn't going to add any complexity to ..., No No Not rescinding it is what gives him the window of opportunity to seek leave-well, he's all been granted leave to amend his points of claim - he's seeking leave to add new evidence. The court is awaiting council's decision on whether the decision stands or is rescinded.

On page 30 after an edited portion over which privilege is claimed the following appears: Mr Mayor, I'm quite concerned - it hasn't been totally clarified that rescinding this particular thing it won't be to his advantage in any way in a legal sense? The advice is then referred to with a statement that it had been circulated to all the Council offices. 38 Mr Galasso submitted that this is not a matter that concerns the subject of the advice and that there is no issue in these proceedings to which the content of that advice has any relevance. He submitted that what the court is ruling on is the Council's decision and he submitted in particular that I could find that the purpose and the reasoning of the Council is evident from the edited portion of the transcript already in evidence.

39 He submitted there is no basis upon which it is unfair to keep back the edited portion of the documents from the plaintiff and that s 126 does not apply because it is not reasonably necessary to understand the document that has already been produced, exhibit B. 40 A review of the material that I have just referred to in exhibit B leads me to the view that there has been an implied waiver by the disclosure of the content of the advice. It is obvious from the surrounding statements made in the transcript that the advice referred to the rescission of the May resolution. The question on page 16 about substituting the motion, the question about the May amendment on page 17, the expressed confusion on page 18 between the May decision and the February decision, and the further references peppered throughout this transcript suggests that this otherwise privileged document that has been produced consensually, exhibit B, has disclosed the content of the advice that was attached to exhibit A and was before the Council for discussion.

41 I am also of the view that some of the material that has been produced in the unedited portion of the transcript would have been appropriately the subject of a claim for privilege. Such portions include the discussions about the legal advice and the decisions in relation to the steps the defendant was considering taking in the litigation and were appropriately the subject of a discussion in closed session pursuant to s 10A(2)(g) of the Local Government Act 1919. In those circumstances the defendant has consented to the adducing of evidence that was otherwise privileged by reason of its consent to the tender of Ex. B. 42 Section 122(1) is therefore applicable and is a trigger for the application of s 126 which permits the admission of another (otherwise privileged) document into evidence if it is reasonably necessary to be produced to enable a proper understanding of the document that has already been produced. 43 What is in issue is the Council's decision. Indeed, Mr Galasso submitted this morning that what this court must do is to look to the state of mind of the Council at the time it passed the August resolution in light of the issues between the parties. It is not possible to properly review the state of mind of the Council without having before the court what was in fact before the Council and the subject of discussion upon which it reached its conclusion. 44 In all of the circumstances I am satisfied that it would be unfair to prevent access to this document. I am satisfied that s 122(1) applies and s 126 is triggered, and the unedited exhibit B, the unedited exhibit A, together with the advice annexed to exhibit A, are in all the circumstances reasonably necessary to enable a proper understanding of the discussion contained in the edited versions of those documents. I intend, therefore, to allow access to the unedited version of exhibit B and the unedited version of Exhibit A and the advice attached to it.

Last Modified: 12/18/2000 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.