Luke v National Consolidated Investments Pty Ltd
[2003] QDC 47
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- Unreported Judgment
- Luke v National Consolidated Investments Pty Ltd[2003] QDC 47
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Luke v National Consolidated Investments Pty Ltd[2003] QDC 47
Luke v National Consolidated Investments Pty Ltd[2003] QDC 47
DISTRICT COURT OF QUEENSLAND
CITATION: | Luke v. National Consolidated Investments Pty Ltd & Ors [2003] QDC 047 |
PARTIES: | KEVIN JOHN LUKE and EILEEN ETHOL LUKE (Plaintiff) v. NATIONAL CONSOLIDATED INVESTMENTS PTY LTD (First Defendant) And AUSTRALIAN FINANCIAL MANAGEMENT CORPORATION PTY LTD ACN 084 379 279 (Second Defendant) And REON WITHERDIN (Third Defendant) And RAPP YARWOOD (a firm) (Fourth Defendant) And RAY STEELE (Fifth Defendant) And MICHAEL YARWOOD (Sixth Defendant) And DAVID EVANS (Seventh Defendant) And GEOFFREY JOHN RAPP (Eighth Defendant) And STAMFORD LYON PTY LTD ACN 010 943 257 (Ninth Defendant) And QUEENSLAND STATE HOME LOANS PTY LTD ACN 072 252 030 (Tenth Defendant) |
FILE NO/S: | D301/2002 |
DIVISION: | Applications |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 22 April 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 April 2003 |
JUDGE: | Robin DCJ |
ORDER: | Application for production of disclosed document dismissed. Cross-application for injunction granted. |
CATCHWORDS: | Legal professional privilege – whether waived – defendant’s solicitors inadvertently included his statement (which would ordinarily attract privilege) in list of disclosed documents under “Court documents” – statement made available for inspection, when plaintiff’s legal representative took detailed notes of the contents – mistake discovered 12 days later when they requested a copy (having not availed themselves of an offer of copying facilities on the inspection) – plaintiff’s application to court for an order the statement be produced refused – cross-application for injunction succeeded – special circumstance that defendant faced penalties in other pending proceedings focussing on the conduct the subject of the statement. |
COUNSEL: | D. A. Skennar for the applicant plaintiff A. B. Crowe SC for the respondent fourth, sixth, seventh & eighth defendants |
SOLICITORS: | Carter Capner for the applicant plaintiff Gilshenan & Luton for the respondent fourth, sixth, seventh & eighth defendants |
- [1]The plaintiffs, Mr and Mrs Luke are applicants for an order that the respondent fourth, sixth, seventh, eighth defendants, deliver up to their solicitors “a copy of the statement of David Evans contained in the List of Documents dated 24 January 2003”. There is a cross-application by the respondents for injunctive relief as follows:
“1.An injunction restraining the Plaintiffs whether by themselves, their solicitors, barristers, servants, agents or otherwise howsoever from in any way using or divulging to any third person any information derived from an inspection of the statement of David Evans which occurred at the offices of Gilshenan & Luton, Brisbane on 6 February 2003.
- An injunction restraining the Plaintiffs whether by themselves, their solicitors, barristers, servants, agents or otherwise howsoever from in any way using or divulging to any third person the diary note (being exhibit “B” to the Affidavit of Judy Ann Tietzel sworn in these proceedings on 4 April 2003) or any copy thereof or any part of such diary note or any copy thereof.”
- [2]Although the plaintiffs may not accept this, the context, in the court’s view, is plainly one of inadvertent disclosure as discussed, for example, in Cross on Evidence (Aust.ed.) Vol 1, 25020 and The Laws of Australia (LBC) 16.7[37] (Division 3 “Unintentional Disclosure”) – para [35] in the hard copy available to me, Release 23.
- [3]The plaintiffs seek relief against 10 defendants in respect of their purchase of a Gold Coast property in the course of what has come to be described as a “marketeering” exercise. The fourth defendant is the law firm conducted by the sixth, seventh and eighth defendants. Serious complaint is made against them as to the way in which they carried out their professional duties as solicitors for the plaintiffs.
- [4]The contentious disclosed document has not been made available to the court, but insight as to what it contains may be gleaned from the detailed notes taken by a representative of the plaintiffs’ solicitors in this proceeding (exhibit “B”). The statement appears to be a fairly full account of the respondents’ (Mr Evans’ in particular) involvement in the exercise. The plaintiffs’ solicitors are in no doubt as to its value to them in this proceeding. In my judgment, it would fly in the face of commonsense and common experience even to contemplate that the subject matter of the statement would intentionally be communicated outside the narrow circle of the respondents (who are not acting for themselves in the proceeding) and their legal advisors.
- [5]It probably does not matter, so far as any issue of mistake or inadvertence is concerned, but the court should not overlook some dramatic additional circumstances deposed to by the seventh defendant:
- “2. I am also a Defendant in a Queensland Law Society prosecution in the Solicitors Complaints
Tribunal for alleged property marketing offences. The charges brought against me are as follows:
- (a)that I allegedly failed to act with undivided fidelity to the interests of certain clients;
- (b)that I allegedly accepted instructions to act where the instructions gave rise to conflict(s) of interests; and
- (c)that I allegedly allowed certain monies of certain clients to be paid to another party without the clients’ authority.
- 3.There have been three (3) days of hearing in the Tribunal and hearing is due to resume on
28 May 2003. If I am found guilty by the Tribunal I may be fined, suspended from practice as Solicitor or even struck off the Roll of Solicitors for the Supreme Court of Queensland.”
Those circumstances powerfully reinforce the conclusion that Mr. Evans, so far as his actions are determinative, at no time intentionally authorised or permitted waiver of the legal professional privilege over the statement which he specifically claims in his affidavit, likewise privilege against self-incrimination in relation to the other proceedings he mentions.
- [6]An articled clerk in the employ of the respondents’ solicitors has acknowledged initial responsibility for what appears, if one thinks about it for the merest instant, the extraordinary listing of the statement in a section headed “Court documents” at the top of the list of disclosed documents. The list follows the approved form (Form 19) in the UCPR. The other items under that heading plainly belong there. No claim of privilege was mentioned, of course, in this part of the list of disclosed documents given to other parties. In line with the ordinary practice, privilege was claimed in respect of other disclosed documents. Mr Evans’ statement clearly does not belong under the heading, Court documents. That it somehow got inside the wrong file may explain why the articled clerk’s supervisor failed to pick up the mistake. (The clerk attributed his slip to his section’s being understaffed at the relevant time.)
- [7]Ms. Tietzel, who swore an affidavit and was cross-examined by Mr. Crowe SC for the respondents, was the solicitor running the matter for the plaintiffs. Mr. Crowe made it clear that he intended no criticism of Ms. Tietzel, still less to charge her with any kind of ethical shortcoming (no one submitted to the court that any relevant ethical principle existed), and the court’s position is similar. Ms. Tietzel acknowledged that legal professional privilege attached to the seventh defendant’s statement, and that, had she been acting, she would not have waived the privilege without express instructions. She said she was surprised “to some extent, but not entirely” to see the statement as Item 5 under the heading “Court documents” but did not conclude that the list of documents must have been prepared by “someone lacking experience”, given her high regard for the firm concerned - “not one who produces sloppy documents”. She agreed that the two (alternative) reasons for disclosure being made as it was would be intentional waiver of privilege or “obvious mistake”. She said she kept an open mind: “An even 50/50 – that’s how I saw it.” In other words, mistake was as likely an explanation as the alternative. She conceded that statements of the sixth and eighth defendants were not disclosed in the same way, denying that this was indicative of an obvious mistake, because “there could be any number of reasons for not including the other statements”. She agreed she had never suggested in the substantial correspondence between the firms that there had been any express waiver of privilege on instructions.
- [8]Ms. Tietzel gave her articled clerk the credit for noting the “not entirely” surprising disclosure of the statement. She instructed the articled clerk to inspect documents, telling her, in relation to the statement, that she “didn’t think it would be produced if it was an error, but if it wasn’t an error, then it probably would be produced”. The disclosed document was produced on the inspection. The respondents were suspicious of the approach taken on behalf of the plaintiffs, because no request was made for copies, although in the respondents’ case the possibility of copies being provided was offered. Such a request might well have alerted the respondents’ solicitors’ representative to the mistake which the court has no doubt they had made. Ms. Tietzel, asked whether she was suggesting that if a document is produced for inspection that is totally inconsistent with their being a mistake, responded “not entirely”. She conceded that, had she enquired whether disclosure was by mistake, if it had been by mistake, the statement would never have been shown. I repeat that no one suggests Ms. Tietzel did anything wrong. If there ever was a time when litigators might have been inclined to protect their opponents’ positions in that way, it is long gone. Nowadays, the expectation is that litigation, and particularly litigation like the present proceeding, will be hard-fought, and that participants will seize and make the most of every opportunity that presents itself.
- [9]At the inspection on 6 February 2002, Ms. Tietzel’s articled clerk was left alone in a room with the documents. The only one of which she took notes (more than two pages) was the subject statement. Notwithstanding the offer of photocopying facilities (which I find was made, on the evidence available), no request for copies was made until 10 February 2003 when copies of 13 documents were requested, this being followed by a request for the statement of Mr. Evans and one other document eight days later, on receipt of which the respondents’ solicitors immediately realised their mistake.
- [10]I think it is fair to say that court decisions in Australia of the highest authority jealously protect legal professional privilege. However, the very same decisions acknowledge that the benefit of the privilege may be lost. The helpful written submissions of both parties included the following extract from the majority judgment in Mann v. Carnell (1999) 201 CLR 1, at 13;
“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 (33). 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 (34). 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 (35), 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 (36).
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” (37). 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 (38), 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.”
- [11]Ms. Skennar, for the plaintiffs, relied on the English Court of Appeal decision in Guinness Peat Properties Ltd v. Fitzroy Robinson Partnership [1987] 2 All ER 716, where it was said at 729-30:
“Nevertheless, a mere plea of inadvertence does not by itself necessarily enable a party to litigation to avoid a loss of privilege. Privilege may be lost by inadvertence. This is well illustrated by the decision of this court in Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485, [1981] 1 WLR 529. In that case the plaintiffs' counsel at the trial read to the judge two paragraphs of a copy of a memorandum, being unaware that the memorandum contained other paragraphs in respect of which privilege could have been claimed and without any intention of waiving privilege. Templeman LJ, with whom Dunn LJ agreed, held that privilege had been thereby waived in respect of the whole memorandum, saying ([1981] 2 All ER 485 at 494, [1981] 1 WLR 529 at 540):
'... when counsel in the course of a trial introduces into the record a document or part of a document, he thereby effectively waives any privilege attaching to that document which could otherwise be asserted by his client.'
Templeman LJ was not persuaded that any discretion existed which would enable the court to restore and enable the plaintiffs to assert privilege in respect of the whole of the memorandum or in respect of that part of it which had not been introduced in evidence so far. He was referred to Ashburton v Pape, but considered that it had no relevance, saying ([1981] 2 All ER 485 at 494, [1981] 1 WLR 529 at 541):
'The court has no jurisdiction to relieve the plaintiffs from the consequences of their own mistakes particularly as those consequences cannot be wholly eradicated; part of the memorandum has in fact been read to the trial judge.'
Counsel for the plaintiffs in the present case did not seek to suggest that the defendants had waived or otherwise lost their privilege simply by including the McLeish letter in Pt 1 of Sch 1 to the first supplementary list of documents. He accepted that they would have been entitled to serve an amended list claiming privilege for it at any time before inspection took place. However, in his submission, privilege is essentially privilege from compulsory disclosure. By analogy with the Great Atlantic Insurance Co case, he submitted, once a privileged document has not only been disclosed but also inspected in the course of discovery, it is too late to put the clock back: the privilege is lost. The essential distinction between the present case and the Goddard and Herbert Smith cases, counsel for the plaintiffs contended, is that neither of those two cases dealt with a loss of privilege occurring as a result of a step taken in the litigation by the party entitled to the privilege. In all cases where inspection has been given in the course of discovery, he submitted, the court should follow the Briamore decision. This provides a simple practical rule. It places the onus on the party giving discovery, who should ensure that only documents in respect of which no claim of privilege is made should be disclosed. It avoids the practical problems involved in attempting to restore the previous status quo by prohibiting a party and his experts from using information obtained in the normal course of discovery.”
And at 730-31:
“In my judgment, the relevant principles may be stated broadly as follows.
(1) Where solicitors for one party to litigation have, on discovery, mistakenly included a document for which they could properly have claimed privilege in Pt 1 of Sch 1 to a list of documents without claiming privilege, the court will ordinarily permit them to amend the list under RSC Ord 20, r 8, at any time before inspection of the document has taken place.
(2) However, once in such circumstances the other party has inspected the document in pursuance of the rights conferred on him by RSC Ord 24, r 9, the general rule is that it is too late for the party who seeks to claim privilege to attempt to correct the mistake by applying for injunctive relief. Subject to what is said in (3) below, the Briamore is good law.
(3) If, however, in such a last-mentioned case the other party or his solicitor either (a) has procured inspection of the relevant document by fraud, or (b) on inspection, realises that he has been permitted to see the document only by reason of an obvious mistake, the court has the power to intervene for the protection of the mistaken party by the grant of an injunction in exercise of the equitable jurisdiction illustrated by the Ashburton, Goddard and Herbert Smith cases. Furthermore, in my view it should ordinarily intervene in such cases, unless the case is one where the injunction can properly be refused on the general principles affecting the grant of a discretionary remedy, for example, on the ground of inordinate delay (see Goddard v Nationwide Building Society [1986] 3 All ER 264 at 272, [1986] 3 WLR 734 at 745 per Nourse LJ).
Possibly there may be other exceptions to the general rule set out in (2) above. However, in my judgment, the exception set out in (3) above suffices to cover the present case. Save where it is too late to restore the previous status quo (eg on facts similar to those of the Great Atlantic case), I do not think the law should encourage parties to litigation or their solicitors to take advantage of obvious mistakes made in the course of the process of discovery.
The judge, in concluding that the present case is covered by the Goddard and Herbert Smith decisions and that for this reason the error on the part of the defendants' solicitors could be corrected, reached his decision by a rather different route from that which I have followed. Distinctions can be drawn between the facts of those cases and the facts of the present case. For the reasons which I have given, however, I think that his decision was correct. The mistakes in question having been obvious ones of which (as I have inferred) the plaintiffs' representatives were aware, the court should intervene by way of injunction for the protection of the defendants, who moved promptly to seek relief as soon as they became aware of what happened. It is not too late to put the clock back, any more than it was in the Goddard and Herbert Smith cases.
I would dismiss this appeal.”
- [12]Woolf LJ and Sir George Waller agreed with the foregoing. Having regard to the actual outcome in Guinness Peat, which saw legal professional privilege protected, I would be strongly disinclined to accept the statement of principles by Slade LJ as definitive here. Circumstances can alter cases. My view is that it is not possible, in advance, to formulate rules to cover all potential cases.
- [13]The decision most relied on by Ms. Skennar was Meltend Pty Ltd v. Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391; 75 FCR 511. There, Goldberg J ordered production of the document concerned. The headnote (FCR report) is as follows:
“The applicants inspected the documents listed in the respondent's affidavit of discoverable documents and later requested a copy of a document included in that list. The respondents refused the request claiming the document was privileged and had been inadvertently included in the list. The applicants sought orders requiring the respondents to provide a copy of the document, contending that privilege, if it existed, had been waived by the inclusion of the document in the list and by producing it for inspection. The respondents' contended that no express or implied waiver of privilege over the document occurred, and its inclusion in the list of non-privileged documents was a mistake. On initial inspection it was not obvious to the inspecting party that the document had been included by mistake and there was no question of fraud on the part of the applicants. The Court considered whether there had been an intentional disclosure and whether privilege had been waived.
Held, allowing the application for an order requiring the respondents to produce the document: (1) The disclosure of the letter was voluntary disclosure as part of the formal process of discovery and inspection and there had been an express waiver or imputed waiver of such privilege as existed in the document. (522C, 523G-524A, 526C-D)
(2) In the absence of obvious mistake apparent to an inspecting party and fraud, once inspection has been allowed of a document listed in that part of an affidavit or list in which privilege from inspection is not claimed, any privilege attaching to that document is to be regarded as waived by being included in that part of the affidavit or list and by being made available for inspection. (526F-527A)
Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1045; [1987] 2 All ER 716 at 730-731, considered.
Per curiam. The obligation is on the party giving discovery to determine what documents are discoverable and what documents are able to be inspected. Any claim for legal professional privilege should be taken at the time an affidavit or list in relation to discovery is filed. (526E-F)”
- [14]What distinguishes Meltend from the present circumstances is that Goldberg J inferred from the evidence of the solicitor who prepared discovery “that he directed his attention to the point – is this letter privileged? He decided that it was not privileged and that is why it remained in Part 1. He now says the inclusion of the letter in Part 1 of Schedule 1 of the list was a mistake.” (517). Duggan J in The Supreme Court of South Australia in Citicorp Australia Ltd v. Cirillo (BC 200003788) distinguished Meltend on the same basis in rejecting an appeal against the granting of relief of the kind sort by the respondents. He said at [33] – [34]:
“[33] But was there an implied waiver of privilege in the present case? The law will impute a waiver of privilege where the conduct of the privilege holder renders it unfair to maintain the privilege (Attorney-General for the Northern Territory v Maurice & Ors (1986) 161 CLR 475 at 488, 497). In Goldberg v Ng (1996) 185 CLR 83 at 95 Deane, Dawson and Gaudron JJ said:
“The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance. The most that can be done is to identify a number of general propositions. Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether ‘fairness requires that his privilege shall cease whether he intended that result or not’ Wigmore on Evidence (McNaughton rev 1961), vol 8, para2327, quoted with approval by Gibbs CJ and by Mason and Brennan JJ in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481, 488. That does not mean, however, that an imputed waiver must completely destroy the privilege. Like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes.”
[34] The principle of fairness could hardly be invoked by a party who procured inspection of the document by fraud or in the knowledge that access was being given to it as a result of a mistake. However, the circumstances in which the court will refuse to impute a waiver when there has been inadvertent disclosure are not limited to such circumstances. In Hooker Corp Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 Rogers J held that privilege had not been waived in a case where a litigant was bound by the court to comply with an accelerated compulsory discovery process and inadvertently discovered a protected document in the list of documents. (See also Ulgera Gap Nominees Pty Ltd & Ors v Elders Ltd & Ors (1996) 188 LSJS 374).”
- [15]The circumstances favouring upholding of the privilege in the South Australian case were, from one point of view, stronger, in that the first two lists of documents prepared by the disclosing party claimed privilege, the claim not being maintained in a subsequent list. (Perhaps a contrary view could be taken that the change was indicative of a mistake having been made).
- [16]The respondents here do not have the sympathetic circumstances acknowledged by Rogers J, but they have the important factor of the disciplinary proceedings the seventh defendant presently confronts.
- [17]I confess to having some misgivings about the use of concepts of “fairness” in circumstances like these. I have no difficulty in appreciating the importance of ensuring fairness towards the person whose privilege stands to be impaired. Here, that is principally Mr. Evans, who, personally, has done nothing whatever (apart from give his statement, which he would have expected to be kept confidential) to give rise to any thought that he might be prepared to waive privilege. The plaintiffs’ case seems to be that he has been put in the position of waiving it by a solicitor’s conduct of this proceeding on his behalf – which is far from being an outlandish suggestion. While there are statements in the cases which acknowledge the importance of the court’s looking to fairness towards the adverse party, who is perceived as having some entitlement to enjoy continuing advantages from some “inadvertent” or “unintended” disclosure, I cannot help but think that the “fairnesses” being considered are qualitatively different, that which the plaintiffs here may invoke being essentially of a procedural nature. They wish to take further advantage of an unlooked-for development which they had no reasonable expectation might happen.
- [18]The plaintiffs here seek the court’s assistance to secure that further advantage. In my opinion, the court ought not to be party to further inroads against the privilege – in circumstances where, in my view, there has been no actual or imputed waiver of privilege, as what occurred, in my view, was clearly a mistake, although I would exempt Ms. Tietzel (who presents herself as having refrained from forming any conclusion either way) from criticism for having acted carefully to protect her client’s interests by taking maximum advantage of the unusual opportunity which was offered.
- [19]Turning to the respondents’ application, I think it is entitled to succeed. In my view, the parties ought to have an opportunity to agree about appropriate orders. There was only limited opportunity at the hearing to canvass such matters. So far as the injunctions specifically sought are concerned, I have no particular difficulties about the second. As to the first, I am concerned that there are respects in which it may be too late to prevent the plaintiffs from “using … information derived from an inspection of the statement”. To an extent, such information may have already become part of the stock of knowledge of people in the plaintiffs’ camp. I would not wish to make any order which, for example, precluded cross-examination of the sixth, seventh or eighth defendants because it could possibly be said that such an injunction was being breached. That seems to me a different thing from cross-examination from the diary-note itself.
- [20]At the hearing reference was made to other relief the court might grant, such as requiring delivery up of the diary note and copies of it, and some order or direction in relation to the copy on the file as “Exhibit B”, such as its being sealed up or taken off the file. On the other hand, Ms. Skennar suggested that court’s orders might be limited as to their duration so that, for example, they would not last beyond the determination of the Queensland Law Society’s proceeding. I am unattracted to such a course. It seems to me essential that, against the possibility there may be litigation by other plaintiffs against this same group of defendants, none of them faces embarrassment in those other proceedings from the mistake which has been made in this one.
- [21]As to costs, again I will hear the parties. It seems inappropriate to characterise the present situation as one in which the respondents are claiming an indulgence, for which they ought to pay, given the very high value placed on protection of legal professional privilege, but it is the case that a rather basic blunder happened in the respondents’ solicitors’ office, and remained undetected there for some time. There is really no doubt where responsibility for the cross-application’s having to be brought lies.