Latest decision on implied waiver upon suing former solicitors

In Schulman v Abbot Tout Lawyers (a firm) t/a Abbott Tout Solicitors [2010] FCA 308, a plaintiff sued his former lawyers for misleading and deceptive conduct.  At the same time as the misleading representations, which were in the nature of legal advice, were alleged to have been made by them to him, he had been obtaining legal advice from the lawyers who came to act for him in the case against the former lawyers.  The former solicitors wanted inspection of the advice given by the new lawyers at exactly the time the plaintiff said he had relied on the former solicitors’ representation to his detriment.  There are certainly issue waiver cases out there pursuant to which such inspection might have been ordered.  But Justice Flick said there was no evidence that the subject matter of the legal advice was the same as the subject matter of the controversial representation, or even that it was relevant to it, and even if there had been, the plaintiff had done nothing in the proceedings so far inconsistent with the maintenance of the privilege so as impliedly to waive it.  His Honour said, at paras [17]ff: Continue reading “Latest decision on implied waiver upon suing former solicitors”

Changes to legal professional privilege operate retrospectively

They’ve changed the law in relation to legal professional privilege on us. The common law has been abolished, at least in relation to compulsory processes (discovery, subpoenas, interrogatories, notice to produce) in fora where the new Evidence Act, 2008 applies, and the adduction of evidence in those fora. Two legal professional privilege regimes are now going to apply in relation to any particular communication.  If the Tax Man, or the Legal Services Commissioner, compels you to produce documents, the common law will apply.  If you produce them, the common law will determine whether the production amounts to a waiver.  If the investigation leads to court (but not VCAT) proceedings proceedings, to which the new law will apply, you might be compelled by subpoena to produce documents you successfully resisted producing in the investigation pursuant to the common law.  Furthermore, in those proceedings, the Court will decide for itself, under the new law, whether the production to the Commissioner in the investigation amounted to a waiver or not.

The change is not as great as it might have been had the uniform evidence law been introduced into our land prior to the last round of amendments.  Now the law relating to implied waiver of privilege is stated in more or less the same terms as the common law, as expounded by Mann v Carnell, and the new law applies to post-commencement but pre-trial stages of court cases as well as at trial.  But there are differences too: Justice Byrne’s decision referred to below confirms it.

I blogged about the transitional provisions for the new legislation here.  It occurred to me that since the Hikers are so fond of emphasising what a basic common law right the right to assert legal professional privilege over confidential communications is, there was a real question about whether the changes ought to operate retrospectively, in the sense that communications which occurred before this year (i.e. before the commencement of the new Act) which were already entitled to legal professional privilege at common law might be adjudged not to be privileged for the purposes of proceedings governed by the new Act.  There is a presumption in statutory interpretation against the retrospective taking away of accrued rights.  But there is no such presumption in relation to changing procedures for the vindication of rights.

Someone has actually already run this esoteric argument.  In Main-Road Property Group Pty Ltd v Pelligra & Sons Pty Ltd (No 4) [2010] VSC 27, Justice Byrne, who knows a thing or two about the law of evidence, gave the argument short shrift, though his views are purely dicta: Continue reading “Changes to legal professional privilege operate retrospectively”

Beneficiaries, executors, trustees, and privilege

Update, 19 August 2009: See now also Gray v BNY Trust Company of Australia Limited (formerly Guardian Trust Australia Limited) [2009] NSWSC 789.

Original post: In the last post, I mentioned that the claimant beneficiary was not allowed to see the solicitor’s file, despite having initiated a costs dispute with the executor’s solicitor. A recent decision of the Supreme Court of Western Australia spells out the law on the question: Murray v Schreuder [2009] WASC 51.  The law is:

58  In the case of a non-discretionary trust, … a beneficiary has a right – subject to exceptions – to inspect trust documents used by the trustee in the administration of the trust.  An exception will arise in the case of documents which are private to the trustee that may evidence the reasons that the trustee has made his or her decision or exercised a discretion, in circumstances where disclosure is not required and has not been made by the trustee:  Hartigan v Rydge (434, 442, 445); or where the document is the subject of a duty of confidence owed to a third party:  see, for example, Hartigan v Rydge (433, 446); Schmidt (734); Morris v Morris (1993) 9 WAR 150, 154; or where disclosure is not in the interests of the beneficiaries as a whole:  Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484, 499; or where the terms of the trust deed give rise to an express or implied limit on a beneficiary’s right of access to trust documents:  Hartigan v Rydge (446).

The whole of the reasons’ legal discussion of this issue is reproduced below. Continue reading “Beneficiaries, executors, trustees, and privilege”

Seems the implied waiver hystericals were right after all

Lawyers Weekly has an article by some folk at Allens noting Justice Branson’s decision in Rich v Harrington [2007] FCA 1987, a mega anti-discrimination suit brought by Christina Rich, a former partner of PricewaterhouseCoopers Australia against the other partners. There are so many privilege cases which come out, it’s hard to know which ones to read. This one would be a good choice: it covers implied waiver, the prerequisites to a successful assertion of privilege over communications with in-house counsel, and the common interest exception to waiver, namely most of the tricky bits.

Pricewaterhouse’s lawyers wrote to Ms Rich saying:

‘Our client has acted at all times with the benefit of external advice and does not believe that there has been any victimisation or other conduct for which compensation could properly be sought.’

That was held to waive privilege in the advice so as to entitle Ms Rich to a copy of it. I have always thought people have been overly hysterical about the dangers of waiver, and, living in fear of it as they do, forego forensic advantage that they might obtain but for their phobia.  Admittedly, this single decision does seem to add fuel to the hystericals’ fire. Allens’ people’s message is: never mention legal advice. To give them their due, they were writing for a national rag. Victorians in fora outside the Federal Court can probably relax a bit more than that because of the Court of Appeal’s decision in Secretary, Department of Justice v Osland [2007] VSCA 96, which the authors mention. Even Victorian Federal Court judges are likely to be influenced by that decision.

One aspect of the law of privilege about which lawyers are more comfortable and relaxed than perhaps they might be is the entitlement of the employers of in-house lawyers to claim privilege over their advice and work. This decision confirms that they are in fact more comfortable and relaxed than they should be.

Getting documents out of insurers

If I recall correctly, one of my first contested hearings as a young solicitor was about whether the claim for privilege over a loss adjuster’s report in an affidavit of documents drafted by me was kosher.  I went on to write an article on the subject in that august journal, the newsletter of Women in Insurance’s Victorian chapter.  The law was all over the place.  Now Wotton & Kearney have put out a note of a substantial decision on the same issues: privilege of documents in the hands of an insurer brought into existence at a time when proceedings were merely anticipated.  The case is Southland Coal Pty Ltd (Receivers & Managers Appointed) (In Liquidation) [2006] NSWSC 899.  It is a decision which is favourable towards insurers and takes an expansive rather than restrictive approach to the question.  The article appears in the firm’s inaugural annual insurance review, but its author, Sydney senior associate Brendan Hammond has given me permission to reproduce it.

This is one of the points made:

‘some of the disputed documents were emails exchanged between officers of the insurer, or between an officer of the insurer and a third party. It was held that the issue was not whether those emails were privileged but whether granting access to them would result in disclosure of privileged communications such as the provision of legal advice by the insurer’s lawyers.’

That is consistent with Justice Chernov’s majority view of waiver in Spotless Group Ltd v Premier Building & Consulting Pty Ltd [2006] VSCA 201, and inconsistent with Neave JA’s minority view.  Now, here’s the article in full:

Continue reading “Getting documents out of insurers”

Yet another corporate counsel privilege case; the US position.

Even though legal professional privilege, duties of confidentiality, and other evidentiary privileges are something I try to keep up with, and though I have just advised a litigation funder on the subject, I would be challenged by an urgent brief to argue the privilege of a communication between in-house counsel and a staff member or officer of his or her corporate employer. There are just so many single-judge cases and so few appellate cases, and I’m not sure they all stitch together too well. The latest is Telstra Corporation Limited v. Minister for Communications, Information Technology and the Arts (No.2) [2007] FCA 1445, and Cutler Hughes & Harris’s note on it is here. Telstra’s resistance to the other side inspecting certain documents failed for want of evidence as to the independence of the relevant in-house counsel.

The law on the question has recently been summarised in the US in  In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d 789 (E.D. La. 2007). Hogan & Hartson’s note on the decision, well worth reading, is here.

Father instructs lawyer as daughter’s agent then daughter sues him: whose privilege?

Here’s a weird old privilege case: Sugden v Sugden [2007] NSWCA 312. A minor from Orange in rural NSW suffered bad injuries in a car crash while she was driving. She was on L plates and her father was supervising. Since she was all banged up and in the Royal North Shore Hospital in Sydney, her father went to the local solicitor in Orange and gave a statement with a view to getting advice as to who was responsible for compensating her for her injuries. Turns out, he was the one to blame, so the daughter sued him. He and the daughter’s solicitor had stopped communicating after a while, of course, but there were the communications beforehand. Needless to say the only reason the daughter was suing her father was that her father had liability insurance. The insurer obviously wanted a copy of the father’s statement. The President of the NSW Court of Appeal and Justices Ipp and McDougall JJ said they couldn’t have it because it was privileged and the owner of the privilege was the father, who had been acting as his daughter’s agent. The analysis was under the uniform evidence legislation which does not apply in Victoria except in the Federal and Family Courts etc. exercising federal jurisdiction.

2nd edition of Professional Liability in Australia reviewed

I was already a fan of the first edition of Judge Stephen Walmsley SC, Alister Abadee, and Ben Zipser‘s excellent Professional Liability in Australia, published by Thomson, and had been waiting for the new edition with interest. I got myself a copy the other day. It’s good, and there are substantial additions since the first edition, including a lot on expert evidence, a new bit on professional discipline, analysis of the Financial Services Reform Act, 2001, analysis of the cases on the civil liability acts and a good analysis of proportionate liability.

It is a text which delves into all of the legislation which clusters around professional liability these days and grapples with it, a thankless task for an Australian text writer compelled to read and understand all of the states’ and territories’ regimes and then synthesise them. So the availability of compensation in professional discipline regimes is treated properly, as is the effect of professional standards legislation, which caps liability for scheme mebers. The research is wide-ranging and thorough: a VCAT decision is cited. It is written from a practical perspective rather than a theoretical perspective. There is not the over-reliance on English authority which sometimes characterises texts in this area. The writing tends to take positions rather than carrying on at great length about parallel or divergent lines of authorities without suggesting which is to be preferred. One suspects that bad decisions have simply been ignored in the hope that they will be forgotten. If only more text writers would operate in this fashion.

Professional negligence is one of those areas of law in which everyone claims to be a specialist. There are, for example, 387 barristers at the Victorian Bar who claim on their web profile to practise in professional negligence. Then there are undoubtedly many others, like me, who haven’t listed their practice areas using the scheme which allows for searching like that.

Thomson has kindly offered a 10% discount for readers of this blog if you go to their bookshop at 160 William St, Melbourne. Alternatively, the book can be purchased online, for $220 inclusive of postage and handling.

Continue reading “2nd edition of Professional Liability in Australia reviewed”

High Court on whether client’s identity can be privileged

In Z v NSW Crime Commission [2007] HCA 7, a man came to a lawyer and sought advice about the implications of anonymously passing to police information about a suspected criminal. The solicitor gave advice, and the client authorised the communication of the information to the police. The solicitor passed it on without advising his client’s identity. Years later, after the suspected criminal allegedly attempted to murder someone, the NSW Crime Commission purported to compel the solicitor to advise the client’s identity and how he could be contacted. The High Court said the solicitor must do so, as did every other judge along the way. The ratio of the decision is that any privilege which did exist over the client’s name and contact details was expressly abrogated by a statute about the Crimes Commission. As to whether there was any privilege in the first place, though, two judges held that the client’s identity was privileged, two held that it was not, and one — the Chief Justice — did not express a view. Update: Deacons’s analysis here. Continue reading “High Court on whether client’s identity can be privileged”

Free notifications of new High Court and Vic Supreme Court cases; client legal privilege watch

I found some useful web resources yesterday. First, Peter Faris QC publishes blogs which do no more than consolidate in one place all the court-provided information (what I think of as the unreported version of a headnote) about the decisions of the High Court, Supreme Court of Victoria, and Victorian Court of Appeal. Each court’s decisions have a separate blog:

High Court blog

Victorian Court of Appeal blog

Supreme Court of Victoria blog.

They make searching across only the keywords a snap, a feature which Peter told me he uses extensively in his own research, but more importantly from everyone else’s point of view, provides an easy way to be alerted automatically to each new decision of each court (though there is a lag between the courts’ publications of their decisions on the web and Faris cutting and pasting it into his blogs). The blogs have instructions on how to set up the automatic notifications using RSS feeds which sound complicated but which either you or one of your nieces will be able to set up without any difficulty. This is a very simple application of technology providing significant benefits.

From Faris’s High Court Blog, I learnt of a new decision of the High Court on legal professional privilege, Z v New South Wales Crime Commission [2007] HCA 7 (see the next post). Then a Google search on that decision resulted in a new find: the Law Council of Australia’s Client Legal Privilege Watch, which digests new decisions about client legal privilege (also known as legal professional privilege).


The solicitor and “the other side’s witness”, part II

Part I is the extraordinary story of a leading labour lawyer in Melbourne who was found to have induced breach of contract in taking a statement from an ex-employee of the other side in a class action in which the lawyer was the plaintiffs’ solicitor. Unbeknownst to him, the ex-employee continued to be bound by a confidentiality agreement.

Part II is a simple case in which the defendant’s solicitor applied to enjoin the plaintiff’s solicitor from continuing to act, based on a conflict of duties, Grego v Great Western Insurance Brokers Pty Ltd [2006] WASC 284. It was a workers’ compensation case brought by a fisherman in relation to an injury said to have been sustained on the remote Abrolhos Islands. The defendant said the payment of wages by the company which engaged in the fishing activities (of which the plaintiff and his wife were the directors) was a retrospective fiddling of the books after the alleged accident. The plaintiff interviewed the defendant’s accountant in relation to discovered documents, having alleged a fraudulent conspiracy to claim loss of wages. The accountant willingly cooperated in the preparation of an affidavit. Its contents were not damaging to the plaintiff [20]. This was said to amount to an “obvious breach of the duty of confidence” owed by the accountant to the plaintiff as his client.

There is no criticism of the defendant’s solicitor in the judgment because there is no property in a witness. The accountant must have woken up to the inappropriateness of what he was doing, though, because he sent the draft affidavit to the plaintiff’s lawyer for comment before signing.

When told of this, the defendant’s lawyer objected, saying that the accountant had disclosed a privileged document to the plaintiff’s lawyer. He said a draft witness statement is privileged under the litigation limb of legal professional privilege (a normally uncontroversial proposition) and the accountant had interfered with the defendant’s privilege by providing it to the plaintiff’s solicitor. The accountant did go on to swear an affidavit in the terms of the draft, having taken counsel’s advice and having been advised by the plaintiff’s solicitor that it was entirely a question for the accountant whether he signed the affidavit or not (the judge found at [39] that this constituted the implicit conveying of the plaintiff’s consent to the swearing of the affidavit). So by the time of the injunction application, that had already occurred, and could not be restrained. There was no attempt to restrain the use of the affidavit in the litigation. The defendant applied for the plaintiff’s solicitor to be restrained on the basis that the solicitor had:

“2.1 wilfully infringed against the legal professional privilege of the [defendant] in a draft affidavit;

2.2 have placed [himself] in a position where [his] duties to the plaintiff and [his] duties to a material witness necessarily conflict;

2.3 by [his] actions have created a perception that [he] interfered with a witness in the giving of evidence.”

His counsel’s argument met with about as little success as is possible. Justice Peter Blaxell said: Continue reading “The solicitor and “the other side’s witness”, part II”

Mega firm escapes liability for clear negligence in limitations decision

Winnote Pty Ltd v Page [2006] NSWCA 287 is not only a case about digging up peat for profit but a learned essay on the application of that simple little rule that you can’t sue your lawyer more than 6 years after your cause of action against him accrued. Victorian soils yield difficult legal questions: Perre v Apand [1999] HCA 36, a 70,000 word exegisis devoted to making the law of tortious damages for pure economic loss even less clear than before, was a case about digging up potatoes for profit. The decision is a crystal clear illustration of two principles: (i) a limitation period for a professional negligence claim may expire before the client is aware of either of the negligence or the loss; and (ii) the limitation period commences when some non-negligible loss is first suffered, even if the main loss is suffered a lot later. It also makes clear that in negligent advice cases (or negligent failures to advise cases) once the negligence has occurred, there is no ongoing duty to give the correct advice during the course of the remainder of the retainer, and the courts will conduct their analysis by reference to the substance of the matter, not by reference to the ever-so-clever pleadings of sophisticated plaintiffs. Continue reading “Mega firm escapes liability for clear negligence in limitations decision”

No issue waiver of 2nd solicitor’s advice on regretted settlement made necessary by 1st solicitor’s negligent advice

Banjo (NT) Pty Ltd v Ward Keller Pty Ltd [2006] NTCA 1

A tenant alleged its solicitors gave it bad advice on its obligations under a lease which led to it losing the chance to renew the lease. It said it got a new lease, but in order to do so, had to settle disadvantageously a claim for damages for breach of the lessor’s duties to repair. By the time of that negotiation it had taken the advice of its new solicitors. But for the disadvantageous negotiating position it had been put in, it said, it would have pursued the claim for damages for the lessor’s breach and would have won. In the suit against the first solicitors for compensation for loss of the opportunity to sue for damages for that breach, the NT Court of Appeal said it did not have to show them the second set of solicitors’ advice it had received in settling the claim; there was no implied waiver of the legal professional privilege which prima facie enured in the lawyer-client communications. Continue reading “No issue waiver of 2nd solicitor’s advice on regretted settlement made necessary by 1st solicitor’s negligent advice”