For the moment, I am taking Advanced Evidence at Melbourne University, and Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 is on the reading guide. As it is a case about a lawyer-client dispute, and as it not likely to be at the forefront of reading about legal professional privilege since Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1, I thought it would be appropriate to share a proper note of it.
How would it be decided today? Both decisions were decided according to the common law. This post is more about the common law than the Evidence Act, 2008. Soon enough, though, s. 122(2) of the Evidence Act, 2008 may provide the answer. But it’s a pretty Mann v Carnellish section, so the answer may well turn out to be the same at common law and under the Act. It provides for waiver where the privilege holder ‘acted in a way that is inconsistent with … objecting to the adducing of the evidence [on the basis of client legal privilege]’. Without limiting sub-section (2), a client is taken, according to sub-section (3)(a) to have acted inconsistently if he knowingly and voluntarily disclosed the substance of the evidence to another person.’ According to sub-section 5(a), a client is not taken to have acted inconsistently merely because the substance of the evidence has been disclosed (i) in the course of making a confidential communication or preparing a confidential document, or (ii) as a result of duress or deception, or (iii) under compulsion of law.’
The majority’s language in Goldberg was certainly tweaked by Mann. ‘Fairness’ is out as the touchstone, and the search for conduct inconsistent with the maintenance of the privilege against the person seeking to establish waiver is in, a category of conduct which overlaps with but does not correlate with unfairness. But would the tweak affect the outcome? Justice McHugh, who alone in Mann thought privilege had been waived, said at [108] he thought Goldberg was wrongly decided, as did Justice Kirby at [147], maintaining the position in his dissenting decision in the Court of Appeal in Goldberg v Ng. The plurality judgment of the rest of the Court (Chief Justice Gleeson and Justices Gaudron, Gummow and Callinan) seemed content with the decision, however (see below).
In outline, a dispute over a payment by a client to his solicitor’s wife of about $100,000 was concurrently the subject of Supreme Court proceedings and a professional conduct complaint made to the NSW Law Society. The proceedings and the complaint were both brought by the former client. In response to a request by the Law Society to look at a proof of evidence the solicitor had prepared for the purpose of a suit for fees he had intended to bring against the former client, the solicitor volunteered it (free of compulsion to do so) for the purpose of convincing the Law Society of his case. Later, he did likewise with a second proof of evidence he drafted at his lawyer’s request in response to the allegations in the former client’ suit against him. Had he not volunteered these two proofs, he would in the ordinary course have had to provide a formal written response to the complaint, but he did not have to do so. The Law Society had promised not to show them to the former client, and reassured him that he maintained his privilege over the documents notwithstanding that he had disclosed them to it. The Law Society dismissed the disciplinary complaint by the Law Society by reference to the information contained in the proofs of evidence, and advised the client complainant to pursue his remedies at law. Had the complaint not been dismissed, the Fidelity Fund might have paid out the $100,000 or so claimed in the Supreme Court proceedings, obviating the need for those proceedings. The proceedings having to continue, however, both proofs were subpoenaed by the former client, along with the rest of the Law Society’s file, which were but ‘different emanations of the same dispute’ — in fact, the complaint had been initiated by providing a copy of the issued but as yet un-served Supreme Court documents to the Law Society with a request that the allegations within be investigated.
The High Court confirmed the lower courts’ decisions that privilege had been waived over the documents by their provision to the Law Society and so could be inspected following production in response to the subpoena. The dissenters said this was a plain case of limited waiver and ‘fairness’, the majority’s touchstone, had nothing to do with it. Furthermore, they took issue with the majority’s characterisation of the solicitor’s conduct as being voluntary and calculated self-interest, saying that the threat of compulsion, and an obligation of frankness in solicitors towards legal regulators meant that there was a quasi-compulsion operating.
I turn to the detail. What follows is my own statement of the facts. It is a little simplified. Justice Gummow states the full facts in the greatest detail.
The facts
Mr Goldberg, a solicitor, acted for Mr Ng, his sister, and their company, in litigation. There was a dispute about fees. The solicitor said the Ngs owed him fees; the Ngs said a payment of about $100,000 made by Mr Ng to the solicitor’s wife was for fees, and the solicitor had failed to account for it when deducting fees from the fruits of the litigation which passed through his trust account. The solicitor and his wife said that money was the purchase price for a diamond bracelet the wife had sold to Mr Ng.
The solicitor retained a lawyer to represent him in a suit against Mr Ng for fees. He prepared a 72 page statement recounting the facts relevant to the fee dispute, for the purpose of obtaining legal advice in anticipation of and representation in that suit.
But Mr Ng, one of the former clients, got in first, suing the solicitor in the Supreme Court for a determination of the dispute about the $100,000 or so. Service proved difficult, however, and before service was effected, the Ngs copied their originating process to the NSW Law Society. It treated it as a professional misconduct complaint and as the first step in a claim on the fidelity fund.
An officer of the Law Society interviewed the solicitor for 3 hours (those were the days). The solicitor had brought his proof of evidence with him to refer to. The officer asked to see the solicitor’s papers. Mr Goldberg said ‘I don’t want to have anything in these papers, which includes the things like a statement to my solicitor, given to the Ngs or their company or their legal advisors because you know it’s my confidential matter.’ The officer said no one else would see them. The solicitor said ‘I want to retain my legal professional privilege in regard to these papers.’ The officer said ‘You do.’
Subsequently, he made a further statement to his solicitor in relation to the matters relevant to Mr Ng’s proceedings (which were the same matters relevant to the conduct complaint), in response to his solicitor’s request that he do so. He told the Law Society officer that he had prepared a further statement for his solicitor, and he was prepared to provide it to her on the same basis as he had provided the first. The officer said ‘Yes, I understand that,’ and the solicitor provided the second statement to her.
The provision of both statements was voluntary. The Law Society’s powers of compulsion were not invoked, and nor was there anything to suggest an express or implied threat by the Law Society that its powers of compulsion would be involved or that Mr Goldberg would be seen as guilty of professional misconduct if he declined to produce to the Law Society the privileged statements. Rather, the production was for the calculated purpose of demonstrating the reliability of his denial of Mr Ng’s allegation of a failure to account.
The Law Society told the Ngs that he appeared to have an answer to the complaint, but did not tell them what the answer was, or provide a copy of the written answer to them. By a bizarre letter, the Law Society rejected the complaint and denied any entitlement in the Ngs to compensation under from the fidelity fund.
Mr Ng subpoenaed the Law Society’s file, which included the solicitor’s proofs of evidence. The Law Society applied to set aside the subpoena. It claimed public interest immunity. It lost before a registrar, a Master, and a Supreme Court judge. The solicitor (rather than the Law Society) appealed to the Court of Appeal presumably as a person affected by the appealed decision. The solicitor also commenced a separate proceeding seeking a declaration that his statements were privileged. The solicitor lost that case because the judge found that delivery of the otherwise privileged documents to the Law Society amounted to a waiver of privilege as against the Ngs. The solicitor appealed to the Court of Appeal. So two decisions of the Supreme Court came together before the Court of Appeal: the first one, about public interest immunity, and the second one about privilege.
The Court of Appeal’s decision is Goldberg v Ng (1994) 33 NSWLR 639. The majority held that the Law Society was not entitled to resist production of the controversial subpoenaed documents on the basis of public interest immunity, as each court below had also found. No appeal against this decision was brought to the High Court. The Court of Appeal held, or assumed, that the controversial subpoenaed documents were protected by legal professional privilege in favour of the solicitor, but that the privilege had been waived. The legal professional privilege decision was appealed to the High Court.
High Court’s decision
The majority held that the controversial documents were privileged when brought into existence. It was not to the point that the subject matter of the solicitor’s instructions to his own legal representatives was an account of his interactions with his own former clients, the Ngs, over some of which the Ngs would be entitled as against the rest of the world to assert legal professional privilege: 93-94 per the majority; 105 where Justice Toohey said:
‘The real thrust of the submission, I think, is that there could be no privilege because it has been said that “an essential element in a claim for legal professional privilege (is) that the material, disclosure of which is sought to be precluded is, so far as the person from whom disclosure is sought is concerned, confidential”. No doubt some of the information in the documents was known to the respondents but … that information was intertwined with observations made by [the solicitor] to his legal advisers. Furthermore, in so far as the material included proofs of evidence, it presumably included accounts by [the solicitor] of conversations or dealings that may be at variance with the accounts likely to be given by the respondents. It is not possible to isolate parts of the material in this analysis.’
The majority held that there had been no ‘express or intentional general waiver’ at 95:
‘[the disclosure to the Law Society] was for the limited purpose of dealing with inquiries made on behalf of the Law Society in relation to the complaint which had been made against Mr Goldberg by Mr Ng and was on the express basis that the documents would not be shown to anyone else. It could not properly be seen as constituting an express or intentional general waiver of legal professional privilege or as destroying the confidentiality which is necessary for its maintenance.’
Their Honours said, at 98:
‘we are firmly of the view that where two or more distinct proceedings or procedures are related in the sense that there is general correspondence between the parties and they arise out of either the same dispute or closely connected disputes, conduct in relation to one proceeding or porcedure, whether anticipated or already commenced, can found an imputed waiver for the purposes of all proceedings and procedures. The two distinct proceedings between the Ngs and the Goldbergs … were all related proceedings or procedures in that sense. There was general correspondence between the parties and they arose out of the same dispute about the nature and effect of the payment of [about $100,000].
It follows that the critical question in the present case is whether [the solicitor’s] disclosure of the privileged documents to the Law Society gave rise to a situation where ordinary notions of fairness required that he be precluded from asserting that those documents were protected from production by the Ngs in the related [Supreme Court] proceedings’.
Applying the law to the facts, they said, at 101-102:
‘Ordinarily, a party involved in a number of related proceedings or procedures will be able, in one proceeding or procedure, to take advantage of documents or other material which have been utilised by the other party in another of the related proceedings or procedures. That would, presumably, have been the case here if [the solicitor] had not elected to make use of the privileged documents for the purpose of rebutting Mr Ng’s complaint to the Law Society since … the “usual procedure” would have been to require [the solicitor] to make a “written response” … such a written response would not, if prepared for the purpose of being placed before the Law Society, have been protected by legal professional privilege from production to the Ngs in the equity proceedings. In these circumstances, it would be unfair if the fact that [the solicitor] saw fit to rely, in answer to Mr Ng’s complaint to the Law Society, upon privileged communications to his solicitor in relation to the [Supreme Court] proceedings should have the effect that the Ngs were deprived of access to, and possible use of, the substance of that answer.’
Justices Toohey and Gummow dissented. Justice Toohey reasoned that this was a case of limited waiver. His Honour said limited waiver was an exception to the law of express waiver, and fairness had no role to play in the analysis. Justice Gummow expressly agreed with these two propositions, at 116. Furthermore, both dissenters noted their disagreement with the majority’s characterisation of the disclosure as entirely voluntary, and in the solicitor’s calculated self-interest. Justice Toohey said, at 110:
‘In the present case [the solicitor] disclosed material to the Society. He did so because there was a complaint against him by one of the respondents. He disclosed the material, not merely on the understanding but on the undertaking by the Society that their contents would be kept confidential. Disclosure was in the context of the investigation of a complaint by the Society exercising its powers under the Legal Profession Act 1987 (NSW) (“the Act“), as it then stood(45). Complaints of professional misconduct could be referred by the Society Council to the Legal Profession Disciplinary Tribunal (46), which could order that the legal practitioner’s practising certificate be cancelled(47). Additionally, the Society Council was empowered to cancel or suspend the practising certificate of a solicitor who failed to give a satisfactory explanation for specified conduct(48). Disclosure by Mr Goldberg was made for the purposes of the Act and was confined to the Society. These considerations militate strongly against any implied or imputed waiver(49).’
Justice Gummow said, at 122-123:
‘I agree also with the statement of Kirby P that, to say that [the solicitor] “chose” to make the disclosure he did, does not tell the full story. In my view, it is here that the critical point is reached.
As I have indicated, the interview with [the solicitor] was conducted in a particular legal setting provided by the existence of the compulsive powers enjoyed by the Society, pursuant to statute, in dealing with complaints by clients. Looked at objectively, the occasion in which the disclosure was made by [the solicitor] was not one in which he was an entirely free actor. Even without the backing provided by the statutory sanction, it might be thought incumbent upon [the solicitor], as a practitioner whose conduct has been called into question, to deal with it fully and frankly before the responsible professional body.
In Woollahra Municipal Council v Westpac Banking Corp(69) and Network Ten Limited v Capital Television Holdings Limited(70), Giles J treated as very significant the circumstance that an alleged implied waiver of legal professional privilege involved making documents available to enable the recipients to carry out their statutory duties and that there existed statutory compulsory processes. I agree.
In the present case, the disclosure to the Society was of this nature.’
Mann v Carnell‘s treatment of Goldberg v Ng
This is what the Court said in Mann v Carnell about Goldberg v Ng:
GLEESON CJ, GAUDRON, GUMMOW AND CALLINAN JJ:
‘Waiver of privilege at common law
28. 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[19]. 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[20]. 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[21], 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[22].
29. 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”[23 eg Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 95]. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank[24], 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.
30. In Goldberg v Ng[25] this Court considered a case in which there was disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party would treat the information disclosed as confidential. The Court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the Court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege. No application was made on the present appeal to re-open Goldberg or any of the earlier authorities on the subject. In Goldberg, reference was made[26] to the statement of Jordan CJ in Thomason v The Council of The Municipality of Campbelltown[27]:
“The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client”.
31. His Honour’s reference to intention must be read subject to what has been said above.
32. Reference was also made[28] to British Coal Corporation v Dennis Rye Ltd (No 2)[29] and Goldman v Hesper[30], in which the English Court of Appeal held that, in the circumstances of those cases, disclosure to a third party for a limited and specific purpose did not lead to a loss of the privilege as against a person opposed in litigation. To like effect is the recent decision in Gotha City v Sotheby’s[31].
[25] [1995] HCA 39; (1995) 185 CLR 83.
[26] [1995] HCA 39; (1995) 185 CLR 83 at 120.
[27] (1939) 39 SR (NSW) 347 at 355.
[28] [1995] HCA 39; (1995) 185 CLR 83 at 107-108.
[29] [1988] 1 WLR 1113; [1988] 3 All ER 816.
[30] [1988] 1 WLR 1238; [1988] 3 All ER 97.
[31] [1998] 1 WLR 114.
McHUGH J (at [103]ff):
‘The issue in this case is different from that in Maurice where the issue was whether the general references to the claim book in the earlier hearing constituted a waiver of privilege generally. In the present case, the issue is whether the voluntary disclosure of the contents of the original documents by Ms Carnell to Mr Moore, a stranger for privilege purposes, constituted waiver by the ACT Executive of its privilege in those documents. The present case is not concerned with a forensic contest where a party has disclosed a part, but not all, of a privileged document and has arguably obtained an unfair advantage by doing so.
In Goldberg v Ng[72], however, this Court applied the fairness test in Maurice to very different circumstances from those that arose in Maurice. In Goldberg, a solicitor who had been sued by a former client attended the Law Society’s office to discuss a complaint made by the client to the Law Society arising out of the subject matter involved in the proceedings. The solicitor had prepared statements with annexures concerning those matters for his own solicitor. At a meeting with one of the Society’s officers, the solicitor indicated that he wished to be frank with the Society and, after being assured by the officer of the Society that, even if he provided the Society with the documents, he would retain his legal professional privilege in them, the solicitor provided the Society with copies of the documents.
In the course of the proceedings between the client and the solicitor, the client subpoenaed the Law Society to produce documents relating to the dispute between the client and the solicitor. The Law Society produced documents which included the statements and the annexures referred to above. The solicitor sought a declaration that those documents were privileged.
Deane, Dawson and Gaudron JJ held that, in determining whether the solicitor had waived his privilege in the documents by disclosing them to the Society, the “critical question” was[73]:
“whether Mr Goldberg’s disclosure of the privileged documents to the Law Society gave rise to a situation where ordinary notions of fairness required that he be precluded from asserting that those documents were protected from production for inspection by the Ngs in the related equity proceedings between the Ngs and the Goldbergs.” (emphasis added)
Notions of fairness may be factually relevant in determining whether privilege has been waived in a case like Maurice where there was partial disclosure of privileged material. In such a case, there is a clear potential for unfairness arising out of the capacity of disclosed material – which is part of an undisclosed whole – to mislead by reason of it being removed from its context. If unfairness would arise from partial disclosure, it may be proper to conclude, as a matter of fact, that the person making the disclosure was waiving privilege rather than seeking to obtain an unfair advantage. If the party was obtaining an advantage or furthering his or her interests, it may be proper to conclude that the party waived or should be taken to have waived privilege.
However, in a case like Goldberg, concerned with whether A can assert privilege against B in circumstances where A has previously disclosed the privileged material to C, I find it difficult to see why notions of “fairness” are relevant. In a case like Maurice, it may be very unfair to a party for the opposing party in a forensic contest to give evidence of part of a privileged communication and claim privilege for the rest. That being so, it is legitimate to treat the owner of the privilege as having waived it. But notions of fairness have nothing to do with whether voluntary disclosure by A to B constitutes a waiver of privilege. Where A voluntarily discloses privileged material to a third party, both principle and the rationale of legal professional privilege require the conclusion that privilege in the material is waived and that A cannot assert that privilege against any other person. In my respectful opinion, for the reasons set out below, the fairness test of waiver is not of general application and, on the facts of Goldberg, that case was wrongly decided.
It is important to distinguish between two classes of case. The first is a communication between a client or lawyer and someone other than the lawyer or client for the purposes of litigation or legal advice (which is also often described in the textbooks as a “third party communication”). The second is a communication between a client or lawyer and some other person which is not made for the purposes of litigation or legal advice and which involves material to which privilege would otherwise attach. In the first case, the communication is made for a privileged purpose. No question of waiver arises. But in the second case, the communication is not made for a privileged purpose, and the question arises whether that communication also waives the privilege otherwise attaching to the primary material. It is the latter situation which is involved in the present case.
The ambit of legal professional privilege should be confined to only the extent which is necessary to meet its rationales
The first reason why I think Goldberg v Ng[74] was wrongly decided on its facts is that, in the context of determining whether voluntary disclosure by A to B entitles A to assert privilege in the disclosed material as against C, a “fairness” test of waiver is contrary to, or at all events is not supported by, the rationales of legal professional privilege.
An early statement of the common law’s rationale for the existence of legal professional privilege was given in 1846 in Pearse v Pearse[75] by Knight Bruce V-C:
“The discovery and vindication and establishment of truth are main purposes certainly of the existence of Courts of Justice; still, for the obtaining of these objects … not every channel is or ought to be open to them. … Truth, like all other good things, may be loved unwisely – may be pursued too keenly – may cost too much. And surely the meanness and the mischief of prying into a man’s confidential consultations with his legal adviser, the general evil of infusing reserve and dissimulation, uneasiness, and suspicion and fear, into those communications which must take place, and which, unless in a condition of perfect security, must take place uselessly or worse, are too great a price to pay for truth itself.”
Thus, the common law has adjudged that the search for truth, which usually has primacy in curial proceedings, must give way to the considerations inherent in legal professional privilege. Even though the privilege admittedly “frustrates access to communications which would otherwise help courts to determine, with accuracy and efficiency, where the truth lies in disputed matters”[76], other aims of the system of administration of justice outweigh the general undesirability of the truth being obscured.
In Grant v Downs[77], Stephen, Mason and Murphy JJ, in speaking of that head of legal professional privilege which protects lawyer-client communications made for the purpose of giving or obtaining legal advice, said:
“The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor.”
The rationale for the head of legal professional privilege which protects communication from a third party to the client or the lawyer made in connection with the litigation is related to, but distinct from, that discussed in Grant. The rationale for the second head of legal professional privilege arises from the need to maintain, in an adversary system of litigation, the freedom of the lawyer and client to make such investigations and inquiries and to engage in such preparation as they think fit in order to further their case. A party to litigation should not be forced to prepare his or her case knowing that statements, advices and other documents, which have been created, may be required to be disclosed to the other party who can then make use of the documents for his or her own advantage. As Brennan J said in Baker v Campbell[78], the relevant purpose of the privilege is the “maintenance of the curial procedure for the determination of justiciable controversies – the procedure of adversary litigation”. His Honour went on to say that “[i]f the prosecution, authorized to search for privileged documents, were able to open up the accused’s brief while its own stayed tightly tied, a fair trial could hardly be obtained”.
Important though these rationales are, they nevertheless represent an exception to the common law’s pursuit of the truth. Legal professional privilege is “the product of a balancing exercise between competing public interests”[79], those competing public interests being the rationales for the privilege on the one hand and the search for truth on the other hand. In Attorney-General (NT) v Maurice, Mason and Brennan JJ described the principle thus[80]:
“Because of [the] conflict between the public interest in ensuring the availability of all relevant evidence in a particular case and the public interest in the administration of justice through effective legal representation, the privilege is confined within strict limits: Grant v Downs[81], per Stephen, Mason and Murphy JJ.”
That being so, in my opinion any common law doctrine which would extend the scope of legal professional privilege must not go beyond the rationales for the privilege. Any extension of the scope of the privilege beyond that which is necessary for its rationales to be realised is an abrogation of the common law’s basal pursuit of truth which is not justified by any countervailing consideration. The common law rules for waiver clearly affect the scope of legal professional privilege. A rule that permits a person to disclose a privileged communication to a stranger without waiving the privilege can only be maintained if it promotes the rationales for legal professional privilege.
Ensuring candid communications between a lawyer and a client is unlikely to be endangered if a privilege holder is held to waive privilege because he or she has voluntarily disclosed the communication to a stranger. Whether the communication will be disclosed in the future to a stranger to the privilege is entirely within the control of the client. At that stage, the client will determine whether his or her interests are best served by retaining the privilege or disclosing the communication. But it is difficult to see how the possibility of voluntary disclosure will prevent the client being candid with his or her lawyer. Why would the client prefer not to seek legal advice or make full disclosure to a lawyer because of the possibility of future disclosure? If no relevant communication is made with the legal adviser, there will be nothing to disclose in the future. It is much more likely that the client will prefer to seek advice, make a full disclosure of the facts to the legal adviser and make a decision later as to whether his or her interests are served by disclosure of those facts and that advice to others.
A client who voluntarily discloses privileged information to a stranger to the privileged relationship has made a choice, based no doubt on considerations personal to him or her, that the purpose for which the communication is disclosed to the stranger is more important than protecting the absolute confidentiality of the communication by preventing the stranger from having knowledge of it. The person may be encouraged to do so, as in Goldberg v Ng[82], by an expectation that the stranger will not further disclose the communication. But in my opinion, if privileged material is voluntarily disclosed to a stranger to the privileged relationship, the fact that it may be received under an obligation of confidence should not be relevant to whether privilege is waived.
Although confidentiality, candour and privilege are related, mere confidentiality, in the absence of a privilege, has never been a ground on which one can refuse to produce material to a court[83]. Confidentiality is a matter inter partes between the privilege holder and the third party owing the obligation of confidence. It would extend the scope of legal professional privilege dramatically if the privilege holder could extend the shield of privilege by entering into confidentiality agreements with third parties who may happen to receive otherwise privileged information from the privilege holder. It would extend the shield of privilege beyond the realm of the lawyer-client relationship (which is the rationale for its existence) into the client’s general social and commercial relationships.
Confidentiality provisions are an increasingly common part of modern commercial relationships. In a takeover bid, a bidder company may have lawyers, merchant bankers and other professionals advising it. Suppose the bidder company receives advice from its lawyers that its proposed course of action is possibly illegal and then sends a copy of this advice to its merchant bankers (who owe an obligation of confidence to the company) in order that they may factor the legal advice into their strategic advice. It seems impossible to hold that the communication to the merchant banker is privileged. Why then should the original documents continue to be protected by legal professional privilege? The objective of the privilege has been met as soon as the company has received advice from its lawyers.
No doubt in commercial relationships, it is often convenient and useful for legal advice to be circulated among non-lawyers who are not officers or employees of the client which owns the privilege. But the client who does so is furthering his, her or its personal or corporate interests, not the administration of justice which is the rationale of the privilege. If the banker has not retained the unprivileged copy of the document sent to him or her and so cannot produce it on discovery, why should the company be able to maintain privilege for its original communication? It has chosen to disclose the original communication, which hitherto was confidential to it and its legal advisers, for its own commercial purposes. Why should the client be able to pick and choose who should receive the communication under the shield of privilege?
In any event, the issue of waiver after disclosure is an academic one in many cases. Where the communication to the stranger remains in existence, documents recording it must be produced unless the communication also falls within legal professional privilege or some other head of privilege.
Furthermore, it cannot be said that, in order to further the first aim of the privilege, it is necessary to determine questions of waiver of privilege by reference to notions of fairness. The particular circumstances which may eventually be decisive of the issue of “fairness” may not even have existed at the time the client chose to disclose the information to the third party, let alone at the time of the communication being made between the lawyer and the client.
The other rationale of privilege is to ensure that the adversary system is preserved by not disclosing one party’s preparations for litigation to the other party. It is difficult to see how the realisation of this objective is endangered by a rule which declares that the voluntary disclosure of privileged information to any stranger to the privilege results in a waiver of the privilege. Before disclosing information to a stranger to the privilege, the client must make a personal choice as to whether the risks associated with the other side seeing the document outweigh the advantage accruing to the client as a result of voluntarily disclosing the document to a stranger to the privilege.
If voluntary disclosure to a stranger ipso facto waives the privilege, the owner of the privilege will, if properly advised, make a choice as to where his or her interests lie in dealing with the communication. As the rationales for the privilege largely align with the interests of the privilege holder, this seems entirely appropriate. The holder of the privilege will make a judgment in his or her self-interest. This will ensure that the rationales for the privilege are furthered as privilege will be waived where the holder of the privilege considers that, on balance, that course favours his or her interests.
The problems of different privilege positions for different parties
Furthermore, there are serious conceptual difficulties with the proposition that, in respect of one communication, a person can be entitled to assert privilege in it against one person but not against another person. In Giannarelli v Wraith [No 2][84], I addressed the issue of whether a party to a taxation of costs could disclose privileged documents to the taxing officer and yet prevent its opponents from seeing those documents. After discussing the English cases of Pamplin v Express Newspapers Ltd[85] and Goldman v Hesper[86] , I said[87]:
“But in Pamplin expressly and in Goldman by inference, the courts said that ultimately a party either waives the privilege entirely and allows the taxing officer and the other side to see the privileged documents or asserts the privilege and maintains the confidentiality of his or her documents. This is the only acceptable view.”
My opinion that this was the “only acceptable view” stemmed from the anomalies inherent in any other view. The unsatisfactory proposition that, in respect of one communication, a person may be entitled to assert privilege against one person but not against another is a necessary corollary of using an “unfairness” test in all cases in determining whether privilege has been waived. Considerations militating for or against a finding of “unfairness” in a particular situation will be a function of the particular relationship between the parties who are in dispute as to whether privilege has been waived. Thus, in a dispute as to whether A has waived its privilege in a document by reason of disclosing the document to B, it may be “fair” for A to assert privilege against C but “unfair” for A to assert privilege against D. However, privilege is something which inheres in a communication[88]. The logical consequence of this proposition is that whether or not the privilege is waived by disclosure must be answered solely by reference to the manner in which the communication is dealt with. To give effect to the “unfairness” test in all circumstances is to determine the issue by reference to the broader context of the manner in which the parties in dispute have dealt with one another, rather than the manner in which the communication has been dealt with.
To use an “unfairness” test for determining waiver after disclosure to a third party also changes the fundamental nature of privilege. It changes privilege from something which inheres in communications as a matter of law to a state of affairs which exists between the parties as a kind of equitable estoppel. This difficulty does not arise in relation to applying the unfairness test to situations of partial disclosure such as Attorney-General (NT) v Maurice[89]. In such cases, “unfairness” arises from the characteristics of the communication itself – ie whether partial disclosure of its contents is misleading – rather than from general concepts of “unfairness” as between the parties in dispute.
The uncertainty and expense created by “unfairness” as a legal criterion
One of the main difficulties with the concept of “unfairness” as a criterion for determining whether privilege has been waived is, as Dr R J Desiatnik has recently pointed out, that[90]:
“[i]t is a peerless example of a ‘legal category of indeterminate reference’[91].”
In Perre v Apand Pty Ltd[92], I pointed out:
“[A]ttractive as concepts of fairness and justice may be in appellate courts, in law reform commissions, in the academy and among legislators, in many cases they are of little use, if they are of any use at all, to the practitioners and trial judges who must apply the law to concrete facts arising from real life activities. While the training and background of judges may lead them to agree as to what is fair or just in many cases, there are just as many cases where using such concepts as the criteria for duty would mean that ‘each judge would have a distinct tribunal in his own breast, the decisions of which would be as irregular and uncertain and various as the minds and tempers of mankind’[93]. …
Furthermore, when legislatures and courts formulate legal criteria by reference to indeterminate terms such as ‘fair’, ‘just’, ‘just and equitable’ and ‘unconscionable’, they inevitably extend the range of admissible evidentiary materials. Cases then take longer, are more expensive to try, and, because of the indeterminacy of such terms, settlement of cases is more difficult, practitioners often having widely differing views as to the result of cases if they are litigated. Bright lines rules may be less than perfect because they are under-inclusive, but my impression is that most people who have been or are engaged in day-to-day practice of the law at the trial or advising stage prefer rules to indeterminate standards.”
Those comments are pertinent in the context of determining whether legal professional privilege has been waived. Claims for legal professional privilege are most often made at an interlocutory stage in legal proceedings. In modern commercial litigation, there will often be a large number of documents which have been copied and sent to strangers to the privilege for non-privileged purposes[94]. The nebulous concept of fairness would have to be applied to these documents. The wide-ranging nature of the inquiry dictated by fairness would mean that it would often not be apparent on the face of the communication or otherwise whether it was privileged. The circumstances of the communication coming into existence and the entire history of dealings between the parties would need to be precisely known in order for the criterion of “fairness” to be applied. What should be a relatively simple preliminary step in proceedings would have the potential to develop into an expensive trial within a trial. Ideally, whether privilege continues to inhere in a document should be prima facie determinable from the face of the document coupled with a knowledge of the roles of the recipients, even in cases where the document has been copied to numerous third parties.
Moreover, as Justice Davies of the Court of Appeal of Queensland, speaking extra-judicially, has pointed out[95]:
“[T]he richer litigant may use the system to the disadvantage of its poorer opponent. The richer party can afford the more extensive search and can, by its process of discovery, impose an oppressive cost burden on its poorer opponent. The same applies, of course, to interlocutory proceedings generally; it is thought to be a common tactic for a wealthy litigant to involve a poorer opponent in a great deal of preliminary skirmishing.”
Uncertainty in the area of legal professional privilege, which is productive of long and protracted “preliminary skirmishing” over whether it may be relied upon, clearly has the potential to exacerbate this undesirable aspect of modern litigation. In contrast, a rule which holds that any voluntary disclosure to a third party who is a stranger to the privileged relationship (ie is not either the lawyer or the client) is certain and easy to apply.
The preferable rule
In my respectful opinion, Goldberg v Ng[96] was wrongly decided, having regard to the facts of the case. Fairness to Mr Goldberg was not relevant in determining whether he had waived his privilege. In some cases, notions of fairness may play a part in determining whether privilege has been waived. In those cases, it will operate as a factual test for determining the issue of waiver. If Goldberg were to be taken as deciding, as a matter of law, that questions of waiver always depend on notions of fairness, it would be wrong in principle, and its application would have consequences detrimental to the administration of justice. It should therefore be treated as a decision depending on its own facts and having no general application. If it is to be regarded as laying down a new legal test of waiver, it should be overruled. It should not be given refuge in the sanctuary of stare decisis. Once there is voluntary disclosure of privileged material to a stranger to the privileged relationship (ie to a person who is not the lawyer or the client), privilege in that material is waived as against the world.’
AWB Limited v Cole (No. 5)‘s treatment of Goldberg v Ng
This is what Justice Young said in AWB Limited v Cole (No. 5) [2006] FCA 1234 about Goldberg v Ng:
‘127. The crux of the Commonwealth’s case is that AWB has disclosed the gist or substance, and in some cases the entirety, of legal advices it obtained as a result of the Project Water and Project Rose investigations. In these circumstances, the Commonwealth contends that the law will impute a waiver of privilege over associated documents. It argues that the associated documents comprise documents that were brought into existence as a result of the Project Rose and Project Water investigations respectively or, at the very least, all of the investigatory reports, documents and communications that directly or indirectly represented the foundation for the advices that have been disclosed by AWB.
128. The kind of waiver that is in issue in this case is commonly referred to as imputed or implied waiver. The former expression is preferable, as it reflects the way in which the High Court expressed the governing legal principles in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 (‘Mann’).
129. In Mann at 13 [29], Gleeson CJ, Gaudron, Gummow and Callinan JJ said:
‘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.’
130 The concluding part of this passage draws attention to the fact that the test for imputed waiver had previously been expressed in terms of fairness: see Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 (‘Maurice’) at 481 per Gibbs CJ, 487–488 per Mason and Brennan JJ, 492–493 per Deane J, and 497–498 per Dawson J. Under the test propounded in Mann, it is inconsistency between the conduct of the client and the maintenance of the confidentiality that the privilege is intended to protect which effects a waiver of the privilege. Fairness has become a subsidiary consideration; it may be relevant to the court’s assessment of inconsistency in some contexts but not in others.
131 In Commissioner of Taxation v Rio Tinto Limited [2006] FCAFC 86 (‘Rio Tinto’) at [44], the Full Court (Kenny, Stone and Edmonds JJ) said that there was a good deal of doubt whether the language used by the majority in Mann worked any real change in the principle which governs imputed waiver. This observation was made somewhat tentatively and was not material to the Court’s decision. My own view is that a test expressed in terms of inconsistency more readily accommodates the variety of situations in which questions of imputed waiver can arise than a test expressed in terms of fairness. The criterion of fairness is readily understandable in the context of inter partes litigation, but it is difficult to apply sensibly in other contexts: see the observations by McHugh J in Mann at 40 [128] and Toohey J in Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 (‘Goldberg v Ng’) at 110.
132 AWB submitted that this Court should hold that there has been no imputed waiver because the Commonwealth has made no attempt to identify why it would be unfair or inequitable for AWB to maintain privilege in the underlying investigations. This submission immediately raises the question – unfair or inequitable to whom? I doubt that any question arises of fairness to the Commission – it is an arm of the executive government charged with the investigation of specified matters. Nor does any question arise of fairness to the Commonwealth. Fairness presupposes a balancing of interests between parties who are in dispute. In that context, partial disclosures raise a question of fairness because there is the capacity to mislead one party to the dispute to his or her detriment. These concepts do not translate easily to the present case: cf McHugh J in Mann at 40 [127]-[128]. There is also the difficulty that, outside the framework of an inter partes dispute, fairness is truly a term of ‘indeterminate reference’: Mann at 40 [129] per McHugh J, citing RJ Desiatnik, Legal Professional Privilege in Australia, 1999, p 122.
133 Mann anticipated that there will be cases in which considerations of fairness have little or no role to play. This is such a case. The broad question posed by Mann is whether, and to what extent, AWB’s disclosures are inconsistent with the maintenance of confidentiality in the documents which are at issue in these proceedings. This question wraps up several subsidiary issues, in particular whether AWB’s disclosures involved, on each occasion, a disclosure of the gist or substance of its legal advice, whether AWB consciously deployed that advice so as to advance its own commercial or other interests, and, if so, whether that disclosure has resulted in an imputed waiver of privilege over any and what associated materials.
134 In any application of Mann, the starting point must be an analysis of the disclosures or other acts or omissions of the party claiming privilege that are said to be inconsistent with the maintenance of confidentiality in the privileged material: see Rio Tinto at [45]. The disclosures in question here were made variously to the IIC, to the Australian Government, to the Commission and in some instances via the procedures of the Commission to the public at large. In my opinion, there is no reason why these disclosures cannot support a finding that AWB has waived legal professional privilege over associated material.
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141 The disclosure of privileged communications to a third party can result in an imputed waiver of privilege, even if there is no intention of waiving privilege and the disclosure is for a limited and specific purpose. In Mann, the Chief Minister of the Australian Capital Territory conveyed legal advice, on a confidential basis, to a member of the Territory’s Legislative Assembly to enable him to consider the reasonableness of the Government’s decision to settle certain legal proceedings. The majority decision turned on the fact that the disclosure to a member of the Legislative Assembly was not regarded as disclosure to a third party. In their joint judgment, Gleeson CJ, Gaudron, Gummow and Callinan JJ said at 15 [35] that:
‘The purpose of the privilege being to protect the Territory from subsequent disclosure of the legal advice it received concerning the litigation instituted by the appellant, there was nothing inconsistent with that purpose in the Chief Minister conveying the terms of that advice, on a confidential basis, to a member of the Legislative Assembly who wished to consider the reasonableness of the conduct of the Territory in relation to the litigation.’
However, their Honours also observed that, while the voluntary disclosure of privileged legal advice to a third party will not necessarily waive privilege, it can do so. They said that Goldberg v Ng illustrates that, depending on the circumstances, the disclosure of a privileged communication to a third party for a limited and specific purpose, and on terms as to confidentiality, can have the consequence of waiving privilege.
142 McHugh J dissented. In his view, any disclosure of privileged material to a third party who is a stranger to the privileged relationship (ie to a person who is not the lawyer or the client) should have the consequence that privilege in that material is waived as against the world: at 34 [108], 37-38 [118], 42 [133]-[134]. As I read his Honour’s judgment, the key reason why his Honour preferred a bright line rule of this kind is that it would ensure that legal professional privilege was not extended beyond the rationales that support it (at 37 [117]-[118]):
‘Ensuring candid communications between a lawyer and a client is unlikely to be endangered if a privilege holder is held to waive privilege because he or she has voluntarily disclosed the communication to a stranger. Whether the communication will be disclosed in the future to a stranger to the privilege is entirely within the control of the client. At that stage, the client will determine whether his or her interests are best served by retaining the privilege or disclosing the communication. But it is difficult to see how the possibility of voluntary disclosure will prevent the client being candid with his or her lawyer. …
A client who voluntarily discloses privileged information to a stranger to the privileged relationship has made a choice, based no doubt on considerations personal to him or her, that the purpose for which the communication is disclosed to the stranger is more important than protecting the absolute confidentiality of the communication by preventing the stranger from having knowledge of it. The person may be encouraged to do so, as in Goldberg v Ng, by an expectation that the stranger will not further disclose the communication. But in my opinion, if privileged material is voluntarily disclosed to a stranger to the privileged relationship, the fact that it may be received under an obligation of confidence should not be relevant to whether privileged is waived.’
On the facts, McHugh J considered that disclosure to a member of the Legislative Assembly who was not a member of the Executive Government was relevantly a disclosure to a stranger to the privileged relationship: at 44 [139].
143 In Goldberg v Ng, the respondents sued their solicitor, Goldberg, for failure to account for monies received and disbursed by him as their solicitor. They also made a professional conduct complaint against him to the Law Society of New South Wales. In answer to the complaint, Goldberg prepared statements, with annexures that included a draft brief to counsel, and submitted them to the Society’s professional conduct department. In doing so, Goldberg told the Society that the statements and the annexures were confidential and he wished to retain his legal professional privilege in them. The Society dismissed the complaint on the ground that there was no evidence of professional misconduct or unsatisfactory professional conduct. Subsequently, in the course of the Supreme Court proceedings instituted by the respondents against Goldberg, the respondents served a subpoena on the Society requiring it to produce documents relating to the complaint against Goldberg.
144 All of the members of the High Court held that there had been no express or intentional waiver by Goldberg of his legal professional privilege in the statements and annexures. The issue that divided the Court was whether waiver should be imputed by operation of law. Deane, Dawson and Gaudron JJ held at 100-102 that it should because the professional complaint and the Supreme Court proceedings were but different emanations of the one dispute, and Goldberg’s provision of the statements to the Society was voluntary and for the calculated purpose of demonstrating the reliability of his denial of the alleged failure to account. Their Honours analysed the issue in terms of ‘fairness’, but they could equally, and perhaps more appropriately, have done so in terms of inconsistency.
145 Toohey and Gummow JJ dissented in separate judgments. Each expressed the view that waiver should not be imputed because the disclosures by Goldberg were made to a third party for a limited and specific purpose. Toohey J said at 110 that the following factors militated strongly against any implied or imputed waiver: first, Goldberg disclosed material to the Society because of a complaint against him on an undertaking by the Society that the contents would be kept confidential; secondly, the disclosure was made in the context of the Society’s investigation of a complaint in pursuance of its statutory powers and, consequently, it could be regarded as having been made for the purposes of the Act; and thirdly, the disclosure was confined to the Society. Gummow J said at 123 that, as the disclosures were made in the context of compulsory statutory processes, the circumstances of the case supplied no sufficient reason for depriving Goldberg of privilege, even allowing for the advantage he sought to gain by making the disclosure.
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147 In Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275, which predated Goldberg v Ng and Mann, Giles J held that a limited and specific disclosure of privileged material, on terms of confidentiality, did not result in a loss of privilege. In Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253, Sackville J said that it follows from Goldberg v Ng that the disclosure of a privileged communication for a limited purpose and subject to a confidentiality requirement may, or may not, amount to a waiver of privilege, depending on the circumstances of the case: at 262-263 [42]-[43]. On the facts of that case, Sackville J held that a disclosure of legal advice to the solicitors and representatives of two other companies, on strict terms as to confidentiality and for the purpose of those other companies obtaining legal advice, did not result in an imputed waiver. His Honour distinguished Goldberg v Ng as a case in which the disclosure was made to gain an advantage over the opposing party in related litigation: at 263 [45].’
