Balnaves v Smith & Anor [2008] QSC 215 [2008] 2 Qd R 413

SUPREME COURT OF QUEENSLAND CITATION: Balnaves v Smith & Anor [2008] QSC 215 PARTIES: NEIL RICHARD BALNAVES (plaintiff) v NEIL CLIFFORD SMITH (first defendant) and ACN 060 759 382 PTY LTD (second defendant) FILE NO: BS1391 of 2005 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court, Brisbane DELIVERED ON: 12 September 2008 DELIVERED AT: Supreme Court, Brisbane HEARING DATE: 9 September 2008 JUDGE: Douglas J ORDER: Application dismissed. Further submissions sought as to costs. CATCHWORDS: PROCEDURE – DISCOVERY AND INTERROGATORIES – PRODUCTION AND INSPECTION – GENERALLY – OTHER CASES – where mention was made of the provision of “certain advices” in an affidavit of the plaintiff’s solicitor – whether such reference enlivened the provisions of r.222 of the Uniform Civil Procedure Rules 1999 PROCEDURE – DISCOVERY AND INTERROGATORIES – PRODUCTION AND INSPECTION – GROUNDS FOR RESISTING PRODUCTION – LEGAL PROFESSIONAL PRIVILEGE – PARTICULAR CASES – whether on its proper construction r.222 of the Uniform Civil Procedure Rules 1999 overrides legal professional privilege PROCEDURE – DISCOVERY AND INTERROGATORIES – PRODUCTION AND INSPECTION – GROUNDS FOR RESISTING PRODUCTION – LEGAL PROFESSIONAL PRIVILEGE – WAIVER OF PRIVILEGE – where the plaintiff through his solicitor revealed that he had made an admission after receiving advice – where the effect of the advice is not revealed – whether an inconsistency arose -- 1 of 6 -- 2 between the plaintiff’s conduct and maintenance of the confidentiality of the advice given Civil Procedure Rules 1998 (UK), Pt. 31.14 Uniform Civil Procedure Rules 1999 (Qld), r.211, 212, 222 Uniform Civil Procedure Rules 2005 (NSW), r.21.10 Balnaves v Smith [2008] QSC 150, cited Century Drilling Ltd v Gerling Australia Insurance Co Pty Ltd [2004] 2 Qd R 481, cited Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, cited Dubai Bank Ltd v Galadari (No 2) [1990] 1 WLR 731, cited Expandable Ltd v Rubin [2008] EWCA Civ 59, followed GMCG, LLC v Agenix Ltd [2007] QSC 309, cited Mann v Carnell (1999) 201 CLR 1, cited Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd [1992] 1 Qd R 91, cited Marubeni Corporation v Alafouzos (Court of Appeal, England and Wales; 6 November 1986, unreported), considered New Cap Reinsurance Corporation Ltd (in liq) v Daya [2008] NSWSC 763, cited Osland v Secretary to the Department of Justice [2008] HCA 37, applied Rhyse Holdings Pty Ltd v McLaughlins (a firm) [2002] QCA 122, cited RP Data Limited v Property Data Solutions Pty Ltd [2006] QSC 214, cited COUNSEL: C. Harding for the applicant J. B. Sweeney for the respondents SOLICITORS: Cantwell Lawyers for the applicant MacGillivrays for the respondents [1] Douglas J: The plaintiff has instituted proceedings claiming damages for personal injuries he suffered in a boating accident on the Coomera River when the boat he was driving collided with a boat driven by the first defendant. In his reply he originally admitted his own contributory negligence to the extent of “not more than” 25 per cent but, on 7 July 2008, Martin J gave him leave to withdraw that admission. The application to withdraw the admission seems to have been precipitated by the receipt of a loss adjuster’s report reassessing the available evidence after the admission had been made.1 [2] The material then before his Honour included an affidavit of the plaintiff’s solicitor setting out the sequence of events which, in para. 14, said: “After delivery of the Defendants’ Defence on or about 30th June 2006, Counsel was engaged to provide certain advices and to draw and settle a Reply thereto. On instructions from the Plaintiff, after 1 See the discussion by Martin J in Balnaves v Smith [2008] QSC 150 at [22]-[30]. -- 2 of 6 -- 3 having the benefit of our and Counsel’s advice on the then prevailing information and in particular, having regard to the fact that the Plaintiff had pleaded guilty to a breach of s43 of the Transport Operations (Marine Safety) Act 1994, the Reply was then filed on 15 th September 2006 containing the admission in paragraph 3.” [3] The affidavit then goes on to exhibit the loss adjuster’s report obtained after the filing of the reply and to argue that the material analysed in it could lead to a conclusion that there had been no contributory negligence by the plaintiff. The issues [4] In this application the defendants have asked for the production for inspection and the right to copy “advices of the Plaintiff’s solicitors and counsel referred to in paragraph 14” of that affidavit. They seek to do so in reliance on r. 222 of the Uniform Civil Procedure Rules 1999 which provides:- “[r 222] Inspection of documents referred to in pleadings or affidavits 222. A party may, by written notice, require another party in whose pleadings, particulars or affidavits mention is made of a document – (a) to produce the document for the inspection of the party making the requirement or the solicitor for the party; and (b) to permit copies of the document to be made.” [5] The application is resisted on the basis that no “mention is made” of a document in para. 14 and on the alternative basis that there has been no waiver of privilege in respect of the advice referred to in the paragraph. [6] The applicant’s argument proceeds from the uncontroversial assumption that the obligation to produce the document for inspection is separate from the duty of disclosure under r. 211 of documents in the possession or under control of a party and directly relevant to an allegation or matter in issue. The obligation under r. 222 extends to documents of which mention is made in pleadings, particulars or affidavits, the object being to give the opposite party the same advantage as if the document referred to had been fully set out in, in this case, the affidavit. 2 Is mention made of a document? [7] Rule 222 and cognate rules in other jurisdictions such as New South Wales and England have been held to require “direct allusion to the document, an inferred or implied reference being insufficient.”3 2 See RP Data Limited v Property Data Solutions Pty Ltd [2006] QSC 1, BC200608728 at p. 4 ; see also Century Drilling Ltd v Gerling Australia Insurance Co Pty Ltd [2004] 2 Qd R 481 at [11]-[12] and Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd [1992] 1 Qd R 91, 96-97. 3 See RP Data Ltd v Property Data Solutions Pty Ltd at BC200608728 at pp. 6-7; Dubai Bank Ltd v Galadari (No 2) [1990] 1 WLR 731, 737-740; Marubeni Corporation v Alafouzos (Court of Appeal, England and Wales; 6 November 1986, unreported); Expandable Ltd v Rubin [2008] EWCA Civ 59 at [23] and New Cap Reinsurance Corporation Ltd (in liq) v Daya [2008] NSWSC 763 at [44]. -- 3 of 6 -- 4 [8] The current English rules use similar language to r. 222 in allowing a party to inspect a document mentioned in an affidavit; see their Civil Procedure Rules 1998, Pt 31.14(1). That language has been treated as equivalent to the previous language which required both in England and here that “reference” be made to the document.4 In New South Wales the rule requires production of any document or thing referred to in an affidavit.5 In that jurisdiction Austin J recently said:6 “In my view the authorities strongly point to the conclusion that if an affidavit merely says that legal advice has been obtained, without any ‘direct allusion’ that the advice was in written form, the affidavit does not refer to a document for the purposes of r 21.10(1)(a) ... and legal advice … is not necessarily a document.” [9] Mr Sweeney for the respondent also points to the earlier English decision in Marubeni Corporation v Alafouzos 7 as buttressing his argument that the language used in this affidavit does not mention a document. In that decision the affidavit used the words “the Plaintiffs have obtained outside Japanese legal advice which categorically states that this agreement does not render performance of the sale contract illegal in anyway whatsoever.” Although counsel conceded that there was a high degree of probability that the Japanese legal advice was contained in a document, Lawton LJ concluded that “there was not a reference to any document in the affidavit.”8 [10] The proper understanding of the language used in the affidavit here does not, in my view, make mention of a document even if one may well infer that some of the advice received by the plaintiff from his solicitors and counsel may have been in writing. It merely said that the plaintiff gave instructions “after having the benefit of our and Counsel’s advice.” From that one can conclude that the plaintiff received advice but it is not the case that mention has been made of a document. There has been no “direct allusion” to such a document. Does r. 222 on its proper construction override legal professional privilege? [11] Mr Harding for the applicant defendants contended that r. 222 imposed an obligation to produce documents which overrode legal professional privilege in those documents partly because of the explicit exemption from the duty to disclose under r. 211 provided by r. 212(1)(a) in relation to documents where a valid claim to privilege from disclosure could be made. He submitted that the absence of such a provision in respect of r. 222 led to the conclusion that privilege could not therefore be claimed. He also relied on an oblique reference in the judgment of Holmes J, as her Honour then was, in Century Drilling Ltd v Gerling Australia Insurance Company Pty Ltd.9 There her Honour, without addressing the issue explicitly at all, concluded that the circumstances did not warrant requiring production of the document with which she was dealing “notwithstanding its privileged status”. 4 See Expandable Ltd v Rubin [2008] EWCA Civ 59 at [23] and the previous Rules of the Supreme Court O. 35 r. 14 and note the words “referred to” in the heading to r. 222. 5 UCPR (NSW) r. 21.10(1). 6 New Cap Reinsurance Corporation Ltd (in liq) v Daya [2008] NSWSC 763 at [44]. 7 Marubeni Corporation v Alafouzos (Court of Appeal, England and Wales; 6 November 1986, unreported) 8 See the discussion by Lloyd LJ also. 9 [2004] 2 Qd R 481 at [21]. -- 4 of 6 -- 5 [12] He argued that one could infer from those four words that her Honour would otherwise have disregarded the privileged status of the relevant document. That does not seem to me to be a powerful basis for the argument and it conflicts with the conclusion reached by the English Court of Appeal in Expandable Ltd v Rubin10 in respect of a similar argument that the rule makers there had deliberately decided to make a right of inspection supersede any ability otherwise to claim privilege. Their Lordships were not attracted to the view that “for the first time in the history of English litigation, the fundamental protection of privilege is automatically abandoned by the mere mentioning of documents … such a fundamental change should not be regarded as having been effected by mere inference.”11 I can see no reason why any different view should apply to r. 222 as any conclusion that it had the effect of overriding a party’s claim to legal professional privilege would require clear words or a necessary implication to that effect and it is not apparent to me that the rule can be construed in that fashion. 12 Has there been a waiver of legal professional privilege? [13] Nor does the content of para. 14 of the plaintiff’s solicitor’s affidavit amount to any waiver of privilege. [14] The High Court has recently reviewed the decisions in this area in Osland v Secretary to the Department of Justice13 . There, the Victorian Attorney-General had issued a press release relating to his recommendation to the Victorian Premier that the state Governor be advised to deny a petition for mercy by Mrs Osland to the former Attorney-General for Victoria. The press release contained this statement: “This week I received a memorandum of joint advice from the panel [of three senior counsel] in relation to the petition. The joint advice recommends on every ground that the petition should be denied. After carefully considering the joint advice, I have recommended to the Premier that the Governor be advised to deny the petition.” [15] The appellant argued that document amounted to a waiver of privilege in respect of the advice from the three senior counsel referred to in it. The appellant’s argument before the High Court turned on the sentence saying: “The joint advice recommends on every ground that the petition should be denied.” The view was taken in the argument that, without that sentence, there would probably be no issue of waiver.14 Even with that language the High Court concluded that the privilege had not been waived. The language here is much more circumscribed than that analysed in Osland as the effect of the advice is not revealed but rather what is said is explicable in context as an explanation why, particularly because of the plaintiff’s guilty plea, the admission had been made in the reply. The content of the advice is not mentioned. [16] The High Court’s conclusion that the Attorney-General’s press release was not inconsistent with the maintenance of the confidentiality which the privilege is 10 [2008] EWCA Civ 59 at [28]-[43]. 11 See at [38] in particular. 12 See Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, 552-553 at [9]-[11]. 13 [2008] HCA 37. 14 See at [16]. -- 5 of 6 -- 6 intended to protect depended on the circumstances in which the statement was made. There the Court concluded that the Attorney-General was seeking to give the fullest information as to the process that had been followed while at the same time following the long standing practice of not giving the reasons for the decision. The Court concluded that this did not involve inconsistency and involved no unfairness to the appellant on the basis that, if she had a legal right to reasons for the Governor’s decision, then she still had that right and if she had no such right the press release did not deprive her of anything to which she was entitled. [17] Applying those same considerations of whether there has been inconsistency between the conduct of the client and maintenance of the confidentiality, effecting a waiver of the privilege,15 there seems to me to be no inconsistency between the conduct of the plaintiff, through his solicitor, in revealing that he had made an admission after receiving advice, which he wished to withdraw after reassessing the evidence available upon the receipt of the loss adjuster’s report, and his maintenance of the confidence attaching to the advice. [18] In those circumstances it does not seem to me that the nature of the advice given earlier itself becomes an issue in the proceeding. The defendants will still be obliged to conduct their defence as they would have done in any event and the plaintiff has not put in issue the substance of any privileged communication referred to in para 14 of his solicitor’s affidavit, unlike, for example, a case where a client sues a former lawyer for allegedly negligent advice. In those circumstances there seems to me to be no inconsistency between the plaintiff’s conduct and maintenance of the confidentiality of the advice given him by his lawyers. Therefore there has been no waiver of privilege attaching to any legal advice he has received.16 Conclusions and orders [19] No mention was made of a document in the affidavit’s reference to the advice given to the plaintiff. [20] Rule 222 does not, on its proper construction, override legal professional privilege. [21] The reference in para. 14 of the solicitor’s affidavit to the fact that the plaintiff had received advice was relevant to the explanation that an admission had been made after that advice was received and, in particular, having regard to the plaintiff’s guilty plea. That background was also relevant to the explanation that the admission was sought to be withdrawn on reconsideration of the evidence after the receipt of the loss adjuster’s report. The affidavit did not reveal the content of the advice or refer to it in such a way as to waive privilege in the advice or in any document that may have contained it. Nor did it make the content of the advice an issue in the litigation. [22] Accordingly the application will be dismissed. I shall hear the parties in respect of costs. 15 See Mann v Carnell (1999) 201 CLR 1, 13 accepted as the source of the principles to be applied in Osland at [44] and also referred to in Rhyse Holdings Pty Ltd v McLaughlins (a firm) [2002] QCA 122 at [13]-[14]. 16 See also GMCG, LLC v Agenix Ltd [2007] QSC 309 at [13]-[16]. -- 6 of 6 --