Case: Telstra Corporation Ltd &amp; Anor v BT Australasia Pty Ltd &amp; Anor (1998) 85 FCR 152
Outcome: referred to
AACo submits that where a party propounds a positive case that it possessed a certain state of mind, it opens up for examination and testing by the Court any evidence as to its actual state of mind. AACo submits that a defence which specifically invokes a positive state of mind is inconsistent with the maintenance of privilege over documents which contributed to that state of mind. As a consequence, AACo submits AMP has necessarily waived privilege in relation to its legal advice. AACo relies upon Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411; Telstra Corporation Ltd &amp; Anor v BT Australasia Pty Ltd &amp; Anor (1998) 85 FCR 152 at 166-7; Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 at [11] ; BP Australia Pty Ltd v Nyran Pty Ltd [2002] FCA 1302 at [17] ; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1336 at [40] [42]. 13 AACo submits that the majority judgment in Telstra Corporation remains good law and relies upon Perpetual Trustees (WA) Ltd v Equuscorp Pty Limited [1999] FCA 925 at [16] and DSE Holdings Pty Limited v Intertan Inc &amp; Anor [2003] FCA 384. 17 AMP submits that the decision in Telstra v BT and other cases propounding a 'state of mind' test should not be relied upon in view of the subsequent decision of the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 which established the inconsistency test. Additionally, AMP says the 'state of mind' test only arises in circumstances where the issue of state of mind was raised by the party claiming privilege, which is not the position in the present case. 26 Prior to the decision in Mann v Carnell , the leading authority of this Court relating to waiver of legal professional privilege was Telstra Corporation v BT Australasia . In that case, Branson and Lehane JJ observed (at 166): 'A party who initiates an undue influence case puts in issue in the proceeding the quality of his or her consent or assent ... The quality of such consent or assent will ordinarily be affected by relevant legal advice received by the party. The principle that requires that in such circumstances the party not be entitled to maintain the confidentiality of such advice is one of fairness which goes to the integrity of the legal process. To allow a party to put in issue the quality of his or her consent or assent whilst, at the same time, withholding evidence relevant to that issue, would be to allow him or her unfairly to handicap the opposing party to the proceeding, and to compromise the ability of the court realistically to determine the issue.' 28 The effect of Mann v Carnell upon the ratio in Telstra was considered by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc , where his Honour said (at 501-502 [4]-[5]): 'I have come to the view that the authorities in this Court may require me to be guided by what the majority of the Full Court said in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152, as necessarily modified by Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at 12 [27] and 13 [29] ... My own view is that Mann v Carnell evinces more than a modification of the approach of the majority in Telstra and amounts to a rejection of that approach and that the notion of inconsistency of conduct by the holder of the privilege and the maintenance of the confidence in question (though informed where relevant by notions of fairness) works a narrower and more confined operation for implied waiver than as expressed by the majority in Telstra .' 29 I respectfully agree with his Honour with respect to the effect of Mann v Carnell . To the extent that Telstra suggests that fairness is the overriding consideration, it should not be followed. It is clear that following Mann v Carnell , inconsistency of conduct should be the guiding principle in determining whether legal professional privilege has been waived, although fairness remains an element for consideration in determining whether conduct is inconsistent.