Case: Sovereign Motor Inns Pty Ltd v Bevillesta [2000] NSWSC 521
Outcome: followed
Since the applicant based his submission that privilege had been waived upon the disclosure of an unedited copy of the memorandum, it is convenient to begin with subsections (2) and (4), which deal expressly with disclosure. It will be necessary subsequently to consider what, if any, application subsection (1) may have to the present case. Before turning to those operative provisions, however, I observe that the exceptions to the operation of those provisions provided in subsections (3) and (5) were not enlivened by the facts of this case. Subsection (3) relieves the effect of subsection (2) where the disclosure is made by an agent, unless the agent was authorised to make the disclosure. The disclosure in the present case was made by the respondents' solicitors, who are agents of the client. There was no suggestion that the disclosure was unauthorised, but in any event I am satisfied that the waiver of a client's privilege over documents lies within the ostensible authority of the client's solicitor and that ostensible authority is sufficient for the purposes of the proviso in subsection (3). That view is supported in the authorities: Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 at 403 per Goldberg J; Sovereign Motor Inns Pty Ltd v Bevillesta [2000] NSWSC 521 (" Sovereign ") at [24] per Austin J. Therefore, subsection (3) does not operate in this case. Subsection (5), which deals with disclosures between persons with common legal representation or a common interest in a proceeding, is plainly inapplicable. 144 It is unclear on the authorities whether subsections (2) and (4) have exclusive spheres of operation, or whether they overlap to some degree. On one view, subsection (2) applies when the disclosure is made by the client (including the client's solicitor: s 117(1)(b)) and subsection (4) applies when the disclosure is made by some other person. This interpretation has its genesis in Telstra Corp Ltd v Australis Media Holdings Pty Ltd (1997) 41 NSWLR 346 at 350-351 per McClelland CJ in Eq and was described by the Full Court of this Court as "cogent and persuasive": Carnell v Mann (1998) 89 FCR 247 at 261 per Higgins, Lehane and Weinberg JJ. Carnell v Mann was overruled by the High Court (on a different point) ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1) so the Full Court's decision is not binding on me, although it is a persuasive authority (see also J D Heydon Cross on Evidence (7 th Australian ed, 2004) [25300] 838-839). An alternative view is that the subsections operate together, the relevant distinction between the two being knowing and voluntary disclosure (subsection (2)) as opposed to express or implied consent to the disclosure (subsection (4)): see S Odgers Uniform Evidence Law (6 th ed, 2004) [1.3.11100] 474-475. In Sovereign Motor Inns Pty Ltd v Bevillesta [2000] NSWSC 521 , Austin J expressly doubted the interpretation according each subsection an exclusive sphere of operation, but left open the question because his Honour had not had the benefit of argument on the point. I am in a similar position in the present case. Given the doubt attending the question, it would not be appropriate to attempt to resolve the conflicting views without the benefit of full argument where the resolution is unnecessary to the decision. In my opinion, the applicant was unable to establish waiver under either subsection and I was content to proceed on the assumption, without deciding the point, that the applicant may rely prima facie on either subsection. 145 For the purposes of subsection (2), the applicant must establish that the client "knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made [in one of the four specified circumstances]". None of the specified circumstances obtain. Moreover, it is clear that there was disclosure "to another person" (the applicant himself) of the entirety of the evidence, such that no question as to what amounts to "the substance of the evidence" arises. The point turned upon whether the disclosure was made "knowingly and voluntarily". The relationship between mistaken or inadvertent disclosure and voluntary disclosure cannot be expressed definitively. It has been held that disclosure by mistake is not, for that reason alone, involuntary, at least where the disclosure is made in the course of formal discovery: Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 at 406 per Goldberg J. The relevant disclosure in the present case occurred when written submissions were served upon the applicant by the respondents. In fact, in the formal discovery process, that is, when the respondents' list of documents was filed, privilege was claimed over those parts of the memorandum dealing with the legal advice from the AGS. Even if some mistaken disclosures can nonetheless be made knowingly and voluntarily within the meaning of subsection (2), I was not satisfied that there was such a disclosure in this case. This is a case "where everything indicates an intention to claim privilege in respect of the document and what has gone wrong is attributable to sheer inadvertence or carelessness": Sovereign at [23] per Austin J; see also BT Australasia Pty Ltd v New South Wales (No 8) (1998) 154 ALR 202 at 208-209 per Sackville J. In Sovereign , Austin J placed weight upon the fact that the solicitor in receipt of the privileged letter mistakenly disclosed must have realised that it was privileged. That is equally true in the present case in light of the respondents' solicitors' letter to the applicant of 7 February 2007 which asserted the privilege. Moreover, the written submissions (to which the unedited copy of the memorandum was attached) referred to the memorandum as "document 49 in the List of Documents", in respect of which privilege was claimed, and claimed to the knowledge of the applicant. This fact militates against the view that the respondents intended to change their position in respect of the privilege and that it was voluntarily waived when the written submissions were served. 146 For the purposes of subsection (4), the applicant must establish that the substance of the evidence has been disclosed with the express or implied consent of the client to another person (with two exceptions, neither presently relevant). Again, no issue regarding "the substance of the evidence" arises and the point turned upon whether there was express or implied consent. Where, as is the case here, the disclosure was made by the client (within the statutory definition, which encompasses agents and hence solicitors: s 117) and not by a third party, it follows from my finding that the disclosure was not voluntary, that the disclosure was not made with express or implied consent. The factors relevant to a determination of whether the solicitors (who, it is to be recalled, had ostensible authority to waive the privilege) consented to the disclosure include the conduct and intentions of the solicitors: Sovereign at [27] per Austin J. As I have said, I accept, based on the evidence before me, that the disclosure was entirely inadvertent and, in such circumstances, it cannot be said that the disclosure was consensual, expressly or impliedly. 147 Waiver of privilege at common law, which is brought about by "the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality" ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ) is described as an "imputed waiver" because it does not depend upon the subjective intentions of the client. Subsection (4) is not satisfied by imputed consent of this species: Sovereign at [28] per Austin J. It is not necessary for the purpose of subsection (4) to consider the common law test and I conclude that subsection (4) is not made out. The common law test is, however, relevant to a consideration of subsection (1) to which I now turn.