Case: Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1
Outcome: referred to
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. 22 AMP says that the observations in the dissenting judgment of McHugh J in Mann v Carnell at [122], which are relied upon by AACo are inconsistent with the reasons of the majority at [30] and [35] of that decision. 23 Since these proceedings are interlocutory, common law principles with respect to legal professional privilege apply: see Mann v Carnell at 12 [27], 16-17 [41], 45 [143] and 45 [144] and DSE (Holdings) Pty Limited at 504 [11]. 24 The test for waiver of legal professional privilege at common law was enunciated by the High Court in Mann v Carnell . In that case, a majority of the Court at [28]: 'It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege.' 25 The Court added at [29]: '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.' 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. 36 In respect of AACo's second submission, namely that AMP waived its privilege by communicating its legal advice to Rabo, I consider that the applicant must also fail. In Mann v Carnell , the majority observed that the reasoning of all members of the Court in Goldberg v Ng [1995] HCA 39 ; (1995) 185 CLR 83 'was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege': see Mann v Carnell at 14 [30]. The majority also noted the observations of Jordan CJ in Thomason at 355, where his Honour said: '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.' 37 In view of these authorities, the disclosure of legal advice in confidence to a commercial adviser cannot, in my opinion, be considered inconsistent with the retention of privilege. In this respect, McHugh J's observations in Mann v Carnell at [120] are inconsistent with the majority reasoning. 38 For the above reasons, the Court orders that: 1. The applicant's notice of motion be dismissed. 2. The applicant pay the respondents' costs of the motion. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. Associate: Dated: 6 April 2006 Counsel for the Applicant: M Hoffman QC Solicitor for the Applicant: Lipman Karas Counsel for the Respondent: T F Bathurst QC, with S A Goodman Solicitor for the Respondent: Clayton Utz Date of Hearing: 17 March 2006 Date of Judgment: 6 April 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/371.html