Case: Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1
Outcome: followed
The principles underlying issue waiver have been the subject of considerable discussion in judgments of this Court, most recently in the Full Court in Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86 ; (2006) 229 ALR 304 at [43] ff; see also DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384 ; (2003) 127 FCR 499; Telstra Corp Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152. In light of the Full Court's decision it is unnecessary for me to consider the extent to which Federal Court decisions which pre-dated the decision of the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 require some qualification. 34 Given that the privilege issue arises here on a pre-trial motion it is governed by the common law of legal professional privilege, not by the provisions of the Evidence Act 1995 (Cth). Issue waiver, a form of implied waiver of privilege, is governed by the principle of "inconsistency" stated in the majority judgment of the High Court in Mann v Carnell at [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'. 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 ... 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." 36 The Full Court in Rio Tinto said of this (at [53]-[54]): "... this correctly summarises the effect of previous authorities, such as Thomason, United States Surgical and Benecke . Referring to the observation of Kirby J in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [1996] HCA 15 ; (1996) 137 ALR 28 at 34; [1996] HCA 15 ; 70 ALJR 603 at 607; [1996] HCA 15 that a mere reference to legal advice will not amount to disclosure, the Spalvins court found that, for the most part, the ASC had done no more than this and had not, therefore, waived privilege. Although the Full Court was necessarily guided by the authorities prior to Mann , there is little, if anything, in the passage quoted above that would require modification to take account of Mann . It is plain enough that the majority in Mann also saw the 'issue waiver' cases as a species of waiver, to which the same basic principle applied. Their Honours' analysis in Spalvins emphasises, as does the majority in Mann , that waiver comes about because the privilege holder's conduct is inconsistent with the continued confidentiality of the communication because he or she has put in issue the character or contents of the communication in pursuing a right or claim , or has created a situation where another party must reasonably do so by way of a defence." (Emphasis added) 38 I would add the following which is of some present importance given the first respondent's oral submissions. As the High Court emphasised in Mann v Carnell , it is inconsistency, not some overriding principle of fairness operating at large that governs implied waiver. 39 I reject the first respondent's contention. 40 This contention can be disposed of shortly. Mr Gurtler has disclosed the fact of a particular instruction having been given - a fact, moreover, which would reasonably be inferred if no such disclosure had been made from the later filing of a motion to join Mr Turnbull. No disclosure was made of the actual content of the communication made or of any advice given in consequence of it. If a disclosure of this variety could result in the loss of privilege by the calling into question of why the particular procedural step it involved had been taken, the basis of the privilege itself would in my view be seriously weakened. 41 All that the affidavit did is to indicate the nature of the instruction given. It did not reveal the basis of, the terms of, or a "version of": cf Mann v Carnell at [28] the communication. Mr Gurtler has not acted in a way which is inconsistent with the maintenance of the confidentiality which the privilege protects. 42 Finance Now's contention is that there is a prima facie basis for alleging that the substantial purpose of advice provided by Williams &amp; Hughes in respect of which privilege is claimed, was advice to Hillcrest for the purpose of Hillcrest conducting the litigation for its own benefit. 43 The prima facie basis relied upon to demonstrate that the advice was to Hillcrest are: (a) the litigation funding agreement and, in particular, the two retainers both of which showed Hillcrest as a client and able to give instructions; and (b) the list of privileged documents shows that, subject to limited exception, Williams &amp; Hughes received correspondence regarding the 31 July 2006 email and the proposed joinder of Mr Turnbull, from Hillcrest rather than Mr Gurtler himself.