Case: Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283
Outcome: followed
The High Court looked at an aspect of waiver of legal professional privilege in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1. The test applied there was whether there was " conduct inconsistent with the maintenance of the confidentiality which the privilege is intended to protect ": Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] . The High Court has not looked directly at the immediate question now in issue. And decisions of trial and intermediate courts both pre and post Mann v Carnell have looked at the question but have not spoken with one voice. On the one hand, there is a body of authority supporting the proposition that " statements or affidavits filed and served in proceedings, but not read in open court, remain ... subject to legal professional privilege ": Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 at [15] (citing Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337; State Bank of South Australia v Smoothdale Ltd (No 2) (1995) 64 SASR 224; Akins v Abigroup Ltd (1998) 43 NSWLR 539; Sevic v Roarty [1998] NSWSC 462 ; (1998) 44 NSWLR 287); Spotless Group Ltd v Premier Building &amp; Consulting Pty Ltd [2006] VSCA 201 ; AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2004] FCA 1196 ; Polyaire Pty Ltd v K-Aire Pty Ltd (2003) 226 LSJS 109 and ACCC v Telstra Corp Ltd [2000] FCA 28 ; (2000) 96 FCR 317. 15 On the other hand, there is also authority for the proposition that filing and service, without more, operates as a full or limited waiver: eg, Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125; Austress v Marlin [2002] NSWSC 958 ; Chief Executive Officer of Customs v Neate (1998) 144 FLR 373; Black &amp; Decker Inc v Flymo Ltd [1991] 1 WLR 753; In the Marriage of Crowe [1988] FLC 91-983 and Leaders Shoes (Aust) Pty Ltd v National Insurance Co of New Zealand Ltd [1968] 1 NSWR 344. As one would expect, Cadbury relies on these cases. Cadbury also relies on Liberty Funding (2005) 218 ALR 283, where the Full Court of the Federal Court considered this conflicting authority. Although the Full Court did not formally decide the issue, it did suggest that the proper approach must recognize the distinction between legal professional privilege and the implied undertaking (with respect to the implied undertaking, see [19-22] below). The Full Court's criticism of the Smoothdale line of cases (at [25]) was in the following terms: The difficulty with the approach in Smoothdale is highlighted by the approach of Barrett J in Austress Freyssinet Pty Ltd v Marlin International Pty Ltd [2002] NSWSC 958 in which his Honour distinguished cases such as Smoothdale on the basis that they were concerned with use in one proceedings of a statement or an affidavit filed and served in another. Barrett J, on the other hand, was dealing with the question whether a party could tender, as an admission, parts of an affidavit sworn by the opposing party in the same proceeding. Barrett J said, buttressed by ample authority, that this could be done, because it was within the range of permitted use the purpose of the proceedings. Barrett J was undoubtedly correct. Thus, it is necessary to posit a limited waiver, within a broad framework of the conduct of proceedings, which may bring about the result (as in Austress ) that it is in the other side's power to destroy the privilege entirely by putting the statement or affidavit into evidence or examining or cross-examining on its contents. (Emphasis added.) 16 What was said by the Full Court may or may not be regarded as being dicta. I need not decide that question. The decision in Liberty Funding (2005) 218 ALR 283 was a decision of the Full Court of the Federal Court. The reasoning, if I may say so, is both persuasive and sensible. If it is conceded, as it must be, that a party upon whom a witness statement is served may use that statement in any way within the context of those proceedings (that is the whole reason why it is filed and served), it follows that it is conduct "inconsistent with the maintenance of the confidentiality which the privilege is intended to protect " ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] ) and an implied waiver of privilege has occurred. Indeed, if one follows the Full Court's reasoning to its logical conclusion, the filing and service operates as a complete, not simply limited, waiver of legal privilege. 21 A basic principle of Australian litigation is that parties give an implied undertaking to the court not to use any document produced to them in the course of litigation except in the context of that litigation: Esso Australia Resources Ltd v Plowman [1995] HCA 19 ; (1995) 183 CLR 10, 32, 36-37, 46; see also Harman v Secretary of State for the Home Department [1983] 1 AC 280. Where other courts have erred doctrinally is in failing to distinguish the implied undertaking analysis from the waiver analysis. The Full Court in Liberty Funding recognized this error when it stated (at [26]): " This so-called 'limited waiver' by service such that the privilege is waived only for the purpose of the legal proceedings in question might be seen to be no more than the operation of the implied undertaking dealt with in Harman ": Liberty Funding (2005) 218 ALR 283. In other words, the limitation on Visy's use of the witness proofs stems not from limitations to be inferred from the conduct of the ACCC in serving them, but in Visy's own obligations to the Court. 23 Moreover, even if the implied undertaking does not automatically give way, a party may still be released from it in the court's discretion upon showing "special circumstances": Liberty Funding (2005) 218 ALR 283 at [31]. Although Cadbury anticipated the implied undertaking issue in its written submissions in these proceedings, the ACCC did not address the implied undertaking in its submissions, nor was the issue fully ventilated in oral submissions by any party . Accordingly, the parties in the damages proceeding and the ACCC will be invited, though not required, to make further written and oral submissions about whether Visy's implied undertaking in the ACCC proceedings prevents Visy producing the Category II and Category III documents and, if the implied undertaking is not overridden, whether Visy should be released from it. 24 I now turn to the ACCC's separate claim of public interest immunity with respect to 8 of the 111 witness proofs, the Category III documents.