Case: Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501
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]. 18 AMP also submits that the facts in these proceedings are distinguishable from those in Fort Dodge v Nature Vet where the respondent's state of mind became an issue when the respondent introduced it (see at [11] and [14]). 19 AMP further submits that if AACo's submissions are accepted, the consequence would be that in any case in which an applicant placed the respondent's state of mind in issue, the respondent would risk waiving privilege if it did any more than file a mere denial to the claim made against it. AMP submits that such result would be absurd. 20 AMP submits in the alternative that if the Court should find that there has been a waiver of privilege, such waiver cannot extend to advice received throughout the whole of the tender process, since only a limited period is referable to the defence. 30 Many decisions of this and other courts have considered circumstances in which, by its pleadings, a party waives its legal professional privilege. In Fort Dodge , the respondent, in its defence to a claim of misleading and deceptive conduct in relation to a contract, alleged that it had entered into the contract on the basis of representations made by the applicant. As such, it raised a positive case with respect to its state of mind at the time of entering into the contract. Hely J (at [11]) found that by doing so, the respondent: 'opened up for examination and testing the source of, and the basis for, that state of mind. Where a party makes allegations raising the issue of its state of mind, to which legal advice is likely to have contributed, the party cannot continue to claim legal professional privilege for that advice: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405'. Hely J determined that the pleading of the state of mind was inconsistent 'with the continued maintenance of confidentiality of contemporaneous legal advice as to those matters' (see at [14]). 34 However, I cannot accept the submission of AACo that any positive defence mounted by AMP which raises its state of mind necessarily constitutes a waiver of privilege. In my opinion, in order to waive privilege a party must assert a belief which is likely to have been, or is explicitly said to have been, materially dependent upon legal advice given to that party. In that case the proof or otherwise of the belief is dependent upon the legal advice and accordingly privilege is waived. This is the position in cases where the dispute relates to a party's understanding of its legal position at a given point in time, such as Thomason , Rio Tinto, Ampolex and Fort Dodge .