//
you're reading...
Australian Law and Politics

State Of Mind And Waiver Of Privelege


Do you impliedly waive privilege in your legal advice by putting in issue your state of mind? Generally speaking, two distinct approaches emerged, a broad view and a narrower view, but recently the narrower view has prevailed. The NSW Court of Appeal recently signalled however that it might be prepared to take a broader view of issue waiver when a party has put in issue his or her state of mind.
Broad vs narrow

Key Point

  • If the Court of Appeal’s comments are followed, framing a case might be enough to inadvertently waive privilege.

An example of the broad view is the decision in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152. BT claimed that Telstra had engaged in misleading and deceptive conduct which induced it to enter into an agreement. Telstra then sought discovery of legal advice received by BT, on the basis that the advice went to BT’s state of mind when it entered into the agreement. Even though BT did not refer to any legal advice, the Court found that privilege had been waived.

The High Court then handed down its decision in Mann v Carnell (1999) 201 CLR 1. By focusing on the notion of inconsistency, Mann v Carnell caused a shift away from the broad formulation in Telstra. For example, in Liquorland (Australia) Pty Ltd v Anghie (2003) 7 VR 27 Justice Byrne held that the putting in issue of a relevant state of mind (one of reliance or otherwise) is merely the starting point for an examination of whether privilege has been waived. The chronological coincidence of the legal communication and the establishment of that state of mind does not of itself determine the question.
The Comments in Archer

Council of the New South Wales Bar Association v Archer [2008] NSWCA 164 concerned the application of waiver in the context of certain provisions of the Legal Profession Act 1987 (NSW). In that case Justice Hodgson (with Justice Handley agreeing) made certain general obiter observations about the common law principles of issue waiver:

“What would involve inconsistency and relevant unfairness is the making of express or implied assertions about the content of the privileged communications, while at the same time seeking to maintain the privilege. In this respect, it may be sufficient that the client is making assertions about the client’s state of mind, in circumstances where there were confidential communications likely to have affected that state of mind” [emphasis added].

Is this a return to the broad view in Telstra, and perhaps a widening of the scope of that principle beyond Telstra and certainly beyond Mann v Carnell?

“Likely to have affected”

Previous cases referred to the likelihood of legal advice having contributed to a state of mind in the context of the dates and descriptions of specific known documents. But what does “likelihood” mean here? It could have two meanings:

  • it could qualify the existence of confidential communications; or
  • it could qualify the probability of those communications having affected the privilege holder’s state of mind.

If it refers to the likelihood of the existence of the documents, a court would then need to determine the likelihood that a party has obtained legal advice, which would throw up some practical problems:

  • Should a court assume that a large corporate entity is more likely to have received legal advice than an individual litigant?

 

  • An affidavit of documents might not reveal the existence of legal advice because of the practice of using a general catch-all to describe privileged documents, so a notice to produce might be necessary – but neither of these will reveal if oral advice has been taken. How then should a court determine if it has been?

If “likely” is intended to qualify the impact of a privileged communication on the privilege-holder’s state of mind, additional complex questions arise:

  • Is the test an objective or subjective one?
  • What degree of likelihood is required?
  • How is the test to be applied where there is more than one decision-maker, for example, several company directors?

A return to the broad old days?

It may be that the comments of the Court of Appeal in Archer were intended to be read more narrowly. This would be consistent with earlier decisions of Justice Hodgson appearing to support the narrow view.

The narrow view certainly has much going for it as a matter of principle; not only does it protect the status of privilege as an essential common law right, it is consistent with the test in Mann v Carnell. The necessary unfairness stems from the inconsistency which would arise if a privilege-holder were allowed on the one hand to use privileged material to advance his or her position, while at the same time asserting privilege over that material.

If, however, the Court is signalling that it is prepared to reconsider the position, and the broader view were to become accepted again, there could be serious ramifications for litigants. It could be that merely pleading a cause of action which is based on reliance (for example, a section 52 TPA claim) could be said to be inconsistent with a claim for privilege, even though the privilege-holder has not disclosed part of legal advice – indeed, he or she would not be seeking to rely on any advice.

It is clear that, nearly a decade after Mann v Carnell, the profession would benefit from a clarification of these issues at appellate level.

Original article by Clayton Utz

About Craig Hill

Teacher and Writer. Writing has been cited in New York Times, BBC, Fox News, Aljazeera, Philippines Star, South China Morning Post, National Interest, news.com.au, Wikipedia and others.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

If you liked what you just read, click "Subscribe" to become a follower of the Craig Hill site. You will receive an email each time a new post is published.

Join 14,942 other followers

An archive of all my old posts

Follow me on Twitter

Most Recent Posts Post on My Blog About China: China News

Cadence Column: Asia, October 25, 2021

Cadence Column: Asia, October 25, 2021

Taiwan was thrust into a position without being asked. In 1971, the United Nations removed the Taipei-seated government known today as “Taiwan” and switched to recognizing the Beijing-based government known as “China”. The Taiwanese were elbowed out of the global forum. Now, the US is working to bring Taiwan back in, but not the same […]

China’s trade practices come under fire

China’s trade practices come under fire

China’s trade policies have come under strong criticism during a review at the World Trade Organization (WTO). The US accused China of “skewing the playing field” by using “unfair trade practices” such as preferential treatment for state businesses. Meanwhile Australia said the country’s behaviour was “inconsistent” with its WTO commitments. China said it was committed […]

China’s economy weakens, then gets even worse and now there’s a global shipping crisis. What’s next?

China’s economy weakens, then gets even worse and now there’s a global shipping crisis. What’s next?

The world is waking up to the fact that maybe being dependent upon China for its goods is not such a good idea. In 2019 at about the same time the US was closing on the trade deals with China, COVID emerged in China. In 2019 China’s economy was also beginning to slow down. COVID […]

U.S. needs nuclear spacecraft to compete with China, NASA official tells Congress

U.S. needs nuclear spacecraft to compete with China, NASA official tells Congress

A NASA official told Congress on Wednesday that the United States needs more nuclear spacecrafts in order to compete with China. “Strategic competitors including China are aggressively investing in a wide range of space technologies, including nuclear power and propulsion,” Bhavya Lal, NASA’s senior advisor for budget and finance, told the House Science, Space, and […]

China shows off drones recycled from Soviet-era fighter jets

China shows off drones recycled from Soviet-era fighter jets

China has for the first time showed off retired 1950s era fighter jets that have been converted to unmanned drones, with satellite photos of two of its east coast bases near Taiwan showing a large number of the jets on site. The People’s Liberation Army’s Eastern Theater Command published the photos of two Shenyang J-6s […]

China’s propaganda machine is intensifying its ‘people’s war’ to catch American spies

China’s propaganda machine is intensifying its ‘people’s war’ to catch American spies

“Let’s fight a ‘people’s war’ against the spies, so that they cannot move a single step and have no place to hide!” That was the rallying cry of a Chinese military newspaper on social media over the weekend, as Beijing urges public vigilance against American espionage following the launch of a CIA mission center dedicated […]

China’s blackouts break power cutoff pledge

China’s blackouts break power cutoff pledge

As China struggles to control the latest surge of power shortages, the government seems to be hoping that the public will have short memories for how it has dealt with similar problems in the past. After months of downplaying the power crisis and recommending partial fixes, central government authorities belatedly acknowledged the spread of electricity […]

Cadence Column: Asia, October 18, 2021

Cadence Column: Asia, October 18, 2021

According to Chinese and US claims, China has a high-orbit, hypersonic missile that can hit a target within 24 miles. And, that’s why China is the new boss of the world and everyone else should hate America. The end. But, that’s not the end in the mind of Taiwan or the US Pentagon. This week, […]

China ‘making its nuclear submarines harder to detect’

China ‘making its nuclear submarines harder to detect’

China is upgrading its nuclear missile-equipped submarines to make them harder for rival powers such as the US to detect, reports suggest. The People’s Liberation Army Navy has redesigned its type 094 submarines to make them quieter, The South China Morning Post reports. Defence experts believe the Chinese 094 submarine can carry and launch the […]

Could China’s economy collapse?

Could China’s economy collapse?

For almost half a century, Chinese officials have overseen one of the greatest economic transformations in human history. The country has gone from collectivized farms and famine to world-leading tech companies and gleaming megacities connected by superfast trains. More than 800 million Chinese have been pulled out of poverty as the Communist Party and its leader […]

%d bloggers like this: