Goldberg v Ng

185 CLR 83
69 ALJR 919
132 ALR 57

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(Judgment by: TOOHEY J)

GOLBERG & ANOTHER v NG & OTHERS

Court:

Judges: Deane, Dawson and Gaudron JJ
Toohey J
Gummow J

Judgment date: 3 November 1995

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Judgment by:
TOOHEY J

TOOHEY J. The issue in this appeal relates to circumstances in which it has been held that the right to legal professional privilege was lost through waiver.

The first named appellant (Mr Goldberg) is a solicitor and the other appellant (Mrs Goldberg) is his wife. The respondents, who were clients of Mr Goldberg, sued him for failure to account for moneys received and disbursed by him as their solicitor. They sued Mrs Goldberg for moneys received by her to their use. The proceedings against Mrs Goldberg, taken in the Common Law Division of the Supreme Court of New South Wales, were consolidated with the proceedings against Mr Goldberg, taken earlier in the Equity Division of the Court.

In the course of those proceedings the respondents issued a subpoena to the Secretary of the Law Society of New South Wales ("the Society") to produce material which was identified in the following terms:

"All documents including (but without limiting the generality of the foregoing) correspondence, files, file notes, minutes and records of conversations or proceedings relating to the complaint to the Society by Bernard Ng regarding Harold John Goldberg, Solicitor, and concerning the accounting by Mr Goldberg to Mr Ng for moneys paid to him or his agent by Mr Ng in or about February 1989."

The Society moved to set aside the subpoena. Powell J rejected the motion on 2 March 1993. The Society, in answer to the subpoena, produced to the Court four bundles of documents which were identified as follows:

"Bundle A - Statements made by Mr Goldberg to the Law Society at the request of the Society when it was investigating allegations made against him to that Society by Mr Ng together with a draft brief and other annexures.

Bundle B - Law Society's carbon copies of letters sent by its officers to Mr Goldberg.

Bundle C - Copies of correspondence between the Law Society's officers and Mr Ng, together with the summons and certain affidavits in the instant case.

Bundle D - The Law Society's internal papers with respect to the complaints made to it."

The respondents did not seek access to Bundle D and those documents were returned to the Society.

In respect of Bundles A, B and C the appellants, by a notice of motion dated 16 March 1993, sought a declaration that the documents were the subject of their legal professional privilege. They sought a further order that no access to the documents be provided to the respondents. It is not apparent why the documents in Bundle C would be the subject of any privilege on the part of Mr Goldberg but nothing was said to turn on that. Young J held that though there was legal professional privilege in respect of the documents, the privilege had been waived. His Honour ordered that the respondents' solicitors and counsel have access to the documents in the three bundles.

The appellants' appeal to the Court of Appeal was dismissed by Mahoney JA and Clarke JA, with Kirby P dissenting ^[F21] . The appellants now ask for an order in terms of their motion. To resolve the question of whether any privilege was waived, it is necessary to describe in some detail Mr Goldberg's dealing with the Society.

Events at the Law Society

Mr Ng, one of the respondents, made a complaint to the Society on 14 March 1990 regarding Mr Goldberg's alleged failure to account for moneys entrusted to him. The complaint was made after the institution of proceedings against Mr Goldberg. Mr Goldberg had prepared certain papers for the purpose of the proceedings and he took a copy of the papers with him when he went to the Society in response to the complaint. Young J accepted Mr Goldberg's evidence that the documents were prepared so that he could get legal advice; they were not prepared for the Society.

Because considerable reference was made by counsel to Mr Goldberg's interview with Ms Shirvington of the Society on 8 June 1990, in the course of which the documents were produced, it is as well to quote verbatim Young J's account of what took place. His Honour said that he fully accepted Mr Goldberg's evidence.

"Mr Goldberg's evidence is ... that the lady asked him what the papers were that he had with him. Mr Goldberg replied: 'I do have papers in this file which are relevant to this matter: and the lady said: 'Can we have a look at those?' Mr Goldberg said: 'I have brought them with me to refer if I need to ... I don't have anything to hide. I've already been very full and frank with you because we have now stayed over three hours being asked questions and giving answers. I don't want to have anything in these papers, which includes the things like a statement to my solicitor, given to the Ngs or their company or their legal advisors because you know it's my private confidential matter.' VS said: 'Well we won't give it to anybody else'. VS said: 'I would like to look through those documents' whereupon Mr Goldberg handed them to her saying 'I want to retain my legal professional privilege in regard to these papers' to which VS said 'You do'. Mr Goldberg then said: 'Well in that case in order to be completely frank and free with you and so that it is clear that I have nothing to hide, you can have a look through them.' VS then said: 'We want to keep these. Do you have a copy for yourself and your solicitor?' Mr Goldberg said 'Yes there are other copies. I just picked these up from my solicitor. There are other copies in the file.' VS said: 'Well, we'll keep these and I'll go through them.'"

The question for determination

Put shortly, the question for determination is whether, in making the documents available to the Society by way of answer to the complaint made against him by Mr Ng, Mr Goldberg waived his legal professional privilege in respect of those documents. It is only that privilege which is before the Court. The matter of public interest privilege was raised by the Society before Powell J whose refusal of the Society's motion was upheld by the Court of Appeal ^[F22] .

The material in question was the subject of legal professional privilege in that it came into existence in anticipation of or for the purpose of the proceedings in the Supreme Court. That was the finding of Young J. Kirby P accepted the finding. Mahoney JA and Clarke JA proceeded on the assumption that the finding was correct without themselves expressing a concluded view on that aspect. It was unnecessary for them to do so because each held that any privilege had been waived.

Young J rejected a submission by the respondents that the documents were brought into existence for an improper purpose ^[F23] . The Court of Appeal did not deal with this aspect but it was raised before this Court. There is no basis for interfering with Young J's finding of fact in this regard.

Although the respondents' argument focused largely on the question of waiver, they also attacked the finding of Young J that the documents were privileged. They submitted, somewhat obscurely, that no privilege attached to the documents because of a lack of confidentiality. As I understood the argument, it was that the documents could not be privileged against the respondents because they related to the affairs of the respondents and incorporated information available to Mr Goldberg solely because he had acted as their solicitor.

This submission should not be accepted. It does not take sufficiently into account that the documents came into existence to enable Mr Goldberg to obtain legal advice in proceedings in which he was being sued by his former clients. Of course the material related to the affairs of the respondents in the sense that it related to dealings between the parties. But that does not throw light on the existence of the privilege. The real thrust of the submission, I think, is that there could be no privilege because it has been said that "an essential element in a claim for legal professional privilege [is] that the material, disclosure of which is sought to be precluded is, so far as the person from whom disclosure is sought is concerned, confidential" ^[F24] . No doubt some of the information in the documents was known to the respondents but, as Young J pointed out, that information was intertwined with observations made by Mr Goldberg to his legal advisers. Furthermore, in so far as the material included proofs of evidence, it presumably included accounts by Mr Goldberg of conversations or dealings that may be at variance with the accounts likely to be given by the respondents. It is not possible to isolate parts of the material in this analysis. The documents were prepared by Mr Goldberg for the purpose of the proceedings in the Supreme Court, they were regarded by him as confidential and he made that clear to Ms Shirvington.

This appeal must be decided on the footing that the documents to which the respondents seek access are the subject of legal professional privilege. The appeal necessarily turns on whether that privilege was waived.

Express waiver

The importance of legal professional privilege was very recently affirmed by this Court in Carter v. Northmore Hale Davy & Leake ^[F25] . Because it is a privilege it can be waived, though only by the client. Mr Goldberg is the client claiming the privilege though, as it happens, he is a solicitor and was the solicitor for those who claim that the privilege was waived.

A litigant may waive the privilege by intentionally disclosing protected material to another. If disclosure is incompatible with the retention of confidentiality, there will ordinarily be a general waiver of privilege ^[F26] . It is therefore necessary to consider the circumstances in which disclosure is made. Legal professional privilege extends to documents exchanged between parties with a common interest in the litigation ^[F27] . Therefore disclosure of otherwise privileged documents to a party with a common interest in the litigation does not constitute a waiver ^[F28] . Disclosure to a third party, such as a doctor, for the purpose of obtaining an expert report to be used in litigation does not constitute a waiver ^[F29] . Nor does disclosure to an associate or confidant unconnected with the proceedings ^[F30] . On the other hand, disclosure to an agent of an opposing party does amount to waiver ^[F31] . Although Mr Goldberg intentionally made the material available to the Society, he did so only on an undertaking of confidentiality. It cannot therefore be said that he expressly waived the privilege generally.

The concept of limited waiver

When material has been deliberately disclosed to a third party for a limited and specific purpose, as here, the roles of express and implied waiver become somewhat blurred. One argument is that there has been an express waiver and that the privilege then ceases to exist at all. The contrary argument is that a limited waiver has no bearing on the privilege except in those limited circumstances. A refinement of the first argument is that once any waiver has taken place, it becomes a matter for the courts to determine whether, as a matter of fairness, the privilege should no longer exist. In the Court of Appeal Kirby P held that any disclosure in the present case was for a limited and specific purpose, hence delivery of documents to the Society did not amount to a waiver generally. Mahoney JA and Clarke JA took a different view. The former held that once the material had been produced to the Society fairness required that the privilege be no longer available and that disclosure of the documents amounted to a waiver of the privilege. Clarke JA held that waiver of the privilege should be imputed as it would be unfair to permit Mr Goldberg to maintain the privilege even though there had been no use or intended use of the documents in the proceedings in the Supreme Court nor was there any suggestion of prejudice to the respondents in those proceedings.

None of the judges below asserted that production of the material to the Society of itself constituted a waiver of the legal professional privilege otherwise attaching to the documents. Those judges who held that there had been a waiver reached that conclusion on the basis of what they regarded as fair in the circumstances.

As the argument has developed, the principal question is what further consequences flow from the disclosure by the holder of legal professional privilege to a third party for a limited and specific purpose. If there are no further consequences, the privilege remains otherwise intact. If the answer is not so straightforward, what test do the courts apply in determining whether the waiver has a wider operation? In particular, is the test one of fairness and, if so, what is meant by fairness in these circumstances?

In two recent decisions the English Court of Appeal has held that disclosure to a third party for a limited and specific purpose does not lead to a loss of the privilege as against a person opposed in litigation. In British Coal Corpn v. Dennis Rye Ltd ^[F32] the plaintiff in an action claiming from the defendants the return of moneys had and damages for misrepresentation handed to the police documents which had been created for the purpose of the civil action. The documents were handed to the police to assist them in investigations as a result of which criminal charges were brought against a number of persons including the defendants. Copies of the documents were made available to the defendants during the criminal trial. Neill LJ, with whom Stocker LJ and Dillon LJ agreed, held that the disclosure for the limited purposes of assisting in the criminal investigation and the criminal trial did not constitute a waiver of the privilege in the civil proceedings.

Neill LJ did not approach the matter in terms of fairness. His Lordship said that it was clear that the plaintiffs made the documents available for a limited purpose only, adding ^[F33] :

"This action of the plaintiff looked at objectively as it must be, cannot be construed as a waiver of any rights available to them in the present civil action for the purpose of which the privilege exists."

His Lordship then added ^[F34] that the plaintiff was acting in accordance with its duty to assist in the criminal proceedings and that it would be contrary to public policy if the plaintiff's action in those circumstances "had the effect of automatically removing the cloak of privilege".

In Goldman v. Hesper ^[F35] the defendant taxed her costs of proceedings in the Family Division. The plaintiff sought to inspect all documents lodged in support of the bill including those which were privileged. His application was refused and the refusal was upheld by the Court of Appeal. Taylor LJ, with whom Woolf LJ and Lord Donaldson of Lymington MR agreed, saw the starting point in considering how far the privilege extended as the procedure for lodging documents on taxation. There was a statutory requirement on a claimant for costs on taxation to disclose privileged documents to the court. It was then the duty of the taxing officer to be fair to both parties by maintaining the privilege as far as possible while giving the paying party a proper opportunity to raise a bona fide challenge to any item. His Lordship applied what he saw as the "pragmatic approach" taken in British Coal Corpn v. Dennis Rye Ltd and concluded that the approach taken by the taxing officer was "fair and reasonable" ^[F36] . Thus fairness played a part in Goldman v. Hesper, though in the context of how the taxing officer should approach his task rather than in terms of some overriding principle governing waiver ^[F37] .

Goldman v. Hesper was referred to in this Court by McHugh J in Giannarelli v. Wraith [No 2] ^[F38] . McHugh J distinguished the English decision from the situation with which he had to deal. That situation was one of a party seeking to tax costs but refusing to produce documents on the ground that they were subject to legal professional privilege. McHugh J held that the taxing officer was not entitled to refuse to tax a bill on the ground that privileged documents had not been produced. Having referred to English decisions including Pamplin v. Express Newspapers ^[F39] , he said ^[F40] :

" In the present case, unlike the English cases, the initial disclosure to the taxing officer must amount to waiver of privilege."

If, as I think, his Honour is saying that there is a waiver of privilege in the sense that the taxing officer and the other party may see the privileged documents, I agree with Kirby P that "that passage does not preclude the concept of 'limited waiver'" ^[F41] . If the passage is understood to have wider ramifications, I respectfully take a different view.

The concept of limited waiver of professional privilege is well accepted. Where some uncertainty has arisen is the point at which ideas of fairness or unfairness intrude. Where the issue is one of limited waiver considerations of fairness do not arise. Fairness is relevant in determining whether there has been imputed waiver; the concept of limited waiver is an exception to express general waiver.

Imputed waiver

Express waiver is not the only way in which the privilege may be lost. In Attorney-General (NT) v. Maurice Mason and Brennan JJ observed ^[F42] :

"He can also lose that protection through a waiver by implication. An implied waiver occurs when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication."

Although judges speak at times of implied waiver in order to contrast it with express waiver, the operative principle is that the law will impute waiver when it would be unfair not to do so ^[F43] . Thus, the judgment of Mason and Brennan JJ in Maurice thereafter asserts: "Hence, the implied waiver inquiry is at bottom focused on the fairness of imputing such a waiver."

Implied or imputed waiver will ordinarily arise when partial disclosure of privileged documents is made in the proceedings in which the privilege is asserted. That was the situation in Maurice in the context of the hearing of a claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) and, in my view, the judgments in that case must be read accordingly. It was also the situation in Great Atlantic Insurance Co v. Home Insurance Co ^[F44] where part of a document was read to the court by counsel. Where that sort of thing occurs, it is appropriate for the court or tribunal to consider whether it is fair that the party making the partial disclosure should otherwise maintain the privilege or whether fairness, in particular fairness to the other party, demands that the privilege be foregone. That question will usually be answered by seeing whether the party making the disclosure gained some advantage in the proceedings or, obversely, whether the other party suffered a disadvantage thereby.

But when the partial disclosure is made outside the proceedings, it hardly seems apt to speak in terms of fairness or unfairness. Ordinarily such a disclosure has no impact on the proceedings in respect of which the privilege is claimed. The party making the disclosure gains no advantage in the proceedings and the other party suffers no disadvantage thereby. The question rather is whether a waiver should be imputed, viewing the conduct of the party concerned objectively.

In the present case Mr Goldberg disclosed material to the Society. He did so because there was a complaint against him by one of the respondents. He disclosed the material, not merely on the understanding but on the undertaking by the Society that their contents would be kept confidential. Disclosure was in the context of the investigation of a complaint by the Society exercising its powers under the Legal Profession Act 1987 (NSW) ("the Act"), as it then stood ^[F45] . Complaints of professional misconduct could be referred by the Society Council to the Legal Profession Disciplinary Tribunal ^[F46] , which could order that the legal practitioner's practising certificate be cancelled ^[F47] . Additionally, the Society Council was empowered to cancel or suspend the practising certificate of a solicitor who failed to give a satisfactory explanation for specified conduct ^[F48] . Disclosure by Mr Goldberg was made for the purposes of the Act and was confined to the Society. These considerations militate strongly against any implied or imputed waiver ^[F49] .

Arguably, the Society should not have given the undertaking in carrying out its function of inquiring into the complaint made against Mr Goldberg. By letter dated 23 November 1990 to Mr Ng's solicitors, Ms Shirvington said that the investigation of the complaint had been completed and the Society's Complaints Committee had resolved to dismiss it. The reasons given for dismissal were twofold. The first was that "As the matter is now presented the Committee was not satisfied that there was any evidence of professional misconduct or unsatisfactory professional conduct." The second was that "The complainant should pursue his own remedies as his solicitors have indicated." The letter did not elaborate on the first reason. Arguably, the Society did not afford natural justice to Mr Ng in dismissing the complaint without informing him of the material provided by Mr Goldberg and of the part (if any) it played in that dismissal. But these are not the questions raised by this appeal. Those questions turn on the waiver of privilege in the Supreme Court proceedings. It is not to the point to say that the respondents might be assisted in those proceedings by access to the documents in question.

And although the complaint and the proceedings in the Supreme Court arose from the same circumstances, they are not the same proceedings nor in any way does one depend upon the other ^[F50] . The respondents' rights against the appellants will be decided in the Supreme Court on the material available to the Court in accordance with the principles governing the reception of evidence. Legal professional privilege is one of those principles.

There was a further argument by the respondents, namely, that by discovering and not claiming privilege for one particular document in their list, the appellants had waived any legal professional privilege. The document in question was the letter from the Society to Mr Goldberg, informing him that the complaint against him had been dismissed. I agree with Kirby P ^[F51] that "the inclusion of the one letter ... cannot be taken to be a waiver of all the documents the subject of this appeal. Plainly, such an inference would be entirely unreasonable."

Conclusion

The issue in the present case is not determined by questions of fairness or unfairness but according to whether any disclosure was for a limited and specific purpose only and hence whether any waiver was so limited. The evidence points inexorably to the conclusion that disclosure by Mr Goldberg was for such a purpose and that waiver was limited to disclosure to the Society in order to meet the complaint made against him. This limited waiver was not an express waiver of the privilege generally. Nor can a waiver be imputed in the circumstances. I would allow the appeal, set aside the orders of the Court of Appeal, allow the appeal to that Court from the judgment of Young J, set aside the judgment of Young J and grant the declaration sought by the appellants in their notice of motion dated 16 March 1993.