PLAINTIFF WHO SUED THE DEFENDANTS FOR DEFAMATION SEEKS WAIVER OF ATTORNEY-CLIENT PRIVILEGE

Seketa v Gadens Lawyers & Ors [2021] VSC 245 (12 May 2021)

The plaintiff applies for an order that the third defendant (‘C&L’) produce for inspection documents claimed to be subject to client legal privilege (‘privilege’).

Facts:

The plaintiff is and was a registered building practitioner and a director of ACN. The first defendant  (‘Gadens’)  carries on business as a commercial law firm and has acted for C&L since at least 22 August 20!6.  The second defendant (‘Denehy’) is and was a partner of Gadens and acted for C&L.

The plaintiff alleges that a letter published by Gadens and Denehy, on behalf of C&L, to the Victorian Building Authority (‘VBA’), contained words that were false and was published maliciously.  The plaintiff claims to have suffered loss and damage by reason of having to incur professional fees and disbursements to rebut the allegations made in the Letter.

C&L admits the Letter was published to the VBA but denies the Letter contained false statements and was published maliciously.

C&L asserts privilege over documents itemized in its affidavit of documents on the basis that the documents contain confidential communications between Gadens, as the lawyers for C&L, and C&L (including C&L’s employees and agents) for the dominant purpose of providing legal advice to C&L.  From the description of the documents, which are emails between Gadens and Denehy and C&L and its employees, and their attachments, some of the communications appear to be in connection with the complaint to, and related correspondence with, the VBA (‘C&L Documents’).

The plaintiff contends that in asserting the Letter did not contain false statements and was not published maliciously, C&L has acted inconsistently with the maintenance of confidentiality in relation to the C&L Documents, and that this gives rise to a waiver of privilege under S.122  of the  Evidence Act.  C&L has positively denied the Letter included words that were false and published maliciously and thus put into issue its state of mind about whether it was entitled to instruct its lawyers to report to the VBA that the plaintiff  was in breach of the of the Building Act with reference to the operation of the  Corporations Act.

C&L submits that the plaintiff’s summons should be dismissed with costs.  Its submission is summarised in three broad propositions which Ms Coleman, as counsel for C&L developed: (a) there has been no conduct by C&L Holdings inconsistent with it maintaining privilege; (b) the fact that the state of mind of C&L Holdings is in issue in this proceeding is not enough to establish a waiver of privilege; and (c) even if C&L Holdings’ state of mind being in issue were sufficient to establish waiver, it would not open up for scrutiny all the privileged communications referred to in the affidavits of documents filed by C&L Holdings, as sought by the plaintiff.

Issue: Should the court grant the waiver of privileged communications?

Law:

• Evidence Act 2008 S.122(2), 131A

Analysis:

The content of the Letter depended on legal advice given by Gadens and Denehy to C&L. That makes the privileged documents that perhaps contain legal advice relevant, but do not necessarily lay them open to scrutiny.  As C&L submitted, none of the matters given as particulars of the denial by C&L relates to legal advice it received, or correspondence with its lawyers.  C&L has not pleaded any justification of its state of mind by reference to the substance or effect of legal advice received.

It seems to be correct to state, as C&L submitted, that where the privilege holder’s state of mind is an issue in a proceeding, the taking of advice and the content of that advice will be facts beyond the reach of the other party unless the privilege holder has attempted to boost its case by reliance on the advice in some way, for example by justifying its position (or state of mind) by reference to the substance or effect of legal advice it has received.

The question in this case is whether the pleadings of C&L, in particular its denial of the falsity of the relevant pleaded paragraphs of the Letter, and the denial of the allegation of malice, and the particularisation of those denials, is plainly inconsistent with the maintenance of the confidentiality in the C&L Documents which the privilege is intended to protect. The court agrees with the submissions of C&L that privilege in communication will only be waived where the privilege holder makes an assertion (express or implied), or brings a case, which is either about the contents of an otherwise privileged communication or which  necessarily lays open the confidential communication to scrutiny.

Nothing in C&L’s pleading has put any legal advice relating to the content of the Letter in issue or laid it open to scrutiny. For these reasons, there is no inconsistency between the assertions in the Particulars and the maintenance of the privilege. The plaintiff has not made out the claim for waiver of privilege in respect of the C&L Documents, and it is unnecessary to consider the arguments concerning the documents that post-date the Letter or to exercise the Court’s discretion to inspect the C&L Documents.

Conclusion: For the above reasons, the plaintiff’s application will be dismissed.

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