The High Court has considered the inadvertent disclosure of privileged documents in the matter ofExpense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategic Management and Marketing Pty Limited & Ors. The judgment is particularly significant considering the nature of modern litigation, which often entails large teams of lawyers reviewing volumes of electronic and hard copy documents.

A number of privileged documents were inadvertently discovered amongst some 60,000 others. The receiving party did not dispute that the disclosure was inadvertentbut argued that privilege had been waived. The High Court held the actions by the disclosing party were not inconsistent with an intention to claim privilege, and rather were strongly indicative of mistaken disclosure. The actions included: confusion of documents listed as both privileged and non-privileged, and a prompt letter of correction by the delivering party once the inadvertent disclosure was brought to light. The High Court stated that there was “no question of waiver sufficient to be agitated before the Court” and that any allegation of waiver would turn on “a legal, technical argument tangential to the main proceedings, and should not have been made”.

In a joint judgment, their Honours Chief Justice French and Justices Kiefel, Bell, Gageler and Keane held that “courts of New South Wales should actively engage in case management in order to achieve the purposes of the CPA,” being the achievement of a just but timely and cost-effective resolution of the real issues. It was emphasised that a Court must give effect to this overriding purpose when exercising any powers, and that “unduly technical and costly disputes about non-essential issues are clearly to be avoided.

Of what had occurred in the Courts below their Honours noted it could hardly be suggested that the pursuit of satellite interlocutory proceedings of the kind here in question in any way fulfils the overriding purpose of the CPA,” rather the pursuit of the interlocutory proceedings had not benefited either party, and simply encouraged “considerable expense and squandered the resources of the Court.”

The High Court held that the Courts below should simply have permitted the mistake to be correctedby allowing an amendment of the List of Documents and consequential orders for the return of the privileged documents. Under section 64 of the CPA, the Court may order any document in the proceedings to be amended to correct any defect or error. Such action would have diffused the dispute, and allowed the parties to continue with their preparation for the trial.

Accordingly, the High Court ordered the return or deletion of the inadvertently disclosed documents.

The pragmatic approach of the High Court sends a strong message that parties and their lawyers should facilitate the overriding objective of the CPA and concern themselves with litigating the real issues in dispute in proceedings rather than creating and pursuing satellite disputes. The High Court could send no clearer message about the receiving party’s conduct than the costs orders in favour of the disclosing party including the costs of first instance, the appeal to the Court of Appeal, the applications for special leave to appeal and to cross appeal and of the appeal to the High Court.

Sarah Margo