Two recent Victorian cases illustrate the importance of ensuring that the way in which you plead a case does not result in a waiver of privilege. The cases considered the question of waiver of legal professional privilege and the pleading of state of mind.
Key points to note:
- a pleading of reliance on legal advice which affected a person's state of mind, without more, will not usually waive privilege but the courts will take a facts-based inquiry into whether the privilege holder put the contents of an otherwise privileged communication into issue in litigation; and
- where waiver is sought but not obtained at the stage of pleadings, there may be circumstances where waiver is obtained during the conduct of the trial.
Legal Professional Privilege
Legal professional privilege generally applies to confidential communications or documents made for the dominant purpose of legal advice or existing or contemplated litigation. A waiver of privilege arises in circumstances where a party acts inconsistently with the maintenance by it of privilege.
Test for implied waiver
There is no settled list of kinds of action which give rise to implied waiver. In considering implied waiver, Australian courts will look to the facts and circumstances at hand in each case.
The High Court in Mann v Carnell (1999) 201 CLR 1, 13 (Mann). Section 122(2) of the Evidence Act 1995 (NSW) reflects this common law test:
"Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120 [being the provisions protecting privileged communications from being adduced in evidence]".
In considering the issue of implied waiver in relation to a pleading in litigation, the courts must undertake a fact-based inquiry about whether, in effect, the privilege holder had directly or indirectly put the contents of an otherwise privileged communication in issue in litigation, either in making a claim or by way of defence.
Recent Victorian Case Law
In Viterra Malt Pty Ltd v Cargill Australia Ltd  VSCA 118 (Viterra) and in Re Connective Services Pty Ltd (No 2)  VSC 128 (27 March 2018) (Re Connective Services) it was submitted that a party can waive legal professional privilege by merely filing a pleading or particulars, as a result of the inconsistency in pleading reliance on the advice, whilst also seeking to shield it.
In Viterra, the Victorian Court of Appeal held that:
"a pleading of reliance, without more, will not usually manifest inconsistency with the maintenance of client legal privilege in communications relevant to that state of mind"  and
This was on the basis that nothing in Cargill's pleading has put its legal advice in issue or laid it open to scrutiny" .
In Viterra, the Victorian Court of Appeal refrained from considering whether such privilege may be subsequently waived by the conduct of the trial.
Similarly, in Re Connective Services the Victorian Supreme Court held that the conduct of proceedings may result in a waiver of privilege, however, this is not the inevitable conclusion of filing a pleading of reliance on advice. The Court also held that it was clear from the authorities that a mere reference to a person's 'state of mind' would not necessarily result in implied waiver of privilege in any legal advice received.