Media Ocean Limited v Optus Mobile Pty Limited (No 8) [2010] FCA 1049 (27 September 2010)

Last Updated: 27 September 2010

FEDERAL COURT OF AUSTRALIA

Media Ocean Limited v Optus Mobile Pty Limited (No 8) [2010] FCA 1049

Citation:		Media Ocean Limited v Optus Mobile Pty Limited (No 8) [2010] FCA 1049
Parties:		MEDIA OCEAN LIMITED, MEDIATEL AUSTRALIA PTY LIMITED and SOUND ADVERTISING LIMITED v OPTUS MOBILE PTY LIMITED
File number(s):		NSD 242 of 2009
Judge:		JAGOT J
Date of judgment:		27 September 2010
Catchwords:		EVIDENCE – legal professional privilege – issue waiver – waiver by disclosure
Cases cited:		Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341; [2006] FCAFC 86 CSL Ltd v Novo Nordisk Pharmaceuticals Pty Ltd [2010] FCA 671
Date of hearing:	23 September 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	20
Counsel for the Applicants:	Mr F Kunç SC and Mr C Bova
Solicitor for the Applicants:	Marque Lawyers
Counsel for the Respondent:	Mr RG McHugh SC and Mr JAC Potts
Solicitor for the Respondent:	Minter Ellison Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 242 of 2009

BETWEEN:	MEDIA OCEAN LIMITED First Applicant MEDIATEL AUSTRALIA PTY LIMITED Second Applicant SOUND ADVERTISING LIMITED Third Applicant
AND:	OPTUS MOBILE PTY LIMITED Respondent

JUDGE:	JAGOT J
DATE OF ORDER:	27 SEPTEMBER 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The parties confer about production required under the notice to produce dated 14 September 2010 and subpoena dated 21 September 2010, having regard to these reasons for judgment.
2. Adjourn the notice to produce dated 14 September 2010 and subpoena dated 21 September 2010 for mention before Jagot J on a date to be determined in consultation with the parties.
3. Costs be reserved.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 242 of 2009

BETWEEN:	MEDIA OCEAN LIMITED First Applicant MEDIATEL AUSTRALIA PTY LIMITED Second Applicant SOUND ADVERTISING LIMITED Third Applicant
AND:	OPTUS MOBILE PTY LIMITED Respondent

JUDGE:	JAGOT J
DATE:	27 SEPTEMBER 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. These reasons for judgment deal with the respondent’s claim that the applicants have waived legal professional privilege over certain documents, production of which has been sought in a notice to produce to the applicants and a subpoena to the applicants’ solicitors.
2. The relevant facts are few. On 3 September 2010 the applicants filed and served a notice of motion seeking leave to amend their third further amended application and third further amended statement of claim. An affidavit of Nathan Mattock, solicitor, sworn 2 September 2010 was filed and served in support of the notice of motion. This affidavit refers to certain paragraphs of an earlier affidavit sworn by Mr Mattock on 3 November 2009. For convenience these documents are referred to as Mr Mattock’s second and first affidavits respectively. The notice of motion has been listed for hearing on 26 and 27 October 2010. Neither party suggested that determining this application was premature, it having been assumed common ground by the parties that the applicants would be seeking to rely on Mr Mattock’s affidavits in support of the notice of motion.
3. The debate is within a narrow compass.
4. According to the respondent, the applicants’ notice of motion seeks a forensic advantage – leave to amend the application and statement of claim. Mr Mattock’s second affidavit attempts to explain the reasons why the application to amend was made on 3 September 2010 rather than at some earlier time. It does so not only by identifying the chronology of the proceeding but also by explaining Mr Mattock’s state of mind at various times, his attempts to obtain instructions from the applicants, the obtaining of instructions from the applicants and the taking of actions thereafter in accordance with those instructions.
5. According to the respondent, Mr Mattock’s state of mind about the proceeding at various times is irrelevant unless, implicitly, his state of mind was communicated to the applicants. By asserting the matters identified above in Mr Mattock’s affidavits in support of their amendment application, the respondent submits that the applicants’ conduct is inconsistent with the maintenance of privilege over documents evidencing those matters. In other words, there has been a waiver of privilege imputed by law or issue waiver. Further, according to the respondent, some parts of Mr Mattock’s second affidavit also effect waiver of privilege by disclosure.
6. The principles are not in dispute.
7. As explained in Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341; [2006] FCAFC 86 at [43]:

At common law, a person who would otherwise be entitled to the benefit of the privilege may become disentitled to rely on it by some act of “waiver”, either express or implied. “Issue waiver”, the subject of this case, is a form of implied waiver. In Mann at [29] [Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1], a majority of the High Court stated the basic principle of implied waiver, as follows:

Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect ... What brings about the [implied] waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

As the majority also said, at [29], where such inconsistency arises, it does not matter that the privilege holder did not subjectively intend to lose the benefit of the privilege.

8. Further, as explained at [61] and [65] of Rio Tinto:

[61] Both before and after Mann, the governing principle required a fact-based inquiry as to 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. In DSE at 519 [58] [DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499], Allsop J put the matter somewhat more descriptively, saying waiver arises when

the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication

(Emphasis original).
...

[65] In any event, even if his Honour was correct in holding that, by the SFIC, the Commissioner raised an issue in the substantive proceeding as to his states of mind, this alone would not provide a proper basis for ‘issue waiver’. As the previous examination of the authorities shows, the question is not whether the Commissioner has put his state of mind in issue but whether he has directly or indirectly put the contents of the otherwise privileged communications in issue in the litigation, either in making a claim or by way of defence. Put another way, to adapt Allsop J’s language in DSE, has the Commissioner (being the privilege holder) made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege?

9. There are two main difficulties with the respondent’s arguments.
10. The first is that the references in Mr Mattock’s second affidavit to his state of mind cannot be read as implicit references to communications with the applicants. The affidavit clearly distinguishes between Mr Mattock’s states of mind and communications with the applicants. As the solicitor for the applicants, Mr Mattock’s state of mind may or may not be relevant depending on the fact in issue. The point is that the evidence relied upon is evidence of his state of mind and no more. Whether evidence of that character is sufficient to support the application for amendment will have to be determined as part of the amendment application. For present purposes it is sufficient to say that one plank in the respondent’s argument – that references in Mr Mattock’s second affidavit to his state of mind are necessarily references to communications with the applicants – cannot be sustained.
11. The second is the breadth of the respondent’s approach. For example, in his second affidavit Mr Mattock says that after receiving the respondent’s further amended defence he had an initial view about the issue of Optus’ blocking and considered that the appropriate way to deal with this issue in the respondent’s further amended defence was to file a reply (paragraphs 13 to 17). In the notice to produce and subpoena the respondent seeks production of documents recording or evidencing Mr Mattock’s consideration of the further amended defence. It cannot be said, however, that Mr Mattock has directly or indirectly put in issue his “consideration of the further amended defence” generally. He has put in issue (for the purpose of the amendment application) only the fact that, at the time referred to in paragraph 17 of his second affidavit, he considered that the appropriate way to deal with Optus’ blocking in the respondent’s further amended defence was to file a reply and did not then consider further amending the statement of claim. To the extent only that documents may record, evidence or relate to communications about that limited consideration, but not otherwise, there has been an issue waiver. To that extent maintenance of the privilege would be inconsistent with the case which the applicants wish to put on the amendment application.
12. The circumstances are thus analogous to those Jessup J considered in CSL Ltd v Novo Nordisk Pharmaceuticals Pty Ltd [2010] FCA 671 where, at [24]-[25], his Honour said:

[24] It is, of course, not documents or letters that attract legal professional privilege, but communications. Generally in the conduct of existing or anticipated contested proceedings, there will be little controversy arising from the sworn statement of a party’s legal representative that a letter written or received by, or a file note made by or addressed to, him or her, about matters in dispute, contained only communications which were privileged. However, as explained above, the cases recognise issue waiver as an exception to this general approach. As was made clear by the High Court in Mann v Carnell, it is an exception which is imputed to the party by law, rather than an exception which turns upon the conduct or intention of the party itself. That being so, I consider that, in giving effect to the exception, the court should do so with respect only to communications which deal with the matter put in issue by the party otherwise claiming privilege, and should be astute to ensure that the protection of privilege otherwise available is not lost.

[25] In the present case, I accept that the existence, timing and content of the applicants’ knowledge or appreciation of the necessity, or advisability, of amending the patent in suit are matters which the applicants necessarily placed in issue upon making their s 105 application. Accordingly, a waiver of privilege in relation to communications dealing with such matters is imputed to them. For reasons expressed in the previous paragraph, however, this is not the same thing as saying that the whole of all of the documents referred to in this part of my reasons must be produced for inspection by the respondents. Such part or parts of those documents only as deal with the matters referred to in this paragraph must be excepted from the applicants’ claim for privilege, and made available for inspection by the respondents.

13. Another example may assist in exposing the undue breadth of the respondent’s approach. Paragraph 24 of Mr Mattock’s first affidavit refers to a meeting with a principal of the applicants on 8 October 2009 to take instructions. Paragraph 4 of the notice to produce and subpoena requires production of documents recording or evidencing this meeting and the instructions provided. Mr Mattock has not placed in issue, directly or indirectly, the content of anything said or done at the meeting other than the fact the meeting occurred for the purpose of taking instructions. Insofar as a document might record or evidence or relate to the fact of the meeting having occurred for that purpose there has been an issue waiver by reason of inconsistency with maintenance of the privilege, but not otherwise.
14. Similarly, paragraph 80 of Mr Mattock’s second affidavit does not directly or indirectly put in issue the content of any instructions Mr Mattock received other than instructions as to service of the fourth amended statement of claim. It puts in issue the fact that he received instructions from the date nominated but that he did not have instructions to serve the fourth further amended statement of claim at a particular date. To the extent only that documents might record or evidence or relate to those asserted facts there has been an issue waiver by reason of inconsistency with maintenance of the privilege, but not otherwise.
15. The same reasoning applies to each category of issue waiver on which the respondent relies.
16. The other ground on which the respondent relies is waiver by disclosure.
17. Paragraph 13 of the second affidavit refers to Mr Mattock having a matter in his mind after receiving the further amended defence (the timing of the text messages). That does not have the effect of issue waiver in respect of any document recording or evidencing Mr Mattock’s opinions about that issue. Nor does it disclose the substance of any such opinions.
18. Paragraph 17 of the second affidavit refers to Mr Mattock’s consideration of the appropriate way to deal with the issue of Optus’ blocking defence (by way of reply). There is a limited issue waiver by this paragraph (see above). There has been a waiver by disclosure in this paragraph also, but it goes no further than the issue waiver.
19. Paragraph 79 of the second affidavit refers to Mr Mattock’s view that the best approach at that time was to amend the statement of claim. There has been an issue waiver to that extent. Documents recording or evidencing or relating to Mr Mattock’s view as set out in that paragraph are the subject of an issue waiver. Maintenance of the privilege is inconsistent with the fact of having made that assertion in support of the amendment application. There has been a waiver by disclosure in this paragraph also, but it goes no further than the issue waiver.
20. Given that the terms of the notice to produce and subpoena in dispute are broader than the scope of any issue waiver or disclosure waiver found above, the appropriate course is to direct the parties to confer having regard to these reasons for judgment and to adjourn the notice to produce and the subpoena for mention on another convenient date. Costs may be argued.
    

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated: 27 September 2010