Federal Court of Australia

Roberts-Smith v Fairfax Media Publications Pty Limited (No 33) [2022] FCA 420

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ amended interlocutory application dated 8 April 2022 is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ABRAHAM J:

1    In August 2018, Mr Roberts-Smith commenced proceedings in this Court seeking damages for alleged defamatory publications by Fairfax Media Publications Pty Ltd, The Age Company Pty Ltd, The Federal Capital Press of Australia Pty Ltd and certain journalists. The substantive hearing, which commenced on 7 June 2021, is currently proceeding before Besanko J, with the respondents having recently closed their case. The applicant’s case in reply has commenced.

2    On 7 March 2022, the respondents issued the applicant a notice to produce in the following terms:

1.    All documents recording or evidencing a communication (or communications):

a.    from the Applicant (or any lawyer or other person acting on his behalf) to Person 27 (or any person on his behalf); or

b.    from Person 27 (or any person on his behalf) to the Applicant (or any lawyer or other person acting on his behalf),

which refers to, evidences, or relates to:

c.    The outline of evidence of Person 27 filed on or about 12 July 2019.

d.    Any draft of the outline of evidence of Person 27 that was ultimately filed on or about 12 July 2019.

e.    Any proof of evidence taken by the Applicant from Person 27 (or any lawyer or other person acting on his behalf).

f.    The evidence Person 27 will give in these proceedings if called as a witness by the Applicant.

g.    A communication or communications from Person 27 (or someone on his behalf) to the Applicant (or any lawyer or other person on the Applicant's behalf) to the effect that Person 27 did not agree with the contents of a draft statement or draft outline of evidence provided to him and that Person 27 would "tell his own story and what occurred".

3    On 16 March 2022, the applicant served on the respondents an objection schedule (dated 15 March 2022) claiming legal professional privilege over items 1-6 covered by the notice. On 22 March 2022, the respondents filed an interlocutory application seeking access to those documents.

4    By subpoena dated 8 March 2022, the respondents also sought production of documents from Person 27 (a witness expected to be called by the applicant in his case in reply). The subpoena is in substantively the same terms as the notice to produce served on the applicant and is as follows:

1.    All documents recording or evidencing a communication (or communications):

(a)    from the Applicant (or any lawyer or other person acting on his behalf) to Person 27 (or any person on his behalf); or

(b)    from Person 27 (or any person on his behalf) to the Applicant (or any lawyer or other person acting on his behalf),

which refers to, evidences, or relates to:

(c)    The outline of evidence of Person 27 filed on or about 12 July 2019.

(d)    Any draft of the outline of evidence of Person 27 that was ultimately filed on or about 12 July 2019.

(e)    Any proof of evidence taken by the Applicant from Person 27 (or any lawyer or other person acting on his behalf).

(f)    The evidence Person 27 will give in these proceedings if called as a witness by the Applicant.

(g)    A communication or communications from Person 27 (or someone on his behalf) to the Applicant (or any lawyer or other person on the Applicant’s behalf) to the effect that Person 27 did not agree with the contents of a draft statement or draft outline of evidence provided to him and that Person 27 would “tell his own story and what occurred”.

5    Documents were produced by Person 27 responsive to the subpoena, in relation to which an amended objection schedule, dated 7 April 2022, was produced by the applicant. At the hearing on 8 April 2022, the respondents sought leave to file an amended interlocutory application seeking access to the documents referred to at paragraphs 1 to 4B of the applicant’s amended objection schedule (together with the documents the subject of the initial application). I granted leave for that amended application to be filed.

6    I note that this application was heard at the same time as a separate application by the respondents for orders that the applicant produce certain documents in respect to, inter alia, Persons 27, 32, 35 and 39, which is addressed in Roberts-Smith v Fairfax Media Publications Pty Limited (No 32) [2022] FCA 419 (Roberts-Smith (No 32)).

7    Orders pursuant to s 38B of the National Security Information (Criminal and Civil Proceedings) Act 2004 (Cth) have previously been made, the most recent version being on 7 April 2022, which dictates the manner in which certain information must be handled in these proceedings. To enable the parties to advance their positions it was necessary to conduct part of this application in closed court. The summary of the submissions in these reasons is of those made in open court.

8    In summary, the respondents submit that the documents identified in the objection schedules are not privileged because the applicant has acted inconsistently with the maintenance of the privilege and, as a result, has expressly waived privilege over two communications with Person 27. It is submitted that has given rise to an associated or related waiver over additional communications. In the alternative, the respondents contend that the privilege is displaced because there is a compelling prima facie case that the outline was filed in furtherance of a fraud.

9    For the reasons below, the respondents’ application is dismissed.

Material relied on

10    In support of their application, the respondents read an affidavit of Peter Llewellyn Bartlett, solicitor for the respondents, dated 22 March 2022, and relied on Exhibit PLB-1 to the affidavit of Mr Bartlett dated 25 March 2022. The respondents also relied on an open court tender bundle and two closed court tender bundles.

Submissions

Respondents’ submission

11    The respondents relied on the following factual matters. On 4 March 2022, Person 18, a witness called by the respondents, gave evidence in the proceedings. Person 18 and Person 27 work together in the Special Air Service Regiment (SASR). Person 18 gave evidence of a recent conversation he had with Person 27 at their workplace. Person 18 gave evidence that during that conversation Person 27 said words to the effect that “I [Person 27] was given a statement to sign which I didn't agree with” and Person 27 had refused to sign that statement and said to the person providing it to him “I will tell my own story and what occurred”.

12    The applicant, through his counsel, did not object to this evidence of Person 18 and nor did he challenge it in cross-examination. It was submitted that the evidence is unchallenged. In the circumstances, the hearsay rule does not apply and the evidence has been admitted for all purposes: s 64(3) of the Evidence Act 1995 (Cth), because Person 27 is being called to give evidence.

13    From that, the respondents submit that Person 18’s unchallenged evidence gives rise to two express waivers. First, the applicant has waived privilege over the content of the communication to Person 27 providing a statement the contents of which Person 27 did not agree with. Second, the applicant has waived privilege over the communication from Person 27 in which he communicated his refusal to sign the particular statement provided to him and said words to the effect of “I will tell my own story and what occurred”.

14    The relevant inconsistencies between the applicant’s conduct, and the maintenance of the privilege, are said to be the forensic decisions by the applicant not to object to Person 18’s evidence or to cross-examine him on it. By not objecting to or cross-examining on that evidence, the applicant has engaged in acts or omissions which are inconsistent with the maintenance of any confidence or privilege over those communications with Person 27.

15    It is submitted that the express waiver over the two communications also gives rise to an associated or related waiver over all prior and subsequent communications with Person 27 as identified in the objection schedules. Those documents are reasonably necessary to enable a proper understanding of the two communications the subject of the express waiver because the differences between the drafts are likely to reveal what aspect or aspects of the initial statement Person 27 disagreed with.

16    The respondents’ alternative position of fraud is put on two bases. First, paragraph [30] of Person 27’s outline, which states that he has a recollection that Person 12 was removed from the Rotation 18 deployment on 31 July 2012 after shooting a dog, is one of five outlines of evidence which set out the same erroneous account concerning Person 12. It is wholly implausible that Person 27 and four other individuals held the same erroneous but innocent recollection that Person 12 was removed after shooting a dog. The Court would be comfortably satisfied that paragraph [30] of Person 27’s outline of evidence, in and of itself, establishes a prima facie case that the outline of evidence was prepared and filed in furtherance of a fraud. The second basis depends on whether the applicant took steps to amend the draft outline in response to Person 27’s comment that he did not agree with it. If the applicant filed Person 27’s outline of evidence without amendment and in the knowledge that he did not agree with its contents, the filing of the outline is a fraud or deception within the meaning of Southern Equities Corporation Ltd (in liq) v Arthur Anderson & Co (1997) 70 SASR 166 at 174. The possibility that the applicant filed Person 27’s outline of evidence knowing that Person 27 did not agree with it, it is submitted, is supported by the fact that the outline foreshadows evidence on four topics which Person 27 was objectively unlikely to have said to the applicant, or to have agreed to include in his outline, given the demonstrable falsities in respect to those four topics. Given the falsities, all of which would have assisted the applicant, it is submitted that there is a prima facie case that the applicant caused an outline of evidence to be filed for Person 27 despite knowing that Person 27 did not agree with its contents. Either way, a prima facie case of fraud is said to be established.

Applicant’s submission

17    The applicant submitted that the objection schedules reveal there are no documents to be produced in respect to category 1(g) to which the express waiver is said to apply.

18    The applicant addressed the legal principles relevant to waiver, and submitted that waiver has not occurred. It was submitted that the proposition that a failure to challenge evidence of the nature relied upon in the cross-examination of Person 18 gives rise to an implied waiver or privilege is a novel one and is unsupported by any authority cited by the respondents. It was submitted that no reasonable analogy can be drawn between the failure to challenge a witness in cross-examination about an alleged conversation and the implied waiver that arises when a party to litigation during proceedings discloses or deploys a partial disclosure of a legally privileged document or legal advice in order to achieve some forensic advantage, while claiming privilege and thereby seeking to deny another party an opportunity to see the full text of the communication.

19    The applicant submitted that the evidence of Person 18 of an alleged conversation with Person 27 which was given for the first time in the witness box and not contained in the outline that was served, whether challenged or not, cannot constitute an express or implied waiver of privilege which belongs to the applicant.

20    As to the alternative allegation of fraud, the applicant relied on his submission made in Roberts-Smith (No 32), summarised at [39]-[45].

Consideration

21    It is appropriate to commence by considering Person 18’s evidence which was relied on by the respondents to found this application, and the circumstances in which it arose. Relevantly, the respondents relied on the first excerpt below from the transcript of Person 18’s evidence:

[COUNSEL FOR THE RESPONDENTS]: Did you have some knowledge about Person 27 in connection with these proceedings that made you ask that question?

[PERSON 18]: No. It was just — it was just a friend of mine and I didn't want anything to sort of come across the work we were doing. He then turned to me and said, you know, words to the effect of, "This is really shit what's occurring right now." I agreed and said, "Yes." He also said words to the effect of, "I was given a statement to sign which I didn't agree with." And I and he then used words to the effect of, "I said, 'No.' I will tell my own story and what occurred." And that was it. At that point I was, like, "I fucking don't want — I don't want to hear that. All I want to hear is that we're going to be good doing this activity together."

[COUNSEL FOR THE RESPONDENTS]: Did he say who gave the statement to him?

[PERSON 18]: No.

22    The applicant submitted, and it was not challenged, that this evidence was given for the first time in the witness box and was not contained in Person 27’s outline of evidence which was served on the respondents. Moreover, as is plain from the transcript, there is nothing in the question which flagged any issue as to privilege that might arise. It is unclear when it is said that the applicant should have been aware that a claim needed to be made. I note there is nothing in the evidence as to who is said to have given Person 27 a statement and when that might have occurred. Although the respondents contend the evidence is unchallenged, Person 27 is yet to give evidence. The respondents’ relied on s 64(3) of the Evidence Act to submit that the evidence is not hearsay. As Person 27 is to be called, the hearsay rule does not apply, although, the significance of this at this stage must be considered in the context where he has not yet given evidence. I assume also that at this stage the status of the evidence has not been raised before the trial judge. Nonetheless, the respondents’ position proceeds on the basis of acceptance of the truth of the contents of the evidence, in the absence of Person 27’s evidence.

23    Given the basis on which the respondents contend there has been a waiver, namely the failure of the applicant to object to the evidence on the basis it is the subject of privilege and his failure to challenge the evidence in cross-examination, it is appropriate to recall the principles in respect to the circumstances in which waiver occurs. In Roberts-Smith v Fairfax Media Publications Pty Ltd (No 25) [2021] FCA 1558, I summarised those principles at [20]-[26].

24    In Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 (Mann v Carnell), the plurality explained the rationale and approach at [28]-[29], and it is unnecessary to repeat those passages. Suffice to say “[w]hat brings about the 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”: Mann v Carnell at [29].

25    In DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499, Allsop J (as his Honour then was) observed at [58] (emphasis in the original):

…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.

26    When considering whether a waiver of privilege has occurred, each case must be assessed on its own facts: Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 (Rio Tinto) at [45], [61]. In Rio Tinto at [61] it was observed:

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...

27    The applicant, who is the party entitled to the privilege, has not made any assertion (express or implied), or brought a case, which is either about the contents of the confidential communication(s) or which necessarily lays open the confidential communication(s) to scrutiny.

28    The respondents did not refer to any authority in support of their application, although in reply it was contended that the application is simple, and commonplace, and that waiver can occur by the privileged material coming out in court to which there is no objection made. The respondents cited what occurred in the instance of Person 4 where the witness was asked questions about his communications with his lawyer to which no objection was taken. That was taken to be a waiver over the communications on that topic.

29    It can be accepted that the failure of a person to object may effect a waiver of legal professional privilege, although whether it does will depend on the circumstances of the case. It involves questions of fact and degree. The basis of the respondents’ reliance on, and the significance of, the applicant’s failure to challenge the answer in cross-examination, is more obscure.

30    More particularly, the respondents’ reliance on Person 4 as representing an analogous situation is inapt. Person 4, while being cross-examined, was asked about his communications with his lawyer. Person 4 answered the question without claiming privilege. It was Person 4’s privilege to claim (noting also he was legally represented at the hearing). Person 4 positively did an act by giving an answer in circumstances where he could have, but did not, object to doing so on the basis of privilege. In that context, the trial judge concluded that privilege had been waived. That factual scenario is qualitatively different from that relied on by the respondents in this application.

31    In this case, the applicant’s conduct could not be seen as being for any forensic advantage, nor has the applicant sought to rely on the communication(s) such as to lay them open to scrutiny. It is not a statement from the applicant, but another, and made in the circumstances described above, which is said to result in the purported inconsistent conduct being directed to the failure to object or cross-examine.

32    In the circumstances in which the failure to object or to cross-examine occurred, the respondents have not established it amounted to waiver of legal professional privilege over what it contends are the two communications referred to above at [13].

33    In any event, I note the following in respect to the two communications over which the respondents contended express waiver had occurred, referred to above at [13]. First, in respect to communications from Person 27 in which he communicated his refusal to sign the particular statement provided to him and said words to the effect of “I will tell my own story and what occurred”, the objection schedules reflect that there are no documents to produce responsive to that particular category. Second, in that light, the remaining communication, which is said to be the content of the communications to Person 27 providing a statement the contents of which Person 27 did not agree with, is problematic. The submission presupposes the truth of the content of the evidence of Person 18, absent any evidence from Person 27. Moreover, given the scant evidence of Person 18 there is no identification of the communication being referred to or when the document (being the statement) was said to have been provided. The terms of the subpoena are such as there is no category which is expressly directed to that communication.

34    As explained above, in the alternative, the respondents seek the material on the basis that privilege is displaced by the fraud exception. The principles applicable to determining this basis of the application are summarised in Roberts-Smith (No 32) at [15]-[27], and are unnecessary to repeat. In so far as the respondents rely on Person 27’s outline in respect to his recollection that Person 12 was removed from Rotation 18 on 31 July 2012, for the reasons given in Roberts-Smith (No 32) at [47]-[68], that basis is not established. It will be recalled that this submission is based on the proposition that alleges the outlines of evidence of Person 27 and others reflects their anticipated evidence. In so far as the respondents contend that the outline might have been filed by the applicant knowing that Person 27 disagreed with its contents, that submission is not based on any evidence, let alone admissible evidence. The respondents’ submission that they do not know whether the outline was filed after amendment, or with known errors, and that this Court should look at it to determine which, fails to grapple with the fact that it is for the respondents to establish that there is a prima facie case of fraud. That is, this submission is premised on the basis that the applicant might have filed an outline of Person 27 which he knows does not accurately reflect his anticipated evidence.

35    The documents in answer to the notice to produce and subpoena were produced to the Court over objection. In light of the objection, and my conclusion as to waiver, I have not considered it necessary to inspect the documents on that issue. On the issue of fraud, which as explained above, is the basis on which the respondents submitted I should view the documents, the respondents have not referred to any authority to support that approach (bearing in mind this is an application to be considered under the common law). Nor, for the reasons given in the preceding paragraph, could it logically be considered appropriate to do so to determine if there is any factual basis for a claim of fraud, where the respondents have the onus of establishing a prima facie case of fraud, on admissible evidence. Even if it were otherwise, given the absence of evidence to support the claim, it being no more than an allegation or speculation, I would not have done so. That is not to suggest that if a prima facie case of fraud has been established, the documents could not be inspected to determine if they were made in furtherance of the fraud.

Conclusion

36    For the reasons above, the respondents’ amended interlocutory application dated 8 April 2022 is dismissed. I will hear the parties on the issue of costs, given the applicant submitted that in the event this was my conclusion he wished to be heard on this topic.

Associate:

Dated:    22 April 2022

SCHEDULE OF PARTIES