Federal Court of Australia

Qantas Airways Limited v Australian and International Pilots Association [2023] FCA 853

ORDERS

THE COURT ORDERS THAT:

1.    The respondent/cross-claimant’s claim of privilege in respect of the written opinion of Mr Ian Neil SC referred to in paragraphs 114 and 115 of the affidavit of Anthony Lucas made in this proceeding and dated 26 June 2023 be upheld.

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

REASONS FOR JUDGMENT

GOODMAN J

A.    Introduction

1    On the first day of the hearing of this proceeding, counsel for the applicant (Qantas) called upon a Notice to Produce addressed to the respondent (the AIPA) which sought production of:

the written Opinion of Mr Ian Neil SC referred to in paragraphs 114 and 115 of the affidavit of Anthony Lucas made in these proceedings and dated 26 June 2023.

2    That call was met with a response that the Opinion was privileged, which response was met with a submission that privilege over the Opinion had been waived. For the reasons set out below I was not persuaded that privilege had been waived and I made an order upholding the AIPA’s claim for privilege.

B.    Background

3    The context in which the issue arose is as follows.

4    Qantas and the AIPA are parties to the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020 (LHEA10). Within LHEA10, Qantas is referred to as the Company; the AIPA is referred to as the Association; and Second Officers under training are referred to as SOTs. Clause 19.1.2 of LHEA10 provides:

Upon completion of training, a SOT will be allocated by the Company to the B787, A330 or A330/A350 SFF aircraft rather than the B747 and A380 aircraft unless there are insufficient bids from suitably qualified pilots employed prior to the commencement of clause 32.7, or otherwise agreed with the Association for operational reasons. The Association will not unreasonably withhold agreement.

5    On 20 August and 20 September 2022 and 15 and 20 February 2023, Qantas made requests of the AIPA by which Qantas sought the AIPA’s agreement to the direct allocation of 20 SOTs to the A380 aircraft, rather than the B787, A330 or A330/A350 SFF aircraft, and did so in circumstances where there were sufficient bids from suitably qualified pilots employed prior to the commencement of cl 32.7 of LHEA10. Thus, Qantas contends, the AIPA’s agreement to the direct allocation was required. The AIPA did not provide its agreement to any of the four requests. Qantas contends, and the AIPA denies, that the AIPA unreasonably withheld its agreement.

6    In support of its defence to this claim, the AIPA filed and served affidavit evidence, including from Captain Anthony Lucas and Captain Christopher Hewett. That evidence touches upon the Opinion in the manner explained at [14] below.

C.    Consideration

7    Questions of waiver aside, there is no dispute that the AIPA was entitled to claim legal professional privilege over the Opinion and thus to maintain the confidentiality of the Opinion.

8    The issue is whether the AIPA has waived its right to maintain its claim of legal professional privilege because it has engaged in conduct which is inconsistent with the maintenance of the confidentiality of the Opinion: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at 13 [28] to [29], (Gleeson CJ, Gaudron, Gummow and Callinan JJ); Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275 at 297 [45] (Gleeson CJ, Gummow, Heydon and Kiefel JJ). Qantas bears the onus of proving waiver: New South Wales v Betfair Pty Ltd [2009] FCA 160; (2009) 180 FCR 543 at 556 [54] (Kenny, Stone and Middleton JJ).

9    An assessment that a party asserting a claim of privilege has engaged in conduct inconsistent with the maintenance of the confidentiality of a privileged communication “is to be made in the context and circumstances of the case, and in the light of any considerations of fairness arising from that context”: Osland at 297 [45]. It is a question of fact and degree: Osland at 298 [49]. As Macfarlan JA (with whom McCallum JA and Simpson AJA agreed) explained in GR Capital Group Pty Ltd v Xinfeng Australian International Investment Pty Ltd [2020] NSWCA 266 at [57(4)]:

The determination of whether there has been an express or implied assertion about the contents of privileged communications giving rise to a relevant inconsistency is an evaluative decision to be made after consideration of the whole of the circumstances of the case. No hard and fast rules can be formulated. Those circumstances will include the degree of relevance of any advice to the issues in the proceedings, the centrality of the relevant issues in the proceedings and the likelihood of advice having been given, informed, as the High Court said in Mann v Carnell, by considerations of fairness.

10    In considering that question of fact and degree, the result may turn on the fine detail of the case at hand, and as Allsop CJ explained in Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd (No 2) [2020] FCA 1013 at [27] to [31]:

27    The distinctions drawn in this area are fine. The disclosure of the substance or gist or conclusion of legal advice will render a waiver: Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; 140 FCR 101 at 119 [65]–[66]; and the authorities there cited, especially Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [1996] NSWSC 7; 40 NSWLR 12 at 17–19 and Adelaide Steamship Co Ltd v Spalvins [1998] FCA 144; 81 FCR 360 at 366–367 read with 376–377.

28    The fineness of the distinctions can be seen in Ampolex. …

…

31    The fineness of the distinctions involved is apparent: there is a waiver if one states: “I have legal advice. Its substance is.” But there is no waiver if a party says what he or she believes and legal advice may be seen to be relevant to it. One must state the substance or gist or conclusion of the advice.

11    Some examples of findings that there had been a waiver by dint of the disclosure of the gist or the conclusion of legal advice are collected in the judgment of Justice Stewart in TerraCom Ltd v Australian Securities and Investments Commission [2022] FCA 208; (2022) 401 ALR 143 at 64.

12    It is insufficient merely that: the state of mind of the party asserting a claim of privilege may be in issue in the proceeding; or that a relevant person considered a privileged communication; or that the privileged communication contributed to the formation of a relevant state of mind: Federal Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341, (Kenny, Stone and Edmonds JJ) at 360 ([65] and [67]) and 362 [71].

13    In Ferella v Official Trustee in Bankruptcy [2010] FCA 766; (2010) 188 FCR 68 at 81 [65], in a passage approved by the Full Court (Middleton, Robertson and Gleeson JJ) in Macquarie Bank Limited v Arup Pty Limited [2016] FCAFC 117 at [28], Yates J explained:

In Federal Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 a Full Court of this Court held (at [45]) that where implied waiver is alleged, a court is bound to analyse the acts or omissions of the privilege holder that are said to be inconsistent with the maintenance of the privilege. The Full Court later observed (at [52]) that the waiver will be established where the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Thus where the contents of the otherwise privileged communication is put in issue that act will be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication. However the question is not simply whether the holder of the privilege has put that person’s state of mind in issue but whether that person has directly or indirectly put the contents of the otherwise privileged communication in issue: see at [65]. Indeed, even the fact that the holder of the privilege makes clear that the advice was relevant or contributed to a particular course of conduct would not be sufficient to waive the privilege unless, possibly, the contents of the legal advice (and not merely the fact of the advice) are specifically put in issue by relying on the contents of the advice to vindicate a claimed state of mind: at [67].

14    Qantas submits that the following conduct of the AIPA is inconsistent with the maintenance of confidentiality in the Opinion:

(1)    the following paragraphs of the affidavit of Captain Lucas made on 26 June 2023:

112.    On or around 14 October 2022, at my instruction, Mr Dalgleish engaged Senior Counsel, Ian Neil SC, to provide AIPA with legal advice in relation to the meaning and application of clause 19.1.2.

113.    On 21 December 2022, I, along with a few other members of the CoM, attended a conference with Mr Neil, in which he provided legal advice.

114.    On 9 January 2023, Mr Dalgleish received a written Opinion of the same date from Mr Neil, which confirmed the legal advice that he had provided in the conference on 21 December 2022.

115.    I considered the legal advice provided by Mr Neil in the conference on 21 December 2022 and in the written Opinion dated 9 January 2023.

116.    I was satisfied that AIPA had not unreasonably withheld agreement under clause 19.1.2 in relation to each of the First, Second, Third and Fourth Respondents. ;

(2)    the following paragraphs of the affidavit of Captain Hewett affirmed on 28 June 2023:

46.    There was a CoM meeting held on 6 December 2022, at which AIPA revisited its decision to withhold agreement under clause 19.1.2 to the First and Second Requests.

…

49.    Mr Dalgleish said: “AIPA has sought legal advice from a barrister, Ian Neil SC, as to whether AIPA declining to provide agreement in response to [the First and Second Requests] was unreasonable.”

50. Mr Dalgleish then summarised the effect of the legal advice.

51. I continued to be satisfied that AIPA had not acted unreasonably in withholding agreement under clause 19.1.2 to the First and Second Requests. I was motivated by the reasoning set out in paragraphs 40 and 41 above.

…

53.    There was a CoM meeting held on 31 January 2023, at which AIPA again revisited its decision to withhold agreement under clause 19.1.2 to the First and Second Requests.

…

55.    At the meeting, Mr Dalgleish provided a further briefing on legal advice received by AIPA from Ian Neil SC.

56.    I continued to be satisfied that AIPA had not acted unreasonably in withholding agreement under clause 19.1.2 to the First and Second Requests. I was motivated by the reasoning set out in paragraphs 40 and 41 above.

(Whilst counsel for Qantas did not specifically rely upon paragraphs [46] and [53], I have set them out as they provide necessary context.) ;

(3)    the following extract from the minutes of a meeting of the AIPA’s Committee of Management (CoM) held on 31 January 2023:

After very careful consideration by the AIPA CoM of Senior Counsel’s advice, based on counsel’s interpretation of the text of clause 19.1.2 of the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2020, applying a purposive approach, and not having regard to any surrounding circumstances, because none have been identified that satisfy the stringent test allowing that to be done, it was decided by the AIPA CoM that its previous decision was within the nature and purpose of the Agreement for the Association, as the representative of its collective membership, to consider, and prefer, the Association’s views as to the best interests of its members. ;

(4)    the following paragraph in the AIPA’s outline of submissions filed on 5 July 2023:

[14]    Between December 2022 and January 2023, AIPA received legal advice in relation to the dispute (Affidavit, Lucas, 26.06.2023 at [112]-[116]). At a CoM meeting on 31 January 2023, the dispute was discussed again, this time in the context of the legal advice, and the CoM agreed that its previous decisions to not give agreement under clause 19.1.2 did not give rise to any unreasonableness (Affidavit, Lucas, 26.06.23 at [117]-[118]; Affidavit, Hewett, 26.06.23 at [53]-[57]).

15    I was not persuaded that the AIPA’s conduct in filing and serving the evidence and the submissions set out in the previous paragraph was inconsistent with the maintenance of confidentiality in the Opinion, for the following reasons.

16    First, that evidence and those submissions do not involve a disclosure of the substance or the gist of the advice contained in the Opinion. There is no statement, express or implied, as to the effect of the advice. Further, and contrary to the submission made by counsel for Qantas, the contiguity of (1) paragraphs [115] and [116] of Captain Lucas’s affidavit; (2) paragraphs [50] and [51] of Captain Hewett’s affidavit; and paragraphs [55] and [56] of Captain Hewett’s affidavit; and (3) does not provide a sufficient basis for an inference that the Opinion was to a particular effect. This is particularly so for (1) above when paragraph [116] of Captain Lucas’s affidavit refers to the third and fourth requests which at that time were yet to be made. Similarly, the minutes of the 31 January 2023 CoM meeting and the submissions do not expressly or impliedly disclose the substance of the advice contained in the Opinion.

17    Secondly, whilst the evidence and submissions make clear that the Opinion was considered by Captains Lucas and Hewett and contributed to the formation of views held by them subsequent to their receipt of the Opinion, such consideration and contribution are insufficient (see [12] and [13] above).

18    Thirdly, the evidence concerning the Opinion has been deployed solely for the purpose of establishing the proposition that the AIPA, through its CoM, obtained and considered legal advice as part of the events surrounding its failure to agree with the requests made by Qantas (relevantly, the third and fourth requests). In this regard, Mr Neil, Senior Counsel for the AIPA submitted:

AIPA relies upon or tenders this evidence, the evidence that Qantas has pointed to, in support of a submission that it’s one factor to be considered in the evaluation of the reasonableness of its conduct in withholding agreement is that it took the trouble to obtain and, through its governing body, consider legal advice, and that’s the only submission, the only purpose for which we seek to rely upon the evidence, the only purpose of the evidence that Qantas has pointed to, the only purpose of our disclosure. We do not manifestly, we submit on the evidence properly read and understood, and if necessary, I repeat it now. I make it plain now: we do not rely upon the content of the legal advice to vindicate AIPA’s position.

19    In these circumstances, there was no inconsistency and no forensic unfairness occasioned to Qantas by the AIPA’s reference to the Opinion in the evidence and submissions set out at [14] above.

Associate:    

Dated:    26 July 2023