GOLBERG & ANOTHER v NG & OTHERS

Judges: Deane, Dawson and Gaudron JJ
Toohey J
Gummow J

Judgment date: 3 November 1995

Judgment by:
GUMMOW J

GUMMOW J. This appeal from the New South Wales Court of Appeal ^[F52] raises issues as to what, particularly since Attorney-General (NT) v. Maurice ^[F53] , has been identified as "waiver" of legal professional privilege.

The first appellant (Mr Goldberg) is a legal practitioner. The second appellant (Mrs Goldberg) is his wife. From the mid-1970s, Mr Goldberg acted as solicitor for the first respondent (Mr Ng) in a number of matters, litigious and non-litigious. The third respondent (Ms Ng) is the sister of Mr Ng. They were the sole shareholders in the second respondent, Hango Holdings Pty Ltd ("Hango"). In October 1985, Mr Ng retained Mr Goldberg, who was then in practice as a sole practitioner, to act for himself, his sister and Hango in relation to a proposed proceeding in the Federal Court of Australia. This proceeding sought relief for allegedly misleading and deceptive conduct on the part of one or other of the State Authorities Superannuation Board ("the Board"), Jennings Industries Limited and Chesterton International (NSW) Pty Ltd in respect of a lease of premises in which the Board was lessor and Hango the lessee.

The Federal Court proceeding was instituted in 1985. In March 1989, an agreement was reached for compromise on terms which included payment by the other parties of $400,000 inclusive of costs. That sum later was paid to Mr Goldberg on behalf of his clients, the respondents.

Disagreement then arose between Mr Goldberg and the respondents. This led to disputes at several levels, but all as part of the one overall controversy. In particular, there was litigation in the Supreme Court of New South Wales giving rise to the present appeal.

Before the compromise of the Federal Court proceeding, the respondents had made an agreement with Mr Goldberg as to the amount of professional fees to be charged by him. The contention of the respondents was that it was pursuant to this agreement that Mr Ng went to Hong Kong in the latter part of February 1989 and there paid to Mrs Goldberg $100,100. In April 1989, after the compromise, Mr Goldberg delivered to the respondents a memorandum of costs and fees, together with a statement of account. This acknowledged receipt of the sum of $400,000 by Mr Goldberg following the compromise but not the sum of $100,100 said by the respondents to have been paid to Mrs Goldberg in Hong Kong. It was accompanied by a cheque for $320,220.92, which represented the balance of the compromise sum after the deduction of costs and fees.

On 1 December 1989, the respondents commenced a proceeding against Mr Goldberg in the Equity Division of the Supreme Court. Mrs Goldberg later was added as second defendant. Relief was claimed in respect of Mr Goldberg's alleged breach of the agreement as to the amount of professional costs and return was sought of the sum of $100,100 allegedly paid to Mrs Goldberg in Hong Kong. On his part, Mr Goldberg admitted that he retained $26,000 from the settlement moneys received by him but asserted that this represented costs and fees payable to him in respect of other matters. Mr Goldberg denied any money had been paid to Mrs Goldberg on his behalf. Mrs Goldberg admitted receipt of $100,100 but contended that this had been paid to her as the purchase price of a platinum and diamond bracelet she sold and delivered to Mr Ng.

On 17 August 1990, Mr Goldberg commenced a proceeding in the Common Law Division of the Supreme Court claiming moneys said to be owing on his bill of costs. On 19 October 1990, orders were made in the Equity Division which had the effect of consolidating the Common Law Division proceeding with that in the Equity Division. The application by Mr Goldberg was reformulated as a cross-claim.

It is now necessary to refer to the involvement in the dispute of the Law Society of New South Wales ("the Society"). The Legal Profession Act 1987 (NSW) ("the Profession Act") vested in or imposed on the Council of the Society powers and duties which involved the Council of the Society in overseeing the professional conduct of solicitors. The Council did so by the reception and investigation of complaints concerning solicitors which had been submitted to the Society by the courts, the Attorney General and members of the public. The procedures maintained by the Society for the investigation of complaints were designed to facilitate a free and frank disclosure of both the complaint and the reply to it of the solicitor in question. The Council frequently resolved to invoke the provisions of what was then s 35(2)(c) of the Profession Act with the objective of compelling reply by a solicitor to an inquiry by the Society which affected the professional conduct of the solicitor. Officers of the Society employed in its professional conduct department encouraged solicitors to respond adequately by the threat of action pursuant to s 35(2). The statutory provision ^[F54] empowered the Council to cancel or suspend a practising certificate held by a solicitor who, being required by the Council to explain specified conduct as a solicitor, failed and continued to fail to give an explanation satisfactory to the Council.

As I have indicated, the Equity proceeding was commenced by the respondents on 1 December 1989. The solicitors for the respondents appeared to have had difficulty in serving the originating process on Mr Goldberg. On 14 March 1990, they wrote to the Secretary of the Society stating that they acted for Mr Ng and that, on his instructions, they had commenced a proceeding in the Equity Division against Mr Goldberg. The letter referred to difficulties in effecting service and continued:

"Our client is claiming an account for moneys received on his behalf by Mr Goldberg and, with our client's consent, and at his direction, we are delivering to you, a copy of the Summons and supporting affidavit, as filed in the Court. We repeat, these documents have not as yet, been served on Mr Goldberg. Would you please treat delivery of these documents as constituting notice to the Society of our client's claim against Mr Goldberg, as specified therein."

The reference to notice of the claim was designed to comply with the requirements of s 80(7) of the Profession Act. Part 7 of that statute (which then comprised ss 70-90) provides for the establishment of a Solicitors' Fidelity Fund ("the Fund"). Section 80(7) states that a claim does not lie against the Fund unless the prospective claimant has notified the Society of the failure to account not later than three months after the prospective claimant has become aware of that failure or within such further time as is allowed by the Council of the Society or the Supreme Court. By letter to the manager of the Fund dated 19 April 1990, the solicitors for Mr Goldberg affirmed that the letter of 14 March was to be regarded as notice pursuant to s 80(7).

The correspondence over this period indicates that the Society was treating the complaint made to it as having two aspects, first, as presenting questions of possible professional misconduct and, secondly, as giving notice of a claim on the Fund.

A solicitor in the professional conduct department of the Society (Ms v. P Shirvington) referred the letter of 14 March and the enclosures to Mr Goldberg for his comments on the allegation that he had failed to account for the sum of $100,100. Ms Shirvington confirmed that she had taken this step in her letter to Mr Ng's solicitors of 24 April 1990. She wrote again to those solicitors on 14 May stating that she had now had two lengthy conferences with Mr Goldberg "in relation to this matter and he has forwarded me quite a number of documents which I have perused".

It will be necessary to refer later in these reasons and in more detail to what transpired at one of those conferences. The letter of 14 May went on to say:

"Mr Goldberg is to forward me a written response but because of the current proceedings between your client and himself (in respect of which I understand he has not yet been served) he will not authorise the Society to make a copy of his response available to you. That is reasonable given that the matters in dispute in the proceedings are identical with the complaint/claim on the Fidelity Fund which you have made on behalf of Mr Ng, based on the material contained in Mr Ng's affidavit in support of summons."

After further correspondence which it is not necessary here to describe, Ms Shirvington wrote on 23 November 1990 to the solicitors for Mr Ng a letter ^[F55] including the following:

"I refer to previous correspondence and advise that the investigation of this complaint has been completed and the Society's Complaints Committee has resolved to dismiss it on the grounds that it does not involve a question of professional misconduct or unsatisfactory professional conduct.

The reasons for this decision are as follows:-

1. As the matter is now presented the Committee was not satisfied that there was any evidence of professional misconduct or unsatisfactory professional conduct.

2. The complainant should pursue his own remedies as his solicitors have indicated.

The Society's file will now be closed and the complainant has been informed of the existence of the Legal Profession Conduct Review Panel, which at the complainant's request has the power to undertake a review of the Society's treatment of the complaint." (emphasis added)

In the meantime, the originating process in the Equity proceeding had been served, the Common Law proceeding had been commenced by Mr Goldberg and, on 19 October 1990, the orders effecting a consolidation of the Common Law proceeding and the Equity proceeding had been made.

On 29 April 1991, the solicitors for the present respondents caused to be issued a subpoena to produce documents addressed to "The Secretary, Law Society of New South Wales" and requiring production of:

"[a]ll documents including (but without limiting the generality of the foregoing) correspondence, files, file notes, minutes and records of conversations or proceedings relating to the complaint to the Society by Bernard Ng regarding Harold John Goldberg, Solicitor, and concerning the accounting by Mr Goldberg to Mr Ng for moneys paid to him or his agent by Mr Ng in or about February 1989".

The Society produced to the Court four bundles of documents. The respondents sought access only to the first three bundles and, in respect of these, on 8 May the Society filed a notice of motion seeking an order that the subpoena be set aside. This was supported by an affidavit sworn by Ms Shirvington. The matter eventually came before Powell J on 24 October 1991 and, on 2 March 1993, his Honour rejected submissions by the Society in which it relied upon public interest immunity. Then, by motion returnable 16 April 1993, Mr and Mrs Goldberg sought an order that there be no access to the three bundles of documents, together with a declaration that the documents were subject to the legal professional privilege of Mr and Mrs Goldberg. The motion came before Young J who, on 17 August 1993, delivered detailed reasons for judgment and ordered that the respondents' solicitors and counsel have access to the relevant documents.

Appeals, by leave, from the decisions of Powell J and Young J were heard together by the Court of Appeal. The Court held that the doctrine of public interest immunity did not apply to documents furnished by a solicitor to the Society in response to a complaint made to it against the solicitor where, confidentiality not being necessary to ensure frankness, there is no public interest in treating as confidential the response of the solicitor. Nothing in this Court turns upon that branch of the case. This appeal is concerned with the decision, by majority ^[F56] , dismissing the appeal from Young J. The appellants, Mr and Mrs Goldberg, submit that it has been wrongly held against them in the Supreme Court and in the Court of Appeal that the production by Mr Goldberg to the Society of the documents sought by the respondents on subpoena addressed to the Society had constituted a waiver of his privilege for the purpose of the Equity proceeding.

I agree with Toohey J, whose judgment I have had the advantage of reading, that this appeal must be decided on the footing that the documents in question are the subject of legal professional privilege. In particular, what I later identify as the first statement was prepared by Mr Goldberg to obtain legal advice with respect to and in anticipation of litigation with his former clients. I agree also that Mr Goldberg made no express waiver of his privilege, that "limited waiver" is an exception or qualification to express waiver, that general considerations of fairness do not arise on any aspect of express waiver, and that the appeal turns upon the doctrine of implied or imputed waiver as an imposition of law. With that in mind, I return to the facts.

Before Young J an affidavit sworn on 16 March 1993 was read by Mr Goldberg in which he described a meeting, by appointment, at the offices of the Society on 1 May 1990. He went to the meeting after taking advice from Mr F Swaab, whom he had engaged as his solicitor to act for him and Mrs Goldberg in the dispute which had arisen with the respondents. In 1989 Mr Swaab had requested that Mr Goldberg prepare a detailed statement. This took some time to complete. It was finished in mid-April 1990 and was approximately 72 pages long. It was prepared for the purpose of obtaining advice from Mr Swaab with respect to, and in anticipation of, litigation with the respondents.

In his affidavit sworn on 16 March 1993, Mr Goldberg stated that, during the course of his interview with Ms Shirvington on 1 May 1990, he said to her words to the effect:

"I have a statement which was prepared solely for my case against Mr Ng, his sister and their company. On that basis and provided I retain legal professional privilege, I am prepared to give it to you, as I wish to be full and frank - I have nothing to hide."

Ms Shirvington was said to have replied to the effect that an undertaking was given not to hand any of the material to anyone else and Mr Goldberg deposed that, on that basis, he then handed to her a copy of the first statement.

Later, Mr Goldberg prepared a supplementary statement, again for the assistance of his solicitor in the Supreme Court litigation with the respondents. Mr Goldberg deposed that he also handed a copy of that statement to Ms Shirvington at a later meeting. He said that he was prepared to provide it on the same basis as the previous statement and Ms Shirvington had said that she understood that.

In cross-examination, Mr Goldberg said that the papers which he supplied at the first meeting were produced to Ms Shirvington towards the end of an interview which had continued for some three and a half hours. He said he had taken the documents with him to refer to if need be at the interview and that they were on the floor beside him in case he needed to refer to them. He described what happened as follows:

"[W]ell, I, first of all, said 'Yes, I do have papers in this pile which are relevant to this matter' and she then said to me 'Can we have a look at those?' and I said to her, 'I have brought them with me to refer if I need to. These are papers which I have prepared for Mr Swaab,' having already mentioned that I had retained him as a solicitor, and I - I prepared them at his request, so that I can get advice from him and they can be used for me in proceedings against Mr Ng and his sister and their company, and we had some other conversation. I then said, 'Look, I don't have anything to hide. I have already been very full and frank with you because we have now stayed over three hours being asked questions and giving answers,' I said 'I don't want to have anything in these papers, which includes the things like a statement to my solicitor, given to the Ngs or their company or their legal advisers because, you know, it's my private confidential matter,' and she said, 'Well, we won't, you know, we won't give it to anybody else' and I think that is the stage when she said in fact 'We can - you can have an undertaking from the Law Society that it will all be confidential, nothing will be - none of the material will be given to anybody else,' and at that time I, you know, I felt under a compulsion to hand it across and that is when - -

OBJECTION

HIS HONOUR: Q. Don't worry about how you felt because that cannot be admitted, but what happened then?

A. Well, the lady then said, you know, 'I would like to look through those documents,' and I picked them up from the floor and brought them up to the table and I said to her, you know - I do recall using the words 'legal professional privilege'. I said to her, 'I want to retain my legal professional privilege in regard to these papers', and she said, 'You do,' and [at] that point in time I said 'Well, in that case, in order to be completely frank and free with you and so that it is clear I have nothing to hide, you can have a look through them,' and she did have a look through the papers and extracted a number of documents which included my statement, a copy of my bill of costs, as I recall it, and a number of what appears to be this other documentation here, from me, and she then said to me something along the line of 'We want to - the Law Society - or we want to keep these. Do you have a copy for yourself and your solicitor?' and I said 'Yes, there are other copies. I just picked these up from my solicitor. There are other copies in the file'. She said, 'Well, we'll keep those and I'll go through them." (emphasis added)

In his judgment, Mahoney JA said ^[F57] :

"It is not clear why Mr Goldberg produced to the Society the documents for which he could claim privilege rather than merely informed the Society of the relevant contents of them. If he did what he did in order, for example, to add force and authenticity to what he told the Society by virtue of the fact that the information was contained in the documents prepared for his solicitors, that would, I think, be a factor suggesting that what he did involved a conscious use of the fact of his solicitors' involvement for his own benefit and accordingly that fairness required that privilege not be available. The Court is asked to rule upon the matter without full knowledge of these circumstances.

The fact that the documents or information were made available to a third party, the solicitor, to achieve a benefit for Mr Goldberg vis-a-vis the clients is, I think, a consideration which, in the circumstances, should weigh against the continuation of the privilege. The disclosure is such as, in my opinion, constituted a waiver of the right to claim the privilege against the clients."

The other member of the majority, Clarke JA, dealt with the matter as follows ^[F58] :

"On the one hand there is no suggestion that the respondents' conduct of the present litigation has itself been influenced or prejudiced by the disclosure of the material to the Society. The respondents do not know the contents of the documents and, obviously enough, have not acted to their prejudice as a consequence of any knowledge of those contents. On the other hand, Goldberg has used the privileged material to his advantage and to the disadvantage of the respondents. The Law Society resolved, as a consequence of the information contained in the privileged material, to dismiss the complaint which had been brought by the respondents and to advise the respondents to take proceedings in the Court.

...

For my part I have concluded that it would be unfair to permit Goldberg to maintain his privilege in the material. In saying this I am taking account of the fact that in the normal course he would have provided the Law Society with statements in response to the complaints, which were not privileged, and these would have been discoverable. The mere assurance of Ms Shirvington that confidentiality would be maintained would provide no answer to a subpoena addressed to the Law Society calling for the production of those documents. However, Goldberg chose to respond to Ms Shirvington's requests by supplying the privileged material which was then used by the Law Society to his advantage and to the disadvantage of the respondents. In these circumstances it is my opinion that it would be unfair to the respondents to uphold the privilege in the documents which have been used to their disadvantage. He should not be permitted to enjoy the benefits derived from the submission of the material to the Law Society without being subjected to the normal consequences of the submission of his own arguments to it. In other words his voluntary decision to use privileged, rather than non-privileged, material to provide his answer to Ng's complaint should not enable him to keep the contents of his answer from Ng."

The President dissented. His Honour pointed out that legal professional privilege might be waived for a limited and specific purpose and found that the disclosure of the documents in question by Mr Goldberg to the Society was for a specific purpose in a specific context. His Honour said ^[F59] :

"To say that Mr Goldberg 'chose' to make the disclosure in the form of the privileged documents does not tell the full story. Nor do I accept that it was done to secure an advantage over his former clients. It was done out of duty as a practitioner and because the Society asked for such disclosure. Accompanying this disclosure was an express reservation by Mr Goldberg of his privilege and confidentiality in the documents. ... [T]he delivery of the relevant documents ... did not constitute a waiver by Mr Goldberg of his legal professional privilege in those documents as against any litigant party, including the Ngs, in the quite separate proceedings for which the documents were created. There was thus a limited waiver only of Mr Goldberg's legal professional privilege."

Has there, then, been an implied or imputed waiver by imposition of law? In Wigmore on Evidence ^[F60] , in answer to the question what constitutes waiver by implication, it is said:

"Judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated in every waiver, ie, not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final."

That statement has been influential not only in the United States but in Canada, where it is said in a leading text and with reference to Wigmore ^[F61] :

"Whether intended or not, waiver may occur when fairness requires it, for example, if a party has taken positions which would make it inconsistent to maintain the privilege."

In Australia, reliance was placed upon the above passage from Wigmore in Attorney-General (NT) v. Maurice ^[F62] . Earlier, in Thomason v. The Council of the Municipality of Campbelltown ^[F63] , Jordan CJ referred to the passage in Wigmore in connection with his Honour's proposition:

"The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client".

Looked at in this way, the question of "fairness" involves an inquiry as to whether the facts supply a sufficient reason for depriving the client of the form of protection which the law confers upon communications between solicitor and client. In approaching any particular case in this fashion, it also is to be borne in mind that legal professional privilege is not a mere rule of evidence but a substantive and fundamental common law doctrine, a rule of law, the best explanation of which is that it affords a practical guarantee of fundamental rights. ^[F64] Thus, English decisions, such as British Coal Corpn v. Dennis Rye Ltd (No 2) ^[F65] , which approach the question of waiver of legal professional privilege on the footing that what is at stake is a rule of evidence, may underestimate the significance of that which, it is contended, has been abrogated by imposition of law.

However, to say that the issue is one whether, in fairness, the facts supply sufficient reason for depriving the client of the benefit of a substantive rule of law is not necessarily to accept the further proposition contended for by the appellants. The substance of this was that the facts said to call for an implied waiver must have occurred in anticipation of or otherwise in relation to the very same legal proceeding in the course of which the privilege is later claimed. The reference by Jordan CJ, in the passage in Thomason which has been set out, to disclosure in evidence "on other occasions" indicates that a broader view is required. So also does the particular proposition for which Thomason treated Minter v. Priest ^[F66] as authority, namely ^[F67] :

"And the rule to be extracted from this authority may therefore well go no further than this, that if a communication made upon a privileged occasion is disclosed to a third party by a person who is entitled to the benefit of the privilege, and the third party is led by the disclosure to regulate his conduct in relation to some matter which becomes relevant in subsequent litigation to which he is a party, the otherwise privileged party cannot on the ground of privilege refuse to give, evidence as to the nature of the privileged communication if questioned on behalf of the third party."

In his dissenting judgment in the present case ^[F68] , Kirby P emphasised what he described as the creation of the privileged documents "in the quite separate proceedings" to those in the course of which disclosure was made to the Society. However, as I have indicated earlier in these reasons, in my view, there was in substance but the one dispute between the appellants and the respondents. That dispute was manifested in the taking of various steps by either side. The respondents instituted the Equity proceeding and took steps to involve the Society on two fronts. Mr Goldberg instituted the Common Law proceeding. The Equity proceeding preceded the complaint to the Law Society which, in turn, came before the institution of the Common Law proceeding. But, by August 1990, all were on foot. In seeking to locate where the fairness of the matter lies, in the sense I have described, it would, on the somewhat unusual facts of this case, be wrong to divorce what was done by Mr Goldberg in responding to the complaint made to the Society from the question of what was to be discovered, without privilege, as an interlocutory step towards the trial of the consolidated proceeding in the Supreme Court.

Counsel for the respondents relied upon the statement by Clarke JA that Mr Goldberg had used the privileged material to his advantage and to the disadvantage of the respondents, the Society having resolved to dismiss the complaint "as a consequence of the information contained in the privileged material". However, in my view, this represents an incomplete picture. Thus, it might be said with some cogency that the Society dismissed the complaint as "now presented" as a consequence of its failure or omission to afford to the respondents the opportunity to counter whatever favourable impression otherwise was created by the provision to the Society of the privileged material. This is not to say that the Society was obliged to provide such an opportunity to the respondents. I express no view upon that matter. It is to say that it cannot simply be said that the dismissal of the complaint was a consequence of the provision of the information by Mr Goldberg.

Certainly, as Mahoney JA pointed out, Mr Goldberg used the privileged material to seek to obtain a benefit vis-a-vis his former clients. The evidence indicates that, following the request of Ms Shirvington to look at the documents prepared for Mr Swaab, Mr Goldberg responded in a manner which avowedly suggested that he had nothing to hide and was being very full and frank in the course of a lengthy interview.

However, I agree also with the statement of Kirby P that, to say that Mr Goldberg "chose" to make the disclosure he did, does not tell the full story. In my view, it is here that the critical point is reached.

As I have indicated, the interview with Mr Goldberg was conducted in a particular legal setting provided by the existence of the compulsive powers enjoyed by the Society, pursuant to statute, in dealing with complaints by clients. Looked at objectively, the occasion in which the disclosure was made by Mr Goldberg was not one in which he was an entirely free actor. Even without the backing provided by the statutory sanction, it might be thought incumbent upon Mr Goldberg, as a practitioner whose conduct has been called into question, to deal with it fully and frankly before the responsible professional body.

In Woollahra Municipal Council v. Westpac Banking Corp ^[F69] and Network Ten Limited v. Capital Television Holdings Limited ^[F70] , Giles J treated as very significant the circumstance that an alleged implied waiver of legal professional privilege involved making documents available to enable the recipients to carry out their statutory duties and that there existed statutory compulsory processes. I agree.

In the present case, the disclosure to the Society was of this nature. Even allowing for the advantage Mr Goldberg sought to gain by making the disclosure, the circumstances of the case supply no sufficient reason for depriving him of the form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.

I would allow the appeal and make the orders proposed by Toohey J.