The case of JM v Trustees of the Marist Brothers [2024] NSWSC 1446 highlights key issues around the waiver of legal professional privilege in civil litigation, particularly in the context of disputes over the validity of deeds of release and the strategic use of legal documentation in settlement negotiations.
In 2009, the plaintiff had brought proceedings against the defendant for damages arising out of historical sexual abuse which was then settled in 2011 following mediation and a Deed of Release executed. Subsequently, in the present proceedings the plaintiff has sought to set aside a 2011 Deed of Release and, in doing so, faced a subpoena from the defendant seeking production of the plaintiff’s entire legal file.
The issue that arose for consideration in the current decision, was whether the plaintiff’s attempt to challenge the deed had resulted in the waiver of legal professional privilege over certain documents which had been detailed and relied upon in his Affidavit, filed in support of the set-aside motion.
This case considers how waiver of privilege operates in legal disputes, particularly when a party relies on legal advice or documents in support of their claims, and when privilege may be deemed lost under certain statutory provisions.
Background of the Case
The plaintiff’s primary argument for seeking to set aside the deed was based on claims regarding the role of legal advice in the decision to settle, potentially involving pre-existing legal impediments that could have affected the plaintiff’s understanding of the deed's implications.
In support of the application to set aside the deed, the plaintiff filed affidavits from both himself and his solicitor. These affidavits referred to the contents of the legal file concerning the plaintiff’s earlier dealings with his legal representatives, which included advice and information regarding the 2011 settlement. This became the key issue when the defendant sought a subpoena for the production of the complete legal file relating to the plaintiff, claiming that by filing the affidavits and relying on legal advice in support of the application, the plaintiff had waived any legal professional privilege over the documents.
Waiver of Privilege: The Defendant’s Argument
The defendant argued that by relying on the legal advice in the affidavits, the plaintiff had waived the privilege protecting the legal file. In particular, the defendant asserted that there had been an issue waiver, meaning that by invoking the contents of the legal file to support their case, the plaintiff had opened up those documents to scrutiny and waived their right to claim privilege over them.
An issue waiver occurs when a party raises a particular issue or claim in a legal proceeding and relies on legal advice or documents to support that issue. By doing so, the party may inadvertently waive the privilege attached to documents that are relevant to that issue. The defendant contended that, in challenging the validity of the deed and seeking to set it aside, the plaintiff had waived privilege over all documents pertaining to the legal advice received during the settlement process.
The Plaintiff’s Argument: Privilege Should Remain Intact
The plaintiff resisted the subpoena, arguing that the subpoena was too broad and that privilege should be maintained over the legal file. The plaintiff contended that the issue at hand was purely objective — whether the pre-existing legal impediments had played a role in the settlement or the deed entered into by the parties. This, the plaintiff argued, did not justify the wholesale waiver of privilege over documents that were not directly relevant to the issue being adjudicated.
However, this argument was rejected by the duty judge, who found that the issue was not as purely objective as the plaintiff claimed. The duty judge reasoned that the application to set aside the deed involved a detailed inquiry into the circumstances surrounding the settlement, including the legal advice provided to the plaintiff. The plaintiff’s attempt to frame the issue as one purely about the validity of the deed, absent reference to legal advice, was not consistent with the breadth of the issues involved.
Judicial Analysis: Waiver and Legal Privilege
The duty judge found that the plaintiff’s argument was not persuasive. The judge pointed to the broad terms of s 7D of the Civil Liability Act and noted that, in a case like this, the role of legal advice in the settlement process was directly relevant to the determination of whether the deed was entered into under duress, mistake, or misunderstanding, and whether the plaintiff’s legal counsel had acted appropriately.
Moreover, the plaintiff’s own solicitor had filed an affidavit which provided an opinion on the plaintiff’s position, based on the contents of the legal file — the very file over which privilege was being claimed. This created an inconsistency between the plaintiff’s claim to maintain privilege and the substantive use of that same legal advice to support the plaintiff’s case.
The duty judge also relied on the decision in EXV v Uniting Church in Australia Property Trust (NSW) [2024] NSWSC 490, where similar issues of waiver of privilege in the context of settlement negotiations were discussed. The judge noted that in order to maintain the integrity of legal privilege, it must not be selectively waived by relying on legal advice in an affidavit, without waiving privilege over the documents that formed the basis of that advice.
Statutory Framework: Sections 122 and 131A of the Evidence Act
The duty judge ultimately concluded that the privilege had been lost. The judge relied on sections 122 and 131A of the Evidence Act, which outline circumstances in which legal professional privilege may be waived. Under these provisions, privilege may be waived either intentionally or inadvertently, and the use of privileged documents in a manner that discloses their content can lead to a loss of that privilege.
In this case, the plaintiff’s use of the legal file to support the application to set aside the deed was deemed sufficient to establish that the privilege had been waived. The judge was satisfied that the documents contained in the legal file were relevant to the issues in dispute, and the plaintiff’s reliance on them in the affidavits meant that privilege could not be maintained.
Conclusion
JM v Trustees of the Marist Brothers underscores the importance of understanding the implications of legal professional privilege in the context of challenging settlement agreements and deeds of release. The case serves as a reminder that when a party relies on legal advice or documents to support its case, it risks waiving privilege over those documents, particularly if they are central to the issues being litigated. The judgment is a useful clarification on the limits of legal privilege and the potential consequences of using privileged materials in civil litigation.
This article should not be taken as legal advice. If you have a matter that deals with the subject matter of this article then you should seek independent legal advice regarding the particular circumstances of your case.
Liability limited by a Scheme approved under professional standards legislation.
