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The author, the publisher and the agent: A tale of privilege.

7 minute read

In Morton v Bolinda Publishing Pty Ltd [2017] FCA 187, Justice Burley of the Federal Court of Australia dismissed an interlocutory application challenging a claim for legal professional privilege in respect of documents relating to publishing and agency agreements in a timely reminder of the principles of legal professional privilege, joint privilege, common interest privilege and waiver.

CASE SUMMARY

In the main proceedings (which, shortly after this decision, were dismissed by consent), the applicant and cross-respondent, author Kate Morton, sought to terminate publishing agreements with the respondent and cross-claimant, Bolinda Publishing Pty Ltd. Those agreements were entered into on behalf of Ms Morton by her literary agent, Ms Anthony (Agent).

Separate to the main proceedings with Bolinda, Ms Morton and the Agent were involved in a dispute in relation to the termination of the agency agreement between Ms Morton and the Agent.

Following orders for discovery in the main proceedings, Bolinda claimed legal professional privilege over certain documents, including:(a) Document 1, being a chain of emails between

(a)   Bolinda’s CEO, Bolinda’s legal advisor and the Agent; and
(b)   Document 3 being a chain of emails between a Bolinda executive, Bolinda’s legal advisor and Bolinda’s CEO.

Should Bolinda’s claim for legal professional privilege be upheld, Bolinda would not be required to produce those documents.

The following issues fell to be determined by the Court in the present interlocutory application:

(a)   Is Bolinda entitled to claim legal professional privilege in the documents?
(b)   Does a joint privilege or common interest privilege apply to the benefit of Bolinda and the Agent in respect of Documents 1 and 3?
(c)   Has Bolinda waived privilege in relation to Documents 1 and 3?
(d)   Has there been an issue waiver due to Bolinda putting the contents of privileged documents in issue?

Bolinda claimed legal professional privilege over Documents 1 and 3 on the basis that the relevant communications were for the purpose of obtaining legal advice from Bolinda’s legal advisor.

In an unusual twist, Ms Morton challenged Bolinda’s ability to claim privilege over such communications as Bolinda’s legal advisor did not hold a practising certificate as at (relevantly) the date of the communications.

Ms Morton also contended that, to the extent Bolinda succeeded in establishing an entitlement to claim legal professional privilege, any such privilege had been waived by:

(a)   the content of its pleadings
(b)   the content of one the Bolinda affidavits; and/or
(c)   the provision of documents to the Agent.

Legal professional privilege

Justice Burley reiterated the principles summarised by Young J in AWB Ltd v Cole (No 5) [2006] FCA 1234 at [44] and noted that legal professional privilege protects confidential communications between a legal advisor and their client from being disclosed in order to promote candour. His Honour observed that a party claiming privilege must prove the communication was undertaken, or the document brought into existence, for the dominant purpose of giving or obtaining legal advice and that “dominant” does not mean “primary” or “substantial” but “clearly paramount”.

His Honour held that the claim for privilege was made out due to the circumstances relating to the creation of the documents being:

(a)   they were created for the purpose of giving or obtaining legal advice; and
(b)   the long standing relationship between Bolinda and its legal advisor.

Of interest is his Honour’s finding that the absence of a practising certificate, whilst a serious matter, did not diminish or disqualify the communications from being the subject of a successful claim for privilege. His Honour’s reasoning in this regard was that the question of legal professional privilege is determined having regard to the whole of the evidence regarding the relationship between the relevant parties, and having regard to the client’s belief that the lawyer was entitled to give the legal advice (at [55]).

Joint privilege or common interest privilege

A claim to joint privilege in Documents 1 and 3 was advanced by Bolinda in answer to Ms Morton’s claim that any privilege in these documents had been waived.

His Honour reiterated the law in relation to Joint Privilege and Common Interest Privilege is as follows:

  • In Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601, Sheller JA, with whom Waddell JA agreed, held that two or more persons may join in communicating with a legal advisor for the purpose of retaining services or obtaining advice and that the parties together are entitled to maintain the privilege against the rest of the world.
  • Common interest privilege applies to a communication where a person entitled to legal professional privilege has such a commonality of interest in relation to the subject matter of the privilege that sharing the content to an identified third party will not result in a loss of privilege (see Marshall v Prescott [2013] NSWCA 152 at [57]). It is not necessary that parties have common legal representation (see Lane v Admedus Regen Pty Limited [2016] FCA 864 at [27]-[30]).

On the facts, his Honour held that Bolinda and the Agent shared a joint privilege in the documents and whilst that finding rendered it unnecessary for him to determine the question of whether common interest privilege would apply, his Honour was of the view that it would. This was on the basis of his Honour’s finding that legal professional privilege applied to the documents and that at the time the documents were created, each of Bolinda and the Agent had an interest in determining the correct construction of the publishing agreements, albeit for different reasons, and a common interest in responding to Ms Morton’s demand.

Waiver and issue waiver

Waiver of privilege must be made by both of the persons in whose benefit the joint or common interest privilege resides (see Farrow at 608-612). His Honour found that as the Agent had not expressly or implicitly waived privilege, it was not necessary to determine whether Bolinda had waived privilege by the provision of the documents to the Agent and refused access on that basis.

In respect of whether Bolinda had waived privilege by putting the contents of the privileged documents in issue, his Honour held that consistent with the authorities, Bolinda had not by its cross-claim, directly or indirectly, put the contents of the privileged documents in issue either by bringing a case about the contents of a communication or necessarily laying open the confidential communication to scrutiny (see Macquarie Bank Ltd v Arup Pty Limited [2016] FCAFC 117 which endorsed the summary of the applicable principles in Ferella v Official Trustee in Bankruptcy [2010] FCA 766; and also the principles in DSE (Holdings) Pty Limited v Intertan Inc [2003] FCA 384.

Key Lessons 

  • The purpose for which a party or parties seek advice is of central importance to the creation of privilege.
  • A party (or parties) considering seeking advice should consider the purpose for which it (or they) are seeking that advice and whether privilege will attach, prior to such advice being sought.
  • Where a party or parties intend to seek advice they should ensure where possible that communications explicitly state their purpose to assist the Court in any later determination relating to privilege;
  • Legal professional privilege applies to communications between a legal advisor and client if the communication was undertaken, or the document brought into existence for the dominant purpose of giving or obtaining legal advice.
  • Joint privilege may attach to a communication where two or more persons join in communicating with a legal advisor for the purpose of retaining services or obtaining advice.
  • Common interest privilege may attach to a communication where a person entitled to legal professional privilege has sufficient commonality of interest in relation to the subject matter of the privilege with the third party with whom the content is shared.
  • Waiver of privilege must be made by both parties in whose benefit the joint or common interest privilege resides and cannot be lost unilaterally.