Supreme Court allows appeal to refuse inspection of documents claiming legal professional privilege.

THE SUPREME COURT

250/2008 and 251/2008

Denham J.

Geoghegan J.

Finnegan J.

BETWEEN

REDFERN LIMITED

PLAINTIFF/RESPONDENT

and

LARRY O’MAHONY AND THOMAS MCFEELY

FIRST AND SECOND NAMED DEFENDANTS

and

LIAM CARROLL AND TAFICA LIMITED

THIRD AND FOURTH NAMED DEFENDANTS/APPELLANTS

and

AIFCA LIMITED

FIFTH NAMED DEFENDANT

Judgment of Mr Justice Finnegan delivered on the 4th day of March 2009

This appeal concerns the decision of the High Court on two applications for inspection of documents pursuant to Order 31

Rule 19 of the Rules of the Superior Courts, one being an application by the appellants and the other an application by the

respondent. The appellants’ motion sought inspection of an opinion of senior counsel in respect of which a claim of privilege

is made. The respondent’s motion sought inspection of all documents discovered by the appellants in respect of which

privilege is claimed which evidence the seeking and/or receipt of legal advices. Each of the motions involve consideration of

aspects of waiver of legal professional privilege. The learned High Court judge ordered inspection on the respondent’s

motion and refused to order inspection on the appellants’ motion. The appellants appeal each of these orders.

For the purposes of this judgment it is necessary to set out the complex factual matrix giving rise to the proceedings and for

ease of reference I propose to apply the following definitions:-

Redfern Limited (hereinafter “Redfern”)

Lowe Taverns (Tallaght) Limited (hereinafter “Lowe”)

Alburn (hereinafter “Alburn”). Alburn is an unlimited company and is a wholly owned subsidiary of Redfern.

Larry O’Mahony and Thomas McFeely (hereinafter called “the partners”). The partners were at material times

entitled to the entire issued share capital in Lowe.

Aifca Limited (hereinafter “Aifca”). Aifca is a wholly owned subsidiary of Lowe and (on what basis this court is

not told) enjoys the sub-licence vested in Lowe.

Liam Carroll. Liam Carroll is beneficially entitled to the entire issued share capital in Tafica Limited.

Tafica Limited (hereinafter “Tafica”).

Agreement dated 4th August 2005 made between Redfern of the one part and the Partners of the other part (hereinafter

“The Alburn Agreement”).

Agreement made between Aifca of the one part and Liam Carroll of the other part (hereinafter “The Aifca

Agreement”).

Agreement dated 31st July 2003 made between Square Management Limited of the one part and Alburn of the

other part (hereinafter “The Joint Venture Agreement”).

The Square, Tallaght, Co. Dublin is a major shopping and commercial development. The development was carried out on

lands held under two leases, a lease dated 8th September 1988 and made between the Right Honourable The Lord Mayor

Aldermen and Burgesses of Dublin of the first part, the County Council of the County of Dublin, of the second part and L

& C Properties Limited of the third part, and a lease dated 1st August 1989 and made between Guardian Assurance Plc of

the first part, the Right Honourable the Lord Mayor Aldermen and Burgesses of Dublin of the second part, the County

Council of the County of the County of Dublin of the third part, and L & C Properties Limited of the fourth part. The

leases, in addition to demising premises, granted a licence over premises which are now a surface car park part of the overall

The Square development. The lessor’s interest under the lease is now vested in South Dublin County Council and the

lessee’s interest is vested in Square Management Limited. Lowe is entitled to a sub-licence in the car park pursuant to a

licence dated 25th October 2001 and which sub-licence is enjoyed by Aifca.

Square Management Limited and Alburn entered into the Joint Venture Agreement dated the 31st day of July 2003, the

object of which was to develop the car park. For the development to take place it is necessary that all licences over the car

park should be extinguished. Square Management Limited agreed to extinguish it’s licence, it being entitled to do so under

the terms of the leases. However if the development is to proceed it is necessary that Lowe’s sub-licence should also be

extinguished and to achieve this the Alburn Agreement was entered into on the 4th August 2005 between the partners of the

one part and Alburn of the other part. By the Alburn Agreement the partners agreed to dispose of the entire issued share

capital in Lowe to Alburn in exchange for the allotment of shares in Alburn to the partners. Completion of the Alburn

Agreement is essential if the development of the car park is to proceed.

On the 13th July 2007 Redfern instituted these proceedings against the partners claiming inter alia a declaration that the

Alburn Agreement is valid and subsisting and seeking specific performance of the same. The defence delivered by the

partners did not deny the existence of the agreement but pleaded that Alburn had been guilty of unreasonable delay and

laches and that as a result of Alburn’s conduct it is estopped from seeking to complete the Alburn Agreement. Delay by

Redfern in completion of the Alburn Agreement caused Lowe’s financial position to deteriorate resulting in it’s lenders

calling for repayment of borrowings failing which the lenders’ security would be enforced. In consequence it was necessary

for the partners to seek alternative funding. Alternative funding was achieved by Aifca entering into the Aifca Agreement

with Liam Carroll whereby Tafica would subscribe for 50.25% of an increased issued share capital in Aifca. In consequence

the partners no longer control Aifca. Redfern promptly joined Liam Carroll, Tafica and Aifca as defendants and delivered

amended pleadings. Against Liam Carroll and Tafica it is pleaded that they entered into the Aifca Agreement with the

intention of interfering with the due performance of the Alburn Agreement and/or of inducing the partners to breach the

Alburn Agreement. The defence of Liam Carroll and Tafica denies that they interfered with, induced or procured a breach

of the Alburn Agreement. They plead that the Aifca Agreement was so designed specifically to ensure that there would be

no breach of the Alburn Agreement. They plead in paragraph 13 of the defence as follows:

“Even if the Redfern Agreement subsisted at the time of the execution of the Aifca Agreement (which is denied), the third

and/or fourth named defendants deny that they had any intention to induce a breach of and/or interference with the

performance of the (Alburn) Agreement. In the premises, the third and/or fourth named defendants were expressly

cautious to ensure that if the Redfern Agreement did subsist then the clauses of the Aifca Agreement should and did

acknowledge and honour the obligations of the first and/or second named defendant under the Redfern Agreement should

that Agreement be completed.”

In the context of the appeal against the order of the High Court granting inspection to Redfern the phrase “expressly cautious

to ensure” is central.

APPEAL AGAINST THE ORDER OF THE HIGH COURT REFUSING THE APPELLANTS INSPECTION OF

REDFERN’S PRIVILEGED DOCUMENT: APPEAL NO. 250/2008

The discovery of Redfern disclosed an opinion of senior counsel dated 8th February 2007 and privilege was claimed in

relation to the same. The appellants by motion sought inspection of the opinion. Inspection was sought on the basis that the

claim to privilege in respect of the opinion had been waived by Redfern furnishing a copy of the opinion to Thomas Dowd,

Chairman of Square Management Limited board committee with responsibility for implementation of the Joint Venture

Agreement and to Eoghan Clear, solicitor to South Dublin County Council. The sole issue on this appeal is whether that

disclosure of the opinion amounts to a waiver of privilege.

For the appellants it is submitted that the membership of Square Management Limited consists of all lessees in The Square

development. Potentially, therefore, the disclosure to Mr Dowd represented a very wide disclosure. Similarly the disclosure

to Eoghan Clear represented a very wide disclosure as each member of South Dublin County Council could request sight of

the same.

The appellants rely upon Fyffes Plc v DCC Plc and Others [2005] 1 I.R. 59 as authority. It was there held that legal

professional privilege was absolute and the court had no discretion to displace it. Privilege might be lost where it was

expressly or by implication waived. While it was there held that the disclosure relied upon as constituting a waiver by

implication was insufficiently wide to constitute waiver and inspection was refused, it subsequently transpired that there had

been much wider disclosure and the High Court, on that basis, held that there had been a waiver of privilege. Reliance is

also placed on the following passages. In Documentary Evidence (9th edition) Hollander [2006] paragraph 19-30 it is

stated:-

“If the document comes into the public domain, it will no longer be possible to assert that the document is confidential,

and thus it will not be possible to claim privilege as one of the necessary pre-requisites of a claim to privilege will be

lacking. If the document is disclosed for a limited purpose, or on terms that the recipient should treat it as confidential,

the analysis set out above is likely to apply, and there is unlikely to be a difficulty in a subsequent claim for privilege.

However, where the document is disclosed to one or more third parties with no express or implied requirement that the

third party should treat the document as confidential, it is hard to see why there should be any legal bar on the third

party disclosing the document or making it available when served with a witness summons.”

In Matthews and Malek on Disclosure (Sweet and Maxwell) 2007 it is stated:-

“The position is less clear where there is a deliberate supply of a privileged document to a third party. One aspect of the

question is the intention with which it was supplied. Was it supplied in confidence, without prejudice to the privilege,

e.g. to the directors of the client company, another professional adviser of the plaintiff, such as his accountant, a person

otherwise with a ‘common interest’,…in such cases the privilege is generally not lost. Or was it supplied with the

intention of abandoning the privilege e.g., to the court to be released to parties and non-parties in the exercise of the

court’s discretion, to the media, in the hope of publication, or to the public generally? In these cases it is normally lost.”

For the respondent it is submitted that the disclosures to Mr Dowd and to Mr Clear must be looked at in context. The

context of the disclosure to Mr Dowd is the Joint Venture Agreement. The context of the disclosure to Mr Clear is a

document circulated by the County Manager of South Dublin County Council to each member of the County Council and

entitled “Proposed Disposal of Lands at The Square, Town Centre, Tallaght incorporating the ‘public’ Millennium Square to

Alburn.” The document concerned a proposal by the County Council to dispose of eleven acres at Tallaght, including the

car park, to Alburn by way of building lease with a view to its development. It is clear that without the grant of such lease

the proposed development of the car park could not proceed. The proposed development conforms with an objective of a

draft Master Plan for the Tallaght area and the Tallaght Integrated Area Plan and the County Council wishes the

development to proceed. In respect of each of the disclosures there is a community of interest with the recipient: Mr Dowd

represents the interest of Square Management Limited in the Joint Venture Agreement and Mr Clear represents the interest

of the County Council in relation to the proposed building lease. The Alburn Agreement is a crucial element in the scheme

envisaged by the Joint Venture Agreement and the proposed building lease. The Joint Venture Agreement expressly provides

for confidentiality. The disclosures did not evince an intention to publish to the public generally but were limited disclosures

to third parties with a common interest and did not amount to an implied waiver.

It is well established that legal professional privilege may be waived expressly or by implication. In Kershaw .v Whelan

[1996] 1 W.L.R. 358 at p. 370 Ebsworth L.J. said:-

“Waiver is not lightly to be inferred; although privilege is an aspect of the law of evidence and not of constitutional

rights it is firmly established in our law for sound reasons of public policy.”

In Paragon Finance v. Freshfields [1999] 1 W.L.R. 1183 Bingham C.J. dealt with the nature and basis of legal

professional privilege at p.1188:-

“At its root lies the obligation of confidence which a legal adviser owes to his client in relation to any confidential

professional communication passing between them. For readily intelligible reasons of public policy the law has,

however, accorded to such communications a degree of protection denied to communications, however confidential,

between clients and other professional advisers. Save where client and legal advisor have abused their confidential

relationship to facilitate crime or fraud, the protection is absolute unless the client (whose privilege it is) waives it

whether expressly or impliedly.”

Fyffes Plc v DCC Plc & Others [2005] 1 I.R. 59 dealt with implied waiver of privilege. At page 68 Fennelly J. said:-

“The appellant, nonetheless, argues for the broad proposition that any disclosure to a third party leads to loss of the

privilege. No authority has been cited in support of such a far-reaching principle. It is not to be found in Matthews and

Malek, Discovery (London 1992) dealing with the topic of waiver. Apart from the more specific cases of waiver, most of

which have been discussed in these proceedings, the authors pose the question whether relevant information was supplied

‘with the intention of abandoning’ the privilege. They footnote instances of communication to the public generally or to

the media. Indeed, these references are the only support for the general proposition that disclosure defeats the privilege.”

Fennelly J. accepted as a correct statement of the law dicta of Clarke J.A. in Goldberg v Mg [1994] 33 N.S.W.L.R. 639

that there is no universal rule that the disclosure of documents produced for the sole purpose of seeking legal advice or

litigation to a stranger to that litigation constitutes a waiver of the privilege in the documents.

It is accordingly clear that privilege may be waived by disclosure. If the document comes into the public domain privilege

will be lost. It will not, however, be lost where there is limited disclosure for a particular purpose or to parties with a

common interest. The disclosure relied upon by the appellants here is limited and was to parties having a common interest

with the respondent in the proposed development of the car park. Such disclosure does not evince an intention to waive

privilege. I am satisfied there has been no waiver of privilege in respect of the opinion sought to be inspected. I would affirm

the order of the learned High Court judge and refuse inspection of the opinion.

APPEAL AGAINST THE ORDER OF THE HIGH COURT GRANTING REDFERN INSPECTION OF

DOCUMENTS EVIDENCING THE APPELLANTS’ LEGAL ADVICE: APPEAL NO 251/2008

The appellants’ discovery disclosed documents relating to its legal advice and claimed privilege in relation to the same. In

paragraph 13 of their defence the appellants plead that they were “expressly cautious” to ensure that if the Auburn

Agreement did subsist then the clauses of the Aifca Agreement should and did acknowledge and honour the obligations of

the partners under the same should it be completed. This plea the respondent contends amounts to an implied waiver of

privilege over the legal advice obtained by the appellant. The appellants by the plea put in issue their state of mind and the

intention of the appellants in entering into the Aifca Agreement cannot be fairly determined without inspection of the advice.

The appellants before this court conceded that at the hearing of the action it is the intention to rely upon the fact that legal

advice was obtained in relation to the Aifca Agreement, which it is claimed is designed so as to not to interfere with

contractual relations between the respondent and the partners, and in effect ask the court to infer from the terms of the

Aifca Agreement and the fact that legal advice was obtained the absence of an intention to procure a breach of contract or

interfere with the respondent’s contractual relations. The legal advice sought or given will not be introduced in evidence.

The court may, of course, make the opposite and adverse inference from the failure of the appellants to waive legal

professional privilege.

The importance of legal professional privilege in our system of litigation cannot be overemphasised. In Smurfit Paribas

Bank Limited v A.A.B. Export Finance Limited [1990] 1 I.R. 469 Finlay C.J. quoted with approval from the judgment of

Jessel M.R. in Anderson v Bank of British Columbia [1876] 2 Ch.D. 644 at 649:-

“The object and meaning of the rule is this: that as, by reason of the complexity and difficulty of our law, litigation can

only be properly conducted by professional men, it is absolutely necessary that a man in order to prosecute his rights or

to defend himself from an improper claim, should have recourse to the assistance of professional lawyers, and it being so

absolutely necessary, it is equally necessary, to use a vulgar phrase, that he should be able to make a clean breast of it to

the gentleman with whom he consults with a view to the prosecution of his claim, or the substantiating of his defence

against a claim of others; that he should be able to place unrestricted and unbounded confidence in the professional

agent, and that the communications he so makes to him should be kept secret, unless with his consent (for it is his

privilege, and not the privilege of the confidential agent), that he should be enabled properly to conduct his litigation.

That is the meaning of the rule.”

While the courts afford a very high degree of protection to legal professional privilege the party entitled to the same may

expressly or by implication waive it. For the proposition that where the communication in respect of which privilege is

claimed is a material fact in itself privilege is impliedly waived the respondent relies on Matthews and Malek, Disclosure,

3rd edition at para. 11.64 where the authors’ state:-

“Where in litigation allegations are made by a party concerning his state of mind (e.g. in entering an agreement) to

which legal advice contributed, that party cannot withhold the advice on grounds of privilege, but this is because of

implied waiver.”

The respondent relies heavily on this passage and on a line of authority in the courts of Australia and most particularly on

Hong Kong Bank of Australia Limited v Murphy [1993] V.R. 419, Telstra Corporation v B.T. Australasia Pty Limited

[1998] 156 A.L.R. 634 and Liquorland (Australia) Pty Limited v Angie [2003] V.S.C. 0073. A review of the Australian

cases discloses that in that jurisdiction privilege may be lost in the following circumstances:-

1. Where a party pleads the privileged document into relevance: Data Access Corporation v Powerflex Services Pty

Limited [1994] A.I.P.C. 91.

2. Where the court might be misled if the document is not available: Hong Kong Bank of Australia Limited v Murphy

[1993] 2 V.R. 419 and

3. Where in his pleadings a party relies upon his state of mind and it would be unfair to permit that party to maintain

privilege in respect of communications passing between them and their legal advisers which might bear upon the existence of

that state of mind: Wardrope v Dunne [1996] 1Qd. R. 224.

Some support for the submission that this is also the law in this jurisdiction might appear to be found in a passage from the

judgment of Finlay C.J. in Smurfit Paribas Bank Limited v A.A.B. Export Finance Limited at p.477:-

“Such privilege should therefore in my view only be granted by the courts in instances which have been identified as

securing an objective which in the public interest in the proper conduct of the administration of justice can be said to

outweigh the disadvantage arising from the restriction of disclosure of all the facts.”

However, in Fyffes Plc v DCC Plc & Others at p.67 Fennelly J. in referring to that passage said:-

“The then Chief Justice did not, in my view, by those words, mean to suggest that in cases where reliance is placed on

legal professional privilege in respect of documents the courts should balance the two considerations, as it were, on a

case by case basis. He was referring to what the policy of the law should be. In my view, whether or not documents are

privileged will be determined by the application of these principles to the facts of the case. Once it is found to exist, there

is no judicial discretion to displace it. I would adopt the following dictum of Lord Bingham C.J. in Paragon Finance v

Freshfields [1999] 1 W.L.R. 1183 at p.1188:-

‘The nature and basis of legal professional privilege has been often and authoritatively

expounded…at its root lies the obligation of confidence which a legal adviser owes to his client in

relation to any confidential professional communication passing between them. For readily

intelligible reasons of public policy the law has, however, accorded to such communications a

degree of protection denied to communications, however confidential, between clients and other

professional advisers. Save where client and legal adviser have abused their confidential

relationship to facilitate crime or fraud, the protection is absolute unless the client (whose

privilege it is) waives it, whether expressly or impliedly.’”

Paragon Finance Plc v Freshfields concerned a claim in negligence against the defendant, a firm of solicitors. The

solicitors advised the plaintiff in relation to the creation of securitised mortgages, each transaction involving several thousand

mortgages. In the early 1990s there were many defaults by mortgagors on the mortgages in question as a result of a fall in

the property market, a situation with which we are all too familiar today. The plaintiff looked to insurers to indemnify it

against the defaults and the insurers refused to indemnify on the basis that the agreed loan to value ratio had not been

complied with. The claim against the insurers was settled but the plaintiff nonetheless suffered losses which it sought to

recover from the solicitors as damages for negligence. A different firm, Slaughter and May, acted for the plaintiff in its claim

against the insurers and Freshfields sought discovery of communications between the plaintiff and Slaughter and May. In the

High Court Buckley J. in granting inspection relied upon Hayes & Another v Dowding & Others [1996] P.N.L.R. 578. He

held that a plaintiff suing a solicitor for negligence may not claim legal professional privilege in relation to similar transactions

involving a different solicitor. Having cited a passage from Hayes & Anor v Dowding & Ors he went on to say at page

591:-

“Neither that passage, in context, nor what I have said above, undermines nor is intended to undermine the most

common and fundamental operation of legal professional privilege, namely, that one party to a dispute cannot obtain

communications between the other party and his lawyer in respect of it. Of course the privilege goes further than that.

But, to my mind, it is not significantly undermined by holding that the implied waiver that arises when a client sues his

lawyer for professional negligence extends to any privilege communications touching the transaction which gave rise to

the charge of negligence and which are relevant to the just determination of issues between them. To borrow a phrase

from a different legal concept, privilege is essentially a shield not a sword. I do not believe that concept would be

difficult to explain to a client or that it would work against the public interest in question.”

In the Court of Appeal, allowing the appeal, Lord Bingham held that by bringing the proceedings against Freshfields the

plaintiff impliedly waived any claim to legal professional privilege in relation to confidential communications between the

plaintiff and Freshfields up to the moment when Freshfields ceased to act. However, there was no waiver of legal

professional privilege in relation to confidential communications between the plaintiff and Slaughter and May as that

confidential relationship had not been brought into the public domain by the pleadings. The defendants relied on references

to justice and fairness in the judgments in Hayes & Another v Dowding & Ors as providing the correct test. The Court of

Appeal held that there is no question of balancing the requirements of fairness and justice against the legitimate interest of a

party in maintaining the confidentiality of a confidential relationship. Save as between client and the solicitor he is suing,

fairness is not the touchstone by which it is determined whether a client has or has not impliedly waived his privilege. The

court expressly disapproved of Hayes & Anor v Dowding & Ors where the trial judge relied heavily on Australian authority

and held that the Australian authorities there relied on did not represent the law in England.

In Nederlandse Reassurantie Groep Holding N.V. v Bacon and Woodrow & Ors [1995] 1 All E.R. 976, a negligence

action, the plaintiff sued their advisers, other than legal advisers, and in particular their accountants. The accountants sought

disclosure of confidential communications between the plaintiff and their legal advisers relating to the purchase of the share

capital of three insurance companies. In the transaction the plaintiff had relied on actuarial, accounting, financial and legal

advice. The plaintiff claimed legal professional privilege which claim was upheld. In the course of his judgment at 987E

Colman J. pointed out that there could be no question of waiving legal professional privilege by the institution of proceedings

in an action to which legal advisers were not a party: in Paragon Finance Plc v Freshfields Bingham J. considered this to

be correct. Bingham J. also approved Colman J’s analysis of the basis upon which in a negligence action against a solicitor

the plaintiff could not maintain a claim to legal professional privilege. He cited with approval the following passage at page

986C of the report:-

“The true analysis of what the courts are doing in such cases of so-called implied waiver of privilege is, in my

judgment, to prevent the unfairness which would arise if the plaintiff were entitled to exclude from the court’s

consideration evidence relevant to a defence by relying upon the privilege arising from the solicitor’s duty of

confidence. The client is thus precluded from both asserting that the solicitor has acted in breach of duty and

thereby caused to the client loss and, to make good that claim, opening up the confidential relationship

between them and at the same time seeking to enforce against that same solicitor a duty of confidence arising

from the professional relationship in circumstances where such enforcement would deprive the solicitor of the

means of defending the claim. It is fundamental to this principle that the confidence which privilege would

otherwise protect arises by reason of the same professional relationship between the parties to the litigation.

The underlying unfairness which the principle aims to avoid arises because the claim is asserted and the

professional relationship opened for investigation against the very party whose duty of confidence is the basis

of the privilege. It is against the unfairness of both opening the relationship by asserting the claim and

seeking to enforce the duty of confidence owed by the defendant that the principle is directed.”

The loss of privilege by the mere instigation of proceedings is limited to negligence actions instituted by a client against his

solicitor: it is based on unfairness. The privilege attached to transactions with other solicitors, however closely related or

relevant, is not affected.

There is one other area in which legal professional privilege can be lost on the basis of unfairness and that is in relation to

partial disclosure of legal advice: see R v Secretary of State for Transport Ex parte Factortame & Others, The Times, 16

May 1997 and cases therein referred to. Where a party deploys in court material which would otherwise be privileged the

other party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from

privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out

of context would be to risk injustice through its real weight or meaning being misunderstood.

It remains the position in England and Wales that while unfairness is material in the circumstances which I have mentioned

there is no general proposition that unfairness to an opponent will result in implied waiver of privilege. In Farm Assist

Limited (In Liquidation) v Secretary of State for Environment, Food and Rural Affairs [2008] All E.R.(d) 124 (Dec) it

was held that there is no general implied waiver of privileged material merely because a state of mind or certain actions are

in issue. The test in English law is based neither on general principles of fairness nor on relevance. Implied waiver arising

from particular proceedings or pleading allegations in those proceedings is limited to proceedings between client and solicitor.

The fact that the plaintiff had obtained legal advice which had contributed to a state of mind does not form any basis for

implied waiver in English Law. In the course of the judgment Matthews and Malek on Disclosure 3rd edition was referred

to:-

“In Matthews and Malek at para. 11-64 the authors referred to a principle that ‘where information which is otherwise

privileged itself constitutes a material fact in the proceedings, it is not privileged from disclosure.’”

It was held that an analysis of the cases establishes no such general principle. Matthews & Malek also state:-

“Where in litigation allegations are made by a party concerning a state of mind (e.g. in entering an

agreement) to which legal advice contributed, that party cannot withhold the advice on grounds of privilege,

but this is because of implied waiver rather than because no privilege attached in the first place.”

In support of this proposition the authors cite at footnote 402 three Australian authorities: Wardrobe v Dunne [1996] 1

Qd.R 224 and Ampolex Limited v Perpetual Trustee Co. (Canberra) Limited [1995] 37 N.S.W.L.R. 405 and one English

authority Hayes & Anor v Dowding & Ors [1996] P.N.L.R. 578. The learned trial judge held that Hayes & Anor v

Dowding & Ors had been overruled in Paragon Finance Plc v Freshfields and that the Australian authorities cited did not

represent the law in England. Whilst there is implied waiver in proceedings between a client and solicitor because of

unfairness, that did not mean that whenever there is unfairness there will always be an implied waiver of privilege. Privilege

is waived on the basis of unfairness in the limited circumstances set out in Lillicrap v Nalder and Paragon Finance Plc v

Freshfields and that is in proceedings between a client and his solicitor. In such proceedings, by instituting the same, the

plaintiff releases the solicitor from his obligation of confidentiality and cannot rely on legal professional privilege in respect of

his documents in the hands of the solicitor. The rationale for an implied waiver in such proceedings is that a party cannot, as

a matter of fairness, subject the confidential relationship with its solicitor to public scrutiny and at the same time seek to

preserve the confidentiality of the relationship. Outside that, English law recognises the right of a party to maintain legal

professional privilege notwithstanding that the person’s state of mind and also that person’s actions may well have been

influenced by legal advice and there is no general implied waiver of privileged material merely because a state of mind or

certain actions are in issue.

Having carefully considered the Australian authorities to which the court has been referred I am satisfied that they do not

represent the law in this jurisdiction. Rather the law is as set out in Paragon Finance Plc v Freshfields and Farm Assist

Limited (In Liquidation) v Secretary of State for Environment, Food and Rural Affairs. No such general proposition as

is sought to be established by the respondent exists in Irish law. As stated by Fennelly J. in Fyffes Plc v DCC Plc & Others

there is no balancing exercise to be carried out, and in particular no balancing of legal professional privilege maintained by

one party against unfairness to the other.

As to the three propositions derived from Australian authorities which I set out above and which are relied upon by the

respondent the position is as follows. In relation to the first, a party by its pleadings or by deployment in court may waive

legal professional privilege: this will arise where the contents and effect of the legal advice are disclosed. That is not the

position here as the contents and effect of the legal advice are not pleaded and, as the appellant has informed the court, will

not be relied upon. Only the fact that legal advice was obtained will be relied upon. The other two propositions derived from

Australian authorities do not represent the law in this jurisdiction.

I would allow the appeal and refuse inspection of the appellants’ documents in respect of which legal professional privilege is

claimed.

Conclusion

On the respondent’s application for inspection I would uphold the decision of the learned trial judge. On the appellants’

application for inspection I would set aside the decision of the learned trial judge and refuse to order inspection of the

documents evidencing legal advice on the grounds that the appellant is entitled to maintain legal professional privilege in

respect of the same.

Redfern Limited v O’Mahony & Ors