Supreme Court of Queensland dismisses an application for the disclosure of advice prepared by a barrister for his client, which was referred to in correspondence to encourage the other party to the dispute to accept an offer of settlement

In brief

The case of Habermann v Cook Shire Council [2021] QSC 101 concerned an application by the Applicant to the Supreme Court of Queensland for an order that the Respondent disclose advice (Advice) given by counsel for the Respondent (Counsel) to his client, in circumstances where the Respondent's solicitors made reference to the Advice in correspondence with the Applicant (Correspondence).

The Correspondence from the Respondent to the Applicant stated as follows (at [5]):

"Without Prejudice, Save as to Costs

…

We have now received advices from Richard Morton of Counsel. Based on that advice, (which is consistent with our views of this claim) the [Applicant] is unlikely to establish that the [Respondent] is liable for her alleged psychiatric injury and even in the unlikely event that liability was established, quantum would not be awarded in the magnitude sought by your client.

 

LGW has made its 'best offer' and will not make any further offers at mediation.

 

[Redacted section, which it is common ground contained the terms of a settlement offer]…"

The application for disclosure was made under rule 223(1)(a) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), on grounds that there were "special circumstances" and the "interests of justice" required disclosure of the Advice to the Applicant (rule 223(4)(a) of the UCPR). It was agreed between the parties that the Advice was contained in a document (at [8]).

The Court was required to determine the following issues:

• Whether the Advice could be disclosed under rule 223 of the UCPR, in circumstances where the Advice was not directly relevant to an issue in the proceeding.

• Whether the Advice could be disclosed, notwithstanding that the Correspondence was entitled "Without Prejudice, Save as to Costs".

• Whether the Respondent waived legal professional privilege by making reference to conclusions contained in the Advice, without disclosing reasons for the conclusions.

• If legal professional privilege was waived, whether disclosure of the Advice was supported by special circumstances and the interests of justice required disclosure.

The Court found that the Advice could be disclosed, notwithstanding that the Advice was not directly relevant to an issue in the proceeding and that the Correspondence was entitled "Without Prejudice, Save as to Costs".

However, the Court dismissed the application on the basis that legal professional privilege was not waived in the Correspondence. For the same reasons, the Court also found that disclosure of the Advice was not supported by special circumstances, and disclosure was not required in the interests of justice. 

Advice could be disclosed, notwithstanding that it was not directly relevant to an issue in the proceeding

Rule 223 of the UCPR is entitled "Court orders relating to disclosure" and relevantly states as follows:

"(1) The court may order a party to a proceeding to disclose to another party a document or class of documents by–

(a) delivering to the other party in accordance with this part a copy of the document, or of each document in the class;

…

(4) An order mention in subrule (1) … may be made only if–

(a) there are special circumstances and the interests of justice require it…"

 

In contrast, rule 211(1) of the UCPR is entitled "Duty of disclosure" and requires disclosure where, amongst other things, a document is "directly relevant to an allegation in issue in the pleadings". Rule 211 and rule 223 of the UCPR are both contained within chapter 7 of the UCPR, which is entitled "Disclosure". 

The Court noted that some provisions contained in chapter 7 of the UCPR required a consideration of whether the duty of disclosure in rule 211 of the UCPR had been complied with. However, the Court found that the wording of rule 223(4)(a) of the UCPR did not require compliance with rule 211 of the UCPR. This outcome was consistent with the objective of rule 5(2) of the UCPR to avoid undue delay in facilitating the resolution of the dispute. 

The Court found that disclosure of the Advice "may inform a decision whether or not to settle the proceeding" (at [16]). This in turn informed a consideration of whether there were special circumstances and whether the interests of justice required disclosure. 

The Court's finding that disclosure of the Advice "may" inform a decision by the Applicant to settle the proceedings, was a sufficient nexus for the Court to make an order for disclosure under rule 223 of the UCPR, but did not of itself indicate that special circumstances and the interests of justice had in fact been met.

Advice could be disclosed, notwithstanding that the Correspondence was entitled "Without Prejudice, Save as to Costs" 

The Court noted that there was no absolute rule which restricted the disclosure of without prejudice communications (at [18] and footnote 4). 

The Court found that the Applicant intended to use the Advice to "fairly comprehend the force of the [R]espondent's offer to settle". This was consistent with promoting the settlement of the dispute without breaching confidence, and did not of itself, preclude disclosure of the Advice (at [19] and Pihiga v Roche (2011) 278 ALR 209; [2011] FCA 240 [86]). 

Respondent did not waive legal professional privilege in the Correspondence

The Applicant contended that "it is unfair for the [R]espondent to use [C]ounsel's [A]dvice as a persuasive device in support of its settlement offer while depriving the [A]pplicant of access to that [A]dvice". Rather, the Applicant intended to "use the full content of the [A]dvice to fairly comprehend the force of the [R]espondent's offer to settle" (at [17] and [19]).

The Court noted that disclosure of "the effect of legal advice for forensic or commercial purposes may amount to a waiver of the confidentiality that attracts legal professional privilege" (at [28] and Bennett v Chief Executive Officer, Australian Customs Service (2004) 210 ALR 220; [2004] FCAFC 237).

This in turn required consideration of whether disclosure was "inconsistent with maintaining the confidentiality the privilege serves to protect", when viewed in light of the individual circumstances of the case (at [28]), Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66, and Osland v Secretary, Department of Justice (2008) 234 CLR 275; [2008] HCA 37).

The Court found that the Correspondence was used to encourage the Applicant to accept the Respondent's offer of settlement (at [31]) and that the Respondent's refusal to disclose the Advice placed the Applicant in a "position of partial ignorance… in considering the merits of the [R]espondent's offer" (at [34]). The Court also found that disclosure of the Advice was not inconsistent with maintaining the confidentiality of the Advice (at [37]).

However, the Court found that the Respondent's strategy to use the Advice to encourage settlement of the dispute was not unfair (at [32]). The Applicant's position was indifferent to, and offset by, the Respondent's position in meeting the Applicant's case and making offers of settlement.

The Court noted that a barrister's advice in relation to liability and quantum was premised upon the following considerations, and found that it was not unfair that the Respondent did not inform the Applicant of those matters to properly consider the offer of settlement (at [33]–[34]): 

• The law – This is known between the parties.

• The nature of the pleaded cases – This is known between the parties.

• The disclosed documents – This is known between the parties.

• The strength of the evidence likely to be adduced at trial – This is a question of fact which ordinarily differs between the parties. 

Alternatively in the event there was unfairness, the Court concluded that "any such unfairness is so trivial that the circumstances fall well short of meeting the [test in rule 223(4)(a) of the UCPR]" (at [32]).

The Court also found that the Correspondence "sparsely" disclosed Counsel's conclusions, which made it implausible that the Correspondence would have "any material influence on the Applicant [and her legal representatives'] consideration of the offer" (at [35]–[36]).

For the same reasons, disclosure of the Advice was not supported by special circumstances, nor did the interests of justice require disclosure of the Advice.

Conclusion

The Court dismissed the application on the basis that legal professional privilege was not waived, and disclosure of the Advice was not supported by special circumstances, nor was disclosure of the Advice required in the interests of justice.