Schmuelly v Elrob Construction Group Pty Ltd (waiver of privilege)

HER HONOUR: The plaintiff seeks to tender a bundle of documents produced by the defendants' former solicitor in answer to subpoena. The subpoena called for inter alia:

The defendants object to the tender of the material on the basis of client legal privilege. The plaintiff submits that any client legal privilege has been lost by an affidavit made by the second defendant, Mr Boujaoude, filed in support of a motion to vacate the hearing today.

In that affidavit, Mr Boujaoude said that the defendants retained solicitor Mark Smith of Brander Smith McKnight on 20 June 2024 and, on 24 June 2024, paid the solicitor $20,000 on account of costs. Mr Boujaoude attributed the defendants’ failure to file any lay or expert evidence in support of their defence and cross-claim on Mr Smith, "despite being paid in advance". Mr Boujaoude further deposed, "Despite assurances by Mr Mark Smith he failed to file my lay and expert evidence or seek leave to file out of time by the Court deadline of 5 July 2024, thereby prejudicing my case."

In addition, Mr Boujaoude said that Mr Smith failed to notify him in a timely manner that he had ceased to act for the defendants. Mr Boujaoude said that he only discovered this recently via an email from the plaintiff's solicitor on 20 January 2025. Mr Boujaoude deposed, "As a result of this late notification, I was left without legal representation just two weeks before the hearing … this has significantly impaired my ability to prepare for the hearing and secure new counsel."

Section 122 of the Evidence Act 1995 (NSW) provides that client legal privilege may be waived in a number of circumstances, including:

In short, “It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects waiver of the privilege”: Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 at [28]. And further, at [29]:

The principles in Mann v Carnell “apply with equal force” to the statutory criteria: Expense Reduction Analysts Group Pty Limited v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46 at [32] per French CJ, Kiefel, Bell, Gagelar and Keane JJ.

Having regard to Mr Boujaoude’s affidavit, I consider that the defendants have waived privilege over communications with Mr Smith in relation to the instructions given and steps taken to prepare lay and expert evidence in this matter and why that evidence was not filed. In addition, privilege has also been waived over communications with Mr Smith in relation to whether or not the defendants were notified in a timely manner that he was ceasing to act for the defendants. It would be inconsistent for the defendants to assert that the solicitor failed to attend to these tasks and to also maintain privilege over communications with the solicitor in respect of those tasks. That is, it would be unfair in the relevant sense for the defendants to maintain privilege in the circumstances.

Assuming that the documents produced by the solicitor and now tendered fall within the schedule to the subpoena, then I consider that privilege has been waived and the documents are admissible, and I admit the documents. If, on closer review, any of the documents fall outside the schedule to the subpoena, then I will reject those documents in due course, as privilege over any such material may not have been waived.