WCX M4-M5 Link AT Pty Ltd in its personal capacity and its capacity as trustee of the WCX M4-M5 Link Asset Trust v Acciona Infrastructure Projects Australia Pty Ltd

1. [1]

   HER HONOUR: Before the Court are two applications:

2. [2]

   An initial issue arose as to whether, by an affidavit served by the Contractor and the Contractor’s written submissions, the Contractor had waived client legal privilege in respect of communications between the Contractor and its former solicitors, MinterEllison. To meet this concern, the Contractor did not read particular words in the affidavit and withdrew portions of the written submissions. The suggestion that privilege had been waived was pressed. (Imprecisions in this judgment as to the precise identity of the parties and contractual regime should be politely overlooked and will be corrected in the judgment in respect of the applications.)

Facts

1. [3]

   On 25 February 2022, these proceedings were commenced by Summons supported inter alia by an affidavit of the plaintiffs’ solicitor, Hamish Macpherson, who described the contractual regime between the parties, in particular:

2. [4]

   On 27 February 2022, the Contractor filed the motion seeking a stay of the proceedings. On 4 March 2022, the plaintiffs filed a Technology and Construction List Statement which pleaded, inter alia, that on 16 December 2020, an expert determination had been delivered, interpreting clause 11.10(e)(i) of the Project Deed such that the plaintiffs were responsible for a contamination issue which had arisen in respect of the construction of the M4-M5 Link. As this was a “Linked Dispute” under the D&C Deed, the Contractor was bound by the expert determination such that any direction or instruction to the Contractor under the D&C Deed to undertake design and construction works to address the contamination issue was not a “Change” under the D&C Deed.

3. [5]

   On 10 March 2022, the Contractor filed a Technology and Construction List Response, contending that it was not bound by the expert determination as an exception to the binding nature of the determination of a Linked Dispute applied: the plaintiffs had made a “concession” to Transport for NSW in respect of the Linked Dispute “without first obtaining the prior written consent of the Contractor to such … concession (such consent not to be unreasonably withheld or delayed)”: clause 3.3(g)(ii)(B), D&C Deed.

4. [6]

   On 15 March 2022, the plaintiffs filed a Reply. As to the suggestion that a concession had been made without consent, the plaintiffs referred to a preliminary conference on 8 October 2020 held for the purpose of making directions for the conduct of the expert determination. During a break in the conference, a telephone conversation was said to have occurred between the plaintiffs’ solicitors and counsel (Michael Christie SC and David Hume) and Peter Wood of MinterEllison regarding a proposal to make a concession, during which Mr Wood agreed the concession should be made. The precise terms of the concession were then crafted by counsel and circulated by email, including to Mr Wood, accepted by the plaintiffs’ solicitor, proposed to Transport for NSW’s solicitor and counsel and accepted. The expert was then informed that the concession had been agreed between the parties and made directions accordingly. The next day, a draft of the directions made by the expert, including the concession, was circulated, including to Mr Wood, who confirmed that he agreed that the documents could be provided to the expert. The plaintiffs contended that these matters, whether alone or in combination, constituted prior written consent on the part of the Contractor within the meaning of clause 3.3(g)(ii)(B).

5. [7]

   On 16 March 2022, the Contractor’s project director, Andrew Marsonet, affirmed an affidavit which, as ultimately read, deposed:

6. [8]

   Later that evening, Mr Macpherson swore a further affidavit describing a “Linked Disputes Protocol” agreed between representatives of the plaintiffs and the Contractor, which applied to various disputes including the expert determination in question. Further, Mr Macpherson described what was said at the preliminary conference held on 8 October 2020. Mr Macpherson also stated that Mr Christie SC and Mr Hume were “counsel chosen and retained by the Contractor”.

7. [9]

   On 18 March 2022, the plaintiffs filed a motion seeking leave to amend their Technology and Construction List Statement, adding a plea of estoppel that, by the Contractor proposing and drafting, through its counsel, the concession, the Contractor conducted itself on the basis that the expert determination of the contamination dispute would be binding on the Contractor. Further, the Contractor knew that the plaintiffs assumed that the Contractor considered the dispute would be binding on the Contractor, such knowledge to be inferred from the terms of the Linked Disputes Protocol and that the Contractor, through its counsel, proposed and drafted the concession. Had the plaintiffs apprehended that the Contractor did not consider itself so bound, the plaintiffs would not have made the concession. The plaintiffs also sought leave to amend their Reply to add that, by reason of events as already particularised in the Reply, clause 3.3(g)(ii)(B) did not apply “because the Concession was proposed by the Contractor, not by the [plaintiffs]”.

8. [10]

   On 28 March 2022, Mr Macpherson swore an affidavit in support of the estoppel claim, advising that he was informed by the General Counsel of his client that he proceeded on the assumption now proposed to be pleaded in making the concession in the expert determination and would have proceeded otherwise if he understood that the Contractor did not consider itself bound by the expert determination. Also on 28 March 2022, the plaintiffs’ filed a motion seeking leave to issue a subpoena to produce and give evidence to Mr Wood. Ball J made orders for short service of the subpoena on Mr Wood and, on 30 March 2022, made orders for access to the documents produced in answer to the subpoena and directions for submissions in respect of any privilege claims, standing over the determination of such claims to the hearing before me.

9. [11]

   Also on 28 March 2022, the Contractor provided reply submissions. The plaintiffs’ written submissions of 23 March 2022 had described the role of Mr Christie SC and Mr Hume in some detail, including that both counsel had been engaged by the Contractor’s solicitor, MinterEllison. Further, according to the Linked Dispute Protocol, whilst the counsel would appear for the plaintiffs, they would, in effect, be instructed by the Contractor. In the reply submissions, the Contractor’s counsel submitted that the plaintiffs’ submissions mischaracterised the facts as Mr Christie SC and Mr Hume were appearing in the preliminary conference on behalf of the plaintiffs and instructed by the plaintiffs’ solicitors. At paragraph 17: (emphasis added)

10. [12]

    Further, at paragraph 19 and 21: (emphasis added)

11. [13]

    In addition, the Contractor’s reply submission, as ultimately put in paragraph 22 was:

12. [14]

    There is an abundance of documents before the Court which make plain that MinterEllison acted for the Contractor and had briefed Mr Christie SC and Mr Hume. As the Contractor had no right to appear at the preliminary conference, it was agreed between the solicitors for the plaintiffs and the Contractor that the plaintiffs’ solicitor would instruct counsel at the preliminary conference, to which the Contractor agreed. The Linked Dispute Protocol, however, also made plain that the Contractor would instruct counsel and prepare written communications in relation to the Linked Disputes. Indeed, Mr Christie SC formally confirmed that he was briefed by the plaintiffs’ solicitor “but that I will not charge KWM”. The subtleties of the capacity in which counsel were appearing at the preliminary conference were communicated to the legal representatives for Transport for NSW.

13. [15]

    Also in evidence are documents produced in answer to the subpoena to MinterEllison over which no claim for privilege is made, including counsels’ fee agreements and fee notes. These make plain that both counsel were retained by the Contractor’s solicitor and rendered fee notes from time to time, including in relation to the preliminary conference. Some of those conferences did not include the plaintiffs’ legal representatives. Thus, whilst counsel were formally instructed by the plaintiffs’ solicitors at the preliminary conference, the Contractor’s solicitors were also separately providing instructions to counsel.

Consideration

1. [16]

   There is no doubt that the communications in question are privileged. The rationale underlying client legal privilege in a situation such as this was explained by Gleeson CJ in Benecke v National Australia Bank (1993) 35 NSWLR 110 at 111-112:

2. [17]

   The question is whether the privilege has been waived. As the privileged documents were produced in answer to a subpoena, the common law applies, although senior counsel agreed that there was little to distinguish the common law test with that of section 122(2) of the Evidence Act 1995 (NSW). Drawing on my judgment in In the matter of Northern Energy Corporation Ltd [2020] NSWSC 1073, a person who would otherwise be entitled to the benefit of legal privilege may waive that privilege; “It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege”: Mann v Carnell (1991) 201 CLR 1; [1999] HCA 66 at [28] (per Gleeson CJ, Gaudron, Gummow and Callinan JJ). And further, at [29]:

3. [18]

   In order to determine whether there has been waiver of client legal privilege, the Court is bound to analyse the acts or omissions of the privilege holder that are said to be inconsistent with the maintenance of the privilege: Commissioner of Taxation v Rio Tinto Limited (2006) 151 FCR 341; [2006] FCAFC 86 at [45]. Mere reference to the existence of a privileged communication will not suffice; waiver ordinarily only occurs where the contents of privileged communications are relied upon: Hastie Group Limited (in liq) v Moore (t/as Deloitte Touche Tohmatsu) [2016] NSWCA 305; (2016) 339 ALR 635 at [53] (per Leeming JA). As Allsop J (as his Honour then was) summarised the position in DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151; [2003] FCA 1191 at [61], privilege will be waived where a confidential communication has been laid open to necessary scrutiny and by so doing, that is, by expressly or impliedly making an assertion about the contents of the communication or laying the communication open to scrutiny, the inconsistency enunciated in Mann v Carnell is brought about. Further, “quite specific inconsistency is necessary to establish waiver. Even reference to legal advice, without more, will not suffice. The inconsistency must be reasonably manifest”: Cantor v Audi Australia Pty Ltd [2016] FCA 1391 at [99].

4. [19]

   A similar situation to the one at hand arose in Benecke, where a client alleged that her barrister had settled proceedings without instructions. The client, however, claimed privilege over what instructions had been given. Gleeson CJ held that the privilege had been waived, at 111:

5. [20]

   Likewise, Clarke JA observed at 116:

6. [21]

   Here, the pleadings put in issue the extent to which Mr Christie SC and Mr Hume were proposing, drafting and making the concession on the instructions of, and with the authority of, the plaintiffs alone or also the Contractor. In determining this issue, the Contractor was entitled to maintain privilege over communications with its then solicitor, MinterEllison, which might have assisted the Court to establish the true position.

7. [22]

   However, fairly read, the Contractor’s position as contained in its reply submissions was that counsels’ instructions and authority, when making the concession, came from the plaintiffs’ solicitors alone. Thus, the proposition sought to be advanced by the Contractor, both by the Technology and Commercial List Response and as elaborated upon in the Contractor’s reply submissions is that the instructions to give the concession were given by the plaintiffs’ solicitor alone where the counsel giving effect to those instructions were, in fact, retained by – and, in large part, instructed by – the Contractor.

8. [23]

   I consider that there is an inconsistency between advancement of a positive case by the Contractor – that the counsel were instructed by the plaintiffs alone – and maintaining privilege over any instructions which, in fact, the Contractor also gave to counsel which formed the basis, or part of the basis, of the instructions on which they acted in giving the Concession. For these reasons, I consider that privilege has been waived.