FEDERAL COURT OF AUSTRALIA Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 4) [2017] FCA 979 File number: NSD 1639 of 2007 Judge: NICHOLAS J Date of judgment: 23 August 2017 Catchwords: EVIDENCE – Legal Professional Privilege – whether implied waiver by reason of statement of intention appearing in affidavit served by privilege holder Cases cited: Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No 3) (2013) 306 ALR 414 Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 Commonwealth of Australia v Sanofi [2017] FCA 382 Council of the New South Wales Bar Association v Archer (2008) 72 NSWLR 236 DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68 Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 Date of hearing: Determined on the papers Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 14 Counsel for the Applicant: Mr PJ Brereton SC with Mr BR Kremer and Mr PM Knowles Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr JC Sheahan QC with Mr S Fitzpatrick Solicitor for the Respondents: Jones Day Counsel for Apotex Pty Ltd, Apotex Inc and Apotex Research Private Ltd: Mr SG Habib SC with Ms JM Beaumont Solicitor Apotex Pty Ltd, Apotex Inc and Apotex Research Private Ltd: Ashurst ORDERS NSD 1639 of 2007 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant AND: SANOFI (FORMERLY SANOFI-AVENTIS) First Respondent SANOFI-AVENTIS US LLC Second Respondent BRISTOL-MYERS SQUIBB INVESTCO LLC Third Respondent JUDGE: NICHOLAS J DATE OF ORDER: 23 August 2017 THE COURT ORDERS THAT: 1. Subject to order 2, the application for access to the documents produced by Apotex Pty Ltd ("Apotex") in answer to the subpoena for production dated 4 August 2017 issued at the request of the Commonwealth that are the subject of a claim of legal professional privilege be refused. 2. By 4.00pm today, Apotex provide to the other parties subject to the existing confidentiality regime: (a) a further redacted copy of the email from Roger Millichamp to Stephen Haas dated Friday, 29 June 2007 (8.13am) of seven paragraphs in which the first sentence of the third paragraph is unredacted; and (b) an unredacted copy of the email from Andrew Kay to Roger Millichamp dated Wednesday, 6 August 2008 (12.23am) of three paragraphs (excluding other parts of the email chain that are the subject of a claim for legal professional privilege). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT NICHOLAS J: 1 Apotex Pty Ltd ("Apotex") has produced documents to the Court pursuant to a subpoena for production ("the Subpoena") issued at the request of the Commonwealth on 4 August 2017. 2 The documents that Apotex was required to produce to the Court pursuant to the Subpoena are the documents and things referred to in paragraphs 42 and 69 of an affidavit made by Mr Roger Millichamp, the managing director of Apotex, on 7 July 2017. That affidavit was filed by the Commonwealth and is to be relied upon by it in support of its claim against the respondents ("the Sanofi parties") for compensation pursuant to the Sanofi parties' undertakings as to damages. It is important to note that Mr Millichamp's affidavit of 7 July 2017 was filed by the Commonwealth. The Commonwealth proposes to read that affidavit at the hearing of its compensation claim. 3 Apotex, Apotex Inc and Apotex Research Private Ltd (collectively "the Apotex companies") have made a claim of legal professional privilege ("LPP") in relation to some of the documents that Apotex produced in answer to the Subpoena. The question to be decided is whether LPP in any of those documents ("the relevant documents") has been waived. For the purpose of deciding this question I have reviewed each of the relevant documents. 4 Each of paras 42 and 69 of Mr Millichamp's affidavit state that: Were it not for the restriction contained in the Settlement Agreement ... Apotex Australia would now agree to voluntarily produce that material to the Commonwealth (and also to the Sanofi Parties and the Court) to the extent it is relevant for the purpose of this proceeding and subject to the agreed confidentiality regime. The reference to the Settlement Agreement is to the deed of settlement made between the Apotex companies and the Sanofi parties dated 4 November 2014 that is the subject of an earlier judgment (Commonwealth of Australia v Sanofi [2017] FCA 382). 5 Despite the statements in paras 42 and 69 of Mr Millichamp's affidavit none of the Apotex companies are willing to voluntarily waive any LPP in the relevant documents even though the Sanofi parties have recently made it clear that they consent to the Apotex companies doing so. 6 The Commonwealth contends that the Apotex companies have waived any LPP in the relevant documents as a result of the Apotex companies having filed two previous affidavits made by Mr Millichamp on 9 April 2011 ("the first affidavit") and 30 April 2013 ("the second affidavit") which formed part of the affidavit evidence on which the Apotex companies proposed to rely in support of the compensation claims they made against the Sanofi parties. 7 One question that was raised in the compensation proceeding between the Apotex companies and the Sanofi parties was what would Apotex have done had it not been bound by the relevant interlocutory restraints which prevented Apotex from (inter alia) supplying the relevant Apotex products or making any application to have them listed on the PBS. Mr Millichamp states at para 72 of his first affidavit that, absent the restraints, it was his intention to list the Apotex products on the PBS Schedule as soon as possible and that Apotex would have been marketing the products and taking orders for them from on or around 1 January 2008. Similar statements appear in paras 202, 203 and 211 of Mr Millichamps's first affidavit. 8 The Commonwealth submitted that these statements in Mr Millichamp's first affidavit, and others like them in the second affidavit, gave rise to an implied waiver of LPP because they "set out his actual intentions (i.e. state of mind) in the period leading up to the imposition of the restraints." 9 The Commonwealth relied on the judgment of Allsop J (as the Chief Justice then was) in DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 in which his Honour discussed the circumstances in which a party by its pleadings or evidence may be taken to have waived LPP in communications that relate to the party's state of mind. His Honour referred to the judgment of Hodgson J (as his Honour then was) in Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87. In that case Hodgson J said at 94-95: If a party, by pleadings or evidence, expressly or impliedly makes an assertion about the content of confidential communications between that party and a legal adviser, then fairness to the other party may mean that this assertion has to be taken as a waiver of any privilege attaching to the communication. 10 After referring to various other authorities in which implied waiver of privilege was considered, including cases of undue influence, Allsop J said in DSE at [58]: It is unnecessary to explore the existence or extent of any such qualification to what Jordan CJ said in Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347 about undue influence or cases such as Re Coomber [1911] 1 Ch 723. It is sufficient to understand, I think, that in most undue influence cases (and in Thomason when its circumstances are appreciated) the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication. Read with an understanding of the effect of the then governing influence of Attorney General (NT) v Maurice (1986) 161 CLR 475 on the views of Hodgson J, the above expression of the matter is consistent with the expression of principle by Hodgson J in Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87. 11 His Honour added at [61]: It is possible that the above expression of principle at [58] above may be seen to be a little wider than that expressed by Hodgson J because, leaving aside the influence of Maurice, his Honour limited the principle to express or implied assertions about the contents of the confidential communication … I would express the matter as including the laying open of the confidential communication 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 by Mann v Carnell (1999) 201 CLR 1 is brought about. But it is the existence of that inconsistency that is important. 12 The Commonwealth also referred to the decision of the Court of Appeal in Council of the New South Wales Bar Association v Archer (2008) 72 NSWLR 236 in which Hodgson JA (with whom Campbell JA and Handley AJA agreed) said at [48] that an implied waiver may arise in a situation where a person makes assertions about his or her state of mind in circumstances where the relevant communications are likely to have affected that state of mind. Hodgson JA said at [48]: … It is not enough to bring about a waiver of client legal privilege that the client is bringing proceedings in which the content of the privileged communications could, as a reasonable possibility, be relevant and of assistance to the other party. For the client to do this is not inconsistent with the maintenance of the privilege, and does not give rise to unfairness of the type in question. What would involve inconsistency and relevant unfairness is the making of express or implied assertions about the content of the privileged communications, while at the same time seeking to maintain the privilege. In this respect, it may be sufficient that the client is making assertions about the client's state of mind, in circumstances where there were confidential communications likely to have affected that state of mind. 13 It is important to emphasise that his Honour was not saying that an assertion as to a person's state of mind will necessarily result in a waiver of LPP in any communication that may have contributed to or influenced that state of mind. The question is whether the person has made any express or implied assertion as to the content of the communication and whether or not there is an inconsistency and any relevant unfairness in doing so while continuing to maintain a claim for privilege. The Full Court in Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 explained the position in this way at [52]: … where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication. See also Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68 at [65] per Yates J and Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No 3) (2013) 306 ALR 414 at [13]-[26] per Wigney J. 14 I am not persuaded that by filing and serving Mr Millichamp's first and second affidavits in support of their claims against the Sanofi parties the Apotex companies have implied waived LPP in any of the relevant documents. In my view Mr Millichamp's statements of intention do not make any express or implied assertion as to the content of any of the relevant documents. Nor do I perceive any inconsistency in the Apotex parties serving an affidavit by Mr Millichamp deposing to his intentions as he did while at the same time maintaining claims to LPP in the relevant documents. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 23 August 2017