Khao Thai Pty Limited -v- Coles Myer Properties Holdings Limited [2000] NSWADT 176

CITATION: Khao Thai Pty Limited -v- Coles Myer Properties Holdings Limited [2000] NSWADT 176 DIVISION: Retail Leases Division APPLICANT Khao Thai Pty Limited PARTIES: RESPONDENT Coles Myer Properties Holdings Limited FILE NUMBER: 005024 HEARING DATES: 23/11/2000 SUBMISSIONS CLOSED: 11/23/2000 DATE OF DECISION: 11/29/2000

BEFORE: Hennessy N (Deputy President) APPLICATION: Privilege - legal professional privilege MATTER FOR DECISION: Preliminary matter LEGISLATION CITED : Retail Leases Act 1994 CASES CITED: Telstra Corporation Ltd v BT Australasia Pty Limited (1998) 85 FCR 151 Esso Australia Resources Ltd v The Commissioner of Taxation [1999] HCA 67 APPLICANT REPRESENTATION: P Tiernan, solicitor RESPONDENT J Simpkins SC, barrister ORDERS: 1. The respondent is granted access to the following documents: (1) Draft typed letter dated 22/05/97 from Charles Thomson to Graham Terry; (2) Typed file note dated 29/05/97 by a solicitor of Gray Perkins recording communication with Charles Thomson; and (3) Handwritten file note dated 19/01/98 by a solicitor of Gray and Perkins recording communications with Charles Thomson.

Introduction 1 The substantive proceedings in this case relate to relief in respect of a retail lease dated 27 March 1998. The applicant is the lessor of premises at Sydney Central Plaza. The respondent is the lessor. The applicant runs a take-away food business at those premises. 2 These preliminary proceedings arise from a summons which was issued by the respondent and addressed to John Gray, Charles Nye, Timothy Crumpton, Stephen Plczynski and Miles Anderson trading as Gray and Perkins, solicitors. Gray and Perkins are the former solicitors of the applicant. 3 Two bundles of documents were produced in response to the summons. The applicant claimed legal professional privilege over the first bundle which contains eleven discrete documents. The respondent submitted that the applicant had waived any claim of legal professional privilege over three of those documents and sought access to them. 4 This matter was heard on 24 November 2000 and the decision was reserved. Set out below are the reasons for the Tribunal's determination that the respondent should be given access to the documents in issue. Documents in issue 5 The three documents in issue are described in the applicant's list of documents as follows: · Draft typed letter dated 22/5/97 from Charles Thomson to Graham Terry. Not sent, referring to shop and its inter-tenancy walls; · Typed file note dated 29/5/97 by a solicitor of Gray and Perkins recording communication with Charles Thomson for and on behalf of Khao Thai; and · Handwritten file note dated 19/1/98 by a solicitor of Gray and Perkins recording communications with Charles Thomson for and on behalf of Khao Thai. Issue 6 Both parties agreed that the applicant could claim legal professional privilege over these documents. The issue was whether the applicant had waived that privilege. Applicant's submission 7 Mr Tiernan on behalf of the applicant, submitted that legal professional privilege has not been waived in relation to these documents. While the applicant has specifically waived any entitlement to legal professional privilege in relation to certain documents which are annexed to affidavits in these proceedings, the applicant has not, expressly or by implication, waived its privilege over the three documents in question. Respondent's submissions 8 The respondent relied on the Federal Court's decision in Telstra Corporation Ltd v BT Australasia Pty Limited (1998) 85 FCR 151. Briefly, the majority of the Federal Court (Branson and Lehane JJ) decided that in some circumstances, a party can be taken to have waived legal professional privilege in relation to certain legal advice at common law and for the purposes of s 122(1) of the Evidence Act 1995 (Cth). These circumstances are where a party relies on a course of action an element of which is the party's state of mind, including the quality of the party's assent to a transaction. The legal advice must be advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind. 9 In this case, senior counsel for the respondent submitted that the applicant had claimed relief arising from an alleged representation by the respondent that there would be only one outlet at Sydney Central Plaza selling Thai and Malaysian food. In the Second Further Amended Application, at paragraph 10(xii), the applicant claims a sum of money and rent reduction as a result of certain actions of the respondent. These actions are particularised as: From on or about 15 October 1999 the Respondent has permitted and continues to permit, Thai food and Malaysian food to be sold by retail by the following lessees: Chop Chop, Fish Delish, Mr Goodpie, Crepe Expectations, All that Sizzles, Anytime Yum Cha, contrary to the Respondent's stated intention that it would not "have more than one operator of Thai and Malaysian Food" in the Sydney Central Plaza." 10 The alleged representations are set out in the affidavit of Charles Thomson dated 27 October 2000, at paragraphs 43 and following. In particular, the affidavit refers to a meeting Charles Thomson (a director of Khao Thai Pty Limited) had with his solicitors at the time, Gray and Perkins. The subject matter of that meeting was the condition in a letter of offer from the respondent that "It is our intention not to have more than one operator of Thai and Malaysian food." 11 In paragraph 72 of Mr Thomson's affidavit of 27 October 2000, he states, in part, that: I on behalf of the Applicant had signed a "letter of acceptance" stating that there would be no other operator in Sydney Central Plaza allowed to sell Thai and/or Malaysian food. The applicant relied upon this representation and were induced to take the retail outlet at a premium rental, far above many other food tenancies' rental payments because of the expected exclusivity of product of sale. 12 The respondent submitted that the affidavit refers to selected communications with Mr Thomson and his solicitors. Once the question of Mr Thomson's state of mind in relying on the alleged representations as to exclusivity was put in issue, the respondent submitted that legal professional privilege has been waived for the entirety of the communications with Mr Thomson and his solicitor for the relevant period. 13 The respondent submitted that privilege would only be waived in relation to those communications which took place prior to entering into the lease on 27 March 1998. Consequently, the respondent argued that waiver related to the three documents set out above. Reasons for decision 14 In relation to proceedings for production of documents under summons in this Tribunal, any claim for privilege is governed by the common law. 15 It is a substantive principle of the common law that a person is entitled to preserve the confidentiality of statements and other materials which have been made or brought into existence for the dominant purpose of seeking or being furnished with legal advice by a practising lawyer. (Esso Australia Resources Ltd v The Commissioner of Taxation [1999] HCA 67. ) 16 As discussed by the majority in Telstra Corporation v BT Australasia Pty Ltd, (see para X above), the privilege can be waived either expressly or impliedly. 17 In this case, the Tribunal is satisfied that the applicant has impliedly waived legal professional privilege over certain communications with their former solicitors. 18 The applicant has put in issue the question of Mr Thomson's state of mind in relation to alleged representations made in relation to exclusivity. In detailing the content of a conversation Mr Thomson had with his solicitors which was relevant to that issue, the applicant impliedly waived its privilege over other communications which took place before the lease was signed. These communications are relevant to an issue in dispute between the parties, namely the state of mind of Mr Thomson when he signed the lease. If these communications are not disclosed then the Tribunal would not have access to all the information potentially relevant to the issues in dispute. The conversation referred to in the affidavit of 27 October 2000 must be placed in the context of all the relevant communications between solicitor and client. Orders 19 The respondent is granted access to the following documents: (1) Draft typed letter dated 22/5/97 from Charles Thomson to Graham Terry; (2) Typed file note dated 29/5/97 by a solicitor of Gray and Perkins recording communication with Charles Thomson; and (3) Handwritten file note dated 19/1/98 by a solicitor of Gray and Perkins recording communications with Charles Thomson.