Reported Decision : 115 LGERA 332 Land and Environment Court of New South Wales CITATION : Yanchenko & Anor v Hornsby Shire Council [2001] NSWLEC 166 APPLICANTS Victor Yanchenko PARTIES : Robbyn Yanchenko RESPONDENT Hornsby Shire Council FILE NUMBER(S) : 10241 of 2001 CORAM: Talbot J KEY ISSUES: Practice and Procedure :- claim for legal professional privilege in class 1 proceedings. Evidence :- notice to produce - legal professional privilege - whether waived - operation and interaction of common law principles Land and Environment Court Rules Supreme Court Rules and the Evidence Act in class 1 proceedings. Land and Environment Court Act 1979 LEGISLATION CITED: Land and Environment Court Rules 1996 Supreme Court Rules 1970 Evidence Act 1995 Attorney-General for the Northern Territory v Maurice & Ors (1986) 161 CLR 475; Baker v Campbell (1983) 153 CLR 52; CASES CITED: Benecke v National Australia Bank (1993) 35 NSWLR 110; Mann v Carnell 201 CLR 1; Multistar Pty Limited v The Minister for Urban Affairs & Planning & Anor [2000] NSWLEC 231, unreported DATES OF HEARING: 24/07/01 DATE OF JUDGMENT: 07/30/2001 APPLICANT Mr I J Hemmings (Barrister) SOLICITORS Mills Cameron Gallagher LEGAL REPRESENTATIVES: RESPONDENT Mr M J Connell (Solicitor) SOLICITORS Michell Sillar JUDGMENT: IN THE LAND AND Matter No. 10241 of 2001 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 30 July 2001 Victor Yanchenko and Robbyn Yanchenko Applicants v Hornsby Shire Council Respondent REASONS FOR JUDGMENT 1. The applicants in these class 1 proceedings have issued a Notice to Produce dated 27 June 2001 addressed to the respondent council requiring it to produce a Council Officers Report No. PLN 204\00 ("the Council report") "including the two page confidential attachment to that report being a letter from Michell Sillar". 2. There is an issue in the proceedings regarding the ability of the applicants to drain the subject land from the rear of their property across an existing easement to a natural watercourse. 3. In the course of the Council report the reporting officers made the following statement:- The applicant submitted a number of articles for consideration as to whether he had the right to drain into the downstream depression. Council sought advice from its solicitors (Michell Sillar) as to whether or not the owner of 18 Beecroft Road (Lot 33) had an existing right to drain stormwater to Blackwood close, or whether he should be required to obtain a drainage easement. It was Council's solicitor's view that Council shall require the owner of Lot 33 to obtain a new drainage easement to connect to Council's drainage system as a condition of its consent to the subdivision applications. 4. A footnote to the Council report notes amongst the attachments as follows:- Letter from Michell Sillar (2 pages) CONFIDENTIAL – (This attachment contains advice concerning litigation, or advice which would otherwise be privileged from production in legal proceedings on the grounds of legal professional privilege) 5. The respondent submits that the letter from its solicitors is protected by legal professional privilege. The legislation 6. The Notice to Produce has been issued pursuant to Pt 13 r 32 of the Land and Environment Court Rules ("the LEC Rules") which provides:- (1) A party served a notice under this rule must, unless the Court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production. (2) This rule applies if a party to proceedings serves on another party notice requiring the party served to produce at a hearing, conference or call-over in the proceedings a document or thing for the purpose of evidence, and the document or thing is in the possession, custody or power of the party served. 7. Mr Hemmings, who appears for the applicant, recognises that Pt 36 of the Supreme Court Rules ("the SC Rules") has no direct application to class 1 proceedings. Furthermore, s 38(2) of the Land and Environment Court Act 1979 ("the Court Act") stipulates that in proceedings in class 1 of the Courts jurisdiction the Court is not bound by the rules of evidence. 8. Nevertheless, Mr Hemmings relies upon s 67 of the Court Act to apply Pt 36 of the SC Rules. This is because s 67 provides that the Court shall have and may exercise the functions vested in the Supreme Court in respect of compelling the production, discovery and inspection of books, records, documents and other papers. 9. He then relies upon Pt 36 r 13 of the SC Rules which applies where a party is required by a notice served under r 16(1) to produce any document. Pt 36 r 16 is compendious but for present purposes has the same effect as Pt 13 r 32 of the LEC Rules. According to Mr Hemmings this Court can, pursuant to s 67 of the Court Act, exercise the functions vested in the Supreme Court under Pt 36 r 13 of the SC Rules when adjudicating a claim for privilege. 10. Mr Hemmings' submission on behalf of the applicants therefore is, that in the course of compelling production of documents, pursuant to Pt 13 r 32 of the LEC Rules, the Court exercises the function of dealing with privilege under Pt 36 r 13 of the SC Rules pursuant to s 67 of the Court Act. 11. Part 36 r 13 of the SC Rules provides that the Court shall not compel the production of a document unless the Court directs that the production shall not be prevented over the objection of a person if evidence of the document could not be adduced over the objection of the person by virtue of the operation of Pt 3.10 Div 1 of the Evidence Act 1995 ("the Evidence Act"). 12. In the result, notwithstanding that the rules of evidence do not apply and that Pt 36 of the SC Rules is not incorporated by Pt 6 r 1 of the LEC Rules, according to Mr Hemmings questions of client legal privilege are to be determined under Pt 3.10 of the Evidence Act. 13. In this respect, Mr Hemmings relies upon s 122(2) of the Evidence Act to claim that the client legal privilege has been waived as a consequence of the council "knowingly and voluntarily" disclosing the substance of the evidence in the Council report which became a public document at the open meeting of council where it was discussed. 14. Moreover, it is Mr Hemmings' contention that even if the Court is not satisfied that Pt 3.10 of the Evidence Act applies, nevertheless the benefit of legal professional privilege has been waived by the publication of the report in accordance with common law privilege. 15. In a joint judgment by Gleeson CJ, Gaudron, Gummow and Callinan JJ in Mann v Carnell 201 CLR 1 at p 13, it was explained that what brings about the waiver of legal professional privilege at common law is the inconsistency between the conduct of a client who is entitled to the benefit of confidentiality and the maintenance of the confidentiality which the privilege is intended to protect ( Benecke v National Australia Bank (1993) 35 NSWLR 110). 16. The Court said at p 13 as follows:- What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. 17. Section 122 of the Evidence Act does not, in terms, take into account the inconsistency referred to by the High Court in Mann. 18. Finally, in passing, Mr Hemmings says that if the express provisions of Pt 13 r 32 in the LEC Rules mean that Pt 36 r 13 of the SC Rules can have no application unless the Notice to Produce is served under r 16(1) of the SC Rules the applicant could nevertheless cause the Court to issue a subpoena. 19. In Multistar Pty Limited v The Minister for Urban Affairs & Planning & Anor [2000] NSWLEC 231, unreported, Lloyd J relied upon Benecke and other authorities mentioned in par 7 and par 8 to find that a council had publicly disclosed the substance of legal advice in two reports and that accordingly it could no longer claim privilege in respect of that legal advice. Lloyd J was dealing with the provisions of the Evidence Act in Multistar . 20. Mr Connell, who appears for the council, relies upon Pt 13 r 32 of the LEC Rules to prevent a consideration of the SC Rules pursuant to s 67 of the Court Act. It is the council's primary submission that the principles of the common law apply to the instant case. If, however, Pt 36 r 13 of the SC Rules does apply then the council seeks to distinguish the decision of Lloyd J in Multistar on the facts. 21. The decision by Lloyd J in Multistar was in class 4 of the Courts jurisdiction where the rules of evidence apply in contra-distinction to the present proceedings in class 1. However, as noted in Mann's case, the application of legal professional privilege is not confined to judicial or quasi-judicial proceedings ( Baker v Campbell (1983) 153 CLR 52). 22. Notwithstanding the very detailed and helpful submissions made by Mr Hemmings in relation to the application of Pt 36 of the SC Rules, I am not persuaded that r 13 of that Part can be applied in these class 1 proceedings. Firstly, Pt 6 r 1 does not include a reference to Pt 36 as being taken to form part of the LEC Rules. On the other hand, Pt 6 r 2 does so expressly. Moreover, Pt 36 r 13(b) of the SC Rules is couched in specific terms which rely upon a notice being served under r 16(1) of the SC Rules. 23. Whether the common law or s 122(2) of the Evidence Act applies probably does not have a great deal of bearing on the outcome of the present argument. 24. The question which arises under s 122 of the Evidence Act is whether the council, in its report, knowingly and voluntarily disclosed to the persons who had access to the report the substance of the advice received from the solicitors. It can be gleaned from the analysis by the judges of the High Court in Attorney-General for the Northern Territory v Maurice & Ors (1986) 161 CLR 475 that the common law test is whether the privileged material has been used in such a way by the privilege holder that by virtue of that conduct it becomes unfair to maintain the privilege. There is a question of whether the disclosure touches the point where fairness requires that the material be produced. 25. It is the Courts view that the above quoted paragraph in the Council report identified alternative questions put to the solicitor for advice. These were "whether or not the owner of 18 Beecroft Road (Lot 33) had an existing right to drain stormwater to Blackwood close, or whether he should be required to obtain a drainage easement". 26. The Council report goes on to disclose the substance of the advice, namely that the owner should be required to obtain a drainage easement. It is clear, therefore, that when the council made its decision based, inter alia, on the report it used the advice to its advantage in such a way that it would be unfair to assert that legal professional privilege rendered it immune from procedures compelling production of the material (see Deane J in Maurice at p 493). 27. None of the exceptions in s 122(2)(a), (b), (c) or (d) apply. Accordingly, as the council knowingly and voluntarily disclosed the substance of the evidence in the Council report any benefit of client legal privilege was lost. 28. It is the Courts opinion that the applicants should succeed on the notice of motion so that the respondent council is required to produce the two page letter from Michell Sillar attached to the Council report. 29. The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.