Implied waiver

LPP will be waived impliedly when the actions of the person entitled to the privilege are inconsistent with maintaining LPP.¹  The High Court in Mann v Carnell² considered circumstances in which LPP will be impliedly waived and noted that where particular conduct is inconsistent with the maintenance of the confidentiality which LPP seeks to protect:

… the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege…³

The decision of Mann v Carnell⁴ marked a change in the court’s approach to determining whether LPP has been impliedly waived.  The High Court emphasised that inconsistency, rather than fairness,⁵ is the appropriate test:

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.⁶

Partial disclosure

Partial disclosure of a privileged document may not constitute implied waiver of the entire document, if the document deals with more than one subject matter and the information that was disclosed is severable from the remainder of the document.⁷  However, where a document that has been partially disclosed deals with a single subject matter, a LPP claim on the remainder of the document may be inconsistent and unfair because the other party may be ‘misled by an inaccurate perception of the disclosed communication’.⁸ 

Where one document among a series of documents is disclosed, all related communications may lose their privilege through the implied waiver of ‘associated material’.⁹

Disclosure of the substance or effect of communications

Importantly, merely referring to the existence of legal advice is not inconsistent with the maintenance of privilege attaching to that advice.¹⁰  However, if the substance or effect of the advice is disclosed, LPP may be impliedly waived for the entire communication.  In Ampolex¹¹ a public statement that ‘legal advice supported [the party’s] position’ was held to be a disclosure of the substance of the legal advice, rather than its mere existence, and as such privilege was impliedly waived on the entirety of the legal advice.

Whether disclosure of the substance of the legal advice will impliedly waive the privilege will depend on whether disclosure is consistent with the maintenance of confidentiality having regard to the purpose of the disclosure.¹²   In Mann v Carnell¹³ disclosure of the substance or effect of the legal advice for the purposes of ‘explaining and justifying’ the actions of a member of Parliament was consistent with maintenance of the privilege, however disclosure of the substance or effect of the legal advice for ‘forensic or commercial purposes’ was not consistent with maintenance of the privilege.¹⁴

In Federal Commissioner of Taxation v Devereaux Holdings Pty Ltd ¹⁵ the failure to claim LPP in respect of documents produced under Freedom of Information legislation, did not waive LPP in respect of the underlying documents.

Minister for Education v Lovegrove Turf Services Pty Ltd deals with the issue of implied waiver in a government context.¹⁶

Disclosure for a limited and specific purpose

Where privileged communications are disclosed to a third party for a limited and specific purpose and ‘upon terms that the third party would treat the information as confidential’,¹⁷ LPP may still be claimed in respect of those communications, albeit not in regards to that third party.¹⁸

However, disclosure of privileged communications for the purpose of one proceeding or procedure will result in an implied waiver for the purpose of another proceeding or procedure where the general correspondence between the parties arises out of the same or a closely connected dispute.¹⁹

Issue waiver

Where the holder of LPP puts their state of mind in issue before the court and their state of mind can only be determined with reference to privileged communications, LPP may be impliedly waived.  This is referred to as “issue waiver” and it only arises where the privilege holder puts his or her own state of mind in issue.²⁰ 

For example, privileged communications may be relevant to determine a person’s state of mind in the following situations:

• mistake as to contract²¹
• reliance on some representation²²
• misleading and deceptive conduct²³
• undue influence;²⁴ and
• legal professional negligence.²⁵

Issue waiver is a type of implied waiver and will therefore only arise where the actions of the privilege holder are inconsistent with the maintenance of the privilege. In DSE Holdings²⁶ it was explained that:

The inconsistency or unfairness arises from the putting in issue of a state of mind and maintaining confidence in communications which were relevant to the formation of that state of mind…²⁷