CARES APPLIANCES LTD v SMITHS CITY (SOUTHERN) LTD [2014] NZHC 1979

CARES APPLIANCES LTD v SMITHS CITY (SOUTHERN) LTD [2014] NZHC 1979 [20 August 2014]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2012-409-002451[2014] NZHC 1979BETWEEN CARES APPLIANCES LIMITEDPlaintiffAND SMITHS CITY (SOUTHERN) LIMITEDDefendantHearing: 12 August 2014Appearances: G J Ryan for PlaintiffM Fogarty for DefendantJudgment: 20 August 2014JUDGMENT OF ASSOCIATE JUDGE MATTHEWS[1] Cares Appliances Limited (Cares) sells used household appliances. Smiths City (Southern) Limited (Smiths) sells new appliances. In the course of doing so it receives trade-ins. On 14 April 2008 the companies entered a contract whereby Smiths would sell to Cares trade-ins and items repossessed from defaulting purchasers, on certain terms. On 8 May 2012 Smiths wrote to Cares cancelling the agreement with immediate effect. Cares issued this proceeding challenging Smiths'purported cancellation of the contract. It sought specific performance of the contract, and damages.[2] In its amended statement of claim it has broadened its allegations of breach of contract. It now says that Smiths also breached the contract by failing to supply certain categories of goods which it was obliged to supply, and goods sourced from stores located in areas other than Christchurch, as it was obliged to do. It no longer seeks specific performance of the contract. Although the damages it seeks are presently quantified at $529,185.50, it is in the process of reassessing the damages it says it has incurred.[3] This judgment determines an application for further discovery. The discovery sought falls into two distinct categories. The first category comprises documents and electronic records which Cares maintains Smiths holds, and which itsays are required to enable it to assess the ambit of Smiths' breaches of the contractprior to its termination and the damages it has suffered as a result. The second category of documents comprises those containing legal advice given to Smiths, which is referred to in a letter from Smiths to Cares; Cares says that Smiths has waived the privilege which would otherwise have attached to that advice.[4] In respect of both categories of discovery Cares relies on r 8.7:Standard discoveryStandard discovery requires each party to disclose the documents that are orhave been in that party's control and that are –(a) documents on which the party relies; or(b) documents that adversely affect that party's own case; or(c) documents that adversely affect another party's case; or(d) documents that support another party's case.[5] Cares says that the documents sought are within paragraphs (b) and (d) of this rule. As the documents it seeks have not been discovered it seeks an order pursuant to r 8.19:Order for particular discovery against party after proceeding commencedIf at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party –(a) to file an affidavit stating –(i) whether the documents are or have been in the party's control;and(ii) if they have been but are no longer in the party's control, the party's best knowledge and belief as to when the documentsceased to be in the party's control and who now has control ofthem; and(b) to serve the affidavit on the other party or parties; and(c) if the documents are in the person's control, to make those documentsavailable for inspection, in accordance with rule 8.27, to the other party or parties.[6] Smiths says that the documents now sought are not documents which should have been discovered in terms of r 8.19 and, in the case of some of the documents, that they have either been discovered already or they do not exist. It also says this application has been filed out of time.[7] The issues to be determined are:(a) As a preliminary issue, whether the late filing of the application should result in it not being considered;(b) whether the records in the first broad category of documents are documents that should have been discovered by Smiths under its obligation to give standard discovery in terms of r 8.7;(c) whether the document or documents containing the relevant legal opinion are documents that should have been discovered, on the basis that privilege in respect of them has been waived.Preliminary issue[8] The Court imposed a deadline for the filing of any interlocutory application for further and better discovery, by Minute dated 24 June 2014. The deadline was 4 July. The application was filed on 8 July, four days, or two working days, late. Cares therefore needs leave to file the application out of time.[9] The reason the application was filed out of time is derived from an exchange of correspondence between the solicitors for Cares and Smiths relating to the provision of further discovery. A final response was not received from the solicitors for Smiths until 3 July, the day before the application was due. A director of Cares says that it was not practically possible to bring an application by the due date, as a result.[10] I accept that this is a sound reason for the application having been filed late. Although the granting of leave is opposed by Smiths, Mr Fogarty candidly accepted that he cannot point to any prejudice to Smiths by the application having been filed out of time.[11] Although adherence to court orders is necessary, the running of a case is not a precise exercise and minor aberrations must be tolerated by the parties, or in the absence of such tolerance, by the Court. I have no hesitation in extending time for the filing of the application.First issue[12] The agreement which has given rise to this case contains the following terms of relevance:• "Smiths" agrees to supply to "Cares" all Appliance Trade-In's (White & Grey ware here after referred to as "Appliances") sourced by SmithsCity, Power Store, and their Related Trading Entities• These Items are specifically Trade-In's purchased by "Smiths" andRepossessed items resulting from their various offers and we believethese "Appliances" are required to be under 10 years of age and in good going order subject to "Smiths" assessment• "Smiths" and their Related Trading Entities will no longer sell second hand "Appliances" other than those items classified as C grade. i.e. failed in-house then repaired for resale.[13] The contract also provides that Cares would uplift free of charge appliances over 10 years of age, and that the relevant appliances were to be uplifted from Smiths warehouse in Heathcote "on a regular weekly or as required basis, ideally 25 units per visit".[14] The agreement was subsequently varied in relation to whiteware and greyware appliances received as trade-ins or recovered by repossession which were aged between 10 and 15 years, and the locations from which Cares was to collect items was expanded to other addresses within Christchurch.[15] It is common ground that the agreement came into effect on 14 April 2008.[16] In the application under consideration the documents sought in this category are described thus:1.2.1 All relevant and discoverable documents, from 14 April 2008 todate, relating to "Appliances", as that term is defined in theAmended Statement of Claim (Appliances), but with Appliances specifically including the following:1.2.1.1 Television, audio and computer appliances;1.2.1.2 Soiled appliances, being appliances which are new (or near new) but shop-damaged.1.2.2 All relevant and discoverable electronically stored information, from 14 April 2008 to date, held by the defendant (including in the systemknown as "JDA"), relating to Appliances (incorporating theappliances specified at 1.2.1 above), including information relating to sales of such Appliances by the defendant.1.2.3 Documents relating to Appliances (including the appliances specified at 1.2.1 above) which were obtained from sources located outside Christchurch from 14 April 2008 to date.1.2.4 Documents relating to the transfer of Appliances (incorporating the appliances specified at 1.2.1 above) made by the defendant from its Christchurch Clearance Centre store to other stores of the defendant or its related trading entities, from 14 April 2008 to date.[17] The specific inclusion of documents relating to televisions, audio and computer appliances, and soiled appliances, is derived from Cares' allegation that these are the items described as "grey ware" in the agreement. Cares says that goodswithin these categories were not supplied under the agreement, but should have been. Smiths says that this is not the meaning of greyware appliances. Rather, this term applies to soiled whiteware appliances and appliances which might otherwise have been described as whiteware appliances (for example, I gather, refrigerators) but which are finished in stainless steel or a painted grey finish. It therefore opposes any order for further discovery which relates to items which Cares maintains are greyware, but which it says are not.[18] Both Cares and Smiths have filed affidavits which set out their respective views of the meaning of this term, and the reasons for those views. In the end, this is an issue for determination at trial. A number of documents produced in evidence for Smiths, suggest that Cares itself did not consider the items it now maintains to be greyware to have been within that category during the course of the agreement. It follows that Cares may face a significant hurdle on this issue, but the affidavit evidence was not tested by cross-examination and I am quite unable on the material as it stands on an interlocutory application to decide this issue. As well, it would in my view be quite wrong to do so as it is a live issue for trial squarely raised on thepleadings. At best, Smiths' opposition to giving discovery of documents relating togreyware as Cares believes it should be defined can only be founded on its view of the improbability of Cares establishing that it was in breach of contract for not providing items of greyware as defined by Cares.[19] Smiths did not produce to me any authority for the proposition that an order for discovery under r 8.19 should not be made where it is improbable that the opposing party will succeed in establishing the claim for which it seeks discovery of documents; nor am I aware of any foundation for such a proposition. Discovery of documents is directed by the pleadings, and by the mandate in r 8.7. I agree with the summary of the position set out in McGechan on Procedure at HR8.19.03(4), thatwhether a document "should have been discovered" in terms of r 8.19 shouldnormally relate to the new "adverse documents" test or any stricter test imposedunder tailored discovery.1 The documents sought must be relevant by reference to those issues which will actually be in issue before the Court. There is no place in this assessment to overlay the mandate in r 8.7 with a preliminary and necessarily only partially-informed view of the strength of the case of the party applying for discovery.[20] Cares also seeks discovery of documents which it says support its claim that Smiths should have been supplying to it appliances sourced from all centres at which it carried on business. It says Smiths only supplied it with appliances sourced from its operations within Christchurch, and even then not from its business operating under the name of Power Store which, at least for a period, resold its own traded-in or repossessed appliances rather than supplying them to Cares. On this allegation, too, Smiths takes issue. It says that the agreement only applied to appliances sourced within Christchurch. I need not go further to outline the basis upon which it maintains that position, because its submission must fail for the same reason as its submission in relation to the items to be supplied in the category of greyware. On this issue, too, there is opposing evidence and room for argument but it cannot be determined on this application, for the reasons I have already given.1 The authority cited in McGechan on Procedure is Karam v Fairfax New Zealand Ltd [2012] NZHC 887.[21] I find, therefore, that Smiths must give discovery of documents without a limitation based on its view of the meaning of the agreement, but instead on the basis of the case as pleaded.[22] I turn now to look more specifically at the categories of documents sought by Cares. As set out earlier in this judgment four categories of documents are set out in the application. At the hearing Mr Ryan for Cares produced a summary of the categories of documents sought, of which five relate to documents sought fromSmiths' records (the sixth relates to Smiths' legal advice, which is discussed below):1. All documents (including electronic records) relating to repossessed Appliances held or received by Smiths City from 14 April 2008 to date.2. A complete electronic version of the Sales Register (exhibit "MS-3"),including all Relevant Data contained within it.3. A complete electronic version of the Inwards Goods Register (exhibit"MS-5"), including all Relevant Data contained within it.4. All documents (including electronic records) relating to transfers of Appliances within Smiths City from April 2008 to date.5. All other documents (including electronic records) contained on SmithsCity's JDA system (or other systems, including Cudas) containingRelevant Data, and including but not limited to stock take records and records held by individual stores.[23] In argument extensive reference was made to the affidavits sworn on behalf of Cares and Smiths and the discovered records of Smiths, some of which are annexed as exhibits to those affidavits. The thrust of the argument for Cares is that some of the records discovered start at dates later than the commencement of the agreement, 14 April 2008, no prime records from which some discovered summaries have been prepared have been provided, no documents amounting to records from branches of Smiths and its related entities outside Christchurch have been provided, nor transportation details, no stock-takes have been provided, and documents from certain computer programmes operated by Smiths referred to in some of the provided documents have not been discovered. Where summaries have been generated, but running only from a certain date, prime records have not been provided for the period after the commencement of the agreement but prior to that date.[24] Mr Ryan describes the documents by reference, in part, to the term "relevant data", which he defines thus:(a) Date of receipt by Smiths City;(b) Cost of purchase (or credit value) for trade-in items;(c) Date of transfer, if any, within Smiths City;(d) Date of sale by Smiths City;(e) Price at which sold by Smiths City;(f) Age;(g) Condition;(h) Brand, model and specifications.[25] This is a summary of the data which Cares wishes to obtain in order to determine with more precision how Smiths is said to have breached the contract prior to its termination, and in order to quantify the losses it says it has suffered as a result. I do not understand Smiths to take issue with this list of information which Cares says it needs, beyond its strong opposition to the two fundamental assertions by Cares in relation to the meaning of greyware, and the geographical ambit of the agreement, which I have discussed. Having decided those points in favour of Cares, therefore, the documents to be provided are those which contain the relevant data defined by Cares. The period for which the documents must be discovered commences on 14 April 2008, and extends to date.[26] Mr Fogarty says all documents have been provided in category 1, save for the files of individual purchasers. Mr Ryan says these must be discovered. I agree : they are a prime record. Mr Fogarty says documents in category 2 have been provided to the extent they still exist. Mr Ryan says the documents provided do not relate to the entire period of the alleged breaches, nor to sources outside Christchurch. For the reasons I have given, this is inadequate. To the extent that any documents in this class may once have existed but no longer exist, an explanation is to be given by affidavit. For category 3 Mr Fogarty says the record provided was only created from 2012 onwards and older records are no longer held. I agree with Mr Ryan who says this must be explained in an affidavit, and in any event thedocuments in this category must extend to areas beyond Christchurch. The same applies to documents in category 4. I am also satisfied the documents in category 5 must be discovered.[27] Mr Ryan objects to giving further discovery partly on the ground of the costto Smiths, which he says would be significant. He voices concerns over his client'sability to recover cost, should the claim fail. However, I do not think that the discovery sought is disproportionate to the seriousness of the claims made by Cares, nor to the losses it claims, presently in excess of half a million dollars. Whilst I accept that discovery should be confined to a degree which is proportional to the case before the Court, the required documents are within the possession and control of Smiths (except to the extent that they may have been destroyed) and the cost of accessing and providing them seems to be an internal cost as distinct from an exercise which would involve incurring significant professional fees. In my view this argument cannot prevail over the need for full discovery of documents in terms of r 8.7.[28] To provide some of the documents sought by Cares, Smiths would need to divulge individual files, be they hard copy or electronic, for customers whose goods have been repossessed. Necessarily this may involve disclosing confidential information to Cares. This would be protected by the usual rules of confidentiality applying to documents provided during discovery but in my view it should also be covered by a suitable undertaking from an appropriate officer of Cares to confine access to the material to those senior officers of Cares who are directly involved inthis litigation, the company's solicitors, and its expert advisors. The undertaking may, should Smiths so require, contain restrictions on photocopying and obligations to return copies provided on discovery after conclusion of this case.[29] Smiths says that certain documents were destroyed in the Christchurch earthquakes so cannot now be provided. An explanation to this effect can, however, be given. The same applies to any other documents which would otherwise be within the ambit of the order to be made, but which for any other reason are no longer held.[30] For these reasons I am satisfied that Smiths must give further discovery to Cares of the documents sought in the five categories summarised by counsel and recorded at [16] above.[31] Within these categories, the word "appliances" is to be taken to mean allwhiteware and greyware held or received by Smiths (wherever situated) during the period 14 April 2008 to date, by way of either trade-in or repossession. Whiteware is to mean refrigerators, freezers, washing machines, driers, dishwashers and ranges, and greyware, for present purposes, is to mean televisions, computers and audio equipment. Smiths is to include all trading enterprises using that name, trading enterprises using the name Power Store, and any related trading entities, which were trading at any time in the period April 2008 to date. I note that in his summary counsel refers to Smiths City (Southern) Limited and to Smiths City Group Limited, and that the former is the Smiths City company cited as the defendant in this proceeding. No explanation has been given to me of the corporate structure of any companies by the name of Smiths City. I reserve leave to the parties to seek further clarification on this point, if necessary, but the intention of the order is that those companies which trade under the name of Smiths or Power Store or other nameswhich are related to the Smiths' companies are covered by the order.[32] I reserve leave to apply for further directions in relation to this order.Issue 2[33] The letter by which Smiths purported to cancel its contract with Cares contains the following passage:We have taken legal advice and note that we have the ability to cancel the Agreement under the Contractual Remedies Act 1979 as a result of your breach. You regularly fail to make the payments as owing to us within the requisite timeframe and accordingly we have decided that we now wish to cancel the Agreement.[34] Based on this passage, Cares says that Smiths has waived the privilege which would otherwise attach to the communication or communications it received from its solicitors. Smiths says that the document or documents are privileged as communications between solicitor and client and no waiver has occurred.[35] Section 65(2) of the Evidence Act 2006 provides:A person who has a privilege waives the privilege if that person, or anyone with the authority of that person, voluntarily produces or discloses, or consents to the production or disclosure of, any significant part of the privileged communication, information, opinion, or document in circumstances that are inconsistent with a claim of confidentiality.[36] Mr Ryan refers first to Houghton v Saunders.2 At [55] her Honour set out seven principles which she had distilled from relevant case law. Of these, Mr Ryan relies on four:3(i) where a party's use of privileged material destroys its confidentiality, the privilege will be treated as impliedly waived, even if that was notthe party's actual intention: Equiticorp Industries Group Ltd v Hawkins (No 2) [1990] 2 NZLR 175 at p 180.Mr Ryan says, therefore, that it does not matter whether Smiths intended or did not intend to waive the privilege attaching to the letter; waiver hasoccurred by the way Smiths used its solicitor's opinion.(iii) whether 'a significant part' of privileged material has been disclosedas required by s 65(2) will depend on the substance rather than the quantity of privileged material that is disclosed: Bete Fog Nozzle Inc v Delavan Ltd (2008) 19 PRNZ 439, at para [23] .Mr Ryan says that the substantive part of the legal advice was disclosed, namely the conclusion referred to: we have the ability to cancel the Agreement under the ContractualRemedies Act 1979 as a result of your breach.(iv) disclosure of the existence of a privileged document as distinct from its contents will not normally amount to implied waiver: Equiticorp at p 180, pp 23-24; Chandris Lines [[1981] 2 NZLR 600 (HC)] at 611;Shannon v Shannon [2005] 3 NZLR 757 (CA). In so far as Tau v Durie [1996] 2 NZLR 190; (1996) 9 PRNZ 7 may be authority to the contrary, it should not be followed.Mr Ryan says that Smiths went further than merely disclosing the existence of its advice, rather it disclosed the conclusion of that advice.(vii) the test to be applied is whether in all the circumstances the conduct is inconsistent with maintaining the confidentiality of the privileged material in a way that could lead to injustice if the privilege is upheld:2 Houghton v Saunders (2009) 19 PRNZ 476 (HC).3 At [55].Ophthalmological Soc [[2003] 2 NZLR 145 (CA)] at p 154; pp 577- 578. This test, although enunciated in a pre-Evidence Act decision, is still applicable to a consideration of both s 65(2) and s 65(3)(a):Astrazeneca [(2008) 12 TCLR 116] at paras 31-39.Mr Ryan says that parts of the advice will be put in evidence at trial because the letter containing the disclosure of the advice is the very letter by which Smiths purported to terminate the agreement. He says the letter will be an essential part of the evidence. Further, he says, the reference to the legal advice when cancelling the agreement was an attempt by Smiths to bolster the legitimacy of the purported termination.[37] Mr Ryan relies next on Bennett v Chief Executive Officer, Australian Customs Service.4 In that case Mr Bennett sought access to legal advice given by the Australian Government Solicitor to the Customs Service which was referred to in aletter sent to Mr Bennett's solicitor, which contained the following passages:5In this regard I note that in reaching the subject decisions the First Respondent construed Public Service Regulation 7(13) broadly, in the light of legal advice which had been provided to him. As a consequence of the proceedings instituted by your client, the correctness of this legal advice has been reconsidered. AGS has now advised Customs that Public Service Regulation 7(13) does not prohibit all public comment by an officer on matters of public administration. Rather, the sub-regulation must beconstrued or "read down" so as to not to apply to public comment on mattersof administration which are already on the public record.AGS has advised Customs that your client is not correct in asserting that he is not subject to the Act and regulations if he makes public statements about Customs-related matters in his capacity as President of the COA.[38] The Federal Court of Australia concluded that in making these statements, in the context in which they were made, the Customs Service had waived privilege in the advice it had received. The following passages set out the basis upon which the Court reached this conclusion:6The above extracts express the substance of the advice that was given by the Australian Government Solicitor in each of the paragraphs. In my view it4 Bennett v Chief Executive Officer, Australian Customs Service [2004] FCAFC 237 (Federal Court of Australia: Full Court).5 At [30].6 At [6], [35] and [68].would be inconsistent and unfair, having disclosed and used the substance of the advice in this way, to now seek to maintain privilege in respect of the relevant parts of that advice which pertain to the expressed conclusion. It may perhaps have been different if it had been simply asserted that the client has taken legal advice and that the position which was adopted having considered the advice is that certain action would be taken or not taken. In those circumstances the substance of the advice is not disclosed but merely the fact that there was some advice and that it was considered. However, once the conclusion and the advice is stated together with the effect of it, then in my view, there is imputed waiver of the privilege. The whole point of an advice is the final conclusion. (At [6] per Tamberlin J).There was no dispute as to the appropriate principles to be applied in determining whether or not there was a waiver of legal professional privilege. The relevant principles are stated by the High Court in Mann v Carnell (1999) 201 CLR 1; 168 ALR 86. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is inconsistency between the conduct of the client and maintenance of the confidentiality that effects a waiver of the privilege. What brings about the waiver is the inconsistency that the Court perceives (informed, where necessary, by considerations of fairness) between the conduct of the client and the maintenance of the confidentiality. Disclosure by a client of confidential legal advice received by the client will effect a waiver of privilege if such disclosure is inconsistent with the confidentiality that the privilege serves to protect. It does not matter why the disclosure hasoccurred: it may be for the purpose of explaining or justifying the client'sactions or for some other purpose. However, considerations of fairness will be relevant to a determination on whether there is such inconsistency: seeMann v Carnell, above, at [28] [29] and [34]. (At [35], per Emmett J).The authorities to which I have referred show that it is well-established that for a client to deploy the substance or effect of legal advice for forensic or commercial purposes is inconsistent with the maintenance of the confidentiality that attracts legal professional privilege. (At [68] per Gyles J).[39] Mr Ryan says that Smiths' purpose in disclosing the existence of the advicewas to persuade Cares to a particular point of view, and to accept Smiths' position, in a commercial context. As counsel put it, it implied that "you may as well give up now". The conclusion reached in the advice was stated. This is inconsistent with the confidentiality that the privilege was intended to protect.[40] Prior to the passing of the Evidence Act 2006 the Court of Appeal considered the principles to be applied when considering whether a party has waived the legal privilege otherwise attaching to legal advice it has received.7 The Court concluded7 Ophthalmological Society of New Zealand Inc v Commerce Commission [2003] 2 NZLR 145 (CA).that whether legal professional privilege has been waived by the conduct of the holder in the course of litigation turns on:8 whether, in all the circumstances, that conduct is inconsistent with maintaining the confidentiality of the privileged material in a way that could lead to injustice if the privilege is upheld. Considerations of natural justice and fairness will often be of great importance to that question but in some circumstances they will be of less importance. In applying the test, the judicial decision required as to whether privilege has been waived is not appropriately characterised as exercising a discretion. It is rather reaching a finding on the evidence, involving a judgment as to the important competing values in which generally only one view will be legally correct.[41] In Bete Fog Nozzle Inc v Delavan Ltd,9 Rodney Hansen J cited and applied this passage.10 His Honour noted that in Ophthalmological Society itself, and also inSt John of God Health & Elder Care Services Trust Board v Little Sisters of the Poor (NZ) Trust Board,11 reference to the conclusion reached in an opinion was held not to be inconsistent with maintaining confidentiality.12[42] In declining to find that privilege had been waived in Bete Fog Nozzle, the learned Judge noted that in referring to their opinion, the solicitors who were said to have waived privilege in the advice were merely seeking to emphasise that whilst taking seriously some demands which had been made against their client, it had good reason to decline to meet them. His Honour noted that there was no suggestion that the party seeking waiver had suffered detriment by virtue of the limited disclosure, and that it had not in fact acted in reliance on the opinions expressed. His Honour noted that, on the contrary, notwithstanding reference to advice from three different firms, the party seeking waiver had resolved to proceed against it. On that basis his Honour saw no risk of injustice if the opinions were withheld.13[43] In the present case, Cares did not respond by accepting the cancellation and there is no suggestion it was materially affected by the conclusion on the part of8 At [38].9 Bete Fog Nozzle Inc v Delavan Ltd (2008) 19 PRNZ 439 (HC).10 At [24].11 St John of God Health & Elder Care Services Trust Board v Little Sisters of the Poor (NZ) Trust Board HC Napier CIV-2007-441-628, 5 March 2008 [St John of God Health & Elder Care Services Trust Board] .12 Bete Fog Nozzle Inc v Delavan Ltd, above n 9, at [25].13 At [27].Smiths' advisors which is recorded in the letter. On the contrary, it issued proceedings for specific performance, after taking legal advice itself.[44] In St John of God Health & Elder Care Services Trust Board it was suggested that the Little Sisters of the Poor (NZ) Trust Board had waived privilege in a legal opinion by way of a passage appearing in an affidavit:14As part of the process in transferring the Home to the Brothers we took advice from Michael Wenley of Willis Toomey Robinson. Michael was theSisters' solicitor in Napier at the time. We discussed with Michael whatshould be done with the bequest now the Sisters were leaving Hastings.[45] The deponent went on to discuss the bequests which were under consideration and then recorded what the Sisters had decided to do.[46] In relation to waiver Williams J said:15[13] In that regard it is clear that in the normal course of events, clients seek advice from solicitors as to the options and the advantages and disadvantages of their adopting one or other course of action open to them and, having received that advice, then make their own decision as to what course of action should be followed.[14] That would appear clearly to have been the case as far as the LittleSisters of the Poor are concerned. As the passages from Sister Patricia'saffidavit make clear, they took advice from Mr Wenley as to what could be done with the bequest in the circumstances in which the Sisters found themselves. She then records that there were generally two types of bequestand "we" decided on how the bequest should be regarded. It is noteworthythat there is no suggestion in the affidavit that Mr Wenley was in any way involved in the taking of the decision apart, of course, from giving advice as to what the Little Sisters of the Poor could do with the bequests they received.[47] After reviewing Ophthalmological Society, his Honour went on to say:16[17] The close analysis required by the Ophthalmological decision of that issue makes it clear, as already mentioned, that what occurred in this particular case was the traditional – and classic – situation where a clientreceives legal advice as to the options available and then makes the client's own decision as to the course to be adopted. Sister Patricia's affidavitreflects no more than that. There is no overriding question of fairness which would compel a conclusion that privilege was waived.14 St John of God Health & Elder Care Services Trust Board, above n 11, at [11].15 At [13]-[14].16 At [17].[48] Mr Fogarty referred to Miller v Commissioner of Inland Revenue,17 again, a decision decided before the passing of the Evidence Act. The Court of Appeal said:18Mr Grierson submitted that there had been a waiver of privilege because a departmental officer has deposed that he relied upon the opinion in coming to a decision about Track B assessments. That cannot possibly, in our view, amount to a waiver of privilege. If it were otherwise, anyone whose explanation for an action was that he or she relied upon legal advice would be obliged to disclose the terms of the advice; and to have the benefit of the privilege, such a person would effectively have to stand mute, offering no explanation at all for his or her behaviour. Mr Grierson did not refer us to any authority for his broad proposition and we reject it.[49] This case is not referred to in the judgment in Ophthalmological Society. It also predates the other cases to which I have referred in this judgment, of whichBennett most strongly favours a finding of waiver where reference is made to legal advice. Although the approach taken by the Federal Court of Australia in Bennetthas not yet been applied in New Zealand, I respectfully venture the view that the finding by the Court of Appeal in Miller, that deposing to reliance upon an opinion in coming to a decision cannot possibly amount to a waiver of privilege, now overstates the position. As the Court of Appeal has since found, the Court must consider whether the conduct under review is inconsistent with maintaining the confidentiality of the privileged material in a way that could lead to injustice if the privilege is upheld. Considerations of natural justice and fairness will often be of great importance in arriving at the answer to that question, but not always so.19[50] Applying these principles I have reached the conclusion that Smiths has not waived the privilege in the legal advice it obtained. First, as in St John of God Health & Elder Care Services Trust Board, this too is a traditional, or classic, situation where a client receives legal advice as to the options available and then makes its own decision as to the course to be adopted. This is plain from the wording of the passage under review: we have decided that we now wish to cancel the Agreement.17 Miller v Commissioner of Inland Revenue [1999] 1 NZLR 275 (CA).18 At 297.19 Ophthalmological Society of New Zealand Inc v Commerce Commission, above n 7.[51] Secondly, the reference to the opinion is scant. It comes down to no more than noting that Smiths had the ability to cancel the agreement as a result of breaches by Cares. Although there is reference to the Contractual Remedies Act 1979 as the source of the right to cancel, there is no more detailed explanation. The real thrust of the passage taken as a whole is that Smiths had decided to cancel the contract because of Cares failing to make payments within the required timeframe. The reference to legal advice having been taken, in the brief terms set out by Smiths, in my view added little weight. Plainly, too, what little weight it might have had had no effect.[52] Finally, I see no unfairness to Cares in not seeing the whole opinion which it seeks. I accept that the letter will be in evidence as it is the document of cancellation, the validity of which is in issue. However, its relevance in evidence will be to the issue of whether the cancellation was valid, and that in turn rests on the ground given for that cancellation, which is entirely contained within the second sentence of the passage under review. The Court would not be assisted by knowingthe basis on which Smiths' solicitors thought their client had grounds to cancel the contract.[53] I conclude that the disclosure which has occurred is not inconsistent with a claim of privilege, and that it is not unfair to Cares for that privilege to subsist.[54] The application for discovery of documents relating to advice given to Smiths, referred to in its letter of 8 May 2012, is dismissed.Costs[55] Cares has succeeded in its application for further discovery in relation torecords of Smiths, but failed in relation to its application for discovery of Smiths'legal advice. Each side has therefore achieved a significant measure of success and my inclination is that costs on the application by Cares should lie where they fall. I will accept a memorandum within five working days if either party seeks to submit otherwise. In that event, that memorandum is to be limited to three pages, and a memorandum in response is to be filed and served within three further working days. I will then decide costs on the papers.Application by Smiths for further discovery[56] Smiths also made an application for further discovery, but Cares agreed to give discovery as sought and the matter was not argued. Smiths is entitled to costs on that application on a 2B basis.Timetable to trial[57] The present timetable will require amendment. A joint memorandum is to be filed within 10 working days._______________________J G MatthewsAssociate JudgeSolicitors:White Fox & Jones, Christchurch.Duncan Cotterill, Christchurch.