J A ROBERTSON & ORS v AUCKLAND COUNCIL [2014] NZHC 422

J A ROBERTSON & ORS v AUCKLAND COUNCIL [2014] NZHC 422 [6 March 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2005-404-7348[2014] NZHC 422UNDER The Public Works Act 1981BETWEEN J A ROBERTSON & ORSPlaintiffsAND AUCKLAND COUNCILDefendantCIV-2005-404-1881BETWEEN P D M SPENCER-WOODPlaintiffAND AUCKLAND COUNCILDefendantCIV-2005-404-7350BETWEEN D J McCORMICKPlaintiffAND AUCKLAND COUNCILDefendantCIV-2005-404-7095BETWEEN THE ROYAL NEW ZEALAND FOUNDATION FOR THE BLIND & ORSPlaintiffAND AUCKLAND COUNCILDefendantCIV-2005-404-4351BETWEEN I B FLAVELL & ANORPlaintiffAND AUCKLAND COUNCILDefendantCIV-2005-404-4250BETWEEN C W WILLIAMS & ANORPlaintiffAND AUCKLAND COUNCILDefendantCIV-2005-404-7351BETWEEN D M STEWARTPlaintiffAND AUCKLAND COUNCILDefendantHearing: 24-28 February, 3-6 March 2014Appearances: C Carruthers QC, W L Aldred and P Cassin for plaintiffsM Casey QC and K Scott for defendantsJudgment: 6 March 2014JUDGMENT OF FOGARTY JSolicitors/Counsel:Colin Carruthers QC., WellingtonWendy Aldred, WellingtonPaul Cassin, AucklandM Casey QC, AucklandBuddle Findlay, Auckland G Hall[1] During the course of the trial I have raised a question as to whether or not the defendant has waived privilege in respect of legal advice given to the Waitakere City Council. It occurred during the delivery of the evidence of Mr G R Wakefield who was at material times the corporate secretary and corporate solicitor of the Waitemata City Council and its successor, the Waitakere City Council.[2] In the course of his evidence, Mr Wakefield was addressing the acquisition of the Te Atau land in 1990 at which time the Minister Transport resolved a dispute between Ports of Auckland and the Council as to the future ownership of this land.[3] Moving on to 1996, he referred to an agenda item which was before the Council on the question of transferring land from the Council to its property owning company, Waitakere Property Ltd (WPL).[4] In the course of his evidence he addressed the agenda record before the Council on 24 April 1996. This was preparatory to and was followed by a resolution by the Council vesting the land in the WPL, but at the same time resolving that in the event that s 40 of the Public Works Act 1928 be deemed at any time for any application to the lands concerned, that the Council considers in the information available to it that it would be impracticable, unreasonable, or unfair, to offer to sell the land to any person from whom it was acquired, or any successor to that person, and further that there has been a significant change in the character of the land for the purposes of public work for which it was acquired.[5] The agenda item backgrounding that is in a passage set out in paragraph 7.12 of Mr Wakefield's evidence, being a copy of material in the agenda materials beforethe meeting:The lands concerned were acquired by agreement by the former Auckland Harbour Board in the early 1950s and have been vested in Council since local Government reorganisation in 1989 free of any specific direction as to its future utilisation. Most of the land has been subject to the Auckland Harbour Board and Waitemata City Council (Te Atatu) Empowering Act 1983, and Council has succeeded to the benefit of the provisions of that Act as the successor Authority. Transfer to Waiakere Properties Limited subject to an obligation to develop the land holding, in accordance with the current resource application, on Council's behalf and for the benefit of the Council as a public work ensures that the "offer back" provisions of the Public Works Act 1981 do not apply. While Council's legal advice indicates that the PublicWorks Act does not apply to the land concerned, Council also has no obligation to offer it back if:(a) Council considers it would be impracticable, unreasonable, or unfair to do so; or(b) There has been a significant change in the character of the land for the purposes of the public work for which it was acquired.It is now over 40 years since the land was originally acquired and the use and development entitlement now attributed to that land under the Resource Management Act have entirely changed from those times. Portions of the land have been developed in the intervening period for road and commercial or industrial purposes in conjunction with the Te Atatu peninsula commercial centre, the factory complex along Harbour View Road and the service station on Te Atatu Road and in association with the former Adventure West Fun Park. The original land holding has itself been subsequently overlaid by further subdivisional activity and associated retitling. There has been previous legislative acceptance that the land should be developed under the control of the (then) Waitemata City Council. There has been no indication in the intervening period of continuing interest in the land by any former owner or any successor of such owner as defined by s 40(5) of the Public Works Act 1981, despite the extensive public consultation in relation to the intended development concept by this Council since 1989.[6] When Mr Wakefield delivered that passage, it seemed to me, as the Judge, that it was written by a lawyer, reasonably tightly written, and may well reflect legal advice that the Council had received. In the passage was the sentence:While Council's legal advice indicates that the Public Works Act does not apply to the land concerned, Council also has no obligation to offer it back if:(a) Council considers it would be impracticable, unreasonable or unfair to do so; or(b) there has been a significant change in the character of the land for the purposes of the public work for which it was acquired.[7] I raised the question as to whether or not this passage being given in the evidence of Mr Wakefield represented a waiver of legal advice. It is apparent from what I have already said when citing the resolution that subsequently followed, that the Council did appear to have acted upon this material.[8] The defendant has resisted the argument of waiver. It is evident that there has been more than one legal opinion to the Council at the time. Mr Casey QC said it would be a question of searching Council's materials to gather up such legal opinions as had been given which relate to this issue. So there is not an issue of fact as towhether or not there were legal opinions. The question is whether or not privilege has been waived. The starting point is s 65 of the Evidence Act 2006:65 Waiver(1) A person who has a privilege conferred by any of sections 54 to 60 and 64 may waive that privilege either expressly or impliedly.(2) 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.(3) A person who has a privilege waives the privilege if the person–(a) acts so as to put the privileged communication, information, opinion, or document in issue in a proceeding; or(b) institutes a civil proceeding against a person who is in possession of the privileged communication, information, opinion, or document the effect of which is to put the privileged matter in issue in the proceeding.(4) A person who has a privilege in respect of a communication, information, opinion, or document that has been disclosed to another person does not waive the privilege if the disclosure occurred involuntarily or mistakenly or otherwise without the consent of the person who has the privilege.[9] I have heard argument from counsel as to the correct interpretation. The key is subs (3) and the question of whether or not a person acts so as to put the privilege communication in issue in a proceeding.[10] Counsel have taken me to a number of authorities of which I have found the judgment of Panckhurst J in the decision of Astrazeneca Ltd v Commerce Commission,1[11] Mr Carruthers QC for the plaintiffs arguing for waiver, said that upholding the legal privilege could lead to unfairness. Specifically, that the defendant relies substantially upon the discretionary nature of the relief, and that the Court should refuse to make declarations asked for by the plaintiffs.the most pertinent to the issue before me. Before going to that test, I will just summarise the main points of the argument before me.1 Astrazeneca Ltd v Commerce Commission (2008) 12 TCLR 116 (HC).[12] By this stage, one of the factors advanced by the plaintiffs is weighing against any recourse by the defendant for equitable principles is that there is evidence that the Council was, or should have been, on notice of the possibility of s 40 obligations arising in relation to the land at various times after the land vested in it, but that it failed to engage with its obligations.[13] The extent to which Mr Dacombe's report on the agenda items supplied with a full and fair summary of the legal advice referred to, will be relevant to the facts in Issue.[14] Mr Casey for the defendant argues that there may have been a misunderstanding or misreading of the agenda report. He emphasises the statement I have already pulled out from the text, that the Council's legal advice indicates the Public Works Act does not apply to the land consent. He argues that that is just a passing mention to the legal advice and the rest of the report is not intended as a summary or otherwise of legal advice, that the full statement effectively deals with the situation as if the Public Works Act does not apply, and so goes on to examine and address the exercise of the discretion in s 40(2).[15] Mr Casey gave two assurances to the Court. Firstly, at the time he made the submissions I have just summarised he added it was not part of the defendant's case that on legal advice it thought that the Public Works Act did not apply. Later in oral argument yesterday he gave a similar assurance. He said the defendant does not seek to argue legal advice justified the step it took.[16] He also made three other points which I think should be recorded. He said that the Court would not be assisted by close inquiry of the legal advice because the Council's actions were consistent with the possibility that the Act did apply. Second, that there is no prejudice as there is no claim to have relied on legal advice in support of the application of the Court's discretion. Thirdly, that the context was by way of introduction to the exercise of the statutory exemption in s 40(2).[17] As an issue of fairness, Mr Casey also raised that this extract from the Council's agenda had been provided for on discovery, and that the plaintiffs should have raised the issue much earlier, and that it is too late to do so now.[18] I do not give any weight to this point as I have emphasised in this judgment that it was the Court who raised the issue. Secondly, I am impressed with the argument that it is not until documents discovered are used in evidence that it could have become apparent that there is intended to be a waiver. But principally I rely on the fact that it was myself as Judge who raised the issue, to put to one side earlier arguments as to whether it is too late for the plaintiffs to rely on this point.[19] As I said earlier, although I have been taken to a number of authorities, I find a passage in the Astrazeneka judgment of Panckhurst J at first instance, the most helpful summary:2To my mind the judgments in Ophthalmological Society 3 and Shannon,4[20] Applying this dictum, I recall again that I now know and am not surprised by the fact there have been a number of legal opinions provided to the defendant and perhaps its predecessors over a period of time.indicate where the boundaries of s 65(3)(a) lie. While the former espouses a test based on the Court's objective judgment as to the consistency of the conduct's claimant with maintaining privilege, the discussion In Shannonelucidates the principles which underpin that test. The mere relevance of a privileged communication to an issue in the case provides no basis for waiver, even if a patty's asserted reliance on a privileged communication is generally insufficient. Waiver occurs where a patty both asserts reliance on the privileged communication and also seeks to inject the substance of the communication in evidence. At that point an abuse of privilege exists. The claimant cannot have the benefit of reliance upon the substance of the advice and still seek to shield that advice from disclosure to the other side. To permit this would give rise to unfairness in the required sense in that the party's conduct would be offensive to the trial process.[21] Second, I have no doubt that the content of those opinions would have been relevant to the conduct of the predecessors of the Auckland Council. But, as Panckhurst J has just emphasised in Astrazeneca, relevance is not the test. This Court has received two assurances that the plaintiff will not rely on the presence of legal2 At [39].3 Ophthalmological Society of NZ Inc v Commerce Commission [2003]2 NZLR 145 (CA).4 Shannon v Shannon [2005] 3 NZLR 757 (CA).opinions as in any way justifying the conduct of the defendant, and I have set those out above. I am satisfied that at this stage of the trial, there is no such reliance. However, it is possible that there may be an accidental or implicit reliance during the arguments yet to come and the scope of laches considerations and a span of relevant considerations upon the discretion of whether or not to grant a declaration if the Court gets to that point.[22] My ruling today is that privilege has not been waived at this point of the hearing. Leave is reserved to the plaintiff to raise the issue again if new grounds for waiver arise, or on my part, I identify a concern depending on what I hear subsequently in this hearing.[23] Costs are reserved.Fogarty J