Estoppel A clear statement which is made by one party to negotiations, and on which the other party is intended to act and does in fact act, may not be protected by the privilege and be admissible as giving rise to an estoppel.62 Misrepresentation, fraud or undue influence Without prejudice privilege cannot be deployed as a shield to protect statements made during without prejudice negotiations which contravene the statutory prohibition from engaging in misleading or deceptive conduct.63 The exception for statements made in contravention of the prohibition on engaging in conduct that is misleading or deceptive enshrined in s52 TPA and s18 ACL appears to have a similar rationale for the exception for estoppel. Central to both exceptions is detrimental reliance by one party on statements made by another in the course of the without prejudice negotiations. "Unambiguous impropriety" The "unambiguous impropriety" exception was first identified by Hoffmann LJ in Forster v Friedland: the value of the without prejudice rule would be seriously impaired if its protection could be removed [for] anything less than unambiguous impropriety. The rule is designed to encourage parties to express themselves freely and without inhibition.64 (emphasis added) The exception for "unambiguous impropriety" has been upheld in subsequent cases and further explained. In Unilever65, Robert Walker LJ stated that "one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other "unambiguous impropriety" but that the exception of "unambiguous impropriety" "should only be applied in the clearest cases of misuse of a privileged occasion". The 'impropriety' contemplated is of a serious nature. Threats will satisfy the requirement, as in Forster v Friedland,66 however the threat needs to be clear. The interests of justice do not countenance that the privilege be used to permit a party to deceive a Court by shutting out evidence which would rebut matters which that party advances as correct.67 Inconsistency between admissions made during without prejudice negotiations and
evidence given or case pleaded will not be sufficient to displace the protection of the privilege in the absence of dishonesty.68 Criminal proceedings Given the public policy basis for without prejudice privilege being the settlement of disputes, there is an inherent contradiction to the application of the privilege to criminal proceedings.69 Although no decisions have squarely raised the point, there is a line of authority to suggest that without prejudice privilege cannot prevent a tribunal of fact from receiving evidence of criminal conduct.70 The position under the Evidence Act 1995 (Cth) is much clearer – attempts to negotiate a settlement of a criminal proceeding or anticipated criminal proceeding are expressly excluded from the scope of the protection afforded by section 131(1) of that Act.71 Although some policies exist within the various Directors of Public Prosecution,72 there is no clear common law recognition of the without prejudice privilege in the criminal sphere. While this may give rise to fairness considerations on the part of an accused that admissions made will not be sought to be admitted, lawyers acting for the accused may find themselves arguing for the application of the without prejudice privilege to those admissions from first principles. To avoid subsequent embarrassment, parties who are seeking to resolve disputes which may have a criminal dimension to them with authorities who have criminal, or concurrent civil and criminal, jurisdiction (in particular Federal authorities such as the Australian Taxation Office and the Australian Securities & Investments Commission) should consider carefully what matters are put to those authorities on a without prejudice basis. THE AFFIDAVIT CLAIMING NEGOTIATION PRIVILEGE If without prejudice documents satisfy the relevance test prescribed by either case management directions or Court rules, the documents should be discovered, notwithstanding they may not be made available for inspection73 nor admissible in evidence.74 The without prejudice privilege is a purpose-based privilege.75 This means that when preparing the list of documents that are the subject to a claim of without prejudice privilege, a party will need to carefully consider the purpose for which each document included in that list was brought into
existence to ensure the indicia identified above are met. Practitioners should also bear in mind their professional responsibility to explain discovery obligations to their clients and the certificate required to be filed under Order 26 rule 16A of the Rules of the Supreme Court. The person objecting to producing a document on the basis of a privilege carries the onus to persuade the Court that the privilege is properly claimed.76 The general principle, at least where legal professional privilege is in issue, is that the party claiming the privilege has the onus to establish the facts on which the privilege is based.77 Mere assertion of the claim is not enough: what is required is exposure of facts from which an informed decision can be made as to whether the claim for privilege is supportable.78 O26 r12 of the Rules of the Supreme Court 1971 is relevant in these circumstances. Where the claim of privilege has been properly formulated in the affidavit of discovery, the party challenging the objection to production should adduce evidence that the claim is unfounded or mistaken.79 In the absence of such evidence, the effect of O26 r12(1) is that the claim is sustained, although the right of the Court to inspect documents the subject of a challenges is expressly preserved by O26 r12(2). Key practice points to note: As will be gleaned from the discussion above, not everything that passes between parties as part of negotiations is privileged. By adopting a defensible methodology for claiming without prejudice privilege in the discovery process, practitioners can maximise the prospect that their clients will not be drawn into time-consuming interlocutory disputes over challenges to claims for without prejudice privilege. An affidavit which contains a series of general assertions and conclusions (e.g. "without prejudice documents in the possession of [deponent or deponent's corporation]") and does not address the basis for which a claim is asserted will not be accepted by the Court as having met the onus.80 Although some explanation of the claim should be made, a detailed one is generally not required, and in some cases, that detailed explanation may result in a waiver.81 Unless there is a demonstrated requirement to list individually each of the documents comprising a bundle of correspondence of which a claim is made, the Court may permit the 33