Expense Reduction Analysts Group Pty Ltd v Armstrong
Strategic Management and Marketing Pty Ltd  HCA 46
A recent judgment of the High Court of Australia has unanimously
held that a party's inadvertent disclosure of privileged
documents did not amount to a waiver of privilege.
The solicitors for Expense Reduction Analysts (ERA)
inadvertently disclosed a number of documents that were the subject
of client legal privilege. The documents had been mistakenly added
to the disclosed list of documents and copies were provided to the
other party's solicitors.
Once notified, the solicitors for ERA stated their clients
maintained their claim of privilege, sought the return of the
documents and requested an undertaking the documents would not be
relied upon in the proceedings or otherwise.
The solicitors for Armstrong responded stating they had no
obligation to return the documents and any privilege attaching to
them had been waived. They declined to return the documents or give
the undertaking sought by the solicitors for ERA.
The trial judge considered it necessary for ERA to show they had
actually intended to claim privilege over each of the documents,
and that a mistake had caused them to be disclosed. Her Honour held
that 9 of the 13 documents in dispute had been inadvertently
disclosed and a valid claim of privilege attached to these
On appeal, the Court focussed on the question of whether there
was power to make an order for return of the documents. The Court
held that the law of privilege did not give courts a positive power
to make such orders, and that the circumstances did not warrant
imposing an obligation of confidentiality because the solicitors
who received the documents could not be taken to be aware that they
had been mistakenly disclosed.
The Court of Appeal also concluded that privilege in the
documents had been waived. It was found the sending of the
documents was an intentional act carried out with knowledge that
privileged documents may be withheld from production during
discovery. In considering the lapse of time between the disclosure
of the documents and the claim of mistake, the court found it would
be inconsistent for the solicitors for ERA to contend the documents
On further appeal, the High Court unanimously held that
privilege was not waived in respect of all the documents. ERA and
its solicitors had not acted in a way that was inconsistent with
claiming the privilege. The Court placed particular emphasis on the
fact that ERA's solicitors informed Armstrong's solicitors
as soon as they became aware of the mistake.
The High Court further went on to consider the Civil
Procedure Act 2005 (NSW) and was of the opinion that the broad
case management powers given under that Act meant that the Court
had power to rectify the problem.
The High Court ordered that the hard copies of the documents be
delivered back to the solicitors for ERA, and that all digital
copies in the possession of the solicitors for Armstrong be
This decision is consistent with rule 31 of the Australian
Solicitors Conduct Rules, which requires documents that have been
inadvertently disclosed to be returned to the party who provided
the documents if the solicitor who received the documents knows or
reasonably suspects they are confidential.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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