Implied Waiver of Privilege

Consider this: your client puts in issue by way of claim or defence a question of purpose. That is, that something was done or not done for a proscribed reason. Pursuant to procedural orders the parties are required to file affidavits or witness statements (which matters not for present purposes) from all persons from whom evidence-in-chief is to be adduced. A witness deposes that legal advice was taken on the issue, without disclosing the content or gist of the advice. The witness also deposes that nothing in the affidavit is to be taken as a waiver of privilege, which is expressly maintained. The evidence amounts to a positive assertion about facts in issue, but nonetheless the privilege holder asserts that legal professional privilege entitles it to withhold documents relevant to the assertion from pre-trial production,

At the pre-trial stage, has privilege been impliedly waived upon service of the affidavit? Moreover can waiver arise before the affidavit is read? To each question the answer is likely yes. Why is explained by the recent decision of the Full Court of the Federal Court of Australia in Mastercard Asia/Pacific (Australia) Pty Ltd v Australian Competition and Consumer Commission [2026] FCAFC 37. It is a decision that all practitioners should be aware of.

The issue arose in this way. The ACCC in civil penalty proceedings contended that Mastercard contravened ss 45, 46 and or 47 of the Competition and Consumer Act 2010 (Cth), in that having a substantial degree of market power in the market for the supply to merchants of credit card acceptance services, it developed and implemented a strategy that was intended to discourage the use of the Eftpos payment system. The strategy involved signing merchants up to strategic merchant agreements (SMA’s), which contained incentives if merchants routed dual Mastercard/Eftpos debit card transactions through Mastercard.

The ACCC alleged that a substantial purpose of the strategy was to adversely affect the competitive market for the supply of debit card acceptance services and thereby limit competition by deterring merchants from using the Eftpos system. Mastercard denied the purpose allegation and pleaded in defence that the purpose of the SMA strategy was to further its retail strategy to compete with other payment schemes, such as Visa.

The primary judge made orders that are common in proceedings for the filing and service of affidavits from all persons to be called at the trial. Mastercard filed and served two affidavits from senior managers. Each deposed to the effect that the strategy was developed through internal discussions focusing on developing the business of Mastercard and, crucially, not for the purpose of preventing or hindering Eftpos from engaging in competitive conduct for the routing of debit transactions. In doing so, each referenced internal discussions and email correspondence with the internal general counsel.

Pre-trial production orders required Mastercard to serve a Redfern list. Mastercard identified as relevant, email correspondence with the internal general counsel over which it maintained a claim for legal professional privilege.

The ACCC by application sought production of the documents on the basis that privilege had been impliedly waived. The primary judge accepted that waiver had occurred and ordered production. Mastercard sought and was granted leave to appeal.

There is a significant body of authority that implied waiver, conformably with the inconsistency principle stated by the High Court in Mann v Carnell (1999) 201 CLR 1 at [29], may arise where a privilege holder references the content or gist of legal advice: for example, Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [52], [61]. In Mastercard by the time the arguments were refined on the Full Court appeal, the ACCC did not submit that the deponents had made express or implied assertions about the content of the confidential legal communications which then laid them open to scrutiny. Rather, the submission was that the deponents made positive assertion about the purpose of the SMA strategy in answer to the impugned purpose and thereby, Mastercard acted inconsistently when it sought to maintain confidentiality over privileged documents indisputably relevant to that issue. Put another way, Mastercard opened to scrutiny the impugned purpose subject-matter when the deponents positively asserted that the internal inquiries and discussions (including communications to and from the in-house counsel) were directed to lawful business purposes and not to inhibit or prevent competition in the relevant market.

As an example, one deponent stated in his affidavit:

At no time have I been made aware of any strategy by Mastercard Australia or Mastercard Singapore to use SMAs on credit to prevent eftpos from competing for the routing of debit transactions. I do not recall any such strategy nor was that my understanding of the purpose of SMAs with Australian merchants. At no stage did anyone from Mastercard Australia or Mastercard Singapore indicate to me that such a strategy was being pursued or that this was their purpose in negotiating or approving SMAs.

I understood that the purpose of strategic agreements entered into by Mastercard with merchants (whether they included granting strategic interchange rates or not) was to increase the use of Mastercard cards. I also understood (as discussed above) that Mastercard Australia was using strategic interchange rates to obtain commercial benefits for Mastercard in some instances, by entering into SMAs with merchants [redacted].

The primary judge concluded that Mastercard had acted inconsistently with maintenance of confidentiality over internal legal advice sought and provided on that question. His Honour ordered production of documents (over which privilege was claimed) created between August 2017 in November 2020 constituting or recording communications to which each deponent was a party which record, in whole or in part, or refer to the strategy or purpose of offering, negotiating, approving or entering the SMA’s: Australian Competition and Consumer Commission v Mastercard Asia/Pacific Pte Ltd (No 3) [2025] FCA 1043.

Mastercard appealed on two grounds: (1) there was no implied waiver in that the deponents did not expressly or impliedly refer to the content of the legal advice; and (2) in any event there can be no waiver unless and until the privilege holder chooses to read the affidavits into evidence (in whole or in part). The Full Court dismissed the appeal.

On the first issue, the Court reasoned that the categories of implied waiver are not confined to cases where a party puts in issue their state of mind or references the content of legal advice. The state of mind cases are well understood. For example Thomason v Municipality of Campbelltown (1939) 39 SR (NSW) 347, a claim by a widow of the deceased to recover compensation for the negligence of the employer when she had earlier elected to receive statutory compensation in lieu of a common law claim. She made the election after consulting her solicitor. Her election was put in issue. It was held that she had waived privilege and was properly cross-examined on the advice provided before she made the election. Mastercard was not a case of that type.

Turning to the content disclosure cases, the Court extensively reviewed the existing authorities, commencing with Rio Tinto, where at [52] the Court stated:

These authorities show that, where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication.

Many other authorities are to the same effect, as analysed by the Full Court in Mastercard at [47] – [64]. In doing so, the Court reasoned that each case was illustrative of the inconsistency principle, rather than exhaustive of its application. Thus at [44], the Court stated:

Mann v Carnell does not categorise or limit the types of cases where inconsistency informed by considerations of fairness will arise and reasoning from the facts of one case to another is of limited utility: “The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance”: Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 95, Deane, Dawson and Gaudron JJ. Decided cases are examples of the application of the principle in Mann v Carnell. Mastercard is correct to submit that express or implied assertions about the content of privileged communications is a category of case where implied waiver has been found, though mere reference to the fact of legal advice is unlikely to amount to disclosure of its content. It is not, however, with respect to the submission, correct that this is the only circumstance where implied waiver operates.”

An illustration of the application of the inconsistency principle, which the primary judge relied on, is Grocon Group Holdings Pty Ltd v Infrastructure NSW (No 2) [2023] NSWSC 1144, Ball J. In that case, the Court concluded that implied waiver was made out where two witnesses in affidavits (in a case concerning representations about the meaning of contractual provisions and which raised reliance as an issue) set out their respective understanding about the meaning of the contract and asserted that if the representations had not been made, a different course would have been adopted. Nonetheless the corporate privilege holder asserted that legal advice recording the views of the deponents on that issue was privileged. The primary judge in Mastercard found in consistency in the present case because (at [33]):

More significantly, where the inconsistency resulting in the waiver is said to arise from the privilege holder making assertions about a particular topic or subject-matter and at the same time maintaining that advice received on that topic or subject-matter remains confidential, it may be appropriate to order production of otherwise privileged documents which refer or relate to that subject-matter. Justice Ball expressed a similar view in Grocon in circumstances not materially dissimilar to the circumstances of this case.

The Full Court upheld that reasoning at [65] – [66]:

In our view Grocon is illustrative of the application of the fact specific evaluative assessment that is necessary to reach a conclusion conformably with the inconsistency analysis required byMann v Carnell. The factual difference emphasised by Mr Bannan is not a distinction at the level of legal principle. There is but one principle illustrated in its application by identification of types of conduct that may rise to inconsistency in the maintenance of a privilege claim. The categories are not exclusive nor exhaustive. Express or implied assertions about the content of privileged communications may expose inconsistency as required by Mann v Carnell but are not necessary. The inquiry must focus on the particular conduct in issue in all the circumstances as inconsistent with maintenance of the confidentiality which the privilege protects. The circumstances of individual cases will vary. Reasoning only by reference to cases which have found waiver in the making of implied assertions about the content of otherwise privileged communications deflects from the inconsistency principle and is likely to lead to error.

This analysis demonstrates that the primary judge was correct at PJ [20] not to confine inconsistency in these types of cases to conduct by the privilege holder that involves an express or implied assertion about the content of a privileged communication. The inconsistency principle is capable of application to a case, such as the present, where the privilege holder puts in issue a subject-matter by making positive assertions whilst maintaining that communications on the subject-matter remain confidential. Thus, the primary judge was also correct to accept that implied waiver may be found in this case by reasoning similarly to the approach in Grocon.

It should be understood that implied waiver will not be made out simply because a privilege holder pleads a matter or when the opposing party puts a matter in issue. More is required. Each case is fact sensitive. The ultimate inquiry required by Mann v Carnell is whether the privilege holder has acted inconsistently with maintenance of confidentiality over the privileged material, informed by considerations of fairness. As a further illustration, implied waiver may also arise when a party appears to allege inconsistent cases in separate proceedings where the pleadings are certified by a lawyer as having a reasonable basis in his/her instructions: Hillier v Martin (No 25) [2026] FCA 455.

Turning to the second issue, whether waiver may arise before an affidavit is read, was somewhat unclear on the many divergent authorities. To resolve the issue, the Full Court commenced with the purpose of affidavit evidence in the Federal Court. In a civil case evidence may be given by affidavit: s 47 of the Federal Court of Australia Act 1976 (Cth). The testimony of a witness is the writing in the affidavit. The usual practice of the Court is that case management orders are made requiring parties to file and serve affidavits (or in some cases witness statements) as a condition to adducing the evidence at trial. This gives effect to the overarching purpose which is to facilitate the just resolution of a proceeding according to law and as quickly, inexpensively and efficiently as possible: [104].

Once an affidavit is filed and served there is no legal professional privilege in the content of the affidavit. The content is within the control of the privilege holder. It is therefore not relevant to the question of implied waiver whether an affidavit is served pursuant to a court order: [107].

When an affidavit is filed and served, and an issue about production of documents arises, it is the common law rather than the Evidence Act 1995 (Cth) which operates. Therefore, the question is whether, for the purposes of discovery and the pre-trial production of discovered documents, Mastercard waived privilege at the point when production was ordered: [110]. Resolution of the inconsistency question at the juncture is informed by the overarching purpose obligations of the parties. The authorities were extensively analysed and many were distinguished by the Full Court at [111] – [128]. It was concluded that no binding authority required the Court to hold that implied waiver can only arise when a privilege holder decides to read an affidavit into evidence. Why was explained at [129]:

The order for the filing of the affidavits did not compel the disclosure of the evidence within them, and Mastercard did not submit otherwise. Subject to any rulings as to admissibility, upon being read at trial the affidavits will be the testimony of the witnesses. The procedural orders for the filing of affidavit evidence had the effect of making the filing of the affidavits a precondition to their admission. Mastercard has not foreshadowed any actual intention or given any undertaking not to read any particular sentences of the affidavits. The filing of the affidavits was therefore a significant formal step with legal consequences. The requirement to file the affidavits of evidence, in the context of a procedural framework where substantial discovery occurred after the affidavits were filed, advanced the moment at which Mastercard was required to examine the information that it had marshalled for the purpose of the trial and to decide what it was going to use and what issues it would raise. For the reasons we have given, in the context of this significant economic regulatory proceeding which is the subject of modern case management, and where the parties are subject to the obligation in s 37N of the FCA Act, the filing and continued unqualified reliance by Mastercard on the affidavits of evidence was – at the time of the primary judge’s orders for production of documents – inconsistent with the maintenance of claims for privilege in the relevant documents. It would be antithetical to the proper case management framework of this Court to apply a principle that has the result that a party is not held to the consequences of the filing of its affidavits of evidence until the moment that they are read at trial. Such a course would have the consequence that the ACCC will not have knowledge of the contents of the relevant documents until it suits Mastercard tactically to call the witness and might be liable to lead to a disruption of the trial.

It should not be assumed that this holding is confined to civil cases in the Federal Court. The Supreme Court Rules 2000 (Tas) at Part 14 make provision for case management conformably with the overarching purpose at r 414(a) and it is common for pre-trial orders that require parties to file and serve affidavits or witness statements for the case in chief.

May 2026

The Honourable Justice Shaun Brendan McElwaine