An Analysis of Mastercard Asia/Pacific (Australia) Pty Ltd v Australian Competition and Consumer Commission [2026] FCAFC 37
1. Introduction
The Full Federal Court’s decision in Mastercard Asia/Pacific (Australia) Pty Ltd v Australian Competition and Consumer Commission [2026] FCAFC 37 (Perram, Wheelahan and McElwaine JJ) addresses two questions of significant practical consequence for the conduct of civil litigation in the Federal Court of Australia and, by force of its general reasoning, in any superior court applying the common law of implied waiver of legal professional privilege. The judgment was delivered on 30 March 2026 on the dismissal of an appeal from Australian Competition and Consumer Commission v Mastercard Asia/Pacific Pte Ltd (No 3) [2025] FCA 1043.
The first question is whether the doctrine of implied waiver at common law is confined to cases where a privilege holder expressly or impliedly makes an assertion about the content of a privileged communication, or whether it extends to cases where the privilege holder makes positive assertions about a subject-matter and, by so doing, lays open to scrutiny privileged communications on that subject-matter. The Court held that the unifying principle in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 is one of inconsistency informed by considerations of fairness, and that content-based waiver is an illustrative category of application of that principle, not the principle itself: at [65].
The second question concerns the timing of implied waiver in the context of affidavits filed before trial. The Court resolved what had previously been regarded as an unsettled area by holding that the filing of an affidavit is capable of effecting an implied waiver of privilege over antecedent privileged communications from the moment at which pre-trial production of documents is ordered, and that the waiver is not deferred until the affidavit is read at trial: at [110], [129]. In reaching that conclusion, the Court drew on the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth) and the obligations of the parties under s 37N.
Underlying both questions is the distinct concept of what it means to “read” an affidavit for the purposes of s 47 of the Federal Court of Australia Act. The Court’s analysis at [103] draws the conventional distinction — familiar to advocates — between the swearing of an affidavit (which is not the giving of evidence), the filing of an affidavit (which is a procedural step), and the reading of an affidavit (which is the act by which the testimony is adduced). That distinction is not merely formal. After Mastercard, the moment at which an affidavit is read has diminished significance for the question of when implied waiver takes effect over antecedent documents, because a party that files an affidavit of evidence under case management orders, and on which discovery orders are framed, is subject to the inconsistency principle in Mann v Carnell from the point of production.
The decision will be of particular interest to practitioners acting in civil penalty proceedings, commercial and regulatory disputes, and any litigation in which the state of mind, purpose or intention of a party is in issue and where contemporaneous legal advice is likely to have been received. It will also be of interest to advocates concerned with the strategic use of affidavit evidence and with the occasion on which objection is to be taken to pre-trial production orders.
2. Relevant Legal Framework
(a) The inconsistency principle in Mann v Carnell
The governing authority remains Mann v Carnell, where Gleeson CJ, Gaudron, Gummow and Callinan JJ identified at [29] that what brings about waiver is “the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large”. That formulation remains the touchstone. The difficulty for practitioners has always been how to apply it — in particular, whether inconsistency requires a disclosure of the content of the communication, or whether something less may suffice.
(b) The content-of-communications line
A line of authority has emphasised the making of express or implied assertions about the content of privileged communications as the paradigm case of implied waiver. In Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 at [52], the Full Court (Kenny, Stone and Edmonds JJ) stated 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”. That passage has been cited in Macquarie Bank Ltd v Arup Pty Ltd [2016] FCAFC 117 at [26] – [28], New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 at [58], and in the New South Wales Court of Appeal’s decisions in Council of Bar Association (NSW) v Archer [2008] NSWCA 164; (2008) 72 NSWLR 236 and GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266 at [55], [57].
(c) The broader subject-matter line
A separate line of authority had recognised that the inconsistency principle may be engaged even where no assertion about the content of a privileged communication is made. In DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 at [58], Allsop J (as his Honour then was) described waiver as arising where “the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny”. That formulation distinguishes content-based waiver from subject-matter waiver. The “state of mind” cases — pleas of reliance, undue influence and mistake — illustrate the second category: Commonwealth of Australia v Temwood Holdings Pty Ltd [2002] WASC 107 at [10]; Thomason v Municipality of Campbelltown (1939) 39 SR (NSW) 347. So too Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101, where disclosure of the “gist” or conclusion of legal advice was held to amount to waiver.
The most directly relevant authority prior to the Mastercard appeal was Grocon Group Holdings Pty Ltd v Infrastructure NSW (No 2) [2023] NSWSC 1144, where Ball J found implied waiver in circumstances where the in-house General Counsel of Grocon gave evidence of views he had formed on particular matters, yet privilege was claimed over the communications recording those views. His Honour held at [37] that it was “inconsistent for [the witness] both to express a view on a particular matter ... and to assert that communications recording his views on those matters remain confidential”, notwithstanding that the relevant communications may have consisted of legal advice. The tension between Grocon and the content-of-communications line underpinned the Mastercard appeal.
(d) Waiver and affidavits filed before trial
The status of affidavits filed before trial has been the subject of conflicting authority. The English cases following General Accident Fire and Life Assurance Corporation Ltd v Tanter (The Zephyr) [1984] 1 WLR 100 (Hobhouse J) and Nea Karteria Maritime Co Ltd v Atlantic and Great Lakes Steamship Corp (No 2) [1981] Com LR 138 (Mustill J) treated “deployment in court” as the critical act for waiver over associated documents. That formulation has itself been the subject of detailed criticism in England: see In re Konigsberg (a Bankrupt) [1989] 1 WLR 1257 at 1264; R v Secretary of State for Transport; Ex p Factortame Ltd (Discovery) (1997) 9 Admin LR 591 (Auld LJ); Vista Maritime Inc v Sesa Goa [1997] CLC 1600 (Mance J); Re Yurov [2022] EWHC 2112 (Ch) at [39].
In Australia, two sub-lines emerged. The first held that waiver of privilege in an affidavit itself — its own contents — occurs upon filing: Cadbury Schweppes Pty Ltd v Amcor Ltd [2008] FCA 88; (2008) 246 ALR 137 at [16] (Gordon J); affirmed in Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32; (2009) 174 FCR 547 at [37], [83], [95] and [103]; Stuart v Rabobank Australia Ltd [2017] FCA 284 at [15]. The second held that waiver of privilege over antecedent or “associated” documents did not arise until the affidavit was read at trial, often on the rationale that service under court order was compulsion of law: Sevic v Roarty (1998) 44 NSWLR 287 (Powell JA); Akins v Abigroup Ltd (1998) 43 NSWLR 539; Waugh Asset Management Pty Ltd v Lynch [2010] NSWSC 197 (McDougall J); Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 2) [2015] NSWSC 994 (Sackar J); Anbu v Vulcanite Pty Limited [2015] FCA 283; (2015) 324 ALR 303; Archer Capital 4A Pty Ltd v Sage Group PLC (No 3) [2013] FCA 1160; (2013) 306 ALR 414. In Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 at [22] – [24] the Full Court had already signalled doubt about Sevic and Akins.
(e) Proof by affidavit under s 47 of the Federal Court of Australia Act
Subsection 47(3) of the Federal Court of Australia Act 1976 (Cth) authorises proof by affidavit at the trial of a civil cause where a direction is made. An affidavit is “a written form of testimony that is sworn or affirmed before a person authorised to witness the affidavit”: Impiombato v BHP Group Ltd [2025] FCAFC 9; (2025) 308 FCR 250 at [139] (Lee J); Hua Wang Bank Berhad v Commissioner of Taxation (No 15) [2013] FCA 1124; (2013) 217 FCR 26 at [11] (Perram J). Proof is given by affidavit when the affidavit is read to the Court; usually the formal reading is dispensed with and affidavits are “taken as read”. The mere swearing is not the giving of evidence; affidavit evidence is given at trial when the affidavit is used in accordance with the practice of the Court.
(f) The overarching purpose and modern case management
Section 37M of the Federal Court of Australia Act identifies the overarching purpose of the civil practice and procedure provisions as the facilitation of the just resolution of disputes “according to law ... as quickly, inexpensively and efficiently as possible”. Section 37N obliges the parties (and their lawyers) to conduct the proceeding in a way consistent with that purpose. The Court’s Central Practice Note: National Court Framework and Case Management (CPN-1) records at [11.1] the entitlement of the parties to know, with sufficient notice and clarity, the evidence upon which the other parties intend to rely. These provisions form the backdrop against which the Court assessed Mastercard’s conduct in serving and maintaining the affidavits of Mr Koh and Mr Molu.
3. The Facts of the Case
(a) The proceeding
The Australian Competition and Consumer Commission (ACCC) contends in civil penalty proceedings that Mastercard Asia/Pacific Pte Ltd (Mastercard Singapore) and Mastercard Asia/Pacific (Australia) Pty Ltd (Mastercard Australia) contravened ss 45(1), 46(1) and 47(1) of the Competition and Consumer Act 2010 (Cth): at [1]. The proceeding is listed for an eight-week trial commencing on 13 April 2026.
(b) The ACCC’s case on purpose
The ACCC alleges that Mastercard, in 2017, developed a “credit leverage strategy” intended to discourage merchants from utilising the Eftpos payment network provided by Eftpos Payments Australia Ltd (EPAL): at [4]. The strategy involved signing merchants to strategic merchant agreements (SMAs) with Mastercard Singapore. The SMAs offered incentives, including lower interchange rates on credit card transactions, conditional on the merchant routing its dual-network debit card transactions through Mastercard. The ACCC’s case is that a substantial purpose of the strategy and the SMAs was to substantially lessen competition in the market for the supply of debit card acceptance services: at [4] – [5]. The purpose of the strategy is described by the primary judge as “perhaps the central issue in the case”.
(c) Mastercard’s defence
Mastercard denies any anti-competitive purpose and positively alleges that, in entering into any particular SMA, it sought ends that varied by merchant. These included furthering Mastercard’s retail strategy, meeting merchant expectations, competing with other payment schemes (including Visa, Eftpos and American Express), competing with Eftpos for dual-network debit card volume, and assisting Mastercard Singapore to balance interchange debit and credit rates: at [7]. Mastercard pleads that its conduct was “legitimate and pro-competitive”.
(d) The affidavits in issue
Mastercard served affidavits from two senior officers of Mastercard Singapore who were involved in the approval of the SMAs. Mr Richard Koh Wee Keong, Vice President, Finance, filed an affidavit on 25 August 2023. Mr Naushaza (Bobby) Molu, the former Chief Financial Officer, filed an affidavit on 8 September 2023.
The critical passages of Mr Koh’s affidavit included: at [24], the statement that offering lower interchange rates on credit “in order to prevent or discourage merchants from routing debit transactions through eftpos” “formed no part of my thinking and nobody ever suggested anything along those lines to me”; at [34], that at no stage did anyone from Mastercard Australia or Mastercard Singapore indicate such a strategy was being pursued or that it was the purpose in negotiating or approving SMAs; and at [35], that he understood that the purpose of the strategic agreements was to “increase the use of Mastercard cards”: summarised by the Full Court at [68].
Mr Molu’s affidavit similarly deposed, at [39], that the alleged strategy to prevent or foreclose Eftpos from competing for debit transactions “was not a strategy of Mastercard Australia or Mastercard Singapore”; that he did not recall any discussions to the effect that SMAs could hinder Eftpos’s ability to compete; and, at [43], that he “never tried to ‘lock out’ ... eftpos” and expected Eftpos to continue to compete. At [68] Mr Molu referred to “internal discussions” having resulted in a “position ... reached internally that these deals were acceptable”: summarised at [70].
(e) The privilege and discovery dispute
Mastercard made discovery of documents by list, organised by agreed categories. It claimed legal professional privilege over a subset: at [39]. The ACCC applied for an order that Mastercard produce for inspection all documents constituting or recording communications to which Mr Koh or Mr Molu was a party that recorded or referred to the strategy or purpose of Mastercard in offering, negotiating, approving or entering SMAs. The ACCC relied on implied waiver. After the primary judge’s orders, Mastercard identified 60 potentially relevant documents, which ultimately reduced to 10 discrete emails: at [39], [93].
(f) The decision of the primary judge
The primary judge (ACCC v Mastercard Asia/Pacific Pte Ltd (No 3) [2025] FCA 1043) granted production orders in the terms ultimately set out at paragraph [91] of the Full Court’s reasons. His Honour found that the affidavits contained express or implied assertions about the contents of communications with other Mastercard officers, including in-house counsel, and that those assertions laid the communications open to scrutiny in a way that was inconsistent with the maintenance of the privilege: PJ [54], [74]. His Honour did not accept the full extent of the waiver contended for by the ACCC and narrowed the scope to communications on the “strategy or purpose” subject-matter: PJ [79] – [80]. The primary judge also rejected Mastercard’s submission that waiver could arise only upon the reading of the affidavits at trial, distinguishing his own earlier reasoning in Archer Capital as applicable to unsigned statements of intended evidence: PJ [78].
(g) The appeal
Leave to appeal was granted on 20 October 2025. Mastercard advanced three grounds: first, that the primary judge had misunderstood the applicable principle and required an assertion about the content of a privileged communication; second, that the primary judge had erred in finding any such assertion on the evidence; and third, that any waiver could not operate before the affidavits were read at trial. Each ground was rejected and the appeal was dismissed with costs: at [131].
4. Analysis of the Court’s Reasoning
(a) The inconsistency principle is unified
The critical proposition of law, stated by the Full Court at [65], is that there is “but one principle” identified in Mann v Carnell — the principle of inconsistency between the conduct of the privilege holder and the maintenance of the privilege. Decided cases are illustrative of the application of the principle, not exhaustive categories.
Mastercard had submitted that Rio Tinto at [52] stated the exclusive test: implied waiver required an express or implied assertion about the contents of the privileged communication. The Full Court at [47] analysed Rio Tinto and held that the Court there had gone no further than extracting a summary principle illustrative of the cases considered. Particular reliance was placed on the further statement in Rio Tinto at [61] that the governing principle “required a fact-based inquiry as to whether, in effect, the privilege holder had directly or indirectly put the contents of an otherwise privileged communication in issue in litigation, either in making a claim or by way of defence”, which picks up Allsop J’s broader formulation in DSE at [58] encompassing conduct that “necessarily lays open the confidential communication to scrutiny”.
The Full Court also analysed Macquarie Bank Ltd v Arup Pty Ltd (distinguished at [49] – [52] as a state of mind case on pleaded representations), New South Wales v Betfair Pty Ltd (distinguished at [53] on its facts concerning the Office of Parliamentary Counsel), Council of Bar Association (NSW) v Archer (the relevant passage at [48] of that decision was explained at [54] – [55] as illustrative rather than exhaustive), and GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd (at [56] – [59], where Macfarlan JA at [57] of the Court of Appeal’s reasons had said that the content inquiry “assists” rather than dictates). None of those authorities supported the submission that an express or implied assertion about the content of a privileged communication is necessary to establish waiver.
Subject-matter waiver is confirmed at [65] – [66] as a legitimate species of the inconsistency principle. The Full Court endorsed Grocon, describing it as “illustrative of the application of the fact specific evaluative assessment that is necessary to reach a conclusion conformably with the inconsistency analysis required by Mann v Carnell”: at [65]. Where a privilege holder “puts in issue a subject-matter by making positive assertions whilst maintaining that communications on the subject-matter remain confidential”, the inconsistency principle is engaged: at [66].
(b) Application to Mr Koh’s affidavit
The Full Court’s reasoning at [75] – [80] analyses Mr Koh’s evidence in context. The Court rejected Mastercard’s submission that Mr Koh’s consultation with in-house counsel (including Mr Teong Lee Chuah) in the drafting of the Strategic Merchant Interchange Rates paper (SMR Paper) revealed only the fact of legal advice, not its content. At [76] the Court observed that the submission failed to address “the subject-matter inquiry”. The effect of Mr Koh’s evidence was that “at no time” was he aware of any strategy to use the SMAs to prevent or hinder competitive conduct by Eftpos, and “at no stage” did anyone from Mastercard indicate that that was their purpose. Those statements, read with the balance of Mr Koh’s affidavit, were implied assertions about the content of communications with all officers of Mastercard in the relevant period: at [78].
At [79] the Court illustrated the point by reference to an internal email of 10 April 2017, sent and copied by Mr Koh (with an internal lawyer copied in), in which Mr Koh had asked whether it was “acceptable to provide the SM1 rate in return for commercial commitments ... Is there any restriction?”. The reply was redacted on privilege grounds. The Court observed that “it is clearly unfair to withhold from scrutiny by the ACCC the response to Mr Koh’s question”: at [80].
(c) Application to Mr Molu’s affidavit
The Full Court at [86] – [89] analysed Mr Molu’s evidence similarly. His affidavit exhibited an email from Mr Peter Slater of 19 November 2019 that referred to an SMA as having “a legal stamp on it” and as having been “reviewed and approved by legal”. The affidavit also exhibited an email chain with Mr Chuah, much of which was redacted on privilege grounds. Mastercard’s submission that the references revealed only the fact of legal sign-off, not the content of any advice, was rejected at [89]: by positively asserting that no proposal or discussion involved preventing Eftpos from competing, Mr Molu made express or implied assertions about the purpose subject-matter and “laid the confidential communications open to scrutiny”.
(d) The scope of the orders
The Court addressed at [90] – [94] the submission that the orders made by the primary judge were too broad. After reviewing the form of the orders — which limited production to documents created between August 2017 and November 2020, recording communications to which Mr Koh or Mr Molu was a party, and that recorded or referred to the strategy or purpose of Mastercard Australia or Mastercard Singapore in offering, negotiating, approving or entering SMAs — the Court held at [93] that the waiver was “not confined to a subset of communications concerned with any anti-competitive purpose”. It extended to the purpose of the strategy and the SMAs as Mastercard pleaded in its defence. Once Mastercard’s review had been applied, the orders resolved to 10 discrete emails.
(e) The timing question
The Court’s treatment of Ground 3 at [95] – [130] deserves close reading. The Court distinguished two issues at [106]: first, whether the filing of an affidavit effects a waiver of privilege over its own contents (to which the answer is yes); and secondly, whether the filing of an affidavit is capable of effecting an implied waiver of privilege over other communications (to which the answer is also yes, and at a point earlier than the reading at trial).
As to the first issue, the Court at [107] agreed with the reasoning of Gordon J in Cadbury v Amcor at [16], supported by the Full Court’s decision in ACCC v Cadbury at [37], [83], [95] and [103]. The filing of an affidavit is inconsistent with the maintenance of confidentiality in its contents and amounts to waiver under Mann v Carnell. It is irrelevant that the affidavit was filed pursuant to a court order: the content was within the control of the party (ACCC v Cadbury at [43]). Mastercard abandoned a contrary submission in oral argument.
As to the second issue, the Court’s reasoning at [108] – [129] warrants particular attention. The Court framed the question at [110]: “whether, for the purposes of discovery and the pre-trial production of discovered documents, Mastercard waived privilege at the point when production was ordered”. The answer is affirmative, and the reasoning combines common law with statutory context.
The Court began with the nature of the trial process (at [103]): evidence-in-chief was by affidavit; the testimony was constituted by the contents of the affidavits upon being read; the mere swearing is not the giving of evidence, and the usual practice is to dispense with formal reading and take affidavits as read. By filing the affidavits in accordance with the Court’s procedural orders, Mastercard “evinced an intention to open up at trial the issues that are the subject of the affidavits”: at [110].
Several features distinguished this proceeding from the unsigned witness statements considered in Archer Capital and Anbu: the evidence-in-chief was by sworn affidavit; discovery orders were framed by reference to paragraphs of the affidavits and to “Relevant Mastercard Representatives”; and the discovery order was made after the filing: at [105]. At [109] the Court noted this was not a situation where the evidence-in-chief was “merely foreshadowed by a witness statement”, which was the material distinction drawn in Archer Capital.
The Court rejected the relevance of the New South Wales cases on which Mastercard relied. Sevic v Roarty (Powell JA at 301) was inconsistent with ACCC v Cadbury at [43]: at [126]. Akins v Abigroup Ltd had been doubted in Liberty Funding at [22] – [24], and that doubt was “now ... elevated by Cadbury v Amcor and ACCC v Cadbury”: at [126]. Waugh Asset Management at [13] – [19], grounded in the “compulsion of law” analysis, could not stand with ACCC v Cadbury: at [127]. Australian Institute of Fitness had turned on the application of Akins, about which Sackar J himself had expressed concern at [45] – [46] of that decision: at [128].
The Court also drew on English developments at [114] – [122]. The restrictive “deployed in evidence” rule of The Zephyr had been criticised in In re Konigsberg at 1264, the Divisional Court in Factortame (Auld LJ), Vista Maritime (Mance J), and Re Yurov (Deputy Insolvency and Companies Court Judge Parfitt). The 14th edition of Phipson on Evidence at [20-37] describes the distinction between “evidence which is merely disclosed and that which is deployed in evidence” as “not a real or satisfactory one”. The Court’s endorsement of this line is significant for the harmonisation of Australian and English authority.
The statutory overlay reinforced the conclusion. At [110] the Court observed that the obligation on the parties under s 37N to conduct the proceeding consistently with the overarching purpose in s 37M “informs the evaluation of conduct that is alleged to be inconsistent with the maintenance of privilege in the relevant documents”. At [129] the Court concluded:
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.
On the discretionary question whether Mastercard should be given the opportunity to consider which parts of the affidavits it would read — a question of practice and procedure governed by In re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 at 323 — Mastercard did not establish House v The King error: at [130].
(f) What it means to “read” an affidavit
The Court’s analysis at [103] proceeds on a clear conceptual distinction, drawn from Wigmore on Evidence (1972, 4th ed, Chadbourn Revision) at §1331 and from Helicopter Aerial Surveys Pty Ltd v Robertson [2015] NSWSC 2104 at [37] (Brereton J), between the affidavit as a written form of testimony and the moment of adducing that testimony. The swearing is not the giving of evidence. The filing is a procedural step. The reading — in the Federal Court, now almost always by the practice of taking the affidavit as read — is the act that transforms the writing into evidence-in-chief.
After Mastercard, that traditional sequence retains its importance for the admissibility and testimonial character of the affidavit. For the purposes of s 47 of the Federal Court of Australia Act, proof is still given by reading. But for the question of when an implied waiver of privilege takes effect over antecedent documents, the Court has decoupled the inquiry from the act of reading. A party who files an affidavit under procedural orders, and who continues to rely on that affidavit in circumstances where discovery is ordered by reference to it, cannot defer the consequences of the filing to some later tactical moment. The waiver attaches, in those circumstances, at the time production is ordered: at [129].
5. Practical Consequences
The decision does not involve quantification in the damages sense but has systemic and tactical consequences for parties to civil litigation that deserve articulation.
(a) Reorientation of pre-trial conduct
The decision compels parties to treat the filing of affidavits of evidence as a significant formal step with immediate consequences for privilege. Practitioners who have been in the habit of filing affidavits shortly before trial, with a view to deciding at trial whether particular passages will be read, must recognise that that strategy will not defer the consequences of the filing if discovery orders are framed by reference to those affidavits: at [105], [110].
(b) Breadth of any waiver
The scope of any waiver will turn on the subject-matter put in issue. In Mastercard itself, the orders narrowed from broad categories to ten discrete emails, which demonstrates that a focused and well-drafted production order will not necessarily produce a flood of documents: at [93]. Nonetheless, the waiver extended to communications addressing the strategy or purpose in offering, negotiating, approving or entering the SMAs, which is the full purpose case pleaded by Mastercard in defence. Where the purpose case is pleaded broadly, the waiver is correspondingly broad.
(c) Strategic implications for regulators and applicants
A regulator or applicant may now apply for production orders framed by reference to affidavits filed by the respondent before the respondent reads those affidavits at trial. The application should be made at a stage when the affidavits have been filed in compliance with case management orders and when the subject-matter pleaded by the respondent is clear. The timing advances the point at which the applicant has sight of contemporaneous documents relevant to the respondent’s positive case.
(d) Strategic implications for the privilege holder
A respondent pleading a positive case on purpose or state of mind — and intending to rely on affidavits to make out that case — must undertake a forensic audit of its privilege claims before the affidavits are filed. The question is whether the affidavits, read in the context of the pleadings, will amount to positive assertions about a subject-matter, with the consequence that contemporaneous privileged communications on that subject-matter will be open to scrutiny.
(e) Case management and proportionality
The Court’s reliance on ss 37M and 37N to inform the inconsistency assessment will be noted in other Australian jurisdictions where similar overarching-purpose provisions apply, including the Civil Procedure Act 2010 (Vic), the Civil Procedure Act 2005 (NSW), and the equivalent provisions in the Rules of the Supreme Court of Western Australia. The Federal Court framework will, in consequence, shape waiver practice more broadly.
6. Worked Example
Consider a hypothetical defamation proceeding in the Federal Court of Australia. Polaris Media Pty Ltd publishes an online investigative article alleging that Mr Quinn, a prominent property developer, bribed a local councillor to secure favourable planning outcomes. Mr Quinn commences proceedings pleading imputations that he is corrupt and that he has paid public officials for favourable decisions.
Polaris pleads, in its defence, (i) substantial truth under s 25 of the Defamation Act 2005 (WA); (ii) statutory qualified privilege under s 30; and (iii) denies that the publication was actuated by malice, in answer to the defeasance pleaded in reply.
To sustain the s 30 defence, Polaris must establish that its conduct in publishing the matter was reasonable in the circumstances. It files an affidavit of Ms Reynolds, the editor who approved the article. Ms Reynolds deposes that (i) she caused extensive pre-publication inquiries to be made, including review of confidential source documents and a draft chronology; (ii) at the time of publication she genuinely believed, on reasonable grounds, that the allegations against Mr Quinn were substantially true and that their publication was in the public interest; (iii) she bore no ill-will toward Mr Quinn and was motivated only by a proper journalistic purpose; and (iv) the article was reviewed and “signed off” by Polaris’s in-house legal team before publication.
The affidavit is filed and served in accordance with the Court’s programming orders. Mr Quinn then applies under the Court’s discovery regime for production of pre-publication communications between Ms Reynolds, the editorial staff and Polaris’s in-house counsel bearing on the reasonableness of the publication and the strength of the allegations.
(a) Analysis for Mr Quinn (applicant)
The application engages Mastercard subject-matter waiver in three respects. First, Ms Reynolds’s positive assertion at (ii) of her affidavit that she held a belief, on reasonable grounds, that the allegations were substantially true is analogous to the positive “purpose” assertions of Mr Koh and Mr Molu in Mastercard at [78] and [89]: it carries an implied assertion about the content of the communications that informed that belief, including pre-publication legal and editorial advice. Secondly, her assertion at (iii) that she held no malice against Mr Quinn places her state of mind squarely in issue, consistently with the inconsistency analysis at [75] – [80]. Thirdly, the express reference at (iv) to pre-publication legal “sign-off” must be read with the rest of the affidavit: although the fact of advice does not of itself waive content, the combination of the sign-off statement with the positive reasonableness and belief case is capable of amounting to an implied assertion about what that advice said, by analogy with the 10 April 2017 email discussed at [79] of Mastercard.
(b) Analysis for Polaris (privilege holder)
Polaris’s task is to confine the scope of any waiver. It may submit that statement (iv) does no more than assert the fact that legal review occurred and imports no statement about the content of the advice: Mastercard at [44]; DSE at [58]. It may seek to narrow the subject-matter to the particular imputations pleaded — corruption and bribery — rather than the wider topic of reasonableness over the whole investigation. It may also press for preservation of privilege over advice directed to litigation risk, as distinct from editorial advice on the strength of the allegations. Under Mastercard, however, the scope of the waiver is likely to extend to the “reasonableness and basis of publication” subject-matter as pleaded in defence, not merely the narrower subset concerned with the specific imputations: at [93].
(c) Timing
Polaris’s anticipated submission — that it be permitted to elect, closer to trial, which passages of Ms Reynolds’s affidavit it will in fact read, having regard to the shape of cross-examination — is unlikely to succeed if the discovery application has been framed by reference to the affidavit and Polaris has offered no undertaking to abandon the relevant passages. On the Mastercard analysis at [129] – [130], waiver crystallises at the point at which production is ordered on the basis of the filed affidavits, not at the later moment of reading at trial. That result is reinforced in the defamation context by the case-management imperative to resolve disputes over sensitive communications between media organisations and their legal advisers at an early stage: ss 37M and 37N; Mastercard at [110].
7. Practitioner Guidance: A Step-by-Step Framework
The following framework is derived from the Full Court’s reasoning and the principles in Mann v Carnell as applied in Mastercard.
Step 1: Audit the pleadings for positive purpose or state-of-mind cases.
Where a party pleads, in answer to an allegation of purpose or state of mind, a positive case that it had a different (lawful) purpose, the pleading itself is the starting point for the waiver analysis. The Court’s analysis at [93] makes clear that the subject-matter of any waiver will ordinarily extend to the full purpose case pleaded in defence.
Step 2: Identify the universe of contemporaneous legal-advice communications.
Before drafting affidavits, identify legal-advice communications from the relevant period that bear on the pleaded subject-matter. These are the communications at risk. The Mastercard discovery exercise ultimately reduced to ten emails, but the assessment must be performed against the full universe in the first instance.
Step 3: Draft affidavits with the subject-matter inquiry in mind.
Blanket denials of the kind “no-one ever told me X” or “I was not aware of any strategy” are particularly exposed to subject-matter waiver. The passages in Mr Koh’s and Mr Molu’s affidavits that drove the Full Court’s conclusion at [78] and [89] were precisely of this character.
Step 4: Distinguish the fact of advice from its content.
References to the fact that advice was obtained or that a document received “legal sign-off” will not of themselves amount to waiver of content: at [44], [88]. But the fact of advice cannot rescue evidence that, read in context, amounts to an implied assertion about the subject-matter: at [78].
Step 5: Consider the timing of affidavit filing relative to discovery orders.
Where the timetable permits, consider whether it is tactically preferable to finalise discovery (including the ambit of privilege claims) before filing affidavits of evidence. Once the affidavits are filed, the Court’s discovery orders may be framed by reference to them (as occurred at [105] of the Full Court’s reasons), and waiver attaches at the point of production.
Step 6: Assess the prospects of a partial reading or undertaking.
The Court at [130] applied In re the Will of F B Gilbert to the discretionary question whether Mastercard should be given an opportunity to withdraw passages of its affidavits. A party intending to preserve the possibility of reading only part of an affidavit must take that step early, and must give an undertaking if one is called for, or the opportunity will be lost.
Step 7: Anticipate that production orders will be framed by reference to the affidavits.
Under modern case management, the Court may direct discovery by categories cross-referenced to paragraphs of affidavits and to defined witnesses. Practitioners should be alive to this when opposing or consenting to case management orders and when proposing categories of discovery.
Step 8: Consider whether to narrow the pleaded purpose case.
A positive purpose case pleaded broadly will create the broadest waiver. If a respondent does not require the breadth of a pleaded positive purpose to resist the applicant’s case, there may be strategic value in narrowing the defence so as to reduce the scope of any subject-matter waiver: Mastercard at [93].
Step 9: Use ss 37M and 37N offensively as well as defensively.
An applicant seeking production orders may properly point to s 37N as supporting a timely resolution of waiver questions. A respondent who delays disclosure until trial risks contravention of s 37N. The Court’s analysis at [110] treats s 37N as part of the context against which inconsistency is assessed.
Step 10: Treat swearing, filing and reading as three distinct acts with different legal consequences.
The swearing is testimony in writing. The filing is a procedural step. The reading is the adduction of the testimony at trial. For admissibility and the testimonial character of the affidavit, the reading remains decisive: at [103]. For waiver over associated documents, the critical act under Mastercard is the filing (or, more precisely, the point at which production is ordered on the basis of the filed affidavits): at [110], [129].
8. Evidence and Arguments Available to Each Side
(a) Arguments available to the applicant or regulator
An applicant seeking to rely on Mastercard will likely deploy the following. First, the proposition at [65] that the inconsistency principle in Mann v Carnell is “but one principle”, with content-based waiver as an application rather than an exhaustive test. Secondly, the detailed analysis at [47] – [60] addressing each of the Full Federal Court and New South Wales Court of Appeal decisions on which a privilege holder is likely to rely, demonstrating that each is illustrative rather than exhaustive. Thirdly, the endorsement of Grocon at [65] – [66] as a paradigm case of subject-matter waiver, particularly where a senior officer (including an in-house General Counsel) gives evidence of views he or she has formed on topics about which privileged communications exist.
Fourthly, the analysis at [103] of the nature of affidavit testimony, and at [110] of the significance of filing in advance of discovery, together with the statutory overlay of ss 37M and 37N. Fifthly, the statement at [129] that it would be “antithetical to the proper case management framework” to defer waiver consequences until the affidavit is read at trial. Sixthly, the practical observation at [93] that a properly framed production order will not necessarily produce a flood of documents — in Mastercard itself, the orders ultimately resolved to ten discrete emails.
(b) Arguments available to the privilege holder
A privilege holder defending against a waiver application retains a number of arguments. First, the Full Court accepted at [44] that “mere reference to the fact of legal advice is unlikely to amount to disclosure of its content”. Careful drafting of affidavits to stay on the correct side of that line remains important.
Secondly, at [46] the Court accepted that “joining issue on the pleading is unlikely of itself sufficient” to waive privilege: DSE at [122]. A respondent who joins issue but does not plead a positive purpose or state of mind is less exposed.
Thirdly, where the applicant has framed its production application by reference to broad categories of documents, the respondent may still contest the scope: at [93] the Full Court emphasised that the scope of the waiver must be limited to the subject-matter asserted, and at [92] that the orders must reflect the extent of the implied waiver.
Fourthly, a respondent may submit that the evidence, properly construed, does not go beyond the fact of advice or the fact of consultation and does not open the subject-matter to scrutiny. Mastercard does not dispense with that analysis; it confirms that it is a fact-sensitive inquiry: at [43], [65].
Fifthly, at [130] the Court acknowledged the discretionary question. An early undertaking not to read offending passages, coupled with a timely application to withdraw them, may preserve the privilege in some cases, though the discretion will be informed by ss 37M and 37N.
Sixthly, where the affidavit is filed under genuine compulsion of law — and not merely pursuant to the Court’s case management orders — a respondent may argue that the compulsion-of-law line retains some residual application at common law. The Court’s analysis at [107] squarely rejects the proposition in the Federal Court context for affidavits filed in compliance with case management orders: the content is within the party’s control. Outside that context — for example, the production of an expert report for a different purpose — the analysis may differ, but the starting point is now clear.
9. Key Takeaways for Legal Practice
1. The inconsistency principle in Mann v Carnell is a single principle, fact-sensitive and evaluative. There are not two tests (content-based and subject-matter) but one, of which each is a species: at [65].
2. Content-based assertions remain the paradigm case of implied waiver, but they are not necessary. The principle extends to positive assertions about a subject-matter that lay open privileged communications on that subject-matter to scrutiny: at [66].
3. Grocon is endorsed. The decision of Ball J in Grocon Group Holdings Pty Ltd v Infrastructure NSW (No 2) [2023] NSWSC 1144 — in which evidence from an in-house General Counsel of views he had formed on particular matters was held to waive privilege over communications recording those views — has now been approved at Full Federal Court level: at [65] – [66].
4. Filing an affidavit waives privilege in its contents. This is confirmed by the line running through Cadbury v Amcor (Gordon J) and ACCC v Cadbury (Full Court) at [37], [83], [95] and [103]. The compulsion-of-law argument is no longer available for affidavits filed in compliance with Court case-management orders: Mastercard at [107].
5. Filing an affidavit is capable of effecting an implied waiver over antecedent documents at the moment of the production order, not only at the reading at trial. This resolves the long-standing tension between the Archer Capital / Anbu line and authorities such as Konigsberg and Factortame: Mastercard at [110], [129].
6. The Sevic and Akins line of New South Wales authority will not be followed in the Federal Court to the extent that it defers waiver over antecedent documents to the reading of the affidavit at trial: Mastercard at [126] – [128].
7. “Reading” an affidavit has a precise meaning. The testimony is constituted by the writing; proof is given when the affidavit is read (usually the formal reading is dispensed with and the affidavit is taken as read). For admissibility purposes, reading remains decisive. For implied waiver over associated documents, the filing is decisive: at [103], [110].
8. Sections 37M and 37N of the Federal Court of Australia Act inform the inconsistency assessment. Modern case management imposes an obligation on the parties to conduct a proceeding quickly, inexpensively and efficiently; that obligation is relevant to whether conduct is inconsistent with the maintenance of privilege: at [110], [129].
9. Discretionary relief from the consequences of waiver is narrow. A party seeking an opportunity to withdraw offending passages must act early and, where necessary, by undertaking. The discretion is reviewable only for House v The King error: at [130].
10. Affidavit drafting is a forensic exercise with privilege consequences. A broad denial such as “nobody ever suggested ...” or “at no stage did anyone within [the company] indicate to me ...” is a positive assertion about the contents of communications with the company’s personnel; where those personnel include in-house counsel, it is a short step to subject-matter waiver of privileged communications on the topic: at [78], [89].
11. The professional significance extends beyond competition law. Any proceeding in which a party pleads a positive purpose or state of mind — employment, misleading conduct, oppression, construction disputes, fiduciary litigation — is affected. The reasoning is expressly linked to the unified principle in Mann v Carnell and to the overarching purpose in the Federal Court of Australia Act, both of which operate at the level of general civil practice.
10. Conclusion
The Full Court’s decision in Mastercard v ACCC is important on the law of implied waiver and, equally, on the practice of civil litigation in the Federal Court. On the law, the decision confirms that there is a single inconsistency principle, of which content-based waiver is an application. Subject-matter waiver, where the privilege holder puts a topic in issue by positive assertion, is well within the principle.
On practice, the decision resolves the long-running tension about the timing of implied waiver in the context of affidavits filed in advance of trial. The Court has held that the filing of an affidavit, together with the making of discovery orders by reference to that affidavit, is the operative moment for waiver over antecedent privileged communications, informed by the statutory overarching purpose and the parties’ obligations under s 37N of the Federal Court of Australia Act. The “deployed in evidence” rubric of The Zephyr and Nea Karteria, and the Australian cases that followed it, are no longer reliable.
For practitioners, the central message is a practical one. The filing of an affidavit is no longer a neutral procedural step. It is an act with immediate legal consequences for privilege where the affidavit is deployed in support of a positive case on a subject-matter over which privileged communications exist. Affidavit drafting is now as much a forensic exercise about privilege as it is about evidence.