Update on Legal Professional Privilege - austlii.edu.au · 9 Evidence Acts, ss 118 and 119. Advice...

Update on Legal Professional Privilege

Michael Schoenberg*

SUMMARY

The doctrine of legal professional privilege touches myriad communicationsbetween lawyers and clients and many reams of documents created every day in thepractice of law, and in many cases does so unobserved or unremarked. In the courts,however, arguments about the application and scope of privilege are the subject offurious disputes, and the loss of the protection of privilege in a document can be acritical event for litigants, and those subject to regulators’ of information requests.Given the terrific potential for loss arising from an inability to establish or maintaina claim for privilege, lawyers and clients alike can benefit from a nuanced and up todate understanding of the operation of legal professional privilege, how to attract it,and how to maintain it.

This paper gives a broad overview of legal professional privilege and theprinciples that underpin it by reference to recent developments and trends in the caselaw relating to privilege. It is divided into two parts. First, it considers how legalprofessional privilege is attracted in a communication, by exploring the scope andapplication of the doctrine. Second, it considers how legal professional privilege ismaintained, through a review of the situations in which the privilege is lost.

ATTRACTING LEGAL PROFESSIONAL PRIVILEGE

History and Scope

Legal professional privilege is a common law rule which protects fromdisclosure communications between clients and their legal advisers. Althoughlegal professional privilege had its origins in lawyers’ immunity from being calledto give evidence of their clients’ confidences,1 the modern view of the privilege isas a “fundamental and general principle of the common law”2 which exists for thebenefit of, and belongs to, the client.3

285

* Partner, Allens Arthur Robinson. The extensive assistance of Duncan Travis, Sam Ureand Laijing Lee in the preparation of this paper is gratefully acknowledged.

1 Ronald Desiatnik, Legal Professional Privilege in Australia (2nd ed, 2005), 11.2 Baker v Campbell (1983) 153 CLR 52, 117 (Deane J).3 Baker v Campbell ibid, 85 (Murphy J).

return to AMPLA 2006 Table of Contents

The purpose of legal professional privilege was explained by the High Court inGrant v Downs as follows:

“The rationale of this head of privilege, according to traditional doctrine, isthat it promotes the public interest because it assists and enhances theadministration of justice by facilitating the representation of clients by legaladvisers, the law being a complex and complicated discipline. This it doesby keeping secret their communications, thereby inducing the client to retainthe solicitor and seek his advice, and encouraging the client to make a fulland frank disclosure of the relevant circumstances to the solicitor.”4

Confidential Communications

Legal professional privilege exists to permit clients to maintain confidentiality incommunications with their lawyers. A communication must therefore be made inconfidence in order to attract the protection of privilege and must be keptconfidential if the privilege is to be maintained.5 If a communication is made incircumstances not subject to an obligation of confidence, or is made to a partyoutside the lawyer-client relationship privilege may not attach to it. If privilegedoes attach to a document, and the document is subsequently disclosed to a thirdparty, the privilege may be lost. The requirement of confidentiality has beenapplied with what appears to be increasing strictness,6 particularly in circumstanceswhere it is alleged that privilege in a communication has been waived.

In proceedings to which the uniform Evidence Acts apply,7 “confidentialcommunication” is defined broadly, and means communications made incircumstances where either the sender or the recipient “was under an express orimplied obligation not to disclose its contents, whether or not the obligation arisesunder law”.8

Legal Advice Privilege and Litigation Privilege

The principal determinant of whether a confidential communication attractsprivilege is its purpose. To attract privilege, a communication must be made for thedominant purpose either of seeking or providing legal advice or preparing for actualor anticipated litigation. These two limbs of legal professional privilege will bereferred to in this paper as advice privilege and litigation privilege. The two limbsare reflected in the Evidence Acts, where a separate provision exists for each.9

286 AMPLA YEARBOOK 2006

4 Grant v Downs (1976) 135 CLR 674, 685 (Stephen, Mason and Murphy JJ).5 Ritz Hotel v Charles of the Ritz (No 22) (1988) 14 NSWLR 132, 133.6 See, eg, Switchcorp v Multiemedia (unreported, Supreme Court of Victoria, Whelan J,

21 October 2005).7 Evidence Act 1995 (Cth), Evidence Act 1995 (NSW) and Evidence Act 2001 (Tas)

(Evidence Acts).8 Evidence Acts, s 117; “confidential document” is defined similarly.9 Evidence Acts, ss 118 and 119.

Advice privilege protects confidential communications between lawyer andclient, and extends to confidential communications sent or received by an agent ofthe client, for the dominant purpose of seeking or providing legal advice.10 Thecommunications need not be in the form of a specific request for legal advice, or aresponse to such a request. Discourse between lawyer and client that arises in aprofessional context is “to be regarded as prima facie for the purpose of giving andreceiving advice”11 and the scope of what is considered legal advice “is notconfined to telling the client the law but includes professional legal advice as towhat should prudently and sensibly be done in the relevant legal context”.12

Documents prepared with a view to being communicated for this purpose, eventhough they are not ultimately communicated, are also protected by this limb ofthe privilege,13 as are drafts and memoranda created for the purpose of makingsuch a communication.14 Further, advice privilege has recently been extended tocover some third party communications (discussed further below under theheading “Preserving the Privilege”).

Litigation privilege protects confidential communications between lawyer andclient at a time when litigation is either on foot or anticipated, if thecommunication is made for the purpose of advising in respect of, or for use in thelitigation. Litigation privilege extends to documents prepared for use in litigationwhere such documents are not necessarily prepared for the purpose of beingcommunicated.15 It also protects communications between a lawyer or client anda third party if their dominant purpose is to be used in relation to actual oranticipated litigation.

Determining when litigation is anticipated is a question of fact, determined byreference to objective criteria. Although the appropriate test is not without doubt,the better view appears to be that, for the privilege to apply, there must be a realprospect of litigation, something more than a mere possibility, although litigationdoes not have to be more probable than not.16

UPDATE ON LEGAL PROFESSIONAL PRIVILEGE 287

10 Evidence Acts, s 117(1)(b). See also Wheeler v Le Marchant (1881) 17 Ch D 675;Westpac Banking Corporation v 789Ten Pty Ltd (2005) 55 ACSR 519; Pratt Holdings vCommissioner of Taxation (2004) 136 FCR 357 (Pratt).

11 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325, 333; see alsoAWB Ltd v Honourable Terence Rhoderic Hudson Cole (unreported, Federal Court ofAustralia, Young J, 17 May 2006) (AWB v Cole), 31.

12 AWB v Cole, ibid, 33, paraphrasing Balabel v Air India [1988] 1 Ch 317, 330.13 Trade Practices Commission v Sterling (1979) 36 FLR 244, (TPC v Sterling), 245.14 TPC v Sterling, ibid, 245-246; Standard Chartered Bank of Australia Ltd v Antico

(1993) 36 NSWLR 87.15 TPC v Sterling, ibid, 245-246; Standard Chartered Bank of Australia Ltd v Antico, ibid.16 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332,

340-341. See also Australian Competition and Consumer Commission v Liquorland(Australia) Pty Ltd) (unreported, Federal Court of Australia, Allsop J, 27 April 2005) 3;Microsoft Corporation v Ben Zhong Fan (trading as Big Ben Computer) (unreported,Federal Court of Australia, Jacobson J, 10 October 2003), 7; Nolan v Nolan & Anor(2003) 10 VR 636, 667-668; contra Australian Competition and Consumer Tribunal vAustralian Safeway Stores (1998) 81 FCR 526, 559.

Two recent decisions have narrowed the range of proceedings to whichlitigation privilege may apply. In AWB v Cole, Young J observed that litigationprivilege “operates to secure a fair civil or criminal trial within our adversarialsystem of justice”,17 and decided that litigation privilege did not apply in thecontext of commissions of inquiry. Young J noted a statement by Dawson J inWaterford v The Commonwealth18 that the concept of litigation for the purposes oflitigation privilege was wide enough to encompass proceedings before theAdministrative Appeals Tribunal (AAT) and held:

“The Administrative Appeals Tribunal is vested with statutory authority todetermine issues with legally binding consequences. A Royal Commissionis not in that position. A Commissioner simply carries out investigations,determines the facts and prepares a report and recommendations. ACommission does not finally determine any rights and obligations.”19

However, in Ingot Capital Investments Pty Ltd v Macquarie Equity CapitalMarkets Ltd,20 Bergin J determined that documents created and communicated forthe purposes of proceedings in the AAT were not protected by litigation privilege.Bergin J considered Young J’s dictum in AWB v Cole, and concluded that Young Jhad not expressly stated that litigation privilege extends to communicationsregarding AAT proceedings.21 Her Honour held that, because AAT proceedingsare not bound by the rules of evidence,22 they do not fall within the scope of“proceedings” as that term is used in the Evidence Acts, and the Evidence Acts donot apply to them.23 Bergin J then examined the nature of AAT proceedings atcommon law and found them to be “outside what Young J referred to in AWB as the‘adversarial system of justice’” and therefore also beyond the scope of commonlaw litigation privilege.24

The “Dominant Purpose” Test

The most significant change to the law of legal professional privilege in recenttimes was the High Court’s decision in Esso Australia Resources Ltd v Commissionerof Taxation,25 which discarded the “sole purpose” test26 in favour of the much broader“dominant purpose” test, which already applied under the Evidence Acts.27 Thechange extended the protection of privilege to communications made or created with


17 Op cit n 11, 53.18 (1987) 163 CLR 54 (Waterford).19 Ibid, 54.20 Unreported, Supreme Court of New South Wales, Bergin J, 6 June 2006) (Ingot Capital

v Macquarie).21 Ibid [37].22 Administrative Appeals Tribunal Act 1975 (Cth), s 33(1)(c).23 Ingot Capital v Macquarie, op cit n 20, [16]; see Evidence Acts, ss 4, 119.24 Ibid [55].25 (1999) 201 CLR 49, 73. 26 Grant v Downs, op cit n 4. 27 The tests under the Evidence Acts are found in ss 118 and 119.

more than one purpose, provided that the purpose attracting privilege “was dominantor of greater importance than any other”.28

Determining the dominant purpose of the communication involves an objectiveconsideration of the client or sender’s purpose, and not the subjective purpose of aperson preparing a document or making a communication. For example, inSydney Airports Corporation Ltd v Singapore Airlines Ltd,29 McDougall Jconsidered a report into an accident commissioned by the Airports Corporation’sin-house lawyer, a Ms Wilder. Although his Honour was able to infer that it wasMs Wilder’s decision to commission the report, he said:

“In the case of a corporation, the relevant purpose is that of the corporation.When an employee such as Ms Wilder, acting within the scope of herauthority, commissions a report such as the Reardon report, the purpose ofthe employee may be imputed to the employer. Nonetheless, the relevantpurpose (in the context under discussion) is that of the corporate employerand not that of the employee.”30

Although Ms Wilder’s evidence was that the predominant purpose in her mindfor commissioning the report was its subsequent use in litigation, his Honourconcluded that the fact that the Airports Corporation led no evidence of its purposeother than that of Ms Wilder meant that it had not shown it had the requisitedominant purpose.31 McDougall J’s decision was affirmed on appeal by the NewSouth Wales Court of Appeal.32

In Kennedy v Wallace,33 Gyles J considered the position of handwritten notesmade by Mr Kennedy on a hotel notepad to record matters about which he was toseek the advice of his Swiss lawyer and business adviser. Mr Kennedy led nopositive evidence as to his dominant purpose in recording the matters on the pieceof paper. Gyles J determined that there was insufficient evidence to conclude thatMr Kennedy’s dominant purpose was to seek legal advice, as distinct frombusiness advice, from his Swiss adviser.34 On appeal the Full Federal Courtupheld the decision at first instance.35

In AWB v Cole, Young J also considered whether a draft public statementcirculated by email from the then chief executive officer of AWB Limited (AWB)


28 Rio Tinto Ltd v Commissioner of Taxation (unreported, Federal Court of Australia,Sundberg J, 4 September 2006), 38.

29 Sydney Airports Corporation Ltd v Singapore Airlines Ltd (unreported, Supreme Courtof New South Wales, McDougall J, 7 May 2004).

30 Ibid [33].31 Ibid [41]; the party seeking to rely upon a claim of privilege bears the onus of

establishing the basis of the privilege claim: National Crime Authority v S (1991)29 FCR 203, 211-212.

32 Sydney Airports Corporation Ltd v Singapore Airlines Ltd (unreported, Supreme Courtof New South Wales, Court of Appeal, Spigelman CJ, Sheller JA and Campbell AJA,9 March 2005).

33 Kennedy v Wallace (2004) 208 ALR 424. 34 Ibid 73.35 Kennedy v Wallace (2004) 142 FCR 185; Black CJ, Emmett and Allsop JJ.

to a working group which included AWB’s lawyers, was protected by adviceprivilege. His Honour concluded that, although one of the purposes of circulatingthe draft statement was to obtain legal advice about it, the draft was circulated fortwo other purposes: to obtain advice on its content from a public relations adviser;and to seek the views of other senior executives of AWB as to whether the draftshould be published. Young J concluded that other two purposes of circulating thedraft ‘were of no lesser importance than the purpose of obtaining legal advice’ andaccordingly the dominant purpose was not made out.36

Justice Bergin of the New South Wales Supreme Court considered theapplication of the dominant purpose test under the Evidence Acts in 789TEN PtyLtd v Westpac Banking Corporation.37 That decision considered the status ofsolicitors’ representation letters which were sent by Westpac’s lawyers to itsauditors and which confirmed Westpac’s directors’ estimates of contingentliabilities arising from litigation in which Westpac was involved. In consideringwhether these were communications having the dominant purpose required forthem to attract the protection either of litigation privilege or advice privilege,Bergin J identified the importance of looking at communications in context,holding: “It is important to look at the whole of the correspondence to ascertain itsdominant purpose, rather than simply relying upon the statement by the Bank as tothe reason [its lawyers’] response was sought.”38

Having regard to the context of the communications, Bergin J concluded that“the dominant purpose was to enable the auditor to use the information in the auditof the Bank’s financial statements” and not the provision of advice or professionallegal services relating to a proceeding.39 The decision was upheld by the NewSouth Wales Court of Appeal.40

Notwithstanding that the dominant purpose test is easier to satisfy than the solepurpose test which preceded it, it appears that the courts are prepared to examineclosely the relevant factual circumstances to ascertain whether the requisitedominant purpose actually existed, and will not accept an assertion of privilege atface value where an objective analysis may lead to a different conclusion as towhat was the true dominant purpose of the communication.

Lawyer Acting as Lawyer

For a communication between client and lawyer to attract advice privilege, thelawyer must be acting in his or her professional capacity – as a lawyer.41 Meeting


36 Op cit n 11, 38.37 (2005) 215 ALR 131.38 Ibid 143.39 Ibid 143,150.40 Westpac Banking Corporation v 789TEN Pty Ltd, op cit n 10.41 Seven Network Ltd v News Ltd (unreported, Federal Court of Australia, Tamberlin J,

28 February 2005); Standard Chartered Bank v Antico (1993) 36 NSWLR 87; AustraliaHospital Care (Pindara) Pty Ltd v Duggan (unreported, Supreme Court of Victoria,Gillard J, 28 April 1999).

this requirement can be problematic in circumstances where a lawyer performs bothlegal and non-legal work for the one client. Even if a lawyer can be shown to beacting in a legal capacity, he or she must also demonstrate competence andindependence from the client for privilege to be established.42 The need to be actingin a professional capacity and the requirement of independence raise particularissues in respect of confidential communications to and from employed or in-houselawyers, the circumstances of whom have been the subject of recent decisions.

In Waterford,43 the High Court considered whether advice provided by in-houselawyers to their employers would attract legal professional privilege. Waterfordconsidered whether advice provided by government lawyers to administrativedecision-makers in respect of the exercise of their powers would attract adviceprivilege, and there are certain aspects of the judgment which are peculiar togovernment lawyers.44

A majority of the High Court found that the employment relationship betweenlawyer and client did not, by itself, deny the application of privilege to the advice.Mason CJ and Wilson J said:

“Whether in any particular case the relationship is such as to give rise to theprivilege will be a question of fact. It must be a professional relationshipwhich secures to the advice an independent character notwithstanding theemployment.”45

Further, Brennan J held:

“If the purpose of the privilege is to be fulfilled, the legal adviser must becompetent and independent. Competent, in order that the legal advice besound and the conduct of litigation be efficient; independent, in order thatthe personal loyalties, duties or interests of the adviser should not influencethe legal advice which he gives or the fairness of his conduct of litigation onbehalf of his client.”46

There is no High Court authority expressly extending the principles inWaterford to private sector in-house lawyers. However, in the decision of the


42 Waterford, op cit n 18.43 Ibid. The question had been discussed by three judges in Attorney-General (NT) v Kearney

(1985) 158 CLR 500 (Kearney), and had already been determined in England: AlfredCrompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2) [1972] 2QB 102 and in North America: United States v United Shoe Machinery Corporation 89 FSupp 357 (1950); Re Director of Investigation & Research and Shell Canada Ltd (1975) 55DLR (3d) 713.

44 See, eg, Brennan J, who doubted whether privilege would attach to advice provided bylawyers employed by commercial corporations, but was able to distinguish the positionof government lawyers (at 72) and Dawson J, who despite agreeing that privilege couldapply to salaried lawyers’ communications (at 97), considered that where a matter ofpublic interest arose, the question whether the communication should be disclosed wasto be determined by the application of public interest immunity, rather than legalprofessional privilege (at 98).

45 Op cit n 43, 62.46 Op cit n 43, 70.

Supreme Court of Victoria in Australian Hospital Care (Pindara) Pty Ltd vDuggan,47 Gillard J referred to Waterford and stated:

“[Although] what was said with respect to salaried employees in the privatesector was obiter …both the quantity and quality of the obiter leads to theconclusion that what was said represented the common law in Australia.

…on a fair reading of what their Honours said at p 60-p 62, the sameprinciple applies to salaried employees in the private sector…”48

Other State Supreme Court decisions have applied privilege to in-houselawyers’ communications.49

The first key issue for in-house lawyers is whether or not they are acting on theoccasion of the communication in a professional legal capacity, given thepotentially “considerable overlap between commercial participation and legalfunctions and opinions”.50 The lawyer must be acting in a legal context or role inrelation to the communications over which privilege is claimed.51 For example, alawyer who is also a director of a company to whom he or she providesprofessional legal advice must take care to distinguish between the director’s role,and the role of legal adviser to the company. In Standard Chartered Bank vAntico,52 privilege was claimed in respect of a portion of board minutes whichrecorded a statement to the board by a director who was also a lawyer. Hodgson Jdeclined to uphold the privilege, finding that the director had:

“…made the statement before the board primarily as a director with legalknowledge, participating in a commercial decision, rather than either asgiving confidential legal advice as a solicitor for the company or assummarising advice previously given.”53

In Australian Hospital Care (Pindara) Pty Ltd v Duggan Gillard J ordered thatdocuments over which privilege had been claimed in respect of an in-house lawyerbe produced for inspection by another justice to determine privilege, in partbecause the evidence disclosed that the lawyer “was involved in the businessactivities of the parent company and that clearly his duties involved activitieswhich were not of a legal nature”.54

In Seven Network Ltd v News Ltd55 legal professional privilege was challenged inrespect of communications to and from the Chief General Counsel of News Ltd.


47 Op cit n 41.48 Ibid, 5-6. 49 See, eg, Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 6) (unreported,

Supreme Court of South Australia, Civil Division, Bleby J, 6 May 2002); Ritz Hotel Ltdv Charles of the Ritz Ltd (No 4) (1987) 14 NSWLR 100; Deputy Federal Commissionerof Taxation v Citibank Ltd (1989) 1 Qd R 516.

50 Seven Network Ltd v News Ltd, op cit n 41, 12.51 Ibid.52 (1993) 36 NSWLR 87.53 Ibid, 93.54 Op cit n 41, 16. Gillard J thought “independence” to be an aspect of the “professional

capacity”requirement, although he considered it as a separate element, 8.55 Op cit n 50.

Tamberlin J observed that the Chief General Counsel held a number of other officesin companies in the corporate group, was a member of an executive committee, andwas extensively involved in numerous commercial negotiations.56 His Honour heldthat, although “there is no bright line separating the role of an employed legalcounsel as a lawyer advising in-house and his participation in commercialdecisions”, the Chief General Counsel was “engaged in the commercial decisionsto such an extent that significant weight must be given to this participation” indifferentiating between commercial and legal advice given.57 His Honour held, inrelation to most of the disputed documents, that the Chief General Counsel was not“acting in a legal context or role” such that privilege should be maintained.58 In alater decision in the same proceeding Graham J found that the documents inquestion had been brought into existence by in-house counsel for the dominantpurpose of providing legal advice notwithstanding that part of the in-housecounsel’s time was dedicated to a “project management” function.59

With regards to the requirements of competence and, in particular,independence, Brennan J’s judgment in Waterford emphasised that the foundationof a lawyer’s qualification to attract privilege to their communications was thelawyer’s ethical and professional obligations, observing that “there is much to besaid for the view that admission to practice as a barrister or solicitor is thesufficient and necessary condition for attracting the privilege.”60

The requirement of independence as identified in Waterford was considered inthe recent decision of the Supreme Court of the Australian Capital Territory (ACT)in Vance v McCormack.61 The court at first instance considered whether, atcommon law, advice provided by legal officers in the Australian Defence Forceattracted legal professional privilege. Crispin J concluded that the amenability oflawyers to professional misconduct proceedings by virtue of the statutory schemeunder which their practising certificates were regulated was central to their actingin a professional capacity. His Honour held, therefore, that a claim for privilege“must fail” where a lawyer did not hold a practising certificate at the time that theconfidential communication was made.62 The Court of Appeal found thatCrispin J had erred in holding that a practising certificate was a pre-requisite to alawyer’s advice attracting privilege, although this conclusion was drawn havingregard to the definition of “lawyer” in the Evidence Acts, and not at common law.63

The Court of Appeal agreed, however, that “the possession of a current practising


56 Ibid, 4.57 Ibid 12.58 Ibid.59 Seven Network Ltd v News Ltd (2005) 225 ALR 672, 676-677, 687-692.60 Op cit n 18, 70.61 Vance v Air Marshall Errol John McCormack & The Commonwealth (2004) 154 ACTR

12 (Vance v McCormack). It was held on appeal that the claim for privilege inCommonwealth v Vance was to be determined under the Evidence Acts.

62 Ibid, 24.63 Commonwealth v Vance (2005) 158 ACTR 47, 52 (Commonwealth v Vance).

certificate can be a very relevant fact to take into account” in determining a claimfor privilege over an in-house lawyer’s communications.64

Crispin J also considered the factual indicia of independence in Vance vMcCormack. His Honour stated:

“The decisive question is whether, as a matter of fact, the relationshipbetween the lawyers and their employer involved professional relationshipswhich secured to the advice sought or conveyed by the relevant documentsan independent character notwithstanding the employment…It requires dueconsideration of all of the evidence including that relating to such factors asthe employment structure and chain of command insofar as those factorsmay impinge upon the independence of employed lawyers, directions in factgiven by superior officers and attitudes and occurrences capable of castinglight on the true nature of the relationships in question.”65

Crispin J found that the employee lawyers did not have a relationship ofindependence as regards their employer. In so finding, he took into account thefact that the lawyers employed by the Australian Defence Force were subject to theDefence Force Discipline Act 1982 (Cth) which imposes criminal penalties fordisobedience of superior officers’ commands.66 He also found evidence of aculture amongst the lawyers in which “advice and decisions should be guided bythe principle that the interests of the Commonwealth should prevail” and notedthat this culture was inconsistent with a lawyer’s paramount duty to the court.67

Commonwealth v Vance clearly demonstrates that in-house lawyers’communications attract privilege under the Evidence Acts, where the definition of“client” expressly includes “an employer (not being a lawyer) of a lawyer”.68 Thedefinition of “lawyer” in the Evidence Acts to mean “a barrister or solicitor”69

introduces a qualification threshold which Commonwealth v Vance interpreted as“not specifically requiring anything more than admission to the status oflawyer”.70 While the Court of Appeal did not read into this definition therequirements of competence and independence considered in Waterford, it stillconsidered them in determining the claims for client legal privilege under theEvidence Acts by taking into account the relevance of practising certificates andthe impartiality of legal advice given.

As has been observed above under the heading “Legal Advice Privilege andLitigation Privilege”, legal advice “is not confined to telling the client the law but


64 Ibid, 54.65 Op cit n 61, 31.66 Ibid, 26.67 Ibid, 27. The Court of Appeal did not uphold Crispin J’s decision on this point, but its

basis for doing so was that in reaching his decision, Crispin J had relied, improperly,upon statements made by a defence force legal officer to a Senate committee incircumstances where the statement was protected by parliamentary privilege. There wasno suggestion that Crispin J’s reasoning on this point was incorrect.

68 Evidence Acts, s 117(1)(a).69 Evidence Acts, Dictionary.70 Commonwealth v Vance, op cit n 63, 51.

includes professional legal advice as to what should prudently and sensibly bedone in the relevant legal context.”71 In Rio Tinto Ltd v Commissioner ofTaxation72 Sundberg J held that this statement of the law is

“…equally applicable to lawyers who practise as in-house counsel. Suchlawyers are less likely to be provided with a bundle of documents and askedto ‘advise me what to do’, but it is implicit in their role that they are to adviseon legal matters that arise in the course of their employment.”73

A related aspect concerns the professional standing of foreign lawyers. Thedecision in Kennedy v Wallace clarified the applicability of legal professionalprivilege to communications made with foreign lawyers.74 At first instance,Gyles J found that Mr Kennedy had not established that the Swiss legal adviser heconsulted had qualities equivalent to those that bestow the protection of privilegeupon communications with Australian lawyers.75 On appeal, the Full FederalCourt disagreed with this aspect of the decision, and found that, absent anyevidence to the contrary, it was sufficient to establish that the foreign lawyer wasadmitted to practice in a foreign country in order for the court to draw the usualinferences about the lawyer’s competence and independence.76

Copy Documents and Severability: Propend and the Converseof Propend

Although legal professional privilege attaches to communications, it is mostcommonly the documents that record those communications that are the focus ofprivilege disputes. This is plainly so because disclosure of a document whichrecords a privileged communication would result in disclosure of thecommunication itself and thereby frustrate the purpose of the privilege.

The logical extension of this reasoning, recognised in many cases, is that arange of documents ancillary to the communication itself, although notthemselves communications, are protected from disclosure on the basis that theirdisclosure would also disclose the content of the privileged communication.77

They include research memoranda, drafts of letters not ultimately communicated,draft agreements and court documents.78 Copies of privileged documents will alsobe protected by privilege on this basis.79


71 AWB v Cole, op cit n 11, 33, paraphrasing Balabel v Air India [1988] 1 Ch 317, 330. Seealso Packer v Deputy Commissioner of Taxation [1985] 1 Qd R 275, 284.

72 Op cit n 28.73 Ibid, 10.74 Op cit n 35.75 Op cit n 33, 450.76 Op cit n 35, 221, 222.77 See, eg, Attorney-General (NT) v Maurice (1986) 161 CLR 475, 496 (Dawson J) and

Pratt, op cit n 10, 362-363 (Finn J). Other examples are cited in Desiatnik, op cit n 1, 26.78 Dalleagles Pty Ltd v Australian Securities Commission, op cit n 11, 333.79 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR

501, 550 (McHugh J), 569 (Gummow J) (Propend).

In Propend, a majority of the High Court also extended legal professionalprivilege to copies of non-privileged documents, provided that the copies weremade for the purpose of a communication to which privilege attached,notwithstanding that the original document remained unprivileged.80 The clearestexample of such a document is a copy of a non-privileged documentcommunicated to a lawyer together with an instruction to provide legal advice asto its contents. The majority in Propend emphasised that privilege attaches to the“communication”, rather than the documents which constitute thecommunication.81 They reasoned that it would “cut across the purpose” ofprivilege if it were possible to compel the production of documents forming part ofa communication between client and lawyer (and, for that matter betweensolicitors and counsel) on the ground that they were copies of original documentsnot protected by legal professional privilege.82 As a matter of principle, therefore,and in deference to the “paramountcy of the principle of legal professionalprivilege in our legal system”,83 privilege attached to copies of documents madefor the purpose of making such a communication.

Finally, it should be noted that, consistent with the principles in Propend, theHigh Court has ruled that presence of non-legal material in a document is not, ofitself, a barrier to a document, or parts of a document, being protected byprivilege.84 However, the disclosure of part of a document in circumstances whereit would be inconsistent or unfair to rely upon part of a document and then claimprivilege over the remainder, has been found to amount to waiver of privilege overthe whole document.85 In contrast to this rule is the generally accepted propositionthat a party may mask privileged parts of a document where the masked parts ofthe document record a privileged communication that is severable from the rest ofthe document.86 The concept that a document can contain both a privileged and anunprivileged communication highlights the flexibility of the notion of a“communication”.

Improper Purpose

Communications between a lawyer and client which facilitate a crime or fraudare not protected by legal professional privilege.87 Although often referred to asthe “fraud exception”,88 the recent Federal Court decision in AWB v Cole (No 5)has made it clear that the principle encompasses a wide species of fraud, criminal


80 Ibid (Gaudron, McHugh, Gummow and Kirby JJ).81 Ibid, 543 (Gaudron J), 552 (McHugh J), 566 (Gummow J), 583 (Kirby J).82 Ibid, 542 (Gaudron J). 83 Ibid, 552 (McHugh J).84 Waterford, op cit n 18, 66 (Mason and Wilson JJ).85 See, eg, Attorney-General (NT) v Maurice, op cit n 77, 488 (Mason and Brennan JJ).

Waiver of privilege is discussed further below.86 Desiatnik, op cit n 1, 150-152.87 AWB v Cole, op cit n 11, 75.88 Kearney, op cit n 43, 515; Propend, op cit n 79, 546; Clements, Dunne & Bell Pty Ltd v

Commissioner of Australia Federal Police (2001) 188 ALR 515, 521-522.

activity or actions taken for illegal or improper purposes and extends to “trickery”or “shams”.89 The fraud exception is based on public policy grounds and is“sufficiently flexible to capture a range of situations where the protection ofconfidential communications between lawyer and client would be contrary to thepublic interest”.90 In AWB v Cole (No 5), Young J held that the documents indispute were brought into existence in furtherance of an improper and dishonestpurpose: to inflate the prices of wheat contracts to extract payments out of theUnited Nations’ escrow account. As this transaction “work(ed) a trickery on theUnited Nations”, Young J held that it would be contrary to public policy forprivilege to attach to communications containing legal advice in relation to thetransaction.91

PRESERVING THE PRIVILEGE

It has already been observed that confidentiality is both the object of privilege,and a precondition for a claim of privilege over a communication. As aconsequence, communications disclosed outside of the confidential relationshipbetween lawyer and client may lose the protection of privilege by operation of thedoctrine of waiver of privilege. The principles applying to waiver of privilege, andthe circumstances in which communications will continue to attract privilegenotwithstanding that they may have been disclosed to third parties to the lawyerand client relationship, are the subject of the second part of this paper.

Protected Communications with Third Parties

Although the overarching principle is that communications with third partiesare not protected by privilege, there are defined circumstances in whichcommunications with third parties will continue to enjoy the protection ofprivilege.

The first category of such circumstances consists of a number of exceptionswhich cause little difficulty and in many cases are accepted or assumed withoutquestion. The first is that a communication made by or to a third party acting as theagent of the client or the lawyer will be protected by privilege if it is made for aprivileged purpose.92 However, two recent decisions have considered and rejectedthe proposition that a client’s accountants acted as agents of the client in receiving93

and sending94 respectively communications from and to the client’s lawyers. Thesecond exception, known as “common interest privilege”, permits privileged


89 AWB v Cole (No 5) (unreported, Federal Court of Australia, Young J, 18 September2006), 5.

90 Kearney, op cit n 43, 514-515.91 AWB v Cole (No 5), op cit n 89, 5.92 Wheeler v Le Marchant, op cit n 10.93 Westpac Banking Corporation v 789TEN Pty Ltd, op cit n 40, 527.94 Pratt, op cit n 10, 367.

communications to be disclosed between parties having a common interest in thesubject matter of legal advice or in the legal proceedings to which thecommunication relates without the privilege being waived. Common applicationsof this exception include circumstances where privileged material is sharedamongst entities in a corporate group95 or, in the context of litigation, betweeninsurer and insured96 and between insurer and reinsurer.97 A third exception in thiscategory is “joint privilege”. It applies in situations where two clients communicatejointly with a single legal adviser.98 It should be noted that, although the EvidenceActs provide for both common interest privilege and joint privilege99 the statutoryequivalent of common interest privilege applies only to litigation privilege.100 TheEvidence Acts also extend privilege to a relationship of agency.101

The second category of exceptions deals with communications with thirdparties that fall more clearly outside the lawyer-client relationship. First withinthis category is the extension of litigation privilege to communications with thirdparties having the requisite privileged purpose. It has long been recognised thatlitigation privilege applies to confidential communications between lawyers orclients and third parties such as witnesses, process servers and loss assessors.102

It also extends to communications with expert witnesses. Materials such asdraft witness statements and notes of interviews used to brief expert witnesses inorder to obtain expert reports, are, as a matter of principle, protected by litigationprivilege.103 The communication from lawyer to expert witness may containalready privileged material (for example, draft witness statements, notes ofinterviews with other witnesses, working documents and advice in relation tolitigation prepared by lawyers) as well as source documents that, although nototherwise privileged, attract privilege to the extent they are an element in acommunication to the expert for a privileged purpose.104 However, once the expertreport is disclosed in the course of litigation, privilege in the material upon whichthe expert founds his or her report will be waived, on the basis that the disclosureresults in an inconsistency between the maintenance of confidentiality in the


95 State of South Australia v Peat Marwick Mitchell (1995) 65 SASR 72.96 Farrow & Mortgage Services (in liq) v Webb (1996) 39 NSWLR 601.97 Commercial Union Assurance Co plc v Mander [1996] 2 Lloyd’s Rep 640.98 Farrow & Mortgage Services (in liq) v Webb, op cit n 96.99 Evidence Acts, s 124. However, statutory joint privilege is circumscribed by subs (2)

which “does not prevent one of those parties from adducing evidence of acommunication made by any one of them to the lawyer”’. Section 124 has been said to“have the effect of encouraging a wide range of clients with similar interests to takeseparate advice, rather than take advice jointly, to avoid the risk of communicationsbecoming the subject of evidence”, Jill Anderson, Jill Hunter and Neil Williams SC, TheNew Evidence Law: Annotations and Commentary on the Uniform Evidence Acts (1sted, 2002), 429.

100 Evidence Acts, s 122(5).101 Evidence Acts, s 122(3).102 See, eg, TPC v Sterling, op cit n 13, 246 (e) & (f).103 TPC v Sterling, op cit n 13, 246.104 Consistent with the principles in Propend, op cit n 79.

source materials when those materials form the basis of the expert’s report.105 Thisapplies to the expert’s instructions from the lawyer, and any source material andotherwise privileged material with which the expert has been provided, where itcan be inferred that the material has provided a foundation for the opinionsexpressed by the expert.106

In Pratt the Full Federal Court considered whether the principle extendingprivilege to third party communications, so long accepted in respect of litigationprivilege, should extend to advice privilege.107 The facts in Pratt involved avaluation report that had been prepared by a firm of accountants and subsequentlycommunicated by the client to its solicitors for the purpose of the solicitorsadvising in relation to a proposed transaction. The communication was not acommunication in relation to actual or anticipated litigation, nor was it made bythe firm of accountants in its capacity as the client’s agent. On the basis of thesefacts, the judge at first instance found no Australian authority supported theextension of advice privilege to the valuation report.108

On appeal, the Full Federal Court found that no binding authority existed on thequestion before them, and that it fell to them to resolve the issue by reference tofirst principles.109 The Full Court found that it would “undercut the privilege” todeny the protection of privilege to documentary communications made by thirdparties where the function of the communication was “to enable the principal tomake the communication necessary to obtain legal advice it required”.110

Accordingly, there is now authority extending advice privilege to third partycommunications, where those communications are made for the dominantpurpose of providing the lawyer with the instructions necessary for the provisionof advice. However, the Evidence Acts have not been amended to incorporate theprinciples established in Pratt, and, as a result, third party communications stillattract only litigation privilege in proceedings to which the Evidence Acts apply.111


105 Lovegrove Turf Services Pty Ltd v Minister for Education (unreported, Supreme Court ofWestern Australia, Johnson J, 5 November 2003) 10 (Johnson J), applying Mann vCarnell (1999) 201 CLR 1.

106 Australian Securities and Investments Commission v Southcorp Ltd (2003) 130 FCR406, 412. The court may accept an expert’s assertion that the lawyer’s instructions didnot form the foundation of the opinion, and find that the disclosure of the report does notresult in a waiver of privilege in the instructions, as occurred in Dingwall vCommonwealth of Australia (1992) 39 FCR 521. The safer course, however, wouldappear to be for the lawyer briefing the expert to set out all relevant facts and instructionsin a communication to the expert in the assumption that the communication will lose theprotection of privilege once the expert’s report is disclosed (see Cole v Dyer (1999) 74SASR 216, 224 (Doyle J).

107 Pratt, op cit n 10.108 Commissioner of Taxation v Pratt Holdings Pty Ltd (2003) 195 ALR 717, 736-737.109 Pratt, op cit n 10.110 Ibid, 368 (Finn J, Merkel J agreeing).111 There have been ALRC recommendations to bring the Evidence Acts in line with Pratt.

See Queensland Law Reform Commission, A Review of the Uniform Evidence Acts,Report No 60 (2005), 249-252.

Express Waiver and Limited Waiver

If it does not fall within any of the exceptions listed above, the disclosure of aprivileged communication to a third party to the lawyer-client relationship will bringabout a waiver of privilege in the communication. The High Court’s most recentauthority on the circumstances that will give rise to waiver of privilege was itsdecision in Mann v Carnell.112 That decision concerned the disclosure by AnneCarnell, Chief Minister of the Australian Capital Territory (ACT), of confidentiallegal advice received from the government’s lawyers concerning a settlement sumpaid to the applicant, a Dr Mann. In response to an inquiry from a Member of theACT Parliament, Ms Carnell provided the Member, on a confidential basis, with acopy of the advice received in respect of the settlement. Dr Mann sought to inspectthat advice on the basis that privilege had been waived by reason of the disclosure ofthe advice. A majority of the High Court found that the disclosure of the advice onthat basis did not amount to waiver of privilege in the advice. The majority said:

“Legal professional privilege exists to protect the confidentiality ofcommunications between lawyer and client. It is the client who is entitled tothe benefit of such confidentiality, and who may relinquish that entitlement.It is inconsistency between the conduct of the client and maintenance of theconfidentiality which effects a waiver of the privilege …

What brings about the waiver is the inconsistency, which the courts,where necessary informed by considerations of fairness, perceive, betweenthe conduct of the client and maintenance of the confidentiality; not someoverriding principle of fairness operating at large.”113

Express waiver may come about because a party decides to abandonconfidentiality in a communication, for example by giving evidence of it orotherwise relying upon it,114 or by providing privileged documents to a party incircumstances where no obligation of confidentiality, whether express or implied,exists.115 Some authority exists for the proposition that voluntary disclosure ofprivileged material to a third party in strict circumstances of confidentiality givesrise to a “limited waiver”, affecting only the privilege holder’s right to assertwaiver against that third party.116 However, when the opposing party in litigationis inadvertently permitted to inspect a document protected by privilege, thegeneral rule is that privilege in the document is lost,117 although the position is farfrom clear, and much may depend on the circumstances of the inadvertentdisclosure and the use to which the disclosed document has been put.118


112 Op cit n 105. 113 Ibid, 13 (Gleeson CJ, Gaudron, Gummow and Callinan JJ).114 See, eg, Giannarelli v Wraith (No 2) (1991) 171 CLR 592. 115 See, eg, Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (1994)

52 FCR 578.116 See, eg, Hartogen Energy Ltd (in liq) v Australian Gas Light Company (1992) 36 FCR

557, 568 (Gummow J).117 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 2 All ER 716. 118 A discussion of the somewhat incoherent case law on this point is contained in

Desiatnik, op cit n 1, 144-148.

Implied Waiver: Disclosure Waiver

In addition to waiver of privilege by express or deliberate actions, waiver ofprivilege may also arise as a matter of law as a result of a party’s conduct,irrespective of the party’s subjective intention. In Mann v Carnell, the majoritysaid:

“Waiver may be express or implied. Disputes as to implied waiver usuallyarise from the need to decide whether particular conduct is inconsistent withthe maintenance of the confidentiality which the privilege is intended toprotect. When an affirmative answer is given to such a question, it issometimes said that waiver is ‘imputed by operation of law’. This meansthat the law recognises the inconsistency and determines its consequenceseven though such consequences may not reflect the subjective intention ofthe party who has lost the privilege.”119

Two types of implied waiver can be discerned from the case law. The first,disclosure waiver, arises when a party discloses part of the content of a privilegedcommunication. This may occur because the party refers to part of the content ofthe communication, in circumstances where that part of the communication is notseverable from the rest of the communication.120 It may also arise as a result of aparty disclosing the gist or substance of legal advice it has received.

There are a number of recent examples of disclosure waiver arising as a resultof the disclosure of the gist or substance of legal advice in public statements. InAmpolex Ltd v Perpetual Trustee Co (Canberra) Ltd,121 the New South WalesSupreme Court considered whether Ampolex had disclosed the gist or substanceof legal advice in two statements contained in a document sent to shareholders inresponse to a takeover bid. The first statement was as follows:

“The views set out below have regard to the pleadings, the evidence availableto Ampolex and the advice of the barristers and the solicitors engaged byAmpolex for the purposes of the litigation, as at 1 May 1996. Ampolexconsiders that:

It is likely that Ampolex will be successful in establishing the conversionratio for the Convertible Notes as one Ordinary Share for each ConvertibleNote.”

Rolfe J found that, although a statement of the summary of legal advice receivedwas sufficient to waive privilege in the advice, this statement set out Ampolex’s viewof the likely outcome of the litigation, which, although clearly informed by legaladvice, did not disclose the substance or the effect of the legal advice.122 However,Rolfe J was prepared to make a finding of waiver in respect of the followingstatement: “There is a dispute about the conversion ratio. Ampolex maintains thatthe correct ratio is 1:1 and has legal advice supporting this position.”


119 Op cit n 105, 13.120 These were the facts in Goldberg v Ng (1995) 185 CLR 83.121 (1996) 40 NSWLR 12.122 Ibid, 18.

In this second instance, the conclusion of the legal advice was held to have beendisclosed.123

Similar decisions have been reached in more recent cases on waiver. InSwitchcorp v Multiemedia,124 Whelan J considered whether privilege had beenwaived as a result of the following statement by a litigant to the Australian StockExchange: “The Board’s lawyers have been instructed to vigorously defend theclaim and have advised that the plaintiffs’ claim will not succeed.”

Whelan J reviewed the case law relating to waiver and found that the casesdealing with disclosure waiver supported two general propositions:

“1. A statement which reveals the contents of legal advice, even if it does soin a summary way or by reference only to a conclusion, will, or probablywill, result in a waiver […]

2. A statement which refers to legal advice, even if it associates that advicewith conduct undertaken or with a belief held by the client, will not, orprobably will not, result in a waiver.”125

The consequences of an express waiver of privilege can be significant, and notconfined to the particular document over which privilege is waived. If privilege isexpressly waived over a communication, the privilege protecting the underlying legaladvice upon which that communication was based may, in consequence, also be lostby disclosure waiver. In Seven Network Ltd v News Ltd (No 12),126 Sackville Jconsidered the following statement in board minutes provided by the 16th and 22ndrespondents (Optus): “Optus will defend vigorously any claims brought by C7. Ourlegal advice is that the risk of damages being awarded against Optus is low.”127

Whether inadvertent or otherwise, the failure to mask the record of aconfidential communication in that passage of the board minutes resulted not onlyin the express waiver of that record of a privileged communication but also theimplied waiver of privilege subsisting over the underlying legal advice.128

Implied Waiver: Issue Waiver

A related, but distinct branch of implied waiver is known as issue waiver. Issuewaiver occurs when a party puts the contents of a privileged communication inissue in a proceeding, either in making a claim or by way of defence.129 Issuewavier can arise in a number of situations, the most common of which are caseswhere a party’s state of mind is a fact in issue between the parties.


123 Ibid.124 Op cit n 6, 1.125 Ibid, 3-4.126 Unreported, Federal Court of Australia, Sackville J, 3 April 2006.127 Ibid, 3.128 Ibid, 8.129 Commissioner of Taxation v Rio Tinto Ltd (unreported, Federal Court of Australia,

Kenny, Stone and Edmonds JJ, 2 June 2006), 18; see also DSE (Holdings) Pty Ltd vIntertan Inc (2003) 127 FCR 499, 519 (Allsop J).

For example, issue waiver occurs almost without exception in professionalnegligence proceedings against lawyers, where it is self-evident that the plaintiffraises as an issue in the proceeding the advice given by its lawyers and, by doingso, waives privilege in that advice.130 It also applies to applicants for extensions oftime to appeal, or similar discretionary relief, if the applicant claims he or she wasignorant of the possibility of an appeal.131 In such circumstances privilege will bewaived in respect of advice received by the applicant about the applicant’s rights.

If a party pleads reliance upon statements made by the other party, the questionas to whether the first party has put in issue its “state of mind” is less clear cut. InTelstra Corporation Ltd v BT Australasia Pty Ltd,132 the Full Federal Courtconsidered whether a claim that a party entered into an agreement in reliance uponallegedly misleading and deceptive conduct brought about a waiver of privilege inrespect of legal advice material to its state of mind. The majority said that:

“… the conduct of a party which leads to the implication of consent to the useof otherwise privileged material, or to an implied waiver of such privilege, inundue influence cases, legal professional negligence cases and, in my view,the ‘state of mind’ cases, is that of raising for determination in legalproceedings, as an element in the cause of action relied upon, an issueincapable of resolution without reference to that material.”133

Subsequent decisions and commentary have criticised as too wide thisstatement of the rule: that privilege is waived in advice relevant to the formation ofa state of mind whenever the state of mind is raised as an issue for determination inlegal proceedings as an element in a cause of action.134 these doubts, the prevailingview in recent decisions of the Federal Court appears to be that the decision inTelstra v BT depended in large measure upon its facts, and, in particular, themajority’s finding that BT’s case, as pleaded, relied upon the state of mind in sucha way that it waived privilege in legal advice material to that state of mind.135

The question of the degree of a party’s reliance upon the state of mind inbringing its case was again emphasised in the decision of Allsop J in DSE(Holdings) Pty Ltd v Intertan Inc.136 Although Allsop J expressed unease with theview that “relevance to an issue is the proper test”,137 he also identified thedifference between the majority view in Telstra v BT and the view of Beaumont J,who dissented, as depending upon the view the judges reached of the “centrality”of the privileged communications to the case.138 This type of fact-based inquiry


130 Lillicrap v Nalder & Son [1993] 1 All ER 724.131 Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347.132 (1998) 85 FCR 1336 (Telstra v BT) (Branson and Lehane JJ, Beaumont J dissenting).133 Ibid, 167 (Branson and Lehane JJ).134 See, eg, Desiatnik, op cit n 1 , 168–170 and the comments of Allsop J in DSE (Holdings)

Pty Ltd v Intertan Inc, op cit n 121, 526 and following.135 See, eg, Commissioner of Taxation v Rio Tinto Ltd, op cit n 129, 16; Fort Dodge

Australia Pty Ltd v Nature Vet Pty Ltd (unreported, Federal Court of Australia, Hely J,24 April 2002), 4.

136 Op cit n 129.137 Ibid, 526.138 Ibid, 525.

was adopted in two decisions of the New South Wales Supreme Court whichidentified a number of factors relevant to determining whether waiver hadoccurred, including the significance or centrality of the belief to the case as awhole, the relevance of the reasonableness of the belief to the case as a whole, andthe probability of the legal advice being relevant to the holding of that belief, orrelevant to its reasonableness.139

The difference between the majority and the minority views in Telstra v BT thusappears mostly to have its lost relevance as courts have shifted the focus of theinquiry to whether, on the facts, a party has put the contents of privilegedcommunications in issue.140 If the factors identified in Wayne Lawrence arecorrect, the inquiry will have regard to centrality of the state of mind to the case aspleaded, but also to the practical likelihood that the legal advice underconsideration was material to the state of mind.

Regulators’ Statutory Compulsion Powers

Finally, it should be noted that powers afforded to regulatory bodies by statuteto demand documents or compel examinations do not operate to cut across legalprofessional privilege.141 In The Daniels Corporation International Pty Ltd vAustralian Competition and Consumer Commission,142 the High Court found that,as a fundamental substantive common law right, privilege would not be abrogatedby statute in the absence of clear words or a necessary implication to that effect.143

It concluded that the provisions of the Trade Practices Act 1974 (Cth) entitling theCommission to require the production of documents upon service of a notice didnot require the production of documents recording privileged communications.Certainly the information gathering powers of the Australian Taxation Office donot extend to privileged documents144 and it is strongly arguable, on the basis ofDaniels v ACCC, that the powers of the Australian Securities and InvestmentsCommission are similarly circumscribed.145


139 Wayne Lawrence Pty Ltd v Hunt (unreported, Supreme Court of New South Wales,Equity Division, Hodgson CJ, 19 October 1999) (Wayne Lawrence) [12]; cited withapproval by Gzell J in Chen v City Convenience Leasing Pty Ltd (unreported, SupremeCourt of New South Wales, Court of Appeal, Bryson JA, Windeyer and Gzell JJ,12 September 2005). In Seven Network Ltd v News Ltd (No 10) (2005) 227 ALR 704,713, 716 Sackville J considered and applied the factors identified in Wayne Lawrence.

140 See, eg, Commissioner of Taxation v Rio Tinto Ltd, op cit n 129, 13.141 See, eg, ss 263 and 264 Income Tax Assessment Act 1936 (Cth); s 155 Trade Practices

Act 1974 (Cth); ss 30, 31, 32A or 33 Australian Securities and Investments CommissionAct 2001 (Cth).

142 (2002) 213 CLR 543 (Daniels v ACCC).143 Ibid, 563 (Gleeson CJ, Gaudron, Gummow and Hayne JJ).144 Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403; Australia & New Zealand

Banking Group Ltd v Deputy Commissioner of Taxation (2001) 46 ATR 451.145 The High Court’s decision in Corporate Affairs Commissioner v Yuill (1991) 172 CLR

319, which considered the powers of a predecessor to the Australian Securities andInvestments Commission, was considered by the majority in Daniels v ACCC, op cit n134, 567 (Gleeson CJ, Gaudron, Gummow and Hayne JJ) and was found not to provideguidance in respect of the specific powers under examination in that case.

CONCLUSION

High Court authority has clearly expanded the application of legal professionalprivilege in recent times, from the substantial broadening of the test to one ofdominant purpose,146 to the resounding endorsement of the right as a fundamentalcommon law immunity147 which is incapable of abrogation other than by expresslegislative intent,148 rather than just a rule of evidence. Similarly, the Full FederalCourt in Pratt has recently shown a capacity to take a robust approach indeveloping new principles governing the application of legal professionalprivilege.149 At the same time, a countervailing trend to strike down privilegeclaims by finding that a party has impliedly waived privilege gathers pace in lowercourts, perhaps as a natural consequence of a trial judges’ concern to have relevantevidence before them. In the circumstances, a keen and current understanding ofthe relevant principles is a valuable skill for lawyers and clients alike in structuringadvice to attract privilege and in avoiding the pitfalls of waiver of privilege.


146 Esso Australia Resources Ltd v Commissioner of Taxation, op cit n 25.147 Baker v Campbell, op cit n 2.148 Daniels v ACCC, op cit n 142.149 Pratt, op cit n 10.

return to AMPLA 2006 Table of Contents

Update on Legal Professional Privilege - austlii.edu.au · 9 Evidence Acts, ss 118 and 119. Advice...

Documents

Transcript of Update on Legal Professional Privilege - austlii.edu.au · 9 Evidence Acts, ss 118 and 119. Advice...