Federal Litigation Section
Brennan v Shaw [2011] FamCAFC 11
(2 February 2011)
In this matter, the Family Court of Australia determined that s 132 of the Evidence Act 1995 (Cth) created a positive duty on the part of the trial Judge to provide the respondent with an opportunity to be heard regarding waiver of privilege. Upon the evidence, it was clear that the respondent understood neither the nature of the claim that privilege had been waived nor her rights in respect of that claim - and the trial Judge did not ensure that she was properly informed. This error on the part of the trial Judge caused a lack of procedural fairness.
On the question of waiver, the Court held that the mere deposition by the solicitor that he had acted upon instructions did not put that matter into issue in proceedings, since no issue was raised during the proceedings that the solicitor had acted outside instructions. The call for access to the solicitor's file on this basis was characterised as a mere ‘fishing expedition'. It was further held that, in any case, the solicitor had no authority to waive privilege over the wife's documents, because he was no longer acting for her at the time of his deposition, and that the wife did nothing that might constitute waiver on her own behalf.
Krok v Szaintop Homes Pty Ltd (No 1) [2011] VSC 16
(8 February 2011)
The issue in this case was whether the trustee of a discretionary trust may refuse to disclose documents to a beneficiary on the basis of client legal privilege.
The judgment found that there was insufficient evidence to support a claim for client legal privilege, because there was no evidence (e.g. terms of the retainer) establishing that the communications were intended to be kept confidential from the beneficiary. Further, it was found that any privilege in the advice obtained by the trustee was held jointly with the beneficiary, because the advice was sought and obtained by the trustee in discharge of its obligation to administer the trust, and not for its own personal benefit.
The ruling rejected the trustee's argument that the beneficiary has no right to advice received before the exercise of a power in a discretionary trust.
British American Tobacco Australia Services Limited v Laurie [2011] HCA 2
(9 February 2011)
In this matter the majority of the High Court decided that an interlocutory judgment against British American Tobacco was sufficient to give rise to a reasonable apprehension that the deciding Judge would not bring an impartial mind to the task of adjudicating separate proceedings where the subject of that finding was in issue.
The interlocutory judgment dealt with the fraud exception to client legal privilege. Section 125(1) permits evidence to be adduced of a communication - notwithstanding the fact that it is the subject of a claim for client legal privilege - if the communication was made ‘in furtherance of the commission of a fraud'. According to s 125(2) of the Evidence Act, if the commission of fraud is a fact in issue in the case the court ‘may find that the communication was so made or the document so prepared' if there are reasonable grounds for finding the fraud was committed.
The majority of the High Court found that Judge Curtis's ruling went beyond the terms of s 125(2) because it was not framed as being made merely because there were ‘reasonable grounds' for finding fraud. Their Honours held that a reasonable bystander might apprehend that Judge Curtis had prejudged the issue of fraud because the interlocutory finding was expressed without qualification or doubt; it was based on actual persuasion of the correctness of that conclusion; the Judge had expressed extreme scepticism about the BATAS's arguments; and the alleged fraud was extremely serious in nature. For the majority, it was immaterial that the Judge had pointed out that the finding was made on the available evidence, and that a different finding may emerge at trial after more evidence was put on.
Wingecarribee Shire Council v Lehman Brothers Australia Limited (in liq) (No 5) [2011] FCA 245
(18 March 2011)
In this matter, the communications in question were created for three purposes, each with equal weight. All of these purposes related to the provision of legal advice, but one purpose was the provision of legal advice to entities other than the party claiming privilege.
The Court ruled that a party may only claim privilege over documents created for the dominant purpose of seeking or obtaining legal advice for themselves. The purpose of providing legal advice to other entities was not, therefore, a privileged purpose. It was further held that if a document is created for multiple purposes of equal weight, none can be said to be the ‘dominant purpose' in the relevant sense.
On these bases the judgment concluded that the documents were not created for the dominant purpose of seeking legal advice, and did not attract privilege.
TransGrid v Members of Lloyds Syndicate 3210 [2011] NSWSC 301
(13 April 2011)
In this matter, the Court decided that copies of legal advices sent from the plaintiff's solicitors to an independent consultant were protected by client legal privilege. It was held that the consultant received the communication in its capacity as an agent for the client, and therefore fell within the definition of ‘client' in s 188 of the Evidence Act.
The communication between the solicitors and consultant was thus considered to be a part of the communication between the solicitors and their client, and the dominant purpose of that communication was determined by reference to the dominant purpose of the communication between the solicitors and the client.
The communications were held to be protected by client legal privilege.
Hodgson v Amcor Ltd; Amcor Ltd v Barnes (No 2) [2011] VSC 204
(11 May 2011)
This case held that the respondent's claim to client legal privilege was not deficient merely because the affidavit of documents did not disclose the identity of third parties to whom communications were made. Rule 29.04(1)(d) of the Supreme Court Rules requires a party making an affidavit of documents disclose the grounds of the privilege, and does not require a statement describing the evidence upon which the claim is founded. The rule will be satisfied, as it was in the present case, where the party claiming privilege identifies the legal basis for the claim to privilege and describes the elements of the document that are relied upon to support the claim for privilege.
On the question of whether a memorandum of costs and a time ledger attracted client legal privilege, the judgment noted that these documents are not normally created for privileged purposes. However, in this matter the documents nevertheless attracted client legal privilege because they disclosed the content of other privileged communications.
Samenic Ltd (formerly Hoyts Cinemas Ltd) v APM Group (Aust) Pty Ltd [2011] VSC 194
(12 May 2011)
Samenic Ltd (formerly Hoyts Cinemas Ltd) v APM Group (Aust) Pty Ltd [2011] VSC 194
This matter asked the question of whether an expert report could attract client legal privilege notwithstanding the fact that the client retained the services of the expert before retaining the legal advisors.
The Court decided that the dominant purpose for which the communication was created was the provision of legal advice. This decision was based upon the following findings:
Public Transport Ticketing Corp Ltd v Integrated Transit Solutions Ltd [2011] NSWSC 453
(19 May 2011)
Public Transport Ticketing Corp Ltd v Integrated Transit Solutions Ltd [2011] NSWSC 453
The primary issue in this matter was whether the minutes from a board meeting could attract client legal privilege. The Court determined that such a document could (and in this case, did) attract the privilege on the basis of:
Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd [2011] SASC 90
(26 May 2011)
In Farrow Mortgage Services Pty Ltd (in liq) v Webi, Sheller JA established that there are two circumstances in which joint privilege can arise.
In this matter it was held that the second limb of this formulation requires that the relationship between the group members include a duty or obligation to disclose to the other members the content of the communication. See full notes for comment about the authority for this proposition.
The first limb of the test was not satisfied in this case. The first respondent was found to have acted as an agent for the applicant, but the respondents did not retain the lawyers in their capacity as agent for the joint venture. The second limb, however, was held to be satisfied. The requirement that the relationship include a duty to disclose the content of communications was satisfied by the relationship of principal-agent.
The Court found that the Quasar's disclosure of legal advice to the Department of Primary Industries and Resources of South Australia (PIRSA) constituted waiver of privilege over advice on the same topic. It was held that there was no ‘unfairness' involved in Quasar waiving its privilege on one topic but maintaining its privilege in relation to advice on other topics. See full notes for comment on the ‘unfairness' test.
Austral Dutch Kaolin Pty Ltd v Hanjin PandC Co Ltd [2011] FCA 638
(7 June 2011)
The Court rejected the respondent's argument that the applicant waived privilege by pleading a cause of action that required it to establish a state of mind, which was presumably influenced by legal advice. In light of the status of client legal privilege as an important common law right, the Court found that the applicant's conduct in pursuing of a cause of action in which reliance is in issue was not inconsistent with the maintenance of confidentiality.
The Court also ruled that an email annexed to an applicant's affidavit, which contained the words "I agree with Michael [the solicitor for the applicant] that we may ruin the good will and the broader picture" did not waive privilege over legal advice given by the applicant's solicitor. While it is possible that the reference to ‘the broader picture' may contain some reference to legal advice, the sentence does not reveal the substance of the legal advice.
Further, the purpose of the disclosure - attaching the email to the affidavit - was to communicate the perceived realities of the practical situation, and there could be no inference, according to the Court, this conduct was inconsistent with the maintenance of the applicant's legal professional privilege attaching to communications between it and its lawyer.
Hodgson v Amcor Ltd Amcor Ltd v Barnes (No 4)
(16 June 2011)
The onus of proof is borne by the party alleging waiver, and only transfers to the privileged party where that party relies upon the provisions of s 122(5) of the Evidence Act to claim that there is no waiver despite specified disclosures.
It was held that the client's disclosure of the privileged material to a third party (Mr Barnes) did not constitute waiver for two reasons:
Mr Hodgson's failure to take action to protect client legal privilege before Amcor sought to adduce the Advice into evidence did not waive the privilege. Since no action open to Mr Hodgson was capable of reversing fact that Amcor had already improperly inspected the documents, it was perfectly acceptable for Mr Hodgson to object when Amcor sought to adduce the Advice into evidence. The rule in Grace v Grace - which held that privilege is waived when the privilege-holder makes documents available to the other party for inspection - applies only in the absence of improper behaviour on the part of the inspecting party.
Even if privilege was waived, the Advice should be excluded from evidence via the operation of s 138 of the Evidence Act, which provides that evidence obtained improperly is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in this fashion.
Amcor Ltd v Barnes [2011] VSC 341
(26 July 2011)
This judgment overturned the order made by Randall AsJ on 21 June 2011 upholding the defendants' claims for client legal privilege in respect of a series of documents.
It was determined that the documents were prima facie prepared in furtherance of the commission of a fraud and serious breaches of the Corporations Act 2001 (Cth), and were therefore excluded from privilege by virtue of s 125 of the Evidence Act 2008 (Vic). Section 125 provides that a person may not claim client legal privilege over any documents prepared in furtherance of commission of fraud or an offence or act that renders the person liable to civil penalty.
In order to arrive at this decision, Kyrou J determined that:
Absolute Analogue Inc v Sundance Resources Ltd [no 2] [2011] WASC 243
(10 August 2011)
The Court determined that an email sent by the defendant's solicitor to the defendant, and forwarded to the plaintiff, was sufficient to waive privilege over material that was part of the same issue or transaction that had been partially disclosed. In this instance, privilege was waived over the email itself, the attachment, and instructions referred to in the email. Waiver did not extend to instructions given by the defendant to its solicitor on previous or subsequent occasions.
It was also held that the defendant did not, by mounting its defence, make an assertion about the contents of its communications with its solicitors of the kind that might waive client legal privilege over those communications. The Court relied on Paragon Finance Plc v Freshfields [1999] 1 WLR 1183 to establish that by denying the existence of an agreement alleged by the plaintiffs the defendant exposed to scrutiny the communications between the defendant and the plaintiffs; but it did not thereby expose to scrutiny the communications between the defendant and its solicitors.
Powercor Australia Ltd v Perry [2011] VSCA 239
(10 August 2011)
The Victorian Court of Appeal affirmed the decision of the Supreme Court, which found that the applicant failed to establish that a series of reports were created for the dominant purpose of providing legal advice.
Since the purpose in question is that of the corporation, the Supreme Court rightly considered that the purpose of the applicant's CEO was a factor of central relevance to the question of privilege. In these circumstances, evidence as to the subjective purpose of the solicitor who commissioned the reports, under instruction from the CEO, was insufficient. The applicant's failure to call the CEO to give evidence as to his state of mind gave rise to the inference that his evidence would not have assisted Powercor's claim for privilege.
It was held that a number of findings of fact regarding the purposes (other than privileged purposes) for which the reports were created were open on the evidence. The finding that one of the purposes of the reports was to give information to the coroner may have been incorrect, but in light of the Court's findings regarding the existence of the other purposes for the reports, the applicant failed to show that its dominant purpose was obtaining legal advice.
British American Tobacco Australia Ltd v Secretary, Department of Health and Ageing [2011] FCAFC 107
(23 August 2011)
The respondent refused the appellant's FOI request on the basis that the Freedom of Information Act 1982 (Cth) provides an exemption for materials that would be privileged in legal proceedings on the ground of client legal privilege. The AAT affirmed the respondent's decision, and the appellant appealed the decision to the Full Federal Court, claiming that the respondent had waived the privilege.
The Full Federal Court found that the tabling of the Government Response in the Senate was protected by parliamentary privilege under s 16(3) of the Parliamentary Privileges Act 1987 (Cth). For this reason the appellant could not tender evidence of this disclosure for the purpose of drawing the inference that it was conduct inconsistent with the maintenance of client legal privilege.
Parliamentary privilege did not extend to the publication of the Government Response on a departmental website, because that action was taken by the executive government, and the Parliamentary Privileges Act 1987 (Cth) is concerned with acts of the legislature.
The Court held that the respondent did not waive client legal privilege over the legal advice when it published the Government Response online, or when it disclosed summaries of the legal advice to government advisory bodies, because it could not be said that the respondent was seeking to deploy a partial disclosure for any forensic or other advantage. The case note examines this reasoning further.
Carey v Korda (No 2) [2011] WASC 220
(26 August 2011)
The Court determined that documents concerning the acts of a Receiver conducted on behalf of a company in receivership - such as sale of the company assets - rightfully belong to the company itself, but that documents containing advice or information about the receivership belong to the receiver. On the evidence, it was found that the Receivers in this matter were not the agents of the Companies in receivership, so those companies had no right to access the advice.
It was held that a series of bills of costs and Recharge Schedules issued by the Receivers attracted client legal privilege because they contained detailed information that revealed the content of privileged communications. There was no general waiver of the privilege, despite the fact that they were disclosed to the Companies, because the disclosure was made for the purpose of allocating the costs of receivership between the Companies, and this disclosure was held not to be inconsistent with the maintenance of confidentiality in the privileged material.
The Court did not address the implications of a limited waiver. For comment on this issue see the full case note.
As a matter of construction, the terms of the Legal Practice Act and the Legal Profession Act do not abrogate the privilege with respect to bills of costs by providing that the person paying the solicitor's bill has the right to have a bill of costs taxed.
Towercom Pty Ltd v Fahour [2011] VSC 455
(9 September 2011)
When the applicant provided the market value of land in its pleadings, it did not thereby waive privilege over a land valuation opinion in its possession. The pleading did not reveal the substance of the opinion; rather, the applicant merely made an allegation of material fact, to be supported by appropriate evidence at a later stage of proceedings.
Unless a pleading goes beyond asserting a material fact to assert the existence of some evidence and its substance, it won't be considered inconsistent with the maintenance of confidentiality in any evidence.
Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 2) [2011] FCA 1057
(12 September 2011)
In the Commonwealth jurisdiction, questions of privilege as they relate to pre-trial procedures are governed by the common law.
The Court determined that a series of witness statements and associated materials were confidential, notwithstanding the fact that the witnesses were free to speak of what they had told ASIC to anyone else. The Court applied the reasoning in the obiter dictum in New South Wales v Jackson [2007] NSWCA 279, finding that the material may only be privileged if it is confidential; and that in this case its confidentiality arises from the fact of its being privileged.
Justice Perram also provided an alternative reasoning. In Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132 it was found that at common law it is sufficient to establish confidentiality that the materials are confidential in the hands of the person from whom production is sought. Since the materials were sought from ASIC, and ASIC has a duty under s 127 of the Australian Securities and Investments Commission Act 2001 (Cth) to take all reasonable measures to protect its information from disclosure, confidentiality was established.
Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477
(23 September 2011)
The Court rejected the applicant beneficiary's contention that it held client legal privilege jointly with the respondent trustee. On the evidence, the Court concluded that the respondent received the advice in question in its personal capacity and not in the discharge of its obligations to properly administer the trust.
The fact of whether the trust paid for the legal advice, while relevant, could not determine the question whether the advice concerned the administration of the trust or was personal in nature.
It was determined that the statutory adjudication process under the Building and Construction Industry Security of Payment Act 2002 (Vic) qualified as an ‘Australian proceeding' within the meaning of s 119 of the Evidence Act, so that documents created to prepare for such a process are capable of attracting the litigation privilege. A broad interpretation of the term ‘Australian Court' was preferred in order to promote the object or purpose of the Evidence Act, which was to ‘ensure fairness between participants in the conduct of litigious processes'.
It was held that documents used to prepare show cause notices - issued under the building contract between the parties - were also capable of attracting the litigation privilege, because these notices addressed the contractual wrongdoing at the heart of the primary litigation between the parties; the litigation was already anticipated by the parties when the notices were drafted; and the notices were themselves crucial steps taken toward the litigation.
