FEDERAL COURT OF AUSTRALIA
AWB Limited v Honourable Terence Rhoderic Hudson Cole
[2006] FCA 571
EXPLANATORY STATEMENT
It is the practice of this Court in matters which are of significant public interest to make a brief explanatory statement when delivering judgment.
The statement I now make describes the main issues in the proceedings and the conclusions I have reached. As it is a summary statement only, it is necessarily incomplete. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.
The case concerns a document entitled ‘Cole Inquiry – Draft Statement of Contrition – Andrew Lindberg.’ The document became Exhibit 665 in the Commission of Inquiry which is being conducted by Commissioner Cole (‘the Inquiry’) under the Royal Commissions Act 1902 (‘RCA’).
The document was inadvertently produced by AWB Limited (‘AWB’) to the Inquiry in response to a notice to produce documents. In these proceedings it was common ground that any legal professional privilege attaching to the document had not been waived by its inadvertent production.
After hearing evidence and submissions concerning Exhibit 665 on 24 and 27 March 2006, the Commissioner said that the RCA confers an ancillary or incidental power on him to determine whether the claim of legal professional privilege had been established in respect of Exhibit 665. On the evidence before him, the Commissioner ruled that Exhibit 665 was not privileged.
I have not undertaken a judicial review of the Commissioner’s rulings. In accordance with the submissions made by AWB and the Commonwealth and pursuant to the jurisdiction conferred upon me by s 39B of the Judiciary Act 1903 (Cth), I have independently considered the questions that arise in this case, including the question whether Exhibit 665 attracts legal professional privilege having regard to the more extensive evidence adduced in this Court.
The major impetus for the creation of Exhibit 665 was advice that AWB obtained from Dr Peter Sandman, a crisis management expert and public relations consultant, to the effect that AWB should ‘over-apologise’, sooner rather than later and via a statement by its managing director, so as to deal with the reputational damage AWB had sustained and was likely to sustain in future in connection with the Inquiry. Exhibit 665 was drafted by Mr Lindberg, who was then the chief executive officer of AWB, following a telephone conference that took place on 21 December 2005. The participants in the telephone conference were Mr Lindberg, Dr Sandman, Mr Zwier from Arnold Bloch Leibler (the solicitors for AWB) and a number of employees of AWB. After the telephone conference, Mr Zwier provided written advice to AWB in an email dated 23 December 2005. Mr Lindberg based his draft very closely on the advice he had received from Mr Zwier.
After preparing the draft statement of contrition, Mr Lindberg gave instructions for it to be circulated by email to the persons who had participated in the telephone conference of 21 December 2005. The draft was circulated in anticipation of another telephone conference scheduled for Monday 2 January 2006.
Legal professional privilege is a rule of substantive law that reflects an important common law immunity. It was common ground before me that it is not abrogated by any of the provisions of the RCA. AWB carries the onus of establishing that Exhibit 665 is privileged.
AWB contended before me that legal professional privilege attaches to Exhibit 665 on one or other of the following grounds. First, AWB contended that Exhibit 665 was brought into existence for the dominant purpose of obtaining legal advice from Mr Zwier. Secondly, AWB contended that it was privileged because it was based closely on Mr Zwier’s advice. And thirdly, it contended that Exhibit 665 was brought into existence for the dominant purpose of being used in relation to litigation, the relevant litigation being either that constituted by the Inquiry itself or that which might arise following the Inquiry.
On the evidence before me, I have reached the following conclusions:
(1) I am not satisfied that Exhibit 665 was brought into existence, and circulated by email, for the dominant purpose of obtaining legal advice.
(2) Exhibit 665 would not, if disclosed, allow a reader to know or infer the nature, content or substance of any legal advice given by Mr Zwier to Mr Lindberg and AWB; nor would the disclosure of Exhibit 665 result in any waiver of the privilege inhering in that legal advice.
(3) The litigation limb of legal professional privilege does not extend to documents brought into existence for use in relation to a commission of inquiry. Further, Exhibit 665 was not brought into existence for the dominant purpose of being used in connection with litigation which might follow from the report of the Commissioner.
I have, accordingly, rejected AWB’s claim for a declaration that Exhibit 665 is protected by legal professional privilege. I have also rejected AWB’s claim for injunctions restraining the Commissioner from using or publishing Exhibit 665 and requiring that it be returned to AWB.
AWB also sought declarations that the Commissioner does not have the power to order the production of a privileged document or to determine whether a document is protected by legal professional privilege. Alternatively, AWB sought a declaration that the Commissioner should not determine whether a claim for legal professional privilege is established.
I have concluded that these declarations should not be granted. In some respects they do not reflect the issues that were litigated in this Court, and in other respects they are contrary to the conclusions I have reached.
In this Court, the dispute between AWB and the Commonwealth concerning the Commissioner’s powers under the RCA was quite narrow. It was essentially common ground between them, and I have found, that the Commissioner had an administrative power or capacity, for the purpose of determining his own actions and procedures, to form an opinion that Exhibit 665 was required to be produced under the notice because it was not privileged. In this sense, the Commissioner had the power to accept or reject the claim of privilege that was made to him. The legal effect of the Commissioner’s ruling was in dispute, at least to some extent. The conclusion I have reached is that the Commissioner’s opinion or ruling had no binding force or effect in point of law, and it was open to either party to bring declaratory proceedings in this Court without embarking upon any review of the Commissioner’s decision.
I will order that the application be dismissed. I will hear submissions on the question of costs.
FEDERAL COURT OF AUSTRALIA
AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571
EVIDENCE – legal professional privilege – dominant purpose test – whether dominant purpose of obtaining legal advice – whether document records or reveals legal advice – whether dominant purpose for use in or in relation to litigation – royal commission of inquiry – draft statement of contrition – statement proposed to be given in evidence at inquiry – document not subject to legal professional privilege
ADMINISTRATIVE LAW – commissioner’s powers under Royal Commissions Act 1902 (Cth) – power to issue notice to produce documents – power to inspect, retain and copy documents – whether apply to privileged documents – power to decide legal professional privilege claims – whether reviewable under Administrative Decisions (Judicial Review) Act 1977 (Cth)
JURISDICTION – s 39B of Judiciary Act 1903 (Cth) – application for injunction against officer of Commonwealth – power to make injunctions and declarations
Royal Commissions Act 1902 (Cth)
Administrative Decisions (Judicial Review) Act 1977 (Cth)
Judiciary Act 1903 (Cth) s 39B
Baker v Campbell (1983) 153 CLR 52 applied
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 applied
Daniels Corporations International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 applied
Mann v Carnell (1999) 201 CLR 1 considered
Grant v Downs (1976) 135 CLR 674 considered
Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 applied
Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 approved
Balabel v Air India [1988] 1 Ch 317 considered
Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976 considered
Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 considered
In re L (a minor) (Police Investigation: Privilege) [1997] 1 AC 16 considered
Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 considered
DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 considered
GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 cited
Attorney-General (NT) v Maurice (1986) 161 CLR 475 considered
Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 cited
Rio Tinto Limited v Commissioner of Taxation (2005) 224 ALR 299 cited
Seven Network Limited v News Limited (No 12) [2006] FCA 348 cited
Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (1994) 126 ALR 58 cited
Carter v Northmore Hale Davy & Leake (1995) 183 CLR 121 considered
Waterford v Commonwealth (1987) 163 CLR 54 considered
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 considered
Griffith University v Tang (2005) 221 CLR 99 considered
Re Adams and the Tax Agents’ Board (1976) 7 ATR 87 cited
Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 cited
Buck v Comcare (1996) 66 FCR 359 considered
National Crime Authority v S (1991) 29 FCR 203 cited
R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 cited
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 considered
Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334 cited
JH Wigmore, Evidence in Trials at Common Law, vol 8, rev J McNaughton, Little Brown & Company, 1961 (1981)
NJ Williams, ‘Four Questions of Privilege: the Litigation Aspects of Legal Professional Privilege’, Civil Justice Quarterly, vol 9, no 139, 1990
JD Heydon, Cross on Evidence, vol 1, Butterworths, 1996
SB McNicol, Law of Privilege, Law Book Company, 1992
SL Phipson, Law of Evidence, 16th edn, Sweet & Maxwell, 2005
AWB LIMITED (ACN 081 890 459) v THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC and COMMONWEALTH OF AUSTRALIA
VID 345 of 2006
YOUNG J
17 MAY 2006
MELBOURNE
| IN THE FEDERAL COURT OF AUSTRALIA |
|
| VICTORIA DISTRICT REGISTRY | VID 345 OF 2006 |
| BETWEEN: | AWB LIMITED (ACN 081 890 459) APPLICANT
|
| AND: | THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC FIRST RESPONDENT
COMMONWEALTH OF AUSTRALIA SECOND RESPONDENT
|
| YOUNG J | |
| DATE OF ORDER: | 17 MAY 2006 |
| WHERE MADE: | MELBOURNE |
THE COURT ORDERS THAT:
1. The application be dismissed.
2. The applicant pay the second respondent’s costs of the proceedings.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
| IN THE FEDERAL COURT OF AUSTRALIA |
|
| VICTORIA DISTRICT REGISTRY | VID 345 OF 2006 |
| BETWEEN: | AWB LIMITED (ACN 081 890 459) APPLICANT
|
| AND: | THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC FIRST RESPONDENT
COMMONWEALTH OF AUSTRALIA SECOND RESPONDENT
|
| JUDGE: | YOUNG J |
| DATE: | 17 MAY 2006 |
| PLACE: | MELBOURNE |
REASONS FOR JUDGMENT
introduction
1 On 10 November 2005, the Governor-General issued Letters Patent to the Honourable Terence Rhoderic Hudson Cole AO RFD QC (‘the Commissioner’) appointing him as a Commissioner under the Royal Commissions Act 1902 (Cth) (‘RCA’) to inquire into and report on:
‘(a) whether any decision, action, conduct, payment or writing of any of the three Australian companies mentioned in the Final Report (“Manipulation of the Oil-for-Food Programme by the Iraqi Regime”) of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, or any person associated with one of those companies, might have constituted a breach of any law of the Commonwealth, a State or Territory; and
(b) if so, whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.’
The applicant, AWB Limited (‘AWB’), is one of the three Australian companies referred to in paragraph (a) of the Letters Patent.
2 The Letters Patent have been amended several times in respects which are not material to the issues raised by these proceedings. As amended, the Letters Patent require the Commissioner to report not later than 30 June 2006.
3 The inquiry authorised by the Letters Patent has become known as the Oil-for-Food Inquiry (‘the Inquiry’). Commencing on 16 January 2006, the Commissioner has taken evidence at a series of public hearings. At the direction of the Commissioner, all witnesses appearing before the Inquiry have been called by counsel assisting the Inquiry. AWB is, and has been, represented before the Inquiry by senior and junior counsel, instructed by Arnold Bloch Leibler. The partners of Arnold Bloch Leibler who have responsibility for the matter are Mr Leon Zwier and Ms Leonie Thompson.
4 Until recently, Mr Andrew Lindberg was the Managing Director of AWB. Mr Lindberg gave evidence at the Inquiry in January 2006 and again in April 2006. The Company Secretary of AWB is and was at all relevant times Dr Richard Fuller. Dr Fuller gave evidence at the Inquiry on 24 March 2006.
exhibit 665 – the draft statement of contrition
5 In the course of the Inquiry, the Commissioner issued a notice to produce documents to the Company Secretary of AWB, Dr Richard Fuller, on 14 January 2006. The notice was issued pursuant to s 2(3A) of the RCA, and required Dr Fuller to produce specified documents or classes of documents to the Secretary of the Inquiry. On 28 February 2006, AWB produced two volumes of hard copy documents to the Inquiry on behalf of Dr Fuller. The documents, which were physically delivered to the Inquiry by Arnold Bloch Leibler, were described as ‘Email Documents: Richard Fuller’. At the time the two volumes of documents were produced to the Inquiry, AWB and its legal advisers believed that the documents had been reviewed so as to exclude any documents which were the subject of legal professional privilege.
6 When Dr Fuller gave evidence on Friday 24 March 2006, he was asked questions by senior counsel assisting the Inquiry, Mr John Agius SC, concerning a document entitled ‘Cole Inquiry – Draft Statement of Contrition – Andrew Lindberg’. The document became Exhibit 665 in the Inquiry.
7 Senior counsel for AWB sought an opportunity to obtain instructions as to whether Exhibit 665 attracted legal professional privilege and had been mistakenly provided to the Commission. The Commissioner made a non-publication order in respect of the document pursuant to s 6D of the RCA. Section 6D(3) relevantly provides that the Commission may direct that the contents of any document produced under a notice under sub-section 2(3A) shall not be published, or shall not be published except in such manner, and to such persons, as the Commission specifies.
8 Early on Monday 27 March 2006, Arnold Bloch Leibler sent an email to the solicitor assisting the Commissioner in relation to the document. Amongst other things, the email stated that the document, together with a number of other drafts, had been produced to the Commission by mistake and that it was the subject of a claim for legal professional privilege by AWB. The document was said to have been created for discussion with, and to obtain advice from, AWB’s lawyers in connection with the preparation for the Inquiry.
9 On the same day, a statutory declaration of Ms Rosemary Peavey dated 27 March 2006 was tendered to the Inquiry by counsel for AWB. Ms Peavey is a senior lawyer employed by AWB. In her statutory declaration, Ms Peavey explained that the document which became Exhibit 665 had been included by mistake in the folders of documents delivered to the Commission. Ms Peavey stated that upon looking at the document which became Exhibit 665 and the covering email that should have been attached to it, it was apparent to her that the document was prepared in late December 2005 ‘for the purpose of obtaining legal advice’ and ‘in contemplation of this Inquiry.’
10 In this proceeding, the Commonwealth objected to the admissibility of Ms Peavey’s statement as evidence of the purpose for which the document was prepared. Senior counsel for AWB maintained that AWB did not rely upon the statement as admissible evidence of the purpose for which the document was created; it is simply relied upon as evidence as to the way in which the claim of privilege was raised in the Commission.
the commissioner’s ruling concerning exhibit 665
11 On 27 March 2006, senior counsel for AWB made a submission to the Commission that Exhibit 665 continued to attract legal professional privilege, notwithstanding its inadvertent production to the Commission.
12 On 5 April 2006, the Commissioner ruled that Exhibit 665 did not attract legal professional privilege. He announced that he proposed to make orders rejecting the claim for legal professional privilege in respect of Exhibit 665 and revoking the non-publication order. However, the Commissioner deferred making these orders so as to give AWB the opportunity of challenging the first order in this Court. In addition, the Commissioner indicated that he would continue the non-publication order pending the determination of any proceedings by this Court.
13 The Commissioner delivered detailed reasons in support of his ruling. On the substantive question of legal professional privilege, the Commissioner assumed that privilege had not been waived by the inadvertent production of the document. He found that Exhibit 665 was prepared for the dominant purpose of considering whether a strategy of apology would be adopted by AWB; it was not prepared for the dominant purpose of obtaining legal advice. Accordingly, the Commissioner rejected the claim for legal professional privilege.
14 The Commissioner also addressed the proper construction of the relevant provisions of the RCA and the scope of his power to make a ruling in relation to the question of legal professional privilege. In summary, the Commissioner reached the following conclusions:
‘a. The Act does not abrogate an entitlement to claim legal professional privilege when documents are required to be produced pursuant to a notice issued under s 2(3A);
b. The making of a “claim” for legal professional privilege does not negate the obligation imposed by s 3(4) to produce such documents in answer to the notice;
c. The obligation of production is negated only if “reasonable excuse” is shown within the meaning of s 3(5), which then reduces the obligation of production imposed by s 3(4) to exclude documents the subject of an established claim for legal professional privilege;
d. “Reasonable excuse” within s 3(5) includes an established claim for legal professional privilege;
e. The Act confers an ancillary or incidental power upon a Royal Commissioner to determine whether the claim of legal professional privilege is established;
f. The onus of establishing the claim for legal professional privilege lies on the party claiming it. The claim must be supported by evidence sufficient to justify the making of an order upholding the claim; and
g. A decision by a Royal Commissioner rejecting a claim for legal professional privilege, and thus requiring production of the documents to the Commission because of the operation of s 3(4), is subject to review by the Federal Court pursuant to the Administrative Decisions (Judicial Review) Act 1977 and s 39B Judiciary Act 1903.’
the proceedings in this court
15 On 5 April 2006, AWB instituted proceedings in this Court under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’) and ss 39B(1) and 39B(1A)(c) of the Judiciary Act 1903 (Cth) (‘Judiciary Act’). The Commissioner and the Commonwealth of Australia were joined as respondents. The Commissioner has advised the Court that he will take no part in the proceedings and that he will abide the result.
16 AWB seeks declarations that:
(1) Exhibit 665 is protected by legal professional privilege;
(2) Exhibit 665 was produced to the Commission in error;
(3) the Commissioner does not have the power to order the production of a privileged document;
(4) the Commissioner does not have the power to determine whether a document is protected by legal professional privilege;
(5) alternatively, the Commissioner should not determine whether a claim for legal professional privilege is established.
In addition, AWB seeks injunctions restraining the Commissioner from using or publishing Exhibit 665 and requiring that it be returned to AWB.
17 AWB’s primary submission was that, in the exercise of its jurisdiction under s 39B of the Judiciary Act and on the evidence now before the Court, the Court should declare that legal professional privilege has been established in respect of Exhibit 665. The Commonwealth also submitted that the Court can determine the question of legal professional privilege by making a declaration under s 39B, without undertaking any review of the Commissioner’s decision. Specifically, the Commonwealth submitted that this is not a case where the power to make a decision is vested only in the administrative decision-maker and any application made subsequently to a Court is necessarily limited to judicial review.
18 It is correct, as both AWB and the Commonwealth submitted, that this Court has jurisdiction under s 39B of the Judiciary Act to declare that legal professional privilege attaches to Exhibit 665 without reviewing or setting aside the Commissioner’s ruling.
19 Jurisdiction is attracted under s 39B(1) because the Commissioner is an officer of the Commonwealth and injunctive relief is sought against him: Eatts v Dawson (1990) 21 FCR 166 at 169-170. Once this jurisdiction is invoked, declaratory relief can be granted even if it proves to be unnecessary to grant injunctive relief: see QPSX Communications Ltd v Deputy Commissioner of Taxation (1990) 21 ATR 213 at 215; Optical Prescription Spectacle Makers Pty Ltd v Withers (1987) 13 FCR 594 at 595-596. In Narish Holdings Pty Ltd v Commonwealth of Australia (unreported, Davies J, 7 December 1988), Davies J said that s 39B is not limited to reviewing errors of law made by officers of the Commonwealth: ‘if an application is brought for an injunction against an officer of the Commonwealth, the Court has jurisdiction to determine all matters of fact or law upon which the rights and obligations of the parties and the grant of an injunction may depend’. See also Jackson v Wells (1985) 5 FCR 296 at 309 per Wilcox J; on appeal (1985) 8 FCR 198 at 201 per Morling J.
20 A similarly broad jurisdiction arises under s 39B(1A)(c) in any matter arising under laws made by the Parliament. The Court is being called upon to determine the extent of the Commissioner’s powers under the RCA in respect of Exhibit 665, including in particular whether the Commissioner is empowered to retain, inspect and use Exhibit 665 for the purposes of the Inquiry. AWB denies the existence of the powers claimed by the Commissioner on the ground that Exhibit 665 is the subject of legal professional privilege. In Felton v Mulligan (1971) 124 CLR 367, Menzies J said at 382:
‘A matter arises under a law when it is necessary in litigation to determine whether that law confers a right or affords a defence which is an issue in the litigation. A matter arises under a law of the Parliament when in a proceeding it is necessary that there should be a decision upon a claim made by one of the parties to the litigation which is based upon that law.’
As the issues between the parties concern the Commissioner’s claimed powers and entitlements under the RCA, the proceedings involve a matter which arises under the RCA: see LNC Industries Limited v BMW (Australia) Limited (1983) 151 CLR 575 at 582; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett v Opitz (1945) 70 CLR 141 at 154; Transport Workers Union v Lee (1998) 84 FCR 60 at 65-67; and Australian Solar Mesh Sails Pty Ltd v Anderson (2000) 101 FCR 1 at 10 [17].
21 The High Court cases of Baker v Campbell (1983) 153 CLR 52 (‘Baker’) at 76, 97 and 132, Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (‘Propend’) at 506, 513, 523, 533, 567-568 and 576, and Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 (‘Daniels’) at 549 [3], 561 [37], 567 [56] and 585 [117] proceed on the footing that the Federal Court has original jurisdiction to declare that legal professional privilege attaches to a document whose production has been compulsorily required, without any need to review or set aside the decision of the relevant officer to seize the document or to require its production. In Propend, Brennan CJ said at 513:
‘When a claim of privilege attaching to a document seized under a warrant comes to be determined judicially, the court must ascertain for itself whether the document was brought into existence solely for a privileged purpose and, if it be found or assumed that the document is a copy of an unprivileged original but was brought into existence solely for a privileged purpose, whether the privilege has been lost. In determining the claim of privilege, the court is not reviewing judicially an executive action but is determining a distinct controversy between the person who seeks to inspect the seized document and the person who seeks to maintain its immunity from inspection on the ground of legal professional privilege.’
Both parties submitted that the Court can approach the question of legal professional privilege in the manner indicated by Brennan CJ.
22 By its application in this proceeding, AWB also seeks to review decisions allegedly made by the Commissioner to the effect that:
‘3.1 the claim for legal professional privilege in respect of exhibit 665 is rejected;
3.2 the non-publication order made pursuant to s 6D of the [RCA] in respect of exhibit 665 is revoked;
3.3 the making of a “claim” for legal professional privilege does not negate the obligation imposed by s 3(4) of the [RCA] to produce such documents in answer to the notice;
3.4 the obligation of production is negated only if “reasonable excuse” is shown within the meaning of s 3(5) of the [RCA], which then reduces the obligation of production imposed by s 3(4) of the [RCA] to exclude documents the subject of an established claim for legal professional privilege;
3.5 the [RCA] confers an ancillary or incidental power upon a Commissioner to determine whether the claim of legal professional privilege is established.’
23 AWB contends that in making these decisions the Commissioner made errors of law or jurisdictional errors as to the proper construction of the RCA, and as to the privileged status of Exhibit 665. Both AWB and the Commonwealth urged me to use the ADJR Act proceedings as a vehicle for determining whether the Commissioner had an implied or incidental power under the RCA to ‘determine’ the claim for legal professional privilege in respect of Exhibit 665. As will appear, there are problems with this course. Not the least of them is that both parties submitted that I could adjudicate upon the claim that Exhibit 665 was the subject of legal professional privilege, without reviewing or setting aside the Commissioner’s ruling, in pursuance of the jurisdiction conferred by s 39B of the Judiciary Act.
24 The live issues in the proceeding are the two issues just mentioned, namely whether legal professional privilege attaches to Exhibit 665 having regard to the evidence before me, and whether the Commissioner had an implied or incidental power under the RCA to determine the claim for legal professional privilege. There is no issue concerning waiver; the Commonwealth took the position before me that it would not contend that any legal professional privilege attaching to Exhibit 665 had been waived by its mistaken production to the Inquiry. The Commonwealth’s position in this respect is in line with settled authority: see Mann v Carnell (1999) 201 CLR 1 at 13; Director of Public Prosecutions v Kane (1997) 140 FLR 468 at 479-480 and 485-486; Goldberg v Ng (1996) 185 CLR 83 at 96-98, 109-110, 120-22; Commissioner of Police Service v Nirta [2002] 1 QdR 364; Saunders v Commissioner of the Australian Federal Police (1998) 160 ALR 469 (‘Saunders’) at 473; Hong Kong Bank of Australia Limited v Murphy [1993] 2 VR 419 at 441; Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511; and Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538.
The royal commissions act 1902
25 Under s 2 of the RCA, a member of a Commission has power to summon witnesses to give evidence or to produce documents and to require a person who is not a witness to produce a document. The latter power is exercisable by notice issued pursuant to s 2(3A), which provides:
‘(3A) A member of a Commission may, by written notice served (as prescribed) on a person, require the person to produce a document or thing specified in the notice to a person, and at the time and place, specified in the notice.’
The notice to Dr Fuller was issued in pursuance of s 2(3A).
26 Section 3 addresses the failure of witnesses to attend and give evidence, and the failure of witnesses and other persons to produce documents. It is helpful to set out s 3 in its entirety:
‘(1) A person served, as prescribed, with a summons to appear as a witness at a hearing before a Commission shall not:
(a) fail to attend as required by the summons; or
(b) fail to attend from day to day unless excused, or released from further attendance, by a member of the Commission.
Penalty: $1,000 or imprisonment for 6 months.
(1A) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(1B) Subsection (1) does not apply if the person has a reasonable excuse.
(2) A person appearing as a witness at a hearing before a Commission shall not fail to produce a document or other thing that the person was required to produce by a summons under this Act served on him or her as prescribed or that the person was required to produce by the member of the Commission presiding at the hearing.
Penalty: $1,000 or imprisonment for 6 months.
(2A) Subsection (2) is an offence of strict liability.
(2B) Subsection (2) does not apply if the person has a reasonable excuse.
(3) It is a defence to a prosecution for an offence against subsection (2) constituted by a failure to produce a document or other thing to a Commission if the document or other thing was not relevant to the matters into which the Commission was inquiring.
Note: A defendant bears an evidential burden in relation to the matters in subsections (1B), (2B) and (3) (see subsection 13.3(3) of the Criminal Code).
(4) A person served with a notice under subsection 2(3A) must not refuse or fail to produce a document or other thing that the person was required to produce in accordance with the notice.
Penalty: $1,000 or imprisonment for 6 months.
(5) Subsection (4) does not apply if the person has a reasonable excuse.
(6) It is a defence to a prosecution for an offence against subsection (4) constituted by a refusal or failure to produce a document or other thing if the document or other thing was not relevant to the matters into which the Commission was inquiring.
Note: A defendant bears an evidential burden in relation to the matters in subsections (5) and (6) (see subsection 13.3(3) of the Criminal Code).’
27 Several other provisions are relevant to the meaning of the expression ‘reasonable excuse’ which is used in s 3. It is defined in s 1B as follows:
‘reasonable excuse in relation to any act or omission by a witness or a person summoned as a witness before a Commission means an excuse which would excuse an act or omission of a similar nature by a witness or a person summoned as a witness before a court of law.’
This definition is directed to any act or omission by a witness or a person summoned as a witness before the Commission. It does not directly address the position of a person who is required by written notice issued by the Commission under s 2(3A) to produce a specified document or thing.
28 Section 6A also bears directly upon the meaning of ‘reasonable excuse’. It provides:
‘(1) It is not a reasonable excuse for the purposes of subsection 3(2B) or (5) for a natural person to refuse or fail to produce a document or other thing that the production of the document or other thing might tend to:
(a) incriminate the person; or
(b) make the person liable to a penalty.
(2) A natural person is not excused from answering a question that the person is required to answer by a member of a Commission on the ground that answering the question might tend to:
(a) incriminate the person; or
(b) make the person liable to a penalty.
(3) Subsections (1) and (2) do not apply to the production of a document or other thing, or the answer to a question, if:
(a) the production or answer might tend to incriminate the person in relation to an offence; and
(b) the person has been charged with that offence; and
(c) the charge has not been finally dealt with by a court or otherwise disposed of.
(4) Subsections (1) and (2) do not apply to the production of a document or other thing, or the answer to a question, if:
(a) the production or answer might tend to make the person liable to a penalty; and
(b) proceedings in respect of the penalty have commenced; and
(c) those proceedings have not been finally dealt with by a court or otherwise disposed of.’
29 Section 6A needs to be read with s 6DD which provides:
‘(1) The following are not admissible in evidence against a natural person in any civil or criminal proceedings in any court of the Commonwealth, of a State or of a Territory:
(a) a statement or disclosure made by the person in the course of giving evidence before a Commission;
(b) the production of a document or other thing by the person pursuant to a summons, requirement or notice under section 2.
(2) Subsection (1) does not apply to the admissibility of evidence in proceedings for an offence against this Act.’
30 Where the Commission has required the production of a document by a notice issued under s 2(3A), the Commission is empowered to inspect, retain or copy that document by s 6F. Section 6F(1) provides:
‘(1) A Commission, a member of a Commission or a person who is an authorized person in relation to a Commission may:
(a) inspect any documents or other things:
(i) produced before, or delivered to, the Commission; or
(ii) produced under a notice under subsection 2(3A); and
(b) retain the documents or other things for so long as is reasonably necessary for the purposes of the inquiry to which the documents or other things are relevant; and
(c) in the case of documents:
(i) produced before, or delivered to, the Commission; or
(ii) produced under a notice under subsection 2(3A);
make copies of any documents that contain matter that is relevant to a matter into which the Commission is inquiring.’
31 For completeness sake, reference should also be made to s 6O as it was relied upon by the Commonwealth in support of its construction of the RCA. Section 6O(2) provides:
‘(2) If the President or Chairman of a Royal Commission or the sole Commissioner is a Justice of the High Court, or a Judge of any other Federal Court, of the Supreme Court of a Territory or of the Supreme Court or County Court or District Court of a State, he or she shall, in relation to any offence against subsection (1) of this section committed in the face of the Commission, have all the powers of a Justice of the High Court sitting in open Court in relation to a contempt committed in face of the Court, except that any punishment inflicted shall not exceed the punishment provided by subsection (1) of this section.’
the rca does not abrogate legal professional privilege
32 In Australia, legal professional privilege is a rule of substantive law that reflects an important common law immunity. In Daniels, Gleeson CJ, Gaudron, Gummow and Hayne JJ said at 552-553 [9]-[11]:
‘It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the “dominant purpose” test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the “sole purpose” test which had been applied following the decision in Grant v Downs.
Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell, that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth).
Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minahan, was the foundation for the decision in Baker v Campbell.’
33 McHugh J said at 563 [44]:
‘Australian courts have classified legal professional privilege as a fundamental right or immunity. Accordingly, they hold that a legislature will be taken to have abolished the privilege only when the legislative provision has done so expressly or by necessary implication. Legal professional privilege describes a person’s immunity from compulsion to produce documents that evidence confidential communications about legal matters made between a lawyer and client or between a lawyer and a third party for the benefit of a client. The immunity also protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of a client, such as research memoranda. The immunity embodies a substantive legal right. Its operation is not limited to judicial or quasi-judicial proceedings. Where it applies, it may be used to refuse to produce documents that are the subject of a search warrant authorised by statute or other extra-curial process as well as a subpoena issued under or discovery required by rules of court.’
34 The RCA does not abrogate legal professional privilege. It does not do so expressly and there is no basis for arguing that it does so by necessary implication. Powers that are conferred in general terms, such as those found in s 2(3A) and s 6F(1), will not be construed as abrogating or adversely affecting a fundamental common law right or immunity, unless Parliament makes its intention unmistakeably clear: see Baker at 96-97 per Wilson J, at 116-117 per Deane J, and at 132 per Dawson J; and Daniels at 553 [17] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, at 562-563 [43] per McHugh J, at 576 [88] and 578 [93]-[94] per Kirby J, and at 591-593 [132]-[135] per Callinan J.
35 The courts have adopted this principle for reasons which were explained by Mason CJ, Brennan, Gaudron and McHugh JJ in Coco v The Queen (1994) 179 CLR 427 at 437:
‘The insistence on express authorisation of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights.’
Lord Hoffman put the same point more bluntly in R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 at 131 by saying that ‘Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words’: see also R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 at 615 [44].
36 None of these propositions is in contention in this case. It was common ground between the parties that the RCA does not abrogate legal professional privilege. In his ruling, the Commissioner also concluded that legal professional privilege is not abrogated by the RCA.
37 There is, however, a dispute as to how the RCA is to be construed so as to preserve legal professional privilege. AWB contends that, consistently with the approach adopted in Baker and Daniels, the power conferred by s 2(3A) is to be read down so that it does not reach documents which are the subject of legal professional privilege. The Commonwealth submits that legal professional privilege is preserved by s 3(5). It says that s 3(5) operates to displace the obligation to produce documents imposed by s 3(4) in circumstances where a person has a reasonable excuse for non-production.
38 In Daniels, the ACCC argued that s 155(5) of the Trade Practices Act 1974 (Cth) (‘TPA’) indicated that the power to compel the production of documents conferred by s 155(1) was not subject to legal professional privilege. Section 155(5)(a) provided that a person shall not refuse or fail to comply with a notice to the extent that the person is capable of complying with it. Section 155(5)(a) of the TPA therefore performed a role similar to s 3(4) and (5) of the RCA, except that it was expressed in more restricted terms.
39 The Full Federal Court in Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd (2001) 108 FCR 123 (‘ACCC v Daniels’) accepted the argument founded upon s 155(5). Moore J considered that the language of s 155(5)(a) was emphatic and required compliance with a notice issued under s 155(1) if the recipient was physically capable of complying with it: at 145 [81], see also at 137 [59] per Wilcox J. Lindgren J agreed generally with the reasons for decision of Wilcox J and Moore J. On appeal, the High Court rejected the argument.
40 In their joint judgment in Daniels, Gleeson CJ, Gaudron, Gummow and Hayne JJ construed s 155(1) and (2) as not conferring a power that abrogated legal professional privilege. They did so for essentially two reasons. In the first place, their Honours observed that subss (1) and (2) of s 155 must be construed consistently. Section 155(2) of the TPA is similar to the search warrant provision in s 10 of the Crimes Act 1914 (Cth) (‘Crimes Act’) that was considered in Baker and Propend. They said that it was difficult to see any basis upon which that subsection could be construed, consistently with Baker and Propend, as authorising entry to premises for the purpose of inspecting and copying material to which legal professional privilege attaches: at 558-559 [27]-[28]. Secondly, their Honours thought that s 155(5)(a) did not support the implication that the Full Court had drawn from it (at 560 [33]):
‘It is very much to be doubted that sub-s (5)(a) is exhaustive of the matters that may be raised in answer to a charge of failing to comply with a notice under s 155(1). At the very least, ordinary principles of construction would suggest that there is an intentional element to the offences created by s 155(5) and (6A). More to the point, however, it is necessary to determine the meaning and effect of s 155(1) before it can be determined what constitutes a refusal or failure to comply with a notice.’
41 McHugh J said that s 155(5)(a) was of no assistance in construing s 155(1), as the implied duty created by s 155(5) operates only in respect of documents which s 155(1), on its proper construction, requires to be produced: at 564 [46]. McHugh J also thought that the contention that the power conferred by s 155(1) is not subject to privilege was inconsistent with the fact that the power conferred by s 155(2) must be regarded as subject to legal professional privilege, having regard to the decision in Baker: at 565-566 [50]-[51].
42 The High Court in Daniels was considering a different statutory scheme and consequently the decision provides guidance only: see Daniels at 566 [53] per McHugh J; Western Australia v Ward (2002) 213 CLR 1 at 216 [480]-[481] per Kirby J; and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (‘Project Blue Sky’) at 381-382 [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ. The Commonwealth submits that the key to understanding the High Court’s construction of s 155 is that the obligation to comply with a notice under s 155 was cast very widely in s 155(5)(a); it operated to the extent that the person concerned was capable of complying with the notice. To preserve legal professional privilege, the Commonwealth says that the power conferred by s 155(1) and (2) had to be read down because there was no other vehicle to achieve that result.
43 The scheme of the RCA is somewhat different. The combined effect of s 3(4) and (5) is that the obligation of a person served with a notice issued under s 2(3A) to produce the documents specified therein ‘does not apply if the person has a reasonable excuse’. The definition of ‘reasonable excuse’ in s 1B operates in relation to any act or omission by a witness or a person summoned as a witness before the Commission. The obligations of a witness, or a person summoned as a witness, before a Commission are addressed in s 3(1) to (3) inclusive. But the definition does not apply directly to s 3(5), which is directed to the obligations of a person (who may not be a witness) to produce documents at a time or place specified in the notice.
44 In Re HIH Insurance Limited [2002] NSWSC 231 at [12], Barrett J said that the non-application of the definition of ‘reasonable excuse’ in s 1B to a person served with a s 2(3A) notice seems to mean that the term ‘reasonable excuse’ in s 3(5) is confined to physical or practical difficulties of complying and does not extend to matters such as legal professional privilege. This view was expressed somewhat tentatively, it predates the decision of the High Court in Daniels, and it was heavily influenced by the decision of the Full Federal Court in ACCC v Daniels and the earlier decision of the High Court in Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 (‘Yuill’). Neither AWB nor the Commonwealth contended that ‘reasonable excuse’ in s 3(5) should be construed in this manner.
45 The Commonwealth submitted that, even though the definition of reasonable excuse does not apply directly to s 3(5), it is reasonable to infer that Parliament intended the term to bear the same substantive meaning throughout s 3. Further, the Commonwealth submitted that there is no reason to exclude legal professional privilege from the concept of ‘reasonable excuse’ where it is used in s 3(5). To do so would not be consistent with the parliamentary intention of ensuring that legal professional privilege is preserved and not abrogated.
46 I am not persuaded that the definition in s 1B should be extended, by implication or by construction, to s 3(5). Where a witness fails to produce a document that was required to be produced under s 2(1) or (2), s 3(2A) provides that any resulting offence is one of strict liability. Under s 6.1 of the Schedule to the Criminal Code Act 1995 (Cth) (‘Criminal Code’), this means that there is no fault element, but a defence of mistake of fact is available. As there is no similar provision in relation to s 3(4), there is an intentional element to the offence created by s 3(4): see s 5.6 of the Criminal Code. In these circumstances, I consider that the legislature intended that the expression ‘reasonable excuse’ should carry its ordinary meaning in s 3(5). That meaning may be wider than the definition in s 1B; certainly it is wide enough to cover any matter, including absence of intention, which the law acknowledges by way of answer, defence, justification or excuse for refusing or failing to produce the specified documents: see Yuill at 338-339 per Gaudron J.
47 The observations of Kirby P in Ganin v New South Wales Crime Commission (1993) 32 NSWLR 423 at 436 are instructive. Speaking of a similar provision contained in s 18(2) of the New South Wales Crime Commission Act 1985 (NSW), Kirby P said:
‘There is no apparent reason to read down exemptions for “reasonable excuse” in s 18(2) of the Act. On the contrary, there is every reason to give the words used their ordinary construction. They simply ask whether the refusal to answer the question was “without reasonable excuse”. As Ireland J rightly pointed out, the question is not whether the excuse stated or subjectively conceived was reasonable. It is whether, at the relevant time of refusal to answer the question as required, there was, or was not, a reasonable excuse. In accordance with orthodox canons of construction these words would not be given a narrow meaning. They appear in a provision which imposes a criminal sanction for its breach. They appear in an enactment which, as has been said, amounts to a drastic derogation from the ordinary liberties of citizens. They appear in a subsection which, giving ample meaning to the words “without reasonable excuse”, will be defensive of fundamental rights recognised both by the common law and by international law: see Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 (at 420E) per Kirby P and per Clarke JA (at 433).’
48 In Bank of the Valletta plc v National Crime Authority (1999) 164 ALR 45 at 55 [42], Hely J construed the expression ‘reasonable excuse’ in s 29(3) of the National Crime Authority Act 1984 (Cth) as follows:
‘Thus while a reasonable excuse would include any current legal right to resist the compulsory production of documents, it is not confined to cases in which the resistance is on the basis of some right, privilege or immunity recognised by the general law. Nor is it necessarily confined to physical or practical difficulties in complying with the notice. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance with a notice lawfully issued by NCA, but bearing in mind the central role that such notices play in the discharge by NCA of its statutory functions.’
49 In my opinion, the preferable construction of s 3(5) of the RCA is that the expression ‘reasonable excuse’ bears its ordinary meaning, and that meaning is wide enough to include the non-production of a document on the grounds that it is the subject of legal professional privilege.
50 Legal professional privilege might be preserved by reading down the powers conferred by s 2(3A) and s 6F and/or by recognising that legal professional privilege constitutes a reasonable excuse for the non-production of documents. The Commonwealth submits that the latter construction represents the only mechanism by which Parliament intended that legal professional privilege, and other privileges such as public interest immunity, should be preserved. It points out that in s 6A Parliament used ‘reasonable excuse’ as the mechanism to limit, but otherwise preserve, the privileges against self-incrimination and exposure to a penalty. It also points out that s 3(2B) and s 3(5) do not simply provide that a reasonable excuse is a defence to a prosecution: cf s 3(3) and (6). Rather the effect of s 3(2B) and s 3(5) is that the obligation to produce the document ‘does not apply’.
51 In my opinion, it is a false dichotomy to suppose that a choice must be made between the construction advanced by AWB and that advanced by the Commonwealth. I prefer to see the two arguments as complementary threads in the harmonious construction of the RCA: see Project Blue Sky at 381-382 [70] per McHugh, Gummow, Kirby and Hayne JJ. The principle enshrined in Baker and Daniels is that, in the absence of clear and unmistakable language, a compulsive notice such as that which can be issued under s 2(3A) will not be construed as requiring the production of legally privileged documents. There is no reason why this principle should not apply in its full rigour to the RCA. A construction of s 2(3A) that accords with this principle is supported by s 3(5); it affords a textual indication that a notice under s 2(3A) does not reach, and consequently s 3(4) does not apply to, documents which are the subject of legal professional privilege.
52 The joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ and the separate judgment of McHugh J in Daniels also make the point that it is necessary to determine the meaning and effect of the provision under which the notice for production is given before it can be determined what constitutes a refusal or failure to comply with the notice. There is nothing to suggest that the approach of the High Court in Baker and in Daniels would have been any different if the offence provisions relating to s 10 of the Crimes Act and s 155 of the TPA contained a ‘reasonable excuse’ exception.
53 The role that both threads can play in the overall construction of the RCA is illustrated by the facts of this case. Exhibit 665 was produced to the Commissioner in answer to the notice, albeit inadvertently and without waiving legal professional privilege in respect of the document. In those circumstances, the provisions of s 3(4) and (5) are not directly applicable and the question would arise whether the Commissioner’s powers under s 6F to inspect, retain and copy documents which have been produced under a notice under s 2(3A) are to be read down, consistently with Baker and Daniels, as not extending to documents which are the subject of legal professional privilege.
54 By contrast, in the context of a prosecution alleging an offence under s 3(4), s 3(5) provides an obvious and immediate protection for a person who has not produced the relevant documents because they are the subject of legal professional privilege. The words ‘reasonable excuse’ are not rendered otiose simply because there is a legal principle of construction which also operates to protect legal professional privilege. Many other facts and circumstances may amount to a reasonable excuse within the meaning of s 3(5), other than the fact that the documents in question are the subject of legal professional privilege.
55 I do not consider that it is any objection to the construction I prefer that the application of the principle in Baker and Daniels to read down the scope of a notice issued pursuant to s 2(3A), and the inclusion of legal professional privilege within the concept of reasonable excuse, might be described as a ‘belt and braces’ approach. There is nothing incongruous in such an approach where the objective of the exercise is the protection of a fundamental immunity recognised by the common law.
56 In any event, if I am wrong about the construction of the RCA and the preferable construction of the RCA is that legal professional privilege is only protected by the reasonable excuse provisions in s 3(2B) and s 3(5), it would make no difference to the conclusions I have reached concerning Exhibit 665. It is common ground in this case that if Exhibit 665 is the subject of legal professional privilege, the document falls outside ss 2 and 3 of the RCA.
57 The Commonwealth urges me to adopt its construction of the RCA because it lays the foundation for its submissions concerning the Commissioner’s powers and functions. There are two steps in the Commonwealth’s argument. First, it says that the question whether there is a reasonable excuse falls to be addressed at the time at which there is a failure or refusal to produce documents in accordance with the notice, rather than at the time the notice is issued. Secondly, and most critically, it argues that the obligation to produce imposed by s 3(4) extends to legally privileged documents, but that it can be displaced at the point of time when a person establishes a reasonable excuse.
58 According to the Commonwealth, the Commissioner has implied authority to require production of a document referred to in a notice under s 2(3A) for the limited purpose of inspecting it in order to determine whether the claim to legal professional privilege is made out. This submission relied on an analogy with the powers of inspection that inhere in a Court: see Grant v Downs (1976) 135 CLR 674 at 689. The Commonwealth also argued that further support could be found in the following factors. First, only a member of a Commission has the power to require production under s 2(3A) of the RCA. Secondly, a Commissioner has the same protection and immunity as Justices of the High Court in the performance of his or her duties under the RCA. Thirdly, it was said that proceedings of a Royal Commission have a quasi-judicial character, albeit they are not adversarial in nature. Reference was made to the protections afforded to witnesses and legal practitioners appearing at Commission hearings and the fact that a Commissioner who is a Judge has the power to punish for contempt in the face of the Commission: s 6O. In my opinion, none of these factors, and nothing in the RCA, supports the Commonwealth’s submission.
59 Furthermore, I do not accept the second step in the Commonwealth’s argument. A reasonable excuse can obviously arise in a range of circumstances. Some circumstances amounting to reasonable excuse, such as physical incapacity, may intervene after the notice to produce has been served. In such a case, it may be appropriate to speak of s 3(5) displacing the obligation to produce non-privileged documents that is otherwise imposed by s 3(4). But to my mind it offends the general principles enunciated in Baker and Daniels to argue that a notice under s 2(3A) imposes an unqualified obligation to produce documents that are the subject of legal professional privilege, unless and until a reasonable excuse is established within the meaning of s 3(5). In my opinion, there is nothing in the RCA to support the contention that the Commissioner has implied authority to inspect documents produced under a s 2(3A) notice for the purpose of determining whether they attract legal professional privilege.
determining whether exhibit 665 attracts legal professional privilege
60 In the passages that I have extracted from Daniels, Gleeson CJ, Gaudron, Gummow and Hayne JJ said that legal professional privilege applies to communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. McHugh J added that the immunity also protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of a client, such as research memoranda.
61 In Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 (‘Esso’) at 64-65 [35], Gleeson CJ, Gaudron and Gummow JJ said:
‘Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court. In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisers, which are not protected from compulsory disclosure. The rationale of the privilege has been explained in a number of cases, including Baker v Campbell, and Grant v Downs itself. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. In Waterford v The Commonwealth, Mason and Wilson JJ explained that legal professional privilege is itself the product of a balancing exercise between competing public interests and that, given the application of the privilege, no further balancing exercise is required. As Deane J expressed it in Baker v Campbell, a person should be entitled to seek and obtain legal advice in the conduct of his or her affairs, and legal assistance in and for the purposes of the conduct of actual or anticipated litigation, without the apprehension of being prejudiced by subsequent disclosure of the communication.’
62 In determining whether Exhibit 665 attracts legal professional privilege, three issues arise. For the moment, these issues can be stated quite broadly. First, was the draft statement of contrition that constitutes Exhibit 665 brought into existence for the dominant purpose of obtaining legal advice? Secondly, does Exhibit 665 record legal advice that was provided by AWB’s lawyers for the benefit of AWB? Thirdly, was Exhibit 665 brought into existence for the dominant purpose of being used in connection with litigation that was reasonably in prospect? It will be necessary to examine each of these questions in the light of the evidence.
63 AWB carries the onus of establishing that Exhibit 665 attracts legal professional privilege. In this Court, AWB has sought to discharge the onus by adducing evidence as to the circumstances in which the document was brought into existence and then communicated to others, by reference to the nature of the document itself, and by argument and submission. It has gone beyond, as it must, formulaic claims of the kind contained in Ms Peavey’s affidavit: see Grant v Downs at 689 per Stephen, Mason and Murphy J; and Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 (‘FCT v Pratt Holdings’) at 477 [30].
the evidence concerning exhibit 665
64 The evidence before me is much more extensive than that which was before the Commissioner when he considered the status of Exhibit 665. It consists of affidavit evidence from Ms Peavey, Mr Lindberg and Mr Zwier, certain documentary materials primarily concerning the retainer of Dr Peter Sandman, and oral evidence given both in chief and under cross-examination by Mr Lindberg and Mr Zwier.
65 Dr Peter Sandman is a crisis management expert and public relations consultant. He holds the degrees of BA, Princeton University, 1967 (Psychology); MA, Stanford University, 1968 (Communication); and PhD, Stanford University, 1971 (Communication). He holds, or has held, various professorial appointments at universities in the United States. He has published extensively in the fields of communications, public relations and crisis management. He carries on his practice from Princeton, New Jersey, in the United States of America. Dr Sandman was recommended to AWB by one of its board members, Mr Peter Polson.
66 Dr Sandman was retained by AWB on 8 December 2005 to provide crisis management and public relations advice to AWB in connection with AWB’s involvement in the Inquiry. The retainer was arranged through an exchange of emails between Ms Jill Gillingham, a group general manager employed by AWB, and Dr Sandman on 7 and 8 December 2005. In her email to Dr Sandman of 7 December 2005, Ms Gillingham said that the Inquiry had raised legal, reputational, public relations and a range of other issues for AWB and its staff. In her email to Dr Sandman of 8 December 2005, Ms Gillingham asked Dr Sandman to spend some time with AWB prior to Christmas assisting AWB to develop its position.
67 In his affidavit of 13 April 2006, Mr Lindberg said that AWB retained Dr Sandman in early December 2005 to provide strategic advice in connection with the Inquiry. Under cross-examination, Mr Lindberg said that his concern in going to Dr Sandman was to obtain advice in relation to public relations matters. He added that he was seeking Dr Sandman’s advice because he was concerned with the effect that the Inquiry would have on the public view of AWB and the allegations against it. These concerns extended to AWB’s share price and the effect that the Inquiry might have on politicians in relation to AWB’s control of wheat exports from Australia (which was referred to as the ‘single desk’).
68 Mr Lindberg said that the notion of a statement of contrition came from AWB’s legal advisers.
69 Mr Lindberg obtained advice from Dr Sandman on several occasions. On about 14 December 2005, Mr Lindberg and Ms Gillingham met with AWB’s counsel, Mr Zwier and Ms Thompson to discuss AWB’s retainer of Dr Sandman and to obtain advice about suggestions made by Dr Sandman. I infer from this evidence that Dr Sandman had provided some advice to Mr Lindberg and Ms Gillingham prior to the meeting of 14 December 2005.
70 On 21 December 2005, Mr Lindberg participated in a telephone conference with Dr Sandman, Mr Zwier, Ms Gillingham, Mr Cooper, Dr Fuller and Mr Hargraves. At that time Mr Cooper was the in-house legal counsel for AWB; Dr Fuller was AWB’s company secretary; and Mr Hargraves was an employee of AWB who had been involved in a project undertaken by AWB to conduct a legal review into the allegations against AWB. This project was known as ‘Project Rose’. Dr Sandman participated in the conference call from the USA. In the course of the telephone conference, Dr Sandman provided advice as to what might constitute an appropriate statement of contrition. Mr Lindberg said that Dr Sandman’s advice was that if there was anything to apologise for it would be better for the company to do it sooner rather than later. During the same telephone conference, Mr Lindberg said that Mr Zwier provided advice about the form and content of the proposed statement of contrition, amongst other things.
71 Mr Zwier’s evidence concerning the engagement of Dr Sandman and the telephone conference of 21 December 2005 was to substantially similar effect. He said that AWB engaged Dr Sandman to advise about, and assist in the drafting of, a proposed statement of contrition by AWB as part of its response to the Inquiry and which might form the basis of some evidence to be given by Mr Lindberg. Mr Zwier said that he was specifically requested by AWB to provide legal advice to AWB concerning the implications of a proposed statement of contrition. In his oral evidence, Mr Zwier said he understood that AWB was considering seeking advice from Dr Sandman to deal with the reputation of AWB in the minds of the public.
72 Mr Zwier said that he provided legal advice to AWB in the course of the telephone conference which took place on 21 December 2005. Mr Zwier also said that during the telephone conference Dr Sandman discussed a strategy which he described as ‘over-apologising’.
73 Following the telephone conference of 21 December 2005, Mr Zwier provided written advice to AWB. The advice was contained in an email which Mr Zwier sent on Friday 23 December 2005 to Mr Lindberg, copied to Ms Thompson, Ms Gillingham and Mr Judd QC. Mr Judd QC had been retained to act as AWB’s senior counsel in relation to the Inquiry. Mr Zwier gave evidence that the issues he addressed in his advice included the presentation of the statement to the Inquiry and whether or not it could constitute some admission of liability in a legal sense. AWB’s claim of privilege in relation to this advice has not been challenged. Mr Zwier’s email of 23 December 2005 is not part of the evidence.
74 At the time of the telephone conference of 21 December 2005 and Mr Zwier’s email advice of 23 December 2005, there was no draft statement of contrition in existence. Mr Zwier considered that he was being consulted in relation to legal issues that would arise for AWB regarding a proposed statement of contrition and, more generally, the strategy of ‘over apologising’ that was being recommended by Dr Sandman.
75 Mr Lindberg said that the written legal advice provided by Mr Zwier was provided to him by email on or about 28 December 2005. He said that Mr Zwier’s written advice confirmed advice that Mr Zwier had given in the course of the telephone conference on 21 December 2005.
76 Following the receipt of Mr Zwier’s written advice, Mr Lindberg personally drafted a statement which he headed ‘Cole Inquiry – Draft Statement of Contrition – Andrew Lindberg’. This draft statement subsequently became Exhibit 665. In his affidavit, Mr Lindberg said that he intended that the draft statement may form the basis of further evidence to be given by him on behalf of AWB in the Inquiry. In his oral evidence, Mr Lindberg said that he acted on Mr Zwier’s oral evidence given on 21 December and on his subsequent written advice in drafting the statement. He also said that the draft statement he prepared was based very closely on the advice he had received from Mr Zwier.
77 After preparing the draft statement of contrition, Mr Lindberg asked Mr Clare Beaton, an AWB employee who assisted Mr Lindberg in administrative matters, to forward it to Ms Gillingham so that she could circulate it for a further conference with Mr Zwier, Dr Sandman and others. On Friday 30 December 2005, Ms Gillingham caused the draft statement to be circulated by email to Mr Cooper, Mr Zwier, Dr Sandman, Mr Hargraves and Dr Fuller. The covering email said that its subject was ‘Pre-reading for hook-up Monday 2 Jan 2006’. The message in the covering email was that ‘Jill [Ms Gillingham] has asked that I forward the attached to you for discussion during the hook-up on Monday morning’. The email attached Mr Lindberg’s draft statement of contrition.
78 Mr Lindberg said that his intention was to circulate the draft statement of contrition back to the same group for further discussion and advice. Mr Lindberg said that a further telephone conference took place between the same participants as the previous telephone conference on 21 December 2005. His purpose in participating in the further conference was to seek further advice as to the appropriateness of the draft statement of contrition for the purposes of the Inquiry.
79 Mr Lindberg said that following the second telephone conference, there were further discussions with legal advisers, including senior and junior counsel representing AWB, as to the content and the appropriateness of the draft statement of contrition. There were also further discussions with Dr Sandman concerning the draft statement.
80 In the course of cross-examination, Mr Lindberg was asked about his intentions concerning the use of the statement of contrition. He agreed that the statement was to be made to the Inquiry as the medium through which AWB would make a public apology. He said that it was always contemplated that any statement of a public relations kind would have to be part of the legal strategy in dealing with the Inquiry. He said that such a statement was a sub-set of that legal strategy because, if it were to proceed, it had to be supported by the legal advice, including the accuracy of the facts and conduct about which AWB was prepared to apologise. He added that AWB needed legal advice to be clear on the facts, the evidence and the conduct about which AWB should properly, if at all, be making an apology. He agreed that he was concerned about possible legal detriment from making the proposed statement of contrition. But Mr Lindberg added that, most importantly, he was concerned about giving clear, honest and true evidence to the Inquiry.
81 The proposal that Mr Lindberg should make a statement of contrition in the course of his evidence before the Inquiry did not proceed.
82 The evidence before the Court includes a transcript of the evidence which Dr Fuller gave to the Inquiry on Friday 24 March 2006. The transcript was tendered as part of Mr Zwier’s affidavit of 11 April 2006. No objection was taken to its tender. In this evidence, Dr Fuller said that Dr Sandman’s thesis was that AWB should ‘over apologise’, that is to say it should apologise for the things that had happened and cover the ground but it should go further than was necessary, because that was in AWB’s interests in terms of its public reputation and its ability to recover from the Inquiry. Dr Fuller said that the purpose of the draft statement of contrition was to think about how AWB might deal with the reputational damage it had sustained and would most likely sustain in the future. In his view, the proposed statement of contrition had to be evaluated against legal advice. Dr Fuller said that he participated in telephone conferences with Dr Sandman a number of times. Dr Fuller did not provide Dr Sandman with information; somebody in the Project Rose team did so. He received a number of draft statements to review to see what he thought of Dr Sandman’s strategy and the facts that might be referred to in the draft.
83 Dr Fuller said that Dr Sandman’s advice was that Mr Lindberg seemed to be the appropriate person to make the apology. He said that Mr Lindberg had mixed views about the strategy that Dr Sandman was recommending. He said that the draft statement of contrition was never finally settled, and at some stage it was decided not to proceed with the strategy. He thought that this decision was made by Mr Lindberg although he also thought that there was some director involvement either at board level or otherwise. Further, he said that in large part the objection to the draft statement of contrition was that it went much further in apologising than was warranted by the facts: it might be a good crisis management strategy but it did not reflect the reality of what had happened.
84 In his affidavit of 5 April 2006, Mr Zwier said that, having read Exhibit 665, he can say that it incorporates aspects of the legal advice which he had given. Subject to the constraint that AWB maintained privilege in the legal advice given by Mr Zwier, Mr Zwier was cross-examined about this statement. Mr Zwier said that he saw in Exhibit 665 some reflection of some advice he had given. He said that the matters he recognised were matters of substance rather than matters of style. He elaborated that he had recommended that Mr Lindberg and AWB should consider a number of issues of substance and some of those issues Mr Zwier said were included in Exhibit 665. Those issues were subject matters; Mr Zwier said that his advice was that a particular subject matter should be included and the subject matter was there in the draft statement, amongst other things.
obtaining legal advice
85 Succinctly stated, the first limb of legal professional privilege attaches privilege to confidential communications made for the dominant purpose of obtaining or giving legal advice. In applying this limb, one of the first questions that arises is what qualifies as legal advice.
86 In Balabel v Air India [1988] 1 Ch 317 (‘Balabel’), Taylor LJ (Parker LJ and Lord Donaldson MR agreeing) said that it goes too far to extend legal advice privilege without limit to all solicitor and client communications upon matters within the ordinary business of a solicitor and referable to that relationship. In his Lordship’s view, the correct test is whether the communication or other document was made confidentially for the purposes of legal advice. Taylor LJ then continued at 330:
‘Those purposes have to be construed broadly. Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. The negotiations for a lease such as occurred in the present case are only one example. Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as “please advise me what I should do”. But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.’
87 This analysis, especially the concluding words, must be understood in the context of the case. Balabel concerned documents which were brought into existence for the purposes of the solicitor’s conduct of a commercial leasing transaction. The trial judge had held that privilege only attached to documents which actually seek or convey advice, and did not extend to two other categories of documents relating to the lease, namely communications between the client and its solicitors, and draft working papers, attendance notes and memoranda of the solicitors: at 323.
88 The approach explained by Taylor LJ in Balabel has been followed in subsequent cases. In Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976 (‘NRG’), the action concerned a negligence claim brought by a Dutch corporation against various parties who had advised it in connection with a share purchase transaction. In the course of discovery, the plaintiff disclosed a bill of costs from its solicitors in respect of work carried out in relation to the share purchase transaction. One of the defendants claimed that the bill of costs showed that the solicitors were providing not only legal advice but advice of a more general nature going to the commercial advisability of the share purchase transaction. They sought specific discovery of communications passing between the plaintiff and its solicitors. Colman J rejected the claim. In doing so, Colman J said that Balabel had not disturbed well accepted principles concerning the scope of legal professional privilege (at 983):
‘However, legal professional privilege only attaches to such communications as pass between the solicitor and client which are brought into existence or occur in the course of the performance of the solicitor's professional duty or function as solicitor retained to give professional advice, as distinct from some other capacity unrelated to the giving of legal professional advice (see Minter v Priest [1930] AC 558 esp at 581-586 per Lord Atkin). The substance of the scope of the privilege as identified by Taylor LJ in Balabel v Air India [1988] 2 All ER 246, [1988] Ch 317 does not, in my view, disturb or modify what has been clear law since Minter v Priest, namely that if a solicitor is instructed for the purpose of getting legal advice in relation to a particular transaction or series of transactions, then all the communications between the solicitor and the client relating to that transaction will be privileged notwithstanding they do not contain advice on matters of law or construction, provided that they are directly related to the performance by the solicitor of his professional duty as legal adviser of the client.’
89 In Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 (‘Three Rivers’), the privilege claim arose in the context of an inquiry by Bingham LJ that followed the collapse of the Bank of Credit and Commerce International SA (‘BCCI’) in July 1991. The focus of the inquiry was the supervision of BCCI by the Bank of England. Freshfields were retained by the Bank to advise generally on all dealings of the Bank, its officials and employees with the inquiry. Freshfields retained counsel to assist in the process. Both Freshfields and counsel gave advice as to the preparation and presentation of the Bank’s evidence to the inquiry and as to the submissions that should be made to the inquiry on the Bank’s behalf. The Bank claimed legal advice privilege over documents which the trial judge summarised as having been ‘generated for the purpose of providing information to the Bank’s legal advisers to enable them to prepare submissions and/or to advise on the nature, presentation, timing and/or content of the Bank’s submissions to, evidence for and responses to requests from the inquiry’: see Three Rivers District Council v Governor and Company of the Bank of England (No 5) [2003] EWHC 2730 (Comm). It appears that insofar as these documents were at issue in the House of Lords in Three Rivers, they all related to the content of the Bank’s ‘overarching statement’ (the statement of its case) to the inquiry: see at 641 [6] and 683 [120]. The Bank did not rely upon the litigation limb of legal professional privilege because the inquiry was not an adversarial proceeding: see the House of Lords’ decision in In re L (a minor) (Police Investigation: Privilege) [1997] 1 AC 16 (‘Re L’) which I discuss later in these reasons.
90 The Court of Appeal (see Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] QB 916) held that legal advice privilege was restricted to material constituting or recording communications between clients and lawyers seeking or giving advice about the clients’ legal rights and obligations. It accepted a contention that advice as to how the Bank should present its case to the inquiry, so as to lead to a conclusion as favourable to the Bank as possible, did not qualify for privilege.
91 The House of Lords overturned the decision of the Court of Appeal. It held that the documents at issue were the subject of legal advice privilege. All of their Lordships endorsed Taylor LJ’s statement in Balabel that legal advice is not confined to telling the client the law but also includes advice as to what should prudently and sensibly be done in the relevant legal context.
92 It is sufficient for present purposes to refer to several passages in the speeches of Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Carswell and Lord Brown of Eaton-under-Heywood.
93 Lord Scott said at 652-653 [43] that:
‘The preparation of the evidence to be submitted and the submissions to be made to the inquiry on behalf of the Bank were for the purpose of enhancing the Bank’s prospects of persuading the inquiry that its discharge of its public law obligations under the Banking Acts in relation to BCCI was not deserving of criticism and had been reasonable in the circumstances. The presentational advice given by Freshfields and counsel for that purpose was advice “as to what should prudently and sensibly be done in the relevant legal context”: Balabel v Air India [1988] Ch 317, 330. The “relevant legal context” was the Bingham Inquiry and the question whether the Bank had properly discharged its public law duties under the Banking Acts. The presentational advice falls, in my opinion, squarely within the policy reasons underlying legal advice privilege.’
A little later Lord Scott said at 653 [44]:
‘The skills of professional lawyers when advising a client what evidence to place before an inquiry and how to present the client and his story to the inquiry in the most favourable light are, in my opinion, unquestionably legal skills being applied in a relevant legal context.’
94 Lord Rodger distinguished the situation which would arise if the Bank consulted other professionals, including ‘the modern equivalent of a rhetorician’, on how to present the Bank’s position and evidence to the inquiry: at 658 [59]. His Lordship then said at 658 [60]:
‘When, however, the [Bank] consulted the lawyers in Freshfields, and through them counsel, about the presentation of their evidence to the inquiry, it was not seeking their comments and assistance as bankers, accountants, rhetoricians or anything else: it was seeking their comments and assistance as lawyers professing expertise in the field. Either expressly or impliedly, the [Bank] was asking them to put on legal spectacles when reading, considering and commenting on the drafts. In other words it was asking them to consider, as lawyers, how the Bank’s evidence could be most effectively presented to Bingham LJ, given that he was inquiring into the Bank’s discharge of their legal responsibilities under the Banking Acts. Such advice could come in many forms.
…
What matters is that the [Bank] was instructing the lawyers in Freshfields to carry out a function which necessarily involved the use of their legal skills if it was to be performed properly. The communications between the [Bank] and Freshfields were therefore concerned with obtaining “legal advice” in the broader sense in which, as Taylor LJ rightly said in Balabel v Air India, that term should be understood for this purpose. It follows that legal advice privilege applies to those communications. The appeal must be allowed.’
95 Lord Carswell said at 681 [114]:
‘The work of advising a client on the most suitable approach to adopt, assembling material for presentation of his case and taking statements which set out the relevant material in an orderly fashion and omit the irrelevant is to my mind the classic exercise of one of the lawyer’s skills. I can see no valid reason why that should cease to be so because the forum is an inquiry or other tribunal which is not a court of law, provided that the advice is given in a legal context: see Lord Scott’s opinion at para 42.’
96 Lord Brown said at 683 [120]:
‘I think it clear that legal advice privilege attaches to the communications between the Bank and its lawyers concerning the preparation of the Bank’s overarching statement (the statement of its case to the Bingham Inquiry). I would go so far as to state as a general principle that the process by which a client seeks and obtains his lawyer’s assistance in the presentation of his case for the purposes of any formal inquiry – whether concerned with public law or private law issues, whether adversarial or inquisitorial in form, whether held in public or in private, whether or not directly affecting his rights or liabilities – attracts legal advice privilege. Such assistance to my mind clearly has the character of legal business. It is precisely the sort of professional service for which lawyers are ordinarily employed by virtue of their expertise and experience.’
97 In Australia, in Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 (‘Dalleagles’), Anderson J rejected the argument that legal advice privilege only extended to what is literally either legal advice or a request for legal advice, and arrived at much the same position as Taylor LJ enunciated in Balabel. At 332-333, Anderson J said:
‘I do not think the authorities provide justification for concluding that the doctrine of legal professional privilege as applying to non-curial communications between solicitor and client has been refined to the extent submitted by counsel for the defendants, which would require professional communications to be excluded from the protection of privilege unless expressed as advice simpliciter or as a request for such advice or unless forming part of a communication expressed in that way. But anyway, I think it is the case that whenever a lay client gives instructions to a legal practitioner to perform specialist legal services involving the exercise of professional skill, there is imposed on the solicitor a duty to give any advice reasonably necessary to protect the client’s interests in the transaction whether expressly requested or not. Two cases in this Court illustrating that rule are Watts v Public Trustee (WA) [1980] WAR 97 and Stone James & Co v Investment Holdings Pty Ltd [1987] WAR 363: see also Macpherson v Kevin J Prunty & Associates [1983] 1 VR 573. It is not a large step from that position to say that whenever a client gives instructions to his solicitor there is assumed to be a request for advice. In my opinion, discourse between solicitor and client with reference to the transactions covered by those instructions, that is, professional discourse in a professional capacity, should be regarded as prima facie for the purpose of giving and receiving advice. This would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor’s engagement and any communication from the client to the solicitor in connection with that engagement. Only if the rule is applied in that way can the policy of it be carried out and its object practically fulfilled.’
Anderson J went on to say that there are limits to the application of this principle, including the fact that the material in question must have been created for the purpose of fulfilling the solicitor’s professional engagement: at 334.
98 In DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 (‘DSE’), Allsop J followed Dalleagles and Balabel, and said that he saw no difference of substance between them: at 173 [71]. But Allsop J made it clear that he did not consider that these cases extended legal professional privilege beyond legal advice (at 165 [45]):
‘I do not read the reasons of Taylor LJ as extending the privilege beyond legal advice. The reasoning of Taylor LJ was clearly directed to the privilege being so limited. What legal advice is, however, goes beyond formal advice as to the law. This recognition does not see the privilege extend to pure commercial advice. In any given circumstance, however, it may be impossible to disentangle the lawyer's views of the legal framework from other reasons that all go to make up the “advice as to what should prudently and sensibly be done in the relevant legal framework” (Taylor LJ in Balabel at 330). That is how I read this last cited paragraph of Colman J: not extending the privilege beyond legal advice to commercial advice, but as recognising the form and nature of advice in a practical day to day context.’
The last sentence in this passage refers to the statement by Colman J in NRG at 983 that a solicitor’s professional duty or function not infrequently relates to the commercial wisdom of entering into a given transaction in relation to which legal advice is also sought.
99 Allsop J’s judgment contains an extensive review of the cases which have referred to, and applied, the reasoning of Taylor J in Balabel. They include Saunders, in which French J said that the principle applied by Anderson J in Dalleagles extends to materials brought into existence by the client in order to communicate with the solicitor for purposes which would attract privilege: at 472. In Wenkart v Australian Federal Police (unreported, Branson J, 11 November 1986) (‘Wenkart’), Branson J cited Dalleagles for the proposition that ‘professional discourse in a professional capacity, with reference to transactions covered by a retainer to provide legal advice, will be regarded as prima facie for the purpose of giving and receiving advice’.
100 Having regard to the forgoing authorities, I accept that legal advice is not confined to telling the client the law but includes professional legal advice as to what should prudently and sensibly be done in the relevant legal context. Furthermore, in view of the House of Lords’ decision in Three Rivers, I also accept that legal advice includes professional advice given by lawyers to a client as to what evidence and submissions should be placed before a commission of inquiry.
101 There are, however, two additional points to be made. First, to qualify as privileged, the lawyer’s advice must satisfy the description of professional advice given by a lawyer in his or her capacity as such: see NRG at 982 [g]-[j]; Three Rivers at 651 [38] and 658 [59]-[60]. The same requirement exists in the United States: see JH Wigmore, Evidence in Trials at Common Law, vol 8, rev J McNaughton, Little Brown & Company, 1961 (1981) at s 2292; and Evans v City of Chicago 231 FRD 302 (ND Ill 2005). Secondly, communications for the purpose of obtaining and giving legal advice in the sense discussed in Balabel and the other cases mentioned above must satisfy the dominant purpose test if they are to attract legal professional privilege.
102 The question whether the draft statement of contrition that now constitutes Exhibit 665 was brought into existence for the dominant purpose of obtaining legal advice is a question of fact. In answering this question it must be kept firmly in mind that the privilege protects confidential communications, and not documents as such. As Dawson J said in Propend at 515, ‘to say that a document is privileged is merely a shorthand way of saying that the communication constituted by the document is privileged’: see also Toohey J at 525, Gaudron J at 543, McHugh J at 552 and Gummow J at 569.
103 The decision in Propend turned fundamentally on the proposition that legal professional privilege protects communications rather than documents. This explains why, as the High Court held in Propend, legal professional privilege can attach to copies of non-privileged documents; the purpose of bringing the copy into existence may be different from the purpose of bringing the original into existence, and may attract legal professional privilege: see Brennan CJ at 507, Gaudron J at 544, McHugh J at 553-554, Gummow J at 571 and Kirby J at 587.
104 In this case, attention must focus on the creation and circulation of the draft statement of contrition that became Exhibit 665. The confidential communications involved in those steps are distinct from the possible future step of communicating a statement of contrition to the public through the medium of evidence to be given by Mr Lindberg at the Inquiry.
105 A ‘dominant purpose’ is one that predominates over other purposes; it is the prevailing or paramount purpose. In FCT v Pratt Holdings, on remitter from the Full Court, Kenny J said at 279-280 [30]:
‘(7) The dominant purpose is not the same as the “primary” or the “substantial” purpose: see Grant v Downs at CLR 678; ALR 580 per Barwick CJ. The “dominant” purpose may be described as the ruling, prevailing, paramount or most influential purpose: see Mitsubishi Electric at [10], citing Federal Commissioner of Taxation v Spotless Services Ltd(1996) 186 CLR 404 at 416; 141 ALR 92 at 98 per Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ. The “dominant purpose” brings within the scope of the privilege a document brought into existence for the purpose of a client being provided with professional legal services notwithstanding that some ancillary or subsidiary use of the document was contemplated at the time: Esso at 72 [58] per Gleeson CJ, Gaudron and Gummow JJ; Sparnon v Apand at FCR 328; ALR 740-1 per Branson J; and see GSA [26]-[28] per Holmes J.’
106 Kenny J also said at 478 [30] that where two purposes are of equal weight, neither is dominant in the relevant sense; hence a document is not privileged from production where one purpose for its creation is to obtain legal advice, but there is another equally important purpose. I agree. The same conclusion follows if several purposes are of roughly similar weight, and it cannot be said that one prevails over the other. In Waugh v British Railways Board [1980] AC 521 (‘Waugh’) at 543, Lord Edmund-Davies adopted the dominant purpose test propounded by Barwick CJ in Grant v Downs, and stated that the element of clear paramountcy should be the touchstone. It is not unusual for privilege claims to fail because the evidence does not establish the requisite dominant purpose: see, eg, Kennedy v Wallace (2004) 208 ALR 424 at 444 [73]; and FCT v Pratt Holdings at 285 [44]-[46] and 287 [56].
107 The authorities accept that an appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence: see Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 (‘Pratt Holdings’) at 366 [35] per Finn J. I would add that where the document is immediately communicated by its author to several other persons, including the author’s legal adviser, by a circular email (which is the case here), it is also important to ask what was the dominant purpose of that email communication.
108 Ordinarily, the relevant purpose will be that of the author of the document in question, but this will not always be the case. In Grant v Downs, Barwick CJ said at 677:
‘Having considered the decisions, the writings and the various aspects of the public interest which claim attention, I have come to the conclusion that the Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.’
109 In Mitsubishi Electric Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 338 [14], Batt JA (Charles and Callaway JJA concurring) said:
‘As summarised by Gummow J in Hartogen Energy by reference to High Court decisions, the purpose, that is the intended use, for which a document is brought into existence is a question of fact. Ordinarily the purpose will be that of the maker of the document, but that will not always be the case, as where some other person, such as a solicitor commissioning the provision of a technical report, calls the document into existence. In that case the relevant intention will not be that of the author but the solicitor: Hartogen Energy. Likewise, in his statement of principle in Grant v Downs Barwick CJ included the dominant purpose of the person under whose direction, whether particular or general, the relevant document was produced or brought into existence.’
110 In FCT v Pratt Holdings, Kenny J observed at 278 [30], correctly in my view, that the dominant purpose must be determined objectively, having regard to the evidence, the nature of the document and the parties’ submissions. Kenny J added that the evidence of the intention of the document’s maker, or of the person who authorised or procured it, is not necessarily conclusive of that purpose: see GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 (‘GSA Industries’) at 153 [28] per Holmes J; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 at 545 per Goldberg J; Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1036 per Slade LJ; Hartogen Energy Ltd (in liq) v Australian Gas Light Company (1992) 36 FCR 557 at 568-569 per Gummow J; and Sparnon v Apand Pty Ltd (1996) 68 FCR 322 at 328 per Branson J. As these cases make clear, it may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that lead to the creation of the document and its subsequent communication.
111 In the usual case, the question will be whether the requisite dominant purpose existed at the time the document was brought into existence. In some cases, however, intentions may shift between the time when the document was commissioned or created or communicated: see GSA Industries at 153-154 [29]-[34]; and Esso at 77 per McHugh J. In GSA Industries, Holmes J observed at 154 [34] that, on the basis that the communication and not the document is the subject of privilege, it is arguable that a time later than the creation of the document may be relevant. This kind of difficulty does not arise in the present case. It is not suggested by either party that Mr Lindberg’s intentions, or those of any other party relevant to the creation or communication of Exhibit 665, changed between the time when Mr Lindberg drafted the statement of contrition and the time when it was communicated by email to those who had participated in the telephone conference of 21 December 2005.
112 Having regard to the evidence before me, the nature of Exhibit 665 and the submissions made by both parties, I find that the draft statement of contrition that constitutes Exhibit 665 was brought into existence for several purposes. One purpose and intended use was to submit the draft statement to Dr Sandman for further comment and advice of a public relations nature. A second purpose and intended use of the draft statement was to submit it to Mr Zwier in order to obtain his further advice. I accept that the advice to be sought from Mr Zwier qualifies as legal advice for the purposes of the first limb of the privilege. A third purpose and intended use was to submit the draft statement to other senior representatives of AWB, including Mr Cooper, Dr Fuller, Mr Hargraves and Ms Gillingham, to enable them to consider in their capacity as senior executives of AWB whether a statement of contrition along the lines of Exhibit 665 should be made by Mr Lindberg to the Inquiry in the course of his evidence.
113 The way that Dr Fuller put it was that the purpose of the draft statement of contrition was to enable the corporate group to think about how AWB might deal with the reputational damage it had sustained and was likely to sustain in the future. I infer from this evidence and other evidence given by Dr Fuller that the thinking was to be done by, inter alia, senior decision-makers within AWB, and extended to some involvement at director level. This is also indicated by the circulation of the draft statement to senior AWB officers.
114 After drafting the statement of contrition, Mr Lindberg caused it to be sent by circular email from Ms Gillingham to Mr Cooper, Mr Zwier, Dr Sandman, Mr Hargraves and Dr Fuller. There was, in effect, a single communication by the stroke of a key with the various recipients of the email. On the evidence before me, I do not draw any distinction between the purposes and intended uses which brought the draft statement of contrition into existence and the purposes and intended uses of the circular email and its attachment.
115 On the evidence, I am not satisfied that Exhibit 665 was brought into existence, and circulated by email, for the dominant purpose of obtaining further legal advice. The evidence does not establish that one or other of the purposes and intended uses which I have identified was paramount, prevailing or dominant.
116 Exhibit 665 is a confidential exhibit to Mr Zwier’s affidavit of 5 April 2005. The exhibit was not made available to the respondents. It is well recognised that a court may examine a document over which privilege is claimed in order to ascertain whether the nature and content of the document supports the claim to legal professional privilege. In Grant v Downs, Stephen, Mason and Murphy JJ stated at 689:
‘The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.’
See also Trade Practices Commission v Sterling [1978] 36 FLR 244 (‘Sterling’) at 246 per Lockhart J.
117 I have inspected Exhibit 665. In my opinion, the character and content of the document does not provide any assistance to AWB in establishing its claim for legal professional privilege. On the contrary, it confirms my view that it was brought into existence, and was to be used, for multiple purposes, and that the two other purposes I have identified were of no lesser importance than the purpose of obtaining legal advice.
118 The mere fact that the draft statement of contrition was sent by email to Mr Zwier, amongst others, for his legal advice is not determinative of the dominant purpose for which the draft statement was created. Nor does it determine that one intended use of the document was more dominant than other intended uses. As Brennan CJ said in Propend at 508, the test is anchored to the purpose for which the document was brought into existence. I have taken into account Mr Lindberg’s evidence that it was always contemplated that any statement of a public relations kind would have to be part of, or a sub-set of, the legal strategy of AWB in dealing with the Inquiry. By this, Mr Lindberg explained that he meant that if the statement were to proceed it had to be supported by legal advice, including the accuracy of the facts and conduct about which AWB was prepared to apologise. Mr Lindberg said that his most important concern was about giving clear, honest and true evidence to the Inquiry. I accept that the proposed statement of contrition had to be evaluated against legal advice. None of this evidence is inconsistent with, or causes me to doubt, my finding that the statement of contrition was brought into existence for multiple purposes and none was dominant.
119 The Solicitor-General for the Commonwealth argued that the heading of Exhibit 665 indicates the character and purpose of the document, which was to influence public opinion through the vehicle of a statement that was to be made by Mr Lindberg during the course of his evidence to the Inquiry. The Solicitor-General added that it should be inferred that this purpose was to be implemented, conditional on the course of action being cleared by AWB’s lawyers. It seems to me that this characterisation goes further than the evidence permits. The evidence does not allow me to find that the purpose of making a public relations statement was the sole purpose, or that it had matured to the point where it was going to be implemented, subject to legal clearance. In addition, I consider that the submission tends to confuse the purpose of possible future evidence to the Inquiry with the purpose and intended use of the draft statement that constituted Exhibit 665.
120 In its submissions, AWB contended that the evidence discloses three possible purposes for the creation of Exhibit 665 which it referred to as the immediate purpose, the intermediate purpose and the ultimate purpose. The immediate purpose of the document was said to be disclosed by the fact that it was brought into existence at the direction of Mr Zwier, notwithstanding that it was authored by Mr Lindberg. AWB submitted that Mr Zwier’s purpose is important, taken together with the objective purposes of the document and its context. In my view, this submission misstates the relevant evidence.
121 Having regard to all of the evidence, I find that the major impetus for the creation of Exhibit 665 was Dr Sandman’s advice that AWB should ‘over-apologise’, sooner rather than later and via a statement by its managing director, so as to deal with the reputational damage AWB had sustained and was likely to sustain in future. AWB retained Dr Sandman directly via an exchange of emails on 7 and 8 December 2005. Dr Sandman was not engaged by Mr Zwier or Arnold Bloch Leibler on behalf of AWB. AWB retained Dr Sandman to provide strategic advice and public relations advice in connection with the Inquiry. I find that Dr Sandman provided advice to AWB prior to the meeting of 14 December 2005, which appears to be the first occasion on which Mr Zwier and Ms Thompson discussed AWB’s retainer of Dr Sandman and gave advice about suggestions which had emanated from Dr Sandman. Mr Zwier considered that he was being consulted in relation to legal issues that would arise for AWB from the strategy of ‘over-apologising’ that Dr Sandman was recommending. In my opinion, Dr Fuller’s evidence at the Inquiry, which I accept, confirms the central role played by Dr Sandman’s advice in the conception and formulation of a public apology by AWB. As for Mr Lindberg’s evidence that the notion of a statement of contrition came from AWB’s legal advisers, its meaning is unclear and I am disposed to accept it only in the limited sense that the idea of incorporating such a statement into Mr Lindberg’s evidence came from the legal advisers.
122 In my opinion, Mr Zwier’s purpose is not determinative of the purposes and intended uses for which Exhibit 665 was brought into existence. Purpose and intended use must be determined objectively, having regard to all of the evidence. I accept that Mr Lindberg acted on Mr Zwier’s advice in drafting the statement of contrition and his drafting was based very closely on the oral and written advice previously provided by Mr Zwier. If the evidence went no further than this, it would not establish that the dominant purpose of the draft statement of contrition was to obtain further legal advice. Nor would it exclude the other purposes to which I have referred or establish that they were of lesser significance. However, when all of the evidence is taken into account, including that of Dr Fuller, it shows the statement of contrition was brought into existence for the three purposes I have identified.
123 AWB submitted that the intermediate purpose for the creation of Exhibit 665 was to seek legal advice from Mr Zwier. It was contended that Exhibit 665 was part of a continuum of ongoing communications between lawyer and client. If the submission is intended to suggest that the sole or dominant purpose for the creation of Exhibit 665 was the purpose of seeking legal advice from Mr Zwier, I reject the submission. If the submission is merely that one of the purposes for the creation of the document was the seeking of legal advice from Mr Zwier, as part of a continuum of advice relating to the Inquiry, I accept that this is supported by the evidence. But, in my opinion, the evidence does not establish that Exhibit 665 was created for the dominant purpose of seeking legal advice from Mr Zwier.
124 As to the ultimate purpose of Exhibit 665, AWB submitted that it was created for the purposes of the Inquiry and its ultimate purpose was to enhance AWB’s prospects in the Inquiry. This does not establish a dominant purpose of obtaining legal advice. Three Rivers is distinguishable: it proceeded on the footing that all of the documents at issue were brought into existence for the dominant purpose of seeking Freshfields’ advice about the Bank’s ‘overarching statement’ of its case to the inquiry: see 642-643, 644, 662-664 and 667. The documents were not privileged merely because they related to the preparation of the Bank’s overarching statement.
125 If and to the extent that the ultimate purpose of the statement of contrition is relevant, it would tell against the application of privilege. On the evidence before me, I consider that the incorporation of a statement of contrition into Mr Lindberg’s evidence to the Inquiry was intended to be a public relations exercise addressing the reputational damage that AWB had suffered, and was likely to continue to suffer, as a result of the Inquiry. But the view I take is that these references to ‘ultimate purpose’ tend to confuse the purpose of possible future evidence to the Inquiry with the purpose and intended use of the draft statement that constituted Exhibit 665.
126 Lastly, AWB submitted that the immediate purpose, the intermediate purpose and the ultimate purpose could be conflated into the single purpose of ‘the preparation of a document in consultation with legal advisers for the purpose of use in this legal context’, that is to say in the context of the Inquiry. In my opinion, the same deficiencies attend this formulation and it does not advance the claim for legal advice privilege.
recording legal advice
127 As an adjunct to the first limb of the privilege, protection against disclosure has been extended to documents that record confidential legal advice or confidential legal work. Examples commonly given include legal research memoranda, draft pleadings, summaries of argument and draft agreements: see Daniels at 563 [44] per McHugh J; Propend at 550 per McHugh J and at 569 per Gummow J; Attorney-General (NT) v Maurice (1986) 161 CLR 475 (‘Maurice’) at 496 per Dawson J; Sterling [1978] 36 FLR 244 at 246 per Lockhart J; Mostyn v West Mostyn Coal Co (1876) 34 LT 531; and Packer v Deputy Commissioner of Taxation (Qld) [1984] 1 Qd R 275 (‘Packer’) at 284-285.
128 Anderson J explained the scope of this protection and the reasons for it in Dalleagles at 333-334:
‘What is protected, of course, is that which is communicated between solicitor and client. It is the communication that is privileged. But this is not to say that material that is not literally a communication or manifestly the record of a communication is never protected. There are many instances of protection being extended to such material. The examples of the draft letter that never leaves the solicitor’s office, the draft agreement and the draft statement of claim have already been referred to. The reason why such material is protected is often stated to be that disclosure of it will, or will tend to, reveal the privileged communication: see Attorney-General (NT) v Maurice, per Dawson J (at 496). Thus a note made by a solicitor of a conference with his client will be privileged in so far as it is a record of the communication from the client (that communication being privileged) but also in so far as it might contain notes of the solicitor’s own thoughts in regard to the matters communicated to him. Protection is afforded in the latter case on the ground that disclosure of that material might tend to reveal what had been communicated to the solicitor. There is much in the cases to support the view that this is the true basis upon which draft agreements, draft letters, draft pleadings and the like have long been accepted as privileged; that it is not so much because they are themselves “advice” or “communication” but because they will, if disclosed, reveal, or tend to reveal, the content of privileged communications. Material created by the solicitor in fulfilment of his engagement “is the result of the solicitor’s mind working upon and acting as professional adviser with reference to” material communicated to him confidentially in his professional capacity (Kennedy v Lyell [1883] 23 Ch D 387 at 407) and, as such, will by its very nature tend to reveal the content of the communication in response to which it had been prepared.
Of course, there are limits and these have often been stated. The material must have been created solely for the purpose of fulfilling the engagement. The material must be confidential. No protection can extend to agreements in their final form intended to constitute the actual transaction between the parties or to records made for the purpose of evidencing an actual transaction, or to letters sent or to forms lodged at public offices or to pleadings filed in courts. This is because legal professional privilege exists to secure confidentiality and such material is no longer confidential.’
129 Gummow J proffered a similar explanation in Propend at 569:
‘It also is significant, as Beaumont J emphasised in the present case that the privilege extends to any document prepared by a lawyer or client from which there might be inferred the nature of the advice sought or given. Examples include communications between the various legal advisers of the client, draft pleadings, draft correspondence with the client or the other party, and bills of costs.
This identification of the privilege with communications, rather than merely with documents, is important for the first issue on the grant of special leave.’
130 This line of authorities was canvassed by Allsop J in DSE, and I have gained assistance from several of the cases he discusses. In Bank of Nova Scotia v Hellenic Mutual War Risk Association (Bermuda) Ltd [1992] 2 Lloyd’s Rep 540 (‘The Good Luck’), Saville J said at 540:
‘In my view if a lawyer-client communication falls within the principles set out in Lord Justice Taylor's judgment (that is to say, is covered by legal professional privilege) then internal documents or parts of documents of the client (or indeed the lawyer) reproducing or otherwise revealing those communications are also covered by the same privilege, whatever the purpose or motive (short of fraud) for which the document comes into existence. The principle justifying legal professional privilege is (as Lord Justice Taylor pointed out) that a client should be able to obtain legal advice in confidence.’
See also Hellenic Mutual War Risks Association (Bermuda) Ltd v Harrison [1997] 1 Lloyd’s Rep 160 (‘The Sagheera’) at 171.
131 In Wenkart, Branson J said that legal professional privilege extends to any document prepared either by the client or the legal adviser from which the nature of the advice sought, or given, might be inferred (eg a draft pleading, a solicitor’s draft letter to the other side, or a bill of costs): see NJ Williams, ‘Four Questions of Privilege: the Litigation Aspects of Legal Professional Privilege’, Civil Justice Quarterly, vol 9, no 139, 1990, at p 142; and Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 at 236-237 per Beaumont J.
132 The principles that emerge from these cases operate to protect privileged communications against the risk that they will be disclosed by secondary evidence: see Tomlinson J in Three Rivers [2002] EWHC 2730 (Comm) at [3]. The question whether privileged communications will be disclosed by virtue of the disclosure of another document, such as a draft pleading, draft agreement or draft witness statement, raises a question of objective fact that depends on what the other document actually states or conveys, either explicitly or as a matter of reasonable inference. To adapt the language used by Gummow J in Propend and Anderson J in Dalleagles, the question is whether the disclosure of the document in question will directly reveal, or allow its reader to infer, the actual content or substance of a privileged communication.
133 There is, of course, a difference between explicit disclosure and disclosure by inference. Inferences are rarely certain. In my opinion, what Gummow J and Anderson J each had in mind was that the document in question would support an inference of fact as to the content or substance of a privileged communication; but the inference of fact must have a definite and reasonable foundation in the contents of the document. It would not be sufficient that the document as a whole, or particular statements within it, cause a reader to wonder or speculate whether legal advice had been obtained and what was the substance of that advice. I do not think that this is the kind of tendency that Anderson J had in mind in Dalleagles when his Honour said that the true basis for extending privilege to this class of documents was not so much that they were themselves advice or communications, but because they will, if disclosed, reveal or tend to reveal, the content of privileged communications.
134 The application of the principle in this way is, I think, supported by Dawson J’s observations in Maurice at 496-497:
‘Before it emerges in its final form, successive drafts of a claim book may be privileged but this is not because of any privilege attaching to the final product. Draft pleadings in an action may be privileged, but I have never heard it suggested that a statement of claim or a defence or a reply is privileged so that the privilege is waived when it is filed or delivered to the other side. The reason why the draft may be privileged before the document is completed was early explained in Walsham v Stainton, upon the basis that, although after a pleading has been filed it becomes publici juris, the drafts “might disclose the precise character of confidential communications with the solicitor, by showing the alterations made from time to time”. In the same way a letter to the other side in litigation which is drafted in a solicitor's office may be privileged before it is sent because it may reveal confidential communications between the solicitor and his client. Once it is sent, however, it ceases to be confidential and there is no privilege in it, not because privilege in the document is waived, but because no privilege attaches to it.
When the claim book in this case reached final form or, at all events, when it was put to the use for which it was intended, it was not a confidential communication and not a privileged document. Legal professional privilege exists to secure confidentiality in communications between a legal adviser and his client but it can have no application in relation to a document the purpose of which is to communicate information to others. Of course, what is contained in such a document may reveal some confidential communication between a legal adviser and his client, but if it does do so and so waives privilege, the waiver is of the privilege in the anterior communication and not in the document itself.
Thus, if in a pleading the contents of a privileged communication are set out then the privilege attaching to that communication may be waived by the pleading. But for this to happen the content of the communication itself must be revealed. The mere reference to the occasion, such as a conversation or a letter, without reference to its content will not constitute a waiver of the privilege: Buttes Oil Co v Hammer [No 3]; Roberts v Oppenheim.’
See also Gibbs CJ at 481, Mason and Brennan JJ at 488 and Deane J at 493.
135 It is logical to apply the principle in a way that matches the way in which the doctrine of waiver is applied. The issue in Maurice was whether the Aboriginal claimants under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) had waived legal professional privilege in the source materials used to prepare their claim book, as a result of having tendered the claim book in evidence. The claim book did not specifically mention, or quote from, any of the source documents. The High Court held that privilege had not been waived in the source documents: see Gibbs CJ at 481, Mason and Brennan JJ at 487-488, Deane J at 493 and Dawson J at 497-499. In the course of his judgment, Gibbs CJ pointed out that privilege in respect of a document is not waived by the mere reference to that document in pleadings or in an affidavit, although the position will be different if the document is reproduced in full: at 481. Mason and Brennan JJ referred with approval at 488 to the following passage from JH Wigmore, Evidence in Trials at Common Law, vol 8, par 2327 at p 36:
‘[W]hen his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.’
Deane J gave a more extended explanation of the way in which the doctrine of waiver should be applied (at 493):
‘If, in such a document, a party sets forth part of the contents of a particular identified document or communication or asserts the effect of or his reliance upon a particular identified document or communication, it may be that considerations of fairness might require that he be treated as having waived any legal professional privilege in relation to the whole document or communication: cf Buttes Gas and Oil Co v Hammer [No 3]. Where, however, he does no more than make use of privileged material (eg legal advice, expert opinion or statements of potential witnesses) for the purpose of formulating the statement in such a document of the details of the case which he proposes to make, it would be an affront to ordinary notions of fairness to hold that the effect of his compliance with that procedural requirement was that he has waived his legal professional privilege in relation to such material.’
136 In my view, the distinction between a mere reference to advice having been obtained, and a reference that discloses the content or substance of the advice, has not been eliminated by the High Court’s restatement of the relevant principles as to waiver in Mann v Carnell (1999) 201 CLR 1. Gleeson CJ, Gaudron, Gummow and Callinan JJ said at 13 [29]:
‘Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is “imputed by operation of law”. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege ... What brings about the 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.’
137 In Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101 (‘Bennett’), the Full Court (Tamberlin, Emmett and Gyles JJ) held that legal representatives of the Australian Customs Service had waived privilege in legal advice by stating openly that they had given advice to Customs that a particular regulation did not prohibit public comment by an officer on matters of public administration. After referring to numerous authorities, Gyles J stated at 119 [65]:
‘The voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made including the reasons for the conclusion. The primary judge was in error in drawing a distinction between conclusion and reasoning in the context of such a disclosure.’
Tamberlin J found that the disclosure expressed the substance of the advice that had been given and consequently it would be inconsistent and unfair to now seek to maintain privilege in respect of the relevant parts of the advice. His Honour continued at 104 [6]:
‘It may perhaps have been different if it had been simply asserted that the client has taken legal advice and that the position which was adopted having considered the advice, is that certain action will be taken or not taken. In those circumstances, the substance of the advice is not disclosed but merely the fact that there was some advice and that it was considered. However, once the conclusion in the advice is stated, together with the effect of it, then in my view, there is imputed waiver of the privilege. The whole point of an advice is the final conclusion. This is the situation in this case.’
Tamberlin J referred to authorities which drew a distinction between a mere reference to the existence of legal advice which did not amount to a waiver, and cases in which the substance of the advice had been disclosed: see Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 70 ALJR 603 at 607; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 and Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 376-377. These cases arose in the context of s 122(2) of the Evidence Act 1995 (Cth), which expressly refers to a loss of client legal privilege consequent upon the disclosure of ‘the substance of the evidence’.
138 Bennett has been followed by Sundberg J in Rio Tinto Limited v Commissioner of Taxation (2005) 224 ALR 299 at 312-313 [49]-[53], and Sackville J in Seven Network Limited v News Limited (No 12) [2006] FCA 348: see also Switchcorp Pty Ltd v Multiemedia Ltd [2005] VSC 425.
139 In Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (1994) 126 ALR 58, Tamberlin J at 67-68 held that the disclosure of memoranda of fees, backsheets to counsel and counsel’s fee slips did not amount to an implied waiver of privilege in the underlying documents. This was because the relevant memoranda etc did not disclose the nature and content of privileged material; they simply recorded in outline form the work which had been undertaken without disclosing the content of privileged communications, advices, briefs or conferences: see also Packer at 282; and Temwood Holdings Pty Ltd v Western Australian Planning Commission [2003] WASCA 112 at [20]-[25].
140 I have carefully read, and re-read, Exhibit 665 with these legal principles in mind.
141 I have also taken into account all of the evidence concerning the links between Mr Zwier’s legal advice and the subsequent drafting of Exhibit 665 by Mr Lindberg, including Mr Lindberg’s evidence that his drafting of Exhibit 665 was based very closely on the oral and written advice he had received from Mr Zwier. Mr Zwier’s affidavit of 5 April 2006 contains the statement that, having read Exhibit 665, he can say that it incorporates aspects of the legal advice which he had given. In his oral evidence Mr Zwier explained to some extent the factual basis for this statement. He said that he saw in Exhibit 665, in substantive respects, some reflection of the advice he had given to Mr Lindberg. In particular, he said that he had advised that particular subject matters should be included in the draft statement and they had been included.
142 At its most specific, the effect of the evidence is that Mr Lindberg included certain subject matters in Exhibit 665 on Mr Zwier’s advice. Those subject matters have not been identified and there is nothing to suggest that a reader of Exhibit 665 could identify them either directly or as a matter of reasonable inference. The most that could be done by a reader who was aware of all of the evidence given in this Court would be to speculate as to what those subject matters might be.
143 Taking all of the evidence into account, I have concluded that Exhibit 665 would not, if disclosed, allow a reader to know or infer the nature, content or substance of any legal advice given by Mr Zwier to Mr Lindberg and AWB. Further, the disclosure of Exhibit 665 would not result in any waiver of the privilege inhering in that advice.
use in connection with litigation
144 A traditional formulation of the second limb of legal professional privilege is that it applies to confidential communications passing between a client, the client’s legal adviser and third parties for the dominant purpose of use in or in relation to litigation which is either pending or in contemplation: see FCT v Pratt Holdings at 284 [39] per Kenny J. This formulation was referred to, with apparent approval, by Finn J in the Full Court in Pratt Holdings at 360 [6]: see also Grant v Downs at 677 per Barwick CJ.
145 The crucial difference between the first and second limbs of the privilege is that the second limb is not limited to communications whose dominant purpose is the giving or obtaining of legal advice. Communications lacking this advice element, such as communications between a solicitor and a prospective expert witness, will attract privilege where they occur in a litigation context: see JD Heydon, Cross on Evidence, vol 1, Butterworths, 1996, par 25235; SB McNicol, Law of Privilege, Law Book Company, 1992, at p 48; and SL Phipson, Law of Evidence, 16th edn, Sweet & Maxwell, 2005, at pars 23-81 and 23-82.
146 AWB contends that the second limb of the privilege extends, or should be extended by me, to confidential communications between a client and its solicitor and third parties which are undertaken for the dominant purpose of preparing evidence for possible use in a commission of inquiry. In short, AWB contends that the Inquiry should be treated as if it were litigation attracting the second limb of the privilege. Further or alternatively, AWB contends that Exhibit 665 was brought into existence for the dominant purpose of being used in connection with civil or criminal litigation that might result from the Inquiry and the recommendations of the Commissioner.
147 In argument, senior counsel for AWB acknowledged that there is no decided case in which the second limb of the privilege has been extended beyond adversarial litigation to a commission of inquiry. In Re L, the House of Lords declined to extend litigation privilege to proceedings under Part IV of the Children Act 1989 which were investigative and non-adversarial in nature and in which the Court was required to regard the welfare of the child as the primary consideration. Lord Jauncey of Tuillichettle held that litigation privilege is essentially a creature of adversarial proceedings and it was not appropriate to extend that privilege to care proceedings which are essentially non-adversarial: at 26 [H]. Lord Lloyd of Berwick and Lord Steyn agreed. Lord Nicholls of Birkenhead delivered a dissenting speech with which Lord Mustill agreed.
148 Lord Nicholls considered that the issue could not be resolved by applying the labels inquisitorial or adversarial to different types of proceedings: at 31 [F]. Proceedings may possess some adversarial features and some inquisitorial features. Moreover, Lord Nicholls thought that these terms divert attention from the crucial question, which is whether the proceedings are of a character which cannot be conducted fairly in the absence of litigation privilege.
149 Lord Nicholls considered that litigation privilege should apply to family proceedings for the following reasons:
‘Family proceedings are court proceedings. The court has to make decisions affecting, often profoundly, the whole future of a child and his or her family. Whenever necessary, the court makes findings on disputes of fact. It goes without saying that the parties to such proceedings are entitled to have a fair hearing. Whatever fairness does or does not require in other contexts, in this context a fair hearing includes at least the right to present one’s case and to call evidence.
Under English law an established ingredient of this right is legal professional privilege. Parties preparing for a court hearing may obtain legal advice in confidence. A party cannot be required to disclose communications between himself and his lawyer, or communications between the lawyer and third parties which come into existence for the purpose of obtaining legal advice in connection with the proceedings. A proof of evidence obtained from a potential witness of fact is not disclosable. Nor is a report obtained from a potential witness of expert opinion. A party may be required to produce a witness statement or expert’s report in advance as a precondition to the admission of that evidence at the hearing, but he is not required to disclose proofs of witnesses whose evidence he does not intend to adduce at the hearing. The public interest in a party being able to obtain informed legal advice in confidence prevails over the public interest in all relevant material being available to courts when deciding cases.
I can see no reason why parties to family proceedings should not be as much entitled to a fair hearing having these features and safeguards as are parties to other court proceedings.’
150 In Three Rivers, the Bank of England’s conduct was the principal subject to be investigated by the Bingham Inquiry. The Bank did not contend that the documents in issue attracted litigation privilege, presumably because of the decision in Re L.
151 In United States of America v Philip Morris Inc [2004] All ER (D) 448, claims of legal professional privilege arose in the context of an order for the examination of a solicitor in the High Court of Justice pursuant to a letter of request issued by the United States District Court for the District of Columbia. Brooke LJ, with whom Chadwick and Scott Baker LJJ agreed, said at [72]-[73]:
For these reasons, while the judge was correct in my judgment to categorise the letter of request process as adversarial, I do not consider that this fact alone would give rise to a sustainable claim for litigation privilege.’
152 In support of its contention that litigation privilege should extend to communications brought into existence in connection with the Inquiry, AWB pointed to the following matters. First, the Commissioner’s terms of reference require him to report on the lawfulness of AWB’s conduct and whether criminal or other legal proceedings should be instituted against AWB or any person associated with it. Thus, the Inquiry may have far-reaching consequences, legal or otherwise, for AWB and persons associated with it. Secondly, the Commissioner has conducted public hearings and witnesses have been examined and cross-examined at those hearings. The Commissioner has permitted AWB and others to be represented at the hearings, and it was said that the proceedings before the Inquiry have had an adversarial dimension to them. Thirdly, AWB submitted that evidence and other material had to be carefully prepared for the Inquiry, especially in view of the criminal penalties which attach to evidence which is untruthful. The preparation of evidence to be placed before the Inquiry necessitated legal assistance. In view of these considerations, AWB submitted that there is a compelling case for extending the second limb of the privilege to the Inquiry and, in particular, to the preparation of evidence for potential submission to the Inquiry.
153 AWB submitted that the policy considerations that attract privilege for documents that are brought into existence for the dominant purpose of providing legal services in connection with litigation apply with equal force to documents that are brought into existence for the dominant purpose of preparing and submitting evidence to the Inquiry. More specifically, it submitted that the broad rationale adopted by the High Court in Carter v Northmore Hale Davy & Leake (1995) 183 CLR 121 (‘Carter’) that underpins both limbs of legal professional privilege, namely that it is ‘a practical guarantee of fundamental, constitutional, or human rights… and a corollary of the rule of law’ (at 161 per McHugh J) supports the extension of the privilege beyond adversarial litigation to the conduct of this particular Inquiry, at least insofar as it affects AWB and its employees.
154 The judgments in Baker trace the origins of the two limbs of legal professional privilege. Dawson J noted at 128, by reference to Lord Selborne LC’s speech in Minet v Morgan (1873) 8 Ch App 361 at 366, that the law had advanced by successive steps: privilege was extended from communications relating to actual litigation to communications in anticipation in litigation and then to communications covering both litigation and legal advice. The litigation limb of the privilege developed first in response to the perceived requirements for a fair trial. Mason J said that communications in aid of litigation work were protected because ‘to compel the parties to disclose such communications made in the conduct of that litigation would be unfair to them, hamper the preparation of their cases and protract the determination of the litigation’: at 75. Brennan J referred to the ‘lawyers brief’ rationale that had been advanced by James LJ in Anderson v Bank of British Columbia (1876) 2 Ch D 644 at 656 and by Lord Simon in Waugh at 537, and said at 108:
‘If the prosecution, authorized to search for privileged documents, were able to open up the accussed’s brief while its own stayed tightly tied, a fair trial could hardly be obtained.’
See also Deane J at 113-116.
155 The traditional rationale for the litigation limb of legal professional privilege was explained by Stephen, Mason and Murphy JJ in Grant v Downs at 685:
‘The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available. As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision. None the less there are powerful considerations which suggest that the privilege should be confined within strict limits.’
156 In Carter at 160-161, McHugh J said that explanations of the rationale that have been put forward in terms of the proper functioning of the legal system or the perfect administration of justice take too little account of the fact that the privilege protects communications that seek or give legal advice in cases where no litigation is pending or contemplated. His Honour therefore expressed the rationale for the privilege more broadly:
‘Now that this Court has held that legal professional privilege is not a rule of evidence but a substantive rule of law, the best explanation of the doctrine is that it is ‘a practical guarantee of fundamental, constitutional or human rights’. By protecting the confidentiality of communications between lawyer and client, the doctrine protects the rights and privacy of persons including corporations by ensuring unreserved freedom of communication with professional lawyers who can advise them of their rights under the law and, where necessary, take action on their behalf to defend or enforce those rights. The doctrine is a natural, if not necessary, corollary of the rule of law and a potent force for ensuring that the equal protection of the law is a reality.’
See also Brennan J in Carter at 127; Baker at 94-95, 118 and 130; Waterford v Commonwealth (1987) 163 CLR 54 (‘Waterford’) at 64; Maurice at 487; and Three Rivers at 677 [C] per Lord Carswell.
157 In Pratt Holdings, Stone J concluded that the High Court’s exposition of legal professional privilege in Daniels, Esso and other cases demonstrates that it is supported by a single rationale which applies to both litigation privilege and legal advice privilege: at 381 [85]. Merkel J agreed with this conclusion. However, Stone J added that the existence of a single rationale does not mean that it is no longer necessary to have regard to the different categories of legal advice and litigation privilege. Finn J did not find it necessary to decide whether legal professional privilege should now be recognised as a unified doctrine which, though having two applications (ie advice and litigation), has a single rationale. His Honour regarded this controversy as a well recognised one and observed that, at an appropriate level of abstraction, a common and unifying rationale can be found for both manifestations of the privilege: at 361 [9].
158 Legal professional privilege must be applied in a manner which is consistent with the policy reasons that justify its existence: see Pratt Holdings at 362 [18] and 367-368 [41]-[42] per Finn J, and 386 [105] per Stone J; and Three Rivers at 650 [35]. But this does not mean that the origins, and the distinctive scope and operation of the second limb of the privilege, are to be ignored. In my view, the authorities establish that the reason why litigation privilege has been recognised as a substantive rule of law and as a fundamental right, is that it operates to secure a fair civil or criminal trial within our adversarial system of justice. The rationale for litigation privilege does not support its extension to a commission of inquiry.
159 AWB also relied upon the broad terms in which legal professional privilege was expressed in the joint judgments in Daniels at 552 [9] and Esso at 64 [35]. In the latter case, Gleeson CJ, Gaudron and Gummow JJ said that the privilege protects the confidentiality of certain communications made in connection with the provision of legal services, including representation in proceedings in a court. AWB also referred to s 119 of the Evidence Act 1995 (Cth) which refers to ‘professional legal services relating to an Australian or overseas proceeding’. In my opinion, these matters do not support the extension of litigation privilege to the context of a commission of inquiry. In Daniels and Esso, the High Court was trying to describe the scope of the privilege in a summary way. The description recognises that in appropriate cases the privilege can extend beyond legal advice to include other forms of legal work. It would be wrong to infer from the High Court’s summary statement that it was intending to radically enlarge the operation of the rule. And in my view the language used in s 119 does not disclose any intention to extend litigation privilege to the conduct of a commission of inquiry.
160 AWB also relied upon the statement by Dawson J in Waterford at 101 that:
‘The concept of litigation for the purpose of the doctrine of legal professional privilege is, I think, wide enough to embrace the proceedings before the Tribunal which were conducted upon adversary lines and contemplated legal representation. Communications for the purpose of giving and receiving legal advice in relation to those proceedings fell, in my view, within the privilege.’
161 In my opinion, it is one thing to extend litigation privilege to adversarial proceedings before the Administrative Appeals Tribunal. The Administrative Appeals Tribunal is vested with statutory authority to determine issues with legally binding consequences. A Royal Commission is not in that position. A Commissioner simply carries out investigations, determines the facts and prepares a report and recommendations. A Commission does not finally determine any rights or obligations.
162 It must also be recognised that legal advice privilege applies in its full extent to legal work undertaken in connection with the Inquiry. Provided the dominant purpose test is satisfied, legal advice provided in connection with the preparation of evidence for possible use at the Inquiry will attract privilege. In the context of the provision of legal advice and the preparation of evidence for a commission of inquiry, the question must be asked whether any communications, falling within the margin between legal advice privilege which is available, and litigation privilege which historically has not been available, justifies the extension of litigation privilege beyond adversarial court proceedings so as to include a commission of inquiry. The location and retention of witnesses, expert or otherwise, is really an adjunct of adversarial litigation and, in my view, does not warrant such an extension.
163 Given the applicability of legal advice privilege in the context of a commission of inquiry, I am not persuaded that the broad rationale for legal professional privilege justifies the extension of the litigation limb so as to include a commission of inquiry.
164 The extension of litigation privilege to a commission of inquiry is a very large step. It is not a step which I feel able to take, as a single judge, in the absence of supporting authority and in the face of the recent decision by the House of Lords in Three Rivers.
165 I also reject AWB’s alternative submission that Exhibit 665 was brought into existence for the dominant purpose of being used in connection with litigation which might follow from the report of the Commissioner. It is unnecessary to debate whether potential future litigation of this kind, whether civil or criminal, is sufficiently in prospect or anticipated that it falls within the scope of the second limb of the privilege. Let that be assumed. The insurmountable difficulty I see is that, on the evidence, Exhibit 665 was not prepared so that it might be used in connection with future litigation of that kind. Rather it was prepared for possible use as part of Mr Lindberg’s evidence to the Inquiry. This use falls outside the scope of the second limb of the privilege so long as a commission of inquiry is not relevantly regarded as litigation.
judicial review
166 The conclusions I have reached on legal professional privilege are founded on this Court’s jurisdiction under s 39B of the Judiciary Act and are based on the evidence adduced in this Court. In those circumstances, even assuming the jurisdiction to do so exists under the ADJR Act, it would be unnecessary and inappropriate for me to embark upon any review of the Commissioner’s ruling on privilege.
167 AWB and the Commonwealth submitted that AWB’s application for judicial review could be used as a vehicle for determining whether the Commissioner was correct in his ruling that he has an ancillary or incidental power under the RCA to ‘determine’ whether or not the claim of legal professional privilege had been established. AWB argued that, while the Commissioner may quite properly accept or reject a claim of privilege in the exercise of administrative or executive power, he does not have the function of deciding a claim; that step is reserved for the Courts, and any decision by the Commissioner on the subsistence of legal professional privilege has no legal force or effect. The Commonwealth submitted that the Commissioner’s ruling on legal professional privilege lacked the authoritative and binding character of a judicial determination. As to whether the Commissioner’s ruling had any legal force or effect as an administrative decision, the Commonwealth adopted shifting positions, at times submitting that it had no legal effect. In addition, the Commonwealth submitted that this Court can determine the existence of legal professional privilege in relation to Exhibit 665 quite apart from any application for judicial review. It is implicit in the lastmentioned submission that the Commissioner’s ruling is not a decision of a kind that has binding legal effect until set aside: see Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614 [51] per Gaudron and Gummow JJ.
168 It is convenient to state my conclusion at once and then to explain the reasons for it. In my opinion, the Commissioner’s ruling that the RCA confers an ancillary or incidental power on him to determine whether the claim of legal professional privilege had been established in respect of Exhibit 665 does not constitute an administrative decision under an enactment that can be the subject of judicial review under the ADJR Act.
169 The judicial review application in this case is founded on ss 5 and 6 of the ADJR Act. The common feature of these provisions is that they attract jurisdiction only where there is ‘a decision of an administrative character made, proposed to be made, or required to be made … under an enactment…’: see s 3(1) of the ADJR Act. Section 5 applies to the review of the decision itself whereas s 6 applies to conduct engaged in for the purpose of making such a decision. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (‘Bond’), the High Court held that a reviewable decision generally entails a decision which is final or operative and determinative, at least in the practical sense, of an issue falling for consideration; a conclusion reached as a step along the way in a course of reasoning to an ultimate decision will not ordinarily qualify as a reviewable decision: at 337 per Mason CJ (Brennan and Deane JJ agreeing). Further, to be reviewable under the ADJR Act, a decision must also be a substantive determination rather than a procedural one: at 337.
170 In Griffith University v Tang (2005) 221 CLR 99 (‘Tang’), the issue was whether a decision by Griffith University to exclude a post-graduate student from further participation in its PhD degree program was a decision under the Griffith University Act 1998 (Qld) (‘University Act’). The excluded student sought judicial review under the Judicial Review Act 1991 (Qld) which is relevantly identical to the ADJR Act: see Tang at 105 [3] per Gleeson CJ, and 119 [49] per Gummow, Callinan and Heydon JJ. It was not disputed that the university’s powers to formulate the terms and conditions of the applicant’s PhD candidature, to decide to enter into a relationship with the applicant in respect of that candidature, and to decide to end it were conferred in general terms by the University Act. A majority of the Court, comprising Gleeson CJ, Gummow, Callinan and Heydon JJ, held that the decision was not reviewable because it was not a decision of an administrative character under an enactment. Kirby J dissented.
171 In their joint judgment, Gummow, Callinan and Heydon JJ said at 130-131 [89]:
‘The determination of whether a decision is “made ... under an enactment” involves two criteria: first, the decision must be expressly or impliedly required or authorised by the enactment; and, secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment. A decision will only be “made ... under an enactment” if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice.’
172 Applying these principles, Gummow, Callinan and Heydon JJ concluded at 132-133 [96]:
‘The decisions of which the respondent complains were authorised, albeit not required, by the University Act. The Committees involved depended for their existence and powers upon the delegation by the Council of the University under ss 6 and 11 of the University Act. But that does not mean that the decisions of which the respondent complains were “made under” the University Act in the sense required to make them reviewable under the [Judicial Review Act 1991]. The decisions did not affect legal rights and obligations. They had no impact upon matters to which the University Act gave legal force and effect. The respondent enjoyed no relevant legal rights and the University had no obligations under the University Act with respect to the course of action the latter adopted towards the former.’
173 Gleeson CJ reached the same conclusion. In his Honour’s view, the critical consideration was that the university’s decision to end the applicant’s PhD candidature was not given legal force or effect by the University Act: at 112 [23]
174 In my opinion, the Commissioner’s rulings that he has an ancillary or incidental power under the RCA to determine whether or not the claim for legal professional privilege was established, and that legal professional privilege does not attach to Exhibit 665, are not given legal force or effect by the RCA. It follows that these rulings are not amenable to the review under theADJR Act.
175 The Commonwealth submitted that the RCA conferred power on the Commissioner, for practical and procedural reasons, to reach an opinion as to whether or not Exhibit 665 attracted legal professional privilege. This submission was founded on Re Adams and the Tax Agents’ Board (1976) 7 ATR 87, in which Brennan J said at 89:
‘An administrative body cannot therefore lawfully exercise authority merely because it is of the opinion that it has the authority. Its opinion is not the charter of its powers and discretions. It derives its powers and discretions from and in accordance with the law. It is the court's judgment and not the administrative body's opinion which defines the extent of (as well as the constitutional support for) its statutory authority.
...
An administrative body with limited authority is bound, of course, to observe those limits. Although it cannot judicially pronounce upon the limits, its duty not to exceed the authority conferred by law upon it implies a competence to consider the legal limits of that authority, in order that it may appropriately mould its conduct. In discharging its duty, the administrative body will, as part of its function, form an opinion as to the limits of its own authority. The function of forming such an opinion for the purpose of moulding its conduct is not denied to it merely because the opinion produces no legal effect. In R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598, Dixon J, whilst denying the power of a Local Coal Reference Board to determine judicially the meaning of a statutory phrase upon which its jurisdiction depended, distinguished the Board's function of forming an opinion upon the question. He said (at 618): “I do not mean to say that the Board may not, for the purpose of determining its own action, ‘decide’ in the sense of forming an opinion upon the meaning and application of the words ‘coal mining industry’. It must make up its mind whether this or that particular function on the borders of the coal mining industry does or does not fall within the conception”.’
Brennan J applied these principles in concluding that the Administrative Appeals Tribunal and the Tax Agents Board could express an opinion about the constitutional validity of a provision of the Income Tax Assessment Act 1936 (Cth), but neither body could make a decision on that question that produces any effect in point of law: at 91-92.
176 I was referred to a number of other authorities to similar effect. The issue in Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 was whether notices issued by the Deputy Commissioner of Taxation extended to documents which were the subject of legal professional privilege. Lockhart J said that any claim for privilege could be asserted and tested in the courts: at 200. Hill J said that at an appropriate time, which would generally be at the latest time for compliance with the notice, it would be incumbent upon the recipient of the notice to make a claim for privilege and, if that claim be rejected, to maintain the claim by an application to a court or by way of defence in a prosecution: at 217. There is no suggestion in the judgments in the Full Court that the Deputy Commissioner of Taxation was impliedly empowered by the legislation to determine the claim for privilege in a way that had any legally binding force or effect.
177 In Buck v Comcare (1996) 66 FCR 359 (‘Buck’), Finn J refused to read a ‘reasonable excuse provision’ in federal legislation as if it were impliedly qualified by the words ‘in the opinion of Comcare’. His Honour said at 362:
‘I am, in effect, being asked to construe s 57(2) as if it were worded: “Where, in the opinion of Comcare, an employee refuses or fails, without reasonable excuse, to undergo ...”. Cf the like implication sought in Minister for Immigration and Ethnic Affairs v Naumovska (1983) 88 ALR 589 at 601.
The formula “without reasonable excuse” occurs commonly enough as a ground of exculpation in penal provisions of statutes: see, eg, Australian Securities Commission Act 1989 (Cth), s 63 and Australian Securities Commission v Ampolex Ltd (1995) 38 NSWLR 504; see also Broadbent v Fairbairn (unreported, Federal Court, Drummond J, 10 July 1995). In these instances the presence or absence of such an excuse is, properly, a matter for judicial determination. In contrast, though, there are instances of its use in legislation in circumstances where the determination required is given to an administrative agency or tribunal with the consequence that judicial supervision of that determination is a matter of judicial review: see, eg, Health Insurance Act 1973(Cth) ss 23DZG(c) and 124FF(2) and Reddy v Medicare Participation and Review Committee (1994) 34 ALD 477.’
Here, both parties submitted that the subsistence of legal professional privilege in Exhibit 665 and the existence of a reasonable excuse within the meaning of s 3(5) of the RCA were properly matters for judicial determination which could be undertaken without reviewing the Commissioner’s rulings.
178 National Crime Authority v S (1991) 29 FCR 203 does not stand for any contrary proposition. It provides an example of the second type of legislation mentioned by Finn J in Buck. The case concerned the National Crime Authority Act 1984 (Cth) which specifically empowered the National Crime Authority to decide whether a claim for legal professional privilege was justified. The legislation attached legal force and effect to that determination, subject to a right to apply to the Federal Court for an order of review. Likewise, Brannigan v Davison [1997] AC 238 turned on its facts, and the special features of the legislation that was in issue.
179 In Baker, Mason J said that a decision of an executive officer on a question of legal professional privilege would not be conclusive; a decision of a court on a prosecution for contravention of the statutory obligation or in proceedings for a declaration as to the existence of the privilege would be required in order to provide a conclusive answer: at 76; see also at 97 per Wilson J, at 105 per Brennan J, and at 132 per Dawson J. Daniels proceeded on the same basis.
180 Propend does not lend any support to the contention that the Commissioner’s ruling on legal professional privilege is amenable to judicial review. Although there were judicial review applications in Propend, the case proceeded on the basis that the appropriate form of relief to resolve the privilege issue was a declaration in pursuance of the Court’s jurisdiction under s 39B of the Judiciary Act: at 506 and 513 per Brennan CJ, and at 568 and 576 per Gummow J.
181 The only decision by the Commissioner that had legal force and effect under the RCA, or would have if implemented, was his announced decision to revoke the non-publication order that he made under s 6D in respect of Exhibit 665. Section 6D(3) confers power on the Commissioner to make a non-publication order, and this power necessarily extends to the revocation of the order: see s 33(3) of the Acts Interpretation Act 1901 (Cth); see also X v Australian Crime Commission (2004) 139 FCR 413. But the basis upon which AWB seeks to review the revocation decision is the contention that the Commissioner made an error of law in holding that Exhibit 665 was not the subject of legal professional privilege. There is no utility in undertaking a review of the Commissioner’s revocation decision on this ground. Pursuant to s 39B of the Judiciary Act, I have independently considered the question whether Exhibit 665 attracts legal professional privilege having regard to the evidence before me.
182 The other decisions that AWB seeks to review concern the Commissioner’s construction of the RCA. In particular, AWB seeks to review the Commissioner’s conclusion concerning the construction and operation of the ‘reasonable excuse’ provisions of s 3(4) and (5) of the RCA, and the Commissioner’s conclusion that the RCA confers an ancillary or incidental power upon him to determine whether a claim of legal professional privilege has been established. Not only do these decisions or conclusions fall outside the scope of the ADJR Act because they are not given legal force or effect by the RCA; none of them amount to final and operative decisions that are amenable to judicial review. They are simply conclusions reached along the way by the Commissioner in the course of reasoning to his ultimate decision that legal professional privilege did not attach to Exhibit 665. As such, they are not decisions of an administrative character made under an enactment: see Bond at 337 per Mason CJ.
183 For the foregoing reasons, I decline to undertake a judicial review of the decisions or rulings made by the Commissioner.
declaratory relief
184 From what appears above, it will be apparent that I reject AWB’s claims for a declaration that Exhibit 665 is protected by legal professional privilege and for injunctions restraining the Commissioner from using or publishing Exhibit 665 and requiring that he return it to AWB. It remains for me to consider AWB’s claim for declarations that the Commissioner does not have power to order the production of a privileged document or to determine whether a document is protected by legal professional privilege and should not determine such a claim.
185 Despite the widely formulated declarations sought by AWB, there was very little in dispute in this Court between AWB and the Commonwealth concerning the nature and extent of the Commissioner’s powers under the RCA. In the end, it was essentially common ground between them that (to adapt the language used by Dixon J in R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 at 618) the Commissioner had an administrative power or capacity, for the purpose of determining his own actions and procedures, to ‘decide’, in the sense of forming an opinion, that Exhibit 665 was required to be produced under the notice because it was not legally privileged. In this sense, the Commissioner had the power to accept or reject the claim for privilege that was made to him. I consider that the Commissioner’s opinion or ruling had no binding force or effect in point of law, and it was open to either party to agitate the issue directly in declaratory proceedings in this Court without embarking upon any review of the Commissioner’s decision.
186 The main area of contention between AWB and the Commonwealth related to two matters. One area that was in dispute before the Commissioner was whether the Commissioner had to defer to a bare claim of legal professional privilege over Exhibit 665. If AWB advanced any such argument in this Court, it did so very weakly. AWB accepted that the Commissioner could quite properly hear argument and evidence about, and could accept or reject, a claim of legal professional privilege in the exercise of administrative or executive power, subject to the qualification that his decision would not have any legally binding force or effect. The Commonwealth submitted that the Commissioner is not required to accept a bare assertion of privilege. It argued that there is no reason why, in order properly to discharge his functions and to determine the scope of his jurisdiction, the Commissioner should not require that a person making a privilege claim properly establish the claim before him by evidence and submissions. These submissions were not seriously disputed by AWB.
187 I do not doubt that the Commissioner can make a non-binding decision concerning a claim of legal professional privilege. It is obviously administratively convenient and practical that the legislation should be construed as giving him the implied authority to do so. The Commissioner might well accept that legal professional privilege applies to certain documents, thereby obviating the need for any application to be made to the Court. On the other hand, if the Commissioner rejects a claim to privilege, his ruling will crystallise a dispute and provide the foundation for either the Commissioner or the other person concerned to make an application to the Court for an appropriate declaration or injunction.
188 The second area of dispute between AWB and the Commonwealth related to the Commonwealth’s submission that the Commissioner has an implied authority under the RCA to require production of a document that is claimed to be the subject of legal professional privilege for the limited purpose of inspecting it in order to determine whether the claim to privilege is made out. In the course of considering the proper construction of the RCA, I rejected this submission on the grounds that it is not supported by the RCA and infringes the principles enunciated in Baker and Daniels.
189 The Commissioner has not asserted that he has an implied authority under the RCA to inspect documents over which legal professional privilege has been claimed in order to determine whether the claim is made out. His inspection of Exhibit 665 was entirely due to the fact that it was produced by AWB mistakenly and without any accompanying claim for legal professional privilege at that time. The Commonwealth’s submission therefore raises an abstract question, which I assume is directed towards the resolution of outstanding claims for legal professional privilege over other documents.
190 This Court has power to grant declaratory relief under s 21 of the Federal Court Act 1976 (Cth). In their joint judgment in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582, Mason CJ, Dawson, Toohey and Gaudron JJ described the nature of a superior court’s power to grant declaratory relief:
‘It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which “[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise”. However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the Court’s declaration will produce no foreseeable consequences for the parties”.’
The making of a declaration and the terms in which it should be framed are in the court’s discretion: see Brennan J at 596; see also Mayfair Trading Pty Ltd v Drewey (1958) 101 CLR 428 at 454 per Dixon CJ; Tito v Waddell (No 2) [1977] Ch 106 at 259.
191 The courts have stressed that it is important that declaratory relief be aimed only at the resolution of real rather than theoretical questions: see Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334 at 355-357 [47]-[49] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; CE Heath Casualty and General Insurance Ltd v Pyramid Building Society [1997] 2 VR 256 at 260-262 and 284-285; Electricity Supply Association of Australia v Australian Competition and Consumer Commission (2001) 113 FCR 230 at 265.
192 I have concluded that it is inappropriate to grant declaratory relief in relation to the Commissioner’s powers under the RCA.
193 The declarations claimed by AWB are expressed very broadly and do not reflect the issues that were litigated in this Court or are contrary to the conclusions I have reached. Leaving aside the Commonwealth’s submission as to the Commissioner’s limited powers of inspection, neither party contended that the Commissioner had power to order the production of a privileged document. The Commissioner did not purport to exercise any such power. It is therefore inappropriate to make the first declaration sought by AWB. The other declarations sought by AWB are inconsistent with my conclusions on the relevant issues.
194 Although the Commonwealth argued that the Commissioner has an implied authority under the RCA to inspect documents over which legal professional privilege has been claimed in order to determine whether the claim is made out, it did not seek a declaration to that effect. Nor did AWB seek a declaration to the opposite effect. Even if they had done so, I consider that the abstract and hypothetical nature of the question raised by the Commonwealth’s submission would make it inappropriate to grant declaratory relief in that regard.
ORDERS
195 I will order that the application be dismissed. I will hear submissions on the question of costs.
| I certify that the preceding one hundred and ninety-five (195) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. |
Associate:
Dated: 17 May 2006
| Counsel for the Applicant: | J Judd QC with Dr S McNicol |
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| Solicitor for the Applicant: | Arnold Bloch Leibler |
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| Counsel for the First Respondent: | The First Respondent did not appear |
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| Counsel for the Second Respondent: | D Bennett QC with Dr M Perry QC |
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| Solicitor for the Respondents: | Australian Government Solicitor |
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| Date of Hearing: | 24 April 2006 |
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| Date of Judgment: | 17 May 2006 |
