CATCHWORDS

PRACTICE AND PROCEDURE - discovery - legal professional privilege - "litigation privilege" and "advice privilege" - public interest immunity - proceedings begun by Australian Securities Commission (ASC) under s 50 of Australian Securities Commission Law in names of others arising out of an investigation thereunder conducted by ASC - whether documents brought into existence in the course of the investigation and prior to ASC's decision that proceedings be begun attract privilege - whether brought into existence solely for purpose of anticipated litigation - disconformity between ASC and persons in whose names proceedings begun - whether "common interest privilege" applies - whether "sole purpose" test of privilege satisfied - whether documents brought into existence at least partly for purpose of ASC's performance of its statutory functions - whether documents protected from discovery by public interest immunity.

Australian Securities Commission Act (1989) ss 1, 5, 11, 13, 49, 50, 90 and 148.

Sankey v Whitlam (1978) 142 CLR 1.

Spargos Mining NL v Standard Chartered Aust Ltd (No 1) (1989) 1 ACSR 311.

Zarro v Australian Securities Commission (1992) 36 FCR 40.

Attorney General (NT) v Kearney (1985) 158 CLR 500.

Waterford v The Commonwealth (1986) 164 CLR 54.

Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (1994) 54 FCR 316.

Carter v Managing Partner, Northmore Hale Davy and Leake (1995) 129 ALR 593.

Grant v Downs (1976) 135 CLR 674.

Deloitte Touche Tohmatsu v Australian Securities Commission (1995) 128 ALR 318.

Buttes Gas & Oil Co v Hammer [1981] 1 QB 223.

Bulk Materials (Coal Handling Services) Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689.

HUGH ROSS SOMERVILLE v AUSTRALIAN SECURITIES COMMISSION & ORS

No VG 188 of 1993

 

ANZ EXECUTORS & TRUSTEE COMPANY LIMITED v AUSTRALIAN SECURITIES COMMISSION & ORS

No VG 190 of 1993

 

DAY NEILSON JENKINS & JOHNS v AUSTRALIAN SECURITIES COMMISSION & ORS

No VG 205 of 1993

Lockhart, Jenkinson and Lindgren JJ

Melbourne

18 September 1995

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY        )    No.  VG 188  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  HUGH ROSS SOMERVILLE

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY       )    No.  VG 190  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  ANZ EXECUTORS & TRUSTEE COMPANY LIMITED

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY       )    No.  VG 205  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  DAY NEILSON JENKINS & JOHNS

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

CORAM:  LOCKHART, JENKINSON  AND LINDGREN JJ.

PLACE:  MELBOURNE

DATE:   18 SEPTEMBER 1995

                       MINUTE OF ORDER

     ON EACH OF THE THREE MOTIONS FOR LEAVE TO APPEAL THE COURT ORDERS THAT:

1.   There be leave to appeal from the order made on 3 March 1995.

2.   The draft notice of appeal exhibited to the affidavit in support of the motion for leave to appeal stand as  the notice of appeal.

3.   The appeal be allowed.

4.   The matter of the motion for order for production of documents discovered by the respondent Australian Securities Commission and of the said order made on 3 March 1995 be remitted to a Judge of the Court for further consideration according to law.

5.   The respondent Australian Securities Commission pay one-half of the costs of the applicant of the motion for leave to appeal and of the appeal. 

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         )  No.  VG 188  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  HUGH ROSS SOMERVILLE

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY       )    No.  VG 190  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  ANZ EXECUTORS & TRUSTEE COMPANY LIMITED

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

IN THE FEDERAL COURT OF AUSTRALIA)

                                  )

VICTORIA DISTRICT REGISTRY       )    No.  VG 205  of  1993

                                  )

GENERAL DIVISION                  )

                   BETWEEN:  DAY NEILSON JENKINS & JOHNS

                                      Applicant

                   AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                             PETER CHAPMAN

                                      Second Respondent

                             AILSA WILSON

                                      Third Respondent

LOCKHART, JENKINSON and LINDGREN JJ.

18 SEPTEMBER 1995

                    REASONS FOR JUDGMENT

LOCKHART J.

     These are three motions for leave to appeal from the interlocutory judgment of a judge of the Court (Northrop J.) given on 3 March 1995.  His Honour dismissed motions seeking orders that the respondents produce documents in their possession, custody or power for inspection by the applicants. The motions at first instance and motions for leave to appeal before us were heard together by consent.  The motions for leave to appeal were argued as if the Court was hearing the appeals themselves.  The case raises questions concerning legal professional privilege and public interest immunity.

     Some statement of the background to the matters is helpful.  For some time before January 1993 the Australian Securities Commission ('the Commission') had been investigating the affairs of Farrow Finance Company Limited ('Farrow') and other members of the Farrow group, following the collapse of the Pyramid and Farrow group of companies in September 1990.  Many noteholders in Farrow suffered loss following the collapse.  The notes were issued pursuant to a trust deed under which ANZ Executors & Trustee Company Limited ('ANZ') was the trustee.  Day Neilson Jenkins and Johns (a firm) ('DNJJ') were the auditors of Farrow, and Hugh Ross Somerville ('Somerville') was an investigating accountant reporting for the purposes of two of the prospectuses relating to the issue of the notes. 

     On 7 January 1993, arising out of its investigations, the Commission resolved that proceedings should be commenced in the Supreme Court of Victoria and carried on in the names of noteholders of Farrow against Somerville, ANZ and DNJJ. 

     On 18 March 1993 the Commission decided to cause the first of such proceedings, called the 'Meadow Gem' proceeding, to be begun in the Supreme Court of Victoria.  It was commenced on 23 March 1993.

     On 29 April 1993 the Commission resolved to cause a further proceeding to be begun and carried on against Somerville, ANZ and DNJJ seeking the same relief as in the Meadow Gem proceeding.  This proceeding ('the Abbott proceeding') was commenced in the Supreme Court of Victoria on 21 June 1993. 

     On 27 August 1993 a third proceeding was instituted in the Supreme Court of Victoria ('the Bergfield proceeding') pursuant to a decision of the Commission of the same date.  All decisions to commence and carry on proceedings in the Supreme Court were made pursuant to s. 50 of the ASC Law, to which reference shall be made later. 

     The plaintiffs in the Supreme Court proceedings make substantially the same claims in each of them, namely, claims for damages for negligence and for misleading and deceptive conduct in contravention of s. 52 of the Trade Practices Act 1974.  The loss or damage claimed in the Supreme Court proceedings is said to be the loss of the principal sum invested by the plaintiffs and interest.

     On 14 May 1993 three proceedings were commenced in this Court by the applicants (Somerville, ANZ and DNJJ) for orders of review under the Administrative Decisions (Judicial Review) Act 1977 ('ADJR Act') and s. 39B of the Judiciary Act 1903 ('the Judiciary Act').  These are the proceedings in which the interlocutory motions for production of documents were made and dismissed by Northrop J.  The applicants seek review of the decisions of the Commission and its delegates under s. 50 of the ASC law to begin and carry on the three proceedings in the Supreme Court of Victoria (the Meadow Gem, Abbott and Bergfield proceedings) in the names of more than 1,200 noteholders in Farrow.  Each of the decisions is challenged upon various grounds which reflect the provisions of s. 5 of the ADJR Act.

     On 9 September 1993 Northrop J. made interlocutory orders in the three proceedings for general discovery of documents. Pursuant to leave, appeals from his Honour's orders were heard by a Full Court of this Court; and on 1 June 1994 the Full Court ordered that the appeals be dismissed with costs (the judgment of Northrop J. is reported at (1993) 118 ALR 149 and that of the Full Court at (1994) 51 FCR 38).

     Following the making of the Full Court's orders, the respondents gave discovery of documents; but of the 144 items listed in the list of documents they have claimed immunity from production in respect of 137 of them, based on a claim for legal professional privilege and a claim of public interest immunity.  The claim for legal professional privilege covers all of the documents in Parts 2A and 2B of Schedule 1 to the list of documents and all the documents in Part 3 except items 1, 2, 4, 5, 9 and 39 to 43.  Part 3 lists all documents covered by the claim of public interest immunity; the documents which bear an asterisk in Part 3 are also subject to the claim for legal professional privilege.  The applicants filed notices of motion for production of these documents, and it was these motions which Northrop J. dismissed.

     I turn first to the issues concerning legal professional privilege.

Legal Professional Privilege

     His Honour rejected the submission on behalf of the applicants that, as the majority of the documents for which legal professional privilege is claimed were brought into existence before 7 January 1993 (the date on which the Commission decided to commence proceedings in the Supreme Court of Victoria), proceedings would not have been in the contemplation of the Commission until then or thereabouts, hence they were not privileged.  In rejecting this submission his Honour said documents brought into existence by actions taken by officers of the Commission before it first considered the matter must be entitled to legal professional privilege if otherwise they are privileged.

     His Honour considered the submission of counsel for the applicants that legal professional privilege is not absolute and that in each case the Court is required to undertake a balancing exercise between competing public interests, and that in the present case a competing public interest, namely, the right of a person to seek a review of a decision or conduct of an administrative character made under an enactment, could be frustrated by the legal professional privilege claim by the Commission.  His Honour accepted the existence of the need to balance competing public interests and relied on R v Bell Ex parte Lees (1980) 146 CLR 141 per Gibbs J. at 145-6.  His Honour's judgment was given shortly before the judgment of the High Court in Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 129 ALR 593 ('Carter') in which the High Court held that where legal professional privilege attaches, no question arises of balancing the considerations favouring the protection of confidentiality against any considerations favouring disclosure in the circumstances of the case.  The privilege is itself the outcome of a balancing process.  It is necessary therefore to approach his Honour's reasons for judgment bearing in mind the impact upon them of Carter.

     As part of the balancing process his Honour referred to the judgment of Gibbs C.J. in Northern Territory of Australia v Kearney (1985) 158 CLR 500 at 515 where his Honour said (in considering Lee's Case):

          'The case is authority for the view that legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.'

Northrop J. said that this principle could have no application to the facts of the present case.  He relied upon s. 13 of, and item (f) of Schedule 2 to, the ADJR Act, which he said made it clear that Parliament, as a matter of policy, had enacted that an authority cannot be compelled to give reasons for a decision in connection with the institution or the conduct of proceedings in a civil court.  His Honour said:

          'There is no room to invoke a public interest policy consideration for not granting legal professional privilege otherwise established, because to do so could have the practical effect of denying an applicant access to review, when the Judicial Review Act itself provides that reasons for the decisions cannot be compelled.  This seems to negate the existence of a public interest policy that legal professional privilege otherwise available should not be granted because to do so would thwart an application for review.' (Judgment at p 17)

His Honour rejected the submission that a person's right to seek a review under the ADJR Act could be frustrated by the legal professional privilege claimed by the Commission.

     I turn to the submissions of the parties on the motions for leave to appeal.  Counsel for the applicants argued that the judgment of Northrop J. is attended with sufficient doubt to warrant its reconsideration by a Full Court because his Honour erred in applying incorrect principles.

     It was argued on behalf of the applicants that there was no room for the application of legal professional privilege because the Commission is not a party to the relevant litigation and it does not have the same interest as a party.  It is a statutory body exercising its statutory powers of investigation; and at least up to the time when the Commission commenced the first action in the Supreme Court it could not be said to be a party for the purposes of the doctrine. 

     It was argued also that legal professional privilege cannot attach to communications in furtherance of an abuse of statutory power and that the Commission in this case did abuse its statutory powers, in that the decisions made by and action taken by the Commission under s. 50 constitute an abuse or an excess of its statutory power.  Nor has the Commission, it was argued, a common interest (as understood in this branch of the law) with any party in the proceedings and it is not in a position analogous to that of a relator in a relator proceeding, an analogy to which his Honour referred.  Further, it was said that any relevant documents were not brought into existence for the sole purpose of the litigation, but rather for a mix of purposes, including, the giving of legal advice by legal staff of the Commission to its investigative staff or to the Commission itself, and the making of the decision under s. 50.  It was said also that litigation was not reasonably anticipated at the time the documents were brought into being which preceded the formation by the Commission of its opinion that proceedings under s. 50 were in the public interest.

     Counsel for the Commission said that the submissions of the applicants relating to allegations of abuse of power were never raised before Northrop J. in address and are not referred to in the draft notices of appeal.  The Commission joined issue with all of the submissions made on behalf of the applicants.

     Central to all questions before us is the Commission's role under the ASC Law and, in particular, s. 50 of that Law.

     The Commission was established as a body corporate: ss. 7 and 8 of the ASC Law.  Section 1 provides that it must, inter alia, strive to administer the Corporations Law effectively and to take action to enforce and give effect to the Corporations Law.  Part 3 of the ASC Law (ss. 13 to 93) confers extensive powers upon the Commission to conduct investigations and gather information.  Where, as a result of an investigation, it appears to the Commission that a person may have committed an offence and ought to be prosecuted, the Commission may cause a prosecution to be begun and continued: s. 49. 

     Section 50 is in the following terms:

          'Where, as a result of an investigation or from a record of an examination (being an investigation or examination conducted under this Part or a corresponding law), it appears to the Commission to be in the public interest for a person to begin and carry on a proceeding for:

 

              (a)  the recovery of damages for fraud, negligence, default, breach of duty, or other misconduct, committed in connection with a matter to which the investigation or examination related; or

              (b)  recovery of property of the person;

 

          the Commission:

 

              (c)  if the person is a company - may cause; or

              (d)  otherwise - may, with the person's written consent, cause;

 

          such proceeding to be begun and carried on in the person's name.'

     Sections 49 and 50 thus reflect the important role of the Commission in the area of public policy and law enforcement by pursuing criminal and civil remedies for contravention of the Corporations Law.

     Section 50 was considered by Lindgren J. in Deloitte Touche Tohmatsu v ASC (1995) 128 ALR 318 in the context of whether 'the appearance to the Commission' that it was in the public interest for a person to begin and carry on a proceeding was or was not a decision under an enactment for the purposes of the ADJR Act.  His Honour held that it was not because it was not a 'final or operative and determinative' decision as those expressions were explained by Mason C.J. in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 337 (see p. 331 of 128 ALR).  Lindgren J. said at 326 that s. 50 conferred an 'extraordinary power' on the Commission to cause a proceeding to be begun and carried on, not in the name of the Commission, but in the name of another person in respect of a cause of action of that other person.  The section gives the Commission a power not available to it under the general law and renders lawful an act by it which would otherwise be unlawful.  His Honour referred also in that connection to Southern Farmers Group Limited v Deputy Commissioner of Taxation (SA) (1989) 92 ALR 317 per O'Loughlin J. at 328 and General Newspapers Pty Limited v Telstra Corporation (1993) 117 ALR 629 per Davies and Einfeld JJ. at 633.

     An evident function of s. 50 is to permit the Commission, acting in the public interest, to cause proceedings to be taken where persons or corporations have suffered loss or harm arising from fraud, negligence or misconduct, but do not have the resources to maintain expensive and complicated litigation.  The section cannot be invoked without the intervention of the Commission.  In the case of a company, the Commission may cause the proceeding to be begun and carried on in the company's name whether it consents or not.  Doubtless the reason for the Commission being empowered to commence and carry on a proceeding if the person is a company without the person's consent is that the company would often be the party who has engaged in the relevant misconduct, a view endorsed by Lindgren J. in Deloitte at 335-336.  But in the case of natural persons, their consent for the proceeding to be begun and carried on in their names is essential.  Consent of a natural person to the commencement and carrying on of the proceeding in that person's name is an essential precondition to the exercise of the power of the Commission to invoke s. 50; and it seems to me that the consent must be available at all relevant times during the progress of the litigation.  If, for example, settlement negotiations take place, in my view settlement cannot be achieved without the consent of the person in whose name the proceeding has been brought.  The person may not be able to require the Commission to settle the matter on the person's terms, but the Commission could not conclude a settlement without the consent of the person.

     The Commission is the active party throughout the litigation from its commencement to its conclusion.  It sues in the name of the person, but the cause of action on which the proceeding is based is not created by the ASC law in general or s. 50 in particular.  The cause of action must arise from the general law, whether statutory or the common law.  Fruits of the litigation, if any, will benefit the person in whose name the proceeding has been brought, not the Commission.  The bringing of the proceeding follows, as s. 50 itself says, where it has been preceded by an investigation or from a record of an examination, in either case conducted under Part 3 of the ASC Law which relates to 'investigations and information gathering' or under a corresponding law.

     For it to appear to the Commission to be in the public interest that a person begin and carry on a proceeding under s. 50, the appearance must be as a result of the investigation or record of the examination as the case may be.  There must be a causative link between the investigation and the formation by the Commission of its view that it appears to it to be in the public interest for the proceeding to be begun and carried on (see Deloitte per Lindgren J. at 326).   It is not necessary that the relevant investigation be concluded before the Commission may invoke s. 50.  It may continue for some time thereafter; but something must have arisen in the investigation as a result of which, in a causative sense, it appears to the Commission to be in the public interest for a person to begin and carry on the relevant proceeding.

     A question arises as to who bears the cost of proceedings instituted by the Commission in the name of a company or other person under s. 50.  Section 90 provides that subject to s. 91 (which relates to recovery of expenses where persons are convicted of certain offences or where judgments are awarded against persons as a result of an investigation) the Commission shall pay the expenses of an investigation.  The expression 'expenses' is defined in s. 5, the interpretation section, as including 'in relation to an investigation under Division 1 of Part 3', 'costs and expenses incurred in relation to a proceeding begun under s. 50 as a result of the investigation'.  Doubtless this covers the costs and expenses of the person in whose name the proceeding is being conducted; but does it extend to cover costs to which the other party to the litigation may become entitled following an order for costs in its favour?  It is not necessary to determine that question in this case; but as at present advised I incline to the view that since the proceeding is begun and continued by the Commission in the name of a company or other person, in those circumstances it renders itself liable for any costs that may be ordered against the company or other person who is the applicant in the proceeding.

     There is a question as to whether the Commission is a party to the proceeding which it causes to be brought in a person's name.  It was argued before us that this question is answered by s. 3 of the Supreme Court Act 1986 in relation to proceedings brought in the Supreme Court of Victoria, which defines a 'party' as including 'every person served with notice of or attending a proceeding, whether named on the record or not', and s. 23 of the Interpretation of Legislation Act 1984 (Vic).  I doubt if those statutory provisions answer the question at all.  In my opinion the Commission is not a party to the proceeding.  The parties are the person in whose name the proceeding has been brought and the person against whom it has been brought.

     Whether the proper description of the applicant in a proceeding brought pursuant to s. 50 is merely the name of the person for whose benefit the proceeding is bought, without reference to the Commission, or the Commission suing in the name of the person concerned, is a matter of debate.  In my opinion, the Commission is not a party to the proceeding, so the proper description of the applicant or plaintiff is merely the name of the person for whose benefit the proceeding is brought.  Some useful analogies may be found in the case of relator actions or actions commenced by next friends: see Daniell's Chancery Practice, 8th ed., 1914, p. 101; Milanese v Harburger [1980] VR 652 (Jenkinson J.); and Lightning Ridge Mining N.L. v Jacombe [1978] 1 NSWLR 253.

     Legal professional privilege protects from disclosure 'communications made confidentially between a client and his legal adviser for the purpose of obtaining or giving legal advice or assistance': R v Bell; Ex parte Lees (1980) 146 CLR 141 per Gibbs J. at 144 and Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 per Mason and Brennan JJ. at 487 where their Honours said:

          'The raison d'etre of legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client.'

     Their Honours said (also at 487) that the privilege is confined within strict limits:

          '... because of this conflict between the public interest in ensuring the availability of all relevant evidence in a particular case and the public interest in the administration of justice through effective legal representation, ...'

See also Grant v Downs (1976) 135 CLR 674 per Stephen, Mason and Murphy JJ. at 685.

     The raison d'etre or rationale of legal professional privilege was stated more recently by the High Court in Carter as being the promotion of the public interest in assisting the administration of justice by facilitating communication between clients and legal advisers upon professional matters: per Brennan J. at 595, Deane J. at 599, Toohey J. (with whom Gaudron J. agreed) at 610-611 and McHugh J. at 621-622.  See also Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 500 per Gibbs C.J. at 511, Mason and Brennan JJ. at 517, Wilson J. at 522 and Dawson J. at 532.

     In Trade Practices Commission v Sterling (1979) 36 FLR 244 I set out at 246 certain classes of documents for which legal professional privilege may be claimed, including communications passing between a party to litigation and a third party if they are made with reference to litigation, either anticipated or commenced, and at the request or
suggestion of that party's solicitor; or, even without any such request or suggestion, if they are made for the purpose of being put before the solicitor for the object of obtaining his advice or enabling him to prosecute or defend an action (category (f) on page 246). 

     For legal professional privilege to apply, the document must be brought into existence either for the sole purpose of obtaining advice for litigation or otherwise for the sole purpose of the litigation.

     The High Court stated recently in Carter that once legal professional privilege is identified, it is absolute and unqualified.  There is no longer a 'balancing' to be done between that privilege and some other public or private interest arising in the case because the balancing exercise has already been done: Carter, supra, per Brennan J. at 596, Deane J. at 600-4 and McHugh J. at 624.  Deane J. said (at 601):

          '... legal professional privilege is itself the outcome of a balancing process and is conclusive when it attaches ...'

     Fundamental to legal professional privilege is the notion that the privilege is that of the client (or others with whom the client has a common interest in the litigation, a matter to which I shall return), being a client in a solicitor/client
relationship.  Only confidential communications which are referable to the solicitor/client relationship enjoy the protection of legal professional privilege.  There is no client with respect to litigation commenced by the Commission in the name of a person pursuant to s. 50 until the proceeding has begun or at least until the decision has been made by the Commission to commence the proceeding.  Before then the Commission is pursuing its investigative function under the ASC Law and the Corporations Law.  Of course the ASC, while exercising this investigative function, may engage in confidential communications with its own legal advisers.  Such communications between the ASC and its solicitors, made or brought into existence for the sole purpose of giving or obtaining legal advice, are privileged, without regard to the question whether they were made for the purpose of actual or contemplated litigation: Kelly v The Commonwealth (1980) 39 FLR 372.  The matters before us were not, however, argued on the basis that the relevant privilege was one of 'advice privilege', but rather the privilege was claimed under the 'litigation limb' of legal professional privilege, in respect of the investigations which led to the institution of the proceedings in the Supreme Court of Victoria pursuant to s. 50 of the ASC Law. 

     The Commission's investigations may or may not result in criminal or civil proceedings being instituted by the Commission.  Documents brought into existence may attract public interest immunity, but they do not attract legal professional privilege under the litigation limb.

     Once the proceeding has been commenced under s. 50 there clearly exists a solicitor/client relationship which will provide the foundation for the operation of the litigation limb of the doctrine of privilege.  The client is the person in whose name the proceeding has been brought by the Commission under s. 50.  It is not the Commission itself.  As mentioned earlier, the Commission causes the action to be begun for the benefit of the person in whose name the proceeding is brought. 

     Where it has appeared to the Commission to be in the public interest for a person to begin and carry on the proceeding for recovery of damages or loss sustained by the person, the cause or causes of action on which the proceeding is based are vested in the person, not the Commission.  The fruits of the litigation accrue to the person, not the Commission.  The Commission is not a party to the litigation, notwithstanding that it will be liable for costs which it incurs for the person and, perhaps, for the costs which that person may become liable to pay to the defendant to the litigation.  The party to the litigation is the person in whose name the proceeding is brought.  The privilege is therefore that of the person (and this includes a company where the Commission brings a proceeding in a company's name).   In practice, of course, it is the Commission that has brought the action in the name of the person.  The documents to which legal professional privilege may attach will include (though not exhaustively) communications between the Commission and the solicitor retained by it to act for the client in the litigation pursuant to s. 50.  There may be some communications between the client and that solicitor, but in general I expect that the communications would be between the Commission itself and the solicitor, as it is the Commission that is conducting the litigation.  Communications between the solicitor engaged by the Commission and third parties, if made for the sole purpose of use in the litigation, will also be protected.  Because the proceeding is, in substance, brought by the Commission in the name of the relevant person or company, there will be an extension of the class of documents to which privilege will attach because of the intervention of the Commission itself and the interposition of it between the solicitor for the client and the client himself.  Communications may pass between the Commission and the client, or between the Commission and the solicitor, or between the solicitor and the client directly. 

     Though the class of documents attracting privilege may be extended, there is no extension of the doctrine of legal professional privilege itself.  The litigation is commenced and conducted by the Commission in the client's name.  The
Commission acts on the client's behalf for the purposes of litigation and is to be treated as if it were the client.  Analogies may be found in relator actions, in actions where insurers cause proceedings to be brought in the name of the insured pursuant to rights conferred by insurance policies, and in actions by next friends or guardians ad litem.  They are all analogies, and so must be treated with caution.  I see no difficulty with the concept that the Commission is the alter ego of the client, a notion which can be accommodated within the established principles of legal professional privilege.  But it must be remembered that the client is the person in whose name the proceeding is brought, not the Commission.

     The client is represented by the Commission.  Communications between the Commission and the solicitor for the client (in practical terms that is the solicitor for the Commission) will attract the operation of legal professional privilege if they answer the usual tests which attract the operation of the doctrine (including the sole purpose test) on the basis that the Commission sues in the name of the plaintiff. 

     In the present proceedings the documents for which privilege has been claimed can conveniently be divided into four classes: -

(a)  communications with or information about prospective witnesses or prospective plaintiffs;

(b)  meetings and communications between the Commission's investigators and legal officers engaged by, or lawyers acting for, the Commission;

(c)  a random collection of documents that includes notes of individuals about legal matters or investigatory matters; and

(d)  the Commission's own documents.

     As mentioned earlier, most of the documents for which privilege is claimed were brought into existence before the date on which the Commission first decided to commence proceedings in the Supreme Court of Victoria, namely, 7 January 1993.  This applies to the documents in Parts 2A and 2B of Schedule 1 to the list of documents and to those documents in Part 3 which are the subject of a claim, not only  of public interest immunity, but also of legal professional privilege. 

     It is plain that the claim for legal professional privilege was made on the assumption that the claim could apply to documents brought into existence before 7 January 1993 (the correct date in my opinion is the later date when the first set of proceedings was in fact commenced, but this does not matter for present purposes).  This assumption is erroneous because most of the documents for which privilege is claimed were brought into existence pursuant to the Commission's investigatory powers and in pursuit of its public duties as investigator in the public interest.  If those documents can be shielded from the public gaze then it is pursuant to the application of public interest immunity not legal professional privilege.  There is no warrant in these circumstances for examining the claim for privilege with respect to the small number of documents that were brought into existence after the commencement of the first proceeding in the Supreme Court of Victoria.

     In the light of these findings it is not necessary to consider the question whether the action taken by the Commission under s. 50 was in excess of its statutory power.

     Nor is the Commission a body with which the client has a common interest in the litigation commenced under s. 50.  Common interest privilege is:

          'a privilege in aid of anticipated litigation in which several persons have a common interest.  It often happens in litigation that a plaintiff or defendant has other persons standing along side him - who have the self-same interest as he - and who have consulted lawyers on the self-same points as he - but these others have not been made parties to the action.'

Buttes Gas & Oil Co v Hammer (No 3) [1981] QB 223 per Lord Denning M.R. at 242-243; Bulk Materials (Coal Handling) Services Pty Ltd v Coast & Allied Operations Pty Ltd [1988] 13 NSWLR 689 at 692-6 and Network Ten Limited v Capital Television Holdings Limited (1995) 16 ACSR 138 at 141-144.

     The Commission does not have the 'self-same' interest as the client who is the party to the litigation.  The client is the plaintiff and entitled to the fruits of the action, not the Commission (Lightning Ridge Mining N.L. v Jacombe (1978) 3 ACLR 360 per Waddell J. at 362).  The Commission is simply the statutory vehicle to commence and conduct litigation in the public interest.  Its interest in the litigation is the furtherance of the public interest by assisting wronged plaintiffs to recover loss or damage or property that has been caused by the wrongful activities of persons whose conduct has been investigated by the Commission pursuant to its investigatory powers.  The Commission's position has nothing to do with the role of persons who claim to have common interest in litigation.

     Nor is it necessary that the Court itself examine the documents for which legal professional privilege is claimed because it is apparent from the description in Schedule 1 to the list of documents that the bulk of them preceded the date of commencement of the litigation.  The list was prepared on a false premise that legal professional privilege can apply to documents that preceded the commencement of the litigation in the Supreme Court.  No claim for immunity from production on the ground of public interest immunity is made except in relation to documents included in Part 3 of Schedule 1.  In the light of these reasons the Commission may seek to revise and widen its claim for public interest immunity.  Whether it does so or not and whether successfully or not, is beyond my field of enquiry.  In other words it will be necessary for the Commission to start afresh the claims for legal professional privilege and public interest immunity in this matter.

     The applicants therefore succeed on the issue of legal professional privilege.

Public Interest Immunity

     The primary Judge applied the general rule that the Court will not order the production of documents, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose them: Sankey v Whitlam (1978) 142 CLR 1.  His Honour said that it is the duty of the Court in all cases to decide whether a document will be produced or may be withheld.  The Court must decide whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice, in performing its functions, should not be denied access to relevant evidence.  In some cases the Court must weigh two competing aspects of public interest to decide where the balance lies.  But the fundamental principle is that documents may be withheld from disclosure if, and to the extent that, the public interest renders it necessary. 

     His Honour considered the principal affidavit relied upon to support the claim of public interest immunity, namely, that of Mr Chapman, the Director of Special Investigations in the Investigation Division of the Commission.  He accepted the facts stated in the affidavit.  His Honour noted that none of the deponents to the affidavits were cross-examined and the evidence given was not challenged by them, though criticisms were made of the evidence, and submissions were made that the evidence did not support the claims made by the respondents.

     His Honour accepted the evidence of Mr Chapman that the officers of the Commission began an investigation into the affairs of Farrow in June 1991, in the course of which they examined the circumstances surrounding the offer to the public to subscribe for notes pursuant to various prospectuses which gave rise to the Supreme Court proceedings.  Certain of the documents are the subject of the claim for public interest immunity on the ground that they are of a confidential nature, recording information received by the Commission in confidence in the course of its investigation of various matters relating to the affairs of Farrow.  Other documents are said to be confidential because they record the actual or possible course of an investigation or particulars of available or potentially available evidence.  His Honour accepted this evidence of Mr Chapman and found that the disclosure of all these documents would be likely to impede seriously the Commission's ability to fulfil its function of effectively investigating possible offences and instituting and prosecuting appropriate civil and criminal proceedings where necessary; and would be likely to reveal investigatory methods used by the Commission or inhibit voluntary assistance to the Commission in this and future investigations and in proceedings conducted by the Commission.  His Honour concluded that the claim for public interest immunity applied to all documents for which the claim was made and upheld the claim.

     As to public interest immunity, it was argued on behalf of the applicants that the Commission failed to discharge the onus of proof which is cast upon it of establishing that disclosure would cause real detriment to the public interest.  It was said that the primary Judge failed to balance the competing aspects of public interest and that he simply accepted the affidavit of Mr Chapman and in doing so failed to have regard to the effect of non-disclosure on the full and fair trial of the proceeding.  His Honour was also criticized for not himself having inspected the documents to resolve the issue before him.

     The Commission supported his Honour's findings with respect to public interest immunity.

     Courts will not order the production of documents, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose them and their contents.  The Court must consider two conflicting aspects of the public interest: first, whether harm would be done by the production of the documents and secondly, whether it would impair the administration of justice if the documents were withheld.  The Court must then engage in a balancing exercise and determine which of these elements predominates.  The balancing exercise can be undertaken only when it appears that both aspects of the public interest require consideration.  In the words of Gibbs C.J. in Alister v The Queen (1984) 154 CLR 404 at 412; the balancing exercise can only be taken:

          '... when it appears, on the one hand, that damage would be done to the public interest by producing the documents sought or documents of that class, and, on the other hand, that there are or are likely to be documents which contain material evidence.  The Court can then consider the nature of the injury which the nation or the public service would be likely to suffer, and the evidentiary value and importance of the documents in the particular litigation ...'

     The general rule was stated by Gibbs C.J. in Sankey v Whitlam (1978) 142 CLR 1 at 41 in these terms:

          'The fundamental principle is that documents may be withheld from disclosure only if, and to the extent that, the public interest renders it necessary.'

     The cases dealing with public interest immunity were collected and reviewed in Zarro v Australian Securities Commission (1992) 36 FCR 40 per Lockhart J. at 44 and 45, Ryan J. at 53-58 and Gummow J. at 59-62.

     That the doctrine of public interest immunity can apply to documents in the possession of a law enforcement agency such as the Commission cannot be doubted: Maloney v New South Wales National Coursing Association Limited [1978] 1 NSWLR 60; Spargos Mining N.L. v Standard Chartered Australia Limited (No 1) (1989) 1 ACSR 311; Zarro at 46. 

     Objection may be taken to the production of documents because it would be against the public interest to disclose their contents or because they belong to a class of documents which, in the public interest, ought not to be produced.  There may be documents which belong to a class which ought not to be disclosed irrespective of the contents of the particular documents, because the law recognizes that in the public interest documents of such a class should be immune from disclosure.  Examples are Cabinet minutes and minutes of discussions between heads of government departments, papers brought into existence for the purpose of preparing submissions to Cabinet: see Sankey v Whitlam per Gibbs A.C.J. at 39; Zarro per Lockhart J. at 45-46 and the cases there cited.  However, it is the duty of the Court to prevent the disclosure of documents the production of which would be
contrary to the public interest, even if no claim is made by a Minister or appropriate government official that its production should be withheld: Zarro at 45.

     In my opinion there is no substance in the criticism made by counsel for the applicants that the primary Judge failed to balance the competing aspects of public interest and in accepting the affidavit of Mr Chapman.  None of the deponents to the affidavits were cross-examined including Mr Chapman. Although criticisms were made of the evidence, and submissions made that the evidence did not support the claims made by the respondents, the evidence given by Mr Chapman was not challenged.

     His Honour was entitled to rely upon the evidence of Mr Chapman.  The documents are described with sufficient particularity to enable an objective view to be formed as to whether they would be likely to contain information of the kind described by Mr Chapman; and the basis for the opinions of Mr Chapman are sufficiently laid in his affidavit.  In my opinion there is no warrant for the criticism of the findings of the primary Judge on this issue of public interest immunity. 

     The applicants fail on the issue of public interest immunity. 

Conclusion

     In conclusion I propose to make some general observations about these proceedings.  They are not the substantive actions brought by the Commission in the Supreme Court of Victoria pursuant to s. 50 of the ASC Law.  They are cases seeking to review decisions of the Commission and its delegates under s. 50 of that law, to commence and carry on those proceedings.  The proceedings in this Court commenced on 14 May 1993.  They have not yet reached the stage of trial, over two years later.  They have only reached the stage of discovery of documents and administration of interrogatories.  In June 1993 application was made by the applicants for discovery.  This was opposed and led to contested proceedings.  Judgment was given by the primary Judge in favour of the applicants in September 1993.  The respondents sought leave to appeal from that judgment; the Full Court heard the appeal and gave judgment in June 1994.  Application was then made by the applicants for production of discovered documents.  This was contested.  Judgment was given in relation to the application by Northrop J. in March 1995.  Leave to appeal from his Honour's judgment was then sought and those are the motions presently before us.

     In the meantime application had been made by the applicants to administer interrogatories to the respondents.  This was contested.  Judgment was given by a judge of the Court in February 1995 allowing certain interrogatories to be administered.  Interrogatories have apparently been administered and answers given, but in June 1995 application was made by the applicants seeking further answers to interrogatories of the respondents.

     The stage has well and truly been reached when these proceedings must be set down for trial and heard.  Interlocutory skirmishes are in danger of becoming the objective of the litigation, not merely a tool to aid the better conduct of it.  There must be an end to this soon, otherwise the trial will be years away.  I am reminded of the comments of Lord Denning in Buttes at 238-9 and 248 in a more extreme example of the problem which besets this case, but which is a salutary reminder of what can happen given undue concentration on interlocutory process, where his Lordship concluded his judgment by saying at 248:

          'It is high time to let bygones be bygones.  I would not allow any further discovery by either side.  Let these two oil companies fight it out - as best they can - with such materials as they have available or can get hold of by subpoena or otherwise.  There is quite enough of it in all conscience.  Take out a summons for directions.  Either side can demand that it be tried by a jury.  I pity the jury.  Set the action down for trial at once.  Let it hang about no longer.  For goodness sake get rid of it one way or the other.'

These words are fast becoming apt in this case.

     The case raises difficult and important questions.  Leave to appeal should be granted. 

     The Commission has succeeded in relation to the public interest immunity claim, but fails in relation to the claim of legal professional privilege which was the primary issue in the case.  The appeals should be allowed.

     On each of the three motions for leave to appeal I would order:-

1.   There be leave to appeal from the order made on 3 March 1995.

2.   The draft notice of appeal exhibited to the affidavit in support of the motion for leave to appeal stand as  the notice of appeal.

3.   The appeal be allowed.

4.   The matter of the motion for order for production of documents discovered by the respondent Australian Securities Commission and of the said order made on 3 March 1995 be remitted to a Judge of the Court for further consideration according to law.

5.   The respondent Australian Securities Commission pay one-half of the costs of the applicant of the motion for leave to appeal and of the appeal. 

              I certify that this and the preceding thirty-four (34) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

              Associate

 

              Dated:  18 September 1995

IN THE FEDERAL COURT OF AUSTRALIA   )

VICTORIA DISTRICT REGISTRY          )   

GENERAL DIVISION                    )

On appeal from a Single Judge of the Federal Court of Australia

                              No. VG188 of 1993

    

                    BETWEEN:      HUGH ROSS SOMERVILLE

 

                                      Applicant

                        AND:      AUSTRALIAN SECURITIES COMMISSION

                                 

                                      First     Respondent

                        AND:      PETER CHAPMAN

                                      Second Respondent

                        AND:      AILSA WILSON

                                      Third Respondent

                                  No. VG190 of 1993

                    BETWEEN:      ANZ EXECUTORS & TRUSTEE COMPANY LIMITED (ACN 005 719 835)

                                      Applicant

                        AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                        AND:      PETER CHAPMAN

                                      Second Respondent

                        AND:      AILSA WILSON

                                      Third Respondent

                                  No. VG205 of 1993

                    BETWEEN:      DAY NEILSON JENKINS & JOHNS

                                      Applicant

                        AND:      AUSTRALIAN SECURITIES COMMISSION

                                      First Respondent

                        AND:      PETER CHAPMAN

                                      Second Respondent

                        AND:      AILSA WILSON

                                      Third Respondent

CORAM:      Lockhart, Jenkinson and Lindgren JJ.

PLACE:      Melbourne

DATE:       18 September, 1995

                    REASONS FOR JUDGMENT      

                             

JENKINSON J.

          The questions which arise in these three motions for leave to appeal and the circumstances relevant to determination of the motions, and of the appeals if the motions be granted, are set out in the reasons of the other two members of the court, which I have had the advantage of reading.

          I share the opinion of Lockhart and Lindgren JJ. that leave to appeal should in each case be granted.  The correctness of the orders refusing inspection of the discovered documents in respect of which legal professional privilege and public interest immunity has been claimed is sufficiently doubtful, and the injustice to be caused the applicants, if that refusal be wrong, sufficiently substantial to attract the exercise of the discretion to grant leave.  The
questions raised are important, too, in point both of legal principle and public administration.

          The respondent Commission is not a party to a proceeding which it brings in exercise of the authority conferred by s.50 of the Australian Securities Commission Act 1989.  The legal professional privilege which attaches to communications for the purpose of pending or contemplated proceedings cannot therefore be a privilege of the respondent Commission in relation to a proceeding begun under that section or contemplated as possibly to be begun under the section, except perhaps in circumstances which have not arisen in the proceedings in the Supreme Court of Victoria with which we are concerned, circumstances to which I will later refer.

          Legal professional privilege is that of the client.  None of the natural persons in whose names the respondent Commission has caused proceedings to be begun and carried on against the applicants could in my opinion be the client, for the purpose of applying the principles governing legal professional privilege in respect of communications having reference to any of those proceedings, until the relationship between the Commission and that person is such that the Commission may be considered the agent of that person with respect to such communications.  "If the representative is a person employed as an agent on the part of the client to obtain the legal advice of the solicitor, of course he stands in exactly the same position as the client as regards
protection, and his communications with the solicitor stand in the same position as the communications of his principal with the solicitor". : Wheeler v. Le Marchant (1881) 17 Ch.D. 675 at 684, per Cotton L.J.  Once the proceeding has been begun by the Commission with the written consent of the plaintiff the Commission becomes, by reason of the operation of s.50 of the Australian Securities Commission Act 1989, the plaintiff's agent to conduct the proceeding and, with respect to communications to and from the Commission with reference to the proceeding, the plaintiff's agent in relation to the application of the principles concerning legal professional privilege.

          Until the Commission has formed the intention to begin a particular proceeding in exercise of the authority conferred by s.50 there cannot, as I think, be constituted such an agency as is contemplated.  That is because, although power is conferred on the Commission by s.11(4) of the Australian Securities Commission Act 1989 "to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions", it cannot in my opinion be incidental to the performance of any of those functions to act as the agent of a natural person, in whose name a proceeding under s.50 may be begun, to procure legal advice, or information for use in obtaining legal advice, about the contemplated litigation, to that person until the Commission has decided to begin the proceeding.  Until that time the procurement of such advice or information for the prospective plaintiff is not an activity incidental to any function of the Commission, in my opinion.

          When the Commission has decided that it will begin the proceeding if the prospective plaintiff consents, the prospective plaintiff may desire to have legal advice or information for use in obtaining legal advise of the kind which attracts legal professional privilege, in order to decide whether he will give the written consent required by paragraph 50(d) to the institution of the proceeding which he is contemplating.  It is, I think, arguable that it would be incidental to the performance of the function conferred on the Commission by the provisions of s.50 other than paragraph (c) thereof that the Commission act as the prospective plaintiff's agent to procure that advice or information for that prospective plaintiff.  It is unnecessary to express a concluded opinion on the point.

          For the reasons given by Lockhart J. the submission that the Commission and the persons in whose names the proceedings begun by the Commission have a common interest in the litigation cannot be accepted.

          As client, the Commission has the benefit of legal professional privilege in respect of communications between its legal adviser and itself made for the sole purpose of enabling the legal adviser to give or the client to receive legal advice.  Such communications are privileged, whether or not the subject is litigation, actual or contemplated : Kelly v. Commonwealth (1980) 39 F.L.R. 372.  The power conferred on the Commission by s.50 to "carry on" a proceeding would appear to be a power at its discretion to carry on or to cease to carry on the proceeding, just as the power to begin the proceeding is discretionary.  See the Acts Interpretation Act 1901, s.33(2A).  If circumstances arose which caused the Commission to consider how to exercise the power to carry on or to cease to carry on a proceeding under s.50, communications between the Commission and its legal adviser made for the sole purpose of enabling the legal adviser to give or the Commission to receive legal advice relevant to the exercise of that power would be privileged, and the privilege would be that of the Commission, not that of the plaintiff in the proceeding.

          I agree with the reasons given by Lockhart J. for the conclusion that no error vitiated the decisions of Northrop J. on the objections to production of documents on the ground of public interest immunity.

          As Lockhart J. has observed, it is possible that upon further consideration the Commission may wish to object to production of certain of the documents, in respect of which public interest immunity has not hitherto been asserted, on that ground.

          On each of the three motions for leave to appeal I would order:

1.   There be leave to appeal from the order made on 3 March 1995.

2.   The draft notice of appeal exhibited to the affidavit in support of the motion for leave to appeal stand as the notice of appeal.

3.   The appeal be allowed.

4.   The matter of the motion for an order for production of documents discovered by the respondent Australian Securities Commission and of the said order made on 3 March 1995 be remitted to a judge of the court for further consideration according to law.

5.   The respondent Australian Securities Commission pay one-half of the costs of the applicant of the motion for leave to appeal and of the appeal.

         

          It may be that, upon further consideration, the order made on 3 March 1995 will not be set aside by the single judge.  If he considers that it ought to be varied or set

aside, O.35 R.7(2)(c) will afford him power to do so, because the order is interlocutory.

                             I certify that this and the preceding 6 pages are a true copy of the Reasons for Judgment of the Honourable Justice Jenkinson.

                                       Associate

                             Dated:  18 September, 1995

IN THE FEDERAL COURT OF AUSTRALIA)

VICTORIA DISTRICT REGISTRY        )

GENERAL DIVISION                           )

  On appeal from a Judge of the Federal Court of Australia

                                           No VG 188 of 1993

                                  BETWEEN:     

HUGH ROSS SOMERVILLE

                           Applicant

                                  AND:

AUSTRALIAN SECURITIES COMMISSION

                    First Respondent

PETER CHAPMAN

                   Second Respondent

AILSA WILSON

                    Third Respondent

  On appeal from a Judge of the Federal Court of Australia

                                           No VG 190 of 1993

                                  BETWEEN:     

ANZ EXECUTORS & TRUSTEE COMPANY LIMITED

                           Applicant

                                  AND:

AUSTRALIAN SECURITIES COMMISSION

                    First Respondent

PETER CHAPMAN

                   Second Respondent

AILSA WILSON

                    Third Respondent

  On appeal from a Judge of the Federal Court of Australia

                                              No VG 205 1993

                                  BETWEEN:     

DAY NEILSON JENKINS & JOHNS

                           Applicant

                                  AND:

AUSTRALIAN SECURITIES COMMISSION

                    First Respondent

PETER CHAPMAN

                   Second Respondent

AILSA WILSON

                    Third Respondent

                                   

CORAM:                       Lockhart, Jenkinson, Lindgren JJ

PLACE:                       Melbourne

DATE:                        18 September 1995

                    REASONS FOR JUDGMENT

LINDGREN J

NATURE OF PROCEEDINGS:

The applicants apply by motion for leave to appeal against an order of Northrop J "refusing" their motions, seeking orders under O 15 r 11 of the Federal Court Rules that the respondents produce certain documents in their possession, custody or power for inspection by the respective applicants.  Because they involved the same issues, his Honour heard the three motions together.  For the same reason, we have heard the three motions for leave to appeal together.

On the hearing of the applications for leave, the parties agreed that if the Court should be disposed to grant leave, the submissions made in relation to the applications for leave should also be treated as made on the appeal itself.  It seemed to the Court appropriate that this course be followed (and the Court indicated this to the parties) because, in addressing the question whether his Honour's judgment is or is not attended with sufficient doubt to warrant its being considered by a Full Court, the parties have addressed fully the question whether his Honour erred in law in the ways referred to in the applicants' draft notices of appeal.

GENERAL BACKGROUND

The proceedings arise out of the collapse of Farrow Finance Company Limited ("FFC") in September 1990.  Members of the public had subscribed funds to FFC in consideration of the issue by it to them of "notes".  According to an affidavit of Peter Michael Chapman, the second respondent and the Director of Special Investigations of the first respondent ("ASC") sworn 13 September 1994, on 21 June 1991 ASC approved of an "investigation by officers of the Commission into various matters relating to the affairs of [FFC]".  A particular matter included in the investigation was that of allegedly false statements in prospectuses issued by FFC in connection with the invitation to the public to subscribe for those notes and the losses suffered by noteholders.

Eventually, on 7 January 1993, ASC resolved, by reference to s 50 of the Australian Securities Commission Act 1989 ("the ASC Law"), that it was in the public interest for the holders of unsecured notes issued by FFC between 1988 and 1990 (inclusive) to begin and carry on proceedings against the present three applicants as defendants for recovery of damages.  Hugh Ross Somerville ("Somerville"), the applicant in proceedings No VG 188 of 1993, had fulfilled the role of "investigating accountant" in connection with FFC and the issue of the notes.  ANZ Executors & Trustee Company Limited ("ANZ"), the applicant in proceedings no VG 190 of 1993, had been the trustee for the noteholders under a debenture deed.  Day Neilson Jenkins & Johns ("DNJ & J"), the applicants in proceedings No VG 205 of 1993, had been the auditors of FFC.  Also on 7 January 1993, ASC resolved that it would cause such a proceeding to be begun and carried on in the names of the noteholders who in the future gave written consent to such a proceeding being begun and carried on in their names and whom ASC from time to time determined, at its absolute discretion, to be suitable plaintiffs.

On or about 18 March 1993, ASC, or in the alternative Mr Chapman, decided to cause proceedings to be instituted in the Supreme Court of Victoria in the names of noteholders, Meadow Gem Pty Ltd, Hilton John Shaw, Patricia Margaret Shaw, Neville George Trewheela and Betty Constance Trewheela, against Somerville, ANZ and DNJ & J.  It is convenient to refer to those proceedings as "the Meadow Gem proceedings".  On 23 March 1993 the writ in the Meadow Gem proceedings was issued, No 2045 F3968 of 1993 in the Supreme Court of Victoria.  Subsequently ASC resolved that eight more noteholders be added as plaintiffs in the Meadow Gem proceedings.  On 10 June 1993 it resolved to carry on the Meadow Gem proceedings in the names of the 13 plaintiffs including Meadow Gem Pty Ltd.

On 21 June 1993, ASC resolved to cause second proceedings to be commenced and carried on in the names of further noteholders, including Kenneth Abbott, against the present applicants as defendants.  They were commenced on that date by Writ No 7034 F4137 of 1993 in the Supreme Court of Victoria issued in the names of 1073 plaintiffs.  It is convenient to refer to these proceedings by reference to the first noteholder-plaintiff as "the Abbott proceedings". 

On 27 August 1993, ASC resolved to cause third proceedings to be commenced and carried on in the Supreme Court of Victoria in the names of yet further noteholders against the present applicants as defendants.  On the same day that resolution was implemented by writ in the Supreme Court of Victoria No 8248 F4136 of 1993 issued in the names of 273 plaintiffs.  It is convenient to refer to these third proceedings by reference to the name of the first noteholder-plaintiff, Louise Bergfield, as "the Bergfield proceedings".

The present three proceedings are applications under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the AD(JR) Act") seeking review of the ASC's decisions to commence and carry on the Meadow Gem, Abbott and Bergfield proceedings.  The second and third respondents were officers of ASC who were involved in the decision to cause the Supreme Court proceedings to be begun and carried on.  It is not necessary for present purposes to distinguish between the positions of ASC and those other respondents. 

On 9 September 1993, Northrop J made orders that the respondents give general discovery to the applicants.  His Honour's judgment in that respect is reported: see Somerville  v Australian Securities Commission (1993) 118 ALR 149.  The respondents appealed unsuccessfully to a Full Court against the orders for general discovery: see Australian Securities Commission v Somerville (1994) 51 FCR 38.

On 8 August 1994, the respondents filed their lists of documents.  For present purposes their lists can be treated as identical.  The documents are referred to in Parts 1 (10 items), 2A (16 items), 2B (78 items) and 3 (43 items) of Schedule 1 to the lists.  Some of the items are single documents.  Others are categories of documents.  For example, item 3 in Part 1 refers to documents described under discovery numbers 1 to 4117 in the Meadow Gem proceedings.

The respondents claim to be entitled to the benefit of legal professional privilege in respect of all 16 items in Part 2A, all 78 items in Part 2B, and 33 of the 43 items in Part 3 of the list (the 10 exceptions being items numbered 1, 2, 4, 5, 9 and 39-43).  Further, the respondents claim that all the documents referred to in all 43 items in Part 3 of the list are immune from production on the ground of public interest immunity.

THE ASC LAW

Section 50 of the ASC Law is central to the case.  It reads as follows:

     "50     Where, as a result of an investigation or from a record of an examination (being an investigation or examination conducted under this Part or a corresponding law), it appears to the Commission to be in the public interest for a person to begin and carry on a proceeding for:

 

             (a)   the recovery of damages for fraud, negligence, default, breach of duty, or other misconduct, committed in connection with a matter to which the investigation or examination related; or

 

             (b)   recovery of property of the person;

 

             the Commission:

 

             (c)   if the person is a company - may cause; or

 

             (d)   otherwise - may, with the person's written consent, cause;

 

             such a proceeding to be begun and carried on in the person's name."

ASC's case is that it appeared to it to be in the public interest for the three sets of proceedings to be begun and carried on as a result of an "investigation" conducted under Part 3 of the ASC Law.  Part 3 (ss 13-93) is headed "INVESTIGATIONS AND INFORMATION-GATHERING".  Division 1 (ss 13-18) is headed "INVESTIGATIONS" and Division 2 (ss 19-27) is headed "EXAMINATION OF PERSONS".  According to an affidavit of Mark George Spittal sworn 13 September 1994, para 2, an "investigation into matters arising out of the affairs of Farrow Finance Company Limited (FFC) under section 13 of the ASC Law formally opened on 21 June 1991."  Sub-sections 13 (1), (2) and (3) of the ASC Law provide as follows:

     "13(1)  The Commission may make such investigation as it thinks expedient for the due administration of a national scheme law of this jurisdiction where it has reason to suspect that there may have been committed:

 

             (a)   a contravention of a national scheme law; or

 

             (b)   a contravention of a law of the Commonwealth or of a State or Territory, being a contravention that:

 

                  (i)    concerns the management or affairs of a body corporate; or

 

                  (ii)   involves fraud or dishonesty and relates to a body corporate, securities or futures contracts.

 

      13(2)  Where the Commission has reason to suspect that unacceptable circumstances within the meaning of Part 6.9 of the Corporations Law of this jurisdiction have, or may have, occurred, the Commission may make such investigation as it thinks expedient:

 

             (a)   for the purposes of determining whether or not to make an application  under subsection 733(1) or 734(2) of that Law; or

 

             (b)   otherwise for the due administration of a national scheme law.

 

      13(3)  Where the Commission has reason to suspect that a contravention of a relevant previous law of this jurisdiction may have been committed, the Commission may make such investigation as it thinks appropriate."

The expression "national scheme law of this jurisdiction" is defined in sub-s 5 (1) of the ASC Law to mean, so far as relevant, the Corporations Law and the ASC Law.

THE PROCEEDINGS BEFORE, AND REASONS OF, NORTHROP J

(i)  Legal professional privilege

His Honour noted the peculiar feature of s 50 that ASC carries out its investigation before any lawyer-client relationship comes into existence between the eventual plaintiffs and the legal practitioners who ultimately represent them in the proceedings and that ASC is not itself a party to those proceedings.

His Honour accepted as accurate the following statement of the general rule with respect to legal professional privilege:

     "Legal professional privilege entitles the client and the client's legal adviser to refuse to disclose:

 

     (a)     confidential communications between the legal adviser and his client (whether directly or through their respective agents) if made for the sole purpose of enabling a client to obtain, or the legal adviser to give, legal advice;

 

     (b)     confidential communications between the client and his legal adviser (whether directly or through their respective agents), or between the legal adviser or client and third parties, if made for the sole purpose of use in existing or anticipated litigation. See Grant v Downs (1976) 135 CLR 674 at pp 682-3, 688." (at p 6)

But his Honour accepted that there was a "gloss" on the general principle expressed in (b) above.  This is that in a case where the communication is with a third party,

     " ... privilege will attach only if:

 

             (a)   the document was brought into existence or the communication was made at a time when litigation was in existence or reasonably contemplated; and

 

             (b)   the document was brought into existence or the communication was made for the sole purpose of obtaining advice for that litigation or otherwise for the sole purpose of use in that litigation." (at pp 6-7)

His Honour saw his task as being to apply these principles to the evidence contained in five affidavits dated 13 September 1994.  The deponents and their positions are as follows:

 

      Mark George Spittal      Principal Investigator in ASC's Investigations Division.

 

 

      Lynette Mary Slade       Legal Officer employed in office of Regional General Counsel of Victorian Regional Office of ASC.

 

 

 

      Anne Therese Dalton      Senior Legal Officer employed in office of Regional General Counsel of Victorian Regional Office of ASC who is the solicitor in these proceedings for the respondents.

 

 

      Peter Michael Chapman    Director of Special Investigations in Investigations Division of ASC.

 

 

      Isaac Gotlib             Senior Legal Officer in office of Regional General Counsel of Victorian Regional Office of ASC.

The deponents were not cross examined and the contents of
their affidavits were not objected to.  His Honour referred to their affidavit evidence:

     (a)     that the taking of proceedings pursuant to s 50 was first contemplated as early as October 1991 and that thereafter ASC's officers continued to contemplate the commencement of such proceedings and set about obtaining material to determine whether to do so and, where necessary, material to be used in the proceedings;

     (b)     that frequent meetings took place between members of the investigation staff of ASC, the legal staff of ASC, outside legal advisers and third parties, with respect to matters relating to contemplated legal proceedings under s 50;

     (c)     that both investigation staff and legal staff were, after February 1992, involved in the interviewing of potential witnesses and in communicating with noteholders or their representatives for the purpose of the contemplated proceedings; and

     (d)     that after ASC decided that proceedings should be commenced pursuant to s 50, ASC's officers sought consent of noteholders to be plaintiffs in the proceedings and requested them to complete questionnaires in the form of a "Memorandum and Consent Agreement" which also informed ASC of the circumstances touching their investments.

His Honour thought that the affidavit evidence of ASC's officers established that the sole purpose for which the documents in question came into existence was the commencement of proceedings under s 50.  In particular, his Honour rejected the following submissions of the applicants:

     (i)      that legal professional privilege was not available because at no stage was it in contemplation that ASC would be a party to litigation;

     (ii)     that since ASC did not make its first decision under s 50 until 7 January 1993, and the documents for which legal professional privilege was claimed or the majority of them pre-dated that date, it could not be said that they were brought into existence at a time when proceedings were in the contemplation of ASC; and

     (iii)    that legal professional privilege is not absolute and calls for a balancing exercise between competing public interests and that in the present case the right of the applicants to seek, under the AD(JR) Act, review of ASC's decisions under s 50 was a strong public interest in competition with that recognised by legal professional privilege.

Northrop J concluded that the respondents had made out their claim for legal professional privilege with respect to all the documents in respect of which that claim was made.

(ii)Public interest immunity

In relation to public interest immunity, his Honour referred to the nature of the immunity as expounded in Sankey v Whitlam (1978) 142 CLR 1 at 38, 39, 41 (Gibbs CJ), Spargos Mining NL v Standard Chartered Aust Ltd (No 1) (1989) 1 ACSR 311 (NSW/McLelland J) ("Spargos Mining") and Zarro v Australian Securities Commission (1992) 36 FCR 40 (Lockhart J) ("Zarro").  He concluded that on the basis of the facts and opinion of Mr Chapman, as expressed in his affidavit, the claim for public interest immunity fell squarely within the principles expressed in those cases and was made out.

OUTLINE OF PARTIES' SUBMISSIONS ON MOTION FOR LEAVE TO APPEAL

Outline of applicants' submissions on motion for leave to appeal

DNJ & J and ANZ adopted the submissions of Somerville and enlarged upon them.  It is convenient if I give an account of the submissions of all three applicants as a whole without distinguishing between them.

(i)  Legal professional privilege

The applicants submitted that legal professional privilege, as formulated in Grant v Downs (1976) 135 CLR 674 at 682-3 and 688, can be seen to have two limbs, and accepted that each limb requires that there be a confidential communication made solely for the particular purpose referred to in it, to which I will refer, for convenience, as a "privileged purpose".  Under the first limb, the confidential documentary communication must be between the client and his legal adviser (whether directly or through agents) or between the legal adviser or the client and third parties, and must be made solely for the purpose of use in existing or anticipated litigation (the "litigation privilege" - see para (b) of the passage quoted earlier from the judgment of Northrop J).  Under the second limb, the confidential documentary communication must be between the legal adviser and his client (whether directly or through agents) and must be made solely for the purpose of enabling the client to obtain, or the legal adviser to give, legal advice (the "advice privilege" - see para (a) of the passage quoted earlier from the judgment of Northrop J).  The applicants submit that litigation privilege arises only where the client in question is or becomes a party to the existing or anticipated litigation, a condition which is not satisfied on the facts of the present case.  Until the Supreme Court proceedings were commenced, ASC was the client of its own legal staff and of outside legal advisers.  But ASC did not become a party to those proceedings, and the documents in question represented communications to which ASC, not the noteholders who did become became plaintiffs in the proceedings, was a party.  Further, it could not be said, according to the submission, that as at the dates of the documents, ASC was an agent of those noteholders.

The applicants further submitted that "common interest privilege" did not arise because ASC did not have the same interest as the noteholders who became plaintiffs, the interest of ASC being the performance of its statutory functions and the interest of the plaintiff - noteholders being the recovery of damages in respect of the losses suffered by them.

The applicants submitted that Northrop J had erroneously found an analogue for the position of ASC in that of the Attorney-General in a relator action.  It is clear, however, that the similarity which his Honour perceived was between the position of the relator (not the Attorney-General) prior to the grant of the Attorney-General's fiat, and that of ASC prior to its decision under s 50 to begin and carry on proceedings in another's name.  With respect, like Northrop J, I think that there is some similarity between ASC's investigations prior to its taking a decision under the section and a public spirited person's investigation of an infringement of a public right or liberty prior to the seeking or granting of the Attorney-General's fiat.  But, like his Honour, I do no more than draw attention to this.

The applicants submitted that if the litigation privilege otherwise attached, it was excluded by reason of the fact that the communication took place in furtherance of, or as part of the process of, an abuse of statutory power, citing Attorney-General (NT) v Kearney (1985) 158 CLR 500 ("Kearney") at 513-6 (Gibbs CJ with whom Mason and Brennan JJ agreed) and Carter v Managing Partner, Northmore Hale Davy and Leake (1995) 129 ALR 593 ("Carter") at 597 (Brennan J), 601 (Deane J) and 623 (McHugh J).  In particular, the applicants submitted that the exclusion of legal professional privilege is not limited to cases of abuse of statutory power which are "deliberate".  They submitted that only Wilson J in Kearney took a different view (158 CLR at 525), that the reasoning of Gibbs CJ is applicable even where the abuse of statutory power arises from mistake (158 CLR at 516), and that Dawson J repudiated the suggestion that an imputation of dishonesty was relevant (158 CLR at 530).

In relation to the second limb of legal professional privilege referred to earlier, "advice privilege", the "abuse of statutory power" exclusion again applied according to the applicants' submissions.  Further, it was submitted that advice privilege does not apply where the advice is intended to form the basis of an administrative decision as to whether or not to exercise a statutory power, and reference was made to what Dawson J said in Waterford v The Commonwealth (1986) 163 CLR 54 ("Waterford") at 96-97.  The applicants submitted that Northrop J was in error in considering that the exclusion (by s 13 and Item (f) of Schedule 2 to the AD(JR) Act) of any right to be given reasons for a decision in connection with the institution or conduct of proceedings in a civil court was persuasive in this respect.

Finally, the applicants submitted that ASC had not established that the documents were brought into existence "solely" for a privileged purpose, since they were brought into existence, at least partly, in order to enable ASC to carry out its statutory investigative function.

(ii)Public interest immunity

In relation to public interest immunity, the applicants submitted that a heavy burden rested on ASC of proving that disclosure would cause real detriment to the public interest, citing Burmah Oil Co v Bank of England [1980] AC 1090 (HL) at 1124-25 (Lord Edmund-Davies).  They submitted that it did not suffice that disclosure would harm some aspect or aspects of the public interest to some degree, citing Sankey v Whitlam, supra, at 59 (Stephen J, who referred, with approval, to Glasgow Corporation v Central Land Board (1956) SC (HL) 1 at 18-19 (Lord Radcliffe)), and Goldberg v Ng (1994) 33 NSWLR 639 (CA) at 663 (Mahoney JA).  They submitted that in order for public interest immunity to be made out, a court must be satisfied that there would be some real detriment which outweighed the detriment which would arise from the other party's not having access to documents in the usual way, citing R v Chief Constable of West Midlands Police; Ex parte Wyley [1995] 1 AC 274 (HL) at 281 (Lord Templeman), 290-291, 298 (Lord Woolf).

Finally, the applicants submitted that Northrop J had erred by simply accepting the claim for public interest immunity on the basis of Mr Chapman's affidavit and that in doing so he had failed to carry out the required "balancing" or "weighing" exercise.  They submitted that his Honour was wrong in concluding that the facts of the case were governed by Spargos Mining and Zarrow, because in those cases (a) the investigations were ongoing current investigations, and (b) the documents were inspected by the Court.

Outline of respondents' submissions on motion for leave to appeal

(i)  Legal professional privilege

The respondents submitted that it is now established by High Court authority that once legal professional privilege is held to apply, it is unqualified in the sense that it is not to be balanced or weighed against any countervailing public or private interest, citing Carter, at 596-7 (Brennan J), 600-604 (Deane J) and 624 (McHugh J).  ASC submitted that the affidavit evidence, not objected to and not cross-examined upon, established the grounds of the privilege.

ASC submitted that to deny the claim for litigation privilege would be to deny the plaintiffs, who are relying upon and are funded by ASC, a significant benefit enjoyed by other litigants, namely privilege in respect of investigatory steps taken by a lawyer prior to the commencement of proceedings.

The respondents submitted that ASC enjoys "common interest privilege" by reason of its having a common interest with the interest of the plaintiffs, citing Buttes Gas & Oil Co v Hammer (No 3) [1981] 1 QB 223 (CA) ("Buttes Gas") at 243 (Lord Denning MR), 251-2 (Donaldson LJ) and 267-8 (Brightman LJ) and Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689 (Giles J).

In relation to abuse of statutory power, the respondents submitted that legal professional privilege is excluded only where there is a deliberate abuse.  Indeed, they filed a notice of contention reading, relevantly,  as follows:

     "The learned judge should have found that legal professional privilege will only be denied to a communication made for the purpose or in furtherance of:

 

             (a)   fraud or the commission of a crime;

 

             (b)   a deliberate abuse of statutory power."

 

The respondents submitted that it does not suffice for an applicant merely to allege that there was a deliberate abuse of statutory power or a colourable case of this: they submitted that there must be some evidence of deliberate abuse of statutory power, that the applicants had not pointed to such evidence and had not even tested the respondents' deponents by cross-examination.

Finally, the respondents submitted that Waterford is not authority for the proposition that advice privilege does not apply in the case of administrative decisions.

(ii)Public interest immunity

In relation to public interest immunity, the respondents relied on Northrop J's acceptance of Mr Chapman's affidavit evidence which had not been objected to or cross-examined upon.  They submitted that the two broad bases on which, according to that affidavit, the claim for public interest immunity was made (see later) were in conformity with the descriptions in Zarrow and Spargos Mining of documents which attract the immunity.

REASONING ON THE APPEAL

General and chronology

ASC expressed its claim of legal professional privilege in its list of documents in the following terms:

     "1.  The ASC has in its possession, custody or power, the documents enumerated in Schedule 1.

 

      2.  The documents enumerated in Parts 2A, 2B and 3 of Schedule 1, save and except for documents
numbered 1, 2, 4, 5, 9, and 39 to 43 in Part 3 are privileged and the ASC objects to their production on the grounds that they are or record:-

 

          (a)  confidential professional communications between the ASC or its legal advisors [sic] and third parties made after legal proceedings were contemplated or were commenced, for the sole purpose of obtaining evidence, or information as to the evidence which will be obtained, and otherwise for the use of the ASC's legal advisors [sic] in actual or contemplated litigation

 

          (b)  confidential communications passsing [sic] between the ASC and its legal advisors [sic] or between its legal advisors [sic] and Counsel for the sole purpose of obtaining or providing legal advice or for the sole purpose of actual or contemplated litigation."

As can be seen, no distinction was made between the respective items for which litigation privilege and advice privilege was claimed.  There was, however, affidavit evidence of Lynette Mary Slade, solicitor, dealing with Item 93 in Part 2B of Schedule 1 and of Isaac Gottlib, solicitor, dealing with Item 89 and four documents in Item 94 of Part 2B.  In my opinion, advice privilege is made out by those affidavits in respect of those items. 

Otherwise, it is the affidavit of Mark George Spittal sworn 13 September 1994 on which ASC relies to establish the claim of legal professional privilege.  He gives the following evidence in respect of the two periods from October 1991 to July 1992 and from July 1992 to February/March 1993:

     "5.   During the periods referred to in paragraphs 3 and 4 hereof [the periods referred to encompassed the total period from October 1991 to February/March 1993], frequent meetings took place between the Investigation Staff of the Commission and the Legal Staff of the Commission.  The purpose of such meetings was to obtain legal advice as to matters relevant to the proceedings and as to the legal procedural and practical requirements to ensure the effective conduct of the investigations with a view to launching civil proceedings.  The investigation was at all relevant times conducted for the purpose of the litigation and pursuant to the said legal advice.  This work involved frequent communications between and amongst the investigation staff and the legal staff.  Those communications were solely for the purposes of the litigation which was then in contemplation.  They were not for the purpose of determining whether or not it was in the public interest for the litigation to be begun but I was conscious at the time that the Commission would ultimately determine that question and might take into account matters that were ascertained in the course of gathering evidence.  Minutes of the matters communicated at such meeting were usually made by the lawyers and the investigators; other communications as described above were by means of memorandum passing between the two divisions.  The following documents listed in Schedule 1 of the List record or relate to communications of the kind described in this paragraph:

 

          Under Part 2B; nos 17 to 23, 28 to 32, 35, 37 to 53, 57 to 61, 63 to 65, 69, 72, 74 to 88

 

          Under Part 3; nos. 7, 8, 10, 18, 20 to 25, 28, 30 to 35 and 38.

 

     6.   As described in paragraph 4(a) hereof [this paragraph related to the period from October 1991 to February 1992], up to February 1992, for the purposes of gathering evidence for use in the contemplated proceedings, the Investigation Staff of the Commission interviewed a number of noteholders and also made other inquiries.  Inquiries for the purposes of gathering evidence continued thereafter.  In addition, the Investigation Staff and Legal Staff were, subsequent to February 1992, engaged in the interviewing of potential witnesses for the purpose of the
contemplated proceedings and in communicating with noteholders or their representatives for the purpose of the proceedings.  Communications flowing from these actions were recorded in notes of meetings and also in internal memoranda circulated between members of the staff of the Commission.  On some occasions the Commission corresponded with potential witnesses and in the case of the noteholders, sought information from them by questionnaire.  None of these communications with persons outside the Commission were for any purpose other than the gathering of information for submission to lawyers for use in the proceedings.  The following documents listed in Schedule 1 of the List record or relate to such communications:

 

          Under Part 2A; nos 4 to 16

          Under Part 2B; nos 24 to 27, 33, 34, 36, 54 to 56, 62, 66 to 68, 70, 73,

          Under Part 3; nos 3, 6, 12 to 19, 26, 27, 29, 32, 36 and 37."

Paragraph 8 of the same affidavit of Mr Spittal was as follows:

     "8.  The documents listed under item 1, Part 3, Schedule 1 of the List are documents which were provided to the Commission by Mr Habersberger.  They were provided on the express agreement between Mr Habersberger and me that they were confidential.  Document[s] 9 and 11 are documents which record conversations I had with Mr John Pinney, a police officer seconded to Mr Habersberger's enquiry.  All communications between the Police and staff of the Commission are understood and treated as confidential."

It was not contested that "litigation privilege" could attach to the communications on and after 7 January 1993, when ASC took its first decision to cause proceedings to be begun and carried on in the names of noteholders against Somerville, DNJ & J and ANZ in the Supreme Court of Victoria. 

The facts prior to 7 January 1993 as revealed in the affidavits (principally the affidavit of Mark George Spittal sworn 13 September 1994 referred to above) and the uncontroversial events after that date can be indicated in chronological form as follows:

21 June 1991

Investigation into "matters arising out of the affairs of [FFC] under section 13 of the ASC Law" was "formally opened" and commenced to be carried out by Mr Spittal and by staff of the Investigations Division of ASC under his direction, including, but not being limited to, "statements made by FFC in its issued prospectuses".  (Spittal, 13.9.94, para 2).  Mr Chapman, in his affidavit sworn 13 September 1994, gave this evidence in relation to the commencement of the investigation:

     "3.  The investigation by officers of the Commission into various matters relating to the affairs of Farrow Finance Company Limited (in liquidation) ('FFC') was approved on 21 June 1991.  This investigation included, but was not limited, to the circumstances surrounding and the consequences of the offer to the public to subscribe for notes pursuant to various prospectuses was approved on 21 June 1991 [sic]. The Commission had earlier conducted informal inquiries in relation to the matter.  That investigation is still continuing and is not expected to conclude before the end of 1994."

October 1991

Legal proceedings under s 50 in the names of FFC noteholders were first contemplated and were conceived of as relating to false statements in the prospectuses issued by FFC.  They were "continuously contemplated until the issue of" the Meadow Gem proceedings in March 1993 (Spittal, 13.9.94, para 3).

Up to about February 1992

Up to this time, the Investigation Division of ASC had been gathering evidence in accordance with the advice and requirements of ASC's Legal Division.  This included the gathering of evidence by telephone and personal interviews with noteholders (Spittal, 13.9.94, para 4 (a)).

February 1992

In this month, junior counsel was briefed to advise ASC in relation to "the contemplated litigation" and Ted Woodward, a solicitor employed by Arthur Robinson and Hedderwicks, was engaged by ASC as a "litigation consultant" on a full time basis with the duty of "overseeing the preparation of the proceedings" (Spittal, 13.9.94, para 4 (b)).

July 1992

By this time, "the contemplated proceedings were similar in scope to those which are now before the Supreme Court of Victoria" (Spittal, 13.9.94, para 3).

August 1992

By this time a "draft statement of claim had been prepared and submitted to Senior Counsel" (Spittal, 13.9.94, para 4 (c)).

December 1992

The report of Mr Habersberger QC relating to FFC was delivered to ASC (Spittal, 13.9.94, para 4 (d)).

January 1993

"The matter was submitted to the Full Commission for final decision" (Spittal, 13.9.94, para 4 (d)).

7 January 1993

ASC resolved that it was in the public interest for the holders of unsecured notes issued by FFC between 1988 and 1990 to begin and carry on proceedings against Somerville, ANZ and DNJ & J for the recovery of damages, and that ASC would cause such proceedings to be begun and carried on in the names of noteholders who consented and whom ASC should determine to be suitable plaintiffs.

February 1993

Consents of the initial plaintiffs in the Meadow Gem proceedings were obtained.

February/March 1993

A revised statement of claim was prepared and settled for the Meadow Gem proceedings (Spittal, 13.9.94, para 4 (e)).

18 March 1993

ASC or Chapman decided to cause the Meadow Gem proceedings to be begun and carried on, having decided on the same date that it was in the public interest that this should occur.

23 March 1993

A writ was issued on behalf of Meadow Gem Pty Ltd  and four other plaintiffs (Mr and Mrs Shaw and Mr and Mrs Trewheela), eight other plaintiffs being added later.

29 April 1993

ASC decided to cause a second proceeding (the Abbott proceedings) to be begun and carried on, having decided on the same day that it was in the public interest that this should occur.

30 April 1993

ASC or Chapman decided that a further six plaintiffs be added to the original five plaintiffs in the Meadow Gem proceedings.

3 June 1993

ASC or Chapman decided that a further two plaintiffs be added in the Meadow Gem proceedings.

10 June 1993

ASC decided to ratify and confirm the commencement and carrying on of the Meadow Gem proceedings in the names of the original five plaintiffs and the additional eight plaintiffs, that it was in the public interest that the Meadow Gem proceedings be carried on in the names of all 13 plaintiffs, and that the Meadow Gem proceedings should be carried on in the names of all 13 plaintiffs.

21 June 1993

Legal practitioners, Lynette Mary Slade and Ailsa Wilson, employed by ASC, wrote and prepared a confidential professional communication to ASC seeking its instructions as to whether the proceedings to which the memo referred should be begun.

21 June 1993

ASC resolved to cause the Abbott proceedings to be begun and carried on in the names of 1073 plaintiffs, having decided that it was in the public interest that this should occur, and on the same day the Abbott proceedings were commenced in the Supreme Court of Victoria on behalf of 1073 plaintiffs.

27 August 1993

ASC decided to cause the Bergfield proceedings to be begun and carried on, having decided that it was in the public interest that this should occur, and on the same day the Bergfield proceedings were commenced in the names of 273 plaintiffs.

(i)  Legal professional privilege

Litigation privilege - sole purpose

There is a paucity of evidence of the background to ASC's decision on 21 June 1991 under s 13 of the ASC Law to carry out the subject investigation. 

It will be recalled that sub- ss 13 (1), (2) and (3) of the ASC Law, quoted earlier, empower ASC to make an investigation provided one of three conditions is satisfied.  One condition, referred to in sub-s 13 (1), is that ASC has reason to suspect that there may have been committed a contravention of a national scheme law or a contravention of a Commonwealth, State or Territory law being a contravention that concerns the management or affairs of a body corporate, or involves fraud or dishonesty and relates to a body corporate, securities or futures contracts.   The second condition, referred to in sub-s 13 (2), is that ASC has reason to suspect that "unacceptable circumstances" within the meaning of Part 6.9 of the Corporations Law of the jurisdiction in question, has or may have occurred.  The third condition, referred to in sub-s 13 (3), is that ASC has reason to suspect that a contravention of a relevant previous law of the jurisdiction may have been committed.  The nature of the investigations which s 13 authorises ASC to make is, in each case, described in general terms, such as "such investigation as it thinks expedient for the due administration of a national scheme law" (sub-s 13 (1)).  Mr Spittal's evidence is that the matters the subject of the investigation included but were not limited to statements made by FFC in its issued prospectuses.  According to Mr Chapman, the investigation included but was not limited to "the circumstances surrounding and the consequences of the offer to the public to subscribe for notes pursuant to various prospectuses".  In the absence of other evidence, it is reasonable to think that ASC's case is that it had reason to suspect that there may have been committed a contravention of the Corporations Law provisions relating to prospectuses and that a purpose, perhaps the primary purpose, of the investigation was to ascertain whether this was so in order that ASC might take appropriate action.

It must be taken that ASC carried out its investigation and performance of its statutory functions and powers.  What are they?  Sub-section 11 (1) of the ASC Law provides, relevantly, that ASC has such functions and powers as are conferred on it by or under the Corporations Law and the ASC Law.  Sub-sections 11 (2) (b), (3) and (6) are as follows:

     "11(2)The Commission also has the following functions:

 

            (a)................................

 

            (b)to advise the Minister about any changes to a national scheme law that, in the Commission's opinion, are needed to overcome, or would assist in overcoming, any problems that the Commission has encountered in the course of performing or exercising any of its functions and powers.

 

        (3)The Commission may, on its own initiative or when requested by the Minister, advise the Minister, and make to the Minister such recommendations as it thinks fit, about any matter of a kind referred to in section 148." [The matters referred to in s 148 are: (a) a proposal to make or amend a national scheme law; (b) the operation or administration of a national scheme law; (c) law reform in relation to a national scheme law; (d) companies, securities or the futures industry; or (e) a proposal for improving the efficiency of the securities markets or futures markets.]

    

        (4)The Commission has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.

            ...........................................

        (6)Subject to this Act, the Commission has the general administration of this Act."

The following provisions of sub-s 1 (2) of the ASC Law are also relevant to an understanding of the context within which it undertook its investigation in the present case:

     "1(2)  In performing its functions and exercising its powers, the Commission must strive:

 

            (a)to maintain, facilitate, and improve, the performance of companies, and of the securities markets and futures markets, in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy; and

 

            (b)to maintain the confidence of investors in the securities markets and futures markets by ensuring adequate protection for such investors; and

 

            (c).......................................

 

            (d)to administer national scheme laws effectively but with a minimum of procedural requirements; and

 

            (e)........................................

 

            (f)........................................

 

            (g)to take whatever action it can take, and is necessary, in order to enforce and give effect to national scheme laws."

Division 5 (ss 49-50) of Part 3 of the ASC Law provides for "Proceedings after an investigation".  Sections 49 and 50 provide respectively for ASC to cause prosecutions and civil proceedings of the kind with which this case is concerned, to be begun and carried on. 

Clearly, however, from the provisions referred to above, these were not the only courses of action which ASC was empowered to undertake as a result of its investigation.  It might, for example, advise and make recommendations to the Minister about any matter connected with the operation or administration of the Corporations Law, with law reform in relation to the Corporations Law, or with companies or securities.  It might use the investigation in order to enable it to administer the Corporations Law and the ASC Law more effectively.  It is difficult to accept that the documents which came into existence in the course of the investigation over a period beginning as early as October 1991, came into existence for the sole purpose of use in civil proceedings to be brought pursuant to that section (of the dated documents for which ASC claims litigation privilege, the earliest (item 5 in Part 2A) is dated 30 April 1991, that is, prior to the first "contemplation of proceedings" in October 1991 and even prior to ASC's decision on 21 June 1991 to make the investigation).

It is reasonable to think that relevant ASC officers would not have been unmindful, from the beginning, of the "possibility" that a prosecution for an offence and/or civil proceedings under s 50 might result from the investigation.  It is further reasonable to think that a stage would be reached when this possibility became a "probability", and that this became a "certainty" only when ASC itself so resolved.  The chronological account of events given earlier shows such a progressive development of the idea of litigating.

The description of the privileged purpose served by litigation privilege is obviously important.  The notion of documents "brought into existence in anticipation of litigation [and] ... called into being for use in litigation" (Grant v Downs, supra, at 683) may give rise to questions.  How, and in particular how precisely and narrowly, is the "litigation" to be defined for the purpose of the litigation privilege test?  Assume that ASC merely had in contemplation the commencement of proceedings under one or both of ss 49 and 50 of the ASC Law, in the latter case in the names of persons not yet identified and in both cases against persons not yet identified, and that proceedings eventuated under s 50 alone: does litigation privilege attach to documents brought into existence solely for use in proceedings so ill defined?  (On the application for leave to appeal, ASC sought to support the existence of litigation privilege by reference to s 50 alone.)  Does "contemplated" require some, and if so what degree of, commitment to the commencement of proceedings?  Does the privilege exist where (a) in the event, no proceedings are commenced, (b) proceedings other than those contemplated are commenced?  What is meant by the expression "for use in"? In Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 490, Deane J referred to "the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings" (emphasis supplied).  

I do not find it necessary to explore these questions, because in my view it cannot be said that the documents in question were brought into existence solely for the privileged purpose (however defined) served by litigation privilege.  At least one other purpose of their creation was that of enabling ASC to perform statutory functions in the public interest which were broader than the exercise of the power given by s 50 or, for that matter, the powers given by both ss 49 and 50 (as noted above, ASC sought to support its claim of litigation privilege by reference only to s 50).

Other purposes which must have attended the creation of written communications in the course of ASC's investigation are those of enabling ASC to decide whether a contravention of a relevant law had occurred and if so whether there should be a prosecution, and as noted earlier, whether to tender advice and/or make recommendations to the Minister and whether to change its own administration of the Corporations Law and the ASC Law.  It follows that the purpose of use in, or in preparation for, proceedings under s 50 was not the sole purpose of the creation of the documents.

The availability of legal professional privilege in respect of documents brought into existence in the course of an investigation followed by litigation does not present a novel issue.  In National Employers' Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648, ("Waind's case") it was held that five reports from a firm of loss assessors and six medical reports obtained by an insurer did not attract legal professional privilege because they had been brought into existence for the dual purposes of enabling the insurer to decide what it would do, as well as for use in litigation by legal advisers against its insured if the occasion arose.  Mason J, with whom Barwick CJ, Stephen, Jacobs and Aickin JJ agreed, held that to allow the privilege would be inconsistent with the sole purpose test of Grant v Downs.  Although the insurer was acting in its private interests whereas ASC acts in the public interest, the sole purpose test defeats ASC's claim in the same way: the documents created in the course of ASC's investigation were brought into existence for at least the purpose of enabling it to decide what it would do in the exercise of its public functions and powers, as well as for use in litigation in the names of others under s 50 if such litigation should ensue.

In Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (1994) 54 FCR 316, a Full Court of this Court had to consider the applicability of legal professional privilege to the transcript of an examination conducted by the Trade Practices Commission pursuant to s 155 of the Trade Practices Act 1974 (Cth).  Davies J, with whom Burchett and O'Loughlin JJ agreed, said this:

 

     "The TPC does not conduct such an examination solely to obtain legal advice but in pursuance of its statutory purposes.  It does so as a statutory authority established under the Trade Practices Act to undertake the functions which the Act reposes in it.  One of those functions is to gather information and evidence with respect to contraventions or possible contraventions of the Act.  As the examination is conducted in the exercise of a statutory power and as the examination is coercive, the element of a confidential communication made for the purposes of the giving or receiving of legal advice or the furtherance of anticipated existing or contemplated judicial proceedings is lacking.  The person who is examined is not in the position of a witness or a potential witness who, by voluntarily making a statement for use in legal proceedings, may, perhaps if the circumstances are appropriate, impliedly accept a duty of confidentiality with respect to the statement given.

     ...............................................

     In my opinion, a s 155 examination is an occasion of the exercise of statutory power, the incidents of which are to be implied from the statute.  It is not an occasion which gives rise to legal professional privilege.  I say nothing as to public interest immunity which stands in a different position or as to the power of the Court, in the exercise of its discretionary powers, to restrict discovery or production of such documents.

     .................................................

     In this circumstance, the obligations of the TPC and of the examinees as to confidentiality, if any, arise by virtue of the statutory provision.  Thus, in Johns v Australian Securities Commission (1993) 178 CLR 408, Brennan J said (at 427):

 

             'A duty not to use or to disclose information obtained in exercise of a statutory power except for a purpose authorised by the statute is a duty imposed by statute, not by equity.'

 

     At 436, Dawson J said:

            ' ... the existence and extent of the duty of confidence resting upon the ASC are to be found in the Act.'

 

     It follows that the motive which the TPC had in conducting the examinations did not determine the incidents of the examinations themselves.  They were examinations pursuant to a statutory power.  The communications made in the course of the examinations were subject to such duties as were to
be implied from the grant of the statutory power, not from principles of common law and equity developed with respect to communications made in confidence by one person to another." (at 322G-323G)

In my view these observations are applicable in the circumstances of the present case.  Like the Trade Practices Commission, ASC is given coercive powers by the ASC Law to enable it to carry out its investigations and information-gathering.  For example, Division 2 (ss 19-27) of Part 3 of the ASC Law empowers ASC to require a person to give it all reasonable assistance in connection with an investigation and to appear before a specified member or staff member for examination on oath and to answer questions (see, in particular, sub-s 19 (2)).  Division 3 (ss 28-39) gives ASC the powers to require production of books and documents.  The coercive character of ASC's powers further emphasises the broad statutory purposes for which an investigation is carried out.

The question arises what is to be made of Mr Spittal's affidavit evidence, admitted without objection, not contradicted by other evidence and not cross-examined upon, that the "sole" purpose for which documents in respect of which legal professional privilege is claimed were brought into existence was that of litigation which was in contemplation.   Stephen, Mason and Murphy JJ in their joint judgment in Grant v Downs, supra, said this:

     "But it should not be thought that the privilege is
necessarily or conclusively established by resort to any verbal formula or ritual." (at 689)

In Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd, supra, there was affidavit evidence in relation to the transcripts of examinations conducted by the Trade Practices Commission pursuant to s 155 of the Trade Practices Act 1974 (Cth) that

     "These transcripts came into existence solely for the purpose of recording evidence to be submitted to counsel for advice and possible use in this litigation." (quoted from (1994) 54 FCR at 319-320 (Davies J) and at 326 (Burchett J)

Burchett J noted that the power given by s 155 is a statutory power conferred in aid of the performance of the Commission's tasks and after referring to the affidavit evidence on which the Commission relied, continued,

     "It would be totally inconsistent with a valid exercise of such a power for the Commission to blindfold itself so as to blot out all further examination of the evidence to be obtained, evidence which might demand the exercise of some other power of the Commission in the performance of its duties; and to do so in favour of simply referring that evidence to a solicitor for advice about its effect in a predetermined legal proceeding.  In my opinion, when the Commission takes up this very great power made available to it by the legislature, it also accepts a responsibility to use the information obtained thereby in the performance of its statutory functions, and it cannot limit the exercise of those functions in advance so as to deny itself the right and duty to make full use of the information, whether that information leads to the pursuit of a previous decision or action, or to its variation, or to its reversal." (at 326)

These observations are, in my view, applicable mutatis mutandi, to ASC and to its investigative and information-gathering activity under Part 3 of the ASC Law.

I do not accept that Mr Spittal's affidavit evidence as to the purpose for which the documents in question were brought into existence, couched as it is in general terms and by reference to the sole purpose test laid down in Grant v Downs, establishes ASC's claim for litigation privilege.

In my opinion ASC's statutory functions and powers show that its investigation cannot properly be regarded as having been directed solely to the purpose of the commencement of proceedings under s 50, and that the subject documents cannot be treated as having been created solely for use in such proceedings.  It follows that in my view his Honour fell into error in thinking that litigation privilege was attracted by the documents in respect of which it was claimed.

Although ASC claimed advice privilege in sub-para 2 (b) of its list, the hearing of the appeal was conducted by reference to litigation privilege alone.  Apart from the documents comprised in items 89, 93 and 94 of Part 2B of Schedule 1 referred to earlier, no particular items are identified as having been created for the sole purpose of the obtaining or giving of legal advice.  Paragraph 5 of Mr Spittal's affidavit quoted earlier states that the purpose of the frequent meetings between Investigation Staff and Legal Staff of ASC was to obtain legal advice as to matters relevant to contemplated civil proceedings, but the documentary communications are said to have been "solely for the purposes of the litigation and pursuant to the ... legal advice".  It is possible that advice privilege attaches to some documents (in addition to those referred to in items 89, 93 and 94 of Part 2B) to which I have held that litigation privilege does not attach (in Waterford, Mason CJ, Wilson and Brennan JJ held, Dawson J contra, that there was no warrant for excluding privilege in respect of legal advice tendered by lawyers employed by the government relating to a public officer's decision as to how a "statutory" or "administrative" function or duty should be performed).  Moreover, although public interest immunity was argued only in relation to Part 3 of the list, it is possible that some documents in Parts 2A and 2B  are also protected by it.  These are matters which cannot be of present concern.

Other matters

In view of my conclusion that the documents for which legal professional privilege is claimed were not brought into existence solely for the purpose which gives rise to litigation privilege, it is unnecessary for me to decide the further issues raised by the parties in relation to litigation privilege, which may be shortly referred to as (1) the disconformity between the client (ASC) and the eventual party-litigants; (2) the distinction between the purposes of ASC officers and those of ASC itself; (3) the existence of common interest privilege; and (4) whether privilege is excluded in cases of non-deliberate abuse of power.

(ii)Public interest immunity

The affidavit of Peter Michael Chapman sworn 13 September 1994 provides the evidentiary basis of ASC's claim to be entitled to the benefit of public interest immunity.  It deals with the documents in question as falling into groups.  The first, comprising the documents in the 25 items numbered 1, 6, 9, 11-17, 19, 22-26, 27, 29, 31, 34 and 39-43 in Part 3 of Schedule 1 of ASC's list, is described by Mr Chapman as being documents "of a confidential nature recording information received by the Commission in confidence in the course of its investigation."  Mr Chapman deposes that these documents contain "information and communications collected by officers of the Commission (or passing between officers) in confidence in the course of investigation of various matters relating to the affairs of FFC".

The second group of documents comprises the documents in the 24 items numbered 2-3, 4-7, 8, 9-11, 18, 20, 21, 27, 28-33, 35, 36, 37 and 38 in Part 3.  Mr Chapman says that each of these documents is "of a confidential nature recording the actual or possible course of an investigation or particulars of available or potentially available evidence."  He deposes that these documents "include internal communications between officers of the Commission in the course of or for the purposes of the investigation ... ". 

Paragraph 10 of Mr Chapman's affidavit is to the effect that if ASC were ordered to produce these documents for inspection, the disclosure would be likely to:

     "(a)   impede seriously the ability of the Commission to fulfil its function of effectively investigating possible offences and, in the appropriate cases instituting and prosecuting criminal and civil proceedings in the public interest;

 

      (b)   reveal investigatory methods used by the Commission which may hinder future investigations; or

 

      (c)   hinder or inhibit voluntary assistance in this and future investigations and proceedings conducted by the Commission."

 

 

Finally, Mr Chapman deposes that he has had more than 20 years' experience in corporate investigations and has formed the opinions to which he deposes after a careful consideration of the contents of the documents.  He continues,

     "In my opinion the disclosure of the documents would be likely to have the effects I have described in the present investigation because it might result in the premature disclosure of the details of the Commission's investigation and close off avenues of enquiry.  In relation to future investigations, my concern is that disclosure might inhibit the willingness of members of the community to give information to the ASC in confidence."

As noted earlier, para 8 of Mr Spittal's affidavit afforded evidence of agreements for the confidentiality of the documents referred to in items 1, 9 and 11 of Part 3 of Schedule 1.

I agree with Northrop J that the opinions of Mr Chapman, as expressed in his affidavit, bring the claim for public interest immunity within the principles expressed in Spargos Mining and Zarrow.  In Spargos Mining, the facts of which bear some similarity to those of the present case, McLelland J said this (at (1989) 1 ACSR at 312):

     "In my opinion, documents within the possession of the Commission of a confidential nature recording information received by the Commission relating to possible offences of irregularities, or recording information received in the course of the investigation of possible offences or irregularities, including the identity of informants, and confidential documents recording the actual or possible course of such investigations or particulars of available or potentially available evidence, are in the public interest prima facie immune from compulsory disclosure, on the basis that such disclosure would be likely to seriously impede the ability of the Commission to fulfil its function of effectively investigating possible offences under, inter alia, the Companies (NSW) Code, and in appropriate cases instituting and prosecuting criminal or civil proceedings in the public interest."

As Northrop J noted, in Zarrow, Lockhart J distinguished between cases where the claim is that production of particular identified documents would be against the public interest and those where the claim is that documents belonging to a class ought not, in the public interest, to be produced.  Lockhart J had expressed doubt whether a claim of the latter kind could succeed.  However, ASC's claim in the present case is of the former kind.

The applicants do not submit that Northrop J tested the claim for public interest immunity against a wrong legal criterion. They attack the way in which his Honour applied that criterion. 

I accept the applicants' submissions that to establish a claim of public interest immunity involves a heavy burden, that the determination of such a claim always involves a "weighing" or "balancing" exercise, and that a "real" rather than merely "some" or "any" detriment to the public interest from disclosure must be established.  However, I do not find in these considerations any basis for thinking that Northrop J  fell into error.  In particular, it would be wrong to conclude from the absence in his Honour's Reasons for Judgment of any reference to the importance of discovery to the applicants, that his Honour was unmindful of this or failed to weigh it against the importance of secrecy in the public interest.

Further, there is no substance in the submission that his Honour wrongly concluded that the case was governed by Spargos Mining and Zarrow on the bases that in those cases investigation was ongoing and the documents in question were inspected by the court.  Northrop J said that the facts and opinions deposed to by Mr Chapman which he accepted brought the claim within the "principles" expressed in those two cases.  So they did, and not the less so because investigation was ongoing and the court inspected the documents in those cases.

Some observations on the making out of a claim of public interest immunity are not out of place.  First, it should not be assumed that the claim will be treated as established by nothing more than the sworn incantation of expressions which have been used in decided cases.  I do not mean to suggest that this is an appropriate description of Mr Chapman's affidavit, but that affidavit would, nonetheless, have been more persuasive if it had been more detailed.  "More detail" of the kind which I have in mind is not inconsistent with the preservation of the secrecy to which the claim of public interest immunity is directed.

Reference should be made to the related subjects of cross examination and of the furnishing of evidence by a party seeking discovery of the importance to that party of the documents sought.  Mr Chapman was not cross-examined.  There is a difficulty in this respect confronted by a party opposing a claim for public interest immunity.  Frequently that party will lack an informed basis for cross-examination.  Moreover, objection can be expected to questions having a tendency to penetrate the veil of secrecy in critical respects.  Having said this, I think that if the sworn evidence in support of the claim is to be seriously challenged, it is reasonable to expect that some cross-examination will take place.  This is likely to provide a more sound basis on which the Court can determine the claim.  Similarly, although the relevance of documents may, to varying degrees, be obvious, it can be of assistance if there is evidence relating the documents sought to particular issues, if a case of that kind is to be made.

Finally, the question of inspection by the Court was raised.  This is a discretionary matter for the presiding judge.  In England it seems to be accepted that the Court should not inspect until satisfied that the documents contain material that would give substantial support to the contention of the party seeking disclosure on an issue in the case; cf Air Canada v Secretary of State for Trade [1983] 2 AC 394 (HL).  Northrop J's decision not to inspect is not open to attack.

CONCLUSIONS ON THE APPLICATION FOR LEAVE TO APPEAL

The applications for leave to appeal have raised questions which should be considered by a Full Court.  Accordingly, in  my view, the motions for leave to appeal should be allowed.  On the basis that the draft notices of appeal are treated as the notices of appeal, the result is that the applicants (as appellants) have succeeded in relation to the claim for legal professional privilege and the respondents have succeeded in relation to the claim for public interest immunity.  I agree in the orders proposed by Lockhart and Jenkinson JJ.

                I certify that this and the preceding 45 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

                Associate:

                Dated:            18 September 1995

Heard:          17, 18 July 1995

Place:          Melbourne

Decision:       18 September 1995

Appearances:    Mr A Chernov QC with Dr S Kenny of counsel instructed by Mallesons Stephen Jaques appeared for Hugh Ross Somerville, the applicant in proceedings No VG 188 of 1993.

                Mr P O'Callaghan QC with Mr G Maloney of counsel instructed by Arnold Bloch & Leibler appeared for ANZ Executors & Trustee Company Limited, the applicant in proceedings No VG 190 of 1993.

                Mr D M B Derham QC with Ms S J Moloney of counsel instructed by Phillips Fox appeared for Day Neilson Jenkins & Johns, the applicant in proceedings No VG 205 of 1993.

                Mr F Costigan QC with Mr R Strong of counsel instructed by The Regional General Counsel for Victoria of the Australian Securities Commission appeared for the respondents in all three proceedings.