Trade Practices Commission v Port Adelaide Wool Co Pty Ltd & Anor [1995] FCA 866

CATCHWORDS

DISCOVERY AND INSPECTION OF DOCUMENTS - claims of legal professional privilege - relevance of ss 118 and 119 of Evidence Act 1995 (Cth) - whether order for production for inspection "necessary" within the meaning of O15 r15 of Federal Court Rules - possible severance of privileged and non-privileged portion of documents.

EVIDENCE - whether enactment in Evidence Act 1995 (Cth) of client legal privilege has expanded circumstances in which pre-trial privilege from production may be claimed - relevance of ss 118 and 119 of Evidence Act 1995 (Cth) to pre-trial procedures.

Evidence Act 1995 (Cth) ss 117(1), 118, 119 and 131(1)

Federal Court Rules O 15 rr 2, 5, 6, 11, 14 and 15

Grant v Downs (1976) 135 CLR 674

Abrook & Ors v Paterson & Ors, unreported decision of the Federal Court, dated 30 August 1995

Trade Practices Commission v International Technology Holdings Pty Ltd & Ors, unreported decision of the Federal Court, dated 10 July 1995

Commonwealth of Australia v Northern Land Council & Anor (1991) 103 ALR 267

Trade Practices Commission v C C (New South Wales) Pty Limited & Ors (No.4), unreported decision of the Federal Court, dated 2 August 1995

Trade Practices Commission v Sterling (1979) 36 FLR 244

Waterford v The Commonwealth (1987) 163 CLR 54

Somerville & Ors v Australian Securities Commission & Ors (1995) 13 ACLC 1527

No SG 18 of 1995

TRADE PRACTICES COMMISSION v PORT ADELAIDE WOOL COMPANY PTY LTD (ACN 007 884 282) & JOHN ROSS SINCLAIR

Branson J

Adelaide

31 October 1995

IN THE FEDERAL COURT OF AUSTRALIA)

)

SOUTH AUSTRALIA DISTRICT REGISTRY) No SG 18 of 1995

)

GENERAL DIVISION )

BETWEEN:

TRADE PRACTICES COMMISSION

Applicant

- and -

PORT ADELAIDE WOOL COMPANY PTY LTD (ACN 007 884 282)

First Respondent

- and -

JOHN ROSS SINCLAIR

Second Respondent

REASONS FOR DECISION

CORAM: Branson J

PLACE: Adelaide

DATE: 31 October 1995

The applicant in this case ("the TPC") has given discovery by serving, and filing on 6 September 1995, an amended list of documents ("the list of documents"). The TPC contends that certain of the documents listed are privileged from production on the ground of legal professional privilege. The respondents contend that the documents which the TPC claims are privileged from production are not so privileged, or are not all so privileged. The respondents seek an order for the production for inspection by them of such of the documents for which privilege is claimed as are not in fact privileged from production.

During argument counsel for the TPC conceded that the descriptions of certain of the listed documents were inadequate. An amplified version of a portion of the list of documents has now been provided to the respondents and to the Court. It was recognised that this might lead to a need for further argument.

There are two distinct kinds of legal professional privilege. The distinction is expressed in Discovery by Matthews and Malek (Sweet & Maxwell, London, 1992) at p159 as follows:-

"One applies whether or not litigation is contemplated or pending, but covers a narrow range of documents: it is often called "advice" privilege for short. The other applies only where litigation is contemplated or pending, but extends over a wider range of documents: this is often referred to as "litigation" privilege. The rationale of both kinds is the same ..."

That rationale was expressed by Stephen, Mason and Murphy JJ in Grant v Downs (1976) 135 CLR 674 at 685 as follows:-

"The rationale ... is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure for the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available."

The more general public interest that requires that litigation should be conducted with relevant documentary evidence available is reflected in O15 of the Federal Court Rules which deals with discovery.

A party required to give discovery, as the TPC was in this case, must file and serve a list in accordance with O15 r6 of the "documents relating to any matter in question" between the parties which are or have been in its possession, power or custody, and an affidavit verifying the list (see O15 rr2 and 5). O15 r6 requires, amongst other things, that the list contain a description of the documents referred to in it sufficient to enable each document or group of documents to be identified.

Order 15 of the Federal Court Rules also recognises the public interest reflected in the privilege described as legal professional privilege, and in other forms of privilege from production such as public interest privilege. O15 r6 requires that where a claim is made that a document in the discovery list is privileged from production the ground of the privilege is to be sufficiently stated.

Order 15 rule 11 provides, so far as is here relevant, as follows:-

"11 (1) Where -

(a) it appears from a list of documents filed by a party under this Order that any document is in his possession, custody or
power;

(b) . . . .

(c) . . . .

the Court may, subject to any question of privilege which may arise, order the party:

(d) to produce the document for inspection by any other party at a time and place specified in the order; or

(e) to file and serve on any other party a copy of the whole or any part of the document, with or without an affidavit verifying the copy made by a person who has examined the document and the copy.

(2) An affidavit made pursuant to an order under paragraph (1)(e) shall, unless the Court otherwise orders, state whether there are in the document copied any and, if so, what erasures, interlineations or alterations."

Order 15 rule 15 is in the following terms:-

"The Court shall not make an order under this Order for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the order is necessary at the time when the order is made."

The law as to legal professional privilege so far as the adducing of evidence in court is concerned has, in this Court, been affected by the coming into operation of the Evidence Act 1995 (Cth) ("the Act"). Division 1 of Part 3.10 of the Act, which is headed "Client legal privilege", contains provisions dealing both with "advice privilege" and with "litigation privilege". The principal substantive provisions are ss118 and 119 which are in the following terms:-

"Legal Advice

118. Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in a disclosure of:

(a) a confidential communication made between the client and a lawyer; or

(b) a confidential communication made between 2 or more lawyers acting for a client; or

(c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer;

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

Litigation

119. Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential document (whether delivered or not) that was prepared;

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party."

The above provisions do not expressly deal with issues of privilege from production. However, in Abrook & Ors v Paterson & Ors (unreported decision of the Federal Court, dated 30 August 1995) I held that in respect of a privilege from production which is governed by rules as to the admissibility of evidence, such as the privilege from production which attaches to without prejudice negotiations, the ambit of the privilege in this Court is now to be determined by reference to the Act (see s131(1)). The relevance of the Act where privilege from production is claimed on a ground not clearly governed by rules of evidence seems to me to be a more contentious matter. It is not clear that legal professional privilege is governed, at least in its entirety, by rules of evidence.

The Law Reform Commission Report No.38 on Evidence at para199 recognised that its terms of reference limited the Commission to considering the application of privilege in the courtroom where evidence is sought to be given. It envisaged a party obtaining access to a document through the discovery process which would be protected from disclosure during the course of a hearing. The Explanatory Memorandum for the Evidence Bill 1994 (Cth) stated at p1 that the Bill was "... based substantially on the recommendations of the Law Reform Commission on its report on Evidence ..." but it otherwise provides no assistance on the issue of whether the present ss118 and 119 of the Act are intended to have a relevance to pre-trial procedures in federal courts and the courts of the Australian Capital Territory.

The fundamental importance of the public interest which finds expression in legal professional privilege, or as it may now be called, client legal privilege, was emphasised by the High Court in Grant v Downs. In the words of Stephen, Mason and Murphy JJ in that case at 685:-

"As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision."

By parity of reasoning it is not, in my view, to be found to have been diminished by statute unless the Parliamentary intention to so diminish it is clearly expressed in the statute. Assuming that it could be contended that legal professional privilege at common law is wider than the evidentiary privilege which finds expression in Division 1 of Part 3.10 of the Act, the ambit of legal professional privilege so far as it touches matters other than the adducing of evidence, would not, in my view be affected by the terms of the Act.

However, to the extent that the Act widens the ambit of legal professional privilege as an evidentiary rule, it seems to me to be arguable that the right of a party to claim that a document is privileged from production on the ground of legal professional privilege may be similarly widened. I note that in Trade Practices Commission v International Technology Holdings Pty Ltd & Ors (unreported decision of the Federal Court, dated 10 July 1995) it was apparently accepted by both parties that the effect of ss118 and 119 of the Act was to extend the ambit of legal professional privilege in pre-trial procedures. I do not consider that the circumstances of this case make it necessary for me to rule on this issue.

The positive obligation to make disclosure of certain documents once litigation is commenced is a matter controlled by courts as part of their own practices and procedures in the interest of achieving fair trials. This Court does not make orders for the production of documents for inspection unless satisfied that the order is necessary at the time when the order is made (Federal Court Rules O15 r15). In Commonwealth of Australia v Northern Land Council & Anor (1991) 103 ALR 267 at 291 the Full Court of the Federal Court said of the criterion of "necessity" in O15 r15:-

"It is a reflection of the policy of judicial case management that underlies the Federal Court Rules generally. It is a broad criterion which requires consideration of the interests of justice in the particular case as well as its economic and efficient disposition."

In Trade Practices Commission v C C (New South Wales) Pty Limited & Ors (No.4) (unreported decision of the Federal Court, dated 2 August 1995) Lindgren J said that the significance of the word "necessary" in O15 r15 "must depend upon the purpose properly served by the procedure of discovery of documents." After referring to various authorities (which I will not relist here) his Honour concluded that necessary in this context implied necessary in the "interests of a fair trial" and for the "fair disposition of a case."

The documents required to be discovered by O15 of the Federal Court Rules are not limited to documents which would be admissible in evidence (Commonwealth of Australia v Northern Land Council & Anor at 290). However, the fact that evidence will not be able to be adduced, over objection, if it would result in disclosure of the contents of a confidential document will, in my view, ordinarily be telling as to whether the production of that document can be said to be necessary for the fair disposal of the proceedings.

It would be a curious result, in my view, if a party to proceedings in this Court could be required to produce for inspection by the other party or parties during pre-trial procedures, or indeed in court, a confidential document prepared, for example, for the dominant, but not the sole, purpose of a lawyer providing legal advice to that party, notwithstanding that at trial that party could successfully object on the ground of client legal privilege to any evidence being adduced which would result in disclosure of the contents of the document. That is, logic at least would seem to suggest that the ambit of client legal privilege should be constant throughout the litigation process. That logic is reflected in the fact that historically legal professional privilege with respect to the contents of documents has had the same ambit whether invoked as a privilege against production of documents outside of the courtroom as part of the discovery process, or as a privilege against disclosing the contents of such documents within the courtroom either by their physical production or by disclosure of their contents in response to questions asked in cross-examination.

As the High Court pointed out in Grant v Downs, the public interest that trials should be conducted in circumstances in which all relevant documents are available to the parties has always given way to the paramount public interest reflected in what has historically been known as legal professional privilege. Now that this paramount public interest has by the Act been extended in this Court, so far as the laws of evidence are concerned, by the statutory adoption of a dominant purpose test (as opposed to the common law sole purpose test), the same test, in my view, will ordinarily be adopted for the purposes of O15 of the Federal Court Rules. That is, the Court will not, in my view, ordinarily be satisfied that an order for the production of a document is necessary if evidence of the contents of such document could not be adduced at trial over the objection of the party discovering the document on the ground of client legal privilege.

In this case I am not satisfied that an order for the production for inspection of any document the contents of which evidence could not, by reason of client legal privilege, be adduced at trial is necessary as part of the pre-trial management of the matter.

The TPC has expressed its claims of privilege in terms of "legal professional privilege" and the "sole purpose" test, rather than in terms of "client legal privilege" and the "dominant purpose" test. It is not at this stage apparent that anything turns on this. I note that no claim of public interest immunity is advanced.

The documents which the TPC claims are privileged from production are those listed as categories 12 and 13 of Part 2 of Schedule 1 of the list of documents.

That portion of Part 2 of Schedule 1 of the list of documents which lists the category 12 documents contains the following heading and claim of privilege:-

"12. RECORDS OF CONFIDENTIAL COMMUNICATIONS BETWEEN THE APPLICANT OR STAFF OF THE APPLICANT AND ITS ~~SOLICITORS~~ LEGAL ADVISERS OR THIRD PARTIES, OR BETWEEN ITS LEGAL ADVISERS AND THIRD PARTIES, FOR THE PURPOSE OF OBTAINING OR PROVIDING LEGAL ADVICE, OR EVIDENCE IN RESPECT OF THESE PROCEEDINGS.

The documents in category 12 are subject to legal professional privilege on the following grounds:-

(i) Records of confidential communications between the Applicant and its legal advisers brought into existence for the sole purpose of requesting or providing legal advice.

(ii) Records of confidential communications between the Applicant and potential witnesses obtained:-

(a) at the request and/or on the advice of the Applicant's legal advisers for the sole purpose of providing legal advice in respect of contemplated or pending proceedings; and/or

(b) brought into existence after 8/12/93 (see document 4.2) solely for the purpose of contemplated or pending proceedings.

(iii) Records of confidential communications between the Applicant's legal advisers and potential witnesses made after 8/12/93 solely for the purpose of contemplated or pending proceedings.

Documents for which legal professional privilege is claimed on ground (i) are marked with an "*".

Documents for which legal professional privilege is claimed on ground (ii) are marked with an "#".

Documents for which legal professional privilege is claimed on ground (iii) ane marked with an "@"."

The first ground upon which it is claimed that certain of the category 12 documents are privileged from production is a ground of "advice privilege". For the reasons set out above, this claim may for present purposes be assessed by reference to the terms of s118 of the Act which are set out above. In the context of this case, the section reaches to confidential communications made between a lawyer and client, and the contents of confidential documents prepared by the client or a lawyer, for the dominant purpose of the lawyer providing legal advice to the client. Such advice need not relate to litigation or anticipated or contemplated litigation. Each of the terms "client", "confidential communication", "confidential document", "lawyer" and "party" is defined either comprehensively or inclusively by s117(1) of the Act. I do not consider it necessary to set out the definitions. They do not in the circumstances of this case alter the ordinary import of the words of the section.

The listed documents for which privilege from production is claimed on this ground fall into the following categories:-

(a) file notes of the TPC recording requests for legal advice and the advice provided in response to such request;

(b) correspondence by letter or facsimile transmission between the TPC and the Australian Government Solicitor ("AGS") for the purpose of the provision of legal advice to the TPC;

(c) file notes, including E-mail messages, of the TPC recording confidential communications between the TPC and officers of the AGS for the purpose of the provision of legal advice to the TPC; and

(d) documents each described as a "TPC staff paper submission" reporting on legal advice and, in some cases, other matters.

I am satisfied that, with the exception mentioned below, an order for the production for inspection of the category 12 documents other than those falling within category (d) above, would result in the respondents coming into possession of documents, the contents of which could not be adduced in evidence at trial over an objection of the TPC made on the ground of client legal privilege. Moreover, at common law such documents would fall within the classes of documents identified by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246 as capable of attracting legal professional privilege. His Honour there identified, amongst others, the following classes of such documents:-

"(a)Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance ...

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

(d)Notes, memoranda, minutes or other documents made by the client or officers of the client or the legal adviser of the client of communications which are themselves privileged, or containing a record of those communications, or relate to information
sought by the client's legal adviser to enable him to advise the client or to conduct litigation on his behalf."

I note the apparent approval of Deane J in Waterford v The Commonwealth (1987) 163 CLR 54 at 87 of Lockhart J's categories of legal professional privilege as set out in Trade Practices Commission v Sterling.

In my view, no order for production for inspection by the respondents ought to be made in respect of such documents.

The exception referred to above is the document numbered 12.29. Portions of that document do not seem to me to bear the necessary relationship to legal advice to attract client legal privilege. It may be that such portions ought to be disclosed (Waterford v The Commonwealth per Mason and Wilson JJ at 66 and per Dawson J at 103). However I will hear further argument on this, and in particular on whether those portions which do not attract client legal privilege can be characterised as relating to any matter in question between the parties.

The documents described as "TPC staff paper submissions" also raise questions of possible severance of privileged and non-privileged material. More importantly, however, although it is asserted on behalf of the TPC that they were brought into existence for "the sole purpose of requesting or providing legal advice" the accuracy of this assertion is by no means plain. I will hear counsel further on these questions - particularly in the light of the reasons for decision of the Full Court of this Court, and more particularly of Lindgren J, in Somerville & Ors v Australian Securities Commission & Ors (1995) 13 ACLC 1527.

The second ground upon which it is asserted that certain of the category 12 documents are privileged from production is a ground of "litigation privilege". I consider that the ambit of this ground, in the circumstances of this case, can be determined by reference to s119 of the Act. The terms of s119 are set out above.

Assuming the accuracy of the description of the documents asserted to fall within the second ground upon which privilege is claimed for the category 12 documents, it seems plain that evidence could not be adduced at trial which would result in the disclosure of the communications so recorded. On that basis, for the reasons set out above, I would not consider it appropriate to order the production for inspection of the records of those communications. I have chosen not to inspect the documents covered by this second ground in view of their nature. There is a risk that I might thereby become privy to material of an evidentiary nature that may not be adduced at the hearing of this matter. I will hear further from counsel on the question of whether it is necessary for me to inspect such documents for the purpose of deciding the validity of the claim of privilege (O15 r14).

The third ground upon which the TPC claims that certain of the category 12 documents are privileged from protection does not expressly assert that the confidential communications there referred to were made with a view to obtaining advice as to the litigation, or evidence to be used in it, or information which may result in the obtaining of such evidence (see category (e) of Lockhart J in Trade Practices Commission v Sterling at 246), or more broadly, for the dominant purpose of the TPC being provided with professional legal services with respect to this litigation (s119 of the Act). It may be that so much ought in the circumstances to be implied. It is not every confidential communication between a legal adviser and potential witnesses in preparation for a trial which attracts privilege. I am reluctant to inspect the documents for the purpose of attempting to make a judgment as to whether these particular documents attract privilege. I shall hear further from counsel in this regard.

That section of Part 2 of Schedule 1 of the list of documents which lists the category 13 documents contains the following heading and claim of privilege:-

"13. CONFIDENTIAL COMMUNICATIONS BETWEEN THE APPLICANT'S SOLICITORS AND COUNSEL FOR THE PURPOSE OF OBTAINING OR ~~REGARDING~~ RECORDING LEGAL ADVICE IN RESPECT OF THESE PROCEEDINGS.

The documents in category 13 are subject to legal professional privilege on the ground that they are records of confidential communications between the Applicant's solicitors and the Applicant's Counsel brought into existence for the sole purpose of requesting or providing legal advice in respect of these proceedings."

Assuming the accuracy of the above descriptions, the category 13 documents are plainly privileged from production (see category (c) of Lockhart J in Trade Practices Commission v Sterling at 245-6 and ss118 and 119 of the Act).

It will be appropriate for this application for orders for production to be relisted for further consideration.

I certify that this and the preceding pages are a true copy of the Reasons for Decision of Justice Branson.

Associate:

Dated:

Counsel for the Applicant : Ms S Maharaj

Solicitors for the Applicant : Australian Government Solicitor

Counsel for the First and

Second Respondents : Mr M Abbott QC

Solicitors for the First and

Second Respondents : Kelly & Co

Hearing Dates : 9 October 1995,

12 October 1995: (receipt of redrawn list of documents).

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