FEDERAL COURT OF AUSTRALIA

EVIDENCE - legal professional privilege - interlocutory proceedings - discovery and subpoenas - whether the appropriate test is common law “sole purpose” or statutory “dominant purpose” test - whether the Evidence Act 1995 (Cth) has impliedly repealed or abrogated the sole purpose test laid down in Grant v Downs (1976) 135 CLR 674.

EVIDENCE - whether preparation and drafting of witness statements by applicant’s officer for provision of information and submission to the applicant were brought into existence for the purpose of use in prospective or reasonably anticipated legal proceedings or obtaining legal advice - whether objective or subjective factors to be considered in determining when proceedings were anticipated.

EVIDENCE - whether documents “confidential” - whether recording of non‑confidential conversation in a document can be protected from production.

EVIDENCE - whether common interest privilege

EVIDENCE - waiver - express waiver by disclosure of documents to an adverse party waiver of privilege - whether waiver if documents annexed to an affidavit tendered to court waiver - whether substance of documents disclosed and was made knowingly voluntarily pursuant to s 122 Evidence Act.

Trade Practices Act 1974  Pt IV

Evidence Act 1995 (Cth)  s 118, s 119, s 122

            Pt 3.10, Div 1

Federal Court Rules  O 15 r15

Grant v Downs (1976) 135 CLR 674, followed

Trade Practices Commission v Port Adelaide Wool (1995) 60 FCR 366, considered

Meltend v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391, considered

National Employers’ Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648, considered

Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 141 ALR 545, considered

Corporate Affairs Commission (NSW) v Yuill (1991) 72 CLR 319, considered

Goldberg v Ng (1995) 185 CLR 83, considered

Attorney‑General (NT) v Maurice (1986) 161 CLR 475, considered

BT Australasia Pty Ltd v State of New South Wales (1996) 140 ALR 268, considered

Esso Australia Resources Limited v The Commissioner for Taxation of the Commonwealth of Australia (unreported, Foster J, Federal Court of Australia, 21 November 1997), approved

Telstra Corporation v Australia Media Holdings Limited (1997) 41 NSWLR 277, disapproved

Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (unreported, Hunter J, 3 March 1997), disapproved

Towney v The Minister for Land and Water Conservation for New South Wales (1997) 147 ALR 402, disapproved

Dyno Nobel Asia Pacific Limited v Sunny Share Shipping Finance Inc (unreported, Tamberlin J, Federal Court of Australia, 24 October 1997), considered

Trade Practices Commission v Sterling (1979) 36 FLR 244, considered

The Adelaide Steamship Co Ltd and Australian Securities Commission v Spalvins & Ors (unreported, Olney, Kiefel and Finn JJ, 2 March 1998), followed

Nagan v Holloway (1996) 1 Qd R 607, considered

Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1, considered

O’Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1, considered

Carmody v Mackellar (1997) 148 ALR 210, considered

Collins v London General Omnibus Company [1893] 68 LT 831, considered

Warner v The Women’s Hospital [1954] VLR 410, considered

Gold Securities Australia Pty Ltd v Siebe PLC (unreported, Giles J, Supreme Court of New South Wales, Commercial Division, 31 October 1990), considered

Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405, considered

Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529, distinguished

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AUSTRALIAN SAFEWAY STORES PTY LTD & ORS

VG 762 of 1997

 

GOLDBERG J

MELBOURNE

18 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 762 of 1997

 

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	AUSTRALIAN SAFEWAY STORES PTY LIMITED (ACN 004 319 939) First Respondent   GEORGE WESTON FOODS LIMITED (ACN 008 429 632) Second Respondent   MARK JONES Third Respondent   BERNIE BROOKES Fourth Respondent
JUDGE:		GOLDBERG J
DATE:		18 MARCH 1998
PLACE:		MELBOURNE

REASONS FOR JUDGMENT

Introduction and background

The applicant (“the Commission”) has filed an application, supported by a statement of claim, seeking pecuniary penalties, declarations and injunctive relief against the first respondent, Australian Safeway Stores Pty Ltd (“Safeway”), two of its employees, the third and fourth respondents and the second respondent George Weston Foods Limited (“George Weston”) in relation to allegations of various contraventions of Pt IV of the Trade Practices Act 1974 (“the Act”).  The first, third and fourth respondents have denied the allegations of contraventions of the Act.  George Weston made certain admissions in its defence which resulted in it admitting it had contravened the Act in five respects and on 30 May 1997 I ordered that George Weston pay certain pecuniary penalties in respect of those contraventions (145 ALR 36).

On 10 April 1997 I ordered that the Commission and Safeway file and serve verified lists of discoverable documents on or before 4 June 1997.  On 5 June 1997 subpoenas for production were filed and issued by Safeway directed to the proper officer respectively of George Weston, Quality Bakers Australia Limited (“Quality Bakers”) and Sunicrust Bakeries Pty Limited (“Sunicrust”) calling upon them to produce various documents identified in the schedules to the subpoenas.  The Commission filed its list of documents verified by Mr Geoffrey Eva on 5 June 1997 in which list it claimed that the documents enumerated in Pt 2 of Sch 1 were privileged from production on the ground that:

“such documents are professional communications between the Applicant and its legal advisers and its agents of a confidential character or are statements and memoranda obtained, made and prepared in reference to threatened or pending litigation or have come into existence or have been made confidentially for the purpose of obtaining or furnishing to its solicitors evidence to be used in litigation and information which might lead to the obtaining of such evidence to be adduced at the trial of the action or are proofs, instructions to Counsel, Counsel’s advices or other similar documents and by their nature are privileged from production.”

Part 2 of Sch 1 identified ten categories of documents and items 123 to 128 (inclusive) are relevant for present purposes.  These were described as follows:

123	Correspondence between the Applicant and/or its solicitor and the Second Respondent’s solicitor in relation to and including draft witness statements of employees of the Second Respondent sought by the Applicant solely for the purposes of the proceeding.	various
124	File notes of the Applicant and/or its solicitor of conversations with the Second Respondent’s solicitor and various current and former employees of the Second Respondent in relation to obtaining witness statements solely for the purposes of the proceeding.	various
125	Signed witness statements of various current and former employees of the Second Respondent obtained by the Applicant solely for the purposes of the proceeding.	various

126	Correspondence between the Applicant and/or its solicitor and various persons (not being current or former employees of the Second Respondent) in relation to and including draft witness statements sought by the Applicant solely for the purposes of the proceeding.	various
127	File notes of the Applicant and/or its solicitor of conversations with various persons (not being current or former employees of the Second Respondent) in relation to obtaining witness statements solely for the purposes of the proceeding.	various
128	Signed witness statements of various persons (not being current or former employees of the Second Respondent) obtained by the Applicant solely for the purposes of the proceeding.	various

On 16 June 1997 I ordered that the Commission file a list of the documents identified in items 123 to 128 (inclusive) of Pt 2 of Sch 1 of its list of documents identifying the documents over which the claim for legal professional privilege was made.  I also directed that George Weston, Sunicrust and Quality Bakers file a list of the documents required to be produced by the subpoenas in respect of which they objected to production on the grounds of legal professional privilege. 

On 30 June 1997 Sunicrust filed its list of documents in respect of which it claimed privilege from production on the grounds of legal professional privilege.  This list included, inter alia, a number of draft statements and unsigned statements of various individuals as well as correspondence between Sunicrust employees and the Commission.  On 1 July 1997 Quality Bakers filed its list of documents which included, inter alia, a number of draft statements, as well as file notes and communications between Quality Bakers’ legal advisers and their client and the Commission.

On 30 June 1997 the Commission filed an affidavit by Mr Eva in which he set out the bases and grounds upon which privilege from production was claimed in respect of the documents listed in items 123 to 128 (inclusive) of its list of documents.  Each one of the items 123 to 128 comprised a number of separate documents which were specifically identified. 

On 30 July 1997 Safeway served a notice to produce on the Commission requiring it to produce certain documents before the Court and on 6 August 1997 Mr Eva swore another affidavit on behalf of the Commission in which he disclosed certain documents in its possession and said that the Commission had no objection to the production of such documents.  However, in relation to a number of other documents the Commission objected to a production of those documents on the grounds of legal professional privilege.

On 6 August 1997 George Weston filed a list of documents in respect of which privilege from production was claimed on the basis of legal professional privilege.  Those documents were, with one exception, witness statements and draft witness statements of various employees of Safeway.  The last item on the list was described as:

“Notes of interview with each of the witnesses referred to in items 1-12 above brought into existence by Ms Wendy Peter of Arthur Robinson & Hedderwicks for the purpose of preparing the Witness Statements referred to in items 1‑12 above”.

Safeway challenged the claims for privilege from production made by the Commission and George Weston in relation to the documents produced and also the claims for privilege from production made by Sunicrust and Quality Bakers in relation to the documents produced under subpoena.  In the course of the hearing, in response to a notice to produce served by Safeway, the Commission produced a number of documents which it exhibited to an affidavit of Mr Eva sworn on 12 September 1997.  Those documents were tendered in evidence by the Commission.  In the affidavit, the Commission objected to producing specified documents which fell within the terms of the notice to produce on the grounds that they were protected by legal professional privilege.  After I had reserved my decision on the primary application by Safeway for inspection of the documents in respect of which privilege from production had been claimed, Safeway filed a motion on 24 September 1997 seeking production of a number of those documents and other documents referred to in a number of documents produced for inspection.  The main issue which arises on that motion is whether the Commission has waived such privilege from production as is attached to those documents.

The competing submissions

Safeway challenges the claims for legal professional privilege from production of the relevant documents made by the Commission and George Weston and also challenges the claims for privilege by Sunicrust and Quality Bakers in respect of the documents produced under subpoena.  The Commission claims legal professional privilege in relation to the documents identified by Sunicrust and Quality Bakers and those companies abide the decision of the court on the issue of production.  Safeway challenges the claim for legal professional privilege on a number of bases.  Firstly, Safeway submits that the common law principle applicable to the claim for legal professional privilege at the interlocutory stages of discovery and production under subpoena, namely the sole purpose test laid down by the High Court in Grant v Downs (1976) 135 CLR 674 has not been touched or affected by the provisions of the Evidence Act 1995 (Cth) (“Evidence Act”) and in particular ss 118 and 122 which only relate to the adducing of evidence.  Safeway then says that the true position disclosed by the evidence, notwithstanding what Mr Eva has said, is that the documents in respect of which legal professional privilege is claimed, and in particular the draft witness statements and final witness statements, were prepared, at the least, for more than one purpose.  One of those purposes was the provision of a means for providing information to the Commission about the investigation which had been carried out so that it could make a decision as to whether legal proceedings should be instituted.  Safeway says that in such circumstances the sole purpose test is not satisfied.  Safeway submits in the alternative that even if the dominant purpose test is to be applied, that test is not satisfied because there is no evidence before the Court, and no evidence from which I can infer, that the dominant purpose for the bringing into existence of the witness statements in particular was for the purpose of anticipated legal proceedings.

Safeway submits that the decision in Trade Practices Commission v Port Adelaide Wool (1995) 60 FCR 366 did not determine that the common law sole purpose test did not apply to interlocutory proceedings or documents produced under subpoena but rather that Branson J accepted that that test still applied but resolved the matter by reference to O 15 r15 of the Federal Court Rules.  It followed that if the documents were not admissible at trial because of legal professional privilege, it was not necessary that they be produced at the interlocutory stage, on the basis that if no use could be made of them at the trial there was no point in having them produced.  As I noted in Meltend v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 I have some difficulties with this proposition having regard to the matters that may be taken into account in determining whether it is necessary that a document be produced for inspection.

Safeway also submits that at the time the relevant witness statements were prepared, no decision had been taken to commence proceedings against Safeway.  Safeway relies upon a conversation between Mr Eva and Mr Corrigan, the solicitor for Safeway on 2 November 1996 and also upon a meeting of the Commission on 12 November 1996 when no decision was taken to commence proceedings against Safeway.  Mr Eva had made a recommendation to the Commission to institute proceedings against Safeway and two of its employees at an earlier stage and that recommendation had been accepted but was subsequently reviewed.

Safeway also raises a threshold issue that in order for a claim for legal professional privilege to be made in respect of the production of documents the propounding party has to establish that the documents came into existence as confidential communication.  Safeway submits that as the relevant statements were prepared by the Commission, amended by the George Weston employees and then given to the Commission they were not confidential documents either of George Weston, its employees or the Commission.  No restrictions were placed upon their use by either George Weston or its employees or the Commission.  Safeway also says that common interest privilege cannot arise between parties whose interests are adverse to each other.  In any event says Safeway, the evidence discloses that the dominant purpose for which a number of the documents came into existence was in relation to furthering the investigations of the Commission before any decision was made to bring proceedings against Safeway.  Finally in respect of some documents Safeway says that the Commission has waived its privilege.

The Commission submits that the dominant purpose test in s 122 of the Evidence Act applies and that the relevant documents satisfy that test as they came into existence when legal proceedings were reasonably anticipated, that the documents were prepared by or for the Commission and came into existence for the purpose of use in, and in anticipation of, legal proceedings and for the purpose of seeking legal advice and were confidential.

George Weston submits that such privilege as exists in relation to the witness statements obtained from its employees is its privilege, rather than the privilege of the Commission and that its documents came into existence for the purpose of use in legal proceedings which were very likely from November 1995.  That use was to assist its defence to the extent that there was disclosure to the Commission that was a disclosure for a limited purpose which did not result in a waiver of the privilege from production.

The evidence

The issues and submissions require a careful analysis of the circumstances which occurred and an evaluation of the evidence given predominantly through Mr Eva and through the production of Commission documents.  Mr Eva was the only Commission officer to give evidence and insofar as he expresses views on what he was doing at relevant times and what his belief and intention was it is said by Safeway that his views, belief and intention cannot be attributed to the Commission. 

Mr Smith, who appeared for Safeway submitted that I should not accept Mr Eva’s evidence as it proceeded upon a misconception as to what was the applicable test to apply in determining whether privilege from production applied.  I am satisfied that Mr Eva was a truthful witness and there was no attack made on his credit.  Rather, the attack on his evidence went to the misconception under which he was said to labour.  I will return to this issue.

Objection was taken to the admissibility of a number of passages in Mr Eva’s affidavits, particularly those passages which deposed to Mr Eva’s state of mind and belief at particular times.  I ruled inadmissible those passages where Mr Eva asserted that:

-           on 13 December 1995 the Commission had decided to proceed to Court for the purposes of the recovery of a pecuniary penalty (¶22);

-           on 7 December 1995 proceedings were to be filed against Safeway and other relevant parties (¶5.2);

-           the actions of the Commission were only consistent with it having decided to proceed to litigation (¶5.4).

Otherwise I admitted, subject to objection, those passages which deposed to Mr Eva’s belief as to the likelihood of legal proceedings and his practice and purpose in preparing witness statements.  One such passage which became critical and controversial was in para 27 of the affidavit sworn 30 June 1997 where Mr Eva said:

“In approaching each of them (potential witnesses) and drafting witness statements I drafted such witness statements for the sole purpose of using them in the prospective legal proceedings.”

This statement was propounded as evidence of Mr Eva’s state of mind from which it could be said that the production of the witness statements was privileged.  Safeway maintained that evidence of Mr Eva’s belief, intention, purpose and practice was irrelevant as it was the intention and purpose of the Commission which was relevant.  For reasons to which I shall refer, I do not regard Mr Eva’s statement as decisive of the issue; it is inconsistent with other evidence given by Mr Eva and it must be considered in the light of Mr Eva’s view of what he meant by “sole purpose” and also all the surrounding circumstances.

Events giving rise to the proceeding

In order to understand Mr Eva’s evidence and the context in which a number of the Commission’s documents came into existence, it is necessary to identify the sequence of events which led to this proceeding.  The sequence of events to which I refer and the documents which came into existence are described substantially by Mr Eva.  However Safeway and its employees have not yet had an opportunity to propound their account of the sequence of events. 

On 15 November 1995 Mr Hollan Morrell, the proprietor of Bob’s IGA store in Albury, telephoned the Commission’s Sydney office and complained that supplies of bread had been withheld by Tip Top Bakeries ( a division of George Weston) (“Tip Top”) as a result of conduct by Safeway.  On 24 November 1995 the Commission’s Sydney office sent by facsimile to the Melbourne office a record of Mr Morrell’s complaint, the subject matter being described as:

“Safeways (Melb) has contacted Tip Top Melbourne to stop supplying MORRELL because he is selling ‘plain wrapped’ bread at a discount.  Tip Top have now stopped supply.  This is the second time this has happened”.

The document contained a section for “summary of advice given” and this was completed in the terms “it appears to be RPM”.  The officer’s recommendation in the record of complaint was “pursue”.  In “The Age” newspaper on 24 November 1995 there appeared an article headed “Safeway ‘Thuggery’ in Bun Fight with Small Retailer” which referred to a statement made in the Victorian Parliament to the effect that Tip Top had withheld supplies of bread to The Coolstore at Ferntree Gully.  The article said that The Coolstore had been told by Tip Top that it had to raise its bread prices “at the behest of Safeway”.  On the same morning there was an interview over radio station 3AW with Mr Ken Dobson from The Coolstore and Professor Alan Fels, the Chairman of the Commission.  Mr Dobson repeated some of the matters referred to in “The Age” article and said, in substance, that “The Age” article was correct.  Professor Fels said that if the allegations were true then “there could well be a breach of the Trade Practices Act”.  Professor Fels said from what he had heard, the matter needed further investigation “to determine the correctness of the allegations” and if they were correct “to see if they do breach the Trade Practices Act”.

After the 3AW interview, on the same day, Mr Eva (at the request of Professor Fels) interviewed Mr Dobson in relation to the subject matter of the 3AW interview.  At this time Mr Eva formed the view that breaches of the Act had occurred and at the conclusion of the interview Mr Eva told Mr Dobson that he wanted to draft a witness statement which, if he was satisfied with its accuracy, he would ask him to sign.  He also told him that he wanted him to appear in court to give evidence in the matter and Mr Dobson agreed to do so.

Mr Eva returned to his office and commenced to draft a witness statement for Mr Dobson based upon the information which Mr Dobson had provided to him.  Mr Eva gave evidence, which was subject to objection, that at this stage he had formed the belief that the Commission would be likely to issue legal proceedings against Tip Top in respect of Mr Dobson’s allegations once further evidence had been gathered.  Mr Eva said that from that point on he had decided to pursue the matter in a manner designed to secure evidence rather than simply to gather information. 

Mr Smith submitted that this evidence was inadmissible as Mr Eva had no authority to make any decision whether to commence legal proceedings and there was no evidence that his views on this topic in any way bound the Commission nor was he authorised to form any such view.  I will return to this evidence later but I note that at this point of time it was very early in the investigative and information gathering process.  Although Mr Eva may have formed the belief that the Commission was likely to issue legal proceedings against Tip Top, and for that reason he decided to secure evidence, it was still part of his reason for preparing the witness statement for Mr Dobson to obtain information either for submission to the Commission or for the purpose of supporting or justifying a recommendation he would make to the Commission in due course.  He may not have been “simply” or only gathering information from Mr Dobson, but gathering information he was.  In cross‑examination Mr Eva said that as at 24 November 1995 (the day of Mr Dobson’s interview) he believed there was a possibility of proceedings against Safeway but that depended on whether he could get evidence against Safeway.

Mr Eva also gave evidence, subject to objection, that it was his practice only to prepare witness statements where he believed a matter “is likely to proceed to litigation”.  I accept that evidence, but having regard to both Mr Eva’s role as director of major investigations and to the early stage of the investigations I consider that there was also an information gathering component in the drafting of the witness statement at this point of time.  Mr Eva acknowledged this proposition in my view when he said he was pursuing the matter not simply for the purpose of gathering information but also for the purpose of securing evidence.  In such a situation two purposes were involved.  In this respect I draw comfort from the press release issued by the Commission on the same day which stated that the Commission:

“has moved swiftly to investigate claims of resale price maintenance in the Victorian bread market”.

Mr Dobson signed the witness statement on 5 December 1995 and it was attached to a report Mr Eva prepared on 11 December 1995 for a meeting of the Commission on 13 December 1995 to which I refer later in these reasons.

On 27 November 1995 Mr Eva interviewed Mr Morrell in Albury about the complaint he had made to the Sydney office of the Commission.  During the interview he formed the view that Mr Morrell’s evidence showed a breach of the resale price maintenance provisions of the Act and asked Mr Morrell if he was prepared to sign a statement and appear in court which he agreed to do.  A similar interview was conducted with another employee of Bob’s IGA, Mrs Dorothy Wiles and she also agreed to provide a witness statement and give evidence in court.  Afterwards, Mr Eva returned to his office and commenced to draft the witness statements for Mr Morrell and Mrs Wiles to sign.  Mr Eva says that his purpose in drafting the witness statements was to use them in legal proceedings.  That evidence of Mr Eva was also the subject of objection to admissibility as was his evidence that he believed that once the Commission had filed proceedings the court would order the filing of witness statements and that the statements of Mr Morrell, Mr Dobson and Mrs Wiles were drafted with this intention.  Mr Eva also says that he intended that prior to settling each of the statements he would seek the advice of the Australian Government Solicitor as to the adequacy of the statements.

On 28 November 1995 Mr Eva sent a memorandum by electronic mail to Glen Barnwell (copied to Craig Henderson) both officers of the Commission, in which he reported on the progress of the investigations involving Tip Top and Safeway.  He referred to what he had been told by Mr Morrell and Mr Dobson.  He expressed the view that Safeway had placed Tip Top under pressure to engage in resale price maintenance and that the Commission’s investigations should concentrate on proving that fact.  He also offered some thoughts on how the matter should proceed for the purpose of briefing the Commission and said that he believed that the Commission would shortly secure sufficient evidence against Tip Top and could proceed against it and its employees.  Up to this point of time the evidence points to Mr Eva’s obtaining of information and the recording of it in witness statements as being part of an investigatory process.

Although he may have been expecting litigation against Tip Top and Safeway, Mr Eva’s information gathering activities were not complete and he had not recommended proceedings at this stage.  In cross‑examination Mr Eva said that as at 28 November 1995 he believed there were reliable indicators that Safeway could reasonably be suspected of having been behind the conduct engaged in by Tip Top but that in recommending the commencement of proceedings he relied upon evidence not on suspicions.  I am satisfied that on 28 November 1995 Mr Eva was gathering evidence for the purpose of either submitting the material to the Commission for its consideration or for the purpose of making a recommendation as to the institution of legal proceedings.  The electronic mail memorandum of 28 November 1995 makes it clear that its contents are to assist Mr Barnwell if he has to brief the Commission on the matter.  Indeed Mr Barnwell’s response was:

“Thanks Geoff.  HRS (Mr Spier an Assistant Commissioner) wants me to report on it in the GM’s report tomorrow.”

I am satisfied that on 28 November 1995 the statements and documents prepared by that date were prepared and came into existence at least partly for the purpose of informing the Commission of the progress of the investigations.  This, notwithstanding that Mr Eva says that his purpose in drafting the witness statements was for use in legal proceedings.  Such purpose, in my view, was in addition to the purpose of informing the Commission and was not the sole purpose for which the statements came into existence.

On 30 November 1995 Mr Eva forwarded copies of three draft witness statements (Messrs Dobson, Morrell and Mrs Wiles) to the Australian Government Solicitor for advice.  Mr Eva said that he wanted to involve the Australian Government Solicitor in the matter “to assist in the preparation of the evidence and to convey to the Commission relevant legal advice”.  Again, this evidence was objected to.  I accept that evidence but, in my view, it does not resolve the relevant issue as I am satisfied that part of the purpose for the preparation of the draft witness statements was to inform the Commission of the relevant facts and to provide material and information on which a recommendation to institute legal proceedings or a decision to institute those proceedings could be based.  This is borne out by the subsequent staff paper of Mr Eva dated 11 December 1995 (to which he annexed the statements of Messrs Morrell and Dobson) submitted to the Commission for the purpose of its meeting on 13 December 1995.

On 7 December 1995 the chairman of the Commission, Professor Fels and Mr Eva met with representatives of George Weston.  During that meeting the representative of George Weston, Mr Kelly and Ms Peter the solicitor for George Weston, admitted that the company had breached the Act and agreed that it would accept a pecuniary penalty.  They also agreed to assist the Commission in gathering evidence in relation to the breaches of the Act in issue and providing affidavits and evidence against Safeway.

In cross‑examination Mr Eva said that on 7 December 1995 he did not have admissible evidence against Safeway and he was hoping that if he could get the Commission to agree to an arrangement with Tip Top involving the co‑operation of their employees, he might convert his suspicions into evidence if he could get the Tip Top employees to give evidence against Safeway.  This was an important object of securing their co‑operation, namely to obtain evidence against Safeway.

On 11 December 1995 Mr Eva prepared a report for the meeting of the Commission to be held on 13 December 1995, the executive summary of which stated:

“The purpose of this paper is to acquaint the Commission with allegations of resale price maintenance committed by George Weston Foods and of the assertion that such conduct was caused by Safeway having complained to Westons.

Two recent incidents (in Albury and Ferntree Gully) have been investigated by staff and it appears that a prima facie case against Westons exists in relation to each incident.”

There was then a reference to the fact that, certainly in relation to Ferntree Gully, George Weston was prepared to come to an arrangement with the Commission.  At that stage George Weston had not thoroughly investigated the Albury incident and had only become aware of the Preston allegations (to which I shall refer) when they were raised with their representatives at the meeting on 7 December 1995.

The report summarised, in general terms, the allegations which had been made and it attached the statements which Mr Eva had obtained from Messrs Morrell and Dobson.  The report then set out the arrangement which George Weston proposed in relation to admitting guilt to their Ferntree Gully incident which included a proposal whereby George Weston and its employees would provide affidavits and give testimony in relation to the part played by Safeway in the events in question.  The report then noted that the matter was referred to the Commission for a decision as to whether it was to proceed to make an arrangement with George Weston and as to the amount of pecuniary penalty it was to seek from that company.

At this point of time although it may be said that proceedings were anticipated against George Weston, having regard to its acknowledgment that the Ferntree Gully incident was a breach of the Act, the relevant issue to determine is for what purpose were the relevant documents brought into existence.  The fact that legal proceedings are anticipated does not mean that every document brought into existence thereafter is subject to a claim for legal professional privilege.  It is the purpose for which the document is brought into existence, not its temporal relationship with the proceedings which is relevant.  I am satisfied that notwithstanding Mr Eva’s intention that the witness statements be cast in  the form they were for later use in legal proceedings which he thought reasonably likely, another purpose for the creation of the statements was to inform the Commission of the evidence available to it upon which it could make a decision whether, and on what terms, to issue legal proceedings.  That was why the witness statements were attached to the report Mr Eva prepared for the meeting of the Commission on 13 December 1995.

The Commission met on 13 December 1995 and instructed Mr Eva to prepare a penalty assessment based on North American models and to inquire into the Preston market issue.  Mr Eva understood that the Commission had given him authority to put the arrangement to George Weston which, if accepted, would require extensive interviews with George Weston employees.

On 19 December 1995 Mr Eva wrote to Ms Peter and confirmed the terms of the understanding which had been reached with the Commission as to the basis on which George Weston and its employees would co‑operate with the Commission in relation to “the matters currently under investigation”.  Those matters related to the Ferntree Gully and Albury incidents and possible breaches of the Act in relation to Preston.  What Mr Eva proposed in the letter included, inter alia, that George Weston would co‑operate with the Commission “during the course of the investigation and any litigation which may ensue” and that this would include the swearing of affidavits and the provision of testimony in court.  I draw particular attention to the words “during the course of the investigation ...” which demonstrate that Mr Eva was still in an investigative mode.  However, one must be careful not to confuse the purpose of gathering information with the purpose of bringing a document into existence.  As Mason J pointed out in National Employers’ Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648 at 654:

“First, the argument at times seemed to suggest that it is the intended use of documents in litigation which attracts the relevant privilege.  This of course is not so.  The relevant head of privilege is legal professional privilege which attaches to communications passing between legal adviser and client.  Documents submitted by the client to his solicitors for advice or for use in anticipated litigation attract the privilege, but it is very doubtful whether there is a privilege for documents coming into existence as materials for the purpose of an action to be conducted by a litigant in person ...  Secondly, the argument did not always make clear the distinction between the purpose for which information is obtained and the purpose for which a document recording information is brought into existence.  It is the latter purpose with which the law of professional legal privilege is concerned.”

Ms Peter responded to Mr Eva on 2 January 1996 “acknowledging that George Weston was prepared to co‑operate fully with the Commission in its investigation.  Ms Peter concluded:

“Of course, the further steps which may be taken after the ACCC investigation will be subject to agreement between the ACCC and GWF as to the penalty, if any, which is appropriate in the circumstances.”

Thereafter from January 1996 through to July 1996 Mr Eva, with Ms Peter’s assistance, conducted numerous interviews with employees of George Weston and following such interviews he drafted a statement of the information which the employee provided and sent a copy to Ms Peter for comment and/or amendment.  Further interviews were subsequently conducted at which the draft statements were discussed.

On 20 February 1996 Mr Eva sent a memorandum to Mr Asher (the Deputy Chairman of the Commission) and other officers of the Commission on “Progress in the Tip Top/Safeway Investigation”, the State director having asked him to report progress in that investigation.  Mr Eva said that he was about to commence settling draft witness statements prepared from George Weston employees and had obtained statements from other witnesses.  It appears from the memorandum that Mr Eva considered legal proceedings would eventuate because in the memorandum he said:

“... I am concerned that when Tip Top give evidence in Court that there will be commercial repercussions against them.  As Safeway is a very large customer of Tip Top I am concerned that Tip Top may be disadvantaged in the market place following the trial.

...

I am also preparing a brief for AGS to advise on evidence and to prepare for the filing of proceedings.  I will await that advice before discussing the question as to whether we should proceed separately against Tip Top and file against Safeway at a later time.”

On 6 March 1996 Mr Eva sent a paper to the Commission, the stated purpose of which was to inform the Commission “of the evidence available to date against George Weston to enable the Commission to determine the penalty it wished to seek from George Weston” during forthcoming negotiations.  In the paper Mr Eva noted that George Weston’s staff had been interviewed and draft statements prepared and set out details of the evidence he had obtained and his evaluation and recommendation of a penalty.

On 3 April 1996 Craig Henderson sent a memorandum to Mr Asher and other officers of the Commission including Mr Spier in which he said:

“I have taken the liberty of having a look at this matter in Geoff’s absence.  I have also discussed it with Michael Corrigan of Clayton Utz for Safeway.

I have requested that a brief be put together asap and counsel retained for an early conference.  I have in mind Jonathon Beach or Charles Scerri with perhaps Jack Fajgenbaum.  Nada is well progressed with the brief and it should go tomorrow.

Safeway are anxious to talk.  I advised that I would take early advice, return the matter to the Commission and in two weeks should be in a position to indicate what, if any, matters there were between us that could form the basis of discussion.  I have in mind a draft statement of claim and particulars would be the basis of any such discussion.  I did not expressly state this but I think Corrigan knows us well enough to understand that this is probably how it will go.”

This was the first document in which there was a specific reference to the retainer of counsel.  On the same day Mr Spier sent a memorandum to Mr Henderson in response simply saying “good”.  This was followed up on 10 April 1996 by a minute from Nada Karadzic, assistant director, Major Investigations, to Glen Barnwell informing him that in relation to Tip Top and Safeway on 4 April 1996 a “brief of evidence” was forwarded to counsel and that they were hoping to have a conference with counsel later that week.  A copy of the brief (minus attachments) was enclosed for his information.

On 23 April 1996 Mr Eva sent a minute to Mr Asher and other officers of the Commission in relation to “Status of Investigation into the Bread Industry (Tip Top/Safeway)” telling them that he was:

“instructed to have the investigation into allegations regarding the conduct of Safeway and bread manufacturers completed by that date (subject to the Commission subsequently deciding on that course).”

In the minute Mr Eva noted that the information uncovered indicated a number of breaches of the Act and said that he expected that the draft statements of Tip Top witnesses would be completed and signed in three weeks.  He also outlined the position then existing in relation to investigations with other companies and other witnesses.  Mr Eva then said:

“Counsel (Fajgenbaum QC and J Beach) have provided advice to the effect that the draft evidence available to date discloses likely breaches of the RPM and price fixing provisions.  While the conduct of Safeway could also be viewed as an exercise in the abuse of market power, there are thorny issues involved in defining the market/s and the power base.  I have instructed Counsel to view the conduct as fitting either RPM or price fixing only as to do otherwise would only increase, unnecessarily, the complexity and duration of the investigation and any subsequent proceedings.

I will be asking Counsel to commence drafting a Statement of Claim in order to facilitate any proceedings which the Commission may decide upon.  While Counsel regard this as premature at this time, I will seek to have the format and “style” settled within the next three weeks.”

At a meeting of the Commission held on 10 July 1996, the Commission agreed that proceedings should be instituted against Tip Top, Safeway and Messrs Jones and Brookes.  The decision to proceed against Safeway was subsequently reviewed and the matter was referred back to the Enforcement Committee.

On 2 August 1996 Mr Eva sent a minute to the Enforcement Committee the stated purpose of which was to provide the Committee with an overview of staff’s assessment of the factors to be considered in negotiating an appropriate penalty with George Weston and the factors relevant to a penalty against Safeway. Counsel’s legal advice as to the provable contraventions was noted and issues as to penalties were discussed in relation to both George Weston and Safeway.  Recommendations were then made.  On the same day Nada Karadzic sent the Enforcement Committee a copy of a brief containing the witness statements which had been obtained, most of which were signed.

On 12 November 1996 Mr Eva told Safeway’s solicitor that whether proceedings would be taken against Safeway was a matter for the Enforcement Committee and that no decision had been made at that stage.

On 2 December 1996 Mr Eva sent Safeway’s solicitors a draft application and statement of claim prepared by counsel in advance of a meeting Safeway was to have with Mr Asher on 4 December 1996.  On 4 December 1996 the draft application and statement of claim prepared by counsel was sent by Mr Eva to the Enforcement Committee.

At a meeting of the Commission on 5 December 1996 the Commission agreed to negotiate with Woolworths (Safeway) and George Weston in relation to an appropriate penalty and failing agreement on penalty, the Commission agreed to institute proceedings against the companies and Messrs Jones and Brooks.

Mr Eva agreed that everything said at the interviews could, and would, be used against Tip Top in any subsequent proceeding and that neither Tip Top nor the Commission could prevent the other from using the information given by Tip Top employees in any proceedings brought by the Commission against Tip Top.  At the time of the meetings in January 1996 Mr Eva did not know whether the Commission would take proceedings against Safeway in respect of anything the Tip Top employees told him and although he had his own views they were not determinative of the matter.  It was put to Mr Eva that it was quite possible that he may have drafted admissible witness statements and communicated their contents to the Commission but that the Commission may have decided not to commence proceedings.  Although Mr Eva accepted that proposition as a possibility, he said that from day one he was under intense and unusual pressure from the Commission to keep reporting to it.  But he accepted that whether the Commission formally decided to institute proceedings depended on the quality of the information he had obtained from the Tip Top employees and the legal advice obtained based on that information which he communicated to the Commission.

Mr Eva said that the purpose of meeting with the Tip Top employees was to find out what they said about the allegations which had been made.  It was put to him that once he had found out what they said about the allegations he intended to convey that information to the Commission and his response was that “long term” his intention was to prepare a draft witness statement for submission to his lawyers for advice, with a view to using the document in proceedings.  However Mr Eva agreed that the information obtained had to be conveyed to the Commission so that it could make a decision whether or not to institute proceedings, it being for the Commission, not Mr Eva, to decide whether proceedings were to be taken.  It was implicit in these answers, in my opinion, that part of the purpose of preparing the draft witness statements was to convey the information in them to the Commission so that it had information before it upon which it could make a decision whether or not to institute proceedings.  The fact that Mr Eva had an intention, to be implemented in the longer term, to have the draft witness statements he had prepared submitted to the Commission’s lawyers for advice with a view to using them in legal proceedings meant that Mr Eva had two purposes in preparing the draft witness statements, one to convey information to the Commission, the other to use them, if so advised, in legal proceedings.  The information conveying purpose of the witness statements should not be overlooked because Mr Eva did not know whether the Commission would take proceedings against Safeway in respect of what the Tip Top employees told him in January 1996 and subsequently and it was necessary that the Commission have information before it upon which it could base such a decision.

Mr Eva did not agree that the procedure for recording information in a draft witness statement was a convenient way of recording information he would have to convey to the Commission in the future and said that if he wished simply to convey information to the Commission he would write a minute.  He said it was a long laborious, detailed and extensive exercise.  However I am satisfied that the evidence shows that in fact Mr Eva prepared and used the draft witness statements of the Tip Top employees partly for the purpose of conveying information to the Commission to enable it to decide whether to institute proceedings against Safeway and that was part of the reason why the statements came into existence.  I am fortified in this conclusion by what I perceive to be Mr Eva’s misapprehension or misunderstanding as to document No 50 in item 126 of the documents to which a claim for privilege was made.  I refer to this later in these reasons.

Mr Eva says that in the course of interviewing George Weston’s employees he formed the view that evidence was available to establish Safeway was implicated in the events under investigation and that it was probable that two other major bread manufacturers, Sunicrust and Quality Bakers were likely to have had dealings of a similar nature to George Weston with Safeway.  On 9 February 1996 Mr Eva approached Quality Bakers and sought its assistance in relation to the investigation as he did with Sunicrust in or about May 1996.  Both companies agreed to provide assistance, and interviews with their relevant employees were subsequently arranged and conducted and draft statements were obtained by Mr Eva.  Ultimately a number of signed witness statements were obtained.  Mr Eva said, and his evidence was subject to objection, that in approaching each employee and drafting witness statements he did so for the sole purpose of using the witness statements “in the prospective legal proceedings”.  However in cross‑examination Mr Eva said that part of the purpose for interviewing Quality Bakers’ employees was to determine whether Quality Bakers had been involved in any breach of the Act, another part of the purpose was to find out what they could say about what had occurred, another part of the purpose was to obtain information to put before the Commission to enable it to decide whether to take proceedings against Quality Bakers for breaches of the Act, another reason was to see if he could mount a case against Safeway in respect of the matters he was investigating with Quality Bakers and another reason was to attempt to find out information, so far as Safeway was concerned, to put before the Commission so that it might consider what it wanted to do about the allegations concerning Safeway.  He gave similar evidence in relation to his interviews with Sunicrust employees.  Although it is necessary to draw a distinction between the purpose of obtaining information and the purpose of preparing witness statements as a result of obtaining that information, I consider that the purpose for which the witness statements were prepared is coloured and influenced by the purpose or purposes for which the information was obtained as those purposes, by virtue of their nature, are carried through into the preparation of the witness statements.

On 30 April 1996 Mr Eva spoke to Mr Kimber from Sunicrust and told him he was investigating allegations that in May 1995 Sunicrust, as a result of pressure from Safeway, had asked a retailer, Costa’s Food Barn, to stop discounting and had threatened to withhold supplies from it.  Mr Eva also said that he suspected that Sunicrust may have breached the law and he wanted to investigate whether his suspicions were correct.  Mr Eva also told Mr Kimber that he was also investigating allegations involving Tip Top and Safeway at Ferntree Gully.  Mr Eva said that he was looking for Sunicrust’s co‑operation and he arranged a meeting for 3 May 1996.  Around this time Mr Eva caused s 155 notices to be issued by the Commission to the retailer involved.  Ultimately Mr Eva recommended against proceeding against Sunicrust and the Commission concurred.  Mr Eva agreed that after April 1996 he was not interested in breaches of the Act by Sunicrust except insofar as they might assist his investigations in relation to Safeway.  At this time he said he was preparing for litigation against Safeway and was trying to mount the widest possible case against them.  Whether he could do that depended on what he was told by people including people from Quality Bakers and Sunicrust.  He agreed that if they did provide information which might assist the case against Safeway, he had to convey that information to the Commission so it could consider whether the information he had gathered would support the decision to commence proceedings against Safeway.

The critical issue before the Court is the purpose for which the draft and final witness statements came into existence.  There is no doubt that from the end of November 1995 onwards Mr Eva was, from his point of view, carrying out two functions namely obtaining information for submission to the Commission and preparing witness statements he anticipated would be used in court proceedings.  Indeed Mr Eva agreed that on 13 December 1995 it was a fundamental aspect of his investigation to gather information and convey it to the Commission so that it might consider whether or not proceedings should be brought against Safeway.

Mr Eva said that throughout 1996 he was obtaining information from Tip Top, Sunicrust and Quality Bakers employees to convey to the Commission so that it could, with the benefit of that information, decide whether or not to commence proceedings against Safeway.  However it is also clear from Mr Eva’s evidence that one of the purposes of interviewing Sunicrust and Quality Bakers employees was to determine whether Sunicrust and Quality Bakers had been involved in breaches of the Act and to obtain information to put before the Commission to enable it to decide whether to commence proceedings against those companies.  He also said he was preparing a case which required the ultimate sanction of the Commission.

It is important therefore to distinguish between the purpose of the interviews and the purpose of bringing into existence documents as a result of those interviews.  Mr Eva said that the ultimate purpose in preparing the draft witness statements was to have in an appropriate form a record of the witnesses’ evidence if proceedings were instituted.  However Mr Eva did not agree that a purpose in drafting the witness statements was to have in a convenient form, a record of the witness’ evidence to convey to the Commission.  From time to time he had submitted memoranda, including draft witness statements, to the Commission for its consideration and he accepted that part of the purpose of the procedure for supplying staff papers to the Commission was to provide it with information about relevant investigations.

The issue is complicated by the controversial issue as to what, or whose, belief or intention is regard to be had in determining whether the relevant document has come into existence for the purpose of anticipated or pending legal proceedings?  It is also complicated by what appears to be Mr Eva’s misapprehension or misunderstanding as to the purpose for which he brought the draft and final witness statements into existence.  Mr Eva was taken to document No 50 in Category 126 of the claimed privileged documents which was described as:

“Facsimile from G. Eva (ACCC) to A. Nicotra (Blake Dawson Waldron) attaching a letter from G. Eva to A. Nicotra”

and dated 13 February 1996.  Mr Nicotra was the solicitor acting for Quality Bakers.  The following exchange occurred during cross‑examination:

“Q.      Now, that is at a point in time when you were giving consideration to the question of whether or not Buttercup, for whom Mr Nicotra had acted, was guilty of a breach of the Act, correct?

A.        And whether - yes, and whether Safeway could be shown to be involved in such breach.

Q.        So may we take it that that communication, document 50, was a communication sent by you for a purpose concerned with your investigation into possible breaches by Quality Bakers, and for another purpose concerning your investigation into whether or not Safeway was involved in that breach?

A.        Yes.

Q.        So that it follows from that, that document 50 is a document which was sent for two purposes does it not?

A.        Well, wrapped in one, I’m sorry but I was trying to enlist ... Buttercup’s Quality Bakers support, or assistance in the investigation, because I particularly wanted to ascertain whether and what was the evidence against Safeway’s behaviour in the market generally, for incorporation in the main matter.

Q.        But you were also looking at Sunicrust’s behaviour too were you not?

A.        The same situation.

            ...

Q.        You were looking at two things were you not?

A.        Yes.

Q.        And it would be wrong, therefore, to say of document 50, that document 50 was a document brought into existence for the sole purpose of these proceedings, would it not, in those circumstances?

A.        No.”

It is a fair reading of this exchange that document No 50 came into existence for two purposes, one relating to obtaining information about possible breaches of the Act by Quality Bakers and one relating to investigating whether Safeway was involved in any such breaches.

In my view this evidence is consistent with and supports the proposition that Mr Eva brought the document into existence for two purposes, at least one of which did not relate to a purpose of anticipated legal proceedings against Safeway, namely trying to enlist the support or co‑operation of Quality Bakers.  Later in cross‑examination Mr Eva said in relation to the purpose of document No 50 that:

“My primary objective was to obtain information and evidence regarding Safeway’s behaviour”

and he again agreed that another objective was to see whether Quality Bakers had committed a breach of the Act.  The following exchange then occurred:

“Q.      So your view is, in effect, taking document 50 as illustration, having the two purposes that you just referred to, you are able to swear that that document was brought into existence for the sole purpose of these proceedings are you?

A.        Yes.

            ...

Q.        ... It is certainly a view you applied to those two documents?

A.        Yes.

Q.        And it is a view ... I would have put to you that you applied generally to all documents that where you had two or more purposes you took the view, you were able to swear that one of them - you took the view you were able to swear that a particular document was brought into existence for the sole purpose of the proceedings?

A.        Yes.”

Ms Peter said that when the Ferntree Gully and Albury incidents came to her attention she spoke to Mr Kelly, George Weston’s company secretary, and after consultations with him it was decided that he would contact the Commission and arrange a meeting which was the meeting held on 7 December 1995.  That decision was made voluntarily by George Weston and on Ms Peter’s advice.  Ms Peter says that there were between thirty and forty meetings between January 1996 and June 1996 at which the interviews were conducted and statements prepared.  At these interviews Ms Peter made notes in respect of which George Weston has claimed privilege from production.  Ms Peter wanted to make sure that the Commission obtained a precise and accurate picture of the evidence which the George Weston employees could give.  Those meetings were not conducted on a “without prejudice” basis and Mr Eva and Ms Peter accepted that there was no restriction or condition placed upon the use that might be made of any statements made at these interviews by any party on any subsequent occasion.  The Commission was able to use whatever the George Weston employees said against George Weston and there were no restrictions or fetters on the Commission’s entitlement to use that information in any proceedings between George Weston and the Commission.  George Weston was providing this information, and making its employees available for interview, so as to enable it in later proceedings to make a submission in relation to mitigation of penalty that there had been full co‑operation with the Commission.  In early 1997 Ms Peter obtained from the Commission copies of Mr Morrell’s and Mr Dobson’s statements, as at that time, she was negotiating an agreed statement of facts with the Commission.  The draft of the agreed statement of facts had contained certain facts of which Ms Peter was not aware and she asked for, and received, the two witness statements for the purpose of verifying the facts which the Commission wanted in the agreed statement of facts.

The purpose for which the witness statements came into existence

I am satisfied on this analysis of the evidence that up until at least 4 April 1996 Mr Eva brought the draft witness statements and such witness statements as were signed into existence for two purposes.  One purpose was as part of the Commission’s investigatory process to gather evidence together for submission to the Commission for consideration as to whether proceedings should be instituted.  The other purpose was as part of his preparation for the legal proceedings which he believed were prospective or reasonably anticipated.  I regard his evidence as to his belief as to what would happen and as to his purpose in drafting the witness statements as admissible, but not determinative, of the issue whether proceedings were reasonably anticipated or the issue as to what was the purpose for which the documents came into existence.

It follows from this conclusion that I do not accept that there was only one purpose for which the statements came into existence.  But given that there was more than one purpose what was the dominant purpose?  If I accept Mr Eva’s evidence at face value and in isolation, it would follow that the dominant purpose was for the purpose of submission to legal advisers for use in prospective or reasonably anticipated legal proceedings.  But it is confining the inquiry too narrowly to look only at what Mr Eva says.  He was part of a large organisation and he had a particular and primarily investigative role; he was the Commission’s director of major investigations.  The decisions he could make which bound the Commission to any particular course of conduct were very limited and it is necessary to look at Mr Eva’s role in the overall context of what was the principal task he was undertaking and where he stood in the hierarchy of decision‑making.  One does not look solely at the evidence or intention of the maker of a document to determine what was the dominant purpose, or indeed any purpose, for which the document came into existence:  Guinness Peat Ltd v Fitzroy Robinson Partnership (1987) 1 WLR 1027, 1036; Hartogen Energy Ltd (In Liq) v Australian Gas Light Co (1992) 36 FCR 557, 568 ‑ 569; Sparnon v Apand Ltd (1996) 68 FCR 322, 328.

When I consider the evidence overall, I am satisfied that a significant purpose for which the draft witness statements of Messrs Morrell, Dobson and Mrs Wiles and the George Weston employees came into existence up to 3 April 1996 was as part of the investigatory process and not for the sole or dominant purpose of prospective or reasonably anticipated legal proceedings.  The process of investigation is logically anterior to, and a precursor to, the point at which it may be said that proceedings are prospective or reasonably anticipated.  If evidence is required for proceedings it can be expected that until that evidence gathering process is well advanced, a view will not be able to be formed that proceedings are prospective or reasonably anticipated.  That is a reason why it is difficult to ascribe a dominant purpose to the preparation of the anticipated proceedings before the evidence gathering process is well advanced and the evidence has been evaluated. 

The matter became public on 24 November 1995 after the article in “The Age” newspaper had appeared and the radio interviews on radio station 3AW had occurred.  Professor Fels requested Mr Eva to interview Mr Dobson.  On the same day Mr Eva spoke to Mr Dobson and commenced to draft a witness statement for Mr Dobson.  Notwithstanding Mr Eva’s belief at this time that the Commission would be likely to issue proceedings against Tip Top in respect of Mr Dobson’s allegations, the investigation had hardly commenced and in my view a significant purpose for the drafting of the witness statement was in furtherance of the investigative process.  That significant purpose remained in my view at least until 20 February 1996 when Mr Eva sent a memorandum to Mr Asher telling him that he was about to commence settling draft witness statements prepared from George Weston employees.  However the significant purpose continued up to 3 April 1996 at which date Mr Henderson decided to retain counsel. 

From shortly after that time, when counsel’s advice was received, I consider that such preparation as occurred, including the preparation and finalisation of witness statements, occurred for the dominant purpose of the prospective or reasonably anticipated proceedings.  Even though the investigative function may have continued, the consequence of Mr Henderson’s note of 3 April 1996 and counsel’s advice was that the emphasis on the preparation of the Commission’s material changed so that the dominant purpose of its preparation was in relation to the prospective or reasonably anticipated proceedings.  If I am wrong so far as the date of 3 April 1996 is concerned, then certainly by 23 April 1996 the dominant purpose to which I have referred was in existence having regard to Mr Eva’s minute that he had been instructed to have the investigation into Safeway’s conduct completed.

I have used the term “significant” purpose because that term is more appropriate to describe what was occurring in November 1995 and into early April 1996.  If I am required to determine what was the dominant purpose for which the statements came into existence (and this is required by ss 118 and 122 of the Evidence Act) I am not satisfied, having regard to all the evidence, that the dominant purpose for which the statements came into existence was for the purpose of obtaining legal advice or for use in prospective or reasonably anticipated legal proceedings.  Mr Eva said that he drafted, or had drafted by the Commission staff, the witness statements with the intention of seeking the advice of the Australian Government Solicitor, that on 30 November 1995 he forwarded copies of draft witness statements by Messrs Morrell, Dobson and Mrs Wiles to the Australian Government Solicitor for advice and that he also wanted to involve the Australian Government Solicitor to assist in the preparation of evidence and to convey relevant legal advice to the Commission.  Mr Eva does not say that he drafted the witness statements for the sole purpose (or the dominant purpose) of submission to the Commission’s solicitors for advice.  He puts it rather on the basis that he drafted the statements for use in the legal proceedings which he believed were prospective or reasonably anticipated.  The submission of the statements to the Commission’s solicitors for advice was ancillary or subservient to this purpose.  And that purpose, in my opinion, was no more dominant than the purpose of carrying on the investigatory function and obtaining information for submission to the Commission for its consideration.  Although Mr Eva’s memorandum of 20 February 1996 had referred to a brief being prepared for the Australian Government Solicitor to advise on evidence there is no evidence that such a brief was completed or delivered.

The evidence discloses that Mr Eva was interviewing Sunicrust and Quality Bakers employees to obtain information as to whether those companies had breached the Act and to put that information before the Commission to enable it to decide whether or not to institute proceedings against those companies.  Although Mr Eva was also seeking to find out if they had any information against Safeway, the evidence is not such as to satisfy me that the dominant purpose of preparing witness statements from information supplied by these employees was for the purpose of use in prospective or reasonably anticipated legal proceedings.  Having regard to the nature and extent of the investigation into Sunicrust and Quality Bakers it seems to me that if there was dominant purpose for obtaining information and putting it into the form of witness statements that purpose was to obtain information and material for consideration and to place it before the Commission so that it could make a decision whether or not to institute proceedings against those companies.

It is a consequence of these findings that whether the appropriate test be the sole purpose test or the dominant purpose test the witness statements drafted and prepared for Messrs Morrell and Dobson, Mrs Wiles and the George Weston employees up to 3 April 1996 are not entitled to protection from production on the ground of legal professional privilege.  The same conclusion applies to the witness statements drafted and prepared for the Sunicrust and Quality Bakers employees up until the time it was decided that proceedings would not be instituted against those companies.  However there is no evidence as to when that point was reached prior to the institution of these proceedings and it therefore follows that the statements of those employees drafted and prepared prior to the date of the institution of these proceedings are not entitled to protection from production.

The documents in respect of which privilege from production is claimed are not only witness statements but also include file notes, memoranda and covering letters.  Insofar as, and to the extent that, such documents relate to the drafting and preparation of the witness statements their privilege from production falls with the witness statements.  To the extent that they are not so related but rather relate to the seeking or giving of legal advice or the preparation for actual or prospective or reasonably anticipated legal proceedings they are entitled to protection from production on the ground of legal professional privilege.

However, Ms Peter’s notes of interviews between the Commission’s officers and George Weston witnesses are not entitled to protection from production on the ground of legal professional privilege.  Ms Peter did not suggest that the notes were brought into existence for the purpose of giving legal advice.  Rather they were her notes of the interviews made in order to prepare the witness statements.  In her affidavit Ms Peter simply said “GWF claims legal professional privilege in my notes.”  After each interview the Commission prepared a draft statement which was sent to Ms Peter for comment.  She then says:

“I would then review each draft in the light of the notes that I had made and my recollections of, and instructions regarding the events the subject of the draft statement.”

I infer from this evidence that the notes recorded Ms Peter’s version of what the witnesses had said.  As the statements themselves are not entitled to protection from production, neither are the notes of the interviews from which the statements were made up. 

If I am wrong in my findings as to the purpose for which the documents came into existence it becomes necessary to determine what is the appropriate test to apply on a claim for privilege from production on the grounds of legal professional privilege.  It also becomes necessary, in such event, to determine at what point of time legal proceedings were reasonably anticipated, whether the relevant documents are properly described as confidential and also the issues raised of common interest privilege and waiver.

What is the appropriate test to apply?

The first question to determine is what is the appropriate test to apply in resolving the claim for legal professional privilege at this interlocutory stage of the proceedings.  Safeway contends that the sole purpose test still applies whereas Mr Beach who appeared for the Commission, submitted that the Evidence Act had impliedly repealed or abrogated the principles laid down in Grant v Downs (supra) and that the dominant purpose test applied at interlocutory stages of proceedings as well as at the trial of the proceedings.  However, there is a difficulty with this proposition as in order to sustain it one must find in the provisions of the Evidence Act the intention to abrogate the common law principle.  Such an intention was found by the High Court in Corporate Affairs Commission (NSW) v Yuill (1991) 72 CLR 319 especially at 323.  In that case there was a finding that the legislation sufficiently evinced an intention that legal professional privilege should not be an answer to a failure to comply with s 275 of the Corporations Code.  It must not be forgotten that the doctrine of legal professional privilege is not merely a rule of evidence but is a basic and fundamental doctrine of the common law:  Baker v Campbell (1983) 153 CLR 52, 88 ‑ 89, 94, 116 ‑ 117, 127 ‑ 128; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 141 ALR 545, 574; Goldberg v Ng (1995) 185 CLR 83, 93; Attorney‑General (NT) v Maurice (1986) 161 CLR 475, 480; Carter v Managing Partner Northmore Hale Davey & Leake (1995) 183 CLR 121, 123, 145, 161.  Because of the fundamental nature of the doctrine of legal professional privilege, a finding should not be made that it has been abrogated by statute unless there is a clear indication that such a position was intended:  Baker v Campbell (supra, 123).

Unconstrained by appellate authority binding me on the issue whether the provisions of the Evidence Act and in particular ss 118 and 122 cover and govern the issue whether legal professional privilege exists or has been waived in relation to the production of documents at the interlocutory or ancillary process stage of discovery/inspection and return of subpoena for notices to produce, I would have reached the conclusion that the common law “sole purpose” test and the doctrine of waiver on account of fairness applied and not the provisions of the Evidence Act.  I would have reached that conclusion on the basis that there is nothing in the Evidence Act which demonstrates that the legislature has directed itself to the interlocutory stages of legal proceedings and has intended to alter the common law position of privilege at that stage.  I would have reached that conclusion in the following manner.

The sole purpose test was set out in Grant v Downs (supra) in the judgment of the majority, Stephen, Mason and Murphy JJ at 688:

“All that we have said so far indicates that unless the law confines legal professional privilege to those documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings the privilege will travel beyond the underlying rationale to which it is intended to give expression and will confer an advantage and immunity on a corporation which is not enjoyed by the ordinary individual.  It is not right that the privilege can attach to documents which, quite apart from the purpose of submission to a solicitor, would have been brought into existence for other purposes in any event, and then without attracting any attendant privilege.  It is true that the requirement that documents be brought into existence in anticipation of litigation diminishes to some extent the risk that documents brought into existence for non‑privileged purposes will attract the privilege but it certainly does not eliminate that risk.  For this and the reasons which we have expressed earlier we consider that the sole purpose test should now be adopted as the criterion of legal professional privilege.”

The Evidence Act in s 118 and s 119 enacted the dominant purpose test as follows:

“118    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 made between the client and a lawyer; or

(b)        a confidential communication made between 2 or more lawyers acting for the 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.

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.”

Section 122 similarly refers to “the adducing of evidence” in the following terms:

(1)       This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2)       Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made:

(a)        in the course of making a confidential communication or preparing a confidential document; or

(b)        as a result of duress or deception; or

(c)        under compulsion of law; or

(d)        if the client or party is a body established by, or a person holding office under, an Australian law - to the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held.

(3)       Subsection (2) does not apply to a disclosure by a person who was, at the time, an employee or agent of a client or party or of a lawyer unless the employee or agent was authorised to make the disclosure.

(4)       Subject to subsection (5), this division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than:

(a)        a lawyer acting for the client or party; or

(b)        if the client or party is a body established by, or a person holding an office under, an Australian law - the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held.”

These provisions only relate to the situation where evidence is sought to be “adduced”.  In my opinion that situation can only occur in the course of a trial as it is at that stage that evidence is “adduced”, led or admitted.

The Second Reading Speech for the Evidence Act makes it clear that the Evidence Act is enacting the recommendations and proposals of the Australian Law Reform Commission.  In its report on Evidence (No 38), paragraph 199 states that:

“The Terms of Reference limit the Commission to considering the application of the privilege in the courtroom where evidence is sought to be given.  Situations may arise where a party obtains access to documents (eg in pre‑trial discovery, or search warrants) outside the courtroom which are protected in the courtroom by the proposed privilege.”

As a matter of statutory interpretation I am satisfied that the dominant purpose test enacted in ss 118 and 119 does not apply to the interlocutory stages of discovery, inspection and the return of subpoenas for production.

However there are a number of decisions which support the proposition that s 118 applies to the interlocutory stage of discovery and inspection, or at least has an impact on that interlocutory stage and I turn to those decisions.

In Trade Practices Commission v Port Adelaide Wool Co Pty Ltd (supra) Branson J was considering an application for production under O 15 r 15 of the Federal Court Rules in respect of which documents a claim for privilege from production had been made.  The question arose as to whether the common law sole purpose test applied in relation to the claim for privilege or whether ss 118 and 119 of the Evidence Act applied.  Her Honour did not find it necessary to determine that question (60 FCR 369).  However, Her Honour decided that she was not satisfied that production of a document was necessary (within the meaning of O 15 r 15) at an interlocutory stage if the document could not be adduced at trial.  In essence Her Honour sought to equate the position which would occur at trial with the position which would occur at the interlocutory discovery and inspection phase.  Her Honour said (at 369):

“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.”

As I observed earlier Her Honour did not consider that the circumstances before her made it necessary for her to rule on the issue.

However, Her Honour gave paramount effect to what would happen at trial.  Her Honour said (at 370):

“The documents required to be discovered by O 15 of the Federal Court Rules are not limited to documents which would be admissible in evidence:  Commonwealth v Northern Land Council at 23.  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.”

Her Honour then concluded:

“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 purpose of O 15 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.”

Her Honour repeated and re-stated this approach in Sparnon v Apand Pty Ltd (supra), 326.

In effect her Honour was applying the dominant purpose test at the interlocutory discovery and inspection stage.  In my opinion this approach does not give enough significance to the fact that at the time of her Honour’s judgment the sole purpose test in Grant v Downs (supra) applied at the interlocutory stage.  I do not regard it as a curious result that a party can be compelled to produce a document for inspection on discovery, prepared for the dominant purpose of obtaining legal advice, notwithstanding that at trial that object could be taken to the admission of that document into evidence.  As I observed in Meltend Pty Limited v Restoration Clinics of Australia Pty Limited (supra, 404 ‑ 405) I can conceive of situations where a document not admissible in evidence can put an opposing party on a train of inquiry which will assist it to obtain further evidence or enable it to ask questions of witnesses it might not otherwise have thought it appropriate to ask.  In other words, one can make derivative use of documents not themselves admissible in evidence.

In BT Australasia Pty Ltd v State of New South Wales (1996) 140 ALR 268 Sackville J applied the reasoning of Branson J and reached the same conclusion, namely that he was not satisfied (at 271):

“that an order for production or inspection of documents was necessary as part of the pre‑trial management of the matter in circumstances where the contents of the documents could not be adduced as evidence at trial by reason of client legal privilege”.

In Esso Australia Resources Limited v The Commissioner for Taxation of the Commonwealth of Australia (unreported, Federal Court of Australia, 21 November 1997) Foster J had difficulty in accepting Branson J’s views and with great respect to her Honour I share that difficulty.

A different approach was taken by McLelland CJ in Eq in the Supreme Court of New South Wales in Telstra Corporation v Australis Media Holdings Limited (1997) 41 NSWLR 277, who decided that the dominant purpose test applied to documents produced on subpoena.  His Honour’s approach was also followed in relation to documents the subject of a notice to produce by Hunter J the Supreme Court of New South Wales, Commercial Division in Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (unreported, 3 March 1997).  However, with very great respect to his Honour I have difficulty with the reasoning by which he reached his conclusion.  McLelland CJ in Eq said there would be anomalous and impractical consequences, confusion and disorder if a different test applied at the trial stage and at the interlocutory discovery stage.  There is great force in this proposition but it does not follow that there has been an implied repeal of the sole purpose test by the Evidence Act.  His Honour appeared to accept that the wording of the Evidence Act was such that it did not deal with the test to be applied in determining the existence of legal professional privilege at the interlocutory discovery stage.  Once this proposition is accepted it is difficult to see how one can reach the conclusion that the same test applies at both stages.

His Honour said (at 279):

“Although as a matter of construction the Act has no direct application to ancillary processes, nevertheless in my opinion the enactment of the Evidence Act principles in respect of the adducing of evidence at a hearing has resulted, as an indirect or flow‑on effect, in the application of equivalent principles to all ancillary processes.  As Dawson J observed in Baker v Campbell (1983) 153 CLR 52 at 126:  ‘The common law doctrine of legal professional privilege emerged in the sixteenth century as a natural exception to the then novel right of testimonial compulsion.’

            Subsequently, the doctrine established in the context of testimony at a trial was extended to ancillary processes, as those processes themselves emerged and developed.  In this sense the principles of legal professional privilege applicable to testimony at a trial provide the paradigm, and the extension of the same principles to ancillary processes as derivative in nature.  Accordingly, any change to the paradigm should rationally be reflected in the derivatives.”

His Honour concluded (at 280):

“For the above reasons, the Evidence Act principles should be treated as applying, not directly but derivatively to the claims of privilege presently under consideration.”

In my respectful opinion such impractical consequences as might arise if different principles of legal professional privilege are applied to the production and inspection of a document and the adducing of evidence of the document at trial ought not warrant the conclusion that the Evidence Act has impliedly repealed the common law sole purpose test laid down in Grant v Downs (supra).  This is more particularly so where the words of the statute and the legislative intent is clear:  (cf Abigroup Ltd v Akins (unreported, Bainton J, Supreme Court of New South Wales, Commercial Division, 2 October 1997).

The reasoning and approach of McLelland CJ in Eq was adopted and followed in this Court by Sackville J in Towney v The Minister for Land and Water Conservation for New South Wales (1997) 147 ALR 402.  At 412 his Honour said:

”The decision of McLelland CJ in Eq is not binding on this court.  However, it is a considered decision on an identical point, concerning legislation that has been enacted both by the Commonwealth Parliament and by the Parliament of New South Wales.  Both enactments derive from a common source, namely, the ALRC final report.  Moreover, the reasoning of McLelland CJ in Eq is consistent with the dicta of Branson J in Trade Practices Commission v Port Adelaide Wool.  I think that the appropriate course is to follow the decision when determining whether documents said to be the subject of privilege should be produced to the court or be made available for inspection, unless I consider that the decision is clearly wrong.  Dr Renwick did not put forward any reason to suggest that the decision is clearly wrong and I do not think it is.  On the contrary, with respect, I think that the reasoning of McLelland CJ in Eq is convincing.  Accordingly, I approach the present case on the basis that the question of loss of privilege in relation to the claimed documents is to be determined according to the principles expressed in the relevant provisions of the Evidence Act.”

I have difficulty with his Honour’s reasons for following the reasoning of McLelland CJ in Eq in Telstra Corporation.  The fact that both enactments derive from the Australian Law Reform Commission final report supports the proposition, in my view, that the dominant purpose test is not to be applied at the interlocutory discovery and inspection stage and that that stage is not governed by any provision in the Evidence Act.

The reasoning of Foster J in Esso Australia Resources Limited v The Commissioner of Taxation of the Commonwealth of Australia (supra) supports the approach to which I have referred.  His Honour declined to follow the reasoning in Telstra Corporation and Towney and concluded that the sole purpose test laid down by the High Court in Grant v Downs (supra) can only be altered by the High Court by an Act of the Parliament, that the Evidence Act has only altered the test in relation to trial proceedings and that the sole purpose test remains the test to be applied in interlocutory proceedings.  (See also Zemanek v Commonwealth Bank of Australia (unreported, Hill J, Federal Court of Australia, 2 October 1997)).

In Dyno Nobel Asia Pacific Limited v Sunny Shore Shipping Finance Inc (unreported, Federal Court of Australia, 24 October 1997) Tamberlin J, in considering whether documents referred to in discovery were privileged from production, held that the controlling principles relating to client legal privilege were those set out in Part 3.10 of the Evidence Act particularly in ss 118 and 119 and he applied the test of dominant purpose.  (See also Re Z (1996) 134 FLR 40 where a majority of the Full Court of the Family Court took a similar approach).

I therefore, disagree with the conclusion reached by McLelland J.  I also venture to disagree with the approach taken by Branson J in accepting the proposition that as a privileged document cannot be adduced into evidence at trial it is not necessary that it be produced at the interlocutory stage as no use can be made of it at trial.  In my opinion, this approach takes an unduly narrow and restrictive view of what is meant by “necessary”.

However a recent decision of the Full Court of the Federal Court obliges me to reach a different conclusion.  In The Adelaide Steamship Co Ltd and Australian Securities Commission v Spalvins & Ors (unreported, Olney, Kiefel and Finn JJ, 2 March 1998) the Full Court, whilst acknowledging that in ancillary processes (as distinct from trial or hearing) “it is the common law which determines the availability of a client legal privilege claim” (p15) concluded that “the common law must now adapt itself, and adapt itself in such a way as to “include [the [Evidence] Act] as a fundamental part of its fabric”.  Their Honours said that “the legislatively prescribed attributes of the privilege ought to be reflected in those of the common law in jurisdictions where the two operate in tandem.  Accordingly their Honours held that the test to be applied in ancillary process was the dominant purpose test so that the effect of the decision is that Pt 3.10 Div 1 of the Evidence Act “should, through the common law, be applied derivatively to ancillary proceedings”.  To the extent to which established common law principles were inconsistent with the Evidence Act and its purposes their Honours regarded the common law principles “to be taken as being modified correspondingly so as to avoid such inconsistency”.

I have some reservations as to whether the principles and approach adopted by the Full Court applies to the circumstances and issues before me.  In that case the court was concerned with documents which came into existence for the purpose of giving the client legal advice.  Before me, it is submitted that the documents are privileged because they have come into existence in effect for the purpose of the second limb in Grant v Downs (supra), namely for use in legal proceedings which were prospective or reasonably anticipated at the time the documents came into existence.  Sections 118 and 119 of the Evidence Act do not appear to refer to documents which come into existence for the purpose of use in legal proceedings such as are covered by the second limb in Grant v Downs and are referred to by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246 sub‑paragraph (b) unless it be accepted that the reference to the client “being provided with professional legal services” relating to anticipated or pending proceedings is a reference to the use of the documents by the client’s lawyer in those proceedings.  In Attorney‑General (NT) v Maurice (supra) Deane J identified what I have called the second limb of Grant v Downs as covering confidential statements and other materials:

“which have been made or brought into existence for the sole purpose of preparing for existing or contemplated judicial or quasi‑judicial proceedings,”

and his Honour referred generally to Baker v Campbell (supra).

None of the parties submitted that the Evidence Act provisions did not cover the second limb of Grant v Downs and I proceed on the basis that it does.

Even if I am wrong in that respect I consider that I am bound by the reasoning in The Adelaide Steamship and Australian Securities Commission v Spalvins & Ors (supra) to apply the dominant purpose test to the circumstances and facts before me.  The Full Court expressed its reasons in the following terms:

“We acknowledge that a consequence of this view is that the ‘sole purpose test of Grant v Downs ought not to be applied as part of the common law in Evidence Act jurisdictions.  Given that the ‘dominant purpose’ test is the legislatively prescribed one where evidence is to be adduced, we can see no reason for a different test in ancillary processes.  We would add that the reasoning in Grant v Downs provides no justification for the maintenance of a difference in approach.  Rather its premises is to the contrary.

... The effect of our decision is that Part 3.10 Division 1 of the Act should, through the common law, be applied derivatively to ancillary proceedings.  We do not need to express a concluded view on the questions (a) whether that Division in fact codifies the law on client legal privilege and (b) whether the common law in Act jurisdictions ought in consequence be regarded as limited in its content to the principles in Division 1.  We need however to emphasise that, insofar as previously established principles of the common law are now inconsistent with the Act and its purposes, they are to be taken as being modified correspondingly so as to avoid such inconsistency.”

I am therefore bound to proceed on the basis that at the interlocutory stages of discovery and the return of subpoenas the dominant purpose test applies and a court in determining issues of legal professional privilege arising at these stages must determine the issue by reference, in particular, to ss 118 and 122.

Alternative ground for existence of privilege from production

There is an alternative basis for protection from production other than the basis predicated upon a communication between client and lawyer and that is documents brought into existence for the purposes of use in or for existing or contemplated litigation and not necessarily communicated at a given point of time to the legal adviser by the client on whose behalf they were brought into existence:  Trade Practices Commission v Sterling (supra) 246; Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63, 66; Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (1994) 52 FCR 578, 582 affirmed on appeal (1994) 54 FCR 321 ‑ 322.  In such circumstances the documents must be brought into existence for “the sole purpose of preparing for existing or contemplated judicial or quasi‑judicial proceedings”:  Attorney‑General (NT) v Maurice (supra) at 490 per Deane J.

I should point out that in Nagan v Holloway (1996) 1 Qd R 607 Williams J held that the sole purpose test in Grant v Downs (supra) did not apply to the second limb of Grant v Downs (supra).  His Honour referred to the passage from Grant v Downs (p27 above) and said (at 610):

“Grammatically the phrase ‘for the sole purpose of’ cannot be made to qualify the later expression ‘for use in legal proceedings’.  In other words if the document came into existence for use in litigation pending, threatened, or anticipated, the privilege will attach on that narrow ground.”

I consider that this is too narrow a reading of Grant v Downs (supra) because at 689 the majority said:

“The privilege requires a combination of dedication to the stipulated purpose and reasonable anticipation that litigation will ensue before it is attracted.”

His Honour observed that a similar result had been reached by Malcolm CJ in Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1, 4 but in that case Malcolm CJ had said:

“... nothing was said in [Grant v Downs] which would limit the operation of the privilege which applies to evidence obtained and documents brought into existence for the sole purpose of litigation”.

However these cases must now be read in the light of The Adelaide Steamship Co Ltd and Australian Securities Commission v Spalvins & Ors (supra).

What is protected from production?

Although the majority of the High Court in Grant v Downs (supra) couched their test of the applicability of legal professional privilege to documents in terms of the purpose of the bringing into existence of the documents (see also Waterford v The Commonwealth (1987) 163 CLR 54, 66) more recent decisions have emphasised that it is the act of the communication of the document which attracts the privilege rather than the existence of the document itself for the stated purpose.  In Carter v Managing Partner, Northmore Hale Davey & Leake (supra), McHugh J said at 166:

“It is the communication and not the document that needs and is given protection.”

In Commissioner, Australian Federal Police v Propend Finance Pty Ltd (supra) this proposition was not universally advanced.  At 547 ‑ 548 Brennan CJ said:

“Yet the purpose of bringing an original document into existence may not be the purpose of bringing the copy into existence and, since Grant v Downs, the protection of legal professional privilege has been confined to documents that have been brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings.

               The test is anchored to the purpose for which the document was brought into existence; the use to which a document is put after it is brought into existence is immaterial.”

Brennan CJ then referred to the observation of Mason J in O’Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1 at 22 - 23:

“But if communications in written form are to be privileged they must still be confidential communications between solicitor and client made for the purpose of advice or for the purpose of use in existing or anticipated litigation.  The documents must come into existence for, and be prepared for, that purpose.  So in Grant a majority of this court held that legal professional privilege is confined to documents which are brought into existence for that sole purpose”.

Brennan CJ then concluded at 549:

“Authority and principle thus combine to establish that, prima facie, copies of non‑privileged documents are privileged if the copies are brought into existence solely for the purpose of obtaining or giving legal advice or solely for use in litigation that is pending, intended or reasonably apprehended.”

Dawson J (who dissented) said at 554:

“... to say that a document is privileged is merely a shorthand way of saying that the communication constituted by the document is privileged.”

However he referred to the same passage of Mason J in O’Reilly v Commissioners of State Bank of Victoria (supra) to which Brennan CJ had referred, repeated what he had said in Baker v Campbell (supra), and said:

“... it is the communication of information that is protected by legal professional privilege against disclosure.  That is so even where a document is brought into existence for use in existing or anticipated litigation, although in that case the information communicated may be of a somewhat different kind.”

Toohey J (who dissented) said at 562:

“... privilege does not attach to a piece of paper.  It attaches to a communication, written or oral, and it is the communication that is at issue.  While it is natural to speak of legal professional privilege in terms of documents, it is the nature of the communication within the document that determines whether or not the privilege attaches.”

Gaudron J said at 576:

“... legal professional privilege does not protect documents, as such, but protects communications between lawyer and client.”

McHugh J said at 583:

“Legal professional privilege is concerned with communications either oral, written or recorded, and not with documents per se.”

At 591 Gummow J referred with approval to the statement of Lindgren J in the Full Court:

“Although it is convenient to speak of ‘privileged documents’, this involves an ellipsis which is apt to mislead.  What are privileged from disclosure are communications, whether between lawyer and client or between one of them and a third party, and information which happens to be in documentary form.”

Kirby J said at 606:

“If the ‘sole purpose’ for creating the copies was to communicate them in order to secure legal advice, then the copies had an existence and a relevant ‘sole purpose’ of their on separate from the originals.”

I have referred to all these passages because in Carmody v Mackellar (1997) 148 ALR 210 the Full Court of the Federal Court (Black CJ, Lindgren and Sackville JJ) said at 229:

“In Carter v Managing Partner, Northmore Hale Davey & Leake (1995)183 CLR 121; 129 ALR 593, a case involving documents, McHugh J (at CLR 166; ALR 626) emphasised that ‘it is the communication and not the document that needs and is given protection’ by legal professional privilege.  To the same effect are passages in Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 141 ALR 545 (Dawson J), at 562 (Toohey J), at 583 (McHugh J) and at 591 (Gummow J).”

I do not consider that the emphasis of four of the judges in Propend and the Full Court in Carmody v Mackellar (supra) detracts from the proposition that the primary relevant inquiry in determining whether a claim for privilege from production on the ground of legal professional privilege should be upheld, is to inquire as to the purpose for which the document came into existence.  However as these cases make clear, that the purpose must be for the purpose of communicating information for the giving of legal advice, communicating the legal advice itself or communicating information to be used in existing or apprehended litigation.

I turn to the issues of:

(a)        at what point of time were legal proceedings reasonably anticipated;

(b)        whether any of the documents in respect of which legal professional privilege has been claimed are properly to be described as confidential documents;

(c)        common interest privilege; and

(d)        waiver.

When were legal proceedings reasonably anticipated?

The key submission made by Safeway is that there was no evidence that at any time relevant to the point of time at which the various documents came into existence, the Commission had made a decision to issue proceedings against Safeway.  Safeway then says that accordingly none of the documents came into existence for the purpose of the legal proceedings, which were not in contemplation at that time, but rather came into existence as part of, and for the purposes of, the continuing ongoing investigation.  Safeway says that Mr Eva’s evidence is of no probative value as to when the Commission decided to institute proceedings as that was not a matter for his decision.

The common law protection for documents brought into existence for the sole purpose of use in legal proceedings covers proceedings which are either existing or anticipated:  O’Reilly v Commissioners of State Bank of Victoria (supra) 22-23; Baker v Campbell (supra) 86, 122, Commissioner, Australian Federal Police v Propend Finance Pty Ltd (supra) 576-577.  Whether proceedings are anticipated must be determined by reference to objective criteria and not simply by reference to the subjective statements of a participant in the relevant information gathering or litigation preparing process.  A document or communication cannot be given protection from production by the creator of the document or the person propounding it in the form of a communication uttering the litany - I brought it into existence for the purpose (be it sole or otherwise) of legal proceedings.  Nor is it sufficient, in my view, for the person to say - I anticipated proceedings would be brought at the time I brought the document into existence and the purpose for which I did so was those proceedings.  Of course, as the authorities to which I have referred establish, it is not the circumstances which give rise to the production or preparation of the document itself which invoke the privilege but rather the fact that it is brought into existence for the purpose of submission to legal advisers for advice or for use in legal proceedings.

Even if I accept Mr Eva’s evidence as to his purpose for bringing the documents into existence (subject to the qualification of his misapprehension in that respect) that does not conclude the matter.  It is necessary to determine whether, at the time the documents were brought into existence, it can be said that legal proceedings were reasonably anticipated.  Mr Smith submitted that it was only the intention and purpose of the Commission which was relevant.  I accept that submission to the extent that it identifies certain objective criteria to which regard may be had in determining whether legal proceedings were anticipated, but I do not regard any evidence of the Commission on the point of whether legal proceedings were reasonably anticipated as determinative of the issue.  That issue must be determined in the context of all relevant facts and circumstances.  However, I do not accept the submission that it is the purpose of the Commission determined or stated as an organic entity alone which determines the purpose for which a document prepared, or communication made, by an officer of the Commission comes into existence.  On such a view there would be many occasions on which one could not relate any purpose to the creation of a document or the making of a communication by an officer of the Commission, that is to say, when no specific statement was made by the Commission itself on the issue.

Whether legal proceedings are reasonably anticipated requires a consideration of the existing state of facts taken in conjunction with the subject‑matter which gives rise to the context in which the document comes into existence or the communication is made.  Where legal proceedings are in existence the relevant relationship between the proceedings and the document or communication is clear.  Where the legal proceedings are anticipated one needs more than speculation as to the possibility of such proceedings; one needs a probability or likelihood that such proceedings will commence.  It is putting it too highly, in my view to say that a decision must have been made by the moving party or authority that such proceedings will be commenced.  It is sufficient in my view, that the moving party or authority has made a decision, for example, that subject to being satisfied as to the strength of the case, proceedings be issued or that, short of such decision, it can be reasonably anticipated on the facts as known, that legal proceedings are likely.  The concept of anticipated proceedings involves the notion that there is a reasonable probability or likelihood that such proceedings will be commenced - not that they will be but rather that more probably than not they will be.

Some early authority suggests that in order for legal proceedings to be reasonably apprehended there must be a “high probability, amounting to almost certainty, that an action will ensue”:  Collins v London General Omnibus Company [1893] 68 LT 831, 833; Warner v Women’s Hospital [1954] VLR 410, 420.  However that test, based on English authority , would appear to be inconsistent with two passages in the judgment of the majority of the High Court in Grant v Downs (supra).  At 682 - 683 Stephen, Mason and Murphy JJ said:

“Although to sustain the privilege it is not necessary that the document has been brought into existence on the advice of the solicitor, it is essential that the circumstances are such that the court can subsequently conclude, viewing them objectively, that litigation can be reasonably anticipated - see Feverheerd v London General Omnibus Co Ltd (1918) 2 KB 565; Catoldi v Commissioner for Government Transport (1969) 1 NSWLR 561; (1970) 1 NSWLR 565 at 568 - and this at the time when the preparation of the document is undertaken.  However the fact that the document is brought into existence in anticipation of litigation is not sufficient, without more, to attract privilege; the document must be called into being for use in litigation or for advice and it is the extent to which this purpose is intended to be served by the preparation of the document that is in question.”

Later at 689 their Honours said:

“There was no doubt a reasonable anticipation that litigation might arise out of the accident.  This, however, does not overcome the deficiency in point of purpose which is revealed by the affidavits and the character of the documents, for, as we have already observed, the privilege requires a combination of dedication to the stipulated purpose and reasonable anticipation that litigation will ensue before it is attracted.”

I do not consider that applying a test of reasonable anticipation of legal proceedings impermissibly widens the scope of the protection of legal professional privilege because it is still necessary to establish that the dominant purpose for the coming into existence of the relevant documents was for use in those reasonably anticipated proceedings.  In Gold Securities Australia Pty Ltd v Siebe PLC (unreported, Supreme Court of New South Wales, Commercial Division, 31 October 1990) Giles J said at 16:

“I do not think that a formula can be laid down to provide an answer in every case in which it is said that there was an anticipation of litigation.  It must be determined on the facts of each case whether the document or documents in question were brought into existence sufficiently in anticipation of litigation, and that determination must be made bearing in mind -

(i)        that the cases to which I have referred [Warner v The Women’s Hospital and Collins v London Omnibus Co Ltd] were decided prior to Grant v Downs establishing the sole purpose test in relation to bringing the document or documents into existence for use in anticipated litigation:  the sole purpose test would normally mean that the litigation should have been anticipated as something very likely to occur;

(ii)       that Grant v Downs emphasised (at 685 per Stephen, Mason and Murphy JJ) that legal professional privilege should be confined within strict limits:  the considerations there mentioned are here present, and militate against an over‑ready finding of sufficient anticipation of litigation;

(iii)      that a finding of anticipated litigation is but one step along the way to this head of legal professional privilege, the (sole) purpose of use in the anticipated litigation being a further step:  this both reflects upon the necessary anticipation of litigation, and provides an independent constraint upon the claim to legal professional privilege.”

(In Laurenson v Wellington City Corporation (1927) NZLR 510, Skerrett CJ said that “a mere vague apprehension of litigation” was insufficient to found a claim for privilege; rather he looked for a probability that litigation would arise after a cause of action had arisen.)

On this basis I must therefore look at the events and circumstances which occurred in and after November 1995 to determine at what point of time, prior to the issue of this proceeding, it can be said that there was a reasonable probability or likelihood that proceedings would be issued.  In that context I consider that Mr Eva’s belief as to the likelihood of legal proceedings and his practice and purpose in preparing witness statements to be relevant to, and therefore admissible on, the issue of the reasonable probability or likelihood of proceedings being commenced.  However this is but one of the numerous factors and circumstances to be taken into account in determining this issue.  In particular, this evidence is not, of itself, determinative of the issue.  Other factors which must be taken into account include any views expressed by the Commission or other responsible officers of the Commission and the state of the evidence against any of the proposed respondents at any given point of time.

Having regard to the evidence that the information gathering process took some time and that evidence had to be obtained from a number of different sources I do not consider that it can be said that legal proceedings were reasonably anticipated until it became apparent that there was sufficient evidence to proceed against at least George Weston for breaches of the Act and that George Weston would not be contesting substantive liability but would be submitting to the imposition of pecuniary penalties.  Although at an early stage in November 1995 Mr Eva believed there was a possibility of proceedings against Safeway he acknowledged that such proceedings depended on whether he could get evidence against Safeway.  It was only when it became apparent that George Weston employees would be providing evidence that it could fairly be said that legal proceedings against Safeway were reasonably anticipated, even though at this stage the Commission had not yet resolved to institute such proceedings. 

In my opinion, legal proceedings were reasonably anticipated against George Weston on 13 December 1995 when the Commission instructed Mr Eva to prepare a penalty assessment.  By this time George Weston had proposed to admit guilt in relation to the Ferntree Gully incident and submit to the imposition of pecuniary penalties and co‑operate with the Commission by supplying evidence.  If I am incorrect in my conclusion that legal proceedings against George Weston were reasonably anticipated by 13 December 1995 then I consider that that position was certainly reached by 19 December 1995 when Mr Eva wrote to Ms Peter and confirmed the terms of the understanding reached with the Commission as to the basis on which George Weston and its employees would co‑operate with the Commission.  This is not to say that by this time the investigative process had concluded.  It had not; indeed it continued well into 1996 so far as Safeway was concerned but it was running concurrently with a period during which it was apparent that legal proceedings against George Weston were reasonably anticipated.

By 13 December 1995 I do not consider that it can be said that proceedings were reasonably anticipated against Safeway as Mr Eva, and through him the Commission, was still very much in an investigative mode so far as Safeway was concerned.  Although Mr Eva was anticipating on 20 February 1996 that proceedings would be instituted against Safeway, it does not appear that at that time the evidence available to the Commission justified the conclusion that proceedings were reasonably anticipated against Safeway.  That position was not reached until 6 March 1996 at the earliest but in any event by 3 April 1996.  On 3 April 1996 Mr Henderson sent a memorandum to Mr Asher in which he referred to his request for a brief to be forwarded to counsel and to the fact that Safeway was anxious to talk.  On 4 April 1996 a “brief of evidence” had been forwarded to counsel.  It is not to hhe point that the Commission had not yet decided to institute proceedings.  Certainly by this date proceedings were reasonably anticipated against Safeway.

However it is artificial to consider the issue whether legal proceedings were anticipated against Safeway separately from whether legal proceedings were reasonably anticipated against George Weston.  They were both said to be participants in a number of separate breaches of the Act and although the Commission was seeking to ensure it had admissible evidence against Safeway, it is sufficient, in order to determine whether legal professional privilege could be claimed, to ask whether legal proceedings were reasonably anticipated against one or more of the participants in the alleged breaches of the Act.  The draft witness statements were to be used in relation to the proceedings proposed to be brought in respect of those breaches and it was not necessary to identify all the proposed respondents before the privilege could be said to arise.  Nor was it necessary to have identified all the incidents to be included in the proceedings.

Are the documents “confidential” documents

It is an integral component of the claim for privilege from production on the ground of legal professional privilege that the relevant documents be confidential:  Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (supra) 320 ‑ 322; Attorney‑General (NT) v Maurice (supra) 490, Baker (supra) 93 ‑ 94; Carter v Managing Partner, Northmore Hale Davey & Leake (supra) 126 ‑ 128, 132 ‑ 133, 144 ‑ 147, 160 ‑ 161; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (supra) 355 ‑357.

The Commission submits that the draft witness statements are confidential documents.  Safeway submits to the contrary as the statements have been obtained from persons with interests adverse to those of the Commission.  There was no express or explicit statement made by either the maker of the statements or the Commission that the statements were to be kept confidential until used in legal proceedings.  Although the privilege to be claimed in relation to the statements and other documents may be the privilege of the Commission and not the maker of the statement Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (supra), it is still necessary to establish that the maker of the statement was under a duty of confidentiality in relation to the statement.  Did such a duty arise on the facts here?

Safeway submits that a communication whereby a party to litigation (or potential litigation) voluntarily tells its story to its opponent cannot be a confidential communication:  Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 14 NSWLR 132, 133 ‑ 134.  Mr Smith relied upon several passages from Wigmore (McNaughton Revision) 1961, Vol VIII, para 2285 for the proposition that in order to establish the privilege against disclosure of a communication the communication must originate in a confidence that the communication will not be disclosed.  Mr Smith says that the witness statements are simply products of non‑privileged and non‑confidential communications and it is said that one cannot convert a non‑confidential communication into a privileged document.  Stated so broadly, that proposition cannot stand in the light of the judgments in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (supra).  It is also inconsistent with decisions which accept that “witness statements brought into existence for the purpose of litigation attract legal professional privilege”:  Carbone v National Crime Authority (1994) 126 ALR 79, 92; Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 124 ALR 493, 496 ‑ 497.

It is important to draw a distinction between the two limbs upon which the claim for privilege is based, because the nature of the relevant confidentiality which is required may differ between the two limbs.  It is relatively easy to identify the confidentiality which exists in relation to the communications between client and legal adviser.  As the majority observed in Grant v Downs (supra) at 685 this head of privilege keeps their communications secret.  But documents brought into existence for use in legal proceedings, in my view, fall into a different category of confidentiality.  Many documents which fall within this category come into existence for the purpose of use or disclosure in the legal proceedings once the trial or hearing has commenced.  Yet it is not suggested that such documents lack the requisite degree of confidentiality required to preserve the privilege from production.  Note for example category (e) of Lockhart J’s classes of privileged documents in Trade Practices Commission v Sterling (supra at 246).

“Communications and documents passing between the party’s solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence.  See Wheeler v Le Marchant (14); Laurenson v Wellington City Corporation (15), and O’Sullivan v Morton”.

(Lockhart J’s judgment was described as “helpful” by Deane J in Waterford v The Commonwealth (supra, 87); see also Hartogen Energy Limited (In Liq) v Australian Gas Light Company (supra, 561); Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (supra, 321).

A document recording or containing a witness statement can be regarded as a document privileged from production if it is brought into existence for the dominant purpose of use in anticipated legal proceedings, even though it may be said that the communication of the information recorded in the document by the witness to the maker of the document (in this case Mr Eva) is not confidential because, for example, it is a communication between two parties with adverse interests.  Propend (supra) is authority for the proposition that a document can become privileged from production even if it is a copy of a non‑privileged document.  In Commissioner, Australian Federal Police v Propend Finance Pty Ltd at 549 Brennan CJ said:

“Authority and principle thus combine to establish that, prima facie, copies of non‑privileged documents are privileged if the copies are brought into existence solely for the purpose of obtaining or giving legal advice or solely for use in litigation that is pending, intended or reasonably apprehended.”

(See also Gaudron J at 576 ‑ 577, McHugh J at 585).

If a copy of a non‑privileged document can become privileged from production because of the purpose for which it has come into existence it seems to me that the recording of a non‑confidential conversation in a document can similarly be protected from production if the document was brought into existence for the dominant purpose of apprehended proceedings.

In the circumstances of intended use in apprehended proceedings I consider that the context in which a document comes into existence and its proposed use makes it a confidential document.  It is hardly to be expected that at the stage the draft witness statements came into existence the Commission would be prepared for any person to see the statements.  I consider that confidentiality should be inferred from the nature of the activities being undertaken by Mr Eva.  Unlike the situation in Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (supra) the information for the witness statements was not obtained under a coercive power in which situation the information is not given in confidence.  As Davies J said in Trade Practices Commission v Ampol Petroleum (Victoria) Pty Ltd (supra at 323):

“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.

            The privilege, when it exists, is that of the client and not that of the lawyer or of the witness who may have given a statement.”

(See Dingle v Commonwealth Development Bank (supra) 239, 242; Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (t/as Uncle Ben’s of Australia) (1994) 126 ALR 58).

I therefore do not accept Safeway’s submission that the witness statements cannot be confidential because the Commission obtained the information in them from another party to the proposed litigation.

Common Interest Privilege

In the alternative, the Commission claims that it and the other parties whose employees provided witness statements (Tip Top, Quality Bakers, Sunicrust) have a common interest in the proceedings to assist the Commission in the institution of the proceedings against Safeway, such that the Commission has a joint privilege in the documents in the possession of those parties.  The Commission relies on such authorities as Buttes Gas and Oil Co v Hammer (No 3) (1981) QB 233; Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1988) 13 NSWLR 689; Network Ten Ltd v Capital Television Holdings Ltd (1995) 16 ACSR 138; Farrow Mortgage Services v Webb (1996) 39 NSWLR 601.

There is a short answer to this submission.  Firstly Sunicrust and Quality Bakers do not claim privilege in respect of the witness statements and documents they have produced on subpoena.  Rather they appear to contend that any privilege which exists in relation to the documents belongs to the Commission and they are prepared to abide the determination of the issue of the existence and enforceability of any privilege of the Commission.  Tip Top does claim that it has a privilege in relation to the documents it has produced on subpoena, however no common interest can exist between the Commission and any of these three parties as the Commission was asserting that each of them had been involved in a breach of the Act.  In that respect they each had interests which were either adverse, or potentially adverse, to each other.  In such circumstances common interest privilege cannot arise as there is no common interest. 

In Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 Giles J said at 409 ‑ 410:

“What is important is that, as Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) [1992] 1 AC 233 and Network Ten Ltd v Capital Television Holdings Ltd itself show, two persons interested in a particular question will not have a common interest for the purposes of common interest privilege if their individual interests in the question are selfish and potentially adverse to each other.  In such a case there will not be the necessary identity of interest.”

(See Farrow Mortgage Services Pty Ltd (In Liq) v Webb (supra) at 612 where Sheller JA cited this passage with approval).

Waiver

The issue of waiver arises in a number of respects.  Safeway submits that if privilege existed in relation to the George Weston witness statements and the information in them, the privilege belonged to George Weston and it was waived when the information was communicated to the Commission for commercial advantage.  It is said that this was a voluntary disclosure for the purpose of obtaining a favourable presentation to the Court on a penalty hearing:  Goldberg v Ng (supra) 101 ‑ 102.  That submission fails at the outset as it is clear from the evidence that the witness statements were documents of, and belonging to, the Commission and if there was any privilege in relation to those statements it is the privilege of the Commission.  If that be so, says Safeway, it then submits that its privilege has been waived by the use the Commission has made of the statements and the fact that either party could make use of the statements.  But that submission is not made out on the evidence as at this stage the Commission has not sought to use the witness statements in the proceeding.

It was also submitted that the Commission had waived its privilege in relation to the witness statements of Messrs Morrell and Dobson by showing them to Ms Peter.  However that disclosure occurred in the context of Ms Peter seeking to satisfy herself as to the existence of evidence for the purpose of agreeing on a form of agreed statement of facts to be used on George Weston’s penalty hearing.  If this constituted a waiver, it was in my view a limited waiver which did not extend beyond Ms Peter and her client, George Weston:  Goldberg v Ng (supra) 96.

A more significant claim of waiver arose as a result of the Commission’s reliance on, and tender of, the documents exhibited to and referred to in Mr Eva’s affidavit of 12 September 1997.  As well as producing those documents, the affidavit claimed privilege from production in respect of a number of other documents on the ground of legal professional privilege.  It is said that as a result of the production of the documents exhibited to the affidavit privilege has been waived not only in respect of those documents which were produced but also in respect of those documents for which the claim for privilege was maintained.  Safeway, consequent upon the Commission’s reliance on Mr Eva’s affidavit of 12 September 1997 and the tender of the documents exhibited to it, sought the production of:

(a)        seven documents comprising staff papers, Commission minutes and a submission to the Commission in respect of which privilege from production is claimed in the affidavit;

(b)        the statements of Messrs Morrell and Dobson which were annexed to a staff paper dated 11 December 1995 submitted by Mr Eva to the Commission for the purpose of a Commission meeting on 13 December 1995 - a document exhibited to Mr Eva’s affidavit;

(c)        all draft witness statements prepared by or on behalf of Mr Eva prior to 20 February 1996 and prior to 6 March 1996;

(d)        the brief referred to in the memorandum from Nada Karadzic to Glen Barnwell dated 10 April 1996 - a document exhibited to Mr Eva’s affidavit;

(e)        all draft witness statements prepared by or on behalf of Mr Eva and submitted to counsel prior to 23 April 1996;

(f)         the advice from Mr Fajgenbaum QC and Mr J Beach referred to in the minute of 23 April 1996 - a document exhibited to Mr Eva’s affidavit.

The documents exhibited to Mr Eva’s affidavit were not part of additional discovery but were documents in respect of which the Commission had decided to waive privilege.

The Commission denies that there has been a waiver of privilege in respect of the documents in the six categories sought by Safeway and says that the documents exhibited to Mr Eva’s affidavit were disclosed for the limited purpose of supporting the Commission’s claim for privilege in respect of the other documents and were disclosed pursuant to the compulsory process of the Court.  However at the time the documents exhibited to the affidavit were tendered by the affidavit being read or relied upon by Mr Beach, it was not put that the documents were tendered on any limited or restricted basis.  Further it is not correct to say that the documents went into evidence pursuant to the compulsory or coercive powers of the Court.  Although they were called upon pursuant to a notice to produce, it was open to the Commission on the return of the notice to produce to claim privilege from production but in respect of the exhibited documents it did not do so but rather expressly waived such privilege as then existed. 

Safeway submits that the effect of that express waiver is that there has been an express waiver in respect of the documents referred to or, conformably with the principles in Attorney‑General (NT) v Maurice (supra), there is an implied or imputed waiver in respect of the documents referred to in the exhibited documents.  It is necessary to identify the exhibited documents and the manner in which it is said waiver has occurred.

Safeway submits there has been an implied or imputed waiver in relation to the documents referred to in, and enclosed with, Mr Eva’s report of 11 December 1995 to the Commission namely, statements of Messrs Morrell and Dobson, an interview with Mr Pecora and a note of a discussion between George Weston and the Commission.  It is said further that the substance of the witness statements is disclosed in the first two paragraphs of the report which read:

“It has been alleged by two retailers (‘The Cool Store’ in Ferntree Gully and ‘Festival’ Supermarket in Albury) that George Weston Foods Limited (trading as Tip Top Bakeries) has recently withheld the supply of bread for the reason that the retailers discounted the price below acceptable levels.  Following publicity, supplies were resumed after about a week.

Information has also been received from a customer of Tip Top (a sandwich bar which purchases bread from a retail outlet operated by Tip Top in the Preston Market) that employees of Tip Top advised him about 18 months ago that the store discontinued its practice of selling day old bread for a dollar a loaf after a complaint by a nearby Safeway store.  It is further alleged that when fresh bread was substituted and retailed at a discounted price, Safeway made a further complaint and Tip Top increased the retail price of the bread.  At present, this is only hearsay evidence however such conduct could amount to a price fixing arrangement.  (see Note for Counsel regarding Mr Pecora attached)”

The report then states that the two statements obtained from the principal witnesses in the Albury and Ferntree Gully incidents are attached.  Mr Smith submits that this constitutes an express waiver of any privilege in relation to the subject‑matter set out in the statements and he relies on the judgments in Attorney‑General (NT) v Maurice (supra) particularly the judgment of Deane J at 492 ‑ 493 in which his Honour said:

“Thus, ordinary notions of fairness require that an assertion of the effect of privileged material or disclosure or part of its contents in the course of proceedings before a court of quasi‑judicial tribunal be treated as a waiver of any right to assist scrutiny of the property of the use he has made of the material by reliance upon legal professional privilege”.

In Mr Eva’s memorandum of 20 February 1996 to the Deputy Chairman Mr Asher and other Commission officers, he refers to the fact that statements have been obtained from witnesses and then says:

“The investigation has indicated that Safeway have not been backward in exercising their muscle as a large customer (the expression ‘thuggery’ was used in Parliament) and I am concerned that when Tip Top give evidence against Safeway in Court that there will be commercial repercussions against them.”

It is submitted that this is an extrapolation from the statements from the three witnesses associated with the retailers involved in the alleged resale price maintenance issues.

Mr Eva prepared a paper on 6 March 1996 for submission to the Commission for its meeting on 13 March 1996.  The stated purpose of the paper in the executive summary was to:

“Inform the Commission of the evidence available to date to establish the extent of unlawful conduct on the part of George Weston Foods ...”

Mr Eva noted that draft statements had been obtained from George Weston staff and he then set out an account of the alleged conduct by which it was said George Weston had breached the Act.  The account of the conduct refers to activities and actions of George Weston staff and it is a reasonable inference (and one which I draw) that the account is taken in substantial part from the draft witness statements.  The account refers to the Preston, Albury and Ferntree Gully incidents.

Mr Smith submits that the material was put into evidence by the Commission and that it cannot be put into evidence without providing the source material (cf Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd (supra) per Rolfe J).

On 10 April 1996 Nada Karadzic sent a minute to Glen Barnwell in which she enclosed “a copy of the brief (minus attachments)” sent to senior and junior counsel.  Although the contents of the brief are not referred to, Mr Smith submitted that as the document is relied upon by the Commission to establish the proposition that proceedings were in contemplation because a brief was sent to counsel there has been a waiver in relation to the contents of the brief.

The final document relied on from the documents tendered in evidence by being exhibited to Mr Eva’s affidavit of 12 September 1996 is Mr Eva’s minute of 23 April 1996 to Mr Asher in which he says he is instructed to have the investigation completed in three weeks “and to be ready to file proceedings by that date (subject to the Commission subsequently deciding on that course)”.  This and earlier documents exhibited to the affidavit are relied on by the Commission to show that by the dates of the documents, proceedings against Safeway were contemplated and evidence was being gathered for that purpose.  In the minute of 23 April 1996 Mr Eva says:

“Counsel (Fajgenbaum QC and J Beach) have provided advice to the effect that the draft evidence available to date discloses likely breaches of the RPM and price fixing provisions.  While the conduct of Safeway could also be viewed as an exercise in the abuse of market power, there are thorny issues involved in defining the market/s and the power base”.

Mr Smith submits that such a statement falls within the principles set out in Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd (supra) and requires production of the advice and the draft evidence to which it refers.

Mr Beach acknowledged that the documents exhibited to Mr Eva’s affidavit were put into evidence voluntarily and not under compulsion and that, insofar as those documents were the subject of a claim for privilege, the Commission intentionally waived that privilege.  However he submitted that the documents were put into evidence not for all purposes and not for trial but rather for the purpose of the interlocutory application to meet Safeway’s challenge to the Commission’s claim for privilege.  Mr Beach said that the documents were put into evidence to demonstrate that Mr Eva reasonably anticipated litigation against George Weston and/or Safeway at the earliest possible time.  Mr Beach submitted that whether or not there is an imputed waiver of privilege depends on the notion of fairness, how the documents tendered were used and whether it is now unfair to Safeway to maintain privilege in any associated material.  Mr Beach then says that the documents were only used on an interlocutory application to justify the Commission’s claim for privilege, that is to demonstrate when Mr Eva reasonably anticipated proceedings against Safeway.  In substance, Mr Beach was submitting there was a limited waiver.

It was part of Mr Beach’s argument that as the hearing on the application for production of the relevant documents for inspection had concluded, there was no unfairness in Safeway not having access to the documents in respect of which the claim for privilege was maintained.  He said that as the imputed waiver point and any issue of unfairness had not been pursued in the context of the interlocutory application, it could not now be said that it was unfair not to allow Safeway recourse to the witness statements as the interlocutory application was concluded.

I do not accept the submission that the exhibited documents were tendered in evidence for a limited purpose or that the privilege which otherwise attached to those documents was the subject of only a limited waiver.  Certainly no such limitation was propounded at the time the documents were exhibited, the affidavit was filed and relied upon and tendered.  It may be that the reason why the documents were put into evidence was only for the purposes of the interlocutory application and to meet the issue of when Mr Eva reasonably anticipated litigation against George Weston and/or Safeway, but once the privilege was waived in relation to those documents, I cannot see that the circumstances of this case warrant the conclusion that there was only a limited waiver.  The waiver was express and intentional and unlike the situation in Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 and the cases therein cited at 539 ‑ 540 and Network Ten Ltd v Capital Television Holdings Ltd (supra) it was not limited to a particular person.

Given then, an express intentional and unconditional waiver, what is the effect of the reference to the documents’ inspection of which is now sought?  Mr Beach says the contents of the witness statements and counsel’s advice were not relied upon but what was relied upon was the fact of their existence being used to support or consolidate the submission that at the time those documents came into existence the Commission’s legal proceedings against George Weston and/or Safeway were reasonably anticipated.  The documents did more than just refer to the existence of the witness statements and the advice received from counsel, they set out the substance of that advice.  Mere reference to the fact or existence of legal advice does not amount to a waiver of its contents:  Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd (supra) per Kirby J.  But here the documents went further.

Because of the Full Court decision in The Adelaide Steamship Co Ltd and Australian Securities Commission v Spalvins & Ors (supra), I am bound to approach the issue of waiver not by reference to the principle of unfairness but rather by reference to the provisions of s 122 of the Evidence Act.  This requires an inquiry as to whether the relevant disclosure was made knowingly and voluntarily, whether the substance of the material contained in the documents has been disclosed and whether the disclosure falls within one of the sub‑paragraphs of s 122(2) (none of which are relevant for present purposes).  There is no doubt that the disclosure of the contents of the documents exhibited to the affidavit was made knowingly and voluntarily; so much is conceded by the Commission.  Although the affidavit purported to be sworn in response to a notice to produce, the Commission did not seek to protect the exhibited documents from inspection; rather it waived privilege in relation to them and sought to rely on the contents of the documents rather than claiming they were privileged from production and should not be inspected.

The issue to be resolved in relation to waiver is whether the substance of the documents referred to in the exhibited documents has been disclosed.  The answer will vary from document to document and I consider the documents sought in Safeway’s motion seriatim.

Seven documents comprising staff papers, Commission minutes and a submission to the

Commission in respect of which privilege from production is claimed in the affidavit

There is no issue of waiver involved in relation to these documents as none of the exhibited documents purport to set out any particular part or extract from these documents or their effect.

The statements of Messrs Morrell and Dobson which were annexed to a staff paper dated 11 December 1995 submitted by Mr Eva to the Commission for the purpose of a

Commission meeting on 13 December 1995 - a document exhibited to Mr Eva’s affidavit

In my opinion there has been a disclosure of the substance of the contents of the statements of Messrs Morrell and Dobson.  The staff paper refers to the allegations of the two retailers and then sets out, albeit briefly, what those allegations are.  It also sets out the substance of information received from a Tip Top customer and I infer from the statement “see Note for Counsel regarding Mr Pecora attached” that Mr Pecora was the customer.

All draft witness statements prepared by or on behalf of Mr Eva prior to

20 February 1996 and prior to 6 March 1996

I do not consider that the statement “the investigation has indicated that Safeway have not been backward in exercising their muscle as a large customer” constitutes the disclosure of the substance of any of the draft witness statements prepared up to the date of the statement.  Rather it is a reference to the effect of the statements and all other results of the Commission’s investigations.  However Mr Eva’s paper of 6 March 1996 is in a different position.  I consider that there was in that paper a disclosure of the substance of the evidence to date in relation to the allegation of unlawful conduct by George Weston and therefore a disclosure of the contents of all the witness statements obtained up to that point of time from George Weston staff.  So much follows from the reference to informing “the Commission of the evidence available to date”, the fact of the obtaining of draft statements from George Weston staff and the account then given.

The brief referred to in the memorandum from Nada Karadzic to Glen Barnwell

dated 10 April 1996 - a document exhibited to Mr Eva’s affidavit

The brief is only referred to, albeit as being enclosed, but there is no reference to any of the contents of the brief, nor is there any summary of, or extrapolation from, those contents.  Indeed there is not even any reference to the effect or consequences of anything contained in the brief.  The fact that the minute may be relied on in support of the proposition that proceedings were in contemplation at the time, does not mean that there has been a disclosure of the substance of the contents of the brief.  It was the fact of the brief being delivered, rather than the nature of its contents, which were relied on.  I do not consider that there has been any waiver by the Commission in relation to the contents of the brief (cf The Adelaide Steamship Co Ltd (supra) 20).

All draft witness statements prepared by or on behalf of Mr Eva and submitted to

counsel prior to 23 April 1996

The advice from Mr Fajgenbaum QC and Mr J Beach referred to in the minute

of 23 April 1996

A distinction is drawn in the authorities between a reference to the existence of legal advice and a disclosure of the contents of the legal advice itself:  Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (supra) per Kirby J.  This minute discloses more than the fact that the legal advice has been given.  It discloses “the effect” of the legal advice but it does so in a way which discloses the substance of the advice namely, not only that there are likely breaches of the Act but also, and more particularly, that “the draft evidence available to date” discloses likely breaches of the Act.  What is to be regarded as “the substance” of evidence or a document is a qualitative as well as a quantitative issue and much will depend upon the contents of the evidence or document which will not initially be available to the court as the privilege has been maintained.  Nevertheless the substance of the evidence or document will be able  to be determined by a consideration of what is set out.  In this case the reader of the minute is told that counsel has considered the draft evidence available to date and counsel’s advice is that that evidence discloses likely breaches of the Act.  It also seems to me, on a fair reading of the minute, that the next sentence is also part of counsel’s advice, namely that having formed a view on resale price maintenance and price‑fixing, counsel have then turned their attention to whether draft evidence discloses a breach of s 46 of the Act and have concluded that the draft evidence supports the conclusion of such a breach although there are difficult issues involved in defining the market and the power base.

The minute discloses more than just the type of effect considered in Derby & Co Ltd v Weldon (No 10) (1991) 1 WLR 660 at 668.  Not only does the minute disclose the substance of counsel’s advice, it discloses the substance of “the draft evidence available”, namely that its contents refer to likely breaches of the Act.

There is an alternative basis for the production of the draft witness statements which is found in s 126 which provides:

“If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document.”

It is apparent that if counsel’s advice is to be produced, it is reasonably necessary to enable a proper understanding of it that the draft evidence to which it refers, and upon which it is based, should be produced.

If I am incorrect in determining the issue of waiver by reference to s 122 of the Evidence Act, I am of the opinion that the application of the fairness doctrine results in there being a waiver of privilege in relation to the documents referred to.  Although the hearing of the application for production of the documents had concluded before Safeway’s motion was filed, it does not follow that there is by virtue of that fact no room for operation of the fairness doctrine.  The scope of fairness is not to be limited to the duration of the interlocutory proceeding in which the issue of waiver arises.  The issue of fairness arises whenever it can be said that a party is left with an incomplete version of an event which may become relevant or in issue later in the proceedings.  It is conceivable if the proceeding is heard by reference to the use of witness statements or affidavits (which is likely) that issues may arise as to the credit of witnesses and whether they have made prior inconsistent statements.  In such circumstances the draft witness statements and any prior signed witness statements may become relevant.

I do not consider that Mr Beach is correct when he says that it is not unfair to disclose the contents of the documents as the hearing in which they were referred to had concluded.  It is implicit in the reasoning of the majority in Goldberg v Ng (supra) Deane, Dawson and Gaudron JJ that unfairness can arise even though the proceeding in which the claimed imputed waiver have concluded.  In Goldberg v Ng the proceeding or procedure before the Law Society had concluded and the documents were sought in the equity proceedings, yet the imputed waiver was found for the purposes of the latter proceedings.  It is true that the two proceedings were related in the sense that they had a common factual sub‑stratum and a common complaint.  However I consider that the reasoning of the majority is not limited by that fact.  As their Honours observed at 95:

“The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance.  The most that can be done is to identify a number of general propositions.”

Their Honours then articulated the major proposition, namely that:

“... the governing consideration is whether ‘fairness requires that his privilege shall cease whether he intended that result or not’.”

Their Honours concluded that as a result of the disclosure of the privileged documents to the Law Society fairness required that the Ngs not be deprived of the opportunity to inspect the documents and maybe use them in the equity proceedings in the Supreme Court of New South Wales. 

Their Honours were influenced by the fact that the privileged documents were used by Mr Goldberg as part of a submission to the Law Society in response to the complaint and the Society agreed to his maintenance of privilege and confidentiality in relation to them.  If Mr Goldberg had not volunteered the submission he could, and probably would, have been required by the Society to make a written response to the complaint which would not have been protected by legal professional privilege from production to the Ngs in the equity proceedings.

Mr Goldberg had pre‑empted the Law Society asking him for a written response to the complaint which would not have been protected by legal professional privilege by submitting a statement in respect of which he claimed privilege.  At 102, Deane, Dawson and Gaudron JJ said:

“In these circumstances, it would be unfair if the fact that Mr Goldberg saw fit to rely, in answer to Mr Ng’s complaint to the Law Society, upon privileged communications to his solicitor in relation to the equity proceedings should have the effect that the Ngs were deprived of access to, and possible use of, the substance of that answer.  That unfairness is heightened in the present case where, in the absence of access to the material before the Law Society, one can only speculate about why the Complaints Committee concluded that Mr Ng’s complaint that Mr Goldberg had failed to account for $100,100 allegedly paid on account of professional costs did ‘not involve a question of professional misconduct or unsatisfactory professional conduct’” (emphasis added).

Thus they found an imputed waiver of privilege.

Certainly the second aspect of unfairness to which their Honours referred has its counterpart here where, in the absence of the witness statements, one can only speculate as to what the witnesses have said about events constituting breaches of the Act and abuse of market power.

I have therefore reached the conclusion that the Commission should produce for inspection of Safeway the following documents, the privilege in respect of which has been waived:

(a)        the statements of Messrs Morrell and Dobson annexed to the staff paper dated 11 December 1995 submitted by Mr Eva to the Commission;

(b)        all draft statements of witnesses prepared by or on behalf of Mr Eva prior to 6 March 1996;

(c)        all draft statements of witnesses prepared by or on behalf of Mr Eva and submitted to counsel prior to 23 April 1996;

(d)        the advice from Mr Fajgenbaum QC and Mr J Beach referred to in Mr Eva’s minute of 23 April 1996.

All these documents, save for the advice of counsel, referred to in Mr Eva’s minute of 23 April 1996 are included within the categories of documents I have found not to be entitled to protection from production.  These categories cover the witness statements drafted and prepared for Messrs Morrell and Dobson, Mrs Wiles and George Weston employees, up to 3 April 1996, the witness statements drafted and prepared for Sunicrust and Quality Bakers’ employees up to the date of the institution of this proceeding and all documents which are related to those statements.

Subject to what counsel may wish to say as to the form of the order, I propose to order that these documents be produced to the Court within fourteen days and that the Commission pay Safeway’s costs of and incidental to the hearing and Safeway’s motion filed 24 September 1997.  I invite the parties to make further submissions as to the costs of Quality Bakers and Sunicrust and I will hear the parties as to the form of the order.

I certify that this and the preceding sixty‑three (63) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg

Associate:

Dated:              March 1998

Counsel for the Applicant:	Mr J Beach
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the first, third and fourth Respondents:	Mr R Smith
Solicitor for the first, third and fourth Respondents:	Clayton Utz
Counsel for the second respondent:	Mr C Scerri
Solicitor for the second respondent:	Arthur Robinson & Hedderwicks
Dates of Hearing:	15, 16, 17, 26 September 1997
Date of Judgment:	18 March 1998