FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v The Daniels Corporation International Pty Ltd [2001] FCA 244

TRADE PRACTICES – Enforcement – Notice by Australian Competition and Consumer Commission requiring provision of information or documents – Whether common law legal professional privilege applies.

Trade Practices Act 1974, s 155

Pyneboard Proprietary Limited v Trade Practices Commission (1983) 152 CLR 328 applied

Baker v Campbell (1983) 153 CLR 52 discussed

Corporate Affairs Commission of New South Wales v Yuill (1991) 172 CLR 319 referred to

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v THE DANIELS CORPORATION INTERNATIONAL PTY LTD, MEERKIN & APEL (a firm)

N922 of 2001

WILCOX, MOORE and LINDGREN JJ

16 MARCH 2001

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N992 of 2001

REFERRED BY THE CHIEF JUSTICE FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	THE DANIELS CORPORATION INTERNATIONAL PTY LTD FIRST RESPONDENT MEERKIN & APEL (a firm) SECOND RESPONDENT
JUDGE:	WILCOX, MOORE and LINDGREN JJ
DATE OF ORDER:	16 MARCH 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS AND DECLARES THAT:

1. The second respondent is not entitled to refuse to comply with either of the notices issued to that respondent on 14 September 1999 by the applicant on the ground of legal professional privilege.

2. The costs of determining the said preliminary issue be paid by the first respondent.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N992 of 2001

REFERRED BY THE CHIEF JUSTICE FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND:

THE DANIELS CORPORATION INTERNATIONAL PTY LTD

FIRST RESPONDENT

MEERKIN & APEL (a firm)

SECOND RESPONDENT

JUDGE:	WILCOX, MOORE and LINDGREN JJ
DATE:	16 MARCH 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX J:

1 The question before the Court is whether common law legal professional privilege applies to notices issued by the Australian Competition and Consumer Commission (“ACCC”) pursuant to s 155 of the Trade Practices Act 1974 (“the Act”).

2 Section 155 of the Act relevantly provides:

“(1) Subject to subsection (2A), if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to a telecommunications matter (as defined by subsection (9)) or is relevant to the making of a decision by the Commission under subsection 93(3) or (3A), a member of the Commission may, by notice in writing served on that person, require that person:

(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and the manner specified in the notice, any such information;

(b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or

(c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents.

(2) …

(2A) …

(3) The Commission may require the evidence referred to in paragraph (1)(c) to be given on oath or affirmation and for that purpose any member of the Commission may administer an oath or affirmation.

(4) …

(5) A person shall not:

(a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it;

(b) in purported compliance with such a notice, knowingly furnish information or give evidence that is false or misleading; or

(6) …

(6A) A person who contravenes subsection (5) or (6) is guilty of an offence punishable on conviction:

(a) in the case of a person not being a body corporate – by a fine not exceeding $2,000 or imprisonment for 12 months; or

(b) in the case of a person being a body corporate – by a fine not exceeding $10,000.

(7) A person is not excused from furnishing information or producing or permitting the inspection of a document in pursuance of this section on the ground that the information or document may tend to incriminate the person, but the answer by a person to any question asked in a notice under this section or the furnishing by a person of any information in pursuance of such a notice, or any document produced in pursuance of such a notice or made available to an authorised officer for inspection, is not admissible in evidence against the person:

(a) in the case of a person not being a body corporate – in any criminal proceedings other than proceedings under this section;

(b) in the case of a body corporate – in any criminal proceedings other than proceedings under this Act.

(7A) …

(8) …

(9) …”

3 In these provisions, “the Commission” is ACCC. The limitation imposed by the opening words of subs(1) is not presently relevant.

The facts

4 On 15 July 1999 ACCC served on The Daniels Corporation International Pty Ltd (“Daniels”), the first respondent, two notices. One of them was issued pursuant to s 155(1)(a) of the Act; the other pursuant to s 155(1)(b). Nothing turns on the form of these notices, so I need not set them out.

5 Daniels referred the notices to its solicitors, Meerkin & Apel. The solicitors arranged for production of certain documents to ACCC but raised questions about some of the requirements of the notices. Correspondence ensued.

6 On 15 September 1999 ACCC served two notices on Meerkin & Apel; once again, one notice was under s 155(1)(a) of the Act and the other under s 155(1)(b). Once again, it is unnecessary to set out the notices. However, it is relevant to note that the information sought by the notices included information about communications during 1998 between Meerkin & Apel and Daniels in respect of a particular subject.

7 Meerkin & Apel produced some documents to ACCC in response to the notices served on 15 September. However, the solicitors took the position that other documents were covered by legal professional privilege. Those documents were not produced.

8 Protracted correspondence ensued about the availability of legal professional privilege, as an answer to a s 155 notice. ACCC took the position that information and documents described in a s 155 notice are required to be supplied in response to the notice, whether or not they are documents that, in other circumstances, might be subject to legal professional privilege.

The proceedings

9 Despite the exchange of numerous letters, the parties were unable to reach any agreement about the claim of legal professional privilege. Accordingly, on 12 September 2000 ACCC moved to resolve the dispute by instituting a proceeding in this Court in which it named Daniels as sole respondent. The application filed by ACCC claimed the following declarations and orders:

“1. A declaration that the power conferred on the applicant by Section 155 of the Trade Practices Act 1974 extends to a requirement that documents the subject of legal professional privilege be produced to the applicant.

2. A declaration that the respondent is not entitled to refuse to produce documents the subject of a notice issued under section 155 of the Trade Practices Act 1974 on the ground of legal professional privilege.

3. An order that the respondent forthwith produce the documents listed in Schedule 1 to the Statutory Declaration of David Pringle dated 21 June 2000 attached hereto and marked ‘A’, to the applicant by delivering them to the office of the applicant situated at Level 10, 500 Queen Street, Brisbane on the basis that legal professional privilege does not ground a lawful refusal to produce documents in answer to a notice issued under section 155 of the Trade Practices Act 1974.

4. In the alternative, an order that the respondent forthwith produce the documents listed in Schedule 1 to the Statutory Declaration of David Pringle dated 21 June 2000 attached hereto and marked ‘A’, to the applicant by delivering them to the office of the applicant situated at Level 10, 500 Queen Street, Brisbane on the basis that the documents listed in Schedule 1 to attachment ‘A’ are not the subject of legal professional privilege.

5. An order that the respondent pay the applicant’s costs of and incidental to the application.”

10 The proceeding was assigned to my docket and listed for directions on 23 October 2000. However, shortly before that date, the parties agreed upon some orders, including for separate determination, as a preliminary issue, of the questions raised by claims 1, 2 and 3 of the Application. I made an order in chambers to that effect. I also made directions regarding the filing and service of affidavits and written submissions and fixed a hearing date, 18 December 2000.

11 Having regard to the content of the written submissions, it appeared to me that this might be a case in which it was appropriate for the Chief Justice to refer the preliminary issue to a Full Court pursuant to s 20(1A) of the Federal Court of Australia Act; the issue was purely a question of law, in relation to which an appeal seemed likely, whatever the result before a single Judge.

12 The parties agreed with this view, so the matter did not proceed on 18 December 2000. The Chief Justice considered the matter and gave a direction pursuant to s 20(1A). By that route, the case came before a Full Court for hearing on 15 February 2001. However, what thereby came before us was only the preliminary issue presented by the first three claims in the Application. The issues raised by the other claims remain before me at first instance.

13 At the commencement of the hearing, the Court drew the parties’ attention to the fact that the notices that had given rise to the dispute concerning the availability of legal professional privilege were addressed to Meerkin & Apel, the solicitors, not to Daniels itself. The parties were asked to consider whether Meerkin & Apel ought to be made an additional respondent. They agreed this would be appropriate. Subsequently, I made an order joining Meerkin & Apel (a firm) as second respondent to the proceeding.

The High Court decisions

(i) Pyneboard

14 During the course of argument, counsel referred to many decided cases; some focusing on the obligations imposed by s 155, some concerned with the nature and ambit of legal professional privilege. I will discuss the more important decisions.

15 In Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450, a Full Court of this Court (Smithers, Franki and Northrop JJ) held that a recipient of a notice under s 155 of the Act was not absolved from compliance on the ground that this might involve self-incrimination or exposure to a penalty. That decision was followed by other Full Courts, in Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 and Dunlop Olympic Ltd v Trade Practices Commission (1982) 62 FLR 145.

16 The latter two decisions were the subject of High Court appeals. The High Court heard the appeals, together, in October 1982. Judgment was reserved. On 10 and 11 February 1983 the High Court heard Baker v Campbell (1983) 153 CLR 52, which I will later discuss. On 18 March 1983 the Court delivered judgment in respect of the appeals by Pyneboard Pty Ltd and Dunlop Olympic Ltd: see Pyneboard Proprietary Limited v Trade Practices Commission (1983) 152 CLR 328. I will refer to the judgments dealing with those cases simply as Pyneboard.

17 The five Justices who decided Pyneboard were unanimously of the opinion that a person cannot refuse to comply with a notice under s 155 of the Act on the ground that the information or documents required to be furnished by the notice might lead to exposure to a penalty. However, their Honours differed in their reasoning.

18 Mason ACJ, Wilson and Dawson JJ wrote a joint judgment in which they discussed (at 337-341) a submission “that the privilege against exposure to a penalty is confined in its application to testimonial disclosures in judicial proceedings and is inherently incapable of application in non-judicial proceedings”. Their Honours noted authority supporting that proposition. They also noted contrary authority. They considered the issue in terms of principle and stated their position (at 341) in this way:

“In the light of these competing considerations we are not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings. The issue of its availability in these proceedings therefore falls to be decided by reference to the statute itself. In the consideration of that question it is necessary to bear in mind the general principle that a statute will not be construed to take away a common law right unless the legislative intent to do so clearly emerges, whether by express words or by necessary implication.” [References omitted]

19 Mason ACJ, Wilson and Dawson JJ then said:

“In deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings.”

Later, at 342-343, the Justices added:

“That the privilege is impliedly excluded in such circumstances is a conclusion which, as we have noted, may be more readily drawn where the obligation to answer questions or provide information does not form part of an examination on oath. The obligation to give an answer not on oath at an executive inquiry provides an illustration. It will be less readily drawn in cases where the obligation to answer questions and produce documents is an element in an examination on oath before a judicial officer whether or not an object of that examination is to ascertain whether an offence has been committed with a view to the institution of a prosecution for that offence.

20 The three Justices thought apposite some comments made in Mortimer v Brown (1970) 122 CLR 493, a case concerning privilege on a public examination of company directors. Those comments related to self-incrimination. Mason ACJ, Wilson and Dawson JJ said (at 343):

“It is significant that sub-s. (5) makes it an offence for a person to refuse or fail to comply with a notice under sub-s. (1) ‘to the extent that the person is capable of complying with it’ for these words in themselves are quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise. Moreover, it is apparent that the purpose of conferring the power and imposing the obligation is to enable the Commission to ascertain whether any contravention of the Act has taken place, or is taking place, and to make the information furnished, the documents produced and the evidence given admissible in proceedings in respect of contravention of the Act, a purpose which would be defeated if privilege were available. As in Mortimer the comment may be made that the provision is valueless if the obligation to comply is subject to privilege. Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Pt IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions. The consequence would be that the provisions of Pt IV could not be enforced by successful proceedings for a civil penalty under s. 76(1).”

21 After some discussion about subs (7) of s 155, the three Justices concluded the appeals should be dismissed.

22 Murphy J held (at 346) that there is no privilege, outside judicial proceedings, against exposure to civil actions for penalties. However, he took a different view about self-incrimination. At 347 he held the privilege against self-incrimination is available generally – that is, including in extrajudicial proceedings – “as part of the common law of the various States” and ought “also be recognized as federal common law which attaches to federal statutory powers of obtaining information whether in judicial proceedings or otherwise”. He said: “It is available unless excluded by unmistakable language”. However, his Honour thought it was excluded, in relation to s 155 notices, by s 155(5).

23 Brennan J saw the issue as one of statutory construction. At 351 he said:

“Section 155 makes an inroad upon the right to silence. At common law, there is no obligation to answer questions asked by an executive agency or to produce documents requested by an executive agency. But if the legislature chooses to arm the Executive with a power of compulsory interrogation – and the frequency with which the Executive is armed with such powers appears to be increasing – it is the function of the courts to ascertain the extent of the power and to determine, by construing the language which the legislature has used, whether the power is qualified by a privilege against self-incrimination.”

24 After noting that the Commission’s power and functions under s 155 are “wholly investigative”, not judicial or quasi-judicial, his Honour referred to various authorities concerning the right to refuse to supply information to investigative agencies on the ground of possible self-incrimination. He concluded (at 354):

“… the better view is that a simple statutory obligation to furnish information to a law enforcement officer is not qualified by a privilege against self-incrimination.”

25 After expressing reasons for this view, Brennan J turned to s 155 itself. He said (at 356):

“Moreover, the purpose of investigating suspected contraventions of Pt IV would be frustrated by a qualification which makes the statute ineffective to compel the furnishing of information or the production of documents tending to show such a contravention.”

Brennan J referred to Mortimer v Brown and went on:

“And so would s. 155 be rendered relatively valueless if privilege against exposure to a penalty were allowed as a ground of non-compliance with sub-s. (5). Section 155 creates obligations in aid of an investigation ‘relating to a matter that constitutes or may constitute a contravention of this Act’ (sub-s. (1)). Proof of some of the practices and of many of the elements of the practices proscribed by Pt IV is likely to be available only from persons who have contravened the relevant provision or who have otherwise become liable to a penalty pursuant to s. 76(1). To allow such a person exemption from the obligations created by sub-s. (5) upon the ground that compliance with the obligation may tend to expose him to a penalty would so hobble investigation as to render much of Pt IV unenforceable.”

(ii) Baker v Campbell

26 Baker v Campbell raised the question whether documents covered by a search warrant, issued under s 10 of the Crimes Act 1914, were immune from seizure on the ground of legal professional privilege. By majority (Murphy, Wilson, Deane and Dawson JJ, Gibbs CJ, Mason and Brennan JJ dissenting) the Court held the doctrine of legal professional privilege is not confined to judicial and quasi-judicial proceedings. The Court also held that, as the Crimes Act did not evince any intention to oust the privilege, it applied to documents that fell within the scope of a search warrant issued under s 10 of that Act.

27 The judgments in Baker v Campbell include some strong statements about the importance of legal professional privilege. For example, at 95 Wilson J said:

“The multiplicity and complexity of the demands which the modern state makes upon its citizens underlines the continued relevance of the privilege to the public interest. The adequate protection according to law of the privacy and liberty of the individual is an essential mark of a free society and unless abrogated or abridged by statute the common law privilege attaching to the relationship of solicitor and client is an important element in that protection.”

28 Statements were also made about what was necessary to abrogate legal professional privilege. For example, at 116-117 Deane J said:

“It is a settled rule of construction that general provisions of a statute should only be read as abrogating common law principles or rights to the extent made necessary by express words or necessary intendment. As has been seen, the underlying principle that a person should be entitled to preserve the confidentiality of relevant communications between himself and his attorney is regarded as of such importance by the common law that the courts themselves do not require disclosure of the content of such communications even if it appears that such disclosure would be conducive to justice in a particular case and even if the proceedings be between parties neither of whom is entitled to claim the protection of the privilege as regards the relevant documents or information. Both logic and authority support the present-day acceptance of the preservation of that confidentiality as a fundamental and general principle of the common law. It is to be presumed that if the Parliament intended to authorize the impairment or destruction of that confidentiality by administrative action it would frame the relevant statutory mandate in express and unambiguous terms.”

29 Other Justices used similar language. At 90 Murphy J said “the privilege should apply to any form of compulsory seizure or production of documents, unless Parliament unmistakably excludes or confines it”. Dawson J recognised the legislature might “cut across the doctrine of legal professional privilege on occasions when it considers that it is more important to obtain information than to preserve the privilege”; but he did not think “the law should ease the way for the legislature to expand the practice nor should it disguise the fact that a principle which the law regards as fundamental is involved”: see 131.

(iii) Yuill

30 In Corporate Affairs Commission of New South Wales v Yuill (1991) 172 CLR 319 the High Court, again by majority (Brennan, Dawson and Toohey JJ, Gaudron and McHugh JJ dissenting), held that the power of an inspector to require information from an officer of a company pursuant to s 295(1) of the Companies (New South Wales) Code was not subject to legal professional privilege. Section 296(2) of the Code provides:

“A person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under section 295.”

31 Brennan J thought the Code should be construed against the background that, when it was enacted, the rule was that legal professional privilege applied only to judicial or quasi-judicial proceedings; so Parliament would not have contemplated that legal professional privilege would be a “reasonable excuse”. But he added (at 323):

“even if ss. 295 and 296(2) were construed in the light of Baker v Campbell so that the privilege would be available unless abrogated by express words or necessary intendment, the Code evinces an intention that legal professional privilege should not be a reasonable excuse for failure to comply with a requirement under s. 295. In the absence of language which expressly excludes the privilege, indicia of legislative intention can be found in the nature of the statutory power, the prescribed manner of its exercise and the purpose which its exercise is designed to achieve.”

32 One indication of legislative intent discerned by Brennan J arose from the purpose of a special investigation under the Code; it would frequently be impossible for an inspector to carry out his function without disclosure of communications between the corporation and its legal advisers.

33 Dawson J held the legislation should be construed in the context of the law enunciated in Baker v Campbell; even so there were sufficient indications of a legislative intent to exclude legal professional privilege. Dawson J referred to the nature of the inspector’s task and, at 336, commented that the term “reasonable excuse” “more aptly refers to any physical or practical difficulties in complying with a request under s 295”.

34 Toohey J agreed with Dawson J.

35 Gaudron J, in dissent, held at 338 that the expression “reasonable excuse” is “wide enough to cover any matter which the law acknowledges by way of answer, defence, justification or excuse for refusing or failing to provide information pursuant to a request of the type laid down by s 295(1)”. She thought legal professional privilege is such a matter.

36 The reasoning of McHugh J followed a similar course to that of Gaudron J. However, as counsel for ACCC point out in this case, McHugh J contrasted the situation then before the Court with that arising under s 155 of the Trade Practices Act. At 350-351 McHugh J set out most of the passage from the majority judgment in Pyneboard quoted by me in para 20 above. He went on:

“This statement was intended as a general rule of construction for determining whether a statute had impliedly abrogated a common law right or privilege. … It is applicable to the present case. Section 296(2) makes it clear that the general power conferred by s. 295 was intended to be subject to the qualification that a requirement under that section need not be complied with if there was a ‘reasonable excuse’ available. Unlike s. 155 of the Trade Practices Act, therefore, the general terms of s. 295 show no implied intention to abolish all relevant common law rights and privileges.”

37 In the light of these observations, counsel for ACCC comment that “in Yuill at least four of the members of the court would have decided that legal professional privilege had been displaced if words such as those used in section 155 had been under consideration.”

Federal Court decisions

(i) Income Tax Assessment Act cases

38 There has been a series of Federal Court decisions relating to the question whether legal professional privilege has been impliedly abrogated by legislation conferring coercive powers upon administrative bodies.

39 In Commissioner of Taxation v Citibank Limited (1989) 20 FCR 403 a Full Court (Bowen CJ, Fisher and French JJ) held the power conferred upon the Commissioner of Taxation by s 263 of the Income Tax Assessment Act 1936, to have access to books, documents and papers for any of the purposes of the Act, is subject to the doctrine of legal professional privilege.

40 The Court’s decision was based directly on Baker v Campbell. At 416-417 Bowen CJ and Fisher J set out passages in the judgment of Deane J in that case and commented:

“In our opinion like reasoning applied to s 263 leads to the conclusion that there is a restriction on the operation of s 263. The power of the Commissioner to search [for] and make copies of documents should be read as not referring to documents to which legal professional privilege attaches. This conclusion follows as a matter of course from Deane J’s reasoning particularly as s 263, as the High Court has indicated on a number of occasions, is in the most general of terms. Those general terms are not to be construed as granting an unrestricted power of search and entry but are subject to the right to claim legal professional privilege in respect of the documents to which the Commissioner seeks access. It is in our opinion nothing to the point that material obtained under s 263 is subject to the secrecy provisions of s 16 of the Act.

Conclusions

49 Six general propositions emerge from the authorities:

(i) In Baker v Campbell, Deane J described legal professional privilege as “a fundamental and general principle of the common law”. In none of the cases to which I have been referred has any judge said otherwise. Consequently, acceptance of that proposition must be the starting point in the resolution of this case;

(ii) Baker v Campbell firmly establishes the Australian common law principle that the doctrine of legal professional privilege is not limited, in its application, to judicial and quasi-judicial proceedings; subject to the terms of the legislation relevant to a particular case, it is available, also, as an answer to statutory administrative investigations and procedures;

(iii) Such is the importance of the common law rule about legal professional privilege, that it is not to be taken as abrogated in a particular case except by clear words;

(iv) However, it is not necessary for the relevant statute expressly to refer to legal professional privilege. The intention to abrogate legal professional privilege will be sufficiently indicated if Parliament has used words that, in their natural meaning, are inconsistent with retention of the privilege in the particular case;

(v) It is immaterial whether Parliament in fact had legal professional privilege in mind when enacting the words. Consequently, it does not matter that the statute may have been enacted at a time when it was generally understood that the doctrine of legal professional privilege had no application to administrative procedures; thus making it unlikely the drafter or the Parliament in fact had legal professional privilege in mind;

(vi) In determining whether the words used by Parliament impliedly exclude legal professional privilege, in a particular case, it is necessary to have regard to the nature of the relevant statutory functions and powers and the extent (if any) to which legal professional privilege might impede the discharge of those functions or the exercise of those powers.

50 The above propositions are not in contest in this case. The problem in the present case, as in most cases involving the availability of legal professional privilege (or the privilege against self-incrimination) to a particular administrative procedure, is whether the relevant statute has sufficiently indicated Parliament’s intention to exclude the privilege. As the authorities demonstrate, the problem is one that readily generates differences of judicial opinion.

51 In my view, the critical question in the present case is the meaning of the words, in s 155(5)(a) of the Act, “to the extent that the person is capable of complying with it”, reading those words in the context of s 155 as a whole. If the natural meaning of those words, in that context, is such as to exclude the doctrine of legal professional privilege, that is the end of the matter. If it is not, legal professional privilege is available in this case.

52 Pyneboard strongly suggests that the natural meaning of the words used in s 155(5)(a) excludes legal professional privilege. It will be recalled that Mason ACJ, Wilson and Dawson JJ stated (at 343) that these words “in themselves are quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise”. The inclusion of the emphasised words is explicable only on the basis that their Honours wished to make a statement, about the effect of the words used in the paragraph, that went beyond the matter of self-incrimination. This is the way McHugh J, in Yuill, understood their Honours.

53 If that understanding is correct, it is impossible to doubt that their Honours intended this statement to include reference to legal professional privilege. Not only is that one of the most significant immunities in respect of a legal obligation to supply information or produce documents; it had recently been debated before the High Court in Baker v Campbell.

54 Legal professional privilege was not in issue in Pyneboard. Consequently, in a technical sense, observations concerning the relationship between that doctrine and s 155 of the Act were obiter. But they were considered observations by three members of the High Court. As such, they command great weight.

55 My understanding of the importance attached in Pyneboard to the words “is capable of complying with it” is consistent with the approach taken, in this Court, to s 264 of the Income Tax Assessment Act, in relation to self-incrimination. In Stergis Hill J held that the adoption of this same formula, in ss 8C and 8D of the Taxation Administration Act, was effective to exclude the privilege against self-incrimination. That decision was followed in Donovan and approved in De Vonk. The two Full Court cases in which reference was made to s 264 and legal professional privilege are not authorities to the contrary; in neither case was the point argued.

56 Other considerations support the application of the Pyneboard approach to the relationship between s 155 of the Act and legal professional privilege. First, in its natural meaning, the word “capable” refers to what a person is able to do. It is not limited by reference to what a person is entitled not to do; a person may be capable of doing something, although entitled not to do it. A person who is called upon to disclose information, or produce a document, that is subject to legal professional privilege is able to comply with the demand, and may choose to do so, notwithstanding that he or she is entitled not to do so.

57 Second, the policy considerations that influenced the High Court in Pyneboard, in relation to self-incrimination, are equally apposite to legal professional privilege. Conduct that involves a contravention of the Trade Practices Act often comprises many separate acts, some of which may be effected through lawyers. Without information about contacts between the person under investigation and that person’s lawyer, it may be impossible for ACCC to see the whole picture. A comment made by Mason CJ, Wilson and Dawson JJ in Pyneboard applies. At 343 their Honours said:

“Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Pt IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions. The consequence would be that the provisions of Pt IV could not be enforced by successful proceedings for a civil penalty under s 76(1).”

58 Lockhart J made the point, in Compass at 455-456, that legal professional privilege does not extend to communications made in furtherance of a criminal or fraudulent purpose. He said:

“This exception to legal professional privilege tends directly against any implication that it is necessary for the effective conduct of an examination under s 597 that the privilege be ousted. If the examination of the examinee reveals that the assertion of legal professional privilege is in fact being used to shield a criminal or fraudulent purpose which taints the communication itself, then the immunity is inapplicable.”

59 This may well be a decisive consideration in respect of legislation relating to the examination of a witness, where there is an independent person capable of evaluating what is happening. It is more difficult to regard the exception as important in a case where a recipient of a notice is asked to supply information or documents. The recipient is not in an independent position. Moreover, a solicitor recipient may not know enough about the client’s actions and affairs to realise that those matters of which he or she is aware, and which may seem innocent enough, are part of a course of conduct that, considered overall, is criminal or fraudulent.

60 In my opinion, the better view is that a claim of legal professional privilege is not a valid answer to a notice under s 155 of the Trade Practices Act. The preliminary issue ought to be resolved by making an appropriate declaration. Daniels should pay the costs relating to determination of the preliminary issue.

I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Associate:

Dated: 16 March 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N922 OF 2001

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND:

THE DANIELS CORPORATION INTERNATIONAL PTY LTD

FIRST RESPONDENT

MEERKIN & APEL (a firm)

SECOND RESPONDENT

JUDGES:

WILCOX, MOORE AND LINDGREN JJ

DATE:

16 MARCH 2001

PLACE:

SYDNEY

REASONS FOR JUDGMENT

MOORE J:

Introduction

61 The Australian Competition and Consumer Commission (“ACCC”) is investigating the activities of The Daniels Corporation International Pty Ltd ("Daniels") to determine whether that company has engaged in conduct in contravention of the Trade Practices Act 1974 (Cth) (“TP Act”). As part of the investigation, several notices were given by the Deputy Commissioner of the ACCC to Daniels and its solicitors, Meerkin & Apel. A notice to produce documents and another to furnish information, dated 14 September 1999, sent to Meerkin & Apel resulted in the production of some documents but not others. The documents not produced were the subject of a claim of legal professional privilege.

62 On 12 September 2000 the ACCC made application to this Court under s 39B(1A)(c) of the Judiciary Act 1903 (Cth). It sought orders to the effect that a person could not resist the production of documents in response to a notice issued under s 155 on the basis that the documents were the subject of a claim of legal professional privilege. An order was made on 23 October 2000 by Wilcox J raising as a preliminary question whether this was so and the question has been referred to a Full Court for determination: see s 20(1A) of the Federal Court of Australia Act 1976 (Cth). While Meerkin & Apel were not originally a party to the application, they have since been joined as a respondent.

The source of the power to issue a notice and related legislative provisions

63 The notice was given under s 155 of the TP Act which relevantly provides:

“(1) Subject to subsection (2A), if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to a designated telecommunications matter (as defined by subsection (9)) or is relevant to the making of a decision by the Commission under subsection 93(3) or (3A), a member of the Commission may, by notice in writing served on that person, require that person:

(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;

(b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or

(c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents.

…

(5) A person shall not:

(a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it;

(b) in purported compliance with such a notice, knowingly furnish information or give evidence that is false or misleading; or

…

(a) in the case of a person not being a body corporate – in any criminal proceedings other than proceedings under this section; or

(b) in the case of a body corporate – in any criminal proceedings other than proceedings under this Act.”

(Emphasis added.)

A notice can issue if the body or a person specified in subs (1) has formed the requisite belief that a person is capable of furnishing information, producing documents or giving evidence: as to the formation of the belief see Melbourne Home of Ford Pty Ltd v Trade Practices Commission and Bannerman (1979) 36 FLR 450. The information, documents or evidence must relate to a matter which, relevantly for present purposes, constitutes, or may constitute, a contravention of the TP Act. Subsection (5), while expressed in the negative as a prohibition on refusing or failing to furnish information or produce documents, obliges the recipient of a notice to comply with it if the recipient is capable of complying with it.

64 The ACCC is established by s 6A of the TP Act and can investigate whether that Act has been contravened and bring proceedings against persons or corporations who are suspected of having contravened it. The matters that might constitute a contravention of the TP Act are varied. They include being a party to a contract, arrangement or understanding which contains an exclusionary provision or has the purpose or effect of substantially lessening competition (s 45) (such as fixing, controlling or maintaining prices (s 45A)); engaging in a secondary boycott, with the purpose and effect of either causing substantial loss or damage to a business (s 45D) or substantially lessening competition (s 45DA) or hindering trade and commerce between Australia and overseas (s 45DB); misusing market power (ss 46, 46A); engaging in exclusive dealing (s 47); engaging in resale price maintenance (s 48); acquiring shares or assets with the effect of substantially lessening competition (s 50); engaging in misleading and deceptive conduct in trade or commerce (s 52); making false or misleading representations in connection with the promotion or supply of goods or services (s 53); engaging in misleading conduct as to the nature, manufacturing process, characteristics, suitability or quantity of goods (s 55) or services (s 55A); engaging in bait advertising (s 56); inducing a consumer to acquire goods or services by representing that the consumer will receive a benefit in return for assisting the corporation to supply to other consumers, if the receipt of the benefit is contingent on an event occurring after the contract is made (s 57); and engaging in pyramid selling (s 61).

The meaning of the expression “is capable of complying”

65 A convenient starting point in ascertaining the nature of the obligation created by s 155(5) is what is meant by the expression “is capable of complying”. It is probable that its meaning is coextensive with the meaning of the expression "is capable of furnishing … producing … or giving" in s 155 (1). The scope of subs (5), but not the meaning of the constituent words in the expression, was considered by the High Court in Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 which will be discussed shortly. However the meaning of a similar expression in a similar statutory context has been considered in several authorities concerning ss 8C and 8D of the Taxation Administration Act 1953 (Cth). Those provisions make it an offence to, amongst other things, refuse or fail to produce documents “to the extent that the person is capable of doing so” if served with a notice to do so under s 264 of the Income Tax Assessment Act 1936 (Cth). As Wilcox J noted in Donovan v Commissioner of Taxation (1992) 34 FCR 355 at 364, the legislature enacted ss 8C and 8D the year following the judgment of the High Court in Pyneboard. His Honour said at 364:

“It seems extremely likely that the drafter of the amendment treated their Honours’ comment [in Pyneboard] [the passage is set out in par 69 below] as authority for the proposition that the formula ‘to the extent that the person is capable of complying with it’ evidenced an intention to exclude the privilege against self-incrimination.”

66 The first detailed discussion of the meaning of the words “is capable of doing so” is found in De Vonk v Commissioner of Taxation (1995) 59 FCR 203. Carr J considered the scope of the obligation created by the combined operation of the provisions of the Income Tax Assessment Act and the Taxation Administration Act in circumstances where the recipient of the notice (whose oral examination was sought) was facing criminal charges relating to the matters the subject of the s 264 notice. As the meaning of the words his Honour said (at 211):

“Mr Martella submitted that Stergis and Donovan were incorrectly decided. He submitted that the words ‘to the extent that the person is capable of doing so’ leave room for the assertion that a person is not capable of doing so because the answer to the questions may lead to self-incrimination. The words ‘extent’ and ‘capable’ were, so it was submitted, words of degree. I reject that submission for two reasons. First, the word ‘capable’ in this content must mean ‘having the ability, power or fitness for some … activity’ (the New Shorter Oxford English Dictionary) or ‘having the ability, strength’ (the Macquarie Dictionary). The fact that his answers may tend to incriminate him does not, in my view, render Mr De Vonk incapable of answering the questions. Secondly the submission is squarely to the contrary of the passage from the judgment of Mason ACJ, Wilson and Dawson JJ in Pyneboard at 343 which I have set out above [the passage is set out in par 69 below].”

His Honour concluded that it was not open to the recipient of a notice to refuse to respond by invoking the privilege against self-incrimination. Nonetheless, his Honour concluded the proposed examination of the recipient of the notice would be unlawful to the extent that the asking of the questions would be an interference with the administration of justice. That was not because the expression "to the extent that the person is capable of doing so" should be read down. Rather, it was because the exercise of the power conferred by s 264 did not extend to questioning a person in circumstances where to do so would interfere with the administration of justice.

67 An appeal against this decision was, in substance, unsuccessful. The Full Court did not express a different view about the meaning of the expression "is capable of doing so". Foster J agreed with the observations of Carr J in the passage set out above: see (1995) 61 FCR 564 at 567. In their joint judgment, Hill and Lindgren JJ said at 583:

“As Wilcox J points out in Donovan, ss 8C and 8D were inserted shortly after the judgment of the High Court in Pyneboard. As his Honour suggests, it is quite likely that the drafter of the amendment regarded Pyneboard as authority for the proposition that the words ‘to the extent that the person is capable of complying with it’ evidenced the intention to exclude the privilege against self-incrimination. Certainly the change of formulation from ‘just cause and excuse’ to ‘capable’ would seem to have been deliberate and to reveal an intention on the part of Parliament to exclude as a defence, inter alia, the privilege against self-incrimination.”

While Hill and Lindgren JJ did not do so expressly, they appear to have accepted the analysis of Carr J as to what is meant by the word “capable”. The Full Court concluded, as had the primary judge, that the provisions under consideration did not authorise the compulsory interrogation of a person in circumstances where the questioning might constitute an interference with the administration of justice, civil or criminal. In my opinion, the expression "capable of complying" in s 155(5) should be approached on the footing that it comprehends, consistent with its ordinary meaning, circumstances where the recipient is physically able to comply as Meerkin & Apel is in the present case.

68 In this matter the issues raised by claims 1, 2 and 3 concern the production of documents in the possession of Meerkin & Apel. It is not suggested, as I understand the position, that apart from the claim of legal professional privilege raised on behalf of its client, Daniels, that firm cannot produce the documents. It is unnecesary to explore what might be the outer boundaries of when a person is “capable of complying”. It is sufficient to consider whether Meerkin & Apel is capable of complying with the notices served under s155 by producing the contentious documents.

The scope of s 155(5) more generally

69 No member of the High Court in Pyneboard discussed the meaning of the expression “is capable of complying” by reference to the specific language used. However Mason ACJ, Wilson and Dawson JJ did say what the words in context meant in the sense that their Honours identified what their effect was (at 343):

“Sub-section (1) confers a power on the Commission to require the provision of information, the production of documents or the giving of evidence relating to contravention, or possible contravention, of the Act. It is significant that sub-s. (5) makes it an offence for a person to refuse or fail to comply with a notice under sub-s. (1) 'to the extent that the person is capable of complying with it’ for these words in themselves are quite inconsistent with the existence of a privilege entitling the recipient of a notice to refuse to comply, whether on the ground that compliance might involve self-incrimination or otherwise. Moreover, it is apparent that the purpose of conferring the power and imposing the obligation is to enable the Commission to ascertain whether any contravention of the Act has taken place, or is taking place, and to make the information furnished, the documents produced and the evidence given admissible in proceedings in respect of contravention of the Act, a purpose which would be defeated if privilege were available.”

(Emphasis added.)

70 At the time Pyneboard was decided the High Court had not determined that legal professional privilege was not limited to judicial and quasi-judicial proceedings. That was not decided until judgment was given on 26 October 1983 in Baker v Campbell (1983) 153 CLR 52. However the High Court heard the argument in Baker v Campbell on 10 and 11 February 1983, a little over a month before judgment was given in Pyneboard. It may be that Mason ACJ and Wilson and Dawson JJ had legal professional privilege in mind when using the words “or otherwise” in the above passage. That the passage was intended to indicate that no privilege was available to resist the disclosure of a communication after service of a notice under s 155, is supported by remarks of McHugh J in Corporate Affairs Commission of New South Wales v Yuill (1991) 172 CLR 319. His Honour (by reference to another passage from Pyneboard) said at 351:

“This statement was intended as a general rule of construction for determining whether a statute had impliedly abrogated a common law right or privilege. It was deduced from decisions such as Mortimer v Brown (1970) 122 CLR 493 and King v McLellan [1974] VR 773. It is applicable in the present case. Section 296(2) makes it clear that the general power conferred by s 295 was intended to be subject to the qualification that a requirement under that section need not be complied with if there was a ‘reasonable excuse’ available. Unlike s 155 of the Trade Practices Act, therefore, the general terms of s 295 show no implied intention to abolish all relevant common law rights and privileges.”

(Emphasis added.)

71 Even if the words “or otherwise” were included in the reasons of Mason ACJ and Wilson and Dawson JJ in anticipation of the changes to the law effected by Baker v Campbell, Pyneboard cannot be treated as an authoritative and binding pronouncement on the meaning of s 155 as it might apply to the disclosure of a communication for which legal professional privilege is claimed. That was not an issue that fell for determination in Pyneboard. Nonetheless the decision of the High Court must be taken to indicate the expression "is capable of complying" imposes an obligation that is unlikely to permit of any exceptions.

The scope of s 155 in the present matter

72 The task of this Court is to construe s 155 and determine the width of its operation having regard to the change in the law brought about by the decision of the High Court in Baker v Campbell. When enacting s 155, Parliament could not have known that a claim of legal professional privilege might arise in relation to compliance with a notice issued under s 155(1). Nor can it be confidently assumed that the declaration of the meaning of s 155(5) by the High Court in Pyneboard was necessarily intended to relate to a privilege that was not then recognised by the common law.

73 In this setting, two approaches to the construction of s 155(5) might assist in resolving the meaning and effect of the words "is capable of complying". The first is that at the time s 155 was enacted Parliament intended to require production of documents or the furnishing of information notwithstanding any common law privilege that then might be raised to resist compliance with a notice. The other is that the intention was to require compliance in the face of any privilege then existing or that might later be recognised by the common law.

74 Support for the first construction is the rule contemporanea expositio est optima et fortissima in lege, a rule of construction recently applied by a Full Court of this Court in Kenneally v New Zealand (1999) 166 ALR 625. The Full Court had to determine the meaning of the expression “or for any other reason, it would be unjust, oppressive or too severe a punishment” in s 34(2) of the Extradition Act 1988 (Cth). The provision under consideration was a product of amendments to the Extradition (Commonwealth Countries) Act 1966 (Cth) by the Extradition (Commonwealth Countries) Amendment Act 1985 (Cth). The expression was similar to a formulation in the Service and Execution of Process Act 1901. That latter provision had been judicially considered on several occasions prior to the amendments made in 1985 and its meaning had become comparatively settled. One issue before the Full Court was whether that meaning was to be attributed to the expression in s 34 of the Extradition Act 1988 (Cth). The Full Court said (at [53]):

“It seems to us that the expression ‘or for any other reason, it would be unjust, oppressive or too severe a punishment’ in s 34(2) of the Act should be construed in accordance with this line of authority, it being the state of the law at the time the amendment was introduced. That approach to the construction of this expression finds support in particular in the judgment of Brennan J in Corporate Affairs Commission of New South Wales v Yuill (1991) 172 CLR 319 at 322-3; 100 ALR 609 at 611. His Honour stated:

‘The alteration of the law … evokes an application of the rule contemporanea expositio est optima et fortissima in lege – the best and surest mode of construing an instrument is to read it in the sense which it would have been applied when it was drawn up: Broom’s Legal Maxims, 10^th ed (1939), p 463.’”

75 Applying this approach to the construction of s 155(5), the subsection might be viewed as having been intended to abrogate privileges recognized by the common law at the time it was enacted, namely 1974. As noted in the preceding paragraph, a similar approach was adopted by Brennan J in Corporate Affairs Commission of New South Wales v Yuill to determine the content of the "reasonable excuse" exemption in s 296 (2) of the Companies (New South Wales) Code.

76 However the above approach to the construction of a statute is rarely appropriate. As a Full Court said in Joyce v Grimshaw [2001] FCA 52 at par 66:

“The current practice is that the words of a statute are normally interpreted in accordance with their ordinary and current meaning. This was not always so. The approach of the courts used to be that Acts were construed in accordance with their natural meaning as at the date of their enactment: DC Pearce and RS Geddes, Statutory Interpretation in Australia 4^th ed, at par [4.6] comment:

‘This rule was given the Latin title, contemporanea expositio est optima et fortissima in lege. It is clear now, however, that the operation of this rule in its fullest extent had been abandoned except perhaps in the construction of ambiguous language used in very old statutes where the language itself may have had a rather different meaning. …’ (emphasis added)

Frances Bennion, Statutory Interpretation 3^rd ed, comments at p 939:

‘Rarely the legislator may use a term which is archaic or obsolete. Here the interpreter must give the term what appears to be its intended meaning, having regard to changes since it was current. …

Sometimes (though very seldom) a term is inserted in an Act even though it is known to be archaic. This may be a technical or non-technical term. It is presumed that the term is intended to have its archaic meaning, though that does not prevent its meaning in the Act from being developed by the courts in the ordinary way.’ (emphasis added)

The position in Canada is that the courts draw a sharp distinction between ordinary legislation and constitutional texts. With respect to ordinary legislation, the original meaning is presumed to prevail. With respect to constitutional texts the courts adopt a dynamic or ambulatory approach. Constitutional texts are not tied to the framer’s original understanding but evolve in response to both linguistic and social change: R Sullivan, Driedger on the Construction of Statutes 3^rd ed, at 137. A similar approach appears to prevail in this country.”

77 The second approach would treat s 155(5) as applying, in terms, notwithstanding changes to the law since it was enacted. That is, the recipient of the notice would be obliged to comply with it notwithstanding the assertion of a privilege not known to the law at the time the section was enacted. Broadly analogous approaches to the construction of statutes operating on the law from time to time can be found in AMS v AIF (1999) 199 CLR 160 at 176 [par 36] and 232 [par 221], Pelechowski v Registrar, Court of Appeal (1999) 162 ALR 336 at 355 [par 79] and 370 [par 137]; Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 at 263 and Downes v Williams (1971) 126 CLR 61 at 84. The observations of Dawson J in Corporate Affairs Commission of New South Wales v Yuill at 331 are apt to apply to the language and content of s 155:

“The absence of an express provision excluding a claim for legal professional privilege in an investigation under Pt VII may be accounted for by the view of the law which the legislature at the time the legislation was passed:cf Annetts v McCann. And if the legislation otherwise evinces a sufficiently clear intention to exclude the doctrine [of legal professional privilege], then effect must be given that intention: see Bropho v Western Australia. It should, however, be emphasized that, in the absence of an express exclusion, any implication to that effect must be a necessary requirement, for legal professional privilege is a doctrine of a fundamental kind which is not to be abrogated except in the clearest terms: see Baker v Campbell; Sorby v The Commonwealth; Balog v Independent Commission Against Corruption.

78 It must be accepted, as recognised by Dawson J in the passage just quoted, that the common law privilege attaching to communications between lawyers and their clients is now recognised as a fundamental one. As Wilson J observed in Baker v Campbell at 95:

79 A recent restatement of the rationale for the privilege (drawing together observations from earlier authorities) is found in the judgment of Kirby J in Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 168 ALR 123 at 155 [par 111]:

“Sixthly, it is necessary to return to the fundamental purpose of the privilege. It arises out of ‘a substantive general principle of the common law and not a mere rule of evidence’. Its objective is ‘of great importance to the protection and preservation of rights, dignity and freedom of the ordinary citizen under the law and the administration of justice and law’. It defends the right to consult a lawyer and to have a completely candid exchange with him or her. It is in this sense alone that the facility is described as ‘a bulwark against tyranny and oppression’ which is ‘not to be sacrificed even to promote the search of justice or truth in the individual case’.”

80 The means by which a court ascertains whether legal professional privilege has been abrogated by statute have been conveniently summarised by Miller J in Corporations and Securities Panel v Bristile Investments Pty Ltd (1999) 152 FLR 469 at 472:

“(A)s a head of privilege, legal professional privilege, is so firmly entrenched in the law that it is not to be exorcised by judicial decision: Grant v Downs (1976) 135 CLR 674 at 685. There must be a clear expression of legislative intent by express words or necessary implication for the privilege to be abrogated: Baker v Campbell (at 90) per Murphy J; (at 116) per Deane J and (at 123) per Dawson J and Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322-323 per Brennan J; (at 331) per Dawson J; (at 338) per Gaudron J and (at 348) per McHugh J . In Yuill (at 323) Brennan J put it this way:

‘In the absence of language which expressly excludes the privilege, indicia of legislative intention can be found in the nature of statutory power, the prescribed manner of exercise and purpose which its exercise is designed to achieve…’.”

81 However several considerations in this matter lead to the conclusion that s 155(5) should be construed as requiring the recipient of a notice produce a document or furnish information which might otherwise be the subject of a claim of legal professional privilege. First, the language of s 155(5) is, in my opinion, emphatic and requires compliance with a notice if the recipient is capable of complying with it. That appears to have been the view of Mason ACJ and Wilson and Dawson JJ in Pyneboard and also of Brennan J who described it (at 355) as "a statutory provision, clear and absolute in its terms". A person is capable of complying with a notice even if to do so is in derogation of a common law right, whether it is a right the person enjoys or the person asserts on behalf of another (as a solicitor does in relation to the client’s legal professional privilege).

82 It is appropriate at this stage, to refer to the judgment of the Full Court in Re Compass Airlines Pty Ltd (1992) 35 FCR 447. In that matter the Full Court concluded that the obligation to "not refuse or fail to produce [a document] in [a person's] possession" arising from s 597 of the Corporations Law did not extend to the production of a document which was privileged because of legal professional privilege. In the leading judgment of Lockhart J a detailed analysis was undertaken of the legislative history (and related case law and commentaries) of the provisions permitting the examination of directors and offices of companies. The analysis returned to the late 19th century. His Honour noted (at 453) that with one recent exception, in no case of which he was aware in Australia or the United Kingdom had it been held that legal professional privilege could not be called in aid by a person required to give evidence or produce documents in the statutory context under consideration. That history together with the fact that the purpose for which the power was conferred (to enable a liquidator to gain information regarding the affairs of the company) would not be stultified if legal professional privilege could be claimed, appear to have been the two central factors leading his Honour to the conclusion that legal professional privilege was not abrogated by s 597.

83 In the present matter there is no equivalent legislative history. Moreover the attainment of the purpose for which the power is conferred by s 155 may be hampered by treating the obligation imposed by s 155(5) as subject to claims of legal professional privilege. Documents or information relevant to the inquiry might be denied to the person undertaking it. As was made clear by the High Court in Pyneboard, a claim of privilege on the ground of self-incrimination would substantially fetter an investigation and stultify the statutory purpose for which s 155 was enacted. It is true that different considerations arise in relation to communications for which a claim for legal professional privilege might be made. Privileged documents, for example, may be sought by a notice under s 155 in circumstances where the documents could ultimately prove to have a limited bearing on whether there had or had not been a contravention of the TP Act. Documents or information resisted on the grounds of the privilege of self-incrimination may be thought, in the ordinary course, to be likely to have a greater bearing on the question of whether there had been contravention. Nonetheless the observations of Dawson J in Corporate Affairs Commission of New South Wales v Yuill (at 333) are, to some extent, apt to apply to an investigation in respect of which a notice might issue under s 155:

“Plainly, any investigation is likely to be hampered by a claim of legal professional privilege on the part of an officer of the company being investigated. This is the more so when the aims of the investigation include the prosecution of offences and the institution of civil proceedings. In particular, establishing such matters as fraud, negligence or breach of duty may depend upon proof of the nature of any legal advice given. Legal professional privilege may not, of course, be claimed even at common law for communications which amount to participation in a crime or fraud, but a claim of legal professional privilege may nonetheless seriously impede the investigation of those matters.”

84 Not only is the problem one associated with the denial, potentially, to the investigator of relevant documents or information. If the recipient of a notice issued under s 155(1) can claim, and thus raise the issue of, legal professional privilege, it would, in many instances, create a significant practical impediment to the investigation. The practical problems arising from a claim of privilege based on self-incrimination were adverted to in Pyneboard. They would be no less if the asserted privilege was legal professional privilege. Mason ACJ and Wilson and Dawson JJ observed at 340:

“There is in addition the problem of deciding whether it is for the authority requiring the answer, production of documents or the provision of information, or the court in subsequent proceedings by way of prosecution for an offence, to decide whether the claim for privilege is correctly made. It is difficult to suppose that the determination is to be left to an unqualified person. And there are practical problems in leaving the determination of the correctness of the claim for privilege to a court in proceedings by way of prosecution for the offence of refusing to answer questions, provide information or produce documents.”

85 Similar problems were identified by Brennan J at 355:

“If a decision upon a claim of privilege were needed to determine whether and to what extent there is an obligation to furnish particular information or to produce particular documents to a law enforcement agency conducting an investigation into a contravention of the law, how and by whom would the claim be decided? Would the obligation be defeated merely by the person from to the information is sought claiming privilege? Or would the claim of privilege defeat the obligation only if it were admitted by the agency which is seeking to enforce the obligation? Neither of these solutions is likely to represent the intention of the legislature …

Would the content of the obligation be ascertainable in practice only in and by a prosecution for its breach? Or in and by some other judicial proceeding? That is hardly a practicable solution when the statutory obligation falls to be discharged within a time specified in the s 155 notice. Where judicial control of privilege is not practicable, it is difficult to imply a qualification of privilege affecting the statutory obligation.”

86 It may be thought that proceedings of the type presently before the Court could be brought to test any disputed claim of legal professional privilege and the matter decided expeditiously. Section 39B(1A) would now appear to provide a mechanism for that to occur. However that, itself, raises more practical problems that are unlikely to be intended. The most likely circumstance in which the claim would be disputed would be if the investigator had cause to believe that the communication with the legal adviser was in furtherance of a contravention of the TP Act. The privilege would not ordinarily be maintainable in relation to such a communication: see Zemanek v Commonwealth Bank of Australia (unreported, Federal Court of Australia, Hill J, 2 October 1997). If, in those circumstances, the ACCC sought to put in issue a claim of legal professional privilege in proceedings under s 39B, it would bear the burden of proving, with admissible evidence, that prima facie the communication was for an unlawful purpose: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501. That is, the ACCC would have to establish the very thing it was seeking to investigate by the issue of the notice under s 155.

87 For the preceding reasons, I would make an order to the same effect as order 2 sought by the ACCC.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated: 16 March 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 992 OF 2000

REFERRED BY THE CHIEF JUSTICE FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

AUSTRALIAN COMPETITION & CONSUMER COMMISSION

APPLICANT

AND:

THE DANIELS CORPORATION INTERNATIONAL
PTY LIMITED (ACN 006 647 936)

FIRST RESPONDENT

MEERKIN & APEL (a firm)

SECOND RESPONDENT

JUDGE:	WILCOX, MOORE AND LINDGREN JJ
DATE:	16 MARCH 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

LINDGREN J:

88 I have read drafts of the Reasons for Judgment of Wilcox J and Moore J. I am in general agreement with their Honours’ reasons. Therefore, I agree that a client served with a notice under s 155 of the Trade Practices Act 1974 (Cth) (“the Act”) is not rendered not “capable of complying with it” for the purpose of par (5)(a) of that section, by the fact that the client enjoys common law legal professional privilege in respect of communications caught by the notice.

89 The proposition just stated resolves a general question of law, although not one which arises directly on the facts of this case, because the notices here were served, not on a client, but on its solicitors.

90 In my view, in par 155(5)(a) of the Act, “to the extent” clearly means “to the full extent”, and “capable” seems to mean at least “immediately physically able without unreasonable practical difficulty and without in any respect acting unlawfully or committing a legal wrong”. Accordingly, to take the most straightforward case, a client in possession of a privileged communication from the client’s solicitor, such as a written advice, would be obliged to produce it in response to a notice given to the client under par 155(1)(b) of the Act.

91 At the commencement of the hearing, The Daniels Corporation International Pty Ltd (“Daniels”) was the only respondent. The parties made clear that they sought a determination of the general question of law mentioned above. But there was a difficulty. The s 155 notices in question were notices requiring the supply of information under par 155(1)(a) of the Act and the production of documents under par 155(1)(b) of the Act, both dated 14 September 1999 and addressed to Daniels’ solicitors, “The Partners Meerkin & Apel”. But Meerkin & Apel were not respondents to the present proceeding. It was understandable that Daniels was a respondent since the privilege, if it existed, was its privilege, not that of its solicitors, and no doubt it was thought desirable that Daniels have the opportunity of asserting and defending its privilege, and be bound by the result in the case. But it was also necessary that the solicitors, as the persons served with the notices, be bound by the result.

92 The Court raised these matters on the hearing and in consequence, by consent, Meerkin & Apel were added as second respondents.

93 Consistently with the parties’ desire that we decide the general question of law mentioned, it was not submitted that we should distinguish between the positions of Daniels and its solicitors. In particular, it was not submitted that if we should decide that Daniels could not rely on its privilege to refuse to comply with a notice served on it, we should, nonetheless, decide that Meerkin & Apel could refuse to comply with a notice served on them on the basis that they could not waive Daniels’ privilege, and, indeed, owed Daniels a duty to attempt to protect its privilege.

94 Accordingly, we have been able to decide the general question of law referred to at the outset, unencumbered by any procedural difficulty.

95 The Court is not required in this case to identify definitively the scope of the expression “capable of complying” in par 155(5)(a) of the Act. In particular, we are not called upon to decide whether “capable” refers to nothing more or less than physical capacity, or, on the other hand, imports a reference to legal concepts. If it does the latter, two questions would arise. First, would a person served with a notice be “capable of complying” with it if, although not immediately physically capable of doing so, the person had a legal right to compel another person to furnish the information or to produce the documents referred to in the notice? Secondly, would a person served with a notice be not “capable of complying” with it if, by doing so, he or she would contravene a statutory provision, infringe the rights of a third party (other than the legal professional privilege of a client of the person), or breach a court order or otherwise commit a contempt of court, such as by interfering with the administration of justice (cf Commissioner of Taxation v De Vonk (1995) 61 FCR 564 (FC))? As I said, the Court is not called upon to explore these questions and has been able to proceed as if the only suggested incapacitating factor was legal professional privilege which, contrary to the fact here, the person served with the notice was at liberty unilaterally to waive.

96 It follows from the answer we are giving to the general question mentioned earlier, that is, that a client served with a notice under s 155 is not entitled to refuse compliance on the ground of its legal professional privilege, that solicitors served with such a notice cannot do so on the ground that they owe their client a duty to attempt to protect the client’s privilege: they can be in no better position than their client.

97 Since the hearing, Meerkin & Apel have drawn the Court’s attention to the decision of Conti J in Joel v Migration Agents Registration Authority [2000] FCA 1919 given on 22 December 2000. It is sufficient to say that the language of subs 308(1) of the Migration Act 1958 (Cth) (“The Migration Agents Registration Authority may require a registered agent: (a) to make a statutory declaration in answer to questions in writing by the Authority; or (b)¼; or (c) to provide the Authority with specified documents or records relevant to the agent’s continued registration”) is “weaker” than that of subs 155(1) and par 155(5)(a) of the Act, and, notably, lacks the words “to the extent that the person is capable of complying”. I do not see his Honour’s view that the provision with which he was concerned is subject to the client’s legal professional privilege as inconsistent with the view that par 155(5)(a) of the Act is not subject to such privilege.

98 The Court should make the orders proposed by Wilcox J.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated: 16 March 2001

Counsel for the Applicant:	Mr A Robertson SC and Mr J C Sheahan SC

Solicitors for the Applicant:	Corrs Chambers Westgarth

Counsel for the Respondent:	Mr S E Marks QC and Ms K L Emerton

Solicitors for the Respondent:	Meerkin & Apel

Date of Hearing:	15 February 2001

Date of Judgment:	16 March 2001

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