FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Pratt Holdings Pty Ltd [2003] FCA 6

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v PRATT HOLDINGS PTY LTD (ACN 004 421 961) & ANOR

V 781 of 2001

KENNY J

10 JANUARY 2003

MELBOURNE

CORRIGENDUM

Please substitute the 2 following pages for the front page and page 26 of the Reasons for Judgment delivered in this matter on 10 January 2003.

Emma Murphy

Associate to Justice Kenny

15 January 2003

Re Highgrade Traders Ltd [1984] BCLC 151 discussed

Price Waterhouse (a firm) v BCCI Holdings (Luxembourg) SA [1992] BCLC 583 discussed

Mudgway v New Zealand Insurance Co Ltd [1988] 2 NZLR 283 discussed

C-C Bottlers Ltd v Lion Nathan Ltd [1993] 2 NZLR 445 discussed

United States v Kovel 296 F 2d 918 (1961) discussed

United States v Schwimmer 892 F 2d 237 (2^nd Cir. 1989) referred

Grand Jury Proceedings (under seal) v United States 947 F 2d 1188 (4^th Cir. 1991) referred

Susan Hosiery Limited v Minister of National Revenue [1969] 2 Ex C.R. 27 discussed

Lyell v Kennedy (No 2) (1883) 9 AC 81 referred

Re Sokolov (1968) 70 D.L.R. (2d) 324 referred

Belgravia Investments Ltd v Canada [2002] FCJ No 870 discussed

Three Rivers District Council v The Governor and Company of the Bank of England (No 7) [2002] EWHC 2730 (Comm), [2002] All ER (D) 201 (Dec) cited

Mann v Carnell (1999) 201 CLR 1 applied

Ronald D Manes and Michael P Silver, Solicitor-Client Privilege in Canadian Law (Butterworths Canada Ltd, 1993)

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v PRATT HOLDINGS PTY LTD (ACN 004 421 961) & ANOR

V 781 of 2001

KENNY J

10 JANUARY 2003

MELBOURNE

71                  The claim made by Pratt Holdings for privilege in respect of the documents in categories (1), (5) and (6) (at [18] above) relies entirely upon the claim for privilege over the documents in (2) and (3).  This claim over categories (1), (5) and (6) therefore fails as well.  The applicants have not contended that the documents in categories (1), (5) and (6) are privileged on any independent basis.

72                  It may be that the requirement in Australia and England that, for the purpose of advice privilege, an agent of a client must be a person who is an agent for the purpose of communicating with the client’s solicitor is too narrow.  For example, this approach apparently requires that the relevant communication pass directly between the non-client and the solicitor.  A communication between a non-party and a solicitor, which passes via the client, it not apparently privileged.  Upon this approach, too much may turn on whether a written communication is prepared by a corporation internally, or externally by a third party, notwithstanding that the communication in either case is for the dominant purpose of obtaining legal advice and may contain the same information:  cf Three Rivers DC v Bank of England [2002] EWHC 2730, at [33].  It may be that the more functional approach adopted in the United States and in Canada (and to a lesser extent in New Zealand) may produce a more rational, or less artificial, result.  In the United States and Canada, a finding that a party is an agent for advice privilege purposes is resolved by finding that a communication was made by the agent for the dominant purpose of obtaining legal advice where the communicator was not acting entirely independently and “under his own steam”.  On the other hand, this more flexible approach puts some strain on the orthodox understanding of privilege, by extending its scope to a wider range of “agency situations” than that presently accepted in English and Australian law.  Further, it diminishes the difference between advice privilege and litigation privilege (for which the rationales differ in some respects) and broadens the protection against enquiry, whether pursuant to statute (as in this case) or otherwise.  Where, however, a question of privilege arises in a statutory context (as in this case) it would be open to the Parliament to modify or qualify the scope of the privilege for statutory purposes (subject, of course, to any relevant constitutional considerations).

consideration of the parties’ submissions on waiver

73                  The Commissioner also submits that the privilege which attached or may have attached to some documents (including written advices given by ABL to Pratt Holdings (referred to in category (4) at [18] above)) was waived by Pratt Holdings when it disclosed

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Pratt Holdings Pty Ltd [2003] FCA 6

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v PRATT HOLDINGS PTY LTD (ACN 004 421 961) & ANOR

V 781 of 2001

KENNY J

10 JANUARY 2003

MELBOURNE

CORRIGENDUM

In paragraph 71, line 4, of the Reasons for Judgment of Justice Kenny handed down on 10 January 2003, replace the word “applicants” with “respondents”.  The sentence should read “The respondents have not contended that the documents in categories (1), (5) and (6) are privileged on any independent basis.”

Sharon Burchell

Associate to Justice Kenny

29 January 2003