FEDERAL COURT OF AUSTRALIA

Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2008] FCA 554  

LEGAL PROFESSIONAL PRIVILEGE – request by solicitor to third party to copy documents – copies made by third party – privilege of copy documents – purpose of creation – whether purpose of solicitor the relevant purpose when determining privilege.

DISCOVERY – implied undertaking not to disclose discovered documents for another purpose – release from implied undertaking.

DISCOVERY – discovery of documents provided by third party – confidentiality of and prejudice to third party – regime for disclosure.

PRACTICE AND PROCEDURE – leave to issue subpoena.

Trade Practices Act 1974 (Cth) s 155

Barnes v Commissioner of Taxation (2007) 242 ALR 601 considered

Cadbury Schweppes v Amcor [2008] FCA 88 referred to

Cadbury Schweppes v Amcor [2008] FCA 398 followed

Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 considered

Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 referred to

Esso Australian Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 cited

Grant v Downs (1976) 135 CLR 674 considered

Hartogen Energy Limited (In Liq) v The Australian Gas Light Company (1992) 36 FCR 557 considered

Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 considered

Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2006] FCA 1802 related

Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2007] FCA 1559 related

Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2008] FCA 391 related

JARRA CREEK CENTRAL PACKING SHED PTY LTD (ACN 085 691 425) v AMCOR LIMITED (ACN 000 017 372), AMCOR PACKAGING (AUSTRALIA) PTY LIMITED (ACN 004 275 165), FIBRE CONTAINERS (QUEENSLAND) PTY LIMITED (ACN 051 607 517), VISY BOARD PTY LIMTIED (ACN 005 787 913), VISY INDUSTRIES HOLDINGS PTY LTD (ACN 005 787 968) and VISY INDUSTRIES AUSTRALIA PTY LTD (ACN 004 337 615)

NSD 702 of 2006

TAMBERLIN J

24 APRIL 2008

SYDNEY

THE COURT DIRECTS THAT:

1.                  The parties consult with a view to agreeing upon and sending to my Associate in chambers Short Minutes of Order giving effect to these reasons for judgment.

2.                  The parties, if unable to agree on Short Minutes of Order giving effect to these reasons for judgment, send to my Associate in chambers competing Short Minutes of Order with brief reasons.

THE COURT ORDERS THAT:

3.                  The applicant pay the costs of the fourth to sixth respondents in relation to the issue concerning privilege of copy documents.

4.                  Other costs be reserved.

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

REASONS FOR JUDGMENT

1                          The applicant (“Jarra Creek”) seeks production of documents by the fourth to sixth respondents (“the Visy parties”) for the purpose of this proceeding.  Although several issues for decision arise in this application, the main issue is whether copy documents, the originals of which may not be privileged, are protected by a privilege claim where they were furnished by the Australian Competition and Consumer Commission (“the ACCC”) in response to a Notice to Produce and requests from the solicitor acting for the Visy parties in another proceeding before the Court (VID 1650 of 2005 – Australian Competition and Consumer Commission v Visy Industries Holdings Pty Limited (“the ACCC proceeding”)).

BACKGROUND

2                          Aspects of the background to this matter have been briefly discussed in my previous judgments: see Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2006] FCA 1802; Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2007] FCA 1559; and Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2008] FCA 391.  I set out below in short compass some additional background information relevant to this application.

3                          Mr Heathcote, a partner of Arnold Bloch Leibler (“ABL”), solicitors for the Visy parties, gave evidence that on 8 December 2004 he formed the conclusion that there was a real prospect of litigation being commenced by the ACCC against the Visy parties in respect of alleged breaches of the Trade Practices Act 1974 (Cth).  The ACCC in fact commenced the ACCC proceeding against the Visy parties (and others) on 21 December 2005. 

4                          In the ACCC proceeding, documents which were brought into existence (or otherwise obtained) by the ACCC for the purpose of that litigation were discovered.  Pursuant to a request by ABL in the ACCC proceeding, some of those documents were copied by the ACCC and the copies were provided to ABL.  The Visy parties claim privilege in this proceeding for those copy documents on the basis that they came into existence pursuant to ABL’s request, which was made for the purpose of providing legal advice or assistance to the Visy parties in relation to the matters the subject of the ACCC proceeding or related proceedings at a time when litigation was reasonably anticipated.

5                          A second group of documents in the possession of the Visy parties includes copies of transcripts of the examinations of certain persons by the ACCC in relation to the ACCC proceeding. This group of documents also includes copies of exhibits referred to in those transcripts.  Copies of these transcripts and exhibits were provided to Mr Heathcote by the ACCC at his request for what he says was the dominant purpose of providing legal advice.

6                          A third group of copy documents provided by the ACCC to the Visy parties in the ACCC proceeding comprises documents produced in response to Notices to Produce.

ISSUES

7                          After the hearing of this application, both Jarra Creek and the Visy parties filed with the Court outlines which identified issues arising for decision on this application.  There are eight matters to be considered.  The ACCC filed a short response in relation to issues 3, 5 and 8.  In short form, the questions are:

1.      Are the proofs of the ACCC and the proofs of the Visy parties subject to an implied undertaking in light of the decision of Gordon J in Cadbury Schweppes v Amcor [2008] FCA 398?

2.      Are the proofs of the Visy parties privileged?

3.      How should outstanding claims of confidentiality and prejudice by third parties in relation to documents adduced in the ACCC proceeding, which may be subject to implied undertakings as to their use, be resolved?

4.      Are copy documents provided by the ACCC to the Visy parties – namely, transcripts and exhibits, discovered documents and documents the subject of Notices to Produce – privileged?

5.      Should leave be granted to Jarra Creek to subpoena the ACCC to the extent that the Visy parties succeed in their privilege claims?

6.      Should the further discovery sought by Jarra Creek be ordered?

7.      Are the s 155 notices discoverable?

8.      What form should the orders take?

ISSUE 1 – IS THERE AN IMPLIED UNDERTAKING?

8                     Gordon J in Cadbury Schweppes v Amcor [2008] FCA 398 held that documents provided by the Visy parties to the applicant in a different proceeding before the Court (that is, the ACCC proceeding) were not subject to an implied undertaking, and that they should therefore be produced to Cadbury SchweppesPty Ltd in the proceeding before her Honour.  However, having made this order, her Honour, on the application of the ACCC, stayed the requirement for compliance for one month (which stay was later extended by Weinberg J until resolution of any application for leave to appeal from her Honour’s judgment).

9                     In my view, the reasons of her Honour are applicable to the present case.  I also consider that the Visy parties should be immediately released from their implied undertaking, subject to the opportunity being given to any third parties to make submissions before disclosure of any documents in which they have an interest.  Any interests of third parties which may be prejudiced should be protected under the regime prepared in relation to Issue 3 below.

10                       It is important to note that Jarra Creek submitted that the implied undertaking automatically yields to orders for discovery which I made in this proceeding on 31 March 2008.  I do not consider that those orders displace the implied undertaking, or that they were intended to do so. 

ISSUE 2 – ARE THE PROOFS OF the VISY PARTIES PRIVILEGED?

11                       Jarra Creek submits that I should proceed to determine this issue, since the Visy parties have not agreed to be bound by the outcome of the appeal from the decision of Gordon J in Cadbury Schweppes v Amcor [2008] FCA 88.

12                       The Visy parties submit that it is premature to decide this issue now.  They say that the Fifth List of Documents (pursuant to which they discovered and claimed privilege over the relevant documents) was only filed on 7 April 2008.  Any challenges to those claims of privilege, it is said, will require an order for verification of the claims and substantive argument on the point.

13                       It is not appropriate at this stage to determine whether the proofs of the Visy parties are privileged.  However, I do not want to defer determination of this issue until the full appeal process from the decision of Gordon J in Cadbury Schweppes v Amcor [2008] FCA 88 has been exhausted.  This would delay the matter significantly, and the matter has already had a long history.  Protracted delay is not acceptable.

14                       For these reasons, I require that the Visy parties verify their claims of privilege forthwith so that the matter can proceed to argument and determination if the parties are not able to reach agreement on this point.

ISSUE 3 – regime TO RESOLVE CONFIDENTIALITY AND PREJUDICE CLAIMS?

15                       The problem connected to this issue is how documents which were provided to the ACCC by third parties, and then provided by the ACCC to the Visy parties during the ACCC proceeding, should be disclosed in this proceeding without prejudice to any claims of confidentiality or any interests which the third parties may wish to assert.

16                       Jarra Creek, the Visy parties, and the ACCC made submissions on the appropriate regime to be instituted to best reconcile the desirability of disclosure with the need to maintain confidentiality and avoid prejudice.  Jarra Creek proposes a regime that makes available the relevant documents, subject to assertions of rights by the ACCC or by any affected third parties.  The Visy parties propose a course, which involves the ACCC providing Jarra Creek with a list of names and addresses of affected third parties, Jarra Creek then writing to those third parties to advise them that it wishes to access and use their documents in this proceeding, and the Court then hearing any submissions at a future hearing date.  Finally, the ACCC proposes a regime by which it provides some lists of names and addresses to Jarra Creek, but with some details not produced.

17                       Given the possible adverse effect on third parties, I favour the submission of the Visy parties.  I am aware that this procedure may involve some expense, but in my view it is the best way to progress this matter.

18                       The appropriate course, which should be implemented immediately, runs along the following lines.  The ACCC should immediately give Jarra Creek a list of the names and addresses of all persons who provided documents to the ACCC which were discovered to the respondents in the ACCC proceeding.  The list should indicate which documents relate to each person who may wish to make submissions.  Where a witness proof has been prepared and served on the Visy parties in the ACCC proceeding, the ACCC should list the names and addresses of the deponents of those witness proofs.  The ACCC should supply Jarra Creek with the lists within 14 days of the date of this judgment.  Jarra Creek should pay the reasonable costs of the ACCC in relation to the compiling of the information.  Secondly, Jarra Creek should prepare a form of letter which it intends to send to third parties, advising them that it seeks disclosure of the documents supplied to the ACCC in this proceeding, and that any objections should be notified to the Court by a specified date.  The form of the letter should be agreed between the parties and the ACCC, failing which it shall be determined by the Court.  Finally, Jarra Creek should send the letter, as approved, to the third parties.  On the next working day after the specified date for objections, the documents relating to those persons who did not object should be disclosed.  A date will be set for the hearing of any objections that are maintained.

19                       I do not accept the submissions of the ACCC on the regime.  It is not appropriate to await the outcome of the appellate process from the decision of Gordon J.  Given the ruling of Heerey J in the ACCC proceeding, I do not consider that documents RMA-24 and RMA-26 should be treated any differently.

ISSUE 4 – ARE THE COPY DOCUMENTS PRIVILEGED?

20                       The question which arises is whether copy documents in the control of the Visy parties are privileged when those copies were made available to them as a result of ABL’s requests or Notices to Produce, given in circumstances where the dominant purpose of ABL for making those requests was to provide legal advice and assistance to the Visy parties.  This raises a factual issue as to whether the Visy parties have adduced sufficient evidence to establish that the documents were produced for the dominant purpose of providing legal advice or assistance.

Submissions

21                       Jarra Creek correctly submits that the Visy parties bear the onus of establishing privilege, and further submits that, since the Visy parties have not made out a sufficient case to show that the copy documents are covered by privilege, they have not discharged this onus.  It is common ground that, in order to succeed, the Visy parties must establish that the copies were made for the dominant purpose of seeking legal assistance or advice or were made in relation to legal proceedings reasonably anticipated at the time the documents came into existence.  It is not sufficient, so it is said by Jarra Creek, merely to show that the legal adviser for the Visy parties requested copies from the ACCC.  It is necessary for the person at the ACCC who made the copy document or ordered that the document be copied be called to give evidence as to his or her dominant purpose.  This, says Jarra Creek, has not been done.  Furthermore, Jarra Creek rejects the proposition that the person at the ACCC who actually made the copy was acting as agent for ABL in complying with the request.

22                       Jarra Creek submits that there was no evidence from the ACCC as to the purpose for which the copies were made, and therefore it is equally possible that the copy documents could have been made for non-privileged purposes.  Jarra Creek says that the time at which the purpose of the creation of the documents must be assessed is when the copy documents are made.  It says that any purpose of a solicitor who requests production of documents from a party, who is not bound to comply with that request, is not relevant and that the use made of the documentsafter they came into existence is also irrelevant.

23                       Jarra Creek says that the evidence in this case purporting to identify the purpose at the time and for which the copy documents were created by the ACCC is neither focused nor specific, and cannot ground a claim of privilege.  Jarra Creek submits that the evidence of Mr Heathcote as to his purpose in requesting the documents is not of any assistance because his motive is not that of the person making, or ordering the making of, the copy.  The purpose of the ACCC is said to be the only relevant purpose and on that point the evidence is silent.  Jarra Creek says that to extend privilege protection to copies made by strangers to the litigation travels beyond the principles set out in the authorities.

24                       The evidence of Mr Heathcote is said by Jarra Creek to be insufficient because it does not establish the purpose for which the documents were brought into existence, nor does it establish that any such purpose is dominant.  Jarra Creek says his evidence is at best equivocal.  In addition, Jarra Creek says that, in any event, the ACCC had a discretion as to whether to accede to Mr Heathcote’s request.  Accordingly, the intent or purpose of the person making the request is not determinative and it is therefore essential to prove the purpose of the ACCC in making the document available in order to resolve the issue as to dominant purpose.  As this has not been done, Jarra Creek says no claim of privilege can be maintained.

25                       In response, the Visy parties say that the approach taken by Jarra Creek is too narrow and that it is necessary to take a more pragmatic approach.  Practical common sense, they say, requires that where a solicitor makes a request for access to copies of documents from a third party, and seeks the copies for the purpose of giving legal advice or assistance or for use in reasonably anticipated litigation, it should be inferred that the dominant purpose for the creation of the copies by the copier was to carry the solicitor’s purpose into effect.  In other words, the Visy parties contend that the person making the copy at the ACCC should be regarded as making it in order to comply with ABL’s request and that ABL’s purpose therefore is sufficient to attract privilege.  This, it is said, is the proper inference to be drawn from the fact that the request was made and that it was complied with unconditionally.

26                       The Visy parties identify the “communication” claimed to be the subject of privilege as being the contents of the documents sent by the ACCC to ABL, namely, the copies, transcripts (including copy exhibits attached thereto) and the correspondence accompanying the documents sent to the Visy parties by the ACCC.

Principles

27                       The relevant principles as to legal advice and litigation privilege are helpfully summarised by Kenny J in Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 278-282.

28                       The most relevant authority in relation to copy documents is the decision in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501. In that case, the High Court undertook a detailed examination of legal professional privilege in circumstances where some original documents were not privileged, but a separate claim of privilege was advanced in respect of copies of those documents which were made for the purpose of obtaining or giving legal advice or for use in legal proceedings.  It is important to note that, in Propend 188 CLR 510, the documents in question were not created by a stranger to the litigation.

29                       In the leading case of Grant v Downs (1976) 135 CLR 674 at 677, Barwick CJ expressed the general principles as to privilege in the following terms:

‘… a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.’  

(Emphasis added.)

From these observations of Barwick CJ, it is clear that he considered that privilege is to be determined not solely by reference to the purpose of the person who actually made the copy, but also by reference to the purpose of the person who directed or authorised the copy.  Although his Honour was in a minority in that case in adopting a dominant purpose as opposed to a sole purpose test, his Honour’s observations are apposite to present circumstances, particularly in light of the later conclusion of the High Court that privilege is determined by reference to the dominant purpose: see Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49.

30                       In Hartogen Energy Limited (In Liq) v The Australian Gas Light Company (1992) 36 FCR 557 at 568-569, Gummow J observed that the purpose for which a document is brought into existence is a question of fact, and the legal issue is whether the purpose of supplying the material to the legal adviser accounts for the existence of the material.  His Honour accepted that the relevant “purpose” will ordinarily be that of the maker of the documents, but his Honour also observed that privilege is attracted where the person who calls the document into existence does so in the bona fide belief that litigation will probably ensue.  By way of example, his Honour referred to situations where solicitors commission the provision of a technical report with the consequence that the relevant intention will not be that of the report’s author but the solicitor who requests it.  Privilege in a copy document may therefore arise where a person requests that the original document be copied for his or her own purpose of providing legal advice or assistance.

31                       The principles summarised by Gummow J in Hartogen 36 FCR at 568-569 were affirmed and applied by Batt JA in the Victorian Court of Appeal in Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 338, with whom Charles and Callaway JJA agreed.  In that case, the reports in question were commissioned by the solicitors.  His Honour considered that the relevant purpose included the intention of a person under whose direction the relevant document is brought into existence. 

32                       In the recent decision of Barnes v Commissioner of Taxation (Cth) (2007) 242 ALR 601, the Full Federal Court considered the question whether privilege attaches to copy documents, and confirmed that the test was whether the copy itself came into existence for the dominant purpose of giving legal advice or assistance.  In that case, the Full Court considered there was an insufficiency of direct evidence as to the purpose of creation.  Their Honours emphasised the need for focused and specific evidence as to the making of the copies in order to properly ground a claim for legal professional privilege.  They observed at 605 that “verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege”. 

Consideration

33                       Where it is necessary to determine the purpose for which a copy document has come into existence, it is appropriate to identify some person or entity from whom that purpose can be elicited.  The authorities refer to “the maker” of the relevant document – a description which, in the circumstances of copy documents, could be interpreted literally to mean the person who actually carries out the physical task of copying.  To limit the concept of “purpose” to such a person is clearly too restrictive, and would run contrary to the authorities which refer to the purpose of the person who “authorised”, “ordered” or “procured” the creation of a copy document, or “called the document into existence”.  In addition, some authorities regard as relevant the purpose of the person at whose “request” a document comes into existence.  An example of such a person is a legal adviser who requests an expert or third party to provide a report for use in litigation: see Hartogen 36 FCR at 568-569.

34                       In principle, it is not easy to see why the purpose of a lawyer who acts for a party should not be relevant, or indeed in some cases controlling, where he or she requests another person to provide copy documents for that particular purpose.  In such a case the circumstances may indicate, when taken together with the terms of the request, or by clear implication from the request, that the documents are required for the dominant purpose of providing legal advice or assistance.  In such a case, an accession to the request (by copying the documents) can properly be treated as being for the purpose of the legal adviser who called the documents into existence.

35                       In my opinion, the copy documents produced by the ACCC in response to the requests by ABL come within the privilege which applies in respect of copy documents produced for legal advice or assistance or for use in reasonably anticipated legal proceedings.  As in the present circumstances, where the evidence is that documents are requested by a solicitor solely for such a purpose, and the request is complied with by the third party without any qualification, it can be reasonably inferred that the copy documents were made in order to comply with the request and to carry out the purpose (be it either expressed or implied from the circumstances) for which the request was made.  There is no evidence in this case to indicate that the ACCC had any other motive or purpose in making the copies available except to comply with the request by ABL.  This conclusion applies in respect of all copy documents requested by ABL orally or in writing in relation to the ACCC proceeding, including those produced under any Notice to Produce issued by ABL to the ACCC. 

36                       In light of the above reasons, it is appropriate that Jarra Creek should pay the costs attributable to the determination of this issue relating to the privilege claim in respect of the copy documents.

ISSUE 5 – SHOULD JARRA CREEK HAVE LEAVE TO SUBPOENA THE ACCC?

37                       Jarra Creek seeks an order that, to the extent that the Visy parties succeed in their privilege claims which were the subject of Issue 4 above, leave should be granted to Jarra Creek to subpoena the ACCC.  Although the Visy parties do not oppose the granting of such leave, the ACCC submits that leave should not be granted:

(a)          until the privilege claims which were the subject of Issue 4 are determined; and

(b)          because it is not appropriate for Jarra Creek to subpoena documents from the ACCC simply because it has been unsuccessful in obtaining those documents from the Visy parties by way of discovery.

38                       In my view, it is appropriate to grant leave to issue the subpoenas.  The request for leave is not opposed by the Visy parties, and the form of subpoena proposed by Jarra Creek is specific and certain in its terms.  Accordingly, leave to issue the subpoena should be granted immediately, and not delayed as the ACCC contends.

ISSUE 6 – SHOULD FURTHER DISCOVERY BE ORDERED?

39                       By order 2 of its Amended Notice of Motion Jarra Creek sought an order that further discovery be granted.  This order was intended to compel the Visy parties to discover and produce for inspection documents and categories of documents which were listed in two schedules to the Amended Notice of Motion.

40                       By agreement, the parties do not require determination of this issue.  Both Jarra Creek and the Visy parties agree that discussions between themselves may obviate the need for an order of the Court granting this further discovery.  I shall therefore refrain from making any orders on this matter at this stage.

ISSUE 7 – ARE THE SECTION 155 NOTICES DISCOVERABLE?

41                       Jarra Creek seeks an order that any as yet undiscovered notices issued by the ACCC pursuant to s 155 of the Trade Practices Act 1974 (Cth) now be discovered by the Visy parties.  The Visy parties submit in response that any such notices are not relevant to this proceeding.

42                       In my view, these notices may be relevant, and should therefore be discovered. 

ISSUE 8 – WHAT FORM SHOULD THE ORDERS TAKE?

43                       The form of the orders should be settled after the parties have had a chance to consider my reasons.  If the parties cannot agree on the form of orders, the points of disagreement should be identified and competing Short Minutes of Order should be sent to my Associate in chambers with brief reasons.  I will then decide on the form of orders in chambers.

CONCLUSION

44                       I direct the parties to consult with one another and endeavour to agree on Short Minutes of Order giving effect to these reasons.  The Agreed Short Minutes of Order should be sent to my Associate in chambers.  If agreement cannot be reached, I direct the parties to send their respective Short Minutes of Order to my Associate in chambers with brief reasons.

45                       Jarra Creek should pay the costs of the Visy parties in relation to the privilege question concerning copy documents (Issue 4 above).  Other costs are reserved.

Associate:

Dated:         24 April 2008