FEDERAL COURT OF AUSTRALIA

Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950

THE COURT ORDERS THAT:

1.    The respondent make available for inspection by the applicant documents 4, 9, 15, 32, 35, 39, 45, 65, 66, 67, 68, 73, 74, 104, 144 and 145 and copies of documents 99 and 100 redacted in accordance with these reasons.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

Introduction

1    This is an interlocutory dispute about whether the respondent’s objections to the production for inspection of certain documents included in its list of documents provided to the applicant on discovery are justified. The ground for the objection in each case is legal professional privilege. The dispute has been a protracted one. In many instances the respondent has either abandoned or waived its claim. Ultimately, however, agreement could not be reached on a relatively small number of documents and a ruling is called for.

The claim

2    At the outset of the hearing, the disputed claims of privilege were made over 37 documents, other documents sought by the applicant not, in fact, having been discovered in this proceeding at all or in one case already having been produced. Unsurprisingly, most of these documents are in fact emails or chains of emails and an email in one of the documents often appears in another, as occurs when a person receives an email and then forwards it on to others. On 9 June 2010, after the hearing concluded, the respondent’s solicitors wrote to the applicant’s solicitors advising that their client had decided to waive its privilege over a further eight of the disputed documents, although only on the basis that it did not waive privilege “over any discussions referred to in those documents” or “in respect of any other document referred to in those documents”. A copy of the respondent’s letter was sent by email to my associate the following day.

3    The respondent’s claim is supported by two affidavits. One is an affidavit affirmed on 3 June 2010 by Elizabeth Ferrier, the solicitor with carriage of the proceeding for the respondent. It does no more than annex the relevant correspondence between the parties’ solicitors. The second, and more important one, is an affidavit of Glenn James Fredericks, Executive Legal Counsel in the Legal Services division of the Commonwealth Bank (Bank), the parent company of the respondent, affirmed on 28 May 2010. Mr Fredericks was not the author of most of the documents but, in a majority of cases, they had been sent, or copied, to him. With one exception the documents were emails or attachments to emails.

4    When it came to the particular documents, Mr Fredericks supplied a table which contained a brief description of each document. In some cases he said the documents were sent “in the context” of providing legal advice. In others he said they were provided “for the purposes of providing legal advice and representation”. In others Mr Fredericks made no reference to legal advice.

The legal principles

5    As this is a question of pre-trial production rather than the adducing of evidence, the common law and not the Evidence Act 1995 (Cth) governs the determination of the issues: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, 201 CLR 49 (Esso) at [17]-[28] per Gleeson CJ, Gaudron and Gummow JJ, [64] per McHugh J.

6    The test of whether a communication or document is subject to legal professional privilege is whether the communication was made or the document was prepared for the dominant purpose of obtaining or providing legal advice or to conduct or aid in the conduct of litigation in reasonable prospect: Esso at [61] per Gleeson CJ, Gaudron and Gummow JJ. In its ordinary meaning the dominant purpose is a reference to “the ruling, prevailing, or most influential purpose”: Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416.

7    The question of whether a purpose is the dominant purpose is to be determined objectively but “the subjective purpose will always be relevant and often decisive”: Esso at [172] per Callinan J. See, too, Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 per Spigelman CJ at [6].

8    Legal professional privilege extends to several classes of documents, including:

(1)    Communications between a party and the party’s professional legal adviser, if confidential and made to or by the adviser in his or her professional capacity and with a view to obtaining or giving legal advice or assistance, even if the communications are made through agents [or employees] of the party and the solicitor or either of them.

(2)    Documents prepared with a view to being used in the way described in category (1) above, although not in fact so used.

(3)    Communications between the various legal advisers of the client, such as between the solicitor and the solicitor’s partner or agent, with a view to the client obtaining legal advice or assistance.

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

(5)    Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence.

(6)    Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his or her advice or enabling him or her to prosecute or defend an action.

(7)    Knowledge, information or belief of the client derived from privileged communications made to the client by the client’s solicitor or agent.

See Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246 (Sterling) where the authorities in support of these propositions are also cited.

9    The other relevant principles may be summarised as follows:

(1)    It is not sufficient for a party merely to assert a claim for client legal privilege; the party making the claim must establish the facts giving rise to the privilege. Verbal formulae (even if unchallenged) will not be enough: Grant v Downes (1976) 135 CLR 674 (Grant v Downes) at 689 per Stephen, Mason and Murphy JJ; Esso at [52] per Gleeson CJ, Gaudron and Gummow JJ; National Crime Authority v S (1991) 29 FCR 203 at 211 per Lockhart J; Kennedy v Wallace [2004] FCAFC 337, 142 FCR 185 at [13] per Black CJ and Emmett J.

(2)    The privilege attaches to communications, which may be oral or in writing or a combination of both; it does not inhere in the document itself: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (Propend).

(3)    Copies of documents made for the dominant purpose of obtaining or giving legal advice or professional legal services relating to actual, anticipated or pending proceedings are privileged, even if the originals are not: Propend.

The in-house lawyer

10    Although Mr Fredericks is not an employee of the respondent, but of its parent company, the parties approached the issues on the basis that he was an in-house lawyer, that is to say, he was a lawyer employed by his client. There is no doubt in Australia that communications to and from such a lawyer may be protected from disclosure by legal professional privilege but whether in any particular case they will depends on the circumstances.

11    In Rich v Harrington [2007] FCA 1987, 245 ALR 106 (Rich) Ms Rich, a partner in the legal and accounting firm of Price Waterhouse Coopers (PwC), who had commenced proceedings against the partners alleging direct and indirect sex discrimination and victimisation, challenged the respondents’ claim of legal professional privilege in respect of certain categories of document. One category was legal advice from lawyers in PwC’s own Office of General Counsel (OGC), which Ms Rich challenged on the basis that the relationship between the respondents and the OGC was not such as to give rise to the privilege. As Branson J understood it, Ms Rich submitted, first, that the independence of legal advice provided by the OGC could not rise above the independence of the person who holds the office of General Counsel because that person supervised and had ultimate responsibility for the work of the OGC; and second, that the OGC’s legal advice was not independent because General Counsel, who was also a partner in PwC, had been both legal adviser and client.  Her Honour did not find it necessary to form a concluded view as to the validity of the second submission but said (at [41]) that the first seemed to be correct. Regardless, her Honour approached the issue on the basis that the question was whether, having regard to the nature of the dispute between Ms Rich and PwC that formed the subject matter of the proceeding, the relationship between OGC and PwC was a professional relationship which secured to the OGC’s advice an independent character despite the fact that the General Counsel, and one other senior solicitor in the OGC, were also partners in PwC.

12    Her Honour formulated the question of principle in the following way at [46]:

The requirement that the legal adviser be independent is principally concerned with the nature of the relationship between the client who claims client legal privilege and the legal adviser. The requirement that the communication be made for the dominant purpose of obtaining legal advice or to conduct or aid in the conduct of litigation in reasonable prospect is concerned with the object and subject-matter of the communication. Each criterion must be satisfied before a claim for client legal privilege will succeed.

13    When considering the first criterion – the requirement of independence – she said (at [58]) that “the critical question” in the case before her was “whether the relationship between OGC and the respondents with respect to Ms Rich’s allegations was one of professional detachment”. To answer the question her Honour said (at [59]) it was necessary to consider the nature of Ms Rich’s allegations and their significance for General Counsel, in particular, and the OGC, in general:

As mentioned above, they were made by one partner against other partners. It seems uncontroversial that they were of a kind capable of tarnishing the reputation of the firm of which the OGC is a part. They cast aspersions of a personal, rather than a purely professional, kind on general counsel’s partners including those partners who comprised the leadership of her firm. The general counsel and the deputy general counsel were themselves likely respondents in the litigation in prospect. Because of its likely subject-matter, that litigation, should it eventuate, could reasonably be expected to attract a high level of media interest of a relatively sensational kind. For these reasons I conclude that Ms Rich’s allegations were by reason of their content inherently likely to engage the personal loyalties and the duties and interests of all partners of PwC – and probably many employees of the firm as well.

14    The result (at [60]) was that the relationship between the OGC and the respondents was not such “as to secure to the advice of the OGC concerning Ms Rich’s allegations the objectively independent character” her Honour held was necessary to support the respondents’ claim of client legal privilege.

15    With respect, her Honour might have overstated the content of the requirement that legal professional privilege will arise only where the advice has “an independent character”. Her Honour applied the decision of the High Court in Waterford v Commonwealth (1987) 163 CLR 54 (Waterford), a case concerning legal officers employed by the Commonwealth providing legal advice to the Commonwealth. A close examination of the judgments in that case does not seem to bear her Honour out.

16    In Waterford Mason and Wilson JJ said at 62:

Whether in any particular case the relationship is such as to give rise to the privilege will be a question of fact. It must be a professional relationship which secures to the advice an independent character notwithstanding the employment.

17    Similarly, Dawson J observed at 95-96:

Whilst there is something to be said for the distinction ... between independent and employed lawyers, it is not a statement of the position at common law and there is authority in this Court and elsewhere for the proposition that legal professional privilege may attach to communications passing between a salaried legal adviser and his employer, provided that the legal adviser is consulted in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client. For this reason the legal adviser must be qualified to practise law and, it seems, subject to the duty to observe professional standards and the liability to professional discipline.

18    Cf. Deane J at 80-2. Brennan J approached the matter differently but, in my respectful opinion, and contrary to what Branson J seems to have thought (Rich at [39]), none of the other members of the Court adopted his Honour’s approach.

19    Thus, with the greatest respect, I doubt that the decision in Waterford requires anything more than that the legal adviser be professionally qualified and acting in a professional capacity. I note that in AWB v Cole (No 5) [2006] FCA 1234, 234 ALR 651 at 664 [44], to which her Honour did not refer, Young J considered that the question of independence involved no more than an inquiry into whether the lawyer was consulted in her or his professional legal capacity, although his Honour also pointed out that some cases have added a requirement that the lawyer who provided the advice must be admitted to practice.

20    Mercifully, it is not necessary in this case for me to decide whether her Honour was correct in the approach she took. The respondent was content that I decide the matter on the basis of her Honour’s formulation, arguing that it was satisfied here. The applicant on the other hand, relying on Rich, submitted that none of the documents in dispute was privileged, presumably because Mr Fredericks admitted to providing non-legal advice from time to time in his position at the Bank.

21    Mr Fredericks’s affidavit contained a description of his employment with the Bank and his role in matters relating to the applicant. He deposed to:

    being a solicitor with an unrestricted practising certificate ([5]);

    holding the same position throughout the period relevant to the documents, called at different times Solicitor, Head of Workplace Advisory Group, or Executive Legal Counsel and Head of Workplace Advisory Group ([6]);

    the practices of the Legal Services Division (such as maintaining separate electronic files and sending letters on the letterhead of the General Counsel to whom the lawyers in that division were responsible and to whom Mr Fredericks reported directly) ([8], [16]-[18]);

    limited accessibility of his own hard copy documents relating to legal advice or the management of a legal matter ([20], [28]);

    the origin and nature of his involvement in matters and proceedings relating to the applicant, including this one ([21]-[29]);

    coming into contact with the respondent’s employees whose conduct is impugned in the proceeding for the first time during this case ([29]).

22    Mr Fredericks emphasised that his involvement in relation to the applicant’s matters was in his position as legal counsel to the Group ([26]). He disavowed any involvement in managing human resources issues relating to the applicant ([27]). He said they were primarily handled by Mick Carroll, the Executive General Manager, Strategic Human Resources, Premium Business Services and Scott Alomes, Executive General Manager, Business Unit Human Resources, although he provided them with legal advice about those issues ([27]). He described his particular legal functions as providing the Bank and the respondent with legal advice in relation to the applicant’s claims, interviewing relevant witnesses and others about the complaint (which I take to be the applicant’s complaint to the Australian Human Rights Commission, at the time the Human Rights and Equal Opportunity Commission (HREOC), from which the proceeding in this Court arises), representing the respondent at a mediation before HREOC, replying to correspondence from the applicant’s representatives, and engaging and briefing external solicitors ([10], [26]). Mr Fredericks also explained that he had retained another firm of solicitors, Turks Legal (Turks), in relation to various workers’ compensation claims the applicant made and that some of the disputed documents either referred to Turks or were attachments to emails he had sent to them ([22], [31]).

23    Counsel for the applicant, Mr King, cross-examined Mr Fredericks briefly about his functions at the Bank, but this took the matter no further than establishing what was already in the affidavit, namely that he performed both legal and non-legal work. Importantly, Mr King did not challenge Mr Fredericks’s evidence that his role in relation to the applicant’s claims was exclusively legal. Mr King also submitted that I should infer from some of the language Mr Fredericks used to describe the documents that his role in relation to the respondent was simply to report to it, not to advise it. The attempt to draw this inference was unconvincing. In any event, it directly contradicts the evidence Mr Fredericks gave in his affidavit and which Mr King did not challenge in cross-examination. I therefore accept Mr Fredericks’s evidence and reject the submission.

24    It is true that Mr Fredericks had multiple responsibilities, some of which could have affected his independence. In particular, he performed a human resources function that included managing the Group’s Chief Medical Adviser and his team and managing workers’ compensation for the Group. That might have been significant, it seems to me, because the applicant has made allegations against the Human Resources Department about its handling of her case and because there are likely to be issues of a medical nature affecting the measure of damages in the proceeding. This does not mean, however, that none of his advice can be privileged or that none of the documents in question can attract privilege. What it does mean is that it is necessary to analyse precisely in what capacity he sent or received the relevant communications, because it is only in his capacity as lawyer that the communications can be privileged: JD Heydon Cross on Evidence, 8th Australian edition, 2010, and the cases he refers to at [25245].

25    This case is distinguishable from Rich.

26    As the Full Court observed in Harrington v Rich [2008] FCAFC 61, 166 FCR 440 at [26], in the course of refusing leave to appeal from her Honour’s decision:

Her Honour emphasises (at [59]) the fact that allegations were made by one partner (Ms Rich) against the others; that the allegations cast aspersions of a personal rather than of a purely professional kind against certain of the Partners; and that General Counsel and her deputy were likely to be respondents in any litigation instituted by Ms Rich. Whatever the merits of her Honour’s conclusions, they do not purport to lay down broad general principles governing the subsistence of legal professional privilege in relation to advice given by legally qualified members of a firm to other members of the firm.

27    Whilst there are some similarities between the two cases, not least because they both involve allegations of sexual harassment and discrimination, and have both attracted media interest, there are also important differences. Here, the respondent’s in-house lawyers are not partners of the respondent. Nor are they actual or potential parties to the litigation. The allegations are made against employees. Mr Fredericks gave unchallenged evidence that he had not met any of the individual employees whose conduct is impugned, which undermines any suggestion that the applicant’s allegations are “inherently likely to engage [his] personal loyalties”.

28    It could not be said of the employed lawyers here, as it was said of the OGC in Rich at [60], that given the nature and significance of the allegations the applicant was making against them, “the objectively independent character necessary to support the respondents’ claim” was missing and the in-house legal team was not in a position to give professionally detached advice to the respondent.

29    I am satisfied on the evidence in this case that Mr Fredericks and the lawyers under his supervision were in such a position.

30    The real question, then, is whether the documents in dispute meet the dominant purpose test.

The documents

31    The documents in question are described in a schedule, an earlier form of which was annexed to Mr Fredericks’s affidavit. A version of the schedule, updated to reflect a narrowing of the documents in dispute, became exhibit 1 on the application and Mr Fredericks was cross-examined on some of the contents of it. For convenience, a copy of exhibit 1 amended to include the Court’s rulings, is annexed to this judgment.

32    The respondent invited me to inspect the documents. Mr King did not dispute that it was permissible for me to examine the documents. See Grant v Downs at 689. He submitted, however, that the respondent had not discharged its onus of proof and for that reason I should decline to inspect them. Such an approach does not accord with judicial practice. Privilege is a fundamental common law right: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49, 213 CLR 543 at [11], [44], [85], [132]. Consequently, an overly narrow or technical approach should not be taken: DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191, 135 FCR 151 (DSE (Holdings)) at [31]. It is well accepted that inferences may be drawn from the documents themselves. I decided to accept the invitation for a number of reasons.

33    First, Mr Fredericks was not the author, sender or recipient of all of them and it was not clear to me from his evidence alone how he was able to speak to the purpose of those he did not send, let alone those he did not receive.

34    Secondly, his descriptions of the documents or their purposes were not particularly informative, often failing to identify any purpose, the thinking behind, or the circumstances giving rise to, the creation of the document. Although it may be accepted that he is unable to speak about the minds of others, it was open to him to explain the circumstances in which the documents came into existence either from his own direct knowledge or from hearsay information as this is an interlocutory proceeding (see s 75 of the Evidence Act 1995 (Cth)). This he did not always do.

35    Thirdly, in most cases, cross-examination was limited and provided little, if any assistance, on the critical issue.

Documents 1 and 23

36    Documents 1 and 23 are identical, apart from differences in format (reflecting, I presume, differences in the form they were stored electronically). They are an email from Michael Blomfield, a senior employee of the respondent against whom the applicant had made allegations of sexual harassment, sex discrimination and victimization, to Mr Fredericks and Mr Alomes. It was sent on 18 February 2008. It attaches another document (document 2, discussed separately below), which Mr Fredericks described as a “confidential document containing information regarding his dealings with Ms Vivienne Dye”. Mr Fredericks said that the document was “provided to [him] in the context of [him] conducting investigations in the context of the applicant’s complaint to [HREOC]”.

37    Mr Fredericks was cross-examined about the document in an apparent attempt to connect it with Mr Blomfield’s resignation, which was suggested by Mr King (wrongly, as it transpired), to have been on 8 February 2008. Mr King also drew attention to Mr Fredericks’s use of the phrase “in the context of”, seeking to distinguish it from his use of the phrase “for the purposes of” which appeared elsewhere. Without a description of the circumstances in which the email came into existence, however, neither expression was of much use. Mr King also submitted that there were clearly two purposes to this document, as evidenced by the fact it was sent, not copied, to Mr Alomes. His submission was, as I understand it, that even if a purpose of the communication was to obtain advice from Mr Fredericks, the respondent could not prove it was the dominant purpose. He also made a general submission with respect to Mr Fredericks’s evidence that what he said about purpose or intention was largely irrelevant because, for the most part, he was not the author or sender of the documents.

38    The document does not explain why Mr Blomfield sent it and nothing in Mr Fredericks’s affidavit bears on this. Still, the mere fact that the document does not expressly seek legal advice does not mean that it is not privileged from production. It was undoubtedly a confidential communication. It was made to one of the Bank’s senior lawyers. In DSE (Holdings) at [38] Allsop J quoted and applied the following passage from Balabel v Air India [1988] Ch 317 (Balabel) at 330 per Taylor LJ:

Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client. The negotiations for a lease such as occurred in the present case are only one example. Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as “please advise me what I should do”. But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.

39    This is a warning, Allsop J said at [52], about formalism in this area of the law. Here, the email was sent on 18 February 2008. The HREOC complaint was filed on 2 January that year. Part of the complaint was sent to the Chief Executive Officer (CEO) of the respondent under cover of a letter dated 24 December 2007, although a note on the letter indicates that it was received on 2 January 2008. Both the Bank and the respondent were named as respondents to that complaint. The letter forwarding part of the complaint to the CEO began with an allegation that the applicant had been “unlawfully dismissed”. On 24 January 2008 Jodie Ball, Principal Investigation/Conciliation Officer with HREOC sent an email to Mr Carroll, copied to Mr Fredericks informing him that the complaint had been listed for conciliation on 20 February 2007, although she clearly meant 2008. One of Mr Fredericks’s responsibilities was to represent the respondent before HREOC. The email from Ms Ball was presumably copied to him in his capacity as legal representative. In the circumstances I have little doubt that Mr Blomfield sent this email, attaching the document that is document 2 below, for the dominant, if not the sole, purpose of Mr Fredericks providing legal advice to the Bank and the respondent about the applicant’s complaint. At the time the email itself shows Mr Blomfield was an employee of the respondent. It is properly characterised, therefore, as a confidential communication between client and legal adviser providing him with instructions for the purpose of seeking legal advice or assistance. This is a case where the dominant purpose alone accounts for the existence of the email: cf Esso per Gleeson CJ, Gaudron and Gummow JJ at [45]. The mere fact that Mr Alomes was also a recipient of the email does not detract from that purpose.

40    Mr King, who appeared for the applicant, argued (in effect) that because the proceeding before HREOC was not a legal proceeding and legal professional privilege did not attach to a document brought into existence in connection with, or in contemplation or anticipation of, such a proceeding. But this is beside the point. This was not a case where the respondent had to rely on the “litigation privilege”. It is not necessary in these circumstances to consider whether the HREOC proceeding is a legal proceeding. In any event, however, Mr Fredericks’s unchallenged evidence was that from the time he first learned of the applicant’s grievances against the respondent he anticipated litigation.

41    I am satisfied that these documents are privileged.

Documents 2, 24 and 26

42    Document 2 is the attachment to document 1. It is a copy of a document apparently created some months beforehand by Mr Blomfield. There is insufficient (if any) evidence to indicate that the original of the document would be privileged. Still, as Brennan CJ observed in Propend at 507 “the purpose of bringing an original document into existence may not be the purpose of bringing the copy into existence”.

43    Mr King cross-examined Mr Fredericks extensively about this document. He showed him another document, which he said the respondent had discovered in this proceeding, and which, he suggested, referred to this document. He also suggested to the witness that document 2 had been created by Mr Blomfield in November 2007 to give to a Mr Matthews, an external investigator appointed by the Bank to inquire into the applicant’s claims. In the end, Mr Fredericks said that he was not able to say whether that was the case or not.

44    Mr King’s submission, as I understand it, was that this showed that the document was not created for a privileged purpose. That may be true but, with respect, it misses the point. As McHugh J said in Propend at 553–554 (since Esso the reference to sole purpose should be read as a reference to the dominant purpose):

The privilege attaches whenever the communication or material is made or recorded for the purpose of confidential use in litigation or the obtaining of confidential legal advice. The protected communication or material may be a telephone conversation between a solicitor and client, a research memo of the legal adviser on an issue pertinent to the client’s affairs or … the collection and collation of material and documents for the purpose of litigation or obtaining legal advice. As long as the communication was made or the material recorded for the sole purpose of legal advice or pending litigation and was intended to be confidential, the actual form of the communication or recording is irrelevant.

…

Where a claim for privilege is made in respect of a copy of the document given to a lawyer for the purpose of obtaining legal advice or assistance, it is likely that the copy was prepared solely for that purpose. Because this is so, the copy will usually have a stronger claim to privilege than the original document. It will usually have a stronger claim because the relevant communication is not the original document; it is the client’s conduct in giving the copy to the lawyer. Handing the copy to the lawyer is as much a part of the communication between lawyer and client as an oral summary of the original document would be part of a communication between lawyer and client …

It follows that, if a solicitor makes a copy of a document that was not privileged, the copy will be privileged if it was created for the sole purpose of obtaining or giving confidential legal advice or for the confidential use of legal advisers in pending litigation. Similarly, if the client makes a copy of the document solely for that purpose or use, the copy will be privileged. If this were not so, inspection of the copied material could expressly or inferentially reveal information that would destroy the confidentiality of the communication between the legal representative and client. Either in their assembly or their selection, disclosure of the documents could reveal a line of reasoning as to the relevant issues in the case or their relative merit. Moreover, once the privilege attaches, it remains until the client waives it.

45    Mr King argued that privilege cannot be conferred on a document merely by attaching it to an email to a solicitor. He relied for this proposition on R v Justice of the Peace for Peterborough; ex parte Hicks and others [1978] 1 All ER 225, a decision of the Court of Appeal of England and Wales, although the proposition does not appear in any of the judgments in that case. The case deals with documents held by a solicitor and given to him by his client who sought to resist seizure of them under a search warrant. It is of no relevance here, as it is only concerned with the proper construction of the legislation under which the search warrant was granted. Mr King’s submission is, of course, true as far as it goes. What the respondent must show is not the mere fact of a communication between client and solicitor but that the dominant purpose of the communication attracts the privilege. He relied as well on Westpac Banking Corp v 789TEN Pty Ltd [2005] NSWCA 321; (2005) 55 ACSR 519. That case concerned whether privilege could attach to documents sent to a third party (in that case, the client’s auditors). It, too, is irrelevant.

46    Mr King also submitted that it had not been shown that there was a real prospect of litigation and that therefore privilege could not attach to the document. He meant, I think, that the respondent could not show that the document was subject to litigation privilege. But it was unnecessary for the respondent to establish that. The purpose of providing the attachment is self-evidently the same purpose as the purpose behind document 1 and the privilege that attaches to it also attaches to the attachment. That disposes of document 2.

47    Documents 24 and 26 are copies of the same document which Mr Fredericks said he emailed to Turks. Mr Fredericks does not state what his purpose was in furnishing the document to those lawyers. But in exhibit 1 he explains that the respondent claimed privilege over the emails to which they were attached and the applicant has not challenged that claim. I do not see how the applicant can accept that the email was sent for a privileged purpose but challenge the claim over its attachment; it was part of the same communication. Regardless, in the light of Mr Fredericks’s uncontested evidence that Turks were retained by the respondent in connection with the applicant’s workers’ compensation claims, the most compelling inference to be drawn is that the documents were provided to Turks to enable them to advise the respondent (and the Bank) in relation to those claims and, therefore, they are also privileged.

Document 4

48    This is an email dated 19 July 2007 from Marilyn Adams, a Bank employee whose title was Case Manager, Workers Compensation (NSW), to Shaun Medrzejewski, Anand (Arnie) Selvarajah and Mr Blomfield, and copied to Mr Carroll. In oral evidence Mr Fredericks said that Mr Medrzejewski worked in the business unit of Human Resources. In his affidavit, Mr Fredericks explained that Ms Adams was part of the team managing the applicant’s workers’ compensation claims. Mr Fredericks described the email as one which “concerns a letter prepared by Turks Legal, external lawyers, relating to [the applicant’s] workers compensation claim”. It is not clear from the email who at the Bank or the respondent initially received the letter. It may have been sent to Ms Adams or to someone else and then passed on to her.

49    Ms Eastman, counsel for the respondent, submitted that the document answered the description of a response to a lawyer’s request for instructions and was therefore privileged. It is, however, not self-evidently so. In fact it is a non-lawyer’s request for information. There is nothing in the document to indicate whether the lawyer sought the instructions and Ms Adams was merely passing on her request or the request was an initiative of Ms Adams, herself. The email does not envisage that the information once obtained will be forwarded to the solicitors. The only way it would attract privilege is if the nature of the legal advice could be inferred from the document. That is certainly a possible interpretation of the email but it is not the only possible interpretation. The scope of Turks’ retainer is not entirely clear. Mr Fredericks merely stated in his affidavit that he “instructed external lawyers in respect of [the applicant’s] workers’ compensation claims, prior to [the applicant’s] latest claim being withdrawn” and that the firm of solicitors was Turks and, in particular, Christine Tsekouras, Special Counsel. In the circumstances, I do not see how it is open to me to be satisfied on the balance of probabilities that the nature of legal advice can be inferred from the email, particularly when the respondent, itself, does not so contend. I therefore order that document 4 be made available for inspection.

Documents 9, 65, 66 and 67

50    Document 9 is an email from Mr Carroll to Jeannette Burn, Executive Assistant to Stuart Grimshaw, whose title was Group Executive, Premium Business Services. It was copied to Mr Fredericks. Mr Fredericks described it in exhibit 1 as an email arranging a meeting with various individuals to discuss the applicant’s claims. Its subject matter is the applicant’s complaint to HREOC. Documents 65, 66 and 67 are the same email, although in two cases they had been printed and presumably placed on a file as some handwritten notes appear on the hard copies. Mr Fredericks states in exhibit 1 that it contains references to without prejudice offers of settlement to the applicant. This is apparently the basis of the claim for privilege. In fact, however, the only references to money in it are to amounts the applicant claimed. As no other basis for the claim was propounded, I am not persuaded that the respondent has discharged its onus. The email appears to have been copied to Mr Fredericks for the purpose of keeping him informed of the status of the applicant’s complaints and so that he was aware of what Mr Carroll was doing about them, not for the dominant purpose of seeking his legal advice or to conduct or aid in the conduct of litigation in reasonable prospect. Although that may well have been a purpose of sending it to Mr Fredericks, I am not satisfied on the evidence that it was the prevailing one. I see no basis for distinguishing the copies that contain the handwritten notes and there is nothing apparently privileged about the content of any of them.

51    Accordingly, documents 9, 65, 66 and 67 should be produced.

Document 12

52    This is an email dated 7 November 2007 from Mr Alomes to Mr Carroll in which he does no more than forward an email sent to him a few minutes earlier by Mr Fredericks and copied to Barbara Chapman. The earlier email conveys Mr Fredericks’s legal advice of the same date. It is a document that contains the substance of a privileged communication between the client and its legal adviser. It is marked “privileged and confidential”. It is plainly privileged and falls in the fourth Sterling category. The only purpose of the email is to forward to Mr Carroll, an employee of the client, Mr Fredericks’s legal advice.

Document 15

53    This is Mr Blomfield’s reply to Ms Adams’s email (document 4). Documents recording instructions intended to be conveyed to a legal adviser, even if not in fact conveyed, may be privileged (the second Sterling category), but I do not think Mr Blomfield’s email is of this class. There is nothing in the evidence or in the email itself that enables me to conclude that it is more probable than not that the information conveyed by Mr Blomfield was to be passed on to the solicitor. Indeed, the more compelling inference is to the contrary. I am not therefore satisfied that privilege attaches to document 15 and it should be made available for inspection.

Document 32

54    This is an email dated 11 December 2007 from Mr Carroll to Messrs Fredericks and Alomes, in which he forwards an email with two attachments sent earlier in the day to him by Peter Rochfort. Unlike document 1 it is actually addressed to both men. As well as forwarding the earlier email and attachments, Mr Carroll also reports on a meeting he attended with Mr Rochfort to discuss the applicant’s claims. Mr Rochfort is an industrial advocate who acted for and represented the applicant after her employment with the respondent came to an end in November 2007 and in connection with her complaint to HREOC. The document does not expressly request legal advice. But in view of Mr Fredericks’s unchallenged evidence concerning his role in the applicant’s dispute with the Bank and the respondent, I am satisfied that Mr Carroll’s purpose in emailing Mr Fredericks was to provide him with information so that he could provide legal advice as required. The purpose of sending the email to Mr Alomes no doubt is to keep him informed. There were legal and human resources issues in play. Which was dominant is impossible to say. It is possible that the attachments might have added something but they were not put before me. On balance, I am not satisfied that the purpose of seeking legal advice was predominant and thatdocument 32 is privileged. It, too, should be produced for inspection.

Document 35

55    This is an email dated 7 November 2007 from Mr Carroll addressed to both Eylem Topracki, a solicitor employed by the Bank in Mr Frederick’s “team”, and Mr Alomes. The email provides instructions and requests advice. There is no reason to suppose, in the context of the subject matter of the email, that the advice being sought of Ms Topracki was of a commercial, rather than a legal nature. In fact, the contrary is overwhelmingly likely. I am satisfied that the dominant, if not the only, purpose of sending it to Ms Topracki was to seek that advice. But in this case, too, the email is also addressed to Mr Alomes which suggests that advice of a non-legal kind is also being sought. Once more, the evidence falls short of establishing that the request for legal advice was the dominant purpose. I therefore direct the respondent to produce document 35 for inspection.

Document 39

56    This is an email chain of two emails dated 12 November 2007 sent by Mr Carroll only to Mr Alomes and the email from Mr Alomes sent the previous day. Nothing about the document suggests any privileged purpose, nor does it disclose the substance of any privileged communication. In exhibit 1 Mr Fredericks says only that it is an email “concerning a without prejudice letter addressed to the applicant’s representative”.

57    I am not satisfied that production of this document is protected by legal professional privilege. It, too, should be made available for inspection.

Document 45

58    This document is an email chain, with the final email dated 19 July 2007 being from Mr Carroll to Mr Blomfield concerning the draft letter prepared by Turks which was the subject of the email in document 4 (which itself appears at the start of the chain). For the reasons I gave in relation to Mr Blomfield’s response (document 15) I am not satisfied that this document is privileged and it should be made available for inspection.

Document 68

59    This is an email dated 14 December 2007 from Mr Carroll to Bryan Fitzgerald, who, according to Mr Fredericks, was at the time General Manager, Media and Issues Management, Marketing and Communications. It also forwards an earlier email from Mr Carroll to Mr Alomes copied to Mr Fredericks. It attaches what is described in the email as the final version of a letter that was to be sent to Mr Rochfort that day (although Mr Fredericks described it in exhibit 1 as “draft without prejudice correspondence”). It also contains confidential information which Mr Fredericks described as “canvassing possible settlement options”. Although it is possible that the “settlement options” were based on legal advice, there is insufficient evidence to enable me to be satisfied that the document contains or conveys information from which the nature of any legal advice may be inferred. Having regard to Mr Fitzgerald’s position, the dominant purpose test cannot otherwise be met. I am not satisfied that this document is privileged. It should be made available for inspection.

Documents 73 and 74

60    Documents 73 and 74 are identical. They are copies of an email dated 11 December 2007 from Mr Carroll to Daniel Terry. Mr Fredericks described Mr Terry in his affidavit as Manager, Strategic HR Support, Premium Business Services. The documents forward the email that is document 32, on which it appears Mr Carroll meant to include Mr Terry. For the reasons I have given in the case of document 32, I am not satisfied that the respondent has discharged its onus of proof. Accordingly, the documents should be made available for inspection.

Documents 99 and 100

61    This is an email dated 30 July 2008 sent by Barbara Chapman, Group Executive, Human Resources and Group Services, to Mr Grimshaw and Ralph Norris, the Bank’s CEO, copied to Mr Fredericks and Mr Fitzgerald. Mr Fredericks described it as an email concerning a proposed statement on behalf of the Bank as well as proposed legal action (by the Bank) in response to the publication of articles in relation to the applicant’s allegations. In argument Ms Eastman submitted that it was not relevant on the current state of the pleadings but that is beside the point as it has been discovered and my ruling is still sought. She also submitted that “it’s clear that the discussion in the document refers to proposed legal action”. To the extent that the communication refers to legal action that part is privileged and I think it reasonable to conclude that disclosing anything about the proposed statement might enable the nature of the advice to be inferred. Otherwise I am not satisfied that the email is privileged. A redacted version of documents 99 and 100 should be prepared which deletes the two numbered points.

Documents 101 and 109

62    Document 101 is an email chain. The email which begins the chain is Document 109. It is an email dated 14 April 2008 from Bryan Fitzgerald to Stuart Grimshaw, Barbara Chapman and Glen Fredericks which expressly requests Mr Fredericks’ advice on what is described in exhibit 1 as a “proposed statement on behalf of the Bank in response to the publication of articles in relation to the applicant’s allegations”. To the extent that the email touches upon anything else, I am satisfied that that is subordinate to the request for Mr Fredericks’s advice. Having regard to the uncontested evidence that his role with respect to the applicant was strictly legal, it follows that the advice that was sought was legal advice. In any event, it is well accepted that a legal adviser may give advice about what is prudent in the circumstances within the relevant legal framework (excluding purely commercial advice) and, in my view, this is a request for advice of that nature. As Taylor LJ said in Balabel, legal advice is not limited to an explanation of the law but extends to advice on what should prudently and sensibly be done in the relevant legal context.

63    The next email in the chain is Mr Fredericks’s response containing his advice. The third is Ms Chapman’s acknowledgement and a further request for advice. Although Ms Chapman’s email doesn’t expressly request the advice from Mr Fredericks, in the context of the email chain, it is in my view plainly directly primarily at him, seeking his further legal advice (in the sense explained by Taylor LJ in Balabel).

64    I am satisfied that the documents are both privileged.

Document 104

65    This is an email dated 16 April 2008 from Mr Fitzgerald to Ms Chapman and Mr Fredericks reporting on a phone call from a journalist and seeking advice. In my opinion the email has two purposes: it seeks legal advice from Mr Fredericks and non-legal advice from Ms Chapman. I am unable on the evidence to determine which predominates. Accordingly, the claim for privilege over this document fails and it should be produced for inspection.

Document 106

66    This is also an email from Bryan Fitzgerald to Ms Chapman and Mr Fredericks. It is dated 29 August 2008. It relates to a proposed statement on behalf of the Bank relating to the proceeding in this Court. Mr Fredericks said that the email was sent to him “in the context of” him providing legal advice about the applicant’s claims. By that time the HREOC complaint had been terminated on the ground that there was no reasonable prospect of conciliation. The application to this Court had been filed. Numerous articles about the case had appeared in the media. The proposed statement was designed as a response to those articles. One purpose of this email was to let Ms Chapman and Mr Fredericks know the text of the statement Mr Fitzgerald intended to make. If that is all there was to it, then it would not attract privilege. But the purpose of the email was also to clear the statement with the Bank’s lawyer and Mr Fredericks uncontested evidence, as I have said before, was that his only role in relation to the applicant’s matters was legal. Although there are two recipients, the salutation is to Mr Fredericks only. It is clear that anything the Bank might say at this point was extremely sensitive and could affect its legal position. On balance, I conclude that this document was prepared for the dominant purpose of obtaining legal advice (in the wider sense Taylor LJ discussed in Balabel).

Document 107

67    This is a copy of an email Mr Fitzgerald sent to Mr Fredericks and Ms Chapman on 14 April 2008 relating to a proposed statement on behalf of the Bank that was triggered by the newspaper articles with which documents 101 and 109 are concerned. Mr Fredericks’s evidence was that it was sent to him “in the context of” him providing legal advice to the respondent about the applicant’s claims. Having regard to Mr Fredericks’s role, it is reasonable to infer that the purpose of sending it to Mr Fredericks, even if unstated, was to elicit his advice. Having regard to the subject of the email, I am satisfied that that was the dominant purpose.

Document 144

68    This is an email dated 20 July 2007 from Mr Medrzejewski to Mr Blomfield and Mr Selvarajah, copied to Mr Carroll. It is an acknowledgment of Mr Blomfield’s earlier email, which is document 15. For the reasons given in relation to document 15, I am not satisfied that this document is privileged either.

Document 145

69    This, too, is an email from Mr Medrzejewski to Mr Blomfield and Mr Selvarajah. It was sent the day before document 144 and should be treated in the same way.

Document 153

70    The final document consists of handwritten notes of a meeting Mr Fredericks attended on 17 April 2008. It canvasses options discussed at the meeting including legal action and other strategies for dealing with the allegations raised in the media concerning the applicant. The evident purpose of making the notes was to assist in the provision of legal advice. It might also be described as a document from which the nature of the advice sought or proffered might be inferred and, hence, is immune from production. I am satisfied that it is privileged.

Waiver

71    The applicant argues in the alternative that, where documents were communicated to third parties, privilege has been waived.

72    Privilege will be waived if the asserting party engages in conduct that is inconsistent with the maintenance of the confidentiality protected by the privilege: Mann v Carnell (1999) 201 CLR 1 at [28] per Gleeson CJ, Gaudron, Gummow and Callinan JJ.

73    The onus of establishing this was, of course, on her: Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 at [27]; State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160 at [54].

74    The applicant’s argument is misconceived. All the so-called third parties are (or were at the relevant time) employees of the client or the same corporate group. Mr King made no attempt to explain why a disclosure to them might amount to waiver. In the absence of any suggestion that there was an intention to publicise the content of the communications beyond the corporate group, there can be no waiver. As the majority said in Mann v Carnell, what brings about the waiver is the inconsistency. There is nothing about the communications that is inconsistent with the maintenance of the confidentiality that the privilege is designed to protect.

Orders

75    I order that the respondent make available for inspection by the applicant documents 4, 9, 15, 32, 35, 39, 45, 65, 66, 67, 68, 73, 74, 104, 144 and 145 and copies of documents 99 and 100 redacted in accordance with these reasons.

76    Unless either party seeks to have the matter listed for argument within 48 hours of the delivery of judgment, costs of this application will be costs in the cause.

Associate:

Dated:    1 September 2010