FEDERAL COURT OF AUSTRALIA

Cantor v Audi Australia Pty Ltd [2016] FCA 1391

ORDERS

THE COURT ORDERS THAT:

1.    The application brought by the applicant to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The application brought by the applicant to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The application brought by the applicants to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The application brought by the applicant to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The application brought by the applicant to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

1    This is an adjudication of claims of legal professional privilege and related claims of waiver of privilege. The claims have arisen in relation to documents sought by the applicants by notices to produce issued in the course of five parallel class actions brought in this Court. All of the applicants and the wider classes they represent are purchasers or lessees (or otherwise acquired an interest) in Australia of various diesel models of Volkswagen, Audi or Skoda brand motor vehicles with an EA 189 diesel engine and with manufacturing dates in the period between 2008 and 2015 (affected vehicles). The respondents can broadly be described as companies within the Volkswagen Group who manufactured, imported, sold and/or distributed the affected vehicles. Volkswagen AG is the entity claiming privilege and resisting claims of waiver by the applicants. Volkswagen AG is also a respondent in three of the five class actions.

2    For the reasons that follow:

(1)    the claims of privilege by Volkswagen AG are upheld, subject only to the making of some adjustments to inconsistent redactions in copies of certain of the documents provided to the applicants;

(2)    the claims by the applicants of waiver of privilege are rejected; and

(3)    the applicants are to pay Volkswagen AG’s costs of the privilege and waiver claims.

Overview

3    The five sets of class action applicants and those they represent in the various class actions are divided into two groups, each in turn represented in this Court by a separate set of solicitors and counsel.

4    The first group of applicants is the Cantor Tolentino group, being:

(1)    Richard Cantor against Audi Australia Pty Ltd; and

(2)    Josefina Tolentino against Volkswagen Group Australia Pty Ltd.

5    The second group of applicants is the Dalton Richardson Roe group, being:

(1)    Alister Dalton and Joanna Dalton against Volkswagen AG and Volkswagen Group Australia;

(2)    Robyn Tanya Richardson against Audi AG, Audi Australia Pty Ltd and Volkswagen AG; and

(3)    Steven Roe against Skoda Auto a.s., Volkswagen Group Australia and Volkswagen AG.

6    The applicants allege in the substantive proceedings before Foster J that the affected vehicles they purchased had software that detected when a test vehicle was being assessed for regulatory approval by the federal authority for motor transport in Germany, the Kraftfahrt-Bundesamt (KBA). It does not appear to be in dispute that the software operated to reduce the emissions of oxides of nitrogen being generated and measured during KBA laboratory testing, although the significance of this fact in isolation is hotly disputed by the respondents by reason of a range of other issues.

7    Following successful testing for regulatory approval for each particular type of vehicle, including those acquired by the applicants, the KBA issued what are known as “type-approvals” in relation to, inter alia, exhaust emissions. It is alleged that when the affected vehicles were used on the road in normal driving conditions, emissions of oxides of nitrogen exceeded test emissions because the software did not then operate to reduce those emissions.

8    The applicants allege the software affecting the operation of the kinds of cars they purchased during test conditions is a “defeat device”, forbidden under German and Australian law, which in turn may affect whether a vehicle can be lawfully registered for driving on Australian roads. That legal characterisation of the software is denied by the respondents in the substantive proceedings, but not by reference to any of their dealings with the KBA. This is an important aspect of the way in which that defence is being conducted when considering waiver, addressed later in these reasons.

9    The parties also disagree as to whether the issue of the equipment being a defeat device has a bearing on the privilege and waiver claims. Either way, what is and is not a “defeat device” forms no part of this adjudication.

10    In September 2015, the KBA commenced regulatory investigations into software that affected laboratory test performance, and its impact on the type-approvals that had been given to vehicles, including those pertaining to the affected vehicles. This investigation included whether the software constituted a defeat device and, whether or not it did, what remedial action needed to be taken to ensure that there was compliance with both the regulatory approval given by the type-approvals issued and with the underlying regulations upon which the approval was based.

11    On 23 and 24 September 2015, representatives of the KBA had meetings with representatives of Volkswagen AG and other companies in the Volkswagen Group in various locations (the VW parties).

12    On Friday, 25 September 2015, the KBA wrote to Volkswagen AG and the other VW parties. The letter referred to meetings held in the preceding two days between the KBA and representatives of the VW parties. The letter stated that it had been admitted by the VW parties that, with respect to engines for certain Volkswagen vehicle types, “mechanical and software-based solutions were being implemented”, an apparent reference to remedial action already being taken by Volkswagen companies. The letter also stated that those remedial actions gave rise to a concern on the part of the KBA that the type-approvals for the affected vehicles did not comply with the applicable regulations. This in turn meant that there was a “suspicion” that “defeat devices” had been installed and used in a prohibited manner. The letter asked that the VW parties provide a formal binding statement on whether defeat devices had been installed. That is, this part of the KBA letter focussed on the legal characterisation of the operation of the software. This can be described conveniently as the legal characterisation question.

13    The KBA letter ordered any and all measures necessary to ensure that the vehicles produced were brought into conformity with the relevant type-approval. The letter further stated an expectation that the VW parties would submit a binding action plan and time schedule setting out how long it would take before their technical solution could be implemented for vehicles already in circulation. The action plan and the schedule were directed to the implementation of a technical solution to the problem identified by the KBA, rather than the legal characterisation of the operation of the software causing the problem. That is, this aspect of the KBA’s letter to the VW parties did not focus on whether or not the software constituted a defeat device or not, but rather what would be done to remedy the operation of that software in cars already sold. This can conveniently be described as the remedial question.

14    The response in respect of both the legal characterisation question and the remedial question was requested by the KBA by no later than Wednesday, 7 October 2015, that is, within eight working days. One of the live questions on the waiver part of this adjudication is whether Volkswagen AG’s response to the KBA on the legal characterisation question has a bearing on the issues being litigated in the substantive proceedings, and in particular how those proceedings are being defended by the respondents. The legislative framework in which the KBA’s request letter and the response by Volkswagen AG were sent also forms an important context to the privilege and waiver claims and is addressed later in these reasons.

15    Between Monday, 28 September 2015 and Tuesday, 6 October 2015, Volkswagen AG sought and obtained advice in writing from their law firm in Germany, Freshfields Bruckhaus Deringer LLP, which was provided in the form of a memorandum (the Freshfields document). The Freshfields document was prepared during that period, and dated and furnished on 6 October 2015.

16    On Wednesday, 7 October 2015, Volkswagen AG wrote to the KBA in response to its 25 September 2015 letter. That letter from Volkswagen AG to the KBA both referred to and enclosed a copy of the Freshfields document in relation to the legal characterisation question. That part of the response did not address the remedial question at all.

17    In relation to the remedial question, Volkswagen AG’s 7 October 2015 letter enclosed a copy of a presentation which the letter said had been given to a German government Commission of Inquiry the previous day. The presentation concerned the implementation of technical measures currently being worked on for affected vehicles, and described other steps that were being taken.

18    The KBA was plainly concerned about and at least potentially critical of what the VW parties had done in relation to the obtaining of the type-approvals, any consequential breaches of regulatory requirements and indeed potential illegality, and what was to be done about it. The VW parties were seeking to remedy, or at least ameliorate the situation, and to influence the regulatory response to what had taken place. The applicants contended that Volkswagen AG’s response, including as to whether to respond at all, remained entirely voluntary, albeit with commercial consequences. Volkswagen AG submitted in response that compulsion is not a precondition for the maintenance of privilege following a third party disclosure.

19    It is not in doubt that the KBA was empowered to make adverse decisions with serious consequences for the VW parties, both on the legal characterisation question and the remedial question. The KBA “request” for a response within a tight timeframe was something that the VW parties could only ignore at their peril. It is also the case that the “request” is not the same as a compulsory process with civil penalty or criminal sanctions. The KBA request entailed seeking a response that was less than truly voluntary given the practical and commercial consequences, but also less than compulsory given the absence of criminal or civil penalty sanctions. Volkswagen AG, on behalf of the VW parties, had no practical alternative but to respond to the KBA letter and “request” in some way. The live questions arising from the approach the VW parties took is whether that either denied the existence of privilege or resulted in its waiver.

20    Parts of the Freshfields document were reproduced in subsequent KBA documents communicated to Volkswagen AG for the apparent purposes of the KBA’s administrative procedures as the regulator dealing with the issues concerning the affected vehicles. The documents issued by the KBA to Volkswagen AG in the period from 15 October 2015 to 11 December 2015 comprised four documents described as “ordinances”.

21    Each ordinance is addressed to particular Volkswagen companies, rather than being public documents in the manner of, for example, similarly named local government ordinances in Australia. They are formal regulatory communications between the KBA and a regulated entity, by which orders are made, and reasons given. This outcome reinforces the conclusion above that Volkswagen AG had no practical alternative but to respond in some way to the 25 September 2015 letter from the KBA.

22    Volkswagen AG claimed privilege over communications comprising or including all parts of the Freshfields document and references to its contents in parts of five other key documents, being the 7 October 2015 letter from Volkswagen AG to the KBA and the four ordinances issued to, inter alia, Volkswagen AG by the KBA in the period from 15 October 2015 to 11 December 2015. Those six documents are in the form of 14 individual documents, due to there being German language original documents, English translations and updated translations. The 14 documents fall into three categories, reflecting the six original communications:

(1)    the Freshfields document of 6 October 2015 in German with an English translation and an updated English translation (three documents, reflecting that single communication) – Volkswagen AG redacted the entirety of this communication in the copies supplied to the applicants;

(2)    Volkswagen AG’s letter to the KBA of 7 October 2015 containing references to the Freshfields document in German with an English translation (two documents reflecting that single communication) – Volkswagen AG redacted the references to the contents of the Freshfields document in the copies supplied to the applicants; and

(3)    the KBA’s responses to Volkswagen AG containing references to the Freshfields document in the form of four ordinances in German with English translations (the first also having an updated translation), dated 15 October 2015, 16 November 2015, 20 November 2015 and 11 December 2015 (nine documents reflecting those four separate communications) – Volkswagen AG redacted the references to the contents of the Freshfields document in the copies supplied to the applicants.

23    The Court was provided with copies of those 14 documents in three formats, solely for the purposes of inspection in the course of adjudicating upon this dispute, which were marked for identification as follows:

MFI-1:    unredacted copies of all 14 documents, printed on pink paper, but with red borders around the text redacted from the copies provided to the applicants – provided to the Court but not to the applicants.

MFI-2:    entirely unredacted “clean” copies of all 14 documents, also printed on pink paper – provided to the Court but not to the applicants.

MFI-3:    redacted copies of 11 of the 14 documents, covering all six original communications, in the form provided to the applicants, printed on yellow paper to signify confidentiality (addressed in prior confidentiality undertakings and related orders made by Foster J) – as noted above, the Freshfields document was wholly redacted.

24    The Court worked from the following red-bordered, pink copies of six documents in English from MFI-1 reflecting the six original communications over which privilege was asserted:

(1)    updated English translation of the Freshfields document at tab 2B of MFI-1 (the applicants had a fully redacted copy of an earlier translation at tab 10 of MFI-3);

(2)    English translation of the 7 October 2015 letter from Volkswagen AG to the KBA at tab 14 of MFI-1 (the applicants had a copy at tab 11 of MFI-3 with one and a half sentences redacted which refer to the Freshfields document);

(3)    English translations of the four KBA ordinances:

(a)    first ordinance dated 15 October 2015 and addressed to Volkswagen AG (updated translation at tab 16 of MFI-1; applicants’ redacted copy at tab 13 of MFI-3);

(b)    second ordinance dated 16 November 2015 and addressed to Volkswagen AG (tab 18 of MFI-1; applicants’ redacted copy at tab 15 of MFI-3);

(c)    third ordinance dated 20 November 2015 and addressed to Volkswagen AG (tab 20 of MFI-1; applicants’ redacted copy at tab 17 of MFI-3); and

(d)    fourth ordinance dated 11 December 2015 and addressed to Audi AG, copy to Volkswagen AG (tab 22 of MFI-1; applicants’ redacted copy at tab 19 of MFI-3).

25    Each ordinance detailed certain measures required by the KBA to be carried out in respect of different, prior type-approvals for different types of vehicles, pursuant to s 25(2) of the German Regulation on the EC approval of motor vehicles and their trailers, and of systems, components and separate technical units for such vehicles (German EC Vehicle Approval Regulation) to ensure conformity with the type-approval, including for vehicles already on the market. Those measures were described in the ordinances as “auxiliary requirements”.

26    The redactions made to the copies of each of the four ordinances provided to the applicants were to those passages that referred to the contents of the Freshfields document and thus to that communication. There are some inconsistencies with some of those redactions as between the different ordinances, to be raised with counsel or solicitors for Volkswagen AG, but they do not affect the substance of the conclusions reached in these reasons.

27    The non-redacted parts of the four ordinances disclose a view formed by the KBA that the software was a defeat device. That conclusion is not accepted by Volkswagen AG as being legally correct, nor the right conclusion to reach in relation to Australian law. However, that argument does not appear to be advanced by the respondents in the substantive proceedings by way of relying upon, or indeed even referring to, the Freshfields document. This is of some importance on the issue of inconsistency and fairness raised on the waiver issue.

28    The applicants assert that the nature and circumstances (including timing) of the communication of the Freshfields document to the KBA and reproduction of the substance of it in the communications made by the other five original documents was such as to deny the existence of privilege.

29    In the alternative, the applicants claim waiver of privilege arises from the disclosure and use of the Freshfields document beyond its original communication to Volkswagen AG, including in the other five original documents, and/or from the respondents’ pleadings in the Australian substantive case about the agreed outcome of Volkswagen AG’s dealings with the KBA. Both of these circumstances are asserted to be inconsistent with Volkswagen AG being permitted fairly to maintain any privilege that otherwise exists.

30    In relation to the allegation that the respondents’ pleadings give rise to waiver, the applicants rely on the respondents’ denial that the applicants have any entitlement to relief because the affected vehicles are to be technically modified at the expense of Volkswagen AG in line with a schedule and action plan submitted to and agreed with the KBA and regulators in other countries. The applicants assert that reliance on this denial without disclosure of all the documents passing between Volkswagen AG and the KBA leading up to the German regulator’s agreement with the action plan and schedule constitutes an inconsistency with the maintenance of privilege sufficient to make it unfair for privilege to endure.

31    Each group of applicants issued a notice to produce which had the practical effect of seeking to obtain copies of the Freshfields document and the subsequent five documents reproducing parts of the Freshfields document as detailed above.

32    It was common ground between the parties to this privilege and waiver adjudication that:

(1)    the issues in dispute as to the existence of privilege and its waiver are governed by Australian law: Stewart v Australian Crime Commission [2012] FCAFC 151; (2012) 206 FCR 347 at 364 [77];

(2)    the relevant law is the common law, not Part 3.10 of the Evidence Act 1995 (Cth): Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 at 59 [16], 100-1 [149];

(3)    Volkswagen AG, as the party claiming privilege over the communications contained within the six original documents (and therefore also necessarily the additional eight copy documents), bears the onus of establishing its existence: Grant v Downs (1976) 135 CLR 674 at 689.1; and

(4)    the applicants in this case bear the onus of establishing the waiver of any privilege that is otherwise found to exist: New South Wales v Betfair Pty Ltd [2009] FCAFC 160; (2009) 180 FCR 543 at 556 [54].

Evidence

33    In addition to relying upon the contents of the documents referred to above containing the communications over which privilege was claimed, Volkswagen AG relied upon three affidavits, together with documents annexed or exhibited to those affidavits, in support of its case both to establish privilege and to deny waiver. There was no cross-examination sought of any of the deponents. Subject to certain objections, the Court is able to proceed on the face of that evidence, with the help of submissions from the parties, especially as, unsurprisingly, the applicants did not adduce any evidence in their case.

34    It is convenient to summarise the nature of the evidence as it helps to understand the source of the facts to be drawn from it as outlined briefly above and detailed further below. Key facts are also drawn from the Court’s examination of the documents upon which the claims of privilege are based. That examination, apart from being supported by the parties, is endorsed by authority as illuminating the inquiry: Grant v Downs at 689.1.

35    The first affidavit relied on by Volkswagen AG was from Dr Thomas Wagner, sworn 1 August 2016. Dr Wagner is a German lawyer and was formerly employed by Freshfields, but did not have any role in advising the Volkswagen Group. His evidence was relied upon to identify and explain German law as it relates to:

(1)    any laws which govern the confidentiality or otherwise of correspondence between Volkswagen AG and the KBA in the context of dealings relating to the conditions of approval and any subsequent auxiliary requirements for diesel vehicles manufactured by Volkswagen AG;

(2)    any laws which permit third parties to access documents exchanged between Volkswagen AG and the KBA in relation to that issue; and

(3)    any other laws that otherwise affect the foregoing.

36    Dr Wagner’s affidavit referred to various statutory and regulatory provisions and certain court and administrative decisions, and produced copies in German as follows (with English translations produced separately as detailed below):

(1)    sections 1, 9, 13, 29 and 30 of the German Federal Administrative Procedure Act;

(2)    sections 2 and 25 of the German EC Vehicle Approval Regulation;

(3)    sections 3, 4, 8 and 9 of the German Environmental Information Act;

(4)    24 September 2009 (7 C 2/09) and 30 April 2009 (7 C 17/08) decisions of the German Federal Administrative Court; and

(5)    1 July 2016 decision of the KBA appeal panel’s decision in relation to a request for access to correspondence between Volkswagen AG and the KBA.

37    The Dalton Richardson Roe group of applicants raised an issue as to whether Dr Wagner’s evidence was being relied upon to read more into the statutory provisions produced than appeared on their face, in which case an objection was taken. Counsel for Volkswagen AG did not suggest that this was the purpose of Dr Wagner’s evidence, although she noted that it did assert firmly that the plain effect and conclusion to be drawn from those provisions was that under German law, administrative procedures in Germany and the information exchanged are confidential to the parties.

38    The Dalton Richardson Roe group also pointed out that the German statutory provisions produced by Dr Wagner did not provide for absolute secrecy. There are third party rights to petition for access, as indeed did happen, albeit unsuccessfully at this stage, as detailed below. I pause to observe that the German regime seems more akin to freedom of information-type legislation in Australia, which also provides for privilege and immunity claims in relation to documents sought to be accessed. That is in contrast to absolute secrecy provisions of the kind to be found in the former s 16 of the Income Tax Assessment Act 1936 (Cth). The weight to be given to regimes of qualified confidentiality as opposed to absolute secrecy in maintaining privilege assumes some importance in this case.

39    The Cantor Tolentino group of applicants objected to the parts of Dr Wagner’s affidavit dealing with German law in relation to access to otherwise confidential information upon the basis it was not relevant. That objection was not acceded to, but was treated as raising an issue of weight. I remain of the view that the terms of the German legislation is not only relevant, but important on the issue of waiver as it is the legislative context in which disclosure of the Freshfields document to the KBA took place. It directly addresses one of the critical issues: maintenance of confidentiality.

40    The second and third affidavits relied upon by Volkswagen AG were those of the solicitor on the record for the respondents in the five class actions, Gregory John Williams, sworn 2 August 2016 and 5 August 2016.

41    Mr Williams’ 5 August 2016 affidavit produced, without objection, accredited translations of documents in German annexed to the affidavit of Dr Wagner and listed above. That evidence enables the Court to read the statutory and regulatory provisions, and German court decisions, in English, rather than rely only on what was said about them by Dr Wagner.

42    The combination of Dr Wagner’s affidavit and my own reading of the documents produced by him (by way of the English translations produced by Mr Williams) allows the following observations to be made and conclusions reached about the legal context in which the disclosures were made by Volkswagen AG to the KBA:

(1)    s 2 of the German EC Vehicle Approval Regulation provides that the KBA is the approval authority for vehicle type-approval and approvals for the sale, offered sale, or commissioning of parts or equipment required for the proper functioning of systems needed to ensure the safety of vehicles or their emissions;

(2)    s 25 of the German EC Vehicle Approval Regulation provides that if the KBA determines that vehicles, systems, components, and separate technical units do not comply with the approved vehicle type, then the KBA may order required measures based on various directives in order to ensure that production complies with the approved vehicle type. Further the KBA may, in whole or in part, revoke or withdraw type-approvals, especially if there is non-compliance with the approved vehicle type; there is a significant risk to traffic safety, public health, or the environment; the manufacturer does not possess an effective system for monitoring the compliance of production, or the system is not used in the intended way; or the possessor of a type-approval violates the requirements associated with that approval;

(3)    the Administrative Procedure Act plainly applies to the KBA and its regulatory activities by reason of the terms of ss 1, 9 and 13, which apply that Act to “public legal administrative acts” of, inter alia and relevantly, authorities of the Federal Republic and Federal government institutions that carry out tasks of public administration;

(4)    ss 13 and  29 of the Administrative Procedure Act in combination provide that an authority governed by that Act must grant “affected parties” (defined in a way that extends to those who deal with authorities, such as Volkswagen AG necessarily does with the KBA) access to relevant files insofar as that is necessary to assert or defend the affected party’s legal interests, but this does not apply to drafts of rulings or work conducted for their immediate preparation until the conclusion of legal proceedings. An authority is not obligated to permit inspection if it would limit the proper fulfilment of the authority’s tasks, if revealing the content of the files would negatively impact the well-being of the German Federation or of a province, or insofar as the processes must be kept confidential in accordance with federal law or the nature of their contents, namely due to the protected interests of affected parties or third parties;

(5)    s 30 of the Administrative Procedure Act provides that affected parties – which in context would necessarily extend to a body such as Volkswagen AG – have the right not to have their secrets, especially those regarding personal life, trade secrets, and business secrets, revealed by the authority without proper authorisation;

(6)    the Administrative Procedure Act on its face restricts access and protects confidential information such as that provided by Volkswagen AG from disclosure without authorisation, such that information of the kind provided by Volkswagen AG is ordinarily not accessible to the public unless provided for by federal law;

(7)    s 3 of the Environmental Information Act gives any person a right to petition for free access to environmental information which an authority possesses without needing to demonstrate a legal interest, and such access can be provided by exchange of information, permission to inspect files or in another manner, ordinarily within one or two months;

(8)    s 4 of the Environmental Information Act provides that environmental information shall, upon request, be supplied by an authority obligated to provide information, and details the process for petitioning to receive such information;

(9)    s 8 of the Environmental Information Act provides an effective exemption from the right to access contained in s 4 of that Act in relation to the balancing of public interests, which extends to the carrying out of ongoing legal proceedings, a person’s right to a fair trial, or carrying out of criminal, administrative, or disciplinary rulings, which on its face safeguards against the disclosure of information relevant to proceedings and guarantees that such proceedings, which include administrative proceedings, are able to function without interference (unless there is a greater public interest in releasing the information);

(10)    s 9(1) of the Environmental Information Act provides an effective exemption from the right to access contained in s 4 in relation to the protection of other interests, mandating the dismissal of the petition for access in the absence of consent by the affected parties or public interest in the release of information outweighing private interests if:

1.    releasing information reveals personal data and thus would significantly impact the interests of the affected party;

2.    rights to intellectual property, especially copyright law, would be infringed upon by revealing environmental information; or

3.    releasing the information would reveal trade or business secrets, or the information is subject to confidentiality of tax records or statistical records.

(11)    The meaning of s 9(2) of the Environmental Information Act is not so easily ascertained, and accordingly I make the following observations and findings:

(a)    the text of s 9(2) (as per the accredited English translation) is as follows:

Environmental information shared by private third parties with an authority obligated to provide information without being legally obligated to do so or being liable to be legally obligated to do so and their disclosure of negative consequences for the interests of third parties cannot be provided to others without the consent of the affected parties unless public interest in the disclosure of information outweighs private interests.  Access to environmental information about emissions cannot be denied by invoking the reasons listed in [s 9(1)].

(b)    Dr Wagner describes the effect of s 9(2) as being:

… information provided by private third parties to a body subject to a disclosure obligation without being under, or capable of being put under, a legal obligation to do so and whose disclosure would adversely affect the interest of the third parties may not be made available to others without their consent unless there is a prevailing public interest that justifies disclosure.  This provision is intended to safeguard against the disclosure of information that has been made available to the authority on the basis of a trusting relationship.

(c)    I consider that Dr Wagner’s summary of the effect of s 9(2) is a reasonable interpretation and one that I should adopt as being able, with some difficulty, to be formed by me independently on the face of the somewhat confusing text, which I attribute to an imperfect rendering of the original German text into English.

(12)    In relation to s 9(1)(3) referred to above, in a decision made on 24 September 2009, the Federal Administrative Court held at [50] that “trade and business secrets” are:

… all facts, conditions, and processes related to a company that are not publicly known, but rather are known only to a limited group of people, and that a legal entity has a vested interest in keeping confidential. Trade secrets include technical knowledge; business secrets include primarily commercial knowledge [citations omitted]. A trade or business secret thus requires, in addition to lack of access to the underlying information, a vested interest of the company in keeping the information confidential. This interest is present if publicising the information would make exclusive technical or commercial information available to market competitors and thus negatively influence the company’s ability to compete in the market [citations omitted].

43    The overall interpretation I give to the above provisions and court decision is that the information provided by Volkswagen AG to the KBA, principally by way of the Freshfields document, was provided in a legal context which places the public interest in candid disclosure to such a regulator above any general public interest in further disclosure. Some higher public interest must be established for the public interest in confidentiality not to prevail. Further, commercial interests in the confidentiality of such information provided will ordinarily be protected. It appears that this interpretation is borne out by the decision of the internal appeal panel of the KBA to revoke a petition for access by an environmental NGO (referred to at [36(5)] above).

44    Although the Freshfields document is discussed further below in relation to the existence of privilege, it is convenient at this point to make the observation that the information contained within that document would appear to have a commercial-in-confidence flavour to it. It is not the sort of information that Volkswagen AG would be likely to wish to have fall into the hands of competitors, not least because it contains a measure of technical detail with likely commercial value.

45    Mr Williams’ 2 August 2016 affidavit had exhibited to it a bundle of documents, also referred to in the text of the affidavit, which were admitted without objection, being correspondence between the parties, screenshots of the KBA website, a schedule of the documents produced to the applicants, and correspondence between the KBA and Volkswagen AG, being:

(1)    the letter from the KBA to Volkswagen AG (and others) in English and German dated 25 September 2015 described in some detail above, concerning the request that Volkswagen AG and related companies provide a binding position by 7 October 2015; and

(2)    a letter from the KBA to Volkswagen AG dated 1 July 2016 outlining the KBA’s appeal panel decision in relation to third party access to documents provided by Volkswagen AG.

46    The body of Mr Williams’ 2 August 2016 affidavit deposed to the following:

(1)    The nature of the correspondence between the applicants and Volkswagen AG produced in the bundle in relation to the claim for privilege and the provision of redacted copies of the documents giving rise to the privilege claims – nothing turns on this evidence, but it does explain the history of the present dispute.

(2)    Information about the KBA, including in particular it being responsible for, inter alia:

(a)    issuing “type-approvals” for vehicles in response to manufacturers’ applications;

(b)    conducting conformity checks to ensure that vehicle production continues to meet the requirements of the original “type-approval”; and

(c)    withdrawing a “type-approval” if there are serious deviations from the original approval that could influence traffic safety or pollute the environment.

(3)    The general nature and contents of the redacted documents provided to the applicants.

(4)    Receiving instructions that the Freshfields document contained confidential communications between Volkswagen AG and its legal advisers at Freshfields that were made for the dominant purpose of providing legal advice to Volkswagen AG. Objection was taken to this paragraph upon the basis that Mr Williams did not indicate the source of the information or who instructed him:

(a)    I was asked to draw an adverse inference from the failure of Volkswagen AG to call any direct evidence as to purpose. However I accept the submission made on behalf of Volkswagen AG that the defect as to source was remedied by a subsequent paragraph referred to below, which stated much the same thing and did identify a source being a lawyer within Freshfields, which the body of the Freshfields document itself discloses was one of its authors. A reasonable explanation exists for not calling an author, namely that they reside in Germany, so as to preclude drawing an adverse inference based upon nothing more than their absence.

(b)    I also note the request provisions in ss 166(c), 166(f), 167 and 169(1)(b) of the Evidence Act 1995 (Cth) and the option for video link evidence for that purpose had that been sought, noting also that it is far from evident that this would have made any difference.

(c)    The cases to which my attention was drawn by the applicants after the hearing of the privilege and waiver claims, Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256; (2005) 148 FCR 68 at 112 [157]-[160] (citing and quoting Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-9) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 525 [230], were addressed to the absence of evidence called in the course of a substantive trial in very different circumstances to the present. Those authorities did not persuade me that this was such a case in which an adverse inference was warranted.

(d)    The authorities referred to below indicate in any event that an assertion of dominant purpose on its own may not carry much weight, and I do not treat the assertion of dominant purpose as being of itself conclusive or sufficient on its own. Indeed on its own that would not have been enough in this case. Accordingly provisional admission of that evidence is confirmed over objection, and the objection is largely addressed by giving limited weight to the dominant purpose assertion on its own.

(5)    Being informed by a German lawyer practising with Freshfields, Dr Burkard Wollenschläger [in fact one of the named authors of the Freshfields document, although the affidavit does not state that] and believing that:

(a)    in September 2015 the KBA began to examine potential issues in relation to the type-approvals of certain Volkswagen, Audi and Skoda vehicles;

(b)    the Freshfields document was prepared between 28 September 2015 and 6 October 2015 for the dominant purpose of providing Volkswagen AG with legal advice on the matters the subject of that advice;

This is the paragraph that remedies in part the complaint made by the applicants referred to above as to the absence of a source for the assertion as to the dominant purpose of the Freshfields document. I consider that this paragraph on its own has limited weight, but provisional admission of that evidence is also confirmed over objection,

(c)    Volkswagen AG wrote to the KBA on 7 October 2015 enclosing the Freshfields document and other documents:

(i)    in response to the KBA exercising its power to investigate potential deviations from the original type-approval which ultimately led to the issuance by the KBA of subsequent auxiliary requirements [the four ordinances];

(ii)    in order to facilitate the KBA’s investigation of those issues; and

(iii)    on the basis that the documents referred to above were provided within the bounds of a confidential German administrative procedure; and

(d)    the subsequent KBA documents [the four ordinances] were sent to Volkswagen AG and Audi AG in response to the 7 October 2015 letter from Volkswagen AG to the KBA, the Freshfields document and other documents sent to the KBA (a schedule and action plan).

(6)    Being informed by another German lawyer practising with Freshfields and believing that:

(a)    in or about October 2015, a German environmental non-government organisation (the NGO) sought disclosure of the abovementioned documents sent between Volkswagen AG and the KBA;

(b)    the KBA initially decided to give disclosure of those documents to the NGO (excluding the schedule and action plan);

(c)    Volkswagen AG successfully challenged that decision in appeal proceedings brought before the appeal division of the KBA, which overruled that initial decision;

(d)    the NGO has further appealed to the Administrative Court, but in the meantime and unless that appeal succeeds, the NGO cannot access the documents; and

(e)    if the Administrative Court chooses to overturn the appeal division decision, Volkswagen AG may appeal to the Administrative Court of Appeal.

Overview of the issues in dispute

47    The concepts of creation of privilege over communications and waiver of such privilege are inter-related. The issues in dispute may be summarised as follows.

First issue: the existence of privilege

48    The applicants contend that the circumstances in which the Freshfields document was provided to Volkswagen AG on 6 October 2015, and its immediate on-use by provision to the KBA on 7 October 2015, is inconsistent with privilege ever attaching to either of those communications. As a preliminary point, if privilege did not attach to the initial communication of the Freshfields document to Volkswagen AG, it is difficult to see how it could attach to the parts of the five subsequent communications which reproduce parts of that document.

49    Volkswagen AG contends that subsequent provision and use of the Freshfields document, even the next day, does not deny the communication of the Freshfields document the protection of privilege, a status to be determined at the time of creation or communication. Submissions were made at the hearing directing the Court to particular parts of the Freshfields document, referred to below, as to it being legal advice, its confidentiality and the requisite dominant purpose in bringing it into existence and communicating it to Volkswagen AG.

50    This issue therefore has two parts. The first part is whether the communication of the Freshfields document to Volkswagen AG on 6 October 2015 was at that time protected by privilege, including as to whether the fact of the further communication of that document to the KBA the next day is such as to cast sufficient doubt on the purpose of the communication to Volkswagen AG by its lawyers. The second part is whether the subsequent communications between Volkswagen AG and the KBA containing parts of the contents of the Freshfields document were protected by privilege. The applicants argued that the subsequent communications resulted from a fresh communication of the Freshfields document, which was said to require the fresh creation of privilege over it, absent which there was no privilege created over any of the subsequent communications.

Second issue: imputed waiver by third party communication and use

51    This issue concerns whether privilege, if otherwise found to attach to the communication of the Freshfields document to Volkswagen AG, was by implication waived by its third party communication to the KBA on 7 October 2015 and/or by the subsequent reproduction and communication of the substance of parts of the Freshfields document in the four KBA ordinances.

52    The applicants contend that privilege was waived by providing the Freshfields document to the KBA the next day for the purpose of seeking to influence the approach of the KBA to the regulatory problems Volkswagen AG and the other VW parties were facing. Particular reliance was placed by the applicants on Volkswagen AG addressing with the KBA the legal characterisation issue of whether the software used to affect emissions test results was a “defeat device”, and the subsequent use to which it was put in further communications between the two, reflected in the redacted portions of the subsequent five documents (the Volkswagen AG letter to the KBA of 7 October 2015, and the four KBA ordinances).

53    Volkswagen AG contends that the provision of the Freshfields document to the KBA was done for a limited purpose in particular circumstances and in a legal context that maintained confidentiality such that privilege was not waived over the communication of that document or over the five subsequent documents, except as against the KBA. Essentially this was an assertion by Volkswagen AG of limited waiver in favour only of the KBA, which had the legal effect of preserving privilege as against the rest of the world generally, and the applicants in particular.

54    If privilege was found to exist over communication of the Freshfields document, but was found to be waived, it was either necessarily waived over the communication of the remaining five documents, or maintaining the privilege would be largely futile as those five documents reflect only a portion of the Freshfields document. The converse is not necessarily true. Waiver in relation to one or more of those subsequent five documents, depending on the reason for reaching that conclusion, did not necessarily result in waiver in relation to the original Freshfields document or any of the subsequent five documents.

Third issue: imputed waiver by reliance in litigation

55    This issue concerns whether, as the applicants submitted, even if privilege did attach to the original communication of the Freshfields document to Volkswagen AG, to the on-communication of the Freshfields document to the KBA (including the redacted part of the 7 October 2015 letter) and to the subsequent communication of the substance of parts of the Freshfields document in the KBA ordinances from the KBA to Volkswagen AG, privilege should be imputed as waived by reason of inconsistent and unfair reliance on those communications by the respondents in the substantive proceedings in this Court.

Legal principles

Authorities on the existence of privilege

56    Privilege is a substantive general principle or right, and a basic doctrine of the common law, reflecting a careful balance between competing public interests. There is a public interest in full disclosure of all available and relevant information in aid of the administration of justice, including in furthering the objectives of scrutiny and accountability. There is a contradictory public interest in maintaining confidentiality in communications which assist and advance the administration of justice by encouraging and supporting the obtaining of legal advice and assistance, including the candid giving of instructions. The balance between these competing public interests is struck by protecting communications from disclosure only to the extent necessary to meet the second public interest. The test for achieving that is to confine protection to confidential communications made for the dominant purpose of giving or obtaining (including preparation for obtaining) legal advice or the provision of legal services, including representation in court.

57    Privilege can only exist and be maintained when the conditions of the test for its existence are strictly complied with and continue to apply: Grant v Downs at 677.3, 685.3, 688.5, 690.4; Esso at 64-5 [35]; Baker v Campbell (1983) 153 CLR 52 at 86.5, 95-6, 114-6, 122.7; Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 at 508.2, 540.5, 543.5, 552, 568.5, 584-5 [consideration 7]; and Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at 552-3 [9]-[11].

58    The statements of principle in the passages in the authorities referred to above are largely consistent, save as to the shift from the requirement of the majority in Grant v Downs of a sole purpose, to acceptance by the majority in Esso that a dominant purpose for the communication will suffice as an appropriate balancing of the competing public interests. The law of privilege pre-Grant v Downs, post-Grant v Downs and post-Esso represents something of a pendulum on the issue of the purpose of the communication in question necessary to attract privilege.

59    As McHugh J pointed out in dissent in Esso at 74-5 [66], the decision in Grant v Downs was a surprise to him as a practising lawyer at the time it was decided, because until then the presence of a purpose to do with legal advice or assistance was generally regarded as being sufficient to establish privilege. The plurality in Esso at 66 [39]-[40] referred to one, not insubstantial, purpose having been sufficient before Grant v Downs was decided. Previously, in Grant v Downs, Barwick CJ dissented in preferring a dominant purpose test to a sole purpose test, although concurring in the result as it was the same whichever test applied. Chief Justice Barwick’s dissenting view ended up prevailing 23 years later in Esso.

60    Esso swung the pendulum back to a dominant purpose, and in so doing the plurality at 67-73 [43]-[61] explained the rationale for the shift. Their Honours specifically addressed the concern expressed by the majority in Grant v Downs that a dominant purpose test would unduly favour large corporations and public authorities in too readily successfully claiming privilege and thereby protecting their conduct from legitimate scrutiny and accountability. The Esso plurality pointed out that complex organisations might legitimately have multiple purposes in obtaining legal advice without the public interest in maintaining confidentiality being absent. Moreover, the sole purpose test had produced what could be described colloquially as some mental gymnastics to make it workable, resulting in outcomes akin to the application of a dominant purpose test anyway. The dominant purpose test, present in many other jurisdictions by that time, and in fact legislated for in relation to the adducing of evidence in the Evidence Act 1995 (at that stage only existing as Commonwealth and New South Wales statutes), better achieved a suitable balance between the competing public interests.

61    The above authorities are also illuminating as to the history and rationale of the privilege. That reasoning helps to inform the analysis below in better understanding how the balance to be struck in establishing privilege should be applied, and also influences the approach to be taken to waiver, especially in the somewhat unusual circumstances of this case.

62    In the case of privilege associated with legal advice, the confidential communication must be for the dominant purpose of obtaining or giving that advice, not some other purpose equal to or greater than that purpose. For legal advice privilege, a confidential communication with a legal adviser will not attract privilege unless it has the requisite purpose associated with obtaining or giving legal advice, although that concept is to be interpreted widely so as to include advice as to what a client should prudently or sensibly do in the legal context in which it arises, but not including advice that is purely commercial or public relations-related in nature: AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at 45 [44(7)] and the cases there cited. Collateral parts of the communication therefore may not be protected. That principle has been tacitly accepted by Volkswagen AG in the five documents subsequent to the Freshfields document, for which privilege is only asserted by redaction of limited portions of those communications.

63    The privilege attaches to the confidential communication itself and not to a document containing the advice per se, whether original or copy, although that will commonly be the means of communication, sometimes leading to an understandable but erroneous shorthand reference to the document itself being privileged. It follows that the communication of an original document may not be privileged, while the communication of a copy will, being the situation arrived at in Propend. The reverse may also be true, so that the communication of an original document is protected by privilege, but the communication of a copy of that document is not. This may affect whether privilege attaches to the communication of portions or extracts of an original document, as the focus is always on the communication, not just the document which records or manifests the communication.

64    The dominant purpose test can be difficult to apply when there are competing purposes. The ordinary meaning of a dominant purpose drawn from consideration of that concept in other contexts indicates the need for a “ruling, prevailing, or most influential purpose”: Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416.6. That is a useful guide for ascertaining whether there was the requisite dominant purpose for the existence of privilege.

65    Dominant purpose will either be established by evidence and other material and circumstances showing such a description is justified, or it will not, although the indications may not all be one way. Some cases will inevitably be more clear-cut than others. If the most that can be said on the evidence is that one of the purposes of the communication included, as relevant here, providing legal advice to the client, the privilege will not apply: Esso at 69 [50]. Because of the need to establish dominance, such that multiple purposes where none dominates will not suffice, privilege cannot be conclusively established by the use of verbal formulae or like rituals, and may require both examination of a document constituting the communication and testing of any assertion as to its purpose: Grant v Downs at 689.3; Esso at 70 [52]; and Cole (No 5) at 45 [44(3)].

66    In the case of a claim of privilege associated with what is plainly in form and content legal advice, the focus will be on the party seeking the protection from disclosure demonstrating that the communication of that advice to the client was the requisite dominant purpose at the time it was created or delivered and not some other or equally shared purpose (Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601 at 602 [5]); and that it was, and was intended to remain, confidential: O’Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 at 22-3. Where communications take place with independent legal advisers, whether in Australia or elsewhere, it may be appropriate to assume, absent any contrary indications, that legitimate legal advice was being sought and provided: Kennedy v Wallace [2004] FCA 332; (2004) 208 ALR 424 at 442 [65]; approved with some modification in detail in Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 at 192 [27], 222-3 [208]-[215].

67    Subsequent use of what has been communicated does not of itself affect the existence of the privilege at the time of creation of the document the subject of the communication giving rise to the existence of the privilege: Propend at 508.2. It follows that the mere fact of subsequent use will not of itself displace privilege otherwise found to exist, but it may have a bearing on whether that privilege endures.

68    If the facts as found on the evidence demonstrate objectively that subsequent use, for example by provision to a third party, was a purpose in creating it equal to or greater than the purpose of providing legal advice, that will be sufficient to displace the provision of the advice to the client as being dominant in the sense of being the ruling, prevailing, or most influential purpose. In that event, there is no privilege. But a later decision to use legal advice in that way, even if made immediately after communication and perhaps dependent on considering the contents of the advice or the conclusions reached in making that decision, will not displace the dominant purpose otherwise established. However, subsequent use may still be of considerable importance on the question of waiver, and the related question of continuing confidentiality, considered later in these reasons.

69    Proof of the various necessary characteristics of being in substance legal advice, confidentiality and dominant purpose can be achieved in a variety of ways, depending on the case at hand. In discharging the onus, “focused and specific evidence” is usually needed; where possible a court should be assisted by evidence of the thought processes behind, or the nature and purpose of the advice sought: Barnes at 605 [18]. However specific evidence is not always needed; nor is evidence of thought processes always required. The nature and extent of the evidence needed to prove the existence of privilege is very much fact and circumstance dependent, albeit with an inherent level of risk if that sort of evidence is not adduced. There is no fixed evidentiary path or process for discharging the onus, although mere verbal formulae and conclusions as to purpose will not suffice. As was pointed out in Cole (No 5) at 44 [44(1)] (referring to Grant v Downs at 689, Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266 at 278 [30] and AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382 at 402 [63]):

… The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by arguments or submissions… .

70    A good example of the necessity of confidentiality to establishing privilege is Seven Network Ltd v News Ltd [2005] FCA 864 (Seven Network FCA), affirmed by the Full Court in Seven Network Ltd v News Ltd [2005] FCAFC 125; (2005) 144 FCR 379 (Seven Network FCAFC). In that case, the communication in question was recorded in a file note taken by an officer of the Australian Competition and Consumer Commission (ACCC) during a meeting convened at the request of Seven for the purpose of lobbying the ACCC as the competition regulator to commence proceedings against News Limited and others. A prior advice of counsel, the communication of which to Seven was undoubtedly privileged, was not provided at the meeting, but rather a separate oral argument was presented in overt reliance upon it. There was no suggestion that what was said to the ACCC at this meeting took place upon the basis of any requirement of confidentiality, express or implied.

71    News Limited subpoenaed the ACCC and the file note was produced to this Court. The primary judge allowed News Limited to access a masked portion of the file note over which client legal privilege was claimed under the Evidence Act 1995 (Cth) and under the then Federal Court Rules 1979 (Cth), but not at common law. At first instance the existence of the privilege relied upon was denied: [2005] FCA 864 at [64].

72    An appeal to the Full Court was dismissed (Seven Network FCAFC). Branson J held that the Evidence Act and then Federal Court Rules did not apply to pre-trial processes, denying the only basis for privilege advanced: 382 [15], 383 [19]. Allsop J (as the Chief Justice then was) agreed with Branson J but also went further in upholding the finding of the primary judge that there was in any event no confidential communication and therefore no scope for there to be any privileged communication: 385-6 [35]-[38]. Edmonds J agreed with the separate judgments of Branson and Allsop JJ.

73    As Allsop J explained on the wider issue of the existence of privilege, Seven had decided to communicate the substance of a privileged communication at the meeting with the ACCC. As between Seven and the ACCC this was a non-privileged disclosure. It was a fresh communication without the protection of privilege because no attempt was made to ensure confidentiality would be maintained and thus carry forward the prior privilege in the sense of any bar to any necessary further communication. While it might be expected that the ACCC might choose to observe a degree of confidentiality, and a warning might need to be given before such further disclosure took place as a matter of procedural fairness, it was within reasonable contemplation that the ACCC might have to justify to the public commencing proceedings at the urging of Seven, and in so doing reveal what it had been told.

74    There was an issue lurking in the background, which was not before the Full Court in Seven Network FCAFC, as to whether the limited non-privileged disclosure to the ACCC may have constituted a wider waiver of privilege over the original advice from counsel: 383 [19]; 386 [38]. That possibility reinforces the importance, in any third party communication, of taking steps to maintain confidentiality in order to preserve privilege, which may be achieved by the face of the document constituting the communication, the means and circumstances in which it occurs, and the factual and legal context.

Authorities on implied or imputed waiver

75    In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303, the High Court at 315-6 [30]-[31] provided the following pithy exposition of the nature of waiver, and especially how and why implied or imputed waiver exists:

According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege) [Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 at 326 (Craine); Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 658]. It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law [Goldberg v Ng (1995) 185 CLR 83 at 95-6] with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect [Mann v Carnell (1999) 201 CLR 1 at 13 [29] (Mann)].

In [Craine at 326], it was explained that “‘[w]aiver’ is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has ‘approbated’ so as to prevent him from ‘reprobating’”.

76    It follows that the central concept in implied or imputed waiver, is relevant and plain inconsistency of position.

77    The waiver asserted and relied upon by the applicants is an implied waiver, by which intention is imputed by the operation of the law, even though no subjective intention exists to lose privilege: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at 13 [29]. The plurality summarised the overarching principle at the conclusion of that paragraph as follows:

… What brings about the waiver is the inconsistency, which the courts, where necessary informed by consideration of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

78    In Goldberg v Ng (1995) 185 CLR 83 it was said by the majority at 95-6 (citations omitted):

The circumstances in which a waiver of legal professional privilege will be imputed by operation of law cannot be precisely defined in advance. The most that can be done is to identify a number of general propositions. Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether “fairness requires that his privilege shall cease whether he intended that result or not”. … That does not mean, however, that an imputed waiver must completely destroy the privilege. Like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes.

79    The majority in Goldberg v Ng further stated at 98:

… we are firmly of the view that where two or more distinct proceedings or procedures are related in the sense that there is general correspondence between the parties and they arise out of either the same dispute or closely connected disputes, conduct in relation to one proceeding or procedure, whether anticipated or already commenced, can found an imputed waiver for the purposes of all proceedings and procedures.

80    The above quotes illustrate that the authorities in this field may not provide a great deal of practical guidance beyond points of high principle which can be very difficult to apply. Some of the cases have produced outcomes which, even with careful analysis, appear inconsistent. As Dawson J observed in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 497-8 (citations omitted):

This is a difficult area of the law, but it is clear enough that an implied waiver may be required by fairness notwithstanding that it was not intended. It would not be fair to allow privilege to be waived with respect to a portion of a document or a conversation without requiring disclosure of the rest of it, at least if the document or conversation dealt with the one subject-matter …. So much may be obvious, but legal professional privilege is concerned with protecting the confidentiality of a relationship and if that confidentiality is abandoned by a particular disclosure it may be necessary in fairness, whether further disclosure was intended or not, to require disclosure extending beyond the particular communication … The cases are not entirely consistent and perhaps what is fair by way of disclosure must ultimately depend upon the relevant circumstances.

81    The central concepts are therefore conduct of the person who holds the privilege which is shown to be inconsistent with maintaining confidentiality, and fairness compelling disclosure by not allowing privilege to be maintained. The party asserting waiver bears the onus of establishing both. It follows that careful examination of what has occurred is required, and the outcome in other cases will generally not be of much assistance unless factually similar: Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 at 354 [45]. However, some understanding of the facts in the authorities is often required to understand how the principles propounded emerged and to an extent the practical limits to the application of those principles.

82    The limitation on using prior cases other than for points of principle has particular application to this case. A common situation in which privilege is found to be waived is when a party to litigation seeks to gain some forensic advantage in advancing or defending proceedings by relying on privileged advice to support the stance taken, yet inconsistently with that stance still seeks to maintain privilege, sometimes called “issue waiver”: Rio Tinto Ltd at 356-9 [52]-[61]. This is the alternative argument relied upon by the applicants, considered below. However the primary basis that the applicants relied upon to establish waiver was the third party-communication of the entire Freshfields document to the KBA, and the use of the substance of parts of that document in subsequent communications passing between them, including by the KBA issuing four ordinances to Volkswagen AG.

83    The state of the law in relation to the impact of third party communications on privilege is not entirely satisfactory due to inconsistent approaches between and within several of the cases. The last sentence of the passage from Goldberg v Ng quoted above, namely that an implied or imputed waiver, like an express waiver, “can be limited so that it applies only in relation to particular persons, materials or purposes” is not as straightforward as it first appears, not least because of conflicting judicial views on the suggestion that implied, as opposed to express waiver, waiver can be limited. To better understand this point, it is necessary to examine the different perspectives expressed in the different judgments in two major cases: Goldberg v Ng (both in the Court of Appeal and the High Court) and Mann v Carnell in the High Court.

84    In Goldberg v Ng, a solicitor, Mr Goldberg, disclosed documents to the New South Wales Law Society that constituted privileged communications. He did so for the purpose of assisting with enquiries concerning a complaint lodged against him by former clients, and subject to an express requirement and agreement that they would not be shown to anyone else. In separate proceedings, essentially involving the same dispute as the subject of the complaint to the Law Society, Mr Goldberg’s former clients sued for the return of moneys they had paid to Mr Goldberg’s wife and in those proceedings subpoenaed the Law Society file.

85    In the Court of Appeal decision in Goldberg v Ng (1994) 33 NSWLR 639, which was upheld by majority in the High Court, albeit on different reasoning:

(1)    Kirby P referred to the following passage from McHugh J’s judgment in Giannarelli v Wraith (No 2) (1991) 171 CLR 592 at 607:

… a party either waives the privilege entirely … or asserts the privilege and maintains the confidentiality of his or her documents. This is the only acceptable view.

(2)    Kirby P at 654B held that, “properly understood”, the above passage did not preclude the concept of “limited waiver” being applied, as expressed in two English Court of Appeal cases: British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113 at 1121-2 and Goldman v Hesper [1988] 1 WLR 1238 at 1244-5; and the Northern Ireland case Downey v Murray [1988] NI 600 at 604-5.

(3)    Kirby P at 654B-C described limited waiver as an exception to the general rule on waiver that was correct as a matter of legal principle and policy. Reliance was placed by his Honour on the administration of justice rationale for the privilege expressed in Grant v Downs at 685 and in Maurice at 490, along with a strong focus on fundamental rights to maintain confidentiality notwithstanding disclosure to a third party for a specific and limited purpose in a specific context. His Honour, in dissent, concluded, also contrary to the outcome in the High Court, that Mr Goldberg’s privilege should be maintained, a position supported by Toohey and Gummow JJ (also in dissent) in the High Court.

(4)    By contrast, Clarke JA at 676 firmly rejected the view expressed in Goldman v Hesper or Downey v Murray that British Coal represented any concept of limited waiver, but rather was an example of a case in which there was no waiver at all, citing Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347 at 355, 357 per Jordan CJ for the notion that not all imparting to a third person constitutes a waiver.

(5)    Mahoney JA did not consider it necessary to decide the issue of limited waiver, deciding the case on it being unfair to allow the privilege to be maintained as doubtless intended by Mr Goldberg when he had received the benefit of providing the material to the Law Society with the result that the plaintiff’s complaint to the Law Society was dismissed. This provided a proper basis for imputing waiver.

86    In the High Court in Goldberg v Ng:

(1)    The majority reached a contrary conclusion to Kirby P by different reasoning to the effect that, on the specific facts in that case, a limited waiver, although permitted by law, could not be maintained as a matter of fairness in that case, given the close association between the court proceedings and the disciplinary process. The difference between Kirby P and the majority in the High Court was therefore more one of characterisation on the facts of that case, rather than substantially divergent views on the correct principles.

(2)    The quote from the majority judgment above at [78] may even be seen to endorse Kirby P’s view as to the legal position of limited waiver being available in some situations, but not its application on the facts of that case.

(3)    The majority held that disclosure by Mr Goldberg to the Law Society did not constitute express or intentional general waiver because confidence had been deliberately maintained: Goldberg v Ng at 95.5. However, their Honours found that it did constitute imputed or implied waiver because the disclosure was voluntary and made for the express purpose of rebutting the complaint made against him, in circumstances in which the court proceedings and the complaint procedure were closely related over precisely the same subject matter. There was a general correspondence between the parties to the dispute: the former clients were the complainant in the disciplinary proceeding and the plaintiff in the court proceeding, both arising out of the same dispute; Mr Goldberg was the responding party in both. There was a relevant inconsistency between the defence of the suit for the return of money, and the confidential steps taken to ward off the complaint: at 98, 101-2. Importantly, it seems that the majority in the High Court would not have imputed waiver by the fact of disclosure to the Law Society on its own – the inconsistency and relevant unfairness in maintaining that privilege in the Supreme Court proceedings were critical to finding waiver had taken place, not at the point of disclosure, but at the point of defence of the subsequent proceedings (albeit commenced first in time, without service being effected).

(4)    The minority considered that because there had been no waiver, questions of fairness did not arise, and the privilege was maintained. That is, the minority considered that the law did not permit limited implied waiver, only limited express waiver.

(5)    Toohey J observed at 106 that where material has been deliberately disclosed to a third party for a limited and specific purpose, the roles of express and implied waiver become blurred.

(6)    Toohey J at 109 described the concept of limited waiver as “well accepted”, but only as a qualification to express general waiver, not to implied or imputed waiver, and therefore not giving rise to considerations of fairness which only arises for implied or imputed waiver. It was for this reason that his Honour would not have implied waiver by Mr Goldberg, because the only basis for doing so – fairness – did not arise on that analysis. Gummow J at 116.5 agreed with Toohey J.

(7)    Neither Toohey J nor Gummow J considered there had been any waiver at all by Mr Goldberg because he had expressly maintained confidentiality and therefore privilege.

(8)    All five judgments endorse the principle that there can be limited waiver beyond which privilege is preserved, but only the majority extended that concept to implied waiver, and only then when the requisite inconsistency and unfairness arose: the bare fact of third party disclosure would not suffice even on the more expansive view of waiver held by the majority. As the discussion of Mann v Carnell below indicates, that position has since been forcefully maintained.

87    In Mann v Carnell in the High Court:

(1)    The appellant, Dr Mann, believed he may have had a right to damages against the respondent, Ms Carnell, the Chief Minister of the Australian Capital Territory for defamation. The source of that right was believed to be contained in four documents which were in the form of confidential communications between legal advisers and the ACT in relation to certain litigation between Dr Mann and the ACT, and its settlement. It was accepted that those communications were privileged.

(2)    While the holder of the privilege was the ACT, that was not lost by being provided to Ms Carnell. That was because she was, as Chief Minister, entitled to see the legal advice given to the ACT by its lawyers.

(3)    The documents were provided to another member of the Legislative Assembly, Mr Moore, by way of a confidential briefing by Ms Carnell to satisfy him that prior proceedings brought by Dr Mann, and their settlement, did not involve a waste of public funds and that those who represented the ACT had acted responsibly and in accordance with legal advice. It was Dr Mann who had made allegations to that effect.

(4)    The plurality held at 15-6 [33] that it was at least an oversimplification to describe the disclosure to Mr Moore as a third party disclosure. The critical fact which denied waiver was that Mr Moore was not at liberty to show the documents to Dr Mann, which would have been inconsistent with the confidentiality protected by the privilege. The plurality concluded at 15 [35]:

The purpose of the privilege being to protect the Territory from subsequent disclosure of the legal advice it received concerning the litigation instituted by [Dr Mann], there was nothing inconsistent with that purpose in [Ms Carnell] conveying the terms of that advice, on a confidential basis, to a member of the Legislative Assembly who wished to consider the reasonableness of the conduct of the Territory in relation to the litigation.

(5)    An essential part of the conclusion reached in Mann v Carnell was therefore that the further communication was in circumstances in which confidence was maintained, it was not in truth a further communication beyond the proper functioning of the body politic who held the privilege, and the purpose of that further communication fell within the ambit of the purpose for the existence of the privilege.

88    The conclusion available to be reached following Goldberg v Ng and Mann v Carnell is that:

(1)    A limited waiver may in some situations be effective in preserving privilege. The minority in Goldberg v Ng supported that outcome effectively in all cases subject to the necessary steps being taken to preserve privilege.

(2)    In other situations limited waiver may be ineffective and be treated as constituting complete waiver and privilege is lost altogether.

(3)    In yet other situations, limited waiver may provide a basis for some degree of limited implied or imputed waiver, provided there is also present conduct by (or perhaps on behalf of or in the interests of) the party asserting privilege that is relevantly inconsistent with its preservation. The conclusion reached may be informed by questions of specific unfairness, not general unfairness, as to be unfair in all the circumstances to the person against whom privilege is maintained. It is a question of factual analysis against the principles stated in those cases as to whether privilege has been preserved and if so as to whether, despite having been preserved, waiver should be imputed or implied.

89    What is critical in determining a privilege and waiver case is a clear appreciation of the metes and bounds of the applicable principles, and a due regard to questions of characterisation of events to ensure that any necessary nuance in application is observed. A number of cases following Goldberg v Ng and Mann v Carnell can assist in this process by illustrating the sorts of situations in which the line of inconsistency and resulting specific unfairness have, and have not, been crossed. Those outcomes inform, rather than dictate, the approach to be taken in this case, which must turn on its own facts and circumstances.

90    In Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101:

(1)    Tamberlin J at 104 [6], agreeing with Gyles J, after referring to Mann v Carnell at [29] and [34] and Maurice at 481, 488 and 493, applied that authority to the case at hand to uphold Mr Bennett’s appeal in finding that legal professional privilege had been waived over a legal advice because the substance of the advice was conveyed in a letter sent to the solicitors for Mr Bennett by the solicitors for Customs, in order to emphasise and promote the strength and substance of the case to be made against him.

(2)    Tamberlin J found that it would be inconsistent and unfair of the solicitors for Customs, having disclosed and used the substance of the advice in that way, to then seek to maintain privilege in respect of the parts of the advice which pertained to the conclusion that had been expressed. His Honour observed that it might have been different had it simply been asserted that Customs had taken legal advice and that the position adopted following consideration of that advice was that certain action would or would not be taken. That was because in those circumstances the substance of the advice was not disclosed, but merely the fact that there was advice and that it had been considered. However, once the conclusion of the advice was stated together with its effect, there was imputed waiver.

(3)    Gyles J at 119 [64]-[65] referred to Australian Unity Health Ltd v Private Health Insurance Administration Council [1999] FCA 1770 in which Goldberg J held that a statement in a letter that separate legal advice supporting the Council’s view of a rule had been received amounted to waiver. Gyles J went on to agree with that reasoning, observing at [65] “[t]he voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made including the reasons for the conclusion”.

(4)    Emmett J would have dismissed Mr Bennett’s appeal, a further indication of how nuanced these decisions can be as to when the line of inconsistency has been crossed.

91    In Rio Tinto the Full Court:

(1)    Observed at 356 [52] that a line of authority referred to, including in particular Mann v Carnell, shows that:

… where issue or implied waiver is made out, the privilege holder has expressly or impliedly made an assertion about the contents of an otherwise privileged communication for the purpose of mounting a case or substantiating a defence. Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain to the communication.

(2)    At 356-7 [53] quoted from Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 371-2 to the effect that implied waiver, referred to as issue waiver, was “no more than a particular manifestation of the principles applying either to waiver by disclosure or implied consent to disclosure” and then further quoted the following from 371F-372B:

The usual type of case said to illustrate issue waiver at common law is one in which, in order to establish a particular right, claim, or defence a party who previously has been legally advised, or has provided advice, needs to show that the advice so given did, or did not, have a particular character … In other words the cases are ones in which, in the substantive proceeding brought, the privilege holder has put in issue the very advice received. We observe in passing that it is questionable whether advice can properly be said to be in issue in a proceeding merely because it may be relevant to an issue in it: see Rhone-Poulenc Rorer Inc v The Home Indemnity Company (3rd Cir 1994) 32 F (3d) 851 at 863; save, perhaps, where the proceeding is between client and legal adviser and the advice is relevant to the adviser's defence of that proceeding: see Lillicrap v Nalder & Son [1993] 1 WLR 94; 1 All ER 724. [emphasis added]

(3)    Then considered a series of cases dealing with waiver, noting at 359 [61] that what is required is a “fact-based inquiry as to whether, in effect, the privilege holder had directly or indirectly put the contents of an otherwise privileged communication in issue in litigation, either in making a claim or by way of defence”, citing and quoting Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 at 519-20 [58] where his Honour observed that waiver will occur, even in a case of undue influence, when:

… the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication. [emphasis in original]

92    Allsop J in DSE (Holdings) further observed at 520 [61]:

… I would express the matter as including the laying open of the confidential communication to necessary scrutiny, and by so doing (that is by expressly or impliedly making an assertion about the contents of the communication or laying the communication open to scrutiny) the inconsistency enunciated by Mann v Carnell is brought about. But it is the existence of that inconsistency that is important.

93    In Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275, the appellant had been convicted and sentenced to imprisonment for murder. Following unsuccessful appeals, she petitioned the Governor of Victoria for mercy. The Attorney-General subsequently issued a press release stating that he had obtained a joint advice from counsel, which recommended that the petition be denied, and that the Governor had denied the petition. The appellant sought access under the Freedom of Information Act 1982 (Vic) (the FOI Act) to a number of documents relating to her petition including the joint advice. That request for access was refused, save for two of 265 pages.

94    The Victorian Civil and Administrative Tribunal determined that the documents in dispute were the subject of privilege and privilege had not been waived, but after inspection ordered that access be granted pursuant to a provision of the FOI Act.

95    The Court of Appeal allowed an appeal by the Secretary, holding that the privilege had not been waived in the joint advice and, without inspecting the documents, held there was no basis on which the public interest could require that access be granted.

96    The High Court agreed that privilege in the joint advice had not been waived, and the plurality further found that the Court of Appeal was wrong not to inspect the documents. The arguments on waiver concerned differences between the parties as to the application of Mann v Carnell. In resolving those differences the majority emphasised the individual fact-finding and characterisation required, holding at 297 [46] and 298 [48]-[49]:

[46]    The conduct of the Attorney-General in issuing the press release and including in it certain information about the joint legal advice is to be considered in context, which includes the nature of the matter in respect of which the advice was received, the evident purpose of the Attorney-General in making the disclosure that was made, and the legal and practical consequences of limited rather than complete disclosure.

…

[48]    The evident purpose of what was said in the press release was to satisfy the public that due process had been followed in the consideration of the petition, and that the decision was not based on political considerations. The three eminent lawyers who gave the advice were appointed following consultation with the State Opposition. They were external to the Department. Their advice covered all the grounds upon which the petition was based. They recommended denial of the petition. Their advice was carefully considered, and the petition was denied. The Attorney-General was seeking to give the fullest information as to the process that had been followed, no doubt in order to deflect any criticism, while at the same time following the long-standing practice of not giving the reasons for the decision. This did not involve inconsistency; and it involved no unfairness to the appellant. If she had a legal right to reasons for the decision, then she still has it. If she had no such right, the press release did not deprive her of anything to which she was entitled. What the Attorney-General said did not prevent the appellant from making public her petition, or any part of it, as and when she desired.

[49]    Whether, in a given context, a limited disclosure of the existence, and the effect, of legal advice is inconsistent with maintaining confidentiality in the terms of advice will depend upon the circumstances of the case. As Tamberlin J said in Nine Films and Television Pty Ltd v Ninox Television Ltd, questions of waiver are matters of fact and degree. … [citations omitted]

97    More recently, in Krok v Commissioner of Taxation [2015] FCA 51, Wigney J considered the question of waiver in the context of pre-trial discovery in an appeal by a taxpayer from decisions of the Commissioner of Taxation to disallow objections to notices of amended assessment. The tax dispute related to whether taxable income had resulted from certain asset sales, using structures involving the use of trusts and loans, asserted by the Commissioner to be shams or alternatively legally ineffective schemes by reason of the operation of Part IVA of the Income Tax Assessment Act 1936 (Cth). Certain documents comprising legal advice in relation to the structures used were listed as part of the discovery categories, with privilege claimed to resist inspection. Affidavits relied upon by Mr Krok referred to the advices.

98    Wigney J concluded that the partial disclosure of the gist of the advice Mr Krok had been given in the affidavits was sufficient in all the circumstances to create the requisite inconsistency between that disclosure and maintenance of confidentially over the balance of the advice given. That was because the partial disclosure, upon careful analysis, went beyond, as asserted, merely disclosing that as a result of advice given he had established the structures in question. The partial disclosure extended into the purpose and reasoning behind those structures, including their “tax efficiency”. His Honour inferred that the evidence of the advice given would be relied upon to establish Mr Krok’s state of mind and intention in entering into the arrangements, and thereby to advance his case in his appeals. Obtaining that forensic advantage, without full disclosure, was relevantly unfair, especially because it denied the Commissioner the opportunity to scrutinise the advice given and test whether the disclosure made was complete and accurate. The partial disclosure therefore put in issue and laid open to scrutiny the confidential communications in the otherwise privileged advice given.

99    The above line of authority makes it clear that quite specific inconsistency is necessary to establish waiver. Even reference to legal advice, without more, will not suffice. The inconsistency must be reasonably manifest.

Submissions

Submissions on the first part of the first issue: existence of privilege over Freshfields document communication

100    The applicants were, unavoidably, at a considerable forensic disadvantage in not being able to see any part of the contents of the Freshfields document. The corresponding disadvantage that Volkswagen AG faced in not being able to make clear or explicit submissions orally or in writing as to the content of the Freshfields document was able to be overcome by taking the Court to key aspects and passages in a vanilla way, and by the Court being able to read it in Chambers in some detail.

101    Volkswagen AG’s case is that the evidence before the Court as to the circumstances and context in which the Freshfields document was brought into existence and communicated to Volkswagen AG, coupled with admittedly hearsay evidence as to its purpose from one of the persons who authored that advice, and its form and contents, including the language used, was more than sufficient to establish privilege. In particular it was submitted the conclusion could be safely reached that the Freshfields document constituted the confidential communication of legal advice for the dominant purpose of providing legal advice to Volkswagen AG by reliance on the evidence before the Court and the face of the document as follows:

(1)    the context in which the need for the advice arose, including in particular the meeting with the KBA prior to its 25 September 2015 letter, that letter and the requirements imposed by it;

(2)    the markings as to the nature of the document and its confidentiality reproduced on each page;

(3)    the lawyer authors of the document (as noted above, one of whom gave Mr Williams instructions as to the dominant purpose of the Freshfields document being to give legal advice to Volkswagen AG, itself not of great weight, but nonetheless evidence in support of the rest of the evidence and the face and contents of the advice itself);

(4)    the title, headings and subheadings used in the document;

(5)    the legal advice character of the contents of the document, starting with the opening paragraph and maintained in numerous other paragraphs;

(6)    the way various propositions are put, including the consideration of propositions that would not be expected to be seen in a submission rather than advice, so as to suggest that the audience was Volkswagen AG only; and

(7)    as set out in the 2 September 2016 affidavit of Mr Williams, and clear on its face and contents, the document was prepared for the dominant purpose of providing legal advice to Volkswagen AG.

102    Counsel for Volkswagen AG made it clear that the face of the Freshfields document and the points she had made referred to above were also relied upon to support the assertion that no other purpose could reasonably be inferred than the dominant purpose of providing that legal advice to Volkswagen AG.

103    A number of the submissions made by counsel for the Dalton Richardson Roe group of applicants on the issue of whether privilege ever existed were advanced from a position of disadvantage in not being able to see the contents of the Freshfields document. For example, reliance was placed on the absence of any evidence from any of the authors, whereas the face of the Freshfields document coupled with the evidence of Mr Williams makes it clear that he received his instructions as to the purpose of that document from one of the authors. Were that all that Volkswagen AG had advanced and were the Freshfields document less comprehensive, these points would have had considerably greater force.

104    The remaining submissions on this issue on behalf of the Dalton Richardson Roe group largely turn on the chronology of events leading to the Freshfields document being furnished to Volkswagen AG on 6 October 2015, and that document then being provided to the KBA under cover of a letter sent the next day. It is essentially an argument that it should be inferred that the Freshfields document was brought into existence for the dominant purpose of providing it to the KBA.

105    The submissions on behalf of the Cantor Tolentino group, adopting and supplementing the submissions made on behalf of the Dalton Richardson Roe group, acknowledged the difficulty in establishing a contrary dominant purpose without having seen the Freshfields document. It was again suggested that the timing and sequence of events supports an inference that the dominant purpose for bringing it into existence was submission to the KBA. The submission was made that if the purpose of the advice was that it be reviewed by Volkswagen AG, there was no evidence that it was so reviewed or by whom. It was submitted that, given the time sequence, it was almost incapable of having been reviewed in the time interval between 6 October 2015 and 7 October 2015, and that, given the size of the VW parties, presumably it would have ultimately been considered by a board or by in-house counsel or the like, but there was no evidence about that.

106    All of those points have been taken into account in the context of the form and contents of the Freshfields document in assessing those matters, including how long it would have taken to review it and make a decision about what, if anything, to do as a result of the advice given.

Consideration & conclusion on the first part of the first issue: privilege over the Freshfields document communication

107    The existence of the privilege claimed in this case turns on it being established that the communication of the Freshfields document, as well as being legal advice rather than, for example, dealing with more general or broader issues (Barnes at 603 [8]), had the essential characteristics of confidentiality and a dominant purpose of being such legal advice provided to and for Volkswagen AG at the time it was furnished. If so, subsequent use will only be relevant to the existence of the privilege if it can be shown to displace the dominant purpose otherwise established of giving legal advice to Volkswagen AG.

108    The Freshfields document has been analysed in the context of the competing submissions and abovementioned authorities, together with the legal and factual (including chronological) context in which it was brought into existence.

109    The substance of the Freshfields document is just over 22 pages. While there are limits on what can be said about it without disclosing its substance, it is plainly and unambiguously legal advice of the kind that would be expected to be provided by any competent lawyer, and especially by a major law firm. It poses the questions in relation to which it can readily be inferred advice was sought, states facts and assumptions, applies legal reasoning, and provides a candid legal opinion as to the correct answer to each of the questions. Relevantly – and this is not true of, nor required of, all legal advices – it is not in the form of a submission, does not seek any outcome, and does not propose any solution in the sense of anything that could or should be done, or not done, even though such characteristics would not ordinarily deny such a document retaining the character of giving legal advice. In that sense, it is a relatively pure legal opinion.

110    The Freshfields document does not have the feature that some legal writing, as a matter of practicality, often does have, or need to have, of advising on broader or more general issues concerning, for example, the financial or commercial dealings of a client: Barnes at 603 [8] and Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd [2015] FCA 282 at [18], 9th dot point. It enabled Volkswagen AG to be informed about where it stood on the legal issues addressed, presuming that advice to be correct. There is no basis to separate out any part of the Freshfields document and exclude it from protection if privilege otherwise applies upon the basis that it departs from being legal advice and flows in any substantial way into non-legal considerations.

111    As to dominant purpose, the provision of important and relevant legal advice to Volkswagen AG appears on its face to be its dominant if not sole purpose even having regard to the issue of subsequent use addressed below. The Freshfields document plainly addresses aspects of the issues raised by the KBA and provides legal advice to inform the response to those issues. The hearsay assertion as to purpose from one of the authors of the advice therefore serves only to confirm, rather than to provide independent conclusive evidence of, the requisite dominant purpose. In truth, that assertion, although wise to obtain, was not really needed in light of the view I have formed from the form, context and especially contents of the Freshfields document. Indeed there is nothing beyond subsequent use, by the provision of the Freshfields document to the KBA the next day, to indicate any other purpose.

112    As already observed in the above discussion of the principles concerning the establishment of the privilege, subsequent use will not usually be relevant to the existence of privilege otherwise found to exist. A possible exception may exist when the subsequent use can be shown to constitute an alternative or competing purpose that existed at or by the time of communication so as to make that purpose dominant or at least equal to the purpose of provision of advice to the addressee. However in this case, there was no evidence to show that Volkswagen AG had made any decision in relation to the use of the Freshfields document before it was furnished. There was simply nothing to show that there had been another purpose in communicating it, at the time of its communication, other than the provision of legal advice to Volkswagen AG.

113    Because of the form, context and especially contents of the Freshfields document already referred to, the fact of subsequent on-communication is not even intractably neutral on when the decision to pass the advice on was made, but rather tends towards supporting a reasonable conclusion that such a decision was more likely to have been made after receipt. It would not have taken very long at all to read the Freshfields document and absorb the burden of the advice given, especially given its clarity and conciseness. As the analysis above indicates, the Freshfields document is not in the form of a submission, and in format, content and style is not written in a way that, on its face, readily lends itself to such a use.

114    To the extent that any inference can be drawn, when regard is had to the form, context and especially contents of the Freshfields document itself, an available inference is that the decision to provide the advice to the KBA was only made after it was provided to Volkswagen AG, upon consideration of its contents and its possible influence on the course to be adopted by the KBA on the legal characterisation issue, as opposed to some less direct course or strategy merely guided or influenced by the legal advice given. Volkswagen AG was undoubtedly in a very difficult position as a result of the troubling conduct of the VW parties. It is reasonable to infer that the decision to provide the Freshfields document to the KBA was not lightly or easily made. However, contrary to the Cantor Tolentino group submissions, while this would have been a difficult decision, it was not a decision that would necessarily take long to make given the history leading up to that point.

115    In this case, there is nothing that enables the Court to conclude that any decision had been made to provide the Freshfields document to the KBA before it was given to Volkswagen AG. It follows that there is nothing to deny the dominant purpose otherwise evident on the reasoning above.

116    A residual impact of the subsequent use by provision to the KBA is that I cannot exclude an inference that such a collateral use of the Freshfields document was in fact in contemplation as a possibility falling short of a purpose, depending on what it finally contained and a view being formed as to how such disclosure might help Volkswagen AG in its dealings with the KBA. It therefore cannot safely be concluded, as might otherwise be the case, that the sole purpose of the furnishing of the Freshfields document was, at the time it was furnished, to provide confidential legal advice to Volkswagen AG. However this bare possibility does not deprive the communication of the requisite dominant purpose.

117    For the foregoing reasons, I am satisfied that privilege did attach to the Freshfields document at the time of its communication to Volkswagen AG on 6 October 2015.

Submissions on the second part of the first issue – existence of privilege in relation to the subsequent communications

118    In further written submissions for the Dalton Richardson Roe group, it was asserted that the 7 October 2015 letter from Volkswagen AG and the four ordinances issued by the KBA were documents that were brought into existence on occasions that were not themselves privileged, relying upon the cases considered above of Seven Network FCA and Seven Network FCAFC.

119    Applying the Seven Network FCAFC analysis to this case, it was submitted on behalf of the applicants that the 7 October 2015 letter from Volkswagen AG to the KBA was not a privileged communication, but rather was part of a submission to a regulator. Likewise, it was submitted, the KBA’s ordinances were made in the course of the KBA undertaking its regulatory functions, and were not privileged occasions or communications made in circumstances attracting any privilege and accordingly should be produced in their entirety. Thus, it was argued, whatever the conclusion reached in relation to the Freshfields document, both as to the existence and the maintenance of privilege at the time of communication to Volkswagen AG on 6 October 2015, the 7 October 2015 letter from Volkswagen AG to the KBA enclosing the Freshfields document and the four ordinances were not privileged communications.

120    Counsel for Volkswagen AG sought to distinguish Seven Network FCA and Seven Network FCAFC from this case upon the basis that the reason why privilege did not attach to a fresh communication between different parties was that it was not conveyed in conditions of confidence. This contrasted with the present situation in which the communication of the Freshfields document took place within a tight legislative regime, preserving confidence, for the narrow purpose of the KBA’s administrative review. In substance, Volkswagen AG’s case is that there was a deliberate and limited waiver by conduct, but only to the KBA, not to the wider world and certainly not to the benefit of the applicants. The KBA had no authority to waive the privilege beyond the limited sense discussed in British Coal, as perhaps enlarged by what was permitted by German law. Once limited waiver in favour of the KBA had taken place, that entitled the KBA to use the Freshfields document for its regulatory purposes, including in relation to the contents and issuing of the four ordinances, but with privilege preserved because confidentiality was maintained.

Consideration & conclusion on the second part of the first issue – existence of privilege in relation to the subsequent communications

121    The Seven Network FCAFC case does not assist the applicants because the disclosure in that case was made in circumstances where confidentiality was absent. The freshness of the communication was not the determining feature in Seven Network FCAFC, although it did contribute to the result by assisting in characterising the nature of the meeting and the communication that took place. Rather, the key feature was the absence of any maintenance of confidentiality, so that it could not be a confidential communication and therefore could not be a privileged communication. In those circumstances what was said at the meeting with the ACCC in Seven Network FCAFC was not a communication to which privilege could attach at all. That is sufficient to resolve this issue adversely to the applicants in relation to the Freshfields document.

122    In relation to the letter from Volkswagen AG, the redacted portions provide no information themselves and are not, for example, a summary or outline of the contents of the advice given. Rather, it would seem that privilege is claimed to ensure that failure to do so does not itself amount to waiver. The claim is made to preserve privilege over the Freshfields document. In my view, the covering letter referring to the Freshfields document came under the umbrella of privilege that was maintained in relation to that document. It would be artificial in the extreme to suggest that privilege is not maintained because any additional step is taken of this kind. On any reasonable view, the situation with the covering letter was quite unlike the situation in the Seven Network FCAFC case.

123    In relation to the four ordinances issued by the KBA, it is true that more information about the contents of the Freshfields document is included in the redacted passages in those documents and constitutes a disclosure of a material component of the advice given that is otherwise protected by privilege. However, the ordinances must be seen for what they are. The KBA, having received the Freshfields document in circumstances of confidence, which of itself is sufficient to preserve privilege over that document absent a relevant inconsistency and perhaps unfairness, was the beneficiary of a limited waiver by conduct for the purpose of performing its regulatory function. There is nothing to suggest, let alone establish, that the ordinances were communicated externally to the KBA beyond Volkswagen AG. The only communications outside the KBA were back to Volkswagen AG as the holder of the privilege in relation to three of the four ordinances, and to Audi AG (copied to Volkswagen AG) for the remaining ordinance.

124    In context, the regulator, in issuing the ordinances in which parts of the Freshfields document were being commented upon, was acting in furtherance of its regulatory function in issuing administrative orders to the addressee of each ordinance. This was not any fresh or new communication in the relevant sense. It was quite unlike the situation in the Seven Network FCAFC case in which it could be reasonably anticipated that had the ACCC commenced proceedings it may be called upon to justify publicly doing so and thereby disclose what had been said at the meeting. No such absence of maintenance of confidentiality is present here.

125    It follows that I reject the applicants’ case that the privilege already found to exist and be maintained over the Freshfields document was not maintained in relation to the on-communications in the 7 October 2015 letter from Volkswagen AG to the KBA, and the four ordinances issued by the KBA to Volkswagen AG.

Submissions on the second issue – imputed waiver by third party communication and use

126    As noted above, Volkswagen AG does not deny waiver, but rather asserts that it was limited waiver by conduct only to the KBA. In substance, Volkswagen AG therefore seeks the outcome that was arrived at in Mann v Carnell, rather than the outcome that was arrived at in Goldberg v Ng. This issue is concerned with the bare fact of disclosure, without regard to what has happened in the substantive litigation. Conduct by Volkswagen AG and the other respondents in the substantive litigation falls for consideration under the third issue, at which point arguments as to inconsistency and fairness are addressed.

127    Submissions on behalf of the Dalton Richardson Roe group asserted that Volkswagen AG had changed its characterisation of its dealings with the KBA from that of voluntary participation to that of compulsion or coercion. Emphasis was placed on the use of the term “request” for the information sought by the KBA. It was submitted that while Volkswagen AG undoubtedly had a strong commercial imperative to cooperate with and put its best case to the KBA, it was entirely a matter for it as to what material was deployed in its response of 7 October 2015.

128    It was further submitted by the applicants that there was no evidence that Volkswagen AG provided the Freshfields document to the KBA for a limited or specific purpose or sought to retain privilege, and characterised reliance on provisions of German law which protect disclosure of information provided to regulatory authorities as, in effect, an attempt to paper over this evidentiary defect. It was submitted those provisions are directed to the protection of business and trade secrets, which was unsurprising in the context of a regulator handling commercially sensitive technical information and data on such things as design, performance and the like provided by car manufacturers. It was submitted that the confidentiality provisions relied upon by Volkswagen AG were not directed at the protection of legally privileged material. However, in my opinion that submission does not address the correct question, which is whether the information was provided in circumstances of confidentiality, such that any waiver of privilege went no further than the KBA itself. I have already made a finding in the above survey of the German statute and case law that such a regime of confidentiality existed.

129    Turning to authority, it was submitted by the applicants that while there are cases where disclosure to a third party is not inconsistent with the maintenance of privilege that was because of the relationship between the third party and the disclosing party, citing in particular Mann v Carnell. It was submitted that a better case was that of Goldberg v Ng, in which the disclosure of privileged material on a confidential basis to a legal regulator was held to be inconsistent with the maintenance of privilege. It was submitted that the present case was a clearer case of waiver than Goldberg v Ng because, unlike the Law Society and the Ng clients, the KBA was “not in the same interest” as Volkswagen AG. The applicants submitted the KBA would be better characterised as an adversary because it was investigating, inter alia, whether the relevant vehicles contained any illegal defeat device. In those circumstances, the choice exercised to advance its commercial interests to maximum effect by provision of the Freshfields document to the KBA was conduct inconsistent with the maintenance of privilege.

130    Submissions for the Cantor Tolentino group adopted the submissions on waiver made on behalf of the Dalton Richardson Roe group.

131    It was submitted on behalf of Volkswagen AG that the communication occurred in the context of the KBA exercising its powers to investigate and conduct a confidential German administrative procedure to which the applicants are not parties. Thus, it was argued, this did not give rise to any circumstance of unfairness in the relevant sense from the bare fact of that communication, or from the subsequent communications from the KBA back to Volkswagen AG (or Audi AG). There was no need for compulsion, and it did not matter that there remained a possibility of persons outside the KBA obtaining access provided the circumstances meant that Volkswagen AG had not relinquished confidentiality, in essence asserting this was the very nature of limited waiver.

132    Volkswagen AG disputed the characterisation of the KBA as an adversary, in part due to the differences between the adversarial system and the inquisitorial procedure under the civilian law in Germany, and in any event pointed out that there is no principle recognised in the authorities on imputed waiver that disclosure to an adversary is the test for a general waiver. Volkswagen AG therefore asserted that it remained entitled to and did maintain its privilege claimed in all of the communications between it and the KBA as against the applicants, and indeed as against the wider world, save as against the KBA, who had no authority to waive privilege except to the extent that German law compelled further disclosure, which had not so far been successfully forced upon it or upon the KBA.

Consideration & conclusion on the second issue – imputed waiver by third party communication and use

133    There is no doubt that the decision to disclose the Freshfields document to the KBA was deliberate, and that the document on its face continued to assert both confidentiality and privilege. However, there is a dispute as to whether that should be characterised as truly voluntary, and whether that in any event matters. There was also a live debate as to what the consequences of that decision should be. Although Toohey J in Goldberg v Ng was in dissent, his Honour’s observation at 107.5 that the principal question is what further consequences flow from the third party disclosure remains apposite. I therefore do not consider the presence or absence of compulsion has any determinative role to play.

134    This case is not on all fours with Goldberg v Ng, but the applicants effectively say that the same position should be arrived at because the issue being considered by the regulator is essentially the same as that in the substantive proceedings in this Court, especially once regard is had to Volkswagen AG’s reliance on the dealings with the KBA in the substantive proceedings.

135    Volkswagen AG urge a different conclusion upon the basis of what it says are the critical and material differences compared to Goldberg v Ng of no commonality of parties between the KBA procedure and the substantive proceedings in this Court; and the lack of any relevant inconsistency and unfairness arising from the bare fact of disclosure to the KBA alone. The question that arises is whether Goldberg v Ng is the outer limit of implied waiver arising from third party disclosure still requiring inconsistency, and thus falling to be determined as part of the third issue. An alternative view, effectively relied upon by the applicants at this point, is that Goldberg v Ng allows waiver upon the basis of disclosure alone, informed by the same general issues arising before the KBA and before this Court in the substantive proceedings.

136    Following Mann v Carnell, the central test is inconsistency, rather than abstract notions of fairness at large. The relevant inconsistency is context specific. It is not until there is relevant inconsistency that considerations of fairness may have any work to do. Sometimes the inconsistency may be enough on its own without any specific unfairness being identified, although that will not be a common occurrence. Applied to this case, the question to be resolved in relation to this issue is whether it was relevantly inconsistent of Volkswagen AG to seek to deal with the regulator in Germany in confidence as to what had occurred and any remedial action to be taken, and at the same time seek to maintain confidentiality as against the rest of the world, including the applicants in the Australian proceedings. In my view, that disclosure alone, or even when taking into account the commonality of issues between the KBA and the substantive proceedings in this Court, is not enough. That does not entail any relevant inconsistency on the part of Volkswagen AG, which is required for waiver if confidentiality has been maintained. But even if there was some kind of inconsistency from the bare fact of disclosure and the same issues arising in different forums without parties in common, in order for that to give rise to waiver in this case, relevant unfairness would have to be demonstrated. This cannot be done in the resolution of this issue, as opposed to the third issue, because the only unfairness that can be pointed to without reference to what has taken place in the substantive litigation goes no further than to invoke an overriding principle of fairness of the kind the High Court in Mann v Carnell made clear would not suffice.

137    As the majority pointed out in Mann v Carnell at 13-14 [29]-[30], one common theme between the majority and minority in Goldberg v Ng was inconsistency. Any notion that any voluntary disclosure to a third party without more necessarily waives privilege was rejected. No party in Mann v Carnell suggested Goldberg v Ng should be reopened on this issue. The following passage from Thomason at 355 per Jordan CJ, quoted by Gummow J in dissent in Goldberg v Ng was quoted by the majority in Mann v Carnell, making it a binding statement of principle (with the use of the word “intention” in the quote to be read more broadly to encompass imputation at law from inconsistency and, when relevant, fairness, not just a subjective intention):

The mere fact that a person on some one occasion chooses to impart to another or others advice which he has received from his solicitor indicates no intention on his part to waive his right to refuse on other occasions to disclose in evidence what that advice was, and supplies no sufficient reason for depriving him of a form of protection which the law has deemed it specially necessary to throw around communications between solicitor and client.

138    The majority in Mann v Carnell at 14 [32] also referred to British Coal and Goldman v Hesper without any suggestion of disapproval of the proposition that those cases were described as being authority for, namely that disclosure to a third party for a limited and specific purpose does not of itself lead to a loss of the privilege as against a person opposed in litigation. In context, this lends support for the notion that, beyond points of high principle, the outcome in Goldberg v Ng is not to be read more expansively than its limited and unusual circumstances permit, with the characterisation and impact of inconsistency being the dominant difference between the majority and minority views. Mann v Carnell can be seen to align with the views of Kirby P in Goldberg v Ng as to principle, especially as Mann v Carnell preserved privilege. The touchstone of inconsistency from Goldberg v Ng is maintained by Mann v Carnell. The difference between the two cases is dictated by different facts, not different principles. It is this Court’s findings of fact that will determine the outcome of these claims.

139    In the circumstances of this case, the relevant inconsistency must arise in the substantive proceedings. Without that, there is no relevant nexus between the disclosure to the KBA in circumstances of statutory confidentiality and the conduct of the litigation to give rise to inconsistency, which is necessary in the absence of a more general waiver than the limited waiver given to the KBA. The resolution of the waiver claim therefore turns on a careful consideration of what precisely has taken place in those proceedings, and how that is said to constitute the relevant inconsistency, informed by concepts of unfairness. This is addressed in response to the third issue, in the context of, and building upon the arguments advanced in support of this issue.

140    It follows that there was no waiver from the bare fact of the disclosure of the Freshfields document to the KBA, nor from the bare fact of references to it in the 7 October 2015 letter from Volkswagen AG to the KBA or in the four ordinances issued by the KBA to Volkswagen AG (and to Audi AG).

Submissions on the third issue – imputed waiver by reliance in litigation

141    A separate basis advanced for waiver on behalf of the applicants by way of submissions made on behalf of the Dalton Richardson Roe group, and adopted by the Cantor Tolentino group, relied on the conduct of the respondents in the substantive proceedings. This necessarily builds upon the fact of disclosure to the KBA having already occurred and looks to the content of the disclosure as against what has happened in the substantive proceedings.

142    It was submitted by the applicants that, in response to the applicants’ claims in the substantive proceedings, the respondents to those proceedings, being companies within the Volkswagen Group including Volkswagen AG, contend that there is no relevant problem arising from the software, or alternatively that any such problem has been cured because of the endorsement by the KBA of rectification works. In those circumstances, the basis upon which the KBA has endorsed those rectification works, including all contentions made and information provided to the KBA, including the Freshfields document, is said to have been put in issue.

143    The written submissions for the applicants identified paragraphs of the particular documents filed by the respondents, which are either pleadings or in the nature of pleadings, which constitute inconsistent reliance, namely:

(1)    [10], [22] and [24] of the respondents’ amended concise narrative statement dated 27 May 2016; and

(2)    [159], [161], [169], [192], [193], [195]-[197] and [199]-[202] of the respondents’ further amended technical document dated 20 June 2016.

144    Volkswagen AG submitted that not only was there no “general correspondence between the parties”, being a critical gateway to the imputation of waiver in Goldberg v Ng, but the respondents in the substantive litigation have not asserted the contents of the Freshfields document in those proceedings so as to give rise to any inconsistency. In other words, Volkswagen AG assert that both limbs in Goldberg v Ng are absent. Volkswagen AG assert that in the substantive proceedings the respondents have done no more than broadly refer to correspondence with the KBA, in the context of the KBA’s approval of Volkswagen AG’s proposed technical solution, without any precise reference to any particular privileged communication within that correspondence. That is, the respondents rely on the remedial question dealings with the KBA, not on the legal characterisation question dealings with the KBA.

Consideration & conclusion on the third issue – imputed waiver by reliance in litigation

145    The competing submissions require consideration of just what has been asserted or relied upon by the respondents in the substantive litigation to ascertain whether or not there is the requisite kind and degree of reliance inconsistent with the maintenance of privilege over the communication of the Freshfields document, and if so, or as a part of that process, whether any relevant specific unfairness is disclosed.

146    The question is whether Volkswagen AG’s conduct in the substantive proceedings has opened a line of enquiry as to the contents of the material referred to in its pleadings, relying on Rio Tinto at 356 [52], 358 [58]. Mann v Carnell found no inconsistency with the original basis for the privilege, and accordingly does not address a situation in which inconsistency is found to exist. Mann v Carnell therefore does not preclude a finding of waiver if it is found that it would be inconsistent and relevantly unfair if Volkswagen AG were permitted to maintain privilege, and at the same time deploy, in a selective manner, its correspondence with the KBA in relation to one of the key issues in the substantive proceedings.

147    I am unable to discern any nexus between the Freshfields document and the consideration, approval and implementation of technical solutions. The technical solutions proposed and apparently being implemented do not involve, let alone turn upon, resolution of the legal characterisation of the software. It is difficult to elaborate what is meant by this without traversing the contents of the advice. However, having looked carefully at each of the paragraphs of the respondents’ amended concise narrative statement dated 27 May 2016 and the respondents’ further amended technical document dated 20 June 2016 to which my attention was directed, and to the documents in which they appear more broadly, and having looked equally carefully at the contents of the Freshfields document and also the reference to the substance of parts of that document in the KBA ordinances, the requisite inconsistency is not apparent, let alone any element of unfairness. It follows that the third party disclosure of the Freshfields document and its subsequent use by the KBA remains no more than such a disclosure and lacks the requisite inconsistency necessary to give rise to an imputed waiver.

148    On the legal characterisation issue, while the respondents in the substantive proceedings (including Volkswagen AG) maintain that the software is not a defeat device, they do not seek to support that assertion by any reference to or reliance upon the Freshfields document. There is no relevant inconsistency in that stance. It may be anticipated that maintaining this defence will require the absence of reference to or reliance upon the Freshfields document. Of course, if that position is not maintained, then a fresh question of waiver may arise. But that is not the present position.

149    The remedial issue is relied upon by the respondents in the substantive proceedings. However, that forms no part of the communications over which privilege is claimed, has been found to exist in these reasons, and is maintained. There is no inconsistency in the respondents in the substantive proceedings (including Volkswagen AG) relying on communications with the KBA on the technical solution proposed, because that is not the subject of any claim of privilege made in the course of this adjudication.

Conclusion

150    As I have found that privilege attached to the communications and was not waived as against the applicants, the application brought by the applicants to access the privileged communications must be dismissed with costs.

Associate:

Dated:    22 November 2016