Federal Court of Australia

Australian Securities and Investments Commission v Insurance Australia Limited [2026] FCA 107

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application dated 30 September 2025 seeking a declaration that a report dated 14 June 2020 with the document ID IAG.0003.0180.0194 is not protected by legal professional privilege (the Application) be dismissed.

2.    The costs of the Application be costs in the cause.

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

REASONS FOR JUDGMENT

ROFE J:

1.    Introduction

1    The Australian Securities and Investments Commission (ASIC), by way of its interlocutory application dated 30 September 2025, seeks a declaration that one document: a report dated 14 June 2020 with the document ID IAG.0003.0180.0194 (the Technical Paper), is not protected by legal professional privilege (the Application). Insurance Australia Limited (IAL) and Insurance Manufacturers of Australia Pty Limited (IMA) (together, the Respondents for the purposes of ASIC’s Application), are subsidiaries of Insurance Australia Group Limited (IAG). I refer to IAG and each of the Respondents interchangeably unless the distinction is material.

2    ASIC, IAL and IMA are parties to a class action listed for trial before Anderson J on the issues of liability in April 2026. If successful in its Application, ASIC intends to tender the Technical Paper as evidence in the trial.

3    The Technical Paper was disclosed to ASIC pursuant to a Voluntary Confidential Legal Professional Privilege Disclosure Agreement dated 3 August 2022 (the VDA), which is discussed further below.

4    The question before the Court is whether the Respondents have discharged their onus of proving that the Technical Paper is a confidential communication that was prepared for the dominant purpose of the Respondents obtaining legal advice.

5    However, before dealing with the central issue, it is necessary to deal with a preliminary issue that arose during the hearing of the Application on 27 November 2025 (the Original Hearing) and which I will explain further below, as to the materials on which the Respondents relied on in support of their claim for privilege. I considered that the issue required further argument and adjourned the hearing. The parties provided submissions on the issue, and closing submissions and the hearing resumed on 4 February 2026 (Second Hearing).

6    Having had regard to the evidence and submissions presented by the parties, and having inspected the Technical Paper, I consider that the Respondents have satisfied their onus and established that the Technical Paper is protected by legal professional privilege.

2.    The Technical Paper

7    The Technical Paper, item 5 in Schedule A to the VDA, is described in the schedule as a “Business Paper”. The applicable category of privilege claimed, and the grounds of privilege are described as “[c]onfidential communication from client to internal lawyers made for the dominant purpose of seeking legal advice”.

8    The Respondents raised the objection that ASIC’s Application was defective in that it sought a declaration that the Technical Paper was not privileged. The Respondents contended that the Technical Paper was not a communication and that privilege subsists in communications, not reports.

9    ASIC rejected the suggestion that the Application was defective. First, the drafting of the Application was informed by the description of the Technical Paper in the VDA production schedule provided by the Respondents, which described the Technical Paper as a “communication”. Second, the Technical Paper was attached to an email dated 14 June 2020 sent to seven direct recipients and copied to five recipients.

10    I am satisfied that the Technical Paper is a communication for the purposes of the Application.

11    I note that I have inspected the Technical Paper in the course of considering the Application and preparing my reasons.

12    The Application sought as an alternative a declaration that part of the Technical Document was not privileged. That alternative declaration was no longer pressed by the Second Hearing.

3.    Materials before the Court

13    In support of its Application, ASIC filed a written outline of submissions dated 21 November 2025 which annexed a chronology of events and dramatis personae. The Respondents also filed a written outline of submissions. Both parties filed additional and separate written closing submissions addressing the preliminary issue prior to the return on 4 February 2026.

14    ASIC relied on the affidavit of Ula Tompkins sworn on 21 November 2025. Ms Tompkins is a Senior Lawyer within the Enforcement and Compliance division at ASIC, and since 16 July 2025, has acted as a Senior Manager within that division. ASIC also relied on an affidavit of Kimberley Chantelle MacKay, partner at Norton Rose Fulbright, which was sworn on 26 November 2025 and annexed a copy of the letter sent to the solicitors for the Respondents.

15    The Respondents read the following seven affidavits into evidence:

(a)    the affidavit of Mark James Kimberley, the Executive Manager, Legal—Insurance, Reinsurance and Distribution at IAG, affirmed on 7 November 2025 (the Kimberley Affidavit) and the exhibit thereto;

(b)    two affidavits of Wei Lin, an actuary and Principal at Finity, and the author of the Technical Paper, sworn on 7 November 2025 (the First Lin Affidavit) and on 25 November 2025, and the exhibit to the First Lin Affidavit;

(c)    three affidavits of Katharine Sara Cahill, Partner, Herbert Smith Freehills Kramer, affirmed on 5 November 2025, 7 November 2025 (the Second Cahill Affidavit) and on 15 December 2025 (the Third Cahill Affidavit) the exhibits thereto;

(d)    the affidavit of Christa Jane Marjoribanks, Chief Financial Officer, Intermediated Insurance Australia of IAG, affirmed on 26 November 2025 (the Marjoribanks Affidavit); and

(e)    the affidavit of Susanne Louise Amos, Principal, Finity Consulting, affirmed 26 November 2025 (the Amos Affidavit).

16    Mr Lin was the only witness cross-examined.

17    The Third Cahill Affidavit was filed following a call made by Senior Counsel for ASIC during the cross-examination of Mr Lin at the Original Hearing, and the subsequent production by the Respondents on that day of two documents, Exhibits A2 and A3. I granted leave for the Respondents to file and rely upon the Third Cahill Affidavit at the Second Hearing.

18    At the Second Hearing, the Respondents also handed up a chronology of evidence which included amendments by ASIC and further amendments by the Respondents.

4.    Inspection issue

19    Of the Respondents’ affidavits listed at [15] above, five made reference to annexed “bundles” of documents or annexures that were claimed to be privileged (the Original Privileged Materials). The Original Privileged Materials comprised some 35 documents, being:

(a)    four emails to which the Technical Paper was attached, which ASIC alleges, in the alternative, were not privileged;

(b)    17 documents contemporaneous with the preparation of the Technical Paper; and

(c)    confidential annexures to three affidavits setting out further evidence as to the witnesses’ recollection of conversations, meetings and the purposes of work performed.

20    The Respondents did not seek to tender the Original Privileged Materials into evidence. Instead, they sought to “hand up” the Original Privileged Materials to only the Court for inspection, invoking the Court’s power to inspect documents in cases of disputed privilege. Although the Original Privileged Materials were not tendered, the Respondents nonetheless proposed to rely upon them as part of their case and to make submissions by reference to them.

21    ASIC objected to the course proposed by the Respondents and maintains that objection. ASIC explained at the Original Hearing that it did not object earlier to the tender of the Original Privileged Materials as it had only appreciated the Respondents’ possible course late the evening prior.

22    The hearing of the Application was adjourned to 4 February 2026 to, inter alia, permit the parties to file submissions on the scope of the Court’s power to inspect documents where privilege is disputed.

23    Prior to the resumption of the hearing and determination of the Application, the Respondents narrowed the scope of the Original Privileged Materials on which they proposed to rely upon. The Respondents now invite the Court to inspect only the following nine documents in addition to the Technical Paper itself:

(a)    Tabs 3 to 8 and 12 to 14 of the Privilege Bundle to the Kimberley Affidavit;

(b)    Confidential annexure SLA-1 and Tab 6 of the Privilege Bundle to the Amos Affidavit;

(c)    Confidential annexures CJM-1, CJM-2 and CJM-3 to the Marjoribanks Affidavit; and

(d)    Tabs 1 to 4 of the Privilege Bundle to the Second Cahill Affidavit,

(together, the Privileged Materials).

24    The confidential annexures to the Marjoribanks Affidavit and the Amos Affidavit are described in their respective affidavits as:

(a)    CJM-1: “being my recollection of a privileged conversation with Ian Brealey”;

(b)    CJM-2: “being comments on the purpose of the work Susie Amos was told to do on secondment”;

(c)    CJM-3: “being further details on my recollection of a meeting with Wei Lin and Susie Amos”; and

(d)    SLA-1: “being my recollection of a privileged conversation with Christa Marjoribanks”.

25    To be clear, the Respondents do not seek to tender the documents comprising the Privileged Materials, and ASIC does not challenge the privileged status of the Privileged Materials. Rather, ASIC contends that, should the Respondents seek to rely on the Privileged Materials for the purpose of determining whether privilege attaches to the Technical Paper, the Respondents ought to tender the Privileged Materials, thereby waiving privilege in those documents. The Respondents sought to “hand up” the Privileged Materials, accepting that tendering the Privileged Materials would amount to a waiver of privilege.

26    It was common ground that the Court has power to inspect the document (or documents) the subject of a privilege dispute in order to determine the dispute (the Subject Document).

27    At issue is whether the Court’s power to inspect documents where there is a disputed claim of privilege is a power to inspect the Subject Document, or whether it extends more broadly to the power to inspect “contextual” privileged documents other than the document the subject of the privilege claim (Contextual Documents), such as the Privileged Materials.

28    After reviewing the parties’ inspection submissions and hearing brief oral argument at the Second Hearing, I ruled that I would not inspect the Privileged Materials and noted that I would provide my reasons for my ruling together with my substantive reasons on the Application.

29    Before proceeding to consider the substantive Application, I will provide the reasons for my refusal to inspect the Privileged Materials.

5.    Refusal to inspect the Privileged Materials

30    The Respondents contend that the Court has broad power as part of its inherent jurisdiction to inspect the Privileged Materials and there is no principled reason to limit that power. In Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 Gleeson CJ, Gaudron and Gummow JJ held at [52] that “[a] court has power to examine documents in cases where there is a disputed claim [for privilege], and it should not be hesitant to exercise such a power”, citing Grant v Downs (1976) 135 CLR 674 at 689, Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] I NZLR 596 at 599 and Trade Practices Commission v Sterling (1979) 36 FLR 244.

31    Although each of Grant, Stuart and Sterling discussed a court’s power to inspect the Subject Document, the Respondents submit that the plurality in Esso did not confine its statement of the Court’s power in this way. The Respondents also rely on the Full Court’s decision in Perazzoli v Bank SA, a division of Westpac Banking Corporation Limited [2017] FCAFC 204 to submit that the power to inspect is not limited to only the Subject Document, and that in some circumstances the power may be exercised to inform a contextual understanding of other documents and the surrounding circumstances in which the Subject Document was prepared.

32    ASIC submits that the exercise of the Court’s power to inspect the Subject Document must be undertaken consistently with the Court’s obligation to accord procedural fairness to the parties. ASIC argues that it would constitute a novel and unwarranted exception if the Court was to permit the Respondents to rely upon privileged material as part of its proof, while denying ASIC the opportunity to review that material, test it, respond to it, and make submissions in respect of it. ASIC accepts that there may be unfairness to the Respondents if they cannot rely on the Privileged Materials but submits that unfairness is outweighed by the unfairness to ASIC if the Respondents are able to rely on the Privileged Materials without tendering them.

33    ASIC further noted that, in more than 40 years since Grant, there has not been one reported authority in which a Court has exercised the power to inspect documents which were not the Subject Document, or in which a Court adopted an approach as analogous to that proposed by the Respondents or expressly endorsed a power to inspect Contextual Documents of the breadth proposed by the Respondents.

34    In Perazzoli, there were in the order of 2,150 documents which were the subject of a claim to privilege. The primary judge did not examine any of the Subject Documents. In the course of explaining why the primary judge had erred in not inspecting any of the Subject Documents, the Full Court observed at [25] that “[…] knowledge obtained by inspecting some documents may inform a contextual understanding of other documents and the surrounding circumstances”. The Respondents submit that by analogy, if a Court can inspect a particular Subject Document to obtain contextual information about other Subject Documents, then the Court should be able to inspect privileged Contextual Documents in order to gain contextual understanding about a Subject Document.

35    As ASIC submits, on the Respondents’ proposed approach, ASIC would have no ability to review the Privileged Materials, test them, respond to them, and make submissions in respect of them. Taken to an extreme, all or most of the “evidence” put forward in support of a claim for privilege, might be claimed to be privileged (see confidential annexures CJM-1 to CJM-3, and SLA-1). Whilst the material relied upon might include sworn direct evidence, none of the evidence would be amenable to being tested by cross-examination as probative of the facts on which the claim for privilege was founded. Such an approach would deny the person challenging the claim any real opportunity to test the claim. It would also require the Court to review the material, entirely unaided by submissions from the challenger. Such a process would be grossly unfair to the party seeking to challenge the privilege claim.

36    A claim to privilege of a Subject Document cannot rest solely on inferences drawn from privileged material that the challenger is unable to test; such an approach would defeat the very purpose of allowing the privilege claim to be scrutinised: Hancock v Rinehart (Privilege) [2016] NSWSC 12 (Brereton J) at [32] and approved by the Court of Appeal in Rinehart v Rinehart [2016] NSWCA 58 (Rinehart Appeal) at [31] (together, the Rinehart Case).

37    In the Rinehart Case, the party claiming the privilege adduced no evidence in support of her claim, instead proposing that the Court review the material the subject of the privilege claim and come to a decision on the face of the privileged documents. The primary judge declined to exercise his discretion to inspect the privileged documents. The Court of Appeal in the Rinehart Appeal identified four difficulties with the approach propounded by the party claiming privilege in that case at [31]–[35]:

(a)    The inability to provide reasons:

The unfairness is manifest once the question of an appeal is considered. The first difficulty is in the formulation of reasons. Irrespective of whether the court finds in favour of or against the claim of privilege, the litigants are at least entitled to ask for reasons. Irrespective of the outcome, it will be difficult to supply reasons which do not disclose the privileged material relied upon.

(Emphasis added.)

(b)    The difficulty with framing an application for leave to appeal, and the resolution of any appeal;

(c)    The undue burden on the Court, both in terms of the time involved in inspecting the documents, and in the preparation of reasons without the assistance of submissions from the party challenging the claim; and

(d)    The obligation that the practice and procedure of the court are to be regulated so as best to attain the objects of the just determination of the proceedings, the efficient disposal of the business of the court and the efficient use of available judicial and administrative resources (s 37M of the Federal Court of Australia Act 1976 (Cth)).

38    I consider that the difficulties identified by the Court of Appeal apply equally to this case.

39    I consider that the present scope of the Court’s power, being the discretion to inspect the Subject Document but not privileged documents more broadly, i.e., Contextual Documents, strikes a balance between the interests of the party claiming privilege and their ability to provide evidence in support of that claim, and the party challenging the claim and their ability to properly challenge the claim.

40    The absence of any express authority in support of the broader power of inspection supports my view as to the appropriate scope of the Court’s inspection power.

6.    Background to the Application

41    By letter dated 1 February 2021, ASIC issued a notice under s 30 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), requiring IAL to produce certain books to ASIC. These books relate to an investigation pursuant to s 13(1) of the ASIC Act in respect of IAL’s impugned conduct in making false or misleading representations in advertising and promotional material as to the application of discounts to the pricing of insurance products in contravention of ss 912A(1)(a) and 1041H(1) of the Corporations Act 2001 (Cth) and ss 12DA(1) and 12DB(1)(g) of the ASIC Act, during the period from 1 January 2014 and ongoing (the Investigation).

42    As part of ASIC’s Investigation, ASIC issued a series of notices to IAL and IMA requiring production of documents and the provision of information over the period from about February 2022 to August 2023.

43    On 24 May 2022, ASIC issued two notices under s 30 of the ASIC Act, bearing the barcodes NTC2214302 and NTC2214303, to IAL and IMA (Notices). Item 5 of each of the Notices required the production of:

Reports recording the outcome of reviews or investigations conducted by or on behalf of IAG during the Relevant Period referring to the extent to which the use of demand adjustment factors, and /or renewal optimiser, and / or a Customer’s or group of Customers’ capacity or propensity to pay a particular premium or premium increase or to obtain a lower premium elsewhere, impacts on premiums, including those offered to new customers and renewing customers, and any consideration of the impact of this on loyalty discounts promoted by IAG.

44    In ASIC’s Investigation, Herbert Smith Freehills Kramer (then known as Herbert Smith Freehills (HSF)) assisted IAG’s in-house legal team to prepare responses to notices and correspondence. IAG’s legal team corresponded with ASIC directly, and HSF sent secure links to copies of documents being provided in response to notices.

45    ASIC was first informed that the Respondents made a claim for privilege over the Technical Paper on 17 June 2022. On this date, IAG, through a secure link provided by HSF, sent ASIC a link to a schedule entitled “2022.06.17—IAL IMA—Privilege Schedule (Final)” (the Privilege Schedule). The Privilege Schedule set out a list of documents that were responsive to the Notices, but which IAL and IMA did not produce on the basis of claims for legal professional privilege. The Technical Paper was listed in the Privilege Schedule at the twentieth row and was identified as being responsive to item 5 of the Notices. The twentieth row also stated that along with the Respondents, their parent company, IAG, claimed legal professional privilege over the Technical Paper.

46    On 29 June 2022, ASIC sent IAG a letter wherein it requested that additional details substantiating the privilege claims within the Privilege Schedule be provided by 1 July 2022.

47    On 2 July 2022, Ms Stephanie Wee (General Counsel—Insurance, Disputes & Regulatory) sent ASIC a responsive letter, which enclosed an amended copy of the Privilege Schedule containing additional details, in red text, to substantiate the claim for privilege (the Amended Privilege Schedule). Further information was included in the Amended Privilege Schedule in relation to the Technical Paper at the twentieth row.

48    The Technical Paper was subsequently produced to ASIC under the VDA. The VDA provided that the Respondents and IAG disclose to ASIC a number of documents over which they had claimed legal professional privilege, subject to the terms of the VDA. The Technical Paper was listed as document 5 in Schedule A to the VDA.

49    Under the terms of the VDA, the parties agreed on a procedure to resolve any dispute in the event ASIC did not accept a privilege claim made under that VDA. That procedure required ASIC to inform the Respondents in writing whether the privilege claim is accepted, and in the event that it was not, that either party was to apply for a declaration to this Court. As matters transpired, ASIC did not inform the Respondents that it did not accept the privilege claim over the Technical Paper and did not seek such a declaration until the filing of the Application on 30 September 2025.

7.    Applicable principles

50    It was common ground that the Application is to be determined by reference to the common law, and that the well-settled principles that apply when determining whether legal professional privilege applies to a document at common law are those that were recently summarised by the Full Court in Singtel Optus Pty Ltd v Robertson (2024) 425 ALR 1 at [23]–[32] (Murphy, Anderson and Neskovcin JJ) and which I applied in McClure v Medibank Private Ltd [2025] FCA 167 at [176]–[183].

7.1    Dominant purpose test

51    At common law, legal professional privilege is confined to confidential communications made for the dominant purpose of giving or obtaining legal advice or the provision of legal services.

52    Relevantly to the present Application:

(a)    The purpose for which a document was created is a matter of fact to be determined objectively, having regard to the evidence, the nature of the document, and the parties’ submissions. The nature and extent of the evidence needed to prove the existence of privilege is fact and circumstance dependent: Singtel Optus at [25].

(b)    The purpose will typically be either that of the author of the document in question, or, distinctly, of the person under whose direction, whether particular or general, it was produced or brought into existence: McClure at [182], citing Grant at 677 (Barwick CJ). The relevant circumstances dictate the focus.

(c)    In many cases, the character of the document will reveal the purpose for which it was brought into existence. Alternatively, if that is not the case, it may be established by identifying the circumstances in which the communication took place and the topics to which the advice was directed: McClure at [183], citing Grant at 689 (Stephen, Mason, and Murphy JJ) and Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278 at [146] (Moshinsky J).

53    The Full Court in Singtel Optus observed at [29] that the quality and precision of the evidence adduced in support of a claim for privilege is relevant, and dominance of purpose is not established by bare ipse dixit.

54    The onus lies with the Respondents as the parties asserting the privilege to demonstrate that it attaches: Grant at 689 (per Stephen, Mason and Murphy JJ). In establishing this, focused and specific evidence is required in respect of each communication, rather than mere generalised assertion, let alone opaque and repetitious verbal formulae: Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Ltd (No 4) [2014] FCA 796 at [29] (Beach J); see also Barnes v Commissioner of Taxation (2007) 242 ALR 601 at [18] (Tamberlin, Stone and Siopis JJ).

7.2    Time for assessment of dominant purpose

55    When considering the appropriate time for the assessment of dominant purpose, the Full Court in Singtel Optus explained at [88] that the proper date upon which to assess purpose will depend upon the particular circumstances of the case. Where a party has commissioned a report from a third-party provider, the relevant time to assess the party’s purpose for doing so will usually be at the time of commissioning.

56    However, evidence as to later events can also be relevant, especially where the purpose of the relevant report changed over the period from the commissioning to its provision: Australian Securities and Investment Commission v Noumi Ltd [2024] FCA 349 at [77], [80] (Shariff J).

57    The general position is clear. The relevant time for ascertaining purpose is when the communication was made; if the communication is a written document, the relevant time is when the written document comes into existence: Asahi Holdings at [30] (Beach J).

8.    Circumstances surrounding the commissioning of the Technical Paper

58    Mr Kimberley, IAG’s Executive Manager, Legal—Insurance, Reinsurance and Distribution and a practising lawyer, gave evidence as to the commissioning of the Technical Paper. The following is taken from Mr Kimberley and Mr Lin’s evidence, unless noted otherwise.

59    Mr Kimberley joined IAG in 2019. Prior to May 2020, he reported to Andrew Collings (then Deputy Group General Counsel of IAG). Since May 2020, Mr Kimberley reports directly to Stephanie Wee (currently IAG’s General Counsel—Insurance, Disputes & Regulatory). Since joining IAG in 2019, Mr Kimberley has attended and/or been a delegate member of IAG's Regulatory Disclosure Committee. He has also been a standing member of IAG's Initial Compliance Assessment Review Forum since its inception in 2021.

60    Mr Kimberley supervises a team of lawyers which provides legal advice to IAG’s Business Division on issues related to the conduct of IAG’s insurance business, IAG’s insurance products and the distribution of those products through IAG’s broker network, underwriting agencies and financial partners, as well as IAG’s reinsurance arrangements. The legal team also provides advice in relation to regulatory compliance, potential breaches of the Corporations Act and the General Insurance Code of Practice and breaches or potential breaches to ASIC, SIRA and the Code Governance Committee in respect of those issues.

61    In mid-May 2019, Mr Kimberley and Matthew Williamson (then Manager, Strategic Partner Relationships) attended a meeting with Deloitte, who was at the time assisting IAG with a remediation project for customers of HBF Health Insurance, a business which at that time distributed IAG insurance products. Deloitte provided market insights on pricing and identified potential issues concerning the application of discounts for HBF customers.

62    Following the meeting, Mr Williamson circulated a summary email on 15 May 2019 along with a slideshow attachment, noting Deloitte’s observations (the Notional Issues). The email indicated that the remediation might need to extend beyond the previously identified member cohort and potentially to all discounts, multi-policy or otherwise, that have been applied. It also stated that further time might be required to assess the issues and, if necessary, to seek guidance from ASIC.

63    Shortly after the Deloitte meeting, in another meeting, Mr Kimberley informed Rebecca Farrell (then Acting Group General Counsel and Company Secretary of IAG) and Mr Collings, that he had met with Deloitte. At that time, Mr Kimberley did not know whether the Notional Issues existed within IAG’s pricing processes. It was agreed that further work was required to “understand whether the Notional Issues were in fact issues, and if so, precisely what the issues were”. Mr Kimberley considered that information from the pricing team on pricing processes would be necessary.

64    Subsequently, Mr Kimberley, Ms Farrell, Mr Collings and other members of the legal team attended regular (usually weekly) meetings with the pricing and compliance teams to discuss the facts that were being gathered by the pricing team in relation to the Notional Issues which became known internally as issues 1, 2 and 3. Issues 1 and 3 concerned aspects of pricing for renewing customers and evolved in scope and description. Issue 2 was a pricing mechanism known colloquially within the industry as “capping and cupping”, which imposed a maximum or minimum limit on the movement of a customer’s premium change, applied after discounts in the order of the pricing algorithm.

65    In an email dated 3 June 2019, Ian Brealey, Executive Manager Pricing, wrote to Suky Wang (Manager, Consumer Pricing), copying in Chris Dolman, Christopher Davis (Personal Insurance Pricing Director) and Charles McAlpine:

[…]

We have a meeting at 8am on Wednesday with compliance teams to discuss the HBF MPD issues and the wider implications to other brands. I’ve put together the start of a story but could you please add some information from your calculations for each of the 3 examples I’ve put forward to illustrate the issue. Also I’m not sure if I’ve quite considered and understood all the possible scenarios, ideally by Wednesday we do and are able to articulate in as simple way possible. Chris Dolman – please share your thoughts on our articulation also.

Chris, Chris & Chas – Including you as FYI, if you have more knowledge or feedback please let us know tomorrow. There’s also a question for you – in your renewal optimisation models, when you calculate a target increase (the 15% in the red box on page 2) are you confident that this takes into account discounts and changes in discounts without issue as to whether these are fulfilled fully? Happy to catch up if we need tomorrow, this is really important that we get this topic right as we don’t want to be revisiting refund calculations.

66    The 3 June 2019 email attached a slide headed “Different Compliance Issues” which set out the three Notional Issues, and another headed “Renewal Pricing Calculation”.

67    In an email dated 4 June 2019, Mr Brealey wrote to Mr Davis and Ms Wang, copying in Mr Dolman and Mr McAlpine:

[…]

I met with Maryann Joubert yesterday, EM Compliance, to understand what all our obligations are around issues such as these. Once you are fairly certain there has been a compliance issue, you have a requirement to raise an incident in GARI within 24 hours. This will then initiate the process with the compliance teams to take forward the investigation and next steps.

I don’t fully understand your description but I think it sounds like you are reasonably sure there has been an issue which has resulted in customers not being passed full discount levels or discount change levels? If this is the case you need to raise it in GARI, we can’t just change the approach for the future

I know it’s a complex issue and we’re early on in our understanding but can we please try and bring to the meeting tomorrow? If there is a third issue can you please add it to the attached slides and if the waterfall is not an accurate description of how renewal pricing works can you please update it (in attached Excel). I know it’s a really complicated topic, especially when different issues overlap and I don’t think we go in to tomorrow saying we can solve it, just to tell the story of where we’re at and plan next steps.

[…]

(Emphasis added.)

68    On around 18 June 2019, Mr Kimberley and Crystal Sanders (Executive Manager, Regulatory Engagement and Investigation) met with members of the pricing team and requested that the team prepare a paper summarising the three Notional Issues to be provided to the legal team. This was to facilitate the legal team’s preparation of a legal advice. Mr Kimberley considered that issues 1 and 3 involved more work and were more complex in terms of the subject matter and the scoping of the potential issues, thereby requiring more consideration than issue 2.

69    The pricing team subsequently prepared scoping documents on the potential issues. On 11 July 2019, Damian Grima, Senior Compliance Specialist, requested legal advice from Mr Kimberley and attached several documents prepared by the pricing and compliance teams on issues 1, 2 and 3. Mr Kimberley deposed that part of IAG's typical process relating to breach assessments was for the compliance team to prepare assessments which would be delivered to the legal team to assist the legal team's consideration of whether a breach had occurred.

70    After reviewing the documents provided by Mr Grima, Mr Kimberley considered that the legal team did not have sufficient facts to advise on any potential breach of financial services law with respect to issues 1 and 3. One of Mr Kimberley or Mr Collings informed Mr Grima or his team that additional information would be required before legal advice could be provided, as the legal team did not have sufficient facts to advise on any potential breach of financial services law. Only when he had sufficient understanding of the facts did Mr Kimberley consider that he, or his team, would be able to provide legal advice in respect of compliance with financial services law.

71    Work on issue 2 was prioritised, leading to a breach report to ASIC in September 2019. Issue 2 has subsequently been the subject of a remediation and separate proceedings (Australian Securities and Investments Commission v Insurance Australia Ltd [2023] FCA 724), wherein Abraham J imposed a pecuniary penalty in respect of admitted contraventions of the ASIC Act.

72    Later in 2019, sometime after issue 2 was reported to ASIC, the Australia Division of IAG established a formal working group responsible for finding, investigating and remedying potential pricing issues (the Pricing Taskforce). The program required additional resourcing, prompting the engagement of external support. At around that time, Finity was retained by IAG to do various tasks with respect to pricing. For example, two Finity personnel were seconded to IAG to work in the “remediation” stream, and another in the “find” stream, both of which were unrelated to the work done by Mr Lin. IAG had previously retained Finity as consultants on a few different projects.

8.1    Ms Marjoribanks’ secondment

73    Christa Marjoribanks, then partner at PricewaterhouseCoopers, was seconded to IAG from January to December 2020 to assist with the establishment and ongoing work of the Pricing Taskforce. Ms Marjoribanks was the Acting Executive General Manager (EGM), Pricing Integrity until around April 2020, when Adam Searle commenced in that role. As part of her role as Acting EGM, Ms Marjoribanks served as Chair of the Pricing Taskforce Steering Committee. The Steering Committee was composed of senior personnel across pricing, legal, compliance, corporate affairs and finance teams. Mr Searle took over as Chair of the Steering Committee when he became EGM and Ms Marjoribanks remained a member of the Steering Committee. Ms Marjoribanks gave evidence as to the structure and work of the Pricing Taskforce.

74    The work of the Pricing Taskforce was confidential. When Ms Marjoribanks commenced her secondment at IAG, she was given a briefing from Mr Collings about the measures in place to ensure the work she and the rest of the taskforce members undertook remained confidential. The measures included only discussing the work of the taskforce with specific individuals, a designated working room for persons working on the taskforce and saving documents in secure server locations.

75    According to Ms Marjoribanks, the Pricing Taskforce involved four workstreams:

(a)    “Find” – which involved an initial consideration of promises made in customer documentation as against the pricing processes [(algorithms and rating factors)] as they were understood at a high level, to identify matters which may require further investigation to consider whether any breaches of financial services laws had occurred;

(b)    “Investigate” – which involved a deeper dive into matters identified in the “Find” workstream as requiring further investigation, to analyse the issue and document the matter so that the legal team could determine whether a matter constituted a breach of financial services laws;

(c)    “Fix” – which involved considering ways to [resolve the matters requiring a fix,] amend[ing] pricing processes and/or documentation where issues were confirmed, as well as quantifying any historical impact to customers; and

(d)    “Remediate” – which involved compensating customers and addressing related risks.

76    In a letter dated 3 June 2022 to ASIC, Ms Marjoribanks (by then EGM, Product, Pricing & Governance) explained the establishment of the Pricing Taskforce:

IAG is committed to ensuring that its customers receive the discounts they are promised. To this end, in late 2019, following identification of the Cupping matter, IAG established the Pricing Taskforce to enable the comprehensive identification, investigation and assessment of potential misalignment between pricing practices and representations made to customers, and to rectify issues and remediate impacted customers where issues were identified. This program has resulted in the remediation of approximately $179 million (in respect of over 2.1 million policies) to date, with an expected total refund amount of $380 million (in respect of approximately 4 million policies) by the time of its completion.

[…]

The significant scale of the investment in the Pricing Taskforce reflects IAG’s commitment to rectifying these issues. This includes the careful design of scope and governance, strong oversight by the Board, and dedicated resourcing. This multi-year program of work has, at various stages, involved a workforce of up to 300 people, including specialist external consultants, internal subject matter experts, the creation of new senior Pricing Integrity roles (to which we have appointed external senior actuaries) and a dedicated customer contact team. This has required an estimated $115m in program administration costs.

[…]

Throughout its life, the Pricing Taskforce has adopted a risk-based, customer-centric approach to its review, involving detailed examination of customer communications and pricing practices for a significant, representative cross-section of IAG’s insurance brands and products.

(Emphasis added.)

8.2    Mr Lin’s secondment

77    Mr Lin is a qualified actuary and Principal at Finity, who works as a consultant to insurers in relation to pricing and analytics matters including technical pricing, price optimisation, customer behaviour analytics, competitor monitoring operational review through predictive analytics and benchmarking, and implementation of pricing and analytical insights.

78    In October 2019, around the time the Pricing Taskforce was formed, Mr Lin was seconded to IAG, a client of Finity. Mr Lin was informed by another principal at Finity that the need for his secondment arose due to resourcing constraints and IAG’s need for additional support with actuarial experience. Mr Lin was not involved in negotiating his secondment. Whilst on secondment at IAG, Mr Lin deposed that he worked on around five technical papers, one of which was the Technical Paper, being what he described as “the most involved”.

79    Four engagement letters between IAG and Finity in 2019 and 2020 concerning Mr Lin’s secondment were in evidence. The first three (dated 4 October 2019, 6 December 2019, and 12 March 2020) were addressed to Steve Marshall (EGM, Product and Pricing), and the fourth (3 July 2020) to Adam Searle (EGM, Pricing Integrity from around April 2020) (together, the Secondment Agreements). The first two letters commenced by noting that IAG had retained Finity “to extend the resourcing support for IAG’s pricing function”. The third and fourth referred to the “resourcing support of IAG’s Pricing Taskforce”.

80    The first two of the Secondment Agreements described the work to be undertaken as:

•    Project planning and scoping;

•    Data extraction, reconciliation and preparation for analysis;

•    Technical analysis and/or modelling;

•    Project delivery and stakeholder engagement.

(Emphasis added.)

81    Each of the Secondment Agreements noted that “[a]ll work will be undertaken on IAG systems in IAG’s office and using only IAG devices (eg laptop, mobile phone). No data or analysis will be taken or sent to Finity’s office”. Schedule 1 to the Secondment Agreements entitled “Revisions to Terms and Conditions” contained express terms on confidentiality obligations in relation to IAG’s Confidential Information (see, e.g., clause 1.6(d)) and added that the secondee could only use IAG devices and systems to access and use IAG data and information and could not collect, store, use, manage, access or move IAG data or information outside of IAG premises or systems.

82    Prior to commencing his secondment, Mr Lin was briefed by Mr Brealey, as to the technical aspects of the work he was to undertake during the secondment. Mr Lin deposed that Mr Brealey informed him that a series of issues had arisen in pricing at IAG, which required further investigation to assist the legal team to determine whether breaches of the law had occurred. Mr Lin was instructed that the primary purpose of his secondment was to investigate factual matters surrounding pricing issues and to provide those facts to the legal team to help them understand complex pricing and actuarial concepts, so that they could then give legal advice relating to these complex pricing matters. Mr Lin accepted that Mr Brealey and his team had started the work that he was seconded in to continue.

83    Mr Lin was also briefed separately by members of the legal team on his work for the Pricing Taskforce. Mr Lin met with members of the legal team, including Mr Kimberley and Warren Leeken, a senior Specialist Lawyer. Mr Lin was told that he was to prepare papers describing various pricing processes. The lawyers also emphasised that Mr Lin’s work was confidential and subject to legal professional privilege. He was instructed to limit discussions to members of the Pricing Taskforce, use secure document storage, and conduct meetings in designated secure rooms that were set aside for the Pricing Taskforce. Mr Lin was further instructed not to document things on a white board that others could see.

84    Mr Lin also attended a legal professional privilege training session delivered by HSF on 15 November 2019 and was provided with a “Practical Guide to Legal Privilege” information sheet. Further, Mr Lin provided an email undertaking around January 2020 confirming that his work was confidential and for the dominant purpose of seeking legal advice. Unless meeting with members of IAG’s pricing teams, Mr Lin undertook his IAG work on an IAG computer in a dedicated project room which was accessible only to members of the Pricing Taskforce who had security pass access. Drafts of his work were marked “confidential and privileged” and stored in a restricted-access SharePoint location. If Mr Lin had questions as to with whom he could share drafts of his work, he asked either Ms Hansen (a Senior Special Lawyer within the Legal team) or Ashwin Dushyanthira, lawyers in the legal team.

85    Mr Lin’s work in documenting pricing issues for the legal team was known as the “Emerging Issues” workstream, which became known as the “investigate” stream upon the establishment of the Pricing Taskforce. The investigate stream reported to the Pricing Legal Advice Working Group (PLA Working Group) comprising Mr Kimberley, Mr Leeken and Ms Hansen, which oversaw legal aspects of the Pricing Taskforce. The “find” workstream also reported to the PLA Working Group, which, in consultation with the compliance team, made decisions to pass matters on to the “investigate” stream. The PLA Working Group in turn reported to a Steering Committee.

86    Issue 3, having already been identified, progressed directly to the “investigate” phase. A contemporaneous document entitled “Pricing Taskforce – Governance Flow – 20 January 2020” is a diagram (PT Governance Diagram) that notes inter alia that the objective of the “investigate” stream led by Mr Lin was to “[d]efine and document the item to enable Compliance and Legal to complete an assessment to determine if an item is a breach”.

87    Throughout late 2019 and into 2020, Mr Lin worked on documenting pricing issues, including the issue that became the subject of the Technical Paper. He met regularly with the legal team, including from time-to-time with Mr Kimberley, to provide updates, seek clarification, respond to feedback and answer questions from the team to inform his further work.

88    To gather factual information, Mr Lin contacted subject matter experts across IAG’s pricing teams but did not disclose the broader context of his requests. In addition to Mr Brealey, Mr Lin recalled seeking information from personnel in:

(a)    the go-to-market team (such as Ms Wang and Ally Luo);

(b)    technical pricing and optimisation (such as Mr Davis, Anthony Clissold and Joshua Anderson); and

(c)    pricing and algorithmic ethics (such as Mr Dolman).

8.3    Dissemination of the Technical Paper

89    A draft of the Technical Paper was circulated by Mr Lin to Mr Kimberley, Mr Leeken and Ms Hansen as part of email invitations for meetings on 11 and 25 November 2019. As I have indicated, Mr Kimberley, Mr Leeken and Ms Hansen are lawyers.

90    Mr Lin attended a meeting of the Pricing Taskforce on 13 December 2019. Attendees included Mr Marshall, Mr Brealey, Mr McAlpine, and Mr Dolman. Other attendees who I have not referred to previously included Vivian Wong, Eric McNamara, Allison Grice, Amy Huen, Richard Wardlow, Pretesh Patel, Matthew Bennett, Marcus Taylor and George Lewis. Most of the attendees were members of the pricing team. An attendee list shows Mr Lin as a “guest” attendee. Mr Lin is only recorded as attending one other meeting of the Pricing Taskforce on 13 August 2020.

91    The minutes of the 13 December 2019 meeting, dated 16 December 2019, record under the heading “Pricing Taskforce” that Mr Lin “walked through items under investigation in the Pricing Taskforce” and that there was “[d]iscussion around possible options for how each item may be addressed going forward”. In cross-examination, Mr Lin gave evidence that in the course of that meeting, he gave a “high-level” update on the matters that he was working on, including the aspect of the pricing process that was under investigation in the Technical Paper. Mr Lin reiterated that he provided “a very high-level overview only” out of concern to protect confidentiality. Mr Lin was therefore confident that the confidentiality of his work was maintained at the meeting. Consistent with his usual practice of not sharing his draft without approval of the legal team, he did not share a draft of the Technical Paper with the attendees. He was also cognisant of his confidentiality obligations, which he understood made him personally liable.

92    Once his investigation was well-progressed, Mr Lin was instructed by the legal team to seek factual review from some members of the pricing team, to ensure that his interpretation and representation of the facts were accurate. Mr Lin then shared his draft Technical Paper with those members of the pricing team for that purpose.

93    Shortly after she commenced her secondment at IAG, Ms Marjoribanks recalled being introduced to Mr Lin in the dedicated secure room and speaking with him about the technical work he was undertaking.

94    Ms Marjoribanks recalls reviewing a draft of the Technical Paper, finding the draft paper highly technical and complex and considered that the concepts would benefit from a summary using non-technical language where possible. Susanne Amos, another Finity principal, was seconded on a part-time basis to prepare the non-technical “Business Summary” section of the Technical Paper. Ms Amos deposed that she took similar measures to Mr Lin to ensure that confidentiality was maintained in her work and in the draft Technical Paper. Ms Amos only discussed her work with Ms Marjoribanks, Mr Lin, Mr Brealey and later, Mr Searle.

95    In the course of finalising the Technical Paper, there were a number of additional individuals who performed a sequenced review of the draft. These individuals were listed on the first page of the Technical Paper as follows:

(a)    Suky Wang and Christopher Davis (‘Review’): Ms Wang and Mr Davis were subject matter experts with technical knowledge of IAG’s pricing systems. They each reviewed and commented on the Technical Paper to ensure it was factually accurate;

(b)    Mr Brealey (‘Business sign-off’): Mr Brealey reviewed the Technical Paper in his role as the Executive Manager of Pricing. His review was to further ensure that the document was factually accurate.; and

(c)    Ms Marjoribanks and Mr Searle (‘Project sign-off’): Ms Marjoribanks and Mr Searle were to carry out a review of the Technical Paper and provided feedback to ensure that the Technical Paper was appropriate for a non-technical audience, including that it would not be misunderstood.

96    Mr Lin accepted the reviewers’ edits to ensure factual accuracy and circulated drafts only to the legal and compliance teams, and those involved in the review sequence. All drafts of the Technical Paper were marked “confidential and privileged” and stored on a secure location on IAG’s SharePoint system, accessible only to a small number of people.

97    On 15 June 2020, Ms Amos sent an email with a link to the Technical Paper to eight people, including Mr Searle, Ms Marjoribanks, Mr Brealy, Ms Joubert (Executive Manager, Compliance Risk), Miss Hansen, Mr Kimberley, and Ms Milford-Chilvers (a Senior Compliance Specialist). Ms Amos received an email from Ms Hansen stating that she could not access the link to the Technical Paper.

98    On the same day, Mr Lin provided a SharePoint link to the final Technical Paper to Mr Kimberley, Ms Hansen, Ms Milford-Chilvers and Ms Joubert. Mr Lin understood that he was circulating the Technical Paper to the legal team to enable them to carry out the necessary legal assessment, and the compliance team to prepare their compliance assessment (the Compliance Assessment) as an input to the legal team’s advice.

99    On 28 July 2020, Ms Hansen subsequently requested additional information from the compliance team that the legal team should consider for the purpose of preparing its advice. Ms Hansen also requested the Compliance Assessment on the issue set out in the Technical Paper. Mr Kimberley did not recall the Compliance Assessment ever being produced.

100    Within IAG, a "legal breach assessment" (LBA) is an internal legal advice prepared by the legal team in relation to an issue raised by the compliance team, which follows a specified template. The LBA is a document that forms part of IAG's breach reporting processes. A "memorandum of advice" is an advice that the legal team provides in response to any request from one of the business divisions for advice. Typically, in the context of matters referred to legal by the compliance team regarding the breach reporting process, the legal team would ordinarily only provide an LBA.

101    Given the significant scope of the review involved in the preparation of the Technical Paper, Mr Kimberley (or Ms Wee) considered that, in addition to the LBA, a more detailed memorandum of advice unconstrained by the pro forma template was needed. Mr Kimberley instructed Mr Dushyanthira to prepare both documents using the Technical Paper. Mr Kimberley reviewed the draft LBA and collaborated with Mr Dushyanthira on the drafting of the memorandum of advice.

102    On 19 August 2020, Mr Kimberley sought advice from Richard Harris, a partner at Gilbert + Tobin. Mr Harris was briefed with the memorandum of advice and the Technical Paper. Mr Harris gave his advice in a call and subsequently in writing, the next day.

103    The compliance team was and is organisationally responsible for the breach reporting process within IAG. It was the legal team's usual practice to send the legal advice to the compliance team, so that the compliance team could either facilitate the provision of the advice to IAG's breach committee for its decision-making processes or otherwise close the matter.

104    After receiving the legal advice from Mr Harris, the final LBA memorandum of advice, Technical Paper and supporting documents were provided to senior compliance personnel in accordance with IAG’s ordinary breach reporting processes. These documents were treated as confidential, with access limited to the legal and compliance teams, and the breach committee. It was Mr Kimberley’s experience from providing previous advice in relation to potential legal breaches, that when legal advice and associated documents are provided to the compliance team, they are treated as being confidential, and access to them is restricted. The documents are not generally accessible to anyone outside of the legal and compliance teams or the breach committee.

105    On 26, 27 and 30 August and 8 October 2020, Mr Dushyanthira sent the Technical Paper to:

    Ms Minney, Ms Joubert and Mr Mulcahy, copying Mr Kimberley and Ms Wee, along with a final LBA, a memorandum of advice from Mr Harris and supporting documents;

    Ms Marsden (Lead, Project Management); and

    Mr Brealey, Mr Zhu, and Ms Wang from the pricing team, copying Ms Hansen.

106    Between 8 November 2019 and 16 June 2020, Mr Lin sent a further 23 emails attaching the Technical Paper. The recipients of Mr Lin’s emails encompassed members of the Pricing Taskforce, and members of the pricing, compliance and legal teams.

9.    The parties’ submissions

107    ASIC submits that the central issue is the purpose for which the Technical Paper was commissioned. It submits that the Respondents do not suggest that the purpose changed from the date on which the Technical Paper was commissioned, in a way that subsequent circulation of the Technical Paper within IAG may shed light on the purpose for which it was commissioned.

108    ASIC submits that having regard to the evidence, and the content and nature of the Technical Paper, it is apparent that the Technical Paper was commissioned for three purported purposes. The first is said to be to document and define a pricing issue that the Respondents had identified. The second is said to be the provision of information to the compliance team to assist in the preparation of a Compliance Assessment. The third is for the provision of information to the legal team to enable it to prepare a legal breach assessment and legal advice. ASIC submits that, at best, one purpose of the Technical Paper was to prepare legal advice, but it was not the dominant purpose, with reliance placed on my findings in McClure at [181].

109    ASIC submits that the organisational status of the individuals to whom the Technical Paper was distributed, once it was finished, is consistent with the Technical Paper having each of the three purposes.

110    ASIC further submits that Mr Brealey was the person who commissioned the Technical Paper. Mr Brealey is presently the Respondents’ Executive Manager, Pricing, and there was no explanation as to why he did not give evidence in relation to the Application. It is ASIC’s position that, given the Respondents elected not to call Mr Brealey, the Court should draw strong inferences adverse to the Respondents from that choice.

111    ASIC also submits that there had been a lack of frankness on the Respondents’ part with respect to the disclosure of the Technical Paper. ASIC expressly noted that the Respondents’ alleged lack of frankness did not extend to the Respondents’ dealings with the Court.

112    On the contrary, the Respondents submit that the evidence of both Mr Kimberley—who commissioned the Technical Paper—and Mr Lin as its key author, demonstrates that the Technical Paper was a confidential communication prepared for the dominant purpose of enabling Mr Kimberley and his team to provide legal advice to IAG. But for the need for information on which to base its legal advice, the Respondents submit that the Technical Paper would not have been brought into existence: Asahi Holdings at [33]. No legal advice could be provided until the Technical Paper was produced.

113    As to the other rival purposes suggested by ASIC, the Respondents submit that none of those purposes have a connection with the commissioning of the Technical Paper.

114    The Respondents go so far as to submit that the only purpose for which the Technical Paper was commissioned was the legal purpose. But of course, they do not need to establish sole purpose, rather dominant purpose.

10.    Consideration

10.1    Commissioning of the Technical Paper

115    I find that the Technical Paper was commissioned for the dominant purpose of the legal team providing legal advice.

116    ASIC accepts that there was a legal purpose for the commissioning of the Technical Paper but rejects that the legal purpose was the dominant purpose.

117    A significant point of difference between the parties is the involvement of the pricing and the compliance teams, and the bearings of that involvement to the dominant purpose of the commissioning of the Technical Report. ASIC submits that, on the evidence, it is uncontroversial that the pricing and compliance teams are different and separate to the legal team. Thus, the preparation and dissemination of the Technical Paper to the pricing and compliance teams, both to define a pricing issue and to enable a compliance assessment, are indicative of two separate non-legal purposes.

118    The Respondents submit that the technical complexities of the issues under consideration necessitated the involvement of the pricing team. As to the compliance team’s involvement, the Respondents contend that compliance assessments routinely form part of the materials relied upon by the legal team when preparing legal advice. Accordingly, the participation of either the pricing or compliance teams does not, in the Respondents’ view, indicate the existence of any separate non-legal purpose.

119    In Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd [2021] FCA 511, White J at [95(f)] observed that where two competing purposes of equal weight are revealed, “neither can be said to be the dominant purpose”. Equally, in Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at [30(8)(b)], Kenny J observed that if the decision to bring the document into existence would have been made irrespective of any purpose of obtaining legal advice, the latter purpose cannot be dominant: see also Asahi Holdings at [33] (Beach J).

120    The question to be answered is whether the Respondents have established that the Technical Paper was created for the dominant purpose of enabling the provision of legal advice, notwithstanding the involvement of the pricing and compliance teams. That requires the Court to weigh the competing accounts of the purposes—and surrounding circumstances—advanced by ASIC and the Respondents, and to assess the evidence available on the point, including what is absent.

121    The broader context at the time of the commissioning of the Technical Paper is important in my finding that the dominant purpose of its commissioning was a legal purpose. The need for the Pricing Taskforce emerged following Mr Kimberley’s meeting with Mr Williamson and Deloitte, wherein Deloitte informed Mr Kimberley that their remediation work unearthed potential issues with the application of discounts for HBF customers, being the Notional Issues comprising two issues—issues 1 and 3— regarding aspects of pricing for renewing customers, and one issue—issue 2—concerning “capping and cupping” pricing mechanisms. Issue 2 was resolved in July and August 2019, leading to a breach report submitted to ASIC in September 2019. However, the former two issues were determined to be complex, requiring more work.

122    The Notional Issues were then brought to the attention of IAG’s Group General Counsel Ms Farrel and Mr Collings by Mr Kimberley. The three discussed the need of further work and the necessity to involve the pricing team to provide technical information on pricing processes before any legal advice on breach could be given.

123    When Mr Kimberley reviewed the materials available to him regarding issues 1 and 3, it became apparent to him that he required more detailed factual information in order to provide legal advice on whether those issues involved breaches of financial services law. It was in this context that Mr Kimberley began attending regular meetings with members of the pricing and compliance teams to ascertain facts surrounding the Notional Issues before he could provide legal advice. Importantly, subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda or other document made by officers or employees of IAG that relate to information sought by its legal adviser to enable them to advise: see Sterling at 246 (Lockhart J). It was in this context that the Pricing Taskforce was formally established.

124    Against that background, it was both understandable and necessary that the remit of the Pricing Taskforce extended beyond the immediate purpose of seeking legal advice. Before any legal advice could be given by Mr Kimberley’s and his team, a series of preliminary investigative and fact-gathering steps had to be carried out, including a comprehensive review of IAG’s pricing practices across the relevant financial products and brands, identifying and investigating issues, fixing the issues and remediating impacted customers. This broader program of work ultimately involved more than 300 personnel and was a multi-disciplinary body overseen by a Steering Committee of 13 members drawn from pricing, compliance, corporate affairs, finance, and legal teams.

125    From ASIC’s characterisation of the purported purposes for which the Technical Paper was commissioned, it is apparent that ASIC conflates the overarching purpose of the Pricing Taskforce with the specific purpose for which the Technical Paper was commissioned.

126    While the work of the Pricing Taskforce consisted of four workstreams—find, investigate, fix, and remediate—the Technical Paper was prepared under the auspices of the “investigate” stream. According to contemporaneous evidence, such as the PT Governance Diagram, that workstream’s stated objective was to “define and document the item to enable Compliance and Legal to complete an assessment to determine if an item is a breach”. The words “to complete an assessment to determine if an item is a breach” are indicative that the investigate stream prepared the Technical Paper for a dominant legal purpose.

127    The purported complexity of IAG’s pricing algorithm and pricing processes was supported by the evidence of Mr Kimberley, and by the surrounding circumstances involving the secondment—and the terms of secondment—of Mr Lin, who was briefed in part by Mr Brealey, a subject matter expert within IAG. This evidence was unchallenged and ASIC did not suggest that, contrary to the Respondents’ evidence, IAG’s pricing algorithm and pricing processes were not complex technical matters that were understood or comprehended by non-actuarially qualified persons such as Mr Kimberley and/or the legal team. In these circumstances, I consider ASIC’s submission—that Mr Brealey’s involvement in briefing Mr Lin necessarily means he commissioned the Technical Paper—to be speculative. I address ASIC’s criticism regarding the Respondents’ decision not to call Mr Brealey for cross-examination further below.

128    As I have elaborated in detail above, the Technical Paper was commissioned at the instigation of Mr Kimberley following internal discussions with Mr Collings and Ms Farrell—who appreciated that technical skill was required to undertake the analysis to thoroughly investigate the identified issue, and that they were not qualified to undertake the analysis. The three also appreciated that the standard Compliance Assessment, constrained in its form, was not fit-for-purpose for similar reasons.

10.2    Preparation and dissemination of the Technical Paper

129    Mr Lin was one of several Finity personnel seconded to IAG at that time to bolster IAG’s resources. Mr Lin was not seconded solely to prepare the Technical Paper, as he prepared a total of five reports during his secondment. The terms of the four Secondment Agreements, the relevant part of which I extracted at [80] above, demonstrate that Mr Lin’s engagement was for a broad purpose.

130    Mr Lin prepared the Technical Paper in confidential circumstances described at [83]–[84] above. In summary, following legal professional privilege training with HSF, strict measures limiting access to files were implemented, including the use of a dedicated room and the treatment of the relevant files. In both his written evidence and in cross-examination, Mr Lin gave evidence of him taking particular care to observe his confidentiality obligations, as he considered that he was personally liable for any breach.

131    Mr Lin was instructed to follow strict confidentiality protocols to preserve privilege, and I find that he adhered to them: he conducted all work on IAG systems, worked in a secure room, saved drafts in a secure location accessible only to individuals with whom he had expressly shared the document, and circulated drafts only to a small number of people whose input were required, by way of practicality and company procedures, to progress the Technical Paper. Each draft was marked “confidential and privileged”. The final version, which was also marked “confidential and privileged”, was provided to members of the legal and compliance teams to enable the legal team to progress its advice.

132    Mr Lin’s circulation of the draft Technical Paper before finalising it, as I have outlined above, aligned with Mr Kimberley’s initial requirement to obtain input from the pricing team for the dominant purpose of providing legal advice. Given the complex technical nature of the issues addressed, Mr Lin sought feedback from relevant stakeholders to ensure the Technical Paper was factually accurate and suitable for a non-technical audience, namely Mr Kimberley and his legal team.

133    The dissemination of the final Technical Paper is also not inconsistent with the purpose for which it was commissioned. The mere fact a document is sent to other officers or departments in the company that are not involved in the process of obtaining legal advice neither precludes nor supports a claim for privilege. The identity of the recipients of a communication does not determine that one intended use of the document was more dominant than other intended uses: see AWB Ltd v The Honourable Cole (2006) 152 FCR 382 at [118] (Young J).

134    If a communication attracts legal professional privilege, then, absent waiver or abrogation by statute, the privilege is absolute: Telstra Corporation Ltd v Minister for Communications, Information, Technology and the Arts [2007] FCA 1445 at [21] (Graham J). That the Technical Paper may have been later disseminated to the compliance team for the purpose of undertaking a post-advice compliance assessment does not alter its original commissioning purpose, and there is no allegation that privilege was waived by the compliance team’s later use of the document. Accordingly, if the Respondents can establish on the balance of probabilities that the Technical Paper was prepared for the dominant purpose of obtaining legal advice, then it is privileged.

135    The evidence shows that the Technical Paper was prepared to “define and document” the pricing item for the purpose of obtaining legal advice. Consistent with that purpose, Mr Lin, the author of the Technical Paper, was invited to attend and speak at the Pricing Taskforce meeting on 16 December 2019 regarding “items under investigation” and “possible options for how each item may be addressed going forward”. Taken together, the evidence supports the conclusion that the document was created for the dominant purpose of legal advice, and that this is not a case of simply copying in the legal team to clothe the Technical Paper with privilege.

136    ASIC submits that the mere routing of the Technical Paper through the legal team—which it says is more appropriately characterised as non-legal advice undertaken to enable the legal team to complete an assessment—does not render the document one prepared for a dominant legal purpose. In ASIC’s view, the Technical Paper was plainly prepared to “define and document” the pricing item, and even if the non-legal work undertaken by Ms Amos and Mr Lin was ultimately intended to be provided to lawyers, this demonstrates a multiplicity of purposes rather than a singular legal one. I reject ASIC’s submission in this regard. IAG led robust evidence substantiating that the involvement of the pricing team was required due to the technical complexity of the subject matter. IAG also led unchallenged evidence that the compliance team’s involvement—specifically for the preparation of a Compliance Assessment—was a necessary prior step to the legal team’s assessment.

137    While preparing the Technical Paper, the evidence shows that Mr Lin did meet with compliance representatives. That the compliance team was later tasked with preparing a Compliance Assessment, and that that ultimately did not occur due to the restrictive nature of the Compliance Assessment’s form, does not detract from the fact that evidence established the common practice I described above. In any event, ASIC maintains that these matters do not alter the dominant purpose analysis. I reiterate that the surrounding circumstances demonstrate that the Technical Paper was commissioned by Mr Kimberley for the dominant purpose of providing legal advice on breach. This conclusion is further supported by the fact that, in addition to meeting the compliance team, Mr Lin also consulted with members of the legal team during the preparation of the Technical Paper, and the legal team subsequently relied on the Technical Paper to prepare a legal breach assessment and advice.

138    Much emphasis is placed by ASIC on the Respondents’ failure to call Mr Brealey, particularly given that he was a key member of the pricing committee who remains employed by the Respondents. When Mr Lin commenced his secondment, Mr Brealey informed him that he and the pricing team had already begun examining a pricing issue that had been identified and had commenced documenting it, but that he (Mr Brealey) required additional capacity and expertise to complete that work. Mr Lin was directed by Mr Brealey to undertake that task, and the work he produced ultimately became the Technical Paper. It was also Mr Brealey’s team that was first asked to prepare the Business Summary section. Mr Brealey continues to serve as the Respondents’ Executive Manager, Pricing, and no evidence was led to suggest he was unavailable to give evidence in response to the application.

139    ASIC contends that this absence of evidence, despite the respondents having both the relevant information and the ability to produce it, demonstrates a deliberate forensic choice not to assist the Court on the issue of the animating purpose. On this basis, ASIC invites the Court to draw strong adverse inferences. However, the evidence demonstrates that Mr Brealey, as a subject-matter expert, was involved at the outset for the limited purpose of briefing Mr Lin on technical matters and reviewing Mr Lin’s drafts to ensure technical accuracy. I therefore decline ASIC’s invitation to draw those inferences adverse to the Respondents as to the animating purpose.

140    Finally, the Respondents submit that the provision of drafts and the final version of the Technical Paper to the compliance team does not undermine the conclusion that the dominant purpose of the Technical Paper was to assist the legal team in providing legal advice. There is no evidence that the Technical Paper was commissioned for a standalone compliance purpose, nor that it would have been commissioned absent the need to inform legal advice. Indeed, the Technical Paper was provided to the compliance team so that it could prepare a compliance assessment—a document typically used as an input into legal advice. Its circulation to the compliance team therefore ultimately served the broader purpose of facilitating the legal team’s advice and does not suggest that the Technical Paper was prepared for any separate, non-legal purpose.

141    In this regard, I observe that ASIC’s position relies heavily on the structural and functional features of the Pricing Taskforce, rather than on direct evidence of the subjective purpose of those who actually caused the Technical Paper to be created, which is supported by the surrounding circumstances, including the context of the commissioning, preparation and dissemination of the Technical Paper. Whilst the absence of evidence from individuals such as Mr Brealey is a relevant consideration, the weight to be given to that omission depends on whether the existing evidence nevertheless provides a coherent account of the dominant purpose advanced by the Respondents.

142    When the movement of the Technical Paper is holistically considered, there appears to be a flow on effect whereby the Technical Paper was necessary for the legal team to provide IAG advice on it, following the identification of the Notional Issues by Deloitte. As such, I find, on the face of the whole of the evidence, that the legal purpose was indeed the paramount or most dominant purpose in the commissioning of the Technical Report: see Asahi Holdings at [33] (Beach J).

10.3    Weight of the direct evidence regarding commissioning purpose

143    The Respondents rely on direct evidence from the two individuals most closely connected with the commissioning and preparation of the Technical Paper: Mr Kimberley and Mr Lin. Their evidence is consistent on the key points and satisfies the high evidentiary threshold, as stipulated by Beach J in Asahi Holdings at [29], of offering cogent material from which the relevant circumstances may be established.

144    First, Mr Kimberley’s evidence is explicit that, once the relevant pricing issues crystallised, he determined that detailed factual analysis was required to enable him and the legal team to provide IAG with legal advice, and it was for that reason that he caused Mr Lin to be instructed to prepare the Technical Paper.

145    Second, Mr Lin’s evidence details the confidentiality protocols he was required to, and did, follow. While the existence of confidentiality protocols is not determinative of dominant purpose, it is a factor that tends to support the Respondents’ account of the sensitivity surrounding the Technical Paper, particularly given the marking of drafts and the final report as “confidential and privileged”, along with the restricted sharing of drafts.

146    Although, in weighing the evidence of Mr Kimberley and Mr Lin, the subjective intention of the person having requested the Technical Paper, and the person having authored it, respectively, is significant, it is not in itself conclusive: Asahi Holdings at [32]. The purpose of the Technical Report is to be objectively determined, and this can be gleaned from the content of the document understood in its full context. Equally, it is open to the Court having regard to the way in which a case is conducted to reject, or to accord limited weight, to the evidence asserted: Singtel Optus at [30] (Murphy, Anderson and Neskovcin JJ), citing Kennedy v Wallace (2004) 142 FCR 185 at [4], [7], [14], [38] and [44] (Black CJ and Emmett J).

147    I consider the evidence of Mr Kimberley and Mr Lin to be compelling. Their accounts are consistent on key issues, including the circumstances of Mr Lin’s secondment, the instructions he received regarding the preparation of the Technical Paper, the confidentiality protocols he followed, and the ultimate use of the Technical Paper by the legal team to provide advice. Their evidence demonstrates that the preparation of the Technical Paper was closely supervised and aligned with a defined purpose, namely, to furnish the legal team with the necessary factual material to enable the provision of legal advice regarding the Notional Issues, and more specifically issues 1 and 3, identified.

148    The steps taken by Mr Lin, including the restriction of access to drafts, the secure storage of materials, and the labelling of the Technical Paper as “confidential and privileged,” further reinforce the conclusion that the preparation and circulation of the Technical Paper were directed for the dominant purpose of legal advice. While the Technical Paper did intersect with pricing and compliance work, this appears to have been incidental to, and in support of, the legal team’s role, rather than constituting an independent or alternative dominant purpose.

149    Taken together, the evidence presents a coherent picture in which the Technical Paper was commissioned, drafted and finalised with a clear legal objective in mind, and the subsequent circulation within the broader Pricing Taskforce and the pricing and compliance teams does not displace this purpose.

150    Accordingly, in weighing the competing submissions, the evidence of Mr Kimberley and Mr Lin provides a strong basis for finding that the dominant purpose of the Technical Paper was the facilitation of legal advice to IAG.

10.4    Lack of frankness allegations

151    In its written submissions, ASIC raised allegations against the Respondents that they have “lacked frankness”, contending that ASIC’s chronology of events should lead the Court to “exercise real caution” in assessing the Respondents’ evidence. ASIC submits that the chronology suggests that the Respondents considered it to be in their interests to be “more coy, and less frank”. These contentions appear to arise from the fact that it emerged, through the evidence filed on the Application and the Respondents’ response to ASIC’s Notices to produce, that the Technical Paper, or drafts of it, were attached to various communications over time.

152    In my view, the Respondents were correct in characterising these allegations as a distraction from the proper issues for determination. The fact that the Technical Paper or its drafts were attached to communications at different points in time does not, of itself, support an inference of a lack of frankness, nor does it bear materially upon the question presently before the Court, which concerns the proper resolution of the privilege dispute.

10.5    Disposition

153    Weighing these considerations, the balance of the evidence favours the conclusion that the Technical Paper was created for the dominant purpose of enabling the legal team to provide legal advice to IAG. ASIC has identified features that suggest the existence of subsidiary or ancillary purposes, but it has not established that those purposes were independent of, or equally significant as, the dominant legal purpose identified by the Respondents. The only direct evidence of the subjective intention of those who commissioned and prepared the Technical Paper is to the effect that legal advice was the dominant purpose. The compliance elements and Pricing Taskforce context support rather displace that finding.

11.    Conclusion

154    For the reasons set out above, I consider that legal professional privilege subsists in the Technical Paper. Accordingly, the Application should be dismissed with costs in the cause.

Associate:

Dated:    18 February 2026