Federal Court of Australia

White Oak Commercial Finance Europe (Non-Levered) Ltd v Insurance Australia Ltd (Japanese Privilege) [2026] FCA 1475

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 20 July 2026 is dismissed.

2.    The applicant pay the second, sixth and seventh respondents’ costs of and incidental to the interlocutory application.

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

REASONS FOR JUDGMENT

THAWLEY J:

Overview

1    White Oak Commercial Finance Europe (Non-Levered) Limited (WO) applies for an order that BCC Trade Credit Pty Ltd, Tokio Marine & Nichido Fire Insurance Co Ltd (TMNF) and Tokio Marine Management (Australasia) Pty Ltd (TMMA) (together, BCC/TM) produce for inspection, without redactions for privilege, a report dated 11 December 2020 prepared by Mori Hamada & Matsumoto (MHM), a Japanese law firm. The report was obtained in the context of investigations which had been undertaken, and were continuing, into the conduct of BCC’s former Head of Trade Credit, Mr Greg Brereton.

2    At the relevant time, BCC was ultimately owned by Tokio Marine Holdings, Inc (TMHD) in Japan. Mr Mizutani, who was the General Manager of the Legal and Compliance Department of TMHD, explained that his department was responsible for overseeing the legal and compliance functions of the Tokio Marine Group, including BCC: Mizutani 1 at [5]. The department was responsible for providing legal advice to the various business units of TMHD, managing compliance capabilities across the Tokio Marine Group, managing significant litigation matters and engaging and briefing external law firms for the purpose of obtaining legal advice and other legal services.

3    In July 2020, Mr Mizutani became aware of concerns that Mr Brereton had written trade credit insurance policies outside of his approved authority limits: Mizutani 1 at [7] and [17]. By about 31 August 2020, he had formed the view that the incident posed legal and regulatory risks for TMHD and the broader Tokio Marine Group, including in respect of TMHD’s legal and regulatory obligations in Japan: Mizutani 1 at [19]. Mr Mizutani therefore decided that TMHD should engage external lawyers in Japan. There is an issue between the parties, discussed further below, as to whether the dominant purpose of the resulting engagement was to provide legal advice or to carry out an investigation. MHM provided a report, in Japanese, marked “Privileged & Confidential Attorney Work Product” (in English): Mizutani 1 at [30]; McGrady 3 at [12]. It was prepared by Mr Satoshi Kawai (a partner at MHM) and six other attorneys-at-law at MHM, five of whom were Japanese lawyers and one of whom was a foreign lawyer qualified in California: Mizutani 2 at [8]. It was received by Mr Mizutani on 11 December 2020.

4    Both parties adduced expert evidence in relation to aspects of Japanese law. Both experts gave evidence to the effect that, in the absence of a procedure akin to discovery, and in circumstances where Japanese law protects the confidentiality of lawyer-client communications, there was no particular need in Japan for, and there is no doctrine of, legal professional privilege. They both referred to an article by Professor Yoko Tamura, a leading Japanese scholar of civil procedure, who wrote:

Under Japan’s system of voluntary submission of evidence and facts, it went without saying, as part of a lawyer’s general duty of confidentiality, that communications between a lawyer and client need not be disclosed to either the opposing party or the court. Moreover, because even primary materials consisting of facts or evidence directly related to the case and adverse to the client generally were not subject to compulsory production, there was no particular need, as under US law, to confer a privilege on secondary materials — such as lawyer–client communications and lawyers’ litigation-preparation documents — as an exceptional defensive right against compulsory disclosure.

5    It is “highly likely” that production of the MHM report could be resisted in civil proceedings in Japan, notwithstanding the absence of a doctrine of legal privilege equivalent to that recognised by the common law of Australia: Naito at [34] and [35]. First, as noted above, there is no general discovery procedure. Secondly, Article 220(iv) of the Code of Civil Procedure excludes from production documents falling within the following categories:

(a)    documents that contain information learned in the course of a lawyer-client engagement (Article 220(iv)(c) of the Code) (Professional Documents): Naito at [48]; or

(b)    documents “prepared exclusively for the use of the person in possession”: (Article 220(iv)(d) of the Code) (Self-Use Documents): Naito at [39].

6    Mr Mizutani considered that the MHM report he commissioned for TMHD would not be subject to compulsory disclosure in legal proceedings. This was an important consideration, including because the confidential nature of the MHM report would facilitate necessary and open conversations internally within the Tokio Marine Group to ensure that TMHD’s legal and regulatory obligations under Japanese law were being met: Mizutani 2 at [14].

7    WO has brought proceedings in this Court against various parties including BCC/TM. The substantive issues between the parties are extensively set out in the pleadings. The general background to the substantive issues may be found in: Greensill Bank AG v Insurance Australia Limited (Anti-Anti-Suit Injunction Application) [2025] FCA 1241.

8    The Court has various rules, practices and procedures according to which the substantive issues are resolved. Part 20 of the Federal Court Rules 2011 (Cth), made under s 59 of the Federal Court of Australia Act 1976 (Cth), addresses discovery of documents, including of documents in the possession or control of the parties to the substantive dispute.

9    WO has the advantage of orders for discovery under Part 20, made in aid of the resolution of the substantive dispute between the parties, the parameters of which are set out in the pleadings.

10    The obligation to discover and produce documents for inspection is a practice peculiar to common law systems, whereby parties to litigation can be compelled to produce to one another, for inspection and copying, documents in their possession or control which contain information that may assist another party to advance its own case or to damage the case of the disclosing party – see: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; 250 CLR 303 at [44]. It is an intrusion into a party’s privacy, involving “an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself” – see: Expense Reduction at [44], quoting Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 300 (Lord Diplock). Various rules, both express and implied, serve to condition and calibrate what is otherwise an intrusive process adopted by the common law for resolution of the substantive dispute. For example, if a party is compelled to disclose documents on discovery, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence – see: Hearne v Street [2008] HCA 36; 235 CLR 125 at [96].

11    Although discovery is an inherently intrusive process, it is not intended that it be allowed to affect a person’s entitlement to maintain the confidentiality of documents where the law allows: Expense Reduction at [45].

12    Rule 20.02 of the Rules expressly protects a party from being required to produce a discovered document which is privileged. Even absent an express provision such as r 20.02, the obligation to produce a discovered document for inspection gives way to a party’s immunity from disclosing confidential communications between the party and its lawyer for the dominant purpose of providing legal advice.

13    BCC/TM discovered copies of the MHM report. It claims immunity from production and inspection on the basis of legal professional privilege.

14    Whilst legal professional privilege is a “fundamental” common law right, it is in the nature of an immunity from the exercise of powers (for example powers requiring a person to give information or produce documents) and not a legal right which is capable of being enforced by cause of action: Glencore International AG v Commissioner of Taxation of the Commonwealth of Australia [2019] HCA 26; 265 CLR 646 at [8] to [13]. A claim that a document is privileged from production on discovery is not a defence to a substantive claim in the same way that a limitation defence might be pleaded in answer to a substantive claim – compare: John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; 203 CLR 503 at [99] and [100].

15    WO contends that, whilst it can take the benefit of Australian law requiring BCC/TM to discover and produce documents, the question whether the MHM report is privileged from production under r 20.02 must be determined according to the law of Japan, where no doctrine of privilege exists. Specifically, WO contends that:

(a)    the lex causae of the privilege issue is Japanese law and, there being no doctrine of legal professional privilege in Japan, production should be ordered;

(b)    if the lex causae of the privilege issue is Australian law:

(i)    that law does not recognise legal privilege if no privilege would attach pursuant to the law in the jurisdiction where the advice was given;

(ii)    irrespective of (i), BCC/TM has not demonstrated that the MHM report is privileged;

(iii)    if the MHM report is privileged, that privilege has been waived.

16    For the reasons that follow:

(a)    No choice of law issue arises.

(b)    If, contrary to that conclusion, it is necessary to determine the lex causae of the privilege issue, the lex causae is the law of Australia.

(c)    The MHM report is privileged according to Australian law, which is capable of recognising privilege notwithstanding the absence in Japan of a doctrine of legal professional privilege.

(d)    Further, even if the original MHM report was not privileged, the copies that have been discovered are privileged on the basis of the principles in Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; 188 CLR 501.

(e)    It is unnecessary to determine BCC/TM’s alternative submission that, if Japanese law governs the privilege issue, production should be refused in the exercise of the discretion under r 20.32 of the Rules.

(f)    BCC/TM has not waived privilege in the MHM report.

17    It follows that WO’s interlocutory application should be dismissed with costs.

No choice of law issue arises

18    Ordinarily, a question about the applicable lex causae is a question about the law governing the substantive legal issues between parties which arise on the pleadings – see, for example: Macmillan Inc v Bishopsgate Investment Trust Plc (No 3) [1996] 1 WLR 387 at 418 (Aldous LJ); Piatek v Piatek [2010] QSC 412; 245 FLR 137 at [111] (Douglas J).

19    Legal professional privilege is a substantive immunity, but the issue in the present context is the existence or otherwise of immunity from a particular Australian compulsory process, arising in the context of litigation. Put another way, the issue is whether Australian law compels production of the MHM report or whether immunity from production is made out.

20    Discovery was ordered under r 20.14 of the Rules. Rule 20.02 provides that an order made under Part 20 “does not require the person against whom the order is made to produce any document that is privileged”. The most direct way to approach the issue is to ask whether the “privilege” referred to in r 20.02 is a reference to the Australian common law of privilege or something else.

21    The preferable construction is that r 20.02 refers to the Australian common law of privilege, including the Australian common law of legal professional privilege. It is unlikely that r 20.02 refers to foreign laws of privilege given the context is discovery required by an Australian court during the course of Australian proceedings. That is particularly so in circumstances where the Australian laws of legal professional privilege are capable of protecting from disclosure confidential lawyer-client communications involving foreign elements, including where advice: was given by foreign lawyers; concerns foreign laws; or was given overseas – see generally: Kennedy v Wallace and Others [2004] FCAFC 337; 142 FCR 185 at [62], [198] to [215]; Stewart v Australian Crime Commission [2012] FCAFC 151; 206 FCR 347 at [77] (Jagot and Bromberg JJ) (Stewart FFC).

22    In other words, the issue can be approached as one of construction of the Australian rule, rather than as one requiring selection of competing systems of law – see, in the context of s 29 of the Australian Crime Commission Act 2002 (Cth) (the ACC Act): Australian Crime Commission v Stewart [2012] FCA 29; 286 ALR 713 at [33] to [45] (Stone J) (Stewart FC), in reasoning endorsed in Stewart FFC at [75] to [79] (Jagot and Bromberg JJ).

23    In Stewart FC and Stewart FFC, s 30 of the ACC Act expressly exempted a legal practitioner from the requirement to answer questions or produce documents disclosing privileged communications made by or to the legal practitioner: Stewart FC at [18]. The ACC Act did not expressly qualify the obligation to answer questions or produce documents on the ground of privilege by anyone other than the legal practitioner: Stewart FC at [19]. The issue was whether s 29 should be construed in accordance with the presumption that the legislature did not (notionally) intend to abrogate fundamental rights, freedoms and immunities unless it makes its intention to do so unmistakably clear – see: Potter v Minahan (1908) 7 CLR 277 at 304 (O’Connor J); Baker v Campbell (1983) 153 CLR 52 at 116 (Deane J).

24    Stone J, at first instance, referred to Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543, noting that the question in that case was whether, in the light of the principle in Potter, s 155 of the Trade Practices Act 1974 (Cth) required the production of documents to which legal professional privilege attached: Stewart FC at [22]. Her Honour referred to the statement of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Daniels at [11]:

It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect.

25    Her Honour concluded that the common law immunities referred to in that passage were common law immunities recognised by Australian law, not foreign laws: Stewart FC at [41]. The respondents accepted that the reference was to Australian common law, but submitted that it did not follow that it was the Australian law of privilege that applied: Stewart FC at [43]. They argued that the common law of Australia included the Australian choice of law rules. Therefore, the reference to common law immunities included those recognised by the common law once the choice of law rules have been applied.

26    Her Honour rejected that submission: Stewart FC at [44].

27    As mentioned, Justice Stone’s analysis was accepted on appeal by Jagot and Bromberg JJ in Stewart FFC at [77], who framed the question as one of statutory interpretation: what legal professional privilege was taken not to have been qualified or abrogated by the general words of s 29? Their Honours answered that it was Australian legal professional privilege. The Australian law of privilege affords immunity from compulsory production to communications with lawyers for the purposes of obtaining legal advice whether those lawyers be local or foreign, whether the law as to which they are advising be local or foreign, and whether the communication occurs here or somewhere else. Their Honours concluded that, once this is recognised, it is apparent that no choice of law rule can arise.

28    The present case differs from Stewart FFC in that the issue raised is not a Potter issue. Here, the issue is what the express reference in r 20.02 to “privilege” means. Given the context – compulsory production of documents in accordance with Australian court processes, where “the Australian law of privilege … affords privilege to communications with lawyers for the purposes of obtaining legal advice whether those lawyers be local or foreign, whether the law as to which they are advising be local or foreign, and whether the communication occurs here or somewhere else” (Stewart FFC at [77]) – the reference is to privileges recognised by Australian law.

29    It follows that no choice of law issue arises.

30    In approaching the matter in this way, I should not be understood as accepting that the resolution of a claim for immunity from production on the ground of legal professional privilege, arising in the course of discovery, raises a “substantive”, rather than a “procedural”, issue in the sense in which those words are distinguished in John Pfeiffer at [99] and [100]. As mentioned, legal professional privilege is a substantive immunity which may be invoked to resist compulsory production, but it does not furnish a substantive cause of action: Glencore at [8] to [13]. The immediate issue is whether, in the course of determining the parties’ substantive rights and liabilities, BCC/TM must produce for inspection documents over which privilege is claimed. That issue arises as an incident of an Australian process of discovery and is arguably procedural in the John Pfeiffer sense.

If a choice of law issue arises, Australian law would apply

31    If, contrary to the view just reached, a choice of law issue does arise because the issue is not resolved simply by construction of the Rules and because the issue is substantive rather than procedural in the John Pfeiffer sense, the law to be applied is Australian law.

32    The issue arises in relation to a question of production and inspection of documents. This suggests that – if there is a choice of law question – the lex causae would be the law of the forum. A long line of authority holds that questions of privilege are governed by the lex fori – see: Lawrance v Campbell (1859) 4 Drew 485 at 491; 62 ER 186 at 188 (Kindersley VC); In Re Duncan [1968] P 306 (Ormrod J); Grofam Pty Ltd v Australia and New Zealand Banking Group Limited [1993] FCA 738; 45 FCR 445 at 455; Bourns Inc v Raychem Corp (No 3) [1999] 3 All ER 154 at 167–8 (Aldous LJ, with whom Sir Stephen Brown P and Swinton Thomas LJ agreed); Stewart FC at [66] (Stone J); Stewart FFC at [53] (Besanko J), [75] (Jagot and Bromberg JJ); Re RBS (Rights Issue Litigation) [2016] EWHC 3161 (Ch); [2017] 1 WLR 1999 at [169] (Hildyard J).

33    In Stewart FFC at [53], Besanko J made three points which, when considered together, led his Honour to the conclusion that the governing choice of law rule for legal professional privilege in that case was the lex fori:

(a)    First, the Australian law of legal privilege incorporates within it a foreign element.

(b)    Secondly, accepting that some of the cases were decided when legal professional privilege was considered to be a rule of evidence rather than a substantive doctrine, the English and Australian cases suggest that the law to be applied is the lex fori.

(c)    Thirdly, although legal professional privilege is linked to the contract of retainer between the client and his or her lawyer, it is not a “transaction” in the same sense as the formation of a contract or the commission of a tort. It is an immunity from what would otherwise be a coercive process dictated or mandated by, in the majority of cases, a statute or piece of delegated legislation of the forum where the policy of the process generally gives way to an important common law immunity based on considerations relevant to the administration of justice. That is, for legal professional privilege, there are important connecting factors with the forum: the production of documents or a request for their production and a claim or assertion of privilege.

34    Jagot and Bromberg JJ expressly agreed with Besanko J’s reasoning: Stewart FFC at [75]. Their Honours’ agreement was not essential to the disposition of the case, because they concluded that no choice of law issue arose.

35    WO criticised the reasoning of Besanko J. WO’s criticism as to the first matter – by way of contradiction rather than argument – was that “[t]he recognition that questions of privilege require consideration of foreign elements detracts from, rather than supports, the argument that questions of privilege should be determined by the law of the forum”: WOS at [32].

36    The first point made by Besanko J, which must be read with the third point, is sound. The immunity generally arises for consideration, as it does in the present case, in the context of the exercise of a power sourced in Australian law. The common law of Australia, which recognises the privilege as an immunity from exercise of power (Glencore at [12]), accommodates the fact that legal advice might be provided by a foreign lawyer and/or in relation to foreign laws and/or given in a foreign country.

37    As to the second matter referred to by Besanko J, WO submitted that recognition of a line of authority applying the lex fori was “not a principled reason to apply the law of the forum, in response to the strength of the arguments that warrant a reconsideration of the approach contained in those authorities”: WOS at [33].

38    Underlying this submission is the proposition that there are good reasons for a different approach. Various arguments in this respect are considered by Charles Hollander KC at [23-20] to [23-22] in Phipson on Evidence (21st ed, Sweet & Maxwell, 2026). Mr Hollander KC concluded that, notwithstanding the recognition of privilege as a fundamental right, there is a body of authority reflecting long-standing principle that the relevant law is the lex fori and that any change would require the courts to fashion a new conflict of laws rule in circumstances where there is great difficulty in formulating a satisfactory rule: at [23-22]. At least in Australia, where the common law is flexible in accommodating a consideration of the foreign elements of any particular situation, the argument for adoption of some different approach is unconvincing.

39    As to the third matter, WO submitted that the recognition that privilege is an “immunity” sourced from a particular legal system indicates that the question of whether it exists should be determined by the law of the legal system that creates the immunity: WOS at [34].

40    If there is a choice of law issue, the appropriate applicable law must be examined in the particular context. Here the context is the statutory power to order discovery in an Australian proceeding, aimed at assisting in the resolution of the substantive issues between the parties. The relevant immunity is the one recognised by the Australian common law.

41    It is not obvious in this context that the law of the country where the retainer was made should be the law governing the question of immunity, or that it should be the law of the country where the lawyer was admitted, as WO contended – see: WOS at [22]. Privilege does not depend upon the existence of a contractual retainer (Perazzoli v BankSA [2017] FCAFC 204 at [169] to [174]), and a communication may involve lawyers admitted in different jurisdictions. The MHM report was prepared by lawyers admitted in Japan and California. A rule selecting the law of the place of admission of those giving advice might not identify a single governing law.

42    Contrary to WO’s submissions, applying the lex fori does not defeat reasonable expectations. Japanese law protects confidential lawyer-client communications, including by restricting the circumstances in which production may be compelled, rather than through a doctrine equivalent to common law privilege. A rule that denies Australian protection on the basis that Japanese law has a different system of civil procedure does not vindicate the parties’ expectations. It would expose in Australian proceedings a communication which the relevant entities reasonably expected would remain confidential and which would be highly likely to be protected from compulsory production in Japanese civil proceedings – see: Naito at [17] to [18], [34] to [35] and [44] to [65]; Mizutani 2 at [14].

43    The fact that the documents are confidential and would be highly likely to be protected from compulsory production in Japanese civil proceedings confirms that recognition of privilege under Australian law is consistent with the policy underlying that privilege. A similar approach is reflected in the English authorities. As Aldous LJ stated in Raychem at 167–8:

“Our system of civil procedure is founded on the rule that the interests of justice are best served if parties to litigation are obliged to disclose and produce for the other party’s inspection all documents in their possession, custody or power relating to the issues in the action.” ... Privilege is an exception to that rule justified on the ground of public interest. It involves a right to keep confidential the document and the information in it. The fact that under foreign law the document is not privileged or that privilege that existed is deemed to have been waived is irrelevant. The crucial consideration is whether the document and its information remain confidential in the sense that it is not properly available for use. If it is then privilege in this country can be claimed and that claim, if properly made will be enforced.

In the present case the documents and the information in them remain confidential in the sense that I have used that word. It follows that the documents remain privileged under English law, whether or not the right to privilege from production in a foreign country is deemed not to exist or to have been waived.

44    In common law systems, the privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; 201 CLR 49 at [35]; Baker at 66 and 95. That purpose would not be served by making recognition of privilege under Australian law depend upon whether the foreign legal system has adopted a doctrine of legal professional privilege. It is consistent with that purpose to recognise, as relevant factual considerations, that Japanese lawyers owe duties of confidentiality to their clients and that the communications would, on the expert evidence, be highly likely to be protected from compulsory production in Japanese civil proceedings.

Australian law recognises privilege in the MHM report

45    There are two issues which should be addressed:

(a)    first, whether – as WO submitted – Australian law would not recognise the claim for privilege (assuming it were otherwise made out) because no doctrine of privilege exists in Japan, where the advice was given: WOS at [36].

(b)    secondly, whether the dominant purpose of the communication (the MHM report) was to provide legal advice or whether the MHM report was predominantly in the nature of an investigation carried out by lawyers.

Advice given in a jurisdiction without a doctrine of legal professional privilege can still be privileged

46    WO submitted that this question has been left open by the authorities, relying principally on the following sentence in the reasons of Allsop J in Kennedy at [214]:

[N]othing I have said should be taken as expressing a view on the existence of privilege in Australia where, under the legal system governing the foreign lawyer, or under the legal system of the state where the advice was given, no privilege would attach.

47    WO submitted that:

(a)    the rationale for legal professional privilege – ensuring full and frank disclosure by clients to their lawyers – does not exist where the jurisdiction in which the advice is given does not recognise the privilege;

(b)    in those circumstances, the absence of privilege would have no chilling effect on the client’s willingness to seek legal advice.

48    It is necessary to read Allsop J’s observation in context. The principal point his Honour conveyed was that the Australian law of legal professional privilege should accord the same protection to foreign lawyers advising in foreign jurisdictions as is accorded to Australian lawyers advising in Australia. His Honour observed at [208]:

Part of the practical guarantee of the fundamental, constitutional or human right and part of the practical worth of the fundamental common law privilege is to seek advice from a lawyer as to one’s rights and obligations in a complex human, commercial and governmental environment which may be, for any particular person, multi-jurisdictional. A principle which differentiates between foreign and domestic lawyers in terms of approach based on training, ethics and curial control is not warranted, in my view, by reference to the underlying rationale of the privilege, at least in circumstances where the person opposing the privilege claim does not raise issues of the kind referred to earlier.

49    Justice Allsop’s observation at [214], upon which WO relied, was made to identify an issue his Honour was not deciding. As WO submitted, his Honour also left open (at [204]) the possibility that issues might arise where foreign legal systems did not recognise a privilege: WOS at [36], [40] to [43]. Those observations leave the present question undecided.

50    It may be that Australian law would not recognise privilege where legal advice was given in a foreign system in which the advice was not given confidentially or would have to be disclosed in litigation. It is unnecessary to decide that question. That is a very different proposition to the proposition that the foreign legal system must have a doctrine of legal professional privilege for a claim for privilege under Australian law to be maintainable.

51    As mentioned earlier by reference to Raychem, it is the expectation of confidentiality and the protection the MHM report would receive from compulsory production in Japanese civil proceedings which are the important considerations. The rationale for respecting privilege as a matter of Australian law subsists. The observations of Aldous LJ in Raychem were referred to with approval in Stewart FC at [56]. The Full Court in Stewart FFC at [77] accepted that Australian privilege is capable of applying to foreign legal advice.

52    WO relied on a publication which indicated that Japanese law does not provide comprehensive protection against the compulsory acquisition or subsequent use of lawyer-client communications in every investigatory, administrative or cross-border context – see: The Practitioner’s Guide to Global Investigations - Tenth Edition: Japan: challenges and solutions for cross-border investigations at CB Tab 7 at 304. That publication included commentary concerning searches and seizures by law-enforcement authorities and the possible use by such authorities of information obtained in investigations. It does not establish that the MHM report would be available through compulsory production in Japanese civil proceedings, nor that the Financial Services Agency of Japan (FSA) – the relevant regulator – could obtain or disclose it in the circumstances which prevailed. In any event, Australian privilege does not depend upon proof that the foreign system gives protection identical in scope to Australian legal professional privilege.

53    In my view, in the present context of discovery, Australian law permits a claim for privilege in relation to foreign legal advice even if the foreign advice was given in a jurisdiction without a doctrine of legal professional privilege.

54    It remains to determine whether the claim for privilege is made out.

The MHM report is privileged under Australian law

Relevant facts

55    TMHD and TMNF were regulated by the FSA – the regulatory body responsible for the insurance industry in Japan – and were required to comply with Japanese laws and regulatory guidelines including the FSA’s Comprehensive Supervision Guidelines for Insurance Companies: Mizutani 1 at [21]. Mr Mizutani understood that TMHD and TMNF were required to report significant issues to the FSA: Mizutani 1 at [35].

56    Mr Mizutani became aware of concerns that Mr Brereton had written trade credit insurance policies outside of his approved authority limits around July 2020: Mizutani 1 at [7] and [17].

57    TMHD appears first to have met with the FSA on 6 August 2020 in relation to the incident which had occurred at BCC: CB Tab 7 at 490.

58    The FSA requested to be kept updated about the incident, and meetings were held about it on an ad hoc basis thereafter: Mizutani 1 at [36].

59    By 31 August 2020, Mr Mizutani had formed the view that the incident posed legal and regulatory risks for TMHD and the broader Tokio Marine Group, including in respect of TMHD’s legal and regulatory obligations in Japan: Mizutani 1 at [19]. He therefore sought legal advice in Japan for TMHD about three matters (Mizutani 1 at [20] and [27]):

(a)    the causes of the incident and, in particular, whether it was caused by any non-compliances with Japanese law or regulatory standards, including what he understood to be TMHD’s management responsibility for its subsidiaries as an insurance holding company under Japanese law;

(b)    what TMHD should do in response to the incident in order to prevent similar incidents in the future, in light of any apparent non-compliances with Japanese law or regulatory standards;

(c)    whether TMHD was complying with its obligations under Japanese law and regulations on an ongoing basis in relation to its investigation of, and response to, the incident.

60    Mr Mizutani considered that obtaining legal advice from Japanese lawyers of the type described above would also assist in ensuring that TMHD met its ongoing legal obligations as an insurance holding company: Mizutani 1 at [21].

61    Mr Mizutani instructed MHM that it did not need to carry out its own factual investigations into the incident, but could rely on the investigations conducted by others, including BCC/TMMA: Mizutani 1 at [22]; Mizutani 2 at [11]. Mr Mizutani ensured that various documents were made available to MHM, including a report of an investigation prepared by McGrath Nicol, transcripts of interviews with Mr Brereton and due diligence documents concerning the acquisition of BCC.

62    Mr Mizutani stated that, in the course of MHM’s engagement, MHM notified him that they proposed to conduct interviews with Mr Nomoto, Mark Callahan (who was a non-executive director of both TMMA and BCC at the time MHM was retained by TMHD), Dawn Miller (Senior Vice President, Internal Audit and Controls at TMHCC (another entity involved in coordinating the acquisition of BCC)), Shigekazu Ueno (then CEO of TMMA) and Joaquim Smith (then Compliance Manager of TMMA): Mizutani 2 at [12(b)].

63    Mr Mizutani’s experience is that it is standard practice for attorneys in Japan to seek further information or instructions relevant to their brief: Mizutani 2 at [12(c)].

64    The MHM report, written in Japanese, was marked “Privileged & Confidential Attorney Work Product” (in English): Mizutani 1 at [30]; McGrady 3 at [12]. It was received by Mr Mizutani on 11 December 2020.

65    It was prepared by Mr Satoshi Kawai (a partner at MHM) and six other attorneys-at-law at MHM, five of whom were Japanese lawyers and one of whom was a foreign lawyer qualified in California: Mizutani 2 at [8]. It was not created for the purpose of sharing with the FSA and was never shared with the FSA: Mizutani 2 at [16].

66    On 16 December 2020, a confidential update based on the MHM report was provided to the TMHD/TMNF Joint Management Committee: Mizutani 1 at [39].

67    On 21 December 2020, a meeting was held between TMHD, TMNF and the FSA. A copy of the confidential update was provided to the FSA at the meeting and the content of the confidential update was discussed: Mizutani 1 at [39] and [42].

The dominant purpose of the communication was to provide legal advice

68    BCC/TM bears the onus of proving that the relevant communication – the MHM report – was privileged. This may be done by pointing to the nature of the document or by evidence describing the circumstances in which it was brought into existence: Grant v Downs [1976] HCA 63; 135 CLR 674 at 689. The dominant purpose is determined objectively from the totality of the evidence.

69    Mr Mizutani’s evidence is relevant but not conclusive. As WO submitted, his evidence must be assessed against the contemporaneous documents and the involvement of others in the obtaining of the report, and in the decision-making process in the context of which the advice was sought.

70    For the reasons which follow, the evidence adduced establishes that the MHM report was brought into existence for the dominant purpose of communicating legal advice to TMHD. First, TMHD had become aware of a serious incident which had occurred at its recently acquired Australian subsidiary and held concerns about its compliance with Japanese laws. Those circumstances provide a plausible and objective setting for TMHD to seek Japanese legal advice, particularly given that it was sufficiently serious to have been reported to the FSA (and the Australian Prudential Regulation Authority in Australia).

71    Secondly, TMHD retained lawyers to provide the advice it sought, providing those lawyers with investigations and other material which had already been obtained. As Young J observed in AWB Ltd v Cole (No 5) [2006] FCA 1234; 155 FCR 30 at [44(4)]:

Where communications take place between a client and his or her independent legal advisers, or between a client’s in-house lawyers and those legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications: Kennedy v Wallace (2004) 208 ALR 424 at 442 [65] per Gyles J; affirmed on appeal, Kennedy v Wallace at 191-192 [23]-[27] per Black CJ and Emmett J. In Kennedy v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given.

72    Of course, that inference is not decisive. As discussed further below, WO relies on contemporaneous documents which it contends point to a predominantly investigatory purpose.

73    Thirdly, the requests made of the lawyers were requests for legal advice – see [59] above. WO observed that there was no documented retainer between TMHD and MHM, such that it was not possible to draw any inference as to the purpose of the MHM report from the terms of the retainer: WOS at [63]. This matter is not significant. Claims for privilege are often determined in the absence of written retainers – see, for example: Cole (No 5) at [56]. Such retainers may or may not specify particular questions or tasks. Mr Mizutani’s evidence was that it is not common to execute an engagement letter every time legal services are sought, particularly in a long-standing relationship, such as the one between TMHD and MHM: Mizutani 1 at [25]. As discussed further below, the objective evidence and circumstances are broadly consistent with Mr Mizutani’s evidence as to what MHM was asked to do.

74    Fourthly, the MHM report addressed the matters which MHM had been asked to address: Mizutani 2 at [7]. Although neither party objected to the Court examining the MHM report in determining the claim for privilege, the evidence was sufficient to determine that issue without following that course.

75    WO contended that MHM was retained to conduct a factual investigation and that the purpose of the MHM report was predominantly to communicate the results of that investigation. In advancing this argument, WO referred to various contemporaneous documents which referred to MHM conducting or continuing an “investigation” or “root cause investigation” – see: CB at Tabs 14 to 17.

76    The concept of legal advice is relatively wide, extending to professional advice as to what a person should prudently or sensibly do in the relevant legal context, but not to advice that is purely commercial or of a public relations character: Cole (No 5) at [44(7)].

77    Mr Mizutani’s evidence was that the MHM report was referred to as an “investigation report” internally and that his purpose in engaging MHM was for them to conduct an investigation into the causes of the incident from the perspective of Japanese laws and regulations and to make recommendations as to appropriate preventative measures from the perspective of TMHD’s group governance under Japanese law: Mizutani 2 at [13]. This explanation is consistent with the contemporaneous documents.

78    One contemporaneous document contained a comment the substance of which was that MHM would provide the necessary advice to the Chief Legal and Compliance Officer (CLCO) for that person to make decisions, and that the information obtained from law firms and forensic accounting firms (including in Australia) was being shared with MHM: CB Tab 15; McGrady 3 at [9].

79    Various documents referred to the “CLCO-led root cause investigation” – see, for example: CB Tabs 14 and 16. The “root cause investigation efforts” were explained as follows in one document (Tab 14):

1. Root Cause Investigation Efforts

From the standpoint of determining the root cause of this matter and formulating measures to prevent recurrence, the following investigations are being conducted.

① Investigation by Crowe (the specialist firm responsible for the internal audit of TMNF Australia Branch): Initial investigation into BCC’s internal controls (completed).

② Investigation by multiple law firms (including a firm specialising in credit insurance) and forensic accounting firms: Confirmation of detailed factual circumstances (including those pertaining to internal controls and fraudulent conduct) for the purpose of examining our legal positions and reducing exposure (final report not yet completed).

③ Investigation led by CLCO: From the standpoint of conducting a comprehensive analysis of governance and internal control issues, Mori Hamada & Matsumoto has been engaged, and further root cause investigation based on the above investigation results is being continued.

80    That description is consistent with Mr Mizutani’s evidence. Read with the questions asked by Mr Mizutani identified at [59] above, it supports the conclusion that the dominant purpose of the MHM report was to provide legal advice on the basis of the investigations provided to MHM and the further investigations made by them.

81    Properly understood, the repeated use of the word “investigation” in the contemporaneous documents does not identify a separate and competing purpose, less still a purpose which predominates the purpose of providing legal advice. As is commonly the case, investigations had to be undertaken in order to provide advice – see: Robertson v Singtel Optus Pty Ltd [2023] FCA 1392 at [96] (Beach J); Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525 at [36] (Rees J); Cole (No 5) at [45] to [46], [56] and [202]. MHM’s investigatory work is properly seen as a necessary component of providing the advice which had been sought. It would be inappropriate and artificial to attempt to sever the factual investigations carried out by MHM from the legal advice they provided – see: Cole (No 5) at [56].

82    WO relied on the timing of MHM’s engagement and the provision of the confidential update to the FSA shortly after the report was received.

83    I accept that the sequence of events is capable of supporting an inference that the MHM report was sought in part to assist TMHD and TMNF in reporting to the FSA. The MHM report was not sought so that it could be provided to the FSA and it was not provided to the FSA. Even if the report was sought in part to assist TMHD and TMNF in reporting to the FSA, the dominant purpose of the MHM report was to provide legal advice in that context. The topics identified in the instructions concerned TMHD’s obligations under Japanese law, the causes of any non-compliance and the measures legally and prudently required to prevent recurrence. The possibility, or likelihood, that advice upon those matters would inform regulatory communications does not displace, and tends to reinforce, the conclusion that the dominant purpose was to obtain legal advice.

84    WO submitted that the factual nature of MHM’s investigation was borne out by the materials that were prepared or provided to MHM as part of its engagement: WOS at [66]. It noted that the materials passing between MHM and TMHD included: (a) transcripts of interviews with Mr Brereton and references to the investigative report prepared by McGrath Nicol in respect of Mr Brereton; (b) emails which have the subject line “Australia-related initial questions”; and (c) documents relating to the transaction by which Tokio Marine acquired BCC, referred to as Project Kiroro. WO submitted that the reference to Project Kiroro was significant because the propriety of this transaction was something that was subsequently discussed between representatives of TMHD and the FSA. WO submitted that this was a non-legal subject matter.

85    Mr Mizutani instructed MHM to consider the factual matters from the time TMMA acquired BCC (Project Kiroro) through to the discovery of the underwriting incident, when preparing their advice: Mizutani 2 at [12(a)(i)]. He stated that Project Kiroro was addressed in the MHM report, but was not the focus of it. It is not surprising that MHM was instructed to consider the events from the time of acquisition in a context where one of the potential issues was TMHD’s oversight obligations in relation to its subsidiaries according to Japanese laws and regulations.

86    WO relied on a record of the 21 December 2020 meeting, where an FSA representative questioned whether MHM was the appropriate firm because the subject concerned Australian matters: WOS at [68]; CB Tab 5 at 121. WO submitted that this comment was inconsistent with the MHM report being for the dominant purpose of legal advice and that the statement at the meeting would be incongruous if the dominant purpose of the MHM report was to obtain advice on Japanese law and regulations.

87    I do not consider the FSA representative’s question to be significant. The representative qualified his statement immediately by ending his observation with the comment: “Since Mori Hamada & Matsumoto is a major firm, I assume they are coordinating with local parties, however”. It is clear enough that, although the primary incident occurred in Australia, MHM’s task included examining TMHD’s obligations under Japanese law and regulatory standards. MHM was also provided with Australian investigations.

88    The dominant purpose for which the MHM report was prepared and obtained was so that MHM could provide legal advice to TMHD. Legal advice includes advice as to what should be done once the relevant facts have been determined.

Whether production would be required as a matter of discretion if Japanese law applied

89    BCC/TM submitted that, even if Japanese law governed the privilege issue, production should be refused in the exercise of the discretion under r 20.32: BTS at [49] to [52]. The power under r 20.32 is discretionary: City of Swan v McGraw-Hill Companies Inc [2014] FCA 1271; 226 FCR 462 at [13] to [14]; see also: Kimberley Mineral Holdings Ltd (in liq) v McEwan [1980] 1 NSWLR 210.

90    In light of my earlier conclusions, it is unnecessary to determine this alternative submission.

Copies of the MHM report are privileged under Australian law

91    The discovered copies of the MHM report are privileged because the original MHM report is privileged and, even if the MHM report were not privileged, on the independent basis that the copies were brought into existence for a privileged purpose.

92    Legal professional privilege attaches to copies of privileged and non-privileged documents if the dominant purpose of bringing the copy into existence was the obtaining or communication of legal advice: Propend at 507 (Brennan CJ); at 544 (Gaudron J); at 553–4 (McHugh J); at 571–2 (Gummow J); at 587 (Kirby J). Even if the original MHM report was not privileged for the reasons given earlier, each of the eight copies discovered by BCC/TM is independently privileged as having been brought into existence for a privileged purpose:

(a)    The first copy was received by Ms Hania, a qualified attorney, for the purpose of providing legal advice to TMHD: Mizutani 1 at [31(a)].

(b)    The second copy was attached to an email sent by Mr Mizutani for the purpose of providing legal advice to Mr Williams, a senior TMHD executive: Mizutani 1 at [31(b)].

(c)    The third to seventh copies (or draft or comparison copies) were attached to various emails, also sent for the purpose of providing TMHD with legal advice: Mizutani 1 at [32].

(d)    The eighth copy was obtained in connection with the discovery exercise from an electronic location accessible only by members of the TMHD team responsible for the litigation. Documents saved in that location were saved for the purposes of the litigation: Mizutani 2 at [24] to [25]. The act of saving the document in that location created a new electronic copy, brought into existence for the purposes of the litigation.

Privilege over the report has not been waived

93    WO submitted that privilege over the MHM report has been waived. It bears the onus of establishing waiver – see: New South Wales v Betfair Pty Ltd [2009] FCAFC 160 at [54]. WO argued that TMHD and TMNF disclosed the substance of the MHM report to the FSA, to advance their position with the regulator, while withholding the report from WO, creating inconsistency: WOS at [82].

94    The issue raised is whether TMHD and TMNF’s uses of the MHM report, or communication of aspects of it to the FSA, are inconsistent with the maintenance of the confidentiality of the information which the privilege is intended to protect: Mann v Carnell [1999] HCA 66; 201 CLR 1 at [28] and [29].

95    As noted earlier, the MHM report itself was not disclosed or provided to the FSA at the meeting on 21 December 2020 or on any other occasion: Mizutani 1 at [41]. Rather, a copy of the confidential update (based on the MHM report) was provided to the FSA at the meeting and the content of the confidential update was discussed: Mizutani 1 at [39] and [42].

96    Mr Mizutani explained that he understood it to be necessary to provide the confidential update to the FSA because of TMHD and TMNF’s approach to real-time reporting to the FSA, the request from the FSA to be kept updated and to ensure transparency: Mizutani 1 at [39].

97    There have been no judgments, findings or publications by the FSA that disclose the contents of the MHM report or the confidential update: Mizutani 1 at [43].

98    Mr Mizutani and Mr Naito (the expert on Japanese law engaged by BCC/TM) explained that officials of the FSA are subject to a confidentiality obligation under Article 100(1) of the Japanese National Public Service Act: Mizutani 1 at [38]; Naito at [77]. The Court was taken to an English translation of that provision which provides as follows:

An official must not divulge any secret which may have come to the official’s knowledge in the course of duties. This also applies after the official has left the position.

99    Mr Mizutani’s evidence was that the confidentiality obligation applied to information and documents provided to the FSA, subject to limited exceptions such as where disclosure is required to comply with a court order: Mizutani 1 at [38].

100    No written confidentiality agreement was entered into between TMHD, TMNF and the FSA: Mizutani 2 at [20]. Mr Mizutani explained that, because of the statutory obligation of confidentiality, it was not standard practice for entities communicating with the FSA to ask for confidentiality agreements: Mizutani 2 at [20].

101    For the reasons which follow, WO has not established that TMHD and TMNF’s limited disclosures to the FSA are inconsistent with the maintenance of the confidentiality of the MHM report.

102    First, unlike the Deloitte reports in Credit Suisse Virtuoso SICAV-SIF v Insurance Australia Ltd (Privilege Hearing) [2026] FCA 1051, which were provided to various regulators in circumstances held not to amount to a waiver, the MHM report has not been provided to the regulator. All that was provided was a confidential update based on the MHM report.

103    Secondly, although TMHD was not required or compelled by any particular Japanese law identified by BCC/TM to provide the confidential update, that does not have the necessary consequence that privilege was waived. The disclosure was for a confined regulatory purpose, based on the fact that the FSA had requested updates and that disclosure was considered necessary to ensure transparency. It was made on an understanding on the part of TMHD and TMNF that the FSA was bound by obligations of confidence.

104    Thirdly, the information was provided by TMHD to the FSA in circumstances where officials of the FSA were bound by a statutory obligation of confidentiality. The absence of a written confidentiality agreement is not significant given the statutory obligation and apparent practice not to enter into such agreements.

105    Fourthly, the fact that the information could be used by the FSA for regulatory purposes does not mean that privilege was waived. WO submitted that the statutory obligation of confidentiality only bound officials of the FSA and not the FSA itself. It was common ground that the FSA would be able to use the material in the proper course of performing its regulatory functions, but there was no evidence about how the information has been used by the FSA. The possibility of regulatory use of the information by the FSA is not sufficient to establish waiver. Confidentiality can co-exist with use for regulatory purposes. There was no evidence establishing any likely use of the information by the FSA inconsistent with the maintenance of confidentiality – see: Credit Suisse at [142].

106    Fifthly, there is no necessary inconsistency between electing to disclose certain information to the FSA and maintaining a claim of privilege over that information as against the rest of the world: Cantor v Audi Australia Pty Ltd [2016] FCA 1391 at [136] and [139]. The evidence does not support characterising the disclosure of the confidential update by TMHD and TMNF as a deployment of the MHM report to secure an advantage by asserting the correctness of MHM’s conclusions while withholding material necessary to test those conclusions. The evidence establishes that TMHD and TMNF gave a confined regulatory update in response to the FSA’s request to be kept informed.

107    WO submitted that the disclosures in the present case were substantially voluntary and usefully compared to the disclosures of the Deloitte reports which had been made to the various authorities referred to in Credit Suisse. WO emphasised for example that, in Credit Suisse, there had been express confidentiality requests (in Switzerland), compulsory or quasi-compulsory demands for information (in Luxembourg), assertions of confidentiality and privilege and practical restrictions on inspection (in Hong Kong) and repeated efforts to preserve confidentiality and privilege (in the United Kingdom).

108    Every case turns on its own facts. The ultimate issue is whether WO has discharged its onus of establishing that the MHM report was used by TMHD and TMNF in a manner inconsistent with the maintenance of the confidentiality of the information which the privilege is intended to protect. The limited disclosure to the FSA, by providing and discussing a confidential update based on the MHM report, was not a use of the MHM report inconsistent with maintaining confidentiality in the report or in the legal advice communicated by it. So far as TMHD and TMNF were concerned, the statutory obligation binding FSA officials and the established practice concerning communications with the FSA provided an assurance of confidentiality.

109    WO has not established that privilege over the MHM report has been waived.

Conclusion

110    WO’s interlocutory application is dismissed with costs.

Associate:

Dated:    7 October 2026

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