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Legal Professional Privilege

  • In Esso Australia Resources v Commissioner of Taxation 1) the High Court approved the earlier decision of Barwick CJ from Grant v Downs 2) namely
    • A document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to
      • obtain legal advice or
      • to conduct or aid in the conduct of litigation,
    • at the time of its production in reasonable prospect, should be privileged and excluded from inspection.
    • Firstly, the common law test for claiming privilege is the dominant purpose test 4).
    • Secondly, a person is entitled to obtain legal advice in relation to his or her affairs and for the purposes of or in anticipation of litigation without the fear and risk of subsequent disclosure of communications between the person and the legal adviser 5).
    • Thirdly, if two or more persons seek and obtain the advice of a lawyer then the privilege that attaches to the communications passing between them or one or other of them and the lawyer is joint privilege 6)
  • Legal Professional Privilege does not apply to communications of an illegal, dishonest or improper purpose.
    • The standard applied by the court (in assessing illegal dishonest or improper purpose) will ordinarily be a stricter standard than is otherwise the case.
    • It has been recognised by the High Court that a claim for privilege can be challenged in pursuance of an illegal, dishonest or improper purpose 13).
    • It is a well established principle that an attempt to overcome or displace the privilege on such a basis does not require a demonstration that the legal advisers were themselves conscious participants in fulfilling the improper purpose 14).
    • However the High Court authorities make it abundantly clear that it is not sufficient to overcome or displace the privilege by merely making allegations; on the other hand it is not necessary to fully prove the allegations 15).
      • … It is open to the party resisting the claim to show reasonable grounds for believing that the communication effected by the document for which legal professional privilege was claimed was made for some illegal or improper purpose, that is, some purpose that is contrary to the public interest.
    • The learned Chief Justice went on to state that in setting the criterion of reasonable grounds for the belief the test is objective and that it is not necessary to prove ulterior motive. Significantly, Brennan CJ in Propend at 514 said
      • … There has to be something 'to give colour to the charge', a 'prima facie case' that the communication is made for an ulterior purpose.
  • The person asserting the privilege carries the onus of establishing a claim for privilege
    • It is the inconsistency between the act by the holder of the privilege and the confidentiality of the communication which destroys the privilege.
  • When it is pleaded
    • expressly
    • by implication
      • Pickering v Edmunds 19)
        • In the present case the conduct of the respondents is such as to make the issue of their appreciation of the legality or otherwise of the trust deed of crucial importance in the case.
        • An effective trial on that issue could not take place in the absence of evidence as to what legal advice they received on the matter.
        • Furthermore the appellants would be unfairly deprived of the opportunity to put material before the court on this key issue.
        • It is true that the respondents did not raise directly the legal advice they received.
        • However they did put in issue their understanding of the legal effect of the earlier deed based on information they had received.
      • Telstra Corporation Ltd v BT Australasia Pty Ltd20)
        • In Telstra the applicant had pleaded that it entered into an agreement in reliance on misleading or deceptive conduct of one of the respondents, the State of New South Wales.
        • The agreement in issue was a large and complex commercial agreement between the State of New South Wales and the applicant, a subsidiary of a large foreign international telecommunications company.
        • The applicant had had, as one would expect, the assistance of its own lawyers before entering into the agreement.
        • The State claimed, at the pre-trial discovery stage, that privilege had been waived by the applicant on that advice because the advice went to the applicant's state of mind in connection with entry into the agreement and the pleading of reliance made state of mind in connection with the entry into the agreement an issue.
        • The advice was relevant to that issue.
        • Reliance was placed by the State in particular on Ampolex.
        • The majority (Branson and Lehane JJ) found waiver. Beaumont J dissented.
        • Where, as in this case, a party pleads that he or she undertook certain actions “in reliance on” a particular representation made by another, he or she opens up as an element of his or her cause of action, the issue of his or her state of mind at the time that he or she undertook such action.
        • The court will be required to determine the factor or factors which influenced the mind of the party so as to induce him or her to act in that way.
        • That is, the party puts in issue in the proceeding a matter which cannot fairly be assessed without examination of relevant legal advice, if any, received by that party.
        • In such circumstances, the party, by putting in contest the issue of his or her reliance, is to be taken as having consented to the use of relevant privileged material, or to put it another way, to have waived reliance on the privilege which such material would otherwise attract.
      • Esso
        • The common law position is that where there is no intentional waiver of privilege, the question whether waiver should be imputed depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that the material, or material associated with it, is privileged from production: 21)
        • it is not sufficient to merely join issue in a defence with an allegation made by the applicant that the parties had a certain state of mind to waive privilege on legal advice relevantly connected with the formation of their state of mind
        • an applicant (who has conceded that it has waived privilege on relevant legal advice contemporaneous with the formation of its state of mind) is not required to disclose (and continue to disclose without temporal limit) legal advice about its state of mind in connection with the transactions the subject of the proceedings, which would include communications in the conduct of these proceedings concerning that subject matter.
    • Privilege waived in relation to, amongst other things, a deed of settlement
  • On an interlocutory matter the right to inspect documents subject to common interest privilege is assessed by determining that an arguable case exists.
      • Given that the present application is an interlocutory application I need be satisfied only that there is at least an arguable case that the joint venture and retainer existed.
      • In order to make an ultimate finding on these matters it would be necessary for me to conduct a mini trial which would be entirely inappropriate at this interlocutory stage.
      • For the purposes of the present application I am not required and, indeed, it would be inappropriate for me to make a finding of fact as to whether or not there was a joint venture, the nature of the retainer and, significantly, whether the 1988 guarantee was part of the re-financing of the Knox property or provided as security for the ongoing debts owed by the Yunghanns Group to Elders.
      • Such matters can only be determined at trial.
      • I need be satisfied of no more than that the plaintiffs have an arguable case.
  • CIA Barca de Panama v George Wimpey & Co 27) Stephenson LJ
    • So here, it seems to me, however you define the relationship which their joint interest creates, it is enough to entitle the plaintiffs whether as beneficiaries, cestui que trust, or as partners in a joint venture, or as principals that is as simply contracting parties.
    • Forget about equity, fiduciary obligations, just treat them as principals in their own contractual right to the same inspection of documents relating to the …claims as the defendants themselves had
  • Commercial Union v Mander 28) Moore-Bick J
    • In my judgment a contract of reinsurance which contains a “follow settlements” clause does create a community of interest… it would follow, of course, that documents of that kind would be subject to common interest privilege in the hands of the reinsurer if communicated in confidence to him
    • Note that there is difference in pre-trial production rather than the adducing of evidence. In such a case the common law and not the Evidence Act 1995 (Cth) governs the determination of the issues30)
  • Meteyard v Love 33)
  • Telstra Corporation Ltd v Australis Media Holdings 34)

Relevant Legislation

1) [1999] HCA 67; 201 CLR 49; 168 ALR 123; 74 ALJR 339
2) [1976] HCA 63; (1976) 135 CLR 674
3) (No. 2) [2000] VSC 113, p22
4) Esso Australia Resources Limited v The Commissioner of Taxation [1999] HCA 67; (1999) 168 ALR 123, 140, 146
5) Esso, 132-3; Waterford v The Commonwealth [1987] HCA 25; (1987) 163 CLR 54, 64; Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52, 114
6) Farrow Mortgage Services Pty Ltd v Webb (1996) 39 NSWLR 601, 608
7) [2007] FCA 444
8) [2005] FCA 1247
9) [2007] FCA 1987
10) [2010] NSWSC 535
11) [2010] FCA 950
12) [2000] VSC 113 p43
13) see Attorney-General for Northern Territory v Kerney [1985] HCA 60; (1985) 158 CLR 500, 512-515, 524;
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1996] HCA 3; (1997) 188 CLR 501, 514, 531, 545 and 572
14) see R v Cox & Railton (1884) 14 QBD 153
15) see Kearney, 516, 525; Propend, 521-2, 546, 556, 572 and 591
16) [1997] HCA 3; (1997) 188 CLR 501; (1997) 141 ALR 545; (1997) 71 ALJR 327
17) at 514
18) [1999] HCA 66; 201 CLR 1; 168 ALR 86; 74 ALJR 378
19) (1994) 63 SASR 357 at 362
20) (1998) 85 FCR 152
21) Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475;
Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83
22) [2003] FCA 384
23) [2010] FCA 308
24) [2004] FCA 264
25) [2012] VSC 279
26) [2000] VSC 113 p19
27) [1980] 1 Lloyd's Rep 692
28) [1996] 2 Lloyd's Rep 640
29) [2009] WASCA 145; (2009) 260 ALR 139
30) Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, 201 CLR 49 (Esso) at [17]-[28] per Gleeson CJ, Gaudron and Gummow JJ, [64] per McHugh J
31) [2011] NSWSC 1419
32) [2006] NSWSC 234
33) [2005] NSWCA 444; (2005) 65 NSWLR 36
34) (1997) 41 NSWLR 147

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