2 October 2002
Legal Professional Privilege and the Government
The Government receives legal advice, and is involved in litigation, on a daily basis in a wide range of areas. In litigation, and under the Freedom of Information Act 1982, the Government can be required to disclose information held by it. However, those requirements do not extend to information which is the subject of legal professional privilege. Also, in many situations, statutory powers enabling the Government to require information to be disclosed to it do not extend to legally privileged information.
It is accordingly important for Government officials to be aware of the principles governing the existence of legal professional privilege. This Briefing summarises those principles, with particular reference to their application to the Government. The Briefing is not a comprehensive outline of all aspects of legal professional privilege.
The privilege can arise out of the common law or statutes such as the Evidence Act 1995 (Cth).
THE COMMON LAW PRINCIPLE
Legal professional privilege applies to confidential communications between a client and the client's legal adviser for the dominant purpose of giving or receiving legal advice or for use in existing or anticipated litigation: eg Baker v Campbell (1983) 49 ALR 385 and Esso Australia Resources Ltd v Commissioner of Taxation (1999) 168 ALR 123. The privilege can extend to some related communications for the same purpose, eg communications between legal advisers of the client, and communications with third parties with a view to obtaining evidence.
The privilege only applies to confidential communications, although in this context the creation of documents for use in legal proceedings (eg witness statements) can itself give rise to the necessary confidentiality: ACCC v Australian Safeway Stores Pty Ltd (1998) 153 ALR 393 at 427-9. Nevertheless, a communication limited to material in the public domain is not privileged. Nor are the identities of clients who have entered into particular tax arrangements: Commissioner of Taxation v Coombes (1999) 164 ALR 131. However, the fact that a confidential communication contains some public information does not remove the privilege: Ainsworth v Wilding (1900) 2 Ch 315.
In Esso, the High Court changed its earlier requirement that the stipulated purpose be the sole purpose, to a requirement that it only be the 'dominant' purpose. The High Court has not defined 'dominant' in the context of legal professional privilege. In a different context the Court has stated that 'in its ordinary meaning, dominant indicates that purpose which was the ruling, prevailing, or most influential purpose': Commissioner of Taxation v Spotless Services Ltd (1996) 141 ALR 92 at 98.
The Test for Being a Legal Adviser
The High Court has held that lawyers employed by the Attorney-General's Department can attract legal professional privilege: Waterford v Commonwealth (1987) 163 CLR 54. That decision had regard to provisions of the then Judiciary Act 1903 relating to those lawyers, and also the role of the Attorney-General as First Law Officer. In AGS' view Waterford extends to AGS lawyers under the current provisions of the Judiciary Act.
The High Court did not decide the issue in relation to employed lawyers in other departments and agencies. However, a theme of the judgments is that the lawyer must have appropriate qualifications and the necessary degree of independence. As to independence, it is likely that the in-house lawyer:
- must hold a practising certificate or, at least, work to a lawyer who holds one, and
- must not, in relation to the giving of legal advice, be subject to direction from someone who does not hold a practising certificate.
Three judges said that the lawyer must be amenable to professional discipline.
Subsequent to Waterford:
- the AAT has held that legal professional privilege could apply to an employed agency solicitor who held a practising certificate and was not subject to direction from elsewhere regarding her legal advice: Re Proudfoot and HREOC (1992) 28 ALD 734
- the Federal Court has held that legal professional privilege could apply to 'qualified legal practitioners' employed in an agency and who, based on evidence not disclosed in the judgment, enjoyed 'the independence from the employer organisation appropriate to a department charged with the responsibility to give professional advice and assistance to the employer' - the judgment does not indicate whether the lawyers held practising certificates: Famous Artists International Pty Ltd v ABC (1992) 7 BR 395
- the NSW Supreme Court has held that legal professional privilege could apply to an employee in the law department of a corporation, who was a qualified lawyer in the USA, who was directly responsible to an attorney, and who was not subject to supervisory authority or control from any other person within the corporation apart from its board of directors: Ritz Hotel v Charles of the Ritz Ltd (1987) 14 NSWLR 100
- courts have held that the Director of Public Prosecutions is capable of attracting legal professional privilege: eg R v Dainer (1988) 78 ACTR 25; Dunesky v Elder (1992) 107 ALR 573; Grofam v ANZ Banking Group Ltd (1993) 117 ALR 669.
Legal professional privilege does not apply to a communication for the purpose of giving policy advice. However, a document meeting the test for legal professional privilege does not lose that privilege merely because it also contains policy advice: Waterford at 67.
The privilege can 'in appropriate circumstances' apply to advice given about the law of a jurisdiction other than the jurisdiction in which the adviser is formally qualified: Ritz Hotel.
Anticipated Legal Proceedings
Legal proceedings are anticipated when there is a reasonable probability or likelihood that such proceedings will be commenced: ACCC v Australian Safeway Stores Pty Ltd at 425. Whether such a probability or likelihood exists is determined by an objective view of the circumstances, not the subjective view of the person making the communication.
Legal professional privilege does not attach to legal advice given to facilitate the commission of a crime, fraud or civil offence, whether or not the legal adviser knows of that purpose: Baker v Campbell at 409-410. This principle extends to communications 'in pursuit of an illegal or improper object': Clements, Dunne & Bell Pty Ltd v Commissioner AFP (2001) 188 ALR 515. The High Court has held that evasion by a Government of the law, by knowingly making regulations not contemplated by an Act as part of a scheme to defeat a land claim, would be a crime or fraud for this purpose: A-G for Northern Territory v Kearney (1985) ALJR 749. However, this principle does not extend to advice given in relation to past conduct.
Communications Held to be Legally Privileged
Examples of communications held to be legally privileged include:
- bills of costs provided by a legal adviser to the client, to the extent that they disclose confidential communications themselves privileged: Packer v Deputy Commissioner of Taxation (1984) 53 ALR 589 at 592
- communications by a prospective client to a prospective legal adviser, made with the object of retaining the legal adviser's services, even if they are not retained, provided that the relationship of solicitor and client is contemplated and the communications are fairly referable to that relationship: Minter v Priest (1930) AC 558
- a document which would tend to establish the innocence of a person charged with a crime: R v Connell (1992) 8 WAR 148.
Communications Held Not to be Legally Privileged
Examples of communications held not to be legally privileged include:
- practical advice, assistance or information which did not require the solicitor to call upon her legal expertise, even if the solicitor could anticipate the possibility of legal advice being sought at some time in the future: Medina v R (1990) 3 WAR 21
- documents which constitute or evidence transactions (eg contracts, conveyances, declarations of trust, offers or receipts) even if they are delivered to a legal adviser for advice or for use in litigation: Baker v Campbell at 409.
Waiver of Privilege
The privilege is that of the client, not the lawyer. Thus, only the client can waive the privilege. The client will be deemed to have waived the privilege if the client does (or authorises) something which is inconsistent with the confidentiality which the privilege is intended to protect: Mann v Carnell (1999) 168 ALR 86. 'What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality of the communication; not some overriding principle of fairness operating at large': Mann at 94.
It follows that not all voluntary disclosures to third parties necessarily waive the privilege. Disclosures which would not waive the privilege include confidential disclosures to a prospective expert witness and to a co-plaintiff or co-defendant.
In Mann the ACT Chief Minister disclosed to a member of the ACT Legislative Assembly legal advice received by the ACT Government regarding settlement of a claim. The disclosure was made on a confidential basis for the purpose of satisfying the member (who was pursuing a complaint by the other party to the settlement) that the settlement did not involve a waste of public funds. The High Court held that privilege was not waived by the disclosure. The High Court stated (at 95):
It does less than justice to the [Chief Minister's] position to describe what occurred in the present case as disclosure to a third party. The privilege was that of the body politic, the Australian Capital Territory. The head of the Territory's Executive, the Chief Minister, in response to a question raised by a member of the Territory's Legislative Assembly as to the reasonableness of the conduct of the Territory in relation to certain litigation, gave the member, confidentially, access to legal advice that had been given to the Territory, and on the basis of which it had acted. Although "disclosure to a third party" may be a convenient rubric under which to discuss many problems of this nature, it represents, at the least, an over-simplification of the circumstances of the present case.
References to Privileged Communications
Legal professional privilege extends to notes, memoranda, minutes or other documents made by the client or officers of the client or the legal advisers of the client of communications which are themselves privileged, or containing a record of those communications: Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 at 93. Thus, privilege in a legal advice given to the Commonwealth extends to references to the advice in departmental briefings.
Copies of Non-Privileged Communications
Subject to possible qualifications, legal professional privilege applies to copies of documents provided to a lawyer which were made for the dominant purpose of obtaining or giving legal advice or for use in legal proceedings, even where the original documents were not privileged: Commissioner AFP v Propend (1997) 141 ALR 545 (as modified by Esso). However, a document which comes into existence independently of the litigation process cannot be brought under the cover of legal professional privilege simply by being affixed to a privileged statement: Mundraby v Commonwealth (2001) 184 ALR 737.
A document which, or a copy of which, has been obtained by the opposing party, by accident, by trickery or even by theft, is not privileged in the hands of that party, although some qualification may be needed, particularly in relation to documents obtained by illegal means or deception: Baker v Campbell at 394, 404-5, 421, 428, 444.
The protection of legal professional privilege is not confined to judicial and quasi-judicial proceedings.
The multiplicity and complexity of the demands which the modern state makes upon its citizens underlines the continued relevance of the privilege to the public interest. The adequate protection according to law of the privacy and liberty of the individual is an essential mark of a free society and unless abrogated or abridged by statute the common law privilege attaching to the relationship of solicitor and client is an important element in that protection. : Baker v Campbell at 416.
Whether, in a particular case a statute should be construed as overriding legal professional privilege is to be ascertained by reference to the 'settled rule of construction that general provisions of a statute should only be read as abrogating common law principles or rights to the extent made necessary by express words or necessary intendment': Baker v Campbell at 434.
Examples of statutory powers held not to extend to legally professionally privileged material include:
- powers conferred by a search warrant under section 10 of the Crimes Act 1914: Baker v Campbell
- powers of access under section 263 of the Income Tax Assessment Act 1936: Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403
- powers to require material under s.264 of that Act, although this may not be entirely settled: ACCC v Daniels Corporation International Pty Ltd (2001) 182 ALR 114; ANZ v Deputy Commissioner of Taxation (Federal Court 17/3/01)
- a liquidator's power to obtain information regarding the company's affairs in an examination under then section 597 of the Corporations Law: Re Compass Airlines Pty Ltd (1992) 109 ALR 119.
Examples of a statutory power held to override legal professional privilege include:
- an inspector's power to require information from a company officer under the then NSW Companies Code: Corporate Affairs Commission NSW v Yuill (1991) 172 CLR 319
- the ACCC's power to require material under section 155 of the Trade Practices Act 1974: ACCC v Daniels Corporation International Pty Ltd (although at the time of preparation of this Briefing the High Court had reserved judgment on an appeal from this decision)
- the powers to listen to and record communications under the Telecommunications (Interception) Act 1979 and the Customs Act 1901: Carmody v MacKellar (1997) 148 ALR 210.
EVIDENCE ACT 1995 (CTH)
The Evidence Act 1995 applies to proceedings in a federal court or an ACT court (s.4). Sections 118 and 119 create a statutory version of legal professional privilege (called 'client legal privilege'). That privilege relates to the adducing of evidence in those proceedings but not to other aspects of the proceedings (eg producing documents pursuant to discovery or subpoena): Esso. The Evidence Act 1995 (NSW) creates a similar privilege.
The Test for Being a Legal Adviser
Sections 118 and 119 apply the privilege to specified communications involving a 'client' and a 'lawyer'. 'Client' is defined in s.117 to include an employer of a lawyer, without requiring any independence in relation to the lawyer. 'Lawyer' is defined in the Dictionary of the Act to mean 'a barrister or solicitor'. The expression 'barrister or solicitor' is not defined. It is thus not clear whether, for the purpose of attracting privilege, 'barrister or solicitor' refers to a person being entitled to practise as such (that is, requiring a practising certificate or having a statutory exemption from that requirement) or merely to a person who is admitted as a barrister or solicitor. Noting that legal professional privilege relates directly to the conduct of a legal practice, the first possible interpretation might well be preferred.
Waiver of Privilege
Section 122 provides that privilege is lost if (among other things) the client has knowingly and voluntarily disclosed to another person the 'substance' of the evidence and the disclosure was not made on a confidential basis. A statement that 'Ampolex maintains that the correct ratio is 1:1 and has legal advice supporting this position' was held to disclose the 'substance' of the legal advice: Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12. In that case Rolfe J stated that 'the substance of the advice may well be disclosed if the ultimate conclusion, without the supporting reasoning process, is revealed' (at 19). Rolfe J noted a somewhat elusive distinction (made in another case) between disclosing the effect of advice (which would not constitute a waiver of privilege in the advice) and disclosure of the substance or content of the advice (which would constitute a waiver of privilege). In refusing special leave to appeal to the High Court, Kirby J expressed the 'tentative view' that the judgment 'seems arguably correct': (1996) 137 ALR 28 at 34.
Without referring to Ampolex, Einfeld J subsequently held that 'the substance of advice is not talking about the, as it were, "bottom line" of the advice, but to what its content is and possibly even the reasoning which led to it': SVI Systems Pty Ltd v Best & Less Pty Ltd (2000) FCA 1507.
In Allatech v Construction Management Group (2002) NSWSC 723, Austin J held that a statement that 'the directors (and their legal advisers) believe that the matters subject to litigation all have "good prospects"' could only disclose the substance of, and thus could only waive privilege in, legal advice of which the maker of the statement was then aware.
The above cases have obvious significant implications for Government officials wishing to inform persons that the Government has legal advice supporting its position. Noting the community's expectation that the Government will conduct itself properly, a Government official or Minister might well wish to state that the Government's position is supported by legal advice. However, based on the current authorities, there is a clear risk that such a statement will waive legal professional privilege in the advice. A considered judgment needs to be made balancing these factors.
Section 42 of the Freedom of Information Act 1982 Act provides that a document is an exempt document if 'it would be privileged from production in legal proceedings on the ground of legal professional privilege'. The AAT has held that exemption under section 42 is to be determined by reference to the common law rather than the Evidence Acts: Re Spier and ACT Australian Electoral Commissioner (1995) 41 ALD 374 and Re Sullivan and Department of Industry, Science and Technology (1997) 49 ALD 743. Specifically, the AAT held that the FOI Act (passed in 1982) could not have had in mind the Evidence Acts of 1995 which create a 'client' privilege applicable only to the adducing of evidence.
This approach was accepted as correct by at least one judge of a Full Federal Court in Commonwealth v Dutton 102 FCR 168
This was an important issue when (prior to Esso) the common law required that the advice/litigation purpose be the sole purpose but the Evidence Acts merely required it to be the dominant purpose. Noting that, since Esso, the dominant purpose test applies to both the common law and the Evidence Acts, the issue is substantially less important. However, the issue remains as there could still be differences between the common law and the Evidence Acts in relation to other aspects, eg regarding in-house employed lawyers and waiver of privilege.
This Briefing was written for AGS by Barry Leader PSM,
AGS Special Counsel, Litigation. For further information
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