Attorney-General for the State of South Australia v Kowalski (No 5) - [2012] SASC 169

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA v KOWALSKI (NO 5)
[2012] SASC 169
Judgment of The Honourable Justice Blue
24 September 2012
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION - GROUNDS FOR RESISTING PRODUCTION - CLIENT LEGAL PRIVILEGE - WHAT CONSTITUTES - PARTICULAR CASES
In the action, the Attorney-General seeks a declaration that the defendant has persistently instituted vexatious proceedings pursuant to s 39 of the Supreme Court Act 1935 (SA).
The defendant seeks production of 11 documents by the Attorney-General. The Attorney-General seeks an order relieving him from the obligation to produce the 11 documents on the basis that they are subject to legal professional privilege.
Held: document 10, being a file note of discussion between the opposing parties, is not subject to legal professional privilege. The remaining documents are the subject of legal professional privilege.
Supreme Court Act 1935 (SA) s 39; Supreme Court Civil Rules 2006 (SA) rule 215(1)(c), referred to.
Ainsworth v Wilding [1900] 2 Ch 315; Parry v News Group Newspapers Ltd (1990) 140 NLJ 1719; Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337, applied.
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501; Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362, discussed.
Baker v London and South Western Railway Company (1867) LR 3 QB 91; Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49; Hughes v Biddulph 38 ER 77; (1827) 4 Russ 190; In Re Worswick; Robson v Worswick (1888) 38 Ch D 370; Kennedy v Lyell (1883) 23 Ch D 387; Nicholl v Jones (1965) 2 H & M 588; R v Braham and Mason [1976] VR 547; Rawstone v Preston Corporation (1885) 30 Ch D 116; Spenceley v Schulenburgh 103 ER 138; (1806) 7 East 357; Trade Practices Commission v Stirling [1979] FCA 33; (1979) FLR 244, considered.

ATTORNEY-GENERAL FOR THE STATE OF SOUTH AUSTRALIA v KOWALSKI (NO 5)
[2012] SASC 169
Civil Application

BLUE J: In this action, the Attorney-General seeks a declaration that Mr Kowalski has persistently instituted vexatious proceedings within the meaning of and pursuant to section 39 of the Supreme Court Act 1935 (SA).
On 21 June 2012, Mr Kowalski served on the Attorney-General a notice to produce at the trial of this action 11 documents pursuant to rule 215(1)(c) of the Supreme Court Civil Rules 2006 (SA) (“the Rules”).
By interlocutory application dated 13 August 2012 (FDN 105), the Attorney-General applies pursuant to rule 140(6) for an order relieving the Attorney-General from the obligation to produce the 11 documents on the basis that they are subject to legal professional privilege.
The Attorney-General’s application is supported by affidavits sworn on 13 and 24 August 2012 by a legal officer within the Crown Solicitor’s Office.
The substantive issue between the parties argued on the application is whether or not each of the 11 documents is subject to legal professional privilege. This involves two issues:
1.Are the documents prima facie subject to legal professional privilege?
2.Is any prima facie privilege abrogated because the documents were created in furtherance of an unlawful or improper purpose?
Identification of the 11 documents
Document 10 is described as a file note authored by the Crown Solicitor’s Office dated 29 April 2011. The affidavit by the legal officer describes it as a file note relating to a telephone discussion which she had with Mr Kowalski on 29 April 2011.
Documents 9 and 8 are emails authored by the Crown Solicitor’s Office dated 29 April and 4 May 2011 respectively. They are described by the legal officer as an internal communication within the Crown Solicitor’s Office and a communication from the Crown Solicitor’s Office to the Attorney-General respectively regarding the telephone discussion between her and Mr Kowalski.
Documents 7 and 6 are emails authored by the Crown Solicitor’s Office dated 6 and 9 May 2011 respectively. They are described by the legal officer as internal communications within the Crown Solicitor’s Office relating to these proceedings.
Documents 5, 3 and 11 are emails authored by the Attorney-General’s Department dated 10 May, 11 May and 9 June 2011. Documents 4, 2 and 1 are emails authored by the Crown Solicitor’s Office dated 11 May, 31 May and 1 June 2011 respectively. They are described by the legal officer as communications between the Attorney-General and the Crown Solicitor’s Office regarding these proceedings.
Legal professional privilege
In the most general terms, legal professional privilege applies to confidential communications made in connection with and for the dominant purpose of legal advice or contemplated or pending litigation.[1]
[1] Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 (1997) 188 CLR 501 at 508 – 509 per Brennan CJ, 543 – 544 per Gaudron J, 550 per McHugh J, 568 – 569 per Gummow J and 584 – 585 per Kirby J; Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67 (1999); 201 CLR 49 at [35] per Gleeson CJ, Gaudron and Gummow JJ.
Communications between opposing parties
It is a fundamental requirement for legal professional privilege to apply that the communication be confidential. Accordingly, a communication between solicitor and client is not privileged if conducted in public[2] or it is a communication between opposing parties to litigation.[3]
[2] R v Braham and Mason [1976] VR 547 at 549 per Lush J.
[3] Ainsworth v Wilding [1900] 2 Ch 315 at 320 per Stirling J.
It has been held that notes taken, in the course of and for the purposes of proceedings, of a hearing in court or before an arbitrator are not privileged.[4] It has also been held that notes taken by a solicitor of a discussion with an opponent in litigation are not privileged.[5]
[4] Nicholl v Jones (1865) 2 H & M 588 (71 ER 592) at 595-596 per Sir Page Wood VC ; Rawstone v Preston Corporation (1885) 30 Ch D 116 at 118 per Kaye J; In Re Worswick; Robson v Worswich (1888) 38 Ch D 370 at 372 – 373 per North J.
[5] Spenceley v Schulenburgh 103 ER 138; (1806) 7 East 357 at 359 per Lord Ellenborough; Baker v London and South Western Railway Company (1867) LR 3 QB 91 at 93-94 per Cockburn CJ (Shee J and Lush J agreeing); Kennedy v Lyell (1883) 23 Ch D 387 at 405 – 406 per Cotton LJ; Parry v News Group Newspapers Ltd (1990) 140 NLJ 1719 at 1719 - 1720 per Dillon LJ (Stocker LJ and Bingham LJ agreeing).
In Ainsworth v Wilding,[6] Stirling J said:
Now, it seems to me that records of proceedings at chambers containing nothing else may be brought under both heads. They are proceedings which took place in the presence of the opposite party, and seem as much to fall within the exception as communications with the opposite party; and, again, they also may be said to be communications as to matters of fact, because they are statements simply of what took place at chambers.[7]
[6] [1900] 2 Ch D 315.
[7] Ibid 324 - 325.
In Parry v News Group Newspapers Ltd,[8] Dillon LJ (Stocker LJ and Bingham LJ agreeing) said:
… a solicitor’s attendance note recording what happened in court in the presence of both parties to the litigation is not privileged. Mr Brown has submitted that that applies merely if the solicitor makes the attendance note as a mechanical recording of what has been happening and not if he makes it with a view of advising his client. I do not read any such distinction in Stirling J’s judgment. A solicitor will take a note of judgment that is delivered in court as a note of the judgment, but also having in mind that it may be necessary for him to advise his client on what should be done if it should turn out that the judgment is against his client … I can see for my part no distinction in principle between attendance notes made by the solicitor recording what took place in court or in chambers in the presence of the parties on both sides, and attendance notes recording meetings between the legal advisors of the parties on both sides with or without their clients in attendance, or attendance notes recording telephone conversations between the parties.
In all those cases the solicitor’s attendance note is recording what happened as a matter of record, setting out what passed publicly between the two parties or their advisers … The attendance note is not a privileged document, but any communication by Mr Barton-Taylor to his clients informing them about his discussion with Mr Crone and advising them or seeking their comments or further instructions, or anything of that nature, is a privileged document.[9]
[8] (1990) 140 NLJ 1719.
[9] Ibid 1719 - 1720
In Telebooth Pty Ltd v Telstra Corporation Ltd,[10] senior executives of opposing parties had a telephone conversation. One executive made a tape recording, and subsequently typed transcript, of the conversation for the purpose of legal advice and litigation. Hedigan J said:
The conversation that took place is admittedly non-confidential. In the circumstance here prevailing, it seems to me that it would be anomalous, contrary to the principle which drives legal professional privilege and an encouragement to inappropriate use of the client-solicitor relationship, to conclude that the tape-recording of the non-confidential conversation is privileged.
It is not necessary to consider whether or not a hand written note taken of the conversation would be privileged in similar circumstances, although I should say that there must be powerful arguments in support of the view that such a note taken for the purpose of giving it to the solicitor would not be privileged.[11]
[10] [1994] 1 VR 337.
[11] Ibid 347 – 348.
The authorities referred to above were prior to the decisions of the High Court in Commissioner of Australian Federal Police v Propend Finance Pty Ltd[12] and of the Full Court in Health & Life Care Ltd v Price Waterhouse.[13] In the Commissioner of Australian Federal Police v Propend Finance Pty Ltd, the High Court held that a copy made for the purpose of legal advice or litigation was privileged notwithstanding that the original document was not privileged. The High Court treated the copy itself as a communication for this purpose. In Health & Life Care Ltd v Price Waterhouse, the Full Court held that a document prepared by a solicitor comprising a witness statement based on an interview of a potential witness, which document was prepared for the purpose of the litigation, was privileged notwithstanding that the interview itself was not confidential in the sense that the witness was not precluded from disclosing the content of the interview to third parties. In each of those decisions, the Court emphasised that the analysis of the requisite confidentiality and purpose must focus on the specific document or communication in question, and not upon any underlying document or communication.
[12] (1997) 188 CLR 501.
[13] (1997) 69 SASR 362.
I do not consider that those decisions impinge upon the earlier authorities addressing audio, typed or handwritten records of communications between opposing parties. In the latter case, at least in ordinary circumstances, the purpose of the creation of the record does not extend beyond the simplistic purpose of making a record of the communication. The mere fact that the communication happens to be in the course of or related to litigation is beside the point. There is no reason to attribute to either party making a note an intention that the notes not be available to both parties in court if some issue arises concerning the underlying communication. Notes of discussions between solicitors involved in litigation are used in this way on a daily basis without any suggestion that the notes are confidential or privileged.
In the present case, the Attorney-General does not contend that, to the extent that document 10 comprises a record of the conversation with Mr Kowalski, it is privileged.
The contention which is put by the Attorney-General is that it is possible that the file note contains additional matters (observations, comments, etc) beyond being a record of the conversation with Mr Kowalski. There is nothing in the description of document 10, or the two affidavits by the legal officer, which demonstrates that the purpose of the file note extended beyond the simplistic purpose of making a record of the conversation. To consider the Attorney-General’s contention, I determined that it was appropriate to inspect the file note.
My inspection revealed that, with one exception, the file note is merely a record of the discussion between the legal officer and Mr Kowalski. The exception comprises a note in parenthesis by the legal officer concerning an earlier communication she had had with someone else. I will hear the parties concerning the words in parenthesis. Subject to that, I conclude that document 10 is not the subject of legal professional privilege.
Communications between solicitor and client
A communication by a solicitor to his or her client in connection with and for the purpose of advice or litigation about a communication with the opposite party is subject to legal professional privilege.
In Ainsworth v Wilding,[14] Stirling J said:
It is sought to obtain production of … correspondence between the solicitor and client … Tt is said that a letter or a statement in a letter as to what had been done in chambers is not privileged on the ground already mentioned. I am unable to see why it is not. It may well have been, and I should infer from the affidavit, that the communication was made for the purpose of obtaining information or instructions from the client necessary for the conduct of the action. If I were to hold that such letters or statements were not privileged, it seems to me that I should be imposing on the free communication with his solicitor to which the client is entitled a fetter hitherto unrecognised in any authority.[15]
[14] [1900] 2 Ch 315.
[15] Ibid 320 – 321 and 322.
In Parry v News Group Newspapers Ltd,[16] Dillon LJ (Stocker LJ and Bingham LJ agreeing) said:
… any communication by Mr Barton-Taylor to his clients informing them about his discussion with Mr Crone [the opposing solicitor] and advising them or seeking their comments or further instructions, or anything of that nature, is a privileged document.[17]
[16] (1990) 140 NLJ 1719.
[17] Ibid 1719 – 1720.
I therefore conclude that document 8 is subject to legal professional privilege.
Documents 5, 4, 3, 2, 1 and 11 comprise communications between the Attorney-General and the Crown Solicitor’s Office concerning these proceedings. I conclude that those communications are subject to legal professional privilege.
Internal communications between legal practitioners
It is well established that internal communications between solicitors for a party which are made for the purpose of advice or litigation are privileged, notwithstanding that they may not be communicated to the client.[18] I conclude that document 9 is subject to legal professional privilege. The same conclusion applies to documents 7 and 6.
[18] Hughes v Biddulph 38 ER 777; (1827) 4 Russ 190; Trade Practices Commission v Stirling [1979] FCA 33; (1979) 26 FLR 244 at 245 – 246 per Lockhart J; Health & Life Care Ltd v Price Waterhouse (1997) 69 SASR 362 at 364 per Doyle CJ, 369 – 371 per Lander J and 373 per Bleby J.
Unlawful or improper purpose
Where a document or communication is prima facie privileged, it will nevertheless not be subject to privilege if the communication was effected for an unlawful or improper purpose.[19] Mr Kowalski contends that these proceedings were instituted by the Attorney-General for the purpose of protecting legal practitioners who Mr Kowalski contends have committed unlawful and fraudulent acts to his detriment. Mr Kowalski contends in turn that the communications comprised or evidenced by the 11 documents are themselves in furtherance of the Attorney-General’s unlawful and improper purpose.
[19] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 514 per Brennan CJ, 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, 575 per Gummow J and 592 – 593 per Kirby J.
Leaving aside the question of Attorney-General’s purpose in instituting these proceedings (which is a matter raised by Mr Kowalski for consideration at trial), on this interlocutory application Mr Kowalski did not adduce any evidence that the specific communications the subject of the 11 documents were in furtherance of the Attorney-General’s alleged unlawful purpose. In those circumstances, I have no basis on which I could find that the privilege which would otherwise adhere to those documents is abrogated.
Conclusion
I conclude that document 10 (subject perhaps to the words in parenthesis) is not subject to legal professional privilege, but that the remaining documents are the subject of legal professional privilege.