FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2020] FCA 1232
File number: NSD 2289 of 2018 Judgment of: WIGNEY J Date of judgment: 27 August 2020 Catchwords: PRIVILEGE – interlocutory application challenging claim for legal professional privilege – advice privilege – litigation privilege – without prejudice privilege – communications and documents involving in-house lawyers – affidavits inadequate to sustain claims of privilege – appropriate for court to inspect communications and documents – dominant purpose test – whether documents the subject of legal professional privilege Legislation: Competition and Consumer Act 2010 (Cth) ss 45, 45(1)(b), 45(2)(a)(ii), 155
Evidence Act 1995 (Cth) s 75
Cases cited: Archer Capital 4A Pty Ltd as trustee for Archer Capital Trust 4A v Sage Group plc (No 2) [2013] FCA 1098; 306 ALR 384
Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 2) [2011] FCA 1057; 283 ALR 299
AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) (2006) 155 FCR 30
Balabel v Air India (1988) Ch 317
Barnes v Commissioner of Taxation [2007] FCAFC 88; 242 ALR 601
Barnetson v Framlington Group Ltd [2007] 1 WLR 2443
Bradford & Bingley plc v Rashid [2006] 1 WLR 2066
Commissioner of Taxation v Pratt Holdings Pty Ltd [2003] FCA 6; 195 ALR 717
District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258
Ensham Resources Pty Ltd v AIOI Insurance Company Ltd (2012) 209 FCR 1
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49
Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404
Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285
Gardner v Irvis (1878) 4 Exch 49
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 38 FCR 452
McKenzie v Cash Converters International Ltd [2017] FCA 1564
Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276
Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332
Pratt Holdings Pty Limited v Commissioner of Taxation (2004) 136 FCR 357
Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd (2007) 34 WAR 279
Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132
Rush and Tompkins Ltd v Greater London Council [1989] 1 AC 1280
Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1
Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47
Trade Practices Commission v Sterling [1979] FCA 33; 36 FLR 244
Westminster Airways Ltd v Kuwait Oil Co Ltd [1951] KB 134
Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529
Yokogawa Australia Pty Ltd v Alstrom Power Ltd [2009] SASC 377; 262 ALR 738
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area Economic Regulator, Competition and Access Number of paragraphs: 290 Date of hearing: 1 April 2020 Counsel for the Applicant: Mr R Yezerski Solicitor for the Applicant: Australian Government Solicitor Counsel for the First, Second and Third Respondents / Cross-Claimants: Dr R Higgins SC with Mr B Lim Solicitor for the First, Second and Third Respondents / Cross-Claimants: Gilbert + Tobin Counsel for the First, Second and Third Cross-Respondents: Mr B Hancock Solicitor for the First, Second and Third Cross-Respondents: Allens Solicitor for the Fourth Cross-Respondent: MinterEllison ORDERS
NSD 2289 of 2018 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: NSW PORTS OPERATIONS HOLD CO PTY LTD
ACN 163 262 351First Respondent / Cross-Claimant
PORT BOTANY OPERATIONS PTY LTD
ACN 161 204 342Second Respondent / Cross-Claimant
PORT KEMBLA OPERATIONS PTY LTD
ACN 161 246 582Third Respondent / Cross-Claimant
STATE OF NEW SOUTH WALES
Fourth RespondentAND: PORT OF NEWCASTLE OPERATIONS PTY LIMITED
ACN 165 332 990
First Cross-RespondentPORT OF NEWCASTLE INVESTMENTS (PROPERTY) PTY LIMITED
ACN 169 286 024
Second Cross-RespondentPORT OF NEWCASTLE INVESTMENTS PTY LIMITED
ACN 169 132 441
Third Cross-RespondentSTATE OF NEW SOUTH WALES
Fourth Cross-Respondent
JUDGE:
WIGNEY J
DATE OF ORDER:
27 AUGUST 2020
THE COURT ORDERS THAT:
1.The parties are to confer and provide the Court with draft orders, within 14 days of the date of this judgment, which are agreed and which:
(a)give effect to the findings that have been made in this judgment concerning the first, second and third cross-respondents legal professional privilege claims; and
(b)deal with the costs of this application.
2.If the parties are unable to reach agreement in accordance with order 1, they are to provide the Court, within 14 days of the date of this judgment, with written submissions, not exceeding five pages in length, which annex their proposed orders, address the issues of disagreement concerning the orders and indicate whether a further oral hearing is required to determine the appropriate orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
WIGNEY J:
This matter concerns contested claims of legal professional privilege in respect of documents which, but for that claim, would be required to be produced pursuant to a subpoena issued in proceedings concerning the privatisation of ports in New South Wales.
In December 2018, the Australian Competition and Consumer Commission commenced proceedings against NSW Ports Operations Hold Co Pty Limited and two of its subsidiaries (collectively referred to in these reasons as the NSW Ports parties). In those proceedings, which are still on foot, the Commission alleges that the NSW Ports parties contravened s 45 of the Competition and Consumer Act 2010 (Cth) by entering into agreements with the State of New South Wales in 2013 which contained provisions which had the purpose, or would have or be likely to have the effect, of substantially lessening competition in the market for the supply of port services for container cargo in New South Wales.
In May 2019, the NSW Ports parties served a subpoena to produce documents on Port of Newcastle Investments Pty Limited and two related companies (collectively referred to in these reasons as the Port of Newcastle parties). While some documents were produced in answer to that subpoena, claims of legal professional privilege were made in respect of a number of other documents which would otherwise need to be produced in answer to the subpoena.
In July 2019, the NSW Ports parties filed a cross-claim against the Port of Newcastle parties and the State.
The NSW Ports parties have challenged some of the Port of Newcastle parties’ privilege claims. The Commission subsequently claimed legal professional privilege in respect of a small subset of the documents the subject of the Port of Newcastle parties’ privilege claims, as well as a small number of other documents. The Port of Newcastle parties ultimately pressed their privilege claims in respect of 112 documents. The Commission’s claims relate to 12 documents, nine of which are also covered by the Port of Newcastle parties’ claims. The privilege claims in respect of 94 of the 112 documents related to only parts of the documents. Redacted versions of those documents have been disclosed. The balance of the claims related to the documents in their entirety.
The documents that are the subject of the Port of Newcastle parties’ privilege claims broadly fall into three categories: first, documents which are said to disclose communications made for the purpose of giving or obtaining legal advice; second, documents which are said to disclose communications relating to existing or anticipated litigation; and third, documents which are said to disclose communications relating to settlement negotiations in respect of existing or contemplated legal proceedings. None of the privilege claims concerned communications between the Port of Newcastle parties and their external solicitors. They all concerned communications involving the Port of Newcastle parties’ employed or “in-house” lawyers.
The Port of Newcastle parties supported, or endeavoured to support, its privilege claims by affidavit evidence from one of its external solicitors. That evidence was, for the most part, admissible hearsay evidence based on what the solicitor had been told by others; so-called “information and belief” evidence. As will be seen, the solicitor plainly had no direct knowledge of the purpose of the relevant communications or the circumstances in which they were made. Indeed, it was not even entirely clear that the person who was said to have given the solicitor information about the relevant documents and communications had direct knowledge of those matters. It was perhaps not surprising, in those circumstances, that the NSW Ports parties challenged the nature and sufficiency of that evidence to support some of the privilege claims. Other issues raised by the NSW Ports parties in relation to the privilege claims included: whether the advice disclosed by the documents the subject of advice privilege claims was commercial or communications advice rather than legal advice; and whether some of the communications in respect of which litigation and without prejudice privilege was claimed occurred well before the Port of Newcastle parties were parties to the proceedings.
The Commission supported, or endeavoured to support, its privilege claim by affidavit evidence from one of its solicitors. Like the evidence adduced by the Port of Newcastle parties, the evidence of the Commission’s solicitor was all evidence on information and belief. The NSW Ports parties also challenged the sufficiency of the evidence relied on by the Commission. They also contended that some of the communications were made before the proceedings were anticipated and that the communications were not confidential in the hands of the Port of Newcastle parties.
Some of the challenges to the privilege claims were not easily resolved. It turned out to be necessary or appropriate to inspect most of the communications over which privilege was claimed, a course that was not opposed by any of the parties. While the evidence and the parties’ submissions tended to address the privilege claims by reference to groups or categories of documents, it has turned out to be necessary to consider individually each document the subject of a claim. As will be seen, some of the privilege claims have been upheld and others have not.
THE PROCEEDINGS
It is necessary to provide some more detail about the relevant proceedings so as to put the privilege claims in context. The following short summary, most of which is uncontroversial, is derived largely from the pleadings. Needless to say, however, some of the facts are or may be disputed or challenged at the hearing of the substantive proceeding.
The proceedings arise out of the State’s privatisation of three ports in New South Wales: Port Kembla; Port Botany; and the Port of Newcastle. Each of those ports had been owned by State owned statutory corporations or subsidiaries prior to the transactions and agreements in question.
The substantial majority of all shipping cargo originating from, or bound for, New South Wales passes through either Port Botany, Port Kembla or the Port of Newcastle. Port Botany is located in southern Sydney, Port Kembla is located in Wollongong, a city south of Sydney, and the Port of Newcastle, as the name suggests, is located in Newcastle.
Port Botany is the primary port for container cargo in New South Wales. It has the only dedicated facilities with specialised infrastructure and equipment for the efficient loading and unloading of container ships and the transfer of containers within and to and from land transport. Port Kembla is primarily a bulk cargo port. It includes a large motor vehicle import hub and grain and coal export facilities. The Port of Newcastle is also primarily a bulk port and includes coal export facilities, as well as other commodities.
Neither Port Kembla nor the Port of Newcastle have container terminals. They are able to load and unload containers by using ships’ cranes and general wharf cranes, however that is a significantly less efficient method of dealing with container cargo than a container terminal. Since 2001, however, the Port of Newcastle has held development approval for a container terminal and since at least 2009, the operator of that port has taken steps to pursue that development.
In July 2012, the State announced its intention to privatise Port Botany and Port Kembla and subsequently invited bids for the acquisition of those ports. At some point, it was recognised or considered that the potential development of the Port of Newcastle as a container terminal may negatively affect the value of the bids for Port Botany and Port Kembla. A bidder in due course requested the State to provide assurances that the development of a container terminal at the Port of Newcastle would not proceed.
Port Botany and Port Kembla were ultimately acquired by a consortium of companies that, as noted earlier, may conveniently be referred to as the NSW Ports parties. As part of the sale, the NSW Ports parties and the State entered into agreements referred to as the Port Commitment Deeds. Clause 3 of those deeds contained a provision which, in general terms, required the State to pay compensation to the new operators of the ports if, at any time in the next 50 years, container cargo through the Port of Newcastle exceeded a specified cap and diverted container cargo away from Port Botany or Port Kembla.
The Commission alleges that cl 3 of each of the Port Commitment Deeds would have, or would be likely to have, one or more of the following effects: first, the effect of substantially lessening the “competitive constraint” on the new operators of Port Botany and Port Kembla arising from their supply or potential supply of port services for container cargo by the Port of Newcastle by reason of their rights to compensation for loss of container traffic; second, the effect of causing the State to “procure” that the Port of Newcastle would not materially increase its ability or capacity to compete in the supply of port services for container cargo in New South Wales for so long as the Port of Newcastle was owned directly or indirectly by the State; and third, the effect of substantially lessening the competitive constraint on the new operators of Port Botany and Port Kembla by causing the State to impose on any acquirer of the Port of Newcastle, the privatisation of which was then in contemplation, an obligation to reimburse the State for any compensation the State was required to pay, and thereby preventing or hindering any new owner of the Port of Newcastle from developing a container terminal.
The Commission alleged, on that basis, that by “making” the Port Commitment Deeds, the NSW Ports parties contravened s 45(2)(a)(ii) of the Act, as in effect at the time the deeds were made, which prohibited the making of a contract containing a provision which has the purpose, or would have or be likely to have the effect, of substantially lessening competition. The Commission also alleged that if the NSW Ports parties sought compensation in the future under cl 3 of the Port Commitment Deeds, it would contravene s 45(1)(b) of the Act, which prohibits a corporation from giving effect to a provision of a contract which has the purpose, or has or is likely to have the effect, of substantially lessening competition.
That was not, however, the end of the matter. As events transpired, the Port of Newcastle was privatised by the State on terms which required the acquirers to reimburse the State for any compensation the State was required to pay the new operators of Port Botany and Port Kembla under cl 3 of the Port Commitment Deeds. As will be seen, that gave rise to yet further controversy.
In June 2013, the State announced its intention to privatise the Port of Newcastle and invited bids for its acquisition. In April 2014, the State announced that it had agreed to lease the port to a consortium. The agreements that were entered into as part of that transaction included a deed, entered into by the State and the Port of Newcastle parties on 30 May 2014 (the Port of Newcastle Deed), cl 3 of which required one of the Port of Newcastle parties to reimburse the State for any payments that the State was required to make under cl 3 of the Port Commitment Deeds.
The Commission alleges that the likely effect of cl 3 of the Port of Newcastle Deed was and is to make it uneconomical to develop a container terminal at the Port of Newcastle for the 50 year term of cl 3 of the Port Commitment Deeds. It therefore provided a barrier to the expansion of the supply of port services for container cargo in New South Wales. In that context, the Commission alleges that, but for that clause, it was likely that the new owners or operators of the Port of Newcastle would be likely to build a container terminal at the port and thereby compete with Port Botany and Port Kembla in the supply of port services for container cargo in New South Wales.
The NSW Ports parties deny a number of the Commission’s key allegations, including the allegations concerning the purpose and effect, or likely effect, of the Port Commitment Deeds. They have also filed a cross-claim against the Port of Newcastle parties and the State.
The NSW Ports parties allege, in both their defence and their cross-claim against the Port of Newcastle parties, that if it be the case that the operators of the Port of Newcastle are unlikely to build a container terminal at the Port of Newcastle, that is the result of cl 3 of the Port of Newcastle Deed, not a result of cl 3 of the Port Commitment Deeds. Indeed, in their cross-claim, the NSW Ports parties seek both a declaration that, by making the Port of Newcastle Deed including the reimbursement provision in cl 3, the Port of Newcastle parties contravened s 45(2)(a)(ii) of the Act and an order that the Port of Newcastle parties be restrained from giving effect to that provision. They also contend, in their defence, that if the Port of Newcastle parties are enjoined from giving effect to the reimbursement provision in cl 3 of the Port of Newcastle Deed, it follows that giving effect to cl 3 of the Port Commitment Deeds would not have the effect of substantially lessening competition in the relevant market as alleged by the Commission.
PROCEEDINGS CHRONOLOGY
Resolution of at least some of the privilege claims hinges to a certain extent on the timing of various steps in the proceedings. Following is a short chronology of the relevant steps.
There was no evidence in relation to the time that the Commission commenced its investigation concerning the privatisation of the relevant ports and the purpose and effect of the clauses in the relevant deeds. On 7 March 2018, however, the Commission instructed the Australian Government Solicitor (AGS) for the purpose of bringing proceedings alleging that provisions in the Port Commitment Deeds contravened s 45 of the Act. A senior officer of the Commission anticipated at that time that the Commission would institute those proceedings.
Solicitors at the AGS commenced drafting statements for witnesses or potential witnesses in September 2018. That process continued in November 2018.
On 17 September 2018, solicitors at the AGS commenced drafting the Commission’s concise statement.
On 18 October 2018, the Commission served notices on two of the NSW Ports parties requiring them to provide information and documents under s 155 of the Act. The NSW Ports parties provided responses to those notices on 23 November 2018.
The proceedings were commenced by the Commission on 10 December 2018 by the filing of an originating application and concise statement. On 20 December 2018, however, the Commission was ordered to file a Statement of Claim. It did so on 28 February 2019. That Statement of Claim, with some minor amendments, was served on 1 March 2019.
On 7 March 2019, the NSW Ports parties served a Notice to Produce on the Commission requiring it to produce documents referred to in the Statement of Claim.
On 13 March 2019, the AGS wrote to the solicitors for the NSW Ports parties in response to the Notice to Produce and advised that certain documents referred to in the Statement of Claim were not, and had never been, in the Commission’s possession, custody or power.
Two months later, on 13 May 2019, the solicitors for the NSW Ports parties wrote to the Port of Newcastle parties and requested them to provide copies of documents referred to in the Commission’s Statement of Claim. The solicitors for the Port of Newcastle parties responded promptly four days later and advised that the Port of Newcastle parties were not in a position to produce the documents requested on a voluntary basis.
On 24 May 2019, Port of Newcastle Investments (Property) Pty Limited was served with a subpoena to produce documents issued at the request of the NSW Ports parties. That subpoena was returnable on 30 May 2019. On 30 May 2019, the NSW Ports parties were given leave to issue a further subpoena to the Port of Newcastle parties. It is that subpoena which is relevant to the current controversy concerning privilege.
Between 13 June 2019 and 16 July 2019, the Port of Newcastle parties produced documents in tranches pursuant to the subpoena issued on 30 May 2019. It would appear that privilege claims were foreshadowed or made as early as 13 June 2019. There was considerable correspondence between the solicitors for the Port of Newcastle parties and the NSW Ports parties concerning the privilege claims over the following months. It is unnecessary to detail that correspondence.
The NSW Ports parties filed and served their cross-claim against the Port of Newcastle parties and the State on 18 July 2019.
On 10 December 2019, the NSW Ports parties filed an interlocutory application which in effect challenged the claims of legal professional privilege made by the Port of Newcastle parties and sought orders permitting them to uplift and inspect the documents which are the subject of those privilege claims. It is that interlocutory application which is to be resolved in this judgment.
RELEVANT PRINCIPLES
As the privilege claims by the Port of Newcastle parties are made in the context of pre-trial disclosure or inspection of documents, the common law applies, not the Evidence Act 1995 (Cth): EssoAustralia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at [16]-[28] and [64].
Legal professional privilege protects a person from being compelled to produce documents or give information which would reveal communications between a client and their lawyer made for the dominant purpose of obtaining or providing legal advice, or the provision of legal services, including representation in pending or anticipated legal proceedings: Esso at [35]; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [9]. The first limb of legal professional privilege may conveniently be referred to as advice privilege, whereas the latter may be referred to as litigation privilege.
A dominant purpose is a reference to “the ruling, prevailing, or most influential purpose”: Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416. It is a purpose that predominates over other purposes; the prevailing or paramount purpose: AWB Ltd v Cole (2006) 152 FCR 382 at [105]-[106]. The purpose for which a document is brought into existence is a question of fact that must be determined objectively; however, evidence of the subjective purpose will be relevant and often decisive: Esso at [172]; Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [6]. An appropriate starting point is to ask what was the intended use or uses of the document which accounted for it being brought into existence: Pratt Holdings Pty Limited v Commissioner of Taxation (2004) 136 FCR 357 at [35]. It is the purpose of the communication at the time it was made that must be considered.
The concept of legal advice in the context of advice privilege is fairly broad. It goes beyond formal advice as to the law, and extends to professional advice as to what a party should prudently or sensibly do in a relevant legal context, but does not extend to advice that is purely factual or commercial: Balabel v Air India (1988) Ch 317 at 323, 330; DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [45]; AWB at [100]. Where the relevant communication by the lawyer occurred in the context of a complex commercial transaction, it may not be “amendable to sharp division between what was advisory and what was merely administrative” (DSE at [22]) and it is necessary to recognise “the form and nature of advice in a practical day to day context”: DSE at [45]; Archer Capital 4A Pty Ltd as trustee for Archer Capital Trust 4A v Sage Group plc (No 2) [2013] FCA 1098; 306 ALR 384 at [50]-[51]. This may be particularly significant where “in-house” or employed lawyers are involved, where it is “often practically impossible to segregate commercial activities from purely ‘legal’ functions”: Seven Network Limited v News Limited [2005] FCA 142 at [38]; Archer Capital at [88].
Litigation privilege extends to protect from disclosure confidential communications passing between a client, their lawyer and third parties for the dominant purpose of use in or in relation to pending or anticipated proceedings: Commissioner of Taxation v Pratt Holdings Pty Ltd [2003] FCA 6; 195 ALR 717 at [39]; Pratt Holdings at [6]; AWB at [144]; Ensham Resources Pty Ltd v AIOI Insurance Company Ltd (2012) 209 FCR 1 at [51]; see generally Trade Practices Commission v Sterling [1979] FCA 33; 36 FLR 244 at 246; or to conduct or aid in the conduct of, litigation in reasonable prospect: Grant v Downs (1976) 135 CLR 674 at 677.
Legal proceedings will be anticipated, in the context of litigation privilege, only where there is a “real prospect of litigation, as distinct from a mere possibility, but it does not have to be more likely than not”: Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [19]; Ensham at [55], [57]. The “real prospect of litigation” must obviously exist at the time of the relevant communication.
An issue that arises in this case is whether a person can claim litigation privilege where they were not a party, or were not anticipated to be a party, to the relevant proceedings or anticipated proceedings at the relevant time. This issue, which was not addressed in the parties’ submissions, does not appear to have been directly considered or decided in any of the authorities.
Nevertheless, when consideration is given to the statements in the authorities which explain the scope of and rationale for litigation privilege, it appears to be fairly clear that the privilege only applies where the person claiming privilege was a party to, or at least anticipated to be a party to, the relevant proceedings or anticipated proceedings at the time of the communication in question. It is difficult to see how a communication could be said to have been for the dominant purposes of the provision of legal services involving “representation in legal proceedings” if the client was not a party, or anticipated to be a party, in those proceedings: cf Daniels at [9]. It is equally difficult to see how it could be said that a communication between a person, their lawyer and a third party was made for the dominant purpose of “use in or in relation to litigation which is either pending or in contemplation” (cf Pratt Holdings at [6]; AWB at [144]), or to “conduct or aid in the conduct of litigation” (cf Grant v Downs at 677), if at the time of the communication the person was not a party, or anticipated to be a party, to those proceedings or anticipated proceedings. Of course, a person may be able to claim advice privilege in relation to communications relating to proceedings in which they were not a party or anticipated party, but in those circumstances it would be necessary to demonstrate that the communications were made for the dominant purpose of obtaining legal advice about or in relation to the proceeding.
There are two accepted categories of litigation privilege involving third party communications which are of particular relevance to the privilege claims made in this matter. The first relevant category involves communications and documents passing between the party’s solicitor and a third party. That category of communications or documents will be privileged if made when litigation was anticipated or commenced and were made for the dominant purpose of the litigation, including the obtaining of evidence to be used in the litigation or the obtaining of information which may result in the obtaining of evidence to be used in the litigation: Sterling at 246 (the fifth category); Australian Securities and Investments Commission v Australian Lending Centre PtyLtd (No 2) [2011] FCA 1057; 283 ALR 299 at [11]. The second relevant category involves communications or documents passing between a party and a third person. That category of communications or documents will be privileged if they were made with reference to litigation, commenced or anticipated, and were made for the dominant purpose of being put before the party’s solicitor with the object of obtaining the solicitor’s advice or enabling the solicitor to prosecute or defend the action: Sterling at 246 (the sixth category); Australian Lending Centre at [12].
Legal professional privilege attaches only to confidential communications. In Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1, the Full Court of Western Australia (Seaman J, with whom Malcolm CJ and White J agreed) appeared to hold (at 21-22) that the requirement of confidentiality did not apply in the case of litigation privilege, at least where the question was whether the relevant communications were privileged in the hands of the solicitor. In a later decision of the Court of Appeal of the Supreme Court of Western Australia, however, doubt was expressed about the correctness of that finding in Southern Equities and it was observed, in that context, that the High Court had made numerous general statements which, on their face, are capable of applying to all categories of legal professional privilege, to the effect that the privilege only attaches to confidential communications: Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd (2007) 34 WAR 279 at [22] (and the cases there cited) and [33]. The better view would appear to be that confidentiality is an essential requirement if a communication is to attract legal professional privilege.
The issue concerning the requirement of confidentiality becomes particularly acute in the case of communications between a party or the party’s solicitor and a witness or potential witness. In such a case, the details of an interview with the witness “would not … be confidential so far as the potential witness is concerned in the absence of special circumstances, because the potential witness in that situation is not a person owing any duty of confidentiality to the party or the party’s solicitor”: Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132 at 133-134, referred to with approval in State of New South Wales v Jackson [2007] NSWCA 279 at [53]; J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 38 FCR 452 at [8]-[13]. In such a case, the details of the interview may be privileged in the hands of the party or the party’s solicitor, but not the witness: Westgold Resources NL v St Barbara Mines Ltd [2007] WASC 47. In Public Transport Authority, however, it was found (at [34]-[35]) that “sufficient confidentiality” existed so as to support a privilege claim in respect of communications in the hands of a witness where “the lawyer, to the knowledge of the witness, intended the communications to be and remain private”.
Legal professional privilege may attach to confidential communications between an employer and its employed or “in-house” solicitor or counsel provided that the employer consulted the employed solicitor in a “professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client”: Waterford v The Commonwealth (1978) 163 CLR 54 at 100. The better view is that there is no separate requirement to prove that the in-house lawyer was acting independently of any pressure from his or her employer, or had any requisite measure of independence, so long as the in-house lawyer was acting in his or her professional capacity as his or her employer’s lawyer and the communication otherwise meets the dominant purpose test: Archer Capital at [59]-[73].
The party claiming privilege bears the onus of proving the facts necessary to establish the relevant privilege, including that the communications or documents in question were made or created for the required dominant purpose. The existence of privilege will not “necessarily or conclusively [be] established by resort to any verbal formula or ritual”: Grant v Downs at 689. Nor will it generally or necessarily be sufficient for a party merely to assert a claim for privilege or rely on an affidavit which asserts the purpose for which a document was brought into existence followed by a statement of the category of legal professional privilege to which the document is said to belong: National Crime Authority v S (1991) 29 FCR 203 at [31] (NCA v S); Kennedy v Wallace (2004) 142 FCR 185 at [13]-[17]. The evidence should be focused and specific: Barnes v Commissioner of Taxation [2007] FCAFC 88; 242 ALR 601 at [18]. A “bare or skeletal” claim, unsupported by evidence which enables the court to consider and make an informed decision about the correctness of the claim or whether it is supportable, will not suffice: NCA v S at [31]-[34]. The claimant must, by direct admissible evidence, set out the facts from which the court can consider whether the assertion or assertions concerning the purpose of the communication in respect of which privilege is claimed is properly made: Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [27]. The best evidence will be that given by the person whose purpose is in question: Hancock at [32].
The Court has the power to examine documents in respect of which a claim is made: Grant v Downs at 689. The preferable explanation of the Court’s power to inspect the documents is that it exists not to facilitate proof by a claimant of the facts required to sustain the claim, but to provide a means of enabling a claim to be scrutinised and tested: Hancock at [31]. The essential purpose of inspecting the documents is “to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege”: AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) (2006) 155 FCR 30 at [44(12)]. It is relevant to note, in this context, that “in many instances the character of documents the subject of the claim will illuminate the purpose for which they were brought into existence”: Grant v Downs at 689. A party is not entitled to insist on the court inspecting the documents, it being a matter for the discretion of the judge, who will only do so if there is good reason: Hancock at [31], citing Westminster Airways Ltd v Kuwait Oil Co Ltd [1951] KB 134 at 146, District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258 at [30], Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 at 542.
“Without prejudice” privilege excludes from evidence “admissions by words or conduct made by parties in the course of negotiations to settle litigation”: Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291. It applies to “all negotiations genuinely aimed at settlement”: Rush and Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299. Documents containing or disclosing such communications are also not discoverable: Rush and Tompkins at 1305; Bailey v Beagle Management Pty Ltd [2001] FCA 185 at [17]-[18]; Austotel Management Pty Ltd v Jamieson (1995) 57 FCR 411 at 416.
It appears to be accepted that without prejudice privilege extends to communications aimed at settling disputes that take place before litigation has begun: Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [27]-[28]; Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 at [81]. In Barnetson, Auld LJ (with whom Longmore and Toulson LJJ agreed) observed (at [33]-[34]) that while the “ambit of the rule should not be extended any further than is necessary in the circumstances of any particular case to promote the public policy interest underlying it”, the “claim to privilege cannot … turn on purely temporal considerations”. Rather, the “critical feature of proximity for this purpose … is one of the subject matter of the dispute rather than how long before the threat, or start, of litigation it was aired in negotiations between the parties”. In Dowling v Ultraceuticals Pty Ltd (2016) 93 NSWLR 155, however, the scope of the privilege was couched in terms of whether litigation between the parties was “in contemplation” (at [25]).
It is also clear that the “the privilege extends to cover disclosure to third parties in a subsequent dispute provided there is sufficient connection between the subject matter of the original dispute and the later one”: Dowling at [28]; Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [18]-[20] and [35].
As for the scope of this extension to the privilege, the required connection has been expressed in various ways. In Yokogawa Australia Pty Ltd v Alstrom Power Ltd [2009] SASC 377; 262 ALR 738, it was said that “the privilege should apply in a case … where the litigation has a connection with the same subject matter as the negotiations” (at [83] and [139]). In Dowling, Hammerschlag J expressed the view (at [35]) that the “assessment of whether there is sufficient connection between two disputes, to justify extension of the privilege to the second, should be made by reference to whether or not the policy (which did or would have protected the documents from disclosure in the first dispute) will be served by extending the privilege to the second dispute in the particular circumstances of the case”. That led his Honour to conclude (at [37]) that “the Court must assess whether the party resisting disclosure would have had a legitimate expectation that the material brought into existence for the purposes of settling the earlier dispute would not be used against it in the later dispute”.
EVIDENCE RELIED ON IN SUPPORT OF THE PRIVILEGE CLAIMS
The evidence adduced by the Port of Newcastle parties and the Commission in respect of their privilege claims was fairly confined.
Evidence relied on by the Port of Newcastle parties
The Port of Newcastle parties relied on two affidavits sworn by their external solicitor, Mr Christopher Michael Prestwich, in support of their privilege claims. Those affidavits were read without objection. Mr Prestwich was not cross-examined. That is not to say, however, that his evidence, or the weight that should be attached to it, was not relevantly in question or open to challenge: Barnes at [18].
Mr Prestwich’s evidence concerning the communications or documents the subject of the privilege claims will be examined in detail later in these reasons. A number of preliminary points about it, however, should be made.
First, Mr Prestwich was not the author or originator of any of the communications or documents that were the subject of the privilege claims. Nor, it appears, was he a party to any of the relevant communications. He had no first-hand knowledge of the purpose of any of the relevant communications.
Second, Mr Prestwich’s evidence about the relevant privilege claims was all given on the basis of what he had been told by Mr Joe Dowling. Mr Dowling was said by Mr Prestwich to be one of the “in-house lawyers” at the Port of Newcastle parties, along with Ms Gabriella Sainsbury, Mr Simon Byrnes and, formerly, Mr Michael Dowzer. Mr Prestwich’s affidavits do not include any evidence about the experience or qualifications of any of the in-house lawyers, or exactly what positions they occupied at the Port of Newcastle parties or how their work was structured or organised.
Third, it is tolerably clear that Mr Dowling was not the author, originator or party of many of the communications or documents that are the subject of the privilege claims. Nor does Mr Prestwich state that Mr Dowling had any direct or first-hand knowledge of the purpose of any of the communications or documents which he did not author, or to which he was not a party. It follows that the person who provided Mr Prestwich with information about the nature and purpose of many, if not most, of the relevant communications or documents did not himself have direct or first-hand knowledge about those documents or communications, or at least there is no evidence that he did.
Fourth, as will be seen, in the case of many, if not most, of the relevant communications or documents about which Mr Prestwich gave evidence, the author or originator of the communication or document in question is not clear or readily apparent from Mr Prestwich’s evidence. Moreover, Mr Prestwich’s evidence about the nature or purpose of many, if not most, of the communications is expressed in very general or generic terms. For example, he states that some communications were made for the purpose of “PON’s [the Port of Newcastle parties’] in-house lawyers providing advice to PON”, or that some documents were “provided to PON’s in-house lawyers for the dominant purpose of requesting their legal opinion”, or that some documents contain “legal advice provided by PON’s in-house lawyers” or “record legal advice provided to PON by its legal advisers”. His evidence was far from “focused and specific”: Barnes at [18].
Fifth, Mr Prestwich’s evidence mostly addresses the relevant communications and documents in groups or categories, rather than individually. That is perhaps understandable and justified in cases where there are multiple drafts or versions of the one document. That is not, however, always the case. In any event, the result again is that much of Mr Prestwich’s evidence about the general nature and content of the relevant communications or documents is again very general or generic. Often the date of the relevant communication or document is unclear and the nature of the document is expressed in broad terms: a “presentation”, or “memo”, or “paper” or “email chain”. Given that Mr Prestwich addressed his evidence to groups or categories of documents, the parties also directed their submissions to those groups or categories. The relevant groups or categories are discussed later.
While it may perhaps be accepted that Mr Prestwich’s evidence is more than a mere “skeleton” (cf Gardner v Irvis (1878) 4 Exch 49 at 52, referred to in NCA v S at 212), it is not much more than that. Similarly, while it may be accepted that his evidence contains more than mere “verbal formula or ritual” (cf Grant v Downs at 689) in detailing the relevant communications and documents and the nature of the claims, it does not extend much beyond that. The weight to be given to his hearsay assertions about many, if not most, of the communications and documents must be assessed with that in mind. While Mr Prestwich’s evidence was not tested by cross-examination, it is not difficult to appreciate why he was not cross-examined. It is difficult to see how he could have materially added to the very sparse and general descriptions he gave about the relevant communications and documents and the circumstances in which they were made or created, particularly given that he had no first-hand knowledge of those circumstances and, in many cases, nor did the person who gave him the information.
Evidence relied on by the Commission
The Commission relied on affidavit evidence of a senior lawyer at the AGS, Mr Christopher Michael Steger, to support its privilege claims. Mr Steger’s affidavit was read without objection. He was not cross-examined.
Mr Steger’s evidence will be addressed in more detail later in the context of the consideration of the documents or communications which were the subject of the Commission’s claims. It suffices at this stage to make the following brief points concerning Mr Steger’s evidence.
First, it would appear that Mr Steger only became part of the AGS “team” which acted for the Commission in this matter in fairly recent time. He was not involved in the matter when the AGS was first retained.
Second, as was the case with Mr Prestwich, most of Mr Steger’s evidence is on “information and belief”. In particular, he was told certain things about the relevant communications and documents, including the circumstances in which they were made or created, or the purpose they were made or created, by Ms Sharon Clancy, who was said to be the “principal instructor throughout AGS’s engagement”. Mr Steger accordingly did not have direct or first-hand knowledge about the relevant communications or documents. He was also not cross-examined, though it is again not difficult to see why that was so.
INSPECTION OF THE DOCUMENTS
While neither party submitted that I should inspect the documents subject to the privilege claims, nor did they oppose that course if I considered it necessary or appropriate to do so in all the circumstances.
The NSW Ports parties submitted, however, that if, having read and considered the evidence adduced by the Port of Newcastle parties or the Commission, as the case may be, I was unpersuaded or “agnostic” as to whether the evidence had established that the relevant communication or document was made predominantly for a privileged purpose, I should not inspect the documents so as to supply or make good any evidentiary deficit. That is because, as discussed earlier, the documents should only be inspected by the Court for the purpose of testing or scrutinising the privilege claim, not as a means of facilitating proof by a claimant of the facts required to sustain the claim.
As will be discussed in more detail in the context of the consideration of the privilege claims in respect of the specific communications and documents, I have for the most part decided to inspect the relevant documents. My reasons for doing so was to test and scrutinise the privilege claims and the evidence adduced in support of them. It was necessary or appropriate to test and scrutinise the claims and evidence because, as discussed earlier, for the most part the evidence concerning the relevant communications and documents was very sparse and general and, at best, almost entirely second hand in nature. While the evidence was admissible and perhaps provided an ostensible basis for the claims, much of it was, in all the circumstances, deserving of little weight or, at the very least, warranted scrutiny.
In addition, in the case of many of the documents over which partial privilege claims were made, the nature of the documents and the context in which the parts of the documents over which privilege was claimed provided limited, if any, support for the claims. Indeed, in the case of many of the documents, contextual considerations, including the general nature of the documents, the date of the documents having regard to the relevant chronology of the dispute and litigation and the surrounding content of the documents, tended to militate against the veracity of the claims. That too suggested that the documents should be inspected.
CATEGORIES OF COMMUNICATIONS AND DOCUMENTS
The parties’ submissions grouped the documents in respect of which privilege is claimed into nine categories. The first six categories relate to the 94 documents in respect of which privilege is claimed in relation to only part of the document. The other three categories relate to the 18 documents which are said to be wholly privileged.
It is convenient to deal with the Commission’s privilege claims as a tenth category; though, as already noted, a number of the Commission’s claims overlap with the Port of Newcastle parties’ claims.
The first category comprises 44 documents (documents 10, 12, 13, 16, 19-27, 36-39, 43-59, 76, 77, 81, 83, 84, 90-93 and 108) that relate to a presentation given by someone, it is unclear who, on behalf of the Port of Newcastle parties, to China Merchant Ports and “MIRA” (PON Presentation documents). Mr Prestwich’s evidence was that China Merchant Ports is a beneficial owner of 50% of the Port of Newcastle parties and that MIRA is “the manager of The Infrastructure Fund’s beneficial ownership of the other 50%” of the Port of Newcastle parties. Some of the documents were said by Mr Prestwich to be “drafts or the final version” of the presentation and some were said to be “speaking notes” to be used by the “CEO” of the Port of Newcastle parties “during a meeting with China Merchant Ports”. These documents were subject to claims of litigation privilege, advice privilege and without prejudice privilege.
The second category comprises four documents (documents 14, 15, 68 and 89) which are said by Mr Prestwich to concern “PON’s strategy in relation to a proposed container terminal” (Container terminal handling strategy documents). These documents were subject to claims of litigation privilege.
The third category comprises four documents (documents 31, 41, 73 and 80) which are said by Mr Prestwich to be “email chains, containing emails between PON employees and between PON and AGS” (ACCC investigation correspondence). These documents were subject to claims of advice privilege, litigation privilege and without prejudice privilege. Perhaps not surprisingly, the Commission also claimed privilege in relation to three documents within this category (documents 31, 73 and 80).
The fourth category comprises 19 documents (documents 8, 9, 63, 75, 79, 87, 88, 94-97 and 109-116) which were said to relate to documents prepared for or by the Port of Newcastle parties’ “external consultant” Newgate Communication in relation to what Mr Prestwich referred to as the Port of Newcastle parties’ “stakeholder engagement strategy” and “container terminal strategy” (Newgate communications documents). These documents were subject to claims of advice privilege.
The fifth category comprises 21 documents (documents 1, 11, 17, 18, 28-30, 40, 61, 65, 66, 70-72, 98-103 and 105) which were said to be documents prepared for the Port of Newcastle parties’ board or minutes of meetings of the board (PON Board documents). Most of the privilege claims in respect of these documents involve litigation privilege, though there are some advice privilege claims. The Commission also claimed privilege in relation to five documents within this category (documents 1, 11, 99, 102 and 103).
The sixth category of documents comprises two documents (documents 62 and 117), which do not fall within the first five categories but which are subject to partial privilege claims (Other part-privileged documents). One is an email chain between Port of Newcastle parties’ employees and the other is said to be a presentation given by Mr Dowzer to a “shareholder of PON”. Both are subject to advice privilege claims.
The seventh category comprises nine documents (documents 42, 60, 64, 67, 69, 78, 82, 85 and 86), all of which are claimed to be wholly privileged. Mr Prestwich’s evidence was that these documents “concern and set out PON’s strategy for attempting to settle the proceedings” (Negotiation strategy outlines). Each of these documents were subject to claims of litigation privilege and without prejudice privilege.
The eighth category comprises six documents (documents 2-7) which are said to be “email chains” and attachments titled “Container Terminal – ABCD” (Container Terminal – ABCD documents). Both the emails and the attachments are said to be wholly privileged on the basis of advice privilege.
The ninth category comprises three documents (documents 33-35), two emails and an email attachment, which are said by Mr Prestwich to contain legal advice provided by Mr Dowling, and emails from “non-lawyer PON staff” discussing that advice, in respect of a question “posed” by the Commission’s lawyers (ACCC related correspondence). Each of these documents is said to be wholly privileged on the basis of both advice and litigation privilege. The ACCC also claimed privilege in relation to one of the documents within this category (document 33).
The tenth category comprised the Commission’s privilege claims. As has already been noted, the Commission’s claims relate to 12 documents, nine of which were also covered by the Port of Newcastle parties’ claims. One of the Commission’s claims concerned part of the minutes of the Port of Newcastle parties’ September 2018 board meeting, four concerned parts of a board paper that had been prepared for that board meeting and the balance concerned emails between the Commission or its lawyers and the Port of Newcastle parties. All of the Commission’s claims involved litigation privilege.
CATEGORY ONE – PON PRESENTATION DOCUMENTS
All but nine of the 44 documents that fall within this category of documents are versions of a multi-page document entitled “Newcastle Container Terminal” and subtitled “A Global Gateway for Australia Next Steps – May 2019”. It appears to be a printout of slides for a PowerPoint presentation. The nine other documents (documents 23, 26, 52, 54, 56-59, and 93), which comprise emails or notes relevant to the presentation, will be considered separately after consideration is given to the presentation document.
The various versions of the presentation slides
The Port of Newcastle parties claim that parts of the various different versions of the presentation document are covered by advice privilege, litigation privilege and without prejudice privilege.
In his affidavit of 11 March 2020, Mr Prestwich addresses the privilege claims in relation to these documents globally. His evidence was that he was informed by Mr Dowling and believed that the parts of the documents over which privilege is claimed record “legal advice received by PON from in-house legal counsel about these proceedings, including in relation to potential outcomes and appeals; or PON’s strategy as advised by in-house counsel for attempting to settle the proceedings”. Mr Prestwich also said that the documents are “drafts or the final version of a presentation to be given by PON to China Merchant Ports and MIRA” and that one of the versions of the presentation was “sent to external consultants for comments and translation into Chinese”. As noted earlier, China Merchant Ports and MIRA were in effect the beneficial owners of the Port of Newcastle parties.
The following points may be noted about Mr Prestwich’s evidence concerning these documents.
First, in relation to his evidence that purports to address the claim of advice privilege, it is unclear who the in-house counsel was who was said to have provided the legal advice. Nor is it clear when, how or in what circumstances that advice was given, or to whom at “PON” the advice was given. There is no evidence of any of those matters. These are not minor deficiencies in the evidence. That is because, as discussed earlier in the context of the relevant principles, in assessing whether confidential communications between an employer and its employed or “in-house” solicitor or counsel are covered by legal professional privilege, it is relevant to consider whether the employer consulted the employed solicitor in a professional capacity in relation to a professional matter and whether the communications were made in confidence and arose from the relationship of lawyer and client. Mr Prestwich’s evidence addressed none of those matters.
Second, in relation to the evidence that purports to address the claims of litigation privilege and without prejudice privilege, Mr Prestwich does not identify the in-house counsel who was said to have given advice concerning the strategy for settling the proceedings, or how, or to whom, or when or in what circumstances that advice was given. One thing is tolerably clear from the unprivileged parts of the documents; the strategy appears to have been formulated at some time around May 2019. As at May 2019, the Port of Newcastle parties were not parties to the proceedings. The NSW Ports parties did not file and serve their cross-claim against the Port of Newcastle parties until mid-July 2019. More significantly, there was no evidence to suggest that the Port of Newcastle parties were, as at May 2019, involved in any dispute with the NSW Ports parties, or anyone else for that matter, in relation to the issues that were later raised against them in the proceedings. Nor was there any evidence to suggest that, as at May 2019, proceedings were contemplated against the Port of Newcastle parties, or that the Port of Newcastle parties were aware that proceedings against them were in contemplation.
The Port of Newcastle parties’ submissions concerning the various versions of the presentation document were directed at one version of the presentation (document 12). Consideration of the unprivileged (and unredacted) portions of that document do not materially assist the Port of Newcastle parties’ privilege claims in respect of the redacted portions. Indeed, if anything, close consideration of the nature and content of the unredacted parts of the document tend to cast doubt on some of the hearsay assertions in Mr Prestwich’s affidavit evidence.
The presentation to the Port of Newcastle parties’ shareholders was plainly designed to secure or sure-up their support for the development of a container terminal at the port. Obviously one of the issues for consideration was the compensation or reimbursement provision in the Port of Newcastle Deed, which in turn raised the issue of cl 3 of the Port Commitment Deeds. The presentation refers, no doubt in that context, to the fact that the Commission was “prosecuting” the NSW Ports parties for the “PCD [Port Commitment Deeds] penalty”, but does not suggest in any way that the Port of Newcastle parties considered or contemplated that they might somehow become a party to the proceedings, or that they were a party to any dispute with the NSW Ports parties.
Perhaps more significantly, the presentation refers to the “PCD strategy” in terms which suggest that, at least at that stage, the strategy primarily involved advocacy and negotiation with the State, which also was not at that point in time a party to the proceedings. Nor is there any indication in the document that it was contemplated that the State would be a party to the proceedings. The content of the presentation also tended to suggest that the PCD strategy appeared to be more a commercial or lobbying strategy, rather than a strategy by which the Port of Newcastle parties might procure a settlement of the proceedings. Indeed, there is nothing in the unredacted portion of the presentation to suggest that the strategy involved negotiations with the NSW Ports parties or anyone else to settle the proceedings.
In light of the issues and deficiencies with Mr Prestwich’s evidence concerning the relevant communications or documents the subject of these privilege claims, and the issues arising from the context in which the alleged privilege statements appeared in the presentation, I considered it appropriate to inspect the various versions of the presentation documents. Scrutiny of the general claims and assertions in Mr Prestwich’s evidence in relation to the documents was warranted and appropriate in all the circumstances.
Having inspected the documents, I am not persuaded that any of the presentation documents contain any privileged material. I am not satisfied that advice privilege, litigation privilege or without prejudice privilege had been established in relation to the portions of the documents over which privilege has been claimed.
As for advice privilege, I am unable to discern any parts of the documents that could clearly or unequivocally be said to contain, communicate or reveal any legal advice about the proceedings, including potential outcomes and appeals. To the extent that the documents contain or reveal any advice, there is nothing to suggest that the advice was requested from or given by a lawyer employed by the Port of Newcastle parties who had been consulted, and who had provided that advice, in confidence and in the context of a solicitor and client relationship with their employer. There are some very general, if not trite or obvious, statements about what might happen in the proceedings, or what the Commission might do. Those statements, however, do not bear the hallmarks of legal advice provided in a professional context of lawyer and client. The source of the information conveyed in those statements is also by no means readily apparent. The generality and second-hand nature of Mr Prestwich’s assertions leaves me unpersuaded that the source of the few statements in the document relating to the proceedings was an in-house lawyer who had provided legal advice about those matters in the context of a professional or solicitor and client relationship.
It is also important to note that the general statements about the litigation are inextricably intertwined with advice which related more to the strategy involving more commercial, public relations and political considerations than legal matters. While, as discussed earlier, communications by an in-house lawyer in the context of commercial dealings may not be amenable to sharp division between what is advisory and what is merely administrative or commercial, the communications concerning the proceedings which are contained in the presentation appear simply to convey factual matters or views about the proceedings for commercial purposes; being to secure or sure-up the shareholders’ support for the development of a container terminal at the port.
As for litigation privilege, there is nothing in Mr Prestwich’s affidavit evidence which provides any sound basis for such a claim. Mr Prestwich’s general and somewhat opaque hearsay assertion that the presentation documents record a “strategy as advised by in-house counsel for attempting to settle the proceedings” does not greatly assist. Nor does anything in the documents appear to comprise or refer to any communication which was made for the dominant purpose of use in, or the conduct of, litigation, let alone litigation, or anticipated litigation, in which the Port of Newcastle parties were parties, or might reasonably be expected to become parties. As has already been noted, the presentation documents refer to the Commission’s proceedings against the NSW Ports parties which were then on foot. The Port of Newcastle parties were not parties to that litigation; nor is there any evidence to suggest that it was contemplated by anyone at that stage that they would or even might be parties. In any event, while the relevant communications disclosed in the presentation may have referred to the litigation, there is nothing to suggest that any of the communications were made for the dominant purpose of use in the litigation, or for the dominant purpose of conducting, or aiding in the conduct of, the proceedings.
As for without prejudice privilege, I am unable to discern any statement in the presentation documents that reveals or discloses any communication between the Port of Newcastle parties and the NSW Ports parties, the State or anyone else, which was aimed at settling the proceedings then on foot between the Commission and the NSW Ports parties, or settling any dispute involving the Port of Newcastle parties which might draw them into the proceedings, or otherwise result in litigation. As was noted earlier, what the presentation documents reveal is that the so-called “PCD strategy” was not a strategy which involved the Port of Newcastle parties somehow procuring a settlement of the proceedings between the Commission and the NSW Ports parties. Rather, it was essentially a commercial strategy that primarily involved advocacy and the lobbying of the State, the ultimate objective of which was to relieve the Port of Newcastle parties of the obligation to pay the “PCD penalty” should it successfully develop a container port.
To the extent that the presentation documents refer to “settlement” options, those references appear to relate to some form of commercial deal with the State in circumstances where it could not be said that there was, at that time, a dispute between the Port of Newcastle parties and the State which might result in litigation, or that litigation involving the Port of Newcastle parties and the State was in contemplation. Those references also do not disclose any actual settlement communications with the State, or anyone else, which had occurred. Rather, they refer to various options which the Port of Newcastle parties might pursue. There is nothing to suggest that without prejudice privilege extends to a party’s internal deliberations about the options that might be available to them to settle a possible dispute, particularly where those internal deliberations cannot be related to any actual settlement communications that occurred with the other party to the dispute.
It should also be noted, in this context, that the Port of Newcastle parties’ privilege claims were, at times, inconsistent across the documents in this category. It is not necessary to detail every instance of such inconsistency. Two examples, again having regard to document 12, are sufficient. First, a portion of a slide titled “Executive Summary – Government Relations” in document 12 was not redacted as privileged, but the same, identical portion was claimed to be privileged in the identical slide in document 10. It is unclear why the exact same wording in the exact same context would be considered to be privileged for one document but not privileged for another. A second example of inconsistency concerned the slide titled “Impact of election result for PON” in document 12, which was not marked as privileged, with this same content (albeit with slightly different formatting and slide heading) marked as privileged in document 13. The same or similar inconsistencies can be found across a not insignificant number of the documents in this category.
It is difficult to comprehend how or why the Port of Newcastle parties came to claim privilege over certain portions of some versions of the slide deck if they were prepared to provide effectively the same material to the NSW Ports parties in other versions of the documents over which they did not claim privilege. It is difficult to avoid the conclusion that insufficient care and consideration was given to the exercise of determining and verifying the existence of bona fide privilege claims. A more thorough review of what was being claimed or marked as privileged, including a careful examination of whether the relevant claims were consistent across the documents, would plainly have been appropriate in all the circumstances.
In any event, none of the Port of Newcastle parties’ privilege claims in relation to parts of the presentation document are upheld.
Emails concerning the presentation
Documents 23, 52, 54, 56, 57, 58 and 59 are copies of an email that Mr Byrnes sent to executives of the Port of Newcastle parties on 18 May 2019. The email attached a copy of a version of the Newcastle Container Terminal presentation. Advice, litigation and without prejudice privilege is claimed in respect of parts of the email.
Mr Prestwich’s evidence in relation to this email was initially that, based on his own “review” of the email, the “portions” of it over which privilege was claimed recorded legal advice given by Mr Byrnes to the Port of Newcastle parties. Needless to say that, as Mr Prestwich’s evidence in this regard was based on nothing more than his review of the documents, he was unable to say anything about the circumstances in which Mr Byrnes was requested to provide this advice, if indeed he was requested to provide it, or the circumstances in which he provided it, other than that it was recorded in the email.
Mr Prestwich did, however, swear a subsequent affidavit which supplemented his evidence about these documents. In that affidavit, Mr Prestwich simply stated that he had been advised by Mr Byrnes that “the portions of the documents over which PON claims privilege record legal advice given by him to PON”. That supplementary evidence was again in such general and conclusionary terms that it does not greatly assist. It again says nothing about the circumstances or capacity in which Mr Byrnes was asked to give, and gave, the advice that is said to be recorded in the email. Nor does it address at all Mr Byrnes’ purpose in sending the relevant email.
It cannot, therefore, be concluded from Mr Prestwich’s evidence alone that Mr Byrnes provided the advice in a professional capacity in the context of a solicitor and client relationship. The mere fact that Mr Byrnes was an in-house lawyer and that he provided advice to his employer is not necessarily sufficient to make out a claim of advice privilege. The bare assertion by Mr Byrnes that it was “legal advice” does not suffice.
The context in which the portion of the email over which privilege was claimed also does not greatly assist the privilege claim. The introductory parts of the email refer to the presentation, the purpose of which was said to be to update the shareholders in relation to issues concerning the prospects of “PCD resolution” and work that can be done “pre-PCD resolution”. Mr Byrnes then provided comments concerning the slides. The part of the email over which privilege was claimed contained some of Mr Byrnes’ comments. While it may be inferred or concluded that Mr Byrnes’ “comments” constituted advice, the fact that the advice was coming from an in-house lawyer does not mean that it was necessarily legal advice, let alone that it was provided in a professional capacity in the context of a solicitor and client relationship.
In all the circumstances, I considered that it was appropriate to inspect the document to scrutinise Mr Prestwich’s evidence. Having inspected the document, I am not persuaded that the parts of it over which privilege is claimed contains legal advice provided by Mr Byrnes in a professional capacity in the context of a solicitor and client relationship. Rather, those parts simply provide Mr Byrnes’ views about what should be said in the slides about the various options available to the Port of Newcastle parties to deal with or resolve the issues arising from the reimbursement provision in the Port of Newcastle Deed, or the various scenarios that might arise having regard to the possible outcome of the litigation between the Commission and the NSW Ports parties. Those views related more to commercial or strategic advice than anything else. Nor am I satisfied that Mr Byrnes’ dominant purpose in sending the email was to provide legal advice to a client, namely his employer, in his professional capacity as a solicitor.
In making these findings, I have borne in mind that the concept of legal advice should not be given an overly narrow meaning in the context of advice privilege and that it is not always possible to disentangle legal, commercial and administrative advice when given by an in-house lawyer in the context of a complex commercial transaction. Despite those considerations, given the very general and somewhat unsatisfactory nature of Mr Prestwich’s evidence concerning this document and the content of the document itself, I am not satisfied that the part of the email over which privilege was claimed reveals a communication the dominant purpose of which was the provision of legal advice by Mr Byrnes in a professional context as the Port of Newcastle parties’ solicitor.
In all the circumstances, the Port of Newcastle parties’ privilege claims in relation to parts of Mr Byrnes’ email sent on 18 May 2019 are not upheld.
It should be noted, however, that there were again inconsistent claims for privilege in this category of documents. For example, dot point 6 in Mr Byrnes’ email was marked as privileged in all the aforementioned documents but not, for some unstated reason, the subject of a privilege claim in document 56. If the relevant privilege claims had been upheld, and the documents then provided to the NSW Ports parties with the privileged portions redacted, document 56 would have rendered those privilege claims effectively irrelevant. It is again difficult to escape the conclusion that insufficient attention and consideration was given to the identification and verification of genuine and consistent privilege claims.
Talking points relating to the presentation
Documents 26 and 93 are “talking points” which relate or correspond to the slides in the Newcastle Container Terminal presentation. Mr Prestwich’s evidence, based on what he was told by Mr Dowling, was that these documents were “speaking notes for use by the CEO of PON during a meeting with China Merchant Ports” and that the portion of the documents over which privilege is claimed record or disclose “the content of legal advice received by PON about the proceedings from in-house legal counsel in relation to PON’s strategy for the resolution of the proceedings”. Advice, litigation and without prejudice privilege is claimed in respect of those parts of the document.
It may again be noted that Mr Prestwich’s evidence about the parts of the document over which privilege is claimed is very general and does not reveal the identity of the in-house counsel who provided the advice, or when, how and in what circumstances the advice was requested and received. Resort to the document itself, in its redacted form, does not assist, particularly when consideration is also given to the content of the slides in the presentation to which these notes are said to be directed. If anything, the context in which the parts of the document over which privilege is claimed appear to suggest that those parts of the document relate to the Port of Newcastle parties’ strategy of engagement or advocacy with the State. It should also again be emphasised, in this context, that the Port of Newcastle parties were not parties to the proceedings at this stage. Nor was there any evidence to suggest that anyone envisaged there was any realistic prospect that they would or even might be. Mr Prestwich’s evidence that the advice was about the proceedings, and the strategy to resolve the proceedings, must be considered in that context. So too must be the claims of litigation and without prejudice privilege.
In all the circumstances, I considered it appropriate to inspect the documents so as to scrutinise the claim and Mr Prestwich’s evidence about it. Having done so, I am unpersuaded that the parts of the documents over which privilege was claimed either contain legal advice provided by Mr Byrnes in a professional capacity in the context of a solicitor and client relationship, or comprise or disclose communications made or brought into existence for the dominant purpose of use in or in relation to, or conducting, or aiding the conduct of, proceedings or anticipated proceedings involving the Port of Newcastle parties. Nor do the documents contain or disclose anything that could be said to be communications aimed at settling a dispute or litigation to which the Port of Newcastle parties were parties, or anticipated or contemplated to be parties.
Insofar as the document contains anything that could be said to record any advice about the proceedings, that advice is in highly general and pedestrian terms. There is nothing to suggest that it was legal advice provided in a professional capacity in the context of a solicitor and client relationship, as opposed to simply general, if not trite, observations that could have been made by anyone with any knowledge of the nature of the proceedings. The fact that information was conveyed about aspects of the proceedings does not mean that the information was the product of legal advice, let alone legal advice provided in the context of a solicitor and client relationship. To the extent that the document contains anything that could be said to constitute advice about strategies, those strategies did not relate to the proceedings, but related to broader commercial and lobbying issues. I am not persuaded that the advice about those matters was legal advice.
As for litigation privilege, it suffices again to note that as at May 2019, when this document was created, the Port of Newcastle parties were not parties to the proceeding and there was no evidence that anyone anticipated or envisaged that they would or even might become parties. In those circumstances, while parts of the document refer to the Port of Newcastle parties’ “options” and refer to the proceedings, it is not easy to see how it could be contended that those parts of the document comprised or disclosed communications the dominant purpose of which was use in or in relation to, or conducting, or aiding the conduct of, proceedings or anticipated proceedings in which the Port of Newcastle parties were parties, or were anticipated to be parties. While the communications may have been about the proceedings, they were not communications which related in any way to the Port of Newcastle parties’ participation, or potential participation in, those proceedings.
The same can be said about the claim of without prejudice privilege. Moreover, none of the parts of the documents over which privilege is claimed comprise or disclose communications with the State, or the NSW Ports parties or anyone else, which relate to or involve negotiations to settle the proceedings, or any dispute involving the Port of Newcastle parties that may result in litigation. Parts of the documents refer to the Port of Newcastle parties’ options, albeit in extremely general terms, but there is nothing to suggest that those parts of the documents disclose any actual negotiations or communications that had or would take place.
In all the circumstances, the Port of Newcastle parties’ privilege claims in relation to parts of the speaking notes are not upheld.
It is, regrettably, again necessary to note that while the claims for privilege were not inconsistent across documents 26 and 93, what was claimed to be privileged in those two documents was, in certain respects, inconsistent with the position taken in respect of other documents in category one. For example, the content claimed to be privileged under slide 6 and slide 9 in documents 26 and 93 was not claimed to be privileged in many of the versions of the presentation slides. It is again unclear why almost identical material — in respect of the actual words used and the nature of that content — in almost identical contexts would be considered to be privileged in one document but not privileged in another. These inconsistencies tend again to support an inference that insufficient care and attention was given to limiting the privilege claims to those where clear and genuine claims were properly available.
CATEGORY TWO – CONTAINER TERMINAL HANDLING STRATEGY DOCUMENTS
That was the case here. While Mr Prestwich’s evidence was admissible and provided some factual basis for the privilege claims, although in most cases only barely so, the vagueness, generality and lack of detail of much of his evidence, together with contextual considerations arising from the documents themselves, compelled careful scrutiny of his evidence and the privilege claims it was said to support. There would have been little point in cross-examining Mr Prestwich as it was readily apparent that he had no direct knowledge about the relevant communications or the purpose for which they were made. In fact, it was highly questionable whether the person who was the source of his information even had any direct knowledge about the communications. The end result was that the Court was required to inspect each and every document.
Where there is a serious challenge to a privilege claim, consideration should generally be given to calling evidence from the person who was responsible for the relevant communication or document. That is because, as Brereton J pointed out in Hancock at [32], the “essential issue on a claim for privilege is the purpose for which the document or communication in question was made” and “the best direct evidence will be that given by the person whose purpose is in question”. Claimants who rely on hearsay evidence in such cases do so at their own risk, particularly where that evidence is as vague, general and unsatisfactory as was the case in this matter.
The following additional observations concern cases where the claimed privilege is said to concern legal advice said to have been sought from or provided by employed or in-house lawyers, or to involve communications involving in-house lawyers in the context of litigation. They may again be considered to be somewhat trite, but they appear to have been largely ignored or overlooked by those responsible for pressing the Port of Newcastle parties’ privilege claims in this matter.
First, the mere fact that an in-house lawyer was party to or involved in an email exchange or the drafting of a document does not mean that the communication was made for the purpose of seeking or giving legal advice, or that the document reveals, records or contains legal advice. Nor does it mean that the communication or document was made or prepared for the purpose of representation or use in litigation.
Second, the mere fact that a document or communication is stated to be or watermarked as “confidential and privileged” does not make it so. It should go without saying that far greater analysis and scrutiny of the document is required before such a conclusion can be reached.
Third, the mere fact that a document refers to “advice” having been provided by an in-house lawyer to his or her employer is generally not sufficient, without more, to demonstrate that the advice was “legal advice”, let alone that it was provided in a professional capacity in the context of a solicitor and client relationship. That is because in-house lawyers often wear more than one “hat” and often provide advice about commercial, strategic and public relations or communication considerations. It may be difficult to unscramble legal advice from other types of advice given by an in-house lawyer, but that is all the more reason why the evidence adduced in support of a privilege claim should at least endeavour to address this issue. Even where legal issues are concerned, general, pedestrian or otherwise obvious statements about what might happen in a proceeding, the possible outcomes of a proceeding or what another party to a proceeding may or may not do, are generally not the hallmarks of legal advice provided in a professional capacity in a solicitor and client relationship.
The evidence relied on by the Port of Newcastle parties to support their privilege claims, while not objected to, was for the most part manifestly deficient for many of the reasons just referred to. The evidence lacked the necessary focus and specificity, was formulaic and conclusionary, was generally based on information provided to Mr Prestwich by someone other than the person or persons responsible for the sending or creation of the communications and documents in question and indeed appeared, for the most part, to be based on someone’s a priori views or assumptions based simply on the fact that the communication or document in question involved in-house lawyers, or somehow concerned these proceedings or general advice or issues relating to or arising from them. As has already been noted, it was for that reason that the Court was effectively compelled to inspect the relevant documents. That inspection revealed that, for the most part, insufficient care and consideration had been given to the relevant privilege claims. Most of them were unsupported and unsupportable, at least in the absence of further and more specific evidence.
CATEGORY TEN – THE COMMISSION’S PRIVILGE CLAIMS
The Commission’s privilege claims, all bar one, involve a claim of litigation privilege in relation to parts of documents which the Port of Newcastle parties were otherwise required to produce in answer to the NSW Ports parties’ subpoena. Most of the claims related to documents created by employees of the Port of Newcastle parties. One of the claims related to a minute of the meeting of the board of the Port of Newcastle parties; four related to board papers prepared for the Port of Newcastle parties’ board; and the balance of the claims involved email chains.
The minute of the board meeting on 21 September 2018 (document 99)
The first document over which a claim was made was a copy of the minutes of the board of the Port of Newcastle parties held on 21 September 2018 (document 99). The Commission claimed litigation privilege in relation to a portion of the minutes under the heading: “Engagement with the [Commission] about the potential legal action to remove the penalty obligation in the port commitment deed”. Mr Steger’s evidence was that the portion of the minutes over which privilege was claimed provided a summary by Mr Dowzer of “meetings between the [Commission], AGS and two potential witnesses in the proceedings” and that he had been informed by Ms Clancy and believed that, at the time of those meetings, the Commission had commenced drafting a concise statement alleging contraventions of s 45 of the Act by the NSW Ports parties and that “each of the meetings referred to by Mr Dowzer (and the communications occurring in those meetings) was for the dominant purpose of obtaining evidence in the proceedings and obtaining information that might result in obtaining evidence to be used in the proceedings”.
The Commission submitted that this part of the board minutes was privileged because it disclosed communications between a party (the Commission) and its solicitor (the AGS) and a third party (the Port of Newcastle parties) made when proceedings were anticipated and for the dominant purpose of the litigation, with a view to obtaining evidence or information which may result in the obtaining of evidence for use in the proceedings.
The NSW Ports parties submitted that there was no evidence and no other basis to find that the officers or employees of the Port of Newcastle parties who were interviewed or spoken to by the Commission and its solicitors were obliged to maintain the confidentiality of the communications that occurred during the interviews. It was also submitted that as at September 2018, when the meeting was held, there was no anticipated proceedings because the Commission was still in its investigatory stage. That was said to be demonstrated by the fact that the Commission was still issuing notices under s 155 of the Act as late as November 2018. Finally, the NSW Ports parties criticised the Commission’s reliance on the evidence of Mr Steger, who plainly had no direct knowledge about the circumstances in which the relevant communications occurred.
As has already been noted, I considered it to be appropriate to inspect the parts of document 99 in respect of which privilege was claimed in the context of the privilege claim by the Port of Newcastle parties. I have also considered it appropriate to inspect those parts of the document for the purpose of resolving the controversy in the context of the Commission’s privilege claim.
The content of that part of the document tends to confirm or corroborate Mr Steger’s evidence, albeit on information and belief, that the communications between the Commission and the officers or employees of the Port of Newcastle parties which were summarised in the document were made for the dominant purpose of the Commission’s conduct of its anticipated litigation proceedings against the NSW Ports parties and with a view to obtaining information or evidence for the purposes of that proceeding. I am satisfied, in those circumstances, that the communications revealed by this part of the document fall within the fifth category of litigation privilege referred to in Sterling.
I am also satisfied that, as at September 2018, while the Commission was still engaged in investigations, the proceedings were nonetheless anticipated. There was, in short, a real prospect that the Commission would commence the proceedings. This was supported by the evidence that suggested that the AGS had, by this stage, commenced to draft a concise statement on the Commission’s instructions. The content of the part of the document over which privilege was claimed also tended to show that proceedings were relevantly anticipated or contemplated by this time.
Finally, while there was no direct evidence that the Port of Newcastle parties who were interviewed by the Commission and its solicitors considered that they were bound to keep the communications which occurred at the interview or interviews confidential, it can readily be inferred that the Commission and its solicitors intended that the communications were and would be kept confidential and that the Port of Newcastle parties knew that to be the case. Those circumstances, in combination with the duty of the Commission and its solicitors to keep the communications confidential, are sufficient to entitle the Commission to claim privilege in respect of the communications, despite the fact that the documents revealing those communications were in the hands of the Port of Newcastle parties: cf Public Transport Authority at [35].
The September 2018 board papers (documents 1, 11, 102 and 103)
Almost identical issues and considerations arise in relation to the Commission’s litigation privilege claims in relation to parts of documents 1, 11, 102 and 103. Those documents are each copies of a document which was prepared for the purposes of a meeting of the board of the Port of Newcastle parties on 21 September 2018. The Commission’s privilege claim was in respect of the portion of the document which commenced with the heading “ACCC Investigation Update” and ended with the words “… will be interviewed separately”.
Mr Steger’s evidence in support of that claim was that that portion of the document “discloses the substance of privileged communications between the ACCC/AGS and PON” and that he had been informed by Ms Clancy and believed “AGS contacted PON in September 2018 to request that certain individuals be made available to attend an interview for the purposes of preparing draft affidavits for use in the proceedings”. Ms Clancy had informed Mr Steger, and he believed, that “the ACCC instructed AGS to make those requests for the dominant purpose of obtaining evidence in the proceedings and obtaining information that might result in obtaining evidence to be used in the proceedings”.
The Commission contended that, as was the case with the relevant part of the minutes of the 21 September 2018 board meeting, the communications revealed in this part of the relevant board paper fell within the fifth category of litigation privilege in Sterling: communications for the dominant purpose of the conduct of anticipated litigation and with a view to obtaining information or evidence for the purposes of those proceedings. It should be noted that these documents were inspected in the context of the Port of Newcastle parties’ privilege claims. I have had regard to the content of the documents, including the parts over which privilege is claimed, for the purpose of resolving the issue concerning the Commission’s privilege claims.
The NSW Ports parties’ challenge to the Commission’s claims in relation to these parts of the documents was the same as their challenge to the privilege claim in relation to the meeting minute. It was submitted that the Port of Newcastle parties were not bound to keep the relevant communications confidential, that the proceedings were not anticipated at the time that these communications occurred and that Mr Steger’s information and belief evidence was unsatisfactory. Those submissions are rejected for the reasons given in relation to the privilege claim concerning the September 2018 board minute.
I am, in all the circumstances, satisfied that the parts of these documents over which privilege is claimed record or reveal communications between the Commission’s solicitor and officers or employees of the Port of Newcastle parties which were made for the dominant purpose of use in or in relation to, the conduct of proceedings which it was anticipated or expected that the Commission would commence, and with a view to obtaining information or evidence for the purposes of those proceedings. I infer that the Commission and its solicitors intended that the communications were and would be kept confidential and that the Port of Newcastle parties knew that to be the case. I am satisfied, in those circumstances, that there was sufficient confidentiality in the relevant communications to sustain the Commission’s privilege claims in relation to them, albeit that the relevant documents were in the hands of the Port of Newcastle parties.
26 September 2018 email chain (documents 31, 73, 80)
The Commission claims litigation privilege over one email in this email chain: an email from an AGS lawyer, Ms Caitlin Baillie, to Mr Dowzer sent on 26 September 2018. It does not claim privilege in relation to the other emails, which are essentially between officers or employees of the Port of Newcastle parties.
Mr Steger’s evidence in relation to this email is that he had been informed by Ms Clancy and believed that the Commission instructed the AGS to request “particular potential witnesses be made available to meet with the ACCC” for the “dominant purpose of obtaining information and evidence for use in contemplated proceedings against NSW Ports”. The Commission again submitted that, having regard to Mr Steger’s evidence, Ms Baillie’s email fell within the fifth category of litigation privilege in Sterling.
The NSW Ports parties’ challenge to this privilege claim again centred on the proposition that the proceedings were not anticipated at this time. They pointed to the fact that the subject line of the relevant emails was “ACCC Investigation” which, in their submission, reinforced the fact that litigation was not a real prospect at this time and that the communications were therefore for the dominant purpose of an investigation, not litigation. The NSW Ports parties also maintained their position in relation to the fact that the Port of Newcastle parties were not bound to keep the communication confidential and that Mr Steger’s evidence was unsatisfactory and lacked the necessary “focus”.
The NSW Ports parties’ challenge to the privilege claims in respect of these email chains is rejected for the reasons given in relation to the Commission’s other privilege claims.
The parts of these email chains that are the subject of the Commission’s privilege claim were inspected in considering the Port of Newcastle parties’ privilege claim. I have also had regard to the content of the documents, including the parts over which privilege is claimed, for the purpose of resolving the issue concerning the Commission’s privilege claims. The content of Ms Baillie’s email confirms and corroborates Mr Steger’s evidence that the dominant purpose of the email was to request that witnesses be made available to meet with the Commission for the dominant purpose of obtaining information and evidence for use in the contemplated proceedings against the NSW Ports parties. I am satisfied that the proceedings were reasonably anticipated at the time the email was sent because there was a real prospect that they would be commenced. I also infer that the Commission and its solicitors intended that the relevant communications were made on a confidential basis and would be kept confidential and that the Port of Newcastle parties knew that to be the case. I am satisfied in those circumstances that there was sufficient confidentiality in the communications recorded in the email to sustain the Commission’s privilege claims in relation to the document, albeit that it is in the hands of the Port of Newcastle parties.
26 February 2019 email chain (document 33)
Detailed consideration was given to the nature and content of this email chain (document 33) in the context of the Port of Newcastle parties’ claim in respect of it. It is unnecessary to repeat what was said about it in that context. It suffices to say that the Port of Newcastle parties’ claim of litigation privilege was not upheld because, at the point in time when the emails were sent, there is nothing to suggest that it was anticipated that the Port of Newcastle parties would be parties to the proceedings that the Commission had commenced against the NSW Ports parties. That reasoning obviously does not apply in relation to the Commission’s claim. It was a party to proceedings which, as at 26 February 2019, were not only anticipated but on foot.
Mr Steger’s evidence in relation to this email exchange was that he had been informed by another AGS lawyer and believed that the information sought by the relevant AGS lawyer in the email exchange was “sought for the purpose of enabling AGS to finalise its statement of claim in these proceedings”.
I inspected the relevant email chain for the purpose of considering the Port of Newcastle parties’ privilege claims in relation to it. I have also considered the contents of the emails for the purpose of considering the Commission’s litigation privilege claim. I am satisfied that the email exchange reveals communications made between the Commission’s lawyer and the Port of Newcastle parties’ in-house lawyers for the dominant purpose of obtaining information for use in the proceedings, or to enable the Commission’s lawyer to provide advice in relation to, or to prosecute the proceedings. It accordingly falls within either the fifth or sixth categories in Sterling. The proceedings were on foot by the time of these communications. For the reasons already given, the communications had the necessary level of confidentiality. The Commission’s litigation privilege claim in relation to this email exchange is accordingly upheld.
2 October 2018 email chain
The last three documents the subject of the Commission’s privilege claims concern an email in an email chain dated 2 October 2018 from Mr Darryn Costanzo, Development Manager at the Port of Newcastle parties, to Mr Carmody and others at the Port of Newcastle parties. The Commission claimed litigation privilege in respect of the first sentence of the third dot point of that email. Mr Steger’s evidence in relation to that sentence was that it discloses a “communication from the ACCC to PON regarding a proposed meeting with a potential witnesses [sic] in these proceedings” and that he had been informed by Ms Clancy and believed that “the proposed meeting was for the dominant purpose of obtaining information and evidence for use in contemplated proceedings against NSW Ports”.
The NSW Ports parties challenged the privilege claim in respect of that sentence on the same basis as it challenged the Commission’s other privilege clams. In relation to this specific claim, the NSW Ports parties submitted that the emails in this chain were “on their face … commercial documents” and that the “commercial context underscores the lack of any evidence as to the confidentiality of the ACCC communication”.
I have inspected the part of the 2 October 2018 email in respect of which the privilege claim is made. It is somewhat difficult to understand why the Commission bothered to claim privilege in respect of this sentence given that it discloses little more than what was disclosed in Mr Steger’s affidavit about it. Nevertheless, I am satisfied that it falls within the fifth category of litigation privilege referred to in Sterling. I am also satisfied, for the same reasons as given in relation to the Commission’s other privilege claims, that the requisite element of confidentiality has been made out and that the proceedings were anticipated at the time this email was sent. The privilege claim in respect of this sentence in the email is accordingly upheld.
Summary and conclusion in relation to the Commission’s privilege claims
All of the Commission’s claims for litigation privilege have been upheld. The parts of the communications recorded in the documents over which privilege was claimed were made for the dominant purpose of the Commission’s conduct of its anticipated or on foot litigation against the NSW Ports parties and with a view to obtaining information or evidence for the purposes of that proceeding, or to enable the Commission’s lawyers to provide advice in relation to, or to prosecute, the proceedings. The documents and communications therefore fell within the fifth or sixth categories of litigation privilege referred to in Sterling. It is also tolerably clear that the Commission and its solicitors intended that those documents and communications were and would be kept confidential and that the Port of Newcastle parties knew that to be the case. I am satisfied, in those circumstances, that there was sufficient confidentiality to sustain the Commission’s privilege claims, albeit that the documents and communications were in the hands of the Port of Newcastle parties.
While the Commission’s privilege claims have been upheld, it would be remiss of me not to make one observation concerning the evidence relied on by the Commission in support of its privilege claims. The NSW Ports parties were critical of the fact that the evidence adduced by the Commission in support of its privilege claims was information and belief evidence from a solicitor who had not been involved in the relevant litigation. There was some merit in that criticism. It is unclear why the Commission appears to have made the deliberate decision not to adduce evidence from either one of its own officers, or an AGS lawyer, who had been involved in the litigation and had some direct knowledge concerning the relevant communications. Perhaps it was a fear or apprehension that such a person with actual knowledge of the purpose of the relevant communications would be cross-examined about the Commission’s investigation or the proceedings generally. Such a fear or apprehension would, however, be entirely unfounded. If cross-examination was permitted, it would only be permitted to the extent that it was directed at the deponent’s evidence concerning the purpose of the relevant communication.
In any event, fortunately Mr Steger’s evidence was slightly more focused and specific than Mr Prestwich’s evidence. The source of the information provided to him also appeared to be someone who had at least some involvement in the proceedings and some direct knowledge about the purpose of the relevant communications.
CONCLUSION AND ORDERS
The parties should confer and agree on the orders necessary to give effect to the findings that have been made in this judgment concerning the Port of Newcastle parties’ privilege claims. The parties should also confer with a view to agreeing on an appropriate orders in relation to the costs of this application. The parties should provide draft orders to the Court within 14 days of the date of this judgment. In the event that the parties are unable to agree on the appropriate orders, including in relation to costs, they are to provide the Court, within 14 days, with short written submissions, not exceeding five pages in length, which annex their proposed orders, address the issues of disagreement concerning the orders and indicate whether a further oral hearing is required.
I certify that the preceding two hundred and ninety (290) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney. Associate:
Dated: 27 August 2020
- AGLC
- Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2020] FCA 1232
- Case
- [2020] FCA 1232
- Decision Date
CaseChat Overview and Summary
The legal issues before the court included whether the communications and documents in question were protected by advice privilege, litigation privilege, or without prejudice privilege. The court had to apply the dominant purpose test to ascertain if the documents were created for the dominant purpose of obtaining or providing legal advice or services, including representation in legal proceedings. Additionally, the court examined whether there was sufficient confidentiality to sustain the privilege claims, considering the communications and documents were in the possession of the opposing party.
The court found that all the ACCC's claims for litigation privilege were upheld, as the relevant communications and documents were made for the dominant purpose of the ACCC's anticipated or ongoing litigation against NSW Ports parties. The communications fell within the fifth or sixth categories of litigation privilege, and there was sufficient confidentiality to sustain the privilege claims. However, the court noted that the ACCC's evidence in support of its privilege claims was primarily information and belief evidence from a solicitor not involved in the litigation, which could have been improved.
ORDERS:
1. The parties must confer and provide the Court with draft orders within 14 days of the date of this judgment, which give effect to the findings concerning the first, second, and third cross-respondents' legal professional privilege claims and deal with the costs of this application.
2. If the parties cannot reach an agreement in accordance with order 1, they must provide the Court, within 14 days of the date of this judgment, with written submissions not exceeding five pages in length, which annex their proposed orders, address the issues of disagreement concerning the orders, and indicate whether a further oral hearing is required to determine the appropriate orders.
Orders
Orders of the court
1. The parties are to confer and provide the Court with draft orders, within 14 days of the date of this judgment, which are agreed and which:
(a) give effect to the findings that have been made in this judgment concerning the first, second and third cross-respondents legal professional privilege claims; and
(b) deal with the costs of this application.
2. If the parties are unable to reach agreement in accordance with order 1, they are to provide the Court, within 14 days of the date of this judgment, with written submissions, not exceeding five pages in length, which annex their proposed orders, address the issues of disagreement concerning the orders and indicate whether a further oral hearing is required to determine the appropriate orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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