Australian Securities and Investments Commission v Mercorella (No 3)

In the case of Australian Securities and Investments Commission v Mercorella (No 3), the central issue revolves around the claim of legal professional privilege over certain documents. The Australian Securities and Investments Commission sought to access these documents as part of their investigation into alleged breaches of the Corporations Act by Mr Mercorella and others. The court was tasked with determining whether the privilege claim over the documents was valid and whether the documents should be disclosed to the Commission.

The primary legal issue before the court was whether the documents in question were indeed privileged and thus protected from disclosure. This involved an examination of the nature of the documents, the context in which they were created, and whether they were prepared in the course of providing legal advice. The court had to consider the distinction between documents created for an improper purpose, which are not privileged, and those created for the purpose of providing legal advice, which are protected. The case hinged on whether the documents were created to further an illegal purpose or if they were part of the process of seeking legal advice regarding the enforceability of security instruments.

The court scrutinised the affidavits provided by Mr Lee, who asserted the privilege over the documents, and found that these affidavits did not sufficiently support the claim of privilege. The court noted that Mr Lee's affidavits merely described the documents and made assertions about their privileged nature without providing substantial evidence of the circumstances surrounding their creation or the context of the legal advice they were meant to facilitate. The court further observed that the documents themselves, particularly those related to security arrangements and tax advice, did not appear to be protected by privilege as they seemed to be involved in the creation of security instruments rather than the provision of legal advice about them. The court concluded that the privilege claim over these documents was not valid, leading to the decision that the documents should be disclosed to the Commission.

As a result of the court's findings, it ordered the disclosure of the contested documents to the Australian Securities and Investments Commission. This decision underscored the principle that only those communications directly related to the provision of legal advice, and not those involved in the creation of illegal or improper arrangements, are entitled to the protection of legal professional privilege.