AWB Ltd v Cole (No 5)

[2006] FCA 1234

FEDERAL COURT OF AUSTRALIA

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5)
[2006] FCA 1234

EXPLANATORY STATEMENT

It is the practice of this Court in matters which are of significant public interest to make a brief explanatory statement when delivering judgment.

The statement I now make describes the main issues in the proceedings and the conclusions I have reached.  As it is a summary statement only, it is necessarily incomplete.  The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.

This case arises from notices to produce documents under s 2(3A) of the Royal Commissions Act 1902 (‘RCA’) that Commissioner Cole directed to AWB and its employees between 23 November 2005 and 20 March 2006. AWB seeks a declaration that the documents specified in revised lists of documents that AWB has filed with the Court are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege.

Although the Commissioner is named as the first respondent, he advised the Court that he would take no part in the proceedings and will abide any order made by the Court.  The second respondent, the Commonwealth, has acted as AWB’s contradictor.

At the commencement of the hearing, some 1,450 original documents were in issue.  During the course of the hearing, AWB withdrew its claim for a declaration that various documents were privileged and the Commonwealth accepted that other documents were the subject of legal professional privilege.  As a result, the number of contested original documents was reduced by some 550 to approximately 900 documents occupying 28 lever arch folders.

The documents at issue span a period of years from about 2002 to 2006.  Over that period, AWB was involved in a number of investigations concerning its sales of wheat to Iraq under the United Nations’ Oil-For-Food Programme (‘OFF Programme’).  AWB conducted two internal investigations, known as Project Rose and Project Water.  In addition, AWB was exposed to investigations by the Permanent Investigations Committee of United States Senate (‘PSI’), the Independent Inquiry Committee of the United Nations (‘IIC’) and ultimately the Commission.

So far as AWB is concerned, these investigations focused on AWB’s payment of inland transportation fees, totalling approximately US$222 million, to a Jordanian company called Alia for Transportation and General Trade Co (‘Alia’).  In its final report, the IIC concluded that Alia was a front company for the Iraqi regime headed by Saddam Hussein and that Alia channelled these payments to Iraq in contravention of the United Nations’ sanctions.  A key issue in the investigations was whether AWB or any of its employees knew or suspected that this was the case.

AWB’s internal investigations also involved a review of matters concerning The Tigris Petroleum Corporation Limited (‘Tigris’).  The Commonwealth contends that AWB and Tigris entered into a transaction whereby AWB agreed to inflate the prices in two contracts (A1670 and A1680) for the supply of 1,000,000 mt of wheat to the Grain Board of Iraq (‘GBI’) as a means of extracting funds from the United Nations’ escrow account to repay a debt of approximately US$8 million which GBI owed to Tigris and to provide AWB with the funds required to make a rebate payment to GBI.

As argued before me, the case focused on three issues:

(1)whether AWB has established its claim that legal professional privilege attaches to each of the documents that remain in contest;

(2)whether any privilege that attaches has been waived by virtue of AWB’s disclosure of the gist or substance of certain legal advices which it obtained; and, if so, what is the extent of that waiver; and

(3)whether legal professional privilege attaches to documents that came into existence in connection with AWB’s settlement of a claim by GBI for a rebate of approximately US$2 million on account of the fact that earlier shipments of wheat by AWB had been contaminated by iron filings (‘the iron filings claim’). 

ESTABLISHING DOMINANT PURPOSE

AWB carries the onus of proving that each relevant communication was undertaken, or each relevant document was brought into existence, for the dominant purpose of giving or obtaining legal advice.  Privilege is not established merely by the use of a verbal formula or by mere assertion that communications were undertaken for the purposes of obtaining or giving ‘legal advice’.  Dominant purpose is a question of fact that must be determined objectively.

In determining AWB’s claims of legal professional privilege, I have looked to the substance of the matter, having regard to the context, the nature of the document, the evidence that was lead in support of the claim of privilege and the content of the document as revealed by inspection. 

I have concluded that, quite apart from any question of waiver, AWB has not made out its claim for privilege in respect of 25 documents.The evidence does not establish that the documents were confidential communications brought into existence for the dominant purpose of obtaining or giving legal advice.  If, contrary to my view, privilege does attach to any of these documents, it has been waived in respect of all but four of the documents.

WAIVER

The Commonwealth contends that, on numerous occasions, AWB disclosed the gist or substance of legal advice that it obtained as a result of, or in the course of, its internal investigations.  It relied on disclosures that were made to the Australian Government between 24 March 2005 and 4 October 2005, to the IIC in the course of Andrew Lindberg’s interview on 28 February 2005, and to the Commission.  As a result, the Commonwealth contends that AWB has waived any privilege that attached to documents brought into existence in the course of its internal investigations. 

The cumulative effect of AWB’s disclosures is that, down to 17 January 2006 when Lindberg gave evidence to the Commission, AWB was openly claiming that its legal advice showed that there was no evidence that it had engaged in any wrongdoing in connection with its supply of wheat to Iraq under the OFF Programme.  Specifically, AWB claimed that there was no evidence of any corruption by AWB, any side payments or after sales payments by AWB to the former Iraqi regime, that AWB knew of any connection between Alia and the Iraqi regime or of any payments being channelled by Alia to that regime, or any conduct by AWB that resulted in breaches of the United Nations’ sanctions.  The disclosures by AWB were expressed in such broad terms that they encompassed advices that AWB had obtained concerning the Tigris transaction and the iron filings claim.

I am satisfied that AWB made a conscious and voluntary decision to deploy the gist or substance of this legal advice in its dealings with the Australian Government, the IIC and the Commission because it considered that it was in its commercial interests to do so.  These actions are inconsistent with the maintenance of confidentiality in the legal advice.

In addition, Lindberg and other AWB executives gave evidence to the Commission that AWB obtained legal advice that the proceeds of the inflated prices in contracts A1670 and A1680 should be disbursed to Tigris to the extent of approximately US$7 million.  That evidence was given in the presence of AWB’s legal representatives without any objection being raised on grounds of legal professional privilege.  I infer that AWB was content for it to be publicly known that it had obtained that legal advice.  Having disclosed the gist or substance of that advice, and having regard to the wide terms in which those disclosures were expressed, I consider that AWB is bound to disclose any other legal advices it obtained in relation to the same subject or same issue. 

The scope of the waiver that must, in my view, be imputed to AWB is not confined to any other legal advice that AWB obtained prior to the date of the relevant disclosures that addressed the same subject matters or issues as the advice that AWB voluntarily disclosed.  It extends to the documents and information which were taken into account in formulating, or which otherwise underpinned or influenced, the legal advice that AWB has chosen to disclose.

To determine precisely what documents fall within these boundaries, I inspected the documents over which a claim of privilege has been made, reviewed the evidence concerning each document, and applied the principles identified in my reasons for judgment.  In the result, I have concluded that AWB has waived any legal professional privilege that subsisted in the documents listed in my reasons for judgment, which number approximately 316.  There are a further 19 documents where any privilege has been waived over part of the document.

In broad terms, the documents over which privilege has been waived comprise documents falling within the following categories: documents which defined the scope of AWB’s internal reviews or which identify what investigations were carried out; summaries, chronologies and other documents which record or analyse the results of those investigations; witness statements and other notes or records of interviews of AWB personnel; records of meetings and periodical reports concerning the findings of the review; and documents seeking advice, or comprising or recording advice provided to AWB, as to whether AWB or any of its employees engaged in any wrongdoing in connection with wheat sales to Iraq under the OFF Programme, including any wrongdoing in connection with the Tigris transaction.

THE IRON FILINGS CLAIM

Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege.  This principle is often referred to as the ‘fraud exception’ to legal professional privilege, but this does not capture its full reach.  The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes and extends to ‘trickery’ and ‘shams’.  As the fraud exception is based on public policy grounds, it is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest.

I have inspected the six documents that were said to relate to the iron filings claim.  My inspection of AWB’s documents revealed a further four documents that fall within this category and are still the subject of a privilege claim.  I am satisfied that these 10 documents are not privileged, as the documents were brought into existence in furtherance of an improper and dishonest purpose – inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations’ escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI.  The evidence establishes to the requisite standard that the transaction was deliberately and dishonestly structured by AWB and GBI so as to misrepresent the true nature and purpose of the trucking fees and to work a trickery on the United Nations.  It would be contrary to public policy for the privilege to enure in communications of this kind. 

COPY DOCUMENTS

AWB has sought a declaration that the documents in its list of duplicate privileged documents are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege. 

Each document in the list is a duplicate of an identified document in AWB’s list of privileged documents.  Where I have held that specified original documents do not attract legal professional privilege, no case has been made out that duplicates of those documents are entitled to privilege.  Where I have held that specified original documents attract legal professional privilege, I have concluded that privilege attaches to the duplicates.

RELIEF

My conclusions on a document by document basis are set out towards the end of my reasons for judgment.  I have determined that specified documents are not the subject of legal professional privilege and that other documents attract legal professional privilege.  The Court has power to make declarations to this effect. 

I propose to give AWB and the Commonwealth an opportunity to make submissions as to the form of any declarations that should be made to give effect to my reasons for judgment.

FEDERAL COURT OF AUSTRALIA

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5)

[2006] FCA 1234

EVIDENCE – legal professional privilege – documents required to be produced by notice under Royal Commissions Act 1902 (Cth) – whether documents brought into existence for the dominant purpose of giving or obtaining legal advice – whether documents brought into existence in furtherance of fraud or improper purpose – waiver of privilege – imputed waiver – associated material waiver – whether privilege has been waived by disclosures made by applicant to Independent Inquiry Committee into the United Nations Oil-For-Food Program, Australian Government and royal commission

Royal Commissions Act 1902 (Cth) ss 2(3A), 6AA(2)
Royal Commissions Amendment Act 2006 (Cth)
Judiciary Act 1903 (Cth) s 39B
Evidence Act 1995 (Cth) ss 69, 78, 79, 135

AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 discussed

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Kennedy v Wallace (2004) 142 FCR 185 applied

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Kennedy v Wallace (2004) 208 ALR 424 considered

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Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 discussed

Thomas v New South Wales [2006] NSWSC 380 applied

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Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2) [1981] Com LR 138 approved

R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 considered

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AWB LIMITED v THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC AND COMMONWEALTH OF AUSTRALIA
VID 594 OF 2006

YOUNG J
18 SEPTEMBER 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 594 OF 2006

BETWEEN:

AWB LIMITED
Applicant

AND:

THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC
First Respondent

COMMONWEALTH OF AUSTRALIA
Second Respondent

JUDGE:	YOUNG J
DATE OF ORDER:	18 SEPTEMBER 2006
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Within 3 business days AWB and the Commonwealth file an agreed minute of orders that give effect to these reasons for judgment.  If AWB and the Commonwealth are unable to agree upon appropriate orders, within 3 business days AWB and the Commonwealth shall each file and serve a minute of the orders that it contends are necessary and appropriate to give effect to these reasons for judgment.

2.The proceeding be adjourned to Monday 25 September 2006 at 10.15am for any argument as to the orders.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 594 OF 2006

BETWEEN:

AWB LIMITED
Applicant

AND:

THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC
First Respondent

COMMONWEALTH OF AUSTRALIA
Second Respondent

JUDGE:	YOUNG J
DATE:	18 SEPTEMBER 2006
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

1. Iraq has been a major export market for Australian wheat for many years.  Prior to 1999, the overseas marketing and export of wheat from Australia was controlled by the Australian Wheat Board (‘Board’), which was a Commonwealth statutory authority.  The Board was first established during the second world war under the Wheat Acquisition Regulations 1939 (Cth).  After the war, the Board was established by the Wheat Industry Stabilization Act 1948 (Cth) and it has continued in existence under later Commonwealth legislation including, most recently, the Wheat Marketing Act 1989 (Cth) (‘WMA’).

2. As a result of amendments made to the WMA by the Wheat Marketing Amendment Act 1997 (Cth) and the Wheat Marketing Legislation Amendment Act 1998 (Cth), the control of wheat exports from Australia was transferred to AWB Limited (‘AWB’). Since 1 July 1999, AWB has carried on business as the exclusive manager and marketer of bulk wheat exports from Australia. It is required to purchase all wheat that is offered to it by Australian growers for inclusion in a pool operated by AWB, provided that the wheat meets standards set by AWB. Growers are paid a purchase price that must be calculated by reference to the net return for the pool in which the wheat is included: s 84 of the WMA. AWB carries out these functions under the general supervision of the Wheat Export Authority which is the successor to the Board: see ss 5, 5D, 57 and 84 of the WMA.

3. By Letters Patent dated 10 November 2005, the Governor-General appointed the Honourable Terence Rhoderic Hudson Cole AO RFD QC (‘the Commissioner’) to inquire into, and report on, inter alia:

   (a)whether any decision, action, conduct, payment or writing of AWB, or any person associated with it, might have constituted a breach of any law of the Commonwealth, a State or Territory;

   (b)whether any decision, action, conduct, payment or writing of BHP Limited (now BHP Billiton Limited), BHP Billiton Petroleum Pty Limited, BHP Petroleum Limited, The Tigris Petroleum Corporation Pty Limited or The Tigris Petroleum Corporation Limited, or any person associated with one of those companies, in relation to specified shipments of Australian wheat to the Grain Board of Iraq, might have constituted a breach of any law of the Commonwealth, a State or a Territory; and

   (c)if the answer to either paragraph (a) or (b) above is in the affirmative – whether the question of criminal or other legal proceedings should be referred to the relevant Commonwealth, State or Territory agency.

4. Between 23 November 2005 and 20 March 2006, the Commissioner issued twelve notices to produce documents to AWB pursuant to s 2(3A) of the Royal Commissions Act 1902 (Cth) (‘RCA’). In addition, various notices to produce documents were directed by the Commissioner to employees of AWB. From early 2006, AWB has maintained that a large number of documents falling within the scope of these notices are the subject of legal professional privilege.

5. These proceedings were instituted on 30 May 2006, shortly before the Royal Commissions Amendment Act 2006 (Cth) (‘the Amending Act’) came into force on 15 June 2006. It is common ground that nothing in the RCA, as amended by the Amending Act, abrogates AWB’s right to withhold documents caught by the notices to produce if they are properly the subject of legal professional privilege.

6. The Commissioner is named as the first respondent.  He has advised the Court that he intends to take no part in the proceedings and will abide any order made by the Court.  The second respondent, the Commonwealth of Australia, has acted as AWB’s contradictor.

7. The principal relief sought by AWB in this proceeding is a declaration that the documents specified in revised lists of documents that have been filed with the Court are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege. This claim falls squarely within the Court’s jurisdiction under s 39B(1) and (1A)(c) of the Judiciary Act 1903 (Cth). The Commonwealth does not suggest that the Amending Act deprives this Court of its jurisdiction to hear and determine AWB’s claims for relief; on the contrary, it accepts that the Court has jurisdiction to determine whether the documents attract legal professional privilege.

8. At the commencement of the hearing, some 1,450 original documents were in issue.  During the course of the hearing, AWB withdrew its claim for a declaration that various documents were privileged and the Commonwealth accepted that other documents were the subject of legal professional privilege.  As a result, the number of contested original documents was reduced by some 550 to approximately 900 documents occupying 28 lever arch folders.

9. The trial of this proceeding was conducted on affidavit.  In support of its privilege claims, AWB relied upon thirty-two affidavits.  In addition, AWB relied upon specified exhibits to two affidavits sworn by Leonie Thompson of Arnold Bloch Leibler (‘ABL’) on 30 May 2006 and 19 June 2006 and certain background documents contained in Exhibit SMXD17 to the affidavit of Simon Daley, a solicitor acting for the Commonwealth, sworn 3 July 2006.  The deponents included AWB executives and employees, AWB’s in-house lawyers, and lawyers from three Melbourne law firms, Blake Dawson Waldron (‘Blakes’), Minter Ellison (‘Minters’) and ABL, that were retained to advise AWB in connection with issues arising from AWB’s supply of wheat to Iraq.  None of the deponents were cross-examined.

10. The Commonwealth did not rely upon any affidavit evidence.  However, it tendered a substantial volume of documents and passages from the transcript of evidence given to the Commission. 

11. The documents at issue in this proceeding span a period of years from about 2002 to 2006.  Over that period, AWB was involved in a number of investigations concerning its sale of wheat to Iraq under the United Nations’ Oil-For-Food Programme (‘OFF Programme’).  AWB conducted two internal investigations, known as Project Rose and Project Water.  In addition, AWB was exposed to investigations by the United States Senate, the Independent Inquiry Committee of the United Nations and ultimately the Commission.  As many of the documents arise out of these investigations, it is necessary to describe their nature and scope in general terms.

    THE OIL-FOR-FOOD PROGRAMME

12. Following the invasion of Kuwait by Iraq, the United Nations Security Council determined on 2 August 1990 that trade sanctions should be imposed on Iraq.  In particular, the Security Council adopted Resolution 661 of 6 August 1990 (‘Resolution 661’) which provided, inter alia, that all States:

    (a)shall prevent the sale or supply by their nationals of any commodities or products to any person or body in Iraq or for the purposes of any business carried on in or operated from Iraq, ‘but not including supplies intended strictly for medical purposes, and, in humanitarian circumstances, foodstuffs’; and

    (b)shall prevent their nationals and any persons within their territory from removing or otherwise making available any funds or other financial or economic resources to the Government of Iraq or to persons or bodies within Iraq, ‘except payments exclusively for strictly medical or humanitarian purposes and, in humanitarian circumstances, foodstuffs’.

13. In April 1991, the Security Council passed Resolution 687 which provided that the prohibition against the sale or supply to Iraq of commodities or products other than medicine and health supplies would not apply to foodstuffs notified to the Committee established by Resolution 661.

14. On 14 April 1995, the Security Council adopted Resolution 986 which established the OFF Programme.  Specifically, by that resolution:

    (a)the Security Council authorised States to purchase petroleum and petroleum products originating in Iraq;

    (b)provided that full payment for each purchase was to be made directly into the escrow account to be established in accordance with the Resolution; and

    (c)decided that funds in the escrow account:

    ‘… shall be used to meet the humanitarian needs of the Iraqi population and for the following other purposes, and requests the Secretary-General to use the funds deposited in the escrow account:

    (a)To finance the export to Iraq, in accordance with the procedures of the Committee established by resolution 661 (1990), of medicine, health supplies, foodstuffs, and materials and supplies for essential civilian needs, … provided that:

    (i)Each export of goods is at the request of the Government of Iraq;

    (ii)Iraq effectively guarantees their equitable distribution, on the basis of a plan submitted to and approved by the Secretary-General, including a description of the goods to be purchased;

    (iii)   The Secretary-General receives authenticated confirmation that the exported goods concerned have arrived in Iraq’.

15. The escrow account was under the control of the United Nations in New York.  Funds standing to the credit of the escrow account were available to be used by Iraq for the purchase of humanitarian goods and services, including the purchase of food, in accordance with the conditions and procedures laid down by the United Nations. 

16. On 20 May 1996, the United Nations and the Government of Iraq entered into a Memorandum of Understanding in relation to the implementation of Resolution 986.  Section II of that Memorandum provided for the Government of Iraq to adopt a distribution plan that was designed to achieve an equitable distribution of medicine, health supplies, foodstuffs and other materials to the Iraqi population throughout the various Governates of Iraq.

    THE INDEPENDENT INQUIRY COMMITTEE

17. On 21 April 2004, following allegations of fraud and corruption in relation to the administration of the OFF Programme, the Secretary-General of the United Nations appointed an Independent Inquiry Committee (‘the IIC’) to investigate the administration of the OFF Programme.  The chairman of the IIC was Paul Volcker, a former chairman of the United States Federal Reserve.  The other members of the IIC were Mark Pieth of Switzerland, an expert on money laundering in the Organisation for Economic Co-operation and Development, and Justice Richard Goldstone of South Africa, a former chief prosecutor of the United Nations International Criminal Tribunals for the former Yugoslavia and Rwanda.  The IIC’s terms of reference were as follows:

    ‘The independent inquiry shall collect and examine information relating to the administration and management of the Oil-for-Food Programme, including allegations of fraud and corruption on the part of United Nations officials, personnel and agents, as well as contractors, including entities that have entered into contracts with the United Nations or with Iraq under the Programme:

    (a)to determine whether the procedures established by the Organization, including the Security Council and the Security Council Committee Established by Resolution 661 (1990) Concerning the Situation between Iraq and Kuwait (hereinafter referred to as the “661 Committee”) for the processing and approval of contracts under the Programme, and the monitoring of the sale and delivery of petroleum and petroleum products and the purchase and delivery of humanitarian goods, were violated, bearing in mind the respective roles of United Nations officials, personnel and agents, as well as entities that have entered into contracts with the United Nations or with Iraq under the Programme;

    (b)to determine whether any United Nations officials, personnel, agents or contractors engaged in any illicit or corrupt activities in the carrying out of their respective roles in relation to the Programme, including, for example, bribery in relation to oil sales, abuses in regard to surcharges on oil sales and illicit payments in regard to purchases of humanitarian goods;

    (c)to determine whether the accounts of the Programme were in order and were maintained in accordance with the relevant Financial Regulations and Rules of the United Nations.’

18. By Security Council Resolution 1538, the Security Council called upon the Coalition Provisional Authority, Iraq, and all Member States of the United Nations, including their national regulatory authorities, to cooperate fully by all appropriate means with the IIC.

19. The IIC issued its final report, entitled ‘Manipulation of the Oil-for-Food Programme by the Iraqi Regime’, on 27 October 2005 (‘the Final Report’).  The IIC found that Iraq had received illicit income totalling about US$1.8 billion from companies that obtained oil and humanitarian goods contracts.  It also found that the largest source of illicit income for the Iraqi regime came from payments made by companies that Iraq selected to receive contracts for humanitarian goods under the OFF Programme.  These payments were disguised by various subterfuges and were not reported to the United Nations by Iraq or by the participating contractors. 

20. In its Final Report, the IIC said that the illicit payments developed in mid-1999 from Iraq’s effort to recoup the costs it incurred to transport goods to inland destinations after their arrival by sea at the Persian Gulf port of Umm Qasr.  The IIC said that, rather than seeking approval from the United Nations for compensation for such costs from the OFF Programme’s escrow account, Iraq required humanitarian contractors to make such payments directly to Iraqi-controlled bank accounts or to front companies outside Iraq that in turn forwarded the payments to the Government of Iraq.  The IIC observed that, not only were these side payments unauthorised, it was also an easy matter for Iraq to impose ‘inland transportation’ fees that far exceeded the actual transportation costs.  The IIC also stated that, by mid 2000, Iraq instituted a broader policy that applied a 10 per cent surcharge on all humanitarian contracts, in addition to any requirement that contractors pay inland transportation fees.  The surcharge was described in most cases as an ‘after sales service fee’. 

21. The IIC said that one conduit for the payment of inland transportation fees to the Iraqi regime was a Jordanian company called Alia for Transportation and General Trade Co (‘Alia’).  The IIC stated that Alia was owned partly by Iraq’s Ministry of Transportation and acted as a collection agent for the Government of Iraq to receive inland transportation payments from certain humanitarian goods suppliers.  The IIC found that the actual transportation of goods from the port of Umm Qasr to inland destinations in Iraq was in fact provided by Iraqi Government employees, and not by Alia. 

22. In its Final Report, the IIC made a number of specific findings in relation to AWB.  It found that AWB paid transportation fees to Alia from December 1999 through until about May 2003 when the OFF Programme came to an end as a result of the invasion of Iraq by US and coalition forces.  In connection with AWB’s first three contracts from late 1999 to mid 2000, inland transport fees ranged between $10.80 and $12.00 per metric tonne (‘pmt’).  The rates rose to between $14.00 and $15.00 pmt in 2000 and then sharply increased in contracts from 2001 to 2003 to between $45.00 and $56.00 pmt.  The IIC also found that AWB did not advise the United Nations that it was making payments to Alia for inland transportation costs.

23. The IIC summed up its conclusions in relation to AWB in the following passage of its Final Report:

    ‘In summary, based on the available evidence, AWB paid to Alia over $221.7 million for what it termed inland transport or trucking fees.  These payments were channeled to the Government of Iraq by Alia.  Both AWB and Alia deny that AWB knew of Iraq’s partial ownership of Alia, and there is no evidence to contradict these denials.  AWB also denies knowing that Alia did not actually transport its wheat from Umm Qasr and that Alia remitted the money paid by AWB to the Government of Iraq.  On the one hand, there is no evidence that Alia told AWB that it was not performing transport services for AWB’s wheat or that it was channeling AWB’s payments to the Government of Iraq.  On the other hand, numerous aspects of the AWB-Alia relationship, as well as the nature of many of the documents received by AWB and discussed above, suggest that some employees of AWB were placed on notice of facts strongly suggesting that AWB’s payments were in whole or in part for the benefit of the Government of Iraq.  Of particular significance is the degree to which Alia’s trucking prices rose sharply beyond what would apparently be a reasonable transportation fee and without other apparent justification.  Such increases, in conjunction with AWB’s knowledge that Alia had been nominated in the first place by the Government of Iraq, should have signaled AWB officials to the probability that the Government of Iraq stood to illicitly benefit financially from AWB’s payments to Alia.  In addition, IGB [the Iraqi Grain Board] and ISCWT [the Iraqi State Company for Water Transport – ie the port authority] initiated or were party to communications concerning AWB’s payment of Alias fees, and AWB was warned that the Government of Iraq would not allow its ships to unload until Alia was paid.’

24. It is relevant to note that, in February 2005, investigators from the IIC travelled to Australia and interviewed a number of senior officers of AWB.  In addition, AWB made a large number of documents available to the IIC investigators.  Certain disclosures by AWB to the IIC represent one ground upon which the Commonwealth contends that there has been a waiver of legal professional privilege by AWB over some of the documents at issue in these proceedings.

    PROJECT ROSE

25. Project Rose commenced in about June 2003 when James Cooper (‘Cooper’), the then general counsel of AWB, was asked to initiate an internal investigation of AWB’s trading activities in Iraq.  The internal investigation began following the publication of a letter dated 3 June 2003 from Alan Tracey (‘Tracey’), president of a lobby group known as US Wheat Associates, to Colin Powell, then the US Secretary of State, in which Tracey alleged that prices in contracts for the sale of wheat under the OFF Programme had been inflated and that some of the sale proceeds might have gone into the accounts of Saddam Hussein’s family.  Cooper engaged Christopher Quennell (‘Quennell’), a consultant employed by Blakes in its Melbourne office, to advise in relation to AWB’s internal investigations.

26. In evidence before the Commission, Cooper described the scope of Project Rose in these terms:

    ‘The subject matter was all of … AWB’s dealings with Iraq during the operation of the Oil-for-Food Program.  …

    … The issues that were raised were the underlying collection of information to understand the company’s position and, secondly, the understanding of the requirement for AWB to be involved in an inquiry in the United States, which involved many, …  fairly complex legal issues, particularly over jurisdiction.’

27. Later in his evidence to the Commission, Cooper described his retainer of Quennell and Blakes in these terms:

    ‘What initially happened in June 2003 was that Chris Quennell came in and took instructions and was told to undertake a review of all of the facts and his assessment of the allegations made by the US Wheat Associates, and he did that by obtaining email records, … he got paper files, he interviewed staff members and conducted quite a large review. 

    … it was an open-ended instruction to him to come into the company and undertake this review and report back on his findings from time to time.’

    On this evidence, Cooper plainly contemplated that Quennell would assess the evidence and the allegations and report back his findings. 

1. In this proceeding, Quennell gave evidence on affidavit that his understanding of his instructions was to review available evidence and interview potential witnesses for the purpose of advising AWB as to its legal position in respect of its sale of wheat to the Grain Board of Iraq (‘GBI’) under the OFF Programme.  He added that the scope of his task and instructions evolved as the matter progressed, particularly following the announcement by the Permanent Investigations Committee of the United States Senate (‘PSI’) of its intention to conduct an investigation and then the appointment of the IIC by the United Nations to conduct an independent inquiry into the OFF Programme.

2. In due course, the board of AWB received a briefing on Project Rose on 25 May 2004.  The board minutes record the following:

   ‘Project Rose

   The Board noted it had received a briefing on Project Rose (attended also by directors of AWB (International) Limited) on Tuesday 25 May 2004 and had also received a memorandum on this matter from the Managing Director on 6 May 2004.  Project Rose is the code-name for the AWB Group’s internal investigation of AWB’s wheat exports to Iraq and AWB’s involvement in the United Nations Oil for Food Program (OFF) in regard to which allegations of impropriety had been made in the public arena.

   The briefing session was addressed by Mr Jim Cooper, General Counsel, and Mr Chris Quennell, trade and transport lawyer of Blake Dawson Waldron.  (The Board noted that a copy of the briefing presentation would be filed with the Board papers).

   The Board noted the following with regard to the Project Rose briefing:

   (a)The allegations of impropriety had commenced with correspondence from the US Wheat Associates to the US Secretary of State, Mr Colin Powell, on 3 June 2003.  There had been sporadic media commentary since that time, and a number of inquiries (all of which remain unconfirmed) had been reported as follows: UN independent inquiry into the OFF program; Interim Iraqi Governing Council Investigation (reportedly to be conducted by KPMG); US House of Representatives Investigation; and a US Senate Committee on Foreign Relations Investigation.

   (b)The Project Rose investigation commenced in June 2003 and has involved a comprehensive review of all contract arrangements for the export of wheat by AWB to Iraq from mid 1999 to 2002, including the inland freight arrangements within Iraq.

   (c)The findings to date of the Project Rose Investigation are as follows:

   1.     all AWB contracts were approved by the Office of the Iraq Program at the United Nations;

   3.       no evidence has been identified of any AWB knowledge that money paid to the Jordanian transport firm, Alia, was onpaid to the Iraq regime;

   4.       no evidence has been identified of payment of funds by AWB to any other person in relation to the OFF shipments; and

   5.       no evidence has been identified of payment of funds to any AWB employee or any other person in relation to OFF shipments.’

3. Blakes made a power point presentation to the board concerning the outcome of its investigations.  The presentation said that Blakes had taken a ‘factual snapshot’ by reviewing 14 international sales and marketing ring binders, 100 chartering files and more than 30,000 AWB emails for 1999 and 2000, interviewing AWB personnel and conducting an audit of documents held by AWB (USA).  It set out Blakes’ findings in terms similar to those recorded in the board minutes.  In addition, it referred to findings that wheat contracts from July 1999 to December 2002 included a trucking fee payable to Alia that had been nominated by GBI; that the same trucking fee was payable under each contract regardless of the destination of the cargo or the distance transported; and that the trucking fee increased from time to time for no apparent reason.  The presentation also stated that Richard Tracey QC (as his Honour then was) had given legal advice in conference on 25 May 2004 that there was no evidence of breach of the relevant United Nations resolution on sanctions and no evidence of breach of Australian domestic law. 

4. The evidence before this Court makes it clear that Project Rose was a continuing process of review and reporting that extended beyond the board meeting of 25 May 2004 and throughout 2004 and 2005.  For instance, Mr Tracey QC provided memoranda of advice on 31 March 2005 and 12 August 2005 in relation to Project Rose and the question whether AWB had paid inflated prices for transport or port charges in breach of the United Nations’ sanctions or Australian domestic law.  Its scope also broadened to include the provision of legal advice and assistance in connection with the PSI investigation, the inquiry undertaken by the IIC and, lastly, the inquiry that is being undertaken by the Commission. 

5. As time passed, Blakes, Minters and ABL each provided advice and assistance to AWB under the umbrella of Project Rose.  Although the immediate focus of Project Rose shifted from time to time between allegations that were publicly made against AWB, the PSI investigation, the IIC investigation, and the Commission, it always involved an ongoing review and investigation of documents and other evidence to determine whether AWB, or any of its employees, had made payments to the Iraqi regime in breach of the United Nations’ sanctions or engaged in any other wrongdoing in connection with the sale of wheat to Iraq under the OFF Programme.

   PROJECT WATER

6. Cooper instructed Quennell to commence the investigation known as Project Water on 12 August 2004.  It involved a review of all matters concerning The Tigris Petroleum Corporation Limited (‘Tigris’).  The Commonwealth contends that AWB and Tigris entered into a transaction whereby AWB agreed to inflate the prices in two contracts (A1670 and A1680) for the supply of 1,000,000 mt of wheat to GBI, as a means of extracting funds from the United Nations’ escrow account to repay a debt of approximately US$8 million which GBI owed to Tigris and to provide AWB with the funds required to make a rebate payment to GBI of approximately US$2 million (‘the Tigris transaction’). 

7. Before the Commission, Cooper gave evidence that on or shortly before 12 August 2004 he was asked, either by Andrew Lindberg (‘Lindberg’) or Sarah Scales (‘Scales’), to undertake a review of AWB’s dealings with Tigris.  Lindberg was AWB’s managing director, and Scales was the general manager of AWB (International) Limited (‘AWBI’).  AWBI is the subsidiary of AWB that is responsible for international wheat sales and marketing.  He said that Scales wanted the review undertaken because a sum of money of over US$8 million was being held in an account of AWBI, and she was not comfortable in approving the payment of that sum to Tigris without understanding all of the circumstances of its receipt by AWBI.  As a result, on 12 August 2004 Cooper and two members of his legal division, Rosemary Peavey (‘Peavey’) and Rosalyn Santen (‘Santen’), initiated a telephone call to Quennell.  In the course of that telephone conversation, Cooper asked Quennell to commence a review of all dealings with Tigris, with particular focus on whether it was proper to make a payment to Tigris of the money held in AWBI’s account.  Quennell’s review took about three months.  Then in December 2004, AWB paid the sum of US$7,087,202.24 to Tigris and retained a fee of US$500,000.00 for assisting in the repayment of the debt. 

8. Some evidence suggests that Project Water, as such, came to an end in December 2004, while other evidence suggests it was an ongoing investigation.  But, whether or not the description of Project Water strictly applied, AWB and its legal advisers continued to investigate and review the facts and circumstances of the Tigris transaction during 2005 in order to determine whether it involved any wrongdoing by AWB or any of its employees.

   THE INQUIRY BY THE UNITED STATES SENATE PERMANENT SUB-COMMITTEE ON INVESTIGATIONS

9. In mid 2004, the PSI announced that it proposed to conduct an investigation into the OFF Programme.  AWB retained Minters and several US law firms to advise it in relation to the PSI investigation.  The evidence indicates that Blakes also provided some advice to AWB in connection with this investigation. 

   THE MAIN ISSUES

10. As argued before me, the case focused on three issues.  The first issue is whether AWB has established its claim that legal professional privilege attaches to each of the documents that remain in contest.  The only head of privilege that AWB relies on is the privilege that attaches to documents brought into existence for the dominant purpose of obtaining or giving legal advice.  In AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 (‘AWB v Cole’), I held that litigation privilege was not available to protect documents brought into existence in contemplation of the Commission and none of the parties has disputed that decision.  AWB has not contended that legal professional privilege is available solely because documents were brought into existence in contemplation of inquiries being undertaken by the PSI or by the IIC. 

11. The second issue is whether, assuming privilege attaches, that privilege has been waived by virtue of AWB’s disclosure of the gist or substance of certain legal advices which it obtained.  I will have to determine whether waiver should be imputed to AWB as a matter of law and, if so, what is the extent of that waiver.  The Commonwealth contends that the waiver extends to all documents that relate to Project Rose and Project Water.

12. The third issue is whether legal professional privilege attaches to documents that came into existence in connection with AWB’s settlement of a claim by GBI for a rebate of approximately US$2 million on account of the fact that earlier shipments of wheat by AWB had been contaminated by iron filings (‘the iron filings claim’).  The Commonwealth contends that the iron filings claim is inextricably linked with the Tigris transaction, in that the prices for wheat contracts A1670 and A1680 were inflated to cover both the amount of the iron filings claim and the repayment by GBI of the debt which it owed to Tigris.  It said that AWB proposed to pay the iron filings claim directly to Alia as an addition to inland transport fees, but spread over several contracts.  The Commonwealth argued that the inflation of the contract prices to cover the iron filings claim was concealed from the United Nations and that it involved a contravention of the United Nations’ sanctions.  In these circumstances, the Commonwealth contends that AWB cannot maintain its claim to privilege over the legal advice it obtained in relation to the iron filings claim as that advice was obtained in furtherance of a fraud, wrongful conduct or sham transaction.

13. AWB contends that there is no evidence which would permit this Court to conclude that the arrangements for payment of the iron filings claim involved a breach of the United Nations’ sanctions or any breach of Australian law, or that the relevant advice was given in furtherance of any improper conduct.  It submitted that the documents relating to the iron filings claim over which privilege is claimed go to the issue of the legality of the payment and were not created in furtherance of any sham or fraud.

    LEGAL ADVICE PRIVILEGE – GENERAL PRINCIPLES PRIVILEGE

14. Under the legal advice limb of legal professional privilege, a document will attract privilege if it was brought into existence for the dominant purpose of giving or obtaining legal advice: Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 (‘Esso’) at 64-65 [35]; Daniels Corporations International Pty Ltd v Australian Competition & Consumer Commission (2002) 213 CLR 543 (‘Daniels’) at 552 [9].

15. AWB placed particular reliance on Dawson J’s formulation of the scope of legal advice privilege in Waterford v Commonwealth (1987) 163 CLR 54 at 95:

    ‘The legal professional privilege relied upon in this case is that which attaches to communications between a legal adviser and his client for the purpose of giving or receiving legal advice and to documents recording those communications or containing information for the purpose of enabling the advice to be given.  In order to attract that privilege, the communications must be confidential and the legal adviser must be acting in his professional capacity: see Minet v Morgan; Wheeler v Le Marchant; Smith v Daniell; Bullivant v Attorney-General (Vict.); Jones v Great Central Railway Co; O'Rourke v Darbishire’.

    There is nothing controversial about this formulation of the principle.

16. I reviewed the relevant authorities and extracted the principles which govern legal advice privilege in my decision in AWB v Cole at [60]-[63] and [85]-[110]. I adhere to what I said in that case. I do not propose to engage in a lengthy discussion of the authorities concerning legal advice privilege in these reasons for judgment, other than to the extent necessary to address the arguments advanced by the parties.

17. The general principles that I consider relevant to the disposition of this case can be summarised as follows:

    (1)The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice.  The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation.  It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs (1976) 135 CLR 674 (‘Grant v Downs’) at 689; Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 278 [30] (‘FCT v Pratt Holdings’); and AWB v Cole at [63].

    (2)The purpose for which a document is brought into existence is a question of fact that must be determined objectively.  Evidence of the intention of the document’s maker, or of the person who authorised or procured it, is not necessarily conclusive.  It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication: see AWB v Cole at [110].

    (3)The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving ‘legal advice’: National Crime Authority v S (1991) 29 FCR 203 at 211–212 per Lockhart J; Candacal Pty Ltd v Industry Research & Development Board (2005) 223 ALR 284 (‘Candacal’) at 298 [70]; Seven Network Limited v News Limited [2005] FCA 142 at [6]–[8]. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 (‘Kennedy v Wallace’) at 189–190 [12]–[17] per Black CJ and Emmett J and at 211–212 [144]–[145] and at 215–216 [166]–[171] per Allsop J; see also Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398.

    (4)Where communications take place between a client and his or her independent legal advisers, or between a client’s in-house lawyers and those legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications: Kennedy v Wallace (2004) 208 ALR 424 at 442 [65] per Gyles J; affirmed on appeal, Kennedy v Wallace at 191-192 [23]-[27] per Black CJ and Emmett J. In Kennedy v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given.

    (5)A ‘dominant purpose’ is one that predominates over other purposes; it is the prevailing or paramount purpose: AWB v Cole at [105]-[106]; FCT v Pratt Holdings at 279-280 [30] per Kenny J.

    (6)An appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence: Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at 366 [35] per Finn J.

    (7)The concept of legal advice is fairly wide.  It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] 1 Ch 317 (‘Balabel’) at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon and Woodrow [1995] 1 All ER 976 (‘Nederlandse’) at 983; Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 (‘Three Rivers’) at 652-653 [43]-[44], 657-658 [59]-[60], 681 [114] and 683 [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 (‘Dalleagles’) at 332-333; DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 (‘DSE’) at 161-173 [25]–[71]; and AWB v Cole at [100]-[101].

    (8)Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: Daniels at 563 [44] per McHugh J; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (‘Propend’) at 550 per McHugh J; Dalleagles at 333–334 per Anderson J; Trade Practices Commission v Sterling (1979) 36 FLR 244 (‘Stirling’) at 245–246 per Lockhart J; and Kennedy v Lyell (1883) 23 Ch D 387 at 407; Lyell v Kennedy (1884) 27 Ch D 1 at 31 per Bowen LJ; Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 at 266 per Lindgren J.

    (9)Subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda or other documents made by officers or employees of the client that relate to information sought by the client’s legal adviser to enable him or her to advise: Stirling at 246. The privilege extends to drafts, notes and other material brought into existence by the client for the purpose of communication to the lawyer, whether or not they are themselves actually communicated to the lawyer: Saunders v Commissioner of Australian Federal Police (1998) 160 ALR 469 at 472.

    (10)Legal professional privilege is capable of attaching to communications between a salaried legal adviser and his or her employer, provided that the legal adviser is consulted 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 Commonwealth (1987) 163 CLR 54 at 96 per Dawson J; see also Deane J at 79–82. Some cases have added a requirement that the lawyer who provided the advice must be admitted to practice: see Dawson J in Waterford at 96; GSA Industries (Aust) Pty Ltd v Constable (2002) 2 Qd R 146 at 150; Glengallan Investments Pty Ltd v Arthur Andersen (2002) 1 Qd R 233 at 245. However, in Commonwealth v Vance (2005) 158 ACTR 47, the Full Court (Gray, Connolly and Tamberlin JJ) did not regard the possession of a current practising certificate as an essential precondition to the availability of legal professional privilege: at [23]–[35]. The same view was taken by Lee J in Candacal at 303 [99], by Gillard J in Australian Hospital Care (Pindara) Pty Ltd v Duggan [1999] VSC 131 at [111], and by Downes J in ReMcKinnon and Secretary, Department of Foreign Affairs and Trade (2004) 86 ALD 780 at 785 [51].

    (11)Legal professional privilege protects communications rather than documents, as the test for privilege is anchored to the purpose for which the document was brought into existence.  Consequently, legal professional privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfies the dominant purpose test: Propend at 507 per Brennan CJ, 544 per Gaudron J, 553-554 per McHugh J, 571-572 per Gummow J, and 587 per Kirby J. In Propend at 512, Brennan CJ added a qualification to this principle: if an original unprivileged document is not in existence or its location is not disclosed or is not accessible to the persons seeking to execute the warrant, and if no unprivileged copy or other admissible evidence is made available to prove the contents of the original, the otherwise privileged copy loses its protection.

    (12)The Court has power to examine documents over which legal professional privilege is claimed.  Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege.

    AWB’S LAWYERS AND THEIR RETAINERS

1. The Commonwealth contended that Project Rose and Project Water were purely factual investigations and therefore should not be regarded as attracting any legal professional privilege.  In advancing this contention, the Commonwealth tended to assume that factual investigations by lawyers, such as a review of documents and interviews of persons involved in the matter under investigation, can be separated from the ultimate legal advice given by the lawyers as a result of their factual investigation.  Leaving aside any question of waiver, this seems to be an unduly narrow approach to the scope of legal advice privilege.  In my view, it finds no support in the authorities.

2. In recognition of the fact that legal professional privilege is a fundamental common law right, the courts have eschewed an overly narrow or technical approach to the identification of communications or documents that fall within the scope of legal advice privilege.  As I said in AWB v Cole at [127]–[133], the legal advice limb of the privilege extends beyond material that is literally a communication, or a record of a communication, of legal advice or instructions. In Propend at 569, Gummow J said that the privilege extends to any document prepared by a lawyer or client from which one might infer the nature of the advice sought or given. The principle extends to internal documents or parts of documents of the client, or of the lawyer, reproducing or otherwise revealing communications which would be covered by privilege: Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd [1992] 2 Lloyd’s Rep 540 at 540 per Saville J.

3. Where a lawyer has been retained for the purposes of providing legal advice in relation to a particular transaction or series of transactions, communications between the lawyer and the client relating to that transaction will be privileged, notwithstanding that they do not contain advice on matters of law; it is enough that they are directly related to the performance by the lawyer of his or her professional duty as legal adviser to the client: Minter v Priest [1930] AC 558 at 581–586; Balabel at 330; Nederlandse at 983 and Dalleagles at 332–333. In Dalleagles, Anderson J said at 332–333 that professional discourse in a professional capacity between a solicitor and his client with reference to the transactions covered by his instructions should be regarded as prima facie for the purpose of giving and receiving advice. In his Honour’s view, this would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor’s engagement and any communication from the client to the solicitor in connection with that engagement. These propositions were referred to, with approval, by Allsop J in DSE at [51]-[52] and by Branson J in Wenkart v Commissioner of Federal Police (unreported, Federal Court, Branson J, 11 November 1996).

4. In DSE, Allsop J said that there was no substantive difference between the views expressed in Balabel and Dalleagles: at [51], [52] and [71]. Allsop J also observed that what underlies the expression of opinion in those cases is the recognition that the obligation of the lawyer to advise, once retained, is pervasive. In his Honour’s view, it would be rare that one could, with any degree of confidence, say that a communication between client and lawyer, in the circumstances of a retainer requiring legal advice and the directing of the client by a legal adviser, was not connected with the provision or requesting of legal advice. Indeed, too literal a requirement of identifying legal advice as express advice about the law would place undue emphasis on formalism and undermine the privilege. Rix J (as his Lordship then was) expressed much the same view in Hellenic Mutual War Risks Associated (Bermuda) Ltd v Harrison [1997] 1 Lloyd’s Rep 160 at 168.

5. In Three Rivers, the relevant legal context consisted of a commission of inquiry into the part played by the Bank of England in the collapse of the Bank of Credit and Commerce International SA.  The House of Lords upheld the Bank of England’s claim that legal advice privilege attached to documents that had been generated for the purposes of providing information to the Bank’s legal advisers to enable them to prepare submissions and evidence, and to advise on the nature, presentation, timing and content of the Bank’s responses to the inquiry.  Relevant passages from the speeches in the House of Lords are extracted in my decision in AWB v Cole at [92]–[96].

6. In this case, the relevant legal context consisted, initially, of public allegations that AWB had acted in breach of United Nations’ sanctions by making improper payments to the Iraqi regime.  Those public allegations were soon followed by a series of investigations by the IIC, the PSI and the Commission.  Blakes was retained for the purpose of advising whether, as a matter of law, there was any substance in the allegations of improper conduct by AWB. 

7. As the various investigations were announced, Blakes’ retainer was extended to the provision of advice in connection with them.  AWB specifically extended Blakes’ retainer to include the provision of advice in relation to AWB’s dealings with Tigris.  It is unclear whether Blakes provided any substantial advice to AWB in connection with the Commission.

8. The catalyst for AWB’s engagement of Minters appears to have been the announcement of the PSI investigation.  From about 1 July 2004, Minters advised AWB in relation to the PSI investigation.  However, Minter’s engagement extended more widely than the provision of advice concerning the actual conduct of the PSI investigation; it included a comprehensive review by Minters of all of the documents and other evidence surrounding AWB’s sales of wheat to Iraq under the OFF Programme.  A key objective of this review was to determine whether there was any evidence that AWB or any of its employees had made payments to Iraq that contravened the United Nations’ sanctions or engaged in any other wrongdoing in connection with the OFF Programme. 

9. Minter’s engagement was subsequently extended to the provision of advice and assistance to AWB in connection with the IIC investigation.  Minters’ wider role in reviewing and analysing the available documents and evidence, which included interviewing employees or former employees, continued during the period of the IIC investigation.  Minters played a prominent role in liaising with the US law firms which AWB retained to act for it in connection with the PSI and IIC investigations.

10. Minters and Blakes acted in tandem in providing advice in connection with the PSI and IIC investigations and in their ongoing review and investigation of the facts and circumstances surrounding AWB’s wheat exports to Iraq.  Both law firms were involved in interviewing present and former employees of AWB and AWBI. 

11. In about February 2005, AWB retained ABL to act for it in relation to the IIC investigation and subsequently in relation to the Commission.  Throughout 2005, ABL worked closely in conjunction with Blakes and Minters.  All three firms were involved in analysing and reviewing the facts and obtaining evidence from potential witnesses, with a view to determining whether there was any evidence that AWB or its employees had made payments to Iraq in breach of the United Nations’ sanctions or engaged in any other wrongdoing in connection with the OFF Programme. 

12. The evidence does not contain any letters of retainer, or any other documentary record of the precise scope of the retainers, under which the three firms acted for AWB.  The affidavit evidence contains the briefest description of each retainer.  The work performed by the three firms overlapped very substantially and, if there were any lines of demarcation, they were very blurred.  Nonetheless, the scope of the work performed by each firm can be discerned with reasonable clarity from the affidavit evidence and the documents referred to in AWB’s revised list of documents.  I am satisfied that Blakes, Minters and ABL were engaged professionally to provide legal advice and assistance within the scope of their respective retainers as described above.  In each relevant context, I consider that it would be inappropriate and artificial to attempt to sever the factual investigations carried out by the lawyers from the legal advice they provided under their retainers.  As I have said, a key purpose of those factual investigations was to enable Blakes, Minters and ABL to determine whether there was any evidence that AWB, or any of its employees, had made payments to Iraq in breach of the sanctions or engaged in any other wrongdoing in connection with its sale of wheat to Iraq.  By that means, the three law firms placed themselves in a position to advise AWB as to the risks it confronted and the course of action it should take in relation to the investigations.

13. I do not see any reason why professional communications between AWB and its lawyers concerning the investigations by the IIC, the PSI, and the Commission should be incapable of attracting legal advice privilege.  In these contexts, the concept of legal advice includes advice as to what AWB should prudently and sensibly do in connection with the relevant investigation.  Advice of this kind is capable of attracting legal advice privilege, notwithstanding that a particular communication is part of a continuum and does itself contain any specific advice on matters of law or any specific request for such advice.

    AWB’S AFFIDAVIT EVIDENCE

14. The Commonwealth contended that AWB had failed in its attempt to prove legal professional privilege because it had not adduced any proof as to AWB’s dominant purpose in seeking or obtaining legal advice.  AWB largely relied upon evidence given by in-house and external lawyers involved in the particular communications at issue.  The Commonwealth submitted that evidence proving the lawyer’s understanding of the purpose of the particular communication and that he or she was giving legal advice affords no evidence of the client’s dominant purpose.  There is no real substance in this criticism.  Dominant purpose must be determined objectively, but it is not uncommon for the relevant purpose to be established by evidence given by the maker of the statement or another person responsible for commissioning the relevant document or bringing it into existence, such as a solicitor: see MitsubishiElectric Australia Pty Ltd v Victoria WorkCover Authority (2002) 4 VR 332 at [14]; Grant v Downs at 677 and AWB v Cole at [110].

15. The Commonwealth objected to the admissibility of statements in AWB’s affidavits where the deponent asserted that particular documents recorded ‘legal’ advice or were brought into existence for the purpose of obtaining, or giving, ‘legal’ advice. It submitted that the description ‘legal’ was a conclusionary assertion or opinion based on other facts and circumstances that were not disclosed by the deponent. AWB argued that the word ‘legal’ ought to be received on the ground that it was an opinion or description about the relevant facts and circumstances as perceived by the deponent. Alternatively, where the deponent was legally qualified, AWB argued that the description represented an opinion that was based on the deponent’s specialised knowledge, training and experience within the meaning of s 79 of the Evidence Act 1995 (Cth).

16. After hearing submissions from counsel, I ruled that I would not exclude the word ‘legal’ where it was used by a lawyer to characterise the relevant advice or communication.  In those circumstances, the presumption referred to in Kennedy v Wallace would be available: see [44] (4) above. In addition, the description would, I think, be admissible as an opinion, based on specialised knowledge, within the meaning of s 79 of the Evidence Act. On the other hand, I rejected the term ‘legal’ in affidavits where the deponent was not legally qualified. In those affidavits, the use of the term amounted simply to a conclusion or opinion by a lay person that was based, in most instances, on facts which were not fully disclosed in the affidavit. Further, I held that the evidence was not admissible under s 78 of the Evidence Act; that provision is concerned with lay perceptions of things or events, such as a person’s apparent age or state of intoxication: see S Odgers, Uniform Evidence Law, 7^th edn, Lawbook, 2006, pp 281-282.

17. At the time I made this ruling, I observed that where I had not struck the expression ‘legal’ from the affidavits, the weight that would be attached to that description in any particular affidavit would depend on the circumstances in which the communication took place; the description might be entitled to little or no weight in the absence of further evidence as to the circumstances surrounding the relevant communications or the topics to which the advice was directed: see Kennedy v Wallace at 189–190 [12]–[17] and 211–212 [144]–[145] and 215–216 [166]–[171].

    DOES PRIVILEGE ATTACH?

18. During the course of the hearing, AWB and the Commonwealth reduced the number of documents which are in contest.

19. On the first day of the hearing, AWB announced that it no longer pressed for a declaration of privilege in respect of a significant number of documents in its list.  In doing so, AWB did not concede that the documents are not protected by legal professional privilege.  As finally revised, those documents are as follows: 27-29, 37-39A, 43, 53, 54, 61, 73-76, 109, 118, 119A, 125, 134, 141, 142, 146A-149, 153, 191-193, 195, 198, 202, 203, 212, 214, 216, 223, 236, 242-244, 248, 249, 272, 287, 289, 312, 314, 325, 328, 329, 335, 360, 363, 364, 366, 367, 369-373, 383, 396, 397, 409, 411, 415, 429, 458, 466, 469, 474, 489, 512, 528, 531, 532, 535, 540A, 545, 546, 597, 598, 604, 606-670, 673, 674, 676, 677, 678, 680, 682-689, 690, 692, 693, 695, 697, 698, 705, 716-720, 723, 726, 728, 734, 735, 746, 750, 767, 774, 776, 778, 782, 783, 786, 789, 791, 793, 795, 796, 803, 805, 825, 832-834, 836, 838, 839, 841-846, 848, 853-855, 858, 859, 862, 864, 871, 874, 875, 878, 880, 884, 886, 890, 890AO, 896, 897, 916, 917, 920, 922, 926, 927, 937, 938-941, 943-946, 949, 954-955, 967-969, 993, 993A, 996, 999, 1007-1008, 1010, 1014-1024, 1027, 1034-1050, 1052-1055, 1057-1058, 1060-1069, 1072, 1082, 1084-1085, 1102-1111, 1113B, 1122, 1125-1143, 1153, 1154, 1156, 1157, 1164-1182, 1188, 1189, 1203, 1205, 1208, 1210, 1211, 1220, 1223, 1224, 1241, 1242, 1263-1292, 1294, 1295 and 1298.

20. Both AWB and the Commonwealth submitted that the consequence of AWB’s announcement was that the Court need not made any ruling as to the status of these documents.  Many of the documents relate to the Tigris transaction.  In paragraphs [90]-[108] of its written submissions, which were filed shortly before the commencement of the trial, the Commonwealth argued that all of the documents in AWB’s revised list that recorded any legal advice in relation to the Tigris transaction attracted the fraud exception to legal professional privilege.  Alternatively, it submitted that any privilege attaching to those documents had been waived by AWB.  Following AWB’s announcement, the Commonwealth and AWB also submitted that the Court need not consider or rule upon any of the arguments raised in paragraphs [90]-[108] of its written submissions.  On the joint submission of AWB and the Commonwealth, I made an order that paragraphs [90]-[108] should be excised from the Commonwealth’s written submissions when those submissions were made available by the Court for public inspection. 

21. The Commonwealth accepted AWB’s claim to legal professional privilege over a number of the documents in the list.  The documents are as follows: 1-11, 13, 16-19, 23-25, 34-36, 40, 42, 44-52, 57-60, 62-72, 80, 86-88, 99, 128, 511, 891-895, 898-915, 918, 919, 921, 923-925, 928-936, 937AA-937AI, 937AK-937AO, 1100, 1101, 1191-1194, 1197-1199, 1201, 1202, 1204, 1207, 1209, 1212, 1216, 1217, 1219, 1227, 1228, 1230, 1233, 1235, 1236, 1238, 1244, 1245, 1251, 1253, 1254, 1257-1259, 1296 and 1302-1304. 

22. The remainder of the documents in AWB’s revised list are in issue.  The Commonwealth submitted that in respect of a number of documents (eg 1190 and following), it understood AWB to be contending those documents were listed as privileged documents in error because they are not within the scope of existing notices to produce.  Although the basis for this ‘understanding’ was never identified, the Commonwealth submitted that the question whether these documents fall within the scope of the notices is not before the Court and, accordingly, the privileged status of those documents does not arise for determination in these proceedings.  I do not agree.  On the material before the Court, I am bound to proceed on the basis that, but for the documents that are no longer pressed and those that are conceded, AWB seeks a declaration over all of the documents in its list because they fall, or may fall, within the scope of notices to produce issued by the first respondent. 

23. In determining claims of legal professional privilege, the Court will look to the substance of the matter, having regard to the context, the nature of the document, the evidence that is led in support of the claim of privilege, any cross-examination of the claimant’s witnesses and, if necessary, the content of the document as revealed by inspection.

24. The documents over which AWB claims privilege can be categorised in various ways, such as communications to and from Blakes, or Minters, or ABL containing legal advice; information obtained from AWB’s records and employees by AWB’s in-house counsel for the purpose of giving or obtaining legal advice; instructions provided by the in-house lawyers to external lawyers for the purpose of obtaining legal advice; and documents brought into existence by lawyers so as to assist them in the provision of legal advice.  But, ultimately, the categories provide limited assistance.  It is necessary to examine the evidence concerning each relevant document over which privilege is claimed and to examine that evidence in the light of the relevant context.  I have also inspected each of the original documents over which AWB has claimed privilege.

25. Applying the legal principles discussed above, I have identified the documents which, in my view, have not been proven to be the subject of legal professional privilege.  I will defer listing these documents at this stage, as many of them are affected by the waiver issue.  I will need to consider waiver and the fraud exception before I express any view about the remaining documents.  My conclusions, listing each affected document, are set out towards the end of these reasons.

    AWB’S DISCLOSURES IN RELATION TO PROJECT ROSE

26. The Commonwealth contends that AWB has waived privilege in relation to its Project Rose documentation by reason of:

    (1)the disclosures by Hargreaves and other AWB executives to the Australian Government from 24 March 2005 onwards;

    (2)the disclosures by Lindberg to the IIC in the course of his interview with IIC investigators on 28 February 2005;

    (3)its production of various documents to the Commission under notices to produce after waiving claims of legal professional privilege, including legal advice that Blakes gave to AWB’s board of directors on 25 May 2004, instructions given to, and advices obtained from, Mr Tracey QC in the period from May 2004 to August 2005, and the instructions given to, and the expert opinion obtained from, Sir Anthony Mason AC KBE in relation to the applicability of Resolution 661; and

    (4)the evidence that Lindberg gave to the Commission in the course of its public hearings. 

27. In the paragraphs that follow, I have set out my factual findings concerning these disclosures.

    DISCLOSURES BY HARGREAVES

28. Peter Hargreaves (‘Hargreaves’) was a senior executive of AWB who acted as the manager of Project Rose.  On 24 March 2005, Hargreaves made a power point presentation to officers of the Department of Foreign Affairs and Trade (‘the Department’) in Canberra that reported on the IIC visit to AWB in February 2005.  It contained references to the results of AWB’s own legal review:

    ‘AWB’s Response

    ·AWB interviewees told the IIC that we believe our trade with Iraq was undertaken in accordance with UN guidelines throughout the life of the OFF Program they had no knowledge that Alia might have an ownership connection back to the old regime.

    ·Alia was regarded as a company providing a genuine service which saved Australian wheat growers considerable demurrage costs, and

    ·They only became aware of a possible connection when the allegations were raised in the media well after the OFF Program ended.

    ·Advised IIC that AWB’s own legal review had found no evidence of:

    ·      corruption by AWB or individuals

    ·      side payments or after sales payments to individuals of the former regime, or

    ·      payments by the regime to former or existing AWB representatives

    ·IIC advised they had found no evidence to the contrary.

    …

    Focus – inland trucking arrangements

    Questioning seems designed to establish whether, through the use of Alia, AWB had wittingly or unwittingly paid money to the Government of Iraq in violation of the Security Council Resolutions 661 and 986.

    Questioning also sought to establish:

    ·How much did AWB know about the background of Alia?

    ·AWB representatives assured the IIC they knew nothing of any connection between Alia and the former regime until well after the OFF Program ended and allegations first began to appear in the media

    ·Unreasonable expectation should AWB have known or inquired of any connection with the former regime?

    ·AWB saw nothing untoward – paying for a service that was genuinely needed to improve efficiency of humanitarian program – also reduced demurrage – a big cost to growers

    ·It was no secret the Iraqis were paying for inland trucking – it was stated on the contracts

    ·UN contractors Contechna were inspecting the port operation including the discharge into Alia trucks

    ·No concerns were raised with AWB by the UN, Contechna or any other body throughout the life of the OFF Program

    ·Was AWB aware of any payments being channelled from Alia to the old regime?

    ·No and subsequent legal review has found no evidence to the contrary

    …

    Allegations of Corrupt Payments:

    AWB’s legal review had found no evidence of:

    ·Corruption by AWB or individuals

    ·Side payments or after sales payments to individuals of the former regime, or

    ·Payments by the regime to former or existing AWB representatives

    Importantly, IIC advised they had found no evidence to the contrary’.

1. The 10 documents in question are listed below in my conclusions.

2. There is an alternative basis for rejecting AWB’s claim for privilege over the 10 iron filings documents.  AWB’s disclosure of the memorandum of 7 February 2003 and its tender by the Commonwealth as an exhibit in these proceedings, without any objection or claim to confidentiality by AWB, effects a waiver over the subject matter of the legal advice set out in the memorandum.  My inspection of the 10 documents relating to the iron filings claim confirms my view that those documents relate to the subjects and issues that are canvassed in the memorandum of 7 February 2003.  If, contrary to my view, any privilege subsisted in any of the documents, it has been waived by AWB.

3. When the Commonwealth tendered the unmasked version of the memorandum of 7 February 2003, I asked Mr Judd why AWB’s production of that document did not waive any privilege that subsisted in documents relating to the iron filings claim.  Mr Judd’s response was that the Commonwealth did not put its case on that basis.  I do not think that is entirely correct.  In the particulars of its case, the Commonwealth contended that AWB’s disclosure of the masked version of the memorandum of 7 February 2003 worked a waiver of any privilege in documents relating to Project Water and the Tigris transaction.  The Commonwealth has never varied from the position that the iron filings claim was an integral part of the Tigris transaction.  However, the Commonwealth did not in its closing address make any submission that privilege over the six documents had been waived by the production of the unmasked memorandum.  To that extent, Mr Judd’s response was correct. 

4. Despite these matters, I have concluded that the Court cannot ignore the effect of the evidence before it, especially as AWB is seeking a declaration that the 10 documents are privileged.

   CONCLUSIONS

5. It is not feasible in these reasons for judgment, when so many documents are at issue, to set out separate reasons for the decision I have reached on each particular document.  I have reached the conclusions set forth hereunder after inspecting all of the documents in AWB’s revised list of privileged documents and by applying the legal principles and factual findings identified above.

6. AWB has not made out its claim for privilege in respect of the following documents:  229, 245-247, 279, 280, 362B, 469A, 495, 542, 565, 586, 675, 784, 867, 872, 890AN, 1090, 1091, 1095, 1096, 1098, 1099, 1118 and 1262.These documents fall into the following categories:

   (a)documents for which there is no evidence of purpose to satisfy the dominant purpose test (documents 229, 469A, 542 and 565);

   (b)documents where the evidence does not satisfy the dominant purpose test, having regard to the nature and content of the document and the vague and formulaic evidence contained in the relevant segments of the affidavit evidence (documents 279, 280, 495, 675, 784, 867, 872, 890AN, 1095, 1096, 1098, 1099, 1118 and 1262);

   (c)a document that was provided to a third party and therefore was not a confidential communication for the dominant purpose of obtaining or giving legal advice (document 362B);

   (d)documents which are partly not proven and partly waived (documents 245-247, 586, 1090, 1091 which are discussed further below).

   If, contrary to my view, privilege does attach to any of these documents, there has been a waiver of privilege in respect of all of them, other than documents 362B, 784, 872 and 1118. The waived documents are included in the list at [237] below.

7. In addition, there are 10 documents relating to the iron filings claims.  They are as follows: 30, 31, 32, 32A, 33, 41, 594, 595, 595A and 596.Privilege does not attach to these documents as they were brought into existence in furtherance of a fraud or other impropriety. Alternatively, any privilege has been waived by AWB. These documents are included in the list at [237] below.

8. AWB has waived any legal professional privilege that subsisted in the following documents: 12, 301-33, 41, 56, 77-79, 81-85, 100-106, 110-117, 120-124, 126, 127, 129-132, 136, 137, 139, 140, 161, 213, 229, 235, 240, 241, 245-247, 250, 252, 253, 257-259, 263, 265-268, 271, 279, 280, 283, 284, 290, 292, 294-301, 308-310, 313, 326, 327, 330-333, 335A-342, 344, 348, 353A, 355-357, 359, 361, 362A, 365, 375, 377-380, 385, 386, 394, 422, 423, 424, 425, 432, 443, 445-449, 455, 461, 463, 465, 469A, 486, 487, 495, 507, 508, 513, 523, 524, 533, 534, 541-544, 547, 548, 553-555, 557, 563, 565, 568-579, 582-590, 592, 594-596, 599, 601-603, 675, 681, 681A, 689A, 689B, 699-704D, 704J-704P, 704T, 704X, 704AA, 704FF, 704KK, 711-715, 721, 722, 725, 729-733, 736-739, 749, 753, 755-757, 762, 771, 788, 794, 798, 815, 817, 820, 823, 824, 837, 840, 847, 867, 890AA, 890AD, 890AE, 890AH, 890AI, 890AJ, 890AK, 890AM, 890AN, 890AP, 890AQ, 1005, 1006, 1009, 1011-1013, 1025, 1026, 1028-1030, 1032, 1033, 1051, 1056, 1059, 1070, 1088-1096, 1098, 1099, 1119- 1121, 1123, 1124, 1144-1152, 1161-1163, 1183-1187, 1221, 1222, 1262 and 1297.

9. In broad terms, the documents over which privilege has been waived comprise documents falling within the following categories: documents which define the scope of AWB’s internal review or which identify what investigations were carried out; summaries, chronologies and other documents which record or analyse the results of those investigations; witness statements and other notes or records of interviews of AWB personnel; records of meetings and periodical reports concerning the findings of the review; and documents seeking advice, or comprising or recording advice provided to AWB, as to whether AWB or any of its employees engaged in wrongdoing in connection with wheat sales to Iraq under the OFF Programme, including any wrongdoing in connection with the Tigris transaction.

10. As I have explained, waiver does not turn on whether the documents attracted the description ‘Project Rose’ or ‘Project Water’.  On inspection, I determined that numerous documents marked ‘Re: Project Rose’ or the equivalent fall outside the scope of any waiver as they related to distinct matters about which AWB sought or obtained legal advice, such as the powers and jurisdiction of the PSI and IIC investigators, other US legal issues, the memorandum of understanding between the IIC and AWB, representation of AWB employees at IIC hearings, the powers of the Wheat Export Authority, and issues of directors’ and officers’ insurance and corporate governance.

11. There are a number of documents where, on inspection, I have determined that the document is only capable of attracting privilege as to part (the balance of the claim for privilege not having been proved), but that such privilege has been waived.  These documents require some further explanation:

    (a)Documents 245 and 246 are drafts of an information paper dated 13 August 2004.  Document 247 substantially replicates the draft information paper in a power point presentation format.  AWB claims privilege in two parts of each of these documents, as indicated on the face of the documents.  In substance, AWB contended that these parts attracted privilege because they recorded legal advice.  On inspection I concluded that the claim is not established in respect of the first part of the documents.  I have determined that the second part claimed attracts privilege but AWB has waived privilege in respect of that second part.

    (b)Document 586 is a table of various legal advices in the possession of Blakes.  AWB contended that the table recorded legal advice.  On inspection I concluded that this claim is not sustainable, save for the entries listed at 23, 24 and 25 of the table which disclose the substance of legal advice given by Mr Tracey QC.  I have determined that AWB has waived privilege in respect of entries 23, 24 and 25 of the table.

    (c)Documents 1090 and 1091 are, respectively, the minutes of AWB and AWBI board meetings dated 22 February 2005.  AWB claims privilege in two parts of each of these documents, as indicated on the face of the documents.  It contended that these parts recorded legal advice.  As to the first part claimed, this is not borne out by my inspection.  I have determined that the second part claimed attracts privilege but AWB has waived privilege in respect of that second part.

12. There are also a number of documents which I have determined to be privileged only as to part of the claim made by AWB.  After inspecting the documents and applying the principles I have discussed, I have determined that certain parts of the documents are privileged, while privilege in another part or parts of the documents has not been proved or it has been waived.  It is necessary to deal with each of these documents:

    (a)Document 138 contains three pages of handwritten file notes.  Privilege has not been established in respect of the first page of the document.  If (contrary to my view) privilege is attracted, it has been waived.  Privilege is established in respect of the second page of the document.  Privilege has not been established in respect of the third page of the document; or if privilege is attracted, contrary to my view, it has been waived.

    (b)Document 251 is a document consisting of a number of entries in a spreadsheet.  AWB claims privilege in certain parts of the document, as indicated on the face of the document.  AWB has waived privilege in respect of the parts claimed on pages 367, 368, 380, 390, and the first of the two parts claimed on each of pages 388 and 395.  The page numbering refers to the system that AWB has adopted for its document control purposes.  Otherwise, the document attracts privilege to the extent claimed.

    (c)Document 376 is a handwritten file note headed ‘Iraq Report for JIS’.  I have determined that the document attracts privilege, but that AWB has waived privilege in respect of the part of the document that relates to the Tigris transaction, namely the second entry commencing with the words ‘completion of Iraq mkt. access arrangements’ and concluding with the words ‘confirm there is compliance’.

    (d)Documents 503, 520, 522, 526, 527 and 965 contain various drafts of a briefing paper initially prepared by ABL.  I have determined that each of the documents attracts privilege, but that AWB has waived privilege in respect of the part of each document under the headings ‘Legal Review’ and ‘Key Messages’.

    (e)Document 516 is another draft of the briefing paper referred to in the preceding subparagraph.  I have determined that the document attracts privilege, but that AWB has waived privilege in respect of the part of the document under the heading ‘Legal Review’.

    (f)Document 691 is a record of a meeting attended by various internal AWB employees and external lawyers.  AWB said that the document attracted privilege in part.  Dr Fuller gave evidence that it recorded legal advice of Leonie Thompson.  I have determined that the passage on page 028 of the document opposite the entry ‘Leonie T’ is privileged.  As to the remainder of the document, it does not record any legal advice and is not privileged.

    (g)Document 696 is a record of a meeting attended by various internal AWB employees and external lawyers.  AWB claimed that the document was part privileged, and relied on Dr Fuller’s evidence that it recorded legal advice given by Leon Zwier.  I have determined that the passage on page 037 of the document opposite the heading ‘Leon Zwier’ (to the balance of the page) is privileged.  Privilege has not been established in respect of the remainder of the document.  If any privilege attached to the remainder, it has been waived. 

    (h)Document 704S is a record of various matters discussed between AWB’s external and internal lawyers.  I have determined that AWB has waived privilege over the six lines commencing with the entry which includes the words ‘iron filings case’.  The balance of the document is privileged.

    (i)Document 704II is a handwritten record of various conversations on 20 and 28 September 2004.  On the face of the document, it appears that a claim for privilege is made only over the part of the document which is dated 28 September 2004.  Privilege has been established over the entry dated 28 September 2004.  However the evidence of Ms Peavey in relation to document 704II addresses the entry of 20 September 2004.  If privilege is claimed over the part of the document which is dated 20 September 2004, it has not been established.

    (j)Document 1097 is the minutes of a meeting of the AWB and AWBI joint board committee.  There are two parts of the document over which a claim for privilege is made on the ground that they record legal advice.  On inspection I determined that the part of the document consisting of the first bullet point under the heading ‘Project Rose’ is privileged.  However, privilege has not been established over the third bullet point.  If privilege is attracted over that part of the document, it has been waived.

13. Document 1297 is a redacted copy of an email from Cooper to Lindberg and Scales, copied to Quennell, dated 16 November 2004.  It appears that the redactions mask those parts of the document over which a claim for privilege is made.  Prima facie, the document appears to be within the scope of the waiver I have identified and applied in these reasons for judgment.  However, I propose to invite further submissions from the parties as to whether document 1297 is in contest and, if so, I will direct that an unredacted version of the document be filed with the Court for its inspection.

14. As for the remaining documents, AWB has in some instances claimed privilege over the entire document and in other instances it has only claimed privilege over a designated part or parts of the document. AWB has established that legal professional privilege attaches to the following documents to the extent claimed by it: 20, 21, 55, 89-98, 107, 108, 119, 133, 135, 143-146, 150-152, 154-160, 162-190, 194, 196, 197, 199-201, 204-211A, 215, 217-222, 224-228, 230-234, 237-239, 254-256, 260-262, 264, 269, 270, 273-278, 281, 282, 285, 286, 288, 293, 302-306, 311, 315-324, 334, 343, 345-347, 349-353, 354, 358, 362, 368, 374, 381, 382, 384, 387, 388-393, 395, 398-408, 410, 412-414, 416-421, 423A, 426-428, 430, 431, 433-442, 444, 450-454, 456, 457, 459, 460, 462, 464, 465A, 467, 468, 470-473, 475-485, 488, 490-494, 496-502, 504-506, 509, 510, 514, 515, 517-519, 521, 525, 529, 530, 536-540, 549-552, 556, 558-562, 564, 566, 567, 581, 591, 593, 600, 605, 671, 672, 673A, 679, 694, 696A, 704E – 704I, 704Q, 704R, 704U-704W, 704Y, 704Z, 704BB-704EE, 704GG, 704HH, 704JJ, 706-710, 724, 727, 740-745, 747, 748, 751, 752, 754, 758-761, 763-766, 768-770, 772, 773, 775, 777, 779-781, 785, 787, 790, 792, 797, 799-802A, 804, 806-814, 816, 818, 819, 821, 822, 826-831, 835, 849-852, 856, 857, 860, 861, 863, 865, 866, 868-870, 873, 876, 877, 879, 881-883, 885, 887-889, 890AB, 890AC, 890AG, 890AIA, 890AL, 890AR-AZ, 890BA-890BG, 937AJ, 937AP, 942, 947, 948, 950-953, 956-964, 966, 970-992, 994, 995, 997, 998, 1000-1004, 1071, 1073-1081, 1082A, 1083, 1086, 1087, 1112-1113A, 1114-1117, 1118A, 1152A, 1155, 1158-1160, 1190, 1195, 1196, 1200, 1206, 1213-1215, 1218, 1225, 1226, 1229, 1231, 1232, 1234, 1237, 1239, 1240, 1243, 1246-1250, 1252, 1255, 1256, 1260, 1261, 1293 and 1299-1301.

    COPY DOCUMENTS

15. AWB has filed a list of duplicate privileged documents.  The list is Exhibit JM5 to the affidavit of John Mitchell sworn 28 July 2002.  Each document in the list is a duplicate of an identified document in AWB’s list of privileged documents.  The duplicates fill 17 lever arch folders.  AWB has sought a declaration that the documents in this list are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege. 

16. At the hearing, neither AWB nor the Commonwealth directed any substantive submissions to the status of these duplicate documents.  In its written submissions, AWB referred to the principles enunciated in Propend as to the circumstances in which a copy of an unprivileged document can itself attract legal professional privilege.  In those written submissions, AWB contended that the qualification which Brennan CJ expressed in Propend at 512 does not represent the law. The Chief Justice’s qualification was that if the original unprivileged document is not in existence or its location is not disclosed or it is not produced, and if no unprivileged copy or other admissible evidence is available to prove the contents of the original document, then privilege cannot be maintained over the copy. However, AWB did not make any submissions as to how, or why, this qualification might be relevant to its claims.

17. AWB adopted the position that the status of the duplicate documents depends on my decision as to the status of the corresponding original document.  The Commonwealth did not make any submission to the contrary at the hearing, although its written submissions contended that AWB had failed to identify the purpose for which particular duplicates were created, or to establish that they were kept confidential.  It would seem a harsh result if AWB were to lose the benefit of privilege in original documents simply because it has not explained or is unable to explain the circumstances in which copies were made.  In large organisations and within law firms, it is hardly unexpected that multiple copies of privileged documents will be brought into existence and that, long after the event, it may be difficult to adduce evidence as to the circumstances in which the copies were made.

18. The submissions of the parties were so cursory that I did not gain any meaningful assistance from them.  However, I have reached the following conclusions.  Where I have held that specified original documents do not attract legal professional privilege, no case has been made out that duplicates of those documents are entitled to privilege.  Where I have held that specified original documents attract legal professional privilege, I have concluded that privilege attaches to the duplicates.  The duplicates come from the custody of AWB, and there is nothing to suggest that the duplicates were dealt with, or communicated, in ways that would deny the privilege claim.  Furthermore, the material before me does not identify any specific grounds for concluding that the duplicates do not attract privilege. 

19. A number of documents in AWB’s revised list of privileged documents are said to be duplicates of other documents in the list.  There is no evidence as to some of those documents (documents 291, 307 and 580) and others have been removed (documents 26 and 1031).  Consequently, I have not made any findings about those documents; it is unclear whether they remain in contest.  It is necessary to make specific reference to a number of other duplicate documents in the list:

    (a)Document 582 is a copy of document 140.  I have determined that AWB has waived any privilege attaching to the documents.

    (b)Document 998 is a copy of document 995 and document 1001 is a copy of part of document 1000. I have determined that the originals are privileged. For the reasons given at [247] above, privilege attaches to the copy documents.

    (c)Document 1006 is said by Chesterman to be a copy of document 1005.  My inspection of the documents has revealed that this is not the case.  There is therefore no evidence capable of supporting the claim for privilege in respect of document 1006.  However, even if there were evidence that document 1006 attracted privilege, I am satisfied that AWB has waived the privilege.

    RELIEF

20. I have determined that specified documents are not the subject of legal professional privilege and that other documents attract legal professional privilege.  The Court has power to make declarations to this effect.  I propose to give AWB and the Commonwealth an opportunity to make submissions as to the form of any declarations that should be made to give effect to these reasons for judgment.

1. AWB’s second further amended application also sought declarations relating to the construction and validity of the Amending Act. In addition, AWB sought a declaration that the exercise of powers by the Commissioner under s 6AA(2) of the RCA, while these proceedings are pending before this Court, would constitute a contempt of Court, and injunctions restraining the Commissioner from making a decision under s 6AA(2) of the RCA. No live issues arise concerning these claims for relief: see AWB Ltd v Honourable Terence Rhoderic Hudson Cole(No 2) [2006] FCA 913. Neither AWB nor the Commonwealth put any submissions to me, whether orally or in writing, concerning these claims for relief. It is unnecessary to address them further.

2. Accordingly, the only orders I propose to make at this stage are as follows:

   (1)Within 3 business days AWB and the Commonwealth file an agreed minute of orders that give effect to these reasons for judgment.  If AWB and the Commonwealth are unable to agree upon appropriate orders, within 3 business days AWB and the Commonwealth shall each file and serve a minute of the orders that it contends are necessary and appropriate to give effect to these reasons for judgment.

   (2)The proceeding be adjourned to Monday 25 September 2006 at 10.15am for any argument as to the orders.

I certify that the preceding two hundred and fifty-one (251) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.

Associate:

Dated:       18 September 2006

Counsel for the Applicant:	J Judd QC, P Corbett and Dr S McNicol
Solicitor for the Applicant:	Arnold Bloch Leibler
Counsel for the First Respondent:	The First Respondent did not appear
Counsel for the Second Respondent:	I Harrison SC, R Newlinds SC and NJ Beaumont
Solicitor for the Second Respondent:	Australian Government Solicitor
Date of Hearing:	7, 9, 10, 11 August 2006
Date of Judgment:	18 September 2006