Bell and Secretary, Department of Health (Freedom of Information) [2020] AATA 1436 (19 May 2020)
Division:GENERAL DIVISION
File Number: 2018/4984
Re:William Bell
APPLICANT
AndSecretary, Department of Health
RESPONDENT
DECISION
Tribunal:Deputy President S A Forgie
Date of decision: 19 May 2020
Place:Melbourne
The Tribunal decides:
to affirm the decision of the respondent dated 22 February 2018 refusing to give access under the Freedom of Information Act 1982 to redacted parts of Document 3 on the basis that they are exempt under s 42 of that legislation as they are of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege.
... ..................[sgd].............................................
Deputy President S A Forgie
Catchwords – FREEDOM OF INFORMATION – legal professional privilege – legal advice given by government in-house legal branch – whether privilege waived – decision affirmed
Legislation
ACT Civil and Administrative Tribunal Act 2008 (ACT) s26
Discrimination Act 1991 (ACT)
Fair Work Act 2009
Financial Management and Accountability Act 1997
Freedom of Information Act 1982 s42
Freedom of Information Bill 1981
Human Rights Commission Act 2005
Cases
AM & S Europe Ltd v Commission of the European Communities [1983] QB 878; 1 All ER 705
Archer Capital 4A and Sage Group plc (No 2) [2013] FCA 1098; [2013] 306 ALR 384
Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82
Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475; 69 ALR 31; 61 ALJR 92
Australian Hospital Care (Pindara) Pty Ltd v Duggan [1999] VSC 131
Australian Wheat Board v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651
AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46
Bell v de Castella [2018] ACTSC 170
Bell & de Castella and Rob de Castella’s SmartStart for Kids Limited [2013] ACAT 27
Bell & de Castella and Rob de Castella’s SmartStart for Kids Limited [2013] ACAT 66
Bell v de Castella and Anor [2014] ACAT 65
Bell v de Castella and Rob de Castella’s SmartStart for Kids Limited DT11/27
Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101; 210 ALR 220; 57 ATR 52; 40 AAR 118; 80 ALD 247
Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 88; (2008) 246 ALR 137
Commissioner of the Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501; 141 ALR 545; 71 ALJR 327; 35 ATR 130
Commissioner of Taxation v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266; 2005 ATC 4903; 60 ATR 466
Commonwealth v Vance [2005] ACTCA 35; (2005) 158 ACTR 47; 224 FLR 243
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 77 ALJR 40
Dye v Commonwealth Securities [No 5] [2010] FCA 950
Esso Australia Resources Ltd v Sir Daryl Dawson [1999] FCA 363; (1999) 87 FCR 588; 162 ALR 79
Edwards and Secretary, Department of Health and Ageing [2011] AATA 147
Goldman v Hesper [1988] 3 All ER 97
Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83
Hartogen Energy (in liq) v Australian Gas Light Co [1992] FCA 322; (1992) 36 FCR 557; 109 ALR 177
Kennedy v Wallace (2004) 142 FCR 185
Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1; 168 ALR 86; 74 ALJR 378
McKinnon and Secretary, Department of Health and Ageing [2004] AATA 1126; (2004) 85 ALD 699
Nine Films and Television Pty Ltd v Ninox Television Ltd [2005] FCA 356; (2005) 65 IPR 442
Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275; 249 ALR 1; 82 ALJR 1288
Re Philip Morris and Prime Minister [2011] AATA 556; (2011) 122 ALD 619
Rich v Harrington [2007] FCA 1987; (2007) 245 ALR 106
Rilstone v BP Australia Pty Ltd [2007] FCA 1557
Seven Network Ltd v News Ltd [2005] FCA 142
Seven Network Ltd v News Ltd [2005] FCA 1551; (2005) 225 ALR 672
Sharjade Pty Ltd v RAAF Landings [2008] NSWC 151
Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No. 2) [2007] FCA 1445
Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347
Trans America Computer Co Inc v IBM Corp 573 F (2d) 646
Waterford v The Commonwealth of Australia [1987] HCA 25; (1987) 163 CLR 54; 71 ALR 673; 61 ALJR 350
REASONS FOR DECISION
Deputy President S A Forgie
Under the Freedom of Information Act 1982 (FOI Act), Mr William Bell made a request to the Department of Health (Department) on 19 August 2015. The Department allocated the reference “030-1516” to the request and granted it in part on 16 October 2015. That meant that Mr Bell had partial access to four documents. Document 3, to which Mr Bell had partial access, is an undated and unsigned draft Minute from Mr Nathan Smyth, First Assistant Secretary, to the Secretary, Ms Jane Halton. It is entitled “Smartstart for Kids – Indigenous Marathon Project – Proposed Way Forward”. It is marked “Legal-in-Confidence”. Mr Bell was given access to a copy from which passages had been redacted in keeping with the Department’s decision that they were exempt from access under s 42 of the Freedom of Information Act 1982 (FOI Act). In or about January 2016, Mr Bell applied to the Information Commissioner (IC) seeking review of the decision to redact Document 3. The Department made submissions to the IC maintaining its position that those parts that had been redacted are exempt under s 42 of the FOI Act. On 22 April 2016, the Office of the Australian Information Commissioner (OAIC) advised the Department that Mr Bell had withdrawn his application to the IC.
In a further request under the FOI Act to the Department on 29 December 2017, Mr Bell sought access to those parts of Document that had been redacted and to which he was not given access in response to his earlier request. The Department has maintained that those parts of the document are exempt under s 42 of the FOI Act on the basis that they are subject to legal professional privilege. It refused access in a decision dated 22 February 2018. On 13 August 2018, the Acting Assistant Commissioner of the OAIC decided under s 54W(b) of the FOI Act not to undertake an IC review. As he was entitled to do under s 57A(1)(b) of the FOI Act, Mr Bell sought review of the Department’s decision dated 22 February 2018. I have decided to affirm that decision.
BACKGROUND
My findings in the following paragraphs are based, in part, on the evidence of Mr Mark Roddam, First Assistant Secretary, Indigenous Health Division, of the Department of Health (Department). In his position, Mr Roddam has oversight of the Indigenous Marathon Project (IMP) but, prior to his appointment on 6 June 2018, he had no involvement with it. His knowledge of the IMP and the Department’s involvement with it before that date has been drawn from his review of the Department’s records. My findings are also based, in part, on the evidence given by Mr Bell and the documentary evidence as indicated.
The Indigenous Marathon Project
The IMP, I find, supports young Indigenous men and women to train for, and participate in, the New York Marathon. It began in 1994 and was developed and run by SmartStart for Kids Limited (SSKF). The IMP continued to be developed and run by SSKF until mid June 2014. On the basis of the evidence of Mr Mark Roddam, First Assistant Secretary, Indigenous Health Division, of the Department of Health (Department), I find that SSKF is a not for profit company limited by guarantee. SSKF is also a registered health promotion charity. During the period from 2009 to 2014, the Department provided funding to SSKF in support of the IMP under a series of funding agreements.
Mr Bell’s proceedings in Fair Work Australia
In 2011, Mr Bell had lodged a claim in Fair Work Australia for reimbursement of monies owed under an employment contract to Fair Work Australia. On 7 February 2011, Commissioner Deegan issued a certificate under s 370 of the Fair Work Act2009 stating that Mr Bell’s application would not have reasonable prospects of success.[1]
[1] Referred to in the reasons of Acting Presidential Member Chenoweth [2014] ACAT 65 at [7]
Mr Bell’s proceedings in the ACT Administrative and Civil Tribunal in 2011 and 2012
Mr Bell has instituted various proceedings against Mr de Castella and SmartStart in the Australian Capital Territory Civil and Administrative Tribunal (ACAT) as well as in Fair Work Australia and in the Supreme Court of the Australian Capital Territory (Supreme Court). He appealed against one of those decisions and it was heard by the Supreme Court. I will refer only to the ACAT case leading to, or arising out of, a costs order made by Senior Member Lennard in the ACAT. Senior Member Lennard’s substantive decision is No. [2013] ACAT 27. She reserved the issue of costs in that matter and made a decision on that issue in a separate decision No. [2013] ACAT 66. Both decisions related to Mr Bell’s applications No. DT 11/27 and DT 12/01. I will summarise only the first for the moment.
Bell & de Castella and Rob de Castella’s SmartStart for Kids Limited[2] arose from a complaint initially made by Mr Bell to the Human Rights Commission (HRC). His complaint had been made against Mr de Castella and SmartStart alleging discrimination based on attributes of race, profession and political conviction. The HRC referred the complaint to the ACAT, which was constituted by Senior Member Lennard. The hearing proceeded as follows:
[2] [2013] ACAT 27; Senior Member Lennard
(1)The hearing was initially held on 25 and 26 June 2012 with the parties to make written submissions.
(2) 23 July 2012 - Mr Bell made an application for:
(a)an order that the senior member of the tribunal disqualify herself because of an apprehension of bias on the basis that her daughter and Mr de Castella’s daughters had gone to school together and stayed at each other’s houses;
(b)a reopening of the hearing to allow him to present further evidence; and
(c)further directions in relation to the submissions that were required at the adjournment of the hearing on 26 June 2012.
(d)30 August 2012 to receive further evidence from the applicant, namely, to watch a DVD titled Running to America and a DVD titled Living Black.
Concerns raised regarding the operation of the Indigenous Marathon Project
On 21 February 2012, Mr Bell wrote to the Commonwealth Auditor-General raising his concerns regarding funding received by Mr de Castella in his role in SSKF for the IMP from 1 April 2009 to date.[3] Mr Bell stated that he had been employed by Mr de Castella as the Project Coach for the IMP. His role as the Project Coach had been featured throughout the documentary entitled “Running to America” and broadcast on the ABC. Mr Bell also referred to his previous 44 years working in Aboriginal and Torres Strait Islander communities at all levels and to his having held a key operational role in the first two years of development of the IMP.
[3] Exhibit A
On 14 March 2012, Mr Bell wrote again to the Auditor-General referring to his previous letter and drawing attention to an email dated 13 March 2012 that he had received from Mr de Castella’s lawyer. Mr Bell drew the Auditor-General’s attention to the following passage from the letter:
“At the end of the day, the damage of any costs that are incurred through your claims will affect the project and our clients’ ability to assist in future programs which you cannot deny have a broad reaching beneficial impact on the lives of Aboriginal people and their communities.”
Mr Bell asked the Auditor-General to investigate whether Mr de Castella had factored his legal costs in to his budget proposals to the Commonwealth government for IMP funding and, if so whether this would be lawful according to the rules governing Commonwealth funding.[4]
[4] Exhibit B
Review of the Indigenous Marathon Project: Department’s letter to Mr de Castella
In late 2012 to 2013, the Department’s Audit and Fraud Control Branch audited the IMP. The audit identified issues of concern regarding the way in which SSFK used the funding. They were summarised in the opening paragraph of a letter dated 14 May 2012 and written by Ms Monique Machutta, Acting Assistant Secretary, Population Health Division in the Department:
“« whether SmartStart for Kids Ltd (SSFK) is the appropriate entity to be party to the agreement with the Commonwealth to carry out the IMP;
«the apparent subcontracting of the IMP;
«potential conflicts of interest in dealings with related parties;
«the use of Commonwealth funds; and
«reports required under the funding agreements.”[5]
[5] Exhibit C
Ms Machutta’s letter went on to expand on each of the five points made in the opening paragraph. She explained, for example, that the review had indicated that SSFK did not employ staff directly and almost no assets other than the grant funds themselves. The substance of the transactions reviewed indicated that SmartStart Australia Pty Ltd (SSA) and, possibly, Decorp Pty Ltd (Decorp) were effectively responsible for the management of the IMP. The Department did not have agreements with either SSA or Decorp and it was not aware of any agreement between SSFK and either SSA or Decorp. It had not approved any subcontracting arrangements and yet SSFK had engaged other parties to assist it with the delivery of the IMP. It was not clear to the Department how SSFK could fulfil its obligations under the funding agreement. If SSFK were not in a position to do that, that would present as a substantial and unacceptable risk for the Department. Ms Machetta asked for Mr de Castella to give the Department the accounting and other source records she identified.
Senior Member Lennard’s email to the Department seeking information
In an email dated 17 September 2012 and relying on s 26 of the ACT Civil and Administrative Tribunal Act 2008 (ACT), Senior Member Lennard asked Mr Craig Black, Director of the Financial Management Unit in the Department, for the following general information:
“1. Can the recipient of grant moneys use those moneys to make payments relating to activities undertaken prior to the grant period? For example to retrospectively pay an employee.
2.If, in an application for grant moneys, a line item is shown with an amount (for example trainer $6 000.00) is there an obligation on the recipient of the grant moneys to spend the money in accordance with that projected budget?
3.If a projected budget in an application states that money is needed for a particular employee (for example coach $38 000.00) would this necessarily be for wages? Could it, for instance, be legitimately used for expenses such as accommodation, airfares, mobile phone of computer?
4.Is it appropriate for a recipient of grant moneys to spend grant moneys on legal fees in the instance where a person employed by the recipient of grant moneys sues the recipient of grant moneys in a matter directly related to the conduct of the recipient of grant moneys in the area of activity covered by the grant.
If the Department is not able to supply the specific information asked for, can you supply some general guidelines relating to the reporting and acquittal requirements of the Department in relation to grants?”[6]
[6] Exhibit E
Ms Rebecca Barnes, Director, Grants and Procurement Services, Office of the Chief Finance Officer in the Department responded for Mr Black in a letter dated 16 November 2012 in general terms. No reference was made to the IMP, Mr de Castella or Mr Bell as Senior Member Lennard had not identified the matter in relation to which she was seeking information from the Department.[7]
[7] Exhibit F; Annexure B
Three months later on 12 February 2013, Ms Krestensen, Assistant Secretary, Drug Strategy Branch of the Department, wrote to Senior Member Lennard regarding her request for information. Ms Krestensen noted that Senior Member Lennard had not received Ms Barnes’ response. She underlined that, since Ms Barnes wrote her response, the Department had become aware of the identity of the parties in the relevant proceedings before Senior Member Lennard. Ms Barnes’ response, Ms Krestensen wrote, had not been intended to apply to any particular matter before the Tribunal. In some cases, it had not sufficiently explained that the terms and conditions in one particular funding agreement may be very different from another. Therefore, Ms Krestensen stated that her letter superseded the response and she wrote:
“The Department administers many funding agreements across a disparate range of projects with those agreements having varying terms and conditions in relation to
Review of the Indigenous Marathon Project: Department’s further letter to
Mr de Castella
On 27 September 2012, Ms Colleen Krestensen wrote a further letter to Mr de Castella. Ms Krestensen began by repeating the substance of Ms Machetta’s letter and then identifying further areas of concern and matters that Mr de Castella should address. Those areas related to subcontracting, potential conflicts of interest and related party transactions in so far as SSA and Decorp are concerned and a number of transactions which did not appear to be consistent with various provisions of the funding agreement or which did not have sufficient supporting documentation to enable the Department’s Audit and Fraud Branch to form an opinion as to whether they were legitimate expenses. Some transactions related to subcontracting and potential conflicts of interest and others did not seem to be related to IMP. Mr de Castella’s attention was drawn to the fact that the transactions appeared to be in breach of the funding agreements that required SSKF to use funds only for the performance of the funding agreements. Ms Krestensen listed the transactions in attachments to her letter and asked Mr de Castella to review the transactions and advise whether he believed that they had been correctly recorded as IMP expenses and are consistent with the funding agreements.
Finally, Ms Krestensen advised Mr de Castella that the financial reports provided by SSFK provided in June 2010 and May 2011 had not complied with the first two funding agreements. Neither had included all income and expenses for the IMP and neither had accounted for funds carried forward between the two agreements. That information was required to ensure the proper use of all funds and to meet the Department’s obligations under the Financial Management and Accountability Act 1997. Ms Krestensen asked that Mr de Castella respond to all of the issues she had raised by 31 October 2012.[8]
[8] Exhibit D
It also outlined the action required to ensure that SSFK complied fully with the provisions of the funding agreements between the Department and SSFK, as well as providing the Department with the appropriate assurances that the IMP is achieving its objectives and that the funds have been used for the purposes of the project.
Minister’s response to Mr Bell’s letter dated 17 December 2012
Mr Bell wrote to the Minister for Indigenous Health, the Hon Warren Snowdon MP, on 28 November 2012 raising his concerns about the payment of legal fees and the requests made by ACAT to the Department. The Minister responded on 17 December 2012 in response saying:
“In relation to the payment of legal fees using grant monies, this is a matter for the Department as it involves the administration of a particular grant. I understand that the Department is aware of your concerns.
I am advised that the Department has responded in general terms to a request from a senior member of the ACAT seeking general information on the Department’s grants management processes. The senior member did not specify the matter about which her enquiry related, and the Department’s response was not intended to provide any information about any matter before the ACAT.
I have asked the Department to follow up directly with the Tribunal to ensure that the general advice it has provided has been received, and that there is no misunderstanding about the intent, scope or purpose of this advice.
While I understand this is a difficult situation for you, I am unable to intervene in such matters.”[9]
[9] Exhibit F; Annexure C
Senior Member Lennard’s substantive decision in DT 11/27 and DT 12/01
In her decision handed down on 26 April 2013 in the proceedings instituted by Mr Bell in DT 11/27 and DT 12/01, Senior Member Lennard decided that she was not satisfied that either Mr de Castella or SmartStart had committed any unlawful act relevant to the Human Rights Commission Act 2005 or the Discrimination Act 1991 (ACT). She reserved costs.
Mr Bell’s appeal against substantive decision on 8 May 2013
On 8 May 2013, Mr Bell had lodged an appeal against Senior Member Lennard’s substantive decision and, on 22 October 2013, appealed against the costs order she later made.
Document in issue written between on unknown date between March and May 2013
The document in issue is an undated Minute addressed to the Secretary of the then Department of Health and Ageing by the then First Assistant Secretary, Mr Nathan Smyth through the then Deputy Secretary, Mr David Butt (Minute). It has a handwritten file number at the top of the record but the printed reference “EA Corro: ……………” is not completed. That, together with the lack of at least Mr Smyth’s initials above the signature block, suggests that the Minute might not have been sent but those matters are not determinative of the issue.
Mr Roddam said in his affidavit, and I accept, that Assistant Secretaries, however designated, frequently prepare and provide Minutes to the Secretary and other members of senior management. Minutes can serve a range of purposes but are primarily used to brief and seek the approval of the Secretary and other senior management to a particular course of action.
Mr Roddam has stated that other documents held by the Department indicate that the document was created at some point between March and May 2013. That would be consistent with the reference in a part of the Minute, for which exemption has not been claimed, that the IMP was currently in the process of selecting runners to train in the lead up to the 2013 New York Marathon. I think that I can take note of the fact the New York Marathon was run on 3 November 2013. A finding that the Minute was created at some point between March and May 2013 would also be consistent with Mr Smyth’s reference to its being critical that communication take place with SSKF and that the future of the IMP was resolved before the process of selecting runners was finalised.
In making my finding regarding the date on which the Minute was written, I have also had regard to the subjects dealt with in the Minute. I will set out those parts of the Minute, which are not claimed to be exempt, to demonstrate that but also to demonstrate where it fits into the course of events:
“Purpose
To seek your agreement to a proposed approach to respond to the results of an internal audit of the Indigenous Marathon Project.
Background
Project and Funding
The Department provides funding to Smart Start for Kids Limited for the Indigenous Marathon Project – Healthy Living Initiative (IMP). The IMP aims to develop Aboriginal and Torres Strait Islander healthy lifestyle role models through the selection, training and support of athletes to run the New York City Marathon. The project promotes and supports participation in physical activity and healthy non-smoking lifestyles in Aboriginal and Torres Strait Islander communities.
The project has been funded since 2009, and the current contract runs up to June 2014 with funding provided under the Indigenous Chronic Disease Fund. The full funding for the project is $1,955,345 (GST Exclusive) from 2009-2010 to 2013-14 over three funding agreements.
Financial Year
Period of Funding Agreement
Funding allocation for each financial year (GST exclusive)
2009-10 (agreement 1)
28/04/10 to 30/06/10
$170,265
2010-11 (agreement 2)
19/10/10 to 30/06/11
$285,431
2011-12 (agreement 3)
07/06/11 to 30/06/14
$499,883
2012-13 (agreement 3)
“ “
$499,883
2013-14 (agreement 3)
“ “
$499,883
The project has been the subject of a high profile dispute between Mr John Bell, a former coach with the IMP, and the Chief Executive Officer of Smart Start for Kids Limited, Mr Robert de Castella. Mr Bell volunteered with the project but had an expectation of paid employment. Mr Bell has taken his concerns to a range of for a including the Auditor General, the ACT Civil and Administrative Tribunal, the press and most recently the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs.
Internal audit review
Following a referral from the Australian National Audit Office the project has been the subject of an internal audit review. Whilst the audit has not yet been finalised the draft report from the audit has identified a number of issues of concern to which there is an imperative to respond without further delay. These issues include:
« Unapproved subcontracting arrangements with and transfer of funds to related companies (SmartStart Australia Pty Ltd and Decorp Pty Ltd). The internal audit suggests that this business model may not be appropriate and that it adds additional costs to the administration and management of the project.
« Use of project funds for purposes which are not sufficiently linked to the objectives of the project. In particular the review has identified that project funds have been drawn upon to cover legal costs relating to the dispute with Mr Bell.
« Excessive management costs associated in part with the unapproved sub-contracting arrangements.
« A lack of clarity between what is funded through the Department’s funding, and what donated funds are used for in respect of the project.
« Concerns that the organisation currently receiving funding – Smart Start for Kids – does not in itself have the capacity to undertake the project.
A letter seeking explanations of issues arising from the audit review was forwarded to Mr de Castella (copy attached). Whilst Mr de Castella provided further information in response to this letter, he has not provided evidence of sub-contracts between the parties mentioned above, nor an explanation of the high level of administrative and management costs.
The expenditure in the project has not been consistent with the original proposal provided for the project by IMP, particularly in respect of management expenses. However the original contractual arrangements did not append a proposed budget for the project, and the proposal, while referred to by name in the Recitals, was not attached to the funding agreement. There have also been other deficiencies identified with the funding agreements which have been in place for the project, including a lack of clear key performance indicators, and specificity about the outcomes from the project. Financial reporting against the project was considered unsatisfactory, although the Department has sought and received additional information including project specific audited statements.
Advice from Legal Services Branch
[Material for which exemption claimed]
Way forward
The IMP is currently in the process of selecting the 2013 runners for the training and lead up to the 2013 New York Marathon. It is critical that communication takes place with the representatives of SSFK and that the future of the project is resolved before this process is finalised. Early resolution of problems will also avert to any further inefficiencies within the project.
[Material for which exemption claimed]
The next steps proposed are as follows:
«A further letter be immediately sent to Mr de Castella providing a final opportunity for him to provide further information within 14 days to verify that there were sub-contracting arrangements between SSFK and the other related companies, and to address other issues arising from the audit to which he has not yet responded.
«At the conclusion of 14 days, it is proposed that a meeting be held with Mr de Castella to outline the results of the audit, and our remaining concerns. [Material for which exemption claimed] Representatives from Legal Services Branch should be invited to attend this meeting.
«Following this meeting a formal letter would be written to Mr de Castella documenting the outcome of the audit and out resulting concerns about the inefficiencies of the project. The letter would articulate and itemise these costs which we do not think reasonable to have been covered by the IMP funds, including the legal costs, and additional costs associated with unapproved sub-contracting arrangements. [Material for which exemption claimed]
Should you agree to this approach, Minister Snowdon’s office will be briefed on the outcome of the audit, and the proposed steps are to be taken to address future contract management of the project.
Recommendation:
«That you agree to the above strategy for addressing concerns which have emerged from the internal review of the IMP project.
Nathan Smyth
First Assistant Secretary
Attachment B
Indigenous Marathon Project
[Material for which exemption claimed]
Problem
Solution
« no detailed budget in contract
« proposal and budget covered total project not just DOHA component
[Material for which exemption claimed]
« insufficient information about other funding sources including grants, donations and in-kind support
« lack of transparency about role of DOHA funding as opposed to other funding sources (grants, donations, and in-kind support) in achieving key deliverables of the project.
[Material for which exemption claimed]
« excessive expenditure on management and administration
[Material for which exemption claimed]
« audit finding that funds appear to have been used for purposes outside project parameters or without verification eg legal costs
[Material for which exemption claimed]
« lack of specificity about certain project components and deliverables (eg vocational training outcomes, partnerships with Regional Tackling Smoking and Healthy Lifestyle Teams and participation in broader Tacking Indigenous Smoking for a and events)
[Material for which exemption claimed]
« Unapproved sub-contracting arrangements resulting in high admin costs
[Material for which exemption claimed]”
Mr Roddam said that the section of the Minute headed “Advice from Legal Services Branch” contains a summary of legal advice provided by the Department’s Legal Services Branch as it was then known. It is currently known as the “Legal and Assurance Division” and provides officers of the Department with “legal advice, assistance and litigation services”. The legal officers within that Division hold practising certificates and report to the Department’s General Counsel.
Mr Roddam said that he had been informed by officers in the Legal and Assurance Division that the Department’s records demonstrate that, on 27 February 2013, a lawyer employed in the Commercial Law section of the then Legal Services Branch sent an email to the Department’s Audit and Fraud Control Branch. The email provided advice in response to a series of questions requesting advice from the Audit and Fraud Control Branch. The questions seeking advice were concerned with issues relating to interpretation of the agreement between the Department and SSFK, legal rights and consequences and options for the Department in the circumstances.
The second paragraph of the section of the Minute headed “Way forward”, and for which exemption is claimed, Mr Roddam said, is a summary of the advice given in the email. In particular, the email presents a number of options and they are presented in the Minute verbatim under the heading of “Advice from Legal Services Branch”. The third and fourth paragraphs under the heading “Way forward”, the second sentence of dot point 2 and the final sentence of dot point 3 on page 4 of the Minute and the “Solution” in Attachment B to the Minute rely upon that advice in a way that makes quite obvious what the advice recommends.
Mr Roddam said that officers of the Legal and Assurance Division had searched the Department’s records to establish whether the legal advice summarised in the Minute has ever been disclosed outside the Department. To the best of Mr Roddam’s knowledge, circulation of the legal advice had been limited to those officers in the Department who had a need-to-know and had not been disclosed outside the Department.
Senior Member Lennard’s costs decision on 27 September 2013
In Bell & de Castella and Rob de Castella’s SmartStart for Kids Limited,[10] Senior Member Lennard considered costs that she had reserved and decided on 27 September 2013 that:
[10] [2013] ACAT 66; Senior Member Lennard
(1)Mr Bell pay, on an indemnity basis, the following costs of the respondents:
(a)50% of the costs arising from the conduct of the hearing on 25 and 26 June 2012;
(b)100% of the costs arising from dealing with the email correspondence generated by the applicant between 26 June 2012 and the date of this order, except for those emails which dealt with the application for disqualification of the Senior Member; and
(c)100% of the costs arising from the hearing conducted on 30 August 2012.
(2)Costs were to be calculated at the Supreme Court scale.
(3)Costs should be agreed.
(4)If the parties were unable to reach agreement as to costs within 21 days of the date of the order, Mr de Castella and SSFK were required to lodge and serve a bill of costs and they and Mr Bell were to follow the procedure set out in the order.
Mr Bell’s appeal against costs decision on 22 October 2013
Mr Bell wanted both of his appeals heard in the ACAT’s Appeal Division but Mr de Castella and SSFK successfully applied for it to be removed to the Supreme Court of the ACT. The order for the removal of the proceedings was made on 16 December 2013.
The appeals were heard by Penfold J over several days: 14 November 2014; 2 February, 30 March and 26 May 2015; 16 May and 3 November 2016 and 24 February 2017 with written submissions made by 17 March 2017. I will return to the appeals below.
Mr Bell’s appeal against dismissal of application for recovery of monies: 17 December 2013
Mr Bell appealed from a decision dated 17 December 2013 and made by Senior Member Corby at ACAT dismissing his application for the recovery of monies which the appellant claimed were owed to him arising out of an alleged employment relationship. Mr Bell had instituted two separate applications numbers XD 13/522 and XD 13/960. Senior Member Corby dismissed application XD 13/960, and ordered that all documents filed in that matter should be included as part of application XD 13/522.
The appeal was heard by Mr Chenoweth OAM, Acting Presidential Member. He dismissed the appeal on 9 October 2014 deciding:
(1)“ The tribunal is satisfied that in this case, the central issue for determination is the same as that determined by President Spender in XD 11/145. That issue is whether there was an employment agreement entered into between the appellant and the second respondent through the agency of the first respondent. Having been decided in the earlier proceedings, it is not open to the appellant to seek to re-litigate that question.”[11]
(2)No order as to costs.
[11] Bell v de Castella and Anor [2014] ACAT 65 at [28]
The decision reached by Presidential Member Spender had been that there was insufficient evidence to support Mr Bell’s contention that he was in an employment relationship with SmartStart but did find that there was an agreement between them relating to reimbursement of expenses.
Minister’s response to Mr Bell’s email dated 31 March 2015
Mr Bell wrote to the Minister for Indigenous Affairs, Mr Nigel Scullion, on 5 January 2015 regarding Mr de Castella’s funding for legal representation. The Minister responded in a letter dated 31 March 2015 and sent to Mr Bell by email:
“I am advised that there is no Commonwealth approval for Mr Robert de Castella’s organisations to use Commonwealth funding to meet the costs of the current legal proceedings surrounding Indigenous Marathon Project nor is there any evidence to date that this has occurred.
The Commonwealth, as represented by the Department of the Prime Minister and Cabinet, currently provides funding to Robert de Castella’s Smartstart for Kids Pty Ltd in the 2014/2015 funding year; the funding is to support the Deadly Fun Run Series and the National Deadly Championships. Funding is not provided to support the Indigenous Marathon Project.
The Commonwealth, as represented by the Department of Health, is no longer funding Robert de Castella’s Smartstart for Kids Pty Limited and ceased funding that entity on 24 June 2014.
The Commonwealth as represented by the Department of Health, now funds the Indigenous Marathon Project Foundation and it is a condition of that agreement that use of Funds for ‘the costs of any legal action or proceeding or to settle, or agree to consent orders in relation to, or otherwise resolved, any proceeding or application for reinstatement and/or wrongful dismissal by a current or former employee’ are prohibited and without any written agreement of the department. I am advised the Department of Health is not aware that any such written agreement has been provided.
I hope this clarifies the situation regarding the use of Commonwealth for funding for the legal proceedings underway.”[12]
[12] Exhibit F; Annexure C
Mr Bell said that he did not receive the Minister’s letter.
Mr Bell’s email to the Department of Prime Minister and Cabinet in June 2016
On 1 June 2016, Mr Bell wrote to the Department of Prime Minister and Cabinet (PM&C) querying Mr de Castella’s use of grant funds for his legal fees. On 27 June 2016, Ms Candice Milosevic, Intelligence & Assessment Team Fraud Control & Investigations, Governance, Audit and Reporting Branch, Ministerial Support Division in PM&C, replied to Mr Bell. Ms Milosevic wrote that PM&C takes all allegations of fraud seriously but only had jurisdiction to take action on matters related to funding by that Department. She referred to the letter written by the Hon Nigel Scullion responding to Mr Bell’s email dated January 2015 and enclosed a copy.
Mr Bell said that he had not received a copy of Mr Scullion’s letter. On 4 July 2016, he wrote to the Department asking for an explanation as to why he had never received Mr Scullion’s letter. Mr Bell said that he had not received a reply to his enquiry. Had he received that response, Mr Bell said, it would have assisted him greatly in his appeal against Senior Member Lennard’s costs decision.
Mr Bell’s correspondence with Mr Mundine in June and September 2016
On 7 June 2016, Mr Bell wrote to Mr Warren Mundine when he was Chair of the Prime Minister’s Indigenous Advisor Council, expressing his concerns about Mr de Castella’s unauthorised expenditure in the auditor’s review findings of 2012. He drew the Council’s attention to the funds that Mr de Castella had drawn from the IMP to pay for his legal fees in proceedings No. DT 11/27 in the ACAT. I do not have a copy of Mr Mundine’s reply dated 1 September 2016 but I will set out Mr Bell’s repetition of its contents:
“Thank you for your correspondence of 7 June 2016 regarding the ABC’s Four Corners story, aired on 6 June 2016, investigating the governance of Aboriginal organisations across Australia, and your concerns with the Indigenous Marathon Project. I apologise for the delay in responding. I note that you have also written to the Minister for Indigenous Affairs, Senator the Hon Nigel Scullion MP, and the Minister for Health, the Hon Susan Ley MP. Under its Terms of Reference, the Prime Minister’s Indigenous Advisory Council is tasked with providing advice to the Government on Indigenous affairs with a specific focus on practical changes to improve lives of Aboriginal and Torres Strait Islander communities. Unfortunately, the Council cannot advocate on behalf of individuals or organisations. I have been advised that the Department of Health has reviewed the funding arrangements with Indigenous Marathon Project and has applied all relevant legislative requirements that govern the use of Commonwealth funding to the agreement it has with the Indigenous Marathon Project. The Project continues to achieve results in promoting a healthy lifestyle, building self-belief, pride and self-worth amongst young Indigenous men and women. Thank you for taking the time to write. I trust this information is of assistance.”[13]
[13] Exhibit F at [50]
Judgment of the Supreme Court on 15 June 2018
On 15 June 2018, Penfold J handed down her judgment in Bell v de Castella[14] after hearing it over seven days between 14 November 2014 and 24 February 2017. Initially, she had reserved her judgment in May 2015 but Mr Bell had sought to reopen the matters so that he could tender documents he had obtained by making freedom of information applications.
[14] [2018] ACTSC 170; Penfold J
Due to various developments over the course of this time, the appeals had become a dispute between the parties about an alleged agreement that had been reached between them to settle the matter. Mr de Castella and SSFK sought a declaration that the agreement had been reached and an order for its specific performance. The events surrounding the alleged agreement were set out in the judgment of Penfold J and were, in summary:
(1)On 9 December 2015, the solicitor for Mr de Castella and SSFK wrote to Mr Bell offering to resolve the matter if he agreed to the dismissal of his appeals, all parties entered a deed of release and Mr Bell either paid $40,000 to “our client” in full satisfaction of “his” costs or paid Mr de Castella’s costs as assessed.
(a)The letter suggested that Mr Bell might like to pay the costs by instalments.
(b)The letter also advised Mr Bell that her client’s costs had increased and she assessed that, on a party/party basis, they were in the order of $77,000 to $80,000. It was clarified in the Supreme Court proceedings that this estimate related to all of the costs of Mr de Castella and SmartStart including those relating to the proceedings before Senior Member Lennard.
(2)Mr Bell did not accept the offer.
(3)On 3 February 2016, Mr Bell wrote to Professor Dick Telford, who had originally introduced Mr Bell and Mr de Castella to each other.
(a)Mr Bell wrote that he would agree to terms that he set out if he, Professor Telford and Mr de Castella met at a venue he nominated.
(4)Penfold J ordered that the parties engage in mediation on 25 October 2016 but the matter did not resolve.
(5)On 11 January 2017 and shortly before the last day of the hearing of the appeals by Penfold J on 24 February 2017, Senior Member Lennard of ACAT made a costs order, by consent, that Mr Bell pay “the respondent’s costs” in the amount of $15,750. The order was to take effect 14 days after a decision had been made on Mr Bell’s appeal to the Supreme Court.
(a)The parties agreed that Senior Member Lennard’s costs order would have no effect if Mr Bell were successful in his appeal to the Supreme Court against her costs order made on 27 September 2013.
(6)On15 June 2018, Penfold J declared that Mr Bell had entered an agreement with Mr de Castella and SSFK to the effect that Mr Bell would withdraw his appeal in the Supreme Court and all other actions, that he would sell his family home and pay Mr de Castella’s lawyers $88,000 and that, after they had shaken hands, Mr Bell would walk away. She refused to order specific performance of the agreement but ordered that Mr Bell pay half of the costs, as agreed or assessed, of the application made by Mr de Castella and SSFK for a declaration and order for specific performance.
THE SUBMISSIONS
Mr Bell submitted that the Department has acted in a manner that is inconsistent with its claim for legal professional privilege in relation to the document. He referred to Mann v Carnell.[15] Mr Bell put forward five bases for his claim that the Department had a strategy to conceal audit findings and all knowledge of its maladministration from the then incoming Minister for Indigenous Affairs, the Hon Nigel Scullion:
[15] [1999] HCA 66; (1999) 201 CLR 1; 168 ALR 86; 74 ALJR 378 at 13; 94; 384; Gleeson CJ, Gaudron, Gummow and Callinan JJ
(1)The evidence suggests that the information, for which exemption is sought, relates to:
(a)fraudulent expenditure or at least serious mismanagement by Mr Robert de Castella and his charity Rob de Castella’s SmartStart for Kids Limited (SmartStart) in spending grants received from the Department.
(b)serious flaws in the Department’s grant administration procedures in failing to detect the expenditure anomalies that occurred unchecked over a two year period between 2010 and 2012.
(2) The evidence suggests that the legal advice in the document was provided during 2012-2013 when Senior Member Jann Lennard of the ACT Civil and Administrative Tribunal (ACAT) formally approached the Department for information relating to Mr de Castella’s expenditure of the grants for the IMP in the matter that she was hearing at the time: Bell v de Castella and Rob de Castella’s SmartStart for Kids Limited[16] (DT11/27).
[16] DT11/27
(a)There is evidence to show that the Department intentionally delayed its formal response to Senior Member Lennard. Mr Bell submitted that the Department’s response concealed from her both the expenditure anomalies detected by the auditors in the IMP funds and the Department’s own seriously defective administration of those funds.
(b)The Department’s response, Mr Bell submitted, intentionally misled Senior Member Lennard to draw erroneous conclusions about the grant funds that were to the benefit of Mr de Castella and adverse to him.[17]
[17] Decision in DT11/27 delivered on 26 April 2013
(c)It is reasonable to infer that the legal opinion was intended to, and had the effect of, assisting the Department to mislead the Senior Member.
(3)Mr Bell submitted that there is evidence to suggest that the gist, substance and conclusion of the legal advice, for which exemption is claimed, was voluntarily or implicitly disclosed by the Department to Mr de Castella during the year 2012/2013.
(a)In DT11/27, Mr de Castella gave evidence, and his lawyer submitted, that the Department had authorised him to draw on grant funds given by the Department for the IMP to pay his legal costs against Mr Bell in those proceedings. A substantial amount of $27,342.57 was drawn in seven amounts over a 13 month period in 2011/2012.
(b)Among their comments in the documents released under the FOI Act in 122-1314, the auditors say of the amount of$24,342.57:
“Legal expenses relate to John Bell. Mr Bell was not an employee or paid directly by the SSKF, but by Good Oil. Legal expenses should not, therefore, be charged to our grant funds. If Mr Bell was an employee then it appears SSFK did not have proper employment contract. If so, this should not be an expense to the Commonwealth.”
(c)In the document in issue in this case, Mr Nathan Smythe states the following about the sum of $24,342.57:
“Use of project funds for purposes which are not sufficiently linked to the objectives of the project. In particular the review has identified that the project funds have been drawn to cover legal costs relating to the dispute with Mr Bell”
“audit findings that funds appear to have been used for purposes outside project parameters or without verification eg legal costs.”
(d)Mr de Castella, Mr Bell continued, gave evidence in DT11/27 that he had properly acquitted the Department’s grant funds in 2010/2012, involving hundreds of thousands of dollars for his personal remuneration as Project Director and for his remuneration as Project Coach.
(e)There is evidence to show that Mr de Castella met with the Department and its Legal Services Branch either during, or just after, the period that Mr Smyth’s “strategy was devised”.
(f)Mr Bell contended that Mr de Castella had subsequently used the knowledge obtained from meeting with the Department and its Legal Services Branch to gain unfair advantage over him in his lawyer’s costs submissions of 17 May 2013 in DT11/27.
(i)Mr de Castella had argued that he, Mr Bell, was a vexatious litigant, who was allegedly trying to financially damage the IMP submitting that:
“In the absence of a costs order against the applicant, the costs of defending the spurious allegations will be drawn from the funds, which could otherwise be used for the beneficial purposes that the second respondent is seeking to achieve.”
(ii)On 27 September 2013, costs were awarded by Senior Member Lennard on an indemnity basis against Mr Bell and in favour of Mr de Castella and his charity.
(iii)Mr Bell alleged that, while disclosing the substance of the advice about Mr de Castella’s expenditure anomalies, the Department would have sought to protect its legal advice about its own flawed grant administration procedures because disclosure to a grant recipient would not have been advantageous to it. This, Mr Bell submitted, is inconsistent with the maintenance of continued confidentiality. He relied on Bennett v Chief Executive Officer of the Australian Customs Service.[18]
[18] [2004] FCAFC 237; (2004) 140 FCR 101; 210 ALR 220; 57 ATR 52; 40 AAR 118; 80 ALD 247;
(4)Mr Bell submitted that the Department intentionally gave false and misleading information to the then Minister for Indigenous Affairs, the Hon Nigel Scullion, about Mr de Castella’s use of the funding for the IMP to pay his lawyers for the ACAT proceedings in DT11/27.
(a)Mr Bell said that he had not become aware of a letter dated 31 March 2015 and written to him by Mr Scullion until June 2016. Mr Bell’s appeal[19] against Senior Member Lennard’s costs order had been set down for hearing on the previous day, 30 March 2015, before Penfold J. The proceedings were adjourned to a further day of hearing on 26 May 2015.
(5)Mr Bell said that there is evidence to show that the IMP has, since its inception, been a high profile Indigenous Project that has enjoyed special ministerial and political favour.
(a)There is evidence to show that the then Minister for Sport, Senator Mark Abib, intervened to ensure that the IMP continued to receive Commonwealth funding even though it did not meet standard grant funding criteria.
(b)In 2013, there is evidence that the Department fully briefed the then Minister for Indigenous Health, the Hon Warren Snowden, on legal advice given to it in the strategy proposed by Mr Smyth and put in place to address Mr de Castella’s expenditure anomalies.
[19] Supreme Court proceedings SCA4 of 2014
The Secretary’s position is that the parts of the minute over which exemption has been claimed is legal advice given by officers of the Legal Services Branch of the Department in their capacity as its professional legal advisers and with the necessary degree of independence from the Department. He referred to previous cases in which the Tribunal has recognised the applicability of legal professional privilege in similar circumstances.[20] Once the legal adviser-client relationship has been established, the scope of the privilege is to be understood broadly. That is to say:
“legal advice is not confined to telling the client the law; it must include as to what should prudently and sensibly done in the relevant legal context.”[21]
[20] See for example Edwards and Secretary, Department of Health and Ageing [2011] AATA 147, [44]; Senior Member Britton; McKinnon and Secretary, Department of Health and Ageing [2004] AATA 1126; (2004) 85 ALD 699 at [111]-[112]; 722; Senior Member Beddoe
[21] “… In General Manager, WorkCover Authority of NSW v Law Society of NSW [2006] NSWCA 84 at [77]- [78], McColl JA quoted, with apparent approval, the observation of Taylor LJ in Balabel v Air India [1988] Ch 317 at 330, that ‘legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context’. …”: Sharjade Pty Ltd v RAAF Landings [2008] NSWC 151; Rein AJ
Copies and summaries of privileged documents are also privileged:
“… [under] the common law…‘privilege extends to any document prepared by a lawyer or client from which might be inferred the nature of the advice sought or given’: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 569 per Gummow J. This is simply a corollary of the proposition that privilege protects communications and not documents per se: Propend, Dawson J at 515, Toohey J at 525, Gaudron J at 543, McHugh J at 552 and Gummow J at 569. It therefore attaches not only to documents which constitute a privileged communication but any documents from which a privileged communication might be disclosed or inferred.”[22]
[22] [2008] NSWC 151 at [3(d)]
It is apparent from the face of the Minute that the parts of the document over which the s 42 exemption is claimed summarises and reveals the contents of legal advice in part and, in other parts allows inferences to be drawn as to the content of the legal advice either by cross-referencing the elements of that advice or by revealing the nature of recommended actions proposed to be taken in light of that legal advice and in connection with a recommendation that the Legal Services Branch continue to be involved in the way forward.
CONSIDERATION
Legal professional privilege?
Section 42(1) of the FOI Act provides that a document is exempt “… if it is of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege.”Legal professional privilege is a concept known to the common law and its essence was explained in the following passage from Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission[23] (Daniels Corporation):
“ It is now well settled that legal professional privilege is a rule of substantive law … which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.”[24]
[23] [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 77 ALJR 40; Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ
[24] [2002] HCA 49; (2002) 213 CLR 543; 192 ALR 561; 77 ALJR 40 at [9]; 552; 564; 42-43 per Gleeson CJ, Gaudron, Gummow and Hayne JJ (citation omitted)
Reference is made to the “dominant purpose” of the client and the lawyer and Kenny J emphasised in Commissioner of Taxation v Pratt Holdings Pty Ltd[25] that:
“ The dominant purpose is not the same as the ‘primary’ or the ‘substantial’ purpose: see Grant v Downs at CLR 678; ALR 580-1 per Barwick CJ. The ‘dominant’ purpose may be described as the ruling, prevailing, paramount or most influential purpose …. The ‘dominant purpose’ brings within the scope of the privilege a document brought into existence for the purpose of a client being provided with professional legal services notwithstanding that some ancillary or subsidiary use of the document was contemplated at the time …”[26]
[25] [2005] FCA 1247; (2005) 225 ALR 266; 2005 ATC 4903; 60 ATR 466
[26] [2005] FCA 1247; (2005) 225 ALR 266; 2005 ATC 4903; 60 ATR 466 at [30]; 279; 4915-4916; 478-479 per Kenny J
The dominant purpose is that of giving “legal advice” or of giving or obtaining legal services. As Young J said in Australian Wheat Board v Cole (No 5):[27]
“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 …”[28]
[27] [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651
[28] [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [44]; 45; 663 (citations omitted) per Young J and see also Sharjade Pty Ltd v RAAF Landings [2008] NSWSC 151 at [3]; Rein AJ
How that dominant purpose is to be ascertained was considered by Young J in the earlier case of AWB Limited v Honourable Terence Rhoderic Hudson Cole:[29]
“ The authorities accept that 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: see Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [35] per Finn J. I would add that where the document is immediately communicated by its author to several other persons, including the author’s legal adviser, by a circular email (which is the case here), it is also important to ask what was the dominant purpose of that email communication.[30]
[29] [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46
[30] [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46 at [107]; 411; 767-768; 71
The dominant purpose will ordinarily be that of the author of the document but it may not be. When, for example, a solicitor commissions an expert report, it will be the solicitor’s purpose in commissioning the report that is the relevant purpose and not the expert’s in writing it.[31] If a solicitor directs that a document be copied, it will be his or her purpose in so directing that is relevant in determining whether it was for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. In those circumstances, the purpose for which the document originally came into existence is not relevant and it may be that the original document is not subject to legal professional privilege but the copy is.
[31] Hartogen Energy (in liq) v Australian Gas Light Co [1992] FCA 322; (1992) 36 FCR 557; 109 ALR 177 at [39]-[40]; 568-569; 187 per Gummow J
Although not addressed in these cases, I would also note that, while the concept of legal advice is wide as Young J observed, it is not without boundaries. It extends to professional legal advice as to what a party should prudently or sensibly do in the relevant legal context, as Rein AJ said in Sharjade v RAAF Landings, but it cannot extend to, for example, legal research prepared for a judicial or quasi-judicial officer for the purposes of being incorporated in a reasons for judgment or decision. Determining or ascertaining the law is an essential element in duties of the judicial or quasi-judicial officer respectively. They cannot seek advice and must find their guidance in the submissions of, and exchange with, parties and from their own analyses. Their position is to be contrasted with the task of a Minister or officer of a Department who must come to a decision. A Minister or an officer can seek legal advice as to what the law is and how it may apply in the circumstances of an issue they must decide. The law, and acting within its boundaries, are essential parts of the decision-making process but neither a Minister nor an officer is charged with responsibility for determining it, as is a judicial officer, or ascertaining it, as is a quasi-judicial officer, within certain boundaries. A Minister or an officer may seek legal advice as to the law.
A. The rationale underpinning legal professional privilege and section 42
The rationale for the privilege appears in the judgment of Advocate General Sir Gordon Slynn in AM & S Europe Ltd v Commission of the European Communities:[32]
“Whether it is described as the right of the client or the duty of the lawyer, this principle has nothing to do with the protection or privilege of the lawyer. It springs essentially from the basic need of a man in a civilised society to be able to turn to his lawyer for advice and help, and if the proceedings begin, for representation; it springs no less from the advantages to a society which evolves complex law reaching into all the business affairs of persons, real and legal, that they should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.”[33]
[32] [1983] QB 878; 1 All ER 705
[33] [1983] QB 878; 1 All ER 705 at 913; 732-733
There are, of course, competing public interests that would favour disclosure but the balance has been found to favour non-disclosure as the Full Court of the Federal Court explained in Esso Australia Resources Ltd v Sir Daryl Dawson:[34]
“ Legal professional privilege has long been the subject of controversy. It operates to exclude evidence not because of its unreliability but to advance other objectives. Jeremy Bentham regarded the exclusion of probative evidence as ‘one of the most pernicious and most irrational notions that ever found its way into the human mind’: J S Mill (ed), Rationale of Judicial Evidence (1827), pp 193-194. But the judgment of the common law has been that while the central objective of the legal system is the search for truth, it is more important that some communications be kept secret. In the case of legal professional privilege, secrecy is defended on the basis that it will promote the administration of justice. ‘The systemic benefits of the privilege are commonly understood to outweigh the harm caused by excluding critical evidence’: Swidler v United States (1998) 141 L ed (2d) 379 at 389 per O’Connor J (in dissent).”[35]
[34] [1999] FCA 363; (1999) 87 FCR 588; 162 ALR 79; Black CJ, Sundberg and Finkelstein JJ
[35] [1999] FCA 363; (1999) 87 FCR 588; 162 ALR 79 at [26]; 596; 87
In the context of the exemption prescribed in s 42 of the FOI Act, the Explanatory Memorandum to Freedom of Information Bill 1981 states that the exemption:
“… will prevent freedom of information legislation’s being used to compel the Commonwealth to disclose its hand in pending or likely litigation or to circumvent the ordinary rules of discovery applied by the Courts.”
B. Identifying the relationship that may give rise to legal professional privilege
B.1 General principles
The authorities establish that legal advice must be given by a legal adviser in the context of a professional relationship which secures the advice an independent character.
(1)“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. …”[36]
(2)“ The authorities recognise that in order to attract privilege the legal adviser should have an appropriate degree of independence so as to ensure that the protection of legal professional privilege is not conferred too widely. Commercial reality requires recognition by the courts of the fact that employed legal advisers not practising on their own account may often be involved to some extent in giving advice of a commercial nature related to the giving of legal advice. Such involvement does not necessarily disqualify the documents relating to that role from privilege. The matter is necessarily one of fact and degree and involves a weighing of the relative importance of the identified purposes.
It is well settled that simply to label a document as being ‘prepared for legal advice’ or as ‘privileged’ or as being ‘without prejudice’ is of itself insufficient to justify the privilege. The Court will look to the substance of the matter, having regard to the content, context and evidence as well as the form of the document.”[37]
(3)“ The content of the requirement that a legal adviser be independent is understandably less stringent than the requirement that, for example, a judge be independent. However, it is informed by the same notions of absence of fear or favour. The concepts of independence and objective impartiality are closely linked … An independent legal adviser is one who can bring a disinterested mind to bear on the subject-matter of the legal advice. In the words of Brennan J in Waterhouse [sic], what is required is a legal adviser who is able to be ‘professionally detached’ in giving the advice.”[38]
(4)Admission to practice and a practising certificate may be relevant in determining whether this is so but neither may be determinative:
“… It seems to us that, while the possession of a certificate is an important factor that would go to establishing the statutory requirement of a confidential communication for the dominant purpose of providing legal advice, to hold that it is conclusive is incorrect. A legal adviser in government or commercial practice may hold a practising certificate, and yet in some aspects of his or her employment, that person may act in a manner inconsistent with the assertion of legal professional privilege. It would not be an answer to the complaint about the conduct of the DLO [Defence Legal Officer] who is said to have handed over the files of their advices to the respondent to the superior officer to say that their conduct met professional standards merely because they held a practising certificate. Equally, a legal adviser may act in an entirely professional manner, generating a claim to client legal privilege, in the absence of a practising certificate.”[39]
[36] Australian Wheat Board v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [44]; 46; 664 per Young J. Justice Young then referred to other authorities querying whether they required that the legal adviser be admitted to practice or must hold a current practising certificate. The issues in that case did not turn on whether the Australian Wheat Board’s legal advisers were admitted to practice or not or on their independence or otherwise and his Honour did not address the matter further. I have analysed each of the cases to which he referred in Re Philip Morris and Prime Minister [2011] AATA 556; (2011) 122 ALD 619 at [83]-[100]; 647-654
[37] Seven Network Ltd v News Ltd [2005] FCA 142 at [5]-[6] per Tamberlin J
[38] Rich v Harrington [2007] FCA 1987; (2007) 245 ALR 106 at [40]; 115 (citations omitted) per Branson J
[39] Commonwealth v Vance [2005] ACTCA 35; (2005) 158 ACTR 47; 224 FLR 243 at [31]; 54-55; 252
B.2 In-house lawyers in government agencies
As a general proposition, legal professional privilege may be claimed in legal proceedings in relation to advice sought from and given by a lawyer employed by the government but only if the professional relationship between the lawyer and the government agency seeking advice has the necessary quality of independence. In Waterford v The Commonwealth of Australia[40] (Waterford), the High Court considered the relationship of client and legal adviser in the context of correspondence passing between the Attorney-General and the Treasurer and between officers of the then Deputy Crown Solicitors’ office and officers of the Treasury. Mason and Wilson JJ held that:
“… there is no reason to place legal officers in government employment outside the bounds of legal professional privilege. The proper functioning of the legal system is facilitated by freedom of consultation between the client and the legal adviser. … To our minds it is clearly in the public interest that those in government who bear the responsibility of making decisions should have free and ready confidential access to their legal advisers. Whether in any particular case the relationship is such as to give rise to the privilege will be a question of fact. It must be a professional relationship which secures to the advice an independent character notwithstanding the employment.”[41]
[40] [1987] HCA 25; (1987) 163 CLR 54; 71 ALR 673; 61 ALJR 350 Mason, Wilson and Brennan JJ and Deane and Dawson JJ dissenting
[41] [1987] HCA 25; (1987) 163 CLR 54; 71 ALR 673; 61 ALJR 350 at 62; 677; 352
Brennan J was more circumscribed in his views and accepted only that officers of the Attorney-General’s Department or of the Commonwealth Crown Solicitor’s Office did not lack the independence that is essential if legal professional privilege is to attach to documents brought into existence for the purpose of their giving advice or for the purpose of obtaining advice from them. They had given advice to officers of The Treasury. The evidence to which he referred in reaching that conclusion was that:
“The Commonwealth, State and Territorial statutes under which officers are employed in the offices of Crown Solicitors, the Australian Government Solicitor and in the Departments of the respective Attorneys-General give them a certain security of tenure and those statutes would be construed, in the absence of contrary express provisions, as leaving these officers completely professionally independent. The protection of the respective Attorneys-General, as the first Law Officers of the Crown, should extend to all of these officers, so that none of them will be affected in the performance of their professional duty by any sense of loyalty or duty to, or hope of reward from, the government of the day. Counsel for the appellant expressly declined to argue that the Department of the Treasury’s advisers in this case lacked the independence which the safeguards to which Mason J. and I referred are intended to secure. I would therefore reject the submission that the officers of the Attorney-General's Department or the Commonwealth Crown Solicitor’s Office lack the independence which is essential if legal professional privilege is to attach to documents brought into existence for the purpose of their giving advice or for the purpose of obtaining advice from them. …”[42]
[42] [1987] HCA 25; (1987) 163 CLR 54; 71 ALR 673; 61 ALJR 350 at 72-73; 685; 356-357
Legal advice given by the Legal and Advice Branch of the Office of Workplace Services (OWS) arose for consideration in the case of Rilstone v BP Australia Pty Ltd[43] (Rilstone). Justice Besanko found that the OWS was an executive agency within the responsibility of the Minister for Employment and Workplace Relations. The documents over which legal professional privilege was claimed had been created during the course of an investigation carried out by the OWS. They were created in the exercise of statutory investigatory powers under the Workplace Relations Act 1996.
[43] [2007] FCA 1557
Justice Besanko was not satisfied on the evidence that the documents were created for the dominant purpose of seeking legal advice from OWS’s Legal and Advice Branch but he was satisfied on the evidence that it had the necessary degree of independence. His Honour referred to the evidence that the Legal and Advice Branch was the Workplace Ombudsman’s central legal division providing nationwide legal advice to inspectors and senior management. It was responsible for engaging and instructing external legal providers such as the Australian Government Solicitor and other legal providers engaged by the Workplace Ombudsman. He concluded:
“In this case the applicant might have put forward more detailed evidence as to how the Legal and Advice Branch operated and its role in the OWS organisation. However, in my opinion, this case has similarities with the facts in Waterford and … the necessary degree of independence has been established or, put another way, it has been established that the Legal and Advice Branch was a legal adviser for the purposes of legal professional privilege.”[44]
[44] [2007] FCA 1557 at [26]
In Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No. 2)[45] (Telstra v MCITA), Graham J came to the contrary conclusion in relation to advice given by lawyers who were employees of Telstra. He noted that:
“ No evidence whatsoever has been led by Telstra to establish the role which the various legal practitioners performed within Telstra. In particular, no evidence has been advanced to disclose the measure of independence of the legal practitioners in question and their ability to provide impartial legal advice, given the roles they have had to perform.”[46]
and continued:
“In my opinion an in-house lawyer will lack the requisite measure of independence if his or her advice is at risk of being compromised by virtue of the nature of his employment relationship with his employer. On the other hand, if the personal loyalties, duties and interests of the in-house lawyer do not influence the professional legal advice which he gives, the requirement for independence will be satisfied.”[47]
Later that same year, Branson J considered the same question in Rich v Harrington[48] in relation to advice given by the OGC located in PricewaterhouseCoopers (PWC). Her Honour found that the person holding the position of General Counsel was a partner of PWC and, as did each of the solicitors in the OGC, held a current practising certificate. That Office operated as a separate unit within PWC and legal advice was provided with the same level of objectivity as would be expected of external lawyers. It is located separately from PWC’s business units, its documents and files are maintained separately and its offices are capable of being locked. The office provided legal advice and legal services to PWC on all issues that touched the firm or required legal advice including regulatory enquiries, litigation, contract reviews and transactions. When necessary and appropriate, it briefed external lawyers and counsel to support it in its role and to provide external legal advice and services.
The only comment made by Branson J on this evidence was that:
“… It may be that as in-house lawyers, including corporate counsel, play an increasingly important role in advising and providing other legal services to their employers and firms, the common law has come to accept that the requisite independence can be ensured by measures of the kind adopted by OGC …”[49]
[49] [2007] FCA 1987; (2007) 245 ALR 106 at [56]; 119
Her Honour declined, however, to decide whether the measures were enough in that case because she had to decide that question in the context of the particular advice that was claimed to attract legal professional privilege. The advice was given in respect of allegations and claims given by one of PWC’s partners, Ms Rich, against others in the firm. Branson J said:
“58 In reaching a decision as to whether the relationship between OGC and the respondents was such as to secure to OGC’s advice concerning
Ms Rich’s allegations and claims an independent character, I am not required to speculate about how General Counsel, or other solicitors in OGC, in fact approached the giving of that advice (Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 per Gleeson CJ, McHugh, Gummow and Hayne JJ at [7]). It may be that General Counsel and each solicitor in OGC was fully conscious of, and capable of avoiding, the insidious influences of factors such as loyalty to individual partners and to the firm, including its leadership, concern for the reputation of the firm and the reputations of individual partners in the firm and other like matters. The critical question is whether the relationship between OGC and the respondents with respect to Ms Rich’s allegations was one of professional detachment.59 To answer the above question it is necessary to give consideration to the nature of Ms Rich’s allegations and the significance that they might have for General Counsel and the OGC generally. As mentioned above, they were made by one partner against other partners. It seems uncontroversial that they were of a kind capable of tarnishing the reputation of the firm of which the OGC is a part. They cast aspersions of a personal, rather than a purely professional kind, on the General Counsel’s partners including those partners who comprised the leadership of her firm. The General Counsel and the Deputy General Counsel were themselves likely respondents in the litigation in prospect. Because of its likely subject matter, that litigation, should it eventuate, could reasonably be expected to attract a high level of media interest of a relatively sensational kind. For these reasons I conclude that
Ms Rich’s allegations were by reason of their content inherently likely to engage the personal loyalties and the duties and interests of all partners of PwC – and probably many employees of the firm as well.60 I therefore conclude that, having regard to the nature and significance of the allegations raised by Ms Rich in her letter of 2 July 2004, the relationship between OGC and the respondents was not such as to secure the advice of the OGC concerning Ms Rich’s allegations the objectively independent character necessary to support the respondents’ claim of client legal privilege. The OGC was not in a position to give professionally detached advice to the respondents concerning allegations of the character of those made by Ms Rich.”[50]
[50] [2007] FCA 1987; (2007) 245 ALR 106 at [58]-[60]; 119-120
Branson J went on to say that once the necessary degree of independence has been established and:
“… 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 …. In Kennedy v Wallace,[[51]] 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.
…”[52]
[51] (2004) 142 FCR 185 per Black CJ and Emmett J
[52] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [44]; 45; 663
The issue arose again before Katzman J in Dye v Commonwealth Securities [No 5][53] (Dye). Her Honour reviewed the cases of Waterford and Rich v Harrington, and expressed the view that:
“ With respect, her Honour might have overstated the content of the requirement that legal professional privilege will arise only where the advice has ‘an independent character’. Her Honour applied the decision of the High Court in Waterford v Commonwealth …, a case concerning legal officers employed by the Commonwealth providing legal advice to the Commonwealth. A close examination of the judgments in that case does not seem to bear her Honour out.”[54]
[53] [2010] FCA 950
[54] [2010] FCA 950 at [15]
After reviewing the authorities, Katzman J said:
“ Thus, with the greatest respect, I doubt that the decision in Waterford requires anything more than that the legal adviser be professionally qualified and acting in a professional capacity. I note that in AWB v Cole (No 5) [2006] FCA 1234, 234 ALR 651 at 664 [44], to which her Honour did not refer, Young J considered that the question of independence involved no more than an inquiry into whether the lawyer was consulted in her or his professional legal capacity, although his Honour also pointed out that some cases have added a requirement that the lawyer who provided the advice must be admitted to practice.”[55]
Given the position taken by the parties, Katzman J concluded that she did not have to decide the issue.[56]
[55] [2010] FCA 950 at [19]
[56] [2010] FCA 950 at [20]
In more recent times, the has been considered in Archer Capital 4A and Sage Group plc (No 2).[57] Wigney J also considered Waterford and the views expressed by the Justices. I will set out only one passage in relation to that:
“Dawson J in Waterford, considered a submission that for communications between a lawyer and client to be privileged, the relevant legal adviser must be independent of the client. His Honour referred (at p 95) to an observation made by the European Court of Justice in AM & S Europe Ltd v Commission of the European Communities [1983] QB 878 which drew a distinction between independent and employed lawyers. Dawson J said, in relation to that distinction:
Whilst there is something to be said for the distinction drawn from that passage between independent and employed lawyers, it is not a statement of the position at common law and there is authority in this Court and elsewhere for the proposition that legal professional privilege may attach to communications passing between salaried legal adviser and his 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. (Emphasis added)”[58]
[57] [2013] FCA 1098; [2013] 306 ALR 384, [59]-[73]; 398-401
[58] [2013] FCA 1098; [2013] 306 ALR 384, [64]; 399
His Honour referred also to other authorities including Australian Hospital Care (Pindara) Pty Ltd v Duggan,[59] Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd[60] and Seven Network Ltd v News Ltd[61] as well as Dye. He concluded:
“ I doubt that much turns on the apparent difference of opinion of Katzmann J in Dye and Branson J in Rich. Whilst Branson J considered that the requirement of independence was separate to the requirement that the communication meet the dominant purpose test, it is difficult to see how the two elements are not inextricably linked. A communication between a lawyer and his or her employer is unlikely to satisfy the dominant purpose test if the lawyer was not employed as a lawyer (that is, the relationship between the lawyer and the employer was not professional) or the lawyer was not consulted in his or her professional capacity as a lawyer (for example, if they were consulted to provide commercial advice, or provide an administrative service, or were consulted as a partner or officer of the firm or company, not as a lawyer). A communication between the lawyer and his or her employer in those circumstances would not be privileged because it would not meet the dominant purpose test, not because the lawyer was not independent. On the other hand, if the relationship between the employer and lawyer was professional (in the sense that he or she was employed as a lawyer) and they were consulted in that professional context to provide legal advice, the resulting communication is likely to satisfy the dominant purpose test. It is difficult to see any reason in principle why to attract privilege in those circumstances it would be necessary to also satisfy some element of independence on the part of the employed lawyer, for example, by proving that the lawyer was not subject to pressure or other interference arising from the employment relationship. Like Katzmann J, I doubt that Waterford establishes that there is a separate or distinct requirement to prove independence in the case of privilege claims involving in-house lawyers.
Were it necessary for me to decide, I would err on the side of concluding that there is no separate requirement of independence in the case of privilege claims where the relevant lawyer is an employed or in-house lawyer. The better view is that any requirement of independence on the part of an in-house lawyer is an aspect of the relationship between the lawyer and the employer (client) and the capacity in which the lawyer is consulted. Legal professional privilege will attach to a confidential communication between an employer and its employed solicitor if it is established that the communication arises as a result of the employer consulting the employed solicitor in a professional capacity in relation to a professional matter that arises from the relationship of lawyer and client. In my opinion it is preferable to approach the issue in this way, rather than relying on presumptions and evidentiary onuses of the sort referred to by Gillard J and Boddice J in, respectively, Australian Hospital Care and Aquila Coal.”[62]
[59] [1999] VSC 131; Gillard
[60] [2013] QSC 82; Boddice J
[61][2005] FCA 1551; (2005) 225 ALR 672; Graham J
[62] [2013] FCA 1098; [2013] 306 ALR 384, [72]-[73]; 401
It seems to me that the weight of authority favours a more liberal approach in which regard must be had to the circumstances in which the particular legal advice was given and whether they are such that it attracts legal professional privilege. Relevant to that consideration will be such matters as the nature of the employment relationship between the employer and the employed in-house lawyer and the duties of the in-house lawyer for they are relevant to establishing that he or she acted in a professional capacity in relation to a professional matter arising from a relationship of lawyer and client.
A.4 Identifying documents that may be subject to legal professional privilege
Legal advice is not given in a vacuum but in a context of events or matters passed or contemplated. Information about those events or matters may need to be gathered by others and that information may include the views of other professionals on them. Legal professional privilege recognises these contextual realities and:
“… 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 … 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 …”[63]
[63] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [44]; 46; 663-664 citations omitted
Three points arise from this statement:
(1)The actual form of the communication or the recording of the legal advice is irrelevant.[64]
(a)“… [L]egal professional privilege extends to any document prepared either by the client or the legal adviser from which the nature of the advice sought, or given, might be inferred …”.[65]
(b)“… [I]t must be kept firmly in mind that the privilege protects confidential communications, and not documents as such. As Dawson J said in Propend at 515, ‘to say that a document is privileged is merely a shorthand way of saying that the communication constituted by the document is privileged’ …”[66]
(c)“… The question whether privileged communications will be disclosed by virtue of the disclosure of another document, such as a draft pleading, draft agreement or draft witness statement, raises a question of objective fact that depends on what the other document actually states or conveys, either explicitly or as a matter of reasonable inference. … [T]he question is whether the disclosure of the document in question will directly reveal, or allow its reader to infer, the actual content or substance of a privileged communication.”[67]
(2)The fact that the privilege extends to notes and other material brought into existence for the purpose of communication to the lawyer means that documents that are copied for that purpose may come within it even though the original documents were not written for that purpose and will not themselves be subject to the privilege.[68]
(3)A person may object to producing part of a document on the ground of legal professional privilege provided it is possible to isolate the privileged material from the remainder of the document.[69]
[64] Commissioner of the Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501; 141 ALR 545; 71 ALJR 327; 35 ATR 130 at 553; 584; 356; 167 per McHugh J
[65] AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46 at [131]; 417; 773; 76 per Young J
[66] AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46 at [102]; 410; 766-767; 69-70 per Young J
[67] AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571; (2006) 152 FCR 382; 232 ALR 743; 91 ALD 46 at [132]; 417; 773; 76-77 per Young J
[68] Commissioner of the Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501; 141 ALR 545; 71 ALJR 327; 35 ATR 130 at 509-510; 549-550; 331; 134-135 per Brennan CJ; citations omitted
[69] Grofam Pty Ltd v ANZ Banking Group [1993] FCA 374; (1993) 43 FCR 408; 116 ALR 535; 26 ATR 174; 93 ATC 4672; 31 ALD 323 at [17]-[19]; 414-415; 542-543; 180-181; 4,677-4,678; 328-329
A.5 Legal professional privilege may not be claimed if it has been waived
The person entitled to claim the privilege may waive it, either intentionally or by implication:[70]
[70] Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475; 69 ALR 31; 61 ALJR 92 at 481; 34; 93-94 per Gibbs CJ and at 493; 43; 99 per Deane J
(1)“… [W]here there is no intentional waiver the question whether a waiver should be implied depends on whether it would be unfair or misleading to allow a party to refer to or use material and yet assert that that material, or material associated with it, is privileged from production.”[71]
[71] Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475; 69 ALR 31; 61 ALJR 92 at 481; 34; 94 per Gibbs CJ and see also Director of Public Prosecutions (Commonwealth) v Kane (1997) 140 FLR 468 at 478-485 per Hunt CJ at CL
(2)“… What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.”[72]
[72] Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1; 168 ALR 86; 74 ALJR 378 at [29]; 13; 94; 384 per Gleeson CJ, Gaudron, Gummow and Callinan JJ
(3)“… [I]t is well established that a voluntary disclosure of the gist, substance or conclusion of legal advice will amount to a waiver in respect of the whole of the relevant advice.”[73]
[73] Australian Wheat Board v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [163]; 76; 693 (citations omitted). If, for example, an agency were to disclose to the Tribunal legal advice it had obtained on a particular matter, that would amount to voluntary disclosure and the agency would be taken to have waived any claim it might otherwise have had for legal professional privilege.
(4)The mere fact of disclosure to a third person, though, does not of itself amount to waiver[74] but:
“ Whether, in a given context, a limited disclosure of the existence, and the effect, of legal advice is inconsistent with maintaining confidentiality in the terms of advice will depend upon the circumstances of the case. As Tamberlin J said in Nine Films and Television Pty Ltd v Ninox Television Ltd …[[75]], questions of waiver are matters of fact and degree. …”.[76]
(5)Mere reference to legal advice in another document such as pleadings in civil litigation does not of itself amount to waiver of the privilege although full disclosure of its contents will.[77]
(6)“ It would, of course, be a different case if the documents and information that the Commonwealth relies upon were disclosed under legal compulsion. On any view, the fact that documents and information were disclosed under compulsion would be very relevant to the question whether the person claiming privilege had engaged in inconsistent conduct. There is, moreover, authority to the effect that a production of documents or evidence under compulsion will not result in any waiver of privilege: Goldman v Hesper [1988] 3 All ER 97; Trans America Computer Co Inc v IBM Corp 573 F (2d) 646 at 651 (1978).”[78]
(7)“… If it is conceded, as it must be, that a party upon whom a witness statement is served may use that statement in any way within the context of those proceedings (that is the whole reason why it is filed and served), it follows that it is conduct ‘inconsistent with the maintenance of the confidentiality which the privilege is intended to protect’ (Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [29]) and an implied waiver of privilege has occurred. … [T]he filing and service operates as a complete, not simply limited, waiver of legal privilege.
17 To put the proposition in different terms, if ‘it is in the other side’s power to destroy the privilege entirely,’ … it can no longer be said that the original holder can reasonably expect any continued confidentiality. In such circumstances, the existence of the privilege cannot be made to turn on whether the other side in fact places the document into evidence or uses it for examination – either legal privilege exists or it does not, and either the client controls it or they do not: Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 at [21] … In other words, once it is found that the original holder of the privilege cannot control further dissemination of the document, the privilege is destroyed as a matter of law without further inquiry into whether the communication was in fact disseminated.
18 This is not to say that there could never be something less than a full waiver of privilege; rather, the point is that for there to be only a limited waiver, the original holder must still retain full control as to further dissemination of the document. So, for example, providing a witness statement to a party but subject to conditions that the party may use it only for internal purposes, may not read it in court, may not place it into evidence and may not otherwise rely on it in examination or the proceedings generally might constitute a limited waiver only: see Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83, 96 (stating that the waiver ‘can be limited so that it applies only in relation to particular persons, materials or purposes’); Goldman v Hesper [1988] 3 All ER 97 (cited in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [29] for the proposition that disclosure ‘for a limited and specific purpose’ will not lead to loss of the privilege).”[79]
[74] Thomason v Campbelltown Municipal Council (1939) 39 SR (NSW) 347 at 355 per Jordan CJ cited with approval in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1; 168 ALR 86; 74 ALJR 378 at [30]; 14; 95; 385 per Gleeson CJ, Gaudron, Gummow and Callinan JJ
[75] [2005] FCA 356; (2005) 65 IPR 442 at [26]; 447
[76] Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275; 249 ALR 1; 82 ALJR 1288 at [49]; 298-299; 17; 1302
[77] Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475; 69 ALR 31; 61 ALJR 92 at 481; 34; 94 per Gibbs CJ
[78] Australian Wheat Board v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30; 234 ALR 651 at [138]; 69; 686
[79] Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 88; (2008) 246 ALR 137 at [16]-[18]; 142-143
Are the passages in the Minute subject to legal professional privilege?
Mr Roddam has given evidence regarding the circumstances in which legal advice is prepared within the Department. It is currently given by officers of the Department who have practising certificates, report to the Department’s General Counsel and who provide other officers in the Department with legal advice, assistance and litigation services. On the basis of the references to it in the Minute, I find that advice had been given to officers in the Department, if not Mr Smyth directly, by the Legal Services Branch of the Department. While I have evidence as to the way in which its successor, the Legal and Assurance Division, is organised and the qualifications of its officer, I do not have any evidence of that sort relating to the Legal Services Branch as it was established in the past.
What I do have is the substance of the advice sought from the Legal Services Branch and a summary of the advice given by it in response. Having regard to the nature of the advice sought and the advice given, I am satisfied that the communications between the officer or officers and the Legal Services Branch are concerned with legal issues that required the Department’s attention following the audit of IMP and with resolution of the future of the project and the consequential resolution of problems in order to avert further inefficiencies. I am satisfied that the Branch’s advice was sought following the Department’s receipt of the audit report regarding the IMP. That is clear from the passages of the Minute that I have set out above.
The advice was sought from, and given by, a separate Branch of the Department. Mr Roddam’s searches of the Department’s records disclosed no evidence of any advice given by the Legal Services Branch on the IMP’s having been distributed as a general matter of course or at all. There is nothing to suggest that the legal advice has been shown to Mr de Castella or to anybody connected with SSFK. What was clear to Mr de Castella and SSFK was that the audit report had found that funds of the IMP had been used for purposes not sufficiently linked to the project. Funds used to cover legal costs relating to the dispute with Mr Bell were used as an example in the Minute.
The audit had been made known much earlier. Mr Bell himself had sought it and its results were referred to by Mr Machutta in her letter dated 14 May 2012. Mr Bell refers to the auditor’s findings that the legal costs should not have been paid from the IMP funds. That is a view repeated by Mr Smyth in the Minute. I find, as Mr Bell asserts, that the Department met with Mr de Castella sometime after the date of the Minute. The way forward identified in the Minute and to which Mr Bell has had access states that it is critical that there be such communication between the Department and Mr de Castella and those associated with him. There is nothing in that communication, however, to suggest that the Department disclosed any part of the legal advice it had obtained to Mr de Castella or to those associated with him or with SSFK.
Mr Bell refers to evidence given by Mr de Castella in the proceedings in ACAT proceedings No. DT 11/27 and asserts that Mr de Castella had an unfair advantage because of his meetings with the Department including its Legal Services Branch. He states that Mr de Castella’s lawyer had submitted to ACAT that, in the absence of a costs order against Mr Bell, the funds to pay his client’s costs would be drawn from the IMP funds. He links that submission with Senior Member Lennard’s decision to award costs against him.
Senior Member Lennard’s reasons for making her costs decision makes no reference to any submission in the nature of that recalled by Mr Bell. A reading of her reasons shows that she focused solely on the way in which Mr Bell had conducted his case. She noted that no one factor was determinative of her decision but she was satisfied that Mr Bell’s conduct caused unreasonable delay or obstruction before or while the Tribunal was dealing with his application. He had persisted in bringing the matter which, to his knowledge, had little or no chance of success. Senior Member Lennard elaborated upon her findings and said that “… It would be manifestly unjust should the applicant be able to misuse the forum provided by a ‘no cost’ jurisdiction to pursue Mr de Castella in this manner and it would be equally unjust for the respondents to be left to pay of their own considerable costs in defending a vindictive, frivolous and vexatious prosecution. …”.[80] She went on to elaborate further upon her view.
[80] [2013] ACAT 66 at [18]
Just as Senior Member Lennard was focused on Mr Bell’s behaviour regarding the conduct of his application in the ACAT, Penfold J was focused on Mr Bell’s agreement with Mr de Castella regarding costs. That is to say, the appeal before Penfold J was resolved in light of Mr Bell’s own actions in making the offer to Mr de Castella regarding the payment of costs. Mr de Castella accepted Mr Bell’s offer and, in summary, the Supreme Court found that was an end of the matter. Just as the funding arrangements under the IMP had been irrelevant in the costs decision of Senior Member Lennard, they were equally irrelevant in the appeal from her decision. Whether the Department knew about the proceedings or did not know is of no consequence.
Applications to the ACAT and the Supreme Court as well as to other tribunals have not worked out for Mr Bell as he would have liked. There is nothing, however, that suggests that the Department has revealed the legal advice it was given by its own Legal Services Branch or that it has used that advice in a way that is inconsistent with the maintenance of legal professional privilege. Finally, I note that there is nothing in the evidence that hints at, let alone suggests, that the Department has misled any Minister of the Commonwealth regarding the payment of Mr de Castella’s legal costs and those of SSFK or regarding the funding of IMP.
DECISION
For the reasons I have given, I affirm the decision of the Department dated 22 February 2018 refusing to give access to those parts of the document for which it has claimed legal professional privilege.
| I certify that the preceding eighty two (82) paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie |
.........................[sgd]...............................................
Associate
Date of decision: 19 May 2020
Heard: Applicant: | 12 March 2019 Self-represented |
| Respondent’s solicitor: | Mr Justin Davidson & Ms Kate McLaren |
- AGLC
- Bell and Secretary, Department of Health (Freedom of Information) [2020] AATA 1436
- Case
- [2020] AATA 1436
- Decision Date
CaseChat Overview and Summary
The legal issues before the court included whether Senior Member Lennard should have disqualified herself due to an apprehension of bias, whether the hearing should be reopened to allow further evidence, and the appropriate costs order following the tribunal’s proceedings. Further appeals concerned the dismissal of Mr Bell’s application for recovery of monies allegedly owed to him arising from an employment relationship, and whether he could re-litigate an issue previously determined by the tribunal.
The tribunal, constituted by Senior Member Lennard, considered an application for disqualification based on the tribunal member's daughter attending the same school as Mr de Castella's daughters. The tribunal also made a costs order against Mr Bell, requiring him to pay a percentage of the respondents' costs on an indemnity basis for specific parts of the proceedings, including email correspondence and a hearing on 30 August 2012. An appeal concerning an alleged employment relationship was dismissed on the grounds that the central issue had already been determined in earlier proceedings, preventing re-litigation.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Bell & de Castella and Rob de Castella’s SmartStart for Kids Limited[2] arose from a complaint initially made by Mr Bell to the Human Rights Commission (HRC). His complaint had been made against Mr de Castella and SmartStart alleging discrimination based on attributes of race, profession and political conviction. The HRC referred the complaint to the ACAT, which was constituted by Senior Member Lennard. The hearing proceeded as follows:[2] [2013] ACAT 27; Senior Member Lennard(1)The hearing was initially held on 25 and 26 June 2012 with the parties to make written submissions.(2) 23 July 2012 - Mr Bell made an application for:(a)an order that the senior member of the tribunal disqualify herself because of an apprehension of bias on the basis that her daughter and Mr de Castella’s daughters had gone to school together and stayed at each other’s houses;(b)a reopening of the hearing to allow him to present further evidence; and(c)further directions in relation to the submissions that were required at the adjournment of the hearing on 26 June 2012.(d)30 August 2012 to receive further evidence from the applicant, namely, to watch a DVD titled Running to America and a DVD titled Living Black.Concerns raised regarding the operation of the Indigenous Marathon Project On 21 February 2012, Mr Bell wrote to the Commonwealth Auditor-General raising his concerns regarding funding received by Mr de Castella in his role in SSKF for the IMP from 1 April 2009 to date.[3] Mr Bell stated that he had been employed by Mr de Castella as the Project Coach for the IMP. His role as the Project Coach had been featured throughout the documentary entitled “Running to America” and broadcast on the ABC. Mr Bell also referred to his previous 44 years working in Aboriginal and Torres Strait Islander communities at all levels and to his having held a key operational role in the first two years of development of the IMP.[3] Exhibit A On 14 March 2012, Mr Bell wrote again to the Auditor-General referring to his previous letter and drawing attention to an email dated 13 March 2012 that he had received from Mr de Castella’s lawyer. Mr Bell drew the Auditor-General’s attention to the following passage from the letter:“At the end of the day, the damage of any costs that are incurred through your claims will affect the project and our clients’ ability to assist in future programs which you cannot deny have a broad reaching beneficial impact on the lives of Aboriginal people and their communities.” Mr Bell asked the Auditor-General to investigate whether Mr de Castella had factored his legal costs in to his budget proposals to the Commonwealth government for IMP funding and, if so whether this would be lawful according to the rules governing Commonwealth funding.[4][4] Exhibit B In late 2012 to 2013, the Department’s Audit and Fraud Control Branch audited the IMP. The audit identified issues of concern regarding the way in which SSFK used the funding. They were summarised in the opening paragraph of a letter dated 14 May 2012 and written by Ms Monique Machutta, Acting Assistant Secretary, Population Health Division in the Department:“« whether SmartStart for Kids Ltd (SSFK) is the appropriate entity to be party to the agreement with the Commonwealth to carry out the IMP;«the apparent subcontracting of the IMP;«potential conflicts of interest in dealings with related parties;«the use of Commonwealth funds; and«reports required under the funding agreements.”[5][5] Exhibit C