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Cantor v Audi Australia Pty Ltd

Cantor v Audi Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Cantor v Audi Australia Pty Ltd [2016] FCA 1391

File numbers: NSD 1307 of 2015
NSD 1308 of 2015
NSD 1459 of 2015
NSD 1472 of 2015
NSD 1473 of 2015

Judge: BROMWICH J

Date of judgment: 22 November 2016

Catchwords: EVIDENCE – Legal Professional Privilege – application for access to legal advice – claim of legal professional privilege over advice – whether privilege attached to communication of legal advice by recipient to regulator in Germany – whether privilege attached to subsequent communications between recipient and German regulator which reproduced and referred to parts of legal advice – requirements of legal professional privilege – held: privilege attached to all communications – whether waiver of privilege occurred by provision to regulator in Germany – whether disclosure to regulator was in circumstances protecting confidentiality – whether recipient’s conduct in Australian class action proceedings inconsistent with maintenance of privilege – held: no waiver as conduct maintained confidentiality and was not inconsistent with conduct in Australian proceedings

Legislation: Evidence Act 1995 (Cth), ss 166(c), 166(f), 167, 169(1)(b), Pt 3.10

Cases cited:
Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360
Attorney-General (NT) v Maurice (1986) 161 CLR 475
Australian Unity Health Ltd v Private Health Insurance Administration Council [1999] FCA 1770
AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382
AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
Baker v Campbell (1983) 153 CLR 52
Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601
Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101
Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256; (2005) 148 FCR 68
British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113
Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501
Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266
Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd [2015] FCA 282
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543
Downey v Murray [1988] NI 600
DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499
Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303
Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] FCA 1391
Decision Date: 22 November 2016

CaseChat Overview and Summary

In Cantor v Audi Australia Pty Ltd, the plaintiffs sought access to documents they claimed were subject to legal professional privilege. The defendants argued that the communications were privileged and not waived. The Federal Court of Australia was tasked with determining the scope of the privilege and whether it had been waived. The central legal issue was whether legal professional privilege applied to the communications in question and, if so, whether any waiver of that privilege had occurred.

The court examined whether the communications in question possessed the essential characteristics of confidentiality and a dominant purpose of providing legal advice. It was established that the Freshfields document, a legal opinion provided by a major law firm, was a pure form of legal advice, addressing specific legal issues. The document was found to have a dominant purpose of providing legal advice to Volkswagen AG. The court also considered whether the privilege was waived by the disclosure of the document to the regulator in Germany. The court held that the privilege was not waived as the conduct in disclosing the document to the regulator was in circumstances protecting confidentiality and was not inconsistent with the conduct in the Australian class action proceedings.

The court concluded that the privilege attached to the communications and was not waived. The application to access the privileged communications was dismissed with costs. The court found that the privilege was maintained as the subsequent communications did not displace the dominant purpose of providing legal advice. The court also held that the conduct in disclosing the document to the regulator was not inconsistent with maintaining the privilege.

Orders

Orders of the court

1. The application brought by the applicant to access the redacted portions of documents produced to the Court subject to a claim of legal professional privilege is dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The remedial issue is relied upon by the respondents in the substantive proceedings. However, that forms no part of the communications over which privilege is claimed, has been found to exist in these reasons, and is maintained. There is no inconsistency in the respondents in the substantive proceedings (including Volkswagen AG) relying on communications with the KBA on the technical solution proposed, because that is not the subject of any claim of privilege made in the course of this adjudication.Conclusion As I have found that privilege attached to the communications and was not waived as against the applicants, the application brought by the applicants to access the privileged communications must be dismissed with costs.

Ratio Decidendi

Legal Principle Established

All of those points have been taken into account in the context of the form and contents of the Freshfields document in assessing those matters, including how long it would have taken to review it and make a decision about what, if anything, to do as a result of the advice given.Consideration & conclusion on the first part of the first issue: privilege over the Freshfields document communication The existence of the privilege claimed in this case turns on it being established that the communication of the Freshfields document, as well as being legal advice rather than, for example, dealing with more general or broader issues (Barnes at 603 [8]), had the essential characteristics of confidentiality and a dominant purpose of being such legal advice provided to and for Volkswagen AG at the time it was furnished. If so, subsequent use will only be relevant to the existence of the privilege if it can be shown to displace the dominant purpose otherwise established of giving legal advice to Volkswagen AG. The Freshfields document has been analysed in the context of the competing submissions and abovementioned authorities, together with the legal and factual (including chronological) context in which it was brought into existence. The substance of the Freshfields document is just over 22 pages. While there are limits on what can be said about it without disclosing its substance, it is plainly and unambiguously legal advice of the kind that would be expected to be provided by any competent lawyer, and especially by a major law firm. It poses the questions in relation to which it can readily be inferred advice was sought, states facts and assumptions, applies legal reasoning, and provides a candid legal opinion as to the correct answer to each of the questions. Relevantly – and this is not true of, nor required of, all legal advices – it is not in the form of a submission, does not seek any outcome, and does not propose any solution in the sense of anything that could or should be done, or not done, even though such characteristics would not ordinarily deny such a document retaining the character of giving legal advice. In that sense, it is a relatively pure legal opinion. The Freshfields document does not have the feature that some legal writing, as a matter of practicality, often does have, or need to have, of advising on broader or more general issues concerning, for example, the financial or commercial dealings of a client: Barnes at 603 [8] and Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd [2015] FCA 282 at [18], 9th dot point. It enabled Volkswagen AG to be informed about where it stood on the legal issues addressed, presuming that advice to be correct. There is no basis to separate out any part of the Freshfields document and exclude it from protection if privilege otherwise applies upon the basis that it departs from being legal advice and flows in any substantial way into non-legal considerations. As to dominant purpose, the provision of important and relevant legal advice to Volkswagen AG appears on its face to be its dominant if not sole purpose even having regard to the issue of subsequent use addressed below. The Freshfields document plainly addresses aspects of the issues raised by the KBA and provides legal advice to inform the response to those issues. The hearsay assertion as to purpose from one of the authors of the advice therefore serves only to confirm, rather than to provide independent conclusive evidence of, the requisite dominant purpose. In truth, that assertion, although wise to obtain, was not really needed in light of the view I have formed from the form, context and especially contents of the Freshfields document. Indeed there is nothing beyond subsequent use, by the provision of the Freshfields document to the KBA the next day, to indicate any other purpose.

File numbers:	NSD 1307 of 2015 NSD 1308 of 2015 NSD 1459 of 2015 NSD 1472 of 2015 NSD 1473 of 2015
Judge:	BROMWICH J
Date of judgment:	22 November 2016
Catchwords:	EVIDENCE – Legal Professional Privilege – application for access to legal advice – claim of legal professional privilege over advice – whether privilege attached to communication of legal advice by recipient to regulator in Germany – whether privilege attached to subsequent communications between recipient and German regulator which reproduced and referred to parts of legal advice – requirements of legal professional privilege – held: privilege attached to all communications – whether waiver of privilege occurred by provision to regulator in Germany – whether disclosure to regulator was in circumstances protecting confidentiality – whether recipient’s conduct in Australian class action proceedings inconsistent with maintenance of privilege – held: no waiver as conduct maintained confidentiality and was not inconsistent with conduct in Australian proceedings
Legislation:	Evidence Act 1995 (Cth), ss 166(c), 166(f), 167, 169(1)(b), Pt 3.10
Cases cited:	Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 Attorney-General (NT) v Maurice (1986) 161 CLR 475 Australian Unity Health Ltd v Private Health Insurance Administration Council [1999] FCA 1770 AWB Ltd v Cole [2006] FCA 571; (2006) 152 FCR 382 AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 Baker v Campbell (1983) 153 CLR 52 Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601 Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101 Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256; (2005) 148 FCR 68 British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] FCA 1247; (2005) 225 ALR 266 Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; (2006) 151 FCR 341 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd [2015] FCA 282 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 Downey v Murray [1988] NI 600 DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404