Freeman, Jack v Health Insurance Commission
[1997] FCA 888
•26 AUGUST 1997
FEDERAL COURT OF AUSTRALIA
EVIDENCE Discovery - Legal professional privilege - Whether legal advice was in furtherance of abuse of statutory power - Privilege lost only if abuse is deliberate -
Standard of proof required
Health Insurance Commission Act 1973 (Cth), ss 8L, 8Y
Health Insurance Commission Regulations reg. 3(2)
Bullivant v Attorney-General for Victoria [1901] AC 196 applied
Grant v Downs (1976) 135 CLR 674 applied
R v Cox and Railton (1884) 14 QBD 153 considered
Varawa v Howard Smith & Co Ltd (1910) 10 CLR 382 applied
Crescent Farm (Sidcup) Sports Ltd v Sterling OfficesLtd [1972] Ch 553 considered
Attorney General (NT) v Kearney (1985) 158 CLR 500 followed
Diamond v Stratton (1982) 95 FRD 503 considered
Irving Trust v Gomez (1983) 100 FRD 273 considered
O’Rourke v Darbishire [1920] AC 581 applied
Butler v Board ofTrade [1971] 1 Ch 680 applied
Australian Federal Police, Commissioner v Propend Finance Pty Ltd (1997) 141 ALR 545 applied
Milliman v Rochester Ry Co (1896) 39 NYS 274 followed
Grofam Pty Ltd v Australia and New Zealand Banking Group Limited (1993) 43 FCR 408 discussed
JACK FREEMAN v HEALTH INSURANCE COMMISSION & ORS
VG 689 of 1996
FINKELSTEIN J
26 AUGUST 1997
MELBOURNE
GENERAL DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY VG689 of 1996
BETWEEN: JACK FREEMAN
Applicant
AND: HEALTH INSURANCE COMMISSION,
ROY LLEWELLYN CORBETT and
DAVID HARPER MCLENNAN
Respondents
JUDGE: FINKELSTEIN J
DATE OF ORDER: 26 AUGUST 1997
WHERE MADE: MELBOURNE
THE COURT ORDERS THAT:
On or before 4.15pm on 28 August 1997, the first and second respondents serve on the applicant a copy of each document described in Item 1 pars (a) to (y) and Items 2 and 3 of Part 2 of Schedule 1 of their Further Amended List of Documents filed on 20 May 1997.
The first and second respondents pay the applicant’s costs of and incidental to the motion filed on 7 May 1997.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY VG 689 of 1996
BETWEEN: JACK FREEMAN
Applicant
AND: HEALTH INSURANCE COMMISSION,
ROY LLEWELLYN CORBETT and
DAVID HARPER MCLENNAN
Respondents
JUDGE: FINKELSTEIN J
DATE: 26 AUGUST 1997
PLACE: MELBOURNE
REASONS FOR JUDGMENT
HIS HONOUR: Application is made for the inspection of documents which the first respondent (the Commission) and the second respondent (Mr Corbett) contend should not be inspected because the documents are the subject of legal professional privilege. It is not disputed that the documents either constitute or record confidential communications between a legal practitioner and an officer of the Commission giving instructions for or receiving legal advice or record information that was obtained for the provision of that advice. As a general rule these documents would be privileged from disclosure. However, there are exceptions to the rule and the applicant says that an exception applies here.
The issue arises in this way. The applicant is a medical practitioner. In October 1994 and a little later he was charged with having committed hundreds of offences, 519 to be precise. Some of the charges concern alleged contraventions of ss 127 and 128B of the Health Insurance Act 1973 (Cth). The other charges are in respect of common law offences, offences against the CrimesAct 1958 (Vic) and the Drugs, Poisons and Controlled Substances Regulations (Vic). Proceedings for the commitment of the applicant for trial on these charges were commenced in the Magistrates Court at Melbourne on 13 November 1995. During the committal proceeding the informant sought to tender 168 medicare forms that had been seized by a member of the Victorian Police when executing a search warrant issued under s 465 of the Crimes Act 1958 (Vic). The medicare forms were an important part of the evidence required to establish contraventions of ss 127 and 128B of the Health Insurance Act. The applicant objected to the tender on the basis that the seizure was unlawful. His point was that a search warrant could not validly issue under s 465 of the Crimes Act1958 (Vic) to obtain evidence to establish a breach of Commonwealth law. The Magistrate presiding over the committal proceeding accepted this submission and found that the warrant was invalid. She ordered the return of the seized papers but granted a stay of fourteen days to enable the Director of Public Prosecutions (Vic) to appeal her decision.
It may be that the Magistrate had no power to order the return of the documents. There was no properly constituted civil action in which the order was made. Proper parties were not before the Court. The Magistrate was not sitting in a judicial capacity. Section 78(6) of the Magistrates Court Act 1989 (Vic), which allows a magistrate to order the return of seized documents in certain circumstances, was an unlikely source of power. However, at this stage it is not necessary to determine any of these issues.
Two days after the orders were made counsel appearing for the informant at the committal proceeding spoke to Mr Corbett. Mr Corbett was a senior investigations officer with the Commission. He was familiar with the case against the applicant. He had been told about the orders made by the Magistrate. Counsel and Mr Corbett discussed ways to retain possession of the medicare forms. Mr Corbett suggested using s 8P of the Health Insurance Commission Act 1973 (Cth). This section allows a notice to be served requiring the production of documents. Mr Corbett sought the advice of Mr Hannan, a legal practitioner employed in the office of the Director of Public Prosecutions (Cth). He described Mr Hannan as “the Commission’s regular legal adviser on matters relating to investigations and prosecutions”. Mr Hannan said that using the power under s 8P was “the way to go”. Accordingly, on 8 November 1996 a notice under s 8P was served by Mr Corbett on the member of the Victorian Police in possession of the medicare forms and the forms were handed to Mr Corbett.
In the meantime, Mr Hannan began to have doubts about the correctness of using a notice under s 8P as the means of taking possession of the medicare forms. On 11 November 1996 he called Mr Corbett and told him of his doubts. He advised Mr Corbett that the medicare forms should be returned to the Victorian Police as soon as possible. This was done. The next morning Mr Corbett went to Mr Hannan’s office. After some discussion Mr Hannan drafted an application for the issue of a search warrant under s 8Y of the Health Insurance Commission Act. He also drafted a search warrant. Later on 12 November 1996 a Magistrate (the third respondent) issued a search warrant in the form drafted by Mr Hannan. It was executed by Mr Corbett and he again took possession of the medicare forms.
The applicant commenced an application in this Court seeking, among other relief, a declaration that the search warrant is invalid and an order that the medicare forms be returned to him. One basis for the claimed invalidity is the allegation that the search warrant was obtained for improper purposes. There are two improper purposes alleged. The first is that the search warrant was issued so that the medicare forms could be retained to assist the Director of Public Prosecutions (Vic) in proceedings against the applicant. The second, which is related to the first, is that the search warrant was issued to circumvent the order made by the Magistrate to return the medicare forms to the applicant so that the Victorian Police retain access to them. Each purpose is said to be improper because it is not a purpose for which a search warrant can be obtained under s 8Y of the Health Insurance Commission Act.
The documents that the applicant seeks to inspect are those that constitute or record legal advice relating to the issue of the search warrant. The applicant accepts that ordinarily those documents would be privileged. However, the applicant says that because the search warrant was obtained for improper purposes (that is, in abuse of power), any document which records advice in furtherance of those purposes cannot be privileged. The applicant says this is so whether the abuse of power was deliberate or inadvertent.
Legal professional privilege is a principle of great importance. Its basis was explained by Lord Halsbury LC in Bullivant v Attorney-General for Victoria [1901] AC 196 at 200-201 as follows:
“I think the broad proposition may be very simply stated: for the perfect administration of justice, and for the protection of the confidence which exists between the solicitor and his client, it has been established as a principle of public policy that those confidential communications shall not be subject to production.”
To much the same effect is a passage in the joint judgment of Stephen, Mason and Murphy JJ in Grant v Downs (1976) 135 CLR 674 at 685:
“The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.”
Nevertheless, the privilege does not apply to all communications between a legal practitioner and his or her client. One well known exception when the privilege will not apply is where the communication sought to be protected is part of a criminal proceeding or was made in furtherance of an illegal object: R v Bell;Ex parte Lees (1980) 146 CLR 141 at 145. It does not matter that the legal practitioner is innocent of knowledge of the criminal proceeding or illegal object. In R v Cox and Railton (1884) 14 QBD 153 at 168, Stephen J explained that for legal professional privilege to apply “there must be both professional confidence and professional employment”, and if the illegal object is not disclosed the client “reposes no confidence, for the state of facts, which is the foundation of the supposed confidence, does not exist. The solicitor’s advice is obtained by a fraud.” The exception also includes a communication that is a step in or an aid to the commission of a “civil fraud”: Varawa v Howard Smith & Co Ltd (1910) 10 CLR 382 at 386. In this context civil fraud is not limited to deceit “but includes all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery and sham contrivances”: Crescent Farm (Sidcup) Sports Ltd v Sterling OfficesLtd [1972] Ch 553 at 565. In Attorney General (NT) v Kearney (1985) 158 CLR 500 the High Court held that the exception was not confined to crime or fraud in the sense just explained but includes a communication made to further an abuse of statutory power where that power is being employed to prevent others enjoying their rights under the law: ibid at 515 per Gibbs CJ and at 516-517 per Mason and Brennan JJ. Further, in Kearney the court made it clear that it was only when there was a deliberate abuse of statutory power that the privilege would be lost: ibid at 515 per Gibbs CJ, at 516-517 per Mason and Brennan JJ and at 525 per Wilson J. None of the justices suggested that it would be lost if there was a genuine but mistaken view of the scope of the power that was being exercised although Gibbs CJ appears to have left the point open.
Notwithstanding the submissions made by the applicant, I do not believe that the exception should be extended so that the privilege is lost if there is an inadvertent abuse of statutory power. In the first place, much of the reasoning of the High Court in Kearney is against such an extension. In the second place, there is no basis in principle for extending the exception in that way. Legal professional privilege is an important right and the public interest does not require it to be lost except by conduct which is morally reprehensible. Finally, if the exception was now to be extended to cover inadvertent conduct it might endanger the basis of the privilege. It could lead to acceptance of the argument, rejected in Crescent Farm, that civil fraud includes any breach of duty or unlawful act. In the United States of America it is generally accepted that the exception is limited to knowingly unlawful conduct, the unlawfulness involving either crime or civil fraud: see Wigmore on Evidence vol. 8 para 2298 (McNaughton rev). There are some recent cases in the United States District Court (Southern District of New York) that suggest that the exception should be extended to communications in furtherance of “intentional torts” or even “reckless tortious behaviour”: see Diamond v Stratton (1982) 95 FRD 503 and Irving Trust v Gomez (1983) 100 FRD 273. But this approach has not gained wide acceptance.
Now it is necessary to consider, for the parties are in disagreement about it, how far the applicant needs to go to establish that the privilege has been lost. To put the matter another way, what standard of proof is required in this type of application. The standard has been expressed in various ways. In O’Rourke v Darbishire [1920] AC 581 Viscount Finlay said at 604:
“If the communications to the solicitor were for the purpose of obtaining professional advice, there must be, in order to get rid of the privilege, not merely an allegation that they were made for the purpose of getting advice for the commission of a fraud, but there must be something to give colour to the charge. The statement must be made in clear and definite terms and there must be some prima facie evidence that it had some foundation in fact.”
Lord Wrenbury said at 633:
“...I should say that to obtain discovery on the ground of fraud the plaintiff must show to the satisfaction of the Court good ground for saying that prima facie a state of things exists which, if not displaced at the trial will support a charge of fraud...a strong probability that there was fraud, may be taken by the court to be sufficient. Every case must be decided on its merits...The mere use of the word “fraud” or the prefix of the adverb “fraudulently” from time to time throughout the narrative will not suffice.”
These passages were referred to with approval by the Supreme Court of the United States in Clark v United States of America, (1932) 289 US 1. In Butler v Board of Trade [1971] 1 Ch 680 Goff J said at 689:
“[W]hat has to be shown prima facie is not merely that there is a bona fide and reasonably tenable charge of crime or fraud but a prima facie case that the communications in question were made in preparation for or in furtherance or as part of it.”
The “prima facie evidence“ test was adopted by the High Court in Kearney: see 158 CLR at 516 per Gibbs CJ, at 517 per Mason and Brennan JJ, at 525 per Wilson J and at 527 per Dawson J. Finally, in Australian Federal Police, Commissioner v Propend Finance Pty Ltd (1997) 141 ALR 545 Brennan CJ said at 553:
“In determining whether a claim of legal professional privilege can be upheld, it is open to the party resisting the claim to show reasonable grounds for believing that the communication effected by the document for which legal professional privilege is claimed was made for some illegal or immoral purpose, that is some purpose that is contrary to the public interest. I state the criteria as “ reasonable grounds for believing” because (a) the test is objective and (b) it is not necessary to prove the ulterior purpose but there has to be something “to give colour to the charge”, “a prima facie case” that the communication is made for an ulterior purpose. The purposes that deny the protection of privilege for a communication (whether documentary or oral) between a client and the client’s solicitor or counsel include the furthering of the commission of an offence.” (footnotes omitted).
These cases show that something more than mere assertion but less than actual proof of the alleged crime or fraud is necessary in order to overcome a claim of privilege. What the cases establish, in my opinion, is a requirement that there must be some evidence that gives substance to the allegation of crime or fraud.
Is there sufficient evidence to make out the allegation of improper purposes? This resolves itself into an enquiry whether obtaining the search warrant was within power or not. Here it is necessary to say something about the powers and functions of the Commission. It was established by s 4 of the Health Insurance Commission Act 1973 (Cth). It is given certain specific functions (for example see s 5 for the medicare functions, s 8A for the health benefit fund functions and s 8BA for the childcare costs functions) and such other functions as are prescribed: see s 8E(1). The prescribed functions are found in the Health Insurance Commission Regulations which came into force in September 1974. For present purposes reference should be made to reg 3(2) which provides:
“For the purposes of subsection 8E (1) of the Act, the following functions are prescribed:
(a) to devise and implement measures intended:
(i) ...
(ii) ...(iii) to prevent, or facilitate the detection of, activities related to claims for payment, or the receipt of, medicare benefits that may constitute an offence under the Health Insurance Act or the Crimes Act 1914.
(b) ...
(c) to investigate cases where there are reasonable grounds to suspect that:
(i) an act done by a person in relation to a claim for payment, or the receipt, of medicare benefits may constitute an offence under the Health Insurance Act or the Crimes Act 1914; or
(ii) a person may have committed an offence against [particular subsections] of the Health Insurance Act;
and, where an investigation discloses that there is sufficient evidence to warrant a prosecution, to refer the case investigated and the information obtained in the course of the investigation to the Australian Federal Police or the Director of Public Prosecutions;”
The prescribed functions make it clear that the Commission has power to investigate whether a person has committed an offence under ss 127 or 128B of the Health Insurance Act. In addition, the Commission has certain coercive powers that enable it to obtain information and documents required for the purposes of an investigation. It also has powers of search and seizure. All of these powers are found in Pt IID of the Health Insurance Commission Act. However, certain conditions must be satisfied before any of these powers may be exercised. The conditions are found in s 8L which reads:
“(1) The Managing Director may, by instrument in writing, authorise the powers under this Part to be exercised in connection with an investigation that the Commission is conducting in the performance of its functions.
(2) Powers under this Part must not be exercised unless they are exercised in connection with an investigation for which such an authorisation is in force.”
So far as is presently relevant, the effect of this section is that Pt IID powers can only be exercised in connection with an investigation that is current and for which there is a written authorisation in force allowing those powers to be used in connection with that investigation. More importantly s 8L(2) makes it clear that Pt IID powers cannot be used except in relation to an investigation that is being conducted by the Commission.
If a Pt IID power, including the power to issue a search warrant under s 8Y, is used for a purpose other than an investigation conducted by the Commission, the power will have been used for an ulterior object and it will be an improper exercise of that power: see generally Arthur Yates & Co Pty Ltd v the Vegetable Seeds Committee (1946) 72 CLR 37 at 67-69 and at 82-84; Sydney Municipal Corporation v Campbell [1925] AC 338 at 343; Brownells Ltd v Ironmongers’ Wages Board (1950) 81 CLR 108 at 120. Whether the power has been used for an ulterior object is always a question of fact: Reid v Sinderberry Reid v McGrath (1944) 68 CLR 504 at 514; Marquess of Clanricarde v Congested Districts Board (1914) 79 JP 481; (1914) 31 TLR 120.
To determine whether there has been an improper use made of s 8Y it is necessary to consider two questions of fact. The first is, was the Commission undertaking an investigation when the search warrant was issued? If so, the second question is was the search warrant issued in connection with that investigation? No issue arises about the existence of an authority under s 8L(1) for such an authority was given on 2 November 1994.
The evidence discloses that the Commission did begin to investigate whether the applicant had committed offences against ss 127 and 128B of the Health Insurance Act. That investigation began in late October 1994 or in early November 1994 when the authority under s 8L(1) was issued. The officers of the Commission involved in the investigation included Mr Corbett and Mr DW Barrow, the acting manager of investigations. The investigation was conducted in conjunction with a similar investigation being undertaken by the Victorian Police. It is not clear what steps the Commission’s officers took in furtherance of the investigation either alone or in conjunction with the Victorian Police. Commission officers did attend with members of the Victorian Police to execute a number of search warrants on 31 October 1994. It was on that day that the medicare forms were first seized. It was also on that day that the applicant was arrested and charged with a number of offences. The discovery of the medicare forms led to enquiries being made of Medicare and statements being obtained from persons who had signed the medicare forms. The evidence does not indicate whether these steps involved any Commission officer. The remaining charges were laid against the applicant sometime before 29 March 1995. According to the evidence no step in the investigation took place after these charges were laid. The question remains, was the Commission in the process of carrying out its investigation into the applicant when the search warrant was issued in November 1996? There is no doubt that an investigation can be quite lengthy but it would not be unusual for there to be periods of inactivity. This could be caused by any number of reasons including the priority of other work or the fact that further evidence is required to enable the investigation to continue. Thus, the fact that an investigation is not active does not mean that it is not current. However, in the ordinary case it would not be difficult to determine when an investigation has been completed. For example, if the purpose of an investigation has been achieved it could confidently be said the investigation is over. Even if its purpose has not been achieved, an investigation might nevertheless be terminated by some act of “closing the file”. Where an investigation is being conducted to ascertain whether a person has committed an offence the investigation is not necessarily over when that person has been charged with having committed the offence. It may be that further steps in the investigation are required. Conversely, once the person has been charged the investigators might form the view that there is nothing further to investigate and “close the file”. It is all a question of fact. Here the fact that stands out is that no officer of the Commission took any step in the investigation after all of the charges had been laid. There is nothing to indicate that the Commission understood or believed it had any further investigatory work to undertake. The matter was left in the hands of the relevant prosecuting authority: compare with reg 3(2)(c) which assumes that an investigation will be over when the Commission has referred a case to a prosecuting authority.
Further, no officer of the Commission, including Mr Corbett, gave evidence in chief to the effect that the investigation was current when the search warrant was obtained. Mr Corbett did file an affidavit in which he deposed to the background that led to the issue of the search warrant. Yet he gave no evidence about the state of the investigation at that time. If the investigation had been current in 1996 and the search warrant obtained as part of that investigation Mr Corbett could easily have said so. After all, he was the one person ideally placed to deal with the topic. His failure to do so should be taken into account, in my opinion, in more readily drawing the inference, which is open in any event, that no investigation was then being conducted by the Commission. On the permissibility of relying on the absence of evidence in chief to support the drawing of an adverse inference I refer to what was said by Follet J in giving judgment for the Appellate Division of the Supreme Court of New York in Milliman v Rochester Ry Co (1896) 39 NYS 274 at 276:
“In case a litigant fails to produce a person known to be friendly to him and to his cause, who is so situated that he must have knowledge of the facts in issue, the jury is permitted to presume that the testimony of that person would not have been favourable to the party... I think that the rule is applicable to a case in which a party fails to interrogate a friendly witness, so situated as to be presumed to have knowledge of the existence or non-existence of the vital facts in issue, as it is to the case of a failure to produce such a witness. Indeed I think the omission to interrogate a friendly witness in respect to facts presumably within his knowledge is more significant than the failure to call such a person as a witness and the presumption that the testimony would not have been favourable to the party’s case is stronger than the one which arises from the failure to produce such a person as a witness.”
This passage was cited with approval in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419.
Having come to the conclusion, on a prima facie basis, that no investigation was being conducted by the Commission when the search warrant was issued, it follows that it has been sufficiently shown that the search warrant was obtained otherwise than in the proper exercise of the power conferred by s 8Y.
It is now necessary to consider whether the evidence also shows that Mr Corbett knew that no investigation was being conducted by the Commission. Mr Corbett was the applicant for the search warrant. He knew that the search warrant could only be obtained for an investigation conducted by the Commission. He said as much in the application to the Magistrate. If he knew that the Commission was not conducting an investigation he knew that the warrant was sought for an illegitimate purpose. It seems to me, prima facie at least, that Mr Corbett knew that the Commission was no longer conducting an investigation. Mr Corbett was one of the investigators when the investigation commenced. It could not have escaped his attention that the investigation had come to an end as I have found had occurred.
In case I am wrong in this conclusion I should deal with the allegation that the search warrant was issued to circumvent the order of the Magistrate requiring the medicare forms to be returned to the applicant so that the Victorian Police could retain access to them and that this was an improper purpose.
The facts do show that the search warrant was not obtained for the purpose of any investigation. The warrant was issued so that the medicare forms would not be returned to the applicant and so that they could be used as evidence in proceedings against him, including the committal proceeding which was then under way. So much seems to be conceded in Mr Corbett’s affidavit. While the gathering of evidence is an obvious and often a necessary part of a criminal investigation, here the seizure of the medicare forms by the Commission was not intended to be a step in any investigation carried on by it. The medicare forms were not intended to be examined by the Commission or its officers. There was no need for that to occur. The medicare forms were not needed as an incident of any other enquiry that was to be undertaken by the Commission or its officers. No such enquiry was contemplated.
I am of the view that it is not a legitimate use of s 8Y to obtain the issue of a search warrant merely for the purpose of seizing evidential material. Section 8L precludes s 8Y being used in that way by requiring the seizure to be for the purpose of an investigation. This position may be contrasted with the power to issue a search warrant under s 465 of the Crimes Act 1958 (Vic) where a search warrant may issue solely for the purpose of obtaining evidence; see also
s 3E of the Crimes Act 1914 (Cth) which allows a search warrant to be issued for like purposes. The power under s 8Y of the Health Insurance Commission Act is much narrower.
Further, the evidence prima facie establishes that Mr Corbett knew, or at least must have suspected, that a search warrant could not be issued to enable the Victorian Police to retain the medicare forms for use against the applicant. In paragraph 4 of the application for the search warrant Mr Corbett deposed:
“The search warrant is sought in connection with an investigation that the Commission is conducting in the performance of its functions and in respect of which the Managing Director of the Commission has authorised the powers under Part IID of the act to be exercised”
This statement might be untrue or misleading. I say this for the reason that, even if there was a current investigation, the medicare forms were not required for the purposes of that investigation. Mr Corbett would have known this. In my opinion this shows a prima facie case of deliberate abuse of power.
The result is that the first and second respondents cannot maintain their claim for legal professional privilege in respect of the documents described in Item 1 paras. (a) to (y) and Items 2 and 3 of Part 2 of Schedule 1 of the Further Amended List of Documents. The applicant is entitled to inspect those documents and an order to that effect will be made. The other documents sought (Item 1 paras. (z) to (vv) of Part 2 of Schedule 1 of the Further Amended List of Documents) came into existence after the search warrant was issued and do not fall within the exception.
There is one final matter that I wish to mention. It concerns the submission made by the applicant that none of the documents in question could be privileged from production for the reason that Mr Hannan did not have power to give legal advice to the Commission. The basis of this contention is that the giving of legal advice to the Commission in the circumstances described was beyond the power of the Director of Public Prosecutions (Cth) for the reason that, on the proper construction of the Director of Public Prosecutions Act 1983(Cth), no such power was conferred upon the Director or his staff. A similar argument was rejected by Heerey J in Grofam Pty Ltd v Australia and New Zealand Banking Group Limited (1993) 43 FCR 408. But on appeal ((1993) 45 FCR 445) the Full Court, while not upholding the appeal, expressed the tentative view that the Director of Public Prosecutions and his staff did not have power to give legal advice except as an incident to some activity that was within power. The Full Court decided the appeal on the basis that the recipient of the legal advice had a genuine belief that the Director of Public Prosecutions was able to give it and the advice was therefore protected by legal professional privilege. In this case it is unnecessary to consider the correctness of the decision of Heerey J in Grofam. I should say that I share the doubts about it that have been expressed by the Full Court. Moreover, if the Director of Public Prosecutions has been acting beyond power in giving legal advice to the Commission and other governmental agencies it is difficult to see why that advice should be privileged even if the particular person receiving it believed that the Director of Public Prosecutions had the right to give it. This is not to doubt the correctness of the decision of the Full Court. The point is that if the Full Court had decided the Director of Public Prosecutions lacked power to give legal advice, I do not see how a Commonwealth department or agency could claim legal professional privilege in respect of that advice when the Commonwealth itself knew of the lack of power. The position might well be the same if the Commonwealth knows that there is real doubt about the existence of the power and ultimately a court decides that the power does not exist.
I certify that this and the preceding twelve
(12) pages are a true copy of the
Reasons for Judgment herein of the
Honourable Justice FINKELSTEIN
Associate:
Date: 26 August 1997
Counsel for the Applicant: S Crennan QC with H.A. Aizen
Solicitor for the Applicant: Valos Black & Associates
Counsel for the Respondents: GT Pagone QC with PJ Hanks
Solicitor for the Respondents: Australian Government Solicitor
Date of Hearing: 30 and 31 July 1997
Date of Judgment: 26 August 1997
0
12
0