Ingot Capital Investments Pty Limited & Ors v Macquarie Equity Capital Markets Limited

[2006] NSWSC 530

Reported Decision: 200 FLR 309

New South Wales

Supreme Court

CITATION:	Ingot Capital Investments Pty Limited & Ors v Macquarie Equity Capital Markets Limited & Ors [2006] NSWSC 530 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	12 May 2006 (Written Submissions 25 May 2006 and 26 May 2006)
JUDGMENT DATE :	6 June 2006
JUDGMENT OF:	Bergin J
DECISION:	Evidence Act does not apply to AAT. Common law (litigation) privilege not available.
CATCHWORDS:	[EVIDENCE] - [PRIVILEGE] Whether the Evidence Act 1995 applies to proceedings in the Administrative Appeals Tribunal - Whether AAT proceedings are "proceedings" as that term is used in s 119 of the Evidence Act or "legal proceedings" for the purpose of common law legal professional privilege.
LEGISLATION CITED:	Administrative Appeals Tribunal Act 1975 (Cth) Civil Procedure Act 2005 Evidence Act 1995 (NSW) Evidence Act 1995 (Cth) Federal Court of Australia Act 1976 (Cth) Supreme Court Act 1970
CASES CITED:	APRA v VBN & Ors [2005] FCA 1868 AWB v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 Blake v Norris (1990) 20 NSWLR 300 Bushell v Repatriation Commission (1992) 175 CLR 408 Cheney v Spooner (1929) 41 CLR 532 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 Griffin v Pantzer (2004) 207 ALR 169 Re Interchase Corporation Ltd (1996) 139 ALR 183 Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186 McDonald v Director-General of Social Security (1984) 1 FCR 354 Re Doran Constructions Pty Limited (in Liq) (2002) 194 ALR 101 Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 1979 ALD 634 Re L (a minor) [1997] AC 16 Re Pochi v Minister for Immigration & Ethnic Affairs (1979) 26 ALR 247 Proust v Blake (1989) 17 NSWLR 267 Waterford v The Commonwealth of Australia (1987) 163 CLR 54
PARTIES:	Applicant - PricewaterhouseCoopers 8th Respondent - Geoffrey Barnum 9th Respondent - Christopher Byatt
FILE NUMBER(S):	SC 50169/2001
COUNSEL:	Applicant: TF Bathurst QC, S Nixon 8th and 9th Respondents: J Dalzell (solicitor)
SOLICITORS:	Applicant: Blake Dawson Waldron 8th and 9th Respondents: Corrs Chambers Westgarth

- 34 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

BERGIN J

6 JUNE 2006

50169/01 INGOT CAPITAL INVESTMENTS PTY LTD & ORS v MACQUARIE EQUITY CAPITAL MARKETS LTD & ORS

JUDGMENT – Motion re litigation privilege

1 The hearing of the main proceedings commenced in the latter part of 2005 and continues. The 13th defendant, PricewaterhouseCoopers (the applicant), by Notice of Motion filed on 18 April 2006, seeks an order for access to documents produced on subpoena (issued in the main proceedings), by Mr William Bartlett. Mr Geoffrey Barnum and Mr Christopher Byatt, former executives of General Reinsurance Australia Limited (the respondents) claim privilege in respect of those documents.

2 The documents in respect of which the claim for privilege was originally made are set out in Annexure B to the affidavit of Chloe Elizabeth Neil sworn 10 April 2006 as follows:

1. Notes from Bill Bartlett “A. Original Questions” –12 February 2006.
2 Draft Overview of General Cologne Re and New Cap Re Reinsurance Treaties by Bill Bartlett – February 2006.
3. Index: Risk Transfer – Research Materials – February 2006
4. Overview of Australian and Principal International Standards, Rulings and Pronouncements on Financial Reinsurance by Bill Bartlett – February 2006.
5. Letter from Bill Bartlett to Chloe Neil Re Paper by Casualty Actuarial Society to American Academy of Actuaries on Risk Transfer Testing August 1, 2005 – 20 February 2006.
6. Letter from Corrs Chambers Westgarth to Bill Bartlett - 30 January 2006.
7. Invoice from Bill Bartlett to Corrs Chambers Westgarth – 7 March 2006.

3 The basis of the claim for privilege is set out in Ms Neil’s affidavit as follows:

3. On 20 December 2004 the clients filed applications for review of a decision by the Australian Prudential Regulation Authority in the Administrative Appeals Tribunal (AAT Proceedings). The AAT Proceedings were concluded on 1 March 2006.

4. In January 2006, acting on instructions from the clients, Corrs engaged Mr William Bartlett to provide Corrs and counsel retained by Corrs on behalf of the clients with certain expert advice for the purpose of assisting Corrs in:

(a) providing legal advice to the clients in connection with matters the subject of the AAT Proceedings; and


(b) considering evidence filed in the AAT Proceedings.

Mr Bartlett was not retained to, nor did he, provide oral or written evidence in the AAT Proceedings. All communications between Mr Bartlett and Corrs and counsel, including Mr Bartlett’s advice, was regarded and treated as being confidential and privileged.

…

10. Each of the documents identified in the schedule annexed and marked “B” record confidential communications between Mr Bartlett and Corrs made either for the dominant purpose of assisting Corrs in:

(a) providing legal advice to the clients in connection with matters the subject of the AAT Proceedings; or

(b) considering evidence filed in the AAT Proceedings.

4 Solicitors for the applicant wrote to the solicitors for the respondents seeking clarification of the basis upon which the privilege claim was made. In a letter dated 13 April 2006 the following information was sought:

(a) Whether you say the documents produced in connection with the AAT proceedings are privileged on the basis they were prepared in contemplation of or for the purposes of legal proceedings, or whether they are said to be privileged because they were created for the purpose of providing legal advice;

(b) The basis on which it is suggested that documents 1 to 4 in Annexure B are privileged, given these documents do not appear to be communications between yourselves and Mr Bartlett;

(c) Whether there is an attachment to document 5, and if so, the basis on which the attachment is said to be privileged.

5 The solicitors for the respondents provided the following information by letter dated 18 April 2006:

1 Notes from Bill Bartlett “A. Original Questions”, 12 February 2006

This document, prepared by Bill Bartlett, an expert retained for the purposes of providing advice and opinion in the AAT proceedings, contains a series of answers to questions posed by counsel and Corrs Chambers Westgarth ( Corrs ) on behalf of the clients, Messrs Barnum and Byatt ( clients ). This confidential document was prepared for the sole purpose of Corrs providing professional legal services to the clients in relation to the AAT proceedings.

2 Draft overview of general and cologne Re and New Cap Re Reinsurance Treaties by Bill Bartlett, February 2006

This document, prepared by Bill Bartlett, contains answers to questions posed by counsel and Corrs on behalf of the clients. This confidential document was prepared for the sole purpose of Corrs providing professional legal services to the clients in relation to the AAT proceedings.

3 Index: Risk Transfer – Research Materials, February 2006

This document was prepared by Bill Bartlett upon request by counsel in conference in February 2006. This confidential document was prepared for the sole purpose of Corrs providing professional legal services to the clients in relation to the AAT proceedings.


4 Overview of Australian and Principal International Standards, Rulings and Pronouncements on Financial Reinsurance, February 2006

Privilege is no longer asserted over this document.

5 Letter from Bill Bartlett to Chloe Neil Re Paper by Casualty Actuarial Society to American Academy of Actuaries on Risk Transfer for Testing, August 1 2005

This is a confidential communication between Bill Bartlett and Corrs. This confidential communication was made for the sole purpose of Corrs providing professional legal services to the clients in relation to the AAT proceedings.


There is no attachment to this document.

6 Letter from Corrs Chambers Westgarth to Bill Bartlett, 30 January 2006

This is a confidential communication between Corrs and Bill Bartlett, which, on further review, does not fall within the terms of the Subpoena. Regardless, our clients maintain their privilege over this document as the communication was made for the sole purpose of Corrs providing professional legal services to the clients in relation to the AAT proceedings.

7 Invoice from Bill Bartlett to Corrs Chambers Westgarth, 7 March 2006

This is a confidential communication between Bill Bartlett and Corrs which on further review does not fall within the terms of the Subpoena.

In summary, for the reasons set out in the affidavit of Chloe Neil sworn 10 April 2006 and clarified above, document 1, 2, 3, 5, 6 and 7, in our opinion, fall within Section 119 of the Evidence Act 1995 or, alternatively, by the equivalent common law rule.

The Motion

6 The Motion was heard on 12 May 2006 when Mr TF Bathurst QC and Mr S Nixon, of counsel, appeared for the applicant and Mr J Dalzell, solicitor, appeared for the respondents. After I reserved my judgment on 12 May 2006 Young J delivered judgment in AWB v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 (AWB) on 17 May 2006. On 25 and 26 May 2006 respectively, the applicant and respondents filed written submissions in relation to that judgment.

7 The respondents contend that the subject documents are protected by “litigation privilege” under s 119 of the Evidence Act 1995 (the Act) or, if the Act does not apply to proceedings in the Administrative Appeals Tribunal (the AAT), then the documents are protected under the second limb of the common law legal professional privilege (the common law privilege). The issues for determination on the Motion are: (1) whether the Act applies to review proceedings in the AAT; (2) if the Act does not apply, whether the common law legal professional (litigation) privilege applies.

8 The subject documents can be shortly described as communications between the respondents’ lawyers and a third party, an expert, for the dominant purpose of providing legal advice to the respondents in relation to the AAT proceedings. There is no point taken by the applicant that the documents are not confidential communications. Indeed the applicant indicated in oral submissions (reiterated in later written submissions) that it does not contend that advice given by a lawyer to a client in relation to AAT proceedings would not be covered by s 118 of the Act, or, I presume, the first limb of the common law privilege. Notwithstanding this indication the respondents have only claimed litigation privilege over the documents.

Whether the Evidence Act applies to AAT proceedings

9 The statutory privilege relied upon is that in s 119 of the Act which provides:

119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or

(b) the contents of a confidential document (whether delivered or not) that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

10 For the purpose of deciding whether the documents are protected by statutory privilege a New South Wales court applies the provisions of the Evidence Act 1995 (NSW). The respondents contend that the documents are privileged because they were confidential communications between the lawyer and a third person (the expert) made for the dominant purpose of the client being provided with professional legal services relating to an “Australian proceeding”. The applicant contends that proceedings in the AAT are not a “proceeding” as that term is to be understood in s 119 of the Act. As the AAT is a Commonwealth Tribunal the Evidence Act 1995 (Cth) would be the applicable statute, if the Evidence Act applies to proceedings in the AAT. For the purpose of this Motion there is no relevant difference between the two statutes. It is firstly necessary to describe the relevant functions and powers of the AAT.

11 The AAT is constituted pursuant to the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). The AAT is required to provide a mechanism of review that is “fair, just, economical, informal and quick” (s 2A). “Proceeding” in relation to the Tribunal is defined to include applications to the Tribunal for review of a decision (s 3).

12 Section 33 of the AAT Act provides:

1. In a proceeding before the Tribunal:

…

(c) the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.

13 In proceedings in which a decision is reviewed the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision (s 43(1)). In Re Pochi v Minister for Immigration & Ethnic Affairs (1979) 26 ALR 247, Brennan J, as President of the AAT, said at 256:

How are facts to be proved, and how is the sufficiency of proof to be determined when there are no rules of evidence binding upon either the Minister or the Tribunal? Section 33(1)(c) of the Administrative Appeals Tribunal Act provides that “the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate”. Although the Tribunal is governed by statute in the approach which it must take in assessing the evidence, and the Minister is not, I do not know that the statute confines the Tribunal to an approach which is more restricted than the approach which the Minister might properly take in assessing the same evidence.
The Tribunal and the Minister are equally free to disregard formal rules of evidence in receiving material on which facts are to be found, but each must bear in mind that “this assurance of desirable flexible procedure does not go so far as to justify orders without a basis in evidence having rational probative force”, as Hughes CJ said in Consolidated Edison Co v National Labour Relations Board 305 US 197 at 229. To depart from the rules of evidence is to put aside a system which is calculated to produce a body of proof which has rational probative force, as Evatt J pointed out, though in a dissenting judgment, in R v War Pensions Entitlement Tribunal; Ex parte Bott (1933) 50 CLR 228 at 256: “Some stress has been laid by the present respondents upon the provision that the Tribunal is not, in the hearing of appeals, ‘bound by any rules of evidence’. Neither it is. But this does not mean that all rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of inquiry best calculated to prevent error and elicit truth. No Tribunal can, without grave danger of injustice, set them on one side and resort to methods of inquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such, do not bind, every attempt must be made to administer ‘substantial justice’.” That does not mean, of course, that the rules of evidence which have been excluded expressly by the statute creep back through a domestic procedural rule. Facts can be fairly found without demanding adherence to the rules of evidence.

14 Section 33 (1AA) of the AAT Act provides:

(1AA) In a proceeding before the Tribunal for a review of a decision, the person who made the decision must use his or her best endeavours to assist the Tribunal to make its decision in relation to the proceeding.

15 Division 4 of the AAT Act deals with “Hearings and evidence”. Section 37 deals with the lodging of material documents with the Tribunal. Section 37 (2) and (3) provide as follows:

Tribunal may require other documents to be lodged

(2) Where the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal, the Tribunal may cause to be given to the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the specified number of copies of each of those other documents that is in his or her possession or under his or her control, and a person to whom such a notice is given shall comply with the notice.

Privilege and public interest

(3) This section has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.

16 There is no definition of “proceeding” in the Act, however s 4 provides relevantly that the Act applies to “all proceedings in a federal court” (Cth Act) or “all proceedings in a NSW court” (State Act). The definitions of “federal court” in the Commonwealth Act and “NSW court” in the State Act include “any person or body (other than a court) that, in exercising a function under the law of the Commonwealth [State], is required to apply the laws of evidence”. It has not been submitted that there is any relevant difference between the “laws of evidence” in s 4 of the Act and the “rules of evidence” in s 33 of the AAT Act for the purposes of this Motion. The AAT is not “required” to apply the laws of evidence and is therefore not a “Court”. It follows therefore that the Act does not apply to the AAT.

Common law (litigation) privilege

17 The common law privilege was referred to in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 as a “rule of substantive law”. Gleeson CJ, Gaudron, Gummow and Hayne JJ said at 552:

It is now 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. It may be noted that the “dominant purpose” test for legal professional privilege was recently adopted by this Court in Esso Australian Resources Ltd v Federal Commission of Taxation in place of the “sole purpose” test which had been applied following the decision in Grant v Downs.

18 There are two aspects, or limbs, to the common law privilege: the first protects communications between the client and the lawyer that are made for the dominant purpose of providing legal advice to the client (advice privilege); the second protects communications between the client and the lawyer made for the dominant purpose of providing the client with legal services in connection with pending or anticipated legal proceedings (litigation privilege). Relevantly to the subject documents on this Motion McHugh J said in Daniels in relation to advice privilege at 563:

Legal professional privilege describes a person’s immunity from compulsion to produce documents that evidence confidential communications about legal matters made between a lawyer and a client or between a lawyer and a third party for the benefit of a client.

19 There is no definition of “proceeding” in the Supreme Court Act 1970 or in the Civil Procedure Act 2005. In contrast, the term is defined in s 4 of the Federal Court of Australia Act 1976 (Cth) as “a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal”.

20 In Griffin v Pantzer (2004) 207 ALR 169, an appeal to the Full Federal Court (Ryan, Heerey and Allsop JJ) in which one of the issues was whether the Evidence Act 1995 (Cth) applied to examinations under s 81 of the Bankruptcy Act 1966 (Cth). Allsop J, with whom Ryan J and Heerey J agreed, said:

198 The word “proceedings” is capable of wide and flexible application. In the Evidence Act, however, the proceedings contemplated are those conducted by a court, or by a person or by a body who or which is required to apply the laws of evidence. The whole Evidence Act is concerned with the regulation of the rules of evidence in proceedings in which there are parties, and in which there are witnesses. Chapter 2 deals with adducing evidence, Ch 3 with admissibility, Ch 4 deals with proof and Ch 5 with miscellaneous matters. Within Ch 3, Pt 3.10 deals with privileges. Division 2 deals with religious confessions and the privilege against self-incrimination.

199 As can be seen from the terms of s 128, and its place within Pt 3.10, the privilege being dealt with is that of a witness in legal proceedings to which the Evidence Act and the rules of evidence otherwise apply.

200 In the Final Report of the Australian Law Reform Commission Report on Evidence (No 38) the application of the bill is discussed at [55]–[57]. The following appears at [57]:

Proceedings. The Evidence Bill applies, subject to specified exceptions, in all proceedings in federal courts and in courts of the Territories. It applies whenever evidence is to be adduced, including in bail applications, interlocutory proceedings and proceedings heard not in open court but in chambers. It applies, not only in ordinary trials (whether civil or criminal) but also in matters such as bankruptcy proceedings . There are transitional clauses included to deal with hearings commenced but not concluded before the commencement of the Bill. [Emphasis added]
201 Though “bankruptcy proceedings” are specifically referred to, it does not follow that an examination after the sequestration order is made and the debtor is made a bankrupt is such a proceeding. The paragraph makes clear that it is proceedings “whenever evidence is to be adduced ”.

21 In Drakev Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, Bowen CJ and Deane J said of the AAT at 584-585:

The general functions conferred upon the Tribunal are plainly administrative in character. … Neither the fact that the Tribunal possesses certain procedural powers ordinarily enjoyed by courts nor the fact that the Tribunal is authorized to decide questions of law arising in proceedings before it means that, in performing these administrative functions, it is exercising judicial power. The fact that the Tribunal for the hearing of the review in the present matter was constituted by a single presidential member whose qualifications happened to be that he was a judge of this court may perhaps be thought to add to the Tribunal a superficial “trapping of curial decision–making”. The trappings of decision-making are not however necessarily indicative of the existence of judicial, as destinct from administrative, power (see generally, R v Quinn ; Exparte Consolidated Food Coporation (1977) 16 ALR 569-576 at 574). Many tribunals whose functions are purely administrative are under a duty to act judicially, that is to say, with judicial detachment and fairness. The trappings of judicial decision-making are, in some cases, no less appropriate to such a tribunal than they are to a court concerned with the exercise of judicial power of the Commonwealth.

22 In Cheney v Spooner (1929) 41 CLR 532 Isaacs and Gavan Duffy JJ, in dealing with the appellants contention that there was no “trial or proceeding” in which the appellant could be lawfully required to give evidence, referred to the existence of a “distinct judicial proceeding” (at 537). In Proustv Blake (1989) 17 NSWLR 267 at 270, Samuels JA noted that the term “proceeding” is not defined in the Supreme Court Act and that “it is used very generally” in that Act “to cover the whole variety of forensic exercises which may occur in the Court”. In Blake v Norris (1990) 20 NSWLR 300 at 306 Smart J said:

In Stroud's Judicial Dictionary , 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words "proceeding" or "proceedings" in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to "an action" whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that "proceedings" is sometimes used as including, or meanings, an action or prosecution, and sometimes as meaning a step in an action. The word "proceeding" is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.

Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question.

23 The respondents relied upon the decision of Campbell J in Re Doran Constructions Pty Limited(in Liq) (2002) 194 ALR 101 in which his Honour held that there was nothing in the Act that leads to the conclusion that evidence given in a liquidator’s examination would not be “the adducing of evidence” within the meaning of s 118 of the Evidence Act. In ReInterchase Corporation Ltd (1996) 139 ALR 183 Kiefel J held that an examination under s 596B of the Corporations Law was a “proceeding”. It does not seem to me that these cases really assist because in both instances the proceedings were in a Court.

24 In AWB the AWB had produced documents pursuant to a notice to produce issued by the Commissioner. AWB submitted that one document had been produced to the Commission by mistake and claimed privilege over it. The Commissioner ruled that legal professional privilege did not attach to the document and Young J considered the question of whether the privilege claim was available. Although the following is a lengthy extract, it seems to me to be a most helpful analysis of litigation privilege. His Honour said:

USE IN CONNECTION WITH LITIGATION


144 A traditional formulation of the second limb of legal professional privilege is that it applies to confidential communications passing between a client, the client’s legal adviser and third parties for the dominant purpose of use in or in relation to litigation which is either pending or in contemplation: see FCT v Pratt Holdings at 284 [39] per Kenny J. This formulation was referred to, with apparent approval, by Finn J in the Full Court in Pratt Holdings at 360 [6]: see also Grant v Downs at 677 per Barwick CJ.

145 The crucial difference between the first and second limbs of the privilege is that the second limb is not limited to communications whose dominant purpose is the giving or obtaining of legal advice. Communications lacking this advice element, such as communications between a solicitor and a prospective expert witness, will attract privilege where they occur in a litigation context: see JD Heydon, Cross on Evidence , vol 1, Butterworths, 1996, par 25235; SB McNicol, Law of Privilege , Law Book Company, 1992, at p 48; and SL Phipson, Law of Evidence , 16th edn, Sweet & Maxwell, 2005, at pars 23-81 and 23-82.

146 AWB contends that the second limb of the privilege extends, or should be extended by me, to confidential communications between a client and its solicitor and third parties which are undertaken for the dominant purpose of preparing evidence for possible use in a commission of inquiry. In short, AWB contends that the Inquiry should be treated as if it were litigation attracting the second limb of the privilege. Further or alternatively, AWB contends that Exhibit 665 was brought into existence for the dominant purpose of being used in connection with civil or criminal litigation that might result from the Inquiry and the recommendations of the Commissioner.

147 In argument, senior counsel for AWB acknowledged that there is no decided case in which the second limb of the privilege has been extended beyond adversarial litigation to a commission of inquiry. In Re L , the House of Lords declined to extend litigation privilege to proceedings under Part IV of the Children Act 1989 which were investigative and non-adversarial in nature and in which the Court was required to regard the welfare of the child as the primary consideration. Lord Jauncey of Tuillichettle held that litigation privilege is essentially a creature of adversarial proceedings and it was not appropriate to extend that privilege to care proceedings which are essentially non-adversarial: at 26 [H]. Lord Lloyd of Berwick and Lord Steyn agreed. Lord Nicholls of Birkenhead delivered a dissenting speech with which Lord Mustill agreed.

148 Lord Nicholls considered that the issue could not be resolved by applying the labels inquisitorial or adversarial to different types of proceedings: at 31 [F]. Proceedings may possess some adversarial features and some inquisitorial features. Moreover, Lord Nicholls thought that these terms divert attention from the crucial question, which is whether the proceedings are of a character which cannot be conducted fairly in the absence of litigation privilege.

149 Lord Nicholls considered that litigation privilege should apply to family proceedings for the following reasons:


‘Family proceedings are court proceedings. The court has to make decisions affecting, often profoundly, the whole future of a child and his or her family. Whenever necessary, the court makes findings on disputes of fact. It goes without saying that the parties to such proceedings are entitled to have a fair hearing. Whatever fairness does or does not require in other contexts, in this context a fair hearing includes at least the right to present one’s case and to call evidence.

Under English law an established ingredient of this right is legal professional privilege. Parties preparing for a court hearing may obtain legal advice in confidence. A party cannot be required to disclose communications between himself and his lawyer, or communications between the lawyer and third parties which come into existence for the purpose of obtaining legal advice in connection with the proceedings. A proof of evidence obtained from a potential witness of fact is not disclosable. Nor is a report obtained from a potential witness of expert opinion. A party may be required to produce a witness statement or expert’s report in advance as a precondition to the admission of that evidence at the hearing, but he is not required to disclose proofs of witnesses whose evidence he does not intend to adduce at the hearing. The public interest in a party being able to obtain informed legal advice in confidence prevails over the public interest in all relevant material being available to courts when deciding cases.

I can see no reason why parties to family proceedings should not be as much entitled to a fair hearing having these features and safeguards as are parties to other court proceedings.’


150 In Three Rivers , the Bank of England’s conduct was the principal subject to be investigated by the Bingham Inquiry. The Bank did not contend that the documents in issue attracted litigation privilege, presumably because of the decision in Re L .

151 In United States of America v Philip Morris Inc [2004] All ER (D) 448, claims of legal professional privilege arose in the context of an order for the examination of a solicitor in the High Court of Justice pursuant to a letter of request issued by the United States District Court for the District of Columbia. Brooke LJ, with whom Chadwick and Scott Baker LJJ agreed, said at [72]-[73]:

‘There is, in my judgment, a clear distinction to be made between adversarial proceedings (pending or contemplated) between two or more parties which are destined, in theory at any rate, for a contested hearing in a court or court-like body, and proceedings whereby a party may compel a non-party to produce relevant documents for the purposes of the main proceedings. The non-party may well wish to seek legal advice about his obligations in this regard, but all that will be in issue is whether he is or is not legally obliged to do what is required of him. In this context there is never any question of collecting evidence from third parties as part of the material for the brief in the action, or of seeking information which might lead to the obtaining of such evidence [references omitted]. If the non-party wishes to notify somebody else that it has received the application, and that other party may wish to take steps to assert a claim for confidentiality or privilege in the documents sought, it is difficult to see why litigation privilege should attach to that communication.
For these reasons, while the judge was correct in my judgment to categorise the letter of request process as adversarial, I do not consider that this fact alone would give rise to a sustainable claim for litigation privilege.’

152 In support of its contention that litigation privilege should extend to communications brought into existence in connection with the Inquiry, AWB pointed to the following matters. First, the Commissioner’s terms of reference require him to report on the lawfulness of AWB’s conduct and whether criminal or other legal proceedings should be instituted against AWB or any person associated with it. Thus, the Inquiry may have far-reaching consequences, legal or otherwise, for AWB and persons associated with it. Secondly, the Commissioner has conducted public hearings and witnesses have been examined and cross-examined at those hearings. The Commissioner has permitted AWB and others to be represented at the hearings, and it was said that the proceedings before the Inquiry have had an adversarial dimension to them. Thirdly, AWB submitted that evidence and other material had to be carefully prepared for the Inquiry, especially in view of the criminal penalties which attach to evidence which is untruthful. The preparation of evidence to be placed before the Inquiry necessitated legal assistance. In view of these considerations, AWB submitted that there is a compelling case for extending the second limb of the privilege to the Inquiry and, in particular, to the preparation of evidence for potential submission to the Inquiry.

153 AWB submitted that the policy considerations that attract privilege for documents that are brought into existence for the dominant purpose of providing legal services in connection with litigation apply with equal force to documents that are brought into existence for the dominant purpose of preparing and submitting evidence to the Inquiry. More specifically, it submitted that the broad rationale adopted by the High Court in Carter v Northmore Hale Davy & Leake (1995) 183 CLR 121 ( ‘Carter’ ) that underpins both limbs of legal professional privilege, namely that it is ‘a practical guarantee of fundamental, constitutional, or human rights... and a corollary of the rule of law’ (at 161 per McHugh J) supports the extension of the privilege beyond adversarial litigation to the conduct of this particular Inquiry, at least insofar as it affects AWB and its employees.

154 The judgments in Baker trace the origins of the two limbs of legal professional privilege. Dawson J noted at 128, by reference to Lord Selborne LC’s speech in Minet v Morgan (1873) 8 Ch App 361 at 366, that the law had advanced by successive steps: privilege was extended from communications relating to actual litigation to communications in anticipation in litigation and then to communications covering both litigation and legal advice. The litigation limb of the privilege developed first in response to the perceived requirements for a fair trial. Mason J said that communications in aid of litigation work were protected because ‘to compel the parties to disclose such communications made in the conduct of that litigation would be unfair to them, hamper the preparation of their cases and protract the determination of the litigation’: at 75. Brennan J referred to the ‘lawyers brief’ rationale that had been advanced by James LJ in Anderson v Bank of British Columbia (1876) 2 Ch D 644 at 656 and by Lord Simon in Waugh at 537, and said at 108:

‘If the prosecution, authorized to search for privileged documents, were able to open up the accussed’s brief while its own stayed tightly tied, a fair trial could hardly be obtained.’
See also Deane J at 113-116.

155 The traditional rationale for the litigation limb of legal professional privilege was explained by Stephen, Mason and Murphy JJ in Grant v Downs 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. As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision. None the less there are powerful considerations which suggest that the privilege should be confined within strict limits.’

156 In Carter at 160-161, McHugh J said that explanations of the rationale that have been put forward in terms of the proper functioning of the legal system or the perfect administration of justice take too little account of the fact that the privilege protects communications that seek or give legal advice in cases where no litigation is pending or contemplated. His Honour therefore expressed the rationale for the privilege more broadly:

‘Now that this Court has held that legal professional privilege is not a rule of evidence but a substantive rule of law, the best explanation of the doctrine is that it is ‘a practical guarantee of fundamental, constitutional or human rights’. By protecting the confidentiality of communications between lawyer and client, the doctrine protects the rights and privacy of persons including corporations by ensuring unreserved freedom of communication with professional lawyers who can advise them of their rights under the law and, where necessary, take action on their behalf to defend or enforce those rights. The doctrine is a natural, if not necessary, corollary of the rule of law and a potent force for ensuring that the equal protection of the law is a reality.’
See also Brennan J in Carter at 127; Baker at 94-95, 118 and 130; Waterford v Commonwealth (1987) 163 CLR 54 (‘ Waterford’ ) at 64; Maurice at 487; and Three Rivers at 677 [C] per Lord Carswell.

157 In Pratt Holdings , Stone J concluded that the High Court’s exposition of legal professional privilege in Daniels , Esso and other cases demonstrates that it is supported by a single rationale which applies to both litigation privilege and legal advice privilege: at 381 [85]. Merkel J agreed with this conclusion. However, Stone J added that the existence of a single rationale does not mean that it is no longer necessary to have regard to the different categories of legal advice and litigation privilege. Finn J did not find it necessary to decide whether legal professional privilege should now be recognised as a unified doctrine which, though having two applications (ie advice and litigation), has a single rationale. His Honour regarded this controversy as a well recognised one and observed that, at an appropriate level of abstraction, a common and unifying rationale can be found for both manifestations of the privilege: at 361 [9].

158 Legal professional privilege must be applied in a manner which is consistent with the policy reasons that justify its existence: see Pratt Holdings at 362 [18] and 367-368 [41]-[42] per Finn J, and 386 [105] per Stone J; and Three Rivers at 650 [35]. But this does not mean that the origins, and the distinctive scope and operation of the second limb of the privilege, are to be ignored. In my view, the authorities establish that the reason why litigation privilege has been recognised as a substantive rule of law and as a fundamental right, is that it operates to secure a fair civil or criminal trial within our adversarial system of justice. The rationale for litigation privilege does not support its extension to a commission of inquiry.

159 AWB also relied upon the broad terms in which legal professional privilege was expressed in the joint judgments in Daniels at 552 [9] and Esso at 64 [35]. In the latter case, Gleeson CJ, Gaudron and Gummow JJ said that the privilege protects the confidentiality of certain communications made in connection with the provision of legal services, including representation in proceedings in a court. AWB also referred to s 119 of the Evidence Act (Cth) which refers to ‘professional legal services relating to an Australian or overseas proceeding’. In my opinion, these matters do not support the extension of litigation privilege to the context of a commission of inquiry. In Daniels and Esso, the High Court was trying to describe the scope of the privilege in a summary way. The description recognises that in appropriate cases the privilege can extend beyond legal advice to include other forms of legal work. It would be wrong to infer from the High Court’s summary statement that it was intending to radically enlarge the operation of the rule. And in my view the language used in s 119 does not disclose any intention to extend litigation privilege to the conduct of a commission of inquiry.

160 AWB also relied upon the statement by Dawson J in Waterford at 101 that:

‘The concept of litigation for the purpose of the doctrine of legal professional privilege is, I think, wide enough to embrace the proceedings before the Tribunal which were conducted upon adversary lines and contemplated legal representation. Communications for the purpose of giving and receiving legal advice in relation to those proceedings fell, in my view, within the privilege.’


161 In my opinion, it is one thing to extend litigation privilege to adversarial proceedings before the Administrative Appeals Tribunal. The Administrative Appeals Tribunal is vested with statutory authority to determine issues with legally binding consequences. A Royal Commission is not in that position. A Commissioner simply carries out investigations, determines the facts and prepares a report and recommendations. A Commission does not finally determine any rights or obligations.

162 It must also be recognised that legal advice privilege applies in its full extent to legal work undertaken in connection with the Inquiry. Provided the dominant purpose test is satisfied, legal advice provided in connection with the preparation of evidence for possible use at the Inquiry will attract privilege. In the context of the provision of legal advice and the preparation of evidence for a commission of inquiry, the question must be asked whether any communications, falling within the margin between legal advice privilege which is available, and litigation privilege which historically has not been available, justifies the extension of litigation privilege beyond adversarial court proceedings so as to include a commission of inquiry. The location and retention of witnesses, expert or otherwise, is really an adjunct of adversarial litigation and, in my view, does not warrant such an extension.

163 Given the applicability of legal advice privilege in the context of a commission of inquiry, I am not persuaded that the broad rationale for legal professional privilege justifies the extension of the litigation limb so as to include a commission of inquiry.

164 The extension of litigation privilege to a commission of inquiry is a very large step. It is not a step which I feel able to take, as a single judge, in the absence of supporting authority and in the face of the recent decision by the House of Lords in Three Rivers .

165 I also reject AWB’s alternative submission that Exhibit 665 was brought into existence for the dominant purpose of being used in connection with litigation which might follow from the report of the Commissioner. It is unnecessary to debate whether potential future litigation of this kind, whether civil or criminal, is sufficiently in prospect or anticipated that it falls within the scope of the second limb of the privilege. Let that be assumed. The insurmountable difficulty I see is that, on the evidence, Exhibit 665 was not prepared so that it might be used in connection with future litigation of that kind. Rather it was prepared for possible use as part of Mr Lindberg’s evidence to the Inquiry. This use falls outside the scope of the second limb of the privilege so long as a commission of inquiry is not relevantly regarded as litigation.

25 The focus in the submissions in the present case has been on paragraphs [160]-[161] of AWB with the respondents submitting that Dawson J’s statements in Waterford and Young J’s statement in AWB at paragraph [161] provide authority for the proposition that litigation privilege is available in AAT proceedings. It is necessary therefore to analyse Waterford more closely.

26 Waterford v The Commonwealth of Australia (1987) 163 CLR 54 was an appeal from a decision of the Full Federal Court [(1985) 7 ALD 93] dismissing an appeal from a decision of the AAT [(1984) 5 ALD 588]. The appellant had made a request in accordance with s 15 of the Freedom of Information Act 1982 (Cth) (the FOI Act) of the Department of Treasury (the Department) for access to documents relating to projections in the 1982/3 Budget Papers and in a subsequent Ministerial press release in relation to the number of people who would receive unemployment benefits. The Department refused access to those documents. The appellant applied to the AAT for review of that decision.

27 Prior to the AAT giving its decision in relation to the appellant’s application, the appellant sought access to the documents in the Department’s possession that related to the processing of his original request. The Department refused access to those documents. The appellant then applied for a review of that decision in the AAT. The documents that were identified in respect of that process included: (i) notes prepared by the Officers of the Department; (ii) letters between the Attorney General and the Treasurer; and (iii) memoranda between the Departmental Officers and Officers of the Deputy Crown Solicitors Office of the ACT (subsequently the Australian Government Solicitor).

28 In the AAT the Department claimed that the documents were exempt documents, inter alia, under s 42(1) of the FOI Act which provides:

A document is an exempt document if it is of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege.

29 The AAT held that each of the documents was exempt under s 42(1) and the Full Federal Court (Fisher, Gallop and Neaves JJ) dismissed the appeal. The appeal to the High Court was dismissed (Mason and Wilson JJ, Brennan J; Deane and Dawson JJ dissenting). In the joint judgment of Mason and Wilson JJ, their Honours identified the central question in the appeal as (at 60):

… whether it is open to the Commonwealth to claim legal professional privilege in the circumstances of this case, that is to say in respect of documents the subject matter of which is legal advice obtained from within the Government and concerned with proceedings pending in the tribunal.

30 Their Honours said of s 42(1) of the FOI Act (at 64):

The plain reading of this provision would suggest that Parliament has acknowledged expressly that legal advice tendered in connexion with the process of administrative decision-making will attract the privilege. Furthermore, the nature of the proceedings on an application for review cannot affect the matter. The relevant question is whether the document to which access is sought is an exempt document. If the privilege attaches, it will have the character from the beginning, regardless of whether or not the decision to refuse access is reviewed.

31 Their Honours also said (at 67):

But the point of overriding importance to the appellant’s argument focuses on the second category of documents to which the privilege attaches, that is to say, professional communications between a client and his legal adviser in connexion with legal proceedings . It was to this category of documents that much of the appellant’s request for access related. If a communication satisfies the description of a document brought into existence for the sole purpose of enabling a confidential professional communication between a client and his legal adviser in connexion with pending or anticipated legal proceedings then in our opinion it follows that it is an exempt document within the meaning of s. 42 of the Act. In such a case it is not to the point that the document may contain advice which relates to matters of policy as well as of law. It is the connexion between the document and legal proceedings that establishes its character and thus attracts the privilege.

32 Dawson J drew the distinction between a situation in which advice was given by an in-house lawyer “in a professional capacity in relation to a professional matter” and that given to assist the government “in the purely executive function of decision making”. His Honour held that the former attracted privilege and the latter did not. Dawson J identified the privilege that was in issue in the proceedings as follows (at 95):

The legal professional privilege relied upon in this case is that which attaches to communications between a legal adviser and his client for the purpose of giving or receiving legal advice and to documents recording those communications or containing information for the purpose of enabling the advice to be given.

33 At 101 his Honour said:

The relevant documents for which privilege was claimed in this case relate, however, not to the decision to refuse access to the document to which access was originally sought and refused, but to the proceedings before the Tribunal in which that refusal was contested. … Thus the communications for which privilege was claimed in this case appear to relate, not to advice given to assist in reaching the decision to refuse access to those documents (a decision which would have been simply in the administration of the Act), but to the proceedings before the Tribunal in which the decision to refuse access was contested.
The concept of litigation for the purpose of the doctrine of legal professional privilege is, I think, wide enough to embrace the proceedings before the Tribunal which were conducted upon adversary lines and contemplated legal representation. Communications for the purpose of giving and receiving legal advice in relation to those proceedings fell, in my view, within the privilege. … [I]t is clear enough that in giving legal advice about the proceedings before the Tribunal [the legal advisers] were acting in a professional capacity in relation to a professional matter and enjoyed the relationship of lawyer and client with the respondent.

34 That statement at the commencement of the second paragraph above is the passage quoted by Young J in AWB at par [160]. The applicant submitted that when the passages above are read together it can be seen that Dawson J was indicating that advice in relation to the AAT proceedings was, for the purposes of advice privilege at common law, legal advice. It was submitted that this was to be contrasted with advice in relation to the decision whether or not to refuse access to documents, which would be advice to assist with the purely executive function of decision-making.

35 It was submitted that the question of whether litigation privilege extended to the communications in connection with the hearing of an application before the AAT does not appear to have been an issue in Waterford in the Full Federal Court [(1985) 7 ALD 93] or to have been the subject of argument before the AAT [(1984) 5 ALD 588]. It was submitted that such argument was conducted in terms of advice privilege. I agree with that submission.

36 The respondents submitted that the question of whether the application before the AAT was a “legal proceeding” for the purposes of the FOI Act was accepted by Mason and Wilson JJ in their finding (at 67) that communications in relation to an application before the AAT would be privileged if there was “connection between the document and the legal proceedings”. The respondents also submitted that Mason, Wilson, Brennan and Deane JJ did not query the status of the AAT proceeding as “legal proceedings” notwithstanding that the issue was clearly raised by Dawson J. The respondents made the following submission:

9. Dawson J (dissenting) considered that the question of privilege should not be determined by reference to the Freedom of Information Act , but under the common law doctrine of legal professional privilege, as communications for which privilege was claimed related to the AAT’s decision to refuse access to the documents and not to the Department’s refusal. Dawson J confirmed that the common law doctrine of litigation privilege could apply to proceedings in the AAT. This element of his Honour’s judgment is accepted by Young J in Cole … The interpretation of the common law doctrine of litigation privilege in both Cole and Waterford is entirely consistent with the respondent’s interpretation of s 119 of the Act.

37 In contrast, the applicant submitted that in the passage at paragraphs [160]-[161] of AWB, Young J did not say that litigation privilege extends to communications regarding AAT proceedings. I agree that Young J did not make that express statement. His Honour identified the fact that AWB relied on what Dawson J said in Waterford and contrasted the position between the AAT and the Royal Commission there under consideration. His Honour did not analyse the nature of AAT proceedings other than to say that the AAT is “vested with statutory authority to determine issues with legally binding consequences”. It seems to me that, rather than endorsing what Dawson J said in Waterford, Young J accepted the statement as correct for the purpose of drawing the distinction between the AAT and the Royal Commission and in doing so identified an attribute of the AAT that was not available to the Royal Commission.

38 The applicant conceded that the decisions in Waterford and AWB identified some relevant factors for determination in this Motion being: (1) the fact that the AAT proceedings contemplated legal representation (Waterford per Dawson J at 101); (2) the fact that the AAT is “vested with statutory authority to determine issues with legally binding consequences” (AWB per Young J at [161]); and (3) the statement that the AAT proceedings were “conducted on adversary lines” (Waterford per Dawson J at 101).

39 It is conceded by the applicant that the AAT proceedings contemplate legal representation. That matter alone is not sufficient to attract litigation privilege. It is a matter that is to be considered with other relevant factors.

40 It is accepted that the AAT has statutory authority to determine issues that are legally binding on parties. There are many bodies that make decisions that are legally binding on individuals, for example the Australian Taxation Office in relation to assessments, licensing authorities in relation to the granting of licenses and local councils in relation to development consents. Once again this criterion alone does not seem to me to be a proper basis upon which litigation privilege should be extended to AAT proceedings, however it is a matter to be taken into account in determining whether litigation privilege extends to the AAT.

41 In Re L (a minor) [1997] AC 16, a case referred to by Young J in AWB, a two year old child was admitted to hospital in an unconscious state after consuming a quantity of prescription methadone. The child recovered quite quickly after medical treatment. The parents were both registered heroin addicts and the mother claimed that the child had taken the methadone accidentally. The local authority obtained an emergency protection order and then commenced care proceedings in the county court under Part IV of the Children Act 1989 (UK). The mother was granted leave to disclose the court papers to a medical expert, for the purpose of a report regarding the frequency of the consumption of methadone by the child. That report was to be filed with the court. The local area police sought access to the report for the purposes of investigating criminal offences. Bracewell J made an order authorising disclosure of the report to the police authority. The mother appealed on the basis that the report was protected by legal professional privilege and that it infringed her privilege against self-incrimination. The Court of Appeal dismissed the appeal and the mother appealed to the House of Lords.

42 Lord Jauncey of Tullichettle, (with whom Lord Lloyd of Berwick and Lord Steyn agreed, Lord Mustill and Lord Nicholls of Birkenhead disagreeing) said (at 25):

Litigation privilege, as it has been called, is an essential component of adversarial procedure

and continued( at 25):

Finally, in Waugh v British Railway Board [1980] A.C. 521, 536 Lord Simon of Glaisdale said:

“ This system of adversary forensic procedure with legal professional advice and representation demands that communications between lawyer and client should be confidential, since the lawyer is for the purpose of litigation merely a client’s alter ego. So to material which is to go into the lawyer’s (i.e. the client’s) brief or file for litigation. This is the basis for the privilege against disclosure of material collected by or on behalf of a client for the use of his lawyer in pending or anticipated litigation …”

43 Lord Jauncey referred to the numerous cases in which wardship proceedings had been held to be non-adversarial and after observing that in both wardship and care proceedings the welfare of the child is the primary consideration, his Lordship agreed with Sir Stephen Brown P in the Oxfordshire case [1994] Fam. 151, that care proceedings “are essentially non-adversarial” (at 25-26). His Lordship said:

However in these proceedings, which are primarily non-adversarial and investigative as opposed to adversarial, the notion of a fair trial between opposing parties assumes far less importance. In the latter case the judge must decide the case in favour of one or other party upon such evidence as they choose to adduce, however much he might wish for further evidence on any point. In the former case the judge is concerned to make a decision which is in the best interest of the child in question and may make orders which are sought by no party to proceedings: sections 10 (1) (b) , 31(5), 34(5) of the Act. Furthermore, the court has wide powers under rule 4.11 (9) (10) of the Rules to require the guardian ad litem to obtain expert reports and other assistance. Thus the court is seeking to reach a decision which will be in the best interests of someone who is not a direct party and is granted investigative powers to achieve that end. In these circumstances I consider that care proceedings under Part IV of the Act are so far removed from normal actions that litigation privilege has no place in relation to reports obtained by a party thereto which could not have been prepared without the leave of the court to disclose documents already filed or to examine the child.

44 The reference to the proceedings being far removed from “normal actions” seems to me to be a reference to the normal or usual actions of the Court. That is, its usual or normal actions of hearing cases on the evidence adduced by the parties and not going beyond those “actions”, for instance, by calling evidence on its own motion or requiring production of possibly relevant documents.

45 Lord Nicholls, in delivering the minority opinion in Re L, suggested that the litigation privilege was a “safeguard” to a “fair hearing” in family proceedings. In AWB Young J expressed the rationale with precision when he said that litigation privilege operates to “secure a fair civil or criminal trial within our adversarial system of justice” (at [158]).

46 In Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186 Fox J said (at 199):

… we should be cautious in trying to apply to procedures and practices operating in an administrative setting those which apply in a judicial setting. This is not to say that an administrative tribunal may not, subject to the regulations governing it, find it convenient or helpful to follow in some respects procedures which over the span of many years have been found by courts of law to be most conducive to the interests of justice. They plainly must be able to accept concessions of fact, but so to express the matter is to confuse their function, which is one of the administrative inquiry, without rules of evidence.

47 The respondents did not call any evidence in relation to the manner in which proceedings are conducted in the AAT. The fact that legal representation is contemplated in the AAT does not mean that the proceedings are adversarial. The fact that the legal representatives of the applicants in AAT proceedings may argue for an outcome different to that in the decision under review whilst the decision-maker is represented does not mean that the proceedings are adversarial. It is important to consider the functions and powers of the AAT in determining whether the proceedings are adversarial.

48 In APRA v VBN & Ors [2005] FCA 1868, in an application pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B(1A)(a) and (c) of the Judiciary Act 1903 (Cth), Ryan J reviewed the decision or conduct of the AAT in making an order under s 37(2) of the AAT Act that the decision-maker lodge certain documents, including “legal advice” and “relevant instructions” relating to the “interpretation and application of the law relating to the decision under review”. In its reasons for making the order the AAT observed that s 37(3) “expressly abrogates legal professional privilege in relation to documents that must be lodged with the Tribunal under ss 37(1) or 37(2)”.

49 Ryan J held that the reach of the sub-section did not extend to expressions of legal opinion or advice that may have been available to the decision-maker but were not considered in the course of arriving at the impugned decision (at [32]) but that the AAT retained the “facility” to require the decision-maker to lodge “copies of legal advices which may be relevant to the review” (at [58]). His Honour said:

38. At [21] of its reasons the Tribunal observed that s 37(3) “expressly abrogates legal professional privilege in relation to documents that must be lodged with the Tribunal under ss 37(1) or 37(2). It also appears to do so in relation to the documents that must be given to each other party of the proceeding. …”. With respect, it may put the effect of s 37(3) too high to say that it “abrogates” legal professional privilege. What the sub-section does, in my view, is to require the earlier provisions of s 37 to be given full effect in the sense that privilege cannot be advanced as a reason or excuse for not complying with those sub-sections …

…


39. If I am right in the analysis undertaken at [34] to [36] above that the sole source of power in the Tribunal to require a decision-maker to lodge documents with the Tribunal is s 37(2) of the Act, a decision to impose such a requirement is expressly provided for by the Act. It is final or operative and determinative in a practical sense in that it impinges on the decision-maker’s right to preserve undisclosed documents to which legal professional privilege attaches. …

40. I have already indicated at [8] above my tentative view that s 37(3) of the Act does not “abrogate” privilege, including legal professional privilege. If, as I think, scope remains for the Tribunal to give effect to legal professional privilege attaching to documents required to be lodged by a decision-maker, a decision which denies that effect has a final impact on what the High Court has identified as a substantive common law right or immunity. It is therefore a decision under an enactment notwithstanding that it is procedural in the sense of being made on the way to arriving at the ultimate decision entrusted to the Tribunal.

50 Section 37(3) makes clear that a claim for legal professional privilege is not available to resist the production of documents ordered to be produced pursuant to s 37(2) of the AAT Act. The express exclusion of that common law right or immunity is confined to that aspect of the AAT’s powers. It does not affect the existence of the right in relation to other aspects of the AAT’s powers. On one view of it, the limit of s 37(3) of the AAT Act and the absence of any other express exclusions, confirms the availability of the common law privilege in relation to review proceedings. However that does not mean that both limbs of the common law privilege are available. It is necessary to analyse the nature of the review “proceedings” to decide whether litigation privilege is available.

51 In McDonald v Director-General of Social Security (1984) 1 FCR 354, the Director General’s decision was challenged on a number of bases including that the AAT had erred in failing to place an onus of proof on the respondent. In the Full Court (Woodward, Northrop and Jenkinson JJ) Northrop J said (at 365-366):

A person makes a claim for a pension and that claim is determined by the Director-General or his delegate. The Director-General, or his delegate, determines a claim on all the relevant material in his possession. Parties do not appear before him. There are no adversary procedures. In one sense it is true to say that a claimant has an onus of proof, but the use of that expression obscures the true nature of the duty imposed on the Director-General, or his delegate, to determine the matter. A pension is paid only so long as the pensioner is qualified to receive the pension.

…

Similar principles apply to proceedings before the AAT. The Tribunal is not bound by the rules of evidence. It has before it all the material that was before the person who made the decision under the Act and which is the subject of the review before the AAT. Additional material may be placed before the AAT. As a matter of convenience, the Director normally appears to assist the Tribunal, but the Director-General is not to be treated in the same way as a party to proceedings before a court. In Sordini v Wilcox (1982) 64 FLR 440, a review under the Administrative Decisions (Judicial Review) Act 1977 (Cth), the administrative body whose decision was being reviewed appeared before the court. At p 451 Northrop J said:

"Counsel for the respondents stated that each of the first three named respondents, being the members of the Review Committee, would abide by the order of the court. Counsel for the respondents, very properly, made substantive submissions on behalf of the Commission. Where there are no adversary parties appearing before an administrative body, as in this case, it is important that the court receive assistance of counsel appearing for the administrative body making the decision which is being challenged under the Judicial Review Act."

It is equally important that in reviews by the AAT of decisions by administrative bodies such as the Director-General, or his delegate, in which there were no adversary parties, the AAT receive the assistance of persons acting on behalf of the administrative body. Likewise, in appeals of this Court from the AAT on questions of law, it is important that the court receive the assistance of counsel appearing for the administrative body. This practice, however, which gives the outward appearance of an adversary system, should not be allowed to obscure the true position, and in particular to justify the introduction of concepts of onus of proof into the determination of claims under the legislation where no onus of proof in the legal sense arises. This view, quite correctly, has been acted upon by the AAT in the past. The AAT has not departed from that practice in the present case.

52 Brennan J in Bushell v Repatriation Commission (1992) 175 CLR 408 said at 424-425:

Proceedings before the AAT may sometimes appear to be adversarial when the Commission chooses to appear to defend its decision or to test a claimant's case but in substance the review is inquisitorial. Each of the Commission, the Board and the AAT is an administrative decision-maker, under a duty to arrive at the correct or preferable decision in the case before it according to the material before it. If the material is inadequate, the Commission, the Board or the AAT may request or itself compel the production of further material. The notion of onus of proof, which plays so important a part in fact-finding in adversarial proceedings before judicial tribunals, has no part to play in these administrative proceedings.

53 These observations are at odds with what Dawson J said in Waterford, however it must be remembered that his Honour did not analyse the AAT Act nor did he provide any reasons for his conclusion that the AAT proceedings were conducted on “adversary lines”. It must also be remembered that the AAT Act had only been in force for about four years at the time that Dawson J made his observations. I am of the view that the observations of Northrop J and Brennan J are more powerful and persuasive on the question of whether proceedings in the AAT are “adversarial”. They lead to the conclusion that the proceedings are not adversarial.

54 Section 33(1AA) of the AAT Act is also of significance. This is the statutory recognition of what Northrop J said in relation to the decision-maker appearing to “assist the Tribunal”. It may be that the outward appearance of the proceedings (as referred to by Northrop J in McDonald and Brennan J in Bushell) is adversarial, but the overriding statutory obligation of assistance to the Tribunal by the decision-maker is another factor that leads me to the conclusion that the proceedings are non-adversarial. Other factors to be taken into account in deciding whether litigation privilege is available include that the AAT stands in the shoes of the decision-maker and is able to inform itself in any manner that it deems fit. It is able to go beyond the submissions put to it by those appearing before it and is able to require the production of documents that it regards “may be relevant to the review of the decision”. It may inquire into matters as it sees fit. The Tribunal’s power to, itself, call evidence is also relevant: Re Drake and Minister for Immigration and Ethnic Affairs (No.2) (1979) 2 1979 ALD 634. The AAT is not a court and the decision on a review does not involve the exercise of judicial power: Drake v Minister of Immigration and Ethnic Affairs (1979) 24 ALR 577 (at 584-585 per Bowen CJ and Deane J).

55 For all these reasons I am satisfied that the AAT stands outside what Young J referred to in AWB as the “adversarial system of justice” (at [158]). I am satisfied that the AAT proceedings are not “proceedings” within the meaning of that term in the Act nor is there a proper basis upon which the common law litigation privilege should be extended to them. The dictates of fairness are served by the availability of common law advice privilege and litigation privilege does not apply to the administrative processes and proceedings in the AAT.

Order

56 As litigation privilege is the only basis upon which access was opposed, the applicant is entitled to an order for access to the documents, however I intend to impose a condition on that access. I order that the applicant may have access to the documents produced on Subpoena by Mr Bartlett subject to any claim for advice privilege made by the respondents. If any such claim is to be made it should be made by no later than 9 June 2006. If the parties are unable to agree on a costs order I will hear argument on a date to be fixed by arrangement with my Associate, such arrangement to be made no later than 16 June 2006.

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