LEGAL PROFESSIONAL PRIVILEGE – communications prepared for purpose of consultation with foreign lawyer – proof that such communications were for the dominant purpose of obtaining legal advice – burden of proof not discharged
LEGAL PROFESSIONAL PRIVILEGE – scope of privilege – communications for purpose of seeking or receiving foreign legal advice – communications for purpose of obtaining foreign assistance to evade scrutiny of assets and transactions by Australian authorities – whether communications entitled to legal professional privilege
CRIMINAL LAW – investigations and inquiries – search and seizure – warrant authorising seizure of documents of specified class– whether warrant authorised seizure of documents reasonably suspected of falling within specified class
EVIDENCE – proceedings seeking declaration that document is privileged from production – disputed document sought in the course of ongoing investigation conducted under statutory authority – whether hearsay evidence of purpose of creation of document admissible – whether proceedings final or interlocutory for purposes of Evidence Act
EVIDENCE – statutory discretion to exclude prejudicial evidence – whether discretion restricted to cases of potential misuse of evidence by tribunal of fact – whether discretion restricted to cases of potential forensic prejudice in instant case
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Kennedy v Wallace [2004] FCA 332
Case
[2004] FCA 332
Decision Date
CaseChat Overview and Summary
In the case of Kennedy v Wallace, the applicant, Kennedy, sought the return of certain documents that were seized by the Australian Securities and Investments Commission (ASIC) under a warrant issued pursuant to the Crimes Act 1914 (Cth). Kennedy argued that the seized documents, specifically two pieces of notepaper with handwriting and a notepad without handwriting, were protected by legal professional privilege. ASIC, on the other hand, argued that the documents were not privileged and that the seizure was valid. The case involved determining whether the seized documents were indeed protected by legal professional privilege, and if so, whether that privilege applied to communications with a foreign lawyer.
The primary legal issues before the court were whether legal professional privilege applied to the documents in question and if so, whether it extended to communications with a foreign lawyer. The court had to consider the nature and scope of legal professional privilege under Australian law, particularly in the context of communications with foreign legal advisers. The court also had to determine whether the privilege was applicable to the specific documents seized by ASIC and whether it could be enforced in this case.
The court examined the rationale and scope of legal professional privilege, noting that it exists to encourage full and frank disclosure by clients to their lawyers, thereby serving the public interest in the administration of justice. The court concluded that the privilege applies to communications between an Australian client and a foreign lawyer when the advice concerns Australian law. However, the court found that the privilege did not extend to communications concerning foreign law. The court also found that the documents in question did not fall within the description of documents specified in the warrant, leading to the conclusion that the seizure of the blank notepad was not authorized. The court ultimately decided that the seized documents were protected by legal professional privilege, but only to the extent that they related to advice concerning Australian law.
The court ordered that the application be stood over to a date to be fixed, indicating that further proceedings would be necessary to determine the specifics of the relief sought by Kennedy.
Orders
Orders of the court
The application stand over to a date to be fixed.
Background
Background to the litigation
It is claimed by the applicant that the two notes with handwriting are protected from valid seizure by the existence of legal professional privilege. That claim of legal professional privilege was first made by Atanaskovic Hartnell on behalf of Kennedy by letter of 18 November 2003. It is claimed that the Ritz notepad without handwriting is not properly within the description of documents in the warrant. Orders are sought for the return of the pieces of notepaper and the notepad. ASIC denies the existence of legal professional privilege in the contents of either of the pieces of notepaper with writing on various bases and says that any such privilege which might otherwise exist was waived or cannot be enforced. Kennedy denies any waiver of privilege. ASIC contends that the seizure of the blank Ritz notepad was authorised by the warrant. Facts and Circumstances The immediate events commenced on 30 October 2003 when The Australian Financial Review newspaper (AFR) published a series of articles over a number of pages (commencing with page 1) concerning what was described as a special investigation. The articles published included headlines such as:‘Share-trading secrets: A special investigationRivkin’s Swiss bank scandal’‘Inside the Offset Alpine maze’‘I keep no Swiss records, says Trevor Kennedy’ The most significant allegation concerning Kennedy was that one René Rivkin (Rivkin) had given evidence to Swiss authorities that Kennedy had been the beneficial owner of approximately 12 per cent of a parcel of shares in the Australian listed public company Offset Alpine Printing Group Limited (Offset Alpine). It will be necessary to look more closely at events surrounding that parcel of shares but for present purposes it suffices to know that, when Kennedy had been interviewed by officers of the predecessor of ASIC in 1995, he had denied holding any beneficial interest in that parcel of shares. The AFR articles also contained a good deal of information alleged to relate to dealings between Kennedy and various Swiss banks. The implication of the articles was that the proceeds from the Offset Alpine shares and other monies had been hidden from the Australian authorities by means of such dealings. The articles purported to quote from the transcript of the interview between Rivkin and the Swiss authorities which was, so they said, conducted in the presence of his Swiss lawyer – a lawyer also said to be retained by Kennedy. The articles also purported to quote from at least two letters written by Kennedy to that lawyer in 2002. By about 10.30 am on 30 October Kennedy had retained Tony Hartnell (Hartnell) of Atanaskovic Hartnell to act for him in matters arising out of the publication of the AFR articles. During the course of the afternoon, he visited Rivkin at his house by prior arrangement. Graham Richardson (Richardson), who was also implicated by the AFR articles in relation to beneficial ownership of part of the Offset Alpine shareholding and dealings with Swiss banks, was also present.
Evidence
Evidence Before The Court
For the sake of completeness, I should say that the warrant holder did not purport to rely upon s 3F(1)(d) of the Crimes Act and gave no evidence which would have permitted reliance upon it. Rulings on EvidenceFinal or interlocutory? During the hearing I ruled that the proceeding was final and not interlocutory for the purposes of s 75 of the Evidence Act 1995 (Cth). I did not then give reasons. These are those reasons. There is a plethora of cases dealing with the question whether proceedings are interlocutory or final for various purposes, including s 75 of the Evidence Act, some of which concern legal professional privilege. An issue as to whether documents are privileged from production upon that basis in the course of a substantive proceeding in a court is interlocutory. That does not decide the present question. This is a proceeding pursuant to s 39B(1) and s 39B(1A)(c) of the Judiciary Act 1903 (Cth) to, inter alia, seek to enforce a common law right or immunity. Legal professional privilege is not merely a rule of evidence. It is a rule of substantive law. (Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40; 192 ALR 561 at [9]–[11].) That has been the position since the High Court redefined the effect of the privilege in Baker v Campbell in 1983. There is a dispute or controversy between Kennedy and ASIC as to whether Kennedy is legally entitled to the benefit of that privilege in the present case. Settlement of that controversy or dispute is a ‘matter’ within the meaning of s 39B. (See the recent analysis by the Full Court in Commonwealth v Lyon (2003) 203 ALR 553 at [14]–[29].) In my opinion, as submitted for Kennedy, a decision upon that matter will be a final resolution of the dispute or controversy between the parties. ASIC submits that the potential seizure of the notes is a step in an ongoing investigation and that a proceeding to determine the legality of that seizure is not determinative of any legal right that could arise for final determination independently of the existence of that investigation. It is submitted that a decision in this case would not govern the same issue arising later, particularly if (as in the case of waiver) there were different facts. It needs to be borne in mind that, although argument in the case has been confined to the issue of legal professional privilege, the relief sought involves the execution of a search warrant which has no connection with any curial proceeding. The description of that as part of an ongoing investigation is beside the point. Reference is made on behalf of ASIC to a statement by Campbell J in Re Doran Constructions Pty Ltd (In Liq) (2002) 194 ALR 101 at [128] that a determination that a document is the subject of legal professional privilege is interlocutory. This statement was referred to with apparent approval by Hansen J in Re Bufalo Corporation Pty Ltd(No 2) (2002) 43 ACSR 241 at [43]–[44]. The jurisdiction being exercised in Re Doran Constructions was supervision by the New South Wales Supreme Court of examinations conducted in that Court by a liquidator pursuant to Part 5.9 of the then Corporations Law. In particular it was a review of a ruling by the Deputy Registrar who presided at the examinations. The issue in Bufalo Corporation Pty Ltd was similar in substance. That situation is clearly distinguishable from the present and it is unnecessary that I should examine the correctness or otherwise of the conclusions in those cases.
Decision
Reasons for decision
GYLES J
It was submitted on behalf of ASIC that a claim of privilege is governed by the law of the forum in which the claim is made in answer to, in this case, seizure of the document (Nygh and Davies, Conflict of Laws in Australia, 7th Edn, 2002, pages 303 and 311) and that submission was not disputed. Neither side sought to prove Swiss law relating to legal professional privilege.Conclusions as to the Law In my opinion, the authorities consulted do not establish the proposition that all communications of a professional nature between an Australian client and a foreign lawyer concerning advice as to foreign law are privileged from seizure in Australia under a valid warrant issued pursuant to the Crimes Act 1914 (Cth). Furthermore, such a proposition is inconsistent with the rationale for legal professional privilege. The High Court of Australia considered the rationale for legal professional privilege most recently in Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49. The majority, Gleeson CJ, Gaudron and Gummow JJ, said (at 64):‘The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers.’ (emphasis added)In Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 511 the rationale ascribed by Gibbs CJ to the privilege was the ‘proper functioning of the legal system’, in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 487 by Mason and Brennan JJ ‘the furtherance of the administration of justice’ and by the Earl of Halsbury LC in Bullivant v Attorney-General (Victoria) [1901] AC 196 at 200–201 ‘the perfect administration of justice’. In Baker v Campbell (1983) 153 CLR 52 at 95, Wilson J sought to explain the extension of the privilege to advice as follows:‘In fostering the confidential relationship in which legal advice is given and received the common law is serving the ends of justice because it is facilitating the orderly arrangement of the client’s affairs as a member of the community. Furthermore in promoting the faithful discharge of his responsibilities and the enjoyment of his rights under the law the ends of justice are being served. It is in the public interest to encourage the service of such ends.’The multiplicity and complexity of the demands which the modern state makes upon its citizens underlines the continued relevance of the privilege to the public interest. The adequate protection according to law of the privacy and liberty of the individual is an essential mark of a free society and unless abrogated or abridged by statute the common law privilege attaching to the relationship of solicitor and client is an important element in that protection.It is not only a matter of protection of the client. But freedom to consult one’s legal adviser in the knowledge that confidential communications will be safeguarded will often make its own contribution to the general level of respect for and observance of the law within the community …’ (emphasis added)
Ratio Decidendi
Legal Principle Established
Established by:
GYLES J
The High Court of Australia considered the rationale for legal professional privilege most recently in Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49. The majority, Gleeson CJ, Gaudron and Gummow JJ, said (at 64):‘The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers.’ (emphasis added)In Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 511 the rationale ascribed by Gibbs CJ to the privilege was the ‘proper functioning of the legal system’, in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 487 by Mason and Brennan JJ ‘the furtherance of the administration of justice’ and by the Earl of Halsbury LC in Bullivant v Attorney-General (Victoria) [1901] AC 196 at 200–201 ‘the perfect administration of justice’. In Baker v Campbell (1983) 153 CLR 52 at 95, Wilson J sought to explain the extension of the privilege to advice as follows:‘In fostering the confidential relationship in which legal advice is given and received the common law is serving the ends of justice because it is facilitating the orderly arrangement of the client’s affairs as a member of the community. Furthermore in promoting the faithful discharge of his responsibilities and the enjoyment of his rights under the law the ends of justice are being served. It is in the public interest to encourage the service of such ends.’The multiplicity and complexity of the demands which the modern state makes upon its citizens underlines the continued relevance of the privilege to the public interest. The adequate protection according to law of the privacy and liberty of the individual is an essential mark of a free society and unless abrogated or abridged by statute the common law privilege attaching to the relationship of solicitor and client is an important element in that protection.It is not only a matter of protection of the client. But freedom to consult one’s legal adviser in the knowledge that confidential communications will be safeguarded will often make its own contribution to the general level of respect for and observance of the law within the community …’ (emphasis added) In the same case Dawson J said of the privilege (at 128–129):‘… it is now established that its justification is to be found in the fact that the proper functioning of our legal system depends upon a freedom of communication between legal advisers and their clients which would not exist if either could be compelled to disclose what passed between them for the purpose of giving or receiving advice. … The restriction of the privilege to the legal profession serves to emphasise that the relationship between a client and his legal adviser has a special significance because it is part of the functioning of the law itself.…The conflict between the principle that all relevant evidence should be disclosed and the principle that communications between lawyer and client should be confidential has been resolved in favour of the confidentiality of these communications. It has been determined that in this way the public interest is better served because the operation of the adversary system, upon which we depend for the attainment of justice in our society, would otherwise be impaired. … It is a doctrine which is based upon the view that confidentiality is necessary for proper functioning of the legal system and not merely the proper conduct of particular litigation.’ (emphasis added)