Law Society of New South Wales v General Manager, WorkCover Authority of New South Wales

[2004] NSWADTAP 40

Pending Appeal:

Appeal Panel - Internal

CITATION:	Law Society of New South Wales v General Manager, Workcover Authority of New South Wales (GD) [2004] NSWADTAP 40
PARTIES:	APPELLANT Law Society of New South Wales RESPONDENT General Manager, Workcover Authority of New South Wales
FILE NUMBER:	049005
HEARING DATES:	27/04/2004
SUBMISSIONS CLOSED:	04/27/2004
DATE OF DECISION:	09/09/2004
DECISION UNDER APPEAL:	Law Society of New South Wales v General Manager, Workcover Authority [2004] NSWADT 4
BEFORE:	O'Connor K - DCJ (President); Needham J - Judicial Member; Blake C - Non Judicial Member
CATCHWORDS:	fail to apply principle correctly to the facts - fail to exercise jurisdiction - no evidence
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	033135
DATE OF DECISION UNDER APPEAL:	01/12/2004
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Freedom of Information Act 1989 Legal Profession Act 1987 Workers Compensation (General) Amendment (Costs) Regulation 2001 Workers Compensation (General) Regulation 1995
CASES CITED:	Attorney General (NT) v Kearney (1985) 158 CLR 500 Attorney-General (NT) v Maurice (1986) 161 CLR 475 Baker v Campbell (1983) 153 CLR 52 Balabel & Anor v Air India [1988] Ch 317 at 330; [1988] 2 All ER 246 Brandusoiu v Commissioner of Police [1999] NSWADTAP 8 Collector of Customs v Pozzolanic [1993] FCR 280 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Commissioner of Police, NSW Police v Mooney (No 3) (EOD) [2004] NSWADTAP 22 Daniels Corp International Pty. Limited v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 DPP v Smith [1991] 1 VR 63 DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 203 ALR 348 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 Fagan v State of New South Wales [2004] NSWCA 182 Kennedy v Wallace [2004] FCA 332 Law Society of New South Wales v General Manager, Workcover Authority [2004] NSWADT 4 Mann v Carnell (1999) 201 CLR 1 Minter v Priest [1930] AC 558 Neary v The Treasurer, New South Wales [2002] NSWADT 261 Nedelandse Reassurantie Groep Holding NV v Bacon & Woodrow & ors [1995] 2 Ll R 77 Nye v State of New South Wales & ors [2002] NSWSC 1267 O’Reilly v State Bank of Victoria (1983) 153 CLR 1 Packer v Dep Cmr Taxation [1985] 1 Qd R 275 Re Cole and the Department of Justice (1994) 8 VAR 132 Re Gill and Brisbane City Council [2001] QICmr 4 Re Hewitt & Queensland Law Society (1998) 4 QAR 328 Re Minister for Immigration and Multicultural Affairs; ex p Applicant S20; A [2003] HCA 30 Re Price & Director of Public Prosecutions (1997) 4 QAR 157 Trade Practices Commission v Sterling (1979) 36 FLR 244 Waterford v Commonwealth of Australia (1987) 163 CLR 54 Wallace and Director of Public Prosecutions [2003] AATA 119
REPRESENTATION:	APPELLANT J Griffiths SC and A Searle of counsel instructed by A Brown, Law Society of New South Wales RESPONDENT M Allars of counsel instructed by R Ellis, Crown Solicitor's Office
ORDERS:	1. Appeal allowed; 2. Decision under appeal set aside; 3. Determination of the respondent set aside in so far as it relies on clause 10 to Schedule 1 (the legal professional privilege exemption); 4. Leave granted to extend appeal to the merits to review the remainder of the respondent’s determination; 5. Respondent’s application for costs of these proceedings adjourned.

1 On 13 December 2002 the appellant, the Law Society of New South Wales (Law Society), applied under the Freedom of Information Act 1989 (‘FOI Act’) to the respondent agency, Workcover, for documents held by it. The documents contained an advice given by a consultant to Workcover as to a new scale of costs for legal services. The advice was provided to assist Workcover in responding to a submission made by the Law Society to a government advisory committee.

2 Workcover refused access to all of the documents comprising the advice. The Law Society applied to the Tribunal pursuant to s 53 of the FOI Act for review of the determination. The Tribunal affirmed the determination: see Law Society of New South Wales v General Manager, Workcover Authority [2004] NSWADT 4.

3 The Tribunal was satisfied that Workcover was entitled to refuse access pursuant to s 25(1)(a) on the ground that it was an exempt document within the meaning of cl 10 to Schedule 1 which provides:

‘ 10 Documents subject to legal professional privilege

(1) A document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege.

(2) A document is not an exempt document by virtue of this clause merely because it contains matter that appears in an agency’s policy document.’

4 Though it was fully argued, the Tribunal did not, as a result, go on to consider whether the basis for refusal was established – that the documents were internal working documents within the meaning of cl 9 to Schedule 1 which provides:

‘ 9 Internal working documents

(1) A document is an exempt document if it contains matter the disclosure of which:

(a) would disclose:

(i) any opinion, advice or recommendation that has been obtained, prepared or recorded, or

(ii) any consultation or deliberation that has taken place,

in the course of, or for the purpose of, the decision-making functions of the Government, a Minister or an agency, and

(b) would, on balance, be contrary to the public interest.

(2) A document is not an exempt document by virtue of this clause if it merely consists of:

(a) matter that appears in an agency’s policy document, or

(b) factual or statistical material.’

5 The Law Society has appealed against the Tribunal’s decision pursuant to s 113 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act). It seeks an order setting aside the Tribunal’s determination on the basis that is affected by errors of law, and the leave of the Appeal Panel, pursuant to s 113(2)(b) of the Tribunal Act, to extend the appeal to the merits. Workcover opposes the appeal and supports the decision of the Tribunal; alternatively if the appeal is successful, it seeks to have the matter remitted (as distinct from being left with the Appeal Panel) for determination of whether the documents are exempt by reference to cl 9.

6 During 2001 the New South Wales Government embarked on major reforms of the workers compensation dispute resolution system. One of the Government’s aims was to reduce the extent of reliance on legal services in the processing and disposal of claims, as one element of a strategy to reduce the cost of the system.

7 In October 2001, Workcover engaged Ms Michelle Castle, a well known legal costs consultant, to provide it with ongoing advice in relation to issues raised by the reform proposals. Ms Castle carried on work through two firms, one a costs consulting firm, the other a solicitor’s practice. She held a solicitor’s practising certificate. The engagement took the form of an agreement between Workcover and ‘Michelle Castle (trading as Thompson Castle [the firm of solicitors of which Ms Castle is a partner]) (‘the Consultant’) and ‘DFT Legal Services Pty Ltd (trading as DG Thompson Legal Costs Assessor)(‘the Consultants’)’.

8 During 2002 a committee to review the operation of the new scale was appointed by the Minister on which the Law Society, as the peak body for solicitors in New South Wales, was represented. In September 2002 Workcover renewed its agreement with Ms Castle. In October 2002 the Law Society made a submission to the review committee raising concerns in relation to the new scale. On 11 November 2002 Ms Castle gave Workcover confidential advice in reply. Apart from general advice, it included (as the Tribunal’s decision below reveals) assessment of the impact of the new scale on ‘scenarios’ developed after consultation with officers of the Law Society. On 13 December the Law Society lodged with Workcover the access application that has given rise to these proceedings.

9 Some aspects of the agreement with Ms Castle (or ‘the retainer’ as the Tribunal called it) should be mentioned.

10 The agreement stated in the preamble that:

‘Workcover has a need for expert advice on proposals for regulations relating to legal and agents costs in the workers compensation scheme. Michelle Castle and DGT Legal Services Pty Ltd has [sic] been selected following an expressions of interest process to provide the necessary services.’

11 Clause 2 of the agreement provided that ‘The Consultant must provide the Services set out in the Annexure’. The Annexure stated that Workcover is conducting a review of the arrangements for regulating legal and agent costs. It went on to state:

‘The Consultant will be required to review a draft policy paper and a draft cost scale and provide advice on the following matters:
1. The effectiveness of the proposed cost scale in controlling legal costs within the workers compensation system;

2. Whether the proposed cost scale provides adequate remuneration for the provision of certain legal and agents services;

3. Whether the proposed cost scale will have any adverse impacts on the rights of injured workers to legal representation;

4. Whether the proposed cost scale creates adequate incentives to settle legal disputes within the workers compensation system, early in the dispute resolution system;

5. Possible adverse impacts of the proposed cost scale, including but not limited to incentives that may be created to provide unnecessary legal services, or create delays in the dispute resolution system;

6. Any other impacts of the proposed scale;

Advice on options to address any problems or issues arising in relation to matters identified under 1 to 6.’

12 The agreement included a professional indemnity clause binding the consultant to indemnify the agency in respect of any losses occasioned by the consultant in respect of the services. She was obligated to have current professional indemnity cover.

13 While it is true, as the agency asserted in the course of the appeal, that there is no Tribunal finding going to this matter, it is, the Appeal Panel considers, clear from the material annexed to Workcover’s affidavit that a material consideration in naming Ms Castle and her solicitors firm as the first party was that the firm held professional indemnity cover (see Annexure C to Ex A).

14 As already noted, the Law Society’s right to appeal is governed by s 113(2) of the Tribunal Act which provides:

‘(2) An appeal under this Part:

(a) may be made on any question of law, and

(b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision.’

Grounds of Appeal

15 The Law Society submitted that the Tribunal erred in that it failed to apply correctly to the facts the principles of legal professional privilege.

16 It claimed that the Tribunal failed to take into account in reaching its conclusions various factual matters of significance: (i) the addition of Ms Castle’s law firm to the agreement so as to satisfy the need for professional indemnity cover; (ii) the agreement’s provision (cl 4) that payment be made to her consultancy firm; (iii) the nature and description of the services contracted for, which on their face relate to matters of policy and administration, not law; (iv) the renewal of the consultancy agreement in September 2002 was in the specific context of the provision of cost consultancy services, not legal services; (v) the advice forwarded by Ms Castle was forwarded to the agency under cover of the email address of her consultancy firm, not her law firm; and (vi) the agency repeatedly referred to Ms Castle providing it with services in her capacity as costs consultant, not legal adviser.

17 The Law Society also claimed that the Tribunal took a ‘seriously mistaken view of the facts’ sufficient to constitute a failure to exercise jurisdiction; that it applied the wrong legal test; and there was ‘no evidence’ to support the finding that the dominant purpose of the relationship was the giving of legal advice.

18 If its principal contentions were not accepted, the Law Society contended that the Tribunal should at least have exercised its powers to provide access to so much of the material as was not covered by privilege, in light of its observations at para [11] of the reasons that ‘a fair proportion’ of the subject documents contain material that went to policy issues alone.

19 Workcover replied that the privilege was properly applied. It rejected the assertions noted at (i) to (vi) in para [16] above principally on the basis that there was ample evidence before the Tribunal to allow it to reach the conclusions that it did. In relation to point (i) it asserted that there was no evidence before the Tribunal in support of such an assertion. We have referred to this issue at para [13] above.

20 Workcover’s reply reiterated the statement made in the agency’s determination that the advice provided related to the legal effect and operation of the Workers Compensation (General) Amendment (Costs) Regulation 2001.

21 The reply asserted that there was no legal error in the finding that the documents were advice provided in a professional capacity even where legal advice provided in confidence also refers to policy and/or contains policy advice; and legal professional privilege applies to documents provided to a costs assessor.

Test for Legal Professional Privilege

22 The parties accepted that the Tribunal had identified the relevant statements of principle for the purpose of examining whether cl 10 applied to the documents in dispute, i.e. the ruling of the High Court in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; as amplified in Daniels Corp International Pty. Limited v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543. Legal professional privilege can be invoked by the client in respect of any confidential communications made by or to a legal adviser if they were made for the dominant purpose of obtaining or giving legal advice or assistance, or for use in legal proceedings.

23 The Tribunal found: that Ms Castle had a retainer in her capacity as a solicitor, that the ‘dominant purpose’ of the retainer was to render ‘legal advice’ and the documents read as a whole constituted ‘legal advice’ though a ‘fair proportion’ constituted ‘policy advice’.

24 On their face these would appear merely to be findings of fact which are not ordinarily open to be disturbed. The consistent approach of Appeal Panels in the Tribunal has been to decline considering the question of an extension of an appeal to the merits (and thereby revisiting findings of fact) if no error of law has been identified of sufficient importance to warrant interfering with the decision under appeal. See generally, Brandusoiu v Commissioner of Police [1999] NSWADTAP 8; and recently Commissioner of Police, NSW Police v Mooney (No 3) (EOD) [2004] NSWADTAP 22 at [16-17].

25 Ordinarily the Tribunal does engage in a fact-finding process when ascertaining whether documents are exempt. In Re Price & Director of Public Prosecutions (1997) 4 QAR 157 at [35] (a case involving advice given by salaried legal officers to government), the Queensland Information Commissioner observed:

‘Legal professional privilege attaches to confidential professional communications between salaried legal officers and government agencies. It must be a professional relationship which secures to the advice an independent character. The reason for the privilege is the public interest in those in government who bear the responsibility of making decisions having free and ready confidential access to their legal advisers. Whether or not the relationship exists is a question of fact.’
(Cited with approval by the Commonwealth Administrative Appeals Tribunal in Wallace and Director of Public Prosecutions [2003] AATA 119 (7 February 2003, Dwyer SM).)

26 The Law Society’s fundamental contention is that the Tribunal must have misunderstood the law to have concluded that the law covered these facts and circumstances. Put another way, the facts and circumstances could not, in the sense adumbrated in Re Minister for Immigration and Multicultural Affairs; ex p Applicant S20; A [2003] HCA 30, rationally sustain the conclusion that they fell within the scope of the doctrine of legal professional privilege. Yet another way of putting the submission is that the question raised is one of the kind listed in Collector of Customs v Pozzolanic [1993] FCR 280 at 289: i.e.‘[whether] the facts as fully found fall within the provision of a statutory enactment, properly construed’.

Limits of Application of Legal Professional Privilege

27 The courts have recognised that there are limits to the application of legal professional privilege. It is necessary to show that a lawyer must be acting in that capacity in order for a communication to attract privilege: O’Reilly v State Bank of Victoria (1983) 153 CLR 1 at 22-23 per Mason J; Attorney General (NT) v Kearney (1985) 158 CLR 500 at 530-531 per Dawson J; Waterford v Commonwealth (1987) 163 CLR 54 at 62 per Mason and Wilson JJ; Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; Re Hewitt & Queensland Law Society (1998) 4 QAR 328 at [80] ff. The existence of a relationship of advice between a government agency and a person practising as a solicitor is of no moment in terms of attracting legal professional privilege to the communications made in their relationship if their contents can not reasonably be characterised as ‘legal advice’. In Baker v Campbell (1983) 153 CLR 52 at 122 Dawson J observed:

‘The privilege cannot operate to put beyond the reach of the law documentary or other material which has an existence apart from the process of giving or receiving advice or the conduct of litigation.’

28 Another way this point might be put is that the advice must have been brought into existence in the course of the performance of a solicitor’s professional duty or function as distinct from some other capacity unrelated to the giving of professional advice: Nedelandse Reassurantie Groep Holding NV v Bacon & Woodrow & ors [1995] 2 Ll R 77 (QBD) per Colman J at 80 applying Minter v Priest [1930] AC 558 at 581-586 per Lord Atkin. See also Packer v Dep Cmr Taxation [1985] 1 Qd R 275 per McPherson J at 287.

29 Once it is shown that the dominant purpose of the relationship is the rendering of legal advice and assistance, we accept, as Ms Allars submitted, that the courts do not take an unduly rigid view.

30 If the overall environment is one of legal advice the courts will allow the privilege to cover broader advice which is of a non-legal character, and will protect documents of an administrative character connected to the giving of the legal advice. As to protection of documents of an administrative character (logs of telephone calls and the like), see per McHugh J in Propend Finance at 550; see also Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246 per Lockhart J.

31 The proposition that ancillary or incidental advice of a non-legal kind may still be protected by the privilege was accepted in, for example, Waterford per Mason and Wilson JJ at 66; and more recently, DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 203 ALR 348 at 350 per Allsop J. The protected material can, according to an older case, include ‘advice as to what should prudently and sensibly be done in the relevant legal context’: per Taylor LJ in Balabel & Anor v Air India [1988] Ch 317 at 330; [1988] 2 All ER 246 at 254. This category may have expanded in modern times with legal advisers often being asked to give of their ‘commercial wisdom’ as part of the lawyer-client relationship: see Nederlandse, cited above, at 81 per Colman J.

Tribunal’s Reasons

32 In the present case the Tribunal concluded that the documents in issue were properly to be characterised as wholly or substantially ‘legal advice’ for the following reasons:

‘8 This agreement plainly constituted the retainer between the solicitors and the Workcover. It also provided for review of the relevant material to be undertaken "from time to time".

9 I presume that certain advice was given by the consultants as the Workcover completed its review of legal costs and the Workers Compensation (General) Regulation 1995 was amended by the Workers Compensation (General) Amendment (Costs) Regulation 2001 which commenced on 1 January 2002 and introduced a system of events-based costing for workers compensation matters. Prior to the regulation being made, it was agreed between representatives of the New South Wales Government and the applicant that it there would be a review of the operation of the new regulation and formal arrangements were made which included participation of both the applicant and the Workcover as well as the newly-established Workers Compensation Commission. A “review panel” was formed with these members to advise the responsible Minister by 30 September 2002. A number of meetings were held, some of which were attended by solicitors from the legal firm Thompson Castle. Mr McInnes was the Chairperson of the review panel.

10 In mid-September 2002 the agreement referred to above was extended between the parties so as to include advice and expert assistance in connection with the new review and, in particular, to advise the applicant in connection with its dealing with very lengthy submissions that were delivered by the applicant to the Workcover on 9 October 2002. Under these contractual and retainer arrangements, Ms Michelle Castle consulted with nominees of the applicant. I am satisfied that this was only for the purposes of obtaining information from them, such as, various legal costs scenarios. At about the same time, the applicant engaged its own legal costs consultant, Ms Sharon Brabiner to advise it in the review process.

11 I have read the five disputed documents carefully. One of them is the proposed methodology for how the consultant can advise on the Workcover on how to deal with the applicant's submission. The other documents comprise versions of an undated draft report by Ms Castle to the Workcover, a cover letter and 4 "dummy" bills of costs for demonstration or explanation purposes.

12 In my view, this material is plainly the legal advice of a lawyer who is also experienced in matters concerning costs assessments. That is the very reason why Ms Castle was engaged in the first instance by the Workcover. I consider that notwithstanding that a fair proportion of the subject documents contain material that could be considered as going to "policy" issues alone, they are largely also appropriately characterised as legal advice on legal issues. This is particularly so given that delegated legislation introduced by the New South Wales Government had already introduced events-based legal costing into workers compensation matters. The issue that remained for the consideration of the review panel was whether the new legislative system of events-based costing could be made better.

13 …

14 However, on my reading of the documents and based on the uncontested evidence as to the manner in which Ms Castle was retained to provide advice, I consider that each of the disputed documents are subject to legal professional privilege. I find that the dominant purpose for their creation was for the obtaining of legal advice in respect of assisting the Workcover to respond to the applicant's submissions on the new events-based legal costs system. The fact that policy issues were wrapped up in that request does not change the fact that legal advice was sought and obtained from a person fully qualified to give it.’

Assessment

33 Care must be shown to avoid an over-generous interpretation as to what documents are protected by legal professional privilege. Beazley JA in the recent case of Fagan v State of New South Wales [2004] NSWCA 182 referred to the rationale for the privilege:

‘71 Legal professional privilege is a rule of substantive law: Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 490 per Deane J. The rationale for the privilege was explained by Mason and Brennan JJ in Maurice’s case at p.487:
“The raison d’etre of legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client”.’
See also Kennedy v Wallace [2004] FCA 332 per Gyles J at [54-56].

34 McHugh J in Mann v Carnell (1999) 201 CLR 1 at [116] emphasised, in a case dealing with discovery of documents and the question of waiver, that any extension of the doctrine of legal professional privilege ‘must not go beyond the rationales for the privilege’. He said: ‘Any extension of the scope of the privilege beyond that which is necessary for its rationales to be realised is an abrogation of the common law’s basal pursuit of truth which is not justified by any countervailing consideration.’

35 This observation reflects the often-cited statement of Wigmore:

‘[Legal professional privilege] is worth preserving for the sake of a general policy, but it is nonetheless an obstacle to the investigation of truth. It ought to be strictly confined within the narrowest possible limits consistent with the logic of its principle’
((rev ed. 1961, McNaughton), vol VIII [2291] as cited by Toohey J in Propend Finance at 527).

36 In our view, it is important to maintain harmony in approach between the discovery cases (where observations of the above kind often appear) and the FOI cases.

37 In Waterford (a FOI case where it was held that the advice of government lawyers to their employer is protected if the requisite degree of independence can be demonstrated) Dawson J in addressing the functions of government noted at 96-97 that the protection did not extend to advice which is:

‘intended to form the basis of an administrative decision to be made in the performance of some public duty. Such advice does not form part of the process of the law which serves the administration of justice. It is concerned rather with the executive function of government.’

38 In Waterford, Deane J observed at 92:

‘There is nothing that is more calculated to undermine the principle of legal professional privilege than its abuse. Where it appears that legal professional privilege has been deliberately or inadvertently abused in that it has been invoked to protect from production documents which do not in fact fall within its ambit, there is a special need for vigilance to ensure that the full extent of any such abuse is corrected … Otherwise, a privilege which exists to serve important public purposes will become a source of unfair and unintended advantage to the careless, the misinformed and unscrupulous.’

39 There is no question that in this case there was an independent professional relationship between Workcover and Ms Castle. The question is whether she was involved in performing the duties or functions of a legal adviser. For advice to be characterised as ‘legal advice’ it must, in our view, be of a kind which involves the application of technical legal skills (or ‘legal principles’ to use the words of Preuss PM in Re Cole and the Department of Justice (1994) 8 VAR 132 at 133); and it must be provided in a context that involves the ‘administration of justice’ as distinct from other types of administration.

40 As noted in the passage from Dawson J, the High Court has drawn a distinction between the matters connected with the administration of justice and matters connected with the conduct of executive government. Governments in their executive and policy making functions will often seek advice from a range of sources including persons inside or outside government administration qualified as lawyers. The advice they render may or may not be ‘legal advice’. See further the examples where advice has been found not to fall on the ‘legal advice’ side of the line cited in Re Gill and Brisbane City Council [2001] QICmr 4 at [35].

41 There is little precise guidance in the case-law as to what characteristics make advice ‘legal’ advice as distinct from professional advice of some other type.

42 The kind of technical skills we have in mind as being characteristic of the giving of ‘legal advice’ are those involved in the drafting or interpretation of a provision in a public instrument such as a bill, ordinance or statute or of a private instrument such as a contract; those that might be involved in giving advice as to how the present law might impact on conduct that has occurred or is contemplated; or those that might be involved in advising on how the law should be amended to enable a proposed course of conduct to be lawfully pursued.

43 Workcover submitted that Ms Castle’s advice was ‘legal advice’ as the advice she gave could only have been given by someone with legal training and experience. It submitted that the reports sought from Ms Castle required an understanding of the legal issues arising in the workers compensation system, the procedures by which claims are made and adjudicated upon, including questions as to the necessity for particular legal services, and the costs of providing those services and representation in such matters.

44 Many legislative schemes are complex, and include schedules of a detailed kind. The provision of advice by experts in relation to schemes of such a kind is a commonplace of government. It so happens that this case involves a system connected with the resolution of disputes over workers compensation entitlements, and that system has been conducted via judicial and quasi judicial institutions in this State. It is logical therefore to seek advice on operational and equity issues from someone well-versed in the system.

45 In this case the expert was a costs consultant. The matters she was called on to address did not, we consider, in any significant way involve the application of technical legal skills but were of a policy or administrative nature, as submitted by the Law Society.

46 The matters she was asked to advise on under the terms of reference contained in the agreement were, to reiterate: the effectiveness of the proposed cost scale in controlling legal costs within the workers compensation system; whether the scale provided adequate remuneration for the provision of certain legal and agents services; whether the scale would have any adverse impacts on the rights of injured workers to legal representation; whether the scale created adequate incentives to settle legal disputes within the workers compensation system and the dispute resolution system; and the possible adverse impacts of the scale, including but not limited to incentives that might be created to provide unnecessary legal services, or create delays in the dispute resolution system (our emphases).

47 All of the terms of reference were, we consider, of a political character, using the term ‘political’ in the broad sense. Clearly it was desirable that the consultant have a good knowledge of the practical workings of the legal system.

48 Ms Castle’s position was no different to that of a medical costs consultant (who may well also be a medical practitioner) engaged by health insurance authorities to advise on proposed fees to be paid to general practitioners and various types of specialists. It can not, we consider, be seriously contended that the medical costs consultant is thereby involved in giving ‘medical advice’ to the authority even though he or she may have to bring a close knowledge of medicine or the medical profession to the formulation of an opinion about an appropriate fee.

49 Ms Allars submitted that the fact that costs assessors were required under the Legal Profession Act 1987 to be legal practitioners of not less than 5 years’ standing (Schedule 7 cl 1) was an indicator that the advice they rendered constituted legal advice. It is unnecessary to address in this case whether a costs assessor renders legal advice when engaged in the process of assessing the reasonableness of professional fees and disbursements in respect of litigation.

50 Here the advice was of a more abstract type, and could, we consider, only be characterised as advice, like that of a medical costs consultant, of a ‘work value’ character in relation to which the possession of relevant professional knowledge was, at least arguably, an asset.

51 To take another example, a prosecutor might be approached by the government to advise on the impact that proposed changes to the criminal law might have on the flow of cases through the system. This does not make the advice that follows ‘legal advice’ though it draws on valued experience of the legal system. (There have been a number of cases dealing with the scope of the privilege as it applies to public prosecutors. See, for example in the FOI context DPP v Smith [1991] 1 VR 63 at 70; Re Cole, cited above; and in the discovery context, Nye v State of New South Wales & ors [2002] NSWSC 1267 (O’Keefe J).)

52 In Waterford Mason and Wilson JJ emphasised the need for a ‘connection’ to be shown between the document in issue and an activity that forms part of the administration of justice – in that case the conduct of legal proceedings. They said at 67: ‘It is the connection between the document and legal proceedings that establishes its character and thus attracts the privilege’.

53 When the courts explain the role of legal professional privilege by reference to securing the public interest in the effective administration of justice, we consider that they have in mind such matters as advice connected with the assertion of rights and claims which might ultimately involve litigation; advice in relation to compliance with laws; particularly in the government context, advice in connection with legal relationships between government and other parties such as employees and contractors; again particularly in the government context, advice on the operation and application of laws, proposed laws, and their drafting.

54 Advice of the kind given by Ms Castle’s can not, we consider, be connected with the fundamental rationale for the privilege – the public interest in the administration of justice. In our view the policy-making exercise that Government undertakes in developing new schemes of regulation or reviewing the early operation of such schemes does not involve the ‘administration of justice’ in the way the courts have used that term. There may be aspects of these policy making exercises which call upon legal expertise and involve the giving of legal advice. At this point the public interest in the administration of justice is being served, in that the provision of legal advice seeks to safeguard the community’s interest in ensuring that executive conduct is lawful.

55 In our view there is substance in the Law Society’s objection. The Tribunal’s findings that the relationship was one of lawyer-client involving the giving of legal advice, let alone one predominantly of that kind, were not open on the evidence presented. The Tribunal’s decision must be set aside.

56 The agency’s claims to exemption should only have been addressed, we consider, by reference to the alternative ground upon which it relied, namely cl 9 referred to earlier.

57 The cl 9 claim to exemption has yet to be considered. As noted earlier, there is a difference in view as to whether the matter should be remitted (Workcover) or retained by the Appeal Panel (Law Society).

58 In the circumstances, our view is that it would be more practical to go on and dispose of the dispute at the Appeal Panel level as much of the material is on the record, and there appears to be a limited need to consider further evidence. Moreover, the access application has now been on foot for nearly two years. There should be a planning meeting to give further directions.

59 We note that there was a submission by the Law Society, opposed by the agency, that there is a public interest ‘override’ discretion to be found in s 25 which operates, in effect, as a qualification to the text of each of the statutory grounds of exemption. This view has been rejected at first instance by the President: Neary v The Treasurer, New South Wales [2002] NSWADT 261 at [60-85]. In light of our ruling on the principal ground of appeal, it is not necessary to deal with this issue in this decision.

60 There was also a ground of appeal alleging that the Tribunal’s error was such as to deprive it of jurisdiction. The error is not of that kind. The Tribunal properly set out on its inquiry. In our view the Tribunal then misconstrued the law as it concerns the scope of legal professional privilege.

Order

1. Appeal allowed.

2. Decision under appeal set aside.

3. Determination of the respondent set aside in so far as it relies on clause 10 to Schedule 1 (the legal professional privilege exemption).

4. Leave granted to extend appeal to the merits to review the remainder of the respondent’s determination.

5. Respondent’s application for costs of these proceedings adjourned.