Limited and Anor - [2003] FCA 601

FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v George Weston Foods
Limited & Anor [2003] FCA 601
LEGAL PROFESSIONAL PRIVILEGE - inquiry into Part IV contraventions by present litigant – common law and statutory privilege claimed by present litigant – denied in parallel circumstances to other litigant by Full Federal Court – other litigant in Federal Court proceedings subsequently obtained special leave to appeal to High Court – claim to privilege maintained by present litigant pending outcome of High Court proceedings pursued by other litigant – special leave to appeal to High Court granted to other litigant – no injunction sought by present litigant to restrain inquiry pending outcome of High Court appeal by other litigant – High Court appeal by other litigant upheld – documents produced under compulsion – no waiver of privilege – production not voluntary.
Trade Practices Act 1974 (Cth), s 155
Evidence Act 1995 (Cth), ss 117, 118, 122
Federal Court Rules Order, 19 Rule 1
Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd and Another (2001) 108 FCR 123
Daniels Corporation International Pty Ltd & Anor v Australian Competition and Consumer Commission (2002) 192 ALR 561
Woolworths Limited v Fels; Coles Myer Limited v Fels [2002] HCA 50
Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529
Goldberg v Ng (1995) 185 CLR 83
AG Australia Holdings Ltd v Burton [2002] NSWSC 170
Lord Ashburton v Pape [1913] 2 Ch 469
Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347
Kabwand Pty Ltd v National Australia Bank (1987) 16 FCR 85
Yuill v Corporate Affairs Commission (1990) 20 NSWLR 386
Baker v Campbell (1983) 153 CLR 52
Grant v Downs (1976) 135 CLR 674
A M & S Europe Ltd v Commission of European Communities [1983] QB 878
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49
Mann v Carnell [1999] 201 CLR 1
Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 346
Ampolex Pty Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12
Sovereign v Bevillesta [2000] NSWSC 521
The Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360
Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485
Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475
ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193
Phillips v Walsh (1990) 20 NSWLR 206
Scott v Handley (1999-2000) 58 ALD 373
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GEORGE WESTON FOODS LIMITED AND PAUL BENEDICT LONERAGAN
N 1295 OF 2002
CONTI J
18 JUNE 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1295 OF 2002

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

GEORGE WESTON FOODS LIMITED (ACN 008 429 632)
FIRST RESPONDENT

PAUL BENEDICT LONERAGAN
SECOND RESPONDENT

JUDGE:

CONTI J

DATE OF ORDER:

18 JUNE 2003

WHERE MADE:

SYDNEY

THE COURT DECLARES THAT:
1.Legal professional privilege and client legal privilege…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2003] FCA 601
Decision Date: 18 JUNE 2003

CaseChat Overview and Summary

In the case of GWF, the Australian company, and its directors, Mr Loneragan and Mr Pascoe, versus the Australian Competition and Consumer Commission (ACCC), the dispute centred on the interpretation and application of legal professional privilege and client legal privilege under the Evidence Act in the context of an investigation into possible breaches of the Trade Practices Act. The matter was heard in the Federal Court of Australia.

The central legal issues that the court needed to address were whether the documents exchanged between GWF and their legal advisers were indeed privileged and whether there had been an implied waiver of this privilege when the documents were provided to ACCC during its investigation. GWF argued that there was no waiver of privilege under the common law or as constrained by the Evidence Act. Conversely, ACCC contended that the act of providing the documents constituted a waiver of privilege, citing the precedent set by Yuill v Corporate Affairs Commission.

The court's reasoning, as articulated in the judgment, recognised that the privileged material in question was created for the dominant purpose of providing legal advice to GWF. The documents were deemed to be protected by legal professional privilege and client legal privilege. The court found that the doctrine of waiver was not applicable as the act of providing the documents to ACCC did not necessarily imply a waiver of privilege, particularly as there was no express agreement or intent to waive the privilege. The High Court's decision in Daniels, which suggested that earlier interpretations of privilege waiver might be reconsidered, further supported GWF's position.

Consequently, the court ruled in favour of GWF, holding that there had been no waiver of privilege. The court granted an order restraining ACCC from using the privileged material in the proceedings and from referring to or adducing in evidence or examination any material derived from the privileged material. Additionally, the court ordered ACCC to pay GWF's costs and gave the parties liberty to apply concerning the scope of relief.

Orders

Orders of the court

1. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings any material that:

(a) refers to the Privileged Material or the information contained in that material;

(b) was created with the use of the Privileged Material; or

2. The Applicant be restrained from using, in relation to these proceedings:

(a) any of the Privileged Material;

(b) any material that refers to the Privileged Material;

(d) any material that was based on or derived from the Privileged Material.

3. The Applicant to pay the First Respondent’s costs of the proceedings the subject of the Notice of Motion filed by the First Respondent.

4. The parties have liberty to apply on 3 days notice concerning the scope of relief as contemplated in paragraph 60 of these Reasons for Judgment.

5. No order be made as to the costs of the Second Respondent.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

CONTI J

In Mann, the Chief Minister of the Australian Capital Territory supplied documents containing legal advice relating to the Government’s conduct in certain already comprised litigation to a member of the Legislative Assembly of the Territory. After considering those documents, the member returned the copies to the Chief Minister, but retained the covering letter. The covering letter, without the legal opinions, was forwarded by the member to the litigant who originally commenced the compromised proceedings against the Government. In the belief that the legal opinions identified in the covering letter might have been defamatory, the litigant applied for preliminary discovery of those opinions in the Supreme Court of the Australian Capital Territory. In the course of their majority judgment, Gleeson CJ, Gaudron, Gummow and Callinan JJ (at 13-15) made the following observations of potential significance to issues of implied waiver arising from inconsistent conduct:‘It is inconsistency between conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege…Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is “imputed by operation of law”. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the objective intention of the party who has lost the privilege.In Goldberg v Ng this court considered a case in which there was disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party would treat the information disclosed as confidential. The court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege.…Disclosure by a client of a confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client’s actions, or for some other purpose, will waive privilege as such disclosure is inconsistent with the confidentiality which the privilege serves to protect.’GWF contends that in the light of the interpretation of the Full Federal Court in Daniels of s 155 of the TP Act, which prevailed until the High Court’s reversal of that decision, there was no waiver of legal professional privilege at common law or client legal privilege confined by the Evidence Act, in relation to the compliance by GWF and Mr Pascoe with ACCC’s demands for evidentiary and other disclosures etc in the meantime, and that it is unfair for ACCC to contend otherwise.Findings and conclusions It is common ground that the privileged material constituted ‘confidential communications’ created for the dominant purpose of providing GWF with legal advice, and that the three documents comprising the privileged material, produced to ACCC, attracted the entitlement of GWF to legal professional privilege, or in terms of s 118 of the Evidence Act, client legal privilege, in the latter case to the extent that the privileged material might subsequently be adduced in evidence. No contention to the contrary was advanced by ACCC at the time of production of the privileged material, or thereafter in the course of ACCC’s investigations, or at the hearing of the present application. I am satisfied that this is so. Ms Peter’s letter of 31 January 2000 to Mr Pascoe, which attached a file note of 31 January 2000 concerning a conversation which took place in the later part of January 2000 between Ms Peter and Mr Loneragan, was brought into existence to advise GWF of the circumstances which may give rise to possible contraventions of the TP Act, and to thereby enable GWF and its legal advisers thereafter to consider GWF’s approach to anticipated litigation. Similarly, Ms Peter’s letter of 4 February 2000 to Mr Pascoe detailed the factual material to which GWF was to have regard in considering how it would approach possible contraventions of the TP Act, as well as various opinions expressed by Ms Peter as to avenues open to GWF to alleviate the likelihood of Part IV proceedings being commenced by ACCC against it. Ms Peter’s letter to Mr Pascoe of 10 February 2000, which attached a signed opinion by Mr Neil Young of Queens Counsel in respect of the appropriate action to be taken by GWF in relation to alleged breaches of the TP Act, was similarly created for the purpose of providing GWF with legal advice in order to ameliorate the likelihood of contravention proceedings being brought against it.

Ratio Decidendi

Legal Principle Established

Established by: CONTI J

Reliance was thus placed by ACCC upon the doctrine of waiver, and the following dictum of Handley JA in Yuill v Corporate Affairs Commission (1990) 20 NSWLR 386 (at 413A):‘In my view, waiver of privilege by a client in producing or permitting his solicitor to product privileged documents to an inspector would constitute a final waiver of the privilege with respect to those documents for all purposes. The client ought to have in contemplation the uses which the inspector may make of those documents. These will include showing them to witnesses, reproducing them, in whole or in part, or otherwise referring to their contents in his report, that the report may be printed and published by the Minister or the Ministerial Council… and that finding of fact by the inspector will be prima facie evidence in civil proceedings.”I interpolate to observe that the High Court (Gleeson CJ, Gaudron, Gummow and Hayne JJ) in Daniels observed at [35] that ‘…it may be that Yuill would now be decided differently’. Nor was any application made to the Court, so ACCC further submitted, to prevent ACCC gaining access to and using the documents, notwithstanding an awareness on the part of GWF concerning the reliance which ACCC was likely to place upon the documents in its investigation. That submission affords no significance to the circumstance that GWF has acted promptly, following upon the reversal by the High Court of the Full Federal Court’s decision in the Daniels litigation.Principles arising for consideration and application A convenient starting point is the precept that legal professional privilege at common law is a ‘practical guarantee of fundamental rights’ (Goldberg at 121 per Gummow J), and is not confined to judicial or quasi-judicial proceedings (Baker v Campbell (1983) 153 CLR 52). ACCC’s processes undertaken to date in relation to the GWF, and also Messrs Loneragan and Pascoe, pursuant to s 155 of the TP Act, appear to have relevantly been neither judicial nor quasi-judicial. The jurisprudence of Australia is replete with explanations and illustrations of the precept of legal professional privilege, and its implications. For instance in Grant v Downs (1976) 135 CLR 674, the following dicta appears in the joint judgment of Stephen, Mason and Murphy JJ (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. As a head of privilege, legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decisions.’ In Baker v Campbell, Deane J as one of the majority of the High Court spoke (at 114) of ‘[t]he importance of the principle that a person should be able to seek relevant legal advice and assistance without apprehension of prejudice’, and his Honour further observed (at 115) that the principle ‘…could not even be sacrificed to promote the main purpose of the existence of courts of justice, namely the discovery, vindication and establishment of truth’. In more recent times, Kirby J in Daniels (at 584) cited with approval what was said by Advocate-General Slynn in A M & S Europe Ltd v Commission of European Communities [1983] QB 878 (at 913) in relation to the principle as follows:‘Whether it is described as the right of the client or the duty of the lawyer, this principle has nothing to do with the protection or privilege of the lawyer. It springs essentially from the basic need of a man in a civilised society to be able to turn to his lawyer for advice and help, and if proceedings begin, for representation; it springs no less from the advantages to a society which evolves complex law reaching into all the business affairs of persons, real and legal, that they should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.’

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1295 OF 2002

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	GEORGE WESTON FOODS LIMITED (ACN 008 429 632) FIRST RESPONDENT PAUL BENEDICT LONERAGAN SECOND RESPONDENT
JUDGE:	CONTI J
DATE OF ORDER:	18 JUNE 2003
WHERE MADE:	SYDNEY