Osferatu and Osferatu (No 2)
[2013] FamCA 644
•22 August 2013
FAMILY COURT OF AUSTRALIA
| OSFERATU & OSFERATU (NO 2) | [2013] FamCA 644 |
| FAMILY LAW – PRACTICE AND PROCEDURE – EVIDENCE – CLIENT LEGAL PRIVILEGE – Where in proceedings under section 79 of the Family Law Act 1975 (Cth) the wife objected to portions of a witness affidavit filed in the husband’s case on the basis of client legal privilege (legal professional privilege) – Where the wife submitted that certain conversations deposed to in the affidavit were confidential communications between the wife and the deponent for the dominant purpose of the deponent providing legal advice to the wife – Consideration of sections 117 and 118 of the Evidence Act 1995 (Cth) – Consideration of the requirement to find that a relationship of “lawyer” and “client” existed between the deponent and the wife – Consideration of the “confidential communication” requirement – Consideration of what constitutes “legal advice” and whether that was the “dominant purpose” of the confidential communications – Consideration of the burden of proof required to establish a claim of client legal privilege – Where the wife’s claim of client legal privilege was not satisfied – Where the wife’s objections were dismissed |
| Legislation cited: Acts Interpretation Act 1901 (Cth) Evidence Act 1995 (Cth) Cases considered: Other material considered: |
| APPLICANT: | Mr Osferatu |
| RESPONDENT: | Ms Osferatu |
| INDEPENDENT CHILDREN’S LAWYER: | Mr Glen Thompson | |
| FILE NUMBER: | SYC | 2318 | of | 2011 |
| DATE DELIVERED: | 22 August 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 22 July – 9 August 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richardson SC with Mr Kearney SC |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kirk QC with Mr Campton |
| SOLICITOR FOR THE RESPONDENT: | Watts McCray |
| COUNSEL FOR THE INDEPENDENT CHILDREN'S LAWYER | Mr Levy | |
Orders
The wife’s objection to paragraphs 4 to 11 of the affidavit of Ms E filed on 17 July 2013 based upon a claim of legal professional privilege are, at this time, overruled. The wife has leave to press the objection further at a later stage of the hearing should further evidence be admitted which touches on the subject objection.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Osferatu & Osferatu (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2318 of 2011
| Mr Osferatu |
Applicant
And
| Ms Osferatu |
Respondent
REASONS FOR JUDGMENT
Objections based on client legal privilege
In considering what evidence the husband may rely upon in the hearing of proceedings under section 79 of the Family Law Act 1975 (Cth) (the Act) objection has been taken by the wife to a portion of the affidavit of Ms E (Ms E) sworn on 14 July 2013 (the E affidavit). These reasons explain the order set out above.
Background
The wife objects to paragraphs 4 to 10 of the E affidavit, which was filed on behalf of the husband on 17 July 2013. She also objects to paragraph 11 of the E affidavit and submitted that the admission or exclusion of that paragraph will depend upon the Court’s ruling in relation to paragraphs 4 to 10. The objections to paragraphs 4 to 11 will therefore be considered jointly.
The wife objects to paragraphs 4 to 11 on the basis of legal professional privilege (also known as client legal privilege). She contends that the paragraphs relate to confidential communications between the wife and Ms E which were made for the dominant purpose of Ms E providing legal advice to the wife.
The E affidavit
In paragraph 1 of the affidavit Ms E states that she holds “a Bachelors Degree and a Masters Degree in law, the latter with a double major in Family law and Mediation”. She explains that she “practiced law for 20 years, and lectured in law at [F University] from 2002 to 2006.”
Ms E then deposes that she is “currently employed as a board member and director of the [H Religious Centre] and as mediator”.
Ms E asserts that she has known the husband for 25 years and the wife for 8 years, but that prior to 2011 she had not seen or spoken to the husband for 6 years.
Paragraphs 4 to 11 of the E affidavit read as follows:
4. In 2006, I met [Ms Osferatu] in Bondi Junction. She was several months pregnant at the time, as was I (we both have 7 year old daughters). [Ms Osferatu] said to me words to the effect of:
“I want to divorce [Mr Osferatu]. [Ms J– a mutual friend] says that you know something about family law. Can you help me? Can you recommend someone?”
5. I gave [Ms Osferatu] my phone number. I made her aware that although I had studies Family Law for my Masters of Laws, my knowledge was academic only. I had not practised as a lawyer for many years. I emphasised that she should seek the advice of a solicitor. [Ms Osferatu] called me a few days after this meeting and said to me during our conversations:
“I’m really concerned about how much I’ll get. I want a lot of money.”
6. Over the next 5 years or so, [Ms Osferatu] called me once every 6 months or so. During each conversation, [Ms Osferatu] spoke of her impending separation from [Mr Osferatu] and how much she would “get” from the divorce. In almost each conversation, I said to [Ms Osferatu] either:
“What do you want in terms of parenting orders?”
Or
“What about the children?”
7. [Ms Osferatu’s] response was always the same:
“[Mr Osferatu] can have 50[per cent] custody. I wouldn’t fight that. He’s actually a fantastic father. But I want my 60 million. I want that waterfront.”
8. In the last conversation I had with [Ms Osferatu], Just before Christmas 2010, [Ms Osferatu] said to me:
“The only tool I have to fight with is the kids. He loves those children. The only way I can get my 60 million is a really dirty fight about the kids.”
9. In almost every conversation I have had with [Ms Osferatu], since we met in 2006, [Ms Osferatu] said to me words to the effect of:
“[Mr Osferatu] doesn’t give me enough money.”
10. At no time during those conversations did [Ms Osferatu] express any concern about the current or future welfare of the children. If the children were raised in our discussions, [Ms Osferatu] said words such as:
“[Mr Osferatu] is extremely devoted to the children.”
From my conversations with [Ms Osferatu], and the statements that she made to me as set out above, I gained the impression that [Ms Osferatu] was extremely fiscally motivated.
11. At no time was I engaged by [Ms Osferatu] to provide her with legal advice or legal services. At the time of our conversations, I was not practising law. I spoke to [Ms Osferatu] as an acquaintance, and as the wife of a long-standing friend.
Submissions
The wife submits that paragraphs 4 to 10 of the E affidavit relate to confidential communications between the wife and Ms E for the dominant purpose of Ms E providing legal advice to the wife in relation to family law and the wife’s separation from the husband.
The wife contends that paragraph 4 lays the foundation for the exchanges between the wife and Ms E which are then set out in the remaining paragraphs. She submits that, in paragraph 5, Ms E states that she gave the wife her telephone number following the wife’s request for help.
As to the statement made by Ms E in paragraph 11, namely that she spoke to wife as an acquaintance, the wife submits that this reflects a belief not a fact.
At the hearing, junior Counsel for the wife handed up to the Court a set of provisions from the Legal Profession Act 2004 (NSW) (the LPA), namely, definitions said to be relevant to the Court’s determination, provisions which deal with admission as a lawyer in NSW and the general requirements for engaging in legal practice in NSW. No other materials were tendered.
In response to the wife’s objections, the husband submits that the prerequisite for establishing a claim of client legal privilege is the holding of a practising certificate. Further, he contends that the wife’s submissions did not engage with the propositions which need to be established to make out such a claim.
The husband also submits that the wife has given no evidence to the Court in support of her claim and that, in adopting that course, she must take the “unequivocal” evidence of Ms E at its highest.
As to the statements made by Ms E in paragraph 11, that she was not practising law at the time of the conversations and that she spoke to the wife as an acquaintance, the husband submits that this disposes of any evidence that Ms E was engaged as a lawyer for any dominant purpose.
The law: Client legal privilege
Part 3.10, Division 1 of the Evidence Act 1995 (Cth) (the Commonwealth Evidence Act) sets out two privileges in ss 118 and 119. These privileges operate to make the contents of confidential communications and documents made between clients and lawyers inadmissible, provided that such confidential communications or documents were made for the dominant purpose of either:
a)providing legal advice (s 118); or
b)providing legal services with respect to actual or anticipated litigation (s 119).
Sections 118 and 119 of the Cth Evidence Act read as follows:
118 Legal advice
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 made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
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.
The wife in oral submissions only relied on the privilege with respect to legal advice.
For completeness, it is noted that the privileges contained in sections 118 and 119 of the Evidence Act 1995 (NSW) (the NSW Evidence Act) are expressed in exactly the same terms as those sections of the Cth Evidence Act.
General principles
Client legal privilege operates as more than just a rule of evidence; it is both a rule of substantive law and a common law right: Daniels Corporation International Pty Ltd v ACCC (2002) 213 CLR 543 (“Daniels v ACCC”) at p.552, per Gleeson CJ, Gaudron, Gummow and Hayne JJ.
Before applying the relevant law to the circumstances of the wife’s objections, it is helpful to consider some commentary on the general principles which underpin and have come to define client legal privilege at common law.
In Baker v Campbell (1983) 153 CLR 52 at p.114, Deane J of the High Court of Australia stated as follows with respect to the principle of client legal privilege:
From at least the eighteenth century however, it has been generally accepted that the explanation of the privilege is to be found in an underlying principle of the common law that, subject to the above-mentioned qualifications, a person should be entitled to seek and obtain legal advice in the conduct of his affairs and legal assistance in and for the purposes of the conduct of actual or anticipated litigation without the apprehension of being thereby prejudiced (see Wigmore, par. 2291). The fact that the privilege is not restricted to the particular legal proceedings for the purposes of which the relevant communication may have been made or, for that matter, to proceedings in which the party entitled to the privilege is a party plainly indicates that the underlying principle is concerned with the general preservation of confidentiality.
In the later High Court case of Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at [35], in a joint judgment of Gleeson CJ, Gaudron and Gummow JJ, the following comments were made as to the rationale behind the privilege:
Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or in the provision of legal services, including representation in proceedings in a court. In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisors, which are not protected from compulsory disclosure. The rationale of the privilege has been explained in a number of cases, including Baker v Campbell (79), and Grant v Downs itself. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. In Waterford v The Commonwealth (80), Mason and Wilson JJ explained that legal professional privilege is itself the product of a balancing exercise between competing public interests and that, given the application of the privilege, no further balancing exercise is required. As Deane J expressed it in Baker v Campbell (81), a person should be entitled to seek and obtain legal assistance in and for the purposes of the conduct of his or her affairs, and legal assistance in and for the purposes of the conduct of actual or anticipated litigation, without the apprehension of being prejudiced by subsequent disclosure of the communication. The obvious tension between this policy and the desirability, in the interests of justice, of obtaining the fullest possible access to the facts relevant to the issues in a case lies at the heart of the problem of the scope of the privilege.
In the more recent High Court decision of Daniels v ACCC at p.552, Gleeson CJ, Gaudron, Gummow and Hayne JJ stated as follows:
It is now settled that legal professional privilege is a rule of substantive law (44) 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 here be noted that the “dominant purpose'' test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation (45) in place of the “sole purpose”' test which had been applied following the decision in Grant v Downs (46).
…
Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minahan (50), was the foundation for the decision in Baker v Campbell (51). It is a rule which, subject to one possible exception, has been strictly applied by this Court since the decision in Re Bolton; Ex parte Beane (52). Cases in which it has since been applied include Bropho v Western Australia (53), Coco v The Queen (54) and Commissioner of Australian Federal Police v Propend Finance Pty Ltd (55). The possible exception to the strict application of that rule was the decision in Yuill (56). (citations omitted)
Relevant statutory definitions
In order to determine whether or not the privilege in section 118 of the Commonwealth Evidence Act applies in the present circumstances, it is necessary to ascertain the meaning of key terms contained therein, namely:
a)lawyer;
b)client;
c)confidential communication (note: it is not relevant for now to consider the meaning of “confidential document”); and
d)for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. (section 118)
Section 117(1) of the Commonwealth Evidence Act contains a list of definitions which apply to the client legal privilege provisions in ss 118 and 119. For present purposes, the following definitions are relevant:
client includes the following:
(a) a person or body who engages a lawyer to provide legal services or who employs a lawyer (including under a contract of service);
(b) an employee or agent of a client;
(c) an employer of a lawyer if the employer is:
(i) the Commonwealth or a State or Territory; or
(ii) a body established by a law of the Commonwealth or a State or Territory;
(d) if, under a law of a State or Territory relating to persons of unsound mind, a manager, committee or person (however described) is for the time being acting in respect of the person, estate or property of a client—a manager, committee or person so acting;
(e) if a client has died—a personal representative of the client;
(f) a successor to the rights and obligations of a client, being rights and obligations in respect of which a confidential communication was made.
…
confidential communication means a communication made in such circumstances that, when it was made:
(a) the person who made it; or
(b) the person to whom it was made;
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.
…
lawyer means:
(a) an Australian lawyer; and
(b) an Australian-registered foreign lawyer; and
(c) an overseas-registered foreign lawyer or a natural person who, under the law of a foreign country, is permitted to engage in legal practice in that country; and
(d) an employee or agent of a lawyer referred to in paragraph (a), (b) or (c).
“Australian lawyer” and “Australian legal practitioner” are defined in the dictionary section of the Cth Evidence Act as follows:
Australian lawyer means a person who is admitted to the legal profession by a Supreme Court of a State or Territory under a law of a State or Territory specified in the regulations.
Australian legal practitioner means an Australian lawyer who holds a practising certificate under a law of a State or Territory specified in the regulations.
By contrast, the dictionary section of the NSW Evidence Act states that “Australian lawyer” and “Australian legal practitioner” have the same meanings as they do in the LPA.
Section 5 of the LPA sets out the definitions of “Terms relating to lawyers” as follows:
For the purposes of this Act:
(a) an Australian lawyer is a person who is admitted to the legal profession under this Act or a corresponding law, and
(b) a local lawyer is a person who is admitted to the legal profession under this Act (whether or not the person is also admitted under a corresponding law), and
(c) an interstate lawyer is a person who is admitted to the legal profession under a corresponding law, but not under this Act.Section 6 of the LPA sets out the definitions of “Terms relating to legal practitioners” as follows:
For the purposes of this Act:
(a) an Australian legal practitioner is an Australian lawyer who holds a current local practising certificate or a current interstate practising certificate, and
(b) a local legal practitioner is an Australian lawyer who holds a current local practising certificate, and(c) an interstate legal practitioner is an Australian lawyer who holds a current interstate practising certificate, but not a local practising certificate.
There are no definitions of “legal advice”, “legal services” or “dominant purpose” in the Commonwealth Evidence Act or the NSW Evidence Act, however, the meanings of these terms have been considered in the case law and other materials referred to below.
In considering what the above provisions mean, the Court notes that in accordance with section 15AB of the Acts Interpretation Act 1901 (Cth) it may consider certain materials which are capable of assisting in ascertaining the meaning of those provisions.
The “lawyer” and “client” requirements
The current definitions of “client” and “lawyer” in section 117(1) of the Commonwealth Evidence Act were introduced in 2008 following the passing of the Evidence Amendment Act 2008 (Cth) (the Amending Act).
The amendments were part of a package of reforms which in large part followed recommendations made by the Australian Law Reform Commission, the New South Wales Law Reform Commission and the Victorian Law Reform Commission in a report titled “Uniform Evidence Law” (the Law Reform Report). The Law Reform Report was released and tabled in Commonwealth Parliament in February 2006.
The Explanatory Memorandum to the Bill for the Amending Act contains statements as to the purpose behind the amended definitions of “client” and “lawyer”. The reason behind the change to the definition of “client” is not relevant to these proceedings (as it was intended to remove the distinction between government and private lawyers in allowing a client to be an employer of the lawyer). The reason behind the change to the definition of “lawyer”, however, was extremely relevant, as can be seen from the following statements made in the Explanatory Memorandum:
Item 60 – Subsection 117(1) (definition of lawyer)
171. It has been unclear whether the definition of ‘lawyer’ as ‘a barrister or solicitor’ as provided in the Act means that the lawyer must hold a current practising certificate or whether it is sufficient to be admitted as either type of legal practitioner on the roll of the relevant court. Item 60 clarifies that the definition of ‘lawyer’ in relation to client legal privilege to includes (sic) ‘Australian lawyers’, that is, those who are admitted but do not necessarily have a current practising certificate, as well as foreign lawyers. This item implements recommendation 14-3 of the Report.
172. This amendment adopts the ACT Court of Appeal decision in Commonwealth v Vance [2005] ACTCA 35. In considering the definition of ‘lawyer’ under section 117, the ACT Court of Appeal found that a practising certificate was an important indicator, but not conclusive on the issue of whether the legal advice was sufficiently independent to constitute legal advice for the purposes of claiming privilege under the Act.
173. The policy of the privilege does not justify its restriction to those with a practising certificate, particularly since a range of lawyers may provide legal advice or professional legal services in various jurisdictions. It is the substance of the relationship that is important, rather than a strict requirement that the lawyer hold a practising certificate. The amendment is directed at clarifying that client legal privilege may pertain to Australian lawyers and their employees and agents. However, the amendment is not intended to affect the common law concept of independent legal advice.
174. This item also extends the definition of ‘lawyer’ so that it includes a person who is admitted in a foreign jurisdiction. The rationale of client legal privilege to serve the public interest in the administration of justice and its status as a substantive right means it should not be limited to advice obtained only from Australian lawyers. This position reflects the reasoning of the Full Federal Court in Kennedy v Wallace (2004) 142 FCR 185.
From the above, it is clear that even if Ms E did not hold a practising certificate when the conversations with the wife occurred (which can be inferred from statements made in the E affidavit), this would not in itself be a barrier to the wife’s claim of client legal privilege: Commonwealth & Anor v Vance [2005] ACTCA 35 (“Vance”).
In Vance, the Court of Appeal of the Australian Capital Territory overturned the decision of a trial judge who had found that client legal privilege could only be established where the lawyer who provided the advice held a current practising certificate. In reaching their conclusion that a practising certificate was not required to establish client legal privilege, their Honours Gray, Connolly and Tamberlin JJ opined as follows at [21]:
Under s 55D(1)(b) of the Judiciary Act 1903 (Cth), a person whose name is on the roll of barristers, solicitors, barristers and solicitors or legal practitioners of the Supreme Court of a state or territory is entitled to practise as a barrister and solicitor in any territory unless suspended or disentitled by court order. The court has power to order that any person on the roll not be entitled to practise if that person is guilty of misconduct. The person remains bound to uphold the standards of conduct and to observe the duties undertaken upon admission to the roll of practitioners. The holding of a practising certificate reinforces that regime and makes it more immediately applicable but the underlying obligations subsist, even if a current practising certificate is not held. However, by not holding a practising certificate, a person cannot necessarily be seen as independent or as necessarily acting in a legal professional capacity as a person who holds one, so as to give the quality of that person’s advice the description “legal advice”.(emphasis added)
In the Law Reform Report, which followed the decision in Vance and which influenced the changes made by the Amending Act, the following was noted at [14.99]:
The Commissions’ view is that, should unusual facts about the status of a lawyer arise in a particular case, it will be open to the court to find that the prerequisite of the communication being made for the dominant purpose of providing legal advice will not have been made out. It will also be open to the party seeking the information to make a case that if client legal privilege was not available in the jurisdiction in which the communication was made, then it was not a confidential communication for the purpose of the uniform Evidence Acts. These are all matters which can be dealt with on a case-by-case basis.
At common law, a number of cases have considered what constitutes a “lawyer” and a “client” for the purposes of client legal privilege.
In Hawksford v Hawksford [2008] NSWSC 31 (“Hawksford”), White J considered whether it was necessary for a retainer to exist to establish a relationship of lawyer and client in the context of a claim of client legal privilege. His Honour held as follows at [17]:
17. A contract of retainer is not essential to the existence of a relationship between lawyer and client or to the existence of client legal privilege. In Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855, Barrett J said (at [7] and [11]):
“7 There is a definition of ‘client’ in s.117(1). It is, however, the kind of explanatory or enlarging definition that specifies items which are included in the defined term, leaving the core meaning to be discovered by other means. In ordinary parlance, a ‘client’ vis-à-vis a lawyer is a person for whom the lawyer performs legal services. Whether a relationship of that kind exists is to be determined by reference to the intentions of the parties objectively ascertained. This is, I think, recognized in the judgment of Mahoney JA (with whom Priestley and Powell JJA agreed) in Maxwell v Chittick (unreported, NSWCA, 23 August 1994):
‘It is, of course, to be accepted that persons in the relationship that existed between Mr Maxwell and the plaintiffs may also undertake the relationship of solicitor and client. Whether that relationship existed depends essentially upon whether it was the intention of the parties that it should be created. I am of the opinion that, having regard to the circumstances, no such relationship was intended to be created … [W]hat occurred between them at each of these times did not constitute in terms the making of a contract of the accepting of a retainer so as to create the relationship of solicitor and client. And I do not think that the circumstances require it to be implied that such a relationship was intended to be created between them.’
...
11 ‘Client’, in its ordinary signification, must therefore be regarded as referring to a person who, in respect of some legal matter within the scope of professional services normally provided by lawyers, has, with the consent of a lawyer, come to stand in a relationship of trust and confidence to the lawyer entailing duties of the lawyer to promote the person’s interests, to protect the person’s rights and to respect the person’s confidences. The privilege exists so that a person may consult his legal adviser in the knowledge that confidentiality will prevail.”
White J went on to cite further authorities on the topic and stated as follows at [19] and [20]:
19. … It is clearly established that privilege can exist in respect of communications where there is no valid retainer of the lawyer because the lawyer lacked statutory authority to act (Grofam Pty Limited v Australia & New Zealand Banking Group Limited (1993) 45 FCR 445 at 455-456; Health Insurance Commission v Freeman (1998) 88 FCR 544 at 566-567). Communications between a person who seeks to secure the services of a solicitor and the solicitor are privileged notwithstanding that the solicitor refuses the retainer (Minter v Priest [1929] 1 KB 655 at 666, 675; Cromack v Heathcote (1820) 2 Brod & Bing 4; 129 ER 857). In Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 Young J (as his Honour then was) held (at 130) that:
“At least in a situation where the client thought that the lawyer was his or her solicitor and that thought was contributed to by the action of the solicitor or by the person who is seeking to tender the statement, the privilege will exist. In my view the authorities go further to support the proposition that if the client bona fide believes on reasonable grounds that the other is his or her solicitor, then the privilege exists up to the time when that belief is exploded.”
20 This was the position at common law. There is no express requirement in s 118 of the Evidence Act or in the definition of “client” or “lawyer” which requires that a person only becomes a client if there is a contract of retainer or if the lawyer has accepted instructions to act.
It is clear from the above that the absence of a retainer between Ms E and the wife would not be a bar to the wife’s claim of client legal privilege.
The “confidential communication” requirement
As stated earlier, confidential communication is defined by s 117 as follows:
confidential communication means a communication made in such circumstances that, when it was made:
(a) the person who made it; or
(b) the person to whom it was made;
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.
In New South Wales v Jackson [2007] NSWCA 279 (“Jackson”) the NSW Court of Appeal considered a string of previous authorities on the topic of client legal privilege and discussed, inter alia, what was meant by “confidential communication”. Their Honours Mason P Beazley JA Giles JA held as follows at [41]:
41 The definition refers to an obligation “whether or not the obligation arises under law”. In Carnell v Mann (1998) 89 FCR 247 at 258 the Full Court of the Federal Court declined to confine the obligation to the type of obligation arising in a solicitor/client relationship, as must be so when s 119 is not confined to client/lawyer dealings. (See also s 120, under which there can be a confidential communication or document where a party does not have a lawyer.) It can extend to an unspoken obligation, and to an ethical, moral or social obligation. Especially when a lawyer is not involved, the particular circumstances determine whether an obligation implicitly arises, as can be seen from decided cases.(emphasis added)
One of the cases that the NSW Court of Appeal considered in Jackson was Rickard Constructions Pty Ltd v Rickard Hailes Moretti Pty Ltd [2006] NSWSC 234 (“Rickard”). In Rickard, her Honour Justice Bergin (as the Chief Judge in Equity) also referred to the decision of the Full Court of the Federal Court of Australia in Carnell v Mann (1998) 89 FCR 247 (supra) and held as follows at [33]:
Assuming the correctness of the analysis by the Full Federal Court, it seems to me that matters relevant in assessing whether a confidential obligation is implied in relationships or circumstances outside that of solicitor/client include the nature of the relationship in question and the circumstances, including conduct and/or conversations, surrounding the communications or documents in question. It is also permissible to have regard to the nature of the documents in question and the purpose and context of their communication: see Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1998) 13 NSWLR 689 at 695E.
The “dominant purpose” and “legal advice” requirements
The meaning of “legal advice” was another question considered by the Court of Appeal in Vance, where the following comments were made at [29]:
Legal advice does not mean all or any advice which may, in fact, be given by a lawyer: see Three Rivers District Council v Governor and Company of the Bank of England (No 5) [2004] 3 All ER 168 at 173, Court of Appeal. In that case the court concluded:
In summary, the authorities to which we have referred show that, where a solicitor–client relationship is formed for the purpose of obtaining advice or assistance in relation to rights and liabilities, broad protection will be given to communications passing between solicitor and client in the course of that relationship. In all the cases, however, the primary object of the relationship was to obtain assistance that required knowledge of the law. We do not consider that the same principle applies to communications between solicitor and client when the dominant purpose is not the obtaining of advice and assistance in relation to legal rights and obligations.
The Court of Appeal went on to comment that the holding of a practising certificate (or not) may be an important factor when determining whether or not a “confidential communication” was for the “dominant purpose of providing legal advice”. The following was said at [31]:
As his Honour acknowledged, it is not a requirement in all Australian jurisdictions to hold a practising certificate, and indeed in the Australian Capital Territory it is only necessary for solicitors to hold practising certificates; there being no statutory provision for a barrister’s practising certificate. It seems to us that, while the possession of a certificate is an important factor that would go to establishing the statutory requirement of a confidential communication for the dominant purpose of providing legal advice, to hold that it is conclusive is incorrect.
In Kennedy v Wallace (2004) 142 FCR 185, Allsop J of the Full Court of the Federal Court of Australia said as follows at [157]:
A person can see a legal adviser and receive legal advice and commercial or other non-legal advice. The former will be privileged, the latter not. Difficulties of course can arise in demarcation. Difficulties can arise if the advice is intermingled. The resolution of the issue will generally be a question of fact. If there is one conversation or one body of writing incapable of being broken up into which there is intermingled privileged material and non-privileged material the communication as one or as a whole will only be protected if the dominant purpose of the communication or the creation of the writing was to give or receive or record legal advice.
In AWB Ltd v Cole (No. 5) (2006) 155 FCR 30 (“Cole No. 5”), Young J in a detailed consideration of the principles of client legal privilege considered the ambit of “legal advice”. His Honour made the following remarks at [44]:
(7) The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] Ch 317 at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976 at 983; Three Rivers District Council v Governor and Company of Bank of England (No 6) [2005] 1 AC 610 at [43] [44], [59]-[60], [114] and [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 332-333; DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [25]-[71]; and AWB v Cole at [100]-[101].
With respect to Young J’s comments on legal advice above, it is useful to look to his Honour’s earlier but related decision in AWB Ltd v Cole & Anor (2006) 152 FCR 382. In that case, Young J reiterated that the lawyer’s advice must be of a “professional” nature and be given by the lawyer in their capacity as a lawyer. To that end, his Honour said as follows at [100] and [101]:
100. … I accept that legal advice is not confined to telling the client the law but includes professional legal advice as to what should prudently and sensibly be done in the relevant legal context...
101. There are, however, two additional points to be made. First, to qualify as privileged, the lawyer’s advice must satisfy the description of professional advice given by a lawyer in his or her capacity as such: see Nederlandse at 982 [g]-[j]; Three Rivers at [38] and [59]-[60]. The same requirement exists in the United States: see Wigmore JH, Evidence in Trials at Common Law (Little Brown & Co, 1961), Vol 8, rev McNaughton J 1981 at s 2292; and Evans v City of Chicago 231 FRD 302 (ND Ill) (2005). Secondly, communications for the purpose of obtaining and giving legal advice in the sense discussed in Balabel and the other cases mentioned above must satisfy the dominant purpose test if they are to attract legal professional privilege.(emphasis added)
As to the “dominant purpose” requirement of client legal privilege, this was considered by Spigelman CJ in Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways Ltd [2005] NSWCA 47 (albeit in the context of a litigation privilege claim section 119).
The Chief Justice, citing a number of other authorities, noted as follows at [6] and [7]:
It was common ground on the appeal that the test of what is a “dominant purpose” was an objective test, but that the subjective intention of the person responsible for the document coming into existence was entitled to weight. The Claimant relied on the observations of Callinan J in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49, at 107 [172]:
“Whether a purpose is a dominant purpose is, in my view, a matter to be objectively determined but the subjective purpose will always be relevant and often decisive.”
The test of “dominant purpose” has been expressed in terms of “clear paramountcy” (see Waugh v British Railways Board [1980] AC 521, at 543; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332, at 336–337[10]). As the High Court said in a different context:
“In its ordinary meaning, dominant indicates the purpose which was the ruling, prevailing, or most influential purpose.”[Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404, at 416 (Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ).]
The onus of proof
In Cole No. 5, Young J set out a list of what his Honour described as the “general principles” of client legal privilege relevant to the disposition of the case before him.
Of those principles, the first that his Honour referred to was that the party seeking to claim client legal privilege bears the onus of proving their claim. His Honour also cast light on the evidentiary burden necessarily imposed upon the claimant. His Honour held as follows at [44]:
(1) The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs (1976) 135 CLR 674 at 689; Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 60 ATR 466 at [30]; and AWB v Cole at [63].
...
(3) The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving “legal advice”: National Crime Authority v S (1991) 29 FCR 203 at 211-212 per Lockhart J; Candacal Pty Ltd v Industry Research and Development Board (2005) 59 ATR 615; 223 ALR 284 at [70]; Seven Network Ltd v News Ltd [2005] FCA 142 at [6]-[8]. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 (Kennedy v Wallace) at [12]-[17] per Black CJ and Emmett J and [144]-[145] and [166]-[171] per Allsop J; see also Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398.(emphasis added)
In the recent decision of the Supreme Court of Victoria in Tabcorp Holdings Ltd v Victoria [2013] VSC 302, Sifris J also considered what was needed to establish a claim of client legal privilege and reiterated that mere assertions and conclusory statements are insufficient. His Honour said at [82]-[85]:
Requirements in establishing a claim to privilege
[82] A party claiming privilege is required to identify and prove that the “dominant purpose” which led to the making of a confidential communication was for the provision of a legal advice by a lawyer to a client. “Dominant purpose” refers to the “ruling, prevailing, or most influential purpose”. If there is more than one purpose, and they are of equal weight, no privilege inheres in the communication. The dominant purpose is determined objectively, having regard to the evidence, the nature of the document and the parties’ submissions.
[83] In Barnes v Commissioner of Taxation the Full Federal Court held that support for a claim of privilege must be “focused and specific”. Verbal formulae and bare conclusory assertions of purpose would not be sufficient to make out a claim for privilege. (citations omitted)
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[85] In the recent decision of Krok v Szaintop Homes Pty Ltd (No 1), 13 Judd J dealt with the nature of the evidence required to establish a claim of privilege as follows:
Ordinarily, a party amenable to a discovery obligation, from whom disclosure is sought, must establish a claim to client legal privilege if that party is to be relieved from a disclosure obligation on that basis. Evidence is required. Mere assertions and conclusions are not sufficient. The evidentiary foundation may, of course, be augmented by inspection, although inspection alone can rarely, if ever, establish a claim.
Conclusion
Before reaching a conclusion in relation to this objection there are two matters to note. Firstly, that the evidence, even if admitted, has not yet been tested and may ultimately be rejected by the Court. Secondly, the evidence objected to, even if permitted, will only be available to the Court should it ultimately be found to be relevant. It is said by the husband to be relevant to the parenting case. It is, by that statement, clearly acknowledged, that it does not have relevance to the property/financial case.
The statements of principle and reference to jurisprudence above set out need now to be applied to the portion of affidavit objected to.
The first matter to note is that nowhere in the affidavit is there any communication which could clearly be described, by its content, as apparently taking place between a client and her lawyer. There is nothing to say that legal advice was sought by the wife from Ms E; nor is it suggested that any legal advice was proffered. Ms E, if accepted, asserts positively that she was not engaged by the wife to provide legal advice. She asserts that she spoke to the wife as an “acquaintance” not, as the authorities require, acting in her capacity as a lawyer and giving legal advice.
The wife has the onus of proving that the claim of client legal privilege is made out, however, she has not given any evidence in support of the objection. That is, she has not provided any evidence to suggest there was a relationship of lawyer and client existing between the witness and the wife at the time the conversations took place as asserted in the affidavit of Ms E. She has also not provided evidence as to the context or circumstances in which the confidential communications were made.
Beyond general assertions made through her Counsel that the “legal advice” sought or received from Ms E pertained to family law matters and the wife’s separation from Mr Osferatu, the wife has not provided evidence as to topics to which the legal advice or instructions were directed. The interaction attested to in the subject affidavit has the feel of acquaintances meeting by chance on the first occasion referred to in the affidavit; thereafter, the wife over a five year period telephoned the witness at approximately six month intervals.
In paragraph 5 of the affidavit, Ms E makes it clear she did not intend to act as a lawyer for the wife. In the conversation at paragraph 4, it is as clear as it can be that the wife did not intend to seek legal advice from Ms E. The use of the words “Can you recommend someone?” serve to illustrate the purpose of the conversation.
As stated in Hawksford, White J considered what a “client” could be for the purpose of determining a claim for client legal privilege. His Honour considered the words of Barrett J in Apple Computer Australia Property. Ltd v Wily [2002] NSWSC 855 at [7], where the following was said:
Whether a relationship of that kind (client and lawyer) exists is to be determined by reference to the intentions of the parties objectively ascertained.
In finding the above, Barrett J drew on words of the Court of Appeal in Maxwell v Chittick (unreported, NSWCA, 23 August 1994).
In Hawksford, the question of a lawyer accepting a retainer before a client lawyer relationship can be established was discussed. Ultimately, the very words of section 118 are referred to, with a specific note that the words do not manifest a requirement that a person hold a contract of retainer in order to be a client for the purpose of the section.
I am not satisfied that the evidence before the Court establishes that, at the time the conversations took place between the wife and Ms E, as deposed to in her affidavit, or at any other time, the wife was a client of Ms E within the meaning of section 118 of the Commonwealth Evidence Act.
If I am correct in my last conclusion then there is nothing further to consider. In the event that such conclusion is erroneous, I now turn to determine other aspects relevant to the objection.
I accept that the wife (if in fact she spoke the words attributed to her by Ms E) would have intended the words spoken to have been said in confidence. She would not have expected that the words would have been repeated by Ms E to the husband. Likewise, I accept that Ms E would have understood at the time the words were stated (if in fact they were) that the wife had an expectation that the words were not to be published to others. To that extent, I accept that the communications set out in the portions of the affidavit under objection were confidential communications.
The next question to be considered is whether the confidential communication was for the “dominant purpose of the lawyer providing legal advice”?
The purpose must be able to be seen from the words spoken and the circumstances in which they were spoken. There may be other evidence which would help inform the determination of the “dominant purpose” of the communications attested to. Again, I emphasise that the only evidence to which the Court has been directed, which is relevant to the question of whether a client lawyer relationship existed between the wife and Ms E, is found in the affidavit of Ms E.
It seems to me, from an objective view of the communications attested to, that the wife did not seek to obtain legal advice from Ms E. She knew that Ms E knew the husband. So much can be readily appreciated from the words she is said to have used. In the first reported conversation between the wife and Ms E in 2006, Ms E “emphasised that she should seek the advice of a solicitor”. This statement must indicate that Ms E was not intending to act as a lawyer for the wife.
Paragraphs 223 and 224 of the wife’s affidavit are set out in the affidavit of Ms E who then replies to same. This reference highlights that the wife referred to an association between the husband, Ms E and Angus. The wife did not say anywhere in her affidavit that she had previously sought legal advice from Ms E.
A question arises in relation to s 118 and its application to prevent evidence of confidential communications being adduced where the communication is made by a potential client to a lawyer who refuses to provide legal advice in response to being given such confidential communication.
By way of illustration, if a putative client asks a lawyer to provide legal advice and in that request sets out what is clearly confidential information, does s 118 of the Evidence Act still have application if the lawyer declines to give legal advice?
To answer this question regard should be had to s 125 of the Commonwealth Evidence Act, which excludes certain communications and documents from the protection of s 118, namely those prepared in furtherance of the commission of a fraud or in the furtherance of a deliberate abuse of power. The question needs to be framed so as to exclude communications which might fall within the description of s 125 of the Commonwealth Evidence Act.
It also needs to be understood that in seeking legal advice, a client may make an admission in relation to a contentious fact or ask the lawyer to assume a fact which the client does not accept as true but nonetheless which they seek to know the consequence of to them, in the event the fact were accepted by a Court or tribunal.
I consider that the privilege could still apply to protect confidential communications made by a potential client to a lawyer in the process of requesting the lawyer to “take on their case” or provide legal advice, even be it that the lawyer declines the retainer for whatever reason. In such cases, the confidential communications would clearly illustrate that legal advice was being sought, and the communications would be privileged. This was found to be so by White J in Hawsford where it was held at [19]:
Communications between a person who seeks to secure the services of a solicitor and the solicitor are privileged notwithstanding that the solicitor refuses the retainer (Minter v Priest [1929] 1 KB 655 at 666, 675; Cromack v Heathcote (1820) 2 Brod & Bing 4; 129 ER 857)
In the present case, however, I conclude that it is not possible to objectively be satisfied from the evidence in the E affidavit, or from any other relevant evidence to which the Court has been directed, that the wife was seeking legal advice. Further, there is nothing in the affidavit on the part of Ms E which illustrates that she provided to the wife legal advice.
I conclude that, on the evidence before the Court at this time, the wife has not satisfied the Court that the objection is made out.
I conclude that the appropriate course to take at this time is to admit the evidence objected to. In so doing, I invite the wife to revisit the ruling should subsequent evidence in the case raise the probability that the communications between the wife and Ms E, which have been objected to, are subject to client legal privilege.
I certify that the preceding seventy seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 22 August 2013.
Associate:
Date: 22 August 2013
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