P1 v National Crime Authority
[1992] FCA 464
•3 Jun 1992
LIMITED DISTRIBUTION JUDGMENT No. ... CATCHWORDS
Evidence - N a t i o n a l Cr ime A u t h o r i t y A c t (Commonwealth) 1984 ss.30 and 32 - objections based on legal professional privilege to production of documents and to answering certain questions in a hearing before Authority - application for orders of review in respect of alleged errors of law in decisions on objections by Authority - whether each purported decision failed to comply with s.32 or was not a decision within the meaning of the Act - extent of privilege - procedure to be adopted by Authority - whether severance available - whether onus on person claming privilege to establish facts giving rise to it - rationale of privilege doctrine - statutory context of ss.30 and 32 examined.
N a t i o n a l Crime A u t h o r i t y ~ c t (Commonwealth) 1984 ss.30; 32 Crimes Act (Commonwealth) 1914 s.86(l)(a)
N a t i o n a l Crime A u t h o r i t y v. S (1991) 100 A.L.R. 151
W a t e r f o r d v. The Commonwealth (1987) 163 C.L.R. 54
3 June 1992
TPT v. TNT Management ( R u l i n g s ) (1984) 56 A.L.R. 687 Grant v. Downs (1976) 135 C.L.R. 674
PI. P2, AND P3 V. NATIONAL CRIME AUTHORITY
Nos. VG384, 385, 386 OF 1991
19 JUN 1992
Sweeney J . Melbourne
IN THE FEDERAL COURT OF AUSTRALIA )
1
VICTORIA DISTRICT REGISTRY 1 NO. VG 384, 385,
) 386 of 1991
GENERAL DIVISION
BETWEEN : PI, P2 AND P3 Applicants AND NATIONAL CRIME AUTHORITY Respondent THE COURT : Sweeney J
PLACE Melbourne 3 June 92 MINUTES OF ORDER
THE COURT ORDERS:
P1 :Cateaorv A1
(a) The Court notes that the respondent does not seek an
order that document ZR275-7 be delivered to it. (b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category be set aside.
' %
' \ . . I '
Cateaorv A2, , I -. .
(a) ,Thle ~olikt notes that the respondent does not seek an order that document ZQ14 be delivered to it. 8 0 , I
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
CategorY B1
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Catecrorv B2
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Category B3
(a) The Authority's decision in relation to document ZR242 be set aside. (b) The Authority's decision, if any, that the applicant
was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Catecrorv B4
(a)
The Authority's decision in relation to document ZR241 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set a side.
Cateqorv B5
(a) The Authority's decision in relation to document ZR225 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B6
There be no order in relation to this category, the matter having been resolved between the parties.
Cateaorv B7
(a)
The Authority's decision in relation to document number ZR131 be set aside.
(b) The Authority's decision in relation to document
number ZR132 be set aside. (c)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B8
(a) The Authority's decision in relation to document ZR122 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv B9
(a)
The Authority's decision that the applicant is not justified in his claim that he is entitled to refuse to produce document ZR114 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv C
(a) The Authority's decision in relation to document ZR229 be affirmed.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv D1
(a) The Authority's decision in relation to document
ZR220 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv D2
The Authority's decision in relation to this category be
a£ f irmed .
cateaorv E
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Each of the documents placed in the custody of the Registrar pursuant to section 32(3) of the National Crime Authority Act 1984 be delivered to the applicant after the expiration of 21 days from the date of this Order.
The respondent is to pay the applicants' costs of and incidental to this application, including reserved costs.
The taxation, if any, of the costs is to proceed as if
P1, P2 and P3 had joined in the one application.
P2:
Cateaorv B1
(a) The Authority's decision in relation to document
(b) The Court notes that the respondent seeks no order ZR281 be set aside. as to any question in this category.
Cateqorv B3
(a) The Authority's decision in relation to document YD28 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateuorv F
(a) The Authority's decision in relation to document 2428 be set aside; (b) The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside. Each of the documents placed in the custody of the Registrar pursuant to section 32(3) of the National Crime
Authority Act 1984 be delivered to the applicant after
the expiration of 21 days of the date of this Order.
The respondent is to pay the applicant's costs of an incidental to this application, including reserved costs. The taxation, if any, of the costs is to proceed as if
PI, P2, and P3 had joined in the one application.
P3 :
Cateuonr A1
(a)
The Court notes that the respondent does not seek the production of document MX34995/001.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv El
The Authority's decision be set aside.
Cateaorv F1
(a) The Authority's decision in relation to document 2428 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv G1
(a) The Authority's decision in relation to document 2428 be set aside;
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Authority Act 1984 be delivered to the applicant after Registrar pursuant to section 32(3) of the National Crime Each of the documents placed in the custody of the the expiration of 21 days of the date of this Order. The respondent is to pay the applicants' costs of and incidental to this application, including reserved costs.
The taxation, if any, of the costs if to proceed as if
P1, P2 and P3 had joined in the one application.
NOTE : Settlement and entry of orders is dealt with in
0.36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY j NO. VG 384, 385, 1 386 of 1991
GENERAL DIVISION 1 BETWEEN : PI. P2 AND P3 Applicants
AND NATIONAL CRIME AUTHORITY Respondent THE COURT : Sweeney J Melbourne 3 June 1992
REASONS FOR JUDGMENT
Each of the applicants is a solicitor who attended for examination before the National Crime Authority ("the Authority"), in the course of which objections were taken to production of a number of documents and to answering a number of questions. Pursuant to sub-section 32(2) of the National
order of review in respect of each decision made by the Crime Authority Act 1984 ("the Act"), each applicant seeks an Authority in relation to those objections. The applicants have been at all material times members of the same firm of solicitors and have been designated as PI, P2 and P3.
These reasons for judgment were originally delivered in camera and included names of persons and companies and stated the dates on which various events took place.
The parties were given the opportunity to agree upon a version of the reasons which could be generally circulated without disclosing the identities of the actors in those events. In the reasons which are now circulated the parties have deleted all names of persons and companies, except those of counsel who appeared before the Authority and the Court, are pseudonyms. Similarly, certain dates appearing in these reasons, not including those relating to the proceedings themselves, have been changed.
A summons was served upon P1 which read, in part, as "The National Crime Authority is conducting an investigation into the matters that have been referred to it as set out in the Notices copies of which are annexed to this summons.
follows : Pursuant to sub-section 28(1) of the National Crime
Authority Act 1984, you are hereby summoned:
(a) to appear at 10.00 a.m. on Tuesday 2 July 1991 before the Authority at the hearing to be held for the purposes of the above-mentioned investigation at 340 Albert Street, East Melbourne in the State of Victoria to give evidence in relation to the investigation and to produce the documents specified in the Schedule annexed hereto. (b) to attend from day to day unless excused or released from further attendance.
The Authority intends to question you regarding circumstances surrounding the acquisition by the COMPANY 2 of COMPANY ll's, COMPANY 1 parcel of shares in February 1988 and matters concerning options held by COMPANY 14 over COMPANY 1 shares.
| i | Dated this 27th day of June 1991. |
........ ........
Member
Take Notice that:
1. Section 30(11) of the National Crime Authority Act 1984 makes it an offence, punishable by a fine of
| l | $1000 or imprisonment fox 6 months to, without |
| l | reasonable excuse, refuse or fail to comply with a |
| I | summons served under section 28(1) of the Act. |
| ! | |
| I | 2. Pursuant to section 25(9) of the National Crime where a summons is to be served on a person under section 28, the fact that the person is about to give evidence at a hearing of the Authority shall not be published save as subsequently directed by the Member or members present at the hearing or save to a legal practitioner for the purpose of obtaining legal representation at the hearing. There has been no subsequent direction authorising or permitting publication. |
| ! | Authoritv Act 1984 the Authority has directed that |
| I |
SCHEDULE
| I | All original or copy minutes, diary notes, letters, agreements, undertakings, notices or any other document whatsoever concerning: |
(i) The acquisition by the COMPANY 2 of COMPANY 11's shareholding in COMPANY 1, in AUGUST 1986;
riil The acauisition bv the COMPANY 2 of control of , , the opiions overashares in COMPANY 1 held by
COMPANY 14, in 1987."
The attached Commonwealth Notice read as follows: COMMONWEALTH OF AUSTRALIA NATIONAL CRIME AUTHORITY
NOTICE
TO: NATIONAL CRIME AUTHORITY
PURSUANT to Subsection 13(1) of the NATIONAL CRIME AUTHORITY ACT 1984 and having consulted the Inter- Governmental Committee, I HEREBY REFER to the National Crime Authority for investigation the following matter
relating to a relevant criminal activity insofar as the relevant offence or relevant offences are or include an offence or offences against the law of the Commonwealth or of a Territory.
MATTER
Whether any relevant offences have been committed as alleged in the allegations particulars of which are set out below, and if so the identity of the person or persons involved and the nature of their involvement.
PARTICULARS PURSUANT TO SUBSECTION 1 3 1 2 1
(a) The general nature of the allegations is: That, in and in relation to transactions concerning (directly or indirectly) the disposal and/or acquisition of securities in COMPANY l, certain directors of that company, alone, or in concert with other persons, improperly used their positions as directors of that company, and improperly used information acquired by virtue of those positions, in order to gain an advantage or advantages for themselves or some other person or persons or to cause detriment to that company and that with fraudulent intent, certain directors of that company, alone, or in concert with other persons, failed, in and in relation to the said transactions, to act honestly in the exercise of their powers and the discharge of the duties of their office as directors of the said COMPANY 1.
(b)
The allegations constitute a relevant criminal activity because the alleged activlties may have constituted, or may be continuing to constitute, an offence against a law of the Commonwealth or of a Territory:
(i) involving 2 or more offenders and
substantial planning and organisation including the use of complex corporate structures and commercial transactions; (ii) of a kind or kinds ordinarily involving the use of sophisticated methods and techniques, including the deployment of persons with extensive knowledge of company law and regulation and with expertise in the area of corporate structures and financing mechanisms;
(iii) of a kind or kinds ordinarily committed in conjunction with other offences of like kinds; and
( iv)
involving fraud, company violations, matters of the same general nature as fraud, and matters of the same general nature as company violations.
The offence or offences which may have been, or are
(c) being committed, are as follows:
(i)
breaches of sub-s.229(1) of the Companies Act 1981 to which paragraph (b) of that sub-section applies;
(ii)
breaches of sub-ss.229(3) and (4) of the Companies Act 1981.
(iii)
conspiracy, contrary to s.86(l)(a) of the Crimes Act 1914, to commit-an offence or offences against sub-s.229(1) of the Companies Act 1981 to which paragraph (b) of that sub-section applies; and-offences against sub-ss.229(3) and (4) of the Companies Act 1981.
(d) The purpose of the investigation is:
(i)
to ascertain whether any or what relevant offences (including any offence deemed to be a relevant offence pursuant to s.4(2) of the National Crime Authoritv Act 1984) have been or are being committed against the laws of the Commonwealth or of a Territory;
(ii) to identify the offender or offenders; (iii)
to assemble evidence that would be admissible in the prosecution of offenders; and
( iv)
to furnish the evidence to the Attorney- General of the Commonwealth of Australia or of a State or Territory or the relevant law enforcement agency for the prosecution of those offences.
DATED this 10th day of September 1990.
Attorney-General
for the Commonwealthof Australia"
Attached to the summons were notices signed by the
relevant State Ministers under the respective State's NationalCrime Authority (State Provisions) Act 1984, the relevant
provisions of which are identical with those in the Act. These two notices are in the same terms as the Commonwealth notice except in sub-paragraph (c)(iii) which deals with one of the alleged offences. In the State notices this sub- paragraph reads:
"a conspiracy to defraud, contrary to the Common Law".
The corresponding paragraph in the Commonwealth Notice refers to a conspiracy contrary to subsection 86(l) (a) of the Crimes Act 1914, which reads:
"Section 86(1)A person who conspires with another person:
(a)
to commit an offence against the law of the Commonwealth ... shall be guilty of an indictable offence".
P2 and P3 were each served with a similar summons and
notices.
follows : The decision of the Authority in relation to P1 read as DECISION PURSUANT TO SECTION 32 NATIONAL CRIME AUTHORITY ACT 1984
By summons No.MS119 issued on 9 October 1991 pursuant to section 28 of the National Crime Authority Act 1984, P1
was required to appear before the Authority to give evidence and produce the documents identified in the schedule thereto.
On 25 and 31 October 1991 P1 attended for examination. He was represented by Mr. Goldberg Q.C., with him Mr. Santamaria. Mr. Rozenes Q.C. with Mr. Lorkin appeared on behalf of the Authority. During the course of the examination P1 refused to answer certain questions and further refused to produce certain documents on the grounds that the answers to the questions would disclose, and the documents contained, privileged communications made by or to him in his capacity as a legal practitioner.
There were a number of bases advanced in support of the several claims of legal professional privilege during the course of the examination. It is convenient to group the various claims into categories and to identify the questions that were not answered and the documents that were not produced by reference to the pages in the transcript.
CATEGORY A.
There is no loss of privilege where the Authority has obtained the communication over which privilege is claimed from a Third Party, there having been no prior waiver by the client.
TRANSCRIPT PAGE NO. DOCUMENT NO.
CATEGORY B.
The whole communication is privileged notwithstanding that it contains in part a fact or instruction relating to a commercial transaction and in part a communication
for the purpose of obtaining or giving legal advice.
TRANSCRIPT PAGE NO. DOCUMENT NO.
CATEGORY C.
A document received by the solicitor for the purpose of providing legal advice is privileged notwithstanding that there is no evidence led as to the purpose for which it was created.
TRANSCRIPT PAGE NO. DOCUMENT NO.
CATEGORY D.
A communication by a client to a solicitor is privileged notwithstanding that it is intended that it be communicated to a third party if the occasion upon whlch it was communicated is otherwise a 'privileged occasion';
and
a communication by a solicitor to a client is privileged notwithstanding that the communication is of facts provided by a third party to a solicltor if the occasion upon which it was so communicated is otherwise a 'privileged occasion'
TRANSCRIPT PAGE NO. DOCUMENT NO.
CATEGORY E.
The Authority is not entitled to enquire whether advice was given in relation to a particular subject matter.
TRANSCRIPT PAGE NO. DOCUMENT NO.
CATEGORY H. That there existed between COMPANY 2 on the one hand and BANKER 1 on the other a relationship of principal and agent. Accordingly communications between LEGAL FIRlrl 1 and BANKER 1 directly and/or between LEGAL FIRM 1 and LEGAL FIRM 2 as solicitors for BANKER 1 are protected by legal professional privilege.
TRANSCRIPT NO.
Mr Goldberg requested that decisions be made pursuant to
Section 32 of the National Crime Authority Act 1984.
I have taken into consideration the arguments of counsel,
which were fully developed during the course of the
examination. I agree with the submissions put forward by
Mr. Rozenes Q.C. It is my opinion that the claim by Mr.
Hoyle that he is entitled to refuse to answer the
questions and/or to produce the documents as identified
above, is not justified.GROUND H
There is no doubt that a claim for legal professional privilege can be sustained where a communication, intended to be confidential, is made to or by an agent of the client or the solicitors acting for the client. If it were the case that either BANKER 1 or LEGAL FIRM 2 were in fact the agent of COMPANY 2, then a claim based on legal professional privilege by LEGAL FIRM 1 would be made out.
The Authority has received certain evidence and received certain documents from BANKER 1 and from LEGAL FIRM
2. Neither BANKER 1 nor LEGAL FIRM 2 have declined to produce documents or to answer questions relating to these transactions on the basis that to do so would disclose communications that were protected by legal professional privilege.
P1 in evidence (at page 2933) said he had not received written instructions from COMPANY 2 that BANKER 1 or
LEGAL FIRM 2 were its agent, nor was he able to recall
any such instructions having been given verbally. Nor did he say that LEGAL FIRM 1 had received any such advice from BANKER 1 or LEGAL FIRM 2. He was not aware whether
COMPANY 2 had requested either BANKER 1 or LEGAL FIRM 2to maintain a claim for privilege based on agency.
There is no factual basis put before the Authority upon which it could be said that such an agency existed. For these reasons the claim for privilege based on an agency as described herein also fails. Accordingly it is my opinion that the claim by P1 that he is entitled to refuse to answer questions and/or to produce documents in reliance upon the claimed agency is not justified.
J . LECKIE MEMBER 3/12/91"
By letter dated 27 November the Authority had given notice to the solicitors for the applicants that, in the absence of a reply by, their counsel to a memorandum from its counsel, it proposed to make decisions on the basis of "the claims as formulated in the 'Proposed Categories of Communications to which a claim of Legal professional Privilege has been taken'. It is not proposed to re-convene a hearing for this purpose but to notify the persons in writing of the decisions".
No reply to the memorandum was received, but by letter dated 28 November, the applicants solicitor's wrote as follows :
"I refer to your letter of 27 November, 1991.
We note the authority's proposal to make decisions on the basis of the claims as formulated in the Proposed Catergories. We do not concede at this stage that the Proposed Catergories correctly define the issues raised. We do not however desire a further hearing to be reconvened, and simply reserve the right to refer to the transcript itself for the purposes of argument in another place if necessary.
In notifying the witnesses of the decisions, I would be
grateful if you would send the notifications to me direct so that I may distribute them to the relevant witnesses." The application to review each decision was made upon the following grounds:
"1. The Applicant is and was at all material times a legal practitioner within the meaning of the Act.
2. Each of the questions required the Applicant to give an answer which was, or related to, a privileged communication.
3. Each of the documents contains a privileged communication made by or to the Applicant in his capacity as a legal practitioner and the person to whom or by whom the communication was made has not agreed to the Applicant producing the documents to the Respondent.
4. Accordingly, the Applicant was entitled under Section 3 0 ( 3 ) of the Act to refuse to produce each of the documents and to refuse to answer each of the questions.
5. Further or alternatively, each of the documents contains or evidences details of privileged communications between the Applicant, in his capacity as a legal practitioner, and his client or agents of his client.
6. Accordingly, the Applicant had a reasonable excuse, within the meaning of Section 30(2) of the Act, for refusing to produce each of the documents to the Respondent."
Each applicant claimed:
"A. An order setting aside the decision
B. An order that each of the documents be delivered to the applicant
C. costs
D. Such further or other relief as to the Court seems
just. "
The documents in question were placed in a sealed envelope in the custody of the Registrar of the Court and have
not been seen by me.
Proceedings before the Authority are regulated by s.30 of the Act, the relevant portions of which are:
(2) A person appearing as a witness at a hearing before
the Authority shall not, without reasonable excuse:
...
(b)
refuse or fail to answer a question that he is required to answer by the member presiding at the hearing; or
(c)
refuse or fail to produce a document or thing that he was required to produce by a summons under this Act served on him as prescribed.
(3) Where:
(a) a legal practitioner is required to answer a question or produce a document at a hearing before the Authority; and (b) the answer to the question would disclose, or the document contains, a privileged communication made by or to the legal practitioner in his capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by whom the communication was made agrees to the legal practitioner complying with the requirement but, where the legal practitioner refuses to comply with the requirement, he shall, if so required by the member or acting member presiding at the hearing, furnish to the Authority the name and address of the person to whom or by whom the communication was made.
(11) A person who contravenes subsection (l), (2) or (3)
is guilty of an offence punishable, upon conviction, by a fine not exceeding $1,000 or imprisonment for a period not exceeding 6 months."
The applications to the Court have been made pursuant to s.32 of the Act, the relevant portions of which read as
follows :
"32. (1) Where: a.. (c) a person claims to be entitled to refuse to answer a question put to him, or to produce a document that he was required to produce, at a hearlng before the Authority; the Authority shall decide as soon as practicable whether in its opinion the claim is justified and notify the person of its decision.
(2) If the person is dissatisfied wlth the decision, he may apply to the Federal Court for an order of review in respect of the decision.
that he is entitled to refuse to produce a document is ( 3 ) Where the Authority decides that a claim by a person
not justified, the person is not entitled to make an application to the Federal Court under subsection (2) in respect of the decision unless the person has produced the document to the Authority or placed the document in the custody of the Registrar of that Court, and where the person has so produced the document and makes such an application, the Authority shall cause the document to be placed in the custody of the Registrar of that Court.
(4) On an application for an order of review in respect of a decision of the Authority under subsection (l), the Federal Court may, in is discretion, make an order:
(a) affirming the decision; or
(b) settlng aside the decision.
(6) A prosecution for an offence under section 20, 29 or
30 shall not be commenced in respect of a refusal or failure by a person to furnish information, produce a document or answer a question:
(a) if the person has claimed to be entitled to refuse to furnish the infonation, produce the document or answer the question, as the case may be, and the Authority decides that, in its opinion, the claim is not justified-until the expiration of the period of 5 days (excluding days on which the Registry of the Federal Court is closed) immediately after the relevant day in relation to the decision or (b) if the person has made an application to the Federal Court under subsection (2) for an order of review in
opinion, a clalm by the person to be entitled to respect of a decision by the Authority that, in its refuse to furnish the information, produce the document or answer the question is not justified- until the application, and any appeal from an order made by the Federal Court on the application, have been determined or otherwise disposed of.
(7) An order of the Federal Court under subsection (4) is, subject to any appeal from that order, conclusive for the purposes of any other proceedings.
(12 An application to the Federal Court under
subsection (2) or (8):
(a)
shall be made in such manner as is prescribed by Rules of Court made under the Federal Court of
Australia Act 1976;
(b) shall set out the grounds of the application; and
shall be lodged with a Registry of the Federal Court
(c) within the period of 5 days (excluding days on which the Registry is closed) immediately after:
(i in the case of an application under subsection (2)-the relevant day in relation to the decision to which the application relates; or (ii) in the case of an application under subsection (8)-the relevant day in relation to the notice given in accordance with subsection (8A) in relation to the application; or within such further period as that Court (whether before or after the expiration of the first-mentioned period) allows.
(14) Where a decision of the Authority under subsection (1) relates to 2 or more questions, or to 2 or more documents, the decision shall, to the extent to which it relates to a particular question or document, be deemed, for the purposes of this Act, to constitute a separate decision relatlng to that question or document only."
The applications have been made in accordance with Order
57 of the Rules of the Court and they have been heard togetherby consent. It will be necessary to make separate orders in
of sub-section 32(14). respect of the applications and to bear in mind the provisions The applications for review were originally fixed for hearing for three days commencing on 11 February 1992. On that day Mr Goldberg QC appeared with Mr J Santamaria for each applicant. In the course of his opening Mr Goldberg outlined the statutory framework involved and accepted that it was necessary for each applicant, not only to claim legal professional privilege before the Authority, but also to establish the basis for it, in accordance with the Full Court
judgments in National Crime Authority v . S (1991) 100 ALR 151. He also accepted that the objections of the applications fell to be decided by the sole purpose test as enunciated by the High Court in relation to an objection based on a claim of legal professional privilege.
In the course of his opening Mr Goldberg also said that the hearings before the Authority, so far as they related to documents, in effect were confined to "the controversial documentsu. A list of documents which fell within each summons had been prepared by the applicants with designations like ZQ, YD and ZR to indicate the person from whose file
they came. Counsel on both sides had gone through the lists to try and limit the documents that were subject to a claim of legal professional privilege. In some instances the privilege was either waived or abandoned and in other instances Mr Rozenes did not seek to ask questions about documents because privilege clearly existed. Counsel followed this course for
of principle. the purpose of trying to identify issues and isolate matters Counsel agreed that the Court should review the decisions for errors of law upon the basis of the facts as found by the Authority, but pointed out that there was a difficulty for both parties in that, as Mr Goldberg put it: (T/S17)
"The member had all the information available to him so far as the evidence that had come before him was concerned but he has not necessarily, and this might go both ways, identified in his reasons all the relevant matters which he should have taken into account in reaching his decision.
In other words we want to submit that there is an error of law but we want to submit and I would expect my learned friend Mr Weinberg to submit that you need to go to other aspects which he did not touch on in order to identify fully why he made the error of law".
Mr Goldberg submitted a document headed "Outline of Some Relevant Facts" which had been prepared on behalf of the applicants and agreed to by the Authority. It was incorporated in the transcript at pp.34-6 as follows:
"1. During 1991, the NCA was conducting an inquiry into, inter alia (a) the acquisition by the COMPANY 2 of COMPANY 11's shareholding in COMPANY 1 in AUGUST 1986; (b) the acquisition by the COMPANY 2 of control of the options over shares in COMPANY 1 by COMPANY 14 in 1987. (Schedule to summons to witness).
2. In the conduct of the transaction, COMPANY 11, COMPANY 1 and COMPANY 2 engaged varlous professional advisers including merchant banks and solicitors. COMPANY 11 had retamed CA 1 and LEGAL FIRM 3. COMPANY 2
retained LEGAL FIRM 1. PI, P2 and P3 were members of
LEGAL FIRM 1 who had responsibility for COMPANY 2. COMPANY 2 comprised some of the senior management: of
COMPANY 1 including DIRECTOR 2, DIRECTOR 3 and DIRECTOR
1 and ACCOUNTANT 1 who was a consultant to COMPANY 1
senior management. SOLICITOR 3/1, SOLICITOR 3/3 and SOLICITOR 3/2 were members of LEGAL FIRM 3 who had responsibility for COMPANMY 11. COMPANY 2 also had dealing with BANKER 1 which had a role in advising COMPANY 2 (2295, 2933). BANKER 1 were represented by
FINANCIER 1. BANKER 1 were advised bv LEGAL FIRM - - - - -
2. LEGAL FIRM 2 were represented by SOLI~ITOR 2/3 and SOLICITOR 2/2. 3. COMPANY 11 and COMPANY 1 held shares in each other. COMPANY 11 and COMPANY 1 had proposed to unwind this arrangement. At some stage in may 1986, banker 1 discussed with COMPANY 2 a proposal whereby COMPANY 1 management would acquire shares in COMPANY 1. It was proposed that BANKER 1 would arrange the funding for the proposal. BANKER 1 gave the name 'ENTITY' to the proposals. On or about 1 JUNE 1986, a meeting was arranged between COMPANY 2 and LEGAL FIRM 1. At that meeting, representatives of COMPANY 2 outline the proposal to representatives of LEGAL FIRM 1 and asked
them to advise in relation to the proposal. (2273-2275, 2927). In the period JUNE 1986 and JULY 1987 there were continuous negotiations and discussions between the parties. P1 took his instructions principally from ACCOUNTANT 1. He also received instructions from, and had conferences with, DIRECTOR 2, DIRECTOR 1 and DIRECTOR 3. P1 also took part in negotiations with SOLICITOR 3/1, SOLICITOR 3/3 and SOLICITOR 3/2 of LEGAL FIRM. 3.
4. Draft agreements and letters associated with those agreement ( sic) were drawn. Draft agreements were prepared, and examined, by P1 and discussed by him with his clients. A number of draft agreements and letters were exchanged between LEGAL FIRM 1 and LEGAL FIRM 3. Some documents were supplied by representatives of COMPANY 2 in conference to PI. After discussions between LEGAL FIRM 1 and LEGAL FIRM 3 and after exchanges of agreements and letters between them, P1 discussed matters raised in those discussions with representatives of COMPANY 2. Not all of these documents were brought into existence by COMPANY 2.
5. P1 was seeking to obtain the maximum flexibility possible and had been given instructions to leave open as many options as possible. (2296) At that time he was told that the bid proposal was no longer current. During the period of Pl's discussions wlth the COMPANY 2 representatives, he was meeting wlth them on a continuous basis to advise and was involved in a continuing process of providing advice. (2971). P1 was also engaged
negotiating with LEGAL FIRM 3 and COMPANY 11, settling
the form of documentation for the proposal with LEGAL FIRM 3 and taking steps generally to implement the proposal. P1 said that his firm 'had been engaged to provide advice and really we continued through to the
implementation of .
. . 'the acquisition of the COMPANY 1
shares from COMPANY 11 (2966)"'. Mr Weinberg QC, who has appeared with Mr Walters for the Authority throughout the hearing before the Court, mentioned some schedules of facts which the respondent had prepared which had been the subject of discussion with counsel for the applicants. when Mr Goldberg said that he wished to go through these schedules with his instructing solicitor, the Court adjourned for the purpose.
When the hearing was resumed counsel for all parties sought a further adjournment so as to attempt to "hammer out an agreed statement of facts". The hearing was adjourned to 23 March 1992.
The Court was later informed that the parties had been unable to reach agreement and the cases were put in the list for further directions on 16 March, when Mr Goldberg said that, in the absence of agreement, they would be likely to last considerably longer than three days. After discussion of other commitments of counsel the hearing was adjourned to 23 March, when, in M r Goldberg's unavoidable absence, M r Mandie QC appeared with Mr J Santamaria for each applicant.
On 23 March, before commencing his opening, Mr Mandie
said (T/S69) that he wished to make a submission that the
decisions of the Authority failed to comply with the
provided by subsection 32(14), the number of which can only be provisions of the Act on their faces and should be set aside. The Court, he said, was dealing with a series of decisions, as found "by ascertaining how many questions were the subject of a claim to be entitled to refuse to answer that question and how many documents were the subject of a claim to be entitled to refuse to produce that document". It was, M r Mandie submitted, important that the decision of the Authority clearly identify any question or document to which it related, for two reasons:
1. to enable the Court to carry out its duty to review each decision.
2. an unjustified claim exposed a witness to the risk of prosecution under subsection 30(11).
On 24 March M r Mandie filed in Court an application for leave to rely upon amended applications so as to raise the contention that each of the purported decisions failed to comply with s.32 or was not a decision within the meaning of the Act, in that:
"(a) each of the decisions fails to identify the claim which is said to be unjustified;
(b) each of the decisions fails to identify the relevant question or questions (if any) other than by a reference to numbered pages of the transcript; (C) each of the decisions fails to identify the relevant
document or documents (if any) other than by a
reference to numbered pages of the transcript;
(d)
alternatively, if questions are identified, none of these questions was required to be answered by the member presiding at the hearing."
I deferred ruling upon the applications to amend and M r
category. The submissions of all counsel included arguments Mandie turned to deal with the decisions, category by relating to the contentions raised in the amended application. As will become clear in the course of dealing with the various categories, counsel in some instances felt able to agree upon the identity of questions said to have been the subject of the decision of the Authority, although not
2 0
identified in it. However, that agreement, so far as Mz: Mandie was concerned, was always subject to his right to rely upon the amended grounds.
I do not consider that it would be proper for the Court to hold in effect that a witness had, without reasonable excuse, refused or failed to answer a question put to him, unless the Court were able to see from the decision itself that a particular question had been the subject of it. It is one thing for counsel to agree upon a basis on which they will present their arguments. It is another for the Court to make orders, as if it could see from the decision itself that a particular question was the subject of it, if it cannot do so.
When the Act makes the decision of the Authority subject to review by the court, it obliges the Authority to identify any question which is the subject matter of its decision, so as to make it capable of review. The terms of subsection 32(14) confirm that the legislature intended that the
Authority should identify any question which was the subject of a decislon by it. If the sequence of events were to be that the Authority ruled against a claim of lawful excuse for failure or refusal to answer a question, the witness sought review, and the Court on review affirmed the decision of the Authority, each party would know that, if the witness were later required by the Authority to answer that question, it would be the very
2 1
question in respect of which the Court had made a conclusive order. The need for this precision is emphasised by the penal consequences to which the witness may be subjected.
In my opinion a decision which is not susceptible of review by the Court is bad on its face. I would have set aside any such decision, even in the absence of an application to amend. There should be leave to amend in accordance with the application.
Cateoorv A1 of the decision in P1 referred to transcript pages
2930-5 but did not state that it intended to refer to a
question or specify any question or questions that were said to be covered by it. It referred to document ZR275-7, taken from a list of documents prepared by PI'S firm.
As it was common ground that the Authority had earlier obtained a copy of the document from another source, Mr Weinberg did not seek an order from the Court that it should be delivered to his client.
Speaking of the document on p.2930 of the transcript before the Authority, Mr Goldberg said that "it is entitled in our list: 'document received from DIRECTOR 3 on behalf of persons behind the COMPANY 2 proposal seeking advice on subject matter'". The reference to "our list" was to the list prepared by Pl's firm.
Counsel agreed upon the question set out on p.2931, one of the six pages cited in the decision, which read:
" M r Rozenes: Is that the document that was produced to
you by DIRECTOR 31"
Mr Mandie referred to pages 2926-7, which, he submitted showed that the witness had said in substance that there was only one document and that it was produced by DIRECTOR 3 in support of his submission that the question had been answered.
However, when at p.2931 Mr Rozenes asked the witness:
"Is that the document produced to you by DIRECTOR 3 ? "
Mr Goldberg raised the objection of privilege and the
Authority reserved its ruling upon it.
The Authority dealt with the subject under the heading of
a claim on behalf of the witness that "there is no loss of
privilege where the Authority has obtained the communication over which privilege is claimed from a third party, there having been no prior waiver by the client." This claim seems apt to refer to the document mentioned but it is not easy to apply to a question, which leads me to doubt that the Authority intended to refer to a question. This observation also applies to Category A2.
2 3
The Authority had obtained a copy of the document from
LEGAL FIRM 2 who acted in the matter for BANKER 1 and had been
made aware by counsel for P1 of its description in the list
prepared by his firm.If the direct question on p.2931 had been answered "Yes", that answer would not have disclosed any information which the Authority did not already possess. If there were any privilege in respect of the question, it had been waived by the earlier disclosure that the document was described on behalf of the applicant as having been received by DIRECTOR 3, and, on Mr Mandie's own submission, by the witness having answered it in substance.
In the circumstances of an investigation of this character where answers are sought for the purpose, amongst others, of use in future proceedings it is proper to require a direct answer to a question. It is not sufficient for the party taking the objection to show that an answer may in substance be spelled out from other parts of the examination either read alone or in conjunction with statements made by
counsel for the witness. The Authority did not refer to the effect of the provision in subsection 30(3) that where a legal practitioner refuses to comply with a requirement by the Authority to answer a question on the ground of privilege there specified, "he shall, if required by the member presiding at the hearing,
2 4
furnish to the Authority the name and address of the person to
whom or by whom the communication was made".Had the question which has been debated been identified by the Authority in its decision, and had it made the appropriate requirement, it would appear that the witness would have been obliged to furnish DIRECTOR 3's name and address to the Authority.
However, as it is not clear that the Authority intended to refer to any question and as it did not, in any event, identify any question, the decision should be set aside.
-
P1 Cateuory A2
The document 7.414 referred to in this category is no longer sought, as the Authority already has it. The decision did not state that it intended to refer to a question or specify any question or questions said to be covered by it. The transcript reference is to pp.3034-7. The agreed question (at p.3035) is:
"In fact were you told by FINANCIER 1 that as the letter (sic) agreement then stood there was some uncertainty about whether COMPANY 2 could proceed to make a bid for
COMPANY 1".
Mr Mandie submitted that FINANCIER 1 was the agent of COMPANY 2, saying that "the text of the question makes it perfectly plain that FINANCIER 1 was either giving instructions or seeking legal advice." The evidence in
relation to LEGAL FIRM 2 and BANKER 1 was said by counsel to be found on p.2933, where 1 Rozenes asked the following questions :
"PI, did your firm ever receive any instruction in written form from COMPANY 2 that BANKER 1 were appointed its agent?-Well, I have no memory of any such ---
Did it ever receive any such verbal instruction?-I am not sure what - no, I cannot recall.
Did it ever receive any instruction from LEGAL FIRM 2 that it was acting as agent for COMPANY 2?---From LEGAL FIRM 2, no.
Or did it ever receive any verbal instruction to that effect?---I do not think so.
Has your client, COMPANY 2, requested BANKER 1 to maintain a privilege in relation to any communications made to it?---I do not know.
Has LEGAL FIRM 2 received such a request from your client
COMPANY 2?---I do not know.Do you propose to say that, nevertheless, both LEGAL FIRM 2 and BANKER 1 are constructed as agents of COMPANY 2?--- Certainly in some - BANKER 1 were certainly engaged to provide advice and to act on behalf of COMPANY 2 at some stage. It is only in those circumstances, yes.
Do you know whether or not BANKER 1 has taken any privilege in relation to those matters?---I do not.
Or that LEGAL FIRM 2 have taken privilege?---I do not.
Would it surprise you that neither have?---No , it would not surprise me." Under the heading Category H the Authority makes a
finding of fact on the agency question.
Cateciorv H referred to the claim on behalf of the witness "that there existed between COMPANY 2 on the one hand and BANKER 1 on the other a relationship of principal and agent. Accordingly communications between LEGAL FIRM 1 and BANKER 1 directly and/or between LEGAL FIRM 1 and LEGAL FIRM 2 as solicitors for BANKER 1 are protected by legal professional privilege".
The Authority's transcript references were:
1. 2932-3 (which are within the reference 2930-5 given
for Al).2. 3035-6 (which are within the reference 3034-7 given
for A2).
The Authority's reasons in respect of Category H have been quoted above, including its conclusion:
"There is no factual basis put before the Authority upon which it could be said that such an agency existed. For these reasons the claim for privilege based on an agency as described herein also fails.
Accordingly it is my opinion that the claim by P1 that he is entitled to refuse to answer questions and/or to produce documents in reliance upon the claimed agency is not justified."
As has been noted, the Authority simply gave transcript references in its introduction of Category H and did not identify documents the subject of decision, as it did in other categories. It did not specify any questions.
Mr Weinberg treated Category H on the basis that it
referred to no document or question other than those referred
to in Category A1 and 2. His submission continued as follows: " ( 2 ) Insofar as a finding of fact made by the Member is under challenge, such a finding should not be lightly overturned. The normal rules governing the circumstances under which appellate Courts interfere with findings of fact by primary fact finders should be applied. It was open to the member to conclude that LEGAL FIRM 1 had not satisfied him that BANKER 1 or LEGAL FIRM 2 were, in any relevant sense, agents of COMPANY 2 or LEGAL FIRM 1. Indeed, the Member had the advantage of having heard a good deal of testimony directed to this issue from various witnesses who were in a position to know whether such an agency existed. That material is not before this Court. A finding made by the Member based upon the totality of the evidence, cannot be overturned in this Court by an assessment of part only, of that material."
In his reply, Mr Mandie conceded that the Authority's finding was open to it in the evidence.
Mr Weinberg's submission continued:
"(3) The suggestion that LEGAL FIRM 2 were agents of the COMPANY 2 Group is impossible to reconcile with the actions of LEGAL FIRM 1 in releasing to the Authority numerous letters which passed between LEGAL FIRM 1 and LEGAL FIRM 2 in relation to the ENTITY 1 transaction. That fact alone demonstrates that the contention of agency is little more than an afterthought. It was open to LEGAL FIRM 1 to adduce any evidence it wished in support of an agency being in existence. Its failure to do so destroys its
claim. In my opinion the present case is not one to be decided
"
by the application of the rules relating to appeals from
findings of fact made by "primary fact finders".In Waterford v. The Commonwealth (1987) 163 CLR 54, Mason and Wilson JJ said (at p.66):
"The appellant's submission fails to appreciate that the sole purpose test is a test that looks to the reason why the document was brought into existence. If its sole purpose was to seek or to give legal advice in relation to a matter, then the fact that it contains extraneous matter will not deny to it the protection of the privilege. The presence of matter other than legal advice may raise a question as to the purpose for which it was brought into existence but that is simply a question of fact to be determined by the Tribunal and its decision on such a question is final. It may also be appropriate in a particular case for the Tribunal to require those parts of the document which do not bear the necessary relation to legal advice to be disclosed. The doctrine of legal professional privilege allows room for questions of fact and degree such as these to fall for decision. Moreover, the Act contemplates that where an exempt document contains material which, standing alone, would not render the document exempt, the agency or Minister should, if it is reasonably practicable to do so, delete the privileged material and grant access to the remainder: s.22."
(This statutory reference to severance is to be contrasted with that in the Act, which will be noted later.)
The reference by their Honours to the purpose for which the document was brought into existence being simply a question of fact to be determined by the Tribunal "and to its decision on such a question being final" is in point in the
present case, where there is no reference in the heading of any of the categories to a clam of privilege based on the sole purpose test and no finding of fact by the Authority on the purpose for which the documents here in question were brought into existence or for which the communications were made.
In Waterford Brennan J said (at pp.77-8):
"A finding by the A.A.T. on a matter of fact cannot be
reviewed on appeal unless the finding is vitiated by an
error of law. Section 44 of the A.A.T. Act confers on a
party to a proceeding before the A.A.T. a right of appeal
to the Federal Court of Australia 'from any decision of
the Tribunal in that proceeding' but only 'on a question
of law'. The error of law which an appellant must rely
on to succeed must arise on the facts as the A.A.T. has
found them to be or it must vitiate the findings made or
it must have led the A.A.T. to omit to make a finding it
was legally required to make. There is no error of law
simply in making a wrong finding of fact. Therefore an
appellant cannot supplement the record by adducing fresh
evidence merely in order to demonstrate an error of fact.
As the purpose for which a document is brought into
existence is a question of fact (per Jacobs J. in Grantv. Downs ( 8 3 ) ) , the contents of document 29 are
immaterial to the question whether the A.A.T. has made an
error of law on the material before it."
Deane J said (at p.84):
"The oral evidence and other material before the Tribunal about the disputed documents was over-generalized and unsatisfactory. Indeed, one is reminded of the description and advice provided by Hamilton L.J. in the Birmingham & Midland Hotor Omnibus Co. Case ( 11) :
l . . . a hybrid, made up by combining a variety of
phrases which have passed muster in decided cases. It is dangerous to rely on these artificial creations. Claiming privilege in an affidavit of documents is not like pronouncing a spell, which, once uttered, makes all the documents taboo. The
draftsman should draw each affidavit with reference
to the actual facts of the case and bearing them in
mind. '
It did, however, emerge with tolerable clarity from the evidence before the Tribunal that at least some of the disputed documents contained or recorded both legal professional advice given by the Crown Solicitor's Office and general policy advice given by the 'freedom of information' section o f the Attorney-Geaeral's Department.
The circumstance that advice of different categories was contained in some of the disputed documents did not, of itself, give rise to any insurmountable problem. If privileged material was contained in one distinct part of a document and non-privileged material was contained in another, protection of the confidentiality of the privileged part of the document would not, as the Act itself recognizes (see, e.g., ss.22, 33(3), 33A(3), 34(3), 35(3), 36(4), 58(2), 64(2) and (4)), ordinarily require that that part which was not covered by privilege should also be immune from production: see, e.g.,
A i n s w o r t h V . W i l d i n g ( 12) ; G r e a t A t l a n t i c I n s u r a n c e Co.
v. Home I n s u r a n c e Co . (13); B r a m b l e s H o l d i n g s L t d . v.
T r a d e P r a c t i c e s C o m m i s s i o n [No.3](14). If it were not possible to classify the contents of the document into distinct parts, it would be necessary to determine whether the contents as a whole were outside the protection of legal professional privilege for the reason that notwithstanding the professional legal advice, they did not satisfy what has conveniently, if somewhat loosely, been referred to as 'the sole purpose' test: see G r a n t v. Downs (15). That test looks to the purpose for which the contents of a document were brought into existence. To adapt the words of Stephen, Mason and Murphy JJ. in G r a n t v. Downs, a document (or a severable part of a document) will not be protected by legal professional privilege if it 'would have been brought lnto existence . . . in any event' for purposes other than that which attracts legal professional privilege: and
cf. , e . g. , the B i r m i n g h a m & M i d l a n d Motor Omnibus Co.
C a s e (16); L o n g h o r n (17); Comment, 'Agents' Reports and
the Attorney-Client Privilege', University o f
C h i c a g o Law R e v i e w , vo1.21 (1954), 752, at pp.754-755.
A finding by the Authority that there was no agency was a finding of fact, and involved no error of law. However, the opening sentence of the decision under the heading "Ground H"
read :
privilege can be sustained where a communication, "There is no doubt that a claim for legal professional intended to be confidential, is made to or by an agent of
the client or the solicitors acting for the client".
The meaning of this sentence, which is repeated under the same heading in the decision in respect of P2, is not clear. In any event it does not appear to state the sole purpose test in the setting of an agency.
3 1
However, as it is not clear that the Authority intended to deal with any question and as it did not, in any event, identify any question the decision under PIA2 should be set aside.
P1 Cateaorv B1 does not refer to a document. The transcript reference was to p.2959. Counsel have agreed upon the question which reads:
"What I am asking you, was that instruction ever withdrawn, that the matter you were asked to act in was a matter which would result in COMPANY 2 obtaining a majority interest in COMPANY l?"
Mr Goldberg claimed privilege in respect of it.
As I observed to counsel in the course of argument, the form of this question involved the witness in accepting an assumption that he had previously been instructed to act in "a matter which would result in COMPANY 2 obtaining a majority interest in COMPANY 1, " and was, in my opinion, objectionable
Authority. The witness earlier had been asked (on p.2958 to on that ground, which was not, however, raised before the which counsel referred): "Initially were you instructed to act for COMPANY 2 in relation to a proposal that it would acquire a controlling interest in COMPANY l?"
Objection on the ground of privilege was taken by Mr
Goldberg, and the question has not been said to be the subjectof decision by the Authority.
As Category B1 does not refer to a document it may be inferred that the Authority's decision related to a question on p.2959. Although the decision did not in terms identify a question, the agreed question is the only one on the page and objection was taken to answering it.
However, as the question which was put was objectionable in form, it does not seem to me to be proper for the Court to rule in effect that the witness was obliged to answer it, so that a refusal to do so would take him a step closer to the risk of prosecution. I would set aside the decision.
P1 Cateoorv B2
No document is referred to. The transcript reference was to p.2964 which read as follows (the agreed question is underlined):
$4 a share to a new private company, and the majority "That COMPANY 11 would sell its COMPANY 1 investment at shareholders in that company would be COMPANY 1 management, COMPANY 9, the joint venture and COMPANY 1 super fund?---If you are asking me whether that I knew that CA 1 had reported that to me, no.
Were you told anything about the fact that there had been - this is by your client - that there had been discussions with COMPANY 11 about those matters? In other words, that it being more than just a request of your firm to advice of a 'pie in the sky' proposal, that there had been discussions with COMPANY 11 about?---I don't remember at that stage being told that, no.
When did you first become aware that there had been discussions with COMPANY ll?
MR GOLDBERG: Is not there an anterior question: did you become aware? MR ROZENES: IS there? Did you become aware? MR GOLDBERG: Whilst I ... indistinct ... to stop leading you on.
MR ROZENES: Yes, but did you become aware?---Yes. And when did you become aware?---My memory is that it: was early JUNE.
Well now, were vou informed on or about 10 JUNE that the transaction that had been ~ u t o COMPANY 11 was no lonaer proceedins bv vour client?---I - - -
MR GOLDBERG: Well again, you are putting it in the context - was that in the course of getting instructions
from the client?MR ROZENES: Well, it is inconceivable, in our submission, that that question could raise a request for advice. I am asking whether he was informed by his client that the negotiations with COMPANY 11 had come to
an end. How can that be a request - - -" Counsel also referred to p.2965 on which Mr Leckie said: " M r Goldberg, what I am struggling with at the moment is
that what i.lr Rozenes appears to be asking the witness is that, were you told we do not want to go any further with this. And he is not seeklng advice. He is just telling
the solicitor to cease".Later on that page Mr Leckie said: "They are not giving instructions to obtain advice, which
is the critical test, is it not?"M r Rozenes agreed that that was the point he was making.
3 4
If in fact the Authority intended its decision to relate to the agreed question, one would expect that its reasons in respect of it would have been expressed on the basis of this observation that the clients were not giving instructions to obtain advice, so that the sole purpose test was not satisfied.
As has been seen the claim of privilege under which the question on p.2964 was placed by the Authority was the heading of a claim:
"The whole communication is privileged notwithstanding that it contains in part a fact or instruction relating to a commercial transaction and in part a communication for the purpose of obtaining or giving legal advice."
Had the Authority specified the agreed question as the subject of its decision, and had it intended to rule that the witness was obliged to answer it, it is hardly conceivable that it would have based its rullng upon the rejection of a claim in the above terms, rather than upon what it spoke of as
instructions to obtain advice. "the critical test" that the client was not giving The Authority has not specified a question. If it intended to refer to the agreed question it made an error of law in placing it under the heading of a claim that did not relate to it and in failing to find that the sole purpose test was not satisfied. The decision should be set aside.
P1 Cateoorv B3 This category refers to document ZR242 and the
Authority cites pp.2974-5.As Mason and Wilson JJ said in Waterford (at p.66):
"The presence of matter other than legal advice may raise a question as to the purpose for which it was brought into existence but that is simply a question of fact to be determined by the Tribunal and its decision on such a question is final".
On p.2975 the following appears:
Mr Rozenes: "Well, see, you may look at document 242, ZR242 which is the privileged document?---Yes.
And that might refresh your memory of when it was that you learnt of the transaction being the sale of shares of the COMPANY 11 parcel into COMPANY 13 or COMPANY 2 at $3.50 a share on deferred terms?---Well, I think as I said in relation to 242, it relates to a request for some further advice on a revised proposal.
(Yes. And the question I am asking you is when did you
(first learn of the proposal that involved the selling of
UN,o (the COMPANY 1 parcel into COMPANY 2 at $3.50 a share on (deferred terms. And you may look at 242 if that assists (you to refresh your memory.
MR GOLDBERG: Well, that is leading, 'Was it part of your instructions?' MR ROZENES: Nothing to do with it.
MR GOLDBERG: Well, it may.MR ROZENES: I am not asking you for any advice you gave (or any advice that was sought. All I am asking you, (when you first learnt that there was a proposal on foot "W" (that COMPANY 11 would sell those shares at that price on
those (terms?---I claim - we have claimed privilege inrespect (of the communications that took place on 17
JUNE. " Mr Mandie contended that the question which I have marked
"M" was the one to which the Authority referred, whereas Mr
Weinberg submitted that it was the question which I have marked "W".
M r Rozenes referred to ZR242 as "the privileged document"
and the witness said that "it relates to a request for some further advice on a revised proposal". Pp.2974-5 of the transcript which the Authority cited do not show that its production by the witness was called for, either formally or informally. The decision in relation to the document should be set aside.
As the decision does not state that it refers to any
question, and no question is identified in it, it should be
set aside, insofar as it purports to deal with any question.
P1 Cateaorv B4
The document referred to is ZR241 and the transcript references are 2978-9.
The relevant portions of those two pages, in which the
agreed question is underlined, are as follows:
"Well, now, if you look at 241 you will see this is said to be a letter from LEGAL FIRM 1 to ACCOUNTANT 1 re advice on draft agreements; is that a fair description?-- -Yes.
And is it a letter written by you?---Yes.
Does it deal with draft agreements?---Yes.
And does it tell you that the agreements were, in fact,Does it tell you that those aqreements are to be forwarded to LEGAL FIRM 3?
MR GOLDBERG: Well, I object to this line of inquiry again. The letter is a letter in respect of which privilege is claimed and what my learned friend is doing is asking what the contents are without first establishing what was - how did the letter come into existence and what was the purpose of the letter coming into existence. I think you have jumped that hurdle.
MR ROZENES: I understand that the letter was brought into existence in part to give advice on agreement.
MR GOLDBERG: Correct.
MR ROZENES: And I am not asking the witness about any advice that he gave in relation to the agreements. What
I am asking - - -
MR GOLDBERG: Well, this now falls into the same category as has been the subject of dispute - I mean disputed submissions, M r Leckie. This is not forwarding them to COMPANY 11, this is forwarding them to ACCOUNTANT 1.
MR ROZENES: I will perhaps ask the next question. On 19 December, the following day, did you forward draft agreements to LEGAL FIRM 3?---I don't remember."
The witness later was shown a letter dated 19 JUNE and
agreed (on p.2979) that on 19 JUNE he must have forwardeddraft bid agreement and security sale agreement to LEGAL FIRM
proceeded on other subjects. 3 on ACCOUNTANT l's instructions. The examination then Mr Mandie submitted that the document was privileged and that the question was objectionable and cited Waterford.
Mt Weinberg originally submitted:
"(1) A communication by a solicitor to his client that draft agreements are to be sent to a third party via the third party's solicitor cannot be regarded
(a) as a confidential communication
(b) made solely for the purpose of providing legal advice.
(2) Pl's testimony that draft agreements were forwarded the next day (i.e. 19th December, 1987) makes it plain that his communication to his clients on the 18th December, 1987 that this was to occur cannot be regarded as anything other than imparting information as to the progress of a transaction, rather than providing legal advice.
(3) The document was not created by the solicitor solely for the purpose of providing legal advice.
(4) If part of the document contains legal advice, and the remainder does not, it may be possible to sever the document."
In his submissions delivered on 3 April, M r Weinberg
wrote:
". . . if the document is found to be privileged because
the evidence discloses that it was brought into existence solely for the purpose of giving or receiving legal
advice :
(b) The decision of the Authority requiring the Applicant to produce document number ZR242 be set aside in part, and such parts of the document as do not constitute the provision of legal advice or the imparting of information connected with the provision of legal advice be severed and those parts be provided to the Authority;"
The Act has made express provision for severance in relation to the circumstances set out in sub-section 32(8), and (10) which read as follows:
"(8) Where a person who is required to produce a document
pursuant to a notice under section 29, or who is required to produce a document at a hearing before the Authority, claims that:
(a) the document contains: (L) particular matter (in this subsection xeferred to as the 'relevant matter') relating to the personal affairs of the person, not being matter relating to the activities of an existing or past business; or
(ii)
in the case of a person who is or has been an employee-particular matter (in this subsection also referred to as the 'relevant matter'),
being details of earnings received by the
person in respect of his employment; and
(b) the person would, if the document had contained only the relevant matter, have been entitled, on the ground that production of the document might tend to incriminate him, to refuse so to produce the document; the person may, whether or not he has made an application to the Federal Court under subsection (2) in respect of a decision by the Authority in relation to the document, make an application to the Federal Court for an order under this subsection and, if such an application is made and the document is produced to that Court, then, subject to paragraph (5)(a), that Court:
(C) if it is satisfied that the claim is justified-may, subject to paragraph (d) of this subsection, make such order as it thinks fit for the excision or concealment of the part of the document that contains the relevant matter and shall, if it makes such an order, make a further order directing that the document be delivered to the Authority after the
first-mentioned order has been complied with;
(d)
if it is satisfied that an undertaking of a kind referred to in subsection 30(5) or (7) has, or 2 or more such undertakings have, been given to the person and that the person would not, if the document contained only the relevant matter and the person were now required to produce the document to the Authority, be entitled, on the ground that production of the document might tend to incriminate him, to refuse so to produce it-shall make an order directing that the document be delivered to the Authority; and
(e)
if paragraph (d) does not apply and that Court does not make an order of the kind first referred to in paragraph (c)-shall make an order directing that the document be delivered to the Authority."
"(10) Where
(a) a person makes a claim as mentioned in subsection (8) in relation to particular matter (in this subsection referred to as the 'relevant matter') contained in a document; and
(b) the Federal Court, being satisfied that the claim is justified, makes in relation to the document an order of the kind first referred to in paragraph
(8) (c); evidence of production of the docuement by the person to the Authority, or of the placing of the document by the person in the custody of the Registrar of the Federal Court, as the case may be, for the purposes of the application on which the order is made is, in so far as the document contains the relevant matter, not admissible in any proceedings against the person for an offence against a law of the Commonwealth, of a State or of a Territory, other than proceedings in respect of the falsity of evidence given by the person."
A member of the Authority who is conducting an examination does not have the advantage which a Court has of looking at a document to determine whether it is privileged, because the privilege would be destroyed in the process.
The Parliament has recognized this difficulty and has
provided a means of overcoming it in the circumstances set out
where legal professional privilege is claimed. in subsection (8) but has made no such provision in a case
In my opinion, the Court should not make an order of severance in the absence of any statutory provision for it, especially as it is reviewing a decision in which the Authority was not asked to order severance.
If one were to assume that under the heading Category B4 the Authority intended to refer not only to document ZR241 but also to a question, it might be permissible to infer that the agreed question was the only one on those pages which could be a subject of the decision. However, the assumption would not be justified. The Authority has said in the preamble to the decision that it related to some documents and to some questions. Where a category does not refer to a document, it may be inferred that the Authority must have intended it to refer to a question, but where, as here, it refers to a document no such inference can be drawn.
In my opinion, the Authority should have reminded itself of what was said in Waterford at p.66, as set out on p.27 above and made a finding of fact as to whether any claim for privilege in respect of a document or an identified question upon which it intended to rule satisfied the sole purpose test, and expressed its reasons to enable the Court to determine whether there was any error of law involved. If the Court were to seek to make such a finding of fact itself, it
would be moving outside its function of review, and would, moreover, be deciding a question of fact upon only a fraction of the evidence which the Authority had before it. In the absence of any identification of a question by the Authority and of any such finding by it the decision should be set aside.
P1 Cateqorv B5. The Authority has referred in its decision to pp.2980-1 and to document ZR225. The relevant parts of p.2980-1 were as follows (both counsel referred to the question marked "M & W" and Mr Mandie also referred to the question marked "M"):
" M r Rozenes: Now, if I can ask vou to have a look at -
M 225, ZR225, it is described as a phone conversation between vourself and ACCOUNTANT 1. What is that about? It is a document over which you have claimed privilege. MR GOLDBERG: Well, that confronts the issue, does not it? MR ROZENES: Of course it does MR GOLDBERG: I object to ... MR ROZENES: Is it a communication solely for the purpose of giving or receiving legal advice?---It is a communication which relates to the state of negotiations in relation to which we were providing advice. All right. So it is a negotiation between whom?---
COMPANY 2, COMPANY 11 and COMPANY 12.M & W And was it passina information that had come from parties outside COMPANY 2?
MR GOLDBERG: Well, we object to that. The witness has answered the question and said this subject matter was communicated to him as part of the subject matter in respect of which advice had been sought.
MR ROZENES: So again - does it follow from that - I ask this question of Mr Goldberg, although he is not in the
witness box.
MR GOLDBERG: Yet. MR ROZENES: Yet. That any communication made to the
solicitor which mentions the subject matter over which
the advice is given must be privileged.
MR GOLDBERG: Not mentions, which is part of the subject
matter or the retainer in respect of which advice has
been sought and is being given.MR ROZENES: Well, do you say, PI, that this conversation was had with you for the purposes of you giving some advice in relation to it?---It foreshadows a further proposal in relation to which advice might be sought.
Well, how can that be the subject matter of privilege?---
As I say, it also deals with the state of the earlier
proposal in relation to which we are providing advice.Well, we would submit that neither of those reasons are reasons why the witness should not answer the question.
MR GOLDBERG: And we submit to the contrary.
MR LECKIE: Well, again - - -
MR ROZENES: We will mark that one for further - - -
MR LECKIE: - - - we will reserve that for a ruling."
The decision insofar as it purports to relate to any question should be set aside on the ground that it does not state that it refers to a question and in any event, it does not identify any question. The decision as to document ZR225 should be set aside on the grounds set out under P1 B4 in relation to ZR242.
P1 Cateqorv B6 has been resolved between the parties and either a consent order, yet to be identified, or no order is sought. Counsel will no doubt deal with this question in short minutes of orders.
Cateqorv B7 refers to p.3195 and to documents ZR131 and 132. In the absence of any statement in the decision that it refers to a question as well as to documents, and of any identification of a question, I will set out the whole of p.3195, in which I have underlined the agreed questions:
"Did you have a conversation with DIRECTOR l?---I think I
did, yes.
What was the conversation about?---They were giving me
instructions in relation to other aspects of the
transaction.Well, now, can you date that document in some way?---It's undated itself, but it does relate to the same as P3
. . . indistinct. . . . this rider to, so it would have been shortly after receipt of that document.
So you think it is somewhere around the 15th?---Yes.
Now in the course of this discussion that you had with M r DIRECTOR 2 and DIRECTOR 1, did they tell you anything for you to pass on to COMPANY 11 or their representatives?--- Not as evidenced by this note.
Have you any recollection of them telling you something to pass on to LEGAL FIRM 3?---No.
Well now, if I can ask you to look at ZR132, that has been described as a letter from LEGAL, FIRM 1 to
ACCOUNTANT 1 re advice on . . . indistinct . . . is that an
accurate description of the document?
MR LECKIE: Advice on?
MR ROZENES: Side letter.MR LECKIE: Thank you?--- It also provides advice on the securities sale agreement. But they are principally about the same matter, yes.
MR ROZENES: Is that a letter written by you?---Yes. Now in addition to aivina advice to ACCOUNTANT 1, did vou pass on to ACCOUNTANT 1 anv facts arisinq out of vour discussions or communications with LEGAL FIRM 3?---I passed on to them some views which had been expressed by
LEGAL FIRM 3. Yes. What were thev?
MR GOLDBERG: I object, Mr Leckie, because what Mr Rozenes is now doing, he is ignoring what the witness has said. This is one of the questions that I think you have reserved a ruling on. Our submission is - if it is not impertinent, if I can remind you of it - this is one of the issues between Mr Rozenes and myself, that if there is a letter of advice on a commercial transaction which has in it facts communicated, involved with, or as part of the advice, or the seeking of instructions, ..."
I was told by counsel, although it did not appear from p.3195, that the answer "Not as evidenced by this note" was made in relation to ZR131.
Mr Weinberg said (T/S390) that the production of both ZR131 and 132 was called for. While they were placed by the Authority under the general claim set out in the heading to Category B, there were, Mr Weinberg said, two. other general headings in the decision, "they would equally fall under", although the Authority had not said so.
In his written submissions, Mr Weinberg dealt with B7 under separate headings, B7(a)Ar B7(a)B. Those submissions read, in part, as follows:
(1) As regards ZR131 (a document described by LEGAL FIRM 1 as 'Handwritten notes undated headed DIRECTOR 2 plus DIRECTOR 1') the evidence is that ZR131 actually contains two notes in different hands. [This information is not to be found on p.31951 P1 testifies that the first note on ZR131 refers to DIRECTOR 2 and DIRECTOR 1 in terms of who will own
how many shares in COMPANY 2. The communication in question is plainly an instruction by a client to his solicitor in the course of implementing a commercial transaction. It is not a communication made for the purpose of receiving legal advice. Insofar as ZR131 contains a record of communications between P1 and BANKER l/LEGAL FIRM 2, the communication so recorded involves a third party and the solicitor. There is no basis for the assertion that BANKER 1 or LEGAL FIRM 2 were agents of either the COMPANY 2 or LEGAL FIRM 1. The evidence is to the contrary - see 2933. The document was not created with a view to litigation, actual or contemplated."
Mr Weinberg further submitted:
(4) So far as ZR132 is concerned, the evidence is that this letter contained in addition to advice to ACCOUNTANT 1, a summary of views which had been expressed by LEGAL FIRM 3 (acting for COMPANY 11) in the course of discussions with LEGAL FIRM 1. A communication from a third party which is passed on to his client by a solicitor cannot be the subject of privilege. The communication was not made with a view to litigation, actual or contemplated. A document cannot attain a privileged status merely because a solicitor has been used as a conduit for transmitting an oral communication between one party to a transaction, and the other.
am just trying to save some time.
MR ROZENES: Thank you.
MR GOLDBERG: My understanding is this is a note with DIRECTOR 2 - a conversation to P2 and DIRECTOR 2. The witness can confirm that?---It - the first line is DIRECTOR 2 which is DIRECTOR 2. It doesn't say whether it's telephoned (sic) to, from, or conference with.
MR ROZENES: But, the subject matter, I am saying is - -
-?---It appears to be a privileged instruction
MR ROZENES: This is instructions from DIRECTOR 2 to
you?---Yes.
1s it in relation - - -?---It appears to be.
Yes. Can I ask you this? Was it an instruction for you to act in relation to some commercial proposal, to take any steps, or was it seeklng advice?---It's an instruction.
Thank you, SOLICITOR 1/1 - P2?---It is an instruction. There is no indication of me giving evidence - giving advice in this diary note.
Is it an instruction to do something in relation to the
third party?--- In other words, to approach COMPANY 11 or to approach LEGAL FIRM 3 to say and do something?---Well, it's not an instruction to approach any third party.
Right. Is it an instruction to prepare any document or submission lntended to be passed on to a third party?--- It's an instruction as to the - as to us acting.
MR LECKIE: Does it involve you progressing a commercial transaction on behalf of a client?---It's an instruction
that I needed an order to proceed with - - -
A commercial transaction on behalf of the client? Yes. And, you had to act because of the agreed - - -?---Yes, yes.
Yes, thank you, P2.
MR ROZENES: I take it this is a matter that you would
like to reserve?MR GOLDBERG: Yes, indeed."
Having regard to the heading of this category, it may fairly be concluded that the Authority was of opinion that all it needed to do was to reject a claim "that the whole communication is privileged notwithstanding that it contains in part a fact or instruction relating to a commercial transaction and in part a communication for the purpose of obtaining or giving legal advice".
The test which the Authority should have been seeking to apply was whether the document was brought into existence for the sole purpose of obtaining or giving legal advice. The reasons do not reveal that it posed this question for itself
or decided it. I would set aside the decision.
P2 Cateqory B3 refers to document YD28 and to 3266-7. The agreed question is underlined in the extract of the relevant
portions of pp.3266-7, which read as follows: "If you look at 7 JUNE, YD28.
MR GOLDBERG: Again, that is a document to which
privilege has been claimed.
MR ROZENES: My apologies.
This again is a conversation between you and DIRECTOR 3,
I take it, about prices to go into the ENTITY 1
agreement. Are you able to say - - -?---I don1 t know that that is necessarily correct. It certainly includes references to prices. And it could be prices that might - I will rephrase it - it was prices that had relevance to the ENTITY 1 arrangement.
Right. Can vou recall at what staae the DaDerWork was at this staqe. 7 JUNE? Was there an aqreement on foot, a draft aareement?---I have no independent recollection of that. Am I required to address the content of the - I think privilege has been claimed.
Well, you may look at that document and see if it refreshes your memory at all, P2?---Well, it pertains to that issue, but I would have thought that my refreshed memory would be privileged, wouldn't it?
MR GOLDBERG: Well, we get into a difficulty in places
with Mr Rozenes where earlier the subject matter of the communication is privileged. If Mr Rozenes wants to ask what happened outside that communication he can, but to ask the witness to refresh himself from memory, he is in effect asking him to refresh his memory from a document, he is asking the witness to use that document as a basis for his evidence. And that is what the privilege protects you from doing.
MR ROZENES: Well, with respect, M r Leckie, assume that there is a fact in issue which does not depend upon a privileged communication such as whether there was a form of agreement in existence, document or whatever. The witness has no recollection as to when it was that document was first brought into existence. And there is a communication between solicitor and client in which the solicitor discusses such a document with the client. Although we concede that we are not entitled to have the solicitor say: this is what I said to the client, or this is what advice I gave him. Nothing stops the solicitor by looking at that communication from saying: now my memory is refreshed. As at that date there was in existence the fact in issue, which cannot be protected by privilege. That must be so?---Could I interpose and say,
independent of what is stated here. I have no recollection kindled, or whatever, by - MR LECKIE: I am not sure that gets around the problem though, P2.
MR ROZENES: It will not get round this problem, but we make the point that there is no objection, in our submission, that could be sustained that stops a solicitor, or for that matter a client, from looking at what otherwise might be a privileged communication for the purpose of refreshing that witness' memory of facts which themselves cannot be covered by privilege.
MR LECKIE: And you say the opposite, I take it, Mr Goldberg?
MR GOLDBERG: Yes, because that is a backdoor way of
getting ... indistinct. ...MR LECKIE: Indirectly getting what you cannot get directly. MR GOLDBERG: Yes. And quite a clever way of doing it. MR LECKIE: You will require a ruling on that in due course.
MR GOLDBERG: Yes." M r Weinberg submitted: "Legal professional privilege may not be claimed because: (1) The document YD28 (described by LEGAL FIRM 1 as a diary note re DIRECTOR 3) contains a record of a conversation between P2 and DIRECTOR 3 about prices 'that had relevance to the ENTITY 1 arrangement'. In answer to the next question (whether P2 could recall at what stage the paperwork was on 7th of JUNE) i.e. whether there was an agreement on foot or, a draft agreement, P2 claimed privilege. He was then asked to refresh his memory from the document in relation to that issue. It is difficult to see how a question cast in terms of whether a draft agreement existed at a particular date can give rise to a claim for privilege. Either the draft agreement did exist, or it did not. The witness is not being asked to do any more than testify about an observable fact, and to see whether his memory is refreshed as to that observable fact by reading a
contemporaneous note.
(2) The question to which objection is taken is one which, if answered, only evidences a transaction, and does not reveal the contents of any privileged communication.
(3) No evidence has been placed before the Authority to suggest that the diary note was created for the sole purpose of recording legal advice which had been, or was to be provided, or for receiving information from the client for the sole purpose of enabling such advice to be given. The applicant, having failed to discharge the onus which rests which rests (sic) upon him must produce the document."
Mr Mandie submitted:
"The document is a diary note of a conversation between
P2 and DIRECTOR 3. It is not called for (before the
Authority). The relevant question appears to be'Can you recall at what stage the paper work was at this stage, 7 December? Was there an agreement on foot, a draft agreement? (3266.8)'
3266-7: The argument at 3266-7 assumes that the document is privileged. Mr. Rozenes's argument is all in terms of what questions may be asked (including the refreshing of memory) on the assumption that the document itself is privileged. No necessity arose to argue the privilege of the document.
The attempt to ask the witness to refresh his memory is simply an indirect means of obtaining the contents of the record of a privileged communication. It is not open to the Respondent to rely on the absence of evidence in relation to the document when the argument before the Authority was premised upon the document being privileged.
It cannot be inferred that the Authority ever decided that any claim to privilege of the document was unjustified - where can such a claim be found? The adoption of Mr. Rozenes's submissions cannot assist wlth this document."
I would set aside the decision so far as it purports to deal with a question on the ground that it does not say that it in fact refers to a question and does not identify one.
The agreed question appears to have been answered on p.3267, where the witness said:
"Could I interpose and say, I have no recollection kindled, or whatever by - independent of what is stated
here"
So far as the document is concerned, the discussion in
the transcript appears to have concentrated on the use of it. by the witness to refresh his memory based on a proposition of
law which has now been abandoned. There does not appear to have been any call for production of the document, or any debate or ruling upon the question whether it was privileged. The heading of the claim in Category B looks more to content than to the sole purpose for which the document was brought into existence. I would set the decision aside.
P2 Cateaorv F refers to document 2428 and to p.3270, which reads as follows wlth the agreed question underlined:
(Mr Rozenes) "No, I am not interested in that. ...
inaudible ... privileged?---Or the views in that respect.
Yes. You are talklng about Mr Begg's letter, the memorandum?---I beg your pardon, the memorandum? That last answer pertained to the letter.
Related to the letter. I am sorry, I am referring to the letter. I apologise. Keep going with the letter, yes?-- -Your question on the letter again, please.
Whether it communicates facts to DIRECTOR 2 that you obtained from a third party. By that I mean LEGAL FIRM 3 or BANKER 1, LEGAL FIRM 2?---I wouldn't say it communicates facts. An enclosure was received from, or something that had been received from one of them as one of the enclosures.
Yes. That will do. From which one of them? MR GOLDBERG: Well, we now get into the area that we have covered before. Here is a letter which we say is privileged. The fact that it includes other matters relating to implementation of the transaction does not take away the privilege, and we have sought a ruling on that matter already.
MR LECKIE: Well, what about the fact of who it comes from?
MR ROZENES: We need to know what the thing is and who it comes from, Mr Goldberg. I mean, this is a memorandum from LEGAL FIRM 3 for example. The fact that it has been passed on to DIRECTOR 2 does not clothe the memorandum in privilege.
MR GOLDBERG: What clothes the - what is covered by the privilege is the communication of the information to the client, and if the purpose of the communication is to either seek instructions or convey advice, other matters conveyed with it, we say as part and parcel of the transaction are similarly covered by privilege.
MR ROZENES: Well, we understand the argument. We just need to identify whether it does fall into that category, or not.
MR LECKIE: The question as I understand it is directed
as to - identify the letter that was being referred to that had come from some other source, an outside source, a third party, and I thought the question was, who was that third party, that is all, identified. Is that right, M r Rozenes?"
P.3271 was not referred to in the decision of the Authority but counsel referred to the following portion of it:
"MR ROZENES: What fact - we need to know what are these - it is an external fact. We need to know who it has come from.
MR GOLDBERG: No. We would argue, for example, that if this is a document - say this is a draft of an agreement prepared by LEGL FIRM 3, and it is forwarded to P2 for the purpose of getting his client's instructions on i t - - -
MR LECKIE: Well, can you see, there are two parts there; who it comes from, and what it is.
MR GOLDBERG: Yes MR LECKIE: Now, the first part is who. Is there any objection to that?
MR GOLDBERG: Yes, there is, because - - -
MR LECKIE: So both parts are objected to.
MR GOLDBERG: Yes. And I am sorry; I thought that that
was a matter that had been reserved on.
MR ROZENES: Well, we just need to keep reserving them. MR GOLDBERG: We do indeed.
MR ROZENES: And was the purpose of sending these matters
to DIRECTOR 2 in order to obtain his instructions?MR GOLDBERG: But it was P3 that sent the letter.
MR ROZENES: He has got the letter before him?---It was P3's letter, and I certainly was not seeking any instructions.
Was P3 seeking, or - does the letter seek instructions in relation to these matters?---As such, no. However, as I would read it and my view is no better than any other legal practitioner's, it would be to facilitate the obtaining of further instructions in order to assist in obtaining of further instructions."
The final position which Mr Weinberg adopted was that "ZQ28 is sought, but not the advice itself, merely the enclosures emanating from third parties".
Mr Weinberg had earlier submitted:
"Legal professional privilege may not be claimed because:
(1) 2428 (described by LEGAL FIRM 1 as a copy facsimile from LEGAL FIRM to DIRECTOR 2 dated 7th December, 1987) [Mr Weinberg (at p.457) asked me to disregard the words contained in brackets] is a letter which contains not merely legal advice obtained from senior counsel (which is properly the subject of a
which have come to LEGAL FIRM l's attention from a claim for privilege) but also communicates matters third party or parties. Three entlties are nominated by counsel assisting - LEGAL FIRM 3, BANKER 1, and LEGAL FIRM 2. P2 concedes that the letter contains an enclosure which came to him from -one of those entities. Counsel then asks, which entity? Privilege is asserted. It is impossible to see how a claim for privilege can be made when all that is sought is information as to which of three entities communicated with the solicitor.
(2) In any event all three named entities were third parties. A communication between a third party, and the client's solicitor, is not privileged unless made in relation to litigation, actual or contemplated.
(3) The submission that any document emanating from a third party which is attached to a communication (which is itself privileged) also becomes privileged is manifestly untenable. Otherwise, the doctrine of privilege could be used as a cloak for preventing disclosure of many documents that are amenable to discovery. If the Applicant's submission is correct, a client can avoid discovery of documents simply by annexing them to a request to counsel for legal advice. The law is clear on this point. A discoverable document does not cease to be so merely because it was transmitted to a solicitor for the purpose of enabling him to provide legal advice. In the present case, it is not clear that this was the purpose for which the document was supplied to the solicitor. In any event, even if that were the purpose, and even if the document had been created by the client (it was not), the test is whether the document was brought into existence solely for the purpose of enabllng legal advice to be given, and not- whether it was delivered to the solicitor for that purpose.
(4) In any event, this might be a case where the doctrine of severance could properly be invoked."
Mr Mandie submitted:
"F1: The decision refers to transcript page 3270.
Document ZQ2 8. Document not called for (before the Authority). Privilege for the document is conceded. The relevant question appears to be:
Yes. That will do. From which one of them?
(3270.3)
The enclosures are now sought - they were not called for at the hearing and no argument took place at the hearing as to whether the enclosures could be produced or not. The argument at the hearing was only whether certain questions could be asked. It was not necessary to claim or argue privilege in relation to the enclosures. The arguments relating to B1, B2, and B3 are repeated."
In my opinion, Mr Mandie has correctly described the effect of the transcript of the hearing before the Authority. If it is now sought to pursue a claim for the production, not of the letter, but of one or more of the enclosures which accompanied it, the proper forum for such a claim is not the
Court. I would set aside the decision in relation to 2428. No question was identified by the Authority. I would set aside the whole of the decision under this category. For the reasons earlier given the Court should not order severance.
- P3 The preamble to the decision in this case reads as
follows : DECISION PURSUANT TO SECTION 32
NATIONAL CRIME AUTHORITY ACT 1984
By summons No.MS121 issued on 9 October 1991 pursuant to section 28 of the National Crime Authority Act 1984, Simon William Begg was required to appear before the Authority to give evidence and produce the documents identified in the schedule thereto.
On 31 October and 8 November 1991 P3 attended for examination. He was represented by Mr. Goldberg Q.C., with him Mr. Santamaria. Mr. Rozenes Q.C. with Mr. Lorkin appeared on behalf of the Authority. During the course of the examination P3 refused to answer certain questions and further refused to produce certain documents on the grounds1 that the answers to the questions would disclose, and the documents contained, privileged communications made by or to him in his capacity as a legal practitioner.
There were a number of bases advanced in support of the several claims of legal professional privilege during the
course of the examination. It is convenient to group the various claims into categories and to identify the questions that were not answered and the documents that were not produced by reference to the pages in the transcript."
After setting out the list of categories the concluding paragraphs of the decision were:
"Mr. Goldberg requested that decisions be made pursuant
to Section 32 of the National Crime Authority Act 1984.
I have taken into consideration the arguments of counsel,
which were fully developed during the course of the examination. I agree with the submissions put forward by Mr. Rozenes Q.C. It is my opinion that the claim by P3 that he is entitled to refuse to answer the questions and/or to produce the documents as identified above, is not justified."
P3 Cateaorv A1 contains only one item.
The Authority referred to Document MX34995/001 and to pp.3229-30. Mr Weinberg said that the production of the document was not sought.
-,- - -
The agreed question was:
"Do you see the second paragraph. The proposal is that a majority interest in - COMPANY 1 is acquired?"
to which the witness replied -
"I thought this one is privileged."
My reading of pp.3229-30 leads me to conclude that the
document, which the witness had referred to as "this one". discussion in the transcript thereafter related to the The transcript does not show that after the question was asked a claim of privilege in relation to the question as distinct from the document was made and reserved for decision.
In its decision, the Authority set out the claim which it regarded as having been made under this category as:
"There is no loss of privilege where the Authority has obtained the communication over which privilege is claimed from a Third Party, there having been no prior waiver by the client".
Such a claim hardly seems apt in relation to the agreed question. My impression is that the Authority intended in this category to refer to the document only and not to a question. When the Authority wished to refer to a claim of privilege based on the proposition that it "is not entitled to enquire whether advice was given in relation to a particular subject matter" it had no difficulty in doing so, as it used these words under Category E. In any event, its decision did not identify a question. I would set it aside.
P3 Cateaorv El does not refer to a document and cites p.3220. The witness had agreed that his firm had been asked to act and that he was asked to provide some advice on particular aspects of the transaction.
Then came the agreed question: "What particular aspects were you asked to advise on?"
whereupon M r Goldberg claimed privilege.
This question was the only one on the page cited in respect of which a claim of privilege was made and it is reasonable to conclude that the Authority intended to refer to it.
Mr Weinberg submitted:
"Legal professional privilege may not be claimed because:
(1) The question which P3 was asked was not what advice he provided in relation to particular aspects of the transaction, but what aspects of the transaction he was asked to advise upon. To reveal the general subject matter of a communication is not to reveal the communication itself. Unless that subject matter can be ascertained, it will be impossible to test a bare assertion that a particular communication was privileged.
(2) Eliciting the general subject matter of the advice
in the present circumstances would not (or need not)
reveal the contents of a privileged communication."
Mr Mandie submitted that "the subject matter of advice is part of the privileged communication. The disclosure of the subject matter more often than not will disclose the nature of the advice given. The privilege would be worthless if a client and solicitor could be asked questions about the subject matter of the advice and instructions passing between
them. "
As Stephen, Mason and Murphy JJ said in Grant v. Downs (1976) 135 CLR 674 at p.685:
"The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available. As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision. None the less there are powerful considerations which suggest that the privilege should be confined within strict limits."
In that passage their Honours spoke of the privilege keeping secret the communications between client and solicitor 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".
If I were now dealing with the question at first instance on the basis of those portions of the transcript to which I have been referred I would be inclined to the opinion that the naming by the client of the subject matter on which he sought advice may well be an integral part of a privileged communication which it is the rationale of the doctrine to
well be instances in which the disclosure of that subject encourage the client to disclose to his solicitor. There may matter will itself be prejudicial to the client. However, I am dealing with the question by way of review of a decision made by the Authority, which had before it much evidence to which I have not been referred, which was itself apparently only part of an extensive investigation. The proper course, therefore, seems to be to set aside the decision on the ground that the Authority has not set out any relevant findings of fact or exposed its reasoning in a manner susceptible of review.
Cateaorv F is said to relate to two claims: "Documents produced by a third party and sent to a client
together with legal advice are privileged;
and
A witness is not required to describe the documents if the only source of the information is within the privileged letter".
The Authority's reference is to document ZQ28, previously referred to under P2 Category F, and to p.3240. The agreed question was that on p.3240 which is underlined in the extract from the transcript set out below.
The reference to ZQ28 begins on p.3239 and continues on
p.3240 and part of p.3241 to which counsel also referred. Thepassages read, with agreed corrections to the names of
counsel : 3239 "MR ROZENES: Thank you. P3, would you have a look at ZQ28 please. Now, is that a facsimile from LEGAL FIRM 1 to DIRECTOR 2?---It bears that appearance, yes.
And, who is it from?---Me. And, how many pages?---One. And, it is a letter over which a claim of privilege has
been made. Does it contain anything other than the
giving of advice?---In particular, does it recount any facts communicated to you by LEGAL FIRM 2 or BANKER l?---No, it doesn't do that.
It does not?---No.
Does it contain anything other than advice?---It depends,
I guess, what you mean by advice. I don't think that it
3240 does; it encloses a number of copy documents, but I guess that they were - no, I wouldn't - I would myself regard it as all advice.
You would regard it as all advice?---All advice, yes.
Those copy documents, are they documents produced by you or your firm or are they produced outside the firm?--- They're a mixture.
Well tell us about the documents that were ~roduced outside the firm?---I think that that is ~rivileaed.
MR GOLDBERG: It is a sensitive area?---Yes.
Same argument.
MR GOLDBERG: Same argument. This communication we claim privilege, notwithstanding the fact that it incorporates within it material that emanated outside.
MR LECKIE: What about the document - the description of the document that it was a document that came from somewhere - not the subject matter of it, but just the description of the document, who it came from, matters of that nature; is that in your view affected by the privilege argument?
MR GOLDBERG: It is because the only source of the
information is within the privileged letter.
MR ROZENES: Now was the purpose of this communication, P3, to obtain instructions from DIRECTOR 2?---Yes, I would say it was. And were the instructions sought - well, did you ask for instructions?---Not overtly, no.
Whether overtly or otherwise, is the purpose of the
letter to obtain instructions from your client?--- Yes. And were those instructions for the purpose of you being able to give him legal advice, or for the purpose of advancing the commercial transaction with the other party, or for both?---No. It is actually - well, for example, one of the items affected - the reference is to two different QCs and the progress of the opinions they were giving.
MR ROZENES: Putting aside the QCs - - - MR GOLDBERG: How dare you.
3241 MR ROZENES:
Is there any aspect of the letter which requires or requests DIRECTOR 2 overtly or otherwise to provide you with instructions for the purpose of advancing the transaction with the other party?---Not -
no, no. It seems rather more bring him up to date - - - MR ROZENES: Can I just ask you this: did you have much to do with LEGAL FIRM 3 in relation to this whole transaction?---Something, yes."
It appears from the transcript that ZQ28 was a one page facsimile from the solicitors to their client which the witness said contained nothing other than advice to his client. It sought instructions from the client and it made reference to the progress of the opinlons two senior counsel
were giving. In the agreed question the witness was asked: "Well tell us about the documents that were produced
outside the firm?"
and privilege was claimed. It would appear that the claim for privilege in respect of the facsimile was practically conceded
before the Authority and attention was focused upon those enclosures produced outside the firm. However the decision refers only to ZQ28. It does not purport to be a decision in relation to those outside documents. Insofar as it relates to the facsimile, I would set it aside. It cannot be seen from the decision that it intends to refer to any question and does not identify one. Insofar as it may be said to refer to any question, I would
set it aside.
Category G also refers to 2428. It cites p.3241, the
relevant portion of which has already been set out. The claim to which it is said to refer is: "A communication relating to the stage reached in a commercial transaction is privileged if given on an otherwise privileged occasion".
Mr Weinberg said that there was no question involved.
For the reasons given in relation to the previous category I would set aside the decision under Category G.
These reasons will be published in the first instance in camera. They include references to the names of the witnesses and other details which would enable them, their clients and the subject matters of the proceedings before the Authority to be identified. After the parties have had an opportunity to
consider the reasons, I invite them as soon as possible to
submit for consideration an agreed version of them in which
all such references have been replaced by pseudonyms, to enable the reasons to be generally circulated. The parties are better placed than the Court to perform this task.
The parties should deliver short minutes of orders, which should be drawn with sub-section 32(14) in mind, by 1 June and deal with the disposition of the documents in the safe.
8 9
The Court will hear submissions on costs at 9.30 on 3
June, when the parties may speak to the short minutes. Orders will then be pronounced in the cases generally. The above reasons were delivered on 27 May 1992. On 3
June 1992 the following orders were pronounced.
P1 :
Cateaorv A1
(a)
The Court notes that the respondent does not seek an order that document ZR275-7 be delivered to it.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category be set aside.
CateqorV A2
(a) The Court notes that the respondent does not seek an order that document 2414 be delivered to it. (b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B1
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B2
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B3
(a) The Authority's decision in relation to document ZR242 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B4
(a) The Authority's decision in relation to document ZR241 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be
set a side.
Cateaorv B5
(a) The Authority's decision in relation to document ZR225 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
9 1
Cateaorv B6
There be no order in relation to this category, the matter having been resolved between the parties.
Cateqorv B7
(a) The Authority's decision in relation to document number ZR131 be set aside. (b) The Authority's decision in relatibn to document number ZR132 be set aside. (C) The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv B8
(a) The Authority's decision in relation to document ZR122 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv B9
(a)
The Authority's decision that the applicant is not justified in his claim that he is entitled to refuse to produce document ZR114 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
9 2
Cateaorv C
(a)
The Authority's decision in relation to document ZR229 be affirmed.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateqorv D1
(a)
The Authority's decision in relation to document ZR220 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv D2
The Authority's decision in relation to this category be
af f irmed.
Cateaorv E
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse
to answer a question in this category, be set aside. Each of the documents placed in the custody of the Registrar pursuant to section 32(3) of the National Crime
Authority Act 1984 be delivered to the applicant after
the expiration of 21 days from the date of this Order.
The respondent is to pay the applicants' costs of and
incidental to this application, including reserved costs.
The taxation, if any, of the costs is to proceed as ifPI, P2 and P3 had joined in the one application.
P2 :
Cateaorv B1
(a) The Authority's decision in relation to document ZR281 be set aside.
(b)
The Court notes that the respondent seeks no order as to any question in this category.
Cateaorv B3
(a) The Authority's decision in relation to document YD28 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv F
(a) The Authority's decision in relation to document
ZQ28 be set aside;
(b) The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside. Each of the documents placed in the custody of the Registrar pursuant to section 32(3) of the National Crime
Authority Act 1984 be delivered to the applicant after
the expiration of 21 days of the date of this Order.
The respondent is to pay the applicant's costs of an incidental to this application, including reserved costs. The taxation, if any, of the costs is to proceed as if PI, P2, and P3 had joined in the one application.
P3:
CatecrorY A1
(a)
The Court notes that the respondent does not seek the production of document MX34995/001.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Category El
The Authority's decision be set aside.
Cateaorv F1
(a) The Authority's decision in relation to document 2428 be set aside.
(b)
The Authority's decision, if any, that the applicant was not justified in his claim that he was entitled to refuse to answer a question in this category, be set aside.
Cateaorv G1
(a) The Authority's decision in relation to document ZQ28 be set aside;
(b) The Court notes that the respondent seeks no order as to any question in this category. Each of the documents placed in the custody of the Registrar pursuant to section 32(3) of the National Crime Authority Act 1984 be delivered to the applicant after the expiration of 21 days of the date of this Order.
The respondent is to pay the applicants' costs of and incidental to this application, including reserved costs.
The taxation, if any, of the costs if to proceed as if
P1, P2 and P3 had joined in the one application.
I certify that this and the preceding ninetyfour (94) pages are a true copy of the Reasons for Judgment herein of the
Honourable M r Justice Sweeney Dated: 3 June 1992 Associate
Counsel for the Applicants: Mr. P. Mandie P.C. and
Mr. J. SantamariaSolicitors for the Applicants:
C o r r s C h a m b e r s Westgarth Counsel for the Respondent: Mr. M. Weinberg Q.C. and Mr B. Walters Solicitors for the Respondent: Australian Government
Solicitor
Dates of Hearing: 11 February, 16, 23, 24 25, 30 & 31 March 1992
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