Somerville, Hugh Ross v Australian Securities Commission ANZ Executors & Trustee Co Ltd v Australian Securities Commission & Ors Day Neilson Jenkins & Johns v Australian Securities Commission
[1995] FCA 831
•20 Oct 1995
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 188 of 1993
GENERAL DIVISION )
BETWEEN:HUGH ROSS SOMERVILLE
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION, PETER CHAPMAN and AILSA WILSON
Respondents
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 20 OCTOBER 1995
MINUTE OF ORDERS
THE COURT ORDERS:
That the respondents by 5.00pm on 23 October 1995 produce for inspection by the solicitors for the applicant each of the documents numbered 32, 19, 21, 35, 43, 52, 53, 64, 76, 4, 6, 8, 9, 10, 11, 14, 15, 16, 45, 57, 74, 89, 85, 68, 27, 33, 34, 36, 54, 55, 56 and 26 referred to in the affidavit of Peter Michael Chapman sworn 2 October 1995 excluding from each of the said documents numbered 32, 64, 45, 57, 74 and 85, the passages marked in yellow on the copy thereof initialled for the purpose of identification by Ryan J.
That the motion on notice dated 30 August 1994 remitted to a Judge of the Court by the Full Court on 18 September 1995 be otherwise dismissed.
That the costs of all parties of the said motion as so remitted be costs in the cause.
NOTE: Settlement and entry of orders is dealt with in O 36 of the Rules of the Federal Court of Australia.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 190 of 1993
GENERAL DIVISION )
BETWEEN:ANZ EXECUTORS AND TRUSTEE COMPANY LTD
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION, PETER CHAPMAN and AILSA WILSON
Respondents
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 20 OCTOBER 1995
MINUTE OF ORDERS
THE COURT ORDERS:
That the respondents by 5.00pm on 23 October 1995 produce for inspection by the solicitors for the applicant each of the documents numbered 32, 19, 21, 35, 43, 52, 53, 64, 76, 4, 6, 8, 9, 10, 11, 14, 15, 16, 45, 57, 74, 89, 85, 68, 27, 33, 34, 36, 54, 55, 56 and 26 referred to in the affidavit of Peter Michael Chapman sworn 2 October 1995 excluding from each of the said documents numbered 32, 64, 45, 57, 74 and 85, the passages marked in yellow on the copy thereof initialled for the purpose of identification by Ryan J.
That the motion on notice dated 30 August 1994 remitted to a Judge of the Court by the Full Court on 18 September 1995 be otherwise dismissed.
That the costs of all parties of the said motion as so remitted be costs in the cause.
NOTE: Settlement and entry of orders is dealt with in O 36 of the Rules of the Federal Court of Australia.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 205 of 1993
GENERAL DIVISION )
BETWEEN:DAY NEILSON JENKINS & JOHNS
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION, PETER CHAPMAN and AILSA WILSON
Respondents
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 20 OCTOBER 1995
MINUTE OF ORDERS
THE COURT ORDERS:
That the respondents by 5.00pm on 23 October 1995 produce for inspection by the solicitors for the applicant each of the documents numbered 32, 19, 21, 35, 43, 52, 53, 64, 76, 4, 6, 8, 9, 10, 11, 14, 15, 16, 45, 57, 74, 89, 85, 68, 27, 33, 34, 36, 54, 55, 56 and 26 referred to in the affidavit of Peter Michael Chapman sworn 2 October 1995 excluding from each of the said documents numbered 32, 64, 45, 57, 74 and 85, the passages marked in yellow on the copy thereof initialled for the purpose of identification by Ryan J.
That the motion on notice dated 30 August 1994 remitted to a Judge of the Court by the Full Court on 18 September 1995 be otherwise dismissed.
That the costs of all parties of the said motion as so remitted be costs in the cause.
NOTE: Settlement and entry of orders is dealt with in O 36 of the Rules of the Federal Court of Australia.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 188 of 1993
GENERAL DIVISION )
BETWEEN:HUGH ROSS SOMERVILLE
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION & OTHERS
Respondents
No VG 190 of 1993
BETWEEN:ANZ EXECUTORS AND TRUSTEE COMPANY LTD
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION & OTHERS
Respondents
No VG 205 of 1993
BETWEEN:DAY NEILSON JENKINS & JOHNS
Applicant
AND:AUSTRALIAN SECURITIES COMMISSION & OTHERS
Respondents
CORAM: RYAN J
PLACE: MELBOURNE
DATE: 20 OCTOBER 1995
REASONS FOR JUDGMENT
RYAN J: The complex factual history of the interlocutory stages of this litigation, as far as it is relevant to the question of discovery presently before the Court, has been set out in the judgment of Lockhart J as a member of the Full Court given in Somerville v Australian Securities Commission &
Others (unreported 18 September 1995). In the course of its judgment, the Full Court held that the Australian Securities Commission ("the Commission") is not a party to litigation commenced pursuant to the powers conferred upon the Commission by s 50 of the ASC Law. The parties, it was held, are the person in whose name the proceedings have been brought and the person against whom they have been brought. Lockhart J went on to observe, at 19:
"There is no client with respect to litigation commenced by the Commission in the name of a person pursuant to s 50 until the proceeding has begun or at least until the decision has been made by the Commission to commence the proceeding. Before then the commission is pursuing its investigative function under the ASC Law and the Corporations Law. Of course the ASC, while exercising this investigative function, may engage in confidential communications with its own legal advisers. Such communications between the ASC and its solicitors, made or brought into existence for the sole purpose of giving or obtaining legal advice, are privileged, without regard to the question whether they were made for the purpose of actual or contemplated litigation: Kelly v The Commonwealth (1980) 39 FLR 372. The matters before us were not, however, argued on the basis that the relevant privilege was one of `advice privilege', but rather the privilege was claimed under the `litigation limb' of legal professional privilege, in respect of the investigations which led to the institution of the proceedings in the Supreme Court of Victoria pursuant to s 50 of the ASC Law."
His Honour acknowledged that, after litigation has been commenced by the Commission in the name of a party, communications from that party to legal advisers may be channelled through the Commission and thereby attract the protection of legal professional privilege. However, the claim reviewed by the Full Court was for legal professional privilege in respect of documents brought into existence before 7 January 1993 which was the date on which the Commission decided to institute the subject proceedings. As to that claim, Lockhart J said, at 23:
"It is plain that the claim for legal professional privilege was made on the assumption that the claim could apply to documents brought into existence before 7 January 1993 (the correct date in my opinion is the later date when the first set of proceedings was in fact commenced, but this does not matter for the present purposes). This assumption is erroneous because most of the documents for which privilege is claimed were brought into existence pursuant to the Commission's investigatory powers and in pursuit of its public duties as investigator in the public interest. If those documents can be shielded from the public gaze then it is pursuant to the application of public interest immunity not legal professional privilege. There is no warrant in these circumstances for examining the claim for privilege with respect to the small number of documents that were brought into existence after the commencement of the first proceeding in the Supreme Court of Victoria."
The Full Court, in the judgment to which I have just referred, affirmed the decision of the learned primary Judge upholding the Commission's claim of public interest immunity in relation to some 43 documents included in Part 3 of Schedule 1 to its affidavit of documents. However, the possibility was left open that the Commission might legitimately resist the production of documents described in para 3 of Part 2A of Schedule 1 and in Part 2B of Schedule 1 to its affidavit of documents by showing that some of those documents had been made for the sole purpose of obtaining or giving legal advice, or by invoking, in respect of some of them, public interest immunity. In leaving open that possibility, Lockhart J observed, at 25:
"Nor is it necessary that the Court itself examine the documents for which legal professional privilege is claimed because it is apparent from the description in Schedule 1 to the list of documents that the bulk of them preceded the date of commencement of the litigation. The list was prepared on a false premise that legal professional privilege can apply to documents that preceded the commencement of the litigation in the Supreme Court. No claim for immunity from production on the ground of public interest immunity is made except in relation to documents included in Part 3 of Schedule 1. In the light of these reasons the Commission may seek to revise and widen its claim for public interest immunity. Whether it does so or not and whether successfully or not, is beyond my field of enquiry. In other words it will be necessary for the Commission to start afresh the claims for legal professional privilege and public interest immunity in this matter.
The applicants therefore succeed on the issue of legal professional privilege."
To similar effect, Lindgren J noted, at 39:
"Although ASC claimed advice privilege in sub-para 2(b) of its list, the hearing of the appeal was conducted by reference to litigation privilege alone. Apart from the documents comprised in items 89, 93 and 94 of Part 2B of Schedule 1 referred to earlier, no particular items are identified as having been created for the sole purpose of the obtaining or giving of legal advice. Paragraph 5 of Mr Spittal's affidavit quoted earlier states that the purpose of the frequent meetings between Investigation Staff and Legal Staff of ASC was to obtain legal advice as to matters relevant to contemplated civil proceedings, but the documentary communications are said to have been "solely for the purposes of the litigation and pursuant to the ... legal advice". It is possible that advice privilege attaches to some documents (in addition to those referred to in items 89, 93 and 94 of Part 2B) to which I have held that litigation privilege does not attach (in Waterford, Mason CJ, Wilson and Brennan JJ held, Dawson J contra, that there was no warrant for excluding privilege in respect of legal advice tendered by lawyers employed by the government relating to a public officer's decision as to how a "statutory" or "administrative" function or duty should be performed). Moreover, although public interest immunity was argued only in relation to Part 3 of the list, it is possible that some documents in Parts 2A and 2B are also protected by it. These are matters which cannot be of present concern."
The Commission has now filed a further affidavit by its Director of Special Investigations, Peter Michael Chapman, in which a claim for "legal advice" privilege is asserted in respect of some 19 documents related to meetings between the investigation staff and the legal staff of the Commission. As to those meetings, Mr Chapman has deposed:
... It was at my instigation and direction that the practice of holding those meetings commenced and continued, and I personally attended most of them. The sole purpose of the meetings was to enable the investigation division to instruct the Commission's lawyers about the progress of the investigation and obtain legal advice as to its future conduct. At the meetings opinion was sought and received as to the legal procedural and practical requirements to ensure the efficient and effective conduct of the investigation with a view to launching civil proceedings. At the meetings the investigation staff requested and received legal advice from the legal staff in relation to those and other matters.
The meetings were usually attended by one or more of myself, Mark Spittal and Tim McDonald from the investigation division and by one or more of Ted Woodward, Isaac Gotlib and Shelley
Lipe of the legal division. Each of Woodward, Gotlib and Lipe were qualified legal practitioners employed as such in the legal division of the Commission. The legal division in Victoria is headed by the Regional General Counsel for Victoria, who acts as solicitor for the Commission in all litigation being conducted by the Victorian Regional Office.
The privilege schedule contains documents relating to 13 such meetings from 5 December 1991 to 26 April 1993. The documents consist of:
(a)notes or minutes of each such meeting - in some cases including notes kept by more than one person;
(b)in some cases, agendas for the meeting
(c)in some cases, documents annexed to those agendas or referred to in the minutes."
Appended to para 7 of Mr Chapman's affidavit is a table setting out, in relation to each document in this category, the facts and circumstances which are said to attract "legal advice privilege" to that document. Mr Chapman was cross- examined on his affidavit and, at the request of the parties, I have examined each of the documents in this category for the purpose of ruling on whether or not the claim should be upheld.
That the relevant head of privilege is wider than "litigation privilege" was recognized by Blackburn CJ in Kelly v Commonwealth (1979) 39 FLR 372, where his Honour observed, at 373:
"Counsel for the plaintiff relied on Grant v Downs (1976) 135 CLR 674, which, he contended, showed that the doctrine of legal professional privilege has a somewhat narrower scope than was thought to exist before that decision. No doubt that is so; but nothing in Grant v Downs related to documents which themselves are confidential communications between solicitor and client for professional purposes; these are privileged without regard to the question whether they were made for the purpose of actual or contemplated litigation. Authority for this proposition is abundant; for example, see the many cases cited in Halsbury's Laws of England (4th ed), vol 13, par 74 and, for Australia, Haydon v McLeod (1900) 26 VLR 452; a case which appears never to have been questioned. I refer also to Atkin's Encyclopaedia of Court Forms in Civil Proceedings (2nd Ed), vol 14, p 122, which clearly shows different forms of words for, on one hand, an objection that the document is a confidential communication between solicitor and client, and on the other hand, an objection that the document is one prepared for pending or anticipated litigation."
Similarly, Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 described the relevant classes of documents in these terms:
"Legal professional privilege extends to various classes of documents including the following:
(a)Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them. See Wheeler v Le Marchant (1881) 17 Ch D 675; Smith v Daniell (1874) LR 18 Eq 649; Bullivant v Attorney-General for Victoria [1901] AC 196; Jones v Great Central Railway Co [1910] AC 4, and O'Rourke v Darbishire [1920] AC 581.
(b)Any document prepared with a view to its being used as a communication of this class, although not in fact so used. See Southwark Water Co v Quick (1878) 3 QBD 315."
The authorities there cited all stress that the communication in question must be made for the purpose of obtaining or giving legal advice. Thus, in Wheeler v Le Marchant (supra) Jessel MR indicated, at 682, that
"... a communication with a solicitor for the purpose of obtaining legal advice is protected though it relates to a dealing which is not the subject of litigation, provided it be a communication made to the solicitor in that character and for that purpose."
In Smith v Daniell, the plaintiff was compelled to produce a "friendly" opinion obtained from Lord Westbury, a former Lord Chancellor, apparently on the ground that his Lordship did not furnish the advice pursuant to a duty of confidence arising from the relationship of legal adviser and client. Similar reasoning seems to underlie the statement by Lord Wrenbury in O'Rourke v Darbishire, at 629 that:
"Not everything that is said at a professional interview between solicitor and client is privileged, any more than the whole of the letter, some part of which contains professional advice and other part bears no such character is privileged."
My examination of the documents for which "legal advice privilege" has been claimed has been undertaken against the background of the principles which I have extracted from the authorities just cited. It has to be borne in mind that the privilege is attracted by the confidential communication between legal adviser and client, and not necessarily by the whole of the document recording that communication. Thus, in so far as minutes of a meeting between the Commission's legal advisers and its investigative officers contain statements made by the investigative officers to each other or made by the legal advisers by way of reciting facts (as distinct from giving legal advice), which were thought to be useful for the investigative officers to know, those parts of the minutes would not attract "legal advice privilege".
I now proceed to indicate in a summary way in the order adopted by Mr Chapman, my view of the documents which Mr Chapman's affidavit has sought to bring under this head of privilege. In the course of doing so, I shall indicate, where appropriate, whether a document contains matter not amenable to the claim for privilege which should be severed from other matter for which the claim can be sustained.
Document No Ruling
This document is essentially a record of legal advice given to the Commission's investigative officers and is wholly privileged from production.
Although the prefatory paragraphs of this document describes the purpose of the meeting as being to "brief the Legal Division" and to obtain certain advice it contains a number of assertions of fact not directed to any matter on which legal advice was sought or given. Although the minutes at times recite that certain officers "advised" to a particular effect, those passages amount to no more than a record of a recital of fact by the relevant officer. This document should be produced for inspection save for the passages which I have highlighted on the copy provided to me.
The agenda and analysis of evidence are primarily administrative or investigative in character as are the handwritten notes. The whole of this document should be produced.
21,35.For reasons indicated in respect of document 19 and because any additional matter appears to be by way of recital of facts not directed specifically to obtaining or giving legal advice, the whole of these documents should be produced.
17,18.These documents essentially record requests for, and the giving of, legal advice and are wholly privileged.
Although arguably administrative in nature, I consider this document to be sufficiently connected with the seeking or giving of legal advice as to be wholly immune from production.
This document appears to be wholly concerned with discussion of advice received from Counsel and is therefore totally privileged.
This document appears to record solely a discussion of a draft statement of claim and legal questions raised by it. The document is wholly privileged.
This document contains essentially notes of a purely administrative kind, although directed in part to obtaining legal advice. I consider that it should be produced in its entirety.
Although this memorandum contains some notes of administrative action to be taken, I consider that those parts are inextricably bound up with legal advice given and the whole document should be immune from production.
52,53.These documents principally detail administrative steps to be taken in connection with the briefing of Counsel and related matters. They are not sufficiently connected with the obtaining of legal advice to attract the protection of "legal advice privilege".
Although this document contains some notes of administrative action to be taken, I regard it as sufficiently connected with issues raised by the statement of claim or the procuring of evidence for the whole document to be privileged.
As indicated by its heading this document lists a number of matters for "discussion at team meeting on 9 November 1992" without differentiating between matters on which legal advice was to be sought or given and other matters. It includes reference to "advice" from a firm of chartered accountants and, except for the passage which I have highlighted, should be produced for inspection.
This document is essentially an administrative record of steps taken or to be taken. It refers to actual or prospective legal advice but not in such a way as to indicate the substance of the advice or the request for it. The whole document should be produced.
This document records in a summary way legal advice given on various aspects, mainly procedural of the investigation and the proposed litigation. The whole document is privileged.
This is a record of a "Farrow Team Meeting" on 26 April 1993 which records action to be taken in the light of advice given by Counsel in conference. It does so in such a way as to indicate the substance of that advice and the whole document is accordingly privileged.
QUESTIONNAIRES
As to these documents numbered 4, 6, 8, 9, 10, 11, 14, 15 and 16 Mr Chapman has deposed:
"10.I refer to paragraph 7 of Spittal's affidavit. Each of the documents referred to in that paragraph and listed in the heading above is a questionnaire completed by a plaintiff in one of the proceedings brought in the Supreme Court of Victoria. The purpose of the questionnaire was to provide for the noteholders to give their instructions to the ASC through its legal officers about their holding of notes and the circumstances of their investment for the purpose of being included [in] the proceedings. Instructions given in the questionnaires provided:
(a)the facts for particulars to be given in the Supreme Court proceedings as to, for example, each plaintiff's holding of notes and the date of acquisition thereof;
(b)the basis for advice given to the ASC by its solicitors and counsel as to the basis on which each plaintiff should be included in one of the classes of plaintiffs, namely those alleging that they invested during the currency of either the third or fourth prospectus, and those alleging that they invested on the faith of one of the prospectuses;
(c)in the case of those plaintiffs who wished to allege that they invested on the faith of a prospectus, evidence or information as to evidence about that allegation.
The sole purpose of the provision of the information in the questionnaires was for use by the plaintiffs' legal advisers in the proceeding in the manner indicated above and for submission to lawyers to obtain the advice referred to above.
The information in the questionnaires was provided to the ASC at the time that each investor consented to be a plaintiff in the proceeding. The times at which investors did this stretched over a seven month period from January to August 1993. The plaintiffs in the Meadow Gem proceeding did so first, before the date of issue (or in the case of the added plaintiffs, before the date they were added). The plaintiffs in the Abbott proceeding provided their consents before that proceeding was commenced but after the issue of the Meadow Gem proceeding; similarly, the plaintiffs in the Bergfield proceeding provided their consents after the issue of the Abbott proceeding but before the issue of their own proceeding."
Paragraph 7 of Mr Spittal's affidavit is in these terms:
"With respect to the circumstances in which the prospectus questionnaires referred to under items 4 to 16 in Part 2A, Schedule 1 of the List, the circumstances in which those documents came into being are as follows: After the ASC had decided to commence proceedings under s 50 of the ASC Law in January 1993, it sought the consent of each noteholder to the commencement of proceedings in their name and requested the completion of a questionnaire. The consent was obtained in a form of Memorandum and Consent and Agreement which the noteholder was required to sign. The questionnaire served as the medium for the communication by the noteholders to the ASC of their instructions as to their holding of notes and the circumstances of their investment for the purposes of including them in the proceedings. Each questionnaire is headed "Privileged and Confidential Prepared for the purposes of the Proceedings referred to in the Memorandum of Consent and Agreement."
The Memorandum of Consent and Agreement there referred to embodied a consent by the respondent investor to a proceeding pursuant to s 50 of the ASC Law to be begun and carried on in the name of the investor. It contained, amongst others, the following recital:
"E.As a result of an investigation carried out by it into the affairs of FFC, it appears to the ASC that it is in the public interest for the Investors, together with all other persons who have suffered losses in respect of notes held by them at the commencement of the winding up of FFC, to begin and carry on a proceeding against one or more of ANZ, members of Price Waterhouse and members of Day, Neilson, Jenkins & Johns (FFC's auditors) in the Supreme Court of Victoria (the "Court") for, among other things, damages for negligence or breach of duties to the holders of notes during the period commencing on 1 December 1988 and ending on 25 September 1990 and compensation for losses suffered by reason of untrue statements in and material omissions from one or more of the prospectuses (the "Proceeding")."
The Memorandum of Consent and Agreement makes clear by cl 1 that whether or not the proceeding should be instituted and in whose names was in the sole discretion of the Commission. Clause 1 is in these terms:
"The ASC may cause the Proceeding to be begun and carried on in the names of the Investors and all other holders of notes who consent to be plaintiffs in the Proceeding."
Similarly, cl 2 reposes in the Commission an absolute discretion in the conduct of the proceeding after its institution including its discontinuance or termination in whole or in part. Remaining clauses of the Memorandum deal with recovery of costs, an indemnity for investors in respect of costs and the distribution of damages or other amounts recovered in the proceeding.
I have examined the questionnaires in issue. Each is headed with the legend "PRIVILEGED AND CONFIDENTIAL Prepared for the purpose of the Proceeding referred to in the Memorandum of Consent and Agreement". However, that proceeding was prospective at the time when each questionnaire was completed and no relationship of legal adviser and client had been established between any lawyers employed or retained by the Commission and the respondent investor.
Although the form of the questionnaires provided scope for the disclosure of communications which were privileged as having been made between the respondents to the questionnaires and
their legal advisers, I am satisfied that no such disclosures were made to the Commission.
In my view, the questionnaires are indistinguishable from the communication considered by the House of Lords in Jones v Great Central Railway [1910] AC 4. In that case the appellant had written to his trade union with a view to being furnished with legal assistance to conduct an action for wrongful dismissal. Speaking of those letters Lord Loreburn LC said, at 5:
"They were written before any action was brought in order to satisfy the union authorities that they ought to sanction the employment of a solicitor and to furnish information by which the solicitor should be enabled to conduct the action which the workman contemplated and desired.
The question is whether or not these documents were privileged from disclosure. My Lords, the rule on this branch of the law of discovery is that, in order to enable a man to confide unreservedly in his legal adviser, all communications between client and solicitor are protected. The rule is expressed by James LJ in the case of Anderson v Bank of British Columbia 2 Ch D 644, at p 656 as follows. He said: "The old rule" - meaning the ancient and venerable rule which still exists - "was that every document in the possession of a party must be produced if it was material or relevant to the cause, unless it was covered by some established privilege. It was established that communications that had passed directly or indirectly between a man and his solicitor were privileged, and the privilege extended no further." Both client and solicitor may act through an agent, and therefore communications to or through the agent are within the privilege. But if communications are made to him as a person who has himself to consider and act upon them, then the privilege is gone; and this is because the principle which protects communications only between solicitor and client no longer applies. Here documents are in existence relating to the matter in dispute which were communicated to some one who was not a solicitor, nor the mere alter ego of a solicitor."
For these reasons each of the questionnaires should be produced for inspection.
COMMUNICATIONS WITHIN THE COMMISSION BEFORE 7 JANUARY 1993
These communications are described as follows in paragraph 5 of Mr Spittal's affidavit sworn 13 September 1995:
"During the periods referred to in paragraphs 3 and 4 hereof, frequent meetings took place between the Investigation Staff of the Commission and the Legal Staff of the Commission. The purpose of such meetings was to obtain legal advice as to matters relevant to the proceedings and as to the legal procedural and practical requirements to ensure the effective conduct of the investigations with a view to launching civil proceedings. The investigation was at all relevant times conducted for the purpose of the litigation and pursuant to the said legal advice. This work involved frequent communications between and amongst the investigation staff and the legal staff. Those communications were solely for the purposes of the litigation which was then in contemplation. They were not for the purpose of determining whether or not it was in the public interest for the litigation to be begun but I was conscious at the time that the Commission would ultimately determine that question and might take into account matters that were ascertained in the course of gathering evidence. Minutes of the matters communicated at such meetings were usually made by the lawyers and the investigators; other communications as described above were by means of memorandum passing between the two divisions."
Privilege has been claimed in respect of fifteen documents in this category. I have examined each of them and shall deal with them in the order adopted by Mr Chapman.
Document No Ruling
This seems to be a note prepared by a legal adviser with a view to giving or obtaining legal advice and is privileged.
37,39,40,41,44. These memoranda conform with the description given of them by Mr Chapman and are all privileged.
This memorandum largely notes administrative steps to be taken, some of which are connected with obtaining legal advice or taking steps related to the litigation. The document should be produced with the exception of the portion marked in yellow.
This is a memorandum by one of the Commission's Senior Investigators to its Litigation Consultant apparently providing information of a factual nature in relation to various paragraphs of a draft statement of claim. I regard it as privileged.
This is a memorandum of discussions between legal advisers to the Commission in relation to procedural aspects of the proposed litigation. It is privileged from production.
This is another memorandum from the Commission's Senior Investigator to its Litigation Consultant. It does not in terms seek legal advice but I infer that the factual statements which it contains were made for the purpose of enabling Mr Woodward to furnish legal advice. I uphold the claim of privilege.
This memorandum is by way of advice from Mr Woodward to the Commission on a specific topic and is privileged.
This appears to be a memorandum by Ms Lipe of the Commission's Legal Department detailing information of a factual kind which she had obtained from another legal practitioner assisting in the Habersberger Inquiry but not retained or employed by the Commission. If this inference be correct, I consider that the document should be produced with the exception of the passages marked in yellow.
58,69.These notes are primarily administrative in character but are sufficiently connected with the seeking of legal advice for their disclosure to reveal the subject matter of that advice. They need not be produced.
This note is elliptical in form but has been described by Mr Chapman as noting "legal advice given by Woodward". On that basis it is privileged from production.
COMMUNICATIONS WITHIN THE COMMISSION AFTER 7 JANUARY 1993
In the light of the reasoning of the Full Court is its judgment of 18 September 1995, these documents, which are thirteen in number, are capable of attracting either or both "legal advice" and "litigation" privilege. I have examined each of them in the order adopted by Mr Chapman against the background provided by the table to paragraph 19 of his affidavit.
Document No Ruling
This memorandum is largely administrative in character being a factual report on the progress of work undertaken by the Commission's legal officers. It should be produced saving the passages marked in yellow which disclose the nature of legal advice given or to be sought.
75,77.These documents have been adequately described by Mr Chapman and are privileged from production.
78,79.These are notes by Mr Gotlib of respectively a telephone and an oral conversation with Mr Spittal which I infer were undertaken by Mr Spittal for the purpose of obtaining Mr Gotlib's legal advice. They are accordingly privileged.
This is a report to "the Farrow Finance Investigation Team" of a factual nature by Mr McDonald, a Senior Investigator for the Commission, based on his examination of a report prepared by a firm of accountants. It should be produced.
81,82.These documents comprise a request for, and the provision of, legal advice and are privileged.
83,84.These documents have been adequately described by Mr Chapman and are privileged from production.
Insofar as this document details legal advice to be given or obtained from Counsel it is privileged. It should be produced save for the sentences marked in yellow.
86,87.I consider that these documents have been adequately described by Mr Chapman and are not required to be produced.
SUNDRY OTHER DOCUMENTS FOR WHICH LEGAL PROFESSIONAL PRIVILEGE HAS BEEN CLAIMED
The claim has been advanced in these terms by paragraph 22 of Mr Chapman's affidavit:
"There are sundry other documents in respect of which the Commission claims legal professional privilege:
(a)Diary notes of Commission Lawyer
The privilege schedule contains 4 handwritten notes made by Ms Lipe, as follows:
(i)Document 20, made on or about 31/3/92, records legal advice given the to [sic] Commission by Mr Strong of counsel
(ii)Document 46, made on or about 5/8/92, records matters in respect of which Ms Lipe was preparing to give legal advice to the Commission as to the contents of a draft statement of claim
(iii)Document 29, which is undated but which I believe from its content to have been made in or about March 1993, records advice given to the Commission by counsel
(iv)Document 30, which is undated, but which I believe from its content was made in or about March 1993, records matters in respect of which Ms Lipe was preparing to give legal advice to the Commission with respect to matters concerning the issue of proceedings.
All of the communications referred to in the preceding paragraph affidavit [sic] were confidential professional communications between the Commission and its legal advisers or among its legal advisers for the sole purpose of obtaining and giving legal advice. In engaging in the communications referred to herein, each of Woodward, Gotlib, Lipe and any other members of the legal division who were involved were acting as the Commission's professional legal advisers.
The Commission, on its own behalf and, in the case of the last two documents, on behalf of the plaintiffs in the proceedings, claims legal professional privilege in respect of the foregoing 4 documents.
(b)Letter to Mr and Mrs Trewheela
Document 5 is a letter of advice from Mr and Mrs Trewheela's solicitors to them in April 1991. It has nothing to do with the Commission, but records advice that they sought and received from Mr Finkelstein QC about possible proceedings in relation to Farrow Finance Co. On behalf of Mr & Mrs Trewheela the Commission claims legal professional privilege in respect of this letter."
I shall again consider these documents in the order in which they have been discussed by Mr Chapman.
Document No Ruling
20,46,29,30.These handwritten notes by Ms Lipe appear to detail advice obtained from Counsel or steps to be taken in the light of that advice. I regard them as privileged.
This letter has been accurately described by Mr Chapman. Its provision to the Commission does not amount to a waiver of the privilege which it attracted as a letter of advice from solicitor to client.
PUBLIC INTEREST IMMUNITY
This claim is made in respect of eighteen further documents brought into existence before 7 January 1993. It is supported by the following paragraphs of Mr Chapman's affidavit:
"24.The Commission objects to producing the documents listed above on the ground that their production would be contrary to the public interest in:
(a)due performance by the Commission of its statutory function under section 50 of the ASC Law to cause legal proceedings to be commenced and carried on in the public interest;
(b)the due administration of justice.
The documents comprise or include information gathered by and communications passing between officers of or counsel engaged by the commission, and communications between the Commission and persons outside the Commission in the course of requesting obtaining and evaluating evidence and information as to evidence for use in a contemplated proceeding under section 50 of the ASC Law.
If the Commission were ordered to produce those documents for inspection, the disclosure would be likely to impede the ability of the Commission to fulfil its function of commencing and conducting proceedings in the public interest under section 50 of the ASC law, including the proceedings currently before the Supreme Court of Victoria. In my opinion the disclosure of the documents would be likely to have the effect I have described because of the following matters:
(a)disclosure would result in the defendants in the proceedings under section 50 presently having access to confidential communications passing between the Commission and potential witnesses in the proceeding including details of evidence and information as to evidence gathered for use in or for the purposes of the plaintiff's case in those proceedings. No corresponding access to such material is available to the plaintiffs, and if the defendants have such access it will be prejudicial to the fair trial of the proceedings;
(b)in any case where it appears that it may be in the public interest for a proceeding to be commenced it will be necessary for the Commission to gather and evaluate evidence or information as to evidence before making a final decision to cause such a proceeding to be commenced. The possibility of prejudice to the fair trial of the proceedings as a result of disclosure of potential evidence or information as to evidence would be likely to inhibit the Commission in that process and inhibit its ability fully and properly to consider and determine whether such a proceeding ought to be commenced
(c)potential witnesses in the proceeding would be likely to be inhibited if it were known that confidentiality would not be respected."
As well, Mr Chapman goes on to contend that the documents would be of limited relevance to the substantive proceedings in this Court which have been brought pursuant to the Administrative Decisions (Judicial Review) Act.
Mr Chapman also invokes public interest immunity in respect of those documents for which legal professional privileged is claimed in paragraphs 3 to 17 of his affidavit which I take to be the documents numbered 31, 32, 19, 21, 35, 17, 18, 22, 38, 41, 43, 49, 52, 53, 63, 64, 76, 28, 88, 4, 6, 8, 9, 10, 11, 14, 15, 16, 23, 37, 39, 40, 41, 44, 45, 47, 48, 50, 51, 57, 58, 69 and 72. In support of that alternative claim, Mr
Chapman in paragraph 30 has, in effect, repeated the assertions in paragraph 26 of his affidavit excluding those in sub-paragraph (c). Paragraph 30(b) concludes with these words which are additional to the assertions in paragraph 26:
"The possibility of prejudice to the fair trial of the proceedings as a result of the disclosure of such advice to the defendants in the section 50 proceeding would be likely to inhibit the Commission in that process and inhibit its ability fully and properly to consider and determine whether such a proceeding ought to be commenced. Further, the legal advisers to the Commission will be inhibited in giving advice about the merits of a proposed proceeding and the prospects of success thereof if such advice is liable to be disclosed to the proposed defendants in that proceeding."
Unlike the claim for legal professional privilege, the invocation of public interest immunity requires the Court to balance two competing considerations. Against the injury to the nation or its public service which production of a given document might inflict has to be weighed the impediment to the attainment of justice which would be raised if a presumptively relevant document were withheld from a party to litigation (see Alister v The Queen (1984) 154 CLR 404 at 412). The examination of whether the public interest asserted in fact exists and the balancing exercise to which I have just referred may be carried out at one and the same time as I indicated, as a member of a Full Court, in Zarro v Australian Securities Commission (1992) 36 FCR 40 where it was observed at 57:
"In my view, the learned primary judge exercised the discretion, which I consider he clearly had, to inspect the documents comprised in Ex BA3 to see whether they supported the claim to public interest immunity which he distilled, not without difficulty, from the affidavits and oral evidence of Mr Adams on behalf of the ASC. His Honour then undertook the different intellectual exercise of balancing the claim which he perceived to be supported by the documents against the public interest in the respondents' having access to those documents for the purposes of the litigation."
I have undertaken a similar process in respect of the documents for which public interest immunity has been claimed in the present case.
I consider that there is a public interest in the Commission's being able to communicate with potential expert witnesses before making a decision whether to institute proceedings under s 50, without those communications being susceptible to inspection by third persons. On the other hand, my examination of the documents in relation to Witness A indicates that the detail of those communications (as distinct from the fact that they occurred and the dates on which they were made) is not likely to assist the case of any of the applicants in the proceedings before this Court.
I except from these findings documents numbered 68 and 27 which are, respectively, an indication to the proposed expert witness of the matters on which his evidence was sought and his response to that request. Those documents, as I understand them, were capable of influencing the decision which is the subject of the proceedings in this Court. Mr Chapman, under cross-examination by Mr Chernov QC for the applicant Somerville, accepted that there would be no impediment to the Commission's conduct of its case in the Supreme Court if documents produced to the applicants in this Court could not be used in the Supreme Court proceedings. That concession was properly made in the light of the principle affirmed in Harman v Secretary of State for the Home Office [1983] AC 280 which, I consider, would prevent the use in the Supreme Court of documents which the Commission is compelled to produce in this Court.
The notes of a conference with Witness B do not indicate at all the substance of the evidence which he might have been able to give in the Supreme Court proceedings. For the reasons indicated in respect of the Witness A documents, none of the Witness B documents need be produced to the applicants. On the other hand, the draft affidavits from the noteholders who were prospective plaintiffs were capable of influencing the impugned decision and should be produced. Similar reasoning leads me to conclude that neither the questionnaires discussed above, nor the letters, being documents numbered 54, 55, 56 and 26, which were apparently framed to enclose copies of the questionnaire and the Memorandum of Consent and Agreement, attract public interest immunity. In the course of examining the other documents covered by paragraphs 3 to 17 of Mr Chapman's affidavit, I have applied the principles governing public interest immunity to those which I considered not to attract the absolute protection afforded by legal professional privilege. In no case have I been persuaded that the public interest, on balance, militates against the production of the document.
I certify that this and the preceding nineteen (19) pages are a true copy of the reasons for judgment of his Honour Justice Ryan
Associate:
Date:
Counsel for H R Somerville Mr A Chernov QC
with Dr S Kenny
Solicitors for H R Somerville Mallesons Stephen Jaques
Counsel for ASC & Others Mr F Costigan QC
with Mr R Strong
Solicitors for ASC & Others Australian Government Solicitor
Counsel for ANZ Executors
and Trustee Company Ltd Mr G Moloney
Solicitors for ANZ Executors
and Trustee Company Ltd Arnold Bloch Leibler & Co
Counsel for D N Jenkins
& JohnsMr R Tracey QC
Solicitors for D N Jenkins
& JohnsPhillips Fox
Hearing date: 6 October 1995
0
5
0