The Palace Gallery Pty Ltd v Police - [2008] SASC 305

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
THE PALACE GALLERY PTY LTD v POLICE
[2008] SASC 305
Reasons for Decision of The Honourable Justice Anderson
12 November 2008
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - COMMUNICATIONS
Application for declaration that recording made by video recording equipment installed at the plaintiff's premises is the subject of legal professional privilege - whether surveillance footage seized by police after an incident that occurred outside the plaintiff's premises is a confidential communication; consideration of dominant purpose; whether arm's length relationship between solicitor and client.
Held: No legal professional privilege exists; no confidential communication; no arm's length relationship. Contrary to public interest to uphold claim for privilege.
Liquor Licensing Act 1997 (SA); Gaming Machines Act 1992 (SA), referred to.
Esso Australia Resources v Federal Commissioner of Taxation (1999) 201 CLR 49; J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 38 FCR 452, applied.
Boyes v Colins (2000) 23 WAR 123; Comcare v Foster (2006) 150 FCR 301, distinguished.
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337; Attorney-General (NT) v Maurice (1986) 161 CLR 475; Mann v Carnell (1999) 201 CLR 1; Seven Network Ltd v News Ltd [2005] FCA 142; Waterford v Commonwealth (1987) 163 CLR 54; Grant v Downs (1976) 135 CLR 674, discussed.

THE PALACE GALLERY PTY LTD v POLICE
[2008] SASC 305
Civil
ANDERSON J.
Introduction

The plaintiff, The Palace Gallery Pty Ltd, has applied for various orders, including a declaration that surveillance footage taken at the plaintiff’s premises at Hindley Street is the subject of legal professional privilege.
There are other claims made by the plaintiff, however, an order has been made by a master that the question of legal professional privilege and whether it can be claimed in respect of the surveillance footage should be heard and determined before the other issues in the matter.
The parties were represented by counsel before me and no oral evidence was adduced. The plaintiff tendered three affidavits and an agreed statement of facts. The defendant tendered one affidavit.
Background
The Palace Gallery Pty Ltd (“The Palace Gallery”) is the licensee of premises situated at 111 Hindley Street, Adelaide, known as “The Palace” and “Red Square”. Mr Antony Tropeano is the sole director of The Palace Gallery. I will refer to him as Mr Tropeano junior.
The sole shareholder of The Palace Gallery is Trop Nominees Pty Ltd (“Trop Nominees”) as trustee for the Tropeano Family Trust. Trop Nominees owns the property at 111 Hindley Street.
Mr Antonio Tropeano is the sole director of Trop Nominees. The shareholders of Trop Nominees are Antonio Tropeano and Marian Tropeano, each holding one $1 share. I will refer to Antonio Tropeano as Mr Tropeano senior.
Mr Tropeano senior is a legal practitioner in the firm Fletcher & Lawson. Mr Antony Tropeano is the son of Mr Tropeano senior. He deposes to the fact that The Palace Gallery carries on the business of a hotel pursuant to a special circumstances and gaming licence under the provisions of the Liquor Licensing Act 1997 (SA) and the Gaming Machines Act 1992 (SA). The liquor licence enables the company to trade at any time on any day within the provisions of the special circumstances licence.
The incident in question
On Saturday 15 September 2007 an incident occurred outside the premises of the hotel at about 3.40 am. At that time, and for some years prior, the owners of the business had surveillance cameras operating on the exterior of the premises. When the police became aware of the incident, they requested from Mr Tropeano senior a copy of any surveillance footage captured by the cameras installed on the premises. Mr Tropeano senior declined the request, in the first instance on the basis that there had been an assault against one of his staff members and he wanted to follow that up. As it turned out, Mr Tropeano senior was apparently involved in the incident and claimed to the police later that he was a victim.
When the police officers attended at the premises and requested the surveillance footage, they were told by a staff member that she had no authority to hand over the footage.
A telephone conversation followed in which Detective Hubbard advised Mr Tropeano senior that he was the holder of a general search warrant and that he wanted to seize a copy of a video recording of the incident that had occurred earlier that day. The agreed facts are that Mr Tropeano senior told Detective Hubbard in a conversation approximately 10 minutes later that he:
(a)would be acting as a solicitor for the premises over this incident;
(b)had been involved in the incident and was a victim; and
(c)claimed legal professional privilege on behalf of the plaintiff over any video surveillance of the incident and would not be handing over anything.
Mr Tropeano senior arrived at the premises at or about 10.30 am on 15 September 2007 and informed the police officers that “the recording made by the equipment of the incident was protected by legal professional privilege as it had been made especially for his firm to be able to provide legal advice to and assist the plaintiff in the conduct of litigation, actual or reasonably contemplated”.
A notice dated 20 March 2006 was affixed to the outside of a cabinet in the hotel containing the video surveillance equipment in the following terms:
To whom it may concern
This letter is to confirm that the material being inside this cabinet and installed on our advice is to record and store information to allow our office to provide legal advice.
The main purpose for the installation of the equipment was to be able to bring into existence information that allowed legal advice or to conduct, or aid in the conduct of, litigation, actual or in reasonable prospect to be provided and therefore it is covered by legal professional privilege. Legal professional privilege applies even if it has not in fact been so used and may never be so used.
In the circumstances, no person is able to seize this material legally and use it.
In the event that the material is seized pursuant to a warrant or other legal means, the material is to be stored and protected by the person seizing it and not accessed by any person until the issue has been dealt with by a Court of competence (sic) jurisdiction.
The person seizing any equipment or information from this cabinet is not authorised by The Palace Gallery Pty Ltd and will be held personally responsible for any costs or damages caused to the full extent of the law.
The notice was signed by Fletcher & Lawson per Antonio Tropeano LLB, LLM, Notary Public, Legal Practitioner.
The video surveillance recording units were seized by the police officers, and after the issue of legal proceedings the two units which had been placed in the custody of the Adelaide Magistrates Court were removed and footage of the incidents relevant to the police investigation were copied onto a CD. This CD was in turn lodged with the Adelaide Magistrates Court where it still remains. It is the contents of that CD which is the subject of the claim for legal professional privilege by the plaintiff. I was informed that the video surveillance equipment for surveillance inside and outside the premises runs 24 hours a day, seven days a week.
The claim for legal professional privilege
Mr Tropeano junior, in his affirmation of 23 July 2008, deposes to the fact that there have been occasions when persons have been refused admission to the premises, and he states that there have been physical threats made to staff and complaints to the Equal Opportunity Commission on the grounds of discrimination. He also deposes to allegations of assaults by staff, and also to staff who have been assaulted by other persons when those persons have been refused admission. He refers also to damage to property on the premises and offences which have occurred inside the premises.
Mr Tropeano junior said that in October 2003 he requested legal advice from Fletcher & Lawson Lawyers. The advice was to install video recording equipment to record events. It was on the basis of that advice that the surveillance system was set up to cover both the perimeter of the premises and inside the premises. The advice was sought from Mr Tropeano senior.
Mr Tropeano junior deposes to the fact that the purpose of the installation was to enable the plaintiff to show its solicitors a recording of events so that the plaintiff could receive advice from its solicitors. He then says in his affirmation:
The purpose of the recording of incidents was so that the plaintiff could communicate the events recorded on the tape which would be made available as part of its instruction (sic) to the plaintiffs (sic) solicitors in turn for the purpose of receiving advise (sic) from its solicitors in respect of litigation actual or contemplated of the type occasioned by the incidents described in paragraph 5, examples or which are described in paragraph 10 hereof.
Legal professional privilege
The elements necessary to constitute a successful claim for legal professional privilege were summarised by Mr Illingworth, who appeared for the defendant, as follows:
1.there must be a communication;
2.the communication must be between solicitor and client;
3.the communication must be confidential;
4.the communication must be for the dominant purpose of either
(a) giving or obtaining legal advice; or
(b) for use in existing or anticipated proceedings.
Communication also includes materials provided
Mr Blue QC, who appeared for the plaintiff, did not dispute the summary above as the relevant elements. Mr Blue pointed out that the privilege is not just confined to communications between solicitor and client but also applies to materials created for the purpose of legal advice or potential use in actual or contemplated litigation. So much is clear from the decisions of the High Court in Grant v Downs (1976) 135 CLR 674 at 682 per Stephen, Mason and Murphy JJ and at 690 per Jacobs J. Likewise in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 479-480 per Gibbs J and at 490 per Deane J. In Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 507-509 per Brennan CJ, 553 per McHugh J and 571 per Gummow J.
Mr Illingworth submits that the surveillance footage is not a communication. He relies on the reasoning of the High Court in Propend where the relevant communication was a copy of an original document. Mr Illingworth argues that the surveillance footage was not put in place for any contemplated litigation. He submits that the footage simply reveals what in fact occurred. To this end he refers to French J in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 38 FCR 452 at 457 where His Honour says:
The video tapes have, it may be accepted, been brought into existence for the sole purpose of possible litigation. They are in one sense analogous to witness statements. But they are more than that. They are real evidence of events which occurred in public. They were not taken in circumstances to which any confidentiality attached.
Mr Illingworth also refers to the decision of Hedigan J in the Supreme Court of Victoria in Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337 where His Honour said, regarding a tape recording, at 348:
But the tape is not a note of the conversation, an impression of it or a description of it. It contains the actual conversation in electronic form. It evokes the voices of each party’s agent, instantaneously encapsulating the non-confidential communications. It is the conversation. Kinchin was as much the author of it as Harris. The policy basis of legal professional privilege – confidentiality in the public interest – is wholly lacking when what is solely sought to be protected is an actual reproduction of the voices of the parties speaking in a non-confidential mutual communication. The tape itself is not a communication to anybody. It is simply a record. It did not come into existence as a communication from the client to the solicitor.
I agree that in this matter the surveillance footage is not a communication to anybody. Mr Blue argues, however, that it is material created for the purpose of submission to legal advisers. I accept that it is not simply a question of deciding if the footage is a communication in itself, as argued by Mr Illingworth, because it may suffice if it is nevertheless material created for the purpose of legal advice or potential use in actual or contemplated litigation. I will consider next the purpose of the surveillance footage.
Dominant purpose
At the forefront of Mr Blue’s argument was the identification of the purpose for which the surveillance footage in this case was created. As the cases make clear, it must be for the dominant purpose of either giving or obtaining legal advice or for use in existing or anticipated proceedings (Esso Australia Resources v Federal Commissioner of Taxation (1999) 201 CLR 49). It appears from Mr Blue’s argument that he relies on the first limb, namely, the giving or obtaining of legal advice as distinct from the use in existing or anticipated proceedings. That is, however, not so clear from the affirmation of Mr Tropeano junior who is apparently including both limbs when he deposes to the purpose of the surveillance footage.
As I have indicated, Mr Blue relies very much on the affirmation referred to from Mr Tropeano junior. The affirmation states what the purpose of recording incidents was, and that has not been challenged. He submits that without a challenge it means that the purpose should be interpreted as the dominant purpose. Mr Illingworth submits that commonsense and judicial notice on my part of the significance and prominence of surveillance footage these days makes a nonsense of the assertion by Mr Tropeano that it was the dominant purpose.
It seems to me that I can take judicial notice of the fact that surveillance footage is frequently produced in courts, both civil and criminal, and that it is a means whereby law enforcement agencies, including the police and the Liquor Licensing Commission, can better control the public in public places. As Mr Illingworth points out, the cameras are clearly there for a deterrent purpose. An equally obvious purpose is to provide security. I am not prepared to find merely on the wording of the affidavit that the dominant purpose of this surveillance system was to enable or facilitate the giving and receiving of legal advice in circumstances where that advice was protected.
That finding is therefore fatal to Mr Blue’s argument. Even accepting that privilege goes beyond communications between solicitor and client and can include materials such as this footage, in my judgment, the footage was not created for the dominant purpose of legal advice or potential use in actual or contemplated litigation.
“Arm’s length” principle
The rationale behind the privilege between solicitor and client is to protect information provided by the client to the solicitor in the hope that the client will make a full and frank disclosure of all relevant matters: see Grant v Downs at 685 per Stephen, Mason and Murphy JJ.
Underlying the arguments put forward by Mr Illingworth denying the existence of legal professional privilege is the position in which Mr Tropeano senior finds himself. In a letter dated 2 January 2007 Mr Tropeano senior, the legal practitioner, on the letterhead of Fletcher & Lawson Solicitors, advises that he is the responsible person and gaming manager for the premises at 111 Hindley Street. These are important positions held in the public interest as approved by the relevant authorities.
I have already set out Mr Tropeano senior’s involvement in the relevant companies and trusts which control both the land and the hotel business at Hindley Street. In this particular instance he was the victim of an alleged incident which the police wanted to investigate. Mr Illingworth argues that in all those circumstances there is no independence between the plaintiff company and Mr Tropeano senior, its legal adviser. He refers to the comments of Tamberlin J in Seven Network Ltd v News Ltd [2005] FCA 142 at paragraph 5 where His Honour said:
The authorities recognise that in order to attract privilege the legal adviser should have an appropriate degree of independence so as to ensure that the protection of legal professional privilege is not conferred too widely.
In Waterford v Commonwealth (1987) 163 CLR 54 at 70, Brennan J said, after discussing the purpose of legal professional privilege:
If the purpose of the privilege is to be fulfilled, the legal adviser must be competent and independent. Competent, in order that the legal advice be sound and the conduct of litigation be efficient; independent, in order that the personal loyalties, duties or interests of the adviser should not influence the legal advice which he gives or the fairness of his conduct of litigation on behalf of his client. If a legal adviser is incompetent to advise or to conduct litigation or if he is unable to be professionally detached in giving advice or in conducting litigation, there is an unacceptable risk that the purpose for which privilege is granted will be subverted.
It is my view that Mr Tropeano senior has placed himself in a very difficult situation in this matter. He is the person responsible to the relevant authorities for the conduct of the licensed premises. An investigation is sought into something which occurred outside the premises. Mr Tropeano senior himself was a victim of that incident. He gives legal advice to the management company in which he has an interest. Very simply, he wears too many hats. In my view, he is not in those circumstances able to provide independent legal advice.
In my opinion, the combination of the lack of a dominant purpose, when looked at against the background of Mr Tropeano senior’s involvement and legal advice, means that the fundamental principles on which legal professional privilege are based have been undermined in this instance. In my view, these are clearly matters which point to the conclusion that the surveillance footage is not privileged. Although I regard these matters as conclusive, I will go on to discuss the other arguments which were put.
Was there a confidential communication between solicitor and client?
I have already decided that the relationship between solicitor and client in this matter was not at arm’s length. I will now consider whether a confidential communication was made. Mr Illingworth submits that J-Corp at 457 per French J, is authority supporting the fact that this surveillance footage was not an appropriate communication for the purpose of claiming privilege.
Mr Blue submits that in this regard I am bound to follow a decision of the Full Court of Western Australia in Boyes v Colins (2000) 23 WAR 123. He also refers to Comcare v Foster (2006) 150 FCR 301 at [41]-[52] where Greenwood J followed Boyes v Colins and not J-Corp.
In J-Corp, the solicitors acting for the Builders Labourers Federated Union requested that video recording be made to capture events which occurred on a picket line. French J held that although brought into existence for the sole purpose of litigation, the footage was not recorded in circumstances to which any confidentiality attached. In both Boyes and Comcare video surveillance was taken of persons already engaged in litigation. This was taken by the opponent in litigation to discredit the other party. In my view, this places those decisions in quite a different context from the decision of French J in J-Corp.

I consider that the recording of public events in this matter as regards their confidentiality should be treated in the same way as French J treated the public aspect of the recordings made of the events occurring on the picket line. The material was not gathered, in my view, as a function of a confidential communication between lawyer and client. Very simply, this is running footage for 24 hours a day, 7 days a week which might at some indefinite time in the future possibly cause advice to be sought. It was not created for any specific purpose which can be identified, nor was it created for any litigation actual or proposed. It very simply might at some indefinite stage in the future be called into play.
I would therefore refuse the claim for privilege on this ground.
Waiver
There is evidence by way of correspondence to show that the operators of the hotel have provided surveillance footage on previous occasions for the purpose of assisting with law enforcement measures and for purposes generally which would not come within the very narrow category of obtaining legal advice.
Mr Illingworth submits that the conduct of Mr Tropeano senior in relation to the previous provision of surveillance footage to law enforcement authorities means that he is now making an inconsistent claim and that he is not permitted to do so. In Mann v Carnell (1999) 201 CLR 1, Gleeson CJ, Gaudron, Gummow and Callinan JJ said at [29]:
... [T]he law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege.
Their Honours went on to say:
What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
Mr Illingworth submits therefore that the plaintiff, by providing footage made by the video equipment installed at the premises on earlier occasions, has acted inconsistently with the claim of legal professional privilege which is now made.
Mr Blue disputes that there is a waiver of privilege. Mr Blue submits that it cannot possibly be the case that the provision of surveillance footage some years ago amounts to a waiver for all time.
I do not consider that there is a waiver. The court is only dealing with the specific incident for which privilege has been claimed. It is important, however, in my opinion, to look at the conduct which Mr Illingworth says constitutes the waiver and examine it from the point of view of conduct which is quite inconsistent with the privilege claimed. This is not from the point of view of creating a waiver but to confirm my analysis of the necessity for independent legal advice. It could be said that the legal advice, whatever it was on this occasion, has been tainted with various matters of self-interest which I have referred to earlier. While the inconsistent conduct helps with an analysis of the claim for privilege, it does not constitute a waiver, in my view.
Conclusion
It is my view that it has not been established that there was a confidential communication made between solicitor and client nor has it been established that the communication was for the dominant purpose of giving or obtaining legal advice or for use in existing or anticipated proceedings. Underlying each of those elements in the claim for professional privilege is the actual interrelationship between the companies, Mr Tropeano senior and the legal firm Fletcher & Lawson such that it would be contrary to public interest, in my view, to allow legal professional privilege to operate in those circumstances.
Therefore on the application by the plaintiff I decline to make the declaration sought in paragraph 3 of the interlocutory application (FDN 5).
I will hear the parties as to the costs of this matter.