X and Y v Z - [2015] SASC 96

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
X AND Y v Z
[2015] SASC 96
Judgment of The Honourable Justice Blue
2 July 2015
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - COMMUNICATIONS
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - DOCUMENTS
EVIDENCE - FACTS EXCLUDED FROM PROOF - ON GROUNDS OF PRIVILEGE - PROFESSIONAL CONFIDENCE - LEGAL PROFESSION - GENERAL PRINCIPLES
The plaintiffs seek a declaration that eight documents created by or on behalf of the plaintiffs or their solicitors between September 2008 and October 2013 are the subject of legal professional privilege.
Held:
1.       It was appropriate in the circumstances for the Court to inspect the documents to assist in determining the privilege claims (at [24]).
2.       Legal professional privilege protects from disclosure confidential communications made for the dominate purpose of, inter alia, seeking or giving legal advice (at [28]).
3.       “Legal” advice extends beyond formal advice as to the law to incorporate advice as to what should prudently and sensibly be done in the relevant legal framework. However, legal advice is to be distinguished from purely commercial advice. The advice must be characterised as a whole and if it comprises integrated legal and commercial advice that cannot be disentangled, it will be characterised as legal advice (at [31]-[33]).
4.       Document 4 is not protected by legal professional privilege because it does not record the content of any legal advice or the content of instructions to obtain any legal advice (at [47]).
5.       The remaining 7 documents are protected by legal professional privilege (at [62]).
Asahi Holdings (Australia) Pty Ltd Pacific Equity Partners Pty Ltd [2014] FCA 796; Attorney General for the Northern Territory v Maurice (1986) 161 CLR 475 ; Attorney-General for the State of South Australia v Kowalski (No 5) [2012] SASC 169; Balabel v Air India [1998] 1 Ch 317; Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237, (2004) 210 ALR 220; BHP Billiton Olympic Dam Corporation Pty Ltd v Bluestone Apartments Pty Ltd [2013] SASC 64; (2013) SASR 586; Buttes Gas & Oil & Co v Hammer (No 3) [1981] QB 2; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543; DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191; (2003) 135 FCR 151; Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49; Grant v Downs (1976) 135 CLR 674 ; Trade Practices Commission v Sterling (1979) 36 FLR 244 , considered.

X AND Y v Z
[2015] SASC 96
Civil:
BLUE J:

This is an action for a declaration that certain documents are the subject of legal professional privilege.
Between September 2008 and October 2013, eight documents were created by or on behalf of the plaintiffs or their solicitors.[1] The plaintiffs claim that each document is the subject of legal professional privilege, a claim with which the defendant takes issue.
[1] One of the eight documents (document 1.8) comprises four different copies of what is essentially the same underlying document.
Background
The second plaintiff Y is the holding company of a group of companies that undertake development. The first plaintiff X is a director of those companies. This action has been conducted on the basis that, for the purpose of considering legal professional privilege issues, no distinction is drawn between the holding company and its subsidiaries. I therefore treat Y as encompassing its subsidiaries and “the plaintiffs” as encompassing the companies in the group.
Since 2008, the plaintiffs were, amongst other things, contemplating or embarking on a particular development project (the Project).
P is a solicitor practising in planning and development law. Since not later than 2009, P’s firm and P in particular were engaged by the plaintiffs to provide legal advice in relation to planning and development matters in respect of the Project.
L is a solicitor practising in commercial law. Since not later than 2008, L’s firm was engaged by the plaintiffs to provide legal advice in relation to contractual and commercial matters in respect of the Project. In 2008, L in particular was engaged to provide that advice.
T is a solicitor practising in taxation law. In 2008, T’s firm and T in particular were engaged by the plaintiffs to provide legal advice in relation to taxation matters in respect of the Project.
On 2 September 2008, a meeting was scheduled to take place between X, an employee of the plaintiffs (E1), L, T and a specialist taxation accountant (A) engaged by the plaintiffs to provide taxation advice in relation to taxation matters in respect of the Project. The purpose of the meeting was to discuss, and for the plaintiffs to receive advice concerning, taxation issues associated with the Project. A draft version and a final version of an agenda for the meeting were prepared setting out the issues and factual basis on which the taxation advice was sought and was to be given at the meeting.[2] In addition, brief notes were made on two copies of the final version of the agenda of aspects of the discussion at the meeting.[3] I refer to the four versions of the agenda as Document 1. A claim of legal professional privilege is made in respect of the narrative under each heading in the four versions of the agenda.
[2] Document 1.8.
[3] Document 1.8.
On 10 March 2009, P sent a letter to X providing advice in answer to a request to recommend the most efficient way to proceed with the Project (Document 2).[4]
[4] Document 1.5.
On 10 August 2009, P had a telephone discussion with a Council officer in relation to the Project. The purpose of the conversation was to obtain information on which to provide legal advice to Y. P made notes of the conversation. There is no suggestion that the communication or the notes are the subject of legal professional privilege.
On 11 August 2009, P sent an email to X (copied by X internally to employees of the plaintiffs) in relation to the Project (Document 3).[5] P reported on his conversation with the Council officer on the previous day and provided advice in relation to the subject matter of the conversation and potential arrangements with the Council in relation to the Project.
[5] Document 1.1.
On 19 May 2010, an employee of the plaintiffs (E2) made notes of various steps to be taken in relation to the Project. A claim of legal professional privilege is made by the plaintiffs in respect of two portions of those notes (Document 4).[6] Those two portions relate to two specific steps that P was to be asked to take.[7]
[6] Document 1.10.
[7] Document 1.10.
On 20 May 2010, E2 telephoned P and asked him to take those two steps.
On 26 May 2010, P sent to E2 a memorandum providing advice in relation to various planning documents and agreements impacting on or relating to the Project (Document 5).[8] The memorandum was sent at the request of E2 to provide advice to the plaintiffs for the purpose of a meeting scheduled for 27 May 2010 with an officer of and consultant to the Council to discuss the Project. It was sent for the purpose of Y’s personnel considering whether to provide it or an altered version of it to the Council representatives at the meeting.
[8] Document 1.4.
On 20 January 2011, P sent a memorandum to X, two employees of the plaintiffs (E3 and E4) and a design consultant (D) (Document 6).[9] P sent the memorandum in response to a request by the plaintiffs for legal advice in respect of matters required to be addressed in the preparation of documentation associated with the Project.
[9] Document 1.3.
On 11 October 2012, P sent a memorandum to X and E3 (Document 7).[10] P sent the memorandum in response to a request by the plaintiffs to provide advice for the formulation of a planning/legal argument to be put to a government Minister at a forthcoming meeting.
[10] Document 1.2.
On 8 October 2013, a meeting took place between P and X, E3 and a consultant engaged by the plaintiffs (C). The purpose of the meeting was for P to provide legal advice to the plaintiffs for the purpose of communications with government Ministers relevant to the Project. X took handwritten notes at the meeting (Document 8).[11]
[11] Document 1.6
The trial
The plaintiffs tendered two affidavits in support of their claim by their solicitor in this action. They were received without objection or cross examination. In the first affidavit, the solicitor provided some background information, addressed and exhibited communications between the parties or their solicitors concerning privilege claims in respect of the eight documents and provided a description of each document (without waving privilege).[12]
[12] Exhibit P1.
In the second affidavit, the solicitor exhibited a “Kadlunga” list that had been provided after his first affidavit, updated the description of the eight documents to correct or add to their previous descriptions and deposed to his view that each document (or the redacted portion thereof) was created for the dominant purpose of giving, seeking or noting legal advice, including noting steps in the implementation of a strategy within a particular legal context and framework.[13]
[13] Exhibit P2.
The plaintiffs also tendered a document relating to fellow participants in the Project, their personnel and relationships.[14]
[14] Exhibit P4.
The defendant tendered an affidavit that addressed and exhibited communications between the parties or their solicitors concerning privilege claims in respect of various documents.[15] It was received without objection or cross examination.
[15] Exhibit D1.
The plaintiffs tendered an affidavit by their current solicitor in reply.[16] It was received without objection or cross examination.
[16] Exhibit P3.
It was common ground at trial that a trial judge has a discretion to inspect documents the subject of a disputed privilege claim.[17] The plaintiffs’ primary contention was that inspection was unnecessary because it was plain on the evidence that the documents were privileged, while the defendant’s primary contention was that inspection was unnecessary for the opposite reason, but both parties accepted that it was appropriate to inspect the documents if I considered that it would assist in determining the privilege claims. It was common ground that, if I determined to inspect any of the documents, I should inspect them all.
[17] Grant v Downs (1976) 135 CLR 674 at 688-689 per Stephen, Mason and Murphy JJ; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246 per Lockhart J; Asahi Holdings (Australia) Pty Ltd Pacific Equity Partners Pty Ltd [2014] FCA 796 at [36] per Beach J.
I decided at trial to inspect the documents. This was in part because the expression of the view by the plaintiff’s solicitor in his affidavits that the documents were created for the dominant purpose of giving, seeking or noting legal advice was ostensibly based on his perusal of the documents rather than knowledge of the events surrounding the creation of the documents. It was in part because I considered that inspection of the documents would assist in determining the privilege claims. I inspected the documents during the course of closing addresses.
At the end of closing addresses, I gave permission to the plaintiffs to adduce further affidavit evidence concerning certain factual matters the significance of which became apparent during (if not before) closing addresses. Closing addresses were completed subject to liberty to the parties to make supplementary written submissions in relation to any such further affidavit evidence.
Pursuant to my permission, the plaintiffs subsequently tendered affidavits by X and P. They were received without objection or cross examination.
I received written supplementary submissions and heard brief oral supplementary submissions. The plaintiffs subsequently tendered a supplementary affidavit by P providing further detail in relation to Document 5.
Legal professional privilege
Legal professional privilege protects from disclosure confidential communications made for the dominant purpose of seeking or giving legal advice or the provision of legal services.[18]
[18] Esso Australia Resources Limited v Commissioner of Taxation[1999] HCA 67; (1999) 201 CLR 49 at [35] and [61] per Gleeson CJ, Gaudron and Gummow JJ; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission[2002] HCA 49; (2002) 213 CLR 543 at [9] per Gleeson CJ, Gaudron, Gummow and Hayne JJ and McHugh J at [44].
The privilege extends to documents that comprise, record or evidence a protected communication or are created for the requisite dominant purpose.[19]
[19] Esso Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 at [36] and [61] per Gleeson CJ, Gaudron and Gummow JJ; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 per [9]-[10] Gleeson CJ, Gaudron, Gummow and Hayne JJ and McHugh J at [44].
In determining whether advice is “legal” advice, there are clear-cut cases of obvious legal advice and obvious non-legal advice. Cases near the borderline involve an evaluative judgment based on nature and degree.
On the one hand, a purist approach is not taken to what constitutes legal advice and it extends beyond “formal advice as to the law” to incorporate “advice as to what should prudently and sensibly be done in the relevant legal framework”.[20]
[20] Balabel v Air India [1998] 1 Ch 317 at 330-332 per Taylor LJ (with whom Lord Donaldson MR and Parker LJ agreed); DSE (Holdings) Pty Ltd v InterTAN Inc [2003] FCA 1191; (2003) 135 FCR 151 at [45] per Allsop J; BHP Billiton Olympic Dam Corporation Pty Ltd v Bluestone Apartments Pty Ltd [2013] SASC 64; (2013) SASR 586 at [62] per Anderson J.
On the other hand, the mere fact that advice is given by a lawyer does not necessarily entail that it is legal advice and legal advice is to be distinguished from purely commercial advice.[21]
[21] Balabel v Air India [1998] 1 Ch 317 at 330-332 per Taylor LJ (with Lord Donaldson MR and Parker LJ agreeing); DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [45] per Allsop J.
Ultimately, the advice must be characterised as a whole and if it comprises integrated legal and commercial advice that cannot be disentangled, it will be characterised as legal advice.[22]
[22] Balabel v Air India [1998] 1 Ch 317 at 330-332 per Taylor LJ (with whom Lord Donaldson MR and Parker LJ agreed); DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [45] per Allsop J.
Document 1
Document 1 comprises the draft and final agendas for the 2 September 2008 meeting.
My inspection of the agendas confirms that the agendas set out the issues and factual basis on which legal advice on taxation issues was sought and was to be given at the meeting. The agendas functioned as a mechanism to convey requests for legal advice. The mere fact that A, a taxation accountant engaged by the plaintiffs, was present at the meeting does not detract from the conclusion that the agendas requested legal advice and that legal advice was to be provided by the lawyers at the meeting.
The notes made on two copies of the final version of the agenda are very limited but are of discussion of legal issues at the meeting.
Document 1 is protected by legal professional privilege.
Document 2
Document 2 comprises P’s 10 March 2009 letter to X.
My inspection of the letter confirms that by the letter P gave legal advice in answer to a request to recommend the most efficient way to proceed with the Project. While there are commercial dimensions to the advice given, the advice is nevertheless properly characterised as legal advice.
Document 2 is protected by legal professional privilege.
Document 3
Document 3 comprises P’s 11 August 2009 email to X.
My inspection of the email confirms that P reported on his conversation with the Council officer on the previous day and provided legal advice in relation to the subject matter of the conversation and potential arrangements with the Council in relation to the Project.
If the only record that P made of his telephone conversation with the Council officer on the previous day had been in this email, it would have been arguable that the first part of the email reporting on the conversation was not created for the dominant purpose of giving legal advice but rather to stand as P’s record of the non-privileged communication with the Council officer.[23] However, P’s record of that non-privileged communication comprised his handwritten notes made on the previous day and the purpose of the email was to provide legal advice to the plaintiffs. The account of the conversation with the Council officer was part and parcel of that legal advice. While there are commercial dimensions to the advice given, the advice is nevertheless properly characterised as legal advice.
[23] See the discussion in Attorney-General for the State of South Australia v Kowalski (No 5) [2012] SASC 169 at [11]-[20].
Document 3 is protected by legal professional privilege.
Document 4
Document 4 comprises E2’s 19 May 2010 notes of a step that P was to be asked to take and was on 20 May 2010 asked by E2 to take.
A distinction is drawn between the fact of a communication the subject of legal professional privilege and its content. The fact of the communication, including when, between whom and how the communication took place, is not protected by the privilege. As a corollary, voluntary disclosure by the privilege holder of these details does not waive the privilege. The same applies to the general subject matter or topic of the communication as opposed to its content. While the line between disclosure of the topic and the substance of the communication frequently involves matters of degree, nevertheless the distinction in principle is clear.[24]
[24] Buttes Gas & Oil & Co v Hammer (No 3) [1981] QB 223 at 3252 per Donaldson LJ; Attorney General for the Northern Territory v Maurice (1986) 161 CLR 475 at 497 per Dawson J; Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237, (2004) 210 ALR 220 at [6]-[13] per Tamberlin J and [64]-[65] per Gyles J.
The two redacted passages relate to an instruction to be given to P to take steps to communicate with two external parties. It is not suggested that the communications with the external parties were capable of being privileged. The redacted passages do not address the detail of the intended communications with the external parties. The fact of the instruction to make the communications is not privileged. Disclosure of the redacted passages would not disclose the content of any legal advice nor the content of instructions provided to obtain any legal advice.
Document 4 is not protected by legal professional privilege.
Document 5
Document 5 comprises P’s 26 May 2010 memorandum providing advice in relation to various planning documents and agreements impacting on or relating to the Project.
My inspection of the memorandum confirms that the memorandum contains legal advice by P.
Document 5 is protected by legal professional privilege.
Document 6
Document 6 comprises P’s 20 January 2011 memorandum to X, E3, E4 and D.
My inspection of the memorandum confirm that the memorandum contains legal advice by P. While there are commercial dimensions to the advice given, the advice is nevertheless properly characterised as legal advice.

The memorandum is headed “private and confidential”. While D was a consultant engaged jointly by the plaintiffs and two co-venturers, it is evident from the memorandum itself and the evidence adduced by the plaintiffs that the memorandum represented a confidential communication that D was required to keep confidential.
Document 6 is protected by legal professional privilege.
Document 7
Document 7 comprises P’s 11 October 2012 memorandum to X and E3.
My inspection of the memorandum confirms that the memorandum comprises legal advice for the formulation of arguments to be put to a government Minister at a forthcoming meeting. While there are commercial dimensions to the advice given, the advice is nevertheless properly characterised as legal advice.
Document 7 is protected by legal professional privilege.
Document 8
Document 8 comprises X’s 8 October 2013 notes of his meeting with P, E3 and C.
The evidence adduced by the plaintiffs is that the memorandum reveals legal advice provided by P to the plaintiffs for the purpose of a forthcoming meeting with government Ministers relevant to the Project.
Document 8 is protected by legal professional privilege.
Conclusions
I will make a declaration that the documents other than Document 4 are the subject of legal professional privilege.
I will hear the parties as to the wording of the declaration and any consequential orders.