FEDERAL COURT OF AUSTRALIA
Yong v Westpac Banking Corporation [2025] FCA 816
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Details
- Case
- [2025] FCA 816
- Decision Date
CaseChat Overview and Summary
The case of Yong v Westpac Banking Corporation involved a dispute regarding the production of certain documents that were alleged to be covered by legal professional privilege. The case was heard in the Federal Court of Australia. The primary issue before the court was whether certain documents, referred to as the Disputed Documents, were protected by legal professional privilege and therefore exempt from production in response to a discovery order.
The Disputed Documents in question included chronological summaries of factual matters prepared by Allens, a law firm engaged by Westpac, in relation to the AUSTRAC Proceeding. These documents were provided to an Advisory Panel and a third party, Promontory, for their review. The Respondent, Westpac, sought to have these documents produced, arguing that their privileged status had been waived by their provision to the third parties. Westpac contended that the documents were prepared for the dominant purpose of providing legal advice and assistance in relation to the AUSTRAC Proceeding.
The court considered whether the documents were prepared for the dominant purpose of giving or receiving legal advice, and whether this purpose had been maintained even after the documents were shared with the third parties. The court held that the documents were indeed protected by legal professional privilege because they were prepared for the dominant purpose of providing legal advice. The fact that the documents were later provided to third parties on a confidential and limited basis for a specific purpose did not alter their privileged status. The court further held that the privilege had not been waived by the subsequent provision to third parties, as the dominant purpose of the communications had not changed.
Based on these findings, the court dismissed the application for the production of the Disputed Documents. The orders of the Registrar dated 8 November 2024, and subsequently amended on 20 November 2024, were set aside, and the application for production filed on 4 June 2025 was dismissed. The court directed the parties to file submissions on the appropriate order as to costs within seven days of the judgment.
The Disputed Documents in question included chronological summaries of factual matters prepared by Allens, a law firm engaged by Westpac, in relation to the AUSTRAC Proceeding. These documents were provided to an Advisory Panel and a third party, Promontory, for their review. The Respondent, Westpac, sought to have these documents produced, arguing that their privileged status had been waived by their provision to the third parties. Westpac contended that the documents were prepared for the dominant purpose of providing legal advice and assistance in relation to the AUSTRAC Proceeding.
The court considered whether the documents were prepared for the dominant purpose of giving or receiving legal advice, and whether this purpose had been maintained even after the documents were shared with the third parties. The court held that the documents were indeed protected by legal professional privilege because they were prepared for the dominant purpose of providing legal advice. The fact that the documents were later provided to third parties on a confidential and limited basis for a specific purpose did not alter their privileged status. The court further held that the privilege had not been waived by the subsequent provision to third parties, as the dominant purpose of the communications had not changed.
Based on these findings, the court dismissed the application for the production of the Disputed Documents. The orders of the Registrar dated 8 November 2024, and subsequently amended on 20 November 2024, were set aside, and the application for production filed on 4 June 2025 was dismissed. The court directed the parties to file submissions on the appropriate order as to costs within seven days of the judgment.
Orders
Orders of the court
1. The orders of Registrar Legge dated 8 November 2024, amended 20 November 2024, be set aside.
2. The application for production of documents filed on 4 June 2025 is dismissed.
3. By 7 days from the date of judgment, the parties are to file submissions (no longer than three pages) on the appropriate order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
It follows from these conclusions that the Disputed Documents are properly the subject of a claim for legal professional privilege, and the application for production will therefore be dismissed. BACKGROUND The present case is a representative proceeding commenced on behalf of, broadly, persons who acquired an interest in Westpac securities in a particular period. By the proceeding, the class members seek declarations and damages in respect of alleged breaches of the ASX Listing Rules, Corporations Act2001 (Cth), Australian Securities and Investments Commission Act2001 (Cth) and the Australian Consumer Law (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)). Those alleged breaches substantially arise from matters that were ventilated in the course of an investigation commencing in or around November 2018 by the Australian Transaction Reports and Analysis Centre (AUSTRAC). That investigation (the AUSTRAC Investigation) concerned Westpac’s compliance with certain aspects of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). The AUSTRAC Investigation led to the commencement of civil penalty proceedings by AUSTRAC against Westpac (the AUSTRAC Proceeding). The originating application and statement of claim in the AUSTRAC Proceeding were filed on 20 November 2019, while a defence was filed on 15 May 2020. The AUSTRAC Proceeding was resolved on the basis of an agreed position, reflected in the decision of this Court on 21 October 2020 (Chief Executive Officer of the Australian Transaction Reports and Analysis Centre v Westpac Banking Corporation [2020] FCA 1538). Certain, uncontroversial aspects of the evidence can be summarised as follows. The AUSTRAC Proceeding involved alleged (and later admitted) failures by Westpac to report to AUSTRAC International Funds Transfer Instructions (often called IFTIs in the evidence discussed below), retain records, and implement appropriate correspondent banking due diligence procedures. The facts underpinning the AUSTRAC Proceeding were not only complex; they were of fundamental importance to Westpac. A range of reviews and responses followed the commencement of the AUSTRAC Proceeding. Westpac issued a release to the Australian Securities Exchange (ASX) the day the statement of claim in the AUSTRAC Proceeding was filed, acknowledging the commencement of the AUSTRAC Proceeding. Allens were engaged to assist Westpac in responding to the AUSTRAC Investigation and then the AUSTRAC Proceeding. Within 48 hours of receiving the statement of claim, Allens received instructions to commence work on chronological summaries of factual matters to assist Westpac to evaluate the allegations in the statement of claim, in order to develop the responses that would constitute its defence (each a Chronology, and together the Chronologies). In its press release of 22 November 2018, Westpac made clear that it was “establishing a multi-layered review” which included “accelerating [its] ongoing program of AML/CTF improvements”. The press release also announced that Westpac would: …appoint independent experts to oversee the program including a review of accountability. We will take actions emerging from that review. An assessment of suitably qualified candidates to lead that review is underway.
Evidence
Evidence Before The Court
There is very limited hearsay evidence from Ms Kylie Gray, who was Westpac’s “General Counsel, Major Regulatory Investigations and Litigation” in the relevant period. Ms Gray has since left employment with Westpac. The evidence concerning Ms Lim and Ms Rodgers Mr Harris gives evidence about what Ms Rodgers and Ms Lim each told him about their involvement in the preparation of the Chronologies. Ms Rodgers says that she was part of the discussions in which Westpac instructed Allens to conduct factual investigations and prepare Chronologies of issues within the AUSTRAC statement of claim for the purpose of Westpac being provided with legal advice. Mr Harris deposes that Ms Rodgers told him that:(1)Her discussions with Allens were solely concerned with Westpac’s defence of the AUSTRAC Proceeding and that no purpose for instructing Allens to carry out the work in question was discussed other than a legal purpose. She was substantially involved in the day to day interactions with Allens while carrying out that work, and so far as she was aware, the only purpose for the work carried out by Allens was analysing the AUSTRAC statement of claim and preparing the Chronologies to provide legal advice and assistance to Westpac in relation to its defence of the proceedings. (2)She did not discuss with anyone or observe anyone to say that the work was to be conducted for a different or additional purpose. No other purpose was discussed in meetings between Westpac and Allens, or internal meetings at Westpac which Ms Rodgers attended. (3)She did not “discuss or hear any person mention that the purpose for the preparation of the chronologies had changed at any other time”. (4)In her opinion, the decision to provide the Advisory Panel with the Allens Chronologies did not alter the fundamental purpose for which they were being prepared. (5)Regarding her understanding of the purpose: Neither at the time that decision [to provide the Chronologies to the Advisory Panel and Promontory] was conveyed to her, nor at any other time, was she informed or did she come to understand that the purpose for the preparation for the Allens Chronologies had changed or that there were other additional purposes for that work, only that, once complete, copies of those documents might also be provided to the Advisory Panel and to Promontory on a confidential basis which they could use, if they assisted, as an aide in the conduct of their respective tasks. Mr Harris gives evidence that he was told by Ms Lim that upon receipt of the statement of claim in the AUSTRAC Proceeding, she quickly formed the view that it would be necessary to have a detailed analysis of the allegations contained in the statement of claim, including a Chronology of events relevant to each key alleged source of contravention. This was so that Westpac could obtain legal advice and assistance in relation to its response to the allegations and any defence that Westpac would file, and facilitate the provision of legal advice and assistance to Westpac and the Board in relation to its general response to the proceeding and any ancillary legal processes that might ensue from the AUSTRAC Proceeding (such as regulator inquiries or third party litigation). She instructed Mr Haig of Allens to commence work on the Chronologies in relation to the matters the subject of those allegations on the date of receipt of the statement of claim, without being aware of the proposed engagement of Promontory or the Advisory Panel. In addition, Ms Lim told Mr Harris that: (1)Some days later, she became aware that the Westpac Board determined to appoint the Advisory Panel. Some days after that time, a request was made by Mr Evensen as to whether there were any materials that the legal team held that he could obtain copies of to provide the Advisory Panel and Promontory as to assist them with understanding the factual background. (2)Mr King agreed that once the Chronologies were completed, copies could be provided to the Advisory Panel and Promontory on a confidential basis to assist them with their reviews. (3)Ms Lim believed that the decision to allow the Advisory Panel and Promontory to review copies of that material did not in any way alter the purposes in requesting the material. (4)She did not instruct Allens, nor did she instruct any lawyer in her team to instruct Allens, that the purpose for the work had changed or that there was now an additional purpose for the work. (5)In Ms Lim’s view, but for the need to have the Allens Chronologies prepared for the purpose of Westpac receiving legal advice in relation to the AUSTRAC Proceeding, she would not have sought that highly detailed work be conducted over a number of months.
Decision
Reasons for decision
Promontory’s assurance was ultimately a fairly limited negative assurance. One of the assurances provided was in the following terms (emphasis original): Given our lack of visibility over the conclusions and recommendations made by the Review Team, Promontory is only able to provide negative assurance over these. Specifically, we saw no reason why the methodology, if implemented as designed, should not lead to accurate and appropriate conclusions and recommendations. The Advisory Panel completed its work and delivered its report on 4 June 2020. That report observed that its task was “not to interrogate specific AUSTRAC allegations…”. This is borne out by a review of the report. The process undertaken by the Advisory Panel is summarised in Appendix D to its report, including the following: Over a four-month period, Panel members have:•Reviewed relevant literature on governance of financial institutions especially the CBA Prudential Enquiry (May 2018), the Westpac Culture, Governance and Accountability Self-Assessment (November 2018), the ASIC Corporate Governance Task Force Report (October 2019) and the APRA Banking Executive Accountability Regime (February 2018). •Reviewed Board and Board Committee documents, and extracts of documents, for the 2013-2019 period. •Interviewed the Chairman (outgoing and incoming), CEO (former and current), and each current Non-Executive Director listed below. •Interviewed senior Westpac executives, listed below, with connection to non-financial risk and specifically financial crime. •Reviewed information on critical Financial Crime events at offshore banks.The Panel interviewed the following current and former Westpac Non-Executive and Managing Directors: …Several Westpac Executives and the external Auditor were also interviewed: …The focus of our investigation has been narrow and we have not interviewed people outside Westpac (except as noted above). The Panel was assisted in their work by a Secretariat and we would like to particularly thank John Arthur, Leif Evensen and Stephanie Gray for their expert assistance. The Disputed Documents may be broadly described as: (1)Chronologies: 11 chronological summaries of factual matters prepared by Allens relating to the AUSTRAC Proceeding. The Chronologies were provided to the Advisory Panel and Promontory and used by the external parties in the manner described above, and analysed in further detail below. (2)Notes: Two notes prepared by Allens, titled “Overview of AUSTRAC claims against Westpac regarding alleged contraventions of the AML/CTF Act” (the First Note) and “Privileged and confidential – Preliminary outline of facts – IFTI non-reporting” (the Second Note) dated 16 December 2019 and 16 February 2020 respectively (together, the Notes). These were sent to the Advisory Panel but not Promontory. (3)Summary: One summary document prepared by the AUSTRAC Response Secretariat Team for the Advisory Panel, in relation to which the Respondent seeks redactions of extracts of one of the Chronologies (the Summary). A second summary was at issue before the Registrar, but Westpac have now consented to its unredacted production.
Ratio Decidendi
Legal Principle Established
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