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Notes on all privilege concepts, including legal professional privilege...

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9/6/2020

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Evidence: August 2020

PRIVILEGE

Catherine Bembrick 2

Evidence Act sections • • Client legal privilege: ss 117 – 126 • Miscellaneous privileges: ss 126A – I, 127 – 128, 187 • Negotiations: s 131 • Public interest: ss 129 – 130 • Other privileges • •

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Working through privilege… 1. Is the evidence privileged? • What type of privilege applies? • What is the scope of that privilege? 2. Has privilege been waived / lost such that the evidence can be admitted? 3.

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Client legal privilege: ss 118 – 119 • Two types: • Advice privilege. • Litigation privilege. • Protects confidential communications between a client and a lawyer (and in some cases between clients or their lawyers and third parties) from disclosure. • An “important common law right, or perhaps…an important common law immunity”: Daniels [2002] HCA 49. • Evidence Act precludes privileged communications from being adduced in evidence, provided the client first objects: ss 118 – 119. • The purpose is to facilitate the administration of justice by encouraging open communications between clients and lawyers. • The privilege belongs to the client, not the lawyer, and is absolute. Once established a communication will remain privileged unless waiver occurs. •

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Section 118 • Section 118 applies to advice privilege: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or (b) a confidential communication made between 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. •

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Section 117 • Defines “client”: • “a person or body who engages a lawyer to provide legal services or who employs a lawyer (including under a contract of service)”. • Defines “confidential communication”: • “a communication made in such circumstances that, when it was made: (a) the person who made it, or (b) the person to whom it was made, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.” • Defines “confidential document”: • “a document prepared in such circumstances that, when it was prepared: (a) the person who prepared it, or (b) the person for whom it was prepared, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.” • Defines “lawyer”: “an Australian lawyer, a foreign lawyer, or an employee or agent of either of them”. • • •

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Section 119 • Applies to litigation privilege: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. •

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Esso Australian Resources v Federal Commissioner of Taxation (2000) 168 ALR 123 • Old common law test in Australia was “sole purpose test”: Grant v Downs. • Test in Evidence Act is “dominant purpose”. • Because the Evidence Act only applies to adducing evidence in proceedings, this can lead to two conflicting tests at different stages of litigation.

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• Court reconsidered decision in Grant v Downs: common law test is now the same as that in the Evidence Act – “dominant purpose”. 9

In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • Uncontested principles: • Rule of substantive law - (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). The "rule of substantive law" is, of course, affected by the terms of the Evidence Act where the Act applies. • Two-stage process - Assessing a claim for privilege under s 118 or s 119 is a two-stage process: (a) The first step is for the court to be satisfied that the communication or contents, disclosure of which is sought to be prevented, satisfies the requirements set out in s118 or s 119 or both sections. (b) The second step is for the court to be satisfied that the production of the document or the unredacted part of it would result in the disclosure of a confidential communication or the confidential contents of a document.

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In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • Onus - the party claiming privilege bears the onus of establishing the basis of the claim and the party seeking production does not bear the onus of excluding privilege (Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59). The party claiming privilege must establish the facts from which the court can determine that the privilege is capable of being asserted (National Crime Authority v S (1991) 100 ALR 151 at 159). The facts are to be proved on the balance of probabilities (Evidence Act, s 142). • Legal advice - In this context, "legal advice" is understood in a pragmatic sense. In General Manager, WorkCover Authority of NSW v Law Society of NSW [2006] NSWCA 84, at [77] to [78]: "legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context". This assumes, of course, that the advice is professional advice given by a lawyer in his or her capacity as such. •

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In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • Whether disclosure would result from adducing the evidence - the question is whether what is disclosed by adducing the evidence explicitly reveals the confidential communication or the contents of the confidential document, or supports an inference of fact as to the content of the confidential communication or document, which has a definite and reasonable foundation. Disclosure does not occur if what is adduced in evidence merely causes the reader to "wonder or speculate whether legal advice has been obtained and what was the substance of that advice" (AWB Ltd v Cole at [133], per Young J). • Communications between third party and client - communications by a third party with a client, not directed to the client's lawyers, may be protected by legal advice privilege, if the function of the communications is to enable the client to obtain legal advice and the third party is so implicated in communications made by the client to its legal adviser as to bring the third party's work product within the rationale of the privilege (Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357, at [41] per Finn J and [105] per Stone J).

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In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • Purpose is a question of fact - the purpose for which a communication is made or a document

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is created is a question of fact (Esso Australia Resources Ltd v Commission of Taxation (1999) 201 CLR 49; Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54; Bauhaus at [24]). Purpose and intended use must be determined objectively, having regard to all of the evidence (AWB Ltd v Cole at [122]). Purpose cannot be proved by mere assertion by a third party. Normally (but not always) the relevant purpose is that of the maker of the communication for which privilege is sought. • Dominant purpose - the dominant purpose of the communication must be determined objectively, having regard to all the circumstances in which the communication was made and its nature (Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689, per Stephen, Mason and Murphy JJ). What is required is an objective view of all of the evidence, taking into account the evidence not only of the author of the communication but of the person or authority under whose direction the document was prepared. If the document would have been prepared irrespective of the intention to obtain professional legal services, it will not satisfy the test (Grant v Downs, at 688, per Stephen, Mason and Murphy JJ). The existence of an ancillary purpose is not fatal to a claim for privilege, but if there are two purposes of equal weight, it is unlikely that one would dominate the other - Odgers, Uniform Evidence Law, 6th ed at [1.3.10500] to [1.3.10520]. 13

In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • A claim for privilege will not succeed if all that emerges is that the document is a commercial document or has been brought into existence in the ordinary course of business - In these circumstances, unless the court is satisfied that the dominant purpose is that identified in ss 118 or 119, no privilege applies. It is necessary to distinguish between documents brought into existence to communicate legal advice, and documents brought into existence to allow the party seeking to maintain privilege to invite comment on commercial alternatives available to it or to allow it to make a decision in the ordinary course of its insurance business as to whether or not to grant indemnity. The former may be privileged, but the latter is not, as it does not satisfy the dominant purpose test (see Seven Network Ltd v News Ltd [2005] FCA 1342 at [27]). • Failure to call relevant witnesses - If the party asserting privilege over a communication has the capacity to call direct evidence on the issue of purpose, but does not do so, the tribunal of fact is entitled to infer that this evidence would not have assisted the person's case (Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572 at 576; Hawksford v Hawksford [2005] NSWSC 796 at [19], per Campbell J).

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In the matter of Southland Coal Pty Ltd (2006) 203 FLR 1 • Inspection by the court - The court has the power to inspect the document itself to determine a claim for privilege, especially where differing kinds of claim about the basis of privilege are made (Grant v Downs (976) 135 CLR 679 at 689; Hawksford v Hawksford [2005] NSWSC 796 at [21], per Campbell J). It should not be hesitant to exercise that power (Esso Australia Resources Ltd v FCT (1999) 201 CLR 49 at 70, per Gleeson CJ, Gaudron and Gummow JJ). That is especially the case where the judge hearing the application relating to privilege is not the trial judge.

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Section 120 • Applies to self represented litigants: Evidence is not to be adduced if, on objection by a party who is not represented in the proceeding by a lawyer, the court finds that adducing the evidence would result in disclosure of: (a)a confidential communication between the party and another person, or (b)the contents of a confidential document (whether delivered or not) that was prepared, either by or at the direction or request of, the party,

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for the dominant purpose of preparing for or conducting the proceeding. • 16

Client legal privilege… 1. Was the communication or document made in confidence? s 117 2. Did the client object to the evidence being adduced? 3. Was the communication between a client and a lawyer? • If yes, what was the purpose of the communication – was it for the dominant purpose (the prevailing purpose) of the lawyer providing legal advice to the client? • If yes – it is privileged (subject to the provisions we will come to on when privilege is lost or waived). 4. If the communication is not with a lawyer, was it between a client and a third party? • If yes, what was the purpose of the communication – was it prepared for the dominant purpose of the client being provided with professional legal services relating to a proceeding or anticipated proceeding (likely or reasonably probable) in which the client is or might be a party? • If yes – it is privileged (subject to the provisions we will come to on when privilege is lost or waived). 5. 5.

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Loss of privilege • Has privilege been waived or lost? • Has the party acted in a manner inconsistent with asserting the privilege? • Was the disclosure deliberate? Partial? • Examples: referring to the substance of legal advice in a public ASX announcement; referring to the substance of legal advice in a meeting with a regulator; sending copies of advice to a third party knowingly. 1. 1.

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Section 122 – Loss of client legal privilege • Long section detailing when CLP may be lost including: (1) consent of the client; (2) where the client or party has “acted in a way that is inconsistent with the client or party objecting to the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120”. The party or client is taken to have so acted where: (3)(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person [does not include disclosure to an employee or agent or a lawyer of the client – subs (4)], or (3)(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party. • • •

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Section 122 – Loss of client legal privilege (5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because: (a) the substance of the evidence has been disclosed: (i) in the course of making a confidential communication or preparing a confidential

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document, or (ii) as a result of duress or deception, or (iii) under compulsion of law, or (iv) if the client or party is a body established by, or a person holding an office under, an Australian law-to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held, or • • • 20

Section 122 – Loss of client legal privilege (b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or (c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court. (6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness’s memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

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Mann v Carnell (1999) 168 ALR 86 • Sections 121 – 126 deal with waiver or loss of CLP. But as these provisions only apply to evidence “adduced” in proceedings (not for example pre-trial production), Mann v Carnell provides common law test for waiver in these situations. Held that there was no derivative application of the statute. • Waiver occurs when there is “inconsistency” between the conduct of the client and the maintenance of the confidentiality in the communication (even if they do not intend to waive). • Waiver can be express or implied – was the particular conduct inconsistent with the maintenance of the confidentiality which the privilege is intended to protect? • If so, the waiver is imputed by law – the law recognises the inconsistency and determines its consequences, even though those consequences may not reflect the subjective intention of the client who has lost privilege. • • •

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Expense Reduction v Armstrong (2013) 250 CLR 303 • During discovery of 60,000 documents a party accidentally discloses 13 documents on a disk that were the basis of a claim for privilege.

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• If inadvertent disclosure is not in issue, it should be corrected. • Seen as a civil procedure issue. • • • 23

Divall v Mifsud [2005] NSWCA 447 • Appeal against damages award in personal injury mater made against Divall and another, owner and driver of truck involved. • One issue was admissibility of the statement of Mr Kent who arrived at the scene and whether privilege had been waived by Mr Kent referring to it during cross-examination. • Counsel claimed privilege over the statement but did not object to Mr Kent being asked questions, the answers to which disclosed the substance of his statement – such that the trial judge held the substance had been “knowingly and voluntarily disclosed” to another person: s 122(2). • Court of Appeal (Ipp JA and McColl JA) agreed. • • • •

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Section 123 • Applies to criminal proceedings and loss of CLP by a defendant. • In a criminal proceeding, this Division does not prevent a defendant from adducing evidence unless it is evidence of: (a) a confidential communication made between an associated defendant and a lawyer acting for that person in connection with the prosecution of that person, or (b) the contents of a confidential document prepared by an associated defendant or by a lawyer acting for that person in connection with the prosecution of that person. • Note : "Associated defendant" is defined in the Dictionary. • • • •

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DPP (Cth) v Galloway (a pseudonym) [2014] VSCA 272 • Could a prosecution witness object on the basis of s 123 to answering a question in crossexamination? • Solicitor was asked in cross-examination to disclose content of legal advice given by CDPP to the AFP. • Trial judge ruled solicitor had to answer question applying s 123. • Court of Appeal held that s 123 was intended to create a statutory exception (from privilege created by ss 118, 119) corresponding to the exception in the common law. • The phrase “adducing evidence” in s 123 refers only to adducing by an accused evidence in the accused’s possession or knowledge – not any evidence that exists (the common law position). • • •

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Section 124 – joint privilege • Applies to civil proceedings with joint clients: (1) This section only applies to a civil proceeding in connection with which 2 or more parties have, before the commencement of the proceeding, jointly retained a lawyer in relation to the same matter. (2) This Division does not prevent one of those parties from adducing evidence of: (a) a communication made by any one of them to the lawyer, or (b) the contents of a confidential document prepared by or at the of any one of them, in connection with that matter.

direction or request

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Section 125 – misconduct (1) This Division does not prevent the adducing of evidence of: (a) communication made or the contents of a document prepared by a client or lawyer (or both), or a party who is not represented in the proceeding by a lawyer, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty, or (b) a communication or the contents of a document that the client or lawyer (or both), or party, knew or ought reasonably to have known was made or prepared in furtherance of a deliberate abuse of a power. (2) For the purposes of this section, if the commission of the fraud, offence or act, or the abuse of power, is a fact in issue and there are reasonable grounds for finding that: (a) the fraud, offence or act, or the abuse of power, was committed, and

the

(b) a communication w...