further OBSERVATIONS ON SPECIFIC SUBMISSIONS
56 Having regard to some of the arguments raised by the parties, it is necessary to make some further observations.
57 The approach we have adopted is consistent with comments made in Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 (Maurice), in which Aborigines claiming to be the traditional owners of certain land filed with the Aboriginal Land Commissioner and handed to the other parties a claims book in which particulars of the claim and certain material in support were set out. In the course of the proceedings the claimants made incidental reference to its contents. It was held that, by lodging and distributing the book and making limited reference to it, the claimants had not waived their legal professional privilege in relation to source materials that had been used in preparing the book but which neither formed part of it nor were mentioned in it.
58 Chief Justice Gibbs, obiter, commented that (at 480):
The matter was argued as though the question in issue was whether source material is waived by a waiver of the privilege in respect of a document derived from that source material. Although it does not matter, it does not seem to me right to suggest that the 1982 claim book was privileged. It was not a document which had been brought into existence for the sole purpose of being submitted to legal advisers for advice or use in legal proceedings: see Grant v Downs (1976) 135 CLR 674; 11 ALR 577. On the contrary the completed claim book (any drafts were no doubt in a different situation) was intended to be, and was, communicated to all the parties concerned and it was open to any party to make any proper use of it. However, if the claim book had been privileged, there can be no doubt that the distribution of the copies would have waived the privilege. On either view the question is whether the publication and use of the claim book constituted a waiver of the privilege in respect of the documents which formed some of its sources.
(Emphasis added).
59 Justice Dawson, also obiter, stated (at 495-6):
I should say at the outset that I regard it as inappropriate to speak in terms of waiver of privilege in relation to the claim book. Whilst it may be difficult to describe with any precision its true nature, the purpose of the claim book was to give notice of the claim made by the claimants, not only in relation to the area of land over which the claim was made, but also in relation to the basis of the claim, that is to say, the basis upon which it was said that the claimants were the traditional owners of the land. The practice of lodging a claim book had developed previously and its function was recognised in the revised Practice Directions issued by the Commissioner in 1979. The Practice Directions also require those appearing on the hearing of an application, as far as is practicable, to prepare and exchange statements of their intended evidence and any material of a technical nature proposed to be used as evidence and to give a copy of those statements and that material to the Commissioner's Associate before the hearing: see Aboriginal Land Commissioner's Report for year ended 30 June 1979 (1980), at pp 9-13. The development and the nature of a claim book is described by a former Commissioner, Toohey J, in an article entitled "Aboriginal Land", Federal Law Review (1988), 159 at p.173, as follows:
"Claimants are required to lodge particulars of their claim, the primary purpose of which is to identify the land claimed and those said to be the traditional Aboriginal owners. The practice has developed of lodging a claim book some weeks before the hearing. Usually this book is prepared by one or more of the anthropologists whom the claimants propose to call in support of their claim. The claim book has become a substantial and sophisticated document which not only identifies the land and the traditional owners. It plots sites of significance on a map, formulates the principle of local traditional land holding and, with the use of genealogies, identifies the traditional owners, gives some history of the claim area since white contact, and generally canvasses the advantages to the claimants and the disadvantages to others if the claim is acceded to."
No doubt a claim book ordinarily - and certainly in the case of the 1982 Claim Book - goes somewhat further than a statement of claim. But its initial purpose is to make known the case which the claimants seek to put. It may subsequently be accepted as evidence on the basis that the author or authors are available for cross-examination if required: Toohey, supra at p 173. Until it is placed in evidence, which never occurred with the 1982 Claim Book, it remains no more than a statement of the claimants' case for use in the relevant proceedings by all parties. It is a document which is intended to be communicated to the Commissioner and other participants in the hearing. It is not in any sense a confidential communication nor is it intended to be. In those circumstances I am unable to see how it is a document to which legal professional privilege attaches.
Before it emerges in its final form, successive drafts of a claim book may be privileged but this is not because of any privilege attaching to the final product. Draft pleadings in an action may be privileged, but I have never heard it suggested that a statement of claim or a defence or a reply is privileged so that the privilege is waived when it is filed or delivered to the other side. The reason why the draft may be privileged before the document is completed was early explained in Walsham v Stainton (1863) 2 H & M 1 at 4 ; 71 ER 357 at 358, upon the basis that, although after a pleading has been filed it becomes publici juris, the drafts "might disclose the precise character of confidential communications with the solicitor, by showing the alterations made from time to time". In the same way a letter to the other side in litigation which is drafted in a solicitor's office may be privileged before it is sent because it may reveal confidential communications between the solicitor and his client. Once it is sent, however, it ceases to be confidential and there is no privilege in it, not because privilege in the document is waived, but because no privilege attaches to it.
When the claim book in this case reached final form or, at all events, when it was put to the use for which it was intended, it was not a confidential communication and not a privileged document. Legal professional privilege exists to secure confidentiality in communications between a legal adviser and his client but it can have no application in relation to a document the purpose of which is to communicate information to others. Of course, what is contained in such a document may reveal some confidential communication between a legal adviser and his client, but if it does do so and so waives privilege, the waiver is of the privilege in the anterior communication and not in the document itself.
(Emphasis added.)
60 The ACCC sought to distinguish the type of documents referred to in Maurice 161 CLR 475 from the finalised proofs of evidence. The ACCC contended that the sort of documents discussed in Maurice are ones which are similar to the claim book the subject of that case, namely documents which will become public. The ACCC alternatively contended that final versions of affidavits and statements of claim prepared for filing in proceedings would not attract privilege (although drafts of those documents would) but that finalised proofs of evidence are fundamentally different in character because that they may never be tendered or even referred to at trial. The ACCC referred to the existence of the "Harman" (or implied) undertaking which Heerey J expressly ordered would bind Visy in relation to the finalised proofs of evidence, and argued that this supported the notion that the ACCC, when producing its finalised proofs of evidence, expected that an obligation of confidence was owed by Visy and that this confidence underpinned the privilege which it claims subsisted in the finalised proofs of evidence.
61 There is undoubtedly a distinction between a pleading on the one hand and proofs of evidence and affidavits filed in accordance with a direction given by the Court on the other. Pleadings may be inspected, unless a confidentiality order is in place, by a search of the Registry: see O 46 r 6(1) and (2) of the Federal Court Rules (Cth). On the other hand, affidavits and witness statements filed will not be able to be inspected without the leave of the Court, and this may not occur if the affidavit or witness statement has not been admitted into evidence or otherwise relied upon or referred to: see O 46 r 6(3) and Churche v Australian Prudential Regulation Authority (No 3) [2006] FCA 1168 at [26]. We note that, whilst O 46 r 6(3) distinguishes between affidavits (see O 46 r 6(3)(a) and unsworn statements of evidence (see O 46 r 6(3)(b)), no different consequence arises from the fact that there exists affidavits or unsworn statements of evidence.
62 However, even accepting this distinction between a pleading and unsworn statements of evidence, is this a relevant distinction in the circumstances of this case, for determining whether legal professional privilege attaches to the finalised proofs of evidence intended to be given to an opponent, not otherwise sought to be made confidential? Does it matter that members of the public do not have access to the finalised proofs of evidence through a search of the Registry, when the opponent has access to the proofs, and can disclose their contents to other persons, subject only to specific portions of them being confidential, and subject to the principles of Harman 1 AC 280? Further, is there a relevant distinction between final affidavits and finalised proofs of evidence?
63 In our view, the operation of the Rules of Court and legal professional privilege are quite distinct. It may be that the general law protection provided by the Harman principle is buttressed by Rules of Court (see Hearne 235 CLR 125, 155 at [98]), but this is in relation to accessing the court file. The Rules of Court do not inform, nor impact upon, the principles of legal professional privilege. The fact that a pleading may become public is not to the point. Once a document in question (here the finalised proof of evidence) is intended to be given to an opposing party, it is not a document in which privilege subsists. As a matter of principle, this is sufficient to conclude that no privilege attaches to the finalised proof of evidence.
64 Further, we see no distinction for the purposes of this appeal between final affidavits and finalised proofs of evidence. Whilst the use that can be made of such documents at trial may depend on this distinction, for the purposes of determining whether privilege attaches to such documents, there is no consequence based on the distinction. The cases relied upon by the ACCC do not make this distinction for the purposes of the application of the principles we have applied: see Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 (Liberty Funding) at [21] (where the distinction was as to an affidavit which was in the nature of discovery, not an affidavit of evidence to be read at trial) and Austress Freyssinet Pty Ltd v Marlin International Pty Ltd [2002] NSWSC 958 (Austress) at [6]-[8] per Barrett J (where reference was made to both affidavits and witness statements). Importantly, whether it be an affidavit, witness statement or finalised proof of evidence, the purpose in serving and filing is not within the rationale of litigation privilege once disclosed to an opposing party. This is because, if the privilege is to protect the confidential communication between one party and that party's legal advisers as to the evidence that might be led at trial, the very giving of such information to the opposing party flies in the face of the rationale for the continued existence of the litigation privilege.
65 The ACCC further relied upon State Bank of South Australia v Smoothdale (No 2) Limited (1995) 64 SASR 224 (Smoothdale), which addressed the issues currently under discussion, as well as the issue of waiver.
66 In Smoothdale, King CJ, with Mullighan and Nyland JJ concurring, made the following observations relevant to the first issue before us (at 226-7):
The argument sought to be advanced by the appellant is that the statements of which production is sought, as distinct from the original statements taken from the witnesses, were prepared and signed for the purpose of compliance with the order, and were not documents brought into existence for submission to legal representatives for the sole purpose of use in legal proceedings; Grant v Downs (1976) 135 CLR 674, Baker v Campbell (1983) 153 CLR 52 at 108 per Brennan J. I think that the argument is fallacious. The documents in question are in substance merely a reproduction of statements already obtained from witnesses for the sole purpose of use in the proceedings, in a form suitable for compliance with the order. They do not lose their character as statements of witnesses because they are prepared with a view to compliance with the order. It is true that the court may order their use as evidence in chief at the trial, but I do not think that that prospect affects the essential character of the documents as statements of witnesses.
It is implicit in the argument for the appellant that privilege would not attach to statements of witnesses prepared and signed with a view to compliance with the usual order, notwithstanding that they were never delivered pursuant to the order because a decision was taken not to call the witnesses. They would be discoverable documents in those and any other proceedings. That, as it seems to me, would make a mockery of legal professional privilege and exposes the plainly fallacious nature of the argument.
In my opinion it is plain that legal professional privilege attached to the statements until they were delivered pursuant to the order. The point sought to be raised by amendment is plainly untenable and the proposed amendment should be refused for that reason, quite apart from the question of whether the point should be permitted to be raised at this stage.
It was argued by Mr Conti that even if the statements were privileged when brought into existence, they ceased to be privileged documents when delivered to the other parties, quite apart from any question of waiver, because they were no longer confidential documents. He relied upon a passage in the judgment of Dawson J in Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 495-496. There is, however, a marked difference between the purpose and function of the claim book in that case and of statements of witnesses. The claim book's very purpose was to communicate the particulars of the claim to the Aboriginal Lands Commissioner and the other parties. Once communicated, there could be no element of confidentiality. Statements of witnesses are by their nature confidential documents. Their communication to another party for a limited purpose pursuant to a court order does not appear to me to deprive them necessarily of every element of their confidential character. They retain the character, except as to use by the other party for the limited purpose, "until either the witness makes the statement public by verifying it on oath in the witness box or the party who served the statement waives the privilege", Fairfield-Mabey Ltd v Shell UK Ltd [1989] 1 All ER 576 at 577, or a party puts the statement in evidence pursuant to leave granted under par 3(e) of the Practice Note. Olney J explained the distinction between the Claim Book in Maurice's case and statements of witnesses, in Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337 at 339-341, and I adopt that explanation.
67 We are mindful that in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-2, Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ reminded us that Australia has the one common law, and that:
Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction … unless they are convinced that the [decision] is plainly wrong.
68 It was contended by Cadbury that the decision in Smoothdale 64 SASR 224 is plainly wrong. However, it has been adopted in a number of cases, as referred to by the primary judge.
69 Apart from arguing that the decision in Smoothdale was contrary to principle, Cadbury relied upon the decision in Liberty Funding 218 ALR 283 in an attempt to undermine the authority of Smoothdale. In Liberty Funding, the Full Court of the Federal Courtdoubted the correctness of the approach taken in Smoothdale, and said that (at [24]):
Whilst on the approach that we have taken it is unnecessary to analyse Smoothdale, Akinand Sevicin detail, it appears to us that there is a real issue as to the correctness of those decisions, at least in so far as they deal with the question of waiver at common law by service of statements (or affidavits) of witnesses in advance of the trial.
70 However, their Honours expressly stated that the matters raised by Liberty Funding could be disposed of 'without the necessity for expressing a concluded view on the correctness or otherwise of the approach of the Full Court in Smoothdale or of the Court of Appeal in Akins v Abigroup Ltd (1998) 43 NSWLR 539or Sevic v Roarty (1998) 44 NSWLR 287': see Liberty Funding at [27]. In any event, the doubt expressed in Liberty Funding as to the correctness of Smoothdale seemed to be especially directed to the issue of waiver, and not the first issue in this appeal.
71 Therefore, it is necessary for us to consider from the point of view of legal principle and the rationale of litigation privilege the reasoning in Smoothdale as referred to above.
72 At one level, there is a clear distinction between the circumstances upon which the court in Smoothdale proceeded and the present circumstances. Here, the evidence is that the finalised proofs of evidence were for the purpose of being provided to Visy so as to convey to it the content of the evidence to be adduced by the ACCC. As the passage from the judgment of King CJ in [66] above indicates, the purpose of the witness statements in issue in that case was for consideration by the legal representatives of the party which caused them to be created for use in the proceedings. We do not, therefore, regard Smoothdale as directly addressing the particular circumstances of this case.
73 However, if these observations in Smoothdale do relate directly to the present circumstances, we do not consider it correct to conclude that the final witness statements were being prepared and signed for the purpose of compliance with a court order or that the documents were merely reproductions of statements already obtained by witnesses for the sole (now dominant) purpose of use in the proceedings so that they were privileged. This fails to appreciate a number of matters. Drafts and final proofs are by nature and in fact different documents. A draft may well include information which is not included in a final version of a witness statement given to an opposing party. A draft may well be a 'discussion' document, intended only to be seen and considered by the party's legal advisor. It should not be assumed that the final version is just a reproduction of anything that comes before it. Even if it be so, once the decision has been made to call a particular witness to give evidence and that the evidence will comprise that which is in the witness statement, that final witness statement assumes a different character. The final version of a proof of evidence is the document prepared for disclosure to the court and to the opponent. The 'essential character' of a final proof of evidence is to make disclosure to the opponent and the court of the evidence which is proposed to be led at trial. Such finalised witness statements may be prepared in the finalised form because of the court order for disclosure of evidence before the hearing. However, the fact remains that the purpose of the party preparing and delivering a final version of a witness statement is to give advance notice of what evidence that party proposes to put before the court. It does not matter whether the finalised version was or was not intended to be tendered in court - the purpose of bringing into existence the finalised proof of evidence was to give it to the opposing party at the time of service and to disclose the information contained in the proof.
74 Chief Justice King also distinguished between a final version of a statement of claim (or claim book) and witness statements. We have already considered this distinction. Chief Justice King said that statements of witnesses are 'by their nature' confidential documents. He relied upon two cases Fairfield-Mabey Ltd v Shell UK Metallurgical Testing Services (Scotland) Ltd [1989] 1 All ER 576 and Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337, to support his conclusion.
75 We do not consider that reliance on those two cases assists in the application of principle. The cases referred to do not examine the issue as one of legal professional privilege, but by reference to the Harman implied undertaking. This was explained by Hill J in Complete Technology 53 FCR 125 at 133-4:
In reaching this conclusion I have the misfortune to differ somewhat from the comments made by Olney J in Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337. In that case his Honour had to consider whether discovery should be ordered of witness statements filed in proceedings brought by the applicant in this Court against a third party in the Supreme Court of Victoria. Those witness statements had been filed and served in the Victorian proceedings but not read. It had been argued that the witness statements attracted legal professional privilege. The argument in support of the continued existence of legal professional privilege relied upon Maurice's case. This, his Honour regarded, with respect, correctly, as distinguishable because the claim book was in the nature of a pleading and as such did not constitute a waiver of privilege of the underlying material. It seems that no other authority was cited to his Honour. However, his Honour found support for the view that the witness statements, although served, continue to attract legal professional privilege in decisions in the United Kingdom in Fairfield-Mabey Ltd v Shell UK Ltd [1989] 1 All ER 576 and Prudential Assurance. In the former, Judge Bowscher QC had said, inter alia, (at 577):
"I take the view that such statements are served on a confidential basis and that they remain confidential until either the witness makes the statement public by verifying it on oath in the witness box or the party who served the statement waives the privilege. The confidence in the statement is the confidence of the party on whose behalf the statement was taken. That is not to say that there is any property in a witness. It may be that more than one party will take a statement from one particular witness but each statement will be confidential to the party taking it." (Original emphasis).
In this ruling, it will be noted no reference is made referring explicitly to legal professional privilege. The ruling, which was given in the course of a trial, dealt with the manner in which witness statements exchanged might be used during the trial. It does not accord with what I understand to be the practice adopted in this court, nor for that matter the practice adopted in the Supreme Court of New South Wales.
Olney J referred also to the Prudential Assurance case, particularly at 769; 890 where Fairfield-Mabey Ltd is referred to, but only as a case to which reference had been made in the course of argument. I have already referred to Prudential. That case also does not refer specifically to legal professional privilege, although what is said by Hophouse J (at 774; 894) may have been intended to relate to it. At that page his Honour said:
"In my judgment when a statement is served pursuant to a direction given under O 38, r 2A and the witness to whose evidence that statement relates is never calledby that party to give evidence (whether it be because the trial never takes place or for any other reason) that statement remains a privileged document in the same way as a without prejudice communication remains privileged. The party serving the statement may not be compelled to disclose the statement to any other person and is entitled to prevent any other person using that statement without his consent and, in particular, using it in evidence against the person who originally served the statement."
However, later on that page and at 775 his Honour referred to the matter as arising under the duty that was owed to the Court, breach of which amounted to contempt, and which duty could be released by the Court. It would be strange if the Court could act in such a way as to waive legal professional privilege. Rather, it seems to me, that his Honour was referring to the [implied undertaking] to which I have referred.
76 The Harman principle seems to us to be the principle to apply in the case of disclosure to an opponent pursuant to a Rule of Court, or Court direction, not by recourse to principles of litigation privilege. If the principles are as we have stated them, then the argument that the finalised proofs of evidence did not attract legal professional privilege is to be readily accepted. Whilst clearly created for the purposes of existing litigation, they were created to be served upon Visy, the opponent in adversarial litigation, and thus no privilege could arise. However, the principles of Harman 1 AC 280 (as explained by the High Court in Hearne 235 CLR 125) would provide the protection needed so that the information contained in the finalised proofs of evidence could not be misused.
77 We consider, therefore, that the principles enunciated in Smoothdale on this issue, if they apply directly on the present facts, are inconsistent with the rationale of litigation privilege and are clearly wrong, and should not be followed.
78 If we are correct in the above analysis, no other questions necessarily arise for determination.
79 We should indicate that Cadbury argued that, even if the finalised proofs of evidence as at the time of their creation were held to be privileged, the case of Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501, with its emphasis on communications rather than documents, requires a separate consideration of the service of the statements on Visy in order to establish whether that communication was privileged (independently of any privilege which existed in the document immediately prior to service).
80 On our analysis, whenever and whatever the 'communication' was for the purposes of the application of the principle of litigation privilege, focussing on the creation of the finalised proof of evidence, or its service upon Visy, the purpose was to give them to the ACCC's opponent. This itself disposes of the appeal for the reasons outlined above.
81 In these circumstances it is unnecessary to consider the application of the principles discussed in Spotless Group Ltd v Premier Building and Consulting Group Pty Ltd (2006)16 VR 1 (Spotless), and whether the majority view in that case was correct in the characterisation of the 'communication' made in that proceeding.
82 Whilst unnecessary to do so, as the waiver question was considered by the primary judge and extensive argument was addressed on this issue, we now proceed to consider the waiver issue.