Australian Competition & Consumer Commission v George Weston Foods [2003] FCA 601 | Case summary

Summary of GWF's submissions to the Court 23 GWF contended that because legal professional privilege had been at all material times claimed in respect of the privileged materials, legal professional privilege had been neither expressly nor impliedly waived, 'implicitly' being used in the sense of 'imputed'. Mr Jackman SC, who appeared for GWF, submitted that the production of documents under compulsion, or under the threat of compulsion, does not in principle amount to waiver of the privilege attaching to the documents, and cited in support of that submission Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 (at 540) (Giles J), where it was held that legal professional privilege had not been waived by production of documents pursuant to a demand made under compulsion of the Local Government Act 1919 (NSW). That exception to the imputation of implied waiver was subsequently cited by the High Court with approval in Goldberg v Ng (1995) 185 CLR 83 (at 95) (Deane, Dawson and Gaudron JJ), (at 110) (Toohey J) and (at 122-123) (Gummow J); (at 123) Gummow J (in the minority with Toohey J) observed in my opinion uncontroversially that 'Giles J treated as very significant the circumstance that an alleged implied waiver of legal professional privilege involved making documents available to enable the recipients to carry out their statutory duties and that there existed statutory compulsory processes. I agree'. It was further submitted that the combined operation of s 155 of the TP Act and the Full Federal Court's decision in Daniels, for the period of time during which that decision remained authoritative,carried the consequence that the production to ACCC of the privileged material had occurred under compulsion, and that therefore there had not thereby taken place any waiver of privilege. Reference was made to the fact that ACCC had accepted from the outset the respective positions of GWF and Mr Pascoe that no waiver of the privilege was intended by the production of those documents, and that it was only following upon the High Court's reversal of the Full Federal Court's decision in Daniels,by finding that privilege could not be maintained in answer to a s 155 notice, that ACCC first asserted that both GWF and Mr Pascoe were not entitled to maintain that claim of privilege. 24 It was then contended by GWF that the appropriate relief to be granted, in circumstances where privileged or otherwise confidential information has been unlawfully obtained, should be formulated in accordance with the principles and forms of relief enumerated by Campbell J in AG Australia Holdings Ltd v Burton [2002] NSWSC 170 and also at 454, a case involving breach of a duty of confidentiality owed to the plaintiff by the voluntary provision of material in a witness statement concerning certain litigation. GWF submitted that reference by Campbell J to Lord Ashburton v Pape [1913] 2 Ch 469 indicated that the principles concerning the appropriate relief apply as much to privileged documents as they do to other kinds of confidential information. It was emphasised that GWF had sought orders to similar effect, on the basis that ACCC is not entitled to retain any benefit it may have received, or may in the future receive, from its access to GWF's privileged material. Consequently, so GWF's submissions continued, such orders should require 'at the very least' the destruction of first, all copies of the privileged documents, secondly, any notes or memoranda which contain material derived from those documents, and thirdly the transcripts of examinations or interviews in relation to which (on ACCC's express concession) ACCC had made use of all such documents. It was further contended that GWF was entitled to an order preventing ACCC, and its Commissioners, employees and legal advisers, having knowledge of the information contained in the privileged material, from being involved in or consulted in relation to, the subject matter of the proceedings against GWF. Summary of Loneragan's submissions to the Court 25 Mr. Tonking of Counsel, who appeared for the second respondent Mr Loneragan, adopted the submissions of Mr Jackman SC as to the operation of the doctrine of legal professional privilege in Australia and contended that there had been no intentional or imputed waiver established on the facts and circumstances placed in evidence before the Court. It was submitted on behalf of Mr Loneragan that the disclosures which occurred in the present case on the part of GWF and Mr Pascoe was not caused by any purported reliance on that material in order to justify their position or to dissuade ACCC from commencing the present or any related litigation, and further that GWF did not act inconsistently with the claim for privilege by refraining from taking any action against ACCC similar to that pursued by Coles Myer and the other companies in the High Court proceedings referred to in [14] above. It was also contended on behalf of Mr Loneragan that for the Court to find that GWF or Mr Pascoe had acted inconsistently with the claim for privilege, by failing to commence proceedings in the original jurisdiction of the High Court to restrain ACCC from compulsorily acquiring the privileged materials, pending determination of the special leave application in the Daniels litigation, would impose 'too high a standard even for a corporation which might be thought to have the required resources to do so'. I should formally record that ACCC did not object to Counsel for Mr Loneragan making submissions, notwithstanding that Mr Loneragan was not an applicant in relation to the proceedings the subject of the Amended Notice of Motion filed on 14 April 2003 for the relief sought by GWF. Summary of ACCC's submissions to the Court 26 ACCC's case in response may be summarised by the proposition that any privilege attaching to the correspondence listed in [2] above had been waived because of the principle of imputed or implied waiver. Alternatively it was contended that there had been limited waiver entitling ACCC to use the documents and the information derived therefrom with respect to its investigation and possible proceedings flowing from the investigation. It was contended that by reason of GWF and Mr Pascoe having acted inconsistently with any entitlement to claim privilege, to the extent of failing to initiate proceedings of the kind pursued in the High Court in the Daniels litigation or Woolworths and Coles Myer litigation, ACCC became thereby entitled or enabled to put to appropriate use the documents, and the information susceptible to being derived therefrom. By 'appropriate use', I refer of course to use in the context of any investigation into conduct of GWF and Mr Loneragan that may have constituted a contravention of the TP Act, and to do so in the further context of any proceedings open to be instituted by ACCC pursuant to that investigation. The following circumstances in particular were contended by ACCC to give rise to waiver of privilege on the part of GWF, given that ACCC had acted at all material times in accordance with the state of the applicable law and legal principles concerning the operation of s 155 of the TP Act, exemplifying thereby in particular the Full Federal Court's decision in Daniels: (i) no constraint was sought to be placed by GWF and Mr Pascoe on the use of the relevant documents by ACCC, whether by injunction or otherwise; (ii) in particular, no step or steps were taken by GWF and Mr Pascoe to obtain appropriate injunctions against ACCC, as occurred at the instance of Woolworths and Coles Myer in their dispute with ACCC, notwithstanding the context of the Full Federal Court's decision in Daniels, and the special leave application made to the High Court pursuant thereto; nor were any relevant steps taken by GWF and Mr Pascoe after Coles and Woolworths had obtained interim injunctive relief against ACCC from the High Court, or after special leave to appeal was granted by the High Court in Daniels; (iii) GWF and Mr Pascoe had produced documents to ACCC that fell outside the ambit of those requested by ACCC's s 155 notice, yet they took no steps to mask, seal or otherwise prevent the use of those portions which conveyed legal advice, whereof ACCC had not compelled production; reference was made to the decision of the Federal Court in Optus Communications Pty Ltd v Telstra Corporation Limited (BC9506137) (27 April 1995), where Lockhart J observed that '[i]t is well established that parts of documents may be masked so as to attract legal professional privilege'; (iv) following the grant of interim injunctions against ACCC in favour of Coles and Woolworths, ACCC had indicated that it would not press for further material that might have been the subject of legal professional privilege, yet no attempt was made by GWF or Mr Pascoe to restrain ACCC from continuing to use the documents which had already been produced from the custody of GWF or Mr Pascoe to ACCC, or to use the information capable of being derived therefrom; (v) GWF and Mr Pascoe were aware that ACCC required the privileged materials purportedly pursuant to its powers of investigation, and that those documents were likely to play a role in the GWF investigation, and any subsequent proceedings which might be taken by ACCC against GWF (and possibly Mr Pascoe) for contraventions of the TP Act; (vi) at the time of providing the privileged materials to ACCC, neither GWF nor Mr Pascoe asserted to ACCC that in the event that the High Court ultimately determined in the context of Daniels that s 155 of the TP Act did not entitle ACCC to demand documents the subject of legal professional privilege, they would adopt the stance that the GWF/Lonergan investigation, or any proceedings taken by ACCC pursuant thereto, was unlawful or an abuse of process, or otherwise 'irretrievably tainted', such that ACCC should be prevented by injunction from prosecuting any such proceedings; (vii) various persons within ACCC, including its legal advisers, have retained knowledge of the contents of the privileged documents, and ACCC has regulated its conduct in relation to the investigation and the commencement of proceedings in reliance upon the documents and the information contained therein (Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 (at 356-358); Kabwand Pty Ltd v National Australia Bank (1987) 16 FCR 85 (at 87.5); and I would add that it was also submitted by ACCC that the injunctions sought by GWF's notice of motion, as to restraint upon ACCC using the privileged material, constituted more than the 'adducing of evidence', as that expression is used in the Evidence Act 1995 (Cth) but the ultimate significance of that submission was not apparent. 27 Reliance was thus placed by ACCC upon the doctrine of waiver, and the following dictum of Handley JA in Yuill v Corporate Affairs Commission (1990) 20 NSWLR 386 (at 413A): 'In my view, waiver of privilege by a client in producing or permitting his solicitor to product privileged documents to an inspector would constitute a final waiver of the privilege with respect to those documents for all purposes. The client ought to have in contemplation the uses which the inspector may make of those documents. These will include showing them to witnesses, reproducing them, in whole or in part, or otherwise referring to their contents in his report, that the report may be printed and published by the Minister or the Ministerial Council… and that finding of fact by the inspector will be prima facie evidence in civil proceedings." I interpolate to observe that the High Court (Gleeson CJ, Gaudron, Gummow and Hayne JJ) in Daniels observed at [35] that '…it may be that Yuill would now be decided differently'. Nor was any application made to the Court, so ACCC further submitted, to prevent ACCC gaining access to and using the documents, notwithstanding an awareness on the part of GWF concerning the reliance which ACCC was likely to place upon the documents in its investigation. That submission affords no significance to the circumstance that GWF has acted promptly, following upon the reversal by the High Court of the Full Federal Court's decision in the Daniels litigation. Principles arising for consideration and application 28 A convenient starting point is the precept that legal professional privilege at common law is a 'practical guarantee of fundamental rights' (Goldberg at 121 per Gummow J), and is not confined to judicial or quasi-judicial proceedings (Baker v Campbell (1983) 153 CLR 52). ACCC's processes undertaken to date in relation to the GWF, and also Messrs Loneragan and Pascoe, pursuant to s 155 of the TP Act, appear to have relevantly been neither judicial nor quasi-judicial. The jurisprudence of Australia is replete with explanations and illustrations of the precept of legal professional privilege, and its implications. For instance in Grant v Downs (1976) 135 CLR 674, the following dicta appears in the joint judgment of Stephen, Mason and Murphy JJ (at 685): 'The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. As a head of privilege, legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decisions.' 29 In Baker v Campbell,Deane J as one of the majority of the High Court spoke (at 114) of '[t]he importance of the principle that a person should be able to seek relevant legal advice and assistance without apprehension of prejudice', and his Honour further observed (at 115) that the principle '…could not even be sacrificed to promote the main purpose of the existence of courts of justice, namely the discovery, vindication and establishment of truth'. In more recent times, Kirby J in Daniels (at 584) cited with approval what was said byAdvocate-General Slynn in A M & S Europe Ltd v Commission of European Communities [1983] QB 878 (at 913) in relation to the principle as follows: 'Whether it is described as the right of the client or the duty of the lawyer, this principle has nothing to do with the protection or privilege of the lawyer. It springs essentially from the basic need of a man in a civilised society to be able to turn to his lawyer for advice and help, and if proceedings begin, for representation; it springs no less from the advantages to a society which evolves complex law reaching into all the business affairs of persons, real and legal, that they should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.' 30 In Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49, the High Court resolved, prior to the events the subject of the present notice of motion, the issue whether client legal privilege under the Evidence Act, as distinct from the common law of legal professional privilege, applied derivatively to ancillary legal processes such as the discovery, production and inspection of documents, in contrast to the adducing of testimony in the 'court room'. Gleeson CJ, Gaudron and Gummow JJ held that ss 118 and 119 of the Evidence Act applies only to the adducing of evidence and therefore not to any such ancillary processes (at [32-34]). The expression 'adducing of evidence' appearing in s 122 of the Evidence Act is not defined, and its limits did not fall for definition in Esso, though it was discussed in Esso by way of contrast to the ancillary processes of discovery and inspection of documents. McHugh J agreed at [64], and likewise Callinan J at [149]. Further, Gleeson CJ, Gaudron and Gummow JJ (at [60]-[61], and Callinan J at [166]-[167]), remoulded the operation of legal professional privilege, so as to subject the same to the dominant purpose test as expounded in the minority view of Barwick CJ in Grant v Downs at 677, and thus to the exclusion of the sole purpose test. 31 In the light of the High Court's reasons for judgment in Esso, the distinction should be drawn between legal professional privilege at common law and client legal privilege under the Evidence Act(see in that regard [6], [16], and [23] of the reasons for judgment of Gleeson CJ, Gaudron and Gummow JJ). One aspect of the distinction for present purposes is that '…the provisions of s 122 [of the Evidence Act] as to the circumstances in which privilege may be lost are not identical to the corresponding common law principles' (Mann v Carnell [1999] 201 CLR 1 at [23] (per Gleeson CJ, Gaudron, Gummow and Callinan JJ) (the High Court judgments in Esso and Mann were delivered contemporaneously). 32 Gleeson CJ, Gaudron, and Gummow JJ observed in Esso that '[o]ther legislatures have not yet enacted similar legislation' to the Evidence Act (ie legislatures other than those of the Commonwealth, the State of New South Wales and the Australian Capital Territory), and that '[f]urthermore, the legislation, even in the jurisdictions where it applies, in its terms leaves untouched certain areas in which the privilege may operate', and that therefore 'in such a setting, there is no consistent pattern of legislative policy to which the common law in Australia can adapt itself' (at [23]). Callinan J observed to similar effect that he '…would reject the theory that [the Evidence Act] operates to alter the common law, so as in some way to make its provisions applicable to circumstances other than the adducing of evidence' (at [44]), being an observation consistent with the view of the joint judgment of Gleeson CJ, Gaudron and Gummow JJ. 33 The dichotomy of operation of client legal privilege and legal professional privilege, since the coming into force of the Evidence Act, is of significance in the circumstances of this case because the relief sought is not limited to preventing the giving or adducing of evidence in the 'courtroom'. The process of inquiry by ACCC under s 155 is not yet apparently completed. Not only does GWF seek to restrain ACCC from 'adducing' evidence of the privileged material but also from 'referring, disseminating, communicating or making use of' the privileged material. Consequently, it becomes appropriate to consider the present application by reference to relevant principles of the common law, as well as to the operation of the Evidence Act. 34 The Evidence Act regulates client legal privilege by imposing a 'dominant purpose' test, in the context of resolving whether privilege attaches to a relevant communication or document.Thus ss 118 and 119 provide respectively as follows: '118. Legal advice 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 or a lawyer; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 119. Litigation 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.' 35 In s 117(1) of the Evidence Act, 'confidential document' is defined to mean 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'. The meaning of a 'confidential communication' is defined by s 117(1) in similar terms. A confidential document would normally of course extend to a document embodying legal advice. Both definitions are here material. 36 Loss of client legal privilege is provided for in s 122 of the Evidence Act, and stipulates as follows, so far as is presently material: '122 Loss of client legal privilege: consent and related matters (1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: … (c) under compulsion of law; … (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party …' 37 The relationship between subs 122(2) and (4) was considered by McLelland CJ in Equity in Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 346 (at 351), his Honour holding that both subsections have discrete fields of operation in that: '… a disclosure by a client or party itself or by an employee or agent of the client or party (or by any other person within the s 117 definition of "client" or "party") is governed by subs (2) and not by subs (4), and a disclosure by any other person or entity is governed by subs (4) and not by subs (2).' I would observe that the disclosure by GWF of the privileged material was made in circumstances governed by subs (2) of s 122, namely under compulsion of law, being the compulsion inherent in the service by ACCC of the s 155 notices upon GWF and Mr Pascoe, and in the light of the Full Federal Court's determination in Daniels which prevailed at the times of disclosure. 38 In Ampolex Pty Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12, in the context of the loss of privilege provisions of s 122 of the Evidence Act, Rolfe J gave (at 22) an illustration of the distinction between a voluntary disclosure and a disclosure made under compulsion of law: 'I assume that the word 'voluntary' is intended to mean something other than "under compulsion of law", which appears in par (c). I think the distinction is that the disclosure was made voluntary, in the sense that it was not made by way of mistake, it being possible that a disclosure may be made "knowingly" yet by way of mistake and, accordingly, perhaps not voluntarily.' 39 It has also been held that whatever may be the precise limits of the words 'knowingly and voluntarily', where used in s 122 of the Evidence Act, the same '…do not apply in a case where everything indicates an intention to claim privilege in respect of the document and what has gone wrong is attributable to sheer inadvertence or carelessness' (Sovereign v Bevillesta [2000] NSWSC 521 at [23] per Austin J). GWF have sought comfort from that dictum, because of the degree of uncertainty or ambiguity which may be distilled in the circumstances of the communications between GWF and ACCC, which have been extracted and/or summarised in [7-12] above. I do not think that the disclosure of documents made by GWF to ACCC could be described as 'inadvertence or carelessness'. The respondents pointed out further that the voluntary disclosure contemplated by s 122 is the disclosure of the 'substance of the evidence', to cite the subs 122(2) expression earlier extracted, and that the test has been described as a 'quantitative one, which asks whether there has been sufficient disclosure to warrant loss of the privilege' (The Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360 at 371 per Olney, Kiefel and Finn JJ). GWF submitted that in the events which happened, its conduct and that of Mr Pascoe did not fall foul of any of these tests. I should record, incidentally, that no cross-examination was undertaken by ACCC of Ms Peter of Allens Arthur Robinson in relation to the production of the documents in question to ACCC on behalf of either GWF or Mr Pascoe, notwithstanding the comprehensive nature of them. 40 As to ACCC's case of waiver on the part of GWF and Mr Pascoe, although legal professional privilege is obviously an important right deserving of special protection, it is of course a right which may be waived by the party otherwise entitled to the privilege, in circumstances where that party performs an act which is inconsistent with the confidence otherwise susceptible to preservation, irrespective of the subjective intention of the party prima facie entitled otherwise to the privilege (Mann v Carnell at [28-29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ). Waiver in any such circumstances may be in principle express or implied, deliberate or inadvertent (Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485). In Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 Mason and Brennan JJ (at 487) described the circumstances in which waiver of privilege may occur as follows: 'A litigant can of course waive his privilege directly through intentionally disclosing protected material. He can lose that protection through waiver by implication. An implied waiver occurs when, by reason of some conduct on the privileged holder's part, it becomes unfair to maintain the privilege.' 41 The circumstances in Goldberg provide an unusual but nevertheless possibly relevant example of the objective nature of the test of waiver of privilege, and its application. Those circumstances were that a solicitor, who had disclosed privileged material of a former client to the Law Society of New South Wales for the limited purpose of influencing the Society in relation to its investigation of a complaint made against the solicitor by that former client, was held not to have been entitled to claim privilege in respect of the material so provided to the Law Society, in the context of subsequent litigation between the solicitor and the former client. In relation to the circumstances giving rise to that litigation, the Evidence Act (NSW) had not yet taken effect, the commencement whereof having been on 1 September 1995. The following passages in the joint majority judgment of Deane, Dawson and Gaudron JJ in Goldberg describe the unusual circumstances in which legal professional privilege (ie at common law) may be lost and in which issues of fairness in a common law context as to maintaining the privilege may be rendered material: 'It is clear that there has been no express or intentional general waiver by Mr Goldberg of legal professional privilege in the present case. Any waiver of the privilege as against the Ngs, if there has been one, must have resulted from Mr Goldberg's disclosure of the relevant documents to an officer (Ms Shirvington) of the Law Society. That disclosure was for the limited purpose of dealing with inquiries made on behalf of the Law Society in relation to the complaint which had been made against Mr Goldberg by Mr Ng and was on the express basis that the documents would not be shown to anyone else. It could not properly be seen as constituting an express or intentional general waiver of legal professional privilege or as destroying the confidentiality which is necessary for its maintenance. Accordingly, if there was a waiver of the privilege as against the Ngs, it was a waiver imputed by operation of law in the particular circumstances. (95) … Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether "fairness requires that his privilege shall cease whether he intended that result or not". That does not mean, however, that an imputed waiver must completely destroy the privilege. Like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes. (96) … It follows that the critical question in the present case is whether Mr Goldberg's disclosure of the privileged documents to the Law Society gave rise to a situation where ordinary notions of fairness required that he be precluded from asserting that those documents were protected from production for inspection by the Ngs in the related Equity proceedings between the Ngs and the Goldbergs. (98) … In the Court of Appeal, both Mahoney JA and Clarke JA concluded that the effect of the delivery of the relevant documents to the Law Society was that it would be unfair to permit reliance by Mr Goldberg upon legal professional privilege to prevent those documents being made available for inspection by the Ngs. Their Honours approached the question of fairness on the basis that, notwithstanding that it was at the request of Ms Shirvington. In that, they were fully justified. It is true that the Law Society possessed powers of compulsion. It is also true that a failure by a solicitor to respond adequately to a complaint of professional misconduct might, in some circumstances, be seen by the Law Society as itself constituting such misconduct. (100) … The disclosure of the relevant documents to the Law Society was not restricted to perusal by Ms Shirvington. Clearly, the documents were handed over on the understanding that Ms Shirvington and other officers of the Law Society could make whatever internal use of them was thought appropriate in dealing with the various aspects of Mr Ng's complaint. Presumably, they played some part in procuring that result. In that regard, it is relevant to note that it has not been suggested that Mr Goldberg provided any other written statement to the Law Society in answer to the complaint against him.' (101) The circumstances in Goldberg thus involved a voluntary production of documents to the (third party) Law Society, albeit for a limited purpose of Mr Goldberg, such as to have constituted an imputed waiver of privilege at common law. That was because having done so to service his own interests, ordinary notions of fairness were found to have precluded Mr Goldberg's reliance upon privileges. The respondents here contend that fairness should work in a sense conversely in their favour, because of the retroactive operation of the authority of the High Court's subsequent decision in Daniels on the occasions when they produced the privileged material, and when they were questioned in relation thereto. 42 In Mann, the Chief Minister of the Australian Capital Territory supplied documents containing legal advice relating to the Government's conduct in certain already comprised litigation to a member of the Legislative Assembly of the Territory. After considering those documents, the member returned the copies to the Chief Minister, but retained the covering letter. The covering letter, without the legal opinions, was forwarded by the member to the litigant who originally commenced the compromised proceedings against the Government. In the belief that the legal opinions identified in the covering letter might have been defamatory, the litigant applied for preliminary discovery of those opinions in the Supreme Court of the Australian Capital Territory. In the course of their majority judgment, Gleeson CJ, Gaudron, Gummow and Callinan JJ (at 13-15) made the following observations of potential significance to issues of implied waiver arising from inconsistent conduct: 'It is inconsistency between conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege … Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the objective intention of the party who has lost the privilege. In Goldberg v Ng this court considered a case in which there was disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party would treat the information disclosed as confidential. The court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege. … Disclosure by a client of a confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege as such disclosure is inconsistent with the confidentiality which the privilege serves to protect.' GWF contends that in the light of the interpretation of the Full Federal Court in Daniels of s 155 of the TP Act, which prevailed until the High Court's reversal of that decision, there was no waiver of legal professional privilege at common law or client legal privilege confined by the Evidence Act, in relation to the compliance by GWF and Mr Pascoe with ACCC's demands for evidentiary and other disclosures etc in the meantime, and that it is unfair for ACCC to contend otherwise. Findings and conclusions 43 It is common ground that the privileged material constituted 'confidential communications' created for the dominant purpose of providing GWF with legal advice, and that the three documents comprising the privileged material, produced to ACCC, attracted the entitlement of GWF to legal professional privilege, or in terms of s 118 of the Evidence Act, client legal privilege, in the latter case to the extent that the privileged material might subsequently be adduced in evidence. No contention to the contrary was advanced by ACCC at the time of production of the privileged material, or thereafter in the course of ACCC's investigations, or at the hearing of the present application. I am satisfied that this is so. Ms Peter's letter of 31 January 2000 to Mr Pascoe, which attached a file note of 31 January 2000 concerning a conversation which took place in the later part of January 2000 between Ms Peter and Mr Loneragan, was brought into existence to advise GWF of the circumstances which may give rise to possible contraventions of the TP Act, and to thereby enable GWF and its legal advisers thereafter to consider GWF's approach to anticipated litigation. Similarly, Ms Peter's letter of 4 February 2000 to Mr Pascoe detailed the factual material to which GWF was to have regard in considering how it would approach possible contraventions of the TP Act, as well as various opinions expressed by Ms Peter as to avenues open to GWF to alleviate the likelihood of Part IV proceedings being commenced by ACCC against it. Ms Peter's letter to Mr Pascoe of 10 February 2000, which attached a signed opinion by Mr Neil Young of Queens Counsel in respect of the appropriate action to be taken by GWF in relation to alleged breaches of the TP Act, was similarly created for the purpose of providing GWF with legal advice in order to ameliorate the likelihood of contravention proceedings being brought against it. 44 It is sufficiently apparent from the conduct of the parties, including their correspondence, that privilege had been maintained by GWF from the time of service of ACCC's attached s 155 notices in relation to the privileged material, to the extent that privilege in respect thereof might subsequently become judicially recognised and enforceable, by reason of any future reversal by the High Court of the Full Federal Court's judgment in the Daniels litigation. A further inference I would draw in favour of GWF is that it did not by its conduct indicate to ACCC that its claim to privilege was not to be treated by ACCC as waived by virtue of GWF's responses in the meantime to the Pascoe and GWF notices by reason of the production to ACCC of the privileged material, or by reason of the examinations of GWF executives subsequently conducted by ACCC upon that material. 45 GWF produced the privileged material to ACCC under the compulsion of the Pascoe and GWF notices, being a compulsion authorised by the judicial interpretation of the operation of s 155 of the TP Act for the time being prevailing, pursuant to the authority of the Full Federal Court in Daniels (Mr Pascoe was of course an executive of GWF). That compulsion constituted a 'compulsion of law' within s 122(2)(c) of the Evidence Act, as well as at common law, notwithstanding that the decision in Daniels of the Full Federal Court was later reversed by the High Court. The purported reliance of ACCC upon Goldberg in denial of that proposition is I think misconceived, because the giving by the solicitor in that case (Mr Goldberg) of his client's documents to the Law Society was, by way of contrast to the circumstances of GWF at the material times, '…voluntary and for the calculated purpose of assisting him (ie the solicitor) in having the complaint against him resolved adversely to Mr Ng' (cited at 101 of the report of the joint majority judgment extracted in [41] above), whereas the same could not be said of the compulsory processes of production of the privileged material and the questioning in relation thereto, to which GWF was required to submit because of the state of the general law for the time being concerning the operation of s 155. In continuing thereafter with its investigation into the conduct of GWF and its officers, including Mr Loneragan, upon the footing that legal professional privilege had no application of relevance thereto, ACCC took merely advantage of the benefit for the time being of the Daniels decision of the Full Federal Court. By the time the High Court gave judgment adversely to ACCC in the Daniels litigation relating to legal professional privilege in respect of the documents the subject of the s 155 notices to produce, ACCC had enjoyed the advantage of access to the privileged material for about 13-14 months (ie from about September 2001 to 7 November 2002). Those circumstances are not to be compared, by way of further illustration, with those involved in Mann v Carnell. 46 I do not think that in the unique context of those events, GWF by its conduct waived its entitlement to legal professional privilege in respect of the privileged material produced to ACCC pursuant to the GWF and Pascoe notices, or in relation to the viva voce evidence subsequently given on behalf of GWF upon or otherwise referrable to the content of the privileged material. Nor do I think that there occurred waiver by inconsistent conduct on the part of GWF. It follows that such information as was obtained by ACCC as a result of the s 155 notices and the examinations conducted by ACCC in relation to the creation and content of that material has been at all times the subject of client legal privilege conferred by the Evidence Act, and of legal professional privilege at common law, depending on the context in which ACCC has used and may hereafter seek to use the same. 47 Until the delivery of the High Court's judgment on appeal in Daniels, GWFwas vulnerable to the imposition of the sanctions stipulated by s 155(6A) of the TP Act, in the event that GWF and its executives (for instance Mr Loneragan) would have sought to withhold from giving information, oral or documentary, to ACCC in the course of the GWF s 155 inquiry. Those sanctions, in the case of individual persons, constituted fines or imprisonment, and in the case of a body corporate, potentially larger fines than those applicable to individual persons. It follows that to the extent that GWF and any of its employees or other agents provided to ACCC information, oral or written, in relation to the privileged material, as well as delivered up to ACCC the privileged material per se, they did so under compulsion, or to use the description in Cross On Evidence (6th Australian Edition by J D Heydon) (at 673), in circumstances of 'a want of the necessary voluntariness'. 48 An illustration of the notion of compulsion to provide privileged evidence, of application to the circumstances of GWF here involved, may be found in Baker v Campbell, (ante). The circumstances there were that a member of the Australian Federal Police sought to seize certain business records held by a solicitor for a taxpayer purportedly pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth). Those documents were subsequently found by a majority of the High Court to have attracted a justifiable claim for legal professional privilege at common law. Wilson J as one of the majority observed (at 95) that 'the very existence of the privilege as providing any significant protection and thereby making its contribution to the public welfare must be threatened unless as a matter of principle the protection extends to all forms of compulsory disclosure'. Deane J (also in the majority) stated (at 111) as follows: 'A person is obliged to disclose or yield his information or property only to the extent that he is compelled to do so by some applicable common law principle or statutory provision. Where no such compulsion exists, there is no need for any special privilege protecting particular types of information or property from disclosure or seizure. The ordinary entitlement to remain silent and to retain one's information or property only constitutes a special privilege where it is preserved as an exception in circumstances where disclosure or cession would otherwise be compelled. In the absence of any such general compulsion, that entitlement represents no more than the ordinary position under the common law.' The compulsion exerted here by ACCC upon GWF took the form of course of the comprehensive notices of demand of ACCC attached to these reasons for judgment, and issued purportedly pursuant to s 155 of the TP Act (ie the Pascoe and GWF notices), and of the examination of GWF's executives pursuant thereto. That conduct occurred at a time when s 155 of the TP Act, concerning of course the exercise by ACCC of powers of investigation under the auspices thereof, by virtue of the Federal Court's decision in Daniels, operated to deny to both respondents in the principal proceedings (ie GWF and Mr Loneragan) privilege in respect thereof. As a consequence of the High Court's reversal of the Federal Court's decision in Daniels, the documents produced, and information given by oral examination in relation thereto, had been always subject in law to the benefit of legal professional privilege. 49 About 10 years after the High Court's decision in Baker v Campbell, the Supreme Court of New South Wales in Woollahra Municipal Council addressed the notion of implied waiver of legal professional privilege at common law in the analogous circumstances of documents produced to a local government inspector, pursuant to the threat of exercise by the inspector of his powers of requiring compulsory disclosure. In the course of the reasons for judgment which have since been cited with approval on a number of occasions (including in Goldberg (at 95) (footnote 27) by Deane, Dawson and Gaudron JJ, (at 110) (footnote 67) by Toohey J and (at 122-123) by Gummow J, Giles J held in that situation as follows: 'Albeit intentional, the disclosure was made under threat of compulsory process and for the purpose of enabling the inspectors to carry out their statutory duty. In the circumstances in which it occurred, I do not think that the provision of documents subject to legal professional privilege to the inspectors was a waiver of privilege.' The circumstances in Woollahra Municipal Council are not precisely parallel to the circumstances here of the production to ACCC of documents pursuant to a demand for the time being authorised by the general law relating to s 155 of the TP Act, by virtue of the Federal Court's decision in Daniels. Once however the legal principles relating to the scope of operation relevantly of s 155 had been subsequently declared by the High Court in Daniels to the contrary effect, the consequence was that the demands of ACCC for production of the privileged material, and the subsequent requirement for viva voce examination in relation thereto, in either case pursuant to s 155, fell to be characterised from the outset as evidence obtained by unlawful compulsion. 50 The circumstances that no 'masking' of the privileged material was undertaken by GWF prior to production thereof to ACCC, and further that GWF did not seek an injunction from the High Court to restrain ACCC from continuing with its investigative activities, in so far as the same related to or involved the use of the privileged material whether before or after Woolworths/Coles Myer had successively pursued the course of obtaining an injunction in analogous circumstances, do not warrant any different conclusion, contrary to ACCC's submissions. For one matter, any such masking exercise would have been undertaken in the face of the Full Federal Court's decision in Daniels, which prevailed of course at the time ACCC served the Pascoe and GWF notices. In addition by the time of the successful Woolworths and Coles Myer applications to the High Court for interlocutory relief on 7 November 2001, Mr Pascoe had already been examined by ACCC upon the basis of, or by reference, to the privileged material (see [13] above). It was open to GWF to think that its communications with ACCC, in response to its demand for documents pursuant to s 155, being the communications which I have earlier summarised in these reasons, afforded GWF the most favourable protection it could probably secure for the time being, pending the outcome of the Daniels appeal to the High Court. A fortiori was GWF's reticence in seeking any such interlocutory relief reasonable in the circumstances which prevailed before the Woolworths and Coles Myer applications. For the Court to apply the benefit of hindsight of the successful injunction course later pursued by those applicants would be in my opinion to imply to the circumstances of GWF prevailing at the time of ACCC's demands for production of the privileged material, an unrealistic application of the notion of waiver of legal professional privilege and client legal privilege. 51 In the light of the correspondence between Allens Arthur Robinson and ACCC which I have extracted or summarised earlier in these reasons, and the unusual circumstances giving rise to the present proceedings which I have already summarised, I do not think that ACCC can rightly invoke assistance from the dictum in Thomason (at 358). That correspondence is not susceptible to an interpretation to the effect that ACCC was 'led by the disclosure to regulate [its] conduct in relation to some matter which becomes relevant in subsequent litigation to which he is a party' (Jordan CJ with whom Halse Rogers and Bavin JJ agreed), despite the submission of ACCC to the contrary. That correspondence gave sufficient notice of the claim of privilege in the event that the Full Federal Court's decision in Daniels might subsequently be reversed by the High Court. Moreover there was no suggestion on ACCC's part that, absence of adducement of evidence, based upon or referrable to legal advice, explicit or implicit, contained in the privileged material, ACCC's investigation would as a consequence have been wholly or partly deferred pending the outcome of the application for special leave in Daniels, or of any subsequent appeal if special leave was to be granted. To the extent therefore that considerations of fairness might intrude, by reason of the implications of the correspondence initiated by GWF's lawyers with ACCC after service of the Pascoe and GWF notices to produce, I do not think that the relief to which GWF might otherwise be entitled in the present proceedings should be refused. The implications of the Allens Arthur Robinson correspondence framed by Ms Peter were sufficiently apparent for ACCC to appreciate the course of action which GWF would pursue, if ACCC was to proceed to use, in the context of its s 155 enquiry, any material which might correctly be characterised as privileged in consequence of an ultimately favourable appeal in the Daniels litigation. 52 Furthermore I do not accept the unqualified and unspecific proposition that the circumstances that ACCC and its legal advisers have necessarily retained knowledge of the contents of the privileged material, and have regulated their conduct in relation to the investigation and commencement of proceedings in reliance upon the privileged material, warrants the characterisation as futile the grant in principle of the relief sought by GWF. Moreover the proposition is somewhat at odds with ACCC's former policy to which reference is made in the passage cited from Daniels in [7] above. Given my finding of an absence of waiver on GWF's part, and the statements of high judicial authority relating to the need for upholding of the integrity of the principle of legal professional privilege (see the authorities cited for instance in [28-29] above), the public interest in upholding the integrity of the principle should here prevail, irrespective of the complexity and difficulty which might hereafter be encountered in so doing. 53 I have therefore reached the conclusion that GWF is entitled in principle to relief broadly of the nature sought by the Amended Notice of Motion, though subject to the modifications which I think should be made, in all the unique circumstances of the case. That relief is authorised upon the basis of client legal privilege arising in the circumstances of the case pursuant to the Evidence Act, and to the extent that the conduct of ACCC has extended or may hereafter extend beyond the adducing of evidence, that relief is authorised upon the basis of legal professional privilege conferred by common law. The disclosure of the privileged material was involuntary, and occurred in circumstances where GWF made efforts reasonably designed to protect and preserve its entitlements to privilege. In so far as that conclusion relates to privilege my conclusion has not been influenced by any considerations of fairness, so far as client legal privilege may extend in the particular contexts. I acknowledge that in Adelaide Steamship (at 425), it was said that the operation of s 122 of the Evidence Act is 'not concerned with any principle of "fairness", such as that developed by the common law and by which waiver may be imputed'. To the extent that the conduct of the GWF inquiry has involved thus far legal professional privilege, I am of the opinion that the conduct of GWF in purported protection of that privilege has been fair upon the footing of the common law principles. I would add for completeness that ACCC was of course as equally on notice as GWF that the Full Federal Court's decision in Daniels was the subject of challenge by High Court proceedings, and it was presumably open to ACCC to have proceeded with the GWF investigation, without resort to the use of the privileged material produced by GWF pursuant to the s 155 notices, pending the outcome of the High Court proceedings. I do not understand any evidence, or at least any compelling evidence, to have been provided by ACCC to the contrary of that latter observation. Viability or otherwise of notice of motion process 54 ACCC has submitted that in any event there is no procedural authority for GWF to have sought relief by notice of motion. 55 Order 19 Rule 1 of the Federal Court Rules provides: '(1) Any interlocutory or other application in any proceedings which has already been commenced in accordance with these Rules shall be made by motion…' 56 The ambit of the relief which may be claimed by notice of motion was considered by Young J in ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193. His Honour observed (at 199-200) that '[g]enerally speaking, the authorities support the proposition in that if the ambit of the case has been defined by pleadings or otherwise, then a motion for injunction made within the proceedings must be made out by affidavits corresponding with the allegations in the statement of claim: see Kerr, A Treatise on the Law and Practice of Injunctions (1927) London, Sweet & Maxwell (6th ed) at 642. Thus a defendant who has not counter-claimed cannot seek interlocutory relief unless it relates to or arises out of the relief sought by the plaintiff…'. 57 The notice of motion procedure contained within Part 19 Rule 1 of the Supreme Court Rules 1970 (NSW) is in similar but not identical terms to Order 19 Rule 1 of the Federal Court Rules. The commentary in Ritchie's Supreme Court Procedure NSW (at 19.1.1) provides nevertheless a useful analysis of what relief may be obtained through the notice of motion process: 'The purpose of this rule is to prescribe the form in which applications in existing proceedings are to be made (namely by motion). It neither restricts nor enlarges the kind of applications that can be made in the proceedings. Whether a particular application can properly be made is to be determined according to general principles. An example of such a situation occurs where application is made to enforce a compromise of the proceedings. Although such an application may be made by notice of motion, the use of that procedure is not appropriate where substantial matters are involved that go beyond the ambit of the proceedings as they were originally constituted, or where the interests of justice otherwise indicate that it is desirable to institute separate proceedings: Phillips v Walsh (1990) 20 NSWLR 206 at 209.' I am of the opinion that the notice of motion is an 'interlocutory or other application in… proceedings… already commenced in accordance with [the Federal Court] Rules', and is also a '…matter arising in connection with… the conduct of the hearing'. The notice of motion procedure adopted by GWF is therefore duly authorised by the Federal Court Rules in the present circumstances. Relief 58 The relief sought by GWF in the Amended Notice of Motion is as follows: '1. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings the material identified in paragraph 5 of the affidavit of Wendy Wilson Peter sworn on 20 February 2003. 2. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings any material that: (a) in any way refers to the Privileged Material or the information contained in that material; (b) was created with the use of the Privileged Material or Privileged Information; or (c) was based on or in any way derived from, or influenced or affected by, the Privileged Material or the Privileged Information. 3. The Applicant be restrained from directly or indirectly using, disseminating, communicating, referring to or making use of in relation to these proceedings: (a) any of the Privileged Material or Privileged Information; (b) any material that in any way refers to the Privileged Material or Privileged Information; (c) any material that was created with the use of the Privileged Material or Privileged Information; and (d) any material that was based on or in any way derived from, or influenced or affected by, the Privileged Material or Privileged Information. 4. The Applicant identify and destroy: (a) all copies of the Privileged Material in its possession, custody or control; (b) all documents and records (including electronic records) in its possession custody or control that in any way directly or indirectly refer to the Privileged Material or the Privileged Information; (c) all documents and records (including electronic records) in its possession, custody or control that were created with the use of the Privileged Material or Privileged Information; and (d) all documents and records (including electronic records) in its possession, custody or control that were based on or in any way derived from, or influenced or affected by, the Privileged Material or Privileged Information. 5. The Applicant identify all Commissioners and Commission staff and legal advisers who have any knowledge of the Privileged Material and/or Privileged Information and must ensure that those persons are: (a) no longer involved in these proceedings in any capacity; (b) no longer involved in any further or additional investigation by the Applicant involving similar allegations against the First and Second Respondents; and (c) instructed in writing not to discuss or refer to or otherwise disseminate any of the Privileged Material or Privileged Information. 6. The Applicant file and serve on the First Respondent on or before 2 May 2003 an affidavit listing the documents referred to in Order 4 and listing the Commissioners and Commission staff referred to in Order 5. 7. Such further and other orders, directions or relief as the court thinks fit.' 59 The above orders are modelled on the relief granted by Campbell J in AG Australia Holdings Ltd to which brief reference has earlier been made. In that case an employee of AG Australia Holdings Ltd had breached his duty of confidentiality owed to his employer by voluntarily providing material, for compilation of a witness statement, to a firm of solicitors acting on behalf of an applicant in representative proceedings in the Federal Court of Australia brought against his employer. At (215) Campbell J said 'now that Mr Burton has talked with MBC and provided a draft statement, MBC is in the situation where it has information which it should never have had. Conscionable behaviour on its part requires that it give up the information it should not have had, and nor, in the future, obtain any benefit from having once had that information'. Later (at 218) Campbell J held that 'Mr. Burton is in breach of his contract, and MBC is, at least after absorbing this judgment, knowingly in receipt of the fruits of that breach of contract. It is not in accordance with equity's approach in giving remedies to allow the wrongdoer to retain the fruits of wrongdoing, on the ground that the plaintiff will not thereby be any worse off, unless it is very clearly the case that the granting of relief would be futile'. 60 In considering the scope of the relief sought, I bear in mind that the present application does not of course involve any claim giving rise to equitable remedies of the scope formulated in AG Australia Holdings. The context of the present proceedings involves the kind of considerations attending to investigations undertaken purportedly in the public interest, and not merely commercial considerations between two litigating parties. I think that the relief framed by GWF is unacceptably wide in scope. Moreover I bear in mind that ACCC as a Commonwealth agency assumes the mantle of a 'model litigant' in its prosecution of proceedings for infringement of the TP Act (Scott v Handley (1999-2000) 58 ALD 373 at [43]). I have modified the text of the relief framed by GWF, but will grant liberty to apply in the event that the orders I have framed, for example in the view of the docket judge, operate to produce for instance impracticality in particular circumstances. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Australian Competition & Consumer Commission v George Weston Foods

At a glance

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Judgment (20 paragraphs)

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Legislation Cited (5)

Cases Cited (18)

Cited By (2)