Principles governing the claims
38 The claims for privilege made on behalf of the applicant arise in response to the issue of a subpoena on behalf of the respondents calling for the production of certain documents and, additionally, for the attendance of the expert to whom the subpoena is addressed (M/s Murphy) for the purpose of giving evidence. The subpoena was issued in reliance on O 27, r 2 of the Federal Court Rules.
39 The subpoena is supported by three affidavits of the Acting Regional Director of the applicant, the latest of which was sworn on 15 May 2002. Although expressed in the form of a "wish", I consider it is beyond doubt that the affidavit asserts the claims: National Crime Authority v S (1991) 100 ALR 151 at 159 per Lockhart J.
40 It is common ground that the privilege claims fall to be decided according to the common law. This is because the provisions relating to privilege in Pt 3.10 of the Evidence Act 1995 (Cth) apply only to the adducing of evidence and hence only during a hearing. Although the hearing in this proceeding is in the course of progress, there must first be a determined response to the subpoena before the issue of adduction of evidence can arise in the course of that hearing.
41 In Pratt, Kenny J reviewed the principles governing legal professional privilege. Her Honour summarised the common law in Australia in that respect as follows, in terms with which I agree:
"The common law in Australia is, …that legal professional privilege attaches to:
(1) confidential communications passing between a client and the client's legal adviser, for the dominant purpose of obtaining or giving legal advice ("legal advice privilege"); and
(2) confidential communications passing between a client, the client's legal adviser and third parties, for the dominant purpose of use in or in relation to litigation, which is either pending or in contemplation ("litigation privilege").
See Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 ("Mitsubishi"), at [8] per Batt JA, with whom Charles and Callaway JJA agreed, and Grant v Downs, at 677 per Barwick CJ. As the majority observed in Esso, at 64:
The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers."
The claims for the applicant are for litigation privilege. The claim of the privilege is a claim at law and nothing can be said adversely of the making of fact of the claim having been made.
42 The onus of establishing the claims falls on to the party asserting or claiming the privilege and is met by establishing the facts giving rise to it: Grant v Downs (1976) 135 CLR 674 per Stephen, Mason and Murphy JJ at 689. Mere assertion of the claims is not enough: what is required is exposure of facts from which an informed decision can be made as to whether the claim for privilege is supportable: National Crime Authority at 159-160. The respondents challenge the claims and in doing so contend on the evidence that they are unfounded or mistaken: cf Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239 at 247 per Owen J.
43 It is not in dispute that the Court has power to examine the documents held by it in response to the subpoena and subject to the claim. However, that is a power to be exercised on a discretionary basis with regard to the necessity to do so and the risks of disqualification: Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246-8; Grant v Downs at 689.
44 The application of the law relating to privilege in relation to the bases upon which an expert's report has been grounded has been considered in a number of cases. They have been usefully collected and considered by Paul Mendelow, "Expert Evidence: Legal Professional Privilege and Experts' Reports"(2001) Australian Law Journal 258. The scope of the privilege was considered in Interchase Corporation Ltd v Grosvenor Hill (Qld) Pty Ltd [No 1] [1999] 1 Qd R 141. The Queensland Court of Appeal held (at 148) that documents used by an expert to form an opinion are not the subject of legal professional privilege, whether or not they emanate from the party claiming the privilege. Thomas J (at 162) acknowledged that privilege could be claimed in relation to communications between the expert and the solicitor when within the requisite confidential purpose. See also Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1 in relation to briefs to lawyers. This accords with the common law position recognized R v King [1983] 1 All ER 929 and Harmony Shipping Co SA v Saudi Europe Line Ltd [1979] 3 All ER 177 at 181, each referred to and relied upon in Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd(No 2) (1998) 156 ALR 364 at 365 by Mansfield J. There it was accepted that the effect of those decisions was that, at common law, the privilege does not attach to the chattels or documents on which the expert based the opinion or to the independent opinion itself of the expert. In Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 at 552 McHugh J stated that "legal professional privilege turns on purpose" so that, if the purpose is established, the privilege attaches without any balancing of considerations of public interest.
45 It follows from the decided cases and the nature of the privilege as enunciated above that the claims for litigation privilege in this matter require the Court to consider the following matters in relation to each of the claims:
(1) was the communication between the requisite parties?
(2) was it made in circumstances showing it to be confidential?
(3) was it made for the dominant purpose of use in or in relation to litigation pending or contemplated?
(4) has any privilege, if established, been waived? [For that purpose it may be necessary to consider whether the communication was one on which the expert based the opinion]
46 Waiver may be express or implied. It will be express when there is intentional disclosure of protected materials. It will be implied when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege: Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 487-488 per Mason and Brennan JJ. Such conduct may include some disclosure or use of the privileged material where that is inconsistent with the maintenance of the confidentiality: at 482-483; 488 and 493; relied upon in Daniel v Western Australia (1999) 94 FCR 537 at 546. The same approach governs the application of sections 118 and 122 of the Evidence Act: Mann v Carnell (1999) 201 CLR 1. In Instant Colour Pty Ltd v Canon Australia Pty Ltd (RD Nicholson J, 30 October 1995, unreported) I ruled, after consideration of matters of fairness in the circumstances of the case, that implied waiver of privilege had occurred in relation to a letter of instruction from instructing solicitors to an accounting expert in circumstances where the expert had said the letter of instruction was a source of his knowledge. The respondents' contentions place weight on this ruling as supporting their contentions in the circumstances of the present case. In Dingwall v Commonwealth (1992) 39 FCR 521 Foster J said that for the principles of waiver to apply there is certainly required that there be an indication that the documents were used in the preparation of the evidentiary document in a way that could be said to influence the content of the document. The absence of this in the circumstances in Tirango was the basis upon which Mansfield J found the privilege had not been impliedly waived.