Australian Competition & Consumer Commission v Rural Press Ltd

"(i) at the request and/or on the advice of the Applicant's legal advisers for the sole purpose of providing legal advice in respect of contemplated or pending proceedings; and/or (ii) after 30 October 1998 (see Discovered Document 5-00009) for the sole purpose of use in contemplated or pending proceedings."

8 Documents (1) to (8) referred to above is each said to be a document "… in the contemplated (and pending) proceedings which was physically prepared by" nominated staff members of the applicant. Document (9) is described as a

"confidential document received from a potential witness in the contemplated proceedings provided in response to requests by ACCC staff or by the witness for incorporation, or possible incorporation, into a draft statement of evidence being in the course of physical preparation by ACCC staff members …"

9 I do not consider that the claim to client legal privilege is satisfactorily expressed in the affidavit. The expression in par 8 above is taken directly from the introductory words to schedule 12 to the list of documents, but that list covers a much longer period and many more documents. The matters expressed in (i) and (ii) are said to be additional or alternative grounds, but there is no attempt to apply them separately to any one document. In fact, all the documents in issue came into existence after 30 October 1998. There has been no attempt to identify which of the documents was produced on the advice of the applicant's legal advisers or how it is that each of those documents is said to be for the sole purpose of providing legal advice in respect of contemplated or pending proceedings. The evidence shows that no decision to institute proceedings was made on 30 October 1998. Investigations to determine whether or not to institute proceedings were carried out after that date. Documents which are part of the applicant's investigation materials need not be the subject of client legal privilege. 10 In Grant v Downs (1976) 135 CLR 674 at 689 ("Grant"), Stephen, Mason and Murphy JJ said:

"… [the Court] needs to scrutinize with care claims of privilege made on the ground now under consideration. It is for the party claiming privilege to show that the documents for which the claim is made are privileged. He may succeed in achieving this objective by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by resort to any verbal formula or ritual."

11 In Somerville v Australian Securities Commission (1995) 131 ALR 517 ("Somerville"), Lindgren J at 549-550 was not prepared to accept an affidavit as to the purpose for which documents in question were brought into existence, where the affidavit was couched only in general terms by reference to the sole purpose test laid down in Grant. His Honour preferred to rule on the claim to privilege based upon an analysis of the relevant statutory background and of the particular circumstances of the case. Consideration of contentions 12 It is convenient first to deal with a preliminary submission put by the fifth to seventh respondents. They submitted that it is not shown that the documents were "prepared" by officers of the first respondent. In my judgment, the argument that the persons involved in the preparation of the documents in issue were not officers of the applicant must fail. The deponent of the affidavit relied upon by the applicant to support its claim for non production identifies herself as a senior investigation officer in the Adelaide regional office of the applicant. When describing the persons who prepared or took the several statements, she identified the persons concerned, including herself, as "staff members". I am satisfied that the affidavits sufficiently identifies the persons so involved as to warrant the conclusion that they were officers of the applicant at material times. 13 The question of whether documents of the present character were prepared by those officers of the applicant is a difficult one. Perhaps surprisingly, the question has not previously been directly addressed so far as my researches and those of counsel have discovered. The question was however addressed by Bowen CJ in Trade Practices Commission v T.N.T. Management Pty Ltd (No 3) (1981) 55 FLR 219 ("T.N.T. Management") in a general way. The nature of the documents then in issue does not appear from the report. It does not suggest that the documents then in issue were statements from potential witnesses. In that case, the former Chief Justice found that the documents had their physical source in an officer of the then Trade Practices Commission. His Honour then considered the context of s 157 of the Act, and said (at 224) that its intention:

"… is that a corporation is to be given fair treatment, in the sense that it is to be given copies of documents which the Commission has and which would, speaking broadly, support the Corporation's case. This may be compared with the obligation placed upon a prosecutor, who knows of a credible witness who can supply material facts which tend to show an accused is innocent, to make the witness or his statement available to the defence." [References omitted]

14 I respectfully agree with his Honour's remarks. Section 157 also appears to endeavour to strike a balance between achieving that intention on the one hand, and to preserve from production working documents of the applicant on the other. Because the applicant's functions and powers under the Act include significant powers of investigation of possible contraventions of the Act, and because documents may be prepared for consideration by the applicant, its internal documents prepared in the course of an investigation may not satisfy the sole purpose test to fall under the aegis of client legal privilege: see Grant. Nevertheless, s 157 clearly intends that those internal working documents of the applicant should be so shielded from production. They would clearly fall within the category of documents prepared by an officer of the applicant. They may be briefing notes, summaries or precisof evidence, commentaries, reports or internal memoranda. They may contain a variety of material. They may simply contain a precis of the statements or quotations of statements of proposed witnesses on a particular topic, for ease of reference or for submission to the applicant, or for other purposes. The other limb of the exemption appears to be based upon the fact that it should not be necessary for the applicant to produce to a corporation or other person documents produced to the applicant by that corporation or other person. 15 The documents in question, other than document (9), on the evidence were physically prepared by an officer of the applicant. However, they may also have been "prepared" by the person who provided the information, at least in the case of those documents which are signed by the potential witness. Counsel for the applicant acknowledged that, in certain circumstances, a document may be "prepared" by two persons. A witness statement may be prepared by a witness providing in writing that statement. It may be prepared by the witness providing answers to questions asked by an officer of the applicant, who then either records the questions and answers verbatim or who composes the information provided into a narrative form. It may be prepared by the witness dictating the proposed statement to an officer of the applicant who is really acting as an amanuensis. The signing of the document, when prepared, may also have some significance. In R v Walker (1993) 61 SASR 260, the court ruled that the transcript, or parts of the transcript, of an examination conducted in a separate proceeding could not be tendered by the accused in the course of a criminal trial. Cox J at 263, and Duggan J at 266, both concluded that a written statement, if not actually made by the witness, must have been verified by the witness in some way before it can be described as a previous statement "reduced into writing" to constitute a previous statement made by that person in writing, or reduced into writing. It was necessary for the witness in those circumstances to have written the statement or to have signed it, or in some other way to have authenticated it, for it to be admissible under s 29 of the Evidence Act 1929 (SA) ("the Evidence Act"). 16 In T.N.T. Management, Bowen CJ appears to some extent to have anticipated such issues. His Honour said (at 225):

In my opinion the words "prepared by an officer … of the Commission" refer to a document which has been drawn up by the officer, whether or not any particular contribution of ideas is evident in the contents of it. This appears to be the ordinary meaning of the word "prepare" in relation to writings or documents. It is consistent with the position in other fields of the law. [References omitted] It is true that if this interpretation is correct it would mean that where a person telephoned the Commission and proceeded to relate facts which would tend to prove the innocence of the corporation and this conversation was recorded in a memorandum by an officer of the Commission, it would not have to be made available under s. 157, whereas if the same person wrote a letter to the Commission setting out the facts favourable to the corporation, this letter would have to be made available. On the other hand, if something more than physical authorship is required, it is difficult to define where the line should be drawn. Whatever test would have to be applied it would seem to lead to an awkward inquiry into the intellectual contribution of the officer. The inquiry might be not unlike that which takes place in determining whether a work is an original literary work entitled to copyright."

Those observations appear to have been referred to with approval by the Full Court (Bowen CJ, Beaumont and Gummow JJ) in Arnotts Ltd v Trade Practices Commission (No 1) (1989) 21 FCR 297 at 302 ("Arnotts"). 17 His Honour's example of the telephone conversation touches upon the present issue. The evidence does not disclose how the documents in issue were prepared by officers of the applicant. Some may have been prepared by the giving of telephone instructions. However, the evidence is clear that the documents (other than document (9) listed above) were physically prepared by officers of the applicant. I also respectfully agree with the observations of the former Chief Justice that it is not necessary for any such document to involve some element of intellectual activity to fall within the protection. The difficulties involved in such an inquiry are evident. Nonetheless, the compilation of data may involve some element of intellectual activity. It could not have been intended that an enquiry into the degree of intellectual activity involved in the preparation of a document by an officer of the applicant was contemplated by the simple expression "prepared by an officer" of the applicant. Such an inquiry would not serve that purpose of s 157 which is to protect the applicant's internal working papers from production, even if they are not truly the subject of client legal privilege. The word "prepare" is defined in the Macquarie Concise Dictionary (2 ed, page 773) as "to make ready, or put in due condition, for something". The measure of its scope is the act of physical preparation or creation. 18 Counsel for the fifth to seventh respondents referred to R v Calabria (1982) 31 SASR 423 ("Calabria") (reversed on other grounds by the High Court in R v Calabria (1983) 151 CLR 670). There a solicitor had taken a statement from a potential witness in the nature of alibi evidence for the purposes of defending criminal proceedings. The potential witness died before trial. The accused sought to tender the statement under s 45b(2) of the Evidence Act. It provides:

"A document shall not be admitted in evidence under this section where the court is not satisfied that the person by whom, or at whose direction, the document was prepared could, at the time of the preparation of the document, have deposed to his own knowledge to the statement that is contained or implicit in, or may be inferred from, the contents of the document." 19 The learned trial judge took the view that the person by whom or at whose direction the statement was prepared was not the deceased potential witness but the solicitor. However, on appeal, King CJ at 430 described that view as involving a "misunderstanding of the section". His Honour said at 431 that the person referred to in the subsection must:

"… be the maker of the statement contained in the document. The phrase "person by whom" is used to describe the maker of the statement who also prepares the document containing it. The phrase "or at whose direction" is used to describe the maker of the statement where the statement is made knowing that some other person is recording or is likely to record it in a document." 20 It was urged that the same approach should be adopted in relation to s 157 of the Act. However, the physical preparation of the document by an officer of the applicant does not mean that the statement also may not be the product of the potential witness concerned. I have discussed above the possibility that a witness statement may be "prepared" by two persons, because that word may be used in different contexts. The purpose of provisions such as s 45b(2) is to facilitate the admissibility of a document in circumstances where the maker of the document is deceased. It is not frustrated because the document may also have been prepared by an officer of the applicant. In the circumstances of Calabria, it was physically prepared by the solicitor, but also, for the purposes of s 45b(2), prepared by or at the direction of the deceased witness. Calabria does not, in my judgment, support the conclusion that a document cannot be the product of some other person in some other legislative context to qualify as a document prepared by an officer of the applicant under s 157 of the Act. 21 For the reasons given, I consider that the documents in issue, other than document (9) above, are documents prepared by an officer or officers of the applicant because, on the evidence, they were physically prepared or created by such officers. It is evident that s 157 therefore does not necessarily lead to a corporation or other person against whom proceedings are brought under the Act being afforded fair treatment in the sense described by Bowen CJ in T.N.T. Management (at 224). The applicant may be entitled to withhold a statement of evidence of a material witness, even if that information may tend to establish the case of a respondent corporation or other person, if that statement was physically prepared by an officer of the corporation or other person. This should be compared with the obligation of disclosure upon the prosecution in criminal proceedings: Re Van Beelen (1974) 9 SASR 163; R v Mills [1998] 1 Cr App R 43. However, in my view, that is a consequence of balancing the respective interests of the applicant and the corporation or other person against whom proceedings under the Act have been instituted. 22 Accordingly, I conclude that the Court has no power under s 157(2) of the Act to direct the production of the documents (1)-(8) listed above. The applicant acknowledged in submissions that document (9) is not of the same character. Given its description in the list of documents and in the evidence, I find that document (9) was not a document prepared by an officer of the applicant. 23 It should be mentioned that, on this application, no point was taken regarding the documents which formed attachments to documents (1)-(5) listed above. I have assumed that those documents, if they are not otherwise exempt from being produced, have been made available to the respondents. 24 In Arnotts, the Full Court determined that s 157 did not abrogate the client legal privilege of the applicant in documents which properly attracted that privilege. It specifically decided, however, that the Court is empowered, but not obliged, to refuse to make an order under s 157(2) of the Act in respect of a document which is the subject of client legal privilege. It further decided that the Court's power to refuse to make such an order is derived from s 157(3) of the Act. The Court said (at 304):

"However, the Court may refuse to make any order in respect of a document or part of a document if it considers it inappropriate to do so, because such disclosure would "prejudice any person" (a phrase which includes but is not confined to the Commission) or "for any other reason". One such reason, in our view, would be the legal professional privilege which the Commission otherwise would enjoy against disclosure. In this way, the doctrine of legal professional privilege is accommodated rather than abrogated by the scheme of s 157. If, in a given case, the Court orders disclosure (without or subject to conditions) despite what otherwise would be the operation of the privilege, then to that extent and in that particular situation the common law privilege of the Commission has been qualified or diminished by the order of the Court in exercise of its statutory powers. By qualifying or diminishing the scope of the Commission's common law privilege on the one hand and by affording the Commission an opportunity to demonstrate prejudice or other reason in a particular case, on the other hand, the legislative scheme contained in s 157 achieves an appropriate balance of the respective interests involved."

25 The Court's reference to the respective interests involved will include that a corporation is to be given fair treatment in that it is to be given documents which the applicant has and which would support the corporation's case in the sense of tending to establish that case. 26 It is clear that witness statements prepared for the sole purpose of legal proceedings are the subject of client legal privilege: Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 487; A-Corp Ltd v Australian Builders Labourers Federated Union of Workers (1992) 38 FCR 452; Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63. The formulaic claim to client legal privilege asserted in the affidavit relied upon does not satisfy me that the version (whether the original or a copy) of document (9) listed above falls within that category of documents. I have had regard to the date of that document. It is not clear when the decision to institute these proceedings was made. I have borne in mind the observations of Lockhart J in Somerville at 525-526 as follows:

"Fundamental to legal professional privilege is the notion that the privilege is that of the client (or others with whom the client has a common interest in the litigation, a matter to which I shall return), being a client in a solicitor/client relationship. Only confidential communications which are referable to the solicitor/client relationship enjoy the protection of legal professional privilege. There is no client with respect to litigation commenced by the Commission in the name of a person pursuant to s 50 until the proceeding has begun or at least until the decision has been made by the Commission to commence the proceeding. Before then the Commission is pursuing its investigative function under the ASC Law and the Corporations Law. … The Commission's investigations may or may not result in criminal or civil proceedings being instituted by the Commission. Documents brought into existence may attract public interest immunity, but they do not attract legal professional privilege under the litigation limb."

27 I have considered the evidence of the decision making processes of the applicant. The fact that the provider of the statement was responding to requests by staff of the applicant (if that be the case) is consistent with the document being sought as part of the applicant's investigative processes or only as material potentially to be adduced at the hearing. It is not clear whether that document was provided in response to a request made by the exercise of some power under the Act, or informally. The affidavit is hard to understand. It suggests the document may have been provided in response to a request "by ACCC staff or by the witness". In Somerville, Lindgren J at 547 discussed when documents are brought into existence for "use in litigation" (the expression used in Grant at 683). His Honour referred to several possible purposes for which the documents then under consideration may have come into existence. He included the performance of statutory functions in the public interest which were broader than the exercise of the power to institute and maintain proceedings. As his Honour pointed out, documents brought into existence in the course of an investigation for the purpose of deciding whether to institute proceedings, as well as for use in the potential proceedings if that occasion arose, do not attract client legal privilege: National Employers' Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648. On the evidence, that may also have been the case with respect to document (9) listed above. Accordingly, I am not satisfied that that document meets the sole purpose test required by Grant. The applicant did not advance any other reason for the Court's refusal to make an order under s 157(3) in respect of that document. 28 Even if document (9) listed above is the subject of client legal privilege, in these circumstances I would not exercise the power to refuse to order the applicant to comply with the request for its production. As stated in Arnotts, I have a discretion whether to do so. I have taken into account that one purpose of s 157 is that the respondents be given fair treatment in the way explained above. I have also taken into account the nature of the document itself. It is within a category of information which typically is provided to the defence in the case of criminal prosecutions: Maddison v Goldrick [1976] 1 NSWLR 651 at 668. There is, as I have found, no particular prejudice to the applicant by allowing the respondents to inspect the documents. Indeed its inspection may assist the fulfilment of the overall interests of justice in reaching a fair and proper result in the proceedings. No prejudice to any other person has been asserted. 29 Logically, an early question to be addressed on this application was whether the documents in issue are documents in connection with the principal proceeding and which tend "to establish the case of" the fifth to seventh respondents. The argument proceeded largely upon the basis that the documents did have that character, so the main focus was upon whether the documents were prepared by officers of the applicant. The parties addressed the question whether the documents had that tendency as a subsidiary issue. It is really no more than a question of fact. The evidence is sparse. As Bowen CJ noted in T.N.T. Management (at 222), there is an onus on the fifth to seventh respondents as this is their application to satisfy the Court that the documents fell within that description, but their capacity to give evidence on the topic is very limited. They do not know who has provided the statements, or their contents. The applicant has provided no information as to their contents, in particular as to the source or content of document (9) listed above. In T.N.T. Management, Bowen CJ said at 225-226 that the words "tends to establish the case" of the corporation or other person

"… do not mean that the documents must tend to place the case of the corporation beyond dispute. It is, I consider, sufficient if the document supports the case of the corporation and so tends to establish that case (see generally, Vines v. Djordjevitch (1955) 91 C.L.R. 512). Although the word "tends" gives the phrase a wide ambit, the word "establish" has a narrowing effect. In my view a document which might suggest some line of inquiry which could be of assistance to a corporation in conducting its case, does not answer the description of a document which tends to establish that case."

"In my opinion, …, if a document tends to impeach the plaintiff's case, it tends to establish the defendant's case within the meaning of the section."

30 I infer from the description of document (9) listed above, in particular, that it is evidence from a potential witness and that its contents are directly material to some matters in issue in these proceedings. It is unclear whether the "additional material" is material not included in a witness statement of a witness who the applicant proposed to call on other matters, or whether the "additional material" led to the decision not to call the potential witness at all, or whether for other reasons the decision was made not to call the potential witness. The fifth to seventh respondents cannot provide information on those matters. The applicant has not done so. In these circumstances I also infer that document (9) listed above, in the sense described by Bowen CJ in T.N.T. Management, is a document which tends to establish the case of the fifth to seventh respondents. 31 Accordingly, pursuant to s 157(2) of the Act, I direct the applicant to comply with the request of the fifth to seventh respondents made on 17 November 1999 in respect of document (9) listed above. 32 Since these reasons were prepared, the High Court in Esso Australia Resources Ltd v The Commissioner of Taxation [1999] HCA 67 has determined that the sole purpose test for client legal privilege as discussed in Grant is not the proper test to determine whether a communication is protected from disclosure by reason of client legal privilege. That decision does not affect this ruling. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate: Dated: 24 December 1999 Counsel for the Applicant: Mr J S Hilton SC with him Mr S White

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the First to Fourth Respondents: Mr A Sullivan QC with him Mr T Blackburn

Solicitors for the First to Fourth Respondents: Deacons Graham & James

Counsel for the Fifth to Seventh Respondents: Mr S W Tilmouth QC with him Mr M Hutton

Solicitors for the Fifth to Seventh Respondents: Lynch & Meyer

Date of Hearing: 6 December 1999

Date of Decision: 8 December 1999

Date of Reasons for Decision: 24 December 1999