Barnes v Commissioner of Taxation

REASONS FOR JUDGMENT 1 The applicants seek a declaration that legal professional privilege attaches to certain communications constituted by or disclosed in documents listed in a schedule, to the details of which reference will later be made. 2 The issue arose in the following circumstances. By notice dated 6 June 2005 issued pursuant to s 263 of the Income Tax Assessment Act 1936 (Cth) (the Notice), the respondent sought and was afforded access to all buildings, places, books, documents and other papers related, either directly or indirectly, to inter alia: (1) Barnes Development Pty Ltd; (2) Barnes Family Trust; (3) The first named applicant; (4) The second named applicant; (5) Multinational Technical Services Inc; (6) Pantheon Trust; (7) Phillip de Figueiredo; (8) Philip Jepson Egglishaw; (9) Roker Nominees Limited; (10) Roker Trustees (Jersey) Limited; (11) Sanderstead Limited; (12) Sapphire Superannuation Fund; and (13) Strachans SA. When affording the respondent such access the applicants asserted legal professional privilege attached to certain documents. 3 On 6 July 2005, the respondent and the applicants, through their solicitors, entered into an agreement titled 'Terms of Inspection' to facilitate access to the documents and to enable the applicants' claims of legal professional privilege to be asserted and tested. In accordance with that agreement and by a notice dated 22 July 2005, the applicants by their solicitors claimed legal professional privilege in respect of 79 documents identified in a schedule to the notice and set out in a schedule to the amended statement of claim. By a further notice dated 29 July 2005, the applicants by their solicitors claimed legal professional privilege in respect of a further three documents identified in a schedule to that notice and again set out in the schedule to the amended statement of claim. 4 The agreement provided inter alia: '… 35. The Commissioner will inspect the lists referred to in clauses 11 and 24 above. … [the Schedules] … 36. If, after doing so, the Commissioner still seeks to access any document or documents in …[the Schedules]… , the Commissioner will give 7 business days written notice to that effect to …[the Applicants] …, specifying such document or documents. 37. At the expiration of those 7 business days …[referred to in clause 36]… the Commissioner will access the documents taken to the premises as described in clause 6 under clauses 6, 10 and 28 but limited to those documents listed in the notice given by the Commissioner under …[clause]… 36 above, and the …[Applicants]… expressly agrees to him doing so and shall be taken to have waived any claim that the documents listed in the notice attract LPP, in whole or part, unless, and save to the extent that, within those 7 business days, the …[Applicants have] … commenced legal proceedings in a competent Court seeking to maintain LPP and serving the originating process on the Commonwealth …' 5 By a letter dated 2 December 2005 the respondent gave written notice to the applicants that he still sought access to all of the documents listed in the schedules to the applicants' notice. By letter dated 22 December 2005 the applicants claimed legal professional privilege in respect of a further 29 documents identified in the letter and set out as items in the schedule to the amended statement of claim. In January 2006, the respondent agreed to the further 29 documents being included among the documents over which legal professional privilege was claimed in the proceedings, subject to the respondent reserving his right to assert that the privilege in those documents had been waived. 6 The precise claim of privilege made by the applicants was in the following terms: '10. All of the communications recorded in, constituted by, or disclosed in, the documents in Schedule 1 are privileged because each of the documents is either: 10.1 a document created by the [applicants] and or their servants, or agents and provided to their solicitors for the sole, and therefore dominant, purpose of seeking and receiving legal advice; or 10.2 a copy document copied and provided by the [applicants] and or their servants or agents to their solicitors for the sole, and therefore dominant, purpose of seeking and receiving legal advice.' 7 When the matter first came on for hearing there were three issues before the Court: (a) whether any of those documents or the communications they evidence are subject to legal professional privilege; (b) whether the applicants have waived privilege in relation to the 29 documents or the communications they evidence; (c) whether the privilege does not attach to those documents or the communications they evidence because they were made in furtherance of a purpose that is contrary to public interest. The respondent no longer presses issues (b) or (c). 8 The claim of privilege in relation to the access to documents by the Notice under s 263 is to be determined according to the common law, and not Pt 3.10, Div 1 of the Evidence Act 1995 (Cth) since no evidence is, relevantly, sought to be adduced.