Charlton v Moore

KEY ISSUES: EVIDENCE :- Legal professional privilege - whether solicitors' letter attracted legal advice privilege insofar as it went beyond formal advice as to the law and indicated what should be done in the relevant legal context.

Evidence Act 1995 LEGISLATION CITED: ss 118 and 119 Local Government Act 1993 s 440(5)

CASES CITED: Sydney Airports Corporation v Singapore Airlines Ltd and Qantas Airways Ltd [2005] NSWCA 47 Workcover Authority (NSW) (General Manager) v Law Society of New South Wales [2006] NSWCA 84, (2006) 65 NSWLR 502

APPLICANT: Mr P Larkin SOLICITORS: Thompson Norrie LEGAL REPRESENTATIVES: 1ST-3RD RESPONDENTS Mr J E Griffiths SC SOLICITORS Sparke Helmore

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

EX TEMPORE JUDGMENT 1 HIS HONOUR: The question before the Court is whether the respondents have discharged their onus of establishing that a document produced by them in answer to a notice to produce issued by the applicants is privileged. 2 The applicant, Belinda Lee Charlton, is an applicant for the vacant position of General Manager of Singleton Council. She is a senior council officer and has been the Acting General Manager of the council at various times since that position became vacant in July 2008. Under a council resolution of 15 December 2008, Mr Gary Woodman was appointed Acting General Manager from 31 January to 22 March 2009 and Ms Charlton was Acting General Manager from 23 March 2009 until commencement of service of the new General Manager.

3 On 27 February 2009, Ms Charlton commenced these proceedings against Susan Rosalie Moore who is the Mayor of Singleton council; Alison Gay Howlett, a councillor who is said to have made a complaint against Ms Charlton which was later withdrawn; and Singleton Council. The Mayor and Ms Howlett were among those appointed by the council to the selection committee for the appointment of the new General Manager. The relief claimed included, inter alia, a declaration that the conduct of the first and second respondents in relation to the processes applicable to the appointment of the General Manager of Singleton council has infringed the principles of procedural fairness, cl 4.4 of the Singleton Council Code of Conduct and/or s 440(5) of the Local Government Act 1993. On the day that the summons was filed, on the applicant's motion for urgent interlocutory relief (a) the first respondent Ms Moore gave an undertaking to the Court without admissions that she would not participate in any way in the processes applicable to the appointment of the permanent General Manager of Singleton council until 27 March 2009 or until further order of the Court; and (b) the hearing of the proceedings were expedited and fixed for 24 and 25 March 2009.

4 Thus, under the terms of the council resolution of 15 December 2008, Ms Charlton was to become Acting General Manager on the day before the proceedings are due to be heard.

5 On 27 February and again on the morning of 2 March 2009 Ms Charlton received a council email which relates to a council meeting later that day. It stated that a report had been prepared for consideration which, inter alia, contained advice concerning litigation or advice that would otherwise be privileged from production in legal proceedings on the ground of legal professional privilege. It said that the council's solicitor would be in attendance and it recommended that the council consider the report. The email gave no indication that it related to the position of Acting General Manager and Ms Charlton did not realise that it did.

6 On 2 March 2009 the council resolved to amend the 15 December 2008 resolution by extending Mr Woodman's appointment as Acting General Manager to the earlier of 30 June 2009 or the commencement of service of the newly appointment General Manager, and by changing the date of commencement of Ms Charlton's appointment as Acting General Manager to 1 July 2009. There appears to be a substantial prospect that the new General Manager will be appointed before 1 July 2009. The financial effect of the 2 March 2009 resolution on Ms Charlton is that she will not receive income of about $1800 per fortnight that she otherwise would have received as Acting General Manager from 23 March 2009.

7 According to Ms Charlton, she knew nothing about the resolution of 2 March 2009, until 3 March 2009 when she had the following conversation with Mr Woodman: "Woodman: 'Belinda because of your conflict of interest in this legal matter, last night Council resolved to alter the resolution of Council from the 15th of December last year, in order to extend me to the 30th of June. What that means is that I will remain the Acting GM till the 30th of June and you will take over on 1 July'.

Charlton: 'Well that won't occur because there won't be the opportunity to act in the role come 1 July'.

Charlton: 'Well you are aware that your solicitor Mr McKelvey has outlined the proposed timeline for recruitment from which I can only draw that the recruitment will be completed before 1 July'.

Charlton 'I am disappointed at how the matter came to council last night because if I had known what was proposed to be discussed I would have made provision to take public access on the matter but there was no disclosure on what the matter even related to'." 8 On 4 March 2009 the applicant served the respondents with a notice to produce requiring production to the Court of the following: "1. The Report of the Acting General Manager being Report No 4/09 relating to Notice of Motion to Amend a Previous Resolution ('the Report') as referred to in Late Agenda Item for the Meeting of the Council held Monday 2 March 2009 ('the Meeting'). 2. The Minutes of the Meeting. 3. Any Documents which were before the Council at the time when it made, and relating to, the Resolution made on 2 March 2009." 9 In response to the notice to produce the council produced and provided Ms Charlton with copies of the late agenda documentation which Ms Charlton had seen prior to the council meeting on 2 March 2009 and an extract from the minutes of that council meeting to which I have earlier referred. 10 The "report" considered by the council on 2 March 2009 was in fact a letter of advice from the council's solicitors Sparke Helmore of 27 February 2009 addressed to the General Manager for the attention of Mr Woodman. The council contends that the solicitors' letter attracts legal professional privilege. The matter has been listed before the Court at short notice today in order to determine the privilege claimed. The respondents have produced a copy of the solicitor's letter to the Court for that purpose, without it being seen by the applicant.

11 The above course of events has led to the applicant to give notice of intention to amend her summons in these proceedings to seek a declaration that the council resolution of 2 March 2009 to alter the resolution of 15 December 2008, concerning the role of the applicant as Acting General Manager, infringed the principles of procedural fairness, cl 4.4 of the Singleton Council Code of Conduct, and/or s 440(5) of the Local Government Act 1993 and is null and void; and an order restraining the council from its councillors, servants and agents from giving any further effect to the resolution.

12 The two heads of legal professional privilege are legal advice privilege and litigation privilege, which are governed by ss 118 and 119 of the Evidence Act 1995. I am satisfied that the respondents have discharged their onus of satisfying the Court that their council's solicitor's letter attracts legal advice privilege under s 118(a) which provides: "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…

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client." 13 As to the onus of proving the dominant purpose, see Sydney Airports Corporation v Singapore Airlines Ltd and Qantas Airways Ltd [2005] NSWCA 47. 14 "Legal advice" is construed broadly to include advice as to what should prudently and sensibly be done in the relevant legal context: Workcover Authority (NSW) (General Manager) v Law Society of New South Wales [2006] NSWCA 84, (2006) 65 NSWLR 502. The first paragraph of the summary of advice at the end of the solicitors' letter to the council went beyond formal advice as to the law, I think, but is nevertheless legal advice within that broad construction. It was directly referable to the performance by the solicitor of his professional duty as legal advisor of his client in the relevant legal context. In Workcover McColl JA (Handley and Hodgson JJA agreeing) said: "77 The scope of the proposition that privilege is not lost if a communication from a lawyer containing legal advice also contains extraneous matter was considered in Balabel v Air India [1988] Ch 317. That case concerned the question whether legal advice privilege extended only to communications seeking or conveying legal advice, or to all that passes between solicitor and client on matters within the ordinary business of a solicitor. Taylor LJ (with whom the Master of the Rolls, Lord Donaldson MR and Parker LJ agreed) said (at 330) that:

`... [T]he purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence...the test is whether the communication or other document was made confidentially for the purposes of legal advice. Those purposes have to be construed broadly ... [L]egal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context.'

78 The House of Lords comprehensively reviewed the scope of legal advice privilege in Three Rivers District Council v Governor and Company of the Bank of England (No 6) …As Baroness Hale of Richmond observed (at 659 [62]), all the Law Lords endorsed the approach taken in Balabel v Air India , and, in particular, Taylor LJ's observation (at 330) that legal advice may include 'advice as to what should prudently and sensibly be done in the relevant legal context'.

81. Taylor LJ's statement (at 331) that, '... to extend privilege without limit to all solicitor and client communication upon matters within the ordinary business of a solicitor and referable to that relationship [would be] too wide'. He then said:

`[38] ... If a solicitor becomes the client's 'man of business', and some solicitors do, responsible for advising the client on all matters of business, including investment policy, finance policy and other business matters, the advice may lack a relevant legal context. There is, in my opinion, no way of avoiding difficulty in deciding in marginal cases whether the seeking of advice from or the giving of advice by lawyers does or does not take place in a relevant legal context so as to attract legal advice privilege. In cases of doubt the judge called upon to make the decision should ask whether the advice relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law. If it does not, then, in my opinion, legal advice privilege would not apply. If it does so relate then, in my opinion, the judge should ask himself whether the communication falls within the policy underlying the justification for legal advice privilege in our law. Is the occasion on which the communication takes place and is the purpose for which it takes place such as to make it reasonable to expect the privilege to apply? The criterion must, in my opinion, be an objective one.'

82 Lord Rodger of Earlsferry (with whom Lord Scott agreed (at 653 [45])) also stressed (at 657 [58]) that '... In relation to legal advice privilege what matters ... [is] ... whether the lawyers are being asked qua lawyers to provide legal advice'. Lord Carswell spoke in like vein when he said (at 679 [111]):

`[111] ... all communications between a solicitor and his client relating to a transaction in which the solicitor has been instructed for the purpose of obtaining legal advice will be privileged, notwithstanding that they do not contain advice on matters of law or construction, provided that they are directly related to the performance by the solicitor of his professional duty as legal adviser of his client.'

83 In DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151, Allsop J undertook an exhaustive review of authorities concerned with the scope of legal advice privilege in the context of documents which contained both legal advice and extraneous matter. After referring approvingly to Taylor LJ's statement in Balabel (at 330), he said (at 165 [45]):

`[45] ... What legal advice is, however, goes beyond formal advice as to the law. This recognition does not see the privilege extend to pure commercial advice. In any given circumstance, however, it may be impossible to disentangle the lawyer's views of the legal framework from other reasons that all go to make up the 'advice as to what should prudently and sensibly be done in the relevant legal framework'..'

84 Allsop J observed (at 163 [31]) that 'the privilege...will not be allowed to be undermined by an overly narrow or technical approach to questions involved, such as the identification of the relevant advice in question'. Nevertheless, he cautioned, that the importance of the privilege 'does not ...provide a foundation for extending the protection beyond its proper bounds'.

85 Allsop J referred with approval (at 169 [58]) to Hellenic Mutual War Risks Association (Bermuda) Ltd v Harrison (The 'Sagheera') [1997] 1 Lloyd's Rep 160 at 168 where Rix J said:

`... In legal advice privilege, I would suggest, the practical emphasis is upon the purpose of the retainer. If the dominant purpose of the retainer is the obtaining and giving of legal advice, then although it is in theory possible that individual documents may fall outside that purpose, in practice it is unlikely. If, however, the dominant purpose of the retainer is some business purpose, then the documents will not be privileged, unless exceptionally even in that context advice is requested or given, in which case the relevant documents probably are privileged.' (Emphasis added)" 15 For these reasons, I uphold the claim to legal professional privilege. The exhibits and the copy of the letter of 27 February 2009 from Sparke Helmore to the third respondent may be returned.

10/03/2009 - Body of judgment missing - Paragraph(s) 1-15

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