Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited

1. The claim for legal professional privilege made by the respondents in respect of the documents identified in the affidavit of Jason Donnelly sworn 22 July 2017, in response to the subpoena issued on 15 July 2017, be upheld. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WIGNEY J: 1 The applicant in this proceeding, the Construction, Forestry, Mining and Energy Union (CFMEU) alleges, amongst other things, that by the words and conduct of the second and third respondents on 3 July 2017, the first respondent, De Martin & Gasparini Pty Limited, took adverse action against its employees contrary to s 342 of the Fair Work Act 2009 (Cth). De Martin & Gasparini's defence includes, amongst other things, the contention that it did not take adverse action because its actions were authorised by the Fair Work Act. The basis of that contention is that the action it took on 3 July 2017 was part of a consultative process in respect of a major workplace change which it was obliged to engage in by a clause in its enterprise agreement with its employees. 2 By subpoena issued on the application of the CFMEU on 15 July 2017, De Martin & Gasparini was called upon to produce, in accordance with paragraph 1 of the Schedule to the subpoena, documents which met the following description: 1. All documents relating to or recording the decision taken by the First Respondent or Second Respondent to seriously consider a major workplace change by ceasing to employ all employees covered by the De Martin & Gasparini/CFMEU Collective Agreement 2015-2018 (Agreement), which decision was communicated to employees of the First Respondent on 3 July 2017. 3 The CFMEU called on the subpoena on 21 July 2017. In partial response to the subpoena, De Martin & Gasparini produced a sealed envelope to the Court which contained documents in respect of which a claim for legal professional privilege was made. Directions were made in relation to the filing of evidence in respect of the legal professional privilege claim. 4 De Martin & Gasparini made it clear, through its counsel, that the legal professional privilege issue could not be resolved by me inspecting the documents because that could mean that I may not be able to hear the proceeding proper. It was clear, therefore, that the documents were produced on the basis that the documents should not be inspected by either the CFMEU or the Court until the resolution of the claim for legal professional privilege. 5 The evidence in due course filed in support of the legal professional privilege claim was an affidavit of Jason Donnelly, a legal practitioner and partner of a law firm called National Workplace Lawyers. Mr Donnelly deposed that he had been retained by De Martin & Gasparini and its parent company, Boral Limited, to advise on various matters, including achieving compliance with the Code for the Tendering and Performance of Building Work 2016, a variation to the De Martin & Gasparini and CFMEU enterprise agreement, and proceedings in relation to those matters in the Fair Work Commission. Mr Donnelly's affidavit contained a number of paragraphs, each of which identified a document in respect of which legal professional privilege was claimed. Each of the paragraphs was in relevantly the same form. It is sufficient to set out three paragraphs, being paragraphs 8, 9 and 10, by way of example: 8. On 18 June 2017 at 6.16pm, I received an email from Daniel Sleeman (National IR/ER Manager, Boral Australia) containing the contents of a confidential communication prepared by the Client and me containing legal advice. Mr Sleeman is a practising lawyer and has a practising certificate issued by the New South Wales Law Society, and I have understood at all times during my retainer that Mr Sleeman held such a practising certificate. Annexed to my affidavit and marked 'JMD1' is a copy of Mr Sleeman's practising certificate. Privilege is claimed over this document under sections 118(a), (b) and (c) of the Evidence Act 1995 (Cth) as it is a confidential communication made between the Client and me for the dominant purpose of me providing legal advice to the Client. 9. On 20 June 2017 at 8.59pm, I received an email from Mr Sleeman requesting legal advice from me in relation to a document which I do not wish to further identify at the risk of it being alleged that it would amount to a waiver of privilege. This was a confidential communication. Privilege is claimed over this document under sections 118(a) (b) and (c) of the Evidence Act 1995 (Cth) as it is a confidential communication made between the Client and me for the dominant purpose of me providing legal advice to the Client. 10. On 21 June 2017 at 9.22pm, I sent an email containing legal advice to Mr Sleeman. This was a confidential communication. Privilege is claimed over this document under section 118(a) and (c) of the Evidence Act 1995 (Cth) as it is a confidential communication made between the Client and me for the dominant purpose of me providing legal advice to the Client. 6 The CFMEU objected to virtually all of those paragraphs of Mr Donnelly's affidavit. By way of example, in relation to paragraph 9 it objected to all but the words: On 20 June 2017 at 8.59 pm, I received an email from Mr Sleeman. 7 The CFMEU submitted that the balance of the paragraph comprised nothing more than inadmissible legal conclusions. 8 The CFMEU's objection to those parts of the paragraphs has no merit and is rejected. 9 It may be readily accepted that, to sustain a claim for legal professional privilege, the claimant must not merely assert the privilege claim, but rather must prove the facts that establish that the claim is properly made. Those facts must be provided by admissible evidence: Hancock v Rinehart [2016] NSWSC 12 at [7]. A claim for privilege cannot be supported by inadmissible hearsay or opinion: Hancock at [7]. Nor can it be made out by inadmissible legal conclusion. 10 Mr Donnelly's statements that a document or documents contain legal advice or contain a request for legal advice are not, however, legal conclusions or inadmissible hearsay or opinion. They are statements of fact about the contents of the documents in question, or their characteristics. Mr Donnelly had firsthand knowledge of the contents and characteristics of the documents in question because he was either the recipient of the documentary communications, or the sender of them. 11 To support a claim for legal professional privilege it is ordinarily necessary to adduce some evidence concerning the nature or characteristics of the document in question. That obviously must be done without annexing the document itself or otherwise disclosing its confidential and privileged content. While Mr Donnelly's evidence concerning the relevant nature and content of the documents in question is somewhat sparse and perhaps not ideal, it is nonetheless admissible. 12 Mr Donnelly's statements concerning the characteristics and contents of the documents in question must also be read in context. That context includes that Mr Donnelly was an external solicitor who had been retained to provide legal advice, that the legal advice concerned various specified matters, and that the documents in respect of which legal professional privilege was claimed fell within paragraph 1 of the schedule to the subpoena. They were therefore likely to relate to the very matters that Mr Donnelly was retained to advise on. 13 When read in context, the statements about the content and characteristics of the documents are not inadmissible conclusions of law. They are capable of constituting evidence in support of De Martin & Gasparini's legal professional privilege claim. 14 The same can be said about Mr Donnelly's statement that the relevant documentary communications were confidential. The confidentiality of the communications could, in any event, relevantly be inferred from the position that the parties to the communications occupied and the context in which the communications were obviously sent. 15 The CFMEU's objections to Mr Donnelly's affidavit must accordingly be rejected. 16 The CFMEU also submitted that the "bare assertions" in Mr Donnelly's affidavit, even if admitted, would not be sufficient to prove that the documents in question were privileged. It submitted that Mr Donnelly's evidence was not sufficiently focused or specific and did not set out the factual basis of the privilege claim. In the CFMEU's submission, the evidence amounted to nothing more than sworn assertions that the documents were privileged. 17 Those submissions must also be rejected. 18 It may be accepted that an affidavit which merely asserts the purpose for which a document was created, followed by a statement about the category of legal professional privilege to which the document is said to belong, will generally not be sufficient: Kennedy v Wallace (2004) 142 FCR 185 at [12]-[13]; National Crime Authority v S (1991) 29 FCR 203 at 211. Equally, a privilege claim will not be established by resort to mere verbal formula or ritual: Grant v Downs (1976) 135 CLR 674 at 689. Mr Donnelly's evidence, however, does not fall into either of those categories. While much of Mr Donnelly's evidence may be said to be rather formalistic and repetitive and, in some respects, relatively sparse, it is nonetheless sufficient, when read in context, to support an inference or conclusion that each of the documents in question was a confidential communication between the client (either De Martin & Gasparini or Boral) and its lawyer, Mr Donnelly, made for the dominant purpose of Mr Donnelly providing legal advice. 19 While Mr Donnelly does not directly depose to or assert the purpose of the relevant communication, such a purpose can nonetheless be inferred from his evidence, read as a whole. As noted earlier, Mr Donnelly was an external lawyer who was retained specifically to advise De Martin & Gasparini and Boral about certain matters. Given that the documents fall within paragraph 1 of the subpoena, it may be inferred that the documents relate to the very matters that Mr Donnelly was retained to advise on. It is not a large step to infer from that fact that the documentary communications were created or sent for the purpose of requesting advice from Mr Donnelly, or for the purpose of Mr Donnelly providing that advice. It should also be noted, in the context of the sufficiency of Mr Donnelly's evidence, that he was not cross-examined. 20 The CFMEU also submitted that any legal professional privilege in respect of the documents had been waived. The waiver argument was put on two bases. First, it was asserted that the production of the documents to the Court, albeit in an envelope and subject to a claim of legal professional privilege, was conduct inconsistent with the maintenance of the privilege. Second, the CFMEU contended that the respondents had waived privilege by laying open to scrutiny the legal advice that was given at a meeting held on 28 June 2017. 21 Both of those contentions are without merit and are rejected. 22 The CFMEU relied on Hancock in support of the first contention. In that case, Brereton J said at [23] (footnotes omitted): Those cases clearly establish that an objection to production founded on a claim for privilege should be taken at the first stage, and the reason why the objection is properly to be taken at the first stage - before the documents are produced to the court - is that the privilege is a privilege from production to the Court. Because the privilege is one against production, it is inconsistent with maintaining the claim to produce the documents to the court, let alone to tender them on the voir dire as evidence in support of the claim. It may be one thing to produce them pursuant to a requirement of the court to inspect them, but it is quite another to voluntarily produce them and tender them as the evidence to sustain the claim. If the claimant voluntarily uses the documents in that way, it has no legitimate basis for insisting that the opponent seeking production should be precluded from seeing them. 23 As can be seen from that passage, the circumstances in Hancock were completely different to this case. The documents in that case were initially produced without objection and without any privilege claim. Here, the documents were produced, but in a sealed envelope and subject to a privilege claim. The respondents accordingly did not act inconsistently with the privilege claim, even though strictly speaking the respondents could, and perhaps should, have objected to production in the first instance, rather than producing the documents in an envelope subject to a privilege claim. 24 The CFMEU's second contention relied on the principles of implied waiver. The CFMEU relied in particular on the principle that there will be an implied waiver where the party entitled to the privilege makes an assertion, express or implied, or brings a case, which is either about the contents of the confidential communication, or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication: DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 at [58]; see also Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [61]. 25 The problem for the CFMEU, however, is that there is no proper basis for contending that the respondents have acted in any way which is inconsistent with the maintenance of the confidentiality in the relevant documents. While the respondents' defence to the CFMEU's adverse action claim depends, in part, on a decision which is said to have been made at a meeting on 28 June 2017, and it would appear that some lawyers were present at that meeting and provided legal advice to others who attended, it does not follow that the respondents' case lays that legal advice open to scrutiny. The respondents' defence makes no reference to the legal advice. The respondents' affidavits which have been filed do not mention the fact that legal advice was given, let alone relied on, at the 28 June meeting other than one affidavit which simply says that legal advice was received. While the respondents' case, to an extent, lays open to scrutiny the decision that was made at that meeting, it does not necessarily lay open to scrutiny any legal advice that may have been given or received in relation to that decision at the meeting. 26 The CFMEU also relied on the following observations of Hodgson JA in Council of the New South Wales Bar Association v Archer (2008) 72 NSWLR 236 at [48]: In my opinion, this exposition is consistent with both Maurice and Mann, subject to the need to look for inconsistency: compare Bayliss v Cassidy (No 2) [2000] 1 Qd R 464; SQMB v Minister for Immigration and Multicultural Affairs (2004) 205 ALR 392 at [30]-[44], A Corkhill and M Selwyn, "Evolution of the Common Law Principle of 'Issue Waiver' " (2008) 82 Australian Law Journal 338. It is not enough to bring about a waiver of client legal privilege that the client is bringing proceedings in which the content of the privileged communications could, as a reasonable possibility, be relevant and of assistance to the other party. For the client to do this is not inconsistent with the maintenance of the privilege, and does not give rise to unfairness of the type in question. What would involve inconsistency and relevant unfairness is the making of express or implied assertions about the content of the privileged communications, while at the same time seeking to maintain the privilege. In this respect, it may be sufficient that the client is making assertions about the client's state of mind, in circumstances where there were confidential communications likely to have affected that state of mind. 27 The CFMEU submitted that the respondents have put their state of mind in issue because their defence includes that their actions on 3 July were for a purpose other than a purpose which would amount to an adverse action. That purpose is said to have been the carrying into effect of the decision made at the 28 June meeting. The CFMEU submitted that the legal advice received at the meeting was likely to have affected the respondents' state of mind or purpose in that regard. 28 There is, however, nothing in the evidence at this stage to suggest that the respondents' state of mind or purpose was likely to have been affected by the legal advice. In any event, even if that was the case, it does not necessarily follow that the respondents have acted inconsistently with the maintenance of the privilege. Hodgson JA in Archer was not seeking to lay down any rigid rule: Archer Capital 4A Pty Ltd as Trustee for the Archer Capital Trust 4A Pty Ltd v Sage Group PLC (No. 3) [2013] FCA 1160; (2013) 306 ALR 414 at [15]. Each case must be considered on its own facts. 29 I am not satisfied on the evidence in its present state that the respondents have relevantly acted inconsistently with the maintenance of the privilege claim over the documents in question. Nor am I satisfied that there was or is any unfairness to the CFMEU arising from the respondents' maintenance of the privilege claim in all the circumstances. The respondents have not directly or indirectly put the contents of the privileged communications in issue. There has been no implied waiver. 30 The respondents' claim of legal professional privilege in respect of the documents referred to in Mr Donnelly's affidavit that would otherwise be required to be produced in answer to paragraph 1 of the schedule to the CFMEU's subpoena is accordingly upheld. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney.