Cretney v State of New South Wales [2005] NSWIRComm 395 | Case summary

1 These proceedings are constituted by a further amended summons filed 24 June 2005. The applicant, Patricia Cretney, claims certain relief against the respondent, State of New South Wales (Department of Education and Training), under s 106 of the Industrial Relations Act 1996 ("the Act"). In essence, the applicant claims that her contract of employment with the respondent, whereby she worked as a senior school assistant from 1986 and continuing, was unfair for the purpose of s 106. The unfairness is said to arise out of allegations made by the respondent with respect to the applicant's conduct and work performance in connection with the investigation of certain matters and the reference to her conduct and work performance contained within a document entitled "Penrose Public School Management Review Report June 2000". 2 The applicant issued a summons addressed to the respondent requiring the production of certain documents said to be relevant to the proceedings, and in particular documents relating to the preparation of the Penrose Public School Management Review Report. The respondent, by motion, has claimed that two documents, both entitled "Evaluation of Information Arising From the Management Review of Penrose Public School - June 2000" are the subject of legal professional privilege and that the respondent should not be compelled to produce them. 3 The first document is dated 23 August 2000 and has attached to it a memorandum bearing the same date from Ms Carolyn Wells, described as the Assistant Director of Audit, addressed to Margaret Baker, senior legal officer, Industrial Relations Services, employed by the respondent. The second document is dated 25 August 2000 and incorporates material from the first document together with legal advice given by Ms Baker during the course of a conference with certain personnel of the respondent. 4 The applicant denied that the respondent was entitled to claim professional legal privilege with respect to these documents. During the course of the hearing of the notice of motion, affidavit evidence was filed by Margaret Baker, Peter Johnson, Carolyn Wells and Michael Burns. There was also tendered into evidence certain correspondence between the solicitors for each of the parties, the covering memorandum from Ms Wells to Ms Baker dated 23 August 2000, a copy of the respondent's "school development policy", a letter from John Murn of the respondent's legal services unit addressed to the applicant, and a letter from Mr Murn to Mr Chris Puplick, the Privacy Commissioner dated 10 December 2001. In addition, Ms Baker and Ms Wells gave oral evidence and were cross-examined. 5 As will be seen, the evidence of Ms Wells is critical to the determination of whether the contentious documents attract privilege. Before considering that evidence, however, I refer first to the School Development Policy document which was tendered into evidence. This permits the department to undertake management reviews of schools with the objective of assisting a school "to improve its management". The document states that a management review will be carried out "when there is substantial evidence of significant dysfunction in the operation of the school as identified by the superintendent". It is important to note that a school management review had already been conducted at the Penrose School prior to the involvement of Ms Wells in any activity which had any relevance to these proceedings. 6 Ms Wells was at all relevant times the Manager of Audit of the respondent. Amongst her duties, Ms Wells said that "I was the person within Audit who the executive of DET would assign to special projects requiring consideration of matters which were such a nature that disciplinary action was a possible outcome. My roles in those types of matters was to collate information regarding events that had occurred or alleged to have occurred. This process sometimes involved the deployment of investigators, the interviewing and taking statements from witnesses, and the application of my judgment on the basis of my experience with Departmental policies, systems, standards and codes of conduct". 7 In her affidavit, Ms Wells said that she was contacted by Mr John Sutton, the Assistant Director-General (primary education) of the respondent in August 2000 in relation to the management review which had been undertaken at Penrose Public School. She said "he requested that I evaluate the material which had been collected in the course of the review for the purposes of providing advices to him as to whether there was a proper basis for further legal action arising out of the Report and, if necessary, to undertake further investigation". Furthermore, it was "normal practice" to refer information to Industrial Relations Service within the department to assess matters and that that Service "routinely sought legal advice from solicitors engaged within a unit of that Service." 8 Ms Wells said that she reviewed the information provided by the "Management Review team" together with a Ms Herring, who was a representative of the Industrial Relations Service. She said that she then created a document "specifically for the purpose of obtaining legal advice in relation to the matters that I had been asked to investigate. That is the document dated 23 August 2000. She said that that document was forwarded to Ms Baker, together with memorandum of 23 August 2000. The memorandum, which is in evidence, says: "Following is information arising from the Management Review of Penrose PS, June 2000. It contains information and opinion provided in confidence to the staff who conducted the review. The information has been organised according to areas where staff of the school may have failed to perform their professional duties during the period 1989 - 2000…The information has been evaluated and conclusions drawn regarding action that should now be taken…This information is presented in order to obtain legal advice prior to the submission of recommendations to the Director General. Please review the following information and comment on the interpretation and application of the legislation". 9 It is clear from the oral evidence given by Ms Wells, and in particular arising out of cross-examination, that the process upon which she embarked in the evaluation of the Penrose School Management Review was a different process from that which she would normally undertake. In normal circumstances she would be asked to conduct an audit or inquiry and that would be referred to the Industrial Relations Service for determination as to whether any further action was appropriate. The Service would then determine whether or not to obtain legal advice about the matter. Ms Wells distinguished those circumstances from those which pertained in connection with this particular investigation. She said that she was asked to investigate the matter and did so in conjunction with a representative from the Industrial Relations Service. Ultimately, she was required to prepare a report to the Director General. In order to do that she said that she prepared a document, namely the document dated 23 August 2000, specifically for the purpose of obtaining legal advice about the matter which she forwarded direct to Ms Margaret Baker, a senior legal officer within the Industrial Relations Services, under cover of the memorandum to which I have earlier referred. The substance of the evidence of Ms Wells is that that document, dated 23 August 2000, was specifically prepared for the purpose of obtaining legal advice. 10 Subsequently, at a conference on 25 August 2000, attended by Ms Herring, Ms Wells, and another officer of the Service, Ms Baker gave verbal advice with respect to matters contained within the 23 August 2000 document. Ms Baker observed Ms Wells to make notes on her copy of that document during the course of that conference. It was the evidence of Ms Wells that those notes of legal advice given by Ms Baker were incorporated within the second document created later that day which was forwarded by her to the Director General and which contained certain recommendations to assist the Director General in determining what action was to be taken. 11 The principles to be applied in determining whether legal professional privilege attaches to a document have most conveniently and recently been stated by the High Court of Australia in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49. In a joint judgment, Gleeson CJ, Gaudron and Gummow JJ overruled Grant v Downs (1976) 135 CLR 674. Their Honours declared that the "dominant purpose test" was the appropriate test to be applied in determining whether privilege attached to a communication. That is, if a document is created for the dominant purpose of obtaining legal advice, legal professional privilege will attach to it. 12 Prima facie, on the basis of the evidence adduced, the document of 23 August 2000 was prepared for the dominant purpose of allowing Ms Wells to obtain legal advice on its contents, so that that legal advice might ultimately be included within any report that was to be made by her to the Director General. To hold otherwise would, in my opinion, be against the actual evidence and the weight of the evidence given in these interlocutory proceedings. 13 It follows that, to the extent that the report of 25 August 2000 contains material which consists of legal advice given by Ms Baker earlier that day, legal professional privilege will attach to that part of it. Whether and to what extent that part of the 25 August 2000 document can have excised from it references to legal advice given is, at this stage, unknown. The respondent asserts, on the basis of counsel's advice, that no such excision can be undertaken. If that assertion is not accepted by the applicant, any further controversy may be agitated before me under the liberty to apply which continues with respect to the case management of these proceedings. 14 Ms Howell, counsel for the applicant, sought to resist these prima facie conclusions by endeavouring to colour the evidence to which I have referred by reference to two documents and by submitting that the respondent had waived privilege. 15 The first document relied upon by the applicant was a letter dated 10 December 2001 from Mr John Murn, Chief Legal Officer of the Legal Services Unit of the respondent, addressed to Mr Puplick, Privacy Commissioner. This letter appears to have been in response to allegations made inter alia by the applicant that certain provisions of the Privacy Act had been breached by the respondent. The letter stated in part that a review had been conducted of the Penrose Public School Management Review "for the purpose of determining that breaches of staff discipline had occurred and whether action should be taken on any breaches. The Assistant Director of Audit, Ms C Wells, undertook that review. Ms Wells did not identify any inaccurate, incomplete or misleading material…". In a letter dated 18 January 2002, Mr Murn wrote to the applicant in reply to a letter from her with respect to the application of the Privacy and Personal Information Protection Act 1998. In describing the exercise undertaken by Ms Wells, Mr Murn said in part: "In conducting the evaluation Ms Wells examined all the material arising from the management review, including the review report and records of interviews. Ms Wells advises that she did not conduct any interviews or have any interviews conducted on her behalf in preparing her evaluation". 16 In my opinion neither of these documents gives any support to a characterisation of the dominant purpose for which the report of 23 August 2000 was prepared. They are indicative of the general nature of the task undertaken by Ms Wells but do not touch upon the preparation of that particular document and the purpose for which it was prepared. 17 The applicant also relied upon both those documents to assert that, in some way, they constituted a waiver of professional privilege. I cannot see how a reference to the task undertaken by Ms Wells contained within both those documents can constitute in any way a waiver of any legal advice given by Ms Baker to Ms Wells in the course of the conference on 25 August 2000. 18 Finally, the applicant sought to rely on the material contained within both documents as constituting conduct which would allow the Court to impute a waiver of privilege pursuant to the general principle espoused in the High Court of Australia in Mann v Carnell (1999) 201 CLR 1. 19 I have discussed my understanding of the principles pertaining to imputed waiver of privilege by conduct in Tynan Motors Pty Ltd v Mazda Australia Pty Ltd [2003] NSWIRComm 146, and I shall not repeat the discussion of those principles here. There is, in my opinion, nothing demonstrated by way of conduct of the respondent, by reference to those two documents or by reference to any other matter, which would allow the Court to determine that there has been any imputed waiver of privilege. 20 Save for the remaining issue concerning excision of material from the document dated 25 August 2000, the respondent's motion is upheld. I see no reason why a costs order for the disposal of the motion to date should not be made in favour of the respondent. 21 ORDERS:

Cretney v State of New South Wales

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Judgment (14 paragraphs)

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Cases Cited (4)