Director General, Attorney General's Department v Cianfrano [2003] FCA 53 | Case summary

REASONS FOR DECISION Introduction 1 In 1999 the New South Wales Government decided to sell the Flemington Markets site to Sydney Markets Limited. Several government agencies were involved in the negotiations including the Premier's Department, the Department of Public Works and Services (as it then was) and the NSW Treasury. In September 2001, the Crown Solicitor was retained by the Premier's Department to act for the Crown in connection with the sale. On 2 June 2005, Mr Cianfrano applied to the Attorney General's Department (the agency) under the Freedom of Information Act 1989 (NSW) (the "FOI Act") for "all internal and administrative documentation and all communications of the Attorney General's Department in relation to the lease and sale of the Flemington Markets. . ." 2 The agency released 56 documents and withheld 88 documents, claiming that those documents were exempt under the FOI Act. That decision was affirmed on internal review. Mr Cianfrano then applied to the Tribunal for a review of that decision. The Tribunal affirmed the decision except in relation to five documents, which it held were not covered by the exemption for legal professional privilege. The agency has appealed to the Appeal Panel against that decision in relation to four of the five documents - documents 81 to 84. 3 Documents 81 to 84 are records of requests for searches and certificates and the response to those requests. Documents 81 and 83 are Request Forms for a title search of the property occupied by the Flemington Markets. Document 82 is a letter from Strathfield Municipal Council to the Crown Solicitor's Office providing a Planning Certificate which identifies the relevant planning instruments relating to the property occupied by the Flemington Markets. Document 84 is an Inquiry Form from the Crown Solicitor's Office requesting property information from Sydney Water, in particular a drainage diagram. It was not in dispute that: (a) the documents were communications between a solicitor (the Crown Solicitor) and a third party; (b) the documents are not communications by an agent of the client or the solicitor - they were direct communications between the solicitor and a third party; and (c) if legal professional privilege attached to the communications it was "advice" privilege and not "litigation" privilege because litigation was not contemplated in relation to the sale of the Flemington Markets site. Appeal Panel's powers 4 The issues for the Appeal Panel are firstly, whether the Tribunal made an error of law when it decided that the four documents were not covered by the exemption for legal professional privilege: Administrative Decisions Tribunal Act 1997 (NSW) (the "ADT Act"), s 113(2). The precise question is whether communications directly between a solicitor and a third party are exempt under Cl 10 of Schedule 1 to the FOI Act on the ground of legal professional privilege when litigation is not contemplated. The agency submitted that if the Appeal Panel found an error of law, we should extend the appeal to the merits of the Tribunal's decision in relation to the four disputed documents: ADT Act, s 113(2)(b). Legal professional privilege exemption 5 Under s 16(1) of the FOI Act "[a] person has a legally enforceable right to be given access to an agency's documents in accordance with this Act." Following an application for access to documents, an agency must determine whether access to the document is to be given or refused, and any charge payable for dealing with the application: FOI Act, s 24. An agency may refuse access to a document if it is an exempt document: FOI Act, s 25(1)(a). An exempt document includes a document referred to in any one or more of the provisions of Schedule 1: FOI Act, s 6. Clause 10 of Schedule 1 relates to documents subject to legal professional privilege: (1) A document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege. (2) A document is not an exempt document by virtue of this clause merely because it contains matter that appears in an agency's policy document. Tribunal's decision 6 The Tribunal dealt with the question of whether certain documents were covered by the exemption for legal professional privilege at [10] to [21] of its decision. The Tribunal commenced its analysis by noting that the submissions in this case were similar to those made in another case involving the applicant - Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282. The Tribunal repeated the passages at [18] and [19] of that decision which it regarded as equally relevant to this case: '18 The Relevant Law : The Tribunal and Appeal Panel has now dealt in a number of decisions with the content of the relevant principles, including in cases involving the present applicant (or his associate in a number of the cases, Mr Saggers); see most recently, Saggers v Director General, Attorney General's Department [2005] NSWADT 193; also, Cianfrano v Director-General, Premier's Department NSW & anor [2004] NSWADT 255 at [29]-[35]; Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135, and they were also dealt with by the Appeal Panel in Law Society of New South Wales v General Manager, Workcover Authority of New South Wales (GD) [2004] NSWADTAP 40. I adopt the statements of law in those cases. 19 In these reasons, I note again Lockhart J's well-known categorisation of documents affected by legal professional privilege in Trade Practices Commission v Sterling (1979) 36 FLR 244, 245-6, which the agency has used as an organising basis for its submissions: '(a) Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them. (b) Any document prepared with a view to its being used as a communication of this class, although not in fact so used. (c) Communications between the various legal advisers of the client, for example between the solicitor and his partner or his city agent with a view to the client obtaining legal advice or assistance. (d) Notes, memoranda, minutes or other documents made by the client or officers of the client or the legal adviser of the client of communications which are themselves privileged, or containing a record of those communications, or relate to information sought by the client's legal adviser to enable him to advise the client or to conduct litigation on his behalf. (e) Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence. (f) Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action. (g) Knowledge, information or belief of the client derived from privileged communications made to him by his solicitor or his agent.'' 7 The Tribunal went on to assess the documents in relation to which an exemption for legal professional privilege had been claimed. 19 Assessment : I have scrutinised all the documents the subject of this claim for exemption. I am satisfied that most of the categorisations made by counsel for the Department are accurate. Almost all of them are, without doubt in my view, protected by legal professional privilege. The central figure, in the case of all of the documents, is Mr Douglas Wilson, Assistant Crown Solicitor. The documentation is typical of a complex commercial transaction involving a range of interested parties. They show Mr Wilson giving advice on various drafts of the proposed contract of sale to the relevant agencies. They show him at times dealing with external consultants to the process such as Mr Bowen and Mr Fennell, and giving advice to the relevant agencies, having taken account of their views. They show him communicating with the prospective purchaser's solicitors. 20 The documents also include records of searches and certificates required to be obtained as part of the process of completing the sale. I refer in that regard to Documents 81-84 described in the schedule of documents as Copy search request form completed by D Wilson (D81 ), Section 149(2) Planning Certificate prepared by Strathfield Municipal Council over 1/853054 (D82), Search request form completed by D Wilson (D83) and Property Information Inquiry Form (D84). 21 I have some difficulty seeing how these documents are protected by legal professional privilege. The submissions claim that they fall into Lockhart category (e), i.e. 'communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purpose of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence'. In my view these documents do not fit this description. I accept that three of them record action taken in respect of the matter by Mr Wilson (D81, D83 and D84) but they seem to me to be no more than administrative records the revelation of which in no way infringes the important protections of the client-lawyer relationship furnished by legal professional privilege. As to D82, this appears to me to be a certificate of a public character supplied by a local council. The fact that it is supplied to a lawyer who has obtained the certificate in connection with work being done for a client seems to be the only basis for the claim to application of legal professional privilege. I am not satisfied that the claims for exemption are made out in respect of Documents 81-84. 8 In summary, the Tribunal decided that while certain communications between the Crown Solicitor's Office and third parties were exempt under Cl 10, the four documents in dispute were not exempt because they do not fall within Lockhart J's category (e) in Sterling. In addition, they are no more than administrative records. The Tribunal also said that a certificate supplied by a local council to a lawyer who requested it in connection with work being done for a client (document 82) does not of itself provide a basis for a claim for legal professional privilege. Evidence Act or common law? 9 The Tribunal and the parties proceeded on the basis that it is the common law principles of legal professional privilege, rather than the statutory provisions relating to client legal privilege in the Evidence Act 1995 (NSW), that are applicable in this case. We agree with that approach for the following reasons. Clause 10 of Schedule 1 exempts a document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege. Part 3.10, Division 1 of the Evidence Act 1995 (NSW), relating to client legal privilege, governs the adducing of evidence, not the production of documents. In Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49, the majority of the High Court (Gleeson CJ, Gaudron and Gummow JJ) noted at [3] that even in a jurisdiction where the Evidence Act applies, the relevant provisions relate only to the adducing of evidence. The majority went on to say that the circumstances in which legal professional privilege may apply are not limited to the adducing of evidence. They include other procedures including the discovery and inspection of documents. 10 In Charteris v General Manager, Leichhardt Municipal Council [2001] NSWADTAP 12 the Appeal Panel decided that the exemption for legal professional privilege is intended to give agencies the same protection as that enjoyed by all litigants and therefore embodies both the common law and the provisions of the Evidence Act (NSW). The Tribunal said at [44] and [45], that: 44 We do not favour an unduly mechanical approach to interpreting cl 10. We are not convinced at this stage that different outcomes would flow in a particular case from application of the Evidence Act tests to documents in dispute in an FOI case, as compared with the common law test. At some point the Tribunal may be required to resolve this issue more conclusively if the potential for different results is realised. 45 At this stage, we would not wish to foster a situation where agencies dealing with FOI requests were forced to divide documents in dispute into documents generated in anticipation of litigation, or documents that were 'producible' and those that were actually received into evidence. In ordinary circumstances it should be acceptable to apply either test, even if technically the Evidence Act provisions have no application to circumstances other than those where a document is being formally adduced in evidence in proceedings. 11 The time has now come to resolve this issue because of the potential for different results to flow from the application of the common law and the Evidence Act 1995 (NSW) in relation to communications between lawyers and third parties where legal advice privilege is claimed: Meteyard v Love [2005] NSWCA 444. The Federal Court has dealt with this issue in relation to s 42 of the Freedom of Information Act 1982 (Cth), the equivalent provision to Cl 10 of Schedule 1. In Commonwealth of Australia v Dutton (2000) 102 FCR 168 at 169, the Full Federal Court (Wilcox, Spender and Moore JJ) accepted the view of the Administrative Appeals Tribunal (AAT) that legal professional privilege under s 42 was not the same as client legal privilege arising under ss 117-126 of the Evidence Act 1995 (Cth). The Court also agreed with the AAT that the relevant privilege to be applied was common law legal professional privilege. That decision was applied by a single judge of the Federal Court, Madgwick J, in Bennett v Chief Executive Officer of the Australian Customs Service [2003] FCA 53 at [20] During the course of the hearing, counsel agreed that, in respect of the principles relating to legal professional privilege referred to in s 42(2) of the FOI Act, it was relevant to have recourse to the common law and not Division 1 of Pt 3.10 (s117 to s126) of the Evidence Act 1995 (Cth) ("the Evidence Act"). Counsel referred to the decision of the Full Court in Commonwealth of Australia v Dutton (2000) 102 FCR 168 in which the Full Court observed obiter that the common law was applicable and that this was clear from the approach taken in Esso Australia where the High Court had found that the Evidence Act was relevant to adducing evidence in Court, but in all other respects the common law applied. I agree. 12 There is no material difference between s 42(2) of the FOI Act (Cth) and Cl 10 of Schedule 1 to the New South Wales FOI Act. Nor is there any material difference between the provisions of the Commonwealth and New South Wales Evidence Acts. We share the view of the Federal Court that it is the common law principles of legal professional privilege that are to be applied when determining whether a document is exempt on the ground of legal professional privilege. As we have said, the Tribunal did not address this issue specifically, but applied its understanding of the common law principles of legal professional privilege to the documents in dispute. Neither party criticised that approach and in our view it was correct. Common law principles of legal professional privilege 13 Our next task is to identify the common law principle of legal professional privilege, if any, which applies to the circumstances of this case. We must then go on to determine whether the Tribunal erred in its understanding of that principle or in its application of that principle to the facts. The common law test for legal professional privilege is now the "dominant purpose test", as contained in the High Court's decision in Esso Australia Resources v Commissioner of Taxation (1999) 201 CLR 49. The most fundamental element of legal professional privilege is that the dominant purpose of the communication must be a privileged purpose: Westpac Banking Corporation v 789Ten Pty Ltd [2005] NSWCA 321 (19 September 2005). The purpose in this case is said to be assisting in the provision of legal advice in relation to the sale of the Flemington Markets. 14 The Tribunal's decision suggests that the disputed documents were obtained for an administrative purpose, and not for the dominant purpose of providing legal advice. In our view, even though the documents in dispute are of an administrative character, the dominant purpose of those communications was to enable the Crown Solicitor's Office to give the Crown legal advice in relation to the sale of the Flemington Markets. It follows that to the extent that the Tribunal's decision was based on a finding that the communications were not covered by legal professional privilege because of their administrative character, that finding is not correct. However, as we have found for other reasons that the documents are not privileged, the outcome of our review would not lead us to change the Tribunal's decision. 15 In relation to communications between a lawyer and a third party, the relevant line of authority begins with Wheeler v Marchant (1881) 17 Ch D 675. In that case the court held that a communication from a third party acting as agent of the client seeking advice could be regarded as a communication by the client itself and therefore attract the privilege, provided that the communication was obtained for the sole (now dominant) purpose of obtaining legal advice. However, where the third party was not acting as agent for the client, the privilege is not attracted. Cotton LJ said at 684-685 that: This privilege should not be given such rein as would allow the legal advisor unilaterally to bring third party communications under the umbrella of lawyer/client communications notwithstanding that the third party was not the client's agent for the purpose. 16 That proposition, if applied to the present case, would mean that the communications were not protected by legal professional privilege. The principle in Wheeler v Marchant, was one of the sources of Lockhart J's category (e) in Sterling: (e) Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence. 17 In its written submissions to the Tribunal at first instance, the agency argued that the disputed documents were privileged on the basis that they fell within category (e) set out by Lockhart J in Sterling. The Tribunal rejected that submission in its reasons at [21]. In its submissions to the Appeal Panel, the agency conceded that the disputed documents do not fall within the terms of category (e) because they were not made or prepared when litigation was anticipated or commenced. We agree with that submission which leads to the conclusion that the Tribunal has not made an error of law in rejecting the agency's submission on that point. 18 The question then arises as to whether the law on this point has changed since the decision in Sterling. On appeal, the agency referred to several other cases that were not raised before the Tribunal, in particular, Meteyard v Love [2005] NSWCA 444 at [91] and [112]. The Court of Appeal delivered that decision on 13 December 2005, well after the hearing before the Tribunal but a week before the Tribunal delivered its decision. 19 Meteyard related to the issuing of a number of summonses and orders for production of documents in relation to the affairs of Southland Coal Pty Ltd (receivers and managers appointed). Southland Coal was the joint owner of a coalmine in which there had been a spontaneous combustion of gas causing the mine to be shut down. Southland Coal had made an insurance claim against QBE Insurance (Australia) Ltd, but it had been refused. The receivers and managers of Southland Coal sought documents from QBE and from several other entities including an insurance loss assessor and a mining consulting company. QBE's solicitors had directly commissioned expert reports from the insurance loss assessor and the mining consulting company. It was the Court of Appeal's discussion about those communications that is relevant to these proceedings. 20 The claimants (QBE, the insurance loss assessor, the mining consulting company and others) applied to set aside the summonses and orders for production, arguing among other things, that they were oppressive. One of the reasons they were said to be oppressive was that a significant number of documents were likely to be privileged. Young J at first instance rejected the challenges to both the summonses and the orders for production. 21 Neither Young J nor the Court of Appeal examined particular documents and determined whether or not they were subject to legal professional privilege. Their Honours were looking at the issue in the abstract for the purpose of determining whether the summonses and orders for production were oppressive. The particular ground of appeal relevant to the present case related to the manner in which Young J at first instance dealt with the question of "advice privilege". His Honour held that "where the solicitor, acting within general instructions, of his or her own initiative seeks a report from an expert, that report falls outside legal advice privilege." That statement is consistent with the decision in Wheeler v Marchant and with Lockhart J's application of those principles in Sterling. One question for the Court of Appeal was whether that statement constitutes an error and if so whether it was material to the conclusion reached by Young J that oppression had not been demonstrated by the claimants. 22 The Court of Appeal (Beazley, Santow and Basten JJA) held at [79] and re-iterated at [102] that the issues in that case relating to legal professional privilege, must be determined by reference to the terms of s 118 of the Evidence Act. Nevertheless the Court referred to cases in which the common law principles of legal professional privilege had been applied. The Court concluded that the decision in Nickmar Pty Ltd v Preserveatrice Skandia Insurance Ltd (1985) 3 NSWLR 44 (Wood J) was of little direct relevance because in that case litigation was contemplated. The Court of Appeal noted at [89] that "In that circumstance, reports prepared by third parties and supplied to the solicitors for the client could attract privilege, even though the client had no direct involvement in obtaining the reports." Wood J in Nickmar followed the conclusions reached in Wheeler v Le Marchant that documents produced by a third party in answer to an inquiry by a solicitor for the purposes of giving legal advice to a client, were not protected by legal professional privilege. The Court of Appeal noted that: [91] It is clear that the primary judge in the present case relied upon and applied that principle. This required the conclusion that the independent consultants did not prepare the reports on behalf of the defendants, as their agents. That conclusion in turn depended upon the proposition that the solicitors were not expressly authorised to employ such consultants on behalf of QBE, despite the fact that it is implausible that the solicitors would have done so, absent authority and some express or implied undertaking by QBE to meet the additional costs. So viewed, there is some artificiality in concluding that the report of a third party, provided directly to the solicitors for the client may be privileged if the third party was in truth the agent of the client, but not if it was providing a service to the solicitors. The solicitors had no interest in the information or services provided by the third parties, except to the extent that such reports assisted the solicitors in giving legal advice to the client. [92] . . . There is, of course, a certain irony in these circumstances. If the reports are provided directly to the client, there is at least a danger that the client would have a significant purpose of the report, other than obtaining legal advice. That danger may be thought to be reduced if the report is supplied to the solicitor. On the other hand, if the report is obtained by the solicitor, without the direct intervention of the client, it may not be protected because the third party is held not to be an agent of the client. (emphasis added) 23 The Court of Appeal went on to discuss the decision of the Full Court of the Federal Court in Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357, another decision applying the common law principles of legal professional privilege to communications involving third parties. One of the questions that arose in Pratt was whether a communication between a third party (a report from an accountant) to a client was privileged. The Federal Court (Stone, Merkel, Finn JJ) found that the report, which was required by the client for the purpose of obtaining legal advice from the solicitors, should be treated as coming within the doctrine of legal professional privilege regardless of the way in which it was obtained and communicated to the solicitors. Stone J held that "the availability of privilege [should not] depend on whether the expert opinion is delivered to the lawyer directly by the expert or by the client". The Crown Solicitor's Office recognised that the principle in Wheeler v Le Marchant which remains unaffected by Pratt, is that where no litigation is contemplated and a third party prepares a report and provides it directly to a legal practitioner, it is not privileged unless the third party was the agent of the client. 24 The Court of Appeal in Meteyard noted that the facts in Pratt were different from the facts in that case, where the communication between the solicitors and the third party was a direct one, but nevertheless said at [99] that Young J's judgment "cannot readily be reconciled with the reasoning of the Full Court." Basten JA then applied the provisions of the Evidence Act to the facts of the case. The main issue for determination was whether the insurance loss assessors and the mining consultants were agents of either the client (QBE) or their lawyers. Basten JA found at [124] to [128] that they were experts acting as agents of QBE. Consequently, he set aside the orders for production at [133] because "they are likely to extend to documents which cannot properly be the subject of an order for production". 25 By way of obiter remarks, Basten JA cast some doubt on Young J's acceptance of the principle in Wheeler v Marchant as applied by Lockhart J in Sterling. However His Honour acknowledged at [92] (quoted above at [22]) that if a document is obtained by the solicitor, without the direct intervention of the client, it may not be protected because the third party is held not to be an agent of the client. The agency conceded that the third parties in this case were not acting as agents of the solicitor, but submitted that the more liberal approach taken in Meteyard indicates that as a matter of principle such communications are privileged if the provision of legal advice is the dominant purpose of the communication. 26 Because the common law principles of legal professional privilege were not directly relevant to the decision in Meteyard, the comments of Basten JA are merely obiter and do not change the law. The Tribunal applied the common law as set out by Lockhart J in Sterling. Nothing submitted by the agency persuades us that it fell into error in doing so. 27 The agency pointed out that the Tribunal dealt differently with two categories of communications with third parties. While the Tribunal accepted that communications between the Crown Solicitor's Office and external consultants were exempt, it held that the communications between the Crown Solicitor's Office and the Strathfield Municipal Council and the Land and Property Information Service were not exempt. We agree with the agency's submission that there is no common law authority that would justify such a distinction. Although, as Ms Allars acknowledged, it is more difficult to establish that a statutory authority providing information is an agent of the CSO than external consultants. Nevertheless, Mr Cianfrano has not lodged a cross-appeal, nor has he submitted that the Tribunal was wrong in relation to documents recording communications between the Crown Solicitor's Office and other third parties. Consequently, those findings of the Tribunal go unchallenged. Extension to the merits 28 Although the Notice of Appeal does not seek to extend the appeal to the merits of the Tribunal's decision, Ms Allars said at the conclusion of the hearing that if the Appeal Panel found an error of law, then we should extend the appeal to the merits of the Tribunal's decision. The Tribunal did make an error of law when it found that the communications were not subject to legal professional privilege because of their administrative character. However, in our view, as stated above, the decision made by the Tribunal was correct, albeit for a different reason. Even if we did extend the appeal to the merits of the Tribunal's decision, the decision would be the same. The finding of an error of law is not the only basis on which the Appeal Panel may extend to the merits of the Tribunal's decision, but it was the only basis on which the agency sought leave. We are not persuaded on the basis that the Tribunal has made an error of law that leave should be given to extend the appeal to the merits of the Tribunal's decision. Orders Decision of Tribunal of 20 December 2005 affirmed. Leave to extend to the merits of the Tribunal's decision refused. Appeal dismissed.

Director General, Attorney General's Department v Cianfrano

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