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[2011] NSWLEC 159
Land and Environment Court (NSW)
2011-09-08
Pepper J
Original judgment source is linked above.
v Jackson [2007] NSWCA 279 Sydney Airports Corp Ltd v Singapore Airlines Ltd [2005] NSWCA 47 TransGrid v Members of Lloyds Syndicate 3210 [2011] NSWSC 301 Walker Corp Pty Ltd v Director-General of the Department of Environment and Climate Change [2009] NSWLEC 138 Waugh Asset Management Pty Ltd v Merrill Lynch [2010] NSWSC 197 Wilson v State Rail Authority of New South Wales [2010] NSWCA 198 Texts Cited: D Byrne and J D Heydon, Cross on Evidence, 8th Australian ed (2010) LexisNexis Butterworths Victoria, Victorian Law Reform Commission, Implementing the Uniform Evidence Act (February 2006) Commonwealth, Australian Law Reform Commission et al, Uniform Evidence Law Report (December 2005) Stephen Odgers, Uniform Evidence Law, looseleaf ed (2002) Thomson Lawbook Co Category: Procedural and other rulings Parties: Environment Protection Authority (Prosecutor) Queanbeyan City Council (Defendant) Representation: Ms G Preston (Prosecutor) Mr T To (Defendant) Office of Environment and Heritage (Prosecutor) Herring & Associates (Defendant) File Number(s): 50080 of 2008
The EPA Makes a Claim of Client Legal Privilege in Answer to a Subpoena 1On 18 May 2011, Queanbeyan City Council ("the council"), the defendant in a Class 5 criminal prosecution commenced by summons on 3 November 2008, issued a subpoena to produce to the Office of Environment and Heritage ("OEH"), who act on behalf of the prosecutor, the Environment Protection Authority ("EPA"). 2In the schedule to the subpoena the following documents were sought:
21In relation to these documents Ms Lenehan gave the following evidence: Emails between the Legal Services Branch, the Investigators and witnesses 18 Emails between OEH officers, Janice Taylor, Craig Jones, Lyndal Walters, me and potential witnesses are contained in Tabs 8, 16, 18 to 19, 29 to 30, 35 to 36, and 38 to 40 of the Amended Index. These emails contain confidential communications with potential witnesses and legal advice to the investigators for the dominant purpose of prosecuting this matter. For example, the email dated 15 September 2008 contained in Tab 40 between Janice Taylor, Graham Nisbet and myself was prepared and sent by Janice Taylor on my instructions for the dominant purpose of prosecuting this matter. Attached to the email in Tab 40 are copies of the draft exhibit sheet (also contained in Tab 2 of the Amended Index), the draft affidavit of Graham Nisbet and the draft affidavit of Evan Scott (also contained in Tab 4 of the Amended Index). The draft affidavit of Graham Nisbet has a minor change in it which distinguishes it from those contained in Tabs 1, 2 and 5 of the Amended Index. 19 The email chain contained in Tab 41 of the Amended Index includes a copy of the emails contained in Tab 38. I have removed Tab 38 from the Amended Index. 20 The email chains contained in Tabs 36 and 37 of the Amended Index both include an identical copy of the draft affidavit of Graham Nisbet. 22The Court was told (which was not a matter of controversy) that Mr Nisbet was, at least at the time of the overflow, an employee of Rad-Tel Engineering, the firm that provided the telemetry alarm system which is alleged to have failed at the time of the overflow. Mr Nisbet also participated in telephone calls between himself and council officers in the afternoon of 4 November 2007, immediately prior to the overflow. 23Ms Lenehan was not cross-examined on the contents of either affidavit.
Issues for Determination 24Two principal issues for determination raised by the application were: (a) first, whether the Evidence Act or the common law governed the resolution of prosecutor's claim for client legal privilege; and (b) second, whether the evidence disclosed a sufficient basis to maintain the privilege claim, and in particular, whether the evidence disclosed in respect of each document or communication that the parties to it were under an express or implied obligation not to disclose its contents.
Does the Evidence Act or Common Law Apply to the Claim for Privilege? 25The council submitted that because this application was made during the course of criminal proceedings that had already been initiated, the claim for privilege is governed not by common law principles, but by Pt 3.10 of the Evidence Act (R v Petroulias (No 22) [2007] NSWSC 692; (2007) 213 FLR 293 at [53]). 26The reasons for this were as follows: (a) first, by reason of the Land and Environment Court Rules 2007 r 5.2(1), Pt 75 of the Supreme Court Rules 1970 applies to proceedings in Class 5 of the Court's jurisdiction; (b) second, as a consequence, r 3(1) of Pt 75 makes applicable to Class 5 proceedings certain provisions of the Uniform Civil Procedure Rules 2005 ("the UCPR"), including Pt 1 of the UCPR; (c) third, r 1.9(1) and (3) of Pt 1 of the UCPR which applies to documents adduced upon subpoena, provides for objections on the grounds that the document is a "privilege document" or would disclose "privileged information"; (d) fourth, the terms "privilege document" and "privileged information" are defined in the UCPR Dictionary and those definitions identify the concept of privilege by reference to Pt 3.10 of the Evidence Act ; and (e) fifth, to the extent that it has been held that the Evidence Act only applies to the adducing or tender of evidence in court and not to pre-trial disclosure processes such as subpoenas ( Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [27] and [144] and Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 at [16]-[17], [64] and [146]-[149]), this position has been legislatively abrogated by s 131A of the Evidence Act, which was inserted into that Act by the Evidence Amendment Act 2007 commencing on 1 January 2009. 27Section 131A of the Evidence Act provides as follows: 131A Application of Part to preliminary proceedings of courts (1) If: (a) a person is required by a disclosure requirement to give information, or to produce a document, which would result in the disclosure of a communication, a document or its contents or other information of a kind referred to in Division 1, 1A, 1C or 3, and (b) the person objects to giving that information or providing that document, the court must determine the objection by applying the provisions of this Part (other than sections 123 and 128) with any necessary modifications as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence. (2) In this section, disclosure requirement means a process or order of a court that requires the disclosure of information or a document and includes the following: (a) a summons or subpoena to produce documents or give evidence, (b) pre-trial discovery, (c) non-party discovery, (d) interrogatories, (e) a notice to produce, (f) a request to produce a document under Division 1 of Part 4.6. 28In reply, the prosecutor, first, relied on Esso to submit that recourse to the UCPR did not assist the council insofar as that case, and subsequent decisions applying it, had effectively held that r 1.9 of the UCPR does not apply to documents that have already been produced to a court, or in other words, to documents sought to be inspected by the party seeking access to them. 29As Brereton J stated in Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151 (at [6]-[11]): 6 Before turning to those issues, however, it is necessary, at least to some extent, to resolve whether the questions pertaining to privilege are to be resolved according to the (NSW) Evidence Act 1995, or according to the common law. 7 The decision of the High Court of Australia in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49, establishes that the Evidence Act applies only to the adducing of evidence in the course of a hearing, and not to ancillary processes such as discovery. It must follow that the Act does not apply, of its own force, to claims for privilege in respect of the production and inspection of documents on subpoena. 8 In order to overcome the dichotomy that would otherwise result, the (NSW) Uniform Civil Procedure Rules (" UCPR ") incorporate the Evidence Act test so far as discovery of documents is concerned, by using the terms 'privileged documents' and 'privileged information' and defining them by adopting the Evidence Act provisions. However, there is no equivalent provision in respect of production of documents on subpoena. UCPR , r 1.9, provides a procedure by which objection may be taken to the production of documents required to be produced inter alia by a subpoena upon grounds that the documents are "privileged documents", again defined by reference to the Evidence Act . But this rule relates to the production of documents, and not the inspection of documents already produced. As Mr Kirk has pointed out in the course of argument, r 1.9(3) - providing, as it does, that a person may object to producing a document - is addressed only to an objection by the person required to produce the document, and not an objection or claim for privilege by someone else in respect of a document so produced. 9 A number of cases seem to have proceeded on the basis that r 1.9 has the effect of applying the provisions of the Evidence Act in the present circumstances. In Re Bauhaus Pyrmont Pty Limited (in liq) [2006] NSWSC 543 and Ryder v Frohlich [2005] NSWSC 1342, it does not appear that any attention was directed to the distinction between producing a document to the Court, and granting access for the purposes of inspection to a document already produced. In ML Ubase Holdings Co Limited v Trigem Computer Inc [2007] NSWSC 859, I treated an application for access to documents produced on subpoena as if it were an objection to production of documents on the ground that the documents were privileged documents under r 1.9, again without attending to that distinction. In Westpac Banking Corp v 789TEN Pty Ltd [2005] NSWCA 321; (2005) 55 ACSR 519, Tobias JA observed that r 1.9 had the effect of reproducing former (NSW) Supreme Court Rules , Part 36, r 13(2), and said that those provisions governed the issue as to whether the Court should or should not have compelled the production of the relevant documents. Again it does not seem that attention was given to the distinction between inspection after production, and the act of production itself. But, in Cassaniti v Paragalli [2006] NSWSC 160; (2006) 229 ALR 416, Barrett J recognised the distinction between r 1.9's focus on an objection made at the time at which production of a document was required, as opposed to the time at which an application for access to a document already produced is under consideration, and at least left open the possibility that the common law might apply in the latter situation. 10 The distinction to which I have referred is a well-recognised one, as it has been at least since National Employers' Mutual General Association v Waind & Hill [1978] 1 NSWLR 372, which explained the three steps in the process of complying with the subpoena: first , the production of the document to the Court in answer to the subpoena; secondly , the interim use which might be made of the document, such as the granting of access for the purposes of inspection, at which stage typically any questions of privilege are agitated; and, thirdly , the tender of the document into evidence. Nowadays, the third stage is governed by the provisions of the Evidence Act . The first stage is governed by r 1.9, which authorises an objection on the ground of a claim for privilege to production of a document - contrary, I should add, to the suggestion in Ritchie's Uniform Civil Procedure NSW , at [33.9.5] - and applies the Evidence Act to such an objection. 11 But neither the Act nor the Rules apply to the second stage, and it follows that the common law continues to apply to the second stage. Inconvenient as this result may be, I do not think that inconvenience can be used, as it were, to apply the statutory provisions "derivatively" to the second stage: to do so would run contrary to the High Court's decision in Esso Australia Resources v Commissioner of Taxation . 30This reasoning has been affirmed and adopted in a number of subsequent decisions (Waugh Asset Management v Merrill Lynch [2010] NSWSC 197 at [7]-[8] per McDougall J, d'Apice v Gutkovich (No 1) [2010] NSWSC 1336 at [9]-[10] per White J, Alderman v Zurich [2011] NSWSC 754 at [12] per Adams J and TransGrid v Members of Lloyds Syndicate 3210 [2011] NSWSC 301 at [9] per Ball J). 31I would not adopt a contrary position. 32Second, the prosecutor submitted that, properly construed, s 131A also had no application to documents produced that were now sought to be inspected, rather the provision only applied to the production of documents or the adducing of documents in court, and therefore, the common law applied. In this regard the prosecutor relied on several authorities commencing with Carbotech-Australia , the reasoning of which, the prosecutor asserted, applied to the present application by analogy. 33In Carbotech-Australia Brereton J emphasised the three stages of complying with a subpoena: first, the production of documents to the court; second, the interim use to be made of those documents by gaining access to them for the purposes of inspection; and third, the tender of those documents into evidence at trial (at [10]). The first stage was clearly governed by r 1.9 of the UCPR, and therefore, the Evidence Act applied. The third stage was clearly governed by the Evidence Act to the extent that it concerned the use made of any documents produced in answer to the subpoena at the trial. However, because both r 1.9 and the Evidence Act were silent as to the second stage, and therefore, did not apply, it followed that this stage was governed by the common law. 34The documents having already been produced to the Court but not yet tendered at trial, this application concerns the second stage of the compliance with the subpoena. 35Because s 131A of the Evidence Act refers only to the "giving of information" or to "producing the document", the prosecutor submitted that properly construed according to its ordinary meaning s 131A is equally silent as to the second stage of compliance and similarly, by parity of reasoning with Carbotech-Australia, the common law applies. 36This argument has been accepted by some judges in the Supreme Court of New South Wales. In Waugh Asset Management McDougall J stated (at [9]-[12]) the following: 9 Section 131A of the Evidence Act applies where a party to litigation is required by a "disclosure requirement" to give information or produce documents. Where the person objects to giving information or providing documents, for example on the grounds of privilege, the objection is to be determined by applying the relevant provisions of Division 1A of Chapter 3 of the Evidence Act "with any necessary modifications as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence". 10 Further, by sub-s (2) a "disclosure requirement" is defined to mean a court process or order that requires the disclosure of information or a document, and includes a subpoena to produce documents. 11 Accordingly, I agree with Brereton J that the focus of r 1.9 (which is the rule that deals with objections to production of documents) and s 131A applies at the stage of production. It does not, as it seems to me, apply at the stage of subsequent use. Of course, it is not at the first stage (production), but at the second (interim use, such as access or photocopying), where questions of privilege are raised. 12 I therefore think that the better view is that the question ought to be dealt with in accordance with the relevant principles of the common law. But that does not seem to me to matter because, as I shall indicate, the same answer is to be given whether the situation is dealt with under the common law, or pursuant to the Evidence Act . 37Likewise in d'Apice White J stated (at [10]): 10 However, his Honour held that rule 1.9 does not apply to the second stage where documents are called for production on subpoena, namely whether access to documents produced to the Court should be provided to the parties for inspection. The Evidence Act does not apply to pre-trial procedures analogically and as neither the Civil Procedure Act 2005 (NSW) nor the Rules expressly apply to the second stage, his Honour found that at the stage of inspection the question of whether privilege attaches to the documents and whether such privilege has been waived was to be decided according to common law. His Honour's decision was followed by McDougall J in Waugh Asset Management Pty Ltd v Merrill Lynch [2010] NSWSC 197, where his Honour also held (at [11]) that s 131A (introduced after Carbotech-Australia Pty Ltd v Yates applies only " at the stage of production " of a document to the court, and not to the second stage. I would not depart from these decisions unless I were satisfied that they were clearly wrong. I do not consider them to be clearly wrong. 38And in Alderman Adams J opined the following (at [12]): 12 Given the nature of the dispute here, its determination may not ultimately depend on any differences between the Evidence Act and the common law but I should note that, whether access to, as distinct from production of, documents should be provided to the parties does not, it seems, depend upon the Evidence Act (either directly or indirectly via UCPR 1.9) and the question whether privilege attaches to the documents is answered by the common law: Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151; Waugh Asset Management v Merrill Lynch [2010] NSWSC 197; D'Apice v Gutkovich - Estate of Abraham (No1) [2010] NSWSC 1336. 39However, in TransGrid Ball J declined to decide the issue and in doing so made the following pertinent, and correct in my respectful opinion, observations (at [10]): 10 Notwithstanding that submission, Mr Miller said that he was content for the issue to be determined by reference to the Evidence Act on the basis that there was no relevant difference between it and the common law. In those circumstances, it is not necessary for me to deal with the issue he raised. I should, however, say that, in my opinion, it would be most unfortunate if different principles were to apply depending on whether the documents had actually been produced to the court. The clear purpose behind UCPR rule 1.9 and its predecessor Part 36, r 13(2) of the Supreme Court Rules, and behind s 131A of the Evidence Act, is to bring the law of privilege in relation to pre-trial production into line with the law (stated in the Evidence Act) as it applies at trial. So far as s 131A of the Evidence Act is concerned, it may be that the reference in subs (1)(b) to an objection to "providing that document" can be read as covering a case where objection is taken to the document being made available for inspection. Moreover, it may be that the court could make an order under UCPR rule 33.8 for the return of documents produced in response to a subpoena so that the matter could be dealt with under UCPR 1.9. However, as I have said, it is not necessary to deal with these possibilities in this case. 40The contrasting positions of the parties reveals a latent, if not patent, ambiguity contained within s 131A of the Evidence Act . 41As Mr To, on behalf of the council, persuasively submitted, an equally defensible interpretation of the provision is that it extends to the second stage of compliance with a subpoena. To construe the section otherwise would be to ignore the clause following the words "to produce a document", namely, "which would result in the disclosure of a communication, a document or its contents or other information of a kind referred to in Division 1". Division 1 is the division that deals with client legal privilege and relevantly contains ss 117, 118 and 119. When the provision is read as a whole, the better view is that it extends to both the first stage and the second stage of complying with a "disclosure requirement" (which as defined in sub-section (2)(a) includes a subpoena). Logically this must be so because the mere production of a document will not, of itself, result in the disclosure of a communication that would otherwise engage Div 1 of the Evidence Act . It is only the gaining of access to that communication or document that causes the disclosure. If the prosecutor's interpretation were correct, the clause would be otiose, and accordingly, such a construction ought not be preferred. A court must strive to give meaning to every word of a statutory provision ( Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [71]) and Wilson v State Rail Authority of New South Wales [2010] NSWCA 198 at [13]). 42The construction proffered by the council is also harmonious with the remaining text in sub-section (1) ("as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence"). Again, on the interpretation provided for by the prosecutor this text would also be redundant. 43More importantly, the council's construction conforms with the objective legislative intention manifested by not only the words of s 131A themselves but also the purpose or object underlying the enactment of the section. A construction that promotes the avoidance of the mischief to which the provision is plainly directed is to be preferred (s 33 of the Interpretation Act 1987, CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408, Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 99, Project Blue Sky at [69], Wilson at [13] and Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 272 ALR 750 at [42]). It must be remembered that the manifest intention of a statue must not be defeated by an overly literal adherence to its precise language (Minister for Immigration and Citizenship v SZJGV; Minister for Immigration and Citizenship v SVJXO [2009] HCA 40; (2009) 238 CLR 642 at [20]). 44The purpose of s 131A may be deduced not only from its heading ("Application of Division to preliminary proceedings of courts"), which suggests a broader application of the section to all preliminary proceedings, and not just the production of documents upon compulsion, but also from its legislative history as illuminated by the extrinsic material. 45If extrinsic material is "capable of assisting in the ascertainment of the meaning of" a provision then it may be used in its interpretation (s 34 of the Interpretation Act ). In the present case, resolution of the ambiguity identified by the parties inherent in s 131A is assisted by recourse to such material (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [52] and Commissioner of Taxation of the Commonwealth of Australia v BHP Billiton Ltd [2011] HCA 17; (2011) 277 ALR 224 at [46]-[47]). 46Of course the extrinsic material can never be substituted for the text of the law (SAEED v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at [32]-[33], Alcan at [47] and Jemena Asset Management (3) Pty Ltd v Coinvest Ltd [2011] HCA 33 at [50]). 47In the present case, the extrinsic material complements rather than derogates from the text of s 131A. This material unequivocally reveals that the purpose or mischief underlying s 131A was to overcome the anomalous result in Esso as subsequently applied in decisions such as Carbotech-Australia , whereby production of documents pursuant to court process and their ultimate use at trial was governed by the Evidence Act , but that the intermediary step of their use post-production but pre-trial was governed by common law. That is to say, the purpose and object in enacting s 131A was to ensure that the operation of the privileges contained in Div 1, 1A and 3 of the Evidence Act extended to all aspects of pre-trial court proceedings. 48The Explanatory Note to the Evidence Amendment Bill 2007 bears this out. It states as follows (at p 15): Extension of privilege provisions to pre-trial disclosure procedures and proceedings outside court Schedule 1 [63] inserts new section 131A to extend certain specified privilege provisions in Part 3.10 of the Principal Act to compulsory processes for disclosure, such as discovery and subpoenas. Issues relating to this extension were discussed in relation to recommendations 14-1, 14-6, 15-3, 15-6 and 15-11 of the Report and a draft provision was included in the Victorian Law Reform Commission's report titled "Implementing the Uniform Evidence Act". 49The reference to "the Report" is a reference to the Uniform Evidence Law Report published by the Australian Law Reform Commission (ALRC Report 102), the NSW Law Reform Commission (NSWLRC Report 112) and the Victorian Law Reform Commission (VLRC Final Report) in December 2005. Chapter 14 dealt with "Privileges: Extension to Pre-Trial Matters and Client Legal Privilege". The "need for extension of privilege" to all pre-trial disclosures was articulated in paragraphs 14.7-14.11 of the Report (references omitted): 14.7 Since the commencement of the Commonwealth and New South Wales legislation in 1995, a number of appellate cases have applied the privilege provisions to discovery and inspection of documents on the basis that the uniform Evidence Acts have a derivative application to the common law. However, in Mann v Carnell and Esso v Commissioner of Taxation , the High Court rejected this approach and found that the uniform Evidence Acts apply to the adducing of evidence only in relevant proceedings. The High Court in Esso emphasised the fact that the uniform Evidence Acts had been adopted only by the Commonwealth and certain states. To modify the common law only in those states which had adopted the uniform legislation was considered by the Court to be an unacceptable fragmentation of the common law. 14.8 The introduction of the uniform Evidence Acts has thus created a situation in which two sets of laws operate in the area of privilege. The uniform Evidence Acts govern the admissibility of evidence of privileged communications and information. The common law does not apply. In all other situations the common law rules persist, unless a statute abrogates the privilege. 14.9 This has several consequences: · within a single proceeding different laws apply at the pre-trial and trial stages; · different laws also apply in determining privilege applications in the context of warrants and in reviewing decisions of bodies not bound by the uniform Evidence Acts; · legal practitioners are required to understand and advise on two sets of laws; and · individuals and bodies are subject to two legal regimes which determine their ability to resist or obtain disclosure of information. Their ability to resist or obtain disclosure of the same information may differ depending on the context in which it is sought. 14.10 This has led to criticism of the uniform Evidence Acts: The ALRC Reports failed to come to terms in any meaningful way with the practical consequences that would flow from the enactment of detailed provisions governing privilege that would apply only to the admission of evidence once privilege had, under the different common law rules, been determined not to apply to that evidence at the pre-trial process stage. 14.11 Kirby J has stated that a 'great deal of inconvenience would be avoided if the bringing forward of evidence for use in a later trial (as by responding to an order for discovery, a subpoena or some other ancillary process) were held to fall within the Act'. The Commissions agree that this is an undesirable situation and needs to be addressed. There are different ways of doing so. 50It was the strong view of the Commissions that the bifurcated system of the privileges contained in the Evidence Act applying only at trial and not to pre-trial processes was undesirable and in need of reform (at paragraphs 14.63-14.66, references omitted): 14.63 The Commissions strongly support the view that a dual system of client legal privilege operating in any one jurisdiction is undesirable. It is the clear position of the courts in Australia since Baker v Campbell that legal professional privilege is a fundamental right that applies to court, administrative and investigative proceedings. The Commissions' view is that, in the interests of clarity and uniformity, the client legal privilege sections of the uniform Evidence Acts should be extended to apply to these pre-trial contexts, as currently regulated by the common law rules of legal professional privilege. 14.64 The current system has resulted in extensive confusion and on-going litigation. Attempts to extend the privilege to some pre-trial matters via the rules of court have led to further litigation. As will be discussed further below, client legal privilege is a heavily litigated area of law and, as a doctrine, continues to develop in response to changing business and legal practices. Should the common law continue to operate pretrial and the uniform Evidence Acts at trial, there is likely to be an increasing disparity between the two systems which can only add to the complexity of the law in this area. 14.65 Therefore, it is the Commissions' view that the client legal privilege sections of the uniform Evidence Acts should apply to pre-trial contexts and to any situation where a person is requested to produce a document 14.66 Some of the options available to achieve this are discussed above. The Commissions do not make any specific recommendation about how this recommendation should be implemented. The draft amendments to Part 3.10 included in Appendix 1 contain only those amendments flowing from other recommendations. 51While the language of the Report frequently refers to the "production" of a document, a fair reading of Ch 14 makes it tolerably clear that the Commissions in no way intended that the extension should apply to production only, but should extend the operation of the privileges contained in the Evidence Act to all pre-trial disclosures, including inspection of documents produced in answer to a subpoena. 52As a consequence, Recommendation 14-1 of the Report was as follows: Recommendation 14-1 The client legal privilege provisions of the uniform Evidence Acts should apply to any compulsory process for disclosure, such as pre-trial discovery and the production of documents in response to a subpoena and in non-curial contexts including search warrants and notices to produce documents, as well as court proceedings. 53The Victorian Law Reform Commission's Report Implementing the Uniform Evidence Act published in February 2006, and referred to in the Explanatory Notes, stated as follows in a section entitled "Extension of Privilege - Section 131A" (at paragraphs 2.70-2.72, references omitted): 2.70 Most of the privilege provisions in Part 3.10 apply to the adducing of evidence. This has the consequence that common law privileges continue to apply to pre-trial disclosure procedures and in matters outside court. The joint Final Report recommends the extension of a number of the privilege provisions in Part 3.10 to compulsory processes for disclosure, such as discovery and subpoenas. Issues surrounding the extension of the privilege provisions are discussed at length in the joint Final Report. However, the commissions do not put forward a draft amendment or provision as the preferred means of achieving the desired result. 2.71 The commission has examined this issue further and drafted a provision which achieves a limited extension of the privilege provisions of the UEA to compulsory process for disclosure in courts. We also make recommendations in relation to procedural aspects of claiming privilege in these contexts. 2.72 In relation to compulsory processes outside court proceedings, we recommend that extension of the UEA provisions be achieved through amendment of the Acts in which disclosure powers are located. 54The VLRC's "preferred option" was (at paragraphs 2.76-2.77, references omitted): 2.76 The commission's preferred option is to include a single flexible extension provision in the Act. This would apply the relevant privilege provisions to other compulsory disclosure processes with any appropriate modifications or, as it is said, mutatis mutandis . Relevant privilege provisions of the Act will then apply to compulsory disclosure processes such as discovery of documents, subpoenas and warrants. 2.77 This option will have the flexibility to apply the privilege provisions with such changes as are necessary to the particular compulsory process. For example, if there is a dispute about whether a discoverable document is subject to the professional confidential relationships privilege, the court can resolve the dispute by applying section 126A. The power to direct that evidence not be adduced would become a power to direct that the document not be required to be produced for inspection. The court would then consider whether it is likely that harm would or might be caused to a protected confider if the document was required to be produced for inspection. 55The result was a recommendation that the Victorian Uniform Evidence Act be drafted to include a provision (s 131A) that is almost identical to the s 131A provision enacted in the Evidence Act . 56That s 131A was intended to extend the privileges contained in, inter alia , Div 1 of the Evidence Act to all curial pre-trial disclosures, including the inspection of documents produced in answer to a subpoena, is reinforced, in my opinion, by the Second Reading Speech of the Evidence Amendment Bill (New South Wales Legislative Council, Hansard , 24 October 2007, at 3204) where the following was said (emphasis added): ( Expanding privileges to pre-trial court procedures ) The last amendment relating to privileges which I will address today also relates to pre-trial proceedings. The Commissions noted that the introduction of the Evidence Act has resulted in two sets of laws operating in the area of privilege. Where the Evidence Act governs the admissibility of evidence of privileged communications and information, the common law does not apply. In all other situations, the common law rules persist unless a statute expressly abrogates the privilege. This means that within a single proceeding, different laws apply at the pre-trial and trial stages. Individuals' ability to resist or obtain disclosure of the same information may vary depending on the stage of the proceedings in which it is sought. The Commissions recommended that the operation of client legal privilege, professional confidential relationship privilege and matters of State privilege should be extended to apply to any compulsory process for disclosure (recommendations 14-1 , 15-3 and 15-11 respectively). The Bill proposes to implement these recommendations in part. The proposed new section 131A extends the operation of these privileges to pre-trial court proceedings . However, the provision does not extend the privileges to non-curial contexts. (Extension to out-of-court proceedings may be considered in future, with the benefit of the Australian Law Reform Commission's final report on client legal privilege, which is due for publication later this year). 57The decisions relied upon by the prosecutor may be dealt within the following way. First, none are binding on me and no notion of comity applies, although I acknowledge that they nevertheless remain of considerable persuasive effect. Second, Carbotech-Australia was decided before s 131A was promulgated. Third, and with the greatest of respect, the decision in Waugh Asset Management does not rest on a detailed textual analysis or construction of s 131A, particularly by reference to the purpose underlying its enactment (see at [11]). A similar observation may be made of the decision in d'Apice, which merely states that Waugh Asset Management was not clearly wrong and thus no departure from it was warranted (at [10]). Similarly Alderman (at [12]). Fourth, against this quartet is the obiter dicta in TransGrid (at [10]). And fifth, the learned authors D Byrne and J D Heydon of Cross on Evidence, 8th Australian ed (2010) LexisNexis Butterworths at pp 923-924 and Stephen Odgers SC of Uniform Evidence Law, looseleaf ed (2002) Thomson Lawbook Co at [1.3.14160] pp 1-20503-1-20504 are of the opinion that s 131A applies to the second stage of compliance with a subpoena. Furthermore, the latter learned author was critical of the decision in Waugh Asset Management noting that in his view it was inconsistent with a purposive approach to statutory interpretation (at [1.3.14160] p 1-20504). I respectfully agree. 58For these reasons I must depart from the decisions referred to above and accept the council's construction of s 131A of the Evidence Act . I therefore find that this application is governed by the Evidence Act and not the common law. 59Having said this, in case I am wrong I have nevertheless determined the application in the alternative, that is, on the basis of the common law. In so doing, it becomes apparent that the result is the same, namely, that the documents are privileged and ought not be disclosed.
Does the Evidence Support a Claim of Client Legal Privilege? 60Under the Evidence Act the source of the client legal privilege relevant to this application, viz , anticipated litigation is contained in s 119. That section provides: 119 Litigation 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 between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. 61Section 117(1) relevantly defines the terms contained in the text of s 119 to mean: 117 Definitions (1) In this Division: client includes the following: (a) a person or body who engages a lawyer to provide legal services or who employs a lawyer (including under a contract of service), (b) an employee or agent of a client, confidential communication means a communication made in such circumstances that , when it was made: (a) the person who made it, or (b) the person to whom it was made, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. confidential document means a document prepared in such circumstances that, when it was prepared: (a) the person who prepared it, or (b) the person for whom it was prepared, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. lawyer means: (a) an Australian lawyer, and ... (d) an employee or agent of a lawyer referred to in paragraph (a), party includes the following: (a) an employee or agent of a party, 62As s 119(a) and the definition of "client" in s 117(1) expressly includes an employee or an agent of a client, there is no question that the privilege can be claimed notwithstanding that the communications were with a third party, for example in the present case, Mr Nisbit and Ms Sue Nisbit (Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122 at [41]). 63In TransGrid Ball J explained the reach of the protection afforded to third parties by s 118, and thus s 119, as follows (at [11]): "Client" is defined in s 117 to include an employee or agent of a client. It seems clear as a result of the decision of the Court of Appeal in Meteyard v Love [2005] NSWCA 444 that "agent" can include an independent consultant. In that case, for example, Basten JA (with whom Beazley and Santow JJA agreed), held that independent consultants engaged by an insurer to investigate a loss were agents of the insurer: see [2005] NSWCA 444 at [124]. Basten JA did not seek to define the limits of the word "agent" in this context but it seems to me that, if the purpose of a communication between a client and a third party, such as an independent consultant, is to enable the third party to assist the client in some way and the third party has no interest in the communication other than to provide that assistance, then the third party is acting as the agent of the client for the purpose of that communication. The position is different where the purpose of the communication is to enable the third party to engage in an activity of its own - such as a communication to an auditor to enable the auditor to perform his or her statutory duties: see Westpac Banking Corporation v 789TEN Pty Ltd [2005] NSWCA 321. 64In the present case both Mr Nisbit and Ms Nisbit may, therefore, alternatively be viewed as the agent of the client of Ms Lenehan, that is to say, an agent of the EPA. Either way,communications to and from Mr Nisbit and Ms Nisbit fall within the purview of s 119. 65The onus of establishing a claim of client legal privilege falls on the party asserting or claiming the privilege (Grant v Downs (1976) 135 CLR 674 at 689; Petroulias (No 22) at [36], Walker Corporation Pty Ltd v Director-General of the Department of Environment and Climate Change [2009] NSWLEC 138 at [7] and State of New South Wales v Jackson [2007] NSWCA 279 at [64]). 66In order to claim the privilege the prosecutor must therefore establish two matters. First, that the communications or documents were "confidential" communications or documents within the meaning of s 117, insofar as they were prepared in circumstances that the person for whom they were prepared was under an express obligation not disclose their contents. Second, the prosecutor must demonstrate that confidential communications were made, or the confidential documents were prepared, for the dominant purpose of the client being provided with professional legal services relating to anticipated litigation.
Were the Communications or Documents Confidential? 67With the exception of one document, the communications were prepared by Ms Taylor and the persons for whom the statements were prepared for were either Mr Nisbit, or Ms Nisbit and Ms Lenehan. The one exception is a document prepared by Ms Nisbit for Ms Taylor. In each case the communication consisted of either an email or an email attaching a draft affidavit of Mr Nisbit. 68The definition of "confidential communication" and "confidential document" in s 117 refers to an obligation not to disclose the contents of the communication or document "whether or not the obligation arises under law". The obligation is not confined to the type obligation arising from a solicitor/client relationship. It is broad and "can extend to an unspoken obligation, and to an ethical, moral or social obligation. Especially when a lawyer is not involved" (Jackson at [41]). 69In the present case there was, on the face of the description of the documents contained in the index attached to Ms Lenehan's later affidavit, no evidence of an express obligation upon the persons preparing the communications and the recipients of the communications not to disclose the contents of the communications and any attachments to those communications. The question arises, therefore, whether there was an implied obligation not disclose their contents within the meaning of the definition of "confidential communication" and "confidential document". 70To support a claim of client legal privilege what is required is exposure of the facts from which an informed decision can be made as to whether the claim for privilege is maintainable. This can include pointing to the nature of the documents or by evidence describing the circumstances in which they were bought into existence. The character of the documents the subject of the claim and the context of their relation may illuminate the purpose for which they were bought into existence (Petroulias (No 22) at [37]). 71The evidence required to prove a claim of privilege was summarised by the Full Federal Court in Barnes v Commission of Taxation [2007] FCAFC 88; (2007) 242 ALR 601; (cited with approval in Bailey v Department of Land and Water Conservation [2009] NSWCA 100; (2009) 74 NSWLR 333 at [38]), where it was held (at [18]): 18 The authorities emphasise the need for focused and specific evidence in order to ground a claim for legal professional privilege. In Kennedy v Wallace [2004] FCAFC 337 ; (2004) 142 FCR 185 at 189, Black CJ and Emmett J reiterated the principles that verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege: see also National Crime Authority v S (1991) 29 FCR 203 at 211 (per Lockhart J); Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689 (per Stephen, Mason and Murphy JJ). Where possible the Court should be assisted by evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each particular document. The fact that generalised evidence is not challenged in cross-examination does not mean that such evidence must be accepted, particularly when it is as manifestly inadequate as it is in this case. As in Kennedy v Wallace , mere general assertions of the purpose of creation of the documents are insufficient to discharge this onus. 72Of course the Court has a broad power to inspect the documents over which a claim of legal professional privilege is made itself to determine the claim and should not hesitate to exercise this power (Esso at [52]; Petroulias (No 22) at [38] and Walker at [7]). 73In the present application the Court was not asked by the prosecutor to inspect the documents over which the claim for privilege had been made if there was any doubt as to whether the claim was maintainable. By contrast, the council, while acknowledging the almost plenary power of the Court in this regard, exhorted the Court not to exercise its powers of inspection because to do so would be to place the council in a position of disadvantage because of the fact that no opportunity would be afforded to it to comment upon what the Court had examined. While there was some force in this submission, because of the importance attached to this privilege (see Grant at 685, Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52 at 114 and Esso at [35]), considered as it is to be a fundamental right, the Court should not shy away from an examination of the documents over which there exists a disputed claim of privilege. 74The Court examined the documents the subject of the contested privilege claim. Document 8 consisted of an email from Ms Taylor to Mr Nisbit, copied to Ms Lenehan, to arrange an appointment with himself and another potential witness to discuss the telemetry system failure on 4 November 2008 and the preparation of their affidavits. Document 35 consisted of an email from Ms Taylor to Mr Nisbit, copied to Ms Lenehan, attaching a draft of Mr Nisbit's affidavit for his review prior to swearing it. Document 36 appeared to be a response to the email contained in document 35. It was sent by Ms Nisbit, described in the document as the "Administration Manager" for Rad-Tel, to Ms Taylor because Mr Nisbit was unavailable to do so himself. It attached Mr Nisbit's draft affidavit. The email stated that it and any attached files were confidential. This document was not copied to Ms Lenehan. Document 39 was a copy of document 8 and document 41 was an email chain from Mr Nisbit to Ms Taylor, copied to Ms Lenehan, concerning the finalisation of the affidavits of Mr Nisbit and another potential witness. Where Mr Nisbit had been the author of the emails in the chain, at the bottom of the email there was a statement that the email and any attachments were confidential. 75Having inspected the documents, I find that to the extent the emails did not contain an express statement of their confidential nature, all of the documents and the communications were plainly subject to an implied obligation of confidentiality. It must be remembered that differential confidentiality does not matter for the definitions in the Act. It is enough that one of the parties to the communication or to the preparation of the document was under an obligation not to disclose it (Jackson at [55]). In the present case, all of the documents consisted of communications where one or more of the parties were under an obligation not to disclose it's contents (either Ms Lenehan, as the solicitor of the EPA, or Ms Taylor, as an employee of the EPA, or Mr Nisbit and Ms Nisbit as a third party or agent of the EPA). To paraphrase the statement by Goldberg J in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 at 563, it could hardly be expected that at that stage the EPA would be prepared for any person to see the affidavits attached or the contents of the communications. Moreover, to the extent that some of the communications attached draft affidavits, the courts have readily held that these are privileged documents pursuant to s 119 (see, for example, New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [34]-[37]). 76This is because, as observed by the Court of Appeal in Jackson in relation to the underpinning of litigation privilege (at [56]-[57]): 56 Reasoning from the party's interest in keeping confidential the communication or document it received is in accord with the present rationale for litigation privilege stated by McHugh J in Mann v Carnell . That was a case of client/lawyer communications, and his Honour dissented in the result, but the explanation holds good - " [114] The rationale for the head of legal professional privilege which protects communication from a third party to the client or the lawyer made in connection with the litigation is related to, but distinct from, that discussed in Grant. The rationale for the second head of legal professional privilege arises from the need to maintain, in an adversary system of litigation, the freedom of the lawyer and client to make such investigations and inquiries and to engage in such preparation as they think fit in order to further their case. A party to litigation should not be forced to prepare his or her case knowing that statements, advices and other documents, which have been created, may be required to be disclosed to the other party who can then make use of the documents for his or her own advantage. As Brennan J said in Baker v Campbell , the relevant purpose of the privilege is the 'maintenance of the curial procedure for the determination of justiciable controversies - the procedure of adversary litigation'. His Honour went on to say that '[i]f the prosecution, authorized to search for privileged documents, were able to open up the accused's brief while its own stayed tightly tied, a fair trial could hardly be obtained'." 57 So it was said of litigation privilege in General Accident Assurance Company v Chrusz (1999) 180 DLR (4th) 241 at [24] that - "It is not rooted, as is solicitor-client privilege, in the necessity of confidentiality in a relationship. It is a practicable means of assuring counsel what Sharpe calls a 'zone of privacy' and what is termed in the United States, protection of the solicitor's work product: See Hickman v Taylor , 329 US 495 (1946)." 77To the extent that this result may be seen to impinge, as was suggested by the council, upon the principle that there is no property in a witness, in Fagan v State of New South Wales [2004] NSWCA 182 it was said (at [70]) that this principle had to operate in conjunction with other principles, including that of client legal privilege. A prospective witness' freedom to disclose the contents of a witness statement is regarded as circumscribed by the latter principle (Jackson at [59]). 78I therefore find that the evidence demonstrates that the documents and communications were "confidential" within the meaning of s 117 of the Evidence Act .
Were the Communications or Documents Prepared for the Dominant Purpose of Anticipated Litigation? 79Insofar as the "dominant purpose" test is concerned, the test is objective, although the subjective intention of the person responsible for the document coming into existence is nevertheless significant (Esso at [172]). 80In Sydney Airports Corp Ltd v Singapore Airlines Ltd [2005] NSWCA 47 Spigelman CJ said (at [7]): 7. The test of "dominant purpose" has been expressed in terms of "clear paramountcy" (see Waugh v British Railways Board [1980] AC 521, at 543; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332, at 336-337[10]). As the High Court said in a different context: "In its ordinary meaning, dominant indicates the purpose which was the ruling, prevailing, or most influential purpose." 81The dominant purpose must exist at the time the communication was made or the document is brought into existence (Sydney Airports Corp Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [9], Singapore Airlines Ltd v Sydney Airports Corp [2004] NSWSC 380 at [19] and Walker at [7]). Whether the dominant purpose can be established is a question of fact (Singapore Airlines Ltd at [7] and Walker at [7]). 82In Alderman , Adams J, quoting from Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 at [19] per Batt JA, stated the general rule as "there must be a real prospect of litigation, as distinct from a mere possibility, but it does not have to be more likely than not" (at [16]). This formulation was adopted by the Court of Appeal in Jackson (at [67] and see also Singapore Airlines Ltd at [44] and Walker at [7]). 83In light of the unchallenged evidence of Ms Lenehan, who was at all times acting for her client, the EPA, and the objective contents of the documents and communications, which must include the timing of their creation given that proceedings were commenced by the prosecutor on 3 November 2008, I have no hesitation in finding that all of the communications were made, and the documents created, in contemplation of a real prospect of legal proceedings, and moreover, were created for this dominant, if not singular, purpose. 84Accordingly, I find that the documents cannot by curial compulsion be disclosed to the council.
Would a Different Result Been Produced at Common Law? 85At common law legal professional privilege has been applied on the basis that the privilege attaches to confidential communications, oral or in writing, made for the dominant purpose of obtaining legal advice or assistance, or relevantly for present purposes, for use in legal proceedings, whether actual, threatened or contemplated (Esso at [61]). 86For the reasons given above, the evidence compels the conclusion that the communications and documents the subject of this application were not only of a confidential character, but that they were clearly made or created for the purpose of anticipated litigation within the contemplation of the EPA. They are therefore similarly protected at common law from disclosure to the council by reason of their privileged status.
Orders 87The orders of the Court are as follows: (1) the notice of motion is dismissed; (2) the costs of the motion are reserved; and (3) the exhibits are to be returned.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 September 2011
Environment Protection Authority
Queanbeyan City Council
[2002] VSCA 59
(2009) 239 CLR 27
(1998) 81 FCR 526
(1983) 153 CLR 52
(2009) 74 NSWLR 333
(2007) 242 ALR 601
(2010) 272 ALR 750
(1997) 187 CLR 384
(2010) 277 ALR 224
(1999) 201 CLR 49
(1976) 135 CLR 674
(1999) 201 CLR 1
(2009) 238 CLR 642
(2002) 4 VR 332
(1997) 191 CLR 85
(1998) 194 CLR 355
(2007) 213 FLR 293
(2010) 241 CLR 252
(2006) 229 ALR 416
(2011) 277 ALR 224
(2004) 142 FCR 185
(1991) 29 FCR 203
[2009] HCA 41