Gaynor v Chief of the Defence Force

Federal Court of Australia|2015-08-11|Before: Mr P, Mr J, Katzmann J

The applicant's other arguments 43 The proposition that the evidence of the applicant should be preferred must be rejected. The applicant called no evidence. Mr King indicated he wished to read four paragraphs of an affidavit sworn by the applicant's solicitor, Mr Balzola on 28 July 2015 but did not press on, conceding that the evidence was irrelevant. 44 I also reject the submission that it is "inherently improbable that the decision-maker's purpose, or those associated with his conduct as members of the ADF, as a senior military officer in receiving or creating the documents in question was predominantly legal in character". There is no or no sufficient basis in the evidence to support such a conclusion. 45 Furthermore, I am unable to accept that in respect of each document another purpose is identified. That said, the statements made throughout MAJ Guilfoyle's affidavit that the documents contain legal advice beg the question in many instances. What is the purpose for which the communications were made? If there was more than one purpose, which purpose was dominant? For this reason, it was necessary to examine the documents. 46 The Court may inspect a document to decide whether the claim for privilege is well made. This power is expressly conferred on the Court by the Rules: FCR, r 20.35(2). In its written submissions the respondent argued that the power should not be exercised in the present case because the applicant did not offer evidence or make submissions which provided any basis for disputing the respondent's claim. But when the application was called on for hearing, Mr Kirk SC resiled from this position, handing to the Court a folder of documents, inviting, indeed effectively urging, the Court to inspect them. This was entirely appropriate. Not only does the Court have the power to examine the documents for itself but where a claim of privilege is disputed, courts are exhorted not to be hesitant to exercise that power: Esso at [52]. See also Grant v Downs at 689 (Stephen, Mason and Murphy JJ).

Are the respondent's objections well-founded? 47 The applicant's principal concern is that the nature of the Defence bureaucracy is such that the documents in question are likely to have been brought into existence for a multiplicity of purposes. This concern is understandable not least because of the way in which MAJ Guilfoyle deals with the matter in her affidavits. In Esso at [37] Gleeson CJ, Gaudron and Gummow JJ observed that: [s]uch a multiplicity of purposes is commonplace, especially in large corporations or bureaucracies, which will often have their own internal legal staff, who are amongst those to whom such reports will be directed. 48 Here, the applicant pointed to the response to the notice to produce to support his argument that the documents were prepared for non-legal purposes or, at least, for multiple purposes. Category 79, for example, called for the production of: [a]ll Defence documents, reports, formal inquiries, investigations or emails used to support the 'Findings of material fact outlined in Termination of Service Decision' dated 10 Dec 13. 49 In her second affidavit MAJ Guilfoyle states that documents 54 and 55 were relevant to this category. Mr King submitted that this: corroborates the lack of any evidence of a dominant or ruling or overriding purpose of professional legal advice, as the fons et origo [source and origin], as it were, of the document. There may be two purposes, there may be three purposes for the production of these documents. But if one of them is a brief to provide information, collate, marshal material to assist a decision-maker, in the course of which some professional legal advice may be given or repeated, that does not pass the test … 50 In other words, the documents may have been prepared in order to furnish (or receive) legal advice but they were obviously also prepared for one or more additional purposes and that is sufficient to defeat the respondent's argument. 51 There are two difficulties with this submission. 52 First, the dominant purpose test which the High Court declared in Esso to be the common law test recognises that, where a communication is made or a document prepared for the dominant purpose of giving or receiving legal advice or assistance, then it does not matter that there were also other, subsidiary purposes. 53 Secondly, the circumstance that the documents are relevant to, or were used to support, the findings of material fact in the reasons of the decision-maker says nothing about the purpose or purposes for which they were prepared. 54 In some cases there is no direct evidence that the communications were confidential but that is the inference which is to be drawn from the evidence that they were made between solicitor and client. Subject to certain exceptions (such as overriding public interests, compulsion of law and cases of fraud), a legal advisor has an obligation "to keep inviolate his client's confidences": Baker v Campbell (1983) 153 CLR 52 at 65 (Gibbs CJ). As Prof Dal Pont put it, "[t]he law has from the earliest times viewed the lawyer-client relationship as a relationship of confidence": Halsbury's Laws of Australia (LexisNexis, as at 31 October 2012) Vol 6, Lawyers' Duty of Confidentiality, 'Nature, Source, Duration and Scope of Lawyer's Duty of Confidentiality' at [250-2500]. 55 In the absence of any evidence that the communications took place in the presence of a third party or were made available to a third party at the behest of the client or that the communications are covered by one of the exceptions, there is no reason to conclude that the communications in question were not confidential. The applicant did not contend otherwise. His claim that he is entitled to have access to them was based entirely on the notion that the respondent had not satisfied the dominant purpose test.

Documents 54, 55 and 63 56 Document 54 was marked "LEGAL-IN CONFIDENCE". MAJ Guilfoyle described it as a "brief" from CMDR Sneath to the Chief of the Defence Force. That is not its title. Indeed, it has no title. In truth it is a legal opinion from CMDR Sneath about matters attending the proposed termination of the applicant's service and advice as to the available options. It easily meets the description of legal advice given by Taylor LJ in Balabel at 330 as including "advice as to what should prudently and sensibly be done in the relevant legal context". 57 Mr King variously submitted that Balabel should not be applied or should be distinguished. First, he argued that Balabel should not be applied where there is no relevant legal context "other than a decision to dismiss a senior officer with a distinguished war record, because he has broken no law, but what he has done is to reflect views which are not consistent with the changing ethos of the Defence Force". This was simply rhetoric. Then he submitted that Balabel should be distinguished from a case such as this where there is no pending litigation or "legal context raised by any issue in circumstances where there may be a fine balance between what is strategic advice and what is professional legal advice". He urged me to err on the side of disclosure. 58 Here, there is undoubtedly a relevant legal context. The termination of the applicant's service could only be effected lawfully; otherwise it would be open to legal challenge. The Chief of the Defence Force was obviously concerned to ensure that, if the applicant's service was to be terminated, it be done lawfully and the decision would withstand a legal challenge. Indeed, this is the context in which all the documents in question appear to have come into existence. 59 I am satisfied that document 54 was prepared at least for the dominant purpose of providing legal advice to the Chief of the Defence Force. Indeed, that is the only apparent purpose of the document. 60 Document 55 (the "brief" from CMDR Sneath (as she then was) to the Chief of the Defence Force) is marked "Sensitive: Legal" and "Sensitive: Personal". The notation suggests that it contains legal advice and personal details of a sensitive nature but is neutral on the critical question of dominant purpose. While some of the material in the document is not legal advice and some of the opinions expressed in the document stray beyond legal matters, I am satisfied that the document was prepared for the dominant purpose of providing advice to the respondent on the question of whether he was entitled as a matter of law to terminate the applicant's service. In other words, it was prepared for the dominant purpose of providing legal advice. As Mason and Wilson JJ observed in Waterford at 66, where the evidence shows that a document has been brought into existence for the dominant purpose of seeking or giving legal advice, the fact that the document also contains advice or information of a different character "will not deny to it the protection of the privilege". 61 Document 63, though also called a brief, and, like document 55, containing material which is not strictly legal advice, was quite clearly prepared for the purpose of providing legal advice and for no other evident purpose.

Document 56 62 This is an email from WGCDR Taylor, a lawyer with the Defence Department, to LTCOL Buxton, one of the decision-makers in relation to the applicant's Redress of Grievance, (copied to MAJ Nimmo and CMDR Smeath) which incorporates a number of earlier emails. The chain begins with a request by LTCOL Buxton to Colonel Christopher Rule and MAJ Nimmo for "guidance and advice". COL Rule is not a lawyer, but MAJ Nimmo is. It appears from the document that MAJ Nimmo referred the matter to WGCDR Taylor who replied with his advice. The email includes the notation that it contains legal advice and may be subject to legal professional privilege. I am satisfied that this notation is an accurate description of the contents and that its dominant, if not exclusive, purpose is to provide legal advice.

Document 57 63 This document was said to relate to category 95 of the notice to produce (not, as Mr King submitted, categories 92-95), that is to say: Any other documents, emails or communications in relation to the applicant's Redress of Grievance as assessed by BRIG MD Bornholdt. 64 It is an email chain printed from the computer of Mr McCulloch. Each email in the chain is marked "Sensitive: Legal". The chain begins with a request made to WGCDR Deveney, another lawyer, and concludes with WGCDR Deveney's response. Although MAJ Guilfoyle did not say so in her affidavits, the emails were also copied to other individuals within the Defence Department. The inference I draw from the content of the emails is that this was to ensure that the Department's record-keeping practices were adhered to. 65 The document itself plainly answers the description of legal advice. On an objective examination, it was prepared solely for that purpose. It falls within the third Sterling category.

Document 59 66 This is a brief for BRIG Bornholt on the applicant's Redress of Grievance. Legal professional privilege is only claimed over paragraphs 34-38 and 66-67. 67 Paragraphs 34-38 contain a record of the request for, and the substance of, the external legal advice provided by Minter Ellison. Their plain purpose is to communicate those matters to BRIG Bornholt. They are accordingly privileged. 68 I accept Mr Kirk's submission that paragraphs 66-67 are so intermingled with the legal advice that it is proper to regard them as containing a record of a privileged communication falling within the fourth Sterling category.

Document 61 69 This document is not a communication between lawyer and client but an internal communication of the client. As Mr Kirk submitted, it falls within Sterling category 4 in that it is a document made by an officer of the client containing a record of privileged communications. It probably also falls within category 7. It contains a summary and encloses a copy of the external legal advice from Minter Ellison. It is marked "Sensitive: Legal" and "Sensitive: Personal" and addressed to the respondent. In accordance with the Joint Directive, it also includes the following statement: This document contains legal advice and may be subject to legal professional privilege. Unless it is waived or lost, legal professional privilege is a rule of law that, in part, provides that the client need not disclose confidential communication between a legal practitioner and client. To keep this privilege, the purpose and content of this advice must only be disclosed to person (sic) who have a need to know and on the basis that those persons must also keep it confidential. 70 While this statement is not determinative, it is relevant. 71 To the extent that the document refers to matters outside the legal advice I am satisfied on balance that they are essentially contextual and I therefore uphold the claim for privilege over the whole of the document.

Document 62 72 Paragraph 5, which is the only paragraph of this document over which privilege is claimed contains a summary of the Minter Ellison legal advice and nothing more. Its sole purpose is to apprise then CMDR Sneath of the nature of that advice. It too, falls squarely within the fourth Sterling category.

Conclusion 73 In summary, then, after examining the documents which remain in contention, I am satisfied that the respondent has discharged it onus of proof and its claims to legal professional privilege have been proved.

Costs 74 The respondent foreshadowed that it would seek costs in the event that he succeeded. The applicant argued that he should recover costs regardless of the outcome on the basis that the respondent had not pressed its claim in relation to a couple of the documents and certain parts of other documents. 75 In my view the difficulties with the affidavit evidence of MAJ Guilfoyle were such as to reasonably excite the suspicions of the applicant that the claims for privilege were not necessarily well-founded and to justify it pressing on with its application. In its written submissions the respondent opposed the Court examining the documents. There is no evidence to indicate that the respondent resiled from that position before the hearing. Although the applicant had some limited success by putting the respondent to proof, overall its application can properly be characterised as a substantial failure. 76 In all the circumstances I consider the just order is that costs be costs in the cause. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.

Defence Act 1903(Cth)s 122B

Relevant principles 31 Legal professional privilege extends to several categories of communication, including: (1) Communications between a party and the party's professional legal adviser, if confidential and made to or by the adviser in his or her professional capacity and with a view to obtaining or giving legal advice or assistance, even if the communications are made through agents of the party and the solicitor or either of them. (2) Documents prepared with a view to being used in the way described in category (1) above, although not in fact so used. (3) Communications between the various legal advisers of the client, such as between the solicitor and the solicitor's partner or agent, with a view to the client obtaining legal advice or assistance. (4) 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 contain a record of those communications, or relate to information sought by the client's legal adviser to enable the adviser to advise the client or to conduct litigation on the client's behalf. (5) 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 about the litigation or evidence to be used in it or information which may result in the obtaining of such evidence. (6) 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 or her advice or enabling him or her to prosecute or defend an action. (7) Knowledge, information or belief of the client derived from privileged communications made to the client by the client's solicitor or agent. See Trade Practices Commission v Sterling (1979) 36 FLR 244 ("Sterling") at 245-246 and the authorities referred to there. 32 Most of the documents in question in the present case are said to fall within the first of these categories. Two -- the communications to which objection was taken in documents 59 and 62 -- are said to fall within the fourth category. 33 A useful summary of the general principles governing legal advice privilege appears in the judgment of Young J in AWB Ltd v Cole (No 5) (2006) 155 FCR 30 at [44]. I have already dealt with the questions of onus of proof and the power of the Court to examine the documents. It is sufficient for present purposes to note the following matters. 34 The first is the breadth of the term "legal advice". It extends beyond formal advice on the law to strategic advice in a relevant legal context or, as Young J put it in AWB Ltd & Cole at [44], "to professional advice as to what a party should prudently or sensibly do in the relevant legal context", picking up what Taylor LJ said in Balabel v Air India [1988] Ch 317 ("Balabel") at 330. It does not, however, extend to advice of a purely commercial or public relations character. 35 Secondly, the question of purpose is to be determined objectively. Evidence as to purpose from the maker of the document or the person who authorised or sought it may be received but is not conclusive and the existence of privilege is not established simply by the use of a verbal formula: Grant v Downs at 689 (Stephen, Mason and Murphy JJ). 36 Thirdly, in a communication between solicitor and client, it is likely that the relevant purpose is that of the client and, in a communication between a lawyer and a third party, that of the lawyer: Heydon JD, Cross on Evidence (10th ed, LexisNexis Butterworths, 2013), [25240]. 37 Fourthly, legal professional privilege may apply to communications to and from in-house lawyers: Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 510 at 530-521, Waterford v Commonwealth (1987) 163 CLR 54 ("Waterford") at 61-62, 79-82, 95. Thus, the circumstance that these are lawyers either employed by the Department of Defence or engaged in the service of the armed services providing legal advice to others in the service does not deprive the communications of the protection of the privilege, provided there is "a professional relationship which [nonetheless] secures to the advice an independent character" (Waterford at 62 (per Mason and Wilson JJ). 38 As Dawson J observed in Waterford at 95-96: [L]egal professional privilege may attach to communications passing between a salaried legal adviser and his employer, provided that the legal adviser is consulted in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client. For this reason the legal adviser must be qualified to practise law and, it seems, subject to the duty to observe professional standards and the liability to professional discipline. 39 Historically, the relationship between members of the Defence services and the Commonwealth has not been one of employer and employee: see Millar v Bornholt at [70] ff. See also Defence (Personnel) Regulations 2002 (Cth), reg 117, which relevantly provides that no civil contract of any kind is created with the Crown or the Commonwealth as a result of the appointment of an officer or the enlistment of an enlisted member. Presumably, this explains why the applicant is seeking relief in respect of his termination under the ADJR Act. 40 Nevertheless, the evidence given by MAJ Guilfoyle establishes that the legal advice the subject of the communications in dispute in the present case was provided by persons qualified to practise law, who were in a fiduciary relationship with the officers who consulted them, subject to the duty to observe professional standards and liable to professional discipline. 41 Fifthly, where there are communications between a client and their lawyers, whether external or in-house, conducted on a professional basis, it may be appropriate to assume that legitimate legal advice was sought absent any indication to the contrary: Kennedy v Wallace (2004) 208 ALR 424; [2004] FCA 332 at [65] (Gyles J), affirmed on appeal: 142 FCR 185 at [23]-[27]. Gyles J said that "such an assumption rests upon judicial notice of, and judicial authority to enforce, the legal and ethical responsibilities of Australian legal practitioners and upon a common understanding as to the body of Australian law which must be complied with" (the Full Court did not express a concluded view on this point). It is unnecessary in this case to refer to the criticisms of the limitation of the principle to Australian lawyers made by Allsop J (as the Chief Justice then was) in Kennedy v Wallace 142 FCR 185 at [198]ff with which Black CJ and Emmett J agreed at [62]. 42 Similarly, in Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 333, followed by Allsop J in DSE (Holdings) at [71] Anderson J said: In my opinion, discourse between solicitor and client with reference to the transactions covered by those instructions, that is professional discourse in a professional capacity, should be regarded as prima facie for the purpose of giving and receiving advice. This would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor's engagement and any communication from the client to the solicitor in connection with that engagement.

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