FINKELSTEIN J: This case raises an important issue concerning the extent to which a party is required to produce for inspection documents which it has discovered in its list of documents. The documents record confidential communications between that party and its solicitors and counsel and information collected by that party in order to obtain legal advice or for use in pending or anticipated litigation. The question is whether these documents are privileged from production. The appellant, who has discovered the documents, says that they are: the privilege relied upon being legal professional privilege or client legal privilege as it has now come to be known.
Legal professional privilege, the oldest of the privileges for confidential communications known to the common law, dates back to the sixteenth century. In its original formulation it was restricted in its operation to an exemption from testimonial compulsion. Its objective was to protect the "oath and honour" of the lawyer who was bound to keep confidential the instructions of his client: see Holdsworth, "A History of English Law" vol 9 at 201-202;
8 Wigmore, "Evidence" (McNaughton Revision) (1961) para 2290; Baker v Campbell (1983) 153 CLR 52 at 126-127.
By the nineteenth century it was accepted that all communications by a client to his lawyer for the purpose of obtaining legal advice were protected from compulsory disclosure, whether by testimony or by the production of documents, at least in the case where that advice had been sought in relation to existing or anticipated litigation.
The classic statement of the policy that lies behind the privilege is that of Lord Brougham LC in Greenough v Gaskell (1833) 39 ER 618 at 620-621:
"The foundation for the rule is not difficult to discover. It is not (as has sometimes been said) on account of any particular importance which the law attributes to the business of legal professors, or any particular disposition to afford them protection, though certainly it may not be very easy to discover why a like privilege has been refused to others, and especially to medical advisers.
"But it is out of regard to the interests of justice, which cannot be upholden, and to the administration of justice which cannot go on, without the aid of me skilled in jurisprudence, in the practice of the courts, and in those matters affecting rights and obligations which form the subject of all judicial proceedings. If the privilege did not exist at all, every one would be thrown upon his own legal resources. Deprived of all professional assistance, a man would not venture to consult any skilful persons or would only tell his counsellor half his case."
See also Anderson v Bank of British Columbia (1876) 2 ChD 644 at 649; Southwark & Vauxhall Water Co v Quick (1878) 3 QBD 315; Wheeler v Le Marchant (1881) 17 ChD 675 at 681-682.
In the United Kingdom there has been some uncertainty whether the privilege is limited to communications made in relation to actual or expected litigation. The early cases held that it was not so limited but extended to the seeking of any legal advice whether for the purpose of litigation or not: see e.g. Lawrence v Campbell (1859) 62 ER 186 at 188, Minet v Morgan (1873) 8 ChApp. 361; Minter v Priest [1929] 1 KB 655. On the other hand in Parry-Jones v Law Society [1969] 1 Ch 1 the Court of Appeal, comprising Lord Denning MR and Diplock and Salmon LJJ, held that the privilege was irrelevant if not concerned with judicial or quasi judicial proceedings. Diplock LJ explained (at 9):
"[S]trictly speaking, [the] privilege refers to a right to withhold from a court, or a tribunal exercising judicial functions, material which would otherwise be admissible in evidence."
This restricted view of legal professional privilege was rejected by the High Court in Baker v Campbell where it was held, by majority, Gibbs CJ, Mason and Brennan JJ dissenting, that the privilege extends to all communications made for the purpose of receiving legal advice. The same principle applies in New Zealand (see e.g. Commissioner of Inland Revenue v West-Walker [1954] NZLR 191), in Canada (see e.g. Solosky v The Queen (1979)105 DLR (3d) 745 at 756) and in the United States of America (see e.g. Upjohn Company v United States (1981) 449 US 383; 8 Wigmore on Evidence, para 2294).
In most common law jurisdictions it has also been accepted that the communication of legal advice by a lawyer to his client is within the privilege: in the United Kingdom see Bunbury v Bunbury (1839) 48 ER 1146; Reece v Trye (1846) 50 ER 365; Phipson on Evidence (14th ed) (1990) para 20-20; in Australia see Baker v Campbell, supra, at 60, 90; Waterford v Commonwealth (1987) 163 CLR 54 at 67;in Canada see Solosky, supra, at 752.
The basis for this branch of the rule has not been stated and the foundation for it is not altogether clear. Where the advice records the substance of a confidential communication from the client then the advice should be treated in the same way as the communication. But what if the advice does not record a confidential communication by the client? If the advice is in relation to litigation the privilege may be justified on the basis that production of the advice would undermine the adversarial system of justice dispensed by our courts. In Waugh v British Railways Board [1980] AC 521 the House of Lords considered whether a report that had been prepared for a number of purposes, only one of which was for the purpose of obtaining legal advice, was privileged. Lord Simon said that the reason for holding the document to be privileged was to further the adversarial system. His Lordship said (at 536):
"This system of adversary forensic procedure with legal professional advice and representation demands that communications between lawyer and client should be confidential, since the lawyer is for the purpose of litigation merely the client's alter ego. So to material which is to go into the lawyer's (i.e. the client's) brief or file for litigation."
See also Brennan J in Baker v Campbell, supra, at 108 where his Honour said that the justification for legal professional privilege is the "maintenance of the curial procedure for the determination of justiciable controversies - the procedure of adversary litigation". But this rationale cannot explain why the privilege should exist in the case of advice given in relation to out of court matters.
Perhaps the true reason for protection being given to all communications between a lawyer and his or her client is that stated by the High Court in Grant v Downs (1976) 135 CLR 674 where, in a joint judgment, Stephen, Mason and Murphy JJ said (at 685):
"The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor."
To a similar effect is the statement of Deane J in Baker v Cambell, supra, (at 118):
"[T]he general and substantive principle underlying legal professional privilege is of fundamental importance to the protection and preservation of the rights, dignity and equality of the ordinary citizen under the law in that it is a pre-condition of full and unreserved communication with his lawyer."
Dawson J in the same case said (at 130):
[I]f a client cannot seek advice from his legal adviser confident that he is not acting to his disadvantage in doing so, then his lack of confidence is likely to be reflected in the instructions he gives, the advice he is given and ultimately in the legal process of which the advice forms part."
In these passages there is to be found the idea that it is not only the need to encourage a client to make a full and free disclosure to his or her lawyer of all relevant facts that gives rise to the privilege but that the privilege is required to protect the administration of justice in a more general way.
However, this is not a universally accepted view. Professor Wigmore has argued that there is no occasion for protecting communications from a lawyer unless the disclosure would hamper freedom of communication by exposing the client's communications or by leading to inferences as to the terms of those communications: 8 Wigmore on Evidence, supra, para 2320; see also McCormack on Evidence (4th) (1992) vol 1 at 326-327. There are cases that have accepted this approach and have denied the protection of legal professional privilege to legal advice that does not disclose the client's communications: see United States v United Shoe Manufacturing Corp (1950) 89 F.Sup.357; Ohio-Sealy Mattress Manufacturing Co v Kaplan (1980) 90 FRD 21; American Standard Inc v Pfizer (1987) 828 F (2d) 734. On the other hand cases have held that this approach is too narrow and that all legal advice should be the subject of the privilege. For example, in Re Spectrum Systems International Corp v Chemical Bank (1991) 78 NY (2d) 371 the Court of Appeals of the State of New York said (at 379):
"As we made clear in Rossi, the privilege is not narrowly confined to the repetition of confidences that was supplied to the lawyer by the client … That cramped view of the attorney-client privilege is at odds with the underlying policy of encouraging opening communication: it poses inordinate practical difficulties in making surgical separations so as not to risk revealing client confidences; and it denies that an attorney can have any role in fact-gathering incident to the rendition of legal advice and services …".
See also Great American Insurance Co v Smith (1978) 574 SW (2d) at 379; Rossi v Blue Cross and Blue Shield of Greater New York (1989) 73 NY (2d) 588.
Thus far the discussion has concerned communications between a client and his lawyer. What is the position where the communication is between a third party and a lawyer made for the purpose of the lawyer providing legal advice to his or her client?
Where the third party is the agent of the client it is clear that the privilege is co-extensive with that which exists if the communication was by the client: Wheeler v Le Marchant, supra, at 682, 684; Anderson v Bank of British Columbia, supra, at 657; Bray, "Law of Discovery" (1885) at 398-401. The rationale is that the act of the agent is to be treated as the act of his or her principal.
However, where the third party is not the agent of the client the generally accepted position is that the communications will be protected provided they are in relation to pending or apprehended litigation. In Wheeler v Le Marchant, supra, Jessel MR said (at 682):
"[T]he evidence obtained by the solicitor, or by his direction, or at his instance, even if obtained by the client, is protected if obtained after litigation has been commenced or threatened, or with a view to the defence or prosecution of such litigation. So, again, a communication with a solicitor for the purpose of obtaining legal advice is protected though it relates to a dealing which is not the subject of litigation, provided it be a communication made to the solicitor in that character and for that purpose. But what we are asked to protect here is this. The solicitor, being consulted in a matter as to which no dispute has arisen, thinks he would like to know some further facts before giving his advice, and applies to a surveyor to tell him what the state of a given property is, and it is said that the information given ought to be protected because it is desired or required by the solicitor in order to enable him the better to give legal advice. It appears to me that to give such protection would not only extend the rule beyond what has been previously laid down, but beyond what necessity warrants."
See also Brett LJ at 683 and Cotton LJ at 684-685.
This view was accepted by the Full Court of the Supreme Court of Victoria in O'Sullivan v Morton [1911] VR 70, the Supreme Court of New South Wales in Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44, the Supreme Court of Queensland in Nagan v Holloway [1996] 1 Qd R 607 and by the Federal Court in Trade Practices Commission v Sterling (1978) 36 FLR 244. It was recently affirmed by the House of Lords in Waugh. The position in Canada is the same: see Blackstone v Mutual Life Insurance Co [1944] OR 329; Re Goodman & Carr v Minister of National Resources [1968] 2 OR 814.
Mr Ligertwood in the first edition of his text, "Australian Evidence", (1988) argued that as a consequence of Grant v Downs there was no longer any justification for privilege to cover communications between third parties and a client's lawyer. In Grant v Downs the High Court was required to consider "the relevant principle of law governing the privilege which attaches to communications and materials submitted by a client to his solicitor for the purpose of advice and for the purpose of the use in existing litigation." Stephen, Mason and Murphy JJ said (at 688):
"All that we have said so far indicates that unless the law confines legal professional privilege to those documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings the true privilege will travel beyond the underlying rationale to which it is intended to give expression and will confer an advantage and immunity on a corporation which is not enjoyed by the ordinary individual."
Mr Ligertwood contended that the High Court did not deal with third party communications in its general formulation of the principle and thus concluded that these communications must be outside the privilege. This is not an approach that has been accepted by the courts (see e.g. TPC v Sterling, supra, at 246; Nickmar, supra, at 53-54; Dingle v Commonwealth Development Bank (1989) 23 FCR 63 at 66) and it appears that Mr Ligertwood has abandoned his argument in the most recent edition of his text published a few months ago.
Finally, it is necessary to consider in what circumstances the privilege will attach to documents, such as reports, briefing notes, statements and the like, that contain confidential material. In Grant v Downs the High Court held that a document prepared by a client or his agent would only be privileged if the document was brought into existence for the sole purpose of submission to his lawyer for advice or for use in legal proceedings. The majority, Stephen, Mason and Murphy JJ, said (at 688):
"It is not right that the privilege can attach to documents which, quite apart from the purpose of submission to a solicitor, would have been brought into existence for other purposes in any event, and then without attracting any attendant privilege. It is true that the requirement that documents be brought into existence in anticipation of litigation diminishes to some extent the risk that documents brought into existence for non privileged purposes will attract the privilege but it certainly does not eliminate that risk. For this and for the reasons which we have expressed earlier we consider that the sole purpose test should now be adopted as the criterion of legal professional privilege."
In Waugh the House of Lords held that it would be going too far to follow the "sole purpose" test adopted in Grant v Downs principally for the reason that it would deny privilege to material whose principal purpose was for use in litigation simply because another and very minor purpose was also present. Accordingly, the House decided that the "dominant purpose" for the coming into existence of the document should be the test. The "dominant purpose" test was that suggested by Barwick CJ in his dissent in Grant v Downs. It is the test that has been adopted in Canada, except in Ontario; see Sopinka Lederman & Bryant, "Evidence" (1992) at 656-658; Manes & Silver, "Solicitor-Client Privilege in Canadian Law" (1993) at 96-99. New Zealand initially adopted the less satisfactory and more difficult to apply "appreciable purpose test" (see Konia v Morley [1976] 1 NZLR 455) but has now followed Waugh: see Guardian Royal Exchange Assurance of New Zealand v Stuart [1985] 1 NZLR 596.
Grant v Downs did not expressly deal with documents that had been prepared by a third party. In the case of these documents they must have been brought into existence for the purpose of pending or threatened litigation before the privilege can be claimed: Waugh, supra, at 542 per Lord Edmund-Davies.
This discussion of the applicable principles of the common law is not sufficient to dispose of the appeal. The appellant says that these principles have been modified by the Evidence Act 1996 (Cth) and in particular by ss 118 and 119 which provide:
"118 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 made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer;
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
119 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."
These provisions significantly alter the common law in the areas in which they operate particularly with regard to the contents of confidential documents. Here they have replaced the "sole purpose" test adopted by the High Court in Grant v Downs in favour of the "dominant purpose" test favoured by other jurisdictions. In the case of communications between a lawyer and his client for the purpose of giving or receiving legal advice and communication between a lawyer and a third party in relation to anticipated or pending proceedings the change is not so significant. It is true that under the common law for these communications to be privileged the communications must be for the "sole purpose" of giving or receiving of advice and in the case of communications with a third party the communications must be for the "sole purpose" of anticipated or pending proceedings: see Waterford, supra, at 67 per Mason and Wilson JJ. However, it is doubtful whether the adjectives "sole" or "dominant" add much by way of definition. In order to attract the privilege the lawyer must be acting in his professional capacity: Minter v Priest [1929] 1 KB 655 at 675. Ordinarily when a lawyer is acting in a professional capacity communications between the lawyer and his client will only be for the purpose of obtaining or giving legal advice. The same is true with respect to communications with third parties undertaken in connection with the provision of advice to the client. It must be remembered that if in the course of a professional communication statements unrelated to the obtaining of legal advice are made they are not privileged: Balabel v Air India [1988] Ch 317 at 331-332; The Sarah C Getty Trust [1985] QB 956 at 964-965.
There are three bases upon which it is said that ss 118 and 119 have altered the category of documents that must be produced for inspection. First it is said that on a proper construction of ss 118 and 119, a construction that adopts a purposive and not a literal approach, these sections should be read as governing pre-trial procedures including the production of discovered documents. The second way the case is put is that the court should make an order under O 15 r 15 of the Federal Court Rules to exempt from production documents which could not be tendered in evidence by reason of ss 118 and 119. The final and by far the most far reaching submission is that the common law must adapt to take account of ss 118 and 119 and arrive at a new set of rules that would see the common law operate in harmony with ss 118 and 119. The appellant relies upon Adelaide Steamship Co Ltd v Spalvins (1994) 152 ALR 418 which has adopted this approach.
The argument that ss 118 and 119 should be given a construction (presumably by way of implication or by the addition of appropriate words) that would have them operate in relation to the production for inspection of discovered documents relies on two independent but nevertheless related propositions. The first is that such a construction would promote the purpose and object underlying the Evidence Act. The second is that a failure to adopt that construction would lead to unfair or absurd consequences. In Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 277 at 279-280 McClelland CJ in Eq. said:
"If principles of client legal privilege … applicable to the adducing of evidence were to differ from those applicable to ancillary processes, the consequence would be anomalous, conducive to confusion and disorder in the preparations for and conduct of proceedings, and verging on the absurd. …
If different principles of client legal privilege were applied to the operation of the production of the documents on the one hand, and the adducing of evidence in the application on the other, in situations of this kind, quite impractical consequences could ensue."
The object of statutory construction is to determine what parliament intended so that the legal consequences of what was intended can be put into effect. If the meaning of the words used in an enactment are clear there will usually be no difficulty: the enactment will be taken to have meant what the legislation literally provides. However, there are circumstances in which it is both appropriate and proper to depart from the literal meaning of an enactment. Those circumstances will only arise where it is apparent that to give effect to the literal meaning of an enactment would be to frustrate the intention of parliament. That is, a departure from the literal meaning of a statute is permitted solely for the purpose of giving effect to the parliament's intention. But it is going too far to say, as Lord Denning did in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1977] 1 All ER 518 at 523 that the court should "adopt a more liberal attitude [to] construction as will 'promote the general legislative purpose' underlying the provision" if his Lordship meant by that that the court can "fill in the gaps" (Ministry of Housing v Sharpe [1970] 2 QB 223 at 264 per Lord Denning MR) in accordance with what the court thinks is good sense (R v Barnett[1982] QB 688 at 720-721 per Lord Denning MR).
There are many cases where the court has held that the literal operation of a statute was not its intended operation. The facts upon which a statute operates may demonstrate that its literal meaning will give rise to absurd or unjust consequences. That is often a good indication that the parliament did not intend the literal meaning to prevail: Mills v Meeking (1990) 169 CLR 214 at 242; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304.
But that is not the only circumstance in which a departure from the literal meaning of a statute is permissible. In Cooper Brookes Mason and Wilson JJ said (at 321):
"[W]hen the judge labels the operation of the Statute as 'absurd', 'extraordinary', 'capricious', 'irrational' or 'obscure' he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of a statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions."
If, on a proper analysis, it appears that the intention of parliament will be thwarted by the application of the literal meaning of an enactment then the court is entitled to remedy the situation by a strained construction of the words used, or by the addition of words, or by the omission of words: Saraswati v R (1991) 172 CLR 1 at 22.
It is not in dispute that if ss 118 and 119 are given their literal meaning they will only operate to prevent evidence being adduced in proceedings if objection to that evidence is taken. Read literally they do not affect the obligation of a party in a proceeding in a federal court to make over for inspection documents that have been discovered by that party. Does this contradict the object and policy of the Evidence Act? Does this create a situation that is "unfair" or "absurd"? Can it be said that if the literal meaning is applied parliament has unintentionally missed its mark?
In arriving at an answer to these questions there is one matter that should steadfastly be borne in mind. Any extension to the privilege and any extension to the area in which the privilege will operate may act as a fetter on the discovery of truth. In United States v Nixon(1974) 418 US 683 at 710, in relation to a claim of privilege made by the President of the United States concerning the production of certain well known tape recordings, Burger CJ said "whatever their origins, these exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth."
The argument that to limit ss 118 and 119 to testimonial compulsion is to defeat the purpose and object of the Evidence Act has no attraction. In the first place it is an argument that is contradicted by the Act itself. Chapter 3 of the Act (the relevant sections are to be found in Part 3.10 of Chapter 3) contains provisions that are solely concerned with the exclusion of evidence. The effect of Chapter 3 is explained in the introductory notes. In relation to Part 3.10 the notes say that it "is about the various categories of privilege that may prevent evidence being adduced." An examination of the provisions found in Part 3.10 bears out this description.
In the second place the general scheme of Part 3.10 suggests that it is not concerned with discovery or other methods of gathering information that may assist a party in the prosecution of his or her case. The Part provides for a variety of circumstances in which evidence is not to be adduced in a federal court: some but not all of the common law privileges are dealt with. Most of the provisions are concerned with the protection of a witness whether or not a party to the proceeding. In some cases the testimonial prohibition is not absolute. For example, in the case of client legal privilege, the privilege may be waived: see s 122. In the case of privilege against self incrimination, where a witness does give criminating evidence he or she is to be provided with protection against the future use of that evidence: see s 128. In the case of settlement negotiations the right to withhold evidence may be lost in a variety of identified circumstances: see s 131. Section 130 is concerned with evidence relating to matters of state. The court is given power to determine whether such evidence should be adduced. That determination will usually take place at the trial. In all of these cases, leaving aside client legal privilege, it would be inappropriate to construe the legislation as imposing additional limitations on the obligation to give discovery. To single out client legal privilege as the exception appears to be the creation of a policy rather than its ascertainment from the text of the legislation.
In the third place the enacting history of the Evidence Act tells against the submission. In 1979 the then Attorney-General, upon the recommendation of the Senate Standing Committee on Constitutional and Legal Affairs, referred to the Law Reform Commission the recommendation that the laws of evidence in federal courts be reviewed. In 1987 the Law Reform Commission delivered its report. The report included a draft bill that had been prepared by the Commission. That draft was the basis of the bill that was tabled in parliament and that was subsequently enacted as the Evidence Act. Sections 118 and 119 were modelled on cl 106 of the draft bill. The Commission had prepared the draft bill on the basis that it would not affect the obligations upon a party to make documents available for inspection. The Commission explained (at para 199):
"The Terms of Reference limit the Commission to considering the application of the privilege in the court room where evidence is sought to be given. Situations may arise where a party obtains access to documents [e.g. in pre-trial discovery, on search warrant] outside the court room which are protected in the court room by the proposed privilege. Under the proposal, the privilege will still apply in the court room unless the client voluntarily disclosed the document. Having wider access on discovery or under a search warrant is usual. Access is not determined by the rules of admissibility such as relevance and hearsay. It is not unreasonable to have wider access in the investigative stage."
In the fourth place, to give effect to the suggested construction is to impute to parliament an intention to impose even greater fetters than those created by ss 118 and 119 on the ability of a party to properly and adequately conduct litigation. It is true that the parliament has decided that the public interest will best be served by an extension of client legal privilege in the manner provided by ss 118 and 119. But there must be a very clear indication that the parliament intended to impose even greater restrictions before a court would be justified in departing from the grammatical meaning of ss 118 and 119 in the way that has been suggested.
Next, there is the argument that seems to be the true foundation for the contention that the purpose of the legislation will be defeated unless the appellant's construction of ss 118 and 119 is adopted, namely that these provisions have as their fundamental objective the protection from disclosure of confidential privileged communications. However, I do not accept that this is a proper characterisation of the purpose of the legislation.
In my view the fundamental objective of ss 118 and 119 is not to protect from disclosure certain confidential communications. Nor is protection from disclosure the fundamental objective of s 127 in relation to religious confessions, of s 128 in relation to self incrimination, of s 129 in relation to reasons for decision by a judge or an arbitrator, of s 130 in relation to matters of state or of s 131 in relation to settlement negotiations. The purpose of each of these provisions, including ss 118 and 119, is to ensure that evidence in respect of the topics dealt with is not to be adduced or given in a proceeding. That purpose finds its expression in s 134 which provides: "Evidence that, because of this part [i.e. part 3.10] must not be adduced in a proceeding is not admissible in the proceeding."
Finally, it is necessary to turn to the contention that the consequence of applying different principles to discovery and to the adducing of evidence is unjust or absurd. There is a good deal of support for the view that the absence of symmetry and consistency in relation to the adducing of evidence and discovery is both anomalous and irrational: see e.g Telstra Corporation Limited,supra, at 279-80 in the passage cited above; see also Kizon v Palmer (unreported, Federal Court 13 June 1997) where Beaumont J said (at 10) that symmetry and consistency required ss 118 and 119 to apply derivatively to the subpoena processes; see also Trade Practices Commission v Port Adelaide Wool Co Pty Ltd (1995) 60 FCR 366 at 370 where Branson J said "it would be a curious result" if the sections did not apply to prevent "dominant purpose" documents being produced for inspection.
However, with the greatest respect to those who have taken this view, I regret to say that I am not persuaded by it. First, the absence of symmetry and consistency, without more, is not a proper basis upon which to depart from the grammatical language of an enactment. If it was there would be very few statutes in respect of which it could be said: "The words mean what they say". Second, it is not by any means apparent how confusion or disorder would result from the fact that a party has obtained inspection of documents that are not admissible in evidence. Only one object of discovery, and in many cases not the principal object, is to obtain evidence. Often the principal object is to obtain information that will throw light on the case (Hutchinson v Glover [1876] 1 QBD 138) including information that would, directly or by a train of enquiry, advance a party's own case or disadvantage that of his or her adversary: (Mulley v Manifold (1989) 103 CLR 341 at 345). It must be remembered that the fact that a document was not admissible in evidence was never a ground either at law or in equity for not granting inspection of that document: Bustros v White (1876) 1 QBD 425; Bray on Discovery at 184-185. Even so, discovery was still regarded as "indispensable to the due administration of justice": The Commissioners appointed to inquire into the Process, Practice and System of Pleading in the Court of Chancery, First Report (1852) at 23.
Further, in the preparation of a case for trial it is commonplace, and it has been for over 150 years, for a party to obtain possession of a large quantity of documents many of which are not capable of being tendered in evidence for one reason or another. The documents may have been obtained by discovery, on subpoena or, nowadays, by non-party discovery. In a world where transactions are becoming increasingly complex there are many cases where a party, whether plaintiff or defendant, is not in a position to adequately advance or defend his or her case based on his or her own first hand knowledge of the facts. Thus, rather than creating confusion and disorder, the ascertainment of facts and information from documents not themselves admissible is often likely to lead to a just determination of a cause.
It is convenient now to turn to the argument that "dominant purpose" documents should be excluded from the documents to be produced for inspection by an order made under O 15
r 15. That rule provides:
"The court shall not make an order under this Order for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the Order is necessary at the time when the Order is made."
Prior to the passage of the Law of Evidence Amendment Act 1851 (UK) discovery was only available in a bill in equity. Every bill for relief in equity was, in reality, a bill for discovery: Smith's Weekly Publishing Co Ltd v Sunday Times Newspaper Co Ltd (1923) 31 CLR 552; Naismith v McGovern (1953) 90 CLR 336; Halsbury's, Laws of England (4th ed) vol 13
para 5.
The Law of Evidence Amendment Act enabled common law courts to give discovery in an action. It was soon the established belief that a party to an action was entitled to discovery as of right subject to certain established exceptions: Bray on Discovery at 11. However, this was only so after the Judicature Act 1873 (UK) because the rules of court provided for automatic discovery in actions commenced by writ (Burmah Oil Co v Bank of England [1980] AC 1090 at 1141) whereas in proceedings commenced by originating summons, a procedure designed for the quick and simple determination of a number of matters, the "right" to discovery was discretionary and the discretion was not often exercised: see e.g. In re Borthwith [1948] Ch 645; National Mutual Life Nominees Ltd v Co-operative Farmers and Graziers Direct Meat Supply Ltd [1976] VR 634.
Discovery in the Federal Court is regulated by O 15. Order 15 r 1 provides that a party may require another party to give discovery unless the court otherwise orders. An order may be made to limit the class of documents to be discovered or provide that discovery is to be made only in relation to particular matters: see O 15 r 3. The object of this rule is to prevent unnecessary discovery. It is clear that in proceedings in the Federal Court discovery is discretionary: see Trade Practices Commission v Rank Commercial Ltd (1994) 53 FLR 303 at 322. Indeed Burchett J has said that the court has a very wide discretion to make appropriate orders in respect of discovery including an order dispensing with discovery altogether: Murex Diagnostics Australia Pty Ltd v Chiron Corporation Ortho Diagnostic Systems Inc (1995) 55 FCR 194 at 199.
Nevertheless, it should not be thought that in an ordinary case limitations will be imposed upon a party's ability to obtain discovery. As a general rule every document that is in the possession or power of a party which is material or relevant to the case must be discovered and thereafter produced for inspection unless covered by some established privilege. In contemporary litigation there is often a real need for very broad discovery. This is not only for the reason that courts should insist on a party disclosing the truth, the whole truth and nothing but the truth to adopt the language of Lord Hailsham in D v National Society for Prevention of Cruelty to Children [1978] AC 171 at 225. Nor is it because, as will often be the case, discovered documents will add materially to the ability of the court to fairly determine controversial issues of fact. Broad discovery is often necessary for the fair disposal of a case because there is a substantial risk that limited discovery, that is discovery limited by class or subject matter, will result in important documents being kept from the court and will substantially inhibit a party's ability to present his or her case in the best possible light.
The same is true in relation to the production of documents for inspection. It is my view that a court should be reluctant to refuse to allow inspection in the case of admittedly relevant documents. As regards "dominant purpose" documents the position is no different from any other category of document. These documents are not amongst the category of documents that are exempt from production and, prima facie, inspection of them should be allowed. The fact that the contents of these documents may not be led in evidence is beside the point. Without more, that is not a sufficient reason for denying inspection: see also the observations of Goldberg J in Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 at 404-405.
This is not to suggest that in an appropriate case the court is not able to make an order that "dominant purpose" documents should not be inspected. However, it would be a rare case where such an order would be made without the court first inspecting the documents to ascertain whether there is some good reason, over and above the fact that they may not be led in evidence, why they should not be inspected: compare Science Research Council v Nasse [1980] AC 1028.
The issue whether the Evidence Act has modified the common law as it applies to the pre-trial gathering of evidence in a federal court, or indeed in all courts if the logic of Adelaide Steamship is to be given its full application, must be considered in the following context. Upon federation there was created throughout Australia a uniform body of unwritten law (the common law) described as "a single legal system" by Sir Owen Dixon in "Sources of Legal Authority", Jesting Pilate (1965) at 198-200; see also Breavington v Godleman (1988) 169 CLR 41 at 121-128 per Deane J. In so far as legislative powers are concerned, while the parliament of the Commonwealth has certain exclusive powers, (see e.g. ss 52, 90, 114 and 115 of the Constitution), most are shared with the States although in the case of inconsistency the laws of the Commonwealth will prevail (see s 109 of the Constitution). In the case of common law privileges such as legal professional privilege the Commonwealth parliament does not have exclusive jurisdiction to enact, circumscribe or abrogate the privilege. It can affect the privilege in its own area of legislative competence, namely where that privilege operates in federal courts, in federal tribunals, in relation to information gathering under federal statutes and in State courts exercising federal jurisdiction. With regard to the Evidence Act its area of operation is relevantly confined to federal courts (as defined) and ACT courts (as defined): see s 4(1) of the Evidence Act.
The orthodox view of judges has been that legislation "generally changes the law for the worse, and that the business of the judge is to keep the mischief of its interference within the narrowest possible bounds": F. Pollock, "Essays in Jurisprudence and Ethics" (1882) at 85. This no doubt followed the attitude of judges that the common law "is the perfection of reason": Blackstone, "Commentaries on the Laws of England" Bk 1 at 70.
Accordingly, courts were disposed, so far as was possible, to confine the operation of a statute according to its precise terms. This has not always been so. In early times statutes were badly drafted and it was necessary for the courts to give them a beneficial construction to ensure that they had a sensible field of operation. This led to the theory of the equity of the statute described by W. Page in "Statutes as Common Law Principles" [1944] Wisconsin Law Review 137 at 185 as being "somewhere between a genuine, though very free, construction, and a disguised use of analogy in the creation of common law principles, rules and standards, taken from the provisions of statutes which, by their terms, applied to like cases but not to the particular case in question."