Federal Court of Australia|1993-10-15|Before: Beazley JJ

Grofam Proprietary Limited; Grollo Brothers Proprietary Limited; Grollo Finance Proprietary Limited and Others v Australia and New Zealand Banking Group Limited; Peter Macauley; Kenneth Wayne Mcdermott and Robert Leslie Tuppen [1993] FCA 501 (15 October 1993)

GROFAM PROPRIETARY LIMITED; GROLLO BROTHERS PROPRIETARY LIMITED; GROLLO

FINANCE PROPRIETARY LIMITED and OTHERS v. AUSTRALIA AND NEW ZEALAND BANKING

Statutes - interpretation - Director of Public Prosecutions Act 1983 (Cth) - scope of power of Director of Public Prosecutions to give legal advice to an authority of the Commonwealth - distinction between powers and functions - general and special powers

Evidence - legal professional privilege - whether Director of Public Prosecutions precluded by statute from giving legal advice - rationale of legal professional privilege - belief of client as to right of Director of Public Prosecutions to give legal advice - circumstances in which privilege protects communications notwithstanding Director of Public Prosecutions not empowered to give legal advice

Edelsten v. Health Insurance Commission and Ors. (1990) 27 FCR 56

Leon Fink Holdings Pty. Limited v. Australian Film Commission (1979) 141 CLR 672

Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-Stock Corporation and Ors [1980] FCA 38; (1980) 29 ALR 333

Waterford v. The Commonwealth of Australia [1987] HCA 25; 163 CLR 54

Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52

Attorney-General (N.T.) v. Kearney [1985] HCA 60; (1985) 158 CLR 500

Great Atlantic Insurance Co. v. Home Insurance Co. and Ors. (1981) 2 All ER 485

Smith v. Daniell (1874) LR 18 Eq 649

with Mr. P.G. Cawthorn

Solicitors for the Applicant: Mallesons Stephen Jaques

Counsel for the First Respondent: Mr. G. Gibson

Solicitors for the First Respondent: Blake Dawson Waldron

Counsel for the Second and Third

Mr. H.A. Aizen

Solicitors for the Second and Third

1. The Notice of Motion be dismissed.

2. The applicant pay the respondents' costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NORTHROP, RYAN AND BEAZLEY JJ On 18 August 1993, the court refused a motion by the applicants for leave to appeal against orders made by a single judge of the court refusing to compel disclosure by the Commonwealth Director of Public Prosecutions (the DPP) of certain documents discovered by the DPP in proceedings numbered VG 110 of 1993, (the proceedings) which have been instituted in this court by Grofam Pty. Limited (Grofam), Bruno Grollo and Rino John Grollo, who apparently control Grofam, and seven associated companies which are also applicants. The proceedings are brought against the Australia and New Zealand Banking Group Limited, Peter MacAuley who is the Commissioner of the Australian Federal Police (the AFP), Kenneth Wayne McDermott, a Detective Sergeant in the AFP, and Robert Leslie Tuppen who is a Stipendiary Magistrate. Mr. Tuppen had issued search warrants at the instigation of Sergeant McDermott for execution at the homes of members of the Grollo family connected with Grofam and at the offices of their accountants and solicitors. The following convenient description of the proceedings has been given by the learned primary judge in his reasons for judgment: Grofam Proprietary Limited and Ors. v. Australia and New Zealand Banking Group Limited and Ors, Federal Court of Australia, Heerey J, 11 August 1993, unreported at pp 5-7:

"By an amended application filed on 17 May relief is sought

against the ANZ Bank, Mr. Peter Macauley (the Commissioner of the

AFP), Sergeant McDermott and Mr. Tuppen. On the same day an

amended statement of claim was filed. Part of the amended

statement of claim raises complaints about an alleged apprehended

disclosure by the ANZ Bank to the AFP of material concerning the

applicants in circumstances which it is said would breach the

bank's obligation of confidentiality to its clients. The amended

statement of claim goes on to plead the issue of the search

warrant by Mr. Tuppen under s.10 of the Crimes Act 1914 (Cth) with

respect to the premises of the bank and the subsequent seizure by

the AFP of documents from the Bank. There then follow complaints

about the warrant. It is alleged that at the time of issue Mr.

Tuppen "was not or ought not to have been satisfied by the

information on oath before him" that the offences alleged in the

warrant had been committed or that there were reasonable grounds

for suspecting such offences had been committed. It is alleged

further that the warrant was too wide in that it went beyond the

offences alleged in the information, that Mr. Tuppen was not or

ought not to have been satisfied that items the subject of the

warrant would be on the bank's premises, that the warrant was so

general that it was on its face oppressive, that the steps taken

by the AFP and Mr. Tuppen in relation to the making of the

decision to issue the warrant and the execution of it were an

exercise of power that was excessive and not bona fide and that

the AFP did not make full and frank disclosure to Mr. Tuppen of

all matters relevant to the making of the decision to issue the

warrant. Those matters are said to have amounted to failure to

observe the procedures required by s.10 of the Crimes Act within

the meaning of s.5(1)(b) of the Administrative Decisions (Judicial

Review) Act 1977 (Cth). It is also alleged that Mr. Tuppen did

not have jurisdiction under s.10 of the Crimes Act and that his

decision was not authorised thereunder. Complaint is made that

the making of the decision to issue the warrant gave rise to a

number of grounds of review under s.5(1)(e) of (the) AD(JR) Act,

namely by Mr. Tuppen taking into account irrelevant

considerations, failing to take into account relevant

considerations, exercising the power to grant the warrant for a

purpose other than a purpose for which the power was conferred,

making his decision in accordance with a rule of policy without

regard to the merits of the particular case and making a decision

that was so unreasonable that no reasonable person could have made

it. Further it is said that the decision involved an error of law

within the meaning of s.5(1)(f) of the AD(JR) Act, that there was

no evidence or other material to justify the making of the

decision within the meaning of s.5(1)(h) and that the decision was

otherwise contrary to law within the meaning of s.5(1)(i). It

also said that the documents seized did not fall within the terms

of the warrant."

2. The third respondent, Sergeant McDermott, filed an amended list of further documents in the proceedings in which he claimed that certain documents were privileged from production on the grounds of legal professional privilege. Some of the documents in that category were described as having been brought into existence by officers of the AFP or the Australian Tax Office (the ATO) for the sole purpose of obtaining legal advice and assistance from the DPP in relation to the investigation of the affairs of, amongst others, the applicants. Other documents for which privilege was claimed were described as having been brought into existence solely with a view to the DPP's giving legal advice and assistance to officers of either or both the ATO and the AFP. Yet other documents were described as having been brought into existence solely for the purpose of obtaining or giving legal advice and assistance in relation to the drawing of the information to be placed before a magistrate in support of various search warrants and the drawing of those warrants.

3. The applicants disputed at first instance the claim for legal professional privilege, contending that at the time when the documents were brought into existence, the DPP and the legally-qualified members of the staff of the office of the DPP were incapable, as a matter of construction of the Director of Public Prosecutions Act 1983 (the DPP Act), of giving legal advice to any of the respondents. That contention was rejected by the learned primary judge but was advanced again on the present motion for leave to appeal. Another issue which arose on this motion was whether, if there was no power in the DPP to give the legal advice, the legal advice which was given and the attendant communications were, in any event, protected by legal professional privilege.

4. The DPP Act establishes an Office of the Director of Public Prosecutions, comprising a Director of Public Prosecutions, an Associate Director and members of the staff of the Office: s.5. The person appointed to the position of DPP must be a legal practitioner of not less than five years standing: s.18(2); the DPP must not engage in practice as a legal practitioner outside the duties of the office: s.22(a); although the DPP and members of the DPP's staff who are legal practitioners have rights of audience: s.16. The DPP may request the Commissioner of Police of the AFP for assistance if the DPP is of the opinion that there is a matter connected with or arising out of an offence which requires further investigation, when considering instituting, taking over or carrying on, or when he or she has instituted, taken over or is carrying on, a prosecution: s.13.

5. The functions and powers of the DPP are prescribed in ss.6 and 9 respectively. The functions are related almost entirely, although not exclusively, to matters arising under a law of the Commonwealth, and unless otherwise stated, a reference to a crime or offence or other matter will be a reference hereafter to such under a law of the Commonwealth. The functions of the DPP include: the institution of prosecutions on indictment for indictable offences: s.6(1)(a); the carrying on of such prosecutions whether or not instituted by the DPP: s.6(1)(b); the institution of proceedings at the request of the Attorney-General: s.6(1)(baa); the institution of proceedings for the commitment of persons for trial and the carrying on of such proceedings whether or not instituted by the DPP: s.6(1)(c) and (e); the institution of proceedings for summary conviction and the carrying on of such proceedings, whether or not instituted by the DPP: s.6(1)(d) and (e); the provision of assistance in coronial inquests: s.6(1)(f); in respect of relevant matters, as defined in subs.6(8), the taking of civil remedies and co-ordinating and supervising the taking of civil remedies on behalf of or by the Commonwealth and authorities of the Commonwealth for or in connection with the payment of tax: s.6(1)(fa); the institution, carrying on and co-ordinating of proceedings for the recovery of pecuniary penalties in the circumstances specified: s.6(1)(g); and, relevantly for present purposes the "function" in s.6(1)(n):

"to do anything incidental or conducive to the performance of any

of the functions referred to in (a) to (m) and in subsection (2)".

Subsection (2) provides that the functions of the DPP include those conferred by or under any other law of the Commonwealth, or such other functions as are prescribed.

6. The powers conferred by s.9 on the DPP were summarised by the learned trial judge, whose summary at pp 7-8 of his reasons we also respectfully adopt:

"Section 9 is headed "Powers of Director". Sub-section (1)

provides for the director to prosecute by indictment in his

official name indictable offences against the laws of the

Commonwealth, although "nothing in this sub-section prevents the

Director from prosecuting an offence against a law of the

Commonwealth in any other manner". Sub-section (2) deals with the

signing of indictments. Sub-section (3) provides for the Director

to take over a prosecution on indictment for an offence against

the law of the Commonwealth being a prosecution by another person

other than the Attorney-General or a Special Prosecutor.

Sub-section (3A) provides for taking over prosecutions by a Special

Prosecutor under the Special Prosecutors Act 1982 (Cth) when a

Special Prosecutor dies or ceases to hold office. Sub-section (4)

provides in effect for the issue of a nolle prosequi by the DPP.

Sub-section (5) provides for the taking over by the Director of a

proceeding being carried on by another person for the commitment

of a person for trial in respect of an indictable offence against

the law of the Commonwealth or for summary conviction for such an

offence. Sub-section (6) provides that the Director may give

undertakings that certain statements made in proceedings will not

be used in evidence against the person making them. Sub-section

(7) provides that where the Director has instituted or taken over

the prosecution of an offence against a law of the Commonwealth,

the Director may exercise in addition to such rights of appeal (if

any) as are exercisable by him otherwise than under the

subsection, such rights of appeal (if any) as are exercisable by

the Attorney-General in respect of that prosecution. Sub-section

(8) provides that sub-section (7) is not to prevent the exercise

by the Attorney-General of a right of appeal which he would

otherwise have. Sub-section (8A) contains a definition of "right

of appeal". Sub-section (9) provides for the Director instituting

proceedings for pecuniary penalties. Sub-section (10) makes

similar provision for proceedings for civil remedies in connection

with the recovery of tax".

Finally, subsection (11), upon which senior counsel for the applicants principally relied, is in the following terms:

"Where an authority of the Commonwealth is a party to a proceeding

in respect of a matter:

(a) that has arisen out of or is connected with the performance

of any of the functions of the Director; or

(b) that may result in the performance by the Director of such a

function;

the Director, or a person who is entitled to represent the

Director in proceedings referred to in subsection 15(1), may act

as counsel or solicitor for that authority".

7. An "authority of the Commonwealth" is defined in s.3 to mean:

"(a) an authority, institution or other body .... established for

a public purpose by or under a law of the Commonwealth;

(b) a society, association or incorporated company in which the

Commonwealth, or an authority, institution or other body of

the kind referred to in paragraph (a), has a controlling

interest; or

(c) a person who holds:

(i) an office or position established by or under a law of

the Commonwealth;

(ii) an appointment made under a law of the Commonwealth; or

(iii) an appointment made, otherwise than under a law of the

Commonwealth, by the Governor-General, by a Minister,

or by any other person on behalf of the Executive

Government of the Commonwealth or the Administration

of a Territory;"

8. The appellant submitted that the giving of legal advice, whether in relation to criminal matters, quasi-criminal matters, civil matters or quasi-civil matters is wholly outside any power, express or implied, of the DPP, except to the extent expressly authorised in s.9(11), that is where there is already on foot a proceeding to which an authority of the Commonwealth is a party and the pre-conditions of paragraphs (a) or (b) of subsection 11 have been satisfied. Senior counsel for the applicants acknowledged that in certain circumstances an incidental power may be implied; (Kathleen Investments (Aust) Ltd. v. The Australian Atomic Energy Commission and Anor. [1977] HCA 55; (1977) 139 CLR 117 at 130; National Companies and Securities Commission v. Bankers Trust Australia Limited and Ors. [1989] FCA 530; (1989) 24 FCR 217) but submitted that in this case, an implied power which enabled the DPP to give legal advice outside the parameters of subsection (11) would conflict with the express provisions of that subsection and so offend the principle that a general power cannot override a special power. Senior counsel for the respondents submitted, however, that there was no question of the implication of an incidental power, as s.6(1)(n) was an express incidental power, which empowered the DPP to give legal advice in the circumstances here. It was submitted that although paragraph (n) was anomalously to be found in the functions provisions of s.6, it made no sense to speak of an incidental "function", and the provision could only be construed as a power.

9. The fact that a provision may, upon its proper construction, be categorised as a power notwithstanding that it is not labelled as such, was recognised in Edelsten v. Health Insurance Commission and Ors. (1990) 27 FCR 56 at pp 62-63 where Northrop and Lockhart JJ described the distinction between functions and powers in these terms:

"The distinction between the functions and powers of an

administrative body is between functions or purposes or activities

of an administrative body on the one hand and the powers conferred

upon it to perform or execute those functions, purposes or

activities on the other. This is the primary sense in which the

words are understood. The types of statutory contexts in which

the expressions "functions" and "powers" of such bodies appear

differ considerably. Sometimes the two expressions are treated

interchangeably or with blurred dividing lines; whilst some

statutory definitions of "functions" provide that "functions

includes powers and duties"".

10. There is force in the respondents' submission as to the categorisation of s.6(1)(n). In our opinion the "incidental" provision in s.6(1)(n) is not a "function" in the primary sense in which that word is used, despite the apparent separation between "functions" and "powers" in ss.6 and 9 of the Act. If a statutory provision specifies the administrative function or purpose or activity to be undertaken or performed, it is likely, if not essential, for that function to have an independent operation, even though it may be related to other functions. Section 6(1)(n) could not have any independent operation of that kind. It is purely incidental. Further, its language is the language of permission or of enabling things to be done or activities to be performed. In other words, it is the language of a power and not of a function.

11. However, senior counsel for the applicants submitted that even if paragraph (n) specifies a power, and not a function, it is a general power and thus cannot override the special power in s.9(11). It was submitted that subs.(11) gives to the DPP a specific power to give legal advice when an authority of the Commonwealth is a party to a proceeding in respect of a matter that has arisen out of or is connected with the performance of any of the functions of the DPP or which may result in the performance by the DPP of such a function. The express terms of subs.(11), it was argued, are inconsistent with the existence of any general incidental power to give legal advice. This submission did not involve a conclusion that an incidental provision in the terms of s.6(1)(n) was ultra vires, (The Attorney-General and Ephraim Hutchings v The Directors of the Great Eastern Railway Company (1880) 5 App Cas 473), but rather that upon its proper construction, s.6(1)(n) was a general provision and did not empower the DPP to give legal advice because of the specific provision in respect of that subject matter in s.9(11).

12. In Leon Fink Holdings Pty. Limited v. Australian Film Commission (1979) 141 CLR 672 Mason J, in dealing with the operation of general and special powers stated at 678:

"It is accepted that when a statute confers both a general power,

not subject to limitations and qualifications, and a special

power, subject to limitations and qualifications, the general

power cannot be exercised to do that which is the subject of the

special power. In Anthony Hordern and Sons Ltd. v. Amalgamated

Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 at

p 7 Gavan Duffy CJ and Dixon J said: "... When the Legislature

explicitly gives a power by a particular provision which

prescribes the mode in which it shall be exercised and the

conditions and restrictions which must be observed, it excludes

the operation of general expressions in the same instrument which

might otherwise have been relied upon for the same power".

This principle is, however, a principle of statutory construction which must at all times be applied so as to give effect to the intention of the legislature. In Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-Stock Corporation and Ors [1980] FCA 38; (1980) 29 ALR 333, Deane J said at p 347:

"As a matter of general construction, where there is repugnancy

between the general provision of a statute and provisions dealing

with a particular subject matter, the latter must prevail and, to

the extent of any such repugnancy, the general provisions will be

inapplicable to the subject matter of the special provisions.

"The rule is, that wherever there is a particular enactment and a

general enactment in the same statute, and the latter, taken in

its most comprehensive sense, would overrule the former, the

particular enactment must be taken to be operative ..." (per

Romilly MR: Pretty v. Solly [1859] EngR 249; (1859) 26 Beav 606 at 610).

Repugnancy can be present in cases where there is no direct

contradiction between the relevant legislative provisions. It is

present where it appears, as a matter of construction, that

special provisions were intended exhaustively to govern their

particular subject matter and where general provisions, if held to

be applicable to the particular subject matter, would constitute a

departure from that intention by encroaching on that subject

matter. A more fundamental example of such repugnancy is where

the particular provisions prescribe or encourage conduct which the

general provisions would render prima facie, though not

irremediably, unlawful or where the particular provisions assume

to be lawful conduct which the general provisions would render

prima facie unlawful. I have already indicated my view that the

latter, more fundamental, example of repugnancy is present in the

instant matter. I consider that the former example of repugnancy

is likewise present".

See also Saraswati v. R. [1991] HCA 21; 172 CLR 1 at p 22.

13. In this case, as the learned trial judge pointed out, it is not clear why s.9(11) was enacted, and in order to determine whether it is the exclusive source of power to give legal advice, or whether s.6(1)(n) may also operate to permit legal advice to be given, it is necessary to consider each provision in its context. We should add that the same considerations that apply to s.6(1)(n) would apply to an implied provision, although for convenience of expression, we confine ourselves to a consideration of the two express provisions. Each is an empowering provision given in aid of the DPP's functions. Section 9(11) may operate in aid of a number of those functions, including those specified in s.6(1)(b), (baa), and (e), assuming in the case of paragraphs (b) and (e) that the proceedings were not initially commenced by the DPP. The functions in those provisions are:

"(b) to carry on prosecutions of the kind referred to in

paragraph (a) (not being prosecutions instituted by the

Attorney-General or a Special Prosecutor), whether or not

instituted by the Director;

(baa) if the Attorney-General requests the Director in writing to

carry on a prosecution of the kind referred to in paragraph

(a) that was instituted by the Attorney-General - to carry

on that prosecution;

...

(e) to carry on proceedings of a kind referred to in paragraph

(c) or (d) (whether or not instituted by the Director);"

However, there are a number of functions which the DPP may perform without an authority of the Commonwealth being a "party to a proceeding". Section 6(1)(a), (f) and (j) are examples. Those paragraphs provide:

"(a) to institute prosecutions on indictment for indictable

offences against the laws of the Commonwealth;

...

(f) to assist a coroner in inquests and inquiries conducted

under the laws of the Commonwealth;

...

(j) to consent to prosecutions for offences against the laws of

the Commonwealth, being offences of a kind in relation to which an

instrument under subsection (4) is in force;".

(Subsection (4) provides that a person appointed under the laws of the Commonwealth who has power to consent to prosecutions for offences of a particular kind against the laws of the Commonwealth, may authorise the DPP to consent to prosecutions for offences of that kind).

14. Having regard to the functions of the DPP, it would be usual and expected for legal advice to be given in aid of those functions to an authority of the Commonwealth, notwithstanding that the authority was not a party to proceedings in the circumstances specified in s.9(11). Sections 6(1)(n) and 9(11) are on their face repugnant and the rule that the special power prevails may well apply. This is not a matter, however, upon which we are required to express a final view, because of the decision which we have reached on this motion for leave. However, if the learned trial judge was correct in his view that s.9(11) was inserted for more abundant caution and is not to be construed so as to prevent the general provisions of s.6(1)(n) being called in aid to empower the giving of legal advice in respect of the DPP's other functions then, assuming paragraph (n) is an empowering provision, it may be that this matter is not properly resolved solely as a matter of statutory construction. The undisputed facts, as recorded by the learned trial judge were:

"Within the ATO there is a section known as the Audit Prosecutions

Unit (APU). When tax investigation raises a suspicion that a

taxpayer might have committed a tax related criminal offence, the

matter is referred to the APU for legal advice and, if considered

appropriate, prosecution. If the APU decides that a serious

offence might have been committed the matter is referred to the

DPP for legal advice and possible prosecution. The APU prosecutes

less serious offences itself.

In the latter half of 1990 a case officer auditing the affairs of

the applicants informed the APU of his suspicion that criminal

offences may have been committed by some or all of the applicants.

The matter was then referred to the APU. By a letter dated 20

December 1990 the Deputy Commissioner of the ATO sought advice

from the DPP as to suspected tax fraud by the applicants. The DPP

formally responded to this request by a minute of advice dated 9

July 1992.

In August and September 1992 a number of meetings took place

attended by Mr. Peter Wood, who is Deputy Director of Public

Prosecutions and in charge of the DPP's Melbourne office, together

with AFP and ATO officers and, on a number of occasions, senior

and junior counsel retained by the DPP. A decision was made to

apply for search warrants.

...".

From these facts, it appears that the ATO, apparently in accordance with an established practice, having engaged the assistance of the AFP, sought advice from the DPP in relation to suspected tax fraud by the applicants. We do not know whether, at the time that the legal advice was being sought, any decision had been made by the ATO or the AFP or the DPP to commence any proceedings of any nature, although we suspect that no such decision had been made. Assuming this to be so, it remained open to the ATO at that stage to decide not to institute proceedings. Alternatively, the ATO might decide to commence and carry on proceedings itself without further reference to the DPP and, correspondingly, the DPP might decide to play no part in the proceedings. As we cannot identify any function of the DPP to which the giving of legal advice in such circumstances would be incidental we doubt whether the DPP has any power, even assuming that s.6(1)(n) is an express incidental provision, to give legal advice to the ATO in any of the circumstances just described. Because of this difficulty we preferred to refuse leave on the basis of our determination of the second issue raised on this application, namely, whether, assuming that there is no power in the DPP to give legal advice in the circumstances here, legal professional privilege attaches to the legal advice and communications in question.

15. Legal professional privilege is a matter of judicial policy: See Waterford v. The Commonwealth of Australia [1987] HCA 25; 163 CLR 54 at p 70. In Grant v. Downs [1976] HCA 63; (1976) 135 CLR 674 at p 685 Stephen, Mason and Murphy JJ explained the basis of the judicial policy in these words:

"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. The existence of the privilege reflects, to the

extent to which it is accorded, the paramountcy of this public

interest over a more general public interest, that which requires

that in the interests of a fair trial litigation should be

conducted on the footing that all relevant documentary evidence is

available."

16. The privilege "exists for practical reasons": Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52 at p 67 per Gibbs CJ. In Attorney-General (N.T.) v. Kearney [1985] HCA 60; (1985) 158 CLR 500, Wilson J at p 522 referred to "the importance of flexibility in the operation of a rule which is grounded in public policy". The privilege has been stated to apply where legal advice is obtained from professional or qualified persons. In Great Atlantic Insurance Co. v. Home Insurance Co. and Ors. (1981) 2 All ER 485 Templeman LJ referred at p 489 to the old authority of Wheeler v. Le Marchant (1881) 17 ChD 675 where Brett LJ said at p 683 that the privilege was "confined entirely to communications which take place for the purpose of obtaining legal advice from professional persons". Similarly in Waterford's case, the privilege was said to attach where legal advice was given by a competent and independent lawyer. Brennan J at p 70 described both the purposes of the privilege and its operation in these terms:

"The purpose of legal professional privilege is to facilitate the

seeking and giving of legal advice and thereby to ensure that the

law be applied and litigation be properly conducted: Greenough v.

Gaskell (1833) 1 My. and K. 98 at p 103; Grant v. Downs (1976) 135

CLR 674 at p 685; Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52 at pp 66,

74, 108, 114-115, 128. If the purpose of the privilege is to be

fulfilled, the legal adviser must be competent and independent.

Competent, in order that the legal advice be sound and the conduct

of litigation be efficient; independent, in order that the

personal loyalties, duties or interests of the adviser should not

influence the legal advice which he gives or the fairness of his

conduct of litigation on behalf of his client. If a legal adviser

is incompetent to advise or to conduct litigation or if he is

unable to be professionally detached in giving advice or in

conducting litigation, there is an unacceptable risk that the

purpose for which privilege is granted will be subverted. As to

competence, there is much to be said for the view that admission

to practise as a barrister or solicitor is the sufficient and

necessary condition for attracting the privilege, but the question

was not argued and need not be decided".

In Kearney, Dawson J in referring to the situation of legal advisers who are salaried employees of a government department also stressed the "professional" circumstances in which the privilege attaches. His Honour said however at p 531, that the fact that these employees are salaried was:

"... no reason for denying privilege to communications passing

between them and their client provided that they are 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: see Crompton Ltd. v. Customs

and Excise Commissioners (No. 2) (1972) 2 QB at pp 129, 136, 138;

on appeal (1974) AC 405; Geraghty v. Minister for Local Government

(1975) IR 300 at p 312; cf. A.M. and S. Europe v. Commission

(E.C.J.) (1983) QB 878 at p 950".

17. The precise question here does not appear to have been the subject of any reported decision. The matter was touched upon in Smith v. Daniell (1874) LR 18 Eq 649. In that case the issue before the court was whether a "friendly opinion" given by Lord Westbury at a time when his Lordship was an ex-Chancellor was privileged on the grounds of legal professional privilege. Sir James Bacon V.C. held the communication was not privileged as it was not expressed "in discharge of any professional duty". However, the Vice-Chancellor also said at p 654:

"The old rule was that, unless the communication was made strictly

in a professional capacity, the privilege could not attach; and I

recollect instances ... where that rule has been carried to a very

rigorous extent. One instance I remember was where a man had been

taken up on a charge of a capital offence and was tried, and upon

the trial a man was proposed to be put in the box to give

evidence. The objection was taken that the communication made to

the witness, which he was about to prove, was a confidential

communication. He was one of those men who hang about police-

offices and represent themselves to be attorneys; but it was clear

he was not an attorney. The objection as to his disclosing the

confession - for it amounted to that - which the person charged

had made to him, was set aside, and he was compelled to give

evidence. I do not say that such a rule prevails at this time,

and certainly not in this Court; ..."

18. An imperfect analogy can be found in the cases where legal advice has been given within a jurisdiction by a foreign legal adviser not qualified to act within that jurisdiction. In Great Atlantic Insurance Co. v. Home Insurance Co. and Ors. (supra) Templeman LJ held that legal professional privilege applied to communications between a client and his foreign lawyers or attorneys. We share his Lordship's view. It would be an anomalous and capricious result that legal advice, given by solicitors duly qualified and authorised to practise within a jurisdiction, especially in respect of a matter which involved a foreign element, although we do not consider that qualification to be decisive, was protected by the privilege, but legal advice given by properly retained foreign lawyers in respect of the same subject matter was not privileged.

19. We have not found this matter without difficulty and as we have said, it appears to be without precedent. If the statement of Brennan J in Waterford, that the privilege attaches where legal advice is given by a "competent and independent" practitioner was to be adopted without more, the policy issue would be determined against the protection of the advice. However, his Honour's comments were made in quite different circumstances and without the present problem in mind. In our opinion, a more useful illustration of the application of the rule, having regard to its rationale is afforded by supposing that an otherwise duly qualified legal practitioner has overlooked the renewal of an annual practising certificate. Would advice given to a client not be protected, even if all concerned believed that the practitioner, to use the language of Brennan J in Waterford, was "competent"? His Honour's requirements of competence and independence were directed at avoiding what was described as "an unacceptable risk that the purpose for which privilege is granted will be subverted". We do not find any "unacceptable risk" in the privilege attaching in the situation just postulated. Indeed, to deny the privilege in those circumstances, would be to subvert its rationale.

20. In the present case the competing policy considerations were the desirability on the one hand of protecting a communication where it is assumed that the communication is privileged and whether on the other hand, the court should protect advice given by a legal practitioner impliedly precluded by statute from giving the advice. Before the question of whether the privilege will attach having regard to these considerations, is determined, it is necessary again to refer to the facts. The evidence revealed that the ATO and the AFP approached the DPP, apparently in the course of an established practice of so doing. There was no evidence whether any relevant person had a belief as to the right of the DPP to give advice in the circumstances in which he did, or indeed whether anyone had given consideration to that question. However, in our opinion, it cannot reasonably be suggested that the ATO, the AFP and the DPP would engage in such conduct in deliberate contravention of the DPP Act. In those circumstances, it is reasonable to infer that the relevant agencies had the belief that the DPP was entitled to do what it did.

21. When it is borne in mind that legal professional privilege is essentially concerned with the protection of the client, we consider that as a matter of judicial policy, communications between the client and a lawyer, which would normally be privileged, ought to be protected where the client involved genuinely believed that there was an entitlement to give the legal advice in question.

22. For the reasons which we have expressed, we declined to grant leave.

Administrative Decisions (Judicial > > Review) Act 1977(Cth)

Public Prosecutions Act 1983

Prosecutors Act 1982

Grofam Proprietary Limited; Grollo Brothers Proprietary Limited; Grollo Finance Proprietary Limited and Others v Australia and New Zealand Banking Group Limited; Peter Macauley; Kenneth Wayne Mcdermott and Robert Leslie Tuppen [1993] FCA 501

At a glance

Court

Decision date

Before

Source

Judgment (66 paragraphs)

Grofam Proprietary Limited; Grollo Brothers Proprietary Limited; Grollo Finance Proprietary Limited and Others v Australia and New Zealand Banking Group Limited; Peter Macauley; Kenneth Wayne Mcdermott and Robert Leslie Tuppen [1993] FCA 501 (15 October 1993)

Parties

Legislation Cited (3)

Cases Cited (10)