Harrington v Rich

Federal Court of Australia (Full Court)|2008-04-18|Before: Branson J, Edmonds J, Jacobson JJ

THE INTERLOCUTORY JUDGMENT 1 On 17 March 2008, the Court heard argument on an application for leave to appeal from an interlocutory judgment given by Branson J on 13 December 2007 and from certain orders made by her Honour on 14 December 2007. The orders made by her Honour and challenged by the applicants ('Partners') required the Partners to produce for inspection by the respondent ('Ms Rich') two handwritten notes and an email including an attachment ('the Documents'). The Partners had argued before Branson J that the Documents were subject to legal professional privilege as they contained legal advice provided to the Partners. 2 The dispute concerning access to the Documents (and to certain other documents) arose in the course of proceedings instituted by Ms Rich. Ms Rich instituted the proceedings against past and present partners of the accounting firm, Price Waterhouse Coopers ('PwC') under s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth), alleging conduct in contravention of that Act and of the Sex Discrimination Act 1984 (Cth). Ms Rich was herself a partner in PwC. She claimed to have been a victim of sexual harassment and to have suffered discrimination on the grounds of sex. She also claimed to have been victimised by reason of her complaints concerning the alleged discrimination. 3 The Partners asserted that some of the documents to which Ms Rich sought access contained legal advice provided by qualified solicitors within PwC's Office of General Counsel ('OGC'). Those persons were either themselves partners in PwC or solicitors employed by PwC. 4 One of the contentions advanced by Ms Rich before Branson J was that PwC's General Counsel and the other solicitors within OGC lacked the overall independence necessary for legal professional privilege to subsist in respect of confidential communications between the OGC and the Partners, even where those communications were made for the dominant purpose of obtaining legal advice or to aid in the conduct of litigation reasonably in prospect. Her Honour did not find it necessary to resolve this broad contention. She held instead that, having regard to the nature of the particular allegations made by Ms Rich against the Partners and the fact that PwC's General Counsel and her deputy were likely to be joined in any proceedings instituted by Ms Rich, OGC: 'was not in a position to give professionally detached advice to [the Partners] concerning allegations of the character of those made by Ms Rich.' 5 Branson J also addressed contentions advanced by Ms Rich that the Partners had waived privilege in respect of documents comprising or recording external legal advice provided to them in relation to the dispute with Ms Rich. Similar issues arose in relation to certain external advice received by one of the Partners, Mr Edwards. Her Honour held that the Partners had waived privilege in the external advice given to them prior to April 2005, but that Mr Edwards had not waived privilege in the advice provided to him. 6 Branson J made orders that the Partners produce the Documents for inspection, on or before 5 February 2008 (Order 1). Her Honour declared that the Partners and Mr Edwards were not obliged to produce for inspection certain other documents in respect of which privilege subsisted and had not been waived (Order 2). Her Honour gave Ms Rich liberty to apply for the production of further documents, insofar as such documents came within the categories of documents in respect of which the Court found on 13 December 2007 that privilege had not been established or had been waived (Order 4). 7 On 10 January 2008, Edmonds J stayed Orders 1 and 4 pending the hearing of the application for leave to appeal. No application was made during the hearing of the leave application for the stay order to be extended until delivery of judgment by the Court. This may have been because the parties assumed that the stay order would operate until judgment in any event.

THE APPLICATION FOR LEAVE TO APPEAL 8 As we have noted, the Partners sought leave to appeal from the interlocutory judgment and orders of Branson J. Ms Rich filed a notice of cross-appeal challenging her Honour's conclusion that Mr Edwards had not waived privilege in respect of the external advice received by him. As Mr Beech-Jones SC, who appeared with Ms Francois for Ms Rich, explained at the hearing of the application for leave to appeal, Ms Rich wishes to pursue the cross-appeal only if the Court grants leave to the Partners to appeal. However, Ms Rich also filed a notice of contention which seeks to uphold Branson J's orders in relation to OGC's advice to the Partners, on the ground that: 'The relationship between the occupant of the position of General Counsel as a partner of the PwC and the other partners of PwC was not one which secured to the advice … an independent character sufficient to enable legal professional privilege to attach to legal advice given by a person in that position or a person or persons acting under the supervision and control of someone in that position.' 9 This Court heard full argument on 17 March 2008 on the application for leave to appeal, the substantive appeal (on the assumption that leave might be granted), the notice of contention and the cross-appeal. Judgment was reserved.

DEVELOPMENTS AFTER THE HEARING 10 On 28 March 2008, the Court received a letter from the solicitors for the Partners, as follows: 'We refer to the above appeal, in which we act for the Appellants, which was heard by the Full Court on 17 March 2008 and in respect of which judgment has been reserved. With the consent of the Respondent to the above appeal, we write to advise the Court that the underlying proceeding (NSD 1865 of 2005) has now been dismissed by consent. The parties have agreed that the Full Court appeal proceeding will remain on foot, as the judgment of the Full Court is a matter which is of import to the Appellants beyond the context of the underlying proceeding.' 11 Branson J made orders on that day in the following form: '1. Proceeding NSD 2160 of 2006 (consolidated with proceeding NSD 1865 of 2005) be dismissed. 2. There be no order as to costs. 3. All existing costs orders be vacated.' 12 The Court sent a reply to the Partners' solicitors on 31 March 2008, in the following terms: 'The members of the Full Court note that the proceedings in the original jurisdiction of the Court (NSD 1865 of 2005) have now been dismissed. They also note that your letter refers to the "Full Court appeal proceeding". The proceeding heard on 17 March 2008 was an application for leave to appeal from certain interlocutory orders made by Branson J. Leave to appeal has not yet been granted. In these circumstances, the present view of members of the Court is that the agreement of the parties recorded in the final paragraph of your letter amounts to an invitation to give an advisory opinion. This may raise the question of whether there is any "matter" now before the Court and, even if there is, whether the Court would proceed to deliver a judgment in a proceeding the issues in which have been rendered moot. A further difficulty appears to be created by the criteria to be applied when considering whether leave to appeal from an interlocutory judgment should be granted. An important criterion is the likelihood of substantial injustice, supposing the decision to be wrong, should leave not be granted. Given that the substantive proceedings between the parties have now been resolved, it is somewhat difficult to understand how any substantial injustice, in the relevant sense, can be occasioned by the interlocutory orders made by Branson J. Subject to one question, the present inclination of the Full Court is to dismiss the application for leave to appeal, with no order as to costs. If any party wishes to argue against this disposition of the application for leave to appeal, or some other form of order, that party should file and serve written submissions within seven days. The question that the parties may need to address is what should be done about the orders made by Branson J, which were stayed by Edmonds J on 10 January 2008.'

SUBMISSIONS 13 The Partners filed written submissions on 4 April 2008, contending that the Court should either: · grant leave to appeal and allow the appeal; or · permanently stay the order for production and inspection of the Documents. 14 The Partners argue that the dispute between the parties to the principal proceedings involves a 'matter' for the purposes of Chapter III of the Constitution and that the dispute relating to production of the Documents is 'within the boundaries of that matter'. They cite Attorney-General (Cth) v Alinta Ltd (2008) 242 ALR 1, as a recent example of the High Court resolving an appeal on the merits notwithstanding that the underlying commercial dispute had been settled before the appeal was heard. They also argue that, even if the present application for leave to appeal is moot, the Court has a discretion to proceed to deliver a judgment on the application for leave to appeal and on the appeal itself. 15 The Partners submit that in exercising its discretion, the Court should take account of several factors: · the judgment of Branson J has ramifications beyond the facts of the case and it is in the public interest that the issue be resolved; · the judgment is not merely attended by doubt but (so it is said) is 'plainly wrong'; · the Court has received the benefit of full argument on the issues; and · the Partners' entitlement to legal professional privilege is a common law right. 16 The Partners appear to accept that the public interest does not require all issues arising on the application for leave to appeal to be resolved and that not all issues have any continuing practical significance. They contend that the Court should prepare a judgment which is limited to deciding what they describe as the issue relating to 'the independence of OGC'. They do not press for the judgment to address the remaining issues relating to waiver of legal professional privilege, which Branson J resolved. 17 Ms Rich's solicitors advised the Court that her position is that the disposition of the application for leave to appeal is a matter for this Court and she submits to the orders of the Court.

A Hypothetical Question 18 We approach the Partners' submissions on the basis that, notwithstanding that orders have been made dismissing the proceedings in the original jurisdiction of the Court, there is no dispute that there is a 'matter' before the Court for the purposes of Chapter III of the Constitution. We take into account that the orders made by Branson J on 14 December 2007 have not been discharged, although they were stayed pending the hearing of the application for leave to appeal. If there were a dispute as to the existence of a 'matter', s 78B of the Judiciary Act 1903 (Cth) would be enlivened and it would then be the duty of the Court to ensure that notice of the cause is given to the Attorneys-General of the Commonwealth, States and Territories. 19 It is nonetheless to be borne in mind that courts are very wary about giving answers to what appear to be hypothetical questions. In Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334, six members of the High Court warned (at 356-357, [48]-[49]) against a court purporting to grant declaratory relief on the basis of a set of hypothetical facts, rather than by reference to facts found by the Court or agreed between the parties. Their Honours observed that, in the absence of a 'concrete situation', the orders of the Court in such circumstances '[do] not finally resolve the dispute or quell the controversy'. 20 The present case does not present precisely the same difficulty as Bass v Permanent Trustee. Undoubtedly there has been a controversy between the parties, and that controversy embraced the ancillary dispute between them concerning production and inspection of the Documents. But the substantive controversy has now been resolved. Consequently, there can be no legitimate forensic basis for Ms Rich to inspect the Documents, even if the stay order imposed on 10 January 2008 has expired or were to be lifted. This is because of the established principle that documents produced in the course of litigation by one party to another, by reason of an order for discovery, are subject to an implied undertaking by the inspecting party not to use any documents disclosed otherwise than in relation to the particular litigation: Esso Australia Resources Ltd v Plowman (1995) 128 ALR 391, at 403, per Mason CJ. Moreover, in the light of the consent orders made by Branson J, the Partners do not suggest that there is any continuing dispute between the parties relating to the costs of the proceedings.

Principles 21 In Bonan v Hadgkiss (2007) 160 FCR 29, the Full Court adopted (at 31 [8]) the general principle that: 'a court should refuse to address an advisory opinion in respect of issues of which there is no longer a controversy between the parties [citing Bass v Permanent Trustee].' The Full Court qualified this general proposition, however, by pointing out that: 'the Court retains [a] discretion to continue to hear an appeal in circumstances where the subject-matter of the appeal has been rendered moot by reason of a change in circumstances or otherwise (Long v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 438; Minister for Immigration and Multicultural and Indigenous Affairs v Al Masri (2003) 126 FCR 54; Hope Downs Management Services Pty Ltd v Hamersley Iron Pty Ltd [2000] ATPR 40,501 (41-733).' 22 In Bonan v Hadgkiss, the appeal had been rendered moot (see [31] below) but a live issue remained as to costs. The Court observed (at 32 [10]-[11]) that in such a case (that is, where costs are in issue) there is no limit on the considerations which may be taken into account in determining whether to exercise the discretion to hear and determine the appeal: 'the authorities show that the courts have had regard to the following factors in determining whether to exercise the discretion: whether the decision under appeal has ramifications which extend beyond the facts of the case in question and it is in the public interest that the issue be resolved (Al Masri 126 FCR 54); whether the decision under appeal reflects adversely upon the reputation of one of the parties and the determination of the appeal may serve to vindicate that party's reputation (Vanstone v Clark (2005) 147 FCR 299); whether a finding of bad faith by the decision-maker has been made (Minister for Immigration and Multicultural and Indigenous Affairs v SBAN [2002] FCAFC 431); whether there is doubt over the correctness of the decision under appeal (Federal Commissioner of Taxation v Industrial Equity Ltd (2000) 98 FCR 573); Al Masri 126 FCR 54); the amount of judicial resources which would be taken in hearing and determining the appeal (IEL 98 FCR 573); and the costs issue (Long [2002] FCAFC 438; Al Masri 126 FCR 54; IEL 98 FCR 573). However, the presence of one or more of those factors does not mean that the discretion will be exercised in favour of hearing and determining the appeal. Each case must be considered on its facts.' 23 As we have noted, the Partners point to several factors that they say justify the Court proceeding to judgment in this case. However, there are other circumstances which suggest that the Court should not accept the Partners' invitation to proceed to judgment.

Circumstances Militating Against Proceeding to Judgment

24 First, the substantive proceedings between the parties have been completely resolved. There is no remaining issue as to the costs of the proceedings: cf Vanstone v Clark (2005) 147 FCR 299; Minister for Immigration v Al Masri (2003) 126 FCR 54, at 62 [20]-[21], per curiam; Commissioner of Taxation v Industrial Equity Ltd (2000) 98 FCR 573, at 577 [16] (in each of these cases costs remained in issue).

25 Secondly, the Partners have not been granted leave to appeal. They require leave because the orders made by Branson J were interlocutory in character: Federal Court of Australia Act 1976 (Cth), s 24(1A). One of the criteria to be applied on an application for leave to appeal from an interlocutory judgment is whether substantial injustice would result if leave were to be refused: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, at 398-399, per curiam. As the Court point out in the letter of 31 March 2008 to the Partners' solicitors, it is difficult to see how any substantial injustice can be occasioned to the Partners if leave is refused, given that the substantive proceedings have been resolved. Even if the orders made by Branson J are not stayed indefinitely, Ms Rich, except with the leave of the Court, cannot make any use of the Documents since the proceedings have been terminated by the consent orders. If necessary, the position can be put beyond doubt by this Court permanently staying Branson J's orders on the ground that they can no longer serve any useful purpose. 26 Thirdly, the Partners say that the primary judgment creates significant uncertainty as to whether solicitors within OGC will be able to give advice that attracts privilege, in the event of an allegation being made regarding the conduct of a partner of PwC. Branson J's judgment, insofar as it addresses the role of OGC, is (as might be expected) fact specific. Her Honour emphasises (at [59]) the fact that allegations were made by one partner (Ms Rich) against the others; that the allegations cast aspersions of a personal rather than of a purely professional kind against certain of the Partners; and that General Counsel and her deputy were likely to be respondents in any litigation instituted by Ms Rich. Whatever the merits of her Honour's conclusions, they do not purport to lay down broad general principles governing the subsistence of legal professional privilege in relation to advice given by legally qualified members of a firm to other members of the firm.

Authorities 27 It is instructive to compare the circumstances presented by the present case with those of the cases relied on by the Partners. In Attorney-General v Alinta, the Attorney-General intervened in the proceedings in the Full Federal Court between Australian Pipeline Ltd ('APL')and Alinta Ltd('Alinta'). The Full Court, among other orders, declared s 657A(2)(b) of the Corporations Act 2001 (Cth) to be invalid on constitutional grounds: Australian Pipeline Ltd v Alinta (2007) 159 FCR 301, at 395-396 [433], per Gyles and Lander JJ. Both the Attorney-General and Alinta sought special leave to appeal to the High Court. The Attorney-General's application for special leave was granted, while Alinta's was referred for argument before a Full High Court: Attorney-General v Alinta, at 17 [62], per Hayne J. 28 The underlying commercial controversy between Alinta and APL was then resolved. Alinta discontinued its application for special leave, while the Attorney-General amended his notice of appeal so that it raised only the issue of the validity of s 657A(2)(b) of the Corporations Act. The Attorney-General also arranged for counsel to be briefed to appear as amici curiae to support the Full Court's declaration that the provision was invalid. 29 Hayne J examined (at 18 [65]-[67]) the basis on which it was appropriate for the High Court to determine the appeal notwithstanding resolution of the underlying commercial controversy: 'The Attorney-General intervened in Alinta's appeal to the Full Court of the Federal Court as of right. The matter was one arising under the Constitution or involving its interpretation. Having thus intervened in those proceedings the Attorney-General was "for the purposes of the institution and prosecution of an appeal from a judgment given in the proceedings ... taken to be a party to the proceedings". The controversy underpinning the matter in which the Attorney-General intervened included (but was not limited to) the question of validity of the impugned provisions of the Corporations Act, and s 657A(2)(b) in particular. And by his intervening, the Attorney-General became party to the controversy about the validity of the impugned provision. … Although other parties to the litigation in which the present constitutional controversy has arisen no longer have any commercial reason to oppose the Attorney-General's appeal, the matter is neither merely hypothetical nor moot.' 30 This passage makes it clear that Attorney-General v Alinta was a very different case from the present. In Attorney-General v Alinta, although the underlying commercial controversy had been resolved, the Attorney-General was a party to the controversy and wished to challenge the declaration made by the Full Federal Court that s 657A(2)(b) of the Corporations Act was invalid. In the present case, the parties have resolved the entirety of the controversy between them (apart from the application for leave to appeal in which Ms Rich has no continuing forensic or practical interest). No issue remains that is comparable to the important constitutional question ultimately determined by the High Court in Attorney-General v Alinta. 31 In Bonan v Hadgkiss, the appellant appealed from a judgment of a Judge of this Court declaring that the respondent (a Building and Construction Commissioner) had power to exclude the appellant's solicitor from an examination conducted under the Building and Construction Industry Improvement Act 2005 (Cth). The solicitor subsequently ceased to represent the appellant and the appellant attended an examination before the respondent represented by another solicitor. The respondent filed a motion seeking to have the appeal dismissed or stayed on the ground that it had become moot. The appellant resisted the motion on the grounds that costs remained an issue and that the appeal raised questions of practical application beyond the facts of the case (at 31 [9]). 32 The Court stated the principles referred to earlier in this judgment ([21], above) and on which the Partners rely. Their Honours pointed out, however, that, although the Court has a discretion to proceed to judgment, each case must be considered on its facts. The appellant was not the subject of any adverse costs order and he had not deposed that he would have to bear any costs personally (at 34 [18]). On what was said to be the issue of general significance, their Honours referred (at 32-33 [13]), with apparent approval, to Hope Downs Management Services Pty Ltd v Hamersley Iron Pty Ltd [2000] ATPR 41-733; [1999] FCA 1652, where a Full Court declined to proceed with an appeal which was otherwise moot, notwithstanding that the National Competition Council (a party) asserted that the appeal presented a very important issue of statutory construction. In any event, the Court in Bonan v Hadgkiss thought that there would be limited utility in addressing the legal question presented by the appeal. There had been no cross-appeal challenging other orders made by the trial Judge and the appeal was not an appropriate vehicle to resolve authoritatively what was said to be an anomaly in the trial Judge's reasoning (at 33 [16]). Accordingly, the appeal was permanently stayed. 33 In Vanstone v Clark (2005) 147 FCR 299, the legal question was whether the Minister for Immigration (the appellant) had acted within her powers in suspending the respondent from his statutory office (Commissioner of the Aboriginal and Torres Strait Islander Commission) on the ground of misbehaviour. After the hearing of the appeal but before judgment was handed down, the relevant legislation was repealed and the statutory office was abolished. The respondent argued that the Court should stay the appeal on the ground that it had been rendered moot. 34 The two-member Court (the third member having died after judgment was reserved) rejected the argument. Black CJ explained the reasons as follows (at 304-305 [6], [8]): 'Although the ATSIC Act has largely been repealed, there remains a controversy between the parties about whether Mr Clark was correctly suspended from office or, on the other hand, whether the Minister acted beyond her powers in suspending him. … There is, therefore, undoubtedly a "matter" before the Court, in that the validity of the Minister's actions and the validity of the Determination are sought, by the Minister, to be established by the Court's decision on appeal … It is well established that the Court has, nevertheless, a discretionary power to stay the appeal on the grounds that to proceed would be futile, or would involve the Court in the determination of issues that are now moot. … I am not persuaded that the Court should exercise its discretion in the manner sought by Mr Clark. Although the resolution of this appeal in the Minister's favour cannot result in Mr Clark losing his office (because it has been abolished), it would vindicate the position she has taken. The same is true of Mr Clark and his position. The resolution of these competing positions involves the discussion of important issues of public law. All of this is sufficient to demonstrate that there remains a real contest between the parties. There is also a live issue as to costs.' See also at 311 [37]-[38], per Weinberg J. 35 Vanstone v Clark involved a continuing live controversy between the parties, notwithstanding abolition of the Commissioner's statutory position. The Minister wished to vindicate her decision to suspend the respondent from office and the appeal was the only means of doing so (the appeal ultimately was dismissed). By contrast, in the present case the controversy between the parties has been resolved and the application for leave to appeal concerns only interlocutory orders that have no practical significance for the now terminated litigation.

CONCLUSION 36 The proceedings between the parties have been resolved and no substantive issue remains between them. To proceed to judgment on the application for leave to appeal would involve the Court in providing what amounts in substance to an advisory opinion on an interlocutory question. While it may be accepted that the Court has a discretion whether or not to proceed to judgment, the circumstances of this case do not justify such a course. As we have explained, the circumstances of this case are different from those in which a court has considered it appropriate to proceed to judgment, notwithstanding that the issues have apparently been rendered moot. 37 The factors identified by the Partners do not justify a contrary conclusion. While it is true that the Court has had the benefit of full argument on the issues, that cannot of itself warrant proceeding to judgment when the parties have finally resolved the controversy between them. The Partners will suffer no relevant prejudice, even assuming that they are entitled (contrary to Branson J's conclusion) to claim privilege in the Documents, since Ms Rich will not be entitled to use the Documents or, indeed, to inspect them. As we have noted, the reasoning of Branson J turns on considerations specific to the circumstances of this case. If similar issues arise in a subsequent case, they can be addressed on their merits. 38 The appropriate course is to stay the application for leave to appeal permanently. This is consistent with the course taken in Bonan v Hadgkiss. The effect of staying the application for leave permanently, having regard to the terms of the stay orders made on 10 January 2008, may be to stay permanently Orders 1 and 4 made by Branson J on 14 December 2007. To avoid any doubt on this score, we propose to make it clear that the stay orders made on 10 January 2008 permanently stay the orders made by Branson J for the production of the Documents. This course is appropriate since the orders can have no practical utility, given that the proceedings have been finalised. 39 As we have indicated, Ms Rich wishes to pursue the cross-appeal only if the Partners are granted leave to appeal. Since leave has not been granted, the cross-appeal should be dismissed. 40 None of the parties has raised any issue as to the costs of the application for leave to appeal. We propose to make no orders as to the costs of the application or the cross-appeal. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate: Dated: 18 April 2008 Counsel for the Applicants: Mr R McHugh SC with Mr S Nixon

Solicitor for the Applicants: Mallesons Stephen Jaques

Solicitor for the 14th Applicant: Maurice Blackburn

Counsel for the Respondent: Mr R Beech-Jones with Ms R Francois

Solicitor for the Respondent: Harmers Workplace Lawyers

Date of Last 28 March 2008 Written Submissions:

Constitution, Ch III Corporations Act 2001(Cth)

Human Rights and Equal Opportunity Commission Act 1986(Cth)

Building and Construction Industry Improvement Act 2005(Cth)

At a glance

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Judgment (17 paragraphs)

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Legislation Cited (7)

Cases Cited (14)