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[2012] FCA 70
Federal Court of Australia
2012-02-10
Bromberg J
Original judgment source is linked above.
AND: CENTRO RETAIL LIMITED (ACN 114 757 783)
First Respondent, Cross-Claimant and Cross-Respondent
Second Respondent, Cross-Claimant and Cross-Respondent
PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
Third Respondent, Cross-Claimant and Cross-Respondent
JUDGE: Marshall J DATE OF ORDER: 28 November 2011 WHERE MADE: MELBOURNE
AND: CENTRO PROPERTIES LIMITED (ACN 078 590 682)
First Respondent, Cross-Claimant and Cross-Respondent
Second Respondent, Cross-Claimant and Cross-Respondent
Third Respondent, Cross-Claimant and Cross-Respondent
Fourth Respondent, Cross-Claimant and Cross-Respondent
PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
JUDGE: Marshall J DATE OF ORDER: 28 November 2011 WHERE MADE: MELBOURNE
AND: PRICEWATERHOUSECOOPERS SECURITIES LIMITED (ACN 003 311 617)
CENTRO CORPORATE SERVICES PTY LTD (ACN 110 082 516)
JUDGE: Marshall J DATE OF ORDER: 28 November 2011 WHERE MADE: MELBOURNE
AND: PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
JUDGE: Marshall J DATE OF ORDER: 28 November 2011 WHERE MADE: MELBOURNE
AND: CENTRO PROPERTIES LIMITED (ACN 078 590 682)
First Respondent, Cross-Claimant and Cross-Respondent
Second Respondent, Cross-Claimant and Cross-Respondent
Third Respondent, Cross-Claimant and Cross-Respondent
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 327 of 2008 BETWEEN: RICHARD KIRBY
AND: CENTRO RETAIL LIMITED (ACN 114 757 783)
First Respondent, Cross-Claimant and Cross-Respondent
Second Respondent, Cross-Claimant and Cross-Respondent
PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
Third Respondent, Cross-Claimant and Cross-Respondent
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 366 of 2008 BETWEEN: NICHOLAS VLACHOS
AND: CENTRO PROPERTIES LIMITED (ACN 078 590 682)
First Respondent, Cross-Claimant and Cross-Respondent
Second Respondent, Cross-Claimant and Cross-Respondent
Third Respondent, Cross-Claimant and Cross-Respondent
Fourth Respondent, Cross-Claimant and Cross-Respondent
PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1028 of 2010 BETWEEN: NICHOLAS STOTT
AND: PRICEWATERHOUSECOOPERS SECURITIES LIMITED (ACN 003 311 617)
CENTRO CORPORATE SERVICES PTY LTD (ACN 110 082 516)
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1041 of 2010 BETWEEN: NICHOLAS VLACHOS
AND: PRICEWATERHOUSECOOPERS (A FIRM) (ABN 52 780 433 757)
JUDGE: bromberg j DATE: 10 february 2012 PLACE: MELBOURNE
REASONS FOR JUDGMENT 1 PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited (collectively "PWC") sought orders requiring various respondent companies within the Centro group of companies (collectively "Centro") to produce for inspection specified documents. That course was resisted by Centro on the basis that the documents or parts of the documents in question are subject to legal professional privilege. 2 In November 2011 there was some urgency attending the Court's determination of PWC's application in the context of my subsequent unavailability and the need for the parties to efficiently prepare for a trial commencing in early March 2012. Accordingly, I considered and determined the issues raised by the application of PWC. On 18 November 2011, I gave short reasons expressing the main conclusions I had reached. I indicated that, if requested, full reasons for the Court's decision would be provided at a later time. These reasons set out my reasons for dismissing PWC's application and requiring PWC to pay the costs of the respondents to the application. Orders to that effect were made on 28 November 2011 together with an order extending the time for PWC to make any application it may wish to make for leave to appeal my orders subsequent to the delivery of these reasons for judgment. 3 PWC's application was made in five proceedings. Those proceedings involve class actions, some brought against Centro and others against PWC. There are a multitude of cross-claims involved, including as between Centro and PWC. I am not the trial judge to whom these various proceedings have been allocated. In order to avoid exposing the trial judge to documents which are the subject of legal professional privilege, PWC's application was considered and determined by me. 4 The pleadings in these proceedings are voluminous and complicated and the parties considered it unnecessary that I be taken to them. Instead, I was given a brief overview of the main issues raised by the pleadings which are relevant to the matters raised by this application. To that I now turn. 5 There are two related groups of related Centro corporations concerned in the litigation. The first is the Centro Properties Group ("CNP") and the second the Centro Retail Group ("CER"). It is sufficient that I explain the main issues by reference to the claims made against CNP and by reference to the claims made by CNP against PWC. Similar claims and cross-claims are made against CER and made by CER against PWC. 6 The first principal claim made against CNP is in relation to an issue which was referred to as the 'classification issue'. By this claim, the classes of persons claiming against CNP allege that in publishing its financial statements for the year ending 30 June 2007, CNP engaged in conduct in breach of various provisions of the Corporations Act 2001 (Cth) ("the Corporations Act"), the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act") and the Fair Trading Act 1999 (Vic). The conduct relied upon is the misclassification of debt by which CNP's current debt was understated and its non-current debt overstated. The misclassification is admitted by CNP, as is CNP's failure to comply with the relevant accounting standard AASB101. For various reasons (not relevant to the task before me) CNP denies liability. 7 A second principal claim made against CNP relates to what has been described as the 'refinancing risk issue'. This claim is related to the first. It asserts a breach of the continuous disclosure obligations of the Corporations Act. The gist of this claim is that CNP should have, but failed to, disclose to the market that it had short-term debt about to become due which it either could not refinance or could only do so at greater cost. 8 At the relevant time, PWC was the auditor for CNP (and CER). CNP has claimed against PWC, including for engaging in misleading and deceptive conduct by making various representations to CNP concerning its 2007 financial statements. In particular, CNP alleges that PWC represented that the financial statements were appropriate for approval by the CNP Board in that they complied with the Corporations Act and relevant accounting standards, including AASB101, when in fact they did not. PWC denies liability to CNP relying upon a number of defences including that any misrepresentations made by PWC in relation to CNP's financial statements were caused by CNP's failure to disclose relevant material to PWC. The alleged failure to disclose is denied by CNP. 9 There are also claims made directly against PWC by the applicants in the class action proceedings in relation to the classification issue. Those claims assert misrepresentations by PWC to the effect that PWC represented that CNP's financial accounts gave a true and fair view of CNP's financial position and complied with the Corporations Act and relevant accounting standards. PWC admits that accounting standard AASB101 was not complied with but denies liability on other grounds.
legal and professional privilege - general principles 10 PWC's application fell to be determined under the common law rather than the Evidence Act 1995 (Cth): Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at [16] (Gleeson CJ, Gaudron and Gummow JJ). As Gleeson CJ, Gaudron, Gummow and Hayne JJ said at [9] in The Daniels Corporation International Pty Ltd v Australia Competition and Consumer Commission (2002) 213 CLR 543: It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. (Footnotes omitted.) 11 Many of the legal principles relevant to the disposition of PWC's application are contained in a helpful summary of the general principles provided by Young J in AWB Ltd v Cole and Another (No 5) (2006) 155 FCR 30 at [44]. That summary sets out 12 'principles', many of which I will later refer to. The summary is as follows: (1) The party claiming privilege carries the onus of proving that the communication was undertaken, or the document was brought into existence, for the dominant purpose of giving or obtaining legal advice. The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see Grant v Downs (1976) 135 CLR 674 at 689; Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 60 ATR 466 at [30]; and AWB v Cole at [63]. (2) The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's maker, or of the person who authorised or procured it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication: see AWB v Cole at [110]. (3) The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving "legal advice": National Crime Authority v S (1991) 29 FCR 203 at 211-212 per Lockhart J; Candacal Pty Ltd v Industry Research and Development Board (2005) 59 ATR 615; 223 ALR 284 at [70]; Seven Network Ltd v News Ltd [2005] FCA 142 at [6]-[8]. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 (Kennedy v Wallace) at [12]-[17] per Black CJ and Emmett J and [144]-[145] and [166]-[171] per Allsop J; see also Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398. (4) Where communications take place between a client and his or her independent legal advisers, or between a client's in-house lawyers and those legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications: Kennedy v Wallace (2004) 208 ALR 424 at [65] per Gyles J; affirmed on appeal, Kennedy v Wallace at [23]-[27] per Black CJ and Emmett J. In Kennedy v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts along will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given. (5) A "dominant purpose" is one that predominates over other purposes; it is the prevailing or paramount purpose: AWB v Cole at [105]-[106]; Commissioner of Taxation (Cth) v Pratt Holdings at [30] per Kenny J. (6) An appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence: Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [35] per Finn J. (7) The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] Ch 317 at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow [1995] 1 All ER 976 at 983; Three Rivers District Council v Governor and Company of Bank of England (No 6) [2005] 1 AC 610 at 155 FCR 30] AWB LTD v COLE (No 5) (Young J) 45 [43]-[44], [59]-[60], [114] and [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 332-333; DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151 at [25]-[71]; and AWB v Cole at [100]-[101]. (8) Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: Daniels at [44] per McHugh J; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 550 per McHugh J (Propend); Dalleagles at 333-334 per Anderson J; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246 per Lockhart J (Sterling); and Kennedy v Lyell (1883) 23 Ch D 387 at 407; Lyell v Kennedy (No 3) (1884) 27 Ch D 1 at 31 per Bowen LJ; Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 per Lindgren J. (9) Subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda or other documents made by officers or employees of the client that relate to information sought by the client's legal adviser to enable him or her to advise: Sterling at 246. The privilege extends to drafts, notes and other material brought into existence by the client for the purpose of communication to the lawyer, whether or not they are themselves actually communicated to the lawyer: Saunders v Commissioner of Australian Federal Police (1998) 160 ALR 469 at 472. (10) Legal professional privilege is capable of attaching to communications between a salaried legal adviser and his or her employer, provided that the legal adviser is consulted in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client: Waterford v Commonwealth (1987) 163 CLR 54 at 96 per Dawson J; see also Deane J at 79-82. Some cases have added a requirement that the lawyer who provided the advice must be admitted to practice: see Dawson J in Waterford at 96; GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at 150; Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at 245. However, in Commonwealth v Vance (2005) 158 ACTR 47, the Full Court (Gray, Connolly and Tamberlin JJ) did not regard the possession of a current practising certificate as an essential precondition to the availability of legal professional privilege: at [23]-[35]. The same view was taken by Lee J in Candacal at [99], by Gillard J in Australian Hospital Care (Pindara) Pty Ltd v Duggan [1999] VSC 131 at [111], and by Downes J in McKinnon v Secretary, Department of Foreign Affairs and Trade (2004) 86 ALD 780 at [51]. (11) Legal professional privilege protects communications rather than documents, as the test for privilege is anchored to the purpose for which the document was brought into existence. Consequently, legal professional privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfies the dominant purpose test: Propend at 507 per Brennan CJ, 544 per Gaudron J, 553-554 per McHugh J, 571-572 per Gummow J, and 587 per Kirby J. In Propend at 512, Brennan CJ added a qualification to this principle: if an original unprivileged document is not in existence or its location is not disclosed or is not accessible to the persons seeking to execute the warrant, and if no unprivileged copy or other admissible evidence is made available to prove the contents of the original, the otherwise privileged copy loses its protection. (12) The Court has power to examine documents over which legal professional privilege is claimed. Where there is a disputed claim, the High Court has said that the court should not be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is exercised, the court will need to recognise that it does not have the benefit of submissions or evidence that might place the document in its proper context. The essential purpose of such an inspection is to determine whether, on its face, the nature and content of the document supports the claim for legal professional privilege. 12 It should be appreciated that when it comes to issues relating to the discovery of documents, a practical and cost efficient approach is to be encouraged. As Austin J said in Re Southland Coal Pty Ltd (2006) 203 FLR 1 at [30], in a passage to which I shall return, the Court has a duty to promote the cost efficient resolution of disputes about discovery. It should also be kept in mind that discovery processes depend for their efficiency upon parties and their practitioners making fair and honest conclusions about the discoverability of documents in their control including as to questions of relevance. Litigation would grind to a halt if a narrow or technical approach was taken to resolving discovery disputes. 13 Further, given that privilege involves a fundamental common law immunity (The Daniels Corporation International at [11] (Gleeson CJ, Gaudron, Gummow and Hayne JJ), [44] (McHugh J), [85] (Kirby J) and [132] (Callinan J)), care should be taken not to adopt an overly narrow or technical approach: DSE (Holdings) Pty Limited v InterTAN Inc (2003) 135 FCR 151 at [31] (Allsop J). A warning about formalism in this area of the law was also given by Allsop J in that case at [52]. As Young J said in AWB at [46], "courts have eschewed an overly narrow or technical approach to the identification of communications or documents that fall within the scope of legal advice privilege". 14 Finally, and in relation to evidentiary issues, it must also to be appreciated that the Court was dealing with an interlocutory application and it was open to the Court to follow the practice normally taken when receiving evidence in interlocutory applications: Re Southland Coal Pty Ltd at [26] (Austin J).
retainers and related documents 15 At the outset of the hearing of PWC's application, I ruled that certain parts of various retainers and related documents were protected from disclosure because of legal professional privilege. PWC had sought that a determination in relation to those documents be made at the outset because a determination favourable to PWC may have assisted other aspects of PWC's application. That approach was not opposed and I acceded to it. In making my ruling I indicated that I would give my reasons for that ruling together with these reasons for judgment. 16 The documents in question and the circumstances surrounding their making are as follows: (i) Annexure PJH-1 to the Affidavit of Peter John Holloway of 22 September 2011. This is a letter dated 17 January 2008 from Alan Mitchell, a partner of Freehills to CNP's General Counsel John Hutchinson. In the affidavit annexing the letter, Mr Holloway deposed that Freehills was instructed "by Centro to provide legal advice to CNP in relation of the classification of interest bearing liabilities in CNP's 30 June 2007 financial statements and matters arising from that issue, as more fully set out in the Freehills Retainer". The reference to the "Freehills Retainer" is a reference to the letter of 17 January 2008 ("the Freehills Retainer"). My examination of this letter revealed that the letter confirms the terms of a retainer for Freehills to advise CNP. Some parts of the letter contain statements which set out with specificity the nature of the advice sought by CNP from Freehills or statements from which the nature of the advice sought may be inferred. (ii) Annexure AJM-1 to the affidavit of Alan James Mitchell of 22 September 2011. This is a letter dated 31 January 2008 from Alan Mitchell, a partner of Freehills, to a partner of KPMG. Mr Mitchell deposed that "in early 2008 Freehills retained KPMG to advise and assist Freehills in relation to aspects of the legal advice Freehills was engaged to provide CNP pursuant to the Freehills Retainer". Mr Mitchell described the annexure as a copy of the Freehills Retainer with KPMG ("the Freehills/KPMG Retainer"). My examination of the contents of the Freehills/KPMG Retainer revealed that it contains statements dealing with the scope of the assistance sought from KPMG. Those statements either reveal the nature of the legal advice sought by CNP from Freehills or enable inferences to be drawn as to the nature of the advice sought. (iii) Annexure AJM-4 to the affidavit Alan James Mitchell of 10 October 2011. This is a letter from a partner of KPMG to Mr Mitchell of Freehills dated 4 February 2008 which Mr Mitchell described as a letter from KPMG "confirming with Freehills the scope of its retainer". My examination of this letter revealed that some parts thereof contain statements which either state the nature of the advice sought by CNP from Freehills or contain statements from which the nature of the advice sought may be inferred. (iv) Annexure MMD-1 to the affidavit of Mark Monteith Dobbie (of Middletons) of 22 September 2011. This annexure contains a series of emails which attach a letter from John Kelly (a partner of Middletons) to CER dated 6 February 2008. The correspondence concerns Middletons' retainer to act for CER. Mr Dobbie deposed that early in 2008 Middletons was instructed by CER to provide legal advice in relation to the classification of interest bearing liabilities in CER's 30 June 2007 financial statements. The letter of 6 February 2008 ("the Middletons Retainer") confirms the terms on which Middletons were retained to advise CER. My examination of the emails and the Middletons Retainer revealed that some parts thereof contain statements setting out with specificity the nature of the advice sought by CER or statements from which the nature of the advice sought may be inferred. (v) Annexure MMD-2 to Mr Dobbie's affidavit of 22 September 2011. This is a letter from KPMG to Middletons dated 12 February 2008. Its content is similar to the letter from KPMG to Freehills described at (iii) above. Mr Dobbie deposed that Middletons retained KPMG to assist it in relation to the Middletons Retainer to advise CER. My examination of this letter revealed that it describes the scope of the instructions given to KPMG by Middletons. In doing so, some parts thereof contain statements which either state the nature of the advice sought by CER from Middletons or constitute statements from which the nature of the advice sought may be inferred. 17 PWC contended that generally a retainer was not a document protected by legal professional privilege. PWC relied upon the observations of Lindgren J in Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44 at [47]. Reliance was also placed on the reasons for decision of Basten JA (with whom Hodgson and McColl JJA agreed) in CSR Limited v Eddy (2008) 70 NSWLR 725 at [62]-[66] where Basten JA referred with approval to the observations made by Lindgren J in Cook. These authorities support the proposition for which PWC contended, but as PWC correctly conceded, the proposition is not absolute and the specific content of a retainer must be examined. As Lindgren J in Cook acknowledged at [48] and Basten J in CSR acknowledged at [62], some communications contained within a retainer may be protected from disclosure because the statements were "within the sphere of protection provided by the privilege" (Basten J at [62]). That qualification to the general rule is consistent with the proposition upon which Centro relied. Centro contended that, insofar as the retainers identified the nature of the legal advice sought, they were privileged to that extent. In that respect, Centro relied upon the following observations of Gummow J in Commissioner of Australian Federal Police v Propend Financial Pty Ltd (1997) 188 CLR 501 at 569: It also is significant, as Beaumont J emphasised in the present case that the privilege extends to any document prepared by a lawyer or client from which there might be inferred the nature of the advice sought or given. Examples include communications between the various legal advisers of the client, draft pleadings, draft correspondence with the client or the other party, and bills of costs. (Footnotes omitted.) 18 As I have earlier indicated, having examined the retainers and other documents in question I was satisfied that parts thereof contain communications which identify the nature of the advice sought by CNP or CER from its lawyers or statements from which the nature of the advice sought might be inferred. Accordingly, I determined that those parts were protected from disclosure and made a ruling to that effect. In doing so, I rejected PWC's contention that the privilege had been waived by Centro. I will return to that issue later. Furthermore, I rejected PWC's contention that legal professional privilege did not extend to a retainer because a retainer pre-dated the formation of the solicitor-client relationship. As Fink J observed in Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1 at [19], legal professional privilege attaches to the relationship of trust and confidence created between a solicitor and client and may extend to a potential client. A retainer need not exist. Communications between a solicitor and a potential client which reveal the nature of the legal advice sought to be the subject of the retainer are privileged. In any event, I was satisfied that the documents in issue confirmed the existence of the retainers in question and did not pre-date the formation of the relevant solicitor-client relationship. Evidence about that is referred to later in these reasons.
DOCUMENTS provided BY CENTRO TO ASIC 19 There are two categories of documents provided by Centro to the Australian Securities and Investments Commission ("ASIC") which were the subject of PWC's application. The first is what the parties called the "subpoenaed documents" ("the Subpoenaed Documents"). These are documents that were provided by Centro to ASIC in the course of proceedings brought against Centro by ASIC (Australian Securities and Investments Commission v Healey (2011) 196 FCR 291) ("the ASIC proceedings") and produced by ASIC pursuant to subpoenas issued in these proceedings at the behest of PWC. A second category identified by the parties as "the other ASIC documents," ("the Other ASIC Documents") comprises documents provided by Centro to ASIC but at a time later than the subpoenas to ASIC were issued and returned.
The Subpoenaed Documents 20 The Subpoenaed Documents were listed by number in a schedule exhibited as "PJH-1" to the affidavit of Peter John Holloway of 6 September 2011. The Subpoenaed Documents were produced in redacted form with black and white masking and were exhibited as "PJH-3" to the affidavit of Mr Holloway of 6 October 2010. Privilege is no longer claimed by Centro over the extract in document 7 on the page numbered CEN.010.001.0187. For reasons that will later become apparent, it is only those extracts which were masked in white which are the subject of challenge. Three documents, numbered 42-44 in exhibit PJH-1, are documents in relation to which privilege was claimed over the entirety of the document concerned. Of those three documents, only documents numbered 43 and 44 remained at issue.
The Hourigan Records 21 The vast bulk of the Subpoenaed Documents comprise handwritten notes taken by Elizabeth Hourigan ("the Hourigan Records"). At the relevant time, Ms Hourigan was Company Secretary of CNP and CER and each of their controlled entities. The documents in question were prepared by Ms Hourigan in her capacity as Company Secretary. The notes were taken at Board meetings or Board Audit and Risk Management Committee meetings of the various Centro companies, which Ms Hourigan attended in her capacity as Company Secretary. The notes were prepared by her for the use of Centro as a record of what transpired at the meetings which her notes record. 22 The extracts of the Hourigan Records that were in issue comprised Ms Hourigan's notes of what Ms Hourigan has deposed to be either: (i) Confidential communications between Board members and Centro's General Counsel (John Hutchinson) who were attendees at the relevant meeting, for the dominant purpose of Centro's General Counsel giving and the Board receiving legal advice on behalf of Centro; (ii) Confidential communications between Board members and Centro's external lawyers, who were attendees at the relevant meeting, for the dominant purpose of Centro's external lawyers giving and the Board receiving legal advice on behalf of Centro; or (iii) Confidential communications between Board members, who were attendees at the relevant meeting, which disclosed legal advice obtained by Centro from its external lawyers. 23 Centro's General Counsel, John Hutchinson, a lawyer holding a practising certificate, also deposed that, insofar as the Hourigan Records comprise extracts of communications between Mr Hutchinson and Centro, for which a claim of privilege is made on the basis that the communication was for the dominant purpose of Mr Hutchinson giving, and Centro receiving, legal advice: (i) Those communications were for the sole or dominant purpose of Mr Hutchinson giving and Centro receiving, legal (and not commercial) advice or assistance; and (ii) The advice given by Mr Hutchinson was independent, objective advice given in his professional capacity, not influenced by others or by the thoughts or actions of others or by Mr Hutchinson's personal loyalties, duties or interests. 24 Neither Ms Hourigan nor Mr Hutchinson were called for cross-examination by PWC. 25 PWC contended that there was insufficient evidence to discharge Centro's burden of demonstrating that the documents in question are privileged. PWC contended that Centro had adopted a formulaic approach which failed to: provide evidence about any particular communication; identify any author or source of each communication; provide evidence from the author or source of the communication as to the purpose of the communication; and, otherwise failed to give objective and admissible evidence from which the purpose of the communications could be inferred. 26 The extracts in the Hourigan Records which were at issue are records of communications involving, in each case, many persons. The author of the record of those communications was Ms Hourigan. Ms Hourigan gave evidence about the circumstances in which the communications occurred. They all occurred at Board or Board Audit and Risk Management Committee meetings. Two of the subcategories she identified (see [22] above) involved either communications between Board members and Centro's General Counsel, or Board members and Centro's external lawyers. Her evidence in this respect is evidence that each of the extracts within these two subcategories is a contemporaneous record of a conversation held in a professional setting between a lawyer and his or her client or an in-house lawyer and his or her employer. In that regard, I was satisfied that Ms Hourigan's approach is not "formulaic" in the sense that no more than a bare assertion of the privilege is made. 27 PWC was right to contend that no evidence was provided by the multiple authors of each separate conversation made in the multiple conversations in question. However, I did not regard such evidence as necessary to discharge Centro's burden in the circumstances at hand. Those circumstances, for which evidence was given by Ms Hourigan (and where relevant Mr Hutchinson), demonstrate that the communications (in subcategories (i) and (ii)) took place between a corporation and its independent legal advisor or advisors in uncontroversial circumstances. Consistently with the authorities referred to under principle numbered (4) of the general summary of principles set out by Young J in AWB at [44], proof of those facts alone will provide a sufficient basis for the conclusion that I made that the communications concerned legitimate legal advice being sought or given. As Gyles J said in Kennedy v Wallace (2004) 208 ALR 424 at [65] (in a passage approved of by Black CJ and Emmett J in Kennedy v Wallace (2004) 142 FCR 185 at [23] and [27]), where "an Australian practising lawyer is communicated with on a professional basis it may be appropriate to assume that legitimate legal advice was sought absent any contrary indications". To those authorities may also be added the observations of Anderson J in Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 who said at 332-333 that professional discourse in a professional capacity between a solicitor and his [or her] client, with reference to the transactions covered by the solicitor's instructions, should be regarded as prima facie for the purpose of the giving and receiving of legal advice. The observations of Anderson J were referred to with approval in DSE (Holdings) Pty Limited at [51] (Allsop J); by Branson J in Wenkart v Commissioner, Australian Federal Police & Ors [1996] FCA 967 at [6]; and by Young J in AWB at [47]. 28 Legal professional privilege is capable of extending to communications between a salaried legal advisor and his or her employer, provided that the legal adviser is consulted in a professional capacity, in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client: AWB at [44] (Principle (10)). 29 Mr Hutchinson's evidence confirmed that the communications between him and Board members concerned legal and not commercial advice or assistance and that the advice or assistance was given by him in his professional capacity as independent and objective advice. Mr Hutchinson also deposed that the communications in which he was involved were for the sole or dominant purpose of the giving and receiving of legal advice. 30 Centro's failure to call all of the relevant authors should not in my view have resulted in the drawing of an adverse inference. That is particularly so, as was the case here, where the calling of direct evidence from each of the authors would "unduly complicate, extend and render unacceptably expensive, the process of determining privilege issues …": Re Southland Coal Pty Ltd at [30] (Austin J). As the judge in that case stated at [30] and as Centro echoed (calling in aid ss 37N and 37M of the Federal Court of Australia Act 1976 (Cth)): It would be inimical to the just, quick and cheap resolution of disputes, which it is the court's duty to promote. 31 For those reasons, I was satisfied that the exchanges between Board Members and Centro's lawyers covered by the first and second subcategories of the Hourigan Records came into existence for the dominant purpose of a client seeking or obtaining legal advice from that client's lawyer and that those parts of the documents which record those communications are protected from disclosure. 32 The third subcategory relied upon by Ms Hourigan was confidential communications between Board Members, who were attendees at the relevant meetings, which disclosed legal advice obtained by Centro from its external lawyers. Privilege extends to any document whether prepared by the lawyer or the client from which might be inferred the nature of the advice sought or given: Propend at 569 (Gummow J). 33 Ms Hourigan's assertion here was open to the criticism that it involved Ms Hourigan's conclusion as to what the relevant communications disclosed. However, without revealing the content of the communications and defeating the purpose of the desired non-disclosure, evidence of this kind must necessarily involve a conclusionary component. Further, in the absence of controversial circumstances, an overly technical approach to conclusionary statements is to be eschewed. 34 Given her position as Company Secretary and what I inferred to be her extensive participation in the affairs of Centro, including her direct involvement in the meetings in question, I was inclined to think that Ms Hourigan was well placed to recognise communications which disclosed legal advice obtained by Centro, and to accept Ms Hourigan's characterisations as likely to be correct. In that regard, it should be recalled that the concept of legal advice is fairly wide and extends to professional advice as to what a party should, prudently or sensibly do in the relevant legal context: see the authorities collected as principle numbered (7) by Young J in AWB at [44]. As Austin J said in Re Southland Coal at [36]: The evidence to be given is evidence of the occasion of the communication and its general nature or characterisation. For example, it is likely to be sufficient, in my view, if evidence is given that the privileged document is an email communication from one officer of a company to another containing a summary of confidential legal advice given by the company's lawyers at a meeting on the same day. But, although the strict rules of admissibility of evidence do not apply, the evidence is likely to be insufficient to establish the privilege if it is a bare assertion by someone who is not the author of the document, which does not supply any clear indication of the source of or basis for the assertion. 35 I was somewhat fortified in the conclusions I have reached about the Hourigan Records by my own perusal of the extracts in question. In general terms, that examination showed that what had been redacted from the notes were comments made by lawyers and, on many occasions, comments made by a Board member adjacent to the comments made by the lawyer. Whilst my perusal was limited by my inability to properly understand, in its proper context, the totality of each of the conversations in question, that perusal tended to confirm the claim made by Ms Hourigan that what has been redacted were conversations from which the nature of legal advice provided to Centro may be inferred.
Hutchinson Records 36 Some of the Subpoenaed Documents are notes prepared by Mr Hutchinson of Board meetings attended by Mr Hutchinson. Privilege was claimed in respect of extracts from such notes which were redacted on Mr Hutchinson reviewing his notes when called upon to do so as part of the discovery process ("the Hutchinson Records"). 37 Mr Hutchinson deposed that the Hutchinson Records were prepared by him in his capacity as General Counsel of CNP and CER and other Centro companies and are notes of meetings of the Boards of Directors of CNP and CER which he attended in his capacity as General Counsel. The notes were prepared by him for the benefit of their use by Centro as a record of what occurred at those Board meetings. He further deposed that the redacted extracts comprise his notes of confidential communications between Board members and himself and that the communications occurred for the dominant purpose of Mr Hutchinson giving legal advice to Centro, and the Board receiving legal advice on behalf of Centro. Mr Hutchinson also deposed that the communications in question were made for the sole or dominant purpose of Mr Hutchinson giving and Centro receiving legal and not commercial advice or assistance and that the advice provided by him was independent, objective advice given in his professional capacity. 38 PWC contended that the evidence provided in this respect was in too general a fashion and that there was a failure to identify the nature of the communication or whether the communication was a communication to Mr Hutchinson or from him. In addition PWC contended generally that Mr Hutchinson was unable to speak to the dominant purpose of others, for instance those that communicated with him. 39 I was satisfied that the Hutchinson Records comprise communications that came into existence for the dominant purpose of Centro seeking and obtaining legal advice from its lawyer. 40 The evidence before the Court in relation to these records was of the same kind as the evidence relating to those parts of the Hourigan Records in subcategory (ii) which recorded exchanges between Mr Hutchinson and Board members. On the basis of the authorities to which I earlier referred in relation to those Hourigan Records at [27] and [28], I also considered that the evidence before the Court in relation to the Hutchinson Records demonstrated that the challenged communications occurred between Centro and its independent legal advisor in uncontroversial circumstances, and provided a sufficient basis upon which the Court could be satisfied that the communications in question came into existence for the dominant purpose of Centro seeking and obtaining legal advice from its lawyer.
The Reid/Stawell Documents 41 Two of the documents included in the Subpoenaed Documents are emails from Ashley Reid of Centro sent to Peter Stawell who was at the time and remains a partner of Freehills. The emails enclosed an earlier email and attachment sent to Mr Reid from BNP Paribas. Those underlying emails and attached documents from BNP Paribas have been discovered. It appeared then that the only communications in issue were those made directly by Mr Reid to Mr Stawell in the covering emails sent by Mr Reid. Mr Stawell gave evidence that during 2007 he provided legal advice to CNP and CER in relation to banking facilities with BNP Paribas and that the emails in question were forwarded to him by Mr Reid for the sole purpose of Mr Stawell providing legal advice to Centro. 42 PWC contended that Mr Stawell's evidence was just a bare assertion by a lawyer as to somebody else's purpose. That submission tends to understate what may reasonably be inferred from the evidence given by Mr Stawell. Whilst Mr Stawell cannot speak to Mr Reid's purpose, his conclusion as to Mr Reid's purpose at least encompasses Mr Stawell's understanding as to the basis for the communication from Mr Reid. The fact that Mr Stawell was retained to provide legal advice and that he understood that he was contacted for the purpose of providing legal advice, provides sufficient evidence of the circumstances in which the communication was brought into existence. The authorities referred to at [27] support that conclusion. I was satisfied that the communications by Mr Reid came into existence for the dominant purpose of Centro seeking and obtaining legal advice from its lawyer.
the other asic documents 43 Of the documents in this category only the masked parts of the following documents were in issue: (i) Documents numbered 1, 2 and 5 in the Schedule which was Exhibit "PJH-5" to the affidavit of Peter Holloway of 6 September 2011; and (ii) Documents CER.001.010.0053 and CER.001.010.0057 referred to in the affidavit of Mark Dobbie of 6 September 2011. 44 The evidence in relation to documents 1 and 5 listed at (i) above was to the same effect as that given by Ms Hourigan in relation to subcategories (i) and (iii) of the Hourigan Records. For the same reasons as earlier given in relation to subcategories (i) and (iii) of the Hourigan Records, I was satisfied that documents 1 and 5 are protected from disclosure by legal professional privilege. 45 Document 2 was the subject of evidence from Mr Holloway who deposed that he had examined the redacted portion of that document and that his belief was that its contents revealed legal advice provided to Centro by Centro's lawyers. Assisted by information provided by Freehills as to the identity of the person referred to in the redacted part, I was satisfied that what had been redacted was a statement from which the content of legal advice provided to Centro by Freehills may be inferred. I therefore upheld the claim for privilege in relation to that document. 46 On the basis of my own inspection of the documents listed at (ii) of [43], I was satisfied that the redacted extracts reveal advice provided by Middletons to CER and that their contents are privileged.
The Investigation Documents 47 The documents in this category are documents referrable to the third order sought by PWC in its application. The substance of that proposed order was that, to the extent that the documents had not already been discovered, CNP and CER "provide discovery of documents (including, but not limited to, file notes of interviews, witness statements, and any draft or final reports) relating to any investigations conducted in or about the period December 2007 to February 2008 by any of KPMG, Middletons and/or Freehills, into the classification of the interest bearing liabilities of CNP and/or CER and related matters…". The documents called up by the order sought by PWC were described by the parties as the "Investigation Documents". 48 The Investigation Documents fell into and may be considered by reference to a number of categories and subcategories as follows: (i) Communications passing between Centro and its solicitors ("the Centro/External Lawyers Communications") which fell into two sub-categories: (a) Communications between CNP and Freehills ("the Centro/Freehills Communications"); and (b) Communications between CER and Middletons ("the Centro/Middletons Communications"); (ii) Communications between Centro and its internal lawyers ("the Centro/Internal Lawyers Communications") which again fell into two subcategories as follows: (a) Communications passing between Centro and its General Counsel Mr Hutchinson ("the Centro/Hutchinson Communications"); and (b) Communications between Centro and its internal lawyer Jacqueline Jovanovski ("the Centro/Jovanovski Communications"); (iii) Notes of interviews conducted by Centro's external solicitors with Centro's employees and of meetings between those solicitors and Centro ("the Solicitor Notes of Interviews and Meetings") which fell into two subcategories as follows: (a) File notes of interviews conducted by Freehills with Centro's employees and file notes of meetings between Freehills and Centro ("the Freehills Notes"); and (b) File notes of interviews conducted by Middletons with Centro's employees and file notes of discussions between Middletons and Centro ("the Middletons Notes"); (iv) Solicitors' internal communications, including draft advices prepared by the solicitors ("the Solicitor Internal Communications") which fell into the following two subcategories: (a) Internal Freehills' communications and draft advices ("the Freehills Internal Communications"); and (b) Internal Middletons' communications and draft advices ("the Middletons Internal Communications"); (v) Communications between Centro's external solicitors and KPMG ("the Centro Solicitors/KPMG Communications") which fell into the following two subcategories: (a) Communications between Freehills and KPMG ("the Freehills/KPMG Communications"); and (b) Communications between Middletons and KPMG ("the Middletons/KPMG Communications"); and (vi) Communications between Middletons and other solicitors ("the Middletons/Other Solicitors Communications") which fell into three subcategories as follows: (a) Communications between Middletons and Freehills; (b) Communications between Middletons and Gadens; and (c) Communications between Middletons and Strongman & Crouch.
The Evidence in Relation to the Investigation Documents
The Centro/External Lawyers Communications 49 Centro claimed that these communications were privileged as confidential communications passing between Centro and its external lawyers for the dominant purpose of obtaining and giving legal advice. Other than for four documents to which I will shortly return, the evidence before me was that the documents in question under this category record communications flowing between Centro and a solicitor or solicitors at Freehills or Centro and a solicitor or solicitors at Middletons. Each of the large number of solicitors involved as either the maker or receiver of the communication, deposed that his or her sole or only purpose or dominant purpose in making or receiving the communication was for Freehills (in the case of a Freehills solicitor) or for Middletons (in the case of a Middletons solicitor) to give, and for Centro to obtain, legal advice and assistance under the terms of the Freehills Retainer (in the case of a Freehills Solicitor) or the Middletons Retainer (in the case of a Middletons solicitor). 50 There were four documents in relation to which Mr Dobbie, one of the partners at Middletons who had the principal carriage of the Middletons Retainer, deposed that the documents in question were located in Middletons' file in relation to the Middletons Retainer and that, based on his review of the documents and his role in relation to the Middletons Retainer, he believed that the documents were provided to Middletons by CER to enable Middletons to provide legal advice pursuant to the Middletons Retainer. Mr Dobbie also deposed as to his belief that these documents were provided to Middletons by Centro for the only or dominant purpose of Middletons giving, and CER obtaining, legal advice pursuant to the terms of the Middletons Retainer.
The Centro/Internal Lawyer Communications 51 The Centro/Hutchinson communications were the subject of evidence from Mr Hutchinson who deposed that, in making or receiving the communications, his purpose or dominant purpose was for him to give, and for Centro to obtain, legal (and not commercial) advice or assistance. Mr Hutchinson deposed that the advice given by him in those communications was independent, objective advice given in his professional capacity and not influenced by others or by Mr Hutchinson's personal loyalties, duties or interests and for the sole or dominant purpose for him to give, and Centro to obtain, legal (and not commercial) advice. 52 Ms Jacqueline Jovanovski was at all relevant times employed as the Legal Counsel of Centro. She holds a practising certificate. In relation to the Centro/Jovanovski communications, Ms Jovanovski gave evidence to the same effect as that given by Mr Hutchinson and just referred to.
The Solicitor Notes of Interviews and Meetings 53 Mr Alan James Mitchell is a partner at Freehills. Together with another partner at Freehills he had principal carriage of the Freehills Retainer on behalf of Freehills. In relation to the Freehills Notes, he deposed that the file notes of interviews of Centro's employees record interviews conducted by Freehills solicitors under his supervision in the period January-February 2008. Those interviews were conducted under the Freehills Retainer and Mr Mitchell deposed that the sole purpose in conducting and supervising those interviews was for Freehills to obtain information from Centro's employees to enable Freehills to provide legal advice to Centro pursuant to the terms of the Freehills Retainer. He further deposed that, in relation to the Freehills file notes of meetings with Centro, those records detail meetings held between Freehills and Centro in January 2008. The meetings were conducted under the Freehills Retainer and were attended by either Mr Mitchell or other partners or solicitors of Freehills working on the Freehills Retainer. Mr Mitchell deposed that the sole purpose of those meetings was for Freehills to obtain information and instructions from Centro to enable Freehills to provide legal advice to Centro pursuant to the terms of the Freehills Retainer. 54 In relation to the Middletons Notes, Mr Dobbie and other Middletons solicitors gave evidence. In relation to file notes of interviews of Centro's employees, the evidence before me was that those notes record interviews conducted by solicitors of Middletons under the supervision of Mr Dobbie, Mr John Kelly of Middletons or Mr Roger Perrins of Middletons. Each of Mr Dobbie and Mr Kelly deposed that those interviews were conducted under the Middletons Retainer and that the sole purpose of those interviews was for Middletons to obtain information from Centro's employees to enable Middletons to provide legal advice to Centro under that retainer. 55 In relation to the Middletons' file notes of discussions with Centro, both Mr Dobbie and Mr Kelly deposed that the file notes were notes of discussions with Centro recording details of meetings held between Middletons and Centro in January 2008. Those discussions were conducted under the Middletons Retainer and attended by either Mr Dobbie, Mr Kelly, Mr Perrins and/or solicitors of Middletons working on the Middletons Retainer under the supervision of Mr Dobbie or Mr Kelly. The evidence of Mr Dobbie and Mr Kelly was that the sole purpose of those discussions was for Middletons to obtain information and instructions from Centro to enable Middletons to provide legal advice to Centro under the Middletons Retainer.
The Solicitor Internal Communications 56 Mr Mitchell deposed that the Freehills Internal Communications comprise Freehills work product under the Freehills Retainer, which work he either carried out or supervised. Mr Mitchell's sole purpose in carrying out and supervising that work was to enable Freehills to provide advice to Centro pursuant to the terms of the Freehills Retainer. The documents in question include draft advices prepared by Freehills under Mr Mitchell's supervision pursuant to the Freehills Retainer. Mr Mitchell's sole purpose in preparing and/or supervising the preparation of those draft advices was to enable Freehills to provide advice to Centro pursuant to the terms of the Freehills Retainer. 57 In relation to the Middletons Internal Communication, Mr Dobbie and Mr Kelly deposed that the internal communications were generated by either Mr Dobbie, Mr Kelly, Mr Perrins and/or other solicitors of Middletons working on the Middletons Retainer under the supervision of Mr Dobbie, Mr Kelly or Mr Perrins, and that the sole purpose of those documents was for Middletons to record information and instructions from Centro to enable Middletons to provide legal advice to Centro under the Middletons Retainer. The Middletons draft advices were prepared under Mr Dobbie's supervision by Middletons pursuant to the Middletons Retainer.
The Centro Solicitors/KPMG Communications 58 Mr Mitchell deposed that the Freehills/KPMG Communications comprised correspondence between Freehills and KPMG and file notes of meetings and of discussions between Freehills and KPMG. He further deposed that the documents came into existence because of the Freehills/KPMG Retainer in which Freehills retained KPMG to advise and assist Freehills in relation to aspects of the legal advice Freehills was engaged to provide to CNP pursuant to the Freehills Retainer. Mr Mitchell deposed that the sole purpose of the communications between Freehills and KPMG pursuant to the Freehills/KPMG Retainer was to enable Freehills to provide legal advice and assistance to CNP under the Freehills Retainer. 59 In relation to the Middletons/KPMG Communications, Mr Dobbie referred to the Middletons/KPMG Retainer and stated that the Middletons/KPMG communications comprised communications that he oversaw but which were primarily engaged in by Rowan McDonald and Roger Perrins of Middletons. Both Mr McDonald and Mr Perrins deposed that their only or dominant purpose in making or receiving the Middletons/KPMG Communications, to which each was a party, was for Middletons to give, and for Centro to obtain, legal advice pursuant to the Middletons Retainer.
The Middletons/Other Solicitors Communications 60 These documents record communications between Middletons and Freehills, Middletons and Gadens or Middletons and Strongman & Crouch. Mr Dobbie deposed in relation to each category that his only or dominant purpose in making or receiving the communications was for Middletons to give, and for Centro to obtain, legal advice pursuant to the terms of the Middletons Retainer.
PWC's Contentions and Other Evidence 61 PWC contended that Centro had not discharged its burden of demonstrating that the dominant purpose of the creation of the communications recorded in the Investigation Documents was the giving or obtaining of legal advice. PWC tendered evidence upon which it relied to contend that the Investigation Documents came into existence as a result of CNP and CER instigating a review of their classification of debt following upon the realisation by their respective Boards, in or about early 2008, that there had potentially been a misclassification of debt. 62 The evidence called by PWC was directed to showing that Centro had a multiplicity of purposes in reviewing the classification issue including, primarily, the conduct of an accounting disclosure exercise to determine for operational purposes the correct classification of the debt which may have been misclassified. PWC contended that the evidence demonstrated that Centro had "required an accounting inquiry and investigation as to what had happened in relation to the classification of debt". Even if there was, in addition, a legal purpose, PWC contended that the Court ought not be satisfied on the evidence before it that the legal purpose was Centro's dominant purpose. 63 PWC contended that the accounting inquiry was a process required in the discharge of CNP's and CER's statutory accounting obligations and that the belated involvement of Freehills and Middletons did not of itself cloak the entirety of that process with legal professional privilege. Nor, so PWC contended, could a factual inquiry directed to CNP and CER forming a view as to an accounting position be rendered privileged, because that factual inquiry was undertaken by external lawyers or an external accountancy firm rather than by management itself. Whilst there was a strong hint in PWC's submissions that the involvement by Centro of Freehills and Middletons was a sham or contrivance to cloak an investigation with legal professional privilege, no submission to that effect was ultimately pursued. 64 A summary of the evidence upon which PWC primarily relied was reproduced in its written submissions and is here reproduced, including with PWC's emphasis. That evidence is as follows: (a) draft minutes of the 11 January 2008 CNP Board Audit and Risk Committee which state (without reference to Freehills or Middletons) "the Committee requested that KPMG opine on whether Centro's accounting treatment of short term and long term debt was correct". (b) a PwC file note of a conversation with Ivan St Clair (CNP's acting CFO) on 11 January 2008 in which Mr St Clair is recorded as stating "Centro wants to be 'front page of AFR squeaky clean' ... Have asked KPMG to review (Introduction of a new brand for credibility -We know the existing disclosure is not right" - question becomes what answer is right (ie not "arguable""; (c) 13 January 2008 minutes of the CNP Board Audit and Risk Committee which state (again without reference to Freehills or Middletons) "It was noted that the internal audit trail needs to be reviewed and compiled properly to understand the interpretation adopted by management at the time the 2007 accounts were prepared. Management advised the Committee that they are not currently in a position to confirm that the 2007 accounts are incorrect, further work being necessary. Mr Maxsted [of KPMG] advised the Committee that KPMG agreed with management that the incomplete working files mean Centro does not yet have something substantive to confirm". (d) A CNP announcement to ASX on 15 January 2008 which stated "Centro has initiated a review of its classification of current versus non current liabilities in its audited 30 June 2007 accounts, as it now considers there is a prospect that the proportion of current liabilities may have been higher than reported". (e) A Centro slide labelled "Borrowings Classification Timeline" bearing annotations by CNP and CER's Group Financial Accounting Manager (Paul Belcher) which states: "* Fri 18 Jan to Wed 23 Jan -Freehills reviewing all correspondence (email, file notes, facility agreements etc) * Wed 23 Jan to Thurs 24 Jan - Freehills interviewing key participants * Fri 25 Jan to Tue 29 Jan - Freehills prepare interim report *Wed 30 Jan to Thurs 30 Jan - Management to review fact pattern in conjunction with KPMG and Freehills * On or around Mon 4 Feb - Management presentation to BAC (incl KPMG and Freehills) * Fri 7 Feb -Final position agreed, PWC advised; [emphasis added] and (f) the characterisations given to this process in the ASIC proceedings, by Mr Cooper: "Once the issue of a potential misclassification did come to the attention of the Board in late December 2007, the Board promptly initiated a thorough independent review of the classification of debt and informed the market via ASX announcements of the issue and the steps being undertaken in response to the issue. Those steps included retaining KPMG, Freehills and Middletons to undertake independent investigations into the matter"[emphasis added]; and by Mr Healey "Following the discovery that the interest bearing liabilities of CNP and CER had been potentially misclassified in Centro's accounts, the Board resolved to retain KPMG, Freehills and Middletons to assist management in investigating the issue and reporting back to the Board. (Those firms, together with Lazar Carnegie Wylie, had already been retained to assist management with the refinancing process.)" [emphasis added]; and by the written submissions of all of the non-executive directors: "Once the issue of a potential misclassification did come to the attention of the Board, steps were very quickly taken by the Board to ascertain how that error came about, including retaining KPMG, Freehills and Middletons to undertake an independent investigation into the matter." [emphasis added]. (Footnotes omitted.) 65 Beyond its reliance upon the evidence I have earlier referred to ([49] to [60]), Centro relied upon specific evidence which it contended countered the evidence called by PWC, and in particular, the contention that Freehills and Middletons became involved in the classification issue belatedly after KPMG had already been involved. 66 That unchallenged evidence may be summarised as follows: (1) From 12 December 2007, KPMG was requested by CNP to act as its restructuring advisor to assist in the negotiations of the extension of its facilities with its financiers and to conduct a strategic review of Centro and its related entities. That "restructuring retainer" is confirmed by a letter from KPMG dated 28 December 2007; (2) By letter dated 4 January 2008, KPMG was further instructed by CNP to assist with the preparation of a data room; (3) Throughout early January/February 2008, a number of partners and employees of KPMG were present at Centro's premises on an ongoing basis in relation to the restructuring retainer; (4) In the period January/February 2008, Mr Belcher, the Group Financial Accountant at Centro, spoke with people from KPMG about how he should interpret accounting standard AASB101 but those discussions did not extend to him requesting that KPMG provide formal advice on the debt classification issue and no written record of those discussions were kept; (5) At no time did CNP or any other company within the Centro Group directly retain KPMG to provide formal advice on the debt classification issue; (6) In early 2008, Freehills was instructed to provide legal advice in relation to the classification issue. Freehills had commenced work under the Freehills Retainer on a date not specified but prior to 17 January 2008 (being the date of the letter setting out the terms of the Freehills Retainer); (7) At the meeting of the Board Audit and Risk Management Committee of 11 January 2008 referred to at [64] which dealt with the reclassification issue, a number of partners of Freehills were in attendance; (8) Freehills retained KPMG "in early 2008" to advise and assist in relation to aspects of the legal advice Freehills was engaged to provide to CNP pursuant to the Freehills Retainer. The Freehills letter setting out the terms of the Freehills/KPMG Retainer is dated 31 January 2008; (9) CER instructed Middletons to advise in relation to the classification issue "in late January 2008". On 31 January 2008, Mr Dobbie met with Ms Jovanovski to discuss CER's instructions. Those instructions were subsequently confirmed in the Middletons Retainer letter of 6 February 2008; and (10) Middletons retained KPMG to assist it in relation to the Middletons' Retainer. The Middleton/KPMG Retainer letter is dated 12 February 2008. 67 In addition, it was apparent on the evidence before me and in particular from the Minutes of the Board Audit and Risk Management Committee meeting of 11 January 2008 that the management of Centro was involved at least to some extent in its own review in relation to the classification issue. Those Minutes state as follows: The Committee was advised that on 10 January 2008, management identified potentially $1.5 billion of borrowings classified as non current in the 30 June 2007 CNP Financial Statements which may need to be reclassified as current liabilities… It was noted that questions raised by PricewaterhouseCoopers during the week alerted management to the above potential issue. As a result, the facility agreements in place were revisited and it was noted that management are currently reviewing the agreements in place (sic) relevant accounting standard. 68 Other evidence relevant to my determination was the privileged contents of the Freehills Retainer and the Middletons Retainer, together with the Freehills/KPMG and Middletons/KPMG Retainers. Although the terms of the Freehills Retainer and Middletons Retainer were set out in correspondence to Centro rather than from Centro, there was no reason why I should not have regarded those terms that express the nature of the advice sought by Centro as advice which in fact Centro did seek. Each of Mr Holloway and Mr Dobbie deposed that their firms were instructed to provide legal advice in relation to the classification of interest bearing liabilities. Beyond that general characterisation, the terms of the retainers give greater detail as to the task which CNP instructed Freehills and CER instructed Middletons to perform. Those terms therefore shed light upon the concerns which Centro held and the purposes for which the advice and assistance was sought. 69 Whilst I am unable to reveal the content which I have determined was privileged, I need to indicate that in determining the dominant purpose of CNP and CER in relation to the Investigation Documents, I placed significant reliance upon the privileged content of the Freehills Retainer and the Middletons Retainer.
Consideration 70 I accepted that in relation to the Centro/External Lawyers Communications and the Solicitor Notes of Interviews and Meetings, the communications concerned occurred between a client and its solicitor acting in a professional capacity with reference to transactions covered by the solicitors' retainer. Evidence of those facts was either expressly given or may be inferred from the evidence given by the solicitors involved who deposed to the general circumstances in which the communications occurred as well as to their understanding of the purpose of those communications. Those facts, for reasons I have already dealt with, may be accepted as demonstrating on a prima facie basis that the communications occurred for the dominant purpose of the lawyers providing, and Centro obtaining, legal advice. It is well established that, subject to the dominant purpose test being met, legal professional privilege will extend to communications made by officers or employees of the client that relate to the information sought by the client's legal advisor to enable him or her to advise: AWB at [44] (Principle (9)). The evidence given by the solicitors in relation to communications received by them from Centro, in the context of the solicitors acting in a professional capacity in pursuance of a retainer to give legal advice, is sufficient to support a finding that, the communications received by them were provided to them to enable the giving of legal advice. 71 Legal professional privilege also protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client such as memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: AWB at [44] (Principle (8)). So long as the dominant purpose test is satisfied, legal professional privilege will extend to the work product (including draft advices) that fall within the Solicitors Internal Communications subcategory identified above. Those communications were created by lawyers in a professional capacity with reference to the performance of work covered by the lawyers' retainer to give legal advice, and in the absence of contrary indications, must be assumed to be for the purpose of the lawyers providing legitimate legal advice to Centro: AWB at [44] (Principle (4)). 72 So long as the dominant purpose requirement is satisfied, communications between a solicitor and a third party (such as an accountant or another solicitor) will be protected by legal professional privilege where the function of the third party was that of enabling the client of the solicitor to obtain legal advice from the solicitor: State of New South Wales v Betfair Pty Ltd (2009) 180 FCR 543, at [29]-[33] (Kenny, Stone and Middleton JJ). The evidence in relation to the Centro Solicitors/KPMG Communications (including the privileged terms of the Freehills/KPMG Retainer and the Middletons/KPMG Retainer) and the evidence in relation to the Middletons/Other Solicitors Communications is sufficient to demonstrate that the function of those communications was to enable Centro to obtain legal advice from Freehills pursuant to the Freehills Retainer or from Middletons pursuant to the Middletons Retainer. Absent any contrary indications, that evidence is also sufficient to permit a conclusion, at least on a prima facie basis, that the dominant purpose for the creation of those communications was for Centro to obtain, and for Freehills and Middletons to provide, legal advice. I deal further below with the nature of the advice in question and why I was satisfied that the advice to be provided with the assistance of KPMG was legal advice. 73 Communications between Centro and its in-house lawyers is the subject of the final subcategory - the Centro/Internal Lawyers Communications. The evidence in relation to those communications passing between Centro and its internal lawyers takes a similar form as that earlier dealt with in relation to the Hutchinson Records. However, the context of the communications is somewhat different. While the context is not confined to communications between an internal lawyer and a Board member at a Board meeting, these were communications between a corporation and its independent legal adviser in furtherance of the provision of legal advice by an external solicitor. Unless contrary indications otherwise exist, the evidence should be regarded as sufficient to establish, on a prima facie basis, that the dominant purpose for the making of those communications was for its lawyers to give, and for Centro to obtain, legal advice. 74 The prima facie position as to dominant purpose which I have determined that the evidence demonstrated, may be displaced. That may be the case where the evidence points to another purpose or purposes held by the client which suggests an alternative purpose in relation to the whole or perhaps a part of the communications in question. I accepted PWC's contention that, ultimately, it is Centro's purposes which need to be ascertained. 75 PWC identified an alternative or additional purpose to any purpose Centro may have had to obtain legal advice, which it described as the conduct of an accounting inquiry or investigation to determine the correct classification of debt for the operational purpose of Centro discharging its statutory obligations in relation to its accounts. 76 I accepted that Centro held such a purpose. I found that in furtherance of that purpose Centro management conducted, at least to some extent, its own investigations including with some assistance from KPMG. The extent of management's investigations was not clear. The 11 January 2008 Minutes of the Board Audit and Risk Management Committee suggests that those investigations occurred at least in January 2008 but there was evidence that Mr Belcher (Centro's Group Financial Accountant) was speaking to KPMG about how he should interpret accounting standards in "January/February 2008". 77 Largely by reference to Mr Cooper's evidence, I found that on or about 15 January 2008, Centro determined that a review be conducted of the classification of debt which would be independent of management. On or just prior to 17 January 2008, CNP retained Freehills. The subject matter of that retainer was the provision by Freehills of legal advice over a range of issues and circumstances. However, I inferred that CNP engaged Freehills including for the purpose of pursuing its desire for an investigation independent of management into the classification of debt. I further found that in doing so, it is probable that CNP expected that KPMG would be retained by Freehills to assist Freehills in providing advice to CNP pursuant to the Freehills Retainer. 78 Middletons were retained by CER from on or about 31 January 2008. The subject matter of that retainer was the provision by Middletons of legal advice over a range of issues and circumstances but again I inferred that CER engaged Middletons including for the purpose of there being an investigation independent of management of the classification of debt. I further inferred that in doing so, CER expected that KPMG would be retained by Middletons to assist Middletons in providing advice to CER pursuant to the Middletons Retainer. 79 The findings I made and have just set out did not persuade me that the prima facie position I found in relation to dominant purpose should be displaced, in the sense that I should no longer have been satisfied that Centro's burden on that issue had been discharged. I reached that conclusion primarily because I was not satisfied that Centro's purpose in seeking an investigation into, and advice to determine, the correct classification of its debt detracted from what the evidence otherwise demonstrated to have been its purpose of seeking legal advice. 80 As I have said, the concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently and sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: AWB at [44] (Principle (7)). 81 Advice about the proper classification of debt by a corporation with statutory reporting obligations in relation to its accounts seems to me to be advice as to what a party should do in a relevant legal context. It may be advice which requires the assistance of an accountant familiar with the application of accounting standards but that alone does not take the advice outside of the concept of legal advice. As Stone J said in Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [103]: The complexity of present day commerce means that it is increasingly necessary for a client to have the assistance of experts, including financial experts such as accountants, in formulating a request for legal advice and in providing legal advisers with sufficient understanding of the facts to enable that advice to be given. This much was recognised by Taylor LJ in Balabel. 82 It was my view that, advice on the correct classification of Centro's debt was likely to require the exercise of legal skills and expertise. Although the evidence before me as to the nature of the exercise involved was scant, PWC's own submissions make good the proposition that the exercise involved the legitimate participation of lawyers providing legal expertise. 83 It is necessary to recount PWC's description of the nature of the accounting inquiry it says was required by Centro. The description given was not relevantly contested and I treated it as part of the uncontroversial factual context in which this application was to be determined. As I have earlier stated, accounting standard AASB101 was a relevant standard on the classification of debt. In a consideration of whether a debt had been misclassified, it was necessary for Centro to consider the application of accounting standard AASB101. Under that standard, a debt is to be treated as a current liability unless there existed a right to repay the debt more than 12 months after the date on which the relevant financial accounts were prepared. In the absence of a contractual right to repay at or after that time, a debt ought be shown as a current liability. 84 PWC contended that, in that context, an inquiry would need to investigate in relation to the various financing facilities in question, their terms and their ability to be renewed. That requirement, PWC contended, explained the need to inquire about what the factual position was in relation to the various facilities including by interviewing Centro's employees about communications with financiers. 85 Questions as to the meaning of the terms of loan agreements or other financing facilities and whether and when obligations to pay or rights to defer payment either exist or arise provide fertile and legitimate ground for the exercise of legal expertise. It may well be the case that a mixture of legal and accounting expertise was required, but there is nothing artificial or contrived in engaging a lawyer where the exercise is likely to require significant legal expertise. Such a process may well involve a review of documentation and interviews with persons involved in various transactions, but as Young J said in AWB at [45], such activities are not to be readily separated from the ultimate legal advice given by lawyers. To do so would be to take an unduly narrow approach to the scope of legal advice privilege. 86 Furthermore, it needs to be appreciated that the advice sought by Centro as to the proper classification of its debt was not sought in a vacuum. The advice sought was sought in the context of Centro seeking other and related advice as to legal issues and concerns which flowed out of the same topic. Those circumstances serve to support the conclusion that the advice sought as to the correct classification of debt should, together with the other advice sought, be characterised as Centro seeking legal advice, that is, professional advice as to what Centro should prudently or sensibly do in a relevant legal context. 87 For those reasons, I was not satisfied that Centro's purpose in engaging Freehills and Middletons in relation to the question of the correct classification of its debt, was not for the purpose of obtaining legitimate legal advice. 88 In seeking advice as to the correct classification of its debt there can be no doubt that Centro held the operational purpose of wanting to utilise that advice to correct its classification of debt if that was required. But the existence of that operational purpose does not diminish the dominant purpose of obtaining legal advice. Legal advice is rarely sought in a commercial context merely for the sake of receiving advice. It is almost always sought by a client for the purpose of applying the advice to a commercial or other operational purpose. The existence of a posterior operational purpose of that kind is of no moment where the client's purpose in engaging its lawyer is to seek legal advice and assistance. 89 The facts of this case are readily distinguishable from those dealt with by Robson J in Perry v Powercor Australia Ltd [2011] VSC 308. PWC placed much reliance on that decision and the fact that it was subsequently upheld by of the Court of Appeal of the Supreme Court of Victoria in Powercor Australia Ltd v Perry [2011] VSCA 239. 90 Powercor involved the question of whether investigative reports prepared by technical experts into the course of a major bushfire were privileged. It was contended that the investigative reports were commissioned by Powercor so that its lawyers could assess how Powercor might deal with anticipated litigation. Robson J concluded that Powercor had multiple purposes in commissioning the reports, including the operational purpose of finding out what had happened and the role Powercor's assets had played in the fire, in circumstances where no other process of investigation had apparently been engaged in by Powercor. In the absence of an explanation by Powercor of the variety of uses to which the information would be put and why it was needed, Robson J was not satisfied that Powercor had discharged its burden of satisfying the court that its dominant purpose in obtaining the investigative reports was a privileged purpose. 91 Powercor is best understood as an example of the kind of non-privileged investigation referred to by Stephen, Mason and Murphy JJ in Grant v Downs (1976) 135 CLR 674 at 687. That is, an investigation carried out for the purpose of arming the central management of a corporation with actual knowledge of what its agents had done. Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 provides another such example. 92 Unlike the situation in Powercor, the evidence before me showed that what had happened in relation to the classification of debt had been at least the subject of an initial investigation by management. Further, insofar as it can be suggested that the investigation conducted by Freehills and Middletons nevertheless had a purpose of informing management of what had happened in relation to the classification of debt, the involvement of lawyers and the use of legal expertise and assistance was, for the reasons referred to above, a necessary and legitimate part of that process and of investigating Centro's obligations and whether or not its classification of debt was correct. This was not a situation where the investigative report of non-lawyers is sought to be protected from disclosure simply because a lawyer has been instructed to evaluate the report once prepared and provide legal advice. If I had come to the conclusion that the involvement of Freehills and Middletons in the investigation of the correct classification of debt was artificial, contrived or was an exercise in which the involvement of a lawyer was objectively unjustified, I would likely have reached a different result.
waiver 93 A recent discussion of relevant principles on the implied or imputed waiver of legal professional privilege is found at [41]-[47] in the reasons for judgment of Keane CJ, Downes and Besanko JJ in British American Tobacco Australia Limited v Secretary, Department of Health and Aging (2011) 195 FCR 123, by reference to the judgments of the High Court in Mann v Carnell (1999) 201 CLR 1 and Osland v Secretary, Department of Justice (2008) 234 CLR 275. There are a number of well established principles which those authorities recount and which are relevant to the issues I need to determine. They are: (i) Legal professional privilege will be waived, whatever the intention of the person whose conduct is in question, if the conduct of the person seeking to rely upon the privilege is inconsistent with the maintenance of the privilege: British America Tobacco at [41]; (ii) The focus is now upon inconsistency of conduct, but in determining whether there has been an inconsistency of conduct, considerations of fairness are still relevant: British American Tobacco at [42]; and (iii) It is now clear that disclosure of the gist of a privileged communication does not necessarily affect a waiver of legal professional privilege. Whether it does in a particular case will depend on whether, in the circumstances of the case, the requisite inconsistency exists, between a disclosure on the one hand and the maintenance of confidentiality on the other. There is no necessary inconsistency in stating the effect of advice and maintaining a claim of privilege. The purpose for which the privilege - holder made the disclosure is highly relevant including whether or not the disclosure was deployed for a forensic or other advantage: British American Tobacco at [44]-[47].
The Retainers 94 PWC contended that if privilege attached to parts of the Freehills Retainer and the Middletons Retainer, that privilege had been waived because in the affidavit material relied upon by Centro, the task for which the solicitors had been engaged was disclosed. Although not stated, I assumed that the claim of waiver was put on the basis of an implied waiver. 95 As I have earlier set out, Mr Holloway deposed that Freehills was instructed "by Centro to provide legal advice to CNP in relation to the classification of interest bearing liabilities in CNP's 30 June 2007 Financial Statements, and matters arising from that issue, as more fully set out in the Freehills Retainer". Mr Dobbie deposed that in early 2008, Middletons was instructed by CER to provide legal advice in relation to the classification of interest bearing liabilities in CER's 30 June 2007 Financial Statements. 96 The descriptions given by Mr Holloway and Mr Dobbie are general and unspecific when compared to the terms of the retainers themselves. Even if it could be said that the gist of the advice sought by Centro has been disclosed, partial disclosure is not necessarily inconsistent with maintaining a claim for privilege. The objective purpose of any partial disclosure of the kind here relied on was to persuade the Court that the retainers in question should be protected from disclosure. That purpose or use is consistent with the maintenance of confidentiality and the claim for privilege. For those reasons, I came to the view that there was no waiver of legal professional privilege in relation to the retainers.
The Subpoenaed Documents and the Other ASIC Documents 97 It is necessary to explain my consideration of whether any waiver occurred in relation to these documents, by explaining the circumstances in which these documents came into the possession of ASIC prior to being produced by ASIC under subpoenas issued in these proceedings. 98 By a number of notices issued in early to mid-2009 pursuant to s 30 of the ASIC Act, ASIC required production by Centro of various categories of documents. It is not in dispute that the production of documents required pursuant to a s 30 notice is a coercive process requiring production under compulsion. However, in each case, the covering letter enclosing the s 30 notice stated that ASIC understood that a valid claim of legal professional privilege was a reasonable excuse for not producing documents pursuant to the s 30 notice and that accordingly, Centro was not obliged to produce documents which were covered by a valid claim of legal professional privilege. ASIC's covering letters went on to say that if a claim for legal professional privilege was made, detailed information in support of that claim was required by ASIC in order that ASIC could assess whether the claim was justified. 99 In response to the various s 30 notices, Centro produced to ASIC the Subpoenaed Documents and the Other ASIC Documents. When those documents were produced, some portions of some of them were redacted (masked in black). A claim for legal professional privilege was made by Centro to ASIC in relation to those documents or the parts of those documents that had been redacted. The documents were provided to ASIC accompanied by covering letters from Centro's solicitors which included a statement that Centro did not intend to waive legal professional privilege by providing documents to ASIC to which Centro may be entitled to claim legal professional privilege. The covering letters also stated that, in the event that Centro ascertains that a document or part of a document is one over which it is entitled to assert a claim for legal professional privilege, Centro reserves the right to seek to assert legal professional privilege over that document. In addition, the covering letters contained a further statement about confidentiality to the effect that the documents that were provided to ASIC were confidential and that they were being provided on the basis that ASIC would treat the documents as confidential and not provide them, or disclose the information contained with in them to any other person except under legal compulsion or with Centro's prior written consent. 100 When orders were made by this Court for leave to be granted to issue subpoenas upon ASIC, orders were also made granting the solicitors for Centro first access to the documents produced by ASIC. Thereafter, Centro identified within the Subpoenaed Documents, extracts over which legal professional privilege was then claimed. It is those extracts (masked in white) which were the subject of dispute in the context of this application. 101 There was evidence before me which sought to explain why the extracts which were in issue were not redacted at the time that the Subpoenaed Documents were provided to ASIC. In general terms, that evidence sought to make out a case of inadvertence relying upon difficulties caused by the number of documents that had to be produced, the shortness of time in which production had to occur and mistakes made by inexperienced lawyers or law graduates or Mr Hutchinson working in difficult conditions. 102 PWC did not expressly identify whether its claim was based upon express or intentional general waiver or alternatively on implied waiver. If the former, a claim in the circumstances at hand for express or intentional general waiver would necessarily fail. That is because the provision of the extracts in dispute to ASIC for a limited purpose (of complying with a s 30 notice) and on the basis that Centro did not intend to waive privilege (as against ASIC or anyone else) and that the documents were confidential and not to be disclosed to other persons, could not properly be seen as constituting an express or intentional general waiver of legal professional privilege: Goldberg v Ng (1995) 185 CLR 83 at 95 (Deane, Dawson and Gaudron JJ). 103 PWC's challenge seemed to be one based upon an implied waiver. PWC contended that the provision of the disputed extracts to ASIC was a voluntary act of disclosure to a third party which is inconsistent with the maintenance of privilege in the documents. PWC relied upon the following observations (made in passing) of Gordon J in AWB Ltd v ASIC [2008] FCA 1877 at [26]: On the assumption that, at the outset of a s 19 examination, ASIC told an examinee that legal professional privilege may be availed of by that person to resist the giving of information or the production of documents that would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, then disclosure by an examinee or witness of information in which he or she holds the privilege would constitute an act inconsistent with the maintenance of that privilege and privilege would be waived: see Cadbury 246 ALR 137 at [13]. So much may be accepted. It is consistent with the established principles on waiver. 104 The passage relied upon may well support the contention that there was a limited waiver by Centro as against ASIC, but it says nothing about any waiver as against another person like PWC. 105 The difficulty PWC had with its contention was in identifying conduct of Centro which was inconsistent with the maintenance of the privilege as against PWC (or anyone else other than ASIC). It is not the case that any voluntary disclosure to a third party necessarily waives privilege: Mann at [30] (Gleeson CJ, Gaudron, Gummow and Callinan JJ). Disclosure to a third party for a limited and specific purpose did not lead to a loss of the privilege as against a person opposed in litigation in Mann or in any of the cases referred to in Mann at [32]. Nor in a case factually not dissimilar to this: see Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 at 540 (Giles J); cited with approval in Goldberg at 110 (Fn 67) (Deane, Dawson and Gaudron JJ). Goldberg is an example of a case where disclosure to a third party was held to be inconsistent with the maintenance of the privilege. But there, the disclosure was for the calculated purpose of the holder of the privilege gaining an advantage against the litigant in a process related to the litigation. 106 PWC was unable to point to any forensic or other advantage to Centro by the disclosure to ASIC nor to any prejudice suffered by it as a result of the disclosure. I rejected PWC's contention that the Court should infer than in disclosing the disputed extracts to ASIC, Centro must have had some purpose of its own which is not disclosed in the evidence. The evidence explained why the extracts were disclosed. That evidence was unchallenged and there was no basis for the drawing of the inference suggested. Furthermore, on the evidence before me, it was not apparent that in disclosing the extracts to ASIC, Centro made any use of the disputed extracts in any relevant sense: Woollahra at 538 (Giles J). 107 Informed by considerations of fairness, I was not satisfied that there was inconsistency in the conduct of Centro sufficient to waive the privilege which was otherwise established in relation to the Subpoenaed Documents. 108 The waiver argument advanced by PWC was not available in respect of the Other ASIC Documents. That is because I was satisfied on the evidence that the disputed extracts in the Other ASIC Documents were redacted before they were produced to ASIC.
Investigation Documents 109 PWC contended that Centro had waived privilege in respect of these documents because it allowed its directors to make submissions relating to the investigations by Freehills, Middletons and KPMG in the course of the penalty phase of the ASIC proceeding. 110 There was a factual controversy as to the extent to which Centro was even aware of the evidence to be given by its directors in relation to penalty in the ASIC proceeding. PWC only established knowledge by Freehills shortly prior to the commencement of the hearing, of written submissions filed by the directors. Those submissions did, however, foreshadow evidence to be given by the directors. Whilst I was prepared to impute the knowledge held by Freehills to Centro, for reasons that I will explain, I was not prepared to impute to Centro an understanding that its directors were about to be involved in making a disclosure of the content of the Investigation Documents. Further, again for reasons I will explain, I rejected PWC's contention that the directors did in fact disclose the contents of the Investigative Documents or at the least, the substance of the legal advice contained therein. 111 PWC contended that what the directors deployed in their evidence and submissions which was inconsistent with the maintenance of the privilege in the investigation themselves, was evidence of the Board's role in the investigations conducted by Freehills, Middletons and KPMG, namely: (a) the rigour and speed with which they were conducted; (b) their diligence in attending meetings at which the results were discussed; and (c) that the process led to corrective statements about the classification of debt being made by the Board. 112 At best, the evidence established (a) but not (b) or (c). Mr Cooper gave evidence in the ASIC proceeding that the Board had promptly initiated a thorough independent review of the classification of debt including by retaining KPMG, Freehills and Middletons. That evidence disclosed the existence of the investigation but revealed nothing of the content of any advice given. Mr Healey gave evidence that the Board received regular updates in meetings held in January 2008 on the work being undertaken on the reclassification issue. He did not say the results were discussed. His evidence in this respect disclosed nothing of the content of the investigation. 113 The content of paragraph (c) above was not expressly supported by any evidence. To the contrary, the evidence given by Mr Healey in the ASIC proceeding was that the corrective statement made of 15 February 2008 was made by the Board "on the recommendation of the acting CFO (Ivan St Clair) and Mr Belcher (Centro's Group Financial Accountant)". 114 For privilege to be waived, the substance or content of advice needs to be disclosed with specificity and clarity: Nine Films and Television Pty Ltd v Ninox Television Limited [2005] FCA 356 at [26] (Tamberlin J). In that case at [18], the Judge rejected a statement to the following effect as sufficient to amount to a waiver of legal advice: "We've engaged Stuart Littlemore QC and he has reviewed everything in great detail and we're moving forward based on his recommendations". 115 I was not satisfied that the evidence carried what PWC contended was "the necessary implication that the directors acted in a manner consistent with the conclusions of the investigations". Nor, for the same reasons, was I satisfied that it would be reasonable to impute to Centro the knowledge that evidence which carried such an implication was to be given by the directors. For those reasons, I was not satisfied that any disclosure by the directors occurred, nor that there had been any disclosure with Centro's knowledge and consent, let alone that the conduct constituted conduct by Centro for a forensic or other advantage. 116 I should add that, at its height, the only inference which might have been open on the evidence (but for which PWC did not contend), was that the directors had considered advice provided as a result of the investigation prior to making the corrective statement. Such an inference would not have resulted in a conclusion that the substance of any advice was disclosed but merely that there was some advice and that it was considered: Bennett v Chief Executive Officer, Australian Customs Service (2004) 210 ALR 220 at [6] (Tamberlin J). 117 For those reasons, I rejected PWC's contention that Centro had waived legal professional privilege in relation to the Investigation Documents.
conclusion 118 For all those reasons, on 28 November 2011 orders in the following terms were made: (1) The application made by PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited dated 16 August 2011 (the Application) is dismissed. (2) PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited pay the Respondents' costs of the Application. (3) The time for PricewaterhouseCoopers and PricewaterhouseCoopers Securities Limited to file a written application for leave to appeal under Division 35.2 of the Federal Court Rules is 14 days after the date His Honour Justice Bromberg provides written reasons in respect of these orders. I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.
Kirby
Centro Properties Limited
Cases cited: Australian Securities and Investments Commission v Healey (2011) 196 FCR 291 AWB Limited v ASIC [2008] FCA 1877 AWB Ltd v Cole and Another (No 5) (2006) 155 FCR 30 Bennett v Chief Executive Officer, Australian Customs Service (2004) 210 ALR 220 British American Tobacco Australia Limited v Secretary, Department of Health and Aging (2011) 195 FCR 123 Brookfield Multiplex v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1 Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 Commissioner of Australian Federal Police v Propend Finance Pty Limited (1997) 188 CLR 501 Cook v Pasminco Pty Limited (2000) 107 FCR 44 CSR Limited v Eddy (2008) 70 NSWLR 725 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 DSE (Holdings) Pty Limited v InterTAN Inc (2003) 135 FCR 151 Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 Grant v Downs (1976) 135 CLR 674 Goldberg v Ng (1995) 185 CLR 83 Kennedy v Wallace (2004) 208 ALR 424 Kennedy v Wallace (2004) 142 FCR 185 Mann v Carnell (1999) 201 CLR 1 State of New South Wales v Betfair Pty Ltd (2009) 180 FCR 543 Nine Films and Television Pty Ltd v Ninox Television Limited [2005] FCA 356 Osland v Secretary, Department of Justice (2008) 234 CLR 275 Perry v Powercor Australia Limited [2011] VSC 308 Powercor Australia Limited v Perry [2011] VSCA 239 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 Re Southland Coal Pty Ltd (2006) 203 FLR 1 The Daniels Corporation International Pty Ltd v Australia Competition and Consumer Commission (2002) 213 CLR 543 Wenkart v Commissioner, Australian Federal Police & Ors [1996] FCA 967 Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529
Kirby v Centro Properties Limited (No 2) [2012] FCA 70
[2008] VSCA 59
[2011] VSC 308
[2011] VSCA 239
[1999] VSC 131
(2011) 196 FCR 291
(2006) 155 FCR 30
(2004) 210 ALR 220
(2011) 195 FCR 123
(2009) 180 FCR 1
(1997) 188 CLR 501
(2000) 107 FCR 44
(2008) 70 NSWLR 725
(1991) 4 WAR 325
(2003) 135 FCR 151
(1999) 201 CLR 49
(1976) 135 CLR 674
(1995) 185 CLR 83
(2004) 208 ALR 424
(2004) 142 FCR 185
(1999) 201 CLR 1
(2009) 180 FCR 543
(2008) 234 CLR 275
(2004) 136 FCR 357
(2006) 203 FLR 1
(2002) 213 CLR 543
(1994) 33 NSWLR 529
(1991) 29 FCR 203
(1979) 36 FLR 244
(1995) 58 FCR 224
(1998) 160 ALR 469
(1987) 163 CLR 54