McCue v SAS Trustee Corporation

CATCHWORDS: SUPERANNUATION - Appeal under s 88 of the Superannuation Administration Act 1996 - Former police officer seeking orders for determination of claim for hurt on duty - Trustee declined to deal with claim until appellant provided an authority to obtain a medical report that the trustee believed to be relevant to the subject matter of his dispute and had not given a reasonable explanation for failing to do so - Appellant declined to say whether medical report existed but even if it did it was subject to legal professional privilege - Consideration of common law regarding legal professional privilege - Advice privilege - Litigation privilege - Whether immunity attaching to privilege overcome by words of relevant statute - Absence of any material upon which to determine whether claim for privilege may be upheld

Evidence Act 1995 LEGISLATION CITED: Police Regulation (Superannuation) Act 1906 Superannuation Administration Act 1996 Trade Practices Act 1974 (Cth)

Attorney-General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475 Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52 CASES CITED: Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 207 ALR 217 The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543

Mr P M O'Rourke of counsel (Appellant) Walter Madden Jenkins, Solicitors LEGAL REPRESENTATIVES: Mr T M Ower of counsel (Respondent) SAS Trustee Corporation

Appeal by John Matthew McCue to appeal against the decision of the SAS Trustee Corporation given on 2 December 2009

1 This is an appeal pursuant to s 88 of the Superannuation Administration Act 1996 ('the SA Act') by John Matthew McCue, a former police officer. The appeal is from a decision of the SAS Trustee Corporation ('STC') made on 2 December 2009 that it would refrain from dealing with Mr McCue's dispute because he had not complied with a request made by STC under s 68(1) of the SA Act to provide an authority to obtain a medical report that STC believed to be relevant to the subject matter of his dispute and had not given a reasonable explanation for failing to do so.

2 The appellant sought orders that: (a) The determination of the Respondent made on 2 December 2009 be set aside.

(b) The applicant's application be remitted to the Respondent for determination on its merits.

(c) Respondent pay the Applicant's costs as agreed or assessed. Background facts

3 The appellant was medically discharged from the NSW Police Force on 8 July 2005 with the certified infirmity of 'severe adjustment disorder with depressed and anxious mood'. STC had certified the infirmity pursuant to s 10B(1) of the Police Regulation (Superannuation) Act 1906 ('the PR(S) Act'). In accordance with his obligation pursuant s 10B(3)(a) of the PR(S) Act, the Commissioner of Police determined the certified infirmity to be not hurt on duty. An appeal from the Commissioner's decision is currently pending in the District Court. 4 On 13 February 2007, the appellant applied to STC to amend the certificate of infirmity by adding the condition 'mild osteoarthritic changes in the middle, ring and little fingers, right hand'. Due to the acknowledgement by the appellant that he had not previously claimed the right hand condition as incapacitating, the matter proceeded as an application for certification of 'osteoarthritis of the right hand' pursuant to s 10B(2) as distinct from an amendment under s 10B(1) of the PR(S) Act. 5 On 1 August 2008, STC declined the appellant's application pursuant to s 10B(2) of the PR(S) Act. The appellant's solicitor replied on 27 August 2008 indicating that the determination was disputed. The letter also stated: Further, we advise that we may obtain further medical evidence in support of the application but will not do so until we have had contact from you. 6 On 13 October 2008, STC wrote to the appellant's solicitor referring to a review conducted by the STC's 'medical consultant' Dr A Christie and expressing an opinion as to the likely outcome of a consideration by STC's Disputes Committee. On 29 October 2008, the appellant's solicitors sought from STC a copy of the medical report of Dr Christie. That letter contained the statement: 'Depending on the content of his [Dr Christie's] report, we will either arrange a further medical appointment for our client or make further submissions to you'. On 4 November 2008, STC forwarded a copy of Dr Christie's report to the appellant's solicitors. 7 In a letter dated 24 June 2009, the appellant's solicitors requested that the appellant's application be referred to the Disputes Committee at the first available opportunity.

8 On 7 July 2009, STC enquired as to whether the appellant had been further medically examined and, if so, requested that the medical report be forwarded for consideration. In a letter dated 28 July 2009 the appellant's solicitors advised STC that they had 'forwarded all material to you that we intend to rely upon'. In a letter dated 6 August 2009, STC repeated its earlier request, namely: [P]lease let me know if he was further medically examined and, if so, provide me with a copy of the doctor's report.

9 In a letter dated 11 August 2009, the appellant's solicitors replied, providing no further information and indicating they were looking forward to receiving the Dispute Committee's determination. 10 In a letter dated 14 August 2009, STC repeated its earlier request for information stating that the information is requested 'in accordance with s.67 of the Superannuation Administration Act 1996.' 11 Section 67 provides: 67 Determination of disputes (1) A dispute under this or any other Act concerning an STC scheme is to be determined by STC or an STC disputes committee, except as otherwise provided by the regulations.

(2) Regulations made for the purposes of subsection (1) may require that a dispute concerning the entitlements or obligations of an employee or beneficiary arising in respect of service by the employee with an employer that: (a) was responsible for the payment of benefits under an STC scheme of which the employee was a member or to which the employee was a contributor, and

(b) has ceased to be responsible for the payment of benefits under that scheme but is responsible for the payment of benefits under a new superannuation scheme created in accordance with section 127, be determined, not by STC or an STC disputes committee, but by the trustee of the new superannuation scheme. (3) In determining a dispute, STC, an STC disputes committee or the relevant trustee may inform itself on any matter in such manner as it thinks fit and, in so doing, is not bound to observe rules of law relating to evidence. (4) A trustee acting in accordance with regulations referred to in subsection (2) and an STC disputes committee have and may exercise the powers conferred on STC by sections 66 and 68.

(5) This section does not apply to a dispute in respect of which an application may be made to the District Court under section 21 of the Police Regulation (Superannuation) Act 1906. 12 In a letter dated 20 August 2009, the appellant's solicitors stated, inter alia: We reiterate our position which is that we have forwarded all material we rely upon and respectfully submit that you should consider our client's application. If we possess any further information or reports which we do not intend to rely upon, such information or reports are privileged information which we are not obliged to provide to you.

13 STC's letter of 22 September 2009 referred to the earlier exchange of correspondence and stated: It is noted that you have not answered the question asked, but have indicated that, if you do have a report that you have not supplied, you claim privilege for the report.

It would seem reasonable to conclude from the correspondence that you did commission a medical report and that you have chosen not to furnish a copy to STC.

STC understands that a party engaged in litigation may claim privilege in respect of a report that is commissioned for use in actual or pending proceedings. However, your letter of 29 October 2008 concerns a pending decision of the STC Disputes Committee, not actual or pending litigation.

STC believes that following your letter of 29 October 2008 you commissioned a medical report relevant to the subject matter of Mr McCue's dispute. In the circumstances, Mr McCue is requested pursuant to section 68(1) to provide STC with an authority to obtain from the medical practitioner who is the author of the report a copy of that report.

14 Section 68 of the SA Act is in the following terms: 68 Evidence from third parties (1) STC may request a person who has made a claim against STC, or who has a dispute with STC, to provide STC with an authority to obtain from a third person any information or evidence that is relevant to the subject-matter of the claim or dispute.

(2) If such a person does not comply with any such request, STC is not obliged to proceed to process the claim or determine the dispute concerned. 15 The appellant's solicitors did not answer STC's request pursuant to s 68(1), but rather insisted that the dispute be determined. On 2 December 2009, STC made its determination in accordance with s 68(2) that it was not obliged to determine the dispute because of the appellant's failure to comply with its request pursuant to s 68(1) of the SA Act. Case for the appellant

16 Mr P O'Rourke of counsel appeared for the appellant. His case consisted of the following main elements: · the appellant, on two separate occasions, provided to STC the authority contemplated by s 68(1) of the SA Act; · STC is able to use that authority to pursue relevant documentation (including medical records) from 'a third person'; · in circumstances where the appellant has retained a solicitor to act on his behalf and provide him with relevant legal advice, that solicitor cannot be seen as a 'third person' for the purposes of s 68. The request made by STC for information from either the appellant or the appellant's solicitor is not a request which can be supported by an authority pursuant to s 68; · for the appellant's solicitor to comply with the request (even if compliance meant saying that no such information existed) the solicitor would be in breach of rule 2 of the Professional Conduct and Practice Rules 1995 ('Solicitors' Rules'); · any communications between the appellant and the appellant's solicitor and any confidential document prepared by the appellant, the appellant's solicitor or another person in the context of the application being made to STC can only be seen as being for the dominant purpose of the appellant's solicitor providing legal advice to the appellant. Given the factual circumstances existing in the present case, the request for information made by STC pursuant to s 68 could only have in contemplation communications made or documents prepared for the dominant purpose of the provision of legal advice. The request could only have brought about one response, namely a claim of privilege. This claim of privilege was appropriate regardless of whether or not the information sought by the request existed; · STC was not entitled to infer, as it did, that the appellant's solicitors 'did commission a medical report and ... have chosen not to furnish a copy to STC'. Such an inference was no more than mere speculation on the part of STC. Case for STC

17 Mr T Ower of counsel appeared for STC. The case for STC was that: · the appellant has, on two occasions, provided a pro forma general authority for STC to obtain information. However, against the backdrop of failing to deny that a relevant medical report exists and failing to identify the doctors who have conducted examinations within the last 18 months, provision of the two abovementioned authorities is not bona fide compliance with his obligation under s 68; · it is difficult to see how the appellant's reliance on privilege and breach of the Solicitor's Rules is tenable given that the appellant is obliged under s 68(1) to give an authority to obtain evidence from a third party. Such authority would effectively waive any claim for privilege that the appellant may have had over a medical report prepared by a medical expert (third party). It would, therefore, not be a breach of confidence to confirm or deny the existence of such a report or identify the doctor involved; · Section 67(3) of the SA Act is in the following terms: (3) In determining a dispute, STC, an STC disputes committee or the relevant trustee may inform itself on any matter in such manner as it thinks fit and, in so doing, is not bound to observe rules of law relating to evidence. · The Police Superannuation Regulations 2005 provide: 27 STC may require evidence STC, when considering any case involving payment to a beneficiary, may require the production of such certificates and other documentary evidence as it considers necessary. · Given that STC has formed a reasonable belief that a relevant medical report exists and given the above regulation and s 67(3) of the Act, it is clear that it is valid for STC to require the production of such a report. The appellant will neither confirm nor deny that such a report exists. The appellant will not identify the relevant examining doctor that could render effective an otherwise ineffective general authority to provide information. Accordingly, the appellant has not provided an effective authority under s 68(1) of the SA Act and STC should, in accordance with s 68(2), not be obliged to process the claim.

18 I did wonder and still do about the necessity for these proceedings. The appellant having advised that it did not intend to rely on any other medical evidence regarding his claim opened the way for STC to deal with the claim on the basis of the supporting material that had already been submitted. 19 Be that as it may, the question that falls to be decided is whether the appellant is entitled, in the face of the provisions of the SA Act and Regulations, to refuse not only to provide STC with an authority to obtain a copy of the medical report it believes may exist, but also to refuse to reveal even that such a report exists. 20 To put it more directly, STC is seeking authorisation from the appellant to obtain from an identifiable medical practitioner any medical report relating to the appellant that was completed after 29 October 2008 and the appellant is refusing to say whether a medical examination was conducted. Obviously, that means STC is unable to obtain a copy of any report. 21 I understand that the appellant has provided a pro forma general authority for STC to obtain information, but STC contends it is not an effective authority because it fails to identify the medical practitioners who have conducted examinations of the appellant within the last 18 months.

22 The appellant relies on s 118 of the Evidence Act 1995 to support his claim that he is entitled to maintain his refusal to provide the information sought under s 68(2) of the SA Act. Section 118 provides: 118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or

(b) a confidential communication made between 2 or more lawyers acting for the client, or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 23 Section 118 is in Pt 3.10 and is concerned with the admissibility of evidence in court proceedings: Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 201 CLR 49 at 55. It has no application to a request by STC under s 68(2) of the SA Act. The Court is not being asked to determine in these proceedings whether a particular communication or document made or prepared is subject to privilege and that, therefore, evidence regarding its contents may not be adduced in the proceedings. What is being sought are orders that the determination of STC made on 2 December 2009 be set aside and the appellant's application be remitted to STC for determination on its merits, essentially on the grounds that the appellant is not obliged to comply with s 68(1) of the SA Act because the communication or document (if it exists) is privileged. 24 Section 131A of the Evidence Act extends the application of the provisions of Pt 3.10 (other than the provisions of ss 123 and 128) to some ancillary processes and pre-trial stages of proceedings, but a request under s 68(1) of the SA Act does not constitute an ancillary proceeding. 25 However, the circumstances in which legal professional privilege may apply are not limited to the adducing of evidence (Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1) and the application of the privilege is not confined to judicial or quasi-judicial proceedings (Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52). In Esso it was said that: '[T]he ambit of the common law doctrine of legal professional privilege in Australia exceeds that of the relevant provisions of the Evidence Act' (at 55 per Gleeson CJ, Gaudron and Gummow JJ). 26 In Attorney-General for the Northern Territory v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 490, Deane J stated: It is a substantive general principle of the common law and not a mere rule of evidence that, subject to defined qualifications and exceptions, a person is entitled to preserve the confidentiality of confidential statements and other materials which have been made or brought into existence for the sole purpose of his or her seeking or being furnished with legal advice by a practising lawyer or for the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings (see, generally, Baker v. Campbell (1983) 153 CLR 52). That general principle is of great importance to the protection and preservation of the rights, dignity and freedom of the ordinary citizen under the law and to the administration of justice and law in that it advances and safeguards the availability of full and unreserved communication between the citizen and his or her lawyer and in that it is a precondition of the informed and competent representation of the interests of the ordinary person before the courts and tribunals of the land. Its efficacy as a bulwark against tyranny and oppression depends upon the confidence of the community that it will in fact be enforced. That being so, it is not to be sacrificed even to promote the search for justice or truth in the individual case or matter and extends to protect the citizen from compulsory disclosure of protected communications or materials to any court or to any tribunal or person with authority to require the giving of information or the production of documents or other materials … 27 The question of privilege was the subject of proceedings in the High Court in The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543. The proceedings involved the application of s 155 of the Trade Practices Act 1974 (Cth). The Australian Competition and Consumer Commission ('ACCC') has wide information-gathering powers under s 155 to enter premises to inspect and copy material or issue notices requesting materials. For example, s 155(1) provided: [I]f the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to a designated telecommunications matter (as defined by subsection (9)) or is relevant to the making of a decision by the Commission under subsection 93(3) or (3A), a member of the Commission may, by notice in writing served on that person, require that person: (a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information; (b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or (c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents. Failure to comply attracted a fine or imprisonment. 28 The ACCC issued s 155 notices to Daniels Corporation and its legal advisers, requiring the production of privileged communications. Daniels Corporation resisted and the ACCC commenced proceedings seeking production of the privileged material. It was held by the Full Federal Court that the ACCC had the power to obtain privileged communications. On appeal, the High Court determined that the ACCC could not use its information-gathering powers to compel the production of privileged communications. 29 At 552-553 the High Court stated in relation to legal professional privilege (citations omitted): 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. It may here be noted that the "dominant purpose" test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the "sole purpose" test which had been applied following the decision in Grant v Downs.

Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell , that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth).

Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minahan , was the foundation for the decision in Baker v Campbell . It is a rule which, subject to one possible exception, has been strictly applied by this Court since the decision in Re Bolton; Ex parte Beane. Cases in which it has since been applied include Bropho v Western Australia , Coco v The Queen and Commissioner of Australian Federal Police v Propend Finance Pty Ltd . The possible exception to the strict application of that rule was the decision in Yuill.

30 Thus, at common law: ... 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. ...

31 Legal professional privilege is generally regarded as having two aspects: advice privilege and litigation privilege. Advice privilege attaches to confidential communications between a legal adviser and client that are made for the dominant purpose of obtaining or providing legal advice. Litigation privilege attaches to confidential communications between a legal adviser and client, or between a legal adviser or client and a third party made for the dominant purpose of use in, or in relation to, litigation that is pending or in contemplation at the time of the communication. I note, however, in Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 207 ALR 217 the Full Federal Court held that advice provided by a third party can be privileged in the absence of actual or anticipated litigation, where that advice is provided at the request of the client for the dominant purpose of use by the legal adviser in providing legal advice to the client. 32 As matters presently stand in the proceedings before me, I am unaware whether there has been a communication to which privilege might attach. However, in light of the authorities to which I have referred, the provisions of the SA Act and the Regulations relied upon by STC to require the appellant to give authorisation for STC to obtain the medical report it seeks, are not sufficient in my view to overcome the common law immunity provided by legal professional privilege, provided that the medical report, if it exists, falls within the scope of advice privilege or litigation privilege. 33 Even though s 67(3) of the SA Act, perhaps the strongest of the provisions relied upon by STC, provides that STC may inform itself on any matter in such manner as it thinks fit and, in so doing, is not bound to observe rules of law relating to evidence, legal professional privilege is not merely a rule of evidence: Daniels at 552. The immunity attaching to privilege may only be overcome by clear words or necessary implication. Given what was decided in Daniels regarding s 155 of the Trade Practices Act, it is impossible to come to the conclusion that the common law immunity of privilege is overcome by the statutory provisions relied upon by STC.

34 In the absence of knowing whether a medical report exists to which legal professional privilege attaches I am not prepared to make the orders sought by the appellant. It seems to me, however, that if such a report does exist to which privilege attaches, it is not available to STC and as the appellant has indicated he does not propose to rely on any further medical evidence other than that which is already in the possession of STC, one obvious way forward is for STC to determine the claim. Alternatively, STC could consider whether there are other processes available to it to determine whether the medical report exists and if so whether it is open to have the Court determine conclusively whether the report is subject to privilege. 35 In light of the decision, the parties are provided with the opportunity to address on costs. The appellant shall have seven days to file submissions on costs with STC having a further seven days in which to reply. Unless a party indicates a desire to be heard orally on costs, the question will be determined on the papers. ___________________________________

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