Plaintiff v ANDREW ALEXANDER LINDBERG

Supreme Court of Victoria|2009-08-06|Before: ROBSON J

CORPORATIONS - legal professional privilege - application by AWB Limited for access to documents - proceedings by ASIC against former managing director of AWB Limited seeking civil penalties - examinations conducted under s 19 of the ASIC Act 2001 and statements given to ASIC in relation to the affairs of AWB Limited - AWB Limited has reasonable grounds to believe that privileged and confidential information may be in the transcript of the examinations and the statements - transcripts and statements ordered to be discovered by ASIC to the defendant - application by AWB Limited to examine the transcripts and statements to assert claims of privilege - whether AWB Limited should be given a realistic and practical opportunity to assert and test is claims to privilege and confidentiality - application granted on terms

ASC v Zarro (No 2) (1992) 34 FCR 427

ASIC v P Dawson Nominees Pty Ltd [2008] FCAFC 123; (2008) 169 FCR 227

AWB Limited v ASIC [2008] FCA 1877

Commissioner of Taxation v Citibank (1989) 20 FCR 403

Commonwealth v John Fairfax & Sons Ltd [1980] HCA 44; (1980) 147 CLR 39

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434

Daniels Corporation v ACCC [2002] HCA 49; (2002) 213 CLR 543

P Dawson Nominees Pty Ltd v Multiplex Ltd [2007] FCA 1659; (2007) 65 ACSR 239

Sankey v Whitlam (1978) 142 CLR 1

Spargos Mining NL v Standard Chartered Aust Ltd (No 1) (1989) 1 ACSR 311

Trevorrow v State of South Australia (No 4) [2006] SASC 42; (2006) 94 SASR 64

Watson v AWB Limited [2009] FCA 215

Zarro v ASC (1992) 36 FCR 40

**1 On 22 July 2009, ASIC was ordered to make discovery to Mr Lindberg of all transcripts of examinations conducted under section 19 of the ASIC Act 2001, and all other statements including draft statements which had previously not been provided to Mr Lindberg, relating to any questions raised by the pleadings in this proceeding.

2 By summons dated 31 July 2009, AWB Limited seeks orders in relation to these section 19 examinations and other statements and essentially seeks an order that the transcripts and statements be provided to AWB before being provided to Mr Lindberg to enable AWB to assert and test claims for legal professional privilege ("LPP") in respect of the transcripts and statements, if it is entitled to do so.

3 During the hearing, AWB altered its stance and submitted that it would accept the transcripts and statements being given to Mr Lindberg's lawyers without AWB having the prior opportunity to inspect them provided AWB's lawyers were provided with the discovered material to enable them to assert and test claims for LPP claim under a protocol to be agreed, or failing agreement, to be determined by the Court.

4 Mr von Schoenberg, solicitor for AWB, deposes that although AWB is not aware of the content of specific statements and transcripts that have been or are to be produced to Mr Lindberg, AWB understands that ASIC has, or may have in the course of its investigations concerning AWB, received witness statements from and/or conducted examinations of individuals who, by reason of the positions held by them with AWB and/or professional services they have performed for AWB, have knowledge of legal professional privilege communications of AWB.

5 He deposes that AWB understands that ASIC may have interviewed or examined former officers and employees including those officers ASIC is seeking civil penalties against such as Mr Flugge, Mr Ingleby, Mr Stott and other officers of AWB, former lawyers for AWB including former General Counsel Mr Jim Cooper and other named lawyers and former other named external lawyers retained by AWB. Mr von Schoenberg deposes that the communications that are subject to a subsisting claim of legal professional privilege by AWB may be known to these individuals and AWB considers that there is a serious risk that these communications may be contained in the statements and transcript relating to these individuals.

6 Mr von Schoenberg refers to several decisions of Young J in the Federal Court where Young J identified certain categories of documents relating to the sale of wheat by AWB to Iraq under the UN Food-for-Oil Program which were protected by existing claims for legal professional privilege.

7 In two other proceedings in which ASIC has been involved, relating to AWB's wheat sales to Iraq and the UN Food-for-Oil Program, AWB has taken steps seeking to ensure that confidentiality is maintained with respect to any LPP communications of AWB that are contained in statements and transcripts concerning the relevant individuals, where the statements and transcripts are to be disclosed or produced by ASIC. In AWB Limited v ASIC[1], heard by Gordon J in the Federal Court of Australia, AWB challenged a decision by ASIC to disclose to the Australian Federal Police, under s 127 of the ASIC Act, statements and transcripts in relation to relevant individuals. AWB contended that ASIC did not, in making its decision, give consideration to whether the statements and transcripts to be disclosed to the AFP contained AWB's LPP communications. Gordon J dismissed AWB's application. AWB has appealed against the decision of Gordon J. The appeal was heard on 18 February 2009 and judgment was reserved.

8 In Watson v AWB Limited,[2] before Foster J in the Federal Court of Australia, the applicants had obtained leave to issue a subpoena to ASIC relating to statements and transcripts in relation to former employees and lawyers of AWB (the relevant individuals). At hearings before Foster J, the applicants and AWB foreshadowed and put forward variations of a proposed procedure whereby AWB would be permitted an exclusive first right to inspect the statements and transcripts produced by ASIC in relation to the relevant individuals, in order to assert and if necessary have determined by the Court any claims AWB may have in respect of LPP. Counsel for ASIC appeared at the hearings and raised no objection to the proposed procedure. Foster J has not yet ruled on the procedure to be adopted, because a number of interested individuals have made submissions opposing the inspection by the applicants of the documents produced by ASIC, and this question has not yet been determined.

9 In AWB Limited v ASIC,[3] Gordon J sets out the steps taken by AWB to protect its LPP at the examination of its employees and former employees by ASIC. I will not repeat what she said but I nevertheless rely on paragraphs [9]-[12]. In substance, AWB sought to attend the examinations to protect its LPP and counsel for AWB made submissions to the ASIC investigator, seeking to ensure that its LPP was protected. The ASIC investigator responded to the submissions, in part, in the following terms:**

I'll confirm that at the preamble to the examinations that we'll be conducting. We'll be confirming to witnesses that they are - in answer to any question - they are not obliged to disclose communication[s] over which they or a third party may have a claim for legal professional privilege.

We will also embark upon a description that if they wish to refuse to answer a question on the basis that to do so would disclose communication that may be the subject of claim for legal professional privilege, then they will be asked to provide the following information:

(1) A description as to the general nature of communication.

(2) To whom and by whom it was made.

(3) The circumstances in which it was made.

(4) Whether any obligation of confidentiality was imposed at the time of the communication, and if so, how.

(5) The name of the party who may have a claim for privilege, and

(6) An explanation of the grounds upon which they believe that the claim may be made.

**10 After adjourning to take advice on the submissions, the investigator returned and said that he was not prepared to permit AWB to be represented at the examination about to take place and therefore would not make a direction under the ASIC Act for such representation. The investigator was not prepared to issue reasons.

11 ASIC also informed the Court that special protocols were laid down for the examination of Mr Cooper, the former general counsel of AWB, to accommodate s 69 of the ASIC Act.[4]

12 In her decision, Gordon J found that ASIC did not permit AWB to protect any of its privileged communications from being inadvertently or deliberately disclosed by the examinees during the course of the s 19 examinations. Moreover, she found that none of the arrangements that were made were expressly said to apply when ASIC voluntarily obtained a witness statement from some of AWB's employees or former employees.

13 For these reasons, AWB submits that it has a reasonable belief that ASIC has or may have in the course of its investigations received witness statements from and/or conducted examinations of individuals who, by reason of the positions held by them with AWB and/or professional services they have performed for AWB, have knowledge of LPP communications of AWB.

14 AWB contends that it is, accordingly, concerned that certain statements and transcripts that have been or are to be produced to Mr Lindberg, or parts thereof, contain communications that are protected by a claim of legal professional privilege by AWB.

15 AWB alleges that ASIC has never denied that the transcripts and statements relate to such persons. AWB contends that ASIC can not assert that the statements and transcripts do not include material in which AWB has privilege. It says that ASIC cannot know that. AWB contends that the highest that ASIC can put its case is that it does not believe that any privileged material is included. AWB submits that ASIC has not stated that it has reviewed the material that it intends to hand over to Mr Lindberg and satisfied itself that the legal professional privilege of AWB has been observed in all instances where it exists.

16 Mr O'Bryan SC, senior counsel for ASIC, conceded that ASIC could not be absolutely certain that some privileged information may not have slipped through the protocol net and will now be included in the transcripts and statements to be disclosed to Mr Lindberg.[5]**

**17 ASIC submits that legal professional privilege is a privilege from production of information that is subject to the privilege.[6] ASIC contends legal professional privilege operates to relieve a party to a communication, or a holder of a document recording the communication, from being compelled to disclose the communication to a third party.[7] ASIC says that although it is now accepted that legal professional privilege is more than just a rule of evidence or procedure, it is clear that it is not characterised as a rule of law conferring individual rights sounding in damages or an injunction to restrain an apprehended or continued breach.

18 In Daniels Corporation v ACCC[8] the High Court said :**

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 (citations omitted).[9]

**19 ASIC submits that the question of whether AWB can restrain the disclosure by ASIC of privileged information to Mr Lindberg is to be determined in accordance with equitable principles relating to threatened breaches of confidence.[10] ASIC contends that the privilege is against giving information or producing documents that would reveal privileged communications but that prevention of the disclosure or use of the communications by third parties is based on the communication being confidential and entitled to the protection as such of equity.

... as the holder of LPP, [it] is entitled to preserve the confidentiality of the communications by restraining any recipient from using, or disclosing to any other person, the content of those communications.[11]

**21 Accordingly, ASIC submits that any right of AWB to restrain the delivery of privileged information to Mr Lindberg by a person in possession of that information depends upon AWB establishing, in the context of a proper exercise of statutory power, a right to injunctive relief based on a breach of confidence.[12] ASIC submits, however, that none of the conditions which equity requires to be satisfied in order to restrain the delivery of confidential information is satisfied in the present case.

22 ASIC contends that AWB falls at the first hurdle. ASIC submits that AWB cannot identify any privileged information in any of the material which ASIC has been ordered to deliver. ASIC submits that AWB does not raise an arguable case that any such material exists. ASIC contends that this is fatal to its claim.[13]

23 AWB describes this argument as an example of "Catch 22." AWB says that ASIC agrees that AWB may restrain the misuse of its privileged communications (if confidential) but that AWB cannot do so as ASIC will not permit it to discover whether its privileged communications are being or are threatened to be misused.

24 Further, ASIC submits that it cannot be a breach of any equitable obligation of confidence for ASIC to disclose the information to Mr Lindberg where the disclosure is required by order of the Court; a fortiori where the disclosure is made subject to both the implied Harman undertaking and a protocol agreed between the parties for the purpose of ensuring the maintenance of confidentiality.**

**25 The courts have recognised that legal professional privilege includes not only the right to resist giving information or documents that may reveal privileged communications, but the right to be given a practical and realistic opportunity to assert the privilege in order to resist giving the information or documents.

26 In Commissioner of Taxation v Citibank,[14] the Full Court of the Federal Court of Australia considered the validity of the exercise of a search warrant where the respondent Citibank challenged the copying of documents on the basis that adequate opportunity was not afforded the holder of the privilege to claim that the documents were subject to LPP. French J held that under the relevant statutory provision giving the right to copy documents, the right did not extend to copying documents subject to LPP. He held that where no practical and realistic opportunity was provided for the assertion and testing of claims of legal professional privilege, the purported exercise of the right to copy documents infringed the privilege and was invalid.[15] Bowen CJ and Fisher J held that it was not sufficient for the officer exercising the search warrant to merely give consideration to the question whether a claim made for privilege was justified. Their Honours held he was also obliged to ensure that Citibank and in particular its staff had in the circumstances an adequate opportunity to make claims of privilege.[16]

27 AWB contend that at no stage has it had a practical and realistic opportunity to assert and test claims of LPP. It says that ASIC has now agreed to orders by the Court which will release the transcripts and statements of AWB's employees and former employees to Mr Lindberg, which may contain information that is subject to its LPP, for him to use in his defence. AWB says that unless it is given access to the transcripts and statements, it will be left with the unsatisfactory course of following Mr Lindberg's trial and seeking to intervene if information which is subject to its LPP is sought to be disclosed or misused.

28 The circumstances referred to above, indicate that to date, AWB has not had a practical and realistic opportunity to assert and test its LPP claims in respect of the interviews and statements provided by its former and current employees and lawyers. Accordingly, AWB's LPP common law rights may not be observed if the transcripts and statements are provided to Mr Lindberg without AWB having a practical and realistic opportunity to assert and test is LPP claims.**

**29 ASIC contends that the court does not have jurisdiction to make the orders sought. It contends that AWB has not established any legal right to the relief sought.

30 AWB contends that the court does have jurisdiction to make quia timet injunctions against apprehended or threatened wrongs which have yet not been committed.[17] Such injunctions nevertheless require evidence that a wrong is apprehended or threatened. In truth, AWB does not complain that a breach of its confidentiality by the information's use is apprehended or threatened. Rather, it wishes to examine the transcripts and statements to ensure that no confidential information has slipped past the procedures ASIC had in place, to ensure no such information was procured from those that it examined under s 19.

31 AWB points to other cases where ASIC has made transcripts and statements available to others.[18] Such conduct may be relevant to my discretion if I have a discretion, but is not relevant to the issue of whether or not I have jurisdiction.

32 The disclosure to Mr Lindberg is being made pursuant to an order of this Court. In my view, the Court does have the inherent jurisdiction to ensure, insofar as it is reasonable and possible to do so, that the orders do not undermine the "important common law" right or immunity of AWB to assert its LPP. In my opinion, the provision of the transcripts and statements to Mr Lindberg for his use in the trial should be done on the basis that permits AWB to have a practical and realistic opportunity to assert and test its common law privilege.

33 Accordingly, subject to any claim of public interest immunity, I am disposed to accede to AWB's application.**

**34 ASIC submits that even if AWB could satisfy the Court that privileged information existed and that it was entitled to intercept the Court's orders for disclosure to Mr Lindberg, the public interest in preventing AWB from accessing s 19 transcripts would prevent their disclosure to AWB.

35 ASIC contends that ASIC's investigation into the affairs of AWB in connection with the Cole Inquiry and Oil-for-Food related matters is continuing.[19] ASIC says that it is contrary to the public interest for AWB to obtain access to any s.19 transcripts or statements provided voluntarily to ASIC in connection with an important and ongoing inquiry into AWB's affairs.[20] ASIC says that the transcripts and statements are:**

documents in the possession of ASIC of a confidential nature, which record information received by ASIC concerning possible offences or irregularities and recording the possible course of investigations.[21]

**36 ASIC contends that disclosure of such documents to AWB would harm the public interest by impeding ASIC's ability to effectively conduct its investigation into the affairs of AWB, by disclosing to the company whose affairs are the subject of the investigation documents that, alone or together, demonstrate "the extent of the information gathered and the directions the investigation is or may be taking."[22]

37 ASIC also submits that further, disclosure to AWB of statements which were provided voluntarily to ASIC may have a chilling effect upon ASIC's ability to secure future cooperation from individuals in this investigation, or other investigations.[23]

38 ASIC submits that the Court must therefore weigh the harm that would result from disclosure to AWB against the possibility that the administration of justice would be frustrated or impaired if the documents were withheld.[24]

39 ASIC accepts that the public interest in the proper administration of justice justifies disclosure of the transcripts and statements to the defendant in this case. But ASIC contends that the opposite conclusion should be reached when AWB asserts a right to look at all s 19 transcripts of an investigation into its own affairs in order to check whether privileged information might be found therein.

40 ASIC relies on Gangemi v ASIC[25] where French J held that an examination under Part 3 of the ASIC Act is conducted in aid of an investigation under that Part. His Honour held that during the investigative process, it was essential that an examination under s 19 be kept confidential pending completion of the investigation. [26] ASIC also refers to ASIC v P Dawson Nominees[27] where the Full Court of the Federal Court of Australia said that it was in the public interest to protect informers and encourage future informers. The Court recognised the public interest in protecting confidential disclosure to ASIC, given its responsibilities in protecting the public.[28]

41 In Sankey v Whitlam[29] Gibbs ACJ said:**

The general rule is that the court will not order the production of a document, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose it. However the public interest has two aspects which may conflict. These were described by Lord Reid in Conway v. Rimmer (1968) AC, at p 940, as follows:

"There is the public interest that harm shall not be done to the nation or the public service by disclosure of certain documents, and there is the public interest that the administration of justice shall not be frustrated by the withholding of documents which must be produced if justice is to be done."

It is in all cases the duty of the court, and not the privilege of the executive government, to decide whether a document will be produced or may be withheld. The court must decide which aspect of the public interest predominates, or in other words whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence. In some cases, therefore, the court must weigh the one competing aspect of the public interest against the other, and decide where the balance lies. In other cases, however, as Lord Reid said in Conway v. Rimmer (1968) AC, at p 940 , "the nature of the injury which would or might be done to the nation or the public service is of so grave a character that no other interest, public or private, can be allowed to prevail over it". In such cases once the court has decided that "to order production of the document in evidence would put the interest of the state in jeopardy", it must decline to order production.[30]

**42 AWB contends that a claim of public interest immunity requires the Court to undertake a balancing exercise and determine whether the public interest in not disclosing the examinations and statements obtained by ASIC in its investigation of the conduct of AWB in connection with its wheat sales to Iraq outweighs the public interest that AWB should be denied access to the documents in order to assert its common law right or immunity.[31]

43 AWB submits that ASIC has not provided the Court with sufficient evidence to carry out the balancing exercise. It has not provided the Court with the documents or any affidavit material other than as referred to above. AWB contrasts this approach with that undertaken by Goldberg J in P Dawson Nominees Pty Ltd v Multiplex Ltd,[32] where the actual statements were examined to ascertain precisely what information it was claimed should not be disclosed in the public interest.

44 Despite the powerful submissions of ASIC on public interest immunity, which in other circumstances I may accept, on the evidence before me I accept the submission of AWB. As far as I know the transcripts and statements may go no further than what was said at the Royal Commission in public. There may be no interest served in the transcripts and statements not being released. Unless further evidence was led, I am unable to find that disclosure would be against the public interest.

45 AWB's solicitors wrote to ASIC asking whether ASIC contends that the transcripts and other documents that it is proposing to discover to the defendant are subject to public interest immunity, and if so, requested ASIC to set out the grounds and file and serve material upon which that claim is made.[33] In reply, ASIC referred to its outline of submissions, the substance of which I have set out above.

46 In those circumstances, I am unable to find that disclosure of the documents to AWB's lawyers would be injurious to the public interest.**

**47 ASIC contends that AWB's application has been made many months after the first discovery orders were made in this proceeding (in November 2008). ASIC submits that it ought to have been apparent to AWB many months ago that ASIC would be required to, and would not resist, giving relevant s.19 transcripts and statements to the defendant.

48 ASIC says that no proper explanation is given by AWB for its long delay in seeking to intercept the delivery of this material. ASIC submits that given the proximity of the trial and the need to ensure that remaining interlocutory and preparatory steps are completed expeditiously, AWB's summons should also be dismissed on the discretionary ground of undue delay.

49 In my view, AWB has made it plain to ASIC that it wishes to assert and protect its LPP. I have found that AWB has not had the opportunity to assert and test its LPP claims. In the circumstances, I do not accept that I should dismiss AWB's application on this ground.**

**50 I propose to accede to AWB's application. I think it is sufficient to make the documents available to AWB's solicitors and counsel generally in accordance with the protocol put forward in AWB's summons. ASIC and Mr Lindberg may have issues with the protocol. I will leave it for the parties to agree on the protocol and failing agreement the matter can be referred to me to resolve.

51 Accordingly, I propose to vary my order of 22 July 2009 to extend the time referred to in order 3 to 6 August 2009. I propose to further order that ASIC provide AWB's solicitors with a copy of the documents so discovered to Mr Lindberg by 10 August 2009. I propose to order that the documents so provided to AWB solicitors be kept confidential to them and counsel and that AWB should make any claims in respect of information therein that is privileged according to a protocol to be agreed between the parties and in default of agreement, to a protocol determined by the Court.

52 I will order that the plaintiff pay AWB's costs of the summons.**

[6] Trevorrow v State of South Australia (No 4) [2006] SASC 42; (2006) 94 SASR 64 at 70 per Doyle CJ; at 80 per Debelle J and White J at 100.

[10] Trevorrow v State of South Australia (No 4) [2006] SASC 42; (2006) 94 SASR 64 at [14] (Doyle CJ), [79] (Debelle J) and [173] (White J).

[12] Trevorrow v State of South Australia (No 4) [2006] SASC 42; (2006) 94 SASR 64 at [14] (Doyle CJ), [79] (Debelle J) and [173] (White J).

[13] Commonwealth v John Fairfax & Sons Ltd [1980] HCA 44; (1980) 147 CLR 39 at 51, per Mason J. See also Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434 at 443, per Gummow J.

[17] Meagher Gummow & Lehane, Equity Doctrine and Remedies 4th edition [21-015].

[19] This and the following foot notes to ASIC submissions are those provided in support of ASIC's written submissions. See Affidavit of Martin Travis Lockett affirmed 1 May 2009 [140]-[141] and [193] and Affidavit of Martin Travis Lockett affirmed 29 May 2009, [4].

[20] ASIC v P Dawson Nominees Pty Ltd [2008] FCAFC 123; (2008) 169 FCR 227 at [48] - [52] (FFC); Zarro v ASC (1992) 36 FCR 40, 46 (Lockhart J); Spargos Mining NL v Standard Chartered Aust Ltd (No 1) (1989) 1 ACSR 311, 312 (McLelland J).

[21] Zarro v ASC (1992) 36 FCR 40, 46 (Lockhart J); approved in Dawson Nominees.

[22] ASC v Zarro (No 2) (1992) 34 FCR 427, 436 (Drummond J).

[23] Zarro v ASC (1992) 36 FCR 40, 49 (Lockhart J); approved in Dawson Nominees.

[24] Sankey v Whitlam (1978) 142 CLR 1

[26] Ibid at [35]-[37] per French J.

[29] Sankey v Whitlam (1978) 142 CLR 1.

[31] Sankey v Whitlam (1978) 142 CLR1; P Dawson v ASIC unreported Federal Court of Australia, Goldberg J, 23 July 2009.

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