88 ALJR 656
Mann v Carnell [1999] HCA 66201 CLR 1
R v Bunting [2002] SASC 412
Judgment (3 paragraphs)
[1]
Solicitors:
Commonwealth Director of Public Prosecutions (Crown)
Hardin Law (McCarthy)
Gibson Lawyers (Seller)
File Number(s): 2009/237556 2009/237509
[2]
Judgment
On 6 August 2014, I upheld claims of privilege made by the Commonwealth Director of Prosecutions (the Director) and the Australian Crime Commission (the ACC) with regard to two sets of documents. At the time I was in the course of a lengthy pre-trial hearing to determine notices of motion filed by the two accused. With the agreement of the parties, I pronounced my orders and indicated that I would provide my reasons later. The following constitutes those reasons.
Background
The two accused have been arraigned in this Court on an indictment alleging, in short, a conspiracy to defraud the Australian Taxation Office (the ATO) with regard to financial arrangements to do with the production of whisky in Scotland (the whisky schemes) that would have provided investors with substantial tax deductions. The overt acts relied upon by the Crown in proof of the conspiracy are alleged to be misleading oral and written statements made by the accused to officers of the ATO.
Each of the accused was compulsorily examined by the ACC. Each of them was also compelled to provide documentary material. I shall compendiously refer to the transcripts of the compulsory examinations and the documents provided as "the compulsorily acquired material".
Mr Tang, a financial analyst, had recourse to the compulsorily acquired material. So did Ms Simpkin, an investigator with the ACC. Each of them attended conferences with solicitors from the Office of the Commonwealth Director of Public Prosecutions (the OCDPP) and private counsel who had been retained by those solicitors. There was no dispute between the parties that some of the compulsorily acquired material was unlawfully supplied to the OCDPP generally, though not to any of the lawyers now retained by the Director.
In the course of the hearing of the motions, counsel for the two accused called upon subpoenas ordering production of documents generally created in preparation for those conferences and subsequently recording the contents and outcomes of them. The documents with regard to which the Director claimed privilege were produced to the Court and became MFI 1. Those documents were inspected by me without them being provided to counsel for the two accused, pursuant to s 133 of the Evidence Act 1995 (NSW). The same procedure was adopted with regard to the documents over which the ACC claimed privilege; they became MFI 4.
One of the orders in the notices of motion sought to have Mr Tang prohibited from giving evidence in the trial, because his proposed evidence of his understanding of the whisky schemes was, it was contended, unlawfully "infected" by his access to the compulsorily acquired material.
Another order sought to have the lawyers currently retained by the Director to prosecute the matters at trial prohibited from appearing. That order was based upon the proposition that it was possible that Mr Tang and Ms Simpkin had, by way of conferences with the lawyers and documents provided to them, informed them of material contained in the compulsory acquired material. To be clear, the contention of the two accused was not that the lawyers had knowingly obtained explicit knowledge of what was contained in the compulsorily acquired material; rather, it was that that could have occurred indirectly and without their knowledge.
Submissions
Mr Fagan SC and Mr McGuire, who appeared for both the Director and the ACC with regard to these claims of privilege only, submitted that the documents connected to the conferences gave rise to client legal privilege on two bases.
The first basis was s 118 of the Evidence Act, in that the solicitors and counsel present were engaging in confidential communications for the dominant purpose of providing legal advice to their client, the Director. Similarly, the solicitors of the OCDPP, and the barristers retained by them, were providing legal advice to the officers of the ACC, in accordance with the proper functions of those lawyers pursuant to s 6 of the Director of Public Prosecutions Act 1983 (Cth) (the DPP Act) and reg 3 of the Director of Public Prosecutions Regulations 1984 (the DPP Regulations) as amended in 1998.
The second basis was s 119 of the Evidence Act. Senior counsel submitted that third parties, in the form of potential witnesses or expert advisers (Mr Tang and Ms Simpkin), were being conferred with by the legal advisors of the Director for the dominant purpose of preparing for anticipated litigation; namely, the criminal proceedings by the Director against the two accused.
By the end of the oral submissions opposing the two claims for privilege, the position of the accused as to why the two claims should not be upheld had evolved to having two foundations.
The first was the proposition that, by purporting to charge the two accused in the Local Court, the ACC was acting unlawfully and beyond its powers. If that were the case, it could not have been a proper function of the ODPP to provide legal advice to the ACC. Accordingly, a privilege based upon s 118, and asserting that the lawyers were providing legal advice to the ACC, could not be upheld.
The second foundation was s 122(2) of the Evidence Act. The accused submitted that there was a real question in the hearing of the motions about the "infection" of the lawyers by way of things that they may well have been told by Mr Tang and Ms Simpkin. That question arose in the context of the Director having presented an indictment averring a serious criminal offence against the two accused. By way of claiming the privilege, the Director had effectively prohibited the accused from exploring that question, and litigating it properly before me. Particular emphasis was placed upon the following sentence from [44] of the unanimous judgment of the High Court of Australia in Lee v The Queen [2014] HCA 20; 88 ALJR 656:
It is the prosecution which has the responsibility of ensuring its case is presented properly and with fairness to the accused. [Citations omitted]
In short it was submitted that the Director had, by maintaining the prosecution in those particular circumstances, "acted in a way that is inconsistent with the claim for privilege."
No client legal privilege because of unlawful conduct?
I consider that the starting point of resolution of this dispute is to consider whether the relationships and dominant purposes that can give rise to client legal privilege have been established by the claimants on the balance of probabilities, pursuant to s 142 of the Evidence Act. To my mind, it is uncontroversial that the relationship between the Director and a solicitor of the OCDPP can be one of client and lawyer: see R v Bunting [2002] SASC 412; 136 A Crim 539 at [40]-[45]; R v Petroulias (No 22) [2007] NSWSC 692 at [56]. The same may be said of the Director and counsel who are briefed by his solicitors in order to provide legal advice to, and to conduct litigation on behalf of, the Director as client.
Having examined the documents for myself, and being careful to maintain their confidentiality, I express the opinion that they are entirely orthodox documents in preparation for, and recording the contents of, legal conferences, and on their face support the proposition that the relationships and purposes that underpin the sections of the Evidence Act were in existence at the time of the conferences.
As for the first submission of the accused, founded on unlawful conduct by the ACC, it was based on an analysis of a number of statutes.
It was accepted that s 6 of the DPP Act and regulation 3 of the DPP Regulations set out the lawful functions of the Director. They include, of course, prosecuting Commonwealth offences on indictment: see s 6(1)(a) and (e) of the DPP Act. It was also accepted that s 6(1)(n) permits the Director to act incidentally to that function. It was not disputed that the Director is also empowered to carry on proceedings instituted by a person who performs services for the ACC and to give advice to Commonwealth authorities about possible prosecutions: reg 3 cll (1)(a)(ii)(a) and (1)(f) of the DPP Regulations.
The real focus of the accused was not upon whether the Director was exceeding his functions in a direct sense, but rather upon the proposition that he was doing so by having his lawyers advise the ACC when the latter body was, in truth, exceeding its functions.
Section 7A of the Australian Crime Commission Act 2002 (Cth) (the ACC Act) sets out the lawful functions of the ACC. In a nutshell, the role of the ACC is to investigate and to gather intelligence, not to prosecute. It was said that the section must be read in light of s 59, which speaks generally of the provision of reports and the furnishing of information. In short it was said that prosecuting citizens is not one of the functions of the ACC. And yet, it was submitted, it can be seen from the Court Attendance Notices filed many years ago in the Local Court charging the two accused with criminal offences that the prosecutor was recorded as being Ms Simpkin, an officer of the ACC.
The proposition was that, in undertaking a prosecuting function, the ACC was acting beyond its powers and unlawfully. And if that be the case, it must also be the case that lawyers employed or retained by the OCDPP, in providing advice to the ACC, were acting beyond the functions and powers of the Director. In those circumstances, it cannot be the case that a privilege could be claimed, either by way of s 118 or s 119 of the Evidence Act.
I respectfully rejected that submission of the accused. I did so for three reasons.
The first was because I was not satisfied that, in truth, the ACC prosecuted anybody, even accepting for the sake of argument the statutory analysis to the effect that the ACC was not empowered to do so. To the contrary, I accepted the proposition of senior counsel for the claimants that, perhaps remarkably, s 13 of the Crimes Act 1914 (Cth) permits any person to commence a private prosecution for a federal offence (though no doubt subject to the intervention of the Director in due course). Ms Simpkin was such a person. The ACC is not recorded as being the prosecutor. Because I considered that the claimants had established on the balance of probabilities that the ACC did not undertake a prosecuting function, it followed that the first submission of the accused must fail.
The second, contingent reason for rejecting the first submission of the accused was as follows. Even if I be wrong in my analysis of who was the prosecutor in the Local Court, and even accepting for the sake of argument the proposition that the ACC was indeed acting unlawfully, I did not accept that that prohibits a claim for client legal privilege. There is nothing in ss 117, 118 or 119 of the Evidence Act to the effect that client legal privilege is lost if legal advice was given to, or legal preparation undertaken for, a client who was acting unlawfully. And the proposition of the accused may be tested by reflecting on a hypothetical example. A citizen attends upon his or her solicitor in order to discuss a dispute with a neighbour about a shed. In truth, the citizen is in the process of acting unlawfully, because the shed that the citizen has constructed is indeed encroaching on the property of the neighbour. It can hardly be the case that the citizen is prohibited from subsequently claiming client legal privilege with regard to the attendance on the solicitor because, at the time of that attendance, the claimant of client legal privilege was acting unlawfully. When I raised that hypothetical example with senior counsel for Mr McCarthy, I was not provided with any authority to the contrary; nor did counsel for Mr Seller do so.
The third and also contingent reason for rejection of the first submission was founded upon the principle in Grofam Pty Limited and Others v Australian and New Zealand Banking Group Limited and Others (1993) 45 FCR 445, a case to which counsel for the two accused invited me in accordance with their duty to the Court. In that case, in the context of it having been established that in truth no client legal privilege existed, the Federal Court stated at [456]:
When it is borne in mind that legal professional privilege is essentially concerned with the protection of the client, we consider that as a matter of judicial policy, communications between the client and a lawyer, which would normally be privileged, ought to be protected where the client involved genuinely believed that there was an entitlement to give the legal advice in question.
In short, even if it be the case that the ACC acted unlawfully and as a result there was no client legal privilege as a matter of theory, nevertheless, in the circumstances of this case, I consider that the ACC is entitled to maintain the privilege as a matter of practice.
In short, I rejected the first submission of the accused on three bases.
No client legal privilege because inconsistent with maintenance of prosecution?
Turning to the second basis upon which the two accused submitted that I should not uphold the two claims, founded upon inconsistency of conduct, the claimants did not dispute the proposition of the accused that considerations of fairness can inform the test contained in s 122(2) of the Evidence Act: see Mann v Carnell [1999] HCA 66; 201 CLR 1 at [29] and Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475. I also accepted that proposition, and consider that such considerations should have particular force in the context of a claim for privilege by the Crown in the course of a trial on indictment.
I also accepted without difficulty the proposition that there are certain cases in which a claim for privilege can be inconsistent with the maintenance of the proceedings themselves, and as a result the claim should not be upheld: see generally DSE (Holdings) v Intertan Inc [2003] FCA 384, 127 FCR 499 (the submission that merely by joining issue on the pleadings with an allegation made by one's opponent that one had a certain state of mind led to waiver of privilege with regard to legal advice connected to that state of mind was rejected); Telstra Corporation Ltd and Another v BT Australasia Pty Ltd v Another (1998) 85 FCR 152, (by majority, privilege found to have been waived with regard to legal advice relevant to reliance by inconsistency in pleading an action founded upon reliance on the representations of the defendant). Perhaps the paradigm would be civil proceedings in which a client sues his or her legal adviser for having given negligent advice, and the client relies upon evidence as to what passed between the client and the lawyer. If the lawyer sought in response to provide his or her alternative version as to what had been said between the two of them, it is inconceivable that the client would be permitted to claim privilege, thereby prohibiting the lawyer from placing his or her version of the crucial conversations before the court for determination.
But that paradigm, in which a successful claim of privilege would really make a forensic response of the opponent to the cause of action impossible, is very far from the circumstances of this case. The evidential foundation of the criminal cause of action brought by the Director against the two accused is, in a nutshell, the untruthful things they allegedly said and wrote many years ago. It is true that the access by Mr Tang and Ms Simpkin to the compulsorily acquired material, and the use they may have made of it subsequently, were important issues on the motion. However, when it comes to assessing true inconsistency between, on the one hand, claiming client legal privilege with regard to a number of legal conferences in which they engaged and, on the other hand, with the maintenance of a prosecution founded on events years beforehand, I assess the conduct of the Director as being by no means inconsistent, in the sense discussed in the cases to which I was invited.
As I have said, the two accused submitted that the discussion of the duty of a prosecutor in Lee v The Queen at [44] supports the proposition that it is a responsibility of the Crown to ensure that an accused person has a fair trial. I had no difficulty in accepting the proposition that the statements of principle in Lee v The Queen are important ones, and are not arbitrarily confined to the extreme facts of that case. Nor did I have difficulty in accepting the proposition that one of the many responsibilities of a prosecutor is to assist in ensuring that an accused person receives a fair trial according to law. But to base on that portion of Lee v the Queen the submission that, in the circumstances that I have outlined, the Director should in effect be forced either to discontinue the proceedings completely or to provide the privileged documents in question to the two accused is, to my mind, a very large extension of the principles discussed by the High Court in that case.
Summary of evidentiary ruling
In short, I upheld the two claims to privilege on the following bases.
First, I was satisfied on the balance of probabilities that the requisite relationships of lawyer, client, and third party, and the requisite dominant purposes with regard to confidential communications, as called for in ss 118, 119 and 117 of the Evidence Act, had been established on the balance of probabilities.
Secondly, I rejected the proposition that the ACC had done anything unlawful or beyond the proper exercise of its functions.
Thirdly, if, to the contrary, it was the case that the ACC had done something unlawful or improper, I rejected the proposition that that meant that client legal privilege could not be claimed.
Fourthly, if it be the case that, due to some illegality on the part of the ACC it in truth possessed no client legal privilege, I considered that Grofam Pty Limited v Australia and New Zealand Banking Group Limited stands as authority for the proposition that it should nevertheless be entitled to claim privilege.
Fifthly, I rejected the proposition that, in the circumstances of this case, the principles discussed in Lee v the Queen meant that the test contained in s 122(2) of the Evidence Act had been made out.
[3]
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Decision last updated: 24 September 2015