Seven Network Limited v News Limited

LEAVE TO APPEAL 5 The Court has a wide discretion to grant leave to appeal from an interlocutory judgment. The exercise of the discretion is not constrained by rigid rules but is ordinarily guided by well‑recognised principles (see Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397). Consideration is usually given to whether the judgment is attended with sufficient doubt to warrant its being reconsidered and to whether substantial injustice would result if leave were refused supposing the judgment to be wrong. Leave is more readily granted where the judgment, if allowed to stand, will have the practical effect of determining the claim of a party to relief (Johnston v Cameron (2002) 124 FCR 160). 6 In this case, if the judgment of the primary judge is allowed to stand, the applicants' privilege, if any, in respect of the masked portion of the document will be lost. It is also of significance, in my view, that the case of the applicants is founded on O 33 r 11 of the Federal Court Rules ('the Rules'). No Full Court has to date given consideration to the proper construction of this rule which was amended in 2002 as a consequence of the enactment of the Evidence Act 1995 (Cth) ('the Evidence Act'). 7 The above considerations, in my view, warrant the grant of leave to appeal in this case.

the appeal 8 The appellants' opposition to the respondents' claim to be entitled to inspect the whole of the ACCC file note ('the File Note') is based upon two legal contentions. First, that at trial Division 1 of Part 3.10 of the Evidence Act, which is concerned with client legal privilege, will prevent evidence being adduced of that portion of the File Note that has been masked on the copy of the File Note provided to the respondents. Secondly, that O 33 r 11 of the Rules, on its proper construction, prevents the Court from compelling production of a document which could not be adduced in evidence at trial because of client legal privilege. 9 It is convenient to consider the second of the above contentions first. If it cannot be sustained it will be unnecessary for this Full Court to determine whether the appellants' contentions concerning the operation of Division 1 of Part 3.10 of the Evidence Act in respect of the File Note is correct. 10 Order 33 of the Rules is headed 'Evidence: General'. The rules contained in O 33 are, in general terms, concerned with the adducing of evidence at trial. For example, rule 1 provides that unless the Court otherwise orders, or the parties otherwise agree, the evidence of a witness at trial shall be given orally. Rule 15 authorises orders to ensure that evidence may be taken from a prisoner in lawful custody. Rules 16‑19 concern the giving of notices under the Evidence Act. 11 Order 33 rule 11 is in the following terms: '11 Privilege (1) Where the Court, by subpoena or otherwise, orders any person to produce any document or thing, and any person makes and substantiates sufficient lawful objection to production on grounds of privilege, the Court shall not compel production of that document or thing except production to the Court for the purpose of ruling on the objection. (2) Where a question is put to a person in the course of examination, and any person makes and substantiates sufficient lawful objection on grounds of privilege to the question being answered, the Court shall not compel an answer to the question. (3) Subrule (1) applies where an order is made for production to, and subrule (2) applies where a question is put to a person in the course of examination before, the Court or any officer of the Court, or any examiner, or other person authorized to receive evidence, whether on a trial or hearing or on any other occasion. (4) This rule does not affect any rule of law which authorizes or requires the withholding of any document or thing or the refusal to answer any question on the ground that the disclosure of the document or thing or the answering of the question would be injurious to the public interest. (5) In this rule: ground of privilege means a ground on which a person may rely to make an objection under Part 3.10 of the Evidence Act 1995.' 12 Subrule (5) of O 33 r 11 was inserted by Statutory Rule 130 of 2002. The insertion of subrule (5) was recommended in Appendix A of Report No 38 of The Law Reform Commission. Report No 38 was a report concerning the laws of evidence in proceedings in Federal Courts and the Courts of the Territories. Appendix A of Report No 38 contains the following note: 'In several instances the Evidence Bill 1987 deals with matters which, at present, are also dealt with by rules of the relevant courts. It is not appropriate to amend such rules by legislation. It may be of assistance, however, to note those rules which the Commission considers ought to be repealed or amended when the Bill is enacted.' 13 Because Report No 38 was concerned with laws of evidence, the Evidence Bill 1987, which was an annexure to Report No 38, did not deal with issues of practice and procedure arising earlier than the trial process. This was recognised by The Law Reform Commission which in Report No 38 at [199] observed: 'Situations may arise where a party obtains access to documents outside the courtroom which are protected in the courtroom by the proposed privilege. Under the proposal, the privilege will still apply in the courtroom unless the client voluntarily disclosed the document. Having wider access on discovery or under a search warrant is usual. Access is not determined by the rules of admissibility such as relevance and hearsay. It is not unreasonable to have wider access in the investigative stage.' 14 The above factors suggest that it is unlikely that The Law Reform Commission intended, by recommending the insertion of subrule (5) in O 33 r 11, to cause its recommendations concerning client legal privilege to operate at what it described as 'the investigative stage'. 15 Moreover, and more importantly, it seems unlikely that the Judges of the Federal Court intended the insertion of subrule (5) in O 33 r 11 to extend the operation of Division 1 of Part 3.10 of the Evidence Act to pre‑trial procedures. In the area of production of discovered documents a Full Court of the Federal Court constituted of five judges in Esso Australia Resources Ltd v Commissioner of Taxation (1998) 83 FCR 511 had expressed the unanimous view that it would be an improper use of the Court's discretionary power to exclude from production discovered documents only because, although not attracting legal professional privilege at common law, they would attract client legal privilege under the Evidence Act (per Black CJ and Sundberg J at 527; Merkel J, with whom Beaumont J agreed, at 557 and Finkelstein J at 572). 16 The doctrine of legal professional privilege prevents disclosure of certain classes of documents notwithstanding their relevance to a proceeding in the Court. However, the mere fact that a document that might prove relevant to a proceeding falls outside any category of privilege does not give a party to that proceeding an enforceable right to inspect it. Various provisions of the Rules reflect the practice of the Court to exercise control over the compulsory disclosure of documents in the course of litigation. For example, Order 15 gives the Court control over the processes of discovery and inspection of documents, including over the extent of discovery to be given in a particular proceeding and over the time at which inspection of discovered documents may be taken (see particularly rules 1 and 15). Order 27 gives the Court control over the pre-trial production to litigants of documents in the custody of the Court following compliance with a subpoena (see particularly rule 13). Order 33 rule 11, as it seems to me, is intended to give the Court (using that term in the broad sense) control when conducting a hearing (again using that term in a broad sense) over the production of documents brought to the Court at that time in compliance with a subpoena. 17 The key to the intended operation of O 33 r 11(1) is, in my view, to be found in O 33 r 11(3). Although subrule (3) is not a model for clarity, its purpose, as it seems to me, is to limit the operation that subrules (1) and (2) respectively would otherwise have because of the general terms in which they are drawn. The effect of subrule (3), so far as O 33 r 11(1) is concerned, is to limit the operation of O 33 r 11(1) to circumstances in which an order is made for production of a document or thing to the Court, or a person of the kind identified in subrule (1), at a time when the Court, or that person, is authorised to receive evidence. That is, in circumstances in which the order to produce the document or thing is made to facilitate its being immediately adduced in evidence. The intended effect of O 33 r 11 is to remove the obligation that would otherwise arise in these circumstances for an objection to the production of the document to be determined according to common law principles notwithstanding that its admissibility into evidence will be governed by the Evidence Act. Order 33 r 11 allows the objection to production to be subsumed into the ruling on admissibility. In respect of a document that may not be adduced in evidence by reason of client legal privilege under the Evidence Act, the Court exercises its control over matters of practice and procedure by refusing to compel production of the document notwithstanding that it is not a privileged document at common law. 18 Order 33 r 11 is not, in my view, intended to establish a regime alternative to that to be found in O 27 of the Rules for the inspection of, and dealing with, documents produced to the Court in response to a subpoena which does not require production of documents to the Court in the course of a trial.

conclusion 19 For the above reasons I conclude that the appellants' reliance on O 33 r 11 is ill‑founded. The appellants did not contend that the file note which the respondents seek to inspect attracts legal professional privilege at common law. It is plain that it does not. It purports to be a record of things said at a meeting between representatives of the appellants and officers of the ACCC. Whether, as a result of things said at that meeting, the appellants waived legal professional privilege in respect of an earlier confidential communication to them of legal advice is not a question for determination on this appeal. 20 The appropriate orders, in my view, are that the applicants be granted leave to appeal and the appeal dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

NEW SOUTH WALES DISTRICT REGISTRY NSD 1095 of 2005

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT ALLSOP J 21 I have had the advantage of reading in draft the reasons for judgment of Branson J. I agree with them and with the orders that her Honour proposes. 22 The applicants sue the respondents and others in respect of conduct that is said to amount to contraventions of the Trade Practices Act 1974 (Cth). The substantive complaints of the applicants concerned the activity of the respondents in respect of bidding for rights to broadcast on television different codes of football, AFL and Rugby League. A pay television channel owned or run by the applicants, or one or more of them ("C 7") had, at that time of the impugned conduct of the respondents, the AFL rights. It lost those rights to rivals after the negotiations the subject of complaint. 23 The applicants, by detailed written and oral submissions, sought to persuade the Australian Competition and Consumer Commission (the "ACCC") to take legal action against, or at least commence an investigation into the bidding of, the respondents, or some of them. The ACCC declined to take that course. Thereafter, the applicants brought proceedings themselves. Those proceedings are due to commence in this Court on Monday, 18 July 2005 and are expected to take up considerable hearing time. 24 As part of what might be called the lobbying of the ACCC, a meeting was held on 12 December 2000. In attendance were three senior executives of two of the applicant companies, two partners of the solicitors then (and now) acting for the applicants and two officers of the ACCC. There can be no doubt that at the meeting the applicants, in particular through Mr Gray and Mr Gammell, one of the solicitors and one of the applicants' officers, respectively, sought to convince the ACCC of the anti-competitive nature of what the notes of the meeting described as "the joint bid for AFL broadcasting rights by News Ltd, the Nine Network, Telstra and the Ten Network". 25 The first point made by Mr Gray at the meeting was to convey to the ACCC officers a summary of relevant legal advice of counsel said to have been received by one of the applicants in respect of the bidding process for the AFL broadcast rights. 26 A subpoena to the ACCC was issued calling for, amongst other documents, the ACCC's file note of the meeting. The file note of the meeting contains a record of Mr Gray's summary of counsel's advice. The respondents sought production of, and access to, the whole of the note. The applicants resisted that course claiming that the part of the note recording what Mr Gray said about counsel's advice was subject to (their) legal professional privilege. 27 The primary judge (not the proposed trial judge) rejected that claim. Leave to appeal has been sought. The question of leave has been argued together with the substance of the appeal. The arguments, reduced to their essentials, raised the following questions. 28 First, does Order 33 rule 11 govern the question of production of the document under subpoena in these circumstances, that is before the commencement of the trial? 29 Secondly, if it does, is production of the document not compellable under Order 33 rule 11 on grounds of privilege, by reference to Part 3.10 of the Evidence Act 1995 (Cth) (the "Act")? 30 Thirdly, if it does not, is production or inspection of the document prevented by the common law? 31 In my view, the answers to these questions are: no, does not arise and no. My reasons are as follows. 32 The Act makes a clear distinction in relation to legal professional privilege between the adducing of evidence (to which the Act applies) and the earlier stages of the trial and litigation process to which it does not. It is evident that this was a deliberate choice of the Law Reform Commission. There is no need to recite the judicial attempts to harmonise or integrate the two regimes. Since Esso Australia Resources v Commissioner of Taxation (2001) 201 CLR 49, it is clear that the two regimes - that of the common law of Australia, and the Act and equivalent legislation in New South Wales, Victoria and the Australian Capital Territory - are distinct in their operation, albeit underpinned by the same dominant purpose test. 33 Orders 33 and 34 of the Federal Court Rules were amended in 2002 (Federal Court Amendment Rules 2002 (No. 1)) in a manner conformable with recommendations made by the Australian Law Reform Commission: Report 38, Appendix A p 267. These changes were introduced to bring relevant aspects of the Rules into conformity with the operation of the Act. It was not an attempt by the exercise of the rule making power to have all questions of production at any stage of the litigation process brought under a regime governed in accordance with the Act. That may or may not be a sensible course; the rule making power may or may not extend that far: cf. Esso Australia Resources v Commissioner of Taxation (1998) 83 FCR 511 at 527, 568 and 572. Order 33 rule 11 is in a part of the Rules dealing with evidence. Subrule (3) identifies the circumstances where subrule (1) applies. It refers in the last clause to 'whether on a trial or hearing or any other occasion'. This reference is, however, to occasions for the taking of evidence. Rule 11 seeks to make clear that at the occasion of the trial or hearing or other reception of evidence the production of documents under subpoena will be governed by theAct. Such a course ensures that during the process of the trial or hearing or other reception of evidence there will not be two regimes under which to analyse privilege: that is, the Act at, but only at, the immediate point of adducing evidence, and the common law at the point of answering a call or subpoena. This is not to neuter the provision, as Mr Sheahan SC, who appeared on behalf of the applicants, submitted; rather, it is to make for a more coherent and simplified hearing process. 34 The inapplicability of the Act makes the second question unnecessary to answer. It was, however, argued, and, in those circumstances and in case the above construction of Order 33 rule 11 be found to be wrong, I propose to express my view that the answer is, no. 35 The primary contention of the applicants was that the production and disclosure of the document (or the adducing of evidence of the document), being secondary evidence in summary form of the advice of counsel, would result (contrary to s118 or s119 of the Act) in disclosure of the confidential communication made between the client and a lawyer (the original advice) for the dominant purpose either as found in s 118 or in s 119 of the Act. The above contention rested for its correctness upon the communication to the ACCC being a "confidential communication" as defined in s 117 of the Act. The primary judge concluded that it was not a confidential communication. In my view, his Honour was correct. There was undoubtedly a policy of the ACCC to treat information given to it by informants or under compulsory process with a degree of confidence. Mr Gray was aware of that policy. No doubt, an argument would be mounted based on public law notions of legitimate expectations and, perhaps, procedural fairness, that warning should be given before any departure from that policy. That is not to say, however, that as between these parties on 12 December 2000 it could be said that the ACCC was obliged not to disclose the contents of the communications made to if by Mr Gray and others. No doubt, the applicants hoped that their urging of the ACCC would result in steps being taken contrary to the interests, legal and commercial, of the respondents. It was hoped that the rival bid or the bidding process would be impeded or interrupted. That, it is apparent, was the idea. In those circumstances, it must have been plain that it was at the very least possible, if not likely, that should the ACCC succumb to the persuasion of the applicants it may have to justify, publicly, its course of action, and, thus, to the extent that the advice that the applicants had received from counsel, as put to the ACCC by Mr Gray, was part of those reasons, it may have to be disclosed. Mr Gray told the ACCC of counsel's advice in order to persuade the ACCC to act upon it as a relevant consideration. In those circumstances, it can hardly be said that the ACCC was obliged not to disclose the communication made to it by Mr Gray on behalf of the applicants. Naturally, the ACCC was not free to communicate the information otherwise than for the purposes of carrying out its functions. Nevertheless, if it decided to act, one of the things that it needed to be in a position to do was justify its course of action. Mr Gray thought the advice of counsel was sufficiently important to raise, and to raise as the first matter at the meeting. As such, it can be taken as a matter, which, the parties must be taken to have appreciated, might have to be disclosed in any explanation as to why public funds were being expended at the instigation and urging of a substantial commercial organisation. This is not a matter of subjective appreciation, but one of the objective analysis of the uncontroversial facts. 36 I should add that there was no suggestion that anything that was said at the meeting of 12 December 2000 by Mr Gray was accidental, unintended or without instructions. 37 As to the third question, the occasion of the meeting was not privileged. The applicants decided to communicate the substance of a privileged communication to the ACCC. As between the applicants and the ACCC there was a non-privileged disclosure. A note was made by an ACCC officer. The making of such a note was no doubt something which was foreseeable and foreseen. The ACCC was being asked to act on the communication. The note was a record of a non-privileged communication made with the consent of the parties at the meeting. The note is simply not privileged. 38 Whether or not the limited disclosure to the ACCC on a non-privileged occasion works any wider waiver, such as to the original advice of counsel (cf Goldberg v Ng (1995)185 CLR 83) is not an issue before us. The only issue is whether the record of a non-privileged communication made by the recipient of that communication can be treated as privileged because of the existence of antecedent privilege in one part of the subject matter of the communication. In my view it is not. Mr Gray told the ACCC of the substance of counsel's advice. That communication was not privileged. A record of that non-privileged communication was made. That record was and is not privileged. It should be produced. 39 The decision of Lehane J in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2000] FCA 593 does not lead to the conclusion that the document here is privileged. Lehane J dealt with the matter before him (being a communication within a group and otherwise attracting common interest privilege) on the basis of Mann v Carnell (2001) 201 CLR 1. That case concerned the question whether there was a loss of the privilege in relation to an original advice by it being shown to a third party, Mr Moore. If, however, the reasons of Lehane J can be taken as support for the contention that a note by a third party of a non-privileged disclosure of legal advice is subject to a derived or derivative privilege of the

discloser, then I would, respectfully, disagree. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

NEW SOUTH WALES DISTRICT REGISTRY NSD 1095 of 2005

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

EDMONDS j 40 I have had the advantage of reading in draft the reasons for judgment of Branson J and the reasons for judgment of Allsop J. I agree with both and with the orders Branson J proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

Associate: Dated: 7 July 2005 Counsel for the Applicants/Appellants: J Sheahan SC and S Nixon

Solicitor for the Applicants/Appellants: Freehills

Counsel for the Respondent: N Hutley SC and C Mantziaris

Solicitor for the Respondent: Allens Arthur Robinson

Date of Hearing: 4 July 2005

Date of Judgment: 7 July 2005