Stanizzo v State of New South Wales

Stanizzo v State of New South Wales - [2018] NSWSC 2003 - NSWSC 2018 case summary — Zoe

The principle relating to privilege

The commencement point for an examination of whether privilege arises is the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") at r 1.9 which allows persons to object to producing a document on the ground that the document is a privileged document and permits a court to deal with those matters at the point in time that production is sought to be required. The Dictionary to the UCPR defines a "privileged document" to mean "a document that contains privileged information".
"Privileged information" means, amongst other things, information that could not be adduced in evidence by virtue of the operation of Division 1 of Part 3.10 of the Evidence Act 1995 (NSW), but does not include information that the relevant court declares not to be privileged information for the purposes of the proceedings.
The Court notes that the term "document" includes part of a document. If the definition of "privileged document" takes account of the definition of "document" then a "privileged document", part of which contains "privileged information", may be redacted to exclude that part which is privileged and the remainder of the document would then cease to be a "privileged document".
The Court has dealt at more length than is usual with the terms of the UCPR, because often parties deal directly with the Evidence Act, without realising that the application of the privileges in the Evidence Act have arisen for some significant time from the operation of UCPR r 1.9 and the definitions of privileged information and privileged document in the UCPR. More recently, namely in or about 2011, the Evidence Act was amended by the insertion of s 131A, which extends the application of most of the privileges upon which parties rely to any disclosure requirement, which is defined to include notices to produce, subpoenas to produce and other like compulsory production.
The Director of Public Prosecutions ("the DPP") relies on the provisions of s 119 of the Evidence Act. Before setting out the terms of s 119 of the Evidence Act, it is appropriate to make some comment on the structure of the Act.
The Evidence Act defines relevance to mean evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings. All relevant evidence is admissible.
The statute then sets out a number of exceptions to the admissibility of relevant evidence. For present purposes, it is sufficient to note the existence of s 118 of the Evidence Act, which prohibits the adducing of evidence, over the objection of a client, where the relevant court finds that adducing the evidence would result in: the disclosure of a confidential communication between the client and a lawyer; or between two or more lawyers acting for the client; or a document prepared by the client, lawyer or another person; in circumstances where such communication or document was for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
None of the communications between complainants in the criminal proceedings and lawyers acting for the Crown or prosecution in the criminal proceedings are alleged to be in the category of that protected by s 118 of the Evidence Act.
Of most relevance is the provision upon which the DPP relies, namely, the provisions of s 119 of the Evidence Act, which are in the following terms: "119 Litigation 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 between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party."
As is clear from the foregoing recitation, in order to object to the producing of evidence (or in this case, the production of a document) the Court is required to find that the production would result in the disclosure of a confidential communication between the client and another person for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding. In this case, the client is the DPP (or its officers), including the State of New South Wales, and that which must be shown in order for the objection to succeed is that there was a confidential communication between the DPP (the client) and another person (Valvano/Fregnan and Badarne) for the dominant purpose of the DPP being provided with professional legal services relating to the criminal proceedings in which the DPP is or may be a party.
Plainly, leaving aside the niceties associated with whether it is the Crown or the DPP that appears in criminal proceedings, the Court is satisfied that the DPP is, may be or might have been a party to the criminal proceedings. It is necessary to deal more fully with the nature of the "client".
The Statement of Claim, filed by the plaintiff, Mr Stanizzo, is against the State of New South Wales. The State of New South Wales is sued, under the Crown Proceedings Act 1988 (NSW) and the Law Reform (Vicarious Liability) Act 1988 (NSW), as being the entity liable for the tortious acts of the offices of the New South Wales Police Service and of officers of the Office of the DPP. As a consequence, it is necessary for the Court to be satisfied that the dominant purpose of the officers of the DPP, in receiving the confidential communication from the complainants, was for the purpose of the DPP being provided with professional legal services.
The difficulty in such an analysis is obvious. It was the DPP that was providing the professional legal services.
If the DPP (including its officers) are treated as the client for the purposes of s 119 of the Evidence Act, it is difficult to claim that the dominant purpose of the DPP was it being provided with professional legal services. There may be, although, again, I have doubt, a better argument, if it were the police officers that were the client and the communication between the DPP and the complainants was for the purpose of the police officers being provided with professional legal services.
On the other hand, if the effect of the Crown Proceedings Act and the Law Reform (Vicarious Liability) Act is that one treats the State of New South Wales as the client, where that term is used in s 119 of the Evidence Act, it may be that that the dominant purpose of the State of New South Wales engaging in the confidential communication was the provision, by the DPP, of professional legal services.
However, if that approach were to be taken, there is a clear tension between the "dominant purpose of the client" and the undertaking of a "confidential communication between the client and another person". The other person in s 119 (a) of the Evidence Act is one or other of the complainants.
If it were the State of New South Wales that prosecutes charges, utilising the DPP, then the communication between the complainants and the officers of the DPP may be a confidential communication, between a lawyer (the DPP), acting for the State of New South Wales, and another person (the complainant), for the dominant purpose of the State of New South Wales being provided with the professional legal services of the DPP, relating to an Australian proceeding. The difficulty with that analysis is that, at least on my understanding of the criminal process, the State of New South Wales is not and never would be a party to the criminal proceedings.
I have some real doubt as to whether s 119 operates at all in the circumstances suggested by the DPP in these proceedings. This is because if the DPP were the client, the confidential communication (assuming for present purposes that the communication was confidential) between the DPP and the complainant was not for the dominant purpose of the DPP being provided with professional legal services.
Secondly, if the State of New South Wales were the client or the police officers were the client, and Ms Rallis and Mr Barr were lawyers acting either for the State of New South Wales or the police officers, then the communication, again assuming they were confidential, between the DPP, acting as a lawyer for the client or clients and the complainants, would be caught by s 119(a) of the Evidence Act, but neither the State of New South Wales nor the police officers could ever have been party to the proceedings for which the confidential communication was made or received.
The plaintiff also relies upon the provisions of s 125 of the Evidence Act, which is in the following terms: "125 Loss of client legal privilege: misconduct (1) This Division does not prevent the adducing of evidence of: (a) a communication made or the contents of a document prepared by a client or lawyer (or both), or a party who is not represented in the proceeding by a lawyer, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty, or (b) a communication or the contents of a document that the client or lawyer (or both), or the party, knew or ought reasonably to have known was made or prepared in furtherance of a deliberate abuse of a power. (2) For the purposes of this section, if the commission of the fraud, offence or act, or the abuse of power, is a fact in issue and there are reasonable grounds for finding that: (a) the fraud, offence or act, or the abuse of power, was committed, and (b) a communication was made or document prepared in furtherance of the commission of the fraud, offence or act or the abuse of power, the court may find that the communication was so made or the document so prepared. (3) In this section: power means a power conferred by or under an Australian law."
The effect of s 125 of the Evidence Act is to overcome the operation of either s 118 or s 119 of the Act. It provides that the Division, which relevantly contains s 118 and s 119, does not prevent the adducing of evidence in certain circumstances. Those circumstances are where: the contents of a document are prepared by a client or lawyer (or both); in furtherance of the commission of a fraud or an offence; or the commission of an act that renders a person liable to a civil penalty; or the contents of a document that the client or the lawyer knew or ought reasonably to have known was made or prepared in furtherance of a deliberate abuse of power.
In the circumstances of these proceedings, s 125(2) of the Evidence Act has operation. As a consequence, the Court, where a fact in issue is the existence of the fraud or abuse of power, may find that the communication was so made, if there are reasonable grounds for that finding.
The proceedings for malicious prosecution involve proceedings in which the abuse of power is a fact in issue and therefore the provisions of s 125(2) of the Evidence Act apply. For obvious reasons, which include that the Court at the interlocutory stage ought not to be required to make findings that, in effect, would resolve the final hearing, the legislature has allowed the Court to rule on the loss of client legal privilege under s 125 of the Evidence Act, if the Court finds that there are reasonable grounds for the document being prepared in furtherance of the abuse of power (amongst other factors).
In the Statement of Claim, the plaintiff does not claim damages against either one of the complainants, but only against the State of New South Wales pursuant to the statutes to which earlier reference has been made. There are other proceedings that relate to the complainants.

[4]

Submissions

The State of New South Wales claims that s 119 of the Evidence Act applies because it is the DPP that is the client and Ms Rallis and Mr Barr are lawyers acting for the client, for the dominant purpose of the DPP being provided with professional legal services, in circumstances where the DPP is, or may be, a party to the proceedings for which the document was prepared.
The definitions, in s 117 of the Evidence Act, define a "client" as including a person or body that employs a lawyer, including employing them under a contract of service. As a consequence, an employed lawyer, who provides advice to the employer, is a situation contemplated by the statute to involve the privilege created by either s 118 or s 119 of the Evidence Act.
On the other hand, a "lawyer" means, relevantly, an employee of a lawyer referred to in paragraph (a), (b) or (c) of that definition. The DPP is appointed under the Director of Public Prosecutions Act 1986 (NSW) by the Governor and is responsible to the Attorney General.
Pursuant to the provisions of s 31 of the Director of Public Prosecutions Act, which, in turn, imports the provisions of Schedule 1, the DPP is required to be an Australian lawyer of at least seven years' standing. As a consequence, an employee or agent of the DPP is a "lawyer" within the meaning of s 117 as a "lawyer", being an employee of an Australian lawyer.
The fundamental difficulty with the argument, as noted earlier, is that it elides the notion of client and lawyer. A lawyer employed by the DPP is, at the time that he is acting as an employee, for all purposes, the DPP. It is the DPP that conducts prosecutions on behalf of the Crown: see s 7 of the Director of Public Prosecutions Act and, otherwise, acts on behalf of the Crown, in the institution and conduct of appeals in relation to indictable offences. It is stretching the ordinary meaning of the term "lawyer representing the client" to refer, in that way, to an employee of the DPP, acting in the prosecution of criminal proceedings, where the client is alleged to be the DPP, itself.
In the context of the plaintiff claiming absence of reasonable and probable cause to commence and maintain the prosecution and malice and the defendant denying each of those elements of malicious prosecution, the existence of reasonable and probable cause to commence or maintain the prosecution is an issue of fact in the proceedings. The information available to the defendant (through the particular officers) is a matter directly going to the reasonable and probable cause that was required in order to commence or maintain the prosecution.
The requirement to prove malice, is more difficult. It requires, as the authorities suggest, the existence of a state of mind in those operating as the prosecutors to commence the proceedings or maintain the proceedings for a primary purpose other than that of carrying the law into effect.
The plaintiff claims that the state of mind of the responsible officers, Mr Barr and Ms Rallis, in regards to the veracity, credibility and reliability of the complainants and certain Crown witnesses, is an aspect that is extremely relevant to the existence of malice or a primary purpose other than that required by the law.
The plaintiff, as a consequence of the foregoing, submits that the state of mind of each of Mr Barr and Ms Rallis was informed and formed by reference to the communications and/or conferences to which objection is taken. Therefore, the plaintiff submits, the communications and/or conference notes are directly in issue.
The fact, if it be the fact, that the communications and/or conference notes are directly in issue is not the requirement that determines or informs the objection to production of the documents on the basis of legal professional privilege embodied by s 119 of the Evidence Act. The Court accepts that Mr Barr and Ms Rallis formed their purpose and state of mind on the basis of the communications and/or conferences. So much, inferentially, arises from the evidentiary statements of each of Ms Rallis and Mr Barr.
Further, the plaintiff submits that the defendant's claim for privilege is misconceived, because the communications between the complainants and/or witnesses and the officers of the DPP were not "confidential communications", because neither the person who prepared it nor the person to or for whom it was prepared was "under an express or implied obligation not to disclose its contents": s 117 of the Evidence Act. In part at least, the plaintiff claims that the obligation of disclosure, resting on the DPP or the particular lawyers in his employ and concerned with the conduct of the criminal proceedings, is inconsistent with the required obligation of confidentiality that must be satisfied before legal professional privilege arises.
The requirement to disclose, which arises under s 141 and is detailed in s 142 of the Criminal Procedure Act 1986 (NSW) and the provisions of s 149F(6) of the Criminal Procedure Act, as it currently exists, provides that the Division does not affect "any immunity" that applies by law to the disclosure of any information. The predecessors to the provisions of s 149F and ss 141 and 142 were, relevantly, to the same effect.
The plaintiff submits that the saving provision for legal professional privilege does not elevate a document that is not otherwise the subject of legal professional privilege to such a document. Because the notes would not otherwise be confidential information, the provision saving legal professional privilege from abrogation does not assist the plaintiff.
Next, the plaintiff submits that the State of New South Wales has waived the privilege that otherwise may exist in regard to the documents. The waiver has occurred because the statements of Ms Rallis and Mr Barr refer to their states of mind based on the communication contained within the documents and, in attempting to establish the presence of reasonable and probable cause to prosecute and the absence of malice, refer to such communications. As a consequence, the communications at conference or otherwise are relied upon by the defendant and the privilege has been waived
The defendant raises three fundamental issues: whether the states of mind of Ms Rallis and Mr Barr are, in truth, in issue; whether the claim for privilege over documents is inconsistent with the duty of disclosure, such that privilege did not attach to those notes; and, thirdly, whether the privilege, if it were to have existed, was abandoned or lost or waived, either because of the duty of disclosure or by the service of evidentiary statements of Mr Barr and Ms Rallis.
The defendant, correctly, submits that the plaintiff must prove that the prosecutors did not honestly or reasonably form the view that there was a proper case for prosecution, or formed that view on an insufficient basis, in order to prove that there was an absence of reasonable and probable cause. Further, the defendant submits that, in order for the plaintiff to prove malice, the plaintiff must prove that the dominant purpose of the prosecutors was a purpose other than the proper invocation of the criminal law. Again, this is a correct statement of the law as has been explained earlier in these reasons.
Ultimately, the defendant submits that the nature of the claim does not necessarily involve the proposition that the plaintiff has put in issue the state of mind of Mr Barr and Ms Rallis. The Defence to the Statement of Claim has denied that either officer acted with an absence of reasonable and probable cause or acted with malice. The defence makes no positive assertions concerning the state of mind of either Mr Barr or Ms Rallis.
As to the detailed aspects of the argument, the defendant refers to the definitions in s 117 and to the privilege in s 119 of the Evidence Act.
The defendant submits that the DPP was the client as referred to in s 119 of the Evidence Act and was entitled to object to the production of the conference notes and/or communications. The purpose of the communication between the witnesses and the lawyers was for the purpose of pending criminal proceedings and were confidential communications. As a consequence, both the documents and the conference notes (if they be different) are documents that are privileged: Sugden v Sugden [2007] NSWCA 312 at [68]-[69], [74], per McDougall J, with whom Mason P and Ipp JA agreed.
There is no dispute by the defendant that the DPP had a continuing duty to disclose certain matters pursuant to common law obligations and to the duties imposed upon the DPP by the Criminal Procedure Act. The defendant relies upon the discussion in R v Petroulias (No 22) (2007) 213 FLR 293; [2007] NSWSC 692, particularly at [63]-[65]. It is not, according to the defendant's submission, relying on the discussion in Petroulias, for the Court to review the DPP's discharge of his duty, and the obligation to disclose all documents, to which the duty attaches, does not bear upon the existence of the privilege under the Evidence Act or at common law.
The defendant submits that the discussion in Petroulias covers precisely that which is before the Court in the current proceedings.

[5]

Consideration

As indicated earlier, I have serious doubt as to whether the provisions of s 119 of the Evidence Act apply to the DPP as a client in circumstances where it is the Office of the DPP that is purporting to act as the lawyer. Employed solicitors and Crown Prosecutors at the DPP, when carrying out their functions under the Director of Public Prosecutions Act, are the DPP. The provision in the definition of "lawyer" that includes employees of a client is intended to apply to a lawyer employed by a person or body that is not, itself, acting as the lawyer. The alternative means that the DPP would be both a client and a lawyer under the definitions in s 117 of the Evidence Act.
Nevertheless, for the present purposes I am prepared to accept that, for the purposes of s 119 of the Evidence Act, the DPP is the client and lawyers employed by the Office of the DPP are lawyers acting for the DPP. As a consequence, the communication between the complainants and the lawyers engaged by the DPP is a communication between a lawyer, or more than one lawyer, acting for the DPP and another person, the dominant purpose of which was the DPP being provided with professional legal services related to the initial criminal proceedings. Even in relation to that latter aspect, it is an odd suggestion or construction that the DPP is employing staff for the purpose of the provision of professional legal services, when it is the DPP that exercises the legal duties imposed upon the DPP by the Director of Public Prosecutions Act.
The question then arises as to whether the communication between a potential witness and/or the complainants, on the one hand, and, on the other, lawyers acting for the DPP, is a confidential communication. First, it should be noted that the complainants were not under any duty to keep confidential the communication between them and the DPP. Further, the complainants and all witnesses were not under any duty to keep confidential that which was communicated to them by the DPP.
The second aspect of the determination of whether the conference notes and other documents are confidential communications is whether the lawyers, employed by the DPP, were under an obligation, either under law or otherwise, whether express or implied, not to disclose the contents of the communication.
In answering that question, the first aspect is that the DPP, himself or herself, is under no such obligation. The only express or implied obligation that may arise is an obligation reposed in the lawyer or lawyers not to disclose the contents of the communications, other than to the DPP.
I do not consider that the obligation to disclose all relevant matters to the accused or the accused's legal representative, pursuant to the duties imposed upon prosecutors, of itself, renders the communication to be other than a confidential communication. The fact, if it were the fact, that a communication was required to be disclosed, does not undermine the confidentiality of the communication otherwise made. It merely imposes an overriding duty to disclose the contents of certain communications and says nothing about the communications in general. I am comforted in this approach by the provisions of s 149F(6) of the Criminal Procedure Act.
If, as earlier accepted, the DPP is the client and the employed solicitor and/or Crown Prosecutor is the lawyer, for the purposes of s 119 of the Evidence Act, then the bifurcated role of the lawyers employed by the Office of the DPP would tend to a construction that the communication was confidential. The lawyers would be taking the statements as lawyers acting for the DPP. Those statements were confidential to the DPP.
When the lawyers decide, themselves, to release statements (whether under an obligation to notify or otherwise), they would be acting as the DPP itself, and exercising the discretion available to a client to release confidential information. This somewhat casuistrous result is the product of treating the DPP as the client and its employed solicitors and/or counsel as employed lawyers. None of these tensions would arise were the DPP not covered by s 119 of the Evidence Act, which is my preferred view.
It is unnecessary to deal finally with the issue of the application of s 119 of the Evidence Act to the DPP. It remains unnecessary, even though the Court's view is that the communication by a witness and/or complainant to lawyers employed by the DPP would be a confidential communication, once one accepts that the DPP is the client.
The last question to be decided is the operation of s 125 of the Evidence Act. There are plainly reasonable grounds for finding that the complainants were seeking the commission of an abuse of power and/or a fraud and possibly a criminal offence. These reasonable grounds arise notwithstanding the very preliminary evidence that is available to the Court at this stage.
As earlier stated the substantive claim is for malicious prosecution, which is an abuse of power. The relevant elements that may be in contention have already been the subject of comment.
It is sufficient for present purposes to make clear that the plaintiff claims that each of Valvano/Fregnan and Badarne falsely and maliciously induced the prosecution of the plaintiff by making false and malicious allegations to police. It is they that the Court has referred to as the complainants. Each of the complainant is a party to proceedings in which the plaintiff claims damages against them. So too is the State of New South Wales, representing the police officers and/or the Office of the DPP.
The terms of s 125(2) of the Evidence Act, as already identified, allow the Court to make a finding, at this preliminary stage, that the communication was made as an abuse of power or in furtherance of the an abuse of power, if there are reasonable grounds for so finding. I have made clear that there are reasonable grounds for so finding at least in relation to the complainants.
There are evidentiary statements before the Court and, of course, there are the pleadings. As Santow J said in Kang v Kwan [2001] NSWSC 698, the material requires that there is "colour to the charge", which plainly there is in these circumstances.
Nevertheless, because the claim of malicious prosecution requires "malice", it is necessary to determine whether an inference can be drawn of such malice, even where all, of which the Court must be satisfied, is reasonable grounds for such a finding. As to the complainants, as already made clear, such is manifest.
As to the issue of whether malice has been shown, or there are reasonable grounds for a finding that there exists malice, in relation to the DPP, there is a serious issue. The Court, as presently constituted, is not minded to consider that, on the evidence that is currently before the Court, there are "reasonable grounds" for finding that the DPP or the police have acted in furtherance of an abuse of power in that they, themselves, have acted maliciously. Nevertheless, inferences would be available, depending upon the manner in which the evidence may be adduced and taking the plaintiff's evidence at its highest.
However, the terms of s 125(1) of the Evidence Act renders inapplicable s 119 where a communication, being a confidential communication, has been made "in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty".
At this stage of the proceedings, the Court is prepared to find, that there are reasonable grounds that the communication between the complainants and the police and/or lawyers was a communication "in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to civil penalty". In this case, the communication, by the complainant to the lawyers for the DPP, was made with the intention of facilitating the fraud by the complainants: Zemanek v Commonwealth Bank of Australia (Federal Court of Australia, Hill J, 2 October 1997, unrep). The document is evidence of the communication. It is unnecessary, in order to fit within the provisions of s 125(1), for the lawyer, in this case the DPP or the lawyers employed by the DPP, to commit, themselves, the fraud, offence or act that renders a person liable to a civil penalty. It is sufficient if the communication were made in furtherance of the commission of the fraud.
Thus far, the Court has paid little attention to the meaning of the term "fraud". Fraud, at the very least, must include an element of dishonesty and includes, as Santow J said in Kang v Kwan, supra, "to include the kind of sharp practice often associated with equitable fraud encompassed by [a] sense of dishonesty, namely 'lack of probity; disposition to deceive, defraud or steal'.": Kang v Kwan at [37], See also ATH Transport v JAS (International) [2002] NSWSC 956, per Barrett J, where Barrett J accepted that the term "fraud", where used in s 125 of the Evidence Act, "is a statutory emanation of the principle that there is no privilege in iniquity": at 12].
As a consequence, it is unnecessary for the Court to delve further into whether Detective Murdock, Ms Rallis or Mr Barr were or should have been aware of the fraud that had been perpetrated, at least in relation to the civil proceedings and the cheque for $134,518 to which attention has been drawn in the evidence adduced. It is sufficient, for present purposes, that there are reasonable grounds for finding that the communication between the complainants and the police and/or DPP was in furtherance of the commission of a fraud.
Even though it is unnecessary to find any further, I would, on the preliminary material already before the Court, also find that there are reasonable grounds that the communication by the complainants to the police and/or DPP ought reasonably to have been known to have been made or prepared in furtherance of a deliberate abuse of power. That latter finding is based upon the timing of the complaint, the known fraud in relation to the civil proceedings and the cheque, together with the other evidence adduced.
For the foregoing reasons the Court finds that any legal privilege, which pertained to the communication between the complainants and the police and/or DPP (or its employees), under s 119 of the Evidence Act, had been lost under the provisions of s 125 of the Evidence Act.
The Court makes the following orders: 1. No privilege arises in relation to the documents that evidence a communication between the complainants and the Office of the Director of Public Prosecutions; 2. Documents for which privilege has been claimed under s 119 of the Evidence Act 1995 (NSW) shall be produced to the Court; 3. The plaintiff, Mr Stanizzo, shall have access to such documents; 4. The State of New South Wales shall pay the plaintiff's costs of and incidental to the motion and the claim for privilege.

At a glance

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Judgment (6 paragraphs)

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