(a) Confidential documents
35 Sections 118 and 119 broadly correspond with the categories of legal professional privilege which have come to be known as advice privilege and litigation privilege. Both sections provide for privilege (although the word "privilege" is used only in headings in the Act) with respect to confidential communications and with respect to confidential documents, and the definitions in s 117(1) are in similar terms for communications and for documents.
36 The privilege under s 118 is confined to client/lawyer dealings, by communications between client and lawyer or between lawyers or in preparation of documents by client or lawyer. The privilege under s 119 is not confined to client/lawyer dealings. The dealings may be by communications between client and lawyer or client and third party, or by unspecified preparation of documents. The control is in confidential communication or confidential document and the necessary dominant purpose.
37 Confidentiality in accordance with the definitions can readily enough be found for client/lawyer dealings. The statements of Ms Jackson and Luke Blenman, however, were obtained by a dealing between the client (the Department, through the agency of Mr Harman) and third parties (Ms Jackson and Luke Blenman). There is some controversy over the need for confidentiality in litigation privilege at common law, and the controversy is particularly material to privilege for communications between client and third party. The controversy need not be explored, since the Act bypasses it. The definitions, taken up in both s 118 and s 119 in their references to a confidential communication and a confidential document, impose the same confidentiality requirement for both the statutory equivalent to advice privilege and the statutory equivalent to litigation privilege. It imposes that requirement in the case of communications between client and third party and documents prepared by a third party for a client.
38 The appellant had to establish the privilege it claimed, see later in these reasons, including that the statements of Ms Jackson and Luke Blenman were confidential documents. For the statements to be confidential documents, it was necessary that they were prepared in such circumstances that, when they were prepared, either Ms Jackson and Luke Blenman or "the person for whom [they were] prepared" was under an express or implied obligation not to disclose their contents.
39 As I have said the statements were prepared by Ms Jackson and Luke Blenman. The person for whom the statements were prepared was either Mr Harman, who obtained the statements, or the Department (strictly the appellant as the legal entity) on whose behalf he obtained them. In my view it was the Department. It was the client in s 119, with the interest in the statements, and the statements were prepared for it as the intended recipient and potential user of the statements. They were not prepared for the person who happened to ask on its behalf that they be prepared.
40 There was no evidence of an express obligation upon Ms Jackson, Luke Blenman or the Department not to disclose the contents of the statements. Was there an implied obligation not to disclose their contents, within the meaning in the definition?
41 The definition refers to an obligation "whether or not the obligation arises under law". In Carnell v Mann (1998) 89 FCR 247 at 258 the Full Court of the Federal Court declined to confine the obligation to the type of obligation arising in a solicitor/client relationship, as must be so when s 119 is not confined to client/lawyer dealings. (See also s 120, under which there can be a confidential communication or document where a party does not have a lawyer.) It can extend to an unspoken obligation, and to an ethical, moral or social obligation. Especially when a lawyer is not involved, the particular circumstances determine whether an obligation implicitly arises, as can be seen from decided cases. Whether a communication or document is confidential can also arise in connection with loss of client legal privilege under ss 122 or 123 of the Act, and some of the cases address it in that connection.
42 In Newcastle Wallsend Coal Co Pty Ltd v Court of Coal Mines Regulation (1997) 42 NSWLR 351, not a case under the Act, a witness statement taken by a solicitor was sent to the witness, McLean, for correction, and was returned. McLean later asked for a copy, which was sent. The draft was expressly sent on a confidential basis. The copy was in an envelope marked "private and confidential". Powell JA, with whom Meagher JA agreed, held that this and other witness statements were initially confidential documents, but that the privilege had been lost in the case of McLean's statement because (at 389) "the copy of that record of interview which was later provided to Mr MacLean was provided to him for his own purposes and was not made subject to any condition as to non-disclosure".
43 This case was followed in Drabsch v Switzerland General Insurance Co Ltd [1999] NSWSC 975 as applicable to confidentiality under the Act. Hamilton J held that privilege in a witness statement had been lost, because a copy had been provided to the witness and (at [8]) -
" … there being no evidence but that the statement was sent to McErlane without comment and with no restriction imposed on his use of it, it seems to me that the circumstances were not such as to impose an obligation of confidentiality on him. In my opinion, it was a statement made by him, it was given to him without comment, and there was nothing in the circumstances that precluded him from giving it to anyone else as his version of the facts if he chose."
44 In Amalgamated Television Services Ltd v Marsden [1999] NSWCA 97 a statutory declaration to which client legal privilege attached was provided to the police. The privilege was lost unless the provision to the police was a confidential communication within the definition in s 117(1). There was evidence that the solicitor providing the statutory declaration, Mr Lee, said to the police officer to whom he provided it, Superintendent Woodhouse, "I trust that like any other material I provide to you during the course of your investigation that you will keep it strictly confidential", and that Superintendent Woodhouse said that he would. Superintendent Woodhouse had no recollection of this conversation, but said that his understanding at all times when he received material from the solicitors was "that the material was to be used exclusively for the purpose of considering it in the context of other material I had received in the course of the investigation of Strike Force Cori". It was held that the communication was not confidential, because (at [28]) -
" … while the Police could not disclose the contents of the documents to all the world, it could disclose them for the purposes of the investigation in which Strike Force Cori was engaged and, if it came to that, for a prosecution of the respondent. So the contents of the document could be put to persons referred to in it, as in fact happened, and those persons would not be under any restriction in further disclosing whatever was disclosed to them; and if the contents of the document were disclosed in the course of a prosecution of the respondent, subject to any special order which might be made, the contents would pass into the public domain."
45 In Seven Network Ltd v News Ltd [2005] FCA 864 Channel 7 provided to the ACCC a summary of legal advice it had received. The trial judge's reasoning in relation to loss of client legal privilege included that the ACCC was not under an implied obligation not to disclose the summary, because the ACCC had publicly declared that it considered itself free to use information in its possession "for its other functions or in other contexts" (at [54]-[55]). On appeal, Seven Network Ltd v News Ltd [2005] FCAFC 125, privilege was decided on other grounds, but Allsop J said obiter at [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."
46 In Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 Bergin J said at [33] that -
" … matters relevant in assessing whether a confidential obligation is implied in relationships or circumstances outside that of solicitor/client include the nature of the relationship in question and the circumstances, including conduct and/or conversations, surrounding the communications or documents in question. It is also permissible to have regard to the nature of the documents in question and the purpose and context of their communication: see Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd (1998) 13 NSWLR 689 at 695E."
47 Her Honour was concerned not with a witness statement, but with communications with a litigation funder. It was held that the relationship of litigant and funder and the nature of the communications, necessarily extending to the merits of the litigation, made it appropriate to imply that information provided to the funder would not be disclosed by it. In Bulk Materials (Coal Handling) Services Pty Ltd v Coal and Allied Operations Pty Ltd to which her Honour referred, not a case under the Act, it was said to be implicit in their nature and the purpose of their provision that pages from a loss assessor's report provided by an insurer to the plaintiff were to be kept confidential by the plaintiff.
48 An obligation is ordinarily owed to another person. Here, if there were an obligation of confidentiality by the Department to Ms Jackson and Luke Blenman, or by Ms Jackson or Luke Blenman to the Department. There is no basis for an obligation of confidentiality owed by any of them to someone else.
49 The respondent submitted that there could not be confidentiality because disclosure by the Department was allowed under para 6.8 and possibly 6.7 of the policy document. The question is not so much one of permitted limited disclosure as of a non-disclosure obligation to begin with.
50 I do not think that the Department was under an obligation not to disclose the contents of the statements. The restrictions on giving copies of statements to third parties in para 6.8 of the policy document, and the reference to secure storage in the privacy note, indicate the Department's intention to confine disclosure of statements. But there was no evidence that Ms Jackson or Luke Blenman was made aware of either. The confined disclosure was to serve the Department's own interests. Its uncommunicated internal resolve was not an obligation, and still less an obligation owed to the makers of the statements.
51 There is nothing else in the evidence from which it could be held that the Department was unable to disclose the contents of the statements if it chose, or from which it could be held that the appellant could not disclose their contents to the respondent for the purposes of the proceedings if the appellant saw fit. Any understanding of Ms Jackson or Luke Blenman, or for that matter anyone else, that the statements were to be provided to the Department's legal advisers and could be used if proceedings were brought by the respondent, would convey not that the statements would be kept confidential, but that the Department could use them as it saw fit including by disclosure to the respondent or to the world in open court in legal proceedings. This is the antithesis of an obligation not to disclose their contents.
52 Nor do I think that Ms Jackson or Luke Blenman was under an obligation not to disclose the contents of the statements. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 110 ALR 510 French J said, at 515, that "[t]here is nothing to stop a prospective witness who has given a statement to a solicitor from announcing that fact and the content of his statement to the world at large". As a general statement that may go too far, but it points up the need to find in the circumstances an obligation not to do so. There is no evidence that at the time Ms Jackson and Luke Blenman were asked, and agreed, not to disclose the contents of their statements. The statements were not on the form from the policy document (although I express no view on whether that would have sufficed for an obligation of confidentiality). Assuming they had the understanding mentioned in the preceding paragraph, I do not think it can be found that the Department had an expectation that they would not do so. So far as the evidence goes, they were neutral observers who told the Department what they observed and were free to tell anyone else both what they had observed and what they had told the Department; and pursuant to para 6.8 of the policy document they could be given copies of their statements if requested, and para 6.8 made no reference to attaching a non-disclosure string.
53 In relation to common law legal professional privilege McLelland J said in Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132 at 133-4 -
"Now, whether in the case of communications between a party or its representative on the one hand and a potential witness on the other, those communications can be said to be confidential so far as the potential witness is concerned, may be a nice question in many circumstances. In the case of an independent witness to some event who is interviewed by a party or his solicitor or representative with a view to his making an affidavit or giving evidence in anticipated or pending proceedings, the details of that interview would not in my view be confidential so far as the potential witness is concerned in the absence of special circumstances, because the potential witness in that situation is not a person owing any duty of confidentiality to the party or to the party's solicitor or representative. And in a situation of that kind, the question whether a claim for protection from disclosure of the communications on the basis of legal professional privilege should be upheld would in my opinion depend on whether the disclosure sought is, on the one hand, from the party or his solicitor or representative, in which case the claim should succeed, or, on the other hand, from the independent witness, in which case the claim should fail."
54 This is consistent with what I have said so far, as his Honour did not think the witness statement confidential "so far as the potential witness is concerned". His Honour would nonetheless have found privilege if disclosure was sought from the party or the party's lawyer.
55 Differential confidentiality does not matter for the definitions in the Act, since it is enough that one of the parties to the communication or the preparation of the document is under an obligation not to disclose its contents. His Honour appears to have thought that there would be privilege if disclosure was sought from the party or the party's lawyer because so far as the party or the lawyer was concerned the statement was confidential. The confidentiality appears to have been founded on the interest of the party in keeping the statement confidential, ultimately on legal professional privilege itself. Confidentiality for common law legal professional privilege has also been found in that manner in, for example, Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, where Goldberg J said at 563 that it was "hardly to be expected that at that stage the Commission would be prepared for any person to see the statements".
56 Reasoning from the party's interest in keeping confidential the communication or document it received is in accord with the present rationale for litigation privilege stated by McHugh J in Mann v Carnell. That was a case of client/lawyer communications, and his Honour dissented in the result, but the explanation holds good -
" [114] The rationale for the head of legal professional privilege which protects communication from a third party to the client or the lawyer made in connection with the litigation is related to, but distinct from, that discussed in Grant. The rationale for the second head of legal professional privilege arises from the need to maintain, in an adversary system of litigation, the freedom of the lawyer and client to make such investigations and inquiries and to engage in such preparation as they think fit in order to further their case. A party to litigation should not be forced to prepare his or her case knowing that statements, advices and other documents, which have been created, may be required to be disclosed to the other party who can then make use of the documents for his or her own advantage. As Brennan J said in Baker v Campbell , the relevant purpose of the privilege is the 'maintenance of the curial procedure for the determination of justiciable controversies - the procedure of adversary litigation'. His Honour went on to say that '[i]f the prosecution, authorized to search for privileged documents, were able to open up the accused's brief while its own stayed tightly tied, a fair trial could hardly be obtained'."
57 So it was said of litigation privilege in General Accident Assurance Company v Chrusz (1999) 180 DLR (4th) 241 at [24] that -
"It is not rooted, as is solicitor-client privilege, in the necessity of confidentiality in a relationship. It is a practicable means of assuring counsel what Sharpe calls a 'zone of privacy' and what is termed in the United States, protection of the solicitor's work product: See Hickman v Taylor , 329 US 495 (1946)."
58 But I do not think that this reasoning is available in order to find a confidential communication or a confidential document within the meaning of the definitions in s 117(1) of the Act. The rationale involves confidentiality, but it is confidentiality afforded by the privilege itself. The party's interest in keeping confidential the communication or document it received is not confidentiality because of an express or implied obligation on the party not to disclose the communication or document. It is confidentiality because of protection from compulsory disclosure by the party. The party can disclose the communication if it wishes; that will waive any privilege, but it is not prevented by any obligation of confidentiality.
59 In Fagan v State of New South Wales [2004] NSWCA 182 it was said at [70] that the principle that there was no property in a witness had to operate in conjunction with other principles, including that of legal professional privilege. In that case a prospective witness' freedom to disclose the contents of a witness statement was regarded as restricted by the latter principle. It was held that where a statement taken by a lawyer was privileged, and remained privileged when given to the prospective witness, a direction by the witness' superior requiring disclosure of its contents would involve a breach of legal professional privilege: at [76]-[77].
60 I do not think that this means that Ms Jackson and Luke Blenman were under an obligation not to disclose the contents of their statements because, in maintenance of its freedom to prepare for litigation without fear of disclosure to the other party, the Department could prevent disclosure. There would be circularity in the reasoning, an assumption of client legal privilege in order to establish client legal privilege. In Fagan v State of New South Wales there was no circularity. It was emphasised at [74] that the State accepted that the prospective witness' statements were and remained privileged. In the present case the non-disclosure obligation is necessary in order that there be privilege in the first place. Fagan v State of New South Wales was not decided with reference to the terms of the Act, and entitlement to litigation privilege can not be used to find the obligation not to disclose the contents of the document.
61 For these reasons, in my opinion the statements of Ms Jackson and Luke Blenman were not confidential documents within the definition in s 117(1) of the Act.