ttormey- of t rthern Territory v Maurice

The matter came before the learned trial Judge in the course of the interlocutory

processes of proceedings brought by the Trade Practices Commission ("TPC") against

Ampol Petroleum (Vic) Pty Limited ("Ampol") and four other respondents who were

executives of Ampol. The statement of claim in the proceedings alleges that Ampol and the other respondents engaged in resale price maintenance contrary to s 48 of the Trade Practices Act 1974 (Cth) ('the Act"). Particulars set out in the statement of claim allege that, between July 1992 and August 1993, the respondents gave directions as to the prices to be charged by certain petro! retailers at,a number of service stations throughout

Prior to the commencement of the proceedings, the TPC conducted examinations under s 155 of the Act, of Messrs Peter and Vincent O'Loughlin, Francis Moloney and Geoffrey Serong, all of whom were service station operators mentioned in the particulars set out in the statement of claim. The statement of claim alleges that they were the subject of directions given by the respondents as to the pricing of petrol sales at their

"(1) Where the Commussion, the Chairman or the Deputy Chairman has reason to believe that a person 1s capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to the making of a decision by the Commission under subsection 93(3), a member of the Commission may, by notice in writing served on that person, require that person -

(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specificd in the notice, any such

(b) to produce to the Commussion, or to a person specified m the notice acting on its behalf, in accordance with the notice any such document: or

(c) to appear before the Commission at a time and place specified in the

notice to give any such evidence, either orally or in writing, and produce any such documents.

(6) The occupier or person im charge of any premises that an authorized officer enters in pursuance of subsection (2) shall provide the authorized officer with all reasonable facilities and assistance for the effective exercise of his powers under that

(6A) A person who contravenes subsection (5) or (6) is guilty of an offence punishable on conviction -

(a) in the case of a person not being a body corporate - by a fine not exceeding

$2,000 or imprisonment for 12 months; or _ (b) in the case of a person being a body corporate - by a fine not exceeding $10,000.

(7) A person 3s not excused from furnishing information or producing or permitting

the inspection of a document in pursuance of this section on the ground that the

information or document may tend to incriminate the person, but the answer by a person

to any question asked in a notice under this section or the furnishing by a person of any

information in pursuance of such a notice, or any document produced in pursuance of

such a notice or made available to an authorized officer for inspection, is not admissible

(a) in the case of a person not being a body corporate - in any criminal proceedings other than proceedings under this section; or

(b) in the case of a body corporate - in any criminal proceedings other than proceedings under this Act."

A copy of the transcript of his examination was given by the TPC to each examinee. On 15 April 1993, an officer of the TPC, Mr Paul Holm, personally handed copies of the respective transcripts to Mr Peter Moloney and Mr Peter O'Loughlin. Mr Holm also gave a copy of the transcript of Mr Serong's examination to Mr O'Loughlin and asked him to deliver that document to Mr Serong, which Mr O'Loughlin did. Mr

Holm did not express any limitation upon the use which the examinees might make of

The subpoena issued to each of the examinees sought production of the examination transcript which he had been given. The motion to set aside was based

solely upon the submussion that the transcripts were the subject of legal professional

privilege which vested in the TPC and that the TPC did not consent to their production.

The examinees themselves raised no objection to producing the transcripts.

The issue before the trial Judge was complicated by the fact that another judge of the Court, Olney J, had earlier ruled upon a number of matters with respect to the discovery of the documents and had ruled, inter alia, that the transcripts of the examinations which were held by the TPC had been obtained for the purpose of recording evidence to be submitted to counsel for advice and for possible use in the litigation. Olney J held that the transcripts were the subject of legal professional privilege and that the supplying of the transcripts to the examinees did not amount to a waiver of that privilege. An affidavit of Nada Karadzic, had deposed that "These transcripts came into existence solely for the purpose of recording evidence to be submitted to Counsel for advice and possible use in this litigation." Olney J made the following findings of

"The applicant asserts that two decisions were made by the applicant. First, on 3 March 1993, 1t was decided to institute proceedings provided that the applicant's advisers considered the evidence sufficient, and second (presumably on 11 August 1993) it was decided that sufficient evidence had been accumulated and that the applicant was in a position to commence proceedings. It 1s said that for the purposes of establishing a claim of legal professional privilege the first decision was sufficient because it indicated that from that point on proceedings were contemplated. .. The fact that in the interval between 3 March 1993 and 27 August 1993 the applicant continued to gather evidence and sought advice as to the adequacy of the available evidence to support the contemplated proceedings does not detract from the fact that as from 3 March 1993 the proceedings were contemplated and accordingly it is my opinion that all documents which have been brought into existence from and after 3 March 1993 for the sole purpose of submusston to legal advisers for advice or for use in the contemplated proceedings attract legal professional privilege "

Before Heerey J, counsel for the respondents accepted that, in accordance with the ruling of Olney J, the transcripts in the possession of the TPC were protected by legal professional privilege. However, the issue before Heerey J was a different one. His Honour held that it was an essential element of legal professional privilege that there be a confidential communication which required protection. His Honour applied the principle enunciated by McLelland J in Ritz Hotel Ltd v Charles of the Ritz Limited

[No 22] (1988) 14 NSWLR 132 where Mclelland J said at 133:-

"It seems to me to be an essential element in a claim for legal professional privilege that the material, disclosure of which is sought to be precluded is, so far as the person from whom disclosure is sought is concermed, confidential."

Heerey J held that, as the transcripts in the hands of the examinees were not confidential, having been handed over without any restriction on their use being imposed, they were not the subject of legal professional privilege. His Honour accordingly refused

In this appeal, the submissions of counsel ranged somewhat more widely. This Full Court is, of course, not bound by the findings of Olney J which were made in the course of an interlocutory ruling. It is necessary for this Full Court to examine the materia] which was before Heerey J in order to determine whether, on the evidence before his Honour, his Honour erred in finding that the documents the subject of the

subpoenas were not the subject of legal professional privilege.

The essential object of the legal professional privilege is, as Deane J stated in

Attorney-General of the Northern Territory v Maurice (1986) 161 CLR 475 at 490:-

-6- *.. to preserve the confidentiality of confidential statements and other materials which

have been made or brought into existence for the sole purpose of [the client] seeking or being furnished with legal advice by a practising lawyer or for the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings: see generally, Baker v. Campbell (1983) 153 C.L.R. 52." (emphasis added)

In that case, Mason & Brennan JJ expressed the principle thus at 487:-

"Legal professional privilege is an ancient doctrine which has assumed a life of its own.

Succinctly stated, the privilege protects from disclosure 'communications made

** confidentially between a client and his legal adviser for the purpose of obtaining or giving legal advice or assistance': Reg. v. Bell; Ex parte Lees (1980) 146 CLR. 141, at p.144, per Gibbs J. The raison d'etre of legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client. The privilege 1s based on:

'the need of laymen for professional assistance in the protection, enforcement or creation of their legal rights. They should have the benefit of that assistance, free of any restraint which fear of the disclosure of their communications with those advisers would impose'. (Reg. v. Beil (1980) 146 C.L.R, at p.152, per Stephen J.)

When the privilege applies, it enables the client to keep the communication from disclosure and interferes with the public's 'nght to every man's evidence': Cobbett's Parhamentary History (1812), vol. 12, p.675. Because of this conflict between the public interest in ensuring the availability of all relevant evidence in a particular case and the public interest in the administration of justice through effective legal representation, the privilege is confined within strict limits: Grant v. Downs (1976) 135 C.L.R. 674, at p.685." (emphasis added)

In Grant v Downs at 685, Stephen, Mason & Murphy JJ had said, inter alia:-

"The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and

comphicated discipline. Thus 1t does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client

to make a full and frank disclosure of the relevant circumstances to the solicitor." (emphasis added)

The privilege extends to confidential documents prepared by a party and to confidential communications between a party and a third person if made for the purpose

of being put before the lawyer to obtain his advice or otherwise to assist in the conduct

of litigation which is anticipated or on foot. In Trade Practices Commission v Sterling

(1979) 36 FLR 244 at 246, Lockhart J expressed the following relevant categories of legal

"(d) Notes, memoranda, minutes or other documents made by the client or officers of the chent or the legal adviser of the chent of communications which are themselves privileged, or containing a record of those communications, or relate to information sought by the client's legal adviser to cnable him to advise the cent or to conduct litigation on his behalf. See Woolley v North London Rauway Co. (1869) L.R. 4 C.P, 602 at p 604; Greenough v. Gaskell (1833) 1 My & K. 98, at p.102, 39 E.R. 618, at p.620, Corporation of Bristol v. Cox (1884) 26 Ch.D. 678, at pp 681-682; Woolley v. Pole (1863) 14 CB.N.S. 538; 143 E.R. 556; Seabrook vy British Transport Commussion [1959] 1 W.L.R. 509, Grant v Downs (1976) 135 C.L R. 674, and Bray, Principles and Practices of Discovery (1885) pp.388-389.

(f) Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enablmg him to prosecute or defend an action. See Wheeler v. Le Marchant (1881) 17 Ch.D 675; Cork v. Union Steamship Co (1904) 23 N.Z.U.L.R. 933, and In Re Holloway (1887) 12 P D. 167."

Notwithstanding the extension to the principle which category (f) appears to suggest, the privilege is limited to documents which are prepared in confidence and to communications which are confidential. Thus, the crux of the privilege is stated in

"Confidential communications passing between a chent and his legal adviser and made for the purpose of obtaining or giving legal advice are in general, privileged from disclosure The privilege 1s available in respect of the oral testimony of witnesses, and the principles which determine whether a communication 1s or 1s not privileged are the same for both oral and written communications The privilege is that of the client and may be waived by him"

The extent to which communications to or from persons who are not the client or the

lawyer or an agent of either will be privileged necessarily depends upon the

-8- circumstances of the case. Thus, in Ritz Hotel [No 22], McLelland J suggested at 133-4

that a statement made by an independent witness would not be subject to the privilege unless the witness was shown to be bound by a duty of confidence. The privilege is concerned with what was referred to in Grant v Downs at 685 as "secret ...

The claim made by the TPC for privilege is based on the contention that the examinations were held for the purpose of obtaining evidence for use in the contemplated legal proceedings and that the transcripts of the examinations were to be submitted to the lawyers acting for the TPC for their advice as to the sufficiency of the evidence. It appears that a decision was taken by the TPC on 3 March 1993 to institute proceedings against the respondents "Subject to advice as to sufficiency of evidence" and that the examinations of the four examinees took place in early April 1993. On 15 April 1993, Mr Holm made copies of the transcripts and distributed the copies to the

examinees. The proceedings were instituted on 11 August 1993.

However, in an examination under s 155, the element of a confidential communication is absent. Information given by an examinee in the course of an examination is not given in confidence. It is given under coercion. The privilege against self-incrimination is expressly abrogated and the privilege against exposure to a penalty is impliedly abrogated. See Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328. The examination proceeds with the threat of prosecution if the examinee does

In my opinion, a s 155 examination is outside the ambit of communications which are encompassed within the concept of legal professional privilege. The TPC does not conduct such an examination solely to obtain legal advice but in pursuance of its statutory purposes. It does so as a statutory authority established under the Trade Practices Act to undertake the functions which the Act reposes in it. One of those functions is to gathey information and evidence with respect to contraventions or possible contraventions of the Act. As the examination is conducted in the exercise of a statutory power and as the examination is coercive, the element of a confidential communication made for the purposes of the giving or receiving of legal advice or the furtherance of anticipated existing or contemplated judicial proceedings is lacking. The person who is examined is not in the position of a witness or a potential witness who, by voluntarily making a

statement for use in legal proceedings, may, perhaps if the circumstances are appropriate,

impliedly accept a duty of confidentiality with respect to the statement given.

The privilege, when it exists, is that of the client and not that of the lawyer or of the witness who may have given a statement: Baker v Evans (1987) 77 ALR 565 at 567- 8; Lake Cumbeline Pty Limited v Effem Foods Pty Limited (unreported, Tamberlin J, 14 November 1994). It would be an extraordinary result if the TPC, which can call in for examination not merely potentially favourable witnesses but also officers of companies and other persons where there 1s suspicion of the commission of an offence, could conduct examinations of these persons but refuse to disclose the transcripts in reliance

In my opinion, a s 155 examination is an occasion of the exercise of statutory power, the incidents of which are to be implied from the statute. It is not an occasion which gives rise to legal professional privilege. I say nothing as to public interest immunity which stands in a different position or as to the power of the Court, in the

exercise of its discretionary powers, to restrict discovery or production of such documents.

Counsel for the TPC submitted that s 155(1) refers to "evidence" and that the purpose of the provision is to enable the TPC to gain evidence for the purpose of contemplated or existing legal proceedings. However, the requirement of s 155 is that the person on whom the notice in writing has been served must appear before the TPC and give such evidence either orally or in writing and, if required, on oath or affirmation,

In this circumstance, the obligations of the TPC and of the examinees as to

confidentiality, if any, arise by virtue of the statutory provision. Thus, in Johns v

Australian Securities Commission (1993) 178 CLR 409, Brennan J said at 427:-

"A duty not to use or to disclose information obtained in exercise of a statutory power except for a purpose authorised by the statute 1s a duty imposed by statute, not by equity."

".. the existence and extent of the duty of confidence resting upon the AS.C, are to be found in the Act."

It follows that the motive which the TPC had mm conducting the examinations did not

determine the incidents of the examinations themselves. They were examinations

pursuant to a statutory power. The communications made in the course of the examinations were subject to such duties as were to be implied from the grant of the statutory power, not from principles of common law and equity developed with respect

to communications made in confidence by one person to another.

_ Consistently with this approach, in Finnane v Australian Consolidated Press Limited (1978) 2 NSWLR 435, Needham J held that, although an inspector appointed under Part VIA of the Companies Act 1961 (NSW) was bound by the statute to observe the confidences of a witness whom he examines, the witness was not similarly bound and could communicate what he had told the inspector to a third party. In Barton v Csidei (1979) 1 NSWLR 524, Street CJ, Hope and Reynolds JJA held that Part VIA of the™ Companies Act did not expressly or inferentially impose upon an officer of a company who had been examined on his oath a duty of confidentiality as to the content of the

examination; an examiner possessing a copy of the notes of his examination would not

be restrained from disclosing the contents of this document to another person.

This principle was also applied by Jenkinson J in Constantine v Trade Practices Commission (1994) 48 FCR 141. It had been submitted to Jenkinson J that, in the course of an examination under s 155(1), the Commission had disclosed to the witness information received by the Commission mn confidence from other persons during earlier examinations held under the s 155 procedure. It had been submitted that an equitable

duty arose binding the witness not to disclose such information. His Honour said at 148:-

"The disclosure to the witness 1s made without his consent and to serve the Commission's inquisitional purposes, not to confer any benefit on the witness. I am not able in those

circumstances to see how the conscience of the witness could be thought to be bound in equity."

It may be noted that, in National Companies and Securities Commission v Bankers Trust_Australia Ltd (1989) 24 FCR 217, the Court held that, under the National

Companies and Securities Commission Act 1979 (Cth), the Commission had no power

to impose an unqualified non-disclosure order upon a witness as to the questions asked and answers given at an examination. On the facts of the case, Beaumont & Einfeld JJ, Lockhart J contra, held that a non-disclosure order which had been made went beyond what was reasonably necessary to secure the privacy of the proceedings. The case is of significance as the National Companies and Securities Commission Act expressly dealt with the question of private hearings and empowered the Commission to give directions preventing or restricting the publication of evidence given before the Commission.

Section 155 of the Act does not contain like provisions.

In my opinion, for the reasons I have given, the s 155 examinations did not give

rise to legal professional privilege vesting in the TPC.

Moreover, in the circumstances of the present case, no duty was imposed upon the examinees, either by the Act, expressly or impliedly, or by the content or circumstances of the communications between the TPC and the examinees to keep the transcripts of the examinations confidential. No duty of confidence precluded the dissemination by the examinees of the content of the examination and the transcripts.

In addition to Finnane and Barton, it should be noted that McLelland J pointed out in

Ritz Hotel [No 2] at 133-4, that legal professional privilege will not preclude the

disclosure of material by a person unless the material is, so far as that person is concerned, confidential. See also Johns v Australian Securities Commission at 432-4, 437- 8, where it was held that, once material is in the hands of a person who is not subject to a duty of confidence, a court may not restrain the use of that material merely "to do

justice between the parties". Dawson J said at 438 that:-

• "There is no breach of confidential information if the information does not have the 'quality of confidence' Moorgate Tobacco Co Ltd v Philip Morns Ltd [No. 2] (1984) 156 CLR. at 438, per Deane J."

It should be noted that the making and keeping of a transcript of the proceedings is as an incident of the undertaking of the examination itself. The making of a transcript ensures the effectiveness of the examination, for it records for future use the questions asked and the answers given at the examination. The transcript is therefore not material which arises for the sole purpose of being submitted to legal advisers for advice or for use in the existing or contemplated legal proceedings. See Grant v Downs, cited above. The transcript arises as an incident of a non-privileged occasion, the examination under s 155. Similarly, the handing to an exammee of a transcript of his or her examination

Counsel for the TPC placed weight upon the decision of Gummow J in Hartogen

Energy Ltd (In liquidation) v The Australian Gas Light Company (1992) 36 FCR 557.

That, however, was a different case. Orders had been made for the examination of

certain persons under s 541 of the Companies (New South Wales) Code. One of the

proposed examinees was invited to attend a private and confidential interview to be

conducted by the counsel who had been engaged to conduct the s 541 examination, an

object of the interview being to ascertain whether an examination was necessary. The examinee so attended and a transcript was taken. In the present case, the examinations

were conducted under the statutory power conferred upon the TPC by s 155 of the Act.

Counsel for the TPC has submitted that the TPC and the examinees had a common interest in bringing the litigation against Ampol and its executives and that,

therefore, the legal professional privilege of the TPC attached to documents in the

examinee's hands. Counsel referred to Buttes Gas & Oil Co v Hammer (No 3) [1981]

QB 223 and Bulk Materials (Coal Handling) Services Pty Ltd v Coal & Allied Operations Pty ltd (1988) 13 NSWLR 689. There is, however, no evidence supporting this allegation.

The fact that the examinees were examined under the coercive provisions of s 155 is an

indication that their interests and those of the TPC were not mutual.

it is unnecessary for me to discuss the issue of waiver which loomed large in the submissions put in the appeal. In my opinion, as the transcripts of the examinations were not the subject of legal professional privilege and were not shown by the evidence to be the subject of any confidence as between the examinees and the TPC, the copies given to the examinees were not the subject of any express or implied confidence. The issue

Heerey J was of the view that the transcripts which were supplied to the examinees were not confidential. I agree with his Honour's view, but have expressed more fundamental reasons for this approach than perhaps his Honour saw fit to do in

I would grant leave to appeal but would dismiss the appeal with costs.

I certify that this and the 14 preceding pages are a true copy of the reasons for judgment herein of

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

WERNER SPREEN, KENNETH MCKAY, WILLIAM MITHEN AND ROBERT MacARTHUR

CORAM: Davies, Burchett and O'Loughlin JJ. PLACE: Sydney (heard in Melbourne) DATE : 2 December 1994

I am in complete agreement with the reasons for judgment

in this appeal of Davies J., and there is little I would add

In Grant v. Downs (1976) 135 CLR 674 at 688, Stephen,

"(W)e consider that the sole purpose test should now be adopted as the criterion of legal professional privilege."

Attempting to match its case to this criterion, the Trade Practices Commission relied on an affidavit that referred to

"the transcript of evidence given by witnesses called by the

++. Commission pursuant to its powers under s. 155 of the

"These transcripts came into existence solely for the purpose of recording evidence to be submitted to Counsel for advice and possible use in this litigation."

The Commission argues that it had previously decided to institute proceedings against the respondents "subject to advice as to sufficiency of evidence", and that the evidence was then obtained solely for the purposes of that advice, to

But the power conferred by s. 155 of the Trade Practices Act 1974 is a statutory power conferred in aid of the

performance of the tasks of the Commission. As Mason J. said

in Pioneer Concrete (Vic.) Proprietary Limited v. Trade

"Its purpose ... is to aid the Commission in the discharge of its functions under the Act."

It would be totally inconsistent with a valid exercise of such a power for the Commission to blindfold itself so as to blot out all further examination of the evidence to be obtained, evidence which might demand the exercise of some other power of the Commission in the performance of its duties: and to do so in favour of simply referring that evidence to a solicitor

for advice about its effect in a predetermined legal

proceeding. In my opinion, when the Commission takes up this very great power made available to it by the legislature, it

also accepts a responsibility to use the information obtained

thereby in the performance of its statutory functions, and it cannot limit the exercise of those functions in advance so as to deny itself the right and duty to make full use of the information, whether that information leads to the pursuit of a previous decision or action, or to its variation, or to its

It follows that the purpose of the Commission in obtaining evidence pursuant to the powers conferred upon it by s. 155 could not, consistently with the validity of what was done, have satisfied the "sole purpose test" as material

The Court should make the orders proposed by Davies J.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

IN _THE FEDERAL COURT QF AUSTRALIA Vv R DISTRICT REGISTRY

Respondents CORAM: Davies, Burchett and O'Loughlin JJ. PLACE: Sydney (heard in Melbourne) DATE : 2 December 1994 REASONS FOR DGMENT

O'Loughlin J: I have read in draft the judgments of Davies and Burchett JJ. For the reasons expressed by them I also

agree that leave to appeal should be granted but that the

I certify that this is a true copy of the Reasons for Judgment of Justice O'Loughlin.

Counsel for the applicant: Solicitor for the applicant: Counsel for the respondents:

A. Goldberg QC & M.J. Crennan Australian Government Solicitor