LEGAL ADVICE PRIVILEGE – GENERAL PRINCIPLES
Extract from decision of Young J in AWB Ltd v Cole (No 5) [2006] FCA 1234.
41.
Under the legal advice limb of legal professional privilege, a document will attract privilege if it
was brought into existence for the dominant purpose of giving or obtaining legal advice: Esso
Australia Resources Limited v Commissioner of Taxation (1999) 201 CLR 49 (‘Esso’) at 64-65
[35]; Daniels Corporations International Pty Ltd v Australian Competition & Consumer
Commission (2002) 213 CLR 543 (‘Daniels’) at 552 [9].
42.
AWB placed particular reliance on Dawson J’s formulation of the scope of legal advice
privilege in Waterford v Commonwealth (1987) 163 CLR 54 at 95: ‘The legal professional
privilege relied upon in this case is that which attaches to communications between a legal
adviser and his client for the purpose of giving or receiving legal advice and to documents
recording those communications or containing information for the purpose of enabling the
advice to be given. In order to attract that privilege, the communications must be confidential
and the legal adviser must be acting in his professional capacity: see Minet v Morgan; Wheeler
v Le Marchant; Smith v Daniell; Bullivant v Attorney-General (Vict.); Jones v Great Central
Railway Co; O'Rourke v Darbishire’. There is nothing controversial about this formulation of the
principle.
43.
I reviewed the relevant authorities and extracted the principles which govern legal advice
privilege in my decision in AWB v Cole at [60]-[63] and [85]-[110]. I adhere to what I said in that
case. I do not propose to engage in a lengthy discussion of the authorities concerning legal
advice privilege in these reasons for judgment, other than to the extent necessary to address
the arguments advanced by the parties.
44.
The general principles that I consider relevant to the disposition of this case can be
summarised as follows:
(1) The party claiming privilege carries the onus of proving that the communication was
undertaken, or the document was brought into existence, for the dominant purpose of
giving or obtaining legal advice. The onus might be discharged by evidence as to the
circumstances and context in which the communications occurred or the documents were
brought into existence, or by evidence as to the purposes of the person who made the
communication, or authored the document, or procured its creation. It might also be
discharged by reference to the nature of the documents, supported by argument or
submissions: see Grant v Downs (1976) 135 CLR 674 (‘Grant v Downs’) at 689;
Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 278 [30] (‘FCT
v Pratt Holdings’); and AWB v Cole at [63].
(2) The purpose for which a document is brought into existence is a question of fact that must
be determined objectively. Evidence of the intention of the document’s maker, or of the
person who authorised or procured it, is not necessarily conclusive. It may be necessary to
examine the evidence concerning the purpose of other persons involved in the hierarchy of
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decision making or consultation that led to the creation of the document and its
subsequent communication: see AWB v Cole at [110].
(3) The existence of legal professional privilege is not established merely by the use of verbal
formula: Grant v Downs at 689 per Stephen, Mason and Murphy JJ. Nor is a claim of
privilege established by mere assertion that privilege applies to particular communications
or that communications are undertaken for the purpose of obtaining or giving ‘legal advice’:
National Crime Authority v S (1991) 29 FCR 203 at 211–212 per Lockhart J; Candacal Pty
Ltd v Industry Research & Development Board (2005) 223 ALR 284 (‘Candacal’) at 298
[70]; Seven Network Limited v News Limited [2005] FCA 142 at [6]–[8]. If assertions of that
kind are received in evidence in support of the privilege claim, their conclusionary nature
can leave unclear what advice was really being sought. There will be cases in which a
claim of privilege will not be sustainable in the absence of evidence identifying the
circumstances in which the relevant communication took place and the topics to which the
instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 (‘Kennedy v
Wallace’) at 189–190 [12]–[17] per Black CJ and Emmett J and at 211–212 [144]–[145]
and at 215–216 [166]–[171] per Allsop J; see also Southern Equities Corporation Ltd (in
liq) v Arthur Andersen & Co (No 6) [2001] SASC 398.
(4) Where communications take place between a client and his or her independent legal
advisers, or between a client’s in-house lawyers and those legal advisers, it may be
appropriate to assume that legitimate legal advice was being sought, absent any contrary
indications: Kennedy v Wallace (2004) 208 ALR 424 at 442 [65] per Gyles J; affirmed on
appeal, Kennedy v Wallace at 191-192 [23]- [27] per Black CJ and Emmett J. In Kennedy
v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client
consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those
facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is
being sought or given.
(5) A ‘dominant purpose’ is one that predominates over other purposes; it is the prevailing or
paramount purpose: AWB v Cole at [105]-[106]; FCT v Pratt Holdings at 279-280 [30] per
Kenny J.
(6) An appropriate starting point when applying the dominant purpose test is to ask what was
the intended use or uses of the document which accounted for it being brought into
existence: Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at 366
[35] per Finn J.
(7) The concept of legal advice is fairly wide. It extends to professional advice as to what a
party should prudently or sensibly do in the relevant legal context; but it does not extend to
advice that is purely commercial or of a public relations character: Balabel v Air India
[1988] 1 Ch 317 (‘Balabel’) at 323 and 330; Nederlandse Reassurantie Groep Holding NV
v Bacon and Woodrow [1995] 1 All ER 976 (‘Nederlandse’) at 983; Three Rivers District
Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 (‘Three
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Rivers’) at 652-653 [43]-[44], 657-658 [59]-[60], 681 [114] and 683 [120]; Dalleagles Pty
Ltd v Australian Securities Commission (1991) 4 WAR 325 (‘Dalleagles’) at 332-333; DSE
(Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 (‘DSE’) at 161-173 [25]–[71]; and
AWB v Cole at [100]-[101].
(8) Legal professional privilege protects the disclosure of documents that record legal work
carried out by the lawyer for the benefit of the client, such as research memoranda,
collations and summaries of documents, chronologies and the like, whether or not they are
actually provided to the client: Daniels at 563 [44] per McHugh J; Commissioner of
Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (‘Propend’) at
550 per McHugh J; Dalleagles at 333–334 per Anderson J; Trade Practices Commission v
Sterling (1979) 36 FLR 244 (‘Stirling’) at 245–246 per Lockhart J; and Kennedy v Lyell
(1883) 23 Ch D 387 at 407; Lyell v Kennedy (1884) 27 Ch D 1 at 31 per Bowen LJ;
Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224
at 266 per Lindgren J.
(9) Subject to meeting the dominant purpose test, legal professional privilege extends to
notes, memoranda or other documents made by officers or employees of the client that
relate to information sought by the client’s legal adviser to enable him or her to advise:
Stirling at 246. The privilege extends to drafts, notes and other material brought into
existence by the client for the purpose of communication to the lawyer, whether or not they
are themselves actually communicated to the lawyer: Saunders v Commissioner of
Australian Federal Police (1998) 160 ALR 469 at 472.
(10) Legal professional privilege is capable of attaching to communications between a salaried
legal adviser and his or her employer, provided that the legal adviser is consulted in a
professional capacity in relation to a professional matter and the communications are
made in confidence and arise from the relationship of lawyer and client: Waterford v
Commonwealth (1987) 163 CLR 54 at 96 per Dawson J; see also Deane J at 79–82.
Some cases have added a requirement that the lawyer who provided the advice must be
admitted to practice: see Dawson J in Waterford at 96; GSA Industries (Aust) Pty Ltd v
Constable (2002) 2 Qd R 146 at 150; Glengallan Investments Pty Ltd v Arthur Andersen
(2002) 1 Qd R 233 at 245. However, in Commonwealth v Vance (2005) 158 ACTR 47, the
Full Court (Gray, Connolly and Tamberlin JJ) did not regard the possession of a current
practising certificate as an essential precondition to the availability of legal professional
privilege: at [23]–[35]. The same view was taken by Lee J in Candacal at 303 [99], by
Gillard J in Australian Hospital Care (Pindara) Pty Ltd v Duggan [1999] VSC 131 at [111],
and by Downes J in Re McKinnon and Secretary, Department of Foreign Affairs and Trade
(2004) 86 ALD 780 at 785 [51].
(11) Legal professional privilege protects communications rather than documents, as the test
for privilege is anchored to the purpose for which the document was brought into
existence. Consequently, legal professional privilege can attach to copies of non-privileged
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documents if the purpose of bringing the copy into existence satisfies the dominant
purpose test: Propend at 507 per Brennan CJ, 544 per Gaudron J, 553-554 per McHugh J,
571-572 per Gummow J, and 587 per Kirby J. In Propend at 512, Brennan CJ added a
qualification to this principle: if an original unprivileged document is not in existence or its
location is not disclosed or is not accessible to the persons seeking to execute the warrant,
and if no unprivileged copy or other admissible evidence is made available to prove the
contents of the original, the otherwise privileged copy loses its protection.
(12) The Court has power to examine documents over which legal professional privilege is
claimed. Where there is a disputed claim, the High Court has said that the court should not
be hesitant to exercise such a power: Esso; see also Grant v Downs at 689. If the power is
exercised, the court will need to recognise that it does not have the benefit of submissions
or evidence that might place the document in its proper context. The essential purpose of
such an inspection is to determine whether, on its face, the nature and content of the
document supports the claim for legal professional privilege.