26 September 2007
A recent case is a timely warning for organisations which assert client legal privilege over documents to and from their in-house counsel - if you want to assert it, you must back up your assertion!
The decision in Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No. 2) [2007] FCA 1445 also suggests that making an application for preliminary discovery in the Federal Court pursuant to Order 15A rule 6 of the Federal Court Rules could also amount to issue waiver (Clayton Utz acted for the successful party, the Minister, in this matter).
At stake was the production of documents created by or sent to Telstra's internal legal advisers (who were legal practitioners). Justice Graham in the Federal Court ruled that there was insufficient evidence to support a claim of client legal privilege. He reiterated the importance of specific evidence to back up a claim of privilege, either by the nature of the documents or by evidence describing the circumstances in which they were brought into existence - but privilege is not necessarily or conclusively established by resort to any verbal formula or ritual.
What did the in-house counsel do?
Justice Graham accepted that there was evidence that the persons referred to as Telstra's internal legal advisers were legal practitioners, but there was no evidence of their role within Telstra, particularly of the "measure of independence of the legal practitioners in question and their ability to provide impartial legal advice, given the roles they have had to perform". In fact, the internal lawyers didn't give evidence at all about these issues.
Describing the documents properly
The documents were generally described as dealing with a decision to commence legal proceedings, and created for the dominant purpose of receiving legal advice.
This, said Justice Graham, wasn't enough: conclusory assertions, verbal formulae and generalised comments from the external lawyers are not sufficient. It might be otherwise, he said, if, for example, the documents were opinions expressed by identified senior counsel where it might be presumed that by its nature the document would have privilege attaching to it.
Could the mere filing of a preliminary discovery application = waiver?
As Justice Graham concluded that the documents were not privileged, it was not necessary to decide whether privilege had been waived. He did make the point, however, that one of the factors as to whether preliminary discovery should be granted is whether the applicant had sufficient information to enable a decision to be made whether to commence a proceeding. It would be unjust, he said, to grant preliminary discovery against a stranger, albeit a prospective respondent, if the applicant failed to place before the Court the information which it did have, to enable a decision to be made whether to commence a proceeding in the Court to obtain the relevant relief.
In his view, if information going to the ability of a person in the position of Telstra to make a decision whether to commence a proceeding in the Court against the Minister as a prospective respondent included information contained in documents which may otherwise enjoy legal professional privilege, it would be surprising if the applicant could pursue an application for relief under Order 15A rule 6 without exposing all of the information which it had, whether privileged or not.
