02 August 2006
Key Points:
In AWB the Federal Court clearly decided that litigation privilege does not apply to documents brought into existence for use in relation to a commission of inquiry.
Whatever the effect on our wheat trade, the AWB inquiry has already had an effect on legal professional privilege. In this article we examine the Federal Court's decision in AWB Limited v Cole [2006] FCA 571 and what it means for clients attempting to assert privilege.
Two types of legal professional privilege
Legal professional privilege has two distinct limbs. The first, "legal advice privilege" attaches to confidential communications between solicitor and client, made for the dominant purpose of obtaining or giving legal advice. The second, "litigation privilege" attaches to confidential communications created for the dominant purpose of use in relation to pending or contemplated litigation.
Importantly, litigation privilege applies not merely to communications between solicitor and client but extends to communications with third parties such as expert witnesses.
In a litigation context, the distinction between the two limbs becomes less significant as invariably privileged communications will be caught by the safety net of litigation privilege. However, the distinction remains highly relevant in the context of commissions of inquiry.
No abrogation of privilege
The AWB case concerned a document inadvertently produced by the Australian Wheat Board to a commission of inquiry, in response to a notice to produce documents. The document was a draft statement of contrition, drafted by the then chief executive officer of AWB. It was created following a telephone conference with solicitors, employees and public relations consultants of AWB.
The Commissioner considered that the document was not privileged. On application by AWB, the Federal Court came to the same conclusion. In the course of doing so, the Court provided a useful summary of the principles of legal professional privilege and made a number of important statements as to the scope of the privilege.
The Court held that the Royal Commissions Act (Cth) 1902 does not abrogate legal professional privilege, either expressly or by necessary implication. In line with existing authorities, the Court held that privilege is a fundamental common law right and in the absence of clear and unmistakeable language, a compulsive notice such as that which can be issued under the Act will not be construed as requiring the production of privileged documents.
Was the document covered by legal advice privilege?
The Court set out the ambit of the legal advice limb of privilege. It held that the limb is not confined to merely telling the client the law, but extends to advice as to what should be done in the relevant legal context. It covers information which passes between solicitor and client as part of the continuum aimed at keeping both informed so that advice may be given and sought as required. In particular, (so long as the dominant purpose test is satisfied) it covers advice given by a solicitor to a client as to the evidence and submissions to be placed before a commission of inquiry. The Court held that the draft statement of contrition did not, on the facts, satisfy that test and accordingly was not protected by legal advice privilege.
What about litigation privilege?
The AWB submitted that a commission of inquiry has an "adversarial dimension" and is sufficiently similar in nature to litigation so as to attract litigation privilege. It pointed to the fact that an inquiry reports on the lawfulness of conduct (including whether legal proceedings should be brought) and conducts public hearings at which witnesses are examined and cross-examined.
Accordingly, the AWB contended that as a matter of policy and principle, evidence and other material prepared for a commission of inquiry should be afforded the same privilege as equivalent documents in litigation.
The Court rejected these submissions. It held that a commission simply conducts an investigation and determines facts; it does not finally determine rights or obligations. The Court stated that litigation privilege has been recognised as a substantive rule of law and a fundamental right because it operates to ensure a fair trial within the adversarial system of justice. This, it said, precluded the extension of the privilege to a commission of inquiry. The Court further noted that the location and retention of witnesses are merely products of adversarial litigation and do not warrant the extension of litigation privilege to a commission of inquiry.
(Importantly, subsequent to the AWB case, the New South Wales Supreme Court held that litigation privilege is also not available in proceedings before the Administrative Appeals Tribunal: Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2006] NSWSC 530).
Implications
It's important to remember that this case only dealt with litigation privilege. In theory, if a document can be classed as advice, it could fall under the (admittedly more limited) scope of advice privilege.
The position is compounded by proposed federal government amendments to the Royal Commissions Act, which will give commissioners power to inspect documents subject to a claim for privilege to decide whether the claim is made out. If a commissioner finds that a document is privileged, he or she is required to disregard its contents. This differs from the position of judges in litigation. In particular, where it is necessary for the court to see a document in order to determine whether it is privileged, this can be done by a judge other than the trial judge, thereby avoiding any actual or perceived prejudice: Tickell v Trifleska (1990) 24 NSWLR 548.
The amendments (which were requested by the Commissioner in the AWA Inquiry) further highlight the need for parties and their lawyer to recognise that commissions of inquiry, while having many of functional characteristics of litigation, do not accord participants the same privilege protection as exists the litigation process.
For further information, please contact Vince Annetta and Nicole Ryan-Green.
