Case: JMA Accounting Pty Ltd v Commissioner of Taxation [2004] FCAFC 274
Outcome: considered
It is apparent that the privilege notice does not readily address documents stored electronically. Section 3K(2) is one means of dealing with such material, but that power was not exercised in this instance. It is also clear that the guidelines in the privilege notice are not mandatory; they are expressed as providing a procedure "to the extent to which it is possible" to follow it. The note about legal professional privilege in the Birchgrove warrant itself also stipulates that the guidelines in the privilege notice be followed as far as is reasonably practicable. Indeed, attempts to agree upon and implement an efficient and effective procedure to identify which, if any, contents of the laptop computer are in fact the subject of legal professional privilege, and so are not capable of being seized under the Birchgrove warrant, have to date been unsuccessful. See also the discussion of Spender, Madgwick and Finkelstein JJ in JMA Accounting Pty Ltd v Commissioner of Taxation [2004] FCAFC 274 ; (2004) 139 FCR 537 at [6] - [12] concerning the power of search and seizure under s 263 of the Income Tax Assessment Act 1936 (Cth). 110 In JMA Accounting the seizure of materials was so indiscriminate, in some instances, as to lead the Court to conclude that no reasonable effort was made to distinguish between the relevant and the irrelevant. That is not the submission presently being considered. Mr Oke's submission is that the laptop computer could not have been lawfully seized under the Birchgrove warrant because there was a blanket claim for legal professional privilege with respect to it. I have separately found that Federal Agent Capaldo did have the belief required to entitle her (subject to claims of legal professional privilege) to seize the laptop computer. 111 As to the present contention, the Full Court in JMA Accounting said at [13]-[14]: "This does not mean that an officer is prevented from conducting his s 263 search until all claims for privilege have been resolved. The resolution of such claims might take weeks or even months; it is inappropriate for the search to be delayed for that amount of time. To put the matter in its proper perspective it is necessary to recall the purpose for legal professional privilege. It is to keep secret communications between a lawyer and his client, and where the communication is written, it is to prevent the document containing the communication from being read. Accordingly, the mere seizure of a document without it being read will not infringe the privilege: Allitt v Sullivan [1988] VR 621 at 640; Solosky v The Queen (1979) 105 DLR (3d) 745 at 758. A good deal of JMA's argument on this aspect of the appeal depended upon acceptance of the proposition that legal professional privilege will be infringed if a copy of a privileged document is taken, whether or not the original or the copy is read. That proposition is simply wrong." 112 I consider their Honours' conclusion is consistent with the decision in Baker v Campbell [1983] HCA 39 ; 153 CLR 52. In Baker v Campbell the documents the subject of the search warrant were assumed to be privileged from disclosure or production on the ground of legal professional privilege. In that event, they could not be the subject of a search warrant under the Act. So, here, if the laptop computer and all its contents were to be so protected, it could not have been the subject of the Birchgrove warrant and its seizure would not have been authorised. The approach of the Full Court in JMA Accounting addresses the circumstances where there is a contested claim to such privilege and the practicality that it cannot be immediately resolved (and where s 3K(2) has not been availed of). 119 There has been some judicial and academic comment to the effect that the guidelines, contrary to their objective, do not preserve legal professional privilege: see Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501 at 537 (Gaudron J); Suzanne McNicol, "Unresolved Issues Arising From the General Guidelines Between the AFP and the Law Council of Australia" (1998) 72 Australian Law Journal 137. I note, however, that the law with respect to waiver of legal professional privilege has since been further refined by the High Court. It is now accepted that "it is inconsistency between the conduct of the client and the maintenance of the confidentiality which effects a waiver of the privilege": Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [28] . Mr Oke's conduct in objecting to the seizure of documents at his house was wholly consistent with the maintenance of their confidentiality. It seems unlikely that any waiver of privilege should be imputed in such circumstances. Furthermore, French J held in Saunders v Commissioner, Australian Federal Police (1998) 160 ALR 469 that legal professional privilege is not necessarily waived even where the occupier fails to claim privilege at the time of execution of the warrant. His Honour said, at 473: "As in the present case circumstances can arise in which the question whether legal professional privilege exists is not able to be answered by simple inspection of the documents or within a timeframe consistent with the exigencies of the investigative process." See also the comments of the Full Court of this Court in JMA Accounting [2004] FCAFC 274 ; 139 FCR 537, quoted above at [111].