Case: Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52
Outcome: applied
The High Court cases of Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 (' Baker ') at 76, 97 and 132, Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501 (' Propend ') at 506, 513, 523, 533, 567-568 and 576, and Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 (' Daniels ') at 549 [3], 561 [37], 567 [56] and 585 [117] proceed on the footing that the Federal Court has original jurisdiction to declare that legal professional privilege attaches to a document whose production has been compulsorily required, without any need to review or set aside the decision of the relevant officer to seize the document or to require its production. In Propend , Brennan CJ said at 513: 'When a claim of privilege attaching to a document seized under a warrant comes to be determined judicially, the court must ascertain for itself whether the document was brought into existence solely for a privileged purpose and, if it be found or assumed that the document is a copy of an unprivileged original but was brought into existence solely for a privileged purpose, whether the privilege has been lost. In determining the claim of privilege, the court is not reviewing judicially an executive action but is determining a distinct controversy between the person who seeks to inspect the seized document and the person who seeks to maintain its immunity from inspection on the ground of legal professional privilege.' Both parties submitted that the Court can approach the question of legal professional privilege in the manner indicated by Brennan CJ. 32 In Australia, legal professional privilege is a rule of substantive law that reflects an important common law immunity. In Daniels , Gleeson CJ, Gaudron, Gummow and Hayne JJ said at 552-553 [9]-[11]: 'It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the "dominant purpose" test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the "sole purpose" test which had been applied following the decision in Grant v Downs . Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell , that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth). Legal professional privilege is not merely a rule of substantive law. It is an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule, the expression of which in this Court can be traced to Potter v Minahan , was the foundation for the decision in Baker v Campbell .' 34 The RCA does not abrogate legal professional privilege. It does not do so expressly and there is no basis for arguing that it does so by necessary implication. Powers that are conferred in general terms, such as those found in s 2(3A) and s 6F(1), will not be construed as abrogating or adversely affecting a fundamental common law right or immunity, unless Parliament makes its intention unmistakeably clear: see Baker at 96-97 per Wilson J, at 116-117 per Deane J, and at 132 per Dawson J; and Daniels at 553 [17] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, at 562-563 [43] per McHugh J, at 576 [88] and 578 [93]-[94] per Kirby J, and at 591-593 [132]-[135] per Callinan J. 37 There is, however, a dispute as to how the RCA is to be construed so as to preserve legal professional privilege. AWB contends that, consistently with the approach adopted in Baker and Daniels , the power conferred by s 2(3A) is to be read down so that it does not reach documents which are the subject of legal professional privilege. The Commonwealth submits that legal professional privilege is preserved by s 3(5). It says that s 3(5) operates to displace the obligation to produce documents imposed by s 3(4) in circumstances where a person has a reasonable excuse for non-production. 40 In their joint judgment in Daniels , Gleeson CJ, Gaudron, Gummow and Hayne JJ construed s 155(1) and (2) as not conferring a power that abrogated legal professional privilege. They did so for essentially two reasons. In the first place, their Honours observed that subss (1) and (2) of s 155 must be construed consistently. Section 155(2) of the TPA is similar to the search warrant provision in s 10 of the Crimes Act 1914 (Cth) (' Crimes Act ') that was considered in Baker and Propend . They said that it was difficult to see any basis upon which that subsection could be construed, consistently with Baker and Propend , as authorising entry to premises for the purpose of inspecting and copying material to which legal professional privilege attaches: at 558-559 [27]-[28]. Secondly, their Honours thought that s 155(5)(a) did not support the implication that the Full Court had drawn from it (at 560 [33]): 'It is very much to be doubted that sub-s (5)(a) is exhaustive of the matters that may be raised in answer to a charge of failing to comply with a notice under s 155(1). At the very least, ordinary principles of construction would suggest that there is an intentional element to the offences created by s 155(5) and (6A). More to the point, however, it is necessary to determine the meaning and effect of s 155(1) before it can be determined what constitutes a refusal or failure to comply with a notice.' 41 McHugh J said that s 155(5)(a) was of no assistance in construing s 155(1), as the implied duty created by s 155(5) operates only in respect of documents which s 155(1), on its proper construction, requires to be produced: at 564 [46]. McHugh J also thought that the contention that the power conferred by s 155(1) is not subject to privilege was inconsistent with the fact that the power conferred by s 155(2) must be regarded as subject to legal professional privilege, having regard to the decision in Baker : at 565-566 [50]-[51]. 51 In my opinion, it is a false dichotomy to suppose that a choice must be made between the construction advanced by AWB and that advanced by the Commonwealth. I prefer to see the two arguments as complementary threads in the harmonious construction of the RCA: see Project Blue Sky at 381-382 [70] per McHugh, Gummow, Kirby and Hayne JJ. The principle enshrined in Baker and Daniels is that, in the absence of clear and unmistakable language, a compulsive notice such as that which can be issued under s 2(3A) will not be construed as requiring the production of legally privileged documents. There is no reason why this principle should not apply in its full rigour to the RCA. A construction of s 2(3A) that accords with this principle is supported by s 3(5) ; it affords a textual indication that a notice under s 2(3A) does not reach, and consequently s 3(4) does not apply to, documents which are the subject of legal professional privilege. 52 The joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ and the separate judgment of McHugh J in Daniels also make the point that it is necessary to determine the meaning and effect of the provision under which the notice for production is given before it can be determined what constitutes a refusal or failure to comply with the notice. There is nothing to suggest that the approach of the High Court in Baker and in Daniels would have been any different if the offence provisions relating to s 10 of the Crimes Act and s 155 of the TPA contained a 'reasonable excuse' exception. 53 The role that both threads can play in the overall construction of the RCA is illustrated by the facts of this case. Exhibit 665 was produced to the Commissioner in answer to the notice, albeit inadvertently and without waiving legal professional privilege in respect of the document. In those circumstances, the provisions of s 3(4) and (5) are not directly applicable and the question would arise whether the Commissioner's powers under s 6F to inspect, retain and copy documents which have been produced under a notice under s 2(3A) are to be read down, consistently with Baker and Daniels , as not extending to documents which are the subject of legal professional privilege. 55 I do not consider that it is any objection to the construction I prefer that the application of the principle in Baker and Daniels to read down the scope of a notice issued pursuant to s 2(3A), and the inclusion of legal professional privilege within the concept of reasonable excuse, might be described as a 'belt and braces' approach. There is nothing incongruous in such an approach where the objective of the exercise is the protection of a fundamental immunity recognised by the common law. 59 Furthermore, I do not accept the second step in the Commonwealth's argument. A reasonable excuse can obviously arise in a range of circumstances. Some circumstances amounting to reasonable excuse, such as physical incapacity, may intervene after the notice to produce has been served. In such a case, it may be appropriate to speak of s 3(5) displacing the obligation to produce non-privileged documents that is otherwise imposed by s 3(4). But to my mind it offends the general principles enunciated in Baker and Daniels to argue that a notice under s 2(3A) imposes an unqualified obligation to produce documents that are the subject of legal professional privilege, unless and until a reasonable excuse is established within the meaning of s 3(5). In my opinion, there is nothing in the RCA to support the contention that the Commissioner has implied authority to inspect documents produced under a s 2(3A) notice for the purpose of determining whether they attract legal professional privilege. 61 In Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67 ; (1999) 201 CLR 49 (' Esso ') at 64-65 [35], Gleeson CJ, Gaudron and Gummow JJ said: 'Legal professional privilege (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court. In the ordinary course of events, citizens engage in many confidential communications, including communications with professional advisers, which are not protected from compulsory disclosure. The rationale of the privilege has been explained in a number of cases, including Baker v Campbell , and Grant v Downs itself. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. In Waterford v The Commonwealth , Mason and Wilson JJ explained that legal professional privilege is itself the product of a balancing exercise between competing public interests and that, given the application of the privilege, no further balancing exercise is required. As Deane J expressed it in Baker v Campbell , a person should be entitled to seek and obtain legal advice in the conduct of his or her affairs, and legal assistance in and for the purposes of the conduct of actual or anticipated litigation, without the apprehension of being prejudiced by subsequent disclosure of the communication.' 154 The judgments in Baker trace the origins of the two limbs of legal professional privilege. Dawson J noted at 128, by reference to Lord Selborne LC's speech in Minet v Morgan (1873) 8 Ch App 361 at 366, that the law had advanced by successive steps: privilege was extended from communications relating to actual litigation to communications in anticipation in litigation and then to communications covering both litigation and legal advice. The litigation limb of the privilege developed first in response to the perceived requirements for a fair trial. Mason J said that communications in aid of litigation work were protected because 'to compel the parties to disclose such communications made in the conduct of that litigation would be unfair to them, hamper the preparation of their cases and protract the determination of the litigation': at 75. Brennan J referred to the 'lawyers brief' rationale that had been advanced by James LJ in Anderson v Bank of British Columbia (1876) 2 Ch D 644 at 656 and by Lord Simon in Waugh at 537, and said at 108: 'If the prosecution, authorized to search for privileged documents, were able to open up the accussed's brief while its own stayed tightly tied, a fair trial could hardly be obtained.' See also Deane J at 113-116. 156 In Carter at 160-161, McHugh J said that explanations of the rationale that have been put forward in terms of the proper functioning of the legal system or the perfect administration of justice take too little account of the fact that the privilege protects communications that seek or give legal advice in cases where no litigation is pending or contemplated. His Honour therefore expressed the rationale for the privilege more broadly: 'Now that this Court has held that legal professional privilege is not a rule of evidence but a substantive rule of law, the best explanation of the doctrine is that it is 'a practical guarantee of fundamental, constitutional or human rights'. By protecting the confidentiality of communications between lawyer and client, the doctrine protects the rights and privacy of persons including corporations by ensuring unreserved freedom of communication with professional lawyers who can advise them of their rights under the law and, where necessary, take action on their behalf to defend or enforce those rights. The doctrine is a natural, if not necessary, corollary of the rule of law and a potent force for ensuring that the equal protection of the law is a reality.' See also Brennan J in Carter at 127; Baker at 94-95, 118 and 130; Waterford v Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 (' Waterford' ) at 64; Maurice at 487; and Three Rivers at 677 [C] per Lord Carswell. 179 In Baker , Mason J said that a decision of an executive officer on a question of legal professional privilege would not be conclusive; a decision of a court on a prosecution for contravention of the statutory obligation or in proceedings for a declaration as to the existence of the privilege would be required in order to provide a conclusive answer: at 76; see also at 97 per Wilson J, at 105 per Brennan J, and at 132 per Dawson J. Daniels proceeded on the same basis. 188 The second area of dispute between AWB and the Commonwealth related to the Commonwealth's submission that the Commissioner has an implied authority under the RCA to require production of a document that is claimed to be the subject of legal professional privilege for the limited purpose of inspecting it in order to determine whether the claim to privilege is made out. In the course of considering the proper construction of the RCA, I rejected this submission on the grounds that it is not supported by the RCA and infringes the principles enunciated in Baker and Daniels .