Case: Commissioner of Taxation v Pratt Holdings Pty Ltd [2004] FCAFC 122 ; (2004) 136 FCR 357
Outcome: cited
15 May 2008, the ATO officer again wrote to Mr Nicholls, relevantly, in the following terms: The ATO and AFP have so far acquiesced to what amounts to a "blanket" claim for LPP notwithstanding that you have no legal basis for doing so. Opportunity was provided at the time of the warrant execution for you to make specific LPP claims which you did not do. You were also provided the opportunity to examine documents before they were removed from your premises and indeed I have been informed that you appeared to do so in the presence of the AFP Federal Agents Allen and Cameron in attendance at the time. On three occasions you attended in the shed at your property and examined documents and other records set aside for seizure by me whilst I was present but made no claim at the time in relation to those records. I acknowledge that you made reference to communications with lawyers at the time in the context that electronic records were likely to contain such communications however, I am informed by Federal Agent Allen that you did not make specific reference to any communication or document nor seek to claim LPP for such communication(s). A claim for LPP is based upon communications or documentation made for the dominant purpose of obtaining or giving legal advice and/or for the dominant purpose of conducting actual or contemplated litigation. Based upon records of the seizure, there appears to be a significant amount of documentation relating to financial records, invoicing, receipts, expenses, banking documents, diaries, notebooks and like documents. As such, there does not appear to be any basis for a claim of LPP. That letter then referred to the "dominant purpose test" in determining whether legal professional privilege exists, as set by Kenny J in Commissioner of Taxation v Pratt Holdings Pty Ltd [2004] FCAFC 122 ; (2004) 136 FCR 357 , and continued: In relation to any LPP claim you wish to make in respect of records held in electronic form, please indicate the location of such records and specifically identify the parties to the communications. The ATO will seek to have the LPP issue dealt with expeditiously and will not agree to or accept any unnecessary delay in respect of the same. The ATO officer then set out a proposal for access to be granted to the seized material for the purpose of Mr Nicholls identifying the seized material over which he claimed legal professional privilege. The letter differentiated between the hard copy seized material and the electronically stored seized material, requiring Mr Nicholls to identify with sufficient particularity his claim to legal professional privilege, with a full and proper description of each document and the basis upon which he claimed legal professional privilege: Each non-electronic document over which you make an LPP claim should be addressed by you vide the following criteria: (a) the nature of the document (e.g. advice, invoice, contract, etc): (b) the exact number of pages; (c) the date the document was prepared or executed; (d) the identity of each person(s) who prepared and/or signed the document and the identity of the person(s), if anyone, to whom it was directed; (e) a physical description of the document (e.g. typed or handwritten); (f) whether the document is an original or a copy; (g) whether LPP is asserted over the whole document or a part of the document and, if the latter, what part; (h) the basis upon which a claim of LPP is asserted; and (i) the person(s) in whose name the LPP claim is asserted and whether consent to the asserting of LPP has been given by that person or those persons. With regard to electronically stored communications and documents, as I stated, you have the original source in your possession. Upon attending any viewing process or at any time before that, you should be able to supply a list of such communications or documents electronically stored over which you wish to claim LPP which addresses the following criteria: (a) the filename of the document (eg. Smith.doc); (b) the location of the document (eg. C:/My Documents/Partner); (c) the nature of the document (e.g. advice, invoice, contract, etc); (d) the exact number of pages; (e) the date the document was prepared or executed; (f) whether LPP is asserted over the whole document or a part of the document and, if the latter, what part; (g) the basis upon which a claim of LPP is asserted; and (h) the person(s) in whose name the LPP claim is asserted and whether consent to the asserting of LPP has been given by that person or those persons. The letter then set out that any claims to legal professional privilege, in respect of both hard copy and electronically stored seized material, should record "sufficient information for the ATO to determine whether they wish to challenge the claim". Mr Nicholls replied by way of letter on 15 May 2008, relevantly, that he did not accept the ATO or AFP's "recollection of events in relation to the matters relating to LPP", and indicated that he was in the course of communications with the Legal Services Commission (LSC) in relation to his claim to legal professional privilege and advised: until such time as we have received a formal response from the LSC and have secured legal representation to adequately respond to the issues at hand, we do not waive our claim of legal professional privilege nor do we agree to the ATO accessing our documentation in the interim period. It appears that the process of identifying the claim to legal professional privilege stalled at that stage.