Case: Commissioner of Taxation v Rio Tinto [2006] FCAFC 86 ; (2006) 151 FCR 341
Outcome: distinguished
the hearing an issue arose as to whether the nature of certain submissions made by counsel for ASIC waived legal professional privilege in certain parts of the Spear Report and the incorporated report based upon the reasoning of the Full Court in Commissioner of Taxation v Rio Tinto [2006] FCAFC 86 ; (2006) 151 FCR 341. After hearing argument on behalf of the Administrators I said: 'I am not persuaded that a defensive argument or submission deploys the substance of legal advice in the way the authorities require ...' Further argument was then presented by counsel and, after further reflection, I adhered to my opinion and rejected the application for access to the whole of the documents in question. Attention was particularly drawn to pars 74 80 of ASIC's written submissions. The submissions in question were an answer to the argument that par 23 of the Gray Memorandum was irrational. It is sufficient to set out par 75 and par 80 to understand the argument: '75. In such a complex case, Mr Gray, in his memorandum to Mr Taylor, was entirely reasonably adverting to the possibility that ASIC's own conclusion as to prospects was not infallible or the only view which could be said to be reasonably or even possibly open, especially in circumstances where ASIC had only examined four persons and the applicants had signalled an intention to examine additional persons. ... 80. The most that can be said of the material is that it indicated that there was insufficient evidence for ASIC to take action. ASIC is a public body with has limited resources to take legal action. As a public prosecutor, ASIC needs to exercise caution before taking steps against private persons. It does not follow from there being insufficient prospects of success for ASIC to take action that there are insufficient prospects of success for a private person to take action. For the same reason, it did not follow from this result of the investigation that the examinations would be futile.' It was submitted that ASIC's reference to 'complex' connoted some form of assessment of the merits which could not be tested without having access to all of the underlying material. It followed that it would be unfair not to have such access to counter that which was put forward on behalf of ASIC. Rio Tinto [2006] FCAFC 86 ; 151 FCR 341 concerned an interlocutory discovery issue. The common law was applied and the test was expressed as follows (151 FCR at [61]): 'Both before and after Mann , the governing principle required a fact-based inquiry as to whether, in effect, the privilege holder had directly or indirectly put the contents of an otherwise privileged communication in issue in litigation, either in making a claim or by way of defence. In DSE (at [58]) Allsop J put the matter somewhat more descriptively, saying waiver arises when: "the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication".' (emphasis in original) Counsel for ASIC submitted that as the point here arose at the hearing, it was governed by s 122 of the Evidence Act rather than the common law. It was not necessary to decide that question as I was not persuaded that the application should succeed on the basis put forward. The reasons in Rio Tinto 151 FCR from [64] [68] make clear that it was a special case, depending upon the form of particulars given by the Commissioner. In my opinion, an argumentative submission that is responsive to an integer of the applicant's case and defensive of the respondent's position would not normally give rise to the type of inconsistency referred to by the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 and applied on the facts of Rio Tinto [2006] FCAFC 86 ; 151 FCR 341 (cf Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237 ; (2004) 140 FCR 101). I could see no special feature of the present case to displace that position.