Case: Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674
Outcome: considered
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 .' 58 According to the Commonwealth, the Commissioner has implied authority to require production of a document referred to in a notice under s 2(3A) for the limited purpose of inspecting it in order to determine whether the claim to legal professional privilege is made out. This submission relied on an analogy with the powers of inspection that inhere in a Court: see Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674 at 689. The Commonwealth also argued that further support could be found in the following factors. First, only a member of a Commission has the power to require production under s 2(3A) of the RCA. Secondly, a Commissioner has the same protection and immunity as Justices of the High Court in the performance of his or her duties under the RCA. Thirdly, it was said that proceedings of a Royal Commission have a quasi-judicial character, albeit they are not adversarial in nature. Reference was made to the protections afforded to witnesses and legal practitioners appearing at Commission hearings and the fact that a Commissioner who is a Judge has the power to punish for contempt in the face of the Commission: s 6O. In my opinion, none of these factors, and nothing in the RCA, supports the Commonwealth's submission. 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.' 63 AWB carries the onus of establishing that Exhibit 665 attracts legal professional privilege. In this Court, AWB has sought to discharge the onus by adducing evidence as to the circumstances in which the document was brought into existence and then communicated to others, by reference to the nature of the document itself, and by argument and submission. It has gone beyond, as it must, formulaic claims of the kind contained in Ms Peavey's affidavit: see Grant v Downs at 689 per Stephen, Mason and Murphy J; and Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 (' FCT v Pratt Holdings' ) at 477 [30]. 105 A 'dominant purpose' is one that predominates over other purposes; it is the prevailing or paramount purpose. In FCT v Pratt Holdings, on remitter from the Full Court, Kenny J said at 279-280 [30]: '(7) The dominant purpose is not the same as the "primary" or the "substantial" purpose: see Grant v Downs at CLR 678; ALR 580 per Barwick CJ. The "dominant" purpose may be described as the ruling, prevailing, paramount or most influential purpose: see Mitsubishi Electric at [10], citing Federal Commissioner of Taxation v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 at 416; [1996] HCA 34 ; 141 ALR 92 at 98 per Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ. The "dominant purpose" brings within the scope of the privilege a document brought into existence for the purpose of a client being provided with professional legal services notwithstanding that some ancillary or subsidiary use of the document was contemplated at the time: Esso at 72 [58] per Gleeson CJ, Gaudron and Gummow JJ; Sparnon v Apand at FCR 328; ALR 740-1 per Branson J; and see GSA [26]-[28] per Holmes J.' 106 Kenny J also said at 478 [30] that where two purposes are of equal weight, neither is dominant in the relevant sense; hence a document is not privileged from production where one purpose for its creation is to obtain legal advice, but there is another equally important purpose. I agree. The same conclusion follows if several purposes are of roughly similar weight, and it cannot be said that one prevails over the other. In Waugh v British Railways Board [1979] UKHL 2 ; [1980] AC 521 (' Waugh' ) at 543, Lord Edmund-Davies adopted the dominant purpose test propounded by Barwick CJ in Grant v Downs , and stated that the element of clear paramountcy should be the touchstone. It is not unusual for privilege claims to fail because the evidence does not establish the requisite dominant purpose: see, eg, Kennedy v Wallace (2004) 208 ALR 424 at 444 [73]; and FCT v Pratt Holdings at 285 [44]-[46] and 287 [56]. 108 Ordinarily, the relevant purpose will be that of the author of the document in question, but this will not always be the case. In Grant v Downs , Barwick CJ said at 677: 'Having considered the decisions, the writings and the various aspects of the public interest which claim attention, I have come to the conclusion that the Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.' 109 In Mitsubishi Electric Pty Ltd v Victorian Workcover Authority [2002] VSCA 59 ; (2002) 4 VR 332 at 338 [14] , Batt JA (Charles and Callaway JJA concurring) said: 'As summarised by Gummow J in Hartogen Energy by reference to High Court decisions, the purpose, that is the intended use, for which a document is brought into existence is a question of fact. Ordinarily the purpose will be that of the maker of the document, but that will not always be the case, as where some other person, such as a solicitor commissioning the provision of a technical report, calls the document into existence. In that case the relevant intention will not be that of the author but the solicitor: Hartogen Energy . Likewise, in his statement of principle in Grant v Downs Barwick CJ included the dominant purpose of the person under whose direction, whether particular or general, the relevant document was produced or brought into existence.' 110 In FCT v Pratt Holdings , Kenny J observed at 278 [30], correctly in my view, that the dominant purpose must be determined objectively, having regard to the evidence, the nature of the document and the parties' submissions. Kenny J added that the evidence of the intention of the document's maker, or of the person who authorised or procured it, is not necessarily conclusive of that purpose: see GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 (' GSA Industries' ) at 153 [28] per Holmes J; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 at 545 per Goldberg J; Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1036 per Slade LJ; Hartogen Energy Ltd (in liq) v Australian Gas Light Company (1992) 36 FCR 557 at 568-569 per Gummow J; and Sparnon v Apand Pty Ltd (1996) 68 FCR 322 at 328 per Branson J. As these cases make clear, it may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that lead to the creation of the document and its subsequent communication. 116 Exhibit 665 is a confidential exhibit to Mr Zwier's affidavit of 5 April 2005. The exhibit was not made available to the respondents. It is well recognised that a court may examine a document over which privilege is claimed in order to ascertain whether the nature and content of the document supports the claim to legal professional privilege. In Grant v Downs, Stephen, Mason and Murphy JJ stated at 689: 'The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence.' See also Trade Practices Commission v Sterling [1978] 36 FLR 244 (' Sterling' ) at 246 per Lockhart J. 117 I have inspected Exhibit 665. In my opinion, the character and content of the document does not provide any assistance to AWB in establishing its claim for legal professional privilege. On the contrary, it confirms my view that it was brought into existence, and was to be used, for multiple purposes, and that the two other purposes I have identified were of no lesser importance than the purpose of obtaining legal advice. 144 A traditional formulation of the second limb of legal professional privilege is that it applies to confidential communications passing between a client, the client's legal adviser and third parties for the dominant purpose of use in or in relation to litigation which is either pending or in contemplation: see FCT v Pratt Holdings at 284 [39] per Kenny J. This formulation was referred to, with apparent approval, by Finn J in the Full Court in Pratt Holdings at 360 [6]: see also Grant v Downs at 677 per Barwick CJ. 155 The traditional rationale for the litigation limb of legal professional privilege was explained by Stephen, Mason and Murphy JJ in Grant v Downs at 685: 'The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. The existence of the privilege reflects, to the extent to which it is accorded, the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available. As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision. None the less there are powerful considerations which suggest that the privilege should be confined within strict limits.'