HIGH COURT OF AUSTRALIA - GENERAL DIVISION

COMMISSIONER, AUSTRALIAN FEDERAL POLICE and ANOTHER v PROPEND FINANCE PTY LTD

Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ

7 February 1997 - Canberra

Dawson J I have had the advantage of reading the reasons for judgment of Toohey J and agree with them and with the orders which he proposes. I wish only to add the following comments.

Legal professional privilege and copy documents

The first question which arises is whether a copy of a document may attract legal professional privilege where the original does not. As Toohey J points out, it is confusing to regard legal professional privilege as attaching to documents rather than the information they communicate. While it is not uncommon in judgments for the distinction to be ignored, to say that a document is privileged is merely a shorthand way of saying that the communication constituted by the document is privileged. ^[1] As I said in Baker v Campbell: ^[2]

Legal professional privilege attaches only to communications made for the purpose of giving or receiving advice or for use in existing or anticipated litigation. Moreover, if the communication in question is in the form of a document submitted by a client to his solicitor for use in existing or anticipated litigation, privilege will attach to it only if it comes into existence solely for that purpose. The privilege cannot operate to put beyond the reach of the law documentary or other material which has an existence apart from the process of giving or receiving advice or the conduct of litigation.

The last sentence of that passage would better convey its true meaning if, instead of the words " documentary or other material " , I had continued to refer to " communications " because it is the communication of information that is protected by legal professional privilege against disclosure. That is so even where a document is brought into existence for use in existing or anticipated litigation, although in that case the information communicated may be of a somewhat different kind. Privilege does not protect a document from disclosure as a mere physical object any more than it protects from disclosure any other physical object. ^[3]

That is why a document which has been brought into existence otherwise than as a communication between client and legal adviser seeking or giving advice or for use in existing or anticipated litigation does not attract the privilege: it is not a communication which has its origin in that confidential relationship between client and legal adviser that it is the purpose of the privilege to protect. It is why a document which merely evidences a transaction, a contract for example, which is not a communication seeking or giving legal advice or for use in the conduct of litigation (in the sense that it pre-exists any actual or anticipated litigation) does not attract legal professional privilege, even if it is subsequently given to the legal adviser for the purpose of seeking advice or for use in litigation. And it is one of the reasons why the preferred view is ^[4] that a communication constituted by a document will only be protected by privilege if the document is brought into existence for the sole purpose of seeking or giving legal advice or for use in legal proceedings. The view that it is sufficient if that is the dominant purpose of the communication constituted by the document disregards the implication that the communication then has an existence apart from the confidential relationship between client and legal adviser and constitutes a communication which ought not be protected against disclosure. ^[5]

Brett MR had some of these considerations in mind in Pearce v Foster ^[6] when he said of the documents in question in that case:

It seems to me, therefore, that they fall within the class of documents with regard to which there is a professional privilege, on the ground that they are brought into existence for the purposes or in the course of professional communications between solicitor and client. I do not think that, where documents are already in existence aliunde, the mere fact of their being handed to a solicitor for the purposes of the conduct of the action can create a privilege; but, where documents are brought into existence by a solicitor or through a solicitor for the purposes of consultation with such solicitor, with a view to his giving professional advice or to the conduct of an action, these are in the nature of professional communications, and are as such privileged.

The same considerations lie behind the question which Jacobs J in Grant v Downs ^[7] thought was appropriate to determine whether legal professional privilege existed or not, namely, " does the purpose of supplying the material to the legal adviser account for the existence of the material? "

The words of Brett MR in Pearce v Foster adopt an argument put by counsel. That argument concluded: ^[8] " So a mere copy of such document made for the purposes of the action is not necessarily privileged: Lyell v Kennedy. " ^[9] Brett MR did not go so far in his judgment and it was unnecessary for him to do so for the purposes of the case before him, but it is, I think, the logical consequence of the argument which he accepted. That is illustrated by the Victorian case of Shaw v David Syme & Co. ^[10]

In that case the transcript of shorthand notes of court proceedings which were held in public was held not to attract legal professional privilege, even though the transcript was brought into existence for the purpose of enabling solicitors to advise in respect of a libel action and to conduct the action. The transcript was treated as a copy of the shorthand notes, that is to say, it was not considered significant that the original was in shorthand and the copy was not. What is important is that it was held that the original was not a communication seeking or giving legal advice nor, being merely a record of proceedings which took place publicly and independently of anticipated litigation, was it brought into existence for the purposes of the anticipated litigation. Of the copy, that is to say, the transcript, Madden CJ, in delivering the judgment of the court, said: ^[11]

It would, in our opinion, be wrong to say that, where a solicitor has said, " Get me a copy of that document, the original of which if in my possession will be liable to be discovered, " and such a copy is obtained for him, that copy document has come into existence for the purpose of being put before the solicitor. The document in question is in effect merely a translation of a document which of itself and untranslated would be useless. Being in shorthand, it has to be brought into such a condition that ordinary persons can read it. Therefore it is, as I have said, merely a translation. We think this transcript was not brought into existence for the purposes of the litigation within the true meaning of the rule which gives the privilege here claimed, and it seems to be definitely established by Chadwick v Bowman ^[12] and Lyell v Kennedy ^[13] that if an original is not privileged a copy can be in no better position.

Thus it was accepted that if an original document does not attract legal professional privilege, a mere copy cannot do so. The reason for this is apparent from the emphasis placed by Madden CJ upon the fact that the copy was a mere translation. The communication constituted by the copy, the translation, was the same as it was in the case of the original. The information conveyed by the one was no more or less than the information conveyed by the other, so that the copy could be in no better position than the original so far as privilege is concerned. That is to say, if the communication constituted by the original did not (as it did not) seek or provide legal advice and was not (as it was not) made for the purpose of litigation, then the communication constituted by the copy could not be regarded differently.

The point is also illustrated by Lambert v Home, ^[14] a case similar to Shaw v David Syme & Co. There it was held that a transcript of the shorthand notes of proceedings in open court was not privileged even though the transcript was made for use in future litigation. The transcriber had, in the words of Buckley LJ, " done nothing more than reproduce in a physical form that which came into existence in its relevant form when the witness spoke in the box. The writer is comparable to a gramophone or a photographic camera. The document as distinguished from its contents is not relevant " . ^[15] The same reasoning applies here. It is the contents of the document, the information which it communicates, that is the important thing. The copy distinguished from its contents is not important, for legal professional privilege attaches to the contents of a document rather than the document itself.

In Vardas v South British Insurance, ^[16] Clarke J said of Lambert v Home that it " rejected in categoric terms the notion that a copy of a document made for use in litigation was privileged although the original was not " . Clarke J disagreed with a decision of Hunt J earlier in the same year ^[17] where he concluded that " [i]f the sole purpose of submission to the party ' s legal advisers for advice accounts for the existence of the copy, it should be privileged " . Hunt J cited Grant v Downs ^[18] and National Employers ' Mutual General Insurance Association Ltd v Waind ^[19] in support of that conclusion, relying in particular on the well-known principle stated by Mason J in Waind ^[20] that legal professional privilege is concerned with the purpose for which the particular document was brought into existence rather than the purpose for which the information which it records was obtained. Expressing the distinction in that way may, perhaps, be misleading. The law is concerned with the purpose for which the information contained in the document was communicated, rather than the purpose for which the information itself was originally obtained. The former purpose remains unchanged upon the making of copies of the document. Clarke J had that in mind when he said ^[21] that Grant v Downs and Waind " were not concerned with, and do not deal with, the purpose of the mechanical reproduction or copying of a document. I regard the distinction between the collating and recording of information in a document and the mere reproduction of that document as one of substance " .

No doubt if the communication constituted by the copy in Shaw v David Syme & Co and Lambert v Home had been accompanied by some further communication which constituted the giving or seeking of legal advice or additional documentation for use in legal proceedings, the further communication would have been privileged. No doubt also a copy may be made of an unprivileged document or unprivileged documents in such a selective way as to render the copy or copies a communication of information which is different from or additional to the information conveyed by the original or originals. In that event, the copy or copies would be privileged.

In Lyell v Kennedy, ^[22] documents which were copies of unprivileged originals were held to attract privilege because the selection involved in the making of the copies by a solicitor " might shew what his view was as to the case of his client as regards the claim made against him " . ^[23] That is to say, the selected copies or the portions selected might by their very existence reveal the basis upon which the solicitor was proceeding and thus the nature of his advice to his client. It is implicit in the decision in Lyell v Kennedy that a mere copy of an unprivileged original document which does not reveal such additional information attracts privilege no more than the original. However, as was pointed out by Byrne J in Roux v Australian Broadcasting Commission: ^[24]

In the modern context where indiscriminate photocopying is the norm, it may be more difficult than in earlier days of manuscript copying to establish that there has been the interposition of professional skill and judgment in the selection of the materials to be copied so that their production discloses implicitly some confidential privileged information.

Lyell v Kennedy, and the earlier decision in Chadwick v Bowman, ^[25] appear to have been misunderstood in England for a time, perhaps because those cases did not spell out the true reason why a copy document does not attract privilege if the original does not do so. But the cases which seem to have applied a different principle were called into question by Lord Denning MR in Buttes Oil Co v Hammer (No 3) ^[26] where he said:

If the original document is privileged … so also is any copy made by the solicitor. But, if the original is not privileged, a copy of it also is not privileged … even though it was made by a solicitor for the purpose of the litigation: see Chadwick v Bowman. ^[27] There are some cases which appear to give a privilege to copies on their own account, even when the originals are not privileged. They range from Palermo ^[28] down to Watson v Cammell Laird & Co (Shipbuilders and Engineers) Ltd. ^[29] But those cases are suspect. They were adversely commented on in the Sixteenth Report of the Law Reform Committee on Privilege in Civil Proceedings (1967). ^[30] Since Waugh v British Railway Board ^[31] it is open to us to reconsider them. In my opinion, if the original is not privileged, neither is a copy made by the solicitor privileged. For this simple reason, that the original (not being privileged) can be brought into court under a subpoena duces tecum and put in evidence at the trial. By making the copy discoverable, we only give accelerated production to the document itself. That was pointed out by Winn LJ ' s committee in the Report of the Committee on Personal Injuries Litigation in July 1968. ^[32]

The reason why a copy document attracts no greater privilege than the original is, as I have endeavoured to explain, more fundamental than that given by Lord Denning MR. It is true that to make the copy discoverable may only be to give accelerated production to the document itself, but that is an argument which has its foundation in policy rather than logic. There are exceptions to the general rule that it is in the interests of justice that relevant documents be produced, and in this country that is so whether the production be for the purposes of litigation or the purposes of search and seizure preceding litigation. One of the exceptions exists where there is legal professional privilege and it exists in order to preserve the confidential relationship between client and legal adviser, a relationship which is to be fostered and preserved for the better working of the legal system. However, that relationship is not impaired and the interests of justice are best served if the client or his legal adviser on his behalf is compelled to disclose a copy of a document when production of the original might be compelled without any ground for objection. That may, I think, be said to be so as a matter of policy.

Notwithstanding the limited basis upon which Lord Denning MR justified his conclusion in Buttes Oil Co v Hammer (No 3), that conclusion appears now to be accepted in England, although again upon grounds of policy rather than principle. ^[33] In Australia there has been a division of judicial opinion, but the correct view is, for the reasons of policy and principle which I have identified, that a copy of a document which does not attract legal professional privilege is in no different position from the original. That view is supported by Australian authority. ^[34]

Admissibility of hearsay to exclude legal professional privilege

The other question which arises is whether hearsay evidence was admissible to establish that certain of the documents in question failed to attract legal professional privilege because there was a sufficient indication that they were brought into existence in furtherance of a crime or fraud. That limit upon the ambit of legal professional privilege was first recognised in R v Cox. ^[35] It is only those communications passing between a legal adviser and his or her client in professional confidence which are privileged and a communication made by the client for assistance in the commission of a crime or fraud lies outside any legitimate professional relationship. The issue in the present case is the nature of the evidence required to establish that the privilege is excluded on this ground.

The cases make it plain that those seeking to exclude legal professional privilege do not have to prove that the communication in question was in furtherance of a crime or fraud. In Bullivant v Attorney-General (Vic), ^[36] which was a case of fraud, the Earl of Halsbury LC said: " you must have some definite charge either by way of allegation or affidavit or what not " . In O ' Rourke v Darbishire ^[37] Viscount Finlay said: " there must be, in order to get rid of privilege, not merely an allegation … of a fraud, but there must be something to give colour to the charge. " That test was accepted in Attorney-General (NT) v Kearney ^[38] by Gibbs CJ, with whom Mason and Brennan JJ agreed. Gibbs CJ added ^[39] the further words of Viscount Finlay: ^[40]

The statement [ie the allegation of fraud] must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact … [T]he court will exercise its discretion, not merely as to the terms in which the allegation is made, but also as to the surrounding circumstances, for the purpose of seeing whether the charge is made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communications.

In requiring less than proof of an allegation of crime or fraud to displace legal professional privilege, the law has made a compromise in the public interest between the competing principles which require, on the one hand, the availability of all relevant evidence and, on the other, the protection of professional confidence. It has done so in favour of the availability of all relevant evidence by placing the threshold for the displacement of the privilege a considerable distance short of proof of the allegation of crime or fraud. No doubt that is so because it is in the public interest that the law should not countenance even the possibility of legal professional privilege being raised as a cloak to hide criminal or fraudulent activities. Proof, that is to say, admissible evidence of the existence of the crime or fraud, is not required. It is enough that circumstances are made to appear which sufficiently point to the bona fides and credibility of the allegation. It is apparent that for this purpose hearsay evidence cannot be excluded. Thus in O ' Rourke v Darbishire Lord Sumner said: ^[41]

The stage in the action is only an interlocutory one, and the materials must be weighed, such as they are, without the apparatus of a formal trial of an issue. On such materials the court must judge whether the claim of privilege is displaced or not.

In the same case Lord Parmoor said: ^[42]

Whether the circumstances brought to the notice of the court in a particular case are sufficiently explicit to establish a prima facie case of definite fraud, either by allegation, affidavit, or in some other way, will depend on the special facts in each case: R v Cox. ^[43] But something more is required than mere pleading, or than mere surmise and conjecture.

Lord Wrenbury said: ^[44]

… the plaintiff must show to the satisfaction of the court good ground for saying that prima facie a state of things exists which, if not displaced at the trial, will support a charge of fraud. This may be done in various ways: admissions on the pleadings of facts which go to show fraud: affidavits in some interlocutory proceedings which go to show fraud; possibly even without admission or affidavit allegations of facts which, if not disputed or met by other facts, would lead a reasonable person to see, at any rate, a strong probability that there was fraud, may be taken by the court to be sufficient.

Of course, in interlocutory proceedings hearsay is ordinarily admissible in the form of affidavit evidence upon the basis of information and belief, but it is apparent that in determining whether the privilege is displaced not even affidavit evidence is necessarily required.

The proceedings in the present case in which Davies J determined that there was sufficient substance to the allegation of crime or fraud to displace the privilege in relation to certain documents may not perhaps be accurately described as interlocutory proceedings for they resulted in a declaration which was not part of any proceedings otherwise on foot. The true nature of those proceedings can only be seen by reference to the General Guidelines between the Australian Federal Police and the Law Council of Australia as to the execution of search warrants on lawyers ' premises, law societies and like institutions in circumstances where a claim of legal professional privilege is made " . ^[45] Under those guidelines, documents in relation to which legal professional privilege is disputed are placed by the legal adviser, under the supervision of the police officer seeking to execute the warrant, in a sealed container. The container is then jointly delivered into the custody of some independent person. That is to enable the question of legal professional privilege to be determined and that is how the proceedings before Davies J arose.

The real question before Davies J, despite the form of relief he ultimately gave, was whether the police officer was entitled to seize the documents which he wished to seize and to which the search warrant could not validly have extended if they were documents which attracted legal professional privilege. That is to say, the question which Davies J was required to decide was whether the police officer was entitled to implement the decision (the implementation being cut short by the invocation of the guidelines) which he reached, namely, the administrative decision to seize the documents in question notwithstanding the assertion of legal professional privilege. He was entitled to do so if it was sufficiently apparent that the documents came into existence in furtherance of a crime or fraud. Clearly in reaching his conclusion upon that question the police officer could act on the materials available to him and was not confined to admissible evidence. Thus if the proceedings before Davies J be considered as, in effect, a review of the police officer ' s decision, then clearly his Honour was entitled to have regard to the same materials as were available to the police officer. On the other hand, if they were independent proceedings to determine whether legal professional privilege was displaced, then they were in substance, if not in form, interlocutory proceedings or at least the kind of proceedings in which it is established that hearsay evidence is not excluded. As Toohey J points out, much of the evidence before Davies J was not hearsay, but in any event, in my view, his Honour was entitled to have regard to hearsay evidence in concluding that the documents in question did not attract the privilege.