O'Reilly and Ors. v. Commissioner of the State Bank of Victoria and Ors.

Judges: Gibbs CJ
Mason J

Murphy J
Wilson J

Court:
High Court of Australia

Judgment date: Judgment handed down 16 December 1982.

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Murphy J.

Questions 3 to 6. I agree with the Chief Justice's answer and with his reasons.

Questions 7 and 8. Section 264 of the Income Tax Assessment 1936 (``the act'' overrides any contractual obligation. including any implied duty of confidence (
Smorgon & Ors. v. F.C. of T. & Ors. 76 ATC 4364 ; (1976) 134 C.L.R. 475 ;
F.C. of T. & Ors. v. The ANZ Banking Group Ltd, ; Smorgon & Ors. v. F.C. of T. & Ors. 79 ATC 4039 ; (1979) 143 C.L.R.4039 ; (1979) 143 C.L.R. 499 ).

Legal professional privilege . The question is whether a federal common law of legal professional privilege applicable to statutory powers of obtaining information should be recognised, and what is its operation in relation to sec. 264 of the Act. The same considerations which led to a general recognition under State law of legal professional privilege warrant extension to federal statutes in the absence of some countervailing consideration. The privilege attaches to and is confined to communications solely ``for the purpose of advice or for the purpose of use in existing or anticipated litigation'' (
Grant v. Downs (1976) 135 C.L.R. 674 at p. 682 ). The privilege does not attach to contracts conveyances, declarations of trust or other transaction or arrangements, even if they have come into the hands of a solicitor for legal advice. The test of whether privilege exists is not the purpose for which the document came into the hands of the solicitor but whether the sole purpose for which it was created was to obtain advice or for use in pending or anticipated litigation.

Thus the privilege is strictly limited to a narrow class of communications. But the exercise of privilege is not confined to judicial or quasi-judicial proceedings, as suggested in England (see
Minter v. Priest (1930) A.C. 558 at p. 579 and recently Lord Diplock in
Parry-Jones v. Law Society (1969) 1 Ch. 1 at p. 9 ). The important public policy which justifies the privilege would often be defeated if the privilege were not generally available. In general the privilege is a sufficient answer to any officer seeking the disclosure of the protected communication, whether written or oral. The common law exception that the privilege cannot be used to facilitate the commission of crimes is applicable in relation to the operation of federal status. The strict confinement, since Grant v. Downs, of the class of privileged communications, is a powerful reason for extending the protection generally and not limiting it to judicial or quasi-judicial proceedings. Leaving aside judicial proceedings (where special considerations may apply connected with the judicial power of the Commonwealth) the privilege may be excluded by statute.

The questions should be answered:

• 3. (a) Yes.
  • (b) Yes.
• 4. Yes.
• 5.
  • (a) Yes.
  • (b) Yes.
• 6. Yes.
• 7.
  • (a) No.
  • (b) No.
  • (c) Perry is excused only in respect of evidence and documents created by or on behalf of the Lawsons solely for the purpose of obtaining legal advice and assistance in relation to existing or contemplated litigation.

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    ATC 4684

• 8.
  • (a) Unnecessary to answer.
  • (b) Perry is entitled, and bound to decide, whether compliance with the requirements of Sch. F would result in a breach of him of the duty of confidence. His decision is not conclusive, but is the basis for his claim of privilege in respect of the documents, and if not allowed, for his good faith application (for declaration or other relief) to a Court of competent jurisdiction to maintain privilege.
  • (c) Same as for (b).