Issues:

• Does the Evidence Act alone now prescribe the tests for the protection of confidential documents and communications? 
• If not, in what circumstances does the common law apply?
• If privilege does not apply to all communications between lawyer and client, then do the restrictions amount to qualifications on the duty to the client?
• How permeable and satisfactory is a “Chinese Wall”?
• Do the Courts help build them or bust them?

Desired Outcomes:

• An appreciation of the relevant test. 
• The ability to work out whether future instructions could give rise to a conflict with the rights of a former client and what to do about it.

1. Confidential communications and privilege

Privileged communications are excluded because their disclosure would harm a fundamental principle or relationship that society deems worthy of preserving at the expense of litigants having all relevant material for litigation. 

Baker v Campbell (1983) 153 CLR 52*

The primary modern rationale for the doctrine rests in the notion of the rule of law; in particular, that the privilege is the necessary corollary of the right of persons to obtain skilled legal advice, in circumstances in which full disclosure is protected and hence encouraged

Not just privilege of evidentiary matter but also to execution of search warrants

Evidence Act 1995 (Cth), ss 118-126*

OnIy applies in respect of proceedings and applies the 'dominant purpose' test.

Section 117 defines “confidential communication” as made in such circumstances that when it was made where two people were involved, one of them was under an express or implied obligation not to disclose it’s contents whether or not it arises under law.  The term client is defined in s118 it includes under (a) an employer of a lawyer

Section 118 says evidence is not to be adduced if on objection by a client the court finds that adducing the evidence would result in disclosure of
(a) a confidential communication for the dominant purpose of the lawyer providing legal advice to the client.
(b) talks about 2 or more lawyers acting for the client and
(c) talks about a confidential document prepared by the lawyer - for the dominant purpose of legal advice.

Section 119 creates legal professional privilege between third parties (ie lawyer/expert, client/expert).  It must still be for the dominant purpose.  The dominant purpose is different it is professional legal services relating to a proceeding.  You must have litigation on foot or anticipated or pending.

Section 120 does not apply in non EA jurisdictions.  It is about a privilege that is available where the litigant is not represented.  Here we have an unrepresented party being able to get a report from another for the purpose of the proceeding. 

Sections 121 – 126 are about circumstances in which the privilege can be lost. 

Section 121(2) is of general relevance where the court would be prevented from enforcing an order of the court.  There was an exception because the court had made an order and that order had to be enforced.

Re Bell; Ex parte Lees

There was a matrimonial dispute.  The question that arose in the divorced proceedings were who was going to have custody of the child.  The other question was about matrimonial property.  Despite the fact that the husband had custody, she refused to accept this and took the child and disappeared.  The lawyer went into court to file a document in relation to the matrimonial property dispute.  The husband concluded that the lawyer was in touch with the wife.  The husband sought the information of the location of the wife.  The lawyer refused on the basis of privilege.  The court sent the lawyer to goal for contempt.

Section 122 – if the client consents then the privilege will not prevent the disclosure of the information.  Also s 122(2) the privilege does not apply if the client has knowingly and voluntarily disclosed the information to another in circumstances not protected the privilege.  It is possible to waive the privilege.  The question arises as to whether waiver can be accidental.  You have to knowingly and voluntarily disclose to another.  Section 122(4) – substance of evidence has been disclosed with the express or implied consent of the party to another person

Section 123 – in a criminal proceeding. 

Section 125 applies in circumstances where the privilege has been used to assist in misconduct, furtherance of commission of fraud.

AG for NT v Kearney

The “public interest privilege” of the executive government is the subject of s 130 of the Evidence Act 1995 (NSW) which codifies and clarifies the common law as laid down in Sankey v Whitlam.  There, the High Court decided that if the government claims that certain documents or information are privileged from being given in evidence on the grounds of a countervailing public interest (“public interest privilege”), the court itself may examine the material to see whether there are reasonable grounds for claiming that privilege

Grant v Downs (1976) 135 CLR 674

Most of the judges said the document will only be protected if it is prepared for the sole purpose of seeking legal advice.  A court can examine the document to determine whether a claim has been made out

Esso Australia Resources Limited v The Commissioner of Taxation [1999] HCA 67 (21.12.99)

Advice privilege protects verbal or written communications between a lawyer and client from disclosure in legal proceedings or otherwise, where such communications are confidential and made for the dominant purpose of requesting or providing legal advice.

Photocopies are also privileged

Baker v Campbell (1983) 153 CLR 52*

A claim of privilege is not confined to judicial or quasi judicial proceedings and extends to

Nickmar v Preservatrice Skandia Insurance (1985) 3 NSWLR 44*

It was held that legal professional privilege only attaches to documents prepared by third parties (not being servants or employees of the entity called upon to produce the documents) when they are prepared for or in contemplation of litigation or for the purpose of giving advice or obtaining evidence with reference to such litigation

Sevic v Roarty (1998) 44 NSWLR 287

Privilege – Compulsion of Law privilege is not waived if disclosure was made under a compulsion of law.  See also EA s122(2)(c)

Citibank v FCT [1985] ATC 4714*

The Full Federal Court held that the doctrine of legal professional privilege applied to restrict the powers of the Federal Commissioner of Taxation under Section 263 of the Income Tax Assessment Act 1936.  The Court also held that the (Commonwealth) taxation officer was obliged to ensure that Citibank, and in particular its staff, had, in the circumstances, adequate opportunity to make claims of privilege on behalf of its clients

CAC v Yuill (1991) 172 CLR 319

As later explained by the High Court in Daniels, a critical plank of the reasoning of the High Court in Yuill was that the then Companies Code 1981 fell to be construed against that background understanding that client legal privilege was merely a rule of evidence

Daniels v ACCC [2002] HCA 49

Now that it is understood to be a rule of substantive law and an important common law immunity

The High Court again pointed to the well-settled rule that statutory provisions should not be constred as overriding common law rights, privileges or immunities without the legislation providing so by express words ot as a necessary implication. If investigations by authorities were to be hampered by the Court's ruling then, the Court suggested, that would be short-lived since Parliament would intervene to amend the legislation.

A majority of the High court said that Yuill might be decided differently today

James Hardy Act specifically overrides privilege

Pyneboard Pty Ltd V TPC (1983) - High Court

General principle that a statute will not be construed to take away a common law right unless the legislative intent to do so clearly emerges, whether by express words or by necessary implication.

[In] deciding whether a statute impliedly excludes (Privilege) much depends on the language and character of the provision and the purpose which it is designed to achieve. The privilege will be impliedly excluded if the obligation to answer, provide information or produce documents is expressed in general terms and it appears from the character and purpose of the provision that the obligation was not intended to be subject to any qualification. This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation. In such cases it will be so, notwithstanding that the answers given may be used in subsequent legal proceedings.

Waterford v The Commonwealth (1987) 61 ALJR 674

Onus of proof of privilege rests on party claiming it.