Every practitioner is aware of the privilege that protects certain communications between themselves and their clients.
Most practitioners would be aware that, like many other government agencies, the Child Support Agency has the power to issue notices compelling production of documents and information, even from third parties to a child support assessment.
What is a solicitor obliged to do if a client has provided a bundle of documentation in relation to a child support query and the Child Support Agency serves Notice under s.120 of the Child Support (Assessment) Act compelling production of all material relevant to that Agency’s assessment process?
What is privileged? What isn’t? What prevails – legal professional privilege or the Child Support Agency notice?
This article aims to provide an answer to the questions posed above.
Legal Professional Privilege at common law
Legal professional privilege has been present for almost as long as common law has existed in the United Kingdom.
It has been described as “a privilege which has existed for many centuries and which has been recognized to be, and has been supported as being, in the public interest” (Gresson J in Commissioner of Inland Revenue v West-Walker (1954) NZLR 191, at p211).
In essence, the privilege is to the effect that “. . . communications made to and from a legal adviser for the purpose of obtaining legal advice and assistance are protected from disclosure in the course of legal proceedings, both during discovery and at the trial. . . . Any other communications as are reasonably necessary in order that the legal advice may be safely and sufficiently obtained are also protected, but in the case of communications to or from a non-professional agent or third party, such as a person who witnessed some event, the privilege only arises if litigation is threatened or contemplated.” (Deane J in Baker v Campbell (1983) 153 CLR 52 at page 117, see also Halsbury’s Laws of England (4th ed.), vol. 13, par. 71 ).
The modern form of the privilege is the privilege of the client (as opposed to the solicitor). That distinction becomes important when issues such as waiver are discussed below.
The rationale behind the doctrine is hardly surprising. A client is more likely to be frank with a lawyer if the client is not worried about what is said being repeated, whether that be voluntarily or under compulsion.
The relatively narrow scope of the privilege is, sometimes, surprising.
The privilege applies to communications only. The historical basis of the privilege lay in the notion that a client should be free to speak candidly with a solicitor and thus obtain the most informed legal opinion possible.
However, as solicitors and clients often need to communicate in writing, and as solicitors often keep contemporaneous notes of their advice, the privilege will extend to documents, in the sense that those documents are evidence of communications between solicitor and client.
It is the communication that is protected.
Legal professional privilege is, historically, a creature of common law. The common law privilege is, however, over-ridden in Commonwealth proceedings by the Commonwealth Evidence Act. That is discussed in more detail below.
Is the Privilege Confined to Judicial and Quasi-Judicial Proceedings?
Like so many things legal, there is no simple answer to the above question, nor has the answer remained static over time.
Of particular interest, from the point of view of this article, is whether or not communications between a client and a solicitor (or evidence of them) would have to be provided by that solicitor to the Child Support Agency if that Agency served a notice in proper form upon the solicitor.
The flow of cases discussed below, seem to identify two major areas of development in the common law privilege — first, the expansion of the operation of the privilege from just trials where evidence was to be adduced in court, and, second, the change in the test to be applied to determine whether or not communications are in fact privileged.
The common law test, historically, contemplated protecting communications made in the course of litigation or in contemplation of litigation.
What happens, though, if the Child Support Agency issues, for example, a Notice to Produce Documents under s.161 of the Child Support (Registration and Collection) Act when there is no litigation or contemplated litigation?
In Baker v Campbell, Gibbs CJ made the following observation (at page 60):
“ The principles relating to legal professional privilege were developed in relation to the giving of testimony and the production of documents in legal proceedings, and we have not been referred to any English or Australian case in which the privilege has been held to protect confidential communications between solicitor and client from production under a lawful requirement made otherwise than in the course of judicial or quasi-judicial proceedings. However, until quite recent times, it has been unnecessary for the courts to consider whether the privilege could have any application outside legal proceedings.
At common law there existed no power to compel a solicitor (or anyone else) to divulge information or produce documents, whether privileged or otherwise, except in legal proceedings, and no power to obtain a search warrant except to search for stolen goods, which would in any case not have been the subject of privilege. For many years after statutory powers were first conferred to grant search warrants, no question of privilege seems to have arisen, possibly because the nature of the things for which the warrant authorized a search to be made (such as things with which a crime was committed, or which were the fruits of a crime or evidence of the commission of a crime) made it unlikely that they would be found in a solicitor’s office. Perhaps because social conditions have changed, the question whether legal professional privilege was an answer to a warrant which authorized a search of a solicitor’s office arose for consideration in reported cases in England or Australia for the first time during the last decade.”
That observation helps place some of the earlier decisions into context.
It makes sense to think that the privilege, a creature of the common law and public policy, was created and developed in an environment where no government agencies existed, let alone had power to compel production of documents or information.
As such agencies came to exist, particularly in the last hundred years or so, it became necessary for the Courts to determine whether or not the privilege had to evolve as well.
Dominant Purpose versus Sole Purpose
In 1976, the majority of the High Court (Stephen, Mason and Murphy JJ) held, in the case of Grant v Downs (1976) 135 CLR 674 that a communication must be made “for the sole purpose” of giving or receiving legal advice on actual or anticipated legal proceedings to attract privilege.
It was later pointed out by the majority of the High Court in the case of Esso Australia Resources Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 that there was no actual debate over a “sole purpose” test versus a “dominant purpose” test in the matter of Grant v Downs.
Neither test was greatly relevant to the outcome of the decision Grant v Downs. In that particular case the reports in question were prepared for a number of purposes, only one of which was to seek legal advice. The purposes behind the creation of the reports wouldn’t have satisfied either a dominant purpose or a sole purpose test.
The law until Grant v Downs was, essentially, to the effect that if a document was prepared for multiple reasons, provided that one of those reasons was to seek or provide legal advice, then that was sufficient to attract privilege.
In the course of his judgment in Grant v Downs, Barwick CJ actually did consider the issue of a sole purpose test versus a dominant purpose test and he held that communications made “for the dominant purpose” of giving or receiving advice would attract legal professional privilege.
When the Commonwealth Evidence Act was passed in 1995, it adopted the “dominant purpose” test, probably in recognition of the fact that that was, by then, the test used in most common law jurisdictions at the time (United Kingdom, New Zealand, and most of the Canadian Provinces).
So, from 1995 when the Commonwealth Evidence Act came into effect, until 1999 when the case of Esso (discussed below) was decided, there were in fact two tests in Australia.
Any question of legal professional privilege being considered in the context of the Commonwealth Evidence Act was considered in terms of the dominant purpose test. Anything else was considered under the common law, and, therefore, in terms of the sole purpose test.
A differently comprised High Court held, (in the Esso case in 1999), that communications made “for the dominant purpose” of giving or receiving advice would indeed attract the privilege.
In a joint decision, Gleeson CJ, Gaudron and Gummow JJ paid considerable attention to the path via which the sole purpose test had established itself in Australian common law.
Their Honours made the observation referred to above that the majority in Grant v Downs were not even called upon to decide whether or not the sole purpose or dominant purpose was the correct test.
Their Honours then observed that over a great many cases in a number of jurisdictions, but notably in the United Kingdom and in New Zealand, Courts had found reason to criticize the sole purpose test as being unduly narrow.
In the end, their Honours held that the correct test to be applied in the common law of Australia was the dominant purpose test. They were joined in this view by Callinan J.
Thus, where the dominant purpose behind the creation of communications and documents is for the purpose of giving or receiving legal advice, then those communications (and any evidence of them) attract the operation of legal professional privilege at common law.
Client legal professional privilege under The Commonwealth Evidence Act (1995)
The Commonwealth Evidence Act sets out to create a uniform body of rules relating to evidence in Commonwealth proceedings.
As all would be aware, New South Wales and Victoria have both passed legislation mirroring the Commonwealth Act. There remains lively speculation with respect to what may happen in the other States.
At any rate, the Commonwealth Evidence Act certainly seems to preserve the notion of legal professional privilege.
Section 118 of the Evidence Act says as follows:
“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 made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.”
Section 119 then goes on to provide as follows:
“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 between the client and another person, or between a lawyer acting for the client and another person, that was made; or
(b) the contents of a confidential document (whether delivered or not) that was prepared;
for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.”
“Confidential communication” is defined in s.117 in such a way that it could include, for example, accountants reports and the like provided that the report meets the dominant purpose test.
For a recent consideration of what constitutes a “confidential document” see Vasser v Taylor-Black [2010] FamCAFC 36.
Prior to the 2008 amendments, the privilege did not extend to documents prepared by third parties.
In the context of a child support dispute, the category of documents not capable of being protected by privilege is large and includes pay slips, bank statements, share trading records, etc.
Though he did not concur with the decision to adopt the dominant purpose test in the Esso case, McHugh J nevertheless made some helpful observations in the course of his judgment. He observed:
“If the sole purpose of the communication is to obtain or give legal advice or assistance, privilege exists under Grant v Downs. If there was some other purpose for the communication , privilege does not exist. But it is the purpose of the communication that is decisive, not the purpose in making the document (for example, to have a record) or any copies of the document. If six copies of a communication are made because they may later be useful, they are all privileged if the communication was privileged. That is because they evidence a privileged communication. Thus, even an entry in a bill of costs may be privileged because it records a communication”
Given the nature of the Evidence Act, the sections referred to above only apply to actual or anticipated litigation.
Legal Professional Privilege at Common Law and Client Legal Privilege under the Evidence Act — Which one Applies When?
The Australian Law Reform Commission clearly was attracted to the idea of uniformity of rules of evidence across all Federal Courts when it wrote its report on evidence in 1988. (see paragraphs 21 to 26 of the report where such a conclusion was reached at an interim step in the report writing process)
Paragraph 57 of that report reads as follows:
“The Evidence Bill applies, subject to specified exceptions, in all proceedings in federal courts and in courts of the Territories. It applies whenever evidence is to be adduced, including in bail applications, interlocutory proceedings and proceedings heard not in open court but in chambers. It applies, not only in ordinary trials (whether civil or criminal) but also in matters such as bankruptcy proceedings. There are transitional clauses included to deal with hearings commenced but not concluded before the commencement of the Bill”.
As was observed in the Esso decision, the Australian Law Reform Commission expressly contemplated that the common law position would still apply whenever the Commonwealth Evidence Act did not.
The Commission also recognized that that meant that production of evidence of communications may very well be compellable outside the scope of federal proceedings, despite the fact that the same evidence would not be compellable in the course of proceedings.
The Commission observed that it was constrained by its terms of reference from investigation of such matters however adopted the view that such an anomaly was not unreasonable in any event. (see paragraph 199 of the report)
It would appear that not everyone agrees with that view however.
McLelland CJ in Eq in Telstra Corporation v Australis Media Holdings [No 1] (1997) 41 NSWLR 277 described the abovementioned situation as anomalous and verging on the absurd.
His Honour was considering the applicability of privilege on subpoena. The Commonwealth Evidence Act applied in NSW.
His Honour held in that case that ss 118 and 119 did not apply to an ancillary process.
The practical consequence of that particular finding was remedied in the Esso decision, after which the dominant purpose test applied to both the common law privilege and the statutory privilege.
Can the Common Law Privilege be Set Aside?
If the Commonwealth Evidence Act does not extend to, for example, investigations undertaken by the CSA in the absence of any Court proceedings, the question becomes relevant — can the common law privilege be set aside by, for example the sections from the Registration and Collection Act, or the Assessment Act, referred to below.
The common law privilege can be set aside.
It is, perhaps, important to observe that legal professional privilege is not merely a rule of evidence. It is better described as a substantive right.
In Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543, a majority of the High Court held that legal professional privilege is a right that will not lightly be held to have been set aside.
In fact, the Court held that the privilege is such that it will only be held to have been abolished by a legislative instrument if the there is express language or clear and unmistakable implication to that effect.
Can the Privilege be Waived or Lost?
Both the common law and the statutory versions of the privilege can also be waived.
It is the client’s privilege to claim or to waive. Waiver can be express or by conduct. A solicitor can inadvertently waive privilege on the client’s behalf.
The statutory form of the privilege can be waived, for example, under s.122 of the Evidence Act via consensual provision of evidence of the communication.
Perhaps most notable within that section is ss.122(2). The privilege can be lost if the client or party has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of the kind that is ordinarily protected.
Sub-section 122(3) clarifies that such conduct can include disclosing the substance of such documents with the express or implied consent of the client or party.
Solicitors, from time to time, are want to make mention of what their counsel said in a written advice, in an attempt to reinforce the correctness of assertions made. The warning is be clear, be very careful not to inadvertently waive privilege when writing letters on behalf of your client.
The words “acting inconsistently” have been interpreted broadly, and can include making the contents of a document known to a third party unrelated to the subject dispute. (Mann v Carnell (1999) 201 CLR 1).
See Brennan v Shaw [2011] FamCAFC 11 for a recent example of a decision by a trial judge to compel production of a solicitor’s file, and to admit parts of that file into evidence on the basis that privilege was deemed to be waived. It took a Full Court Appeal for the wife in those proceedings to establish that the solicitor may not have necessarily been acting on instructions.
The Powers of the Child Support Agency
The Child Support Agency (“the CSA”) has, by any measure, an extraordinary range of powers and resources available to it to assist it in its tasks of assessing and collecting child support.
The CSA has in fact, a number of sources of power to compel the production of documents.
Looking first at the Child Support (Registration and Collection) Act (“the Registration and Collection Act”), it can be observed that the CSA has, prima facie, the power to compel persons to produce documents and information to the Agency in it’s efforts to discharge it’s duties under the scheme.
Section 120 provides as follows:
“(1) The Registrar may, for the purposes of this Act, by notice in writing, require a person:
(a) to furnish to the Registrar, within a reasonable period, and in a reasonable manner, specified in the notice, such information as the Registrar requires;
(b) to attend before the Registrar, or before an officer authorised by the Registrar for the purpose, at a reasonable time and place specified in the notice, and then and there answer questions; and
(c) to produce to the Registrar, at a reasonable time and place specified in the notice, any documents in the custody or under the control of the person.”
There is nothing in the Act that clarifies or otherwise narrows down the wide usage of the words “any documents”.
However, there is also nothing in the Registration and Collection Act that expressly excludes the operation of legal professional privilege.
Nor is there anything in that Act that could be said to create a clear and unmistakable implication that privilege should be excluded.
Section 161 of the Child Support (Assessment) Act is in more or less identical terms and nothing in that Act either expressly ousts legal professional privilege or could be said to create the clear and unmistakable implication referred to earlier.
So we find ourselves in that somewhat odd situation where, for example, in the course of enforcement proceedings the statutory form of the privilege will apply.
However if the Agency is pursuing an investigation absent proceedings, the common law form of the privilege applies.
It must be borne in mind that legal professional privilege, whether of the common law or statute created variety, only applies to documents created for the purposes of giving or receiving legal advice.
The privilege does not, for example, apply to documents that would otherwise be compellable in the hands of the client such as bank statements, contract documents, share transfer statements, etc.
The privilege would attach to things such as letters of advice, letters seeking advice, counsel’s opinion, and the like.
Conclusions
If the CSA attempts to compel production of documents there is, arguably a distinction to be drawn based upon the timing of such a request.
If the request is made in the absence of proceedings (such as enforcement or variation proceedings, for example), the common law version of legal professional privilege applies.
Consequently, third party documents such as reports prepared by accountants, for example, may not be protected by privilege.
If the request is made when proceedings are on foot, the provisions of the Commonwealth Evidence Act apply
Greg Shoebridge
