Legal Professional Privilege - The Latest from the High Court of Australia

On 14 August 2019, the High Court of Australia delivered judgment in Glencore International AG & Ors v Commissioner of Taxation of the Commonwealth of Australia & Ors [2019] HCA 26. In these proceedings, brought before the High Court exercising its original jurisdiction, the plaintiff companies (Glencore Group) sought an injunction restraining the defendants, the Commissioner, the Second Commissioner and the Deputy Commissioner of Taxation and any other officer of the Australian Taxation Office (Commissioners) from making any use of documents described as "the Glencore documents" or any information contained in or which may be derived from those documents and an order for the delivery up of those documents (Glencore Documents).

 

1                     The Glencore Group asserted that the Glencore Documents were created for the sole or dominant purpose of the provision by Appleby (Bermuda) Limited (Appleby), an incorporated law practice in Bermuda, of legal advice regarding the corporate restructure of Australian entities within the Glencore Group.  The Glencore Documents were amongst documents colloquially described as the "Paradise Papers" which were stolen from Appleby's electronic file management systems and provided to the International Consortium of Investigative Journalists.  The existence and content of the Paradise Papers has received global media coverage. There was no issue in the proceedings that the Glencore Documents were of a nature that would ordinarily attract a claim for legal professional privilege.

2                     Relevantly, the Commissioner demurred to the claim arguing that no cause of action was disclosed by which the Glencore Group are entitled to the relief sought.  Equity will restrain an apprehended breach of confidential information and will do so with respect to documents which are the subject of legal professional privilege and which are confidential.  Equity will also restrain third parties if their conscience is relevantly affected. The Glencore Group did not seek to restrain the use of the documents on the ground of confidentiality because the documents were in the public domain and there was no allegation concerning the Commissioners’ conduct or knowledge. 

3                     They primary issue in the case therefore was whether the fact that a communication is subject to legal professional privilege is itself sufficient for the grant of the injunction sought.

The Claims

4                     The Glencore Group argued that:

5                     (a)          legal professional privilege has been recognised by decisions of the High Court as a fundamental common law right; 

6                     (b)          an injunction in equity's auxiliary jurisdiction requires that a plaintiff demonstrate an actionable legal right;

(c)           Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission(2002) 213 CLR 543; [2002] HCA 49 (Daniels Corporation) is not to be understood as confining the scope of the privilege, and that no decision of the Court has held that the privilege operates only as an immunity;

(d)          the scope of the privilege should reflect the policy of the law upon which it is based.  The rationale for legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client.  It should be understood to have its basis in the rule of law.  The recognition of an actionable right to restrain the use of and recover privileged documents advances this policy; and

(e)          the provision of a remedy may also be seen as necessary because it is unsound for the privilege to be recognised as a fundamental right but for confidentiality to provide the only basis for its enforcement. 

The Decision

7                     In unanimously dismissing the case and upholding the demurrer, the Court said that that Glencore Group’s argument rested upon an incorrect premise, namely, that legal professional privilege is a legal right which is capable of being enforced, which is to say that it may found a cause of action.  The privilege is only an immunity from the exercise of powers which would otherwise compel the disclosure of privileged communications (see Daniels Corporation)

8                     The Court held (at [13] that “…it is not sufficient to warrant a new remedy to say that the public interest which supports the privilege is furthered because communications between client and lawyer will be perceived to be even more secure.  The development of the law can only proceed from settled principles and be conformable with them.  The plaintiffs' case seeks to do more than that.  It seeks to transform the nature of the privilege from an immunity into an ill-defined cause of action which may be brought against anyone with respect to documents which may be in the public domain.”

In coming to its decision, the Court provided a useful summary of the historical development of law of legal professional privilege which lends support to the proposition that its true character (conformably with Daniels Corporation) is a freedom from the exercise of legal power or control, which is to say an immunity.

 

9                     The Court also had the following to say about the manner in which the common law develops in circumstances where the Glencore Group contended that any furtherance of the public interest which supports the privilege is sufficient to warrant the creation of a new, actionable right respecting privileged documents (at [40] & [41]):

This is not how the common law develops.  The law develops by applying settled principles to new circumstances, by reasoning from settled principles to new conclusions, or determining that a category is not closed.  Even then the law as developed must cohere with the body of law to which it relates. 

Policy considerations may influence the development of the law but only where that development is available having regard to the state of settled principles.  Policy considerations cannot justify an abrupt change which abrogates principle in favour of a result seen to be desirable in a particular case.”

Conclusion

 

Once privileged communications have been disclosed, resort must be had to equity for protection respecting the use of that material.  Although the policy upon which legal professional privilege is founded is not irrelevant to the exercise of that jurisdiction, the juridical basis for relief in equity is confidentiality. (A full copy of the judgment may be accessed at http://eresources.hcourt.gov.au/downloadPdf/2019/HCA/26).

 

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