Highest court of Australia, agreeing with privilege law of United Kingdom, Canada, United States and European Union, holds, as matter of first impression, that its Trade Practices Act does not authorize competition agency to compel production of documents covered by solicitor-client privilege
The Australian Competition and Consumer Commission (the ACCC) served notices on solicitors, Meerkin & Apel (the Firm), pursuant to Section 155 of the Trade Practices Act 1974 (Cth) (the Act). It demanded that the Firm turn over certain documents obtained by them in the course of acting as solicitors for the Daniels Corporation International Pty. Ltd. (Daniels). The Firm and Daniels objected, claiming that legal professional privilege protected certain documents and that Section 155 of the Act did not empower the ACCC to compel the production of documents sheltered by that privilege. As a result, the Firm handed over the unprivileged documents but declined to deliver the rest.
Section 155(1) of the Act provides in part that, if the ACCC has reason to believe that a person in possession of documents pertaining to a matter that amounts to, or may constitute, a violation of the Act, "a member of the Commission may, by notice in writing served on that person, require that person: . . . (b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents". In addition, Section 155(5) of the Act declares that "a person shall not: (a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it".
The ACCC then took the matter to the Federal Court of Australia, which ruled for the agency. Defendants then obtained preliminary review in the Full Court limited to the privilege question. The Full Court also decided in favor of the ACCC. It ruled that Section 155 did entitle the ACCC to get a court order that defendants turn over relevant documents otherwise within the solicitor-client privilege. The Firm and Daniels sought appellate review.
In a per curiam ruling, the Australian High Court allows the appeal, overturning the order of the Full Court. In a case of first impression, the Court declares that Section 155 of the Trade Practices Act of 1974 (Cth) does not require the production of documents to which legal professional privilege has attached. The High Court remands the matter to the Federal Court to determine which, if any, of the documents specified in the notices are covered by legal professional privilege.
The Court first summarizes the characteristics of the privilege. "It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the "dominant purpose' test for legal professional privilege was recently adopted by this court [Cite] in place of the "sole purpose' test which had been applied [Cite]." [N/A]
"Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather, and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which Section 155 of the Act provides." [N/A]
"Legal professional privilege is [also] ... an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule ...is a rule which ... has been strictly applied by this court since [1990]." [N/A]
On the practical level, the Court stresses the relative rarity of invocations of privilege in the course of the ACCC's administration of the Act. Moreover, it suggests that what is generally called in the U.S. the "crime or fraud" exception tends to lessen any obstructive impact the privilege might be thought to have on law enforcement.
"A communication the purpose of which is to "seek help to evade the law by illegal conduct' is not privileged. That being so, it is difficult to see that the availability of legal professional privilege to resist compliance with a notice under Section 155(1) of the Act would result in any significant impairment of the investigation of contraventions of the Act, much less in the frustration of such investigations. ... So to say, however, does not obviate the need to construe Section 155 of the Act." [N/A]
The Court cannot read the general language of Section 155(1) as authorizing the production of documents protected by legal professional privilege. "It is an elementary rule of statutory construction that courts do not read general words in a statute as taking away rights, privileges and immunities that the common law or the general law classifies as fundamental unless the context or subject matter of the statute points irresistibly to that conclusion."
"Nothing in the context or subject matter of Section 155 points to the parliament intending the commission to have power to require the production of documents that are the subject of legal professional privilege. In that respect, the right of legal professional privilege is in a different category from the [statutory] immunity against self incrimination, an immunity which Section 155 expressly abolishes..." [N/A]
"Courts do not construe legislation as abolishing, suspending or adversely affecting rights, freedoms and immunities that the courts have recognised as fundamental unless the legislation does so in unambiguous terms. In construing legislation, the courts begin with the presumption that the legislature does not interfere with these fundamental rights, freedoms and immunities unless it makes its intention to do so unmistakably clear."
"The courts will hold that the presumption has not been overcome unless the relevant legislation expressly abolishes, suspends or adversely affects the right, freedom or immunity or does so by necessary implication. They will hold that the legislature has done so by necessary implication whenever the legislative provision would be rendered inoperative or its object largely frustrated in its practical application, if the right, freedom or immunity were to prevail over the legislation." [N/A]
"In the United Kingdom, Canada, the United States of America and the European Union, documents to which legal professional privilege attaches are exempted from production in like circumstances. It is therefore difficult to accept that a different regime is now essential in Australia. If it is, it is not unreasonable that the [ACCC], which has access to government, should be obliged to seek an amendment of its Act to secure from the parliament the addition of such a power, either expressly or by unmistakable implication. [N/A]
Citation: Daniels Corp. International Pty. Ltd. v. Australian Competition and Consumer Commission, 192 A.L.R. 561 (Aust. High Ct., November 7, 2002).
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