A judge is, sometimes at short notice, confronted with an issue about privilege. In a civil trial, more often than not, the privilege claimed will arise in connection with legal professional privilege, as it is known in the common law. Such a privilege has existed since Elizabethan times, although its derivation and nature altered during the 18th century: J D Heydon, Cross on Evidence at [25005].

This section of the Evidence chapter is principally concerned with “client legal privilege”, the terminology by which legal professional privilege is described in the Evidence Act 1995 (NSW) (“the Act”). The legislation, however, also concerns itself with other kinds of privilege: professional confidential relationships (Pt 3.10 Div 1A), sexual assault communications (Div 1B), religious confessions (s 127), self-incrimination (s 128), judicial and jury reasons (s 129), matters of state (s 130), and negotiations for settlement (s 131).

The confidential relationship between client and lawyer is central to the existence of the privilege. The common law of privilege concerning confidential communications passing between a client and a legal adviser is now largely absorbed by and reflected in the Act, ss 118 and 119: S Odgers, Uniform Evidence Law, 13th edn at [EA.118.60]. See also the decision of Campbell JA in Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWCA 430. This decision, although containing a useful and scholarly history of the development of legal professional privilege to “client legal privilege”, did not survive the High Court’s pragmatic and practical approach to a classic example of inadvertent disclosure of privileged material: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303.

A judge, facing such an issue, normally will need to address two fundamental questions:

The first question is dealt with by ss 118 and 119 of the Act (note: the important definition section s 117); the second question is resolved by the application of ss 122–126 of the Act.

Before these matters are addressed, however, the judge must take into account the proper procedure for production of the documents sought. The documents will be brought to court usually as a consequence of the subpoena process. What happens when a party or third party objects to production?

In Hancock v Rinehart (Privilege) [2016] NSWSC 12, Brereton J refined the procedure to be adopted where a claim of legal professional privilege is taken to documents sought on subpoena. In so doing, his Honour re-examined the traditional common law authorities and the impact of the UCPR. At issue was the plaintiff’s contention that she could simply tender the relevant documents and (absent their production to the other parties) ask the judge to inspect them and determine privilege. Brereton J rejected this proposition, and held:

The NSWCA heard and dismissed an urgent application for leave to appeal from Brereton J’s decision: Rinehart v Rinehart [2016] NSWCA 58. The court acknowledged that the primary judge recognised the existence of a discretionary power to inspect documents, and that there was no power on the part of a person claiming privilege to require the court to inspect documents in the course of the hearing of an application making a claim for privilege. The court thought it “neither necessary nor appropriate” to express views as to all the propositions enunciated by the primary judge. This should only occur, it said, where “something will turn on the outcome”: [40]. The present case was “highly unusual” in that at issue was not the existence of privilege, but whether or not any privilege was maintainable by Mrs Reinhart in her personal capacity as opposed to her capacity as trustee. The primary judge’s decision was made in the context of a claim unsupported by any evidence at all. His Honour has been correct to find, in that context, that the UCPR in question was not intended to subvert the ordinary obligation upon a party to support a contested claim for privilege by evidence.

Rule 1.9 UCPR has since been amended to clarify that when an objection is made to the production of a document on the ground of privilege, access to the document must not be granted unless and until the objection is overruled, and that the production of a document to the court under a claim for privilege does not constitute a waiver of privilege.

The general proposition has been stated as follows:

The first aspect of client legal privilege (as described above) is often called “advice privilege”. The second aspect is referred to as “litigation privilege”. Section 118 deals with the first; s 119 is concerned with the second.

Section 118 creates a privilege for, in general terms, confidential communications made, and confidential documents prepared, for the dominant purpose of a lawyer providing legal advice: S Odgers, Uniform Evidence Law, 13th edn at [EA.118.60]. As originally framed, the section did not permit the extension of “advice privilege” to third party communications made for the purpose of obtaining legal advice where litigation was not pending or anticipated. However, the 2007 amendments to the Act ensured that the privilege attached to any confidential document prepared for the dominant purpose of legal advice being provided. It did not extend, however, to all communications with a third party, (ALRC Report 102 at 14.122) only those prepared with the relevant dominant purpose in mind.

Note:

Evidence that must not be adduced in a proceeding (ss 118 and 119) is not admissible in the proceedings: s 134. Equally, a document to which the provision applies may not be tendered in evidence.

The common law in relation to legal professional privilege is complicated and highly technical. It may be said that the Evidence Act’s attention to the subject (and to litigation privilege) brings with it its own range of technicalities and unresolved problems. However, the following broad propositions (emerging from relatively recent decisions) may be of assistance to trial judges faced with a claim for this type of privilege:

A practical illustration of some of these principles is provided in the decision of Schmidt J in Banksia Mortgages Ltd v Croker [2010] NSWSC 535. In that case, an in-house solicitor (who also had a private practice) provided an email advice to the plaintiff’s risk manager concerning an application for a loan by the defendant. An issue in the proceedings was whether the contents of the email were privileged.

Schmidt J determined that the contents of the email were confidential; that the major portion of the document contained legal advice for the client; and that the in-house solicitor’s role was not such as to suggest he lacked the necessary independence to prevent him providing an uncompromised legal opinion.

Consequently, her Honour held that the major portion of the email (with the exception of two paragraphs) attracted privilege.

This provision creates a privilege for confidential communications and confidential documents made or prepared for the dominant purpose of a lawyer providing professional legal services relating to existing or contemplated litigation: S Odgers, Uniform Evidence Law, 13th edn at [EA.119.60]; J D Heydon, Cross on Evidence at [25225]. As with s 118, the privilege is that of the client.

Note:

the width of the definition of “Australian Court” in the Dictionary to the Act. It extends to certain tribunals that are not required to apply the rules of evidence; see also the definition of “foreign court”.

The reference to “another person” in s 119(a), in contrast to its absence in s 118, indicates that communications between third parties and the lawyer or the client are protected only where the dominant purpose is the provision of professional legal services in litigation, as distinct from legal advice: J D Heydon, Cross on Evidence at [25300].

Examples of privilege within s 119 include:

See also White J in New Cap Reinsurance Corp Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258, and also in Buzzle Operations v Apple Computer Australia (2009) 74 NSWLR 469 for the more complicated situation in relation to witness statements, affidavits and documents or reports prepared by experts. A finalised proof of evidence or affidavit created for the purpose of serving it on the opposing party may not be “confidential” and privilege may never have attached to it.

See also Sexton v Homer [2013] NSWCA 414. The NSW Court of Appeal analysed the circumstances in which a report concerning possible litigation furnished by an accident investigator to an insurance company attracted privilege. It also examined the circumstances in which such a report attracts the concept of confidentiality for the purposes of securing the protections of litigation privilege.

Somewhat anomalously, s 120 of the Act protects from tender certain confidential communications and the contents of a confidential document where objection is taken by a party to litigation who is not represented in the proceedings by a lawyer. It was clearly considered that fairness should protect confidential communications prepared for the “dominant purpose of preparing for or conducting the proceedings”. Trial judges dealing with unrepresented persons should be astute to draw this protection to the attention of the parties.

Section 122(1) provides that “this Division does not prevent the adducing of evidence given with the consent of the client or party concerned”.

Odgers suggests that, in view of recent amendments to the Division, this apparently simple (but historically complex) provision “now appears otiose and a source of potential confusion”: S Odgers, Uniform Evidence Law, 13th edn at [EA.122.60].

The reference is to amendments made following upon the High Court’s decision in Mann v Carnell (1999) 201 CLR 1. In that case the High Court changed the focus of the common law (Odgers, above): the test for waiver at common law became whether the conduct of the client was, bearing in mind “considerations of fairness”, “inconsistent with maintenance of the confidentiality of communications between lawyer and client”.

ALRC Report 102 (Recommendation 14-5) proposed that s 122(2) should be amended to provide that evidence may be adduced where a client or party has acted in a manner inconsistent with the maintenance of the privilege. Attention thus focused on the behaviour of the holder of the privilege as opposed to his or her intention.

Section 122(2) now provides:

Section 122(3) provides:

Subsection 5 outlines circumstances in which a client or party will not be taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence. He or she will not be taken to have so acted “merely because” of those circumstances. They include where:

Similarly, a disclosure by a client to a person for whom a lawyer is providing professional legal services to both regarding the same matter (s 122(5)(b)); or to a person with whom the client or party had, at the time of the disclosure, a common interest in an existing, anticipated or pending proceeding: s 122(5)(c).

Section 122(6) provides that, notwithstanding a claim for privilege, a document that has been used to try to revive a witness’s memory about a fact or opinion (or by a police officer under s 33) may be adduced in evidence.

A useful example of the correct approach to the concept is provided for in Osland v Secretary to the Department of Justice (2008) 234 CLR 275. (This case involved, however, the application of the common law, not the Evidence Act.)

In Osland, above, the Victorian Government had obtained confidential legal advice concerning a petition for mercy. The Attorney-General issued a press release which said that the advice had recommended that the petition be refused. The High Court unanimously held that there was no inconsistency between disclosing the fact of, and the conclusions of, the advice for the purpose of informing the public that the Government’s decision was based on independent legal advice, and its desire to maintain the confidentiality of the advice itself. It is necessary, the court said at [49], that the question of inconsistency should depend “upon the circumstances of the case ... questions of waiver are questions of fact and degree”. S Odgers, Uniform Evidence Law, 13th edn at [EA.122.120], suggests this approach is likely to be adopted by the courts in application of s 122(2): Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333.

More recently, the NSW Court of Appeal considered waiver of privilege under the Evidence Act: Cooper v Hobbs [2013] NSWCA 70. This was a case where the issue before the District Court had been a simple one: had the respondents to the appeal lent $150,000 to the appellant (as they claimed); or had they invested that sum in a company recommended by the appellant (as he claimed)? The primary judge had found in favour of the respondents, preferring their version of the facts to the appellant’s version. This was notwithstanding the existence of a letter from the respondent’s then solicitor to a third party in which the transaction was plainly referred to as an investment not a loan.

The Court of Appeal held that there had been an error in the fact-finding process, particularly in light of the fact that the respondents had not called the solicitor to give evidence as to the circumstances in which he had written the letter.

A central issue in the appeal was whether the respondents, by giving evidence as to the solicitor’s advice to them (as to why the letter was written referring to an investment rather than a loan) had effectively waived privilege. The Court of Appeal found that it was inconsistent for the respondents to “deploy the substance” of the solicitor’s advice “for forensic purposes” while maintaining a claim for privilege. This was so whether the test in Mann v Carnell (1999) 201 CLR 1 was applied or that arising under s 122(2) Evidence Act.

These provisions result in the loss of the ss 118–120 privileges. Some illustrations of “disclosure” follow:

Whether disclosure amounts to disclosure of the substance of a privileged communication is a question of degree. The balance of authority suggests that, at the least, an express or implied summary of the subject legal advice is required. In this regard, the conclusions of the advice may not sufficiently be “the substance of the evidence”, without disclosure of relevant factual bases and a reasoning process proceeding from those bases to the conclusions reached. For example, in Fenwick v Wambo Coal Pty Ltd (No 2), above, after referring to authorities on the point, White J concluded that a draft letter disclosed the substance of the legal advice as it disclosed the reasoning. His Honour, at [24], appeared to consider the inclusion of reasoning to be determinative.

“[C]onfidential communication” and “confidential document” are defined in s 117 of the Act. Both incorporate a requirement of “an express or implied obligation not to disclose [the communication’s or document’s] contents, whether or not the obligation arises under law”. There is a need to examine carefully the terms on which the communication is made. The Full Court of the Federal Court in Carnell v Mann (1998) 159 ALR 647 has observed (at 659, per Higgins, Lehane and Weinberg JJ) in relation to this phrase that it should not be read narrowly and should not be confined to “the type of obligation which arises in the course of a solicitor/client relationship”. It is important to note that the provision is expressed in terms that a client or party objecting to the adducing of the evidence “merely because” the substance of the evidence has been disclosed on a confidential basis. It follows that circumstances may arise where privilege is lost notwithstanding disclosure of the substance of the evidence on a confidential basis: S Odgers, Uniform Evidence Law, 13th edn at [EA.122.300].

The effect of this provision changed with amendments made following ALRC Report 102, and although the issue is yet to be tested before the NSW Court of Appeal, the preferable approach may prove to be that suggested by Garling J in Gillies v Downer EDI Ltd [2010] NSWSC 1323 at [46]. In that case, his Honour posited that if a party objects to the disclosure of a document on the basis of privilege in the pre-trial gathering of evidence — for example, during discovery, interrogatories, or the production of documents under a subpoena or Notice to Produce — the court is to apply forthwith the principles expressed in Pt 3.10 of the Evidence Act 1995 (NSW): s 131A. (See, for the contrary view, Harrison J in Actone Holdings Pty Ltd v Gridtek Pty Ltd [2012] NSWSC 991.) There had been a line of authority suggesting such a determination was to be reserved until the document/evidence imputed to support the waiver was tendered at trial or otherwise used in such a way on the hearing of those proceedings as would make it unfair not to treat the privilege as having been waived: Sevic v Roarty (1998) 44 NSWLR 287; Akins v Abigroup Ltd [1998] 43 NSWLR 539. These cases however did not have the benefit of s 131A which was introduced by the Evidence Amendment Act 2007 and only came into force on 1 January 2009. The effect of this provision, it is suggested, coheres with modern case-management practices, in particular, the more efficient running of trials.

Section 122(5) does not itself confer privilege. Where applicable, it only prevents privilege being lost by a particular disclosure. Under s 122(5), a client is not taken to have acted in a manner inconsistent with the client objecting to the adducing of the evidence “merely because” of a disclosure by the client to “another person” concerning a matter in respect of which they are joint clients of the same lawyer (s 122(5)(b)) or the client and the other person share a “common interest” in current or anticipated legal proceedings (s 122(5)(c)): S Odgers, Uniform Evidence Law, 13th edn at [EA.122.360].

The concept of common interest for the purposes of s 122(5(c) is not rigidly defined. Examples of situations where the provision may apply include disclosure by insured to insurer, partner to partner, and co-tenant to co-tenant. Each case must be considered on its own facts. It has been suggested that a mere common interest in the outcome of litigation will be sufficient to enable any party with that interest to rely upon it: Marshall v Prescott (No 4) [2012] NSWSC 992 per Bellew J at [61]. In that case, a deceased’s de facto partner and workers’ compensation insurer succeeded in establishing a common interest in relation to proceedings concerning the entitlement to damages from class action litigation in the United States against the manufacturer of the engine of a plane that crashed, killing the deceased. The de facto had succeeded against the insurer in prior proceedings in the Compensation Court. The common interest stemmed from s 151Z(1)(b) of the Workers Compensation Act 1987 (NSW) which permitted the insurer to recover compensation already paid to the de facto from the damages. For another example, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234, Bergin J (as her Honour then was) found at [57] that since a “litigation funder” had “an interest in the most advantageous conduct of [those] proceedings by the plaintiff” and that interest “[was] identical with that of the plaintiff”, the “funder in [that] case [had] a ‘common interest in relation to’ the proceedings”.

A further example is afforded by Hamilton v State of NSW [2017] NSWCA 112. The appeal concerned controversial proceedings following the death of the applicant’s partner. In those proceedings, the applicant had sought production of documents from the DPP concerning the prosecution of her partner. The court at first instance had found that the claim for client legal privilege was valid. Although the DPP had voluntarily disclosed the documents to the Crown Solicitor, the disclosure did not result in a waiver or loss of client privilege. The Court of Appeal agreed with Beech-Jones J, that, as the possibility of the joinder of the DPP as a party to the proceedings was “realistic”, there was an interest in common with the State in the common law proceedings. This was “more than a mere preference as to how the litigation should unfold”. Leave to appeal was refused.

In Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWCA 430, the NSW Court of Appeal considered the situation where, in a complicated and lengthy pre-trial discovery process, a number of documents (apparently privileged) were listed as non-privileged, produced (on compact disc), and inspected by the other side. Some three months later, a demand was made that the documents be returned and that an undertaking be given that they not be used. Both requests were refused. The primary judge issued an injunction on the parties who had received the privileged material from making any further use of it and ordered the delivery up of the documents.

The Court of Appeal granted leave on the principal issues and allowed the appeal. The principal judgment was given by Campbell JA (McFarlan JA agreeing). The third member of the court (Sackville AJA) agreed with the orders, reversing those made by the primary judge. However, his Honour reserved his position on several matters.

In the course of his reasons, Campbell JA made the following important points:

In the course of his reasons, Campbell JA made an erudite and exhaustive analysis of a number of United Kingdom and Australian cases bearing on the one basis which might have sustained the injunctions granted by the primary charge. These were cases dealing with the law of confidential information and equity’s protection of such information. His Honour paid particular attention to recent Australian decisions where the protection of confidential information had been considered in the context of the modern discovery process.

Campbell JA enunciated a simple proposition: in the circumstances of the present case, the question needed to be asked whether a reasonable solicitor (in the position of the solicitor who had received the documents) would have realised that the documents had been disclosed by an obvious mistake. If the answer to this question is yes, then, depending on the overall circumstances, equity might impose an obligation on the solicitor to return the documents in much the same way as the court might order the return of documents obtained by fraud. Of course, had the receiving solicitor in fact realised that the documents were confidential and that they had been disclosed by mistake, that also might suffice to impose an obligation.

His Honour made a detailed analysis of the facts surrounding the discovery process in the case before the court. His conclusion was that a reasonable solicitor in the position of the solicitor receiving the documents would not have considered that the disclosure had been made as a result of an obvious mistake. Consequently, there was no basis on which the injunctions should have been made. Campbell JA stressed that the case had been wrongly decided at first instance on a waiver of privilege basis rather than by the correct consideration of the law of confidential information.

If, contrary to his views, the availability of the injunctions had depended upon whether privilege had been waived, his Honour said that he would hold, applying s 122 of the Evidence Act, that it had been waived on the basis of the inconsistency test. Once again, his Honour conducted a thorough analysis of the facts in coming to this conclusion. (Sackville AJA reserved his decision on this point on the basis that the matter had not been fully or adequately argued either at first instance or on appeal and that it was an issue that might arise, if at all, only at trial.)

During the course of his obiter analysis of the waiver issue, Campbell JA made an obvious but important point. Section 122 inhibited a finding a waiver where documents were produced under “compulsion of law”. However, the solicitors were never compelled by the discovery process to produce privileged documents for inspection. The fact that they did so occurred at best as a result of their own mistake. Consequently, s 122(5)(a)(iii) did not assist their argument.

On appeal, Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303, the High Court, while not doubting Campbell JA’s analysis, in relation to injunctive relief concerning confidential information, held in effect that the litigation in the courts below had missed the point. This was simply a case in which an inadvertent and unintentional mistake had been made. As such, it should have been promptly corrected either by the parties themselves or by a simple court order amending the discovery lists and directing the return of the documents listed by mistake as non-privileged material. Where disclosure has been inadvertent, then, absent a compelling reason, a court will ordinarily correct the mistake and make orders for the return of the documents. The ordinary case is one in which the party claiming privilege has acted promptly and the other party has not been placed, as a result of the disclosure, in a position which would make an order to return the documents unfair. In such a case, no issue of waiver arises.

The High Court reminded the Supreme Court and, in particular, practitioners that the purpose of the powers in the Civil Procedure Act 2005 is to facilitate the overriding purpose of the legislation. A prompt direction and order to amend the list of documents in the present case would have satisfied the dictates of justice and avoided the complex and lengthy litigation which followed the discovery of the original mistake. There was a duty cast upon solicitors to support the objectives of the proper administration of justice by avoiding unnecessary and costly interlocutory applications.

For a case on “mistaken” production of privileged documents, see Bendigo and Adelaide Bank Limited v Stamatis [2013] NSWSC 248. It was held that the documents were not privileged; if they had been, their production to the respondent’s solicitors would have been reasonably seen as intentional, and not as a mistake.

Privilege does not apply to a document that a witness has used to try to revive his or her memory about a fact or opinion under s 32 of the Act, or that a police officer has read or been led through under s 33 of the Act. The success of the attempt to revive memory is irrelevant to the operation of s 122(6).

By contrast, in El-Zayet v R (2014) 88 NSWLR 534 an undoubtedly privileged document (the Deputy DPP’s advice as to why a prosecution should be discontinued) was inadvertently handed up to the court. The CCA unanimously held that the DPP’s privilege had not been waived either expressly or by implication. The Crown Prosecutor, who had mistakenly handed up the document had no authority to waive privilege.

The general effect of this provision is that privilege is lost if evidence is adduced by a defendant in criminal proceedings, unless the evidence derives from an associated defendant.

An “associated defendant” is defined in the Dictionary to the Act as follows:

The term “adducing evidence” as it appears in the provision does not encompass a “call” made by a defendant on the prosecution for production of documents during the hearing of a criminal proceeding: S Odgers, Uniform Evidence Law, 13th edn at [EA.123.90]. The provision would apply, for example, where the defendant, in actual possession of the documents, seeks to tender them in the proceedings: R v Wilkie [2008] NSWSC 885, per Grove J at [4].

The effect of this provision is that privilege under ss 118 or 119 is lost if, in civil proceedings where “2 or more parties have, before the commencement of the proceeding, jointly retained a lawyer in relation to the same matter”, evidence of a communication made by any of the parties to the lawyer, or a confidential document prepared by or for any of the parties, in relation to the same matter, is adduced by one of the parties. Whether there is a communication made to, or from, a solicitor in his or her joint capacity is decided by objective evidence about whether the occasion for the communication was one where the solicitor was being asked to advance the purpose for which he or she was jointly consulted: Doran Constructions Pty Ltd (in liq), Re [2002] NSWSC 215 at [72] per Campbell J.

In Feridun Akcan v Cross [2013] NSWSC 403, Rein J held that s 118 did not prevent a barrister giving evidence (said by the plaintiff to have been jointly retained by himself and the defendants) as to what the defendants said at a conference at which they all attended. The issue was whether the plaintiff was a silent partner with the defendants in a restaurant venture at the Drummoyne Sailing Club. The barrister’s evidence was that the defendants, during the conference, confirmed that this was the situation.

Rein J first examined the position at common law. His Honour considered that the better view was not that there had been a waiver of privilege; rather the more coherent view was that no privilege arose as between the three persons in the first place.

Rein J found that s 124 operated in the same manner as the common law position notwithstanding its somewhat infelicitous expression.

In general terms, this provision results in loss of privilege if a communication or document was made or prepared by a client, lawyer or party in furtherance of a fraud, an offence or an act that renders a person liable to a civil penalty. Further, the privilege will be lost if the communication or document was known, or should reasonably have been known, by the client, lawyer or party, to have been made or prepared in furtherance of a deliberate abuse of statutory power: s 125(1)(a) and (b): S Odgers, Uniform Evidence Law, 13th edn at [EA.125.90]–[EA.125.120].

Section 125 relates only to the adducing of evidence. Where no question of adducing evidence has arisen and the matter is concerned with an order for access to documents produced on subpoena, s 131A provides that the disclosure requirements under Div 1 (client legal privilege) apply to the production of documents pursuant to a subpoena: s 131(2)(a) Evidence Act; DPP v Stanizzo [2019] NSWCA 12 at [32].

In Kang v Kwan [2001] NSWSC 697, the plaintiff had carried out work on certain property at Castlecrag owned by the second and third defendants. There was evidence to show that the first defendant colluded with the others to create a false mortgage, participated in a sale of the property to a third party, received “payment” of the mortgage monies and dissipated the funds overseas. The privilege argument centred on legal advice and other confidential communications passing between various lawyers and the defendants. Santow J held that there were reasonable grounds to hold that both limbs of s 125 were established and that privilege had been lost.

Arising from Kang v Kwan at [37] and [40] and other decisions indicated, the following useful list of propositions relevant to the operation of “fraud” and “abuse of power” loss of privilege may be stated:

This effect of this provision is to permit the adducing of “evidence of another communication or document” if it is reasonably necessary to do so to enable a prior understanding of a communication or document before the court. Sackville J made the following helpful observations about the operation of s 126 of the Act in Towney v Minister for Land & Water Conservation (NSW) (1997) 147 ALR 402:

In Ku-ring-gai Council v West (2017) 95 NSWLR 1, the NSW Court of Appeal considered a claim for public interest immunity pressed on behalf of the NSW Government. The claim arose in the context of the proposed merger of local government areas. It concerned an expert report by KPMG for submission to Cabinet regarding the proposed local government reforms. Production under s 130 had been refused at first instance. The majority of the court allowed production on the basis that it would have little impact on the “frankness and candour” of the firm preparing the report. That it might do so was dismissed as “fanciful”. The public interest in the production of the material outweighed any notion of preserving secrecy or confidentiality.

The effect of this provision is that the privilege against self incrimination under the Evidence Act applies to disclosure orders. The approach of s 128A to the protection of a person's privilege against self-incrimination in relation to disclosure of information that may tend to prove that the person has committed an offence under an Australian law or a law of a foreign country is in substance identical to that of s 128.

Section 128A(5) makes clear that the discretion to make or refuse to make an order under s 128A(6) arises for consideration by a court only where the person to whom a disclosure order is directed has taken an objection to disclosure of information under s 128A(2) and only where the court has found under s 128A(4) that there are reasonable grounds for the objection that has been taken. The party making a claim for self-incrimination privilege must set out the basis for the objection. Under s 128A(2)(c), the person must disclose so much of the information required to be disclosed to which no objection is taken and under s 128A(2)(d) the person must prepare an affidavit containing so much of the information required to be disclosed to which objection is taken (the privilege affidavit) and deliver it to the court in a sealed envelope. Section 128A(6) in that context operates to permit the court to make an order requiring information that the court is satisfied under s 128A(6)(a) may tend to prove that the person has committed an offence against Australian law to be filed and served on the parties only if the court is also satisfied that both of the propositions in s 128A(6)(b) and (c) apply to that information.

Making or refusing to make an order under s 128A(6) is a discretionary decision in respect of which the applicable standard of appellate review is that identified in House v The King.

Under s 128A(6), the court may order the privilege affidavit, in whole or in part, be disclosed if satisfied that (a) any information in it may tend to prove the person committed an offence under Australian law; and (b) the information does not tend to prove the person committed an offence under a foreign country’s law; and (c) the interests of justice require disclosure.

Section 128A(6)(a) and (b) do not impose a standard or burden on the party claiming privilege against self-incrimination additional to or higher than that imposed by s 128A(2) and (4): Deputy Commissioner of Taxation v Shi [2021] HCA 22 at [70]. In that case, the majority of the High Court found there was an unchallenged finding that the information in the privilege affidavit may tend to prove that the respondent had committed an offence under an Australian law. The question for the court under s 128A(6) is whether it is satisfied the interests of justice require that the privilege affidavit be disclosed. In the circumstances of Shi, a failure to object on the grounds of foreign law meant that the question raised by s 128A(6)(b) did not arise.

In Galafassi v Kelly (2014) 87 NSWLR 119 the Court of Appeal analysed the section and its important “exception” in s 131(2)(g). The principal section (excluding settlement negotiations) does not apply where “the court would be likely to be misled as to the existence or contents of an excluded communication or document, where those matters are in issue in the proceedings.”

In the instant case, an important issue was whether the purchasers of a Paddington property intended to continue to repudiate the contract for sale after equity proceedings had been commenced. The correspondence in question showed that this was plainly the case — the email from the purchasers made it clear that they would never be in a position to complete. Hence, even if the document were capable of being viewed as an attempt to negotiate a settlement, the exception provision in s 131(2)(g) made it essential that the documents be received into evidence.