Key Points:

This decision on legal professional privilege will facilitate sharing of legal advice among NSW Government departments in the context of specific matters.

The NSW Land and Environment Court recently held that various departments within the State Government can be a single "client" under the rules for legal professional privilege, so that sharing advice among departments does not waive privilege.

The Court made these findings, and also outlined a three step test for applying public interest immunity, in Woollahra Municipal Council v Minister for Local Government [2016] NSWLEC 44.

Documents relating to Council amalgamations

Woollahra Municipal Council is currently challenging the examination process for the State's proposal to amalgamate Woollahra, Waverley and Randwick Councils.

Woollahra Council issued subpoenas to the Minister for Local Government and the Government's consultant, KPMG, seeking documents relating to the proposed amalgamation. The Minister and, on his instruction, KPMG, claimed:

  • legal professional privilege for three emails from an officer in the Department of Premier and Cabinet (DPC) to the delegates of the Chief Executive of the Office of Local Government (OLG) who had been appointed to consider the amalgamation proposal under section 218F of the Local Government Act 1993; and
  • public interest immunity for various documents concerning options analysis, impacts analysis and the business case for the proposed local council amalgamations.

The emails for which legal professional privilege was claimed included confidential legal advice from the DPC's own in-house lawyers and from an external lawyer. It appears, from the judgment, that the relevant DPC officer was not acting as a lawyer in passing on the advice he had received to the OLG Executive's delegates.

The documents for which public interest immunity was claimed included reports which had been prepared by third parties (such as KPMG) for and provided to Cabinet, reports which had been prepared for Cabinet but ultimately not provided, and related documents.

The Council opposed the Minister's claims.

What is public interest immunity and legal professional privilege?

The Evidence Act 1995 provides several bases for not disclosing documents in response to calls for production, such as under a subpoena. These include documents which are subject to legal professional privilege or public interest immunity.

In summary:

  • legal professional privilege applies to documents which reveal a confidential communication between a client and a lawyer, communications between lawyers acting for the client or documents prepared by the client, lawyer or other person, for the dominant purpose of providing the client with legal advice; and
  • public interest immunity applies to government documents where the public interest in disclosing those documents is outweighed by the public interest in preserving their secrecy or confidentiality.

Who is the client for the purposes of legal professional privilege?

The Minister argued that, in this case, the "client" for the purposes of the claim for legal professional privilege was the State of NSW, and that included all of its various departments. So, the Minister argued, the emails in this case, from a non-legal officer for DPC to non-legal officers of the OLG, were privileged because they involved passing of legal advice to the State among officers of the State.

Chief Justice Preston agreed, saying:

"Legal advice provided by lawyers to one department (the Department of Premier and Cabinet), which was in turn communicated to another agency within a department (the Office of Local Government), did not waive legal professional privilege as the legal advice was kept within the confines of the one client."

The Council argued that communication between the DPC and the OLG delegates was actually outside the confines of the "client", because the delegates had been appointed to exercise a specific function under section 218F of the Local Government Act and they were, therefore, acting independently of the Government. However, Justice Preston disagreed.

As a result, the documents remained subject to legal professional privilege and were not disclosed.

What will the Court consider when deciding whether public interest immunity applies?

Justice Preston stated that, in determining a claim of public interest immunity, the Court must balance the public interest in withholding the disclosure of information or the production of a document against the public interest in ensuring that courts performing the functions of justice should have access to relevant evidence. "If, on balance, disclosure would be harmful, then it will not be permitted".

He then set out a three-step process for making this determination:

  1. demonstrating the harm (if any) that will flow from disclosure ‒ "if that is demonstrated, the Court will initially incline against disclosure";
  2. identifying the need of the party seeking access and indicating that disclosure would materially assist their case; and
  3. weighing up the public interest of withholding the documents with the conflicting public interest of ensuring that the court can serve justice with the relevant evidence.

In this case, he decided that the disclosure of the documents would be harmful to the public interest, presumably because it would reveal documents relating to the deliberations of Cabinet.

Justice Preston also decided that disclosure would not be likely materially to assist the Council's case in the litigation. However, he left open the possibility that the Council could ask the Court to revisit this finding if the Council's case changed during the lead-up to or in the hearing.

What does this mean for Government?

The NSW Land and Environment Court has provided a broad interpretation of the meaning of "client" in the test for legal professional privilege. This should help Government administration, because it will facilitate sharing of legal advice among departments in the context of specific matters.

It's not clear whether the Court's findings would extend to the sharing of legal advice among Government agencies who are separate legal bodies, such as different authorities or government corporations. If their enabling legislation says that they represent the State, there may be a basis for arguing that the decision applies to them too.

In all cases, we think the relationship of the government departments or agencies sharing the advice will be important. Although the interests of government departments or agencies are often aligned, this is not always the case. The specific circumstances of a disclosure may influence a decision as to whether the sharing of advice is protected by legal professional privilege.

Of course, it's still very important to ensure that the building blocks of legal professional privilege (ie. confidentiality, the relevant parties involved in the communication, and the proper purpose) are in place to establish legal professional privilege.

The Court's clear explanation of how the public interest immunity works is also very helpful for Government departments and agencies who are preparing material for Cabinet or are commissioning work from others for that purpose.