The Australian Crime Commission has no right to documents if they are protected by legal professional privilege – but Hogan’s documents were not.
In the long running dispute involving John Cornell and Paul Hogan in relation to the Crocodile Dundee films the Full Federal Court in Stewart v Australian Crime Commission  FCAFC 151 was called on to determine which laws govern the determination of questions concerning the attraction of legal professional privilege to documents obtained by the Australian Crime Commission under section 29 of the Australian Crime Commission Act 2002 (Cth).
The documents sought by the Australian Crime Commission and the claim of legal professional privilege
Section 29 of the Australian Crime Commission Act 2002 (Cth), like similar provisions available to ASIC, ACCC and ATO, provides the Commission with power to require a person to produce documents relevant to a regulatory investigation.
The appellants, including Cornell and Hogan, argued that they did not have to produce documents subject to legal professional privilege. They also argued that the application of legal professional privilege to the documents was to be determined by a choice of law analysis that required reference to the law of California.
The Commission disputed the second proposition, and argued that the application of legal professional privilege was governed by Australian law.
Which law determined legal professional privilege – Australian or Californian?
A majority of the Full Federal Court (Justices Jagot and Bromberg) held that in relation to section 29 of the Australian Crime Commission Act there was no choice of law issue. Rather, the issue involved the interpretation of an Australian statute.
This required an application of the Australian common law principle that a substantive common law privilege was not abrogated, unless the statute expressly or by necessary implication requires that it be abrogated. On that basis, the law of California in relation to legal professional privilege was irrelevant.
Rather, the question that arose was whether privileged communications with lawyers for the purposes of obtaining legal advice, whether those lawyers be local or foreign, was abrogated by section 29 of the Australian Crime Commission Act. The majority found, consistent with settled High Court authority, that it had not and as a result legal professional privilege, if it existed, prevented disclosure of the documents.
Justice Besanko did not agree that no choice of law issue arose. He took the position that when legal professional privilege is raised in answer to a demand to inspect and use documents, the court must determine whether the privilege exists, which includes considering the common law choice of law rule. Consequently, if the relevant choice of law rule directed attention to foreign law which recognised legal professional privilege, then it could also be recognised for the purposes of Australian law including Australian statutes.
Choice of law and finding legal professional privilege applies
The choice of law determination in relation to legal professional privilege is complicated, as the High Court has recognised privilege as a substantive rule of law and not just a rule of evidence.
If privilege were simply a rule of evidence, then it would be regarded as procedural law for the purposes of a choice of law analysis. In that situation the law of the forum would clearly govern the question.
However the change in the status of legal professional privilege has made the question unclear. The appellants contended that the governing choice of law rule for legal professional privilege was the law governing the retainer between the client and the lawyer, or the law of the jurisdiction in which the lawyer was admitted to practice. Greater emphasis was placed on the former. Here both of those pointed to Californian law.
Justice Besanko rejected the appellants’ submissions and concluded that the better argument is that the governing choice of law rule for legal professional privilege is the lex fori, the law of the forum. As a result Australian law governed the question of legal professional privilege.
Did Australian legal professional privilege apply?
All members of the Full Federal Court agreed with the primary judge's rulings that Australian legal professional privilege was not applicable to the documents the subject of the appeal. In conducting the analysis of the documents the primary judge set out a number of useful principles for applying legal professional privilege:
- The privilege attaches to the communication, not to a physical document, or indeed, to an electronic form.
- The onus to establish that a document is privileged is on the party claiming the privilege.
- There is a need to consider what constitutes legal advice. There is a distinction (although sometimes difficult to draw) between a lawyer, in the performance of his or her professional duty as legal adviser, giving advice as to what may prudently and sensibly be done in the relevant legal framework and giving advice as to the commercial wisdom of entering into a particular transaction.
- In order to attract privilege the dominant purpose must be the seeking or obtaining of legal advice. Whether there is such a dominant purpose is a question of fact to be determined as a matter of judgment.
- Providing the requisite dominant purpose can be established, communications with third parties may also be protected.
- The purpose is to be determined objectively and evidence of the intention of the maker of the document is not necessarily conclusive.
Justice Besanko added that the proposition dealing with legal and commercial advice required further elaboration. He provided insight into the distinction between legal and commercial advice. The provision of legal advice was not only telling a client what the law was, but included advice as to what might, as a matter of prudence and good sense, be done in the relevant legal context.
Further, the distinction between giving advice as to what might, as a matter of prudence and good sense, be done in the relevant legal context and advice as to the commercial wisdom of entering into a particular transaction (which is not the subject of legal professional privilege) may be difficult to draw.
However, purpose is to be determined objectively and that the purpose of the creator or provider of the document is not decisive. A judge may prefer the objective surrounding circumstances over the testimony of the creator or provider of the document.