Kirby v Centro Properties Limited (No 2) (2012) 87 ACSR 229
On 10 February 2012, Bromberg J delivered his reasons on an application by PricewaterhouseCoopers (PwC) that various Centro Group (Centro) entities be compelled to produce specified documents for inspection. Centro had resisted the application on the basis that the documents, or parts of them, were subject to legal professional privilege. His Honour dismissed PwC’s application, concluding that the materials were privileged.
Bromberg J found that privilege attaches to retainer agreements, notes taken by Centro’s company secretary and materials generated by Centro’s general counsel. Relevant also is the evidence which will be enough to get a party claiming privilege over the line.
PwC’s application was brought in connection with five separate proceedings relating to the misclassification of debt in breach of the continuous disclosure obligations of the Corporations Act 2001. At the relevant time, PwC was Centro's auditor.
In assessing Centro’s claim for privilege, his Honour reconfirmed the following 12 principles of legal professional privilege set out in AWB Ltd v Cole and Another (No 5) (2006) 155 FCR 30:
- The onus is on the party claiming privilege to prove that the document was brought into existence for the dominant purpose of giving or obtaining legal advice.
- This is a question of fact that must be determined objectively.
- Evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed may be required.
- For client/lawyer communications, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications.
- A “dominant purpose” is the prevailing or paramount purpose.
- An appropriate starting point to assess the dominant purpose is to ask what was the intended use or uses of the document.
- Legal advice does not extend to advice that is purely commercial or of a public relations character.
- Privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client whether or not they are actually provided to the client.
- Privilege extends to notes, memoranda or other documents (including drafts) that relate to information sought by the client’s legal adviser to enable him or her to advise, whether or not they are themselves actually communicated to the client.
- Privilege is capable of attaching to communications between a salaried legal adviser and his or her employer, provided that the legal adviser is consulted in a professional capacity in relation to a professional matter and the communications are made in confidence and arise from the relationship of lawyer and client.
- Privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfies the dominant purpose test.
- The Court has power to examine documents over which legal professional privilege is claimed.
Applying these principles to the facts of the case, his Honour found privilege to attach to documents which might not ordinarily be regarded as privileged documents, including:
- retainer agreements;
- communications between solicitors and potential clients;
- notes of in-house counsel; and
- handwritten notes of a board member.
While His Honour agreed that generally a retainer was not a document protected by legal professional privilege, he also noted that this proposition is not absolute and that an examination of the specific content of each retainer must be conducted to assess whether they are “within the sphere of protection provided by the privilege”. In this case, Bromberg J was satisfied, having reviewed the documents in question, that they contained communications identifying the nature of the advice sought by Centro or from which that advice might be inferred.
Significantly, Bromberg J also held that communications between a solicitor and a prospective client are capable of attracting privilege and that a retainer itself need not exist.
Independent Legal Advisers
Privilege was claimed over communications between Centro and various external lawyers and KPMG. PwC argued that Centro had a multiplicity of purposes in communicating with KPMG in particular and that “the belated involvement of Centro’s lawyers” in what it described as a mere “accounting exercise” did not of itself cloak the entirety of the process with a character worthy of attracting legal professional privilege.
In each instance, evidence was given by the relevant solicitor that the sole or dominant purpose in the communication was to give, or for Centro to obtain, legal advice. PwC contended that these were bare assertions by a lawyer as to somebody else’s purpose and were inadequate.
Bromberg J disagreed, finding that the solicitor’s affidavits, in some instances coupled with evidence taken from contemporaneous documents and in other instances on the basis of the affidavit alone, were sufficient to demonstrate that the communications came into existence for the requisite dominant purpose such that the claim for privilege could be upheld.
Notes of Board Members
Privilege was claimed over substantial handwritten notes taken by the Company Secretary at meetings of the board and an audit and risk management committee meeting. The evidence of the Company Secretary, provided by way of affidavit, was that these notes were prepared by her for Centro’s use as a record of what transpired at the meetings but that they nonetheless disclosed confidential communications between Board members and Centro’s attending General Counsel/external lawyers and/or disclosed legal advice obtained.
Bromberg J rejected an argument by PwC that Centro had adduced insufficient evidence in the Company Secretary’s affidavit to discharge its onus. In reliance on 4 and 10 of Young J’s principles, Bromberg J concluded instead that the communications either came into existence for the dominant purpose of a client seeking or obtaining legal advice, or themselves disclosed that legal advice.
General Counsel Communications
Centro claimed privilege over certain communications from its in-house lawyers, including extracts of notes prepared by Centro’s General Counsel of Board meetings he had attended. The General Counsel’s evidence was that this advice was independent, objective advice “given in his professional capacity and not influenced by others or his personal loyalties, duties or interests”. In this way, his evidence attempted to highlight the demarcation between the dual roles of commercial and legal adviser which was considered relevant to such a rolebut for which the commercial character would be insufficient to attract the protection of privilege.
PwC contended that the evidence was too general however Bromberg J again disagreed, upholding the claim for privilege and characterizing the communications as being “between a corporation and its independent legal adviser” notwithstanding that they had emanated from within the company.
The thrust of PwC’s argument was that Centro had failed to discharge its burden of establishing the dominant purpose of the communications by either failing to adduce evidence at all or failing to adduce evidence of all of the relevant stakeholders. Bromberg J disagreed, taking the view that it was unnecessary for evidence to be provided by the multiple authors or recipients of each conversation provided that the evidence deposed in affidavits from the solicitors was sufficient to permit a conclusion that the dominant purpose for the creation of the communications was to obtain legal advice. This case is of interest in relation to the broad scope of documents to which privilege was found to apply and to the relatively confined evidenced required to support the claim.