The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission

[2002] HCA 49

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(Judgment by: GLEESON, GAUDRON, GUMMOW, HAYNE JJ)

The Daniels Corporation International PTY LTD & anor APPELLANTS
v Australian Competition and Consumer Commission RESPONDENT

Court:

Judges:
GLEESON CJ, GAUDRON, GUMMOW, HAYNE JJMcHUGH JJ
KIRBY JJ
CALLINAN JJ

Subject References:
Evidence
Legal professional privilege
Statutory notice to produce documents
Whether statute abrogated legal professional privilege
Trade practices
Notice to produce documents to Australian Competition and Consumer Commission
Commission investigating whether Trade Practices Act 1974 (Cth) contravened
Whether documents to be produced included those for which legal professional privilege claimed

Legislative References:
Trade Practices Act 1974 - 155

Judgment date: 7 November 2002

Canberra

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Judgment by:
GLEESON, GAUDRON, GUMMOW, HAYNE JJ

The Australian Competition and Consumer Commission ("the ACCC"), the respondent to this appeal, served notices on Meerkin & Apel ("the solicitors"), the second named appellants, requiring the production of documents held by them as a result of their having acted as solicitors for the first named appellant, The Daniels Corporation International Pty Ltd ("the Corporation"). The notices were served pursuant to s 155 of the Trade Practices Act 1974 (Cth) ("the Act").

2. The solicitors produced some but not all of the documents specified in the notices. They and the Corporation claimed that the remaining documents were the subject of legal professional privilege and that s 155 of the Act does not authorise the ACCC to require production of documents to which that privilege attaches.

History of the proceedings

3. To test the correctness of the claim that s 155 does not authorise it to require production of documents to which legal professional privilege attaches, the ACCC commenced proceedings against the Corporation in the Federal Court of Australia seeking, amongst other orders, a declaration that it, the Corporation, was not entitled to refuse to produce documents on the ground of legal professional privilege and, also, an order requiring it to produce specified documents. The solicitors were later joined as respondents to the proceedings and similar orders were sought against them.

4. In the Federal Court, the question whether s 155 of the Act authorises the ACCC to require production of documents to which legal professional privilege attaches was isolated as a preliminary issue and referred to the Full Court for decision. The Full Court held that s 155 did authorise notices requiring the production of such documents ^[F1] , relying principally on the decisions of this Court in Pyneboard Pty Ltd v Trade Practices Commission ^[F2] and Corporate Affairs Commission ( NSW ) v Yuill ^[F3] . In the result, the Full Court declared that the solicitors were "not entitled to refuse to comply with ... the notices ... on the ground of legal professional privilege" and ordered the Corporation to pay the costs of determining the preliminary issue. Having made those orders, it was unnecessary for the Federal Court to determine whether or not privilege attached to any of the documents the subject of the notices under s 155 of the Act.

Section 155 of the Act

5. Subject to sub-s (2A), which is not presently relevant, s 155(1) provides:

"if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to a designated telecommunications matter (as defined by subsection (9)) ^[F4] or is relevant to the making of a decision by the Commission under subsection 93(3) or (3A) ^[F5] , a member of the Commission may, by notice in writing served on that person, require that person:

(a)

to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;

(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; or

(c)

to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents."

6. Section 155(2) of the Act confers power on the ACCC to authorise entry to premises to inspect documents. That power arises in somewhat different circumstances from the power to require the provision of information, the production of documents and the giving of evidence under s 155(1). Again subject to sub-s (2A), s 155(2) provides:

"if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person has engaged or is engaging in conduct that constitutes, or may constitute, a contravention of this Act, Part 20 of the Telecommunications Act 1997 ^[F6] or Part 9 of the Telecommunications ( Consumer Protection and Service Standards ) Act 1999 ^[F7] , a member of the Commission may, for the purpose of ascertaining by the examination of documents in the possession or control of the person whether the person has engaged or is engaging in that conduct, authorize, by writing signed by the member, a member of the staff assisting the Commission (in this section referred to as an authorized officer ) to enter any premises, and to inspect any documents in the possession or under the control of the person and make copies of, or take extracts from, those documents."

7. The obligations that arise on the service of a notice under ss 155(1) or (2) and the consequences of the failure to comply with those obligations are specified in ss 155(5), (6), (6A) and (7). As at the date of the notices in issue in this appeal ^[F8] , those sub-sections provided:

"(5) 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;

(b)

in purported compliance with such a notice, knowingly furnish information or give evidence that is false or misleading; or

(c)

obstruct or hinder an authorized officer acting in pursuance of subsection (2).

(6) The occupier or person in charge of any premises that an authorized officer enters in pursuance of subsection (2) shall provide the authorized officer with all reasonable facilities and assistance for the effective exercise of his or her powers under that subsection.

(6A) A person who contravenes subsection (5) or (6) is guilty of an offence punishable on conviction:

(a)

in the case of a person not being a body corporate-by a fine not exceeding $2,000 or imprisonment for 12 months; or

(b)

in the case of a person being a body corporate-by a fine not exceeding $10,000.

(7) A person is not excused from furnishing information or producing or permitting the inspection of a document in pursuance of this section on the ground that the information or document may tend to incriminate the person, but the answer by a person to any question asked in a notice under this section or the furnishing by a person of any information in pursuance of such a notice, or any document produced in pursuance of such a notice or made available to an authorized officer for inspection, is not admissible in evidence against the person:

(a)

in the case of a person not being a body corporate-in any criminal proceedings other than proceedings under this section; or

(b)

in the case of a body corporate-in any criminal proceedings other than proceedings under this Act."

8. Reference should also be made to sub-s (7A) which, at the relevant time ^[F9] , provided:

" This section does not require a person:

(a)

to give information or evidence that would disclose the contents of a document prepared for the purposes of a meeting of the Cabinet of a State or Territory; or

(b)

to produce or permit inspection of a document prepared for the purposes of a meeting of the Cabinet of a State or Territory; or

(c)

to give information or evidence, or to produce or permit inspection of a document, that would disclose the deliberations of the Cabinet of a State or Territory."

Legal professional privilege

9. It is now settled that legal professional privilege is a rule of substantive law ^[F10] 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 in Esso Australia Resources Ltd v Federal Commissioner of Taxation ^[F11] in place of the "sole purpose" test which had been applied following the decision in Grant v Downs ^[F12] .

10. 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 ^[F13] and the giving of evidence in judicial proceedings ^[F14] . 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 s 155 of the Act provides. Thus, for example, it was held in Baker v Campbell, that documents to which legal professional privilege attaches could not be seized pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth) ^[F15] .

11. Legal professional privilege is not merely a rule of substantive law. It is 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, the expression of which in this Court can be traced to Potter v Minahan ^[F16] , was the foundation for the decision in Baker v Campbell ^[F17] . It is a rule which, subject to one possible exception, has been strictly applied by this Court since the decision in Re Bolton; Ex parte Beane ^[F18] . Cases in which it has since been applied include Bropho v Western Australia ^[F19] , Coco v The Queen ^[F20] and Commissioner of Australian Federal Police v Propend Finance Pty Ltd ^[F21] . The possible exception to the strict application of that rule was the decision in Yuill ^[F22] .

The decisions in Pyneboard and Yuill

12. Pyneboard, which was decided prior to Re Bolton; Ex parte Beane ^[F23] , was concerned not with legal professional privilege, but with the privilege against exposure to penalties - a privilege which all members of the Court in Pyneboard treated as separate and distinct from the privilege against incrimination ^[F24] . In that case, it was held that neither a person nor a corporation served with a notice under s 155(1) of the Act could refuse to comply with the notice on the ground that compliance might expose that person or corporation to a civil penalty.

13. Before turning to the reasoning which led to the decision in Pyneboard, it is convenient to say something as to the nature of the privilege against exposure to penalties and its treatment in that case. That privilege is one of a trilogy of privileges that bear some similarity with the privilege against incrimination. The other two are the privilege against exposure to forfeiture and the privilege against exposure to ecclesiastical censure ^[F25] . The privilege against exposure to penalties and that against exposure to forfeiture had their origins in the rules of equity relating to discovery ^[F26] , but it is clear, as noted by Mason ACJ, Wilson and Dawson JJ in Pyneboard, that the privilege against exposure to penalties has long been recognised by the common law and is no longer simply a rule of equity relating to discovery ^[F27] .

14. Two other questions with respect to the privilege against exposure to penalties were considered in Pyneboard. The first was whether the privilege was available to a corporation. Mason ACJ, Wilson and Dawson JJ were prepared to assume, without deciding, that it was ^[F28] , but neither Murphy J ^[F29] nor Brennan J ^[F30] found it necessary to consider that question.

15. The second question that arose in Pyneboard with respect to the privilege against exposure to penalties was whether that privilege had application outside judicial proceedings. On this issue, Mason ACJ, Wilson and Dawson JJ said they were "not prepared to hold that the privilege is inherently incapable of application in non-judicial proceedings" ^[F31] . However, that statement does not amount to a holding that the privilege is available in non-judicial proceedings. On the other hand, Murphy J saw "no reason for recognizing [the] privileges [against exposure to penalties, forfeiture and ecclesiastical censure] outside judicial proceedings" ^[F32] .

16. Because of his view that the privilege against exposure to penalties should not be recognised outside judicial proceedings, it was unnecessary in Pyneboard for Murphy J to engage in the process of construing s 155 of the Act ^[F33] , as was done by Mason ACJ, Wilson and Dawson JJ ^[F34] and, also, by Brennan J ^[F35] . In construing s 155, Mason ACJ, Wilson and Dawson JJ expressly acknowledged that legislation is construed as abrogating a common law right only if it does so expressly or by necessary implication ^[F36] . On the other hand, Brennan J approached the construction of s 155 on the basis that the issue was whether the obligation in s 155(5) to comply with a notice under s 155(1) was impliedly qualified by the privilege against self-incrimination or any like privilege ^[F37] - an approach which fails to give effect to the rule expressed in Potter v Minahan ^[F38] .

17. Two aspects of s 155 led Mason ACJ, Wilson and Dawson JJ to conclude that, as a matter of necessary implication, s 155 of the Act abrogates the privilege against exposure to penalties. The first was that:

"Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Pt IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions. The consequence would be that the provisions of Pt IV could not be enforced by successful proceedings for a civil penalty under s 76(1)." ^[F39]

The second was the express provision in s 155(7) relating to the privilege against self-incrimination. In their Honours' view, it was "irrational to suppose that Parliament contemplated that a person could be compelled to admit commission of a criminal offence yet be excused from admitting a contravention of the Act sounding in a civil penalty." ^[F40]

18. In the view of Brennan J in Pyneboard, no implied qualification was to be read into the obligation to comply with a notice under s 155(1) of the Act for that would frustrate the purpose of investigating suspected contraventions of Pt IV of the Act. On his Honour's approach, the express provisions in s 155(7) relating to the privilege against self-incrimination were unnecessary and were to be treated as inserted out of an abundance of caution ^[F41] . Similarly, on the approach taken by Mason ACJ, Wilson and Dawson JJ, "the first part of sub-s (7) [was] redundant" and "it was the prohibition against the use of the material in proceedings for a criminal offence otherwise than under the Act that was the mainspring for the introduction of the sub-section." ^[F42]

19. Although concerned with legal professional privilege, Yuill ^[F43] was not concerned with s 155 of the Act. The question in that case was whether the power under s 295(1) of the Companies (New South Wales) Code ("the Code") to require the production of company books was subject to legal professional privilege. It was provided by s 296(2) of the Code that "[a] person [should] not, without reasonable excuse, refuse or fail to comply with a requirement made under section 295" so, thus, strictly the question decided by Yuill was that legal professional privilege was not a reasonable excuse for failing to comply with a notice under s 295(1) of the Code.

20. Baker v Campbell had not been decided when the Code was enacted in 1981 ^[F44] and, at that time, it was generally accepted that, in accordance with the decision of this Court in O'Reilly v State Bank of Victoria Commissioners ^[F45] , legal professional privilege could only be availed of in judicial and quasi-judicial proceedings. It was primarily that consideration that led Brennan J to conclude in Yuill that legal professional privilege could not be claimed in answer to the requirements of s 295(1) of the Code, his Honour taking the view that the Code was to be construed in light of the law as it was understood when enacted ^[F46] . However, his Honour also stated that ss 299(2)(d) and 308 of the Code (which gave some limited protection with respect to privileged communications) indicated a legislative intent to abrogate legal professional privilege ^[F47] . Moreover, his Honour was of the view that to admit legal professional privilege as an excuse for failure to comply with the requirements of s 295 "would be to impair and, in some cases, to destroy the effectiveness of the mechanism ... created ... to enforce the laws governing corporations" ^[F48] .

21. In Yuill, Dawson J, with whom Toohey J agreed ^[F49] , took the view that the limited protection given to privileged communications by ss 299(2)(d) and 308 of the Code, "render[ed] inescapable ... the conclusion that it was intended that, save as provided, legal professional privilege should play no part in an investigation under Pt VII [of the Code]" ^[F50] . On the other hand, Gaudron ^[F51] and McHugh JJ ^[F52] each took the view that ss 296(2) and 308 were explicable on the basis that, in a context in which it was generally thought legal professional privilege could be availed of only in judicial and quasi-judicial proceedings, ss 296(2) and 308 were intended to supply a measure of protection to privileged communications and, thus, could not be treated as the manifestation of legislative intent to otherwise abrogate the privilege.

22. One other matter should be noted with respect to the decision in Yuill. In that case, McHugh J referred to the decision in Pyneboard and noted that the relevant provisions of the Code differed from s 155 of the Act in that, unlike that provision, they allowed that the requirements of s 295 "need not be complied with if there was a 'reasonable excuse' available." ^[F53]

Construction of s 155 as it affects legal professional privilege

23. On behalf of the ACCC, it was argued that, so far as concerns the question of legal professional privilege, s 155 should be construed by the same process as was adopted in Pyneboard and, later, by the majority in Yuill. It was also put that the purpose of investigating contraventions of the Act would be impaired or frustrated if legal professional privilege could be availed of to resist compliance with a notice under s 155(1) of the Act. In that context, reference was made to the expansion of the privilege effected by Esso ^[F54] and to the difficulties that would be encountered in situations in which legal advice was sought in relation to proposed contraventions of the Act.

24. The notion that privilege attaches to communications made between client and lawyer for the purpose of engaging in contraventions of the Act should not be accepted ^[F55] . A communication the purpose of which is to "seek help to evade the law by illegal conduct" is not privileged ^[F56] . That being so, it is difficult to see that the availability of legal professional privilege to resist compliance with a notice under s 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. At least, that conclusion is far less obvious than in the case of the privilege against exposure to penalties. So to say, however, does not obviate the need to construe s 155 of the Act.

25. The first question that arises in relation to the construction of s 155 is whether the approach adopted in Pyneboard should be followed in this case. There are a number of difficulties with that course, one of which has already been mentioned, namely, that the approach adopted by Brennan J is inconsistent with the rule expressed in Potter v Minahan. There are also difficulties with the approach adopted by Mason ACJ, Wilson and Dawson JJ.

26. The chief difficulty with the approach adopted by Mason ACJ, Wilson and Dawson JJ in Pyneboard is that it concentrates on the terms of s 155(1) which sub-section, it may be noted in passing, is not only concerned with the investigation of contraventions of the Act but, also, with matters relevant to designated telecommunications matters and the making of decisions under ss 93(3) or (3A) of the Act. In particular, the approach of Mason ACJ, Wilson and Dawson JJ pays no regard to s 155(2).

27. Section 155(2) authorises what would otherwise constitute a trespass. In that respect, it is similar to the search warrant provision in s 10 of the Crimes Act 1914 (Cth) considered in Baker v Campbell and, later, in Propend. Those decisions, which were subsequent to the decision in Pyneboard, respectively held and confirmed that that provision did not authorise the seizure of material to which legal professional privilege attached. Given the generality of the words of s 10 of the Crimes Act 1914 (Cth) ^[F57] and their similarity to the words of s 155(2), it is difficult to see any basis upon which that sub-section can be construed, consistently with Baker v Campbell and Propend, as authorising entry to premises for the purpose of inspecting and copying material to which legal professional privilege attaches.

28. The other difficulty with the approach adopted by Mason ACJ, Wilson and Dawson JJ in Pyneboard is that, as already noted, it renders the express abrogation, in s 155(7), of the privilege against incrimination otiose. As a general rule, statutory provisions are to be construed by giving effect to their express terms unless that would result in some absurdity ^[F58] . No absurdity is involved in construing ss 155(1) and (2), in accordance with the rule expressed in Potter v Minahan, as not abrogating fundamental common law privileges and giving effect to s 155(7) according to its terms.

29. Given the difficulties with the approach adopted by Mason ACJ, Wilson and Dawson JJ in Pyneboard, that approach should not be followed in this case for the purpose of determining whether a person may resist a notice under s 155(1) of the Act on the ground of legal professional privilege. So to say, is not to say that Pyneboard was wrongly decided.

30. The implication that the privilege against exposure to penalties was abrogated by s 155(1) can be supported by reference to the absurdity that would result if that privilege could be claimed and, pursuant to s 155(7), the privilege against self-incrimination could not. However, it may be that a more secure basis for the decision is to be found in the nature of the privilege.

31. In Naismith v McGovern, Williams, Webb, Kitto and Taylor JJ said:

"Originally orders for discovery were not obtainable at common law, except to a limited extent, and a party to a common law action who desired general discovery had to proceed by bill in equity. But the Court of Equity would not make an order for discovery or for the administration of interrogatories in favour of the prosecutor whether the prosecutor was the Crown or a common informer or any other person where the proceeding was of such a nature that it might result in a penalty or forfeiture: 'nemo tenetur seipsum prodere' ^[F59] . When discovery and interrogatories were provided for under the rules made under the Judicature Act the same principle was applied." ^[F60]

Today the privilege against exposure to penalties serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it ^[F61] . However, there seems little, if any, reason why that privilege should be recognised outside judicial proceedings. Certainly, no decision of this Court says it should be so recognised, much less that it is a substantive rule of law. Further, it should now be accepted that, as the privilege against self-incrimination is not available to corporations ^[F62] , the privilege against exposure to penalties is, similarly, not available to them ^[F63] .

32. It is necessary now to turn to the terms of s 155 of the Act. Sub-sections (1) and (2) are expressed in general terms and, save to the extent that they serve to indicate that a significant purpose of that section is the investigation of contraventions of the Act, they provide no basis, standing alone, for an implication, much less a necessary implication, that they abrogate legal professional privilege. On the contrary, if s 155(2) is construed consistently with the decisions in Baker v Campbell and Propend, as in our view it should be, that sub-section does not abrogate legal professional privilege. And if s 155(2) is so construed, it would be incongruous for s 155(1) to be construed differently.

33. In support of the contention that legal professional privilege cannot be asserted in resistance to a notice under s 155(1) of the Act, counsel for the ACCC relied on the terms of s 155(5)(a) which, together with sub-s (6A), make it an offence to refuse or fail to comply with a notice under s 155(1) to the extent the person concerned "is capable of complying with it". Those words, it was argued, permit of an exception only where the person concerned is physically incapable of complying. It is very much to be doubted that sub-s (5)(a) is exhaustive of the matters that may be raised in answer to a charge of failing to comply with a notice under s 155(1). At the very least, ordinary principles of construction would suggest that there is an intentional element to the offences created by ss 155(5) and (6A) ^[F64] . More to the point, however, it is necessary to determine the meaning and effect of s 155(1) before it can be determined what constitutes a refusal or failure to comply with a notice.

34. There is, in our view, only one aspect of s 155 which positively suggests a legislative intent to effect an abrogation of legal professional privilege, namely, the express preservation, in sub-s (7A), of the privilege attaching to Cabinet documents and deliberations. However, very little, if anything, can be implied from the express preservation of that privilege in a context in which there is an express abrogation of the privilege against self-incrimination. Moreover, if any such implication could be made by application of the maxim expressio unius est exclusio alterius - a maxim upon which, it has often been pointed out, it is dangerous to rely ^[F65] - it could hardly be said that it was a necessary implication.

35. Given the above considerations and, given also, that it is far from obvious that the retention of legal professional privilege would significantly impair the ACCC's functions under the Act, s 155 cannot be construed, consistently with the rule expressed in Potter v Minahan, as impliedly abrogating legal professional privilege. As earlier indicated, that does not mean that Pyneboard was wrongly decided. However, it may be that Yuill would now be decided differently.

36. It should be added that whilst reference was made in submissions to what was said to be apprehended abuses of the privilege in some circumstances, questions of the attachment of privilege to the particular documents in question have yet to be decided by the Federal Court. Further, as was pointed out long ago, "the contriving of a fraud could form no part of a recognized professional relationship." ^[F66] In making that observation no view is expressed respecting the present litigation.

Conclusion and orders

37. The appeal should be allowed with costs. The orders of the Full Court should be set aside and in lieu thereof, it should be declared that s 155 of the Act does not abrogate legal professional privilege and the ACCC should be ordered to pay the appellants' costs of the proceedings in the Full Court. The matter should be remitted to the Federal Court to determine what, if any, of the documents specified in the notices are the subject of legal professional privilege.