The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission
[2002] HCA 49(Judgment by: McHUGH JJ)
The Daniels Corporation International PTY LTD & anor APPELLANTS
v Australian Competition and Consumer Commission RESPONDENT
Judges:
GLEESON CJ, GAUDRON, GUMMOW, HAYNE JJ
McHUGH JJKIRBY 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
Judgment by:
McHUGH JJ
38. This appeal is brought by special leave against an order of the Full Court of the Federal Court. That Court held that a firm of solicitors could not claim legal professional privilege in respect of documents required to be produced to the Australian Competition and Consumer Commission ("the Commission") by a notice given under s 155 of the Trade Practices Act 1974 (Cth) ("the Act"). The question in the appeal is whether, by enacting the general provisions of s 155(1) of the Act, the Parliament of the Commonwealth intended the Commission to have power to require the production of documents that are the subject of legal professional privilege.
39. In my opinion, the general words of s 155(1) cannot be read as authorising the production of documents protected by legal professional privilege. It is an elementary rule of statutory construction that courts do not read general words in a statute as taking away rights, privileges and immunities that the common law or the general law classifies as fundamental unless the context or subject matter of the statute points irresistibly to that conclusion. Nothing in the context or subject matter of s 155 points to the Parliament intending the Commission to have power to require the production of documents that are the subject of legal professional privilege. In that respect, the right of legal professional privilege is in a different category from the immunity against self-incrimination, an immunity which s 155 expressly abolishes. It is also in a different category from the immunity against being exposed to a civil penalty, an immunity that this Court has held was abrogated by s 155(1) [F67] .
40. Relevantly, s 155 of the Act gives the Commission and its authorised officers extensive powers to obtain documents, to enter premises and to take copies of documents on the premises when the Commission has reason to believe that the Act has been contravened. Section 155(1) relevantly enacts that, if the Commission has reason to believe that a person is capable of producing documents "relating to a matter that constitutes, or may constitute, a contravention" of the Act, a member of the Commission may by notice require that person to produce the documents. If such circumstances exist, s 155(2) authorises a member of the staff assisting the Commission to enter premises, to inspect documents under the control of the person and to take copies or extracts of the documents. Section 155(5) declares that a person shall not "refuse or fail to comply with a notice ... to the extent that the person is capable of complying with it". Section 155(6) requires the person in charge of premises to provide an authorised officer with all reasonable facilities and assistance for the effective exercise of the powers conferred by s 155(2). By s 155(6A) a person who contravenes s 155(5) or (6) is guilty of an offence, punishable by fine in the case of a corporation or by fine or imprisonment in the case of a natural person.
41. Section 155 specifically declares that one immunity recognised by the common law as fundamental is no answer to a request for the production of documents. Section 155(7) declares that "[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". However, the sub-section also declares that any answer, information or document produced in response to a notice "is not admissible in evidence against the person" in criminal proceedings.
42. Section 155 also expressly provides that certain information or evidence need not be given or produced. Section 155(7A) enacts that a person is not required to give information or evidence that would disclose the contents of or permit the inspection of documents "prepared for the purposes of a meeting of the Cabinet of a State or Territory". Nor is a person required to give information or evidence or permit the inspection of documents "that would disclose the deliberations" of such a body.
The construction of s 155
43. Courts do not construe legislation as abolishing, suspending or adversely affecting rights, freedoms and immunities that the courts have recognised as fundamental unless the legislation does so in unambiguous terms [F68] . In construing legislation, the courts begin with the presumption that the legislature does not interfere with these fundamental rights, freedoms and immunities unless it makes its intention to do so unmistakably clear. The courts will hold that the presumption has not been overcome unless the relevant legislation expressly abolishes, suspends or adversely affects the right, freedom or immunity or does so by necessary implication. They will hold that the legislature has done so by necessary implication whenever the legislative provision would be rendered inoperative or its object largely frustrated in its practical application, if the right, freedom or immunity were to prevail over the legislation. A power conferred in general terms, however, is unlikely to contain the necessary implication because "general words will almost always be able to be given some operation, even if that operation is limited in scope" [F69] .
44. Australian courts have classified legal professional privilege as a fundamental right or immunity [F70] . Accordingly, they hold that a legislature will be taken to have abolished the privilege only when the legislative provision has done so expressly or by necessary implication [F71] . Legal professional privilege describes a person's immunity from compulsion to produce documents that evidence confidential communications about legal matters made between a lawyer and client or between a lawyer and a third party for the benefit of a client [F72] . The immunity also protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of a client, such as research memoranda [F73] . The immunity embodies a substantive legal right. Its operation is not limited to judicial or quasi-judicial proceedings [F74] . Where it applies, it may be used to refuse to produce documents that are the subject of a search warrant authorised by statute [F75] or other extra-curial process as well as a subpoena issued under or discovery required by rules of court [F76] .
45. Neither s 155 nor any other provision of the Act expressly abolishes the right to claim legal professional privilege for documents the subject of a s 155 notice. But the Commission contends that s 155 does so by necessary implication. I reject this contention. Section 155 would neither become inoperative nor be rendered practically useless if a person to whom a s 155 notice was addressed could refuse to produce documents because they were protected by legal professional privilege. Documents protected by the privilege must be a small percentage of the documents whose production can be required by such notices. Only in recent times has the Commission or its predecessor claimed that legal professional privilege does not apply to documents that are the subject of a s 155 notice. The Commission's long acceptance of its earlier position supports the view that the section's object would not be frustrated by holding that it does not abolish the right to claim immunity for documents protected by legal professional privilege. Nor is it likely that the position has greatly changed as the result of this Court's decision in Esso Australia Resources Ltd v Federal Commissioner of Taxation [F77] . In Esso, the Court held that a claim of legal professional privilege is made out if the dominant purpose of the communication was the giving or receiving of legal advice or assistance. Before Esso, the received doctrine was that a communication was protected by legal professional privilege only if the sole purpose of the communication was the giving or receiving of legal advice or assistance.
46. The Commission also claimed that s 155(5) indicates that the power conferred by s 155(1) is not subject to legal professional privilege because s 155(5) declares that a person shall not "refuse or fail to comply with a notice ... to the extent that the person is capable of complying with it". But s 155(5) is of no assistance in construing s 155(1). The implied duty created by s 155(5) operates only in respect of documents which s 155(1), on its proper construction, requires to be produced.
Pyneboard and Yuill
47. The Commission also contended that two decisions of this Court - Pyneboard Pty Ltd v Trade Practices Commission [F78] and Corporate Affairs Commission (NSW) v Yuill [F79] - compelled the conclusion that the power conferred by s 155(1) was not subject to claims of legal professional privilege. In Pyneboard, the Court unanimously held that it was no answer to a notice given under s 155(1) that production of the documents might expose a person or a corporation to a penalty. In Yuill, a majority of the Court held that a claim of legal professional privilege was not a "reasonable excuse" for refusing to obey a requirement under s 295(1) of the Companies (New South Wales) Code. That sub-section empowered an inspector to require an officer of a corporation, the subject of an investigation under the Code, to produce such books of the corporation as were in his or her custody or control. Neither decision assists the Commission.
48. The decision in Pyneboard can be justified by the presence of s 155(7) in the Act. Section 155(7) declared that "[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". Mason ACJ, Wilson and Dawson JJ said [F80] 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". Because of the presence of s 155(7), therefore, it was a necessary implication of s 155 that a notice under s 155(1) abolished any right to claim that production of the documents required might expose a person to a civil penalty. However, no provision in s 155 has the same, or for that matter any, relation to legal professional privilege as s 155(7) has to a claim that producing documents might expose a person to a penalty in civil proceedings.
49. More helpful to the Commission is another strand in the reasoning of Mason ACJ, Wilson and Dawson JJ in Pyneboard. Echoing comments in an earlier corporations case decided by the Court [F81] , their Honours said that s 155(1) "is valueless if the obligation to comply is subject to privilege" [F82] . With great respect to their Honours, this statement cannot be accepted as correct. It is denied by the longstanding acceptance by the Commission and its predecessor of a right to claim legal professional privilege in respect of documents the subject of a s 155 notice.
50. Moreover, the contention that the power conferred by s 155(1) is not "subject to privilege" is inconsistent with the fact that the power conferred by s 155(2) is subject to legal professional privilege. Where the Commission has reason to believe that a person has contravened the Act, s 155(2) authorises a member of the staff assisting the Commission to enter premises, to inspect documents under the control of the person and to take copies or extracts of the documents. The power conferred by s 155(2) is no greater, however, than the power given by s 10 of the Crimes Act 1914 (Cth) to issue a search warrant to enter premises and seize anything including a document if there were reasonable grounds for suspecting that the thing afforded evidence of an offence. In Baker v Campbell [F83] , the Court held that the power conferred by s 10 was subject to legal professional privilege. Nothing in the context, history or purpose of s 155(2) provides any ground for distinguishing the application of Baker [F84] to that sub-section.
51. If the power conferred by s 155(2) is subject to legal professional privilege, as I think it is, it is difficult to see why s 155(1) is not also subject to legal professional privilege. Given the Court's decision in Baker [F85] , the above statement of Mason ACJ, Wilson and Dawson JJ [F86] in Pyneboard cannot be regarded as authoritative.
52. Because Pyneboard dealt with a different privilege and because of the presence of s 155(7) in the Act, the decision in that case does not assist the Commission.
53. Nor does the decision in Yuill [F87] assist the Commission. The context, history and purpose of s 155 are so different from those of s 295 of the Companies (New South Wales) Code that Yuill furnishes no assistance in construing s 155(1). Judicial decisions on statutory terms "can never give more than guidance as to the meaning of the same terms in different statutes unless the statutes are not materially different in context, history and purpose" [F88] . And a decision on a statute "is likely to be of even less assistance ... when the judicial decision turned on an inference or inferences drawn from the statute as a whole" [F89] . Because legal professional privilege was perceived as applying only in judicial and quasi-judicial proceedings at the time when s 295 was enacted, Brennan J held in Yuill [F90] that the legislature did not intend the privilege to come within the term "reasonable excuse". Dawson and Toohey JJ also held [F91] that the privilege did not come within that term. They did so because other provisions of the Code gave limited protection to legal professional privilege in some situations and to have held otherwise would have been incongruous with those provisions and the denial of self-incrimination as a "reasonable excuse".
54. The decision in Yuill was also influenced by the view that the contents of a corporation's books and documents are essential to an understanding of the affairs of a corporation. Because that is so, an investigation of its affairs might be gravely impaired if an inspector was denied access to all of its books and documents. In Yuill [F92] , Brennan J [F93] and Dawson and Toohey JJ [F94] used this fact to support their conclusion that legal professional privilege was not a "reasonable excuse" for failing to comply with s 295(1).
55. Whether or not access to legally privileged documents is necessary if the affairs of a company are to be properly investigated, failure to obtain access to legally privileged documents does not render the Commission's powers under s 155 futile. Accordingly, Yuill does not compel or require the Court to find that the power conferred by s 155(1) is not subject to legal professional privilege.
Order
56. I would allow the appeal and set aside the orders of the Full Court of the Federal Court. I would substitute for those orders a declaration that powers conferred by s 155 of the Act are subject to any claim of legal professional privilege. I would remit the matter to the Federal Court for further hearing to determine whether legal professional privilege can be claimed in respect of any document referred to in the notices. The Commission must pay the costs of this appeal.