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Test Document v Test Document [2006] FCA 1999 (8 August 2006)

Last Updated: 20 September 2006


THIS IS A TEST DOCUMENT USED FOR TEST PURPOSES ONLY

FEDERAL COURT OF AUSTRALIA


AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5)
[2006] FCA 1234



EXPLANATORY STATEMENT


It is the practice of this Court in matters which are of significant public interest to make a brief explanatory statement when delivering judgment.

The statement I now make describes the main issues in the proceedings and the conclusions I have reached. As it is a summary statement only, it is necessarily incomplete. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.

This case arises from notices to produce documents under s 2(3A) of the Royal Commissions Act 1902 (‘RCA’) that Commissioner Cole directed to AWB and its employees between 23 November 2005 and 20 March 2006. AWB seeks a declaration that the documents specified in revised lists of documents that AWB has filed with the Court are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege.

Although the Commissioner is named as the first respondent, he advised the Court that he would take no part in the proceedings and will abide any order made by the Court. The second respondent, the Commonwealth, has acted as AWB’s contradictor.

At the commencement of the hearing, some 1,450 original documents were in issue. During the course of the hearing, AWB withdrew its claim for a declaration that various documents were privileged and the Commonwealth accepted that other documents were the subject of legal professional privilege. As a result, the number of contested original documents was reduced by some 550 to approximately 900 documents occupying 28 lever arch folders.

The documents at issue span a period of years from about 2002 to 2006. Over that period, AWB was involved in a number of investigations concerning its sales of wheat to Iraq under the United Nations’ Oil-For-Food Programme (‘OFF Programme’). AWB conducted two internal investigations, known as Project Rose and Project Water. In addition, AWB was exposed to investigations by the Permanent Investigations Committee of United States Senate (‘PSI’), the Independent Inquiry Committee of the United Nations (‘IIC’) and ultimately the Commission.

So far as AWB is concerned, these investigations focused on AWB’s payment of inland transportation fees, totalling approximately US$222 million, to a Jordanian company called Alia for Transportation and General Trade Co (‘Alia’). In its final report, the IIC concluded that Alia was a front company for the Iraqi regime headed by Saddam Hussein and that Alia channelled these payments to Iraq in contravention of the United Nations’ sanctions. A key issue in the investigations was whether AWB or any of its employees knew or suspected that this was the case.

AWB’s internal investigations also involved a review of matters concerning The Tigris Petroleum Corporation Limited (‘Tigris’). The Commonwealth contends that AWB and Tigris entered into a transaction whereby AWB agreed to inflate the prices in two contracts (A1670 and A1680) for the supply of 1,000,000 mt of wheat to the Grain Board of Iraq (‘GBI’) as a means of extracting funds from the United Nations’ escrow account to repay a debt of approximately US$8 million which GBI owed to Tigris and to provide AWB with the funds required to make a rebate payment to GBI.

As argued before me, the case focused on three issues:


ESTABLISHING DOMINANT PURPOSE
AWB carries the onus of proving that each relevant communication was undertaken, or each relevant document was brought into existence, for the dominant purpose of giving or obtaining legal advice. Privilege is not established merely by the use of a verbal formula or by mere assertion that communications were undertaken for the purposes of obtaining or giving ‘legal advice’. Dominant purpose is a question of fact that must be determined objectively.

In determining AWB’s claims of legal professional privilege, I have looked to the substance of the matter, having regard to the context, the nature of the document, the evidence that was lead in support of the claim of privilege and the content of the document as revealed by inspection.

I have concluded that, quite apart from any question of waiver, AWB has not made out its claim for privilege in respect of 25 documents. The evidence does not establish that the documents were confidential communications brought into existence for the dominant purpose of obtaining or giving legal advice. If, contrary to my view, privilege does attach to any of these documents, it has been waived in respect of all but four of the documents.

WAIVER
The Commonwealth contends that, on numerous occasions, AWB disclosed the gist or substance of legal advice that it obtained as a result of, or in the course of, its internal investigations. It relied on disclosures that were made to the Australian Government between 24 March 2005 and 4 October 2005, to the IIC in the course of Andrew Lindberg’s interview on 28 February 2005, and to the Commission. As a result, the Commonwealth contends that AWB has waived any privilege that attached to documents brought into existence in the course of its internal investigations.

The cumulative effect of AWB’s disclosures is that, down to 17 January 2006 when Lindberg gave evidence to the Commission, AWB was openly claiming that its legal advice showed that there was no evidence that it had engaged in any wrongdoing in connection with its supply of wheat to Iraq under the OFF Programme. Specifically, AWB claimed that there was no evidence of any corruption by AWB, any side payments or after sales payments by AWB to the former Iraqi regime, that AWB knew of any connection between Alia and the Iraqi regime or of any payments being channelled by Alia to that regime, or any conduct by AWB that resulted in breaches of the United Nations’ sanctions. The disclosures by AWB were expressed in such broad terms that they encompassed advices that AWB had obtained concerning the Tigris transaction and the iron filings claim.

I am satisfied that AWB made a conscious and voluntary decision to deploy the gist or substance of this legal advice in its dealings with the Australian Government, the IIC and the Commission because it considered that it was in its commercial interests to do so. These actions are inconsistent with the maintenance of confidentiality in the legal advice.

In addition, Lindberg and other AWB executives gave evidence to the Commission that AWB obtained legal advice that the proceeds of the inflated prices in contracts A1670 and A1680 should be disbursed to Tigris to the extent of approximately US$7 million. That evidence was given in the presence of AWB’s legal representatives without any objection being raised on grounds of legal professional privilege. I infer that AWB was content for it to be publicly known that it had obtained that legal advice. Having disclosed the gist or substance of that advice, and having regard to the wide terms in which those disclosures were expressed, I consider that AWB is bound to disclose any other legal advices it obtained in relation to the same subject or same issue.

The scope of the waiver that must, in my view, be imputed to AWB is not confined to any other legal advice that AWB obtained prior to the date of the relevant disclosures that addressed the same subject matters or issues as the advice that AWB voluntarily disclosed. It extends to the documents and information which were taken into account in formulating, or which otherwise underpinned or influenced, the legal advice that AWB has chosen to disclose.

To determine precisely what documents fall within these boundaries, I inspected the documents over which a claim of privilege has been made, reviewed the evidence concerning each document, and applied the principles identified in my reasons for judgment. In the result, I have concluded that AWB has waived any legal professional privilege that subsisted in the documents listed in my reasons for judgment, which number approximately 316. There are a further 19 documents where any privilege has been waived over part of the document.

In broad terms, the documents over which privilege has been waived comprise documents falling within the following categories: documents which defined the scope of AWB’s internal reviews or which identify what investigations were carried out; summaries, chronologies and other documents which record or analyse the results of those investigations; witness statements and other notes or records of interviews of AWB personnel; records of meetings and periodical reports concerning the findings of the review; and documents seeking advice, or comprising or recording advice provided to AWB, as to whether AWB or any of its employees engaged in any wrongdoing in connection with wheat sales to Iraq under the OFF Programme, including any wrongdoing in connection with the Tigris transaction.

THE IRON FILINGS CLAIM
Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. This principle is often referred to as the ‘fraud exception’ to legal professional privilege, but this does not capture its full reach. The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes and extends to ‘trickery’ and ‘shams’. As the fraud exception is based on public policy grounds, it is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest.

I have inspected the six documents that were said to relate to the iron filings claim. My inspection of AWB’s documents revealed a further four documents that fall within this category and are still the subject of a privilege claim. I am satisfied that these 10 documents are not privileged, as the documents were brought into existence in furtherance of an improper and dishonest purpose – inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations’ escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI. The evidence establishes to the requisite standard that the transaction was deliberately and dishonestly structured by AWB and GBI so as to misrepresent the true nature and purpose of the trucking fees and to work a trickery on the United Nations. It would be contrary to public policy for the privilege to enure in communications of this kind.

COPY DOCUMENTS
AWB has sought a declaration that the documents in its list of duplicate privileged documents are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege.

Each document in the list is a duplicate of an identified document in AWB’s list of privileged documents. Where I have held that specified original documents do not attract legal professional privilege, no case has been made out that duplicates of those documents are entitled to privilege. Where I have held that specified original documents attract legal professional privilege, I have concluded that privilege attaches to the duplicates.

RELIEF
My conclusions on a document by document basis are set out towards the end of my reasons for judgment. I have determined that specified documents are not the subject of legal professional privilege and that other documents attract legal professional privilege. The Court has power to make declarations to this effect.

I propose to give AWB and the Commonwealth an opportunity to make submissions as to the form of any declarations that should be made to give effect to my reasons for judgment.

FEDERAL COURT OF AUSTRALIA

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5)

[2006] FCA 1234



EVIDENCE – legal professional privilege – documents required to be produced by notice under Royal Commissions Act 1902 (Cth) – whether documents brought into existence for the dominant purpose of giving or obtaining legal advice – whether documents brought into existence in furtherance of fraud or improper purpose – waiver of privilege – imputed waiver – associated material waiver – whether privilege has been waived by disclosures made by applicant to Independent Inquiry Committee into the United Nations Oil-For-Food Program, Australian Government and royal commission



Royal Commissions Act 1902 (Cth) ss 2(3A), 6AA(2)
Royal Commissions Amendment Act 2006 (Cth)
Judiciary Act 1903 (Cth) s 39B
Evidence Act 1995 (Cth) ss 69, 78, 79, 135

AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 discussed
Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 approved
Daniels Corporations International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 approved
Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54 cited
Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 cited
Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 cited
National Crime Authority v S (1991) 29 FCR 203 cited
Candacal Pty Ltd v Industry Research & Development Board (2005) 223 ALR 284 cited
Seven Network Limited v News Limited [2005] FCA 142 cited
Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 applied
Southern Equities Corporation Ltd (in liq) v Arthur Anderson & Co (No 6) [2001] SASC 398 cited
Kennedy v Wallace (2004) 208 ALR 424 considered
Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357 considered
Balabel v Air India [1988] 1 Ch 317 approved
Nederlandse Reassurantie Groep Holding NV v Bacon and Woodrow [1995] 1 All ER 976 cited
Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] UKHL 48; [2005] 1 AC 610 cited
Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 considered
DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 1191; (2003) 135 FCR 151 cited
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 applied
Trade Practices Commission v Sterling (1979) 36 FLR 244 cited
Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 considered
Saunders v Commissioner of Australian Federal Police (1998) 160 ALR 469 cited
GSA Industries (Aust) Pty Ltd v Constable (2002) 2 Qd R 146 cited
Glengallan Investments Pty Ltd v Arthur Andersen (2002) 1 Qd R 233 cited
Commonwealth v Vance (2005) 158 ACTR 47 cited
Mitsubishi Electric Australia Pty Ltd v Victoria WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 cited
Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 applied
Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 discussed
Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 considered
Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86 distinguished
Goldman v Hesper [1988] 1 WLR 1238 cited
Trans America Computer Co Inc v IBM Corporation 573 F2d 646 (9th Cir 1978) cited
Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52 approved
Restom v Battenberg [2006] FCA 781 considered
Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 cited
Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253 considered
British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113 considered
Gotha City v Southeby’s (No 1) [1988] 1 WLR 1114 cited
Giannarelli v Wraith (No 2) [1991] HCA 2; (1991) 171 CLR 592 considered
Weil v Investment/Indicators Research and Management, Inc 647 F2d 18, 24 (9th Cir 1981) cited
United States v Aronoff 466 FSupp 855 (DC NY 1979) cited
In re Sealed Case 676 F2d 793 (DC Cir 1982) considered
United States v AT & T Co 642 F2d 1285 (DC Cir 1980) cited
Diversified Industries Inc v Meredith 572 F2d 596 (8th Cir 1977) questioned
Permian Corp v United States 665 F2d 1215 (DC Cir 1981) cited
In re Weiss 596 F2d 1185 (4th Cir 1979) cited
S & K Processors Ltd v Campbell Ave Herring Producers Ltd (1983) CPC 146 (BCSC) cited
Professional Institute of the Public Service of Canada v Canada (Director of the Canadian Museum of Nature) [1995] 3 FC 643 cited
British Columbia (Securities Commission) v BDS (2000) BCJ No 2111 (BCSC); (2003) 226 DLR (4th) 393 cited
Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 cited
Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101 followed
Nine Films and Television Pty Ltd v NINOX Television Ltd (2005) 65 IPR 442 considered
Seven Network Ltd v News Ltd (No 12) [2006] FCA 348 cited
Rio Tinto Ltd v Commissioner of Taxation (2005) 224 ALR 299 considered
British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524 questioned
Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 discussed
Thomas v New South Wales [2006] NSWSC 380 applied
Newcrest Mining (WA) Limited v Commonwealth (1993) 40 FCR 507 considered
Dunlop Slazenger International Ltd v Joe Bloggs Sports Limited [2003] EDWCA Civ 901 cited
Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2) [1981] Com LR 138 approved
R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 considered
Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] 2 All ER 599 applied
Attorney-General (NT) v Kearney [1985] HCA 60; (1985) 158 CLR 500 considered
Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 considered
R v Cox and Railton (1884) 14 QBD 153 cited
Bullivant v Attorney-General (Vic) [1901] AC 196 cited
Annesley v Anglesea (1743) 17 St Tr 1139 cited
Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 cited
Gartner v Carter [2004] FCA 258 cited
Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 considered
Barclays Bank plc v Eustice [1995] 4 All ER 511 considered
R v Bell; Ex parte Lees [1980] HCA 26; (1980) 146 CLR 141 cited
Butler v Board of Trade [1971] 1 Ch 680 applied
O’Rourke v Darbishire [1920] AC 581 approved
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 cited


T Harman, Fairness and the Doctrine of Subject Matter Waiver of the Attorney-Client Privilege in Extrajudicial Disclosure Situations (1988) University of Illinois Law Review 999
AM Pinto, Cooperation and Self-Interest are Strange Bedfellows: Limited Waiver of the Attorney-Client Privilege through Production of Privileged Documents in a Government Investigation (2004) 106 West Virginia Law Review 359
RH Porter, Voluntary Disclosures to Federal Agencies – Their Impact on the Ability of Corporations to Protect from Discovery Materials Developed During the Course of Internal Investigations (1990) 39 Catholic University Law Review 1007
RD Manes and MP Silver, Solicitor-Client Privilege in Canadian Law, Butterworths, 1993
S Odgers, Uniform Evidence Law, 7th edn, Lawbook, 2006







AWB LIMITED v THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC AND COMMONWEALTH OF AUSTRALIA
VID 594 OF 2006

YOUNG J
18 SEPTEMBER 2006
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 594 OF 2006

BETWEEN:
AWB LIMITED
Applicant
AND:
THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC
First Respondent

COMMONWEALTH OF AUSTRALIA
Second Respondent

JUDGE:
YOUNG J
DATE OF ORDER:
18 SEPTEMBER 2006
WHERE MADE:
MELBOURNE


THE COURT ORDERS THAT:

  1. Within 3 business days AWB and the Commonwealth file an agreed minute of orders that give effect to these reasons for judgment. If AWB and the Commonwealth are unable to agree upon appropriate orders, within 3 business days AWB and the Commonwealth shall each file and serve a minute of the orders that it contends are necessary and appropriate to give effect to these reasons for judgment.
  2. The proceeding be adjourned to Monday 25 September 2006 at 10.15am for any argument as to the orders.


Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 594 OF 2006

BETWEEN:
AWB LIMITED Applicant
AND:
THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC First Respondent COMMONWEALTH OF AUSTRALIA Second Respondent

JUDGE:
YOUNG J
DATE:
18 SEPTEMBER 2006
PLACE:
MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

  1. Iraq has been a major export market for Australian wheat for many years. Prior to 1999, the overseas marketing and export of wheat from Australia was controlled by the Australian Wheat Board (‘Board’), which was a Commonwealth statutory authority. The Board was first established during the second world war under the Wheat Acquisition Regulations 1939 (Cth). After the war, the Board was established by the Wheat Industry Stabilization Act 1948 (Cth) and it has continued in existence under later Commonwealth legislation including, most recently, the Wheat Marketing Act 1989 (Cth) (‘WMA’).
  2. As a result of amendments made to the WMA by the Wheat Marketing Amendment Act 1997 (Cth) and the Wheat Marketing Legislation Amendment Act 1998 (Cth), the control of wheat exports from Australia was transferred to AWB Limited (‘AWB’). Since 1 July 1999, AWB has carried on business as the exclusive manager and marketer of bulk wheat exports from Australia. It is required to purchase all wheat that is offered to it by Australian growers for inclusion in a pool operated by AWB, provided that the wheat meets standards set by AWB. Growers are paid a purchase price that must be calculated by reference to the net return for the pool in which the wheat is included: s 84 of the WMA. AWB carries out these functions under the general supervision of the Wheat Export Authority which is the successor to the Board: see ss 5, 5D, 57 and 84 of the WMA.
  3. By Letters Patent dated 10 November 2005, the Governor-General appointed the Honourable Terence Rhoderic Hudson Cole AO RFD QC (‘the Commissioner’) to inquire into, and report on, inter alia:
  4. Between 23 November 2005 and 20 March 2006, the Commissioner issued twelve notices to produce documents to AWB pursuant to s 2(3A) of the Royal Commissions Act 1902 (Cth) (‘RCA’). In addition, various notices to produce documents were directed by the Commissioner to employees of AWB. From early 2006, AWB has maintained that a large number of documents falling within the scope of these notices are the subject of legal professional privilege.
  5. These proceedings were instituted on 30 May 2006, shortly before the Royal Commissions Amendment Act 2006 (Cth) (‘the Amending Act’) came into force on 15 June 2006. It is common ground that nothing in the RCA, as amended by the Amending Act, abrogates AWB’s right to withhold documents caught by the notices to produce if they are properly the subject of legal professional privilege.
  6. The Commissioner is named as the first respondent. He has advised the Court that he intends to take no part in the proceedings and will abide any order made by the Court. The second respondent, the Commonwealth of Australia, has acted as AWB’s contradictor.
  7. The principal relief sought by AWB in this proceeding is a declaration that the documents specified in revised lists of documents that have been filed with the Court are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege. This claim falls squarely within the Court’s jurisdiction under s 39B(1) and (1A)(c) of the Judiciary Act 1903 (Cth). The Commonwealth does not suggest that the Amending Act deprives this Court of its jurisdiction to hear and determine AWB’s claims for relief; on the contrary, it accepts that the Court has jurisdiction to determine whether the documents attract legal professional privilege.
  8. At the commencement of the hearing, some 1,450 original documents were in issue. During the course of the hearing, AWB withdrew its claim for a declaration that various documents were privileged and the Commonwealth accepted that other documents were the subject of legal professional privilege. As a result, the number of contested original documents was reduced by some 550 to approximately 900 documents occupying 28 lever arch folders.
  9. The trial of this proceeding was conducted on affidavit. In support of its privilege claims, AWB relied upon thirty-two affidavits. In addition, AWB relied upon specified exhibits to two affidavits sworn by Leonie Thompson of Arnold Bloch Leibler (‘ABL’) on 30 May 2006 and 19 June 2006 and certain background documents contained in Exhibit SMXD17 to the affidavit of Simon Daley, a solicitor acting for the Commonwealth, sworn 3 July 2006. The deponents included AWB executives and employees, AWB’s in-house lawyers, and lawyers from three Melbourne law firms, Blake Dawson Waldron (‘Blakes’), Minter Ellison (‘Minters’) and ABL, that were retained to advise AWB in connection with issues arising from AWB’s supply of wheat to Iraq. None of the deponents were cross-examined.
  10. The Commonwealth did not rely upon any affidavit evidence. However, it tendered a substantial volume of documents and passages from the transcript of evidence given to the Commission.
  11. The documents at issue in this proceeding span a period of years from about 2002 to 2006. Over that period, AWB was involved in a number of investigations concerning its sale of wheat to Iraq under the United Nations’ Oil-For-Food Programme (‘OFF Programme’). AWB conducted two internal investigations, known as Project Rose and Project Water. In addition, AWB was exposed to investigations by the United States Senate, the Independent Inquiry Committee of the United Nations and ultimately the Commission. As many of the documents arise out of these investigations, it is necessary to describe their nature and scope in general terms.

THE OIL-FOR-FOOD PROGRAMME

  1. Following the invasion of Kuwait by Iraq, the United Nations Security Council determined on 2 August 1990 that trade sanctions should be imposed on Iraq. In particular, the Security Council adopted Resolution 661 of 6 August 1990 (‘Resolution 661’) which provided, inter alia, that all States:
  2. In April 1991, the Security Council passed Resolution 687 which provided that the prohibition against the sale or supply to Iraq of commodities or products other than medicine and health supplies would not apply to foodstuffs notified to the Committee established by Resolution 661.
  3. On 14 April 1995, the Security Council adopted Resolution 986 which established the OFF Programme. Specifically, by that resolution:
shall be used to meet the humanitarian needs of the Iraqi population and for the following other purposes, and requests the Secretary-General to use the funds deposited in the escrow account:
To finance the export to Iraq, in accordance with the procedures of the Committee established by resolution 661 (1990), of medicine, health supplies, foodstuffs, and materials and supplies for essential civilian needs, ... provided that:Each export of goods is at the request of the Government of Iraq;Iraq effectively guarantees their equitable distribution, on the basis of a plan submitted to and approved by the Secretary-General, including a description of the goods to be purchased;
  1. The escrow account was under the control of the United Nations in New York. Funds standing to the credit of the escrow account were available to be used by Iraq for the purchase of humanitarian goods and services, including the purchase of food, in accordance with the conditions and procedures laid down by the United Nations.
  2. On 20 May 1996, the United Nations and the Government of Iraq entered into a Memorandum of Understanding in relation to the implementation of Resolution 986. Section II of that Memorandum provided for the Government of Iraq to adopt a distribution plan that was designed to achieve an equitable distribution of medicine, health supplies, foodstuffs and other materials to the Iraqi population throughout the various Governates of Iraq.

THE INDEPENDENT INQUIRY COMMITTEE

  1. On 21 April 2004, following allegations of fraud and corruption in relation to the administration of the OFF Programme, the Secretary-General of the United Nations appointed an Independent Inquiry Committee (‘the IIC’) to investigate the administration of the OFF Programme. The chairman of the IIC was Paul Volcker, a former chairman of the United States Federal Reserve. The other members of the IIC were Mark Pieth of Switzerland, an expert on money laundering in the Organisation for Economic Co-operation and Development, and Justice Richard Goldstone of South Africa, a former chief prosecutor of the United Nations International Criminal Tribunals for the former Yugoslavia and Rwanda. The IIC’s terms of reference were as follows:
independent inquiry shall collect and examine information relating to the administration and management of the Oil-for-Food Programme, including allegations of fraud and corruption on the part of United Nations officials, personnel and agents, as well as contractors, including entities that have entered into contracts with the United Nations or with Iraq under the Programme:
  1. By Security Council Resolution 1538, the Security Council called upon the Coalition Provisional Authority, Iraq, and all Member States of the United Nations, including their national regulatory authorities, to cooperate fully by all appropriate means with the IIC.
  2. The IIC issued its final report, entitled ‘Manipulation of the Oil-for-Food Programme by the Iraqi Regime’, on 27 October 2005 (‘the Final Report’). The IIC found that Iraq had received illicit income totalling about US$1.8 billion from companies that obtained oil and humanitarian goods contracts. It also found that the largest source of illicit income for the Iraqi regime came from payments made by companies that Iraq selected to receive contracts for humanitarian goods under the OFF Programme. These payments were disguised by various subterfuges and were not reported to the United Nations by Iraq or by the participating contractors.
  3. In its Final Report, the IIC said that the illicit payments developed in mid-1999 from Iraq’s effort to recoup the costs it incurred to transport goods to inland destinations after their arrival by sea at the Persian Gulf port of Umm Qasr. The IIC said that, rather than seeking approval from the United Nations for compensation for such costs from the OFF Programme’s escrow account, Iraq required humanitarian contractors to make such payments directly to Iraqi-controlled bank accounts or to front companies outside Iraq that in turn forwarded the payments to the Government of Iraq. The IIC observed that, not only were these side payments unauthorised, it was also an easy matter for Iraq to impose ‘inland transportation’ fees that far exceeded the actual transportation costs. The IIC also stated that, by mid 2000, Iraq instituted a broader policy that applied a 10 per cent surcharge on all humanitarian contracts, in addition to any requirement that contractors pay inland transportation fees. The surcharge was described in most cases as an ‘after sales service fee’.
  4. The IIC said that one conduit for the payment of inland transportation fees to the Iraqi regime was a Jordanian company called Alia for Transportation and General Trade Co (‘Alia’). The IIC stated that Alia was owned partly by Iraq’s Ministry of Transportation and acted as a collection agent for the Government of Iraq to receive inland transportation payments from certain humanitarian goods suppliers. The IIC found that the actual transportation of goods from the port of Umm Qasr to inland destinations in Iraq was in fact provided by Iraqi Government employees, and not by Alia.
  5. In its Final Report, the IIC made a number of specific findings in relation to AWB. It found that AWB paid transportation fees to Alia from December 1999 through until about May 2003 when the OFF Programme came to an end as a result of the invasion of Iraq by US and coalition forces. In connection with AWB’s first three contracts from late 1999 to mid 2000, inland transport fees ranged between $10.80 and $12.00 per metric tonne (‘pmt’). The rates rose to between $14.00 and $15.00 pmt in 2000 and then sharply increased in contracts from 2001 to 2003 to between $45.00 and $56.00 pmt. The IIC also found that AWB did not advise the United Nations that it was making payments to Alia for inland transportation costs.
  6. The IIC summed up its conclusions in relation to AWB in the following passage of its Final Report:
summary, based on the available evidence, AWB paid to Alia over $221.7 million for what it termed inland transport or trucking fees. These payments were channeled to the Government of Iraq by Alia. Both AWB and Alia deny that AWB knew of Iraq’s partial ownership of Alia, and there is no evidence to contradict these denials. AWB also denies knowing that Alia did not actually transport its wheat from Umm Qasr and that Alia remitted the money paid by AWB to the Government of Iraq. On the one hand, there is no evidence that Alia told AWB that it was not performing transport services for AWB’s wheat or that it was channeling AWB’s payments to the Government of Iraq. On the other hand, numerous aspects of the AWB-Alia relationship, as well as the nature of many of the documents received by AWB and discussed above, suggest that some employees of AWB were placed on notice of facts strongly suggesting that AWB’s payments were in whole or in part for the benefit of the Government of Iraq. Of particular significance is the degree to which Alia’s trucking prices rose sharply beyond what would apparently be a reasonable transportation fee and without other apparent justification. Such increases, in conjunction with AWB’s knowledge that Alia had been nominated in the first place by the Government of Iraq, should have signaled AWB officials to the probability that the Government of Iraq stood to illicitly benefit financially from AWB’s payments to Alia. In addition, IGB [the Iraqi Grain Board] and ISCWT [the Iraqi State Company for Water Transport – ie the port authority] initiated or were party to communications concerning AWB’s payment of Alias fees, and AWB was warned that the Government of Iraq would not allow its ships to unload until Alia was paid.’
  1. It is relevant to note that, in February 2005, investigators from the IIC travelled to Australia and interviewed a number of senior officers of AWB. In addition, AWB made a large number of documents available to the IIC investigators. Certain disclosures by AWB to the IIC represent one ground upon which the Commonwealth contends that there has been a waiver of legal professional privilege by AWB over some of the documents at issue in these proceedings.

PROJECT ROSE

  1. Project Rose commenced in about June 2003 when James Cooper (‘Cooper’), the then general counsel of AWB, was asked to initiate an internal investigation of AWB’s trading activities in Iraq. The internal investigation began following the publication of a letter dated 3 June 2003 from Alan Tracey (‘Tracey’), president of a lobby group known as US Wheat Associates, to Colin Powell, then the US Secretary of State, in which Tracey alleged that prices in contracts for the sale of wheat under the OFF Programme had been inflated and that some of the sale proceeds might have gone into the accounts of Saddam Hussein’s family. Cooper engaged Christopher Quennell (‘Quennell’), a consultant employed by Blakes in its Melbourne office, to advise in relation to AWB’s internal investigations.
  2. In evidence before the Commission, Cooper described the scope of Project Rose in these terms:
subject matter was all of ... AWB’s dealings with Iraq during the operation of the Oil-for-Food Program. ...
The issues that were raised were the underlying collection of information to understand the company’s position and, secondly, the understanding of the requirement for AWB to be involved in an inquiry in the United States, which involved many, ... fairly complex legal issues, particularly over jurisdiction.’
  1. Later in his evidence to the Commission, Cooper described his retainer of Quennell and Blakes in these terms:
initially happened in June 2003 was that Chris Quennell came in and took instructions and was told to undertake a review of all of the facts and his assessment of the allegations made by the US Wheat Associates, and he did that by obtaining email records, ... he got paper files, he interviewed staff members and conducted quite a large review.
it was an open-ended instruction to him to come into the company and undertake this review and report back on his findings from time to time.’


On this evidence, Cooper plainly contemplated that Quennell would assess the evidence and the allegations and report back his findings.

  1. In this proceeding, Quennell gave evidence on affidavit that his understanding of his instructions was to review available evidence and interview potential witnesses for the purpose of advising AWB as to its legal position in respect of its sale of wheat to the Grain Board of Iraq (‘GBI’) under the OFF Programme. He added that the scope of his task and instructions evolved as the matter progressed, particularly following the announcement by the Permanent Investigations Committee of the United States Senate (‘PSI’) of its intention to conduct an investigation and then the appointment of the IIC by the United Nations to conduct an independent inquiry into the OFF Programme.
  2. In due course, the board of AWB received a briefing on Project Rose on 25 May 2004. The board minutes record the following:
Rose
Board noted it had received a briefing on Project Rose (attended also by directors of AWB (International) Limited) on Tuesday 25 May 2004 and had also received a memorandum on this matter from the Managing Director on 6 May 2004. Project Rose is the code-name for the AWB Group’s internal investigation of AWB’s wheat exports to Iraq and AWB’s involvement in the United Nations Oil for Food Program (OFF) in regard to which allegations of impropriety had been made in the public arena.briefing session was addressed by Mr Jim Cooper, General Counsel, and Mr Chris Quennell, trade and transport lawyer of Blake Dawson Waldron. (The Board noted that a copy of the briefing presentation would be filed with the Board papers).Board noted the following with regard to the Project Rose briefing:The allegations of impropriety had commenced with correspondence from the US Wheat Associates to the US Secretary of State, Mr Colin Powell, on 3 June 2003. There had been sporadic media commentary since that time, and a number of inquiries (all of which remain unconfirmed) had been reported as follows: UN independent inquiry into the OFF program; Interim Iraqi Governing Council Investigation (reportedly to be conducted by KPMG); US House of Representatives Investigation; and a US Senate Committee on Foreign Relations Investigation.The Project Rose investigation commenced in June 2003 and has involved a comprehensive review of all contract arrangements for the export of wheat by AWB to Iraq from mid 1999 to 2002, including the inland freight arrangements within Iraq.The findings to date of the Project Rose Investigation are as follows:
  1. all AWB contracts were approved by the Office of the Iraq Program at the United Nations;
  2. no evidence has been identified of any AWB knowledge that money paid to the Jordanian transport firm, Alia, was onpaid to the Iraq regime;
  3. no evidence has been identified of payment of funds by AWB to any other person in relation to the OFF shipments; and
  4. no evidence has been identified of payment of funds to any AWB employee or any other person in relation to OFF shipments.’
  1. Blakes made a power point presentation to the board concerning the outcome of its investigations. The presentation said that Blakes had taken a ‘factual snapshot’ by reviewing 14 international sales and marketing ring binders, 100 chartering files and more than 30,000 AWB emails for 1999 and 2000, interviewing AWB personnel and conducting an audit of documents held by AWB (USA). It set out Blakes’ findings in terms similar to those recorded in the board minutes. In addition, it referred to findings that wheat contracts from July 1999 to December 2002 included a trucking fee payable to Alia that had been nominated by GBI; that the same trucking fee was payable under each contract regardless of the destination of the cargo or the distance transported; and that the trucking fee increased from time to time for no apparent reason. The presentation also stated that Richard Tracey QC (as his Honour then was) had given legal advice in conference on 25 May 2004 that there was no evidence of breach of the relevant United Nations resolution on sanctions and no evidence of breach of Australian domestic law.
  2. The evidence before this Court makes it clear that Project Rose was a continuing process of review and reporting that extended beyond the board meeting of 25 May 2004 and throughout 2004 and 2005. For instance, Mr Tracey QC provided memoranda of advice on 31 March 2005 and 12 August 2005 in relation to Project Rose and the question whether AWB had paid inflated prices for transport or port charges in breach of the United Nations’ sanctions or Australian domestic law. Its scope also broadened to include the provision of legal advice and assistance in connection with the PSI investigation, the inquiry undertaken by the IIC and, lastly, the inquiry that is being undertaken by the Commission.
  3. As time passed, Blakes, Minters and ABL each provided advice and assistance to AWB under the umbrella of Project Rose. Although the immediate focus of Project Rose shifted from time to time between allegations that were publicly made against AWB, the PSI investigation, the IIC investigation, and the Commission, it always involved an ongoing review and investigation of documents and other evidence to determine whether AWB, or any of its employees, had made payments to the Iraqi regime in breach of the United Nations’ sanctions or engaged in any other wrongdoing in connection with the sale of wheat to Iraq under the OFF Programme.

PROJECT WATER

  1. Cooper instructed Quennell to commence the investigation known as Project Water on 12 August 2004. It involved a review of all matters concerning The Tigris Petroleum Corporation Limited (‘Tigris’). The Commonwealth contends that AWB and Tigris entered into a transaction whereby AWB agreed to inflate the prices in two contracts (A1670 and A1680) for the supply of 1,000,000 mt of wheat to GBI, as a means of extracting funds from the United Nations’ escrow account to repay a debt of approximately US$8 million which GBI owed to Tigris and to provide AWB with the funds required to make a rebate payment to GBI of approximately US$2 million (‘the Tigris transaction’).
  2. Before the Commission, Cooper gave evidence that on or shortly before 12 August 2004 he was asked, either by Andrew Lindberg (‘Lindberg’) or Sarah Scales (‘Scales’), to undertake a review of AWB’s dealings with Tigris. Lindberg was AWB’s managing director, and Scales was the general manager of AWB (International) Limited (‘AWBI’). AWBI is the subsidiary of AWB that is responsible for international wheat sales and marketing. He said that Scales wanted the review undertaken because a sum of money of over US$8 million was being held in an account of AWBI, and she was not comfortable in approving the payment of that sum to Tigris without understanding all of the circumstances of its receipt by AWBI. As a result, on 12 August 2004 Cooper and two members of his legal division, Rosemary Peavey (‘Peavey’) and Rosalyn Santen (‘Santen’), initiated a telephone call to Quennell. In the course of that telephone conversation, Cooper asked Quennell to commence a review of all dealings with Tigris, with particular focus on whether it was proper to make a payment to Tigris of the money held in AWBI’s account. Quennell’s review took about three months. Then in December 2004, AWB paid the sum of US$7,087,202.24 to Tigris and retained a fee of US$500,000.00 for assisting in the repayment of the debt.
  3. Some evidence suggests that Project Water, as such, came to an end in December 2004, while other evidence suggests it was an ongoing investigation. But, whether or not the description of Project Water strictly applied, AWB and its legal advisers continued to investigate and review the facts and circumstances of the Tigris transaction during 2005 in order to determine whether it involved any wrongdoing by AWB or any of its employees.

THE INQUIRY BY THE UNITED STATES SENATE PERMANENT SUB-COMMITTEE ON INVESTIGATIONS

  1. In mid 2004, the PSI announced that it proposed to conduct an investigation into the OFF Programme. AWB retained Minters and several US law firms to advise it in relation to the PSI investigation. The evidence indicates that Blakes also provided some advice to AWB in connection with this investigation.

THE MAIN ISSUES

  1. As argued before me, the case focused on three issues. The first issue is whether AWB has established its claim that legal professional privilege attaches to each of the documents that remain in contest. The only head of privilege that AWB relies on is the privilege that attaches to documents brought into existence for the dominant purpose of obtaining or giving legal advice. In AWB Limited v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571 (‘AWB v Cole’), I held that litigation privilege was not available to protect documents brought into existence in contemplation of the Commission and none of the parties has disputed that decision. AWB has not contended that legal professional privilege is available solely because documents were brought into existence in contemplation of inquiries being undertaken by the PSI or by the IIC.
  2. The second issue is whether, assuming privilege attaches, that privilege has been waived by virtue of AWB’s disclosure of the gist or substance of certain legal advices which it obtained. I will have to determine whether waiver should be imputed to AWB as a matter of law and, if so, what is the extent of that waiver. The Commonwealth contends that the waiver extends to all documents that relate to Project Rose and Project Water.
  3. The third issue is whether legal professional privilege attaches to documents that came into existence in connection with AWB’s settlement of a claim by GBI for a rebate of approximately US$2 million on account of the fact that earlier shipments of wheat by AWB had been contaminated by iron filings (‘the iron filings claim’). The Commonwealth contends that the iron filings claim is inextricably linked with the Tigris transaction, in that the prices for wheat contracts A1670 and A1680 were inflated to cover both the amount of the iron filings claim and the repayment by GBI of the debt which it owed to Tigris. It said that AWB proposed to pay the iron filings claim directly to Alia as an addition to inland transport fees, but spread over several contracts. The Commonwealth argued that the inflation of the contract prices to cover the iron filings claim was concealed from the United Nations and that it involved a contravention of the United Nations’ sanctions. In these circumstances, the Commonwealth contends that AWB cannot maintain its claim to privilege over the legal advice it obtained in relation to the iron filings claim as that advice was obtained in furtherance of a fraud, wrongful conduct or sham transaction.
  4. AWB contends that there is no evidence which would permit this Court to conclude that the arrangements for payment of the iron filings claim involved a breach of the United Nations’ sanctions or any breach of Australian law, or that the relevant advice was given in furtherance of any improper conduct. It submitted that the documents relating to the iron filings claim over which privilege is claimed go to the issue of the legality of the payment and were not created in furtherance of any sham or fraud.

LEGAL ADVICE PRIVILEGE – GENERAL PRINCIPLES

  1. Under the legal advice limb of legal professional privilege, a document will attract privilege if it was brought into existence for the dominant purpose of giving or obtaining legal advice: Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 (‘Esso’) at 64-65 [35]; Daniels Corporations International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 (‘Daniels’) at 552 [9].
  2. AWB placed particular reliance on Dawson J’s formulation of the scope of legal advice privilege in Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54 at 95:
legal professional privilege relied upon in this case is that which attaches to communications between a legal adviser and his client for the purpose of giving or receiving legal advice and to documents recording those communications or containing information for the purpose of enabling the advice to be given. In order to attract that privilege, the communications must be confidential and the legal adviser must be acting in his professional capacity: see Minet v Morgan; Wheeler v Le Marchant; Smith v Daniell; Bullivant v Attorney-General (Vict.); Jones v Great Central Railway Co; O'Rourke v Darbishire’.

There is nothing controversial about this formulation of the principle.

  1. I reviewed the relevant authorities and extracted the principles which govern legal advice privilege in my decision in AWB v Cole at [60]-[63] and [85]-[110]. I adhere to what I said in that case. I do not propose to engage in a lengthy discussion of the authorities concerning legal advice privilege in these reasons for judgment, other than to the extent necessary to address the arguments advanced by the parties.
  2. The general principles that I consider relevant to the disposition of this case can be summarised as follows:

AWB’S LAWYERS AND THEIR RETAINERS

  1. The Commonwealth contended that Project Rose and Project Water were purely factual investigations and therefore should not be regarded as attracting any legal professional privilege. In advancing this contention, the Commonwealth tended to assume that factual investigations by lawyers, such as a review of documents and interviews of persons involved in the matter under investigation, can be separated from the ultimate legal advice given by the lawyers as a result of their factual investigation. Leaving aside any question of waiver, this seems to be an unduly narrow approach to the scope of legal advice privilege. In my view, it finds no support in the authorities.
  2. In recognition of the fact that legal professional privilege is a fundamental common law right, the courts have eschewed an overly narrow or technical approach to the identification of communications or documents that fall within the scope of legal advice privilege. As I said in AWB v Cole at [127]–[133], the legal advice limb of the privilege extends beyond material that is literally a communication, or a record of a communication, of legal advice or instructions. In Propend at 569, Gummow J said that the privilege extends to any document prepared by a lawyer or client from which one might infer the nature of the advice sought or given. The principle extends to internal documents or parts of documents of the client, or of the lawyer, reproducing or otherwise revealing communications which would be covered by privilege: Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd [1992] 2 Lloyd’s Rep 540 at 540 per Saville J.
  3. Where a lawyer has been retained for the purposes of providing legal advice in relation to a particular transaction or series of transactions, communications between the lawyer and the client relating to that transaction will be privileged, notwithstanding that they do not contain advice on matters of law; it is enough that they are directly related to the performance by the lawyer of his or her professional duty as legal adviser to the client: Minter v Priest [1930] AC 558 at 581–586; Balabel at 330; Nederlandse at 983 and Dalleagles at 332–333. In Dalleagles, Anderson J said at 332–333 that professional discourse in a professional capacity between a solicitor and his client with reference to the transactions covered by his instructions should be regarded as prima facie for the purpose of giving and receiving advice. In his Honour’s view, this would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor’s engagement and any communication from the client to the solicitor in connection with that engagement. These propositions were referred to, with approval, by Allsop J in DSE at [51]-[52] and by Branson J in Wenkart v Commissioner of Federal Police (unreported, Federal Court, Branson J, 11 November 1996).
  4. In DSE, Allsop J said that there was no substantive difference between the views expressed in Balabel and Dalleagles: at [51], [52] and [71]. Allsop J also observed that what underlies the expression of opinion in those cases is the recognition that the obligation of the lawyer to advise, once retained, is pervasive. In his Honour’s view, it would be rare that one could, with any degree of confidence, say that a communication between client and lawyer, in the circumstances of a retainer requiring legal advice and the directing of the client by a legal adviser, was not connected with the provision or requesting of legal advice. Indeed, too literal a requirement of identifying legal advice as express advice about the law would place undue emphasis on formalism and undermine the privilege. Rix J (as his Lordship then was) expressed much the same view in Hellenic Mutual War Risks Associated (Bermuda) Ltd v Harrison [1997] 1 Lloyd’s Rep 160 at 168.
  5. In Three Rivers, the relevant legal context consisted of a commission of inquiry into the part played by the Bank of England in the collapse of the Bank of Credit and Commerce International SA. The House of Lords upheld the Bank of England’s claim that legal advice privilege attached to documents that had been generated for the purposes of providing information to the Bank’s legal advisers to enable them to prepare submissions and evidence, and to advise on the nature, presentation, timing and content of the Bank’s responses to the inquiry. Relevant passages from the speeches in the House of Lords are extracted in my decision in AWB v Cole at [92]–[96].
  6. In this case, the relevant legal context consisted, initially, of public allegations that AWB had acted in breach of United Nations’ sanctions by making improper payments to the Iraqi regime. Those public allegations were soon followed by a series of investigations by the IIC, the PSI and the Commission. Blakes was retained for the purpose of advising whether, as a matter of law, there was any substance in the allegations of improper conduct by AWB.
  7. As the various investigations were announced, Blakes’ retainer was extended to the provision of advice in connection with them. AWB specifically extended Blakes’ retainer to include the provision of advice in relation to AWB’s dealings with Tigris. It is unclear whether Blakes provided any substantial advice to AWB in connection with the Commission.
  8. The catalyst for AWB’s engagement of Minters appears to have been the announcement of the PSI investigation. From about 1 July 2004, Minters advised AWB in relation to the PSI investigation. However, Minter’s engagement extended more widely than the provision of advice concerning the actual conduct of the PSI investigation; it included a comprehensive review by Minters of all of the documents and other evidence surrounding AWB’s sales of wheat to Iraq under the OFF Programme. A key objective of this review was to determine whether there was any evidence that AWB or any of its employees had made payments to Iraq that contravened the United Nations’ sanctions or engaged in any other wrongdoing in connection with the OFF Programme.
  9. Minter’s engagement was subsequently extended to the provision of advice and assistance to AWB in connection with the IIC investigation. Minters’ wider role in reviewing and analysing the available documents and evidence, which included interviewing employees or former employees, continued during the period of the IIC investigation. Minters played a prominent role in liaising with the US law firms which AWB retained to act for it in connection with the PSI and IIC investigations.
  10. Minters and Blakes acted in tandem in providing advice in connection with the PSI and IIC investigations and in their ongoing review and investigation of the facts and circumstances surrounding AWB’s wheat exports to Iraq. Both law firms were involved in interviewing present and former employees of AWB and AWBI.
  11. In about February 2005, AWB retained ABL to act for it in relation to the IIC investigation and subsequently in relation to the Commission. Throughout 2005, ABL worked closely in conjunction with Blakes and Minters. All three firms were involved in analysing and reviewing the facts and obtaining evidence from potential witnesses, with a view to determining whether there was any evidence that AWB or its employees had made payments to Iraq in breach of the United Nations’ sanctions or engaged in any other wrongdoing in connection with the OFF Programme.
  12. The evidence does not contain any letters of retainer, or any other documentary record of the precise scope of the retainers, under which the three firms acted for AWB. The affidavit evidence contains the briefest description of each retainer. The work performed by the three firms overlapped very substantially and, if there were any lines of demarcation, they were very blurred. Nonetheless, the scope of the work performed by each firm can be discerned with reasonable clarity from the affidavit evidence and the documents referred to in AWB’s revised list of documents. I am satisfied that Blakes, Minters and ABL were engaged professionally to provide legal advice and assistance within the scope of their respective retainers as described above. In each relevant context, I consider that it would be inappropriate and artificial to attempt to sever the factual investigations carried out by the lawyers from the legal advice they provided under their retainers. As I have said, a key purpose of those factual investigations was to enable Blakes, Minters and ABL to determine whether there was any evidence that AWB, or any of its employees, had made payments to Iraq in breach of the sanctions or engaged in any other wrongdoing in connection with its sale of wheat to Iraq. By that means, the three law firms placed themselves in a position to advise AWB as to the risks it confronted and the course of action it should take in relation to the investigations.
  13. I do not see any reason why professional communications between AWB and its lawyers concerning the investigations by the IIC, the PSI, and the Commission should be incapable of attracting legal advice privilege. In these contexts, the concept of legal advice includes advice as to what AWB should prudently and sensibly do in connection with the relevant investigation. Advice of this kind is capable of attracting legal advice privilege, notwithstanding that a particular communication is part of a continuum and does itself contain any specific advice on matters of law or any specific request for such advice.

AWB’S AFFIDAVIT EVIDENCE

  1. The Commonwealth contended that AWB had failed in its attempt to prove legal professional privilege because it had not adduced any proof as to AWB’s dominant purpose in seeking or obtaining legal advice. AWB largely relied upon evidence given by in-house and external lawyers involved in the particular communications at issue. The Commonwealth submitted that evidence proving the lawyer’s understanding of the purpose of the particular communication and that he or she was giving legal advice affords no evidence of the client’s dominant purpose. There is no real substance in this criticism. Dominant purpose must be determined objectively, but it is not uncommon for the relevant purpose to be established by evidence given by the maker of the statement or another person responsible for commissioning the relevant document or bringing it into existence, such as a solicitor: see Mitsubishi Electric Australia Pty Ltd v Victoria WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 at [14]; Grant v Downs at 677 and AWB v Cole at [110].
  2. The Commonwealth objected to the admissibility of statements in AWB’s affidavits where the deponent asserted that particular documents recorded ‘legal’ advice or were brought into existence for the purpose of obtaining, or giving, ‘legal’ advice. It submitted that the description ‘legal’ was a conclusionary assertion or opinion based on other facts and circumstances that were not disclosed by the deponent. AWB argued that the word ‘legal’ ought to be received on the ground that it was an opinion or description about the relevant facts and circumstances as perceived by the deponent. Alternatively, where the deponent was legally qualified, AWB argued that the description represented an opinion that was based on the deponent’s specialised knowledge, training and experience within the meaning of s 79 of the Evidence Act 1995 (Cth).
  3. After hearing submissions from counsel, I ruled that I would not exclude the word ‘legal’ where it was used by a lawyer to characterise the relevant advice or communication. In those circumstances, the presumption referred to in Kennedy v Wallace would be available: see [44] (4) above. In addition, the description would, I think, be admissible as an opinion, based on specialised knowledge, within the meaning of s 79 of the Evidence Act. On the other hand, I rejected the term ‘legal’ in affidavits where the deponent was not legally qualified. In those affidavits, the use of the term amounted simply to a conclusion or opinion by a lay person that was based, in most instances, on facts which were not fully disclosed in the affidavit. Further, I held that the evidence was not admissible under s 78 of the Evidence Act; that provision is concerned with lay perceptions of things or events, such as a person’s apparent age or state of intoxication: see S Odgers, Uniform Evidence Law, 7th edn, Lawbook, 2006, pp 281-282.
  4. At the time I made this ruling, I observed that where I had not struck the expression ‘legal’ from the affidavits, the weight that would be attached to that description in any particular affidavit would depend on the circumstances in which the communication took place; the description might be entitled to little or no weight in the absence of further evidence as to the circumstances surrounding the relevant communications or the topics to which the advice was directed: see Kennedy v Wallace at 189–190 [12]–[17] and 211–212 [144]–[145] and 215–216 [166]–[171].

DOES PRIVILEGE ATTACH?

  1. During the course of the hearing, AWB and the Commonwealth reduced the number of documents which are in contest.
  2. On the first day of the hearing, AWB announced that it no longer pressed for a declaration of privilege in respect of a significant number of documents in its list. In doing so, AWB did not concede that the documents are not protected by legal professional privilege. As finally revised, those documents are as follows: 27-29, 37-39A, 43, 53, 54, 61, 73-76, 109, 118, 119A, 125, 134, 141, 142, 146A-149, 153, 191-193, 195, 198, 202, 203, 212, 214, 216, 223, 236, 242-244, 248, 249, 272, 287, 289, 312, 314, 325, 328, 329, 335, 360, 363, 364, 366, 367, 369-373, 383, 396, 397, 409, 411, 415, 429, 458, 466, 469, 474, 489, 512, 528, 531, 532, 535, 540A, 545, 546, 597, 598, 604, 606-670, 673, 674, 676, 677, 678, 680, 682-689, 690, 692, 693, 695, 697, 698, 705, 716-720, 723, 726, 728, 734, 735, 746, 750, 767, 774, 776, 778, 782, 783, 786, 789, 791, 793, 795, 796, 803, 805, 825, 832-834, 836, 838, 839, 841-846, 848, 853-855, 858, 859, 862, 864, 871, 874, 875, 878, 880, 884, 886, 890, 890AO, 896, 897, 916, 917, 920, 922, 926, 927, 937, 938-941, 943-946, 949, 954-955, 967-969, 993, 993A, 996, 999, 1007-1008, 1010, 1014-1024, 1027, 1034-1050, 1052-1055, 1057-1058, 1060-1069, 1072, 1082, 1084-1085, 1102-1111, 1113B, 1122, 1125-1143, 1153, 1154, 1156, 1157, 1164-1182, 1188, 1189, 1203, 1205, 1208, 1210, 1211, 1220, 1223, 1224, 1241, 1242, 1263-1292, 1294, 1295 and 1298.
  3. Both AWB and the Commonwealth submitted that the consequence of AWB’s announcement was that the Court need not made any ruling as to the status of these documents. Many of the documents relate to the Tigris transaction. In paragraphs [90]-[108] of its written submissions, which were filed shortly before the commencement of the trial, the Commonwealth argued that all of the documents in AWB’s revised list that recorded any legal advice in relation to the Tigris transaction attracted the fraud exception to legal professional privilege. Alternatively, it submitted that any privilege attaching to those documents had been waived by AWB. Following AWB’s announcement, the Commonwealth and AWB also submitted that the Court need not consider or rule upon any of the arguments raised in paragraphs [90]-[108] of its written submissions. On the joint submission of AWB and the Commonwealth, I made an order that paragraphs [90]-[108] should be excised from the Commonwealth’s written submissions when those submissions were made available by the Court for public inspection.
  4. The Commonwealth accepted AWB’s claim to legal professional privilege over a number of the documents in the list. The documents are as follows: 1-11, 13, 16-19, 23-25, 34-36, 40, 42, 44-52, 57-60, 62-72, 80, 86-88, 99, 128, 511, 891-895, 898-915, 918, 919, 921, 923-925, 928-936, 937AA-937AI, 937AK-937AO, 1100, 1101, 1191-1194, 1197-1199, 1201, 1202, 1204, 1207, 1209, 1212, 1216, 1217, 1219, 1227, 1228, 1230, 1233, 1235, 1236, 1238, 1244, 1245, 1251, 1253, 1254, 1257-1259, 1296 and 1302-1304.
  5. The remainder of the documents in AWB’s revised list are in issue. The Commonwealth submitted that in respect of a number of documents (eg 1190 and following), it understood AWB to be contending those documents were listed as privileged documents in error because they are not within the scope of existing notices to produce. Although the basis for this ‘understanding’ was never identified, the Commonwealth submitted that the question whether these documents fall within the scope of the notices is not before the Court and, accordingly, the privileged status of those documents does not arise for determination in these proceedings. I do not agree. On the material before the Court, I am bound to proceed on the basis that, but for the documents that are no longer pressed and those that are conceded, AWB seeks a declaration over all of the documents in its list because they fall, or may fall, within the scope of notices to produce issued by the first respondent.
  6. In determining claims of legal professional privilege, the Court will look to the substance of the matter, having regard to the context, the nature of the document, the evidence that is led in support of the claim of privilege, any cross-examination of the claimant’s witnesses and, if necessary, the content of the document as revealed by inspection.
  7. The documents over which AWB claims privilege can be categorised in various ways, such as communications to and from Blakes, or Minters, or ABL containing legal advice; information obtained from AWB’s records and employees by AWB’s in-house counsel for the purpose of giving or obtaining legal advice; instructions provided by the in-house lawyers to external lawyers for the purpose of obtaining legal advice; and documents brought into existence by lawyers so as to assist them in the provision of legal advice. But, ultimately, the categories provide limited assistance. It is necessary to examine the evidence concerning each relevant document over which privilege is claimed and to examine that evidence in the light of the relevant context. I have also inspected each of the original documents over which AWB has claimed privilege.
  8. Applying the legal principles discussed above, I have identified the documents which, in my view, have not been proven to be the subject of legal professional privilege. I will defer listing these documents at this stage, as many of them are affected by the waiver issue. I will need to consider waiver and the fraud exception before I express any view about the remaining documents. My conclusions, listing each affected document, are set out towards the end of these reasons.

AWB’S DISCLOSURES IN RELATION TO PROJECT ROSE

  1. The Commonwealth contends that AWB has waived privilege in relation to its Project Rose documentation by reason of:
  2. In the paragraphs that follow, I have set out my factual findings concerning these disclosures.

DISCLOSURES BY HARGREAVES

  1. Peter Hargreaves (‘Hargreaves’) was a senior executive of AWB who acted as the manager of Project Rose. On 24 March 2005, Hargreaves made a power point presentation to officers of the Department of Foreign Affairs and Trade (‘the Department’) in Canberra that reported on the IIC visit to AWB in February 2005. It contained references to the results of AWB’s own legal review:
Response
...
– inland trucking arrangementsseems designed to establish whether, through the use of Alia, AWB had wittingly or unwittingly paid money to the Government of Iraq in violation of the Security Council Resolutions 661 and 986.also sought to establish:
...
of Corrupt Payments:legal review had found no evidence of:
IIC advised they had found no evidence to the contrary’.
  1. On 20 April 2005, Hargreaves attended at the Australian Embassy in Washington DC to brief Ambassador Michael Thawley and members of his staff. The uncontested evidence before me includes a statutory declaration by Anastasia Carayanides, a Minister Counsellor (Commercial) at the Embassy in Washington, who attended the briefing by Hargreaves. The statutory declaration records that Hargreaves made statements to the following effect:
“I think that AWB has cooperated with the IIC and that the IIC now has a better appreciation of AWB operations under OFF. AWB has not been involved in paying bribes in Iraq. I think the IIC will conclude that AWB was not knowingly involved in breaching sanctions, or at worst that it was unwittingly involved.” When someone asked what he meant by that statement, he replied in words to the following effect: “The IIC is looking at the use of a fictitious trucking company. But I’m confident that AWB does not fall in that category.” To my knowledge, Mr Hargreaves referred to Alia by name for the first time either in this meeting or in the meeting on 15 June 2005 (see paras 36-37 below).’
  1. Hargreaves made a further presentation to Embassy staff on 15 June 2005 at which Hargreaves told Ms Carayanides and others that:
“I can assure you that AWB has not been involved in any illicit payments to the Iraqi regime or breaches of sanctions. AWB has conducted an internal audit and an independent legal review by a law firm, and both had found no wrongdoing.”...
has done nothing wrong. It has not been involved in breaking sanctions. All of AWB’s contracts were approved by the UN. No-one in AWB is aware of paying kickbacks to Iraq.”...is a Jordanian trucking company that provided real trucking services to AWB in Iraq. Alia unloaded ships at Umm Qasr directly on to its trucks and delivered the wheat throughout the country. As far as AWB knew Alia was not a front company. AWB was not aware of Alia channelling money to Iraq”.’
  1. On 25 June 2005, in consultation with AWB’s legal advisers, Hargreaves prepared a memorandum for Lindberg to speak to at a board meeting of AWB that was scheduled for 28 June 2005. The memorandum apprised board members of meetings which AWB had held with key elements of the Federal Government, including the Australian Embassy in Washington, and expanded on those meetings as follows:
with Federal Government
  1. Later in the memorandum, Hargreaves identified the commercial objectives which AWB was pursuing:
objectives
  1. Protect and defend the reputation of AWB both within Australia and overseas
  2. To minimize any attack by US wheat interests on the single desk selling system arising from this report
  3. To manage the media, politics in Canberra and domestic stakeholders in order to avoid any need for a further inquiry into AWB’s role in OFF
  4. To manage the media and politics in the United States with the aim of containing this issue and preventing our involvement in the OFF Program from becoming the subject of inquiry by Congressional Committees
  5. Avoiding any impact on our relationship with Iraq or other customers.’
  1. Hargreaves had a further meeting in Washington DC with Ms Carayanides at some time in the period between 16 June 2005 and September 2005. In the course of this meeting, Hargreaves was asked whether the amount paid by AWB to Alia for trucking services was reasonable. Ms Carayanides said that he responded in words to the following effect:
he thought it was reasonable, because it reflected the costs of insurance and transportation throughout the country in difficult circumstances. Alia was providing a real service, and AWB was paying for that service. It was the only trucking company that was reliable and that AWB could use to off load wheat into trucks at Umm Qasr. No one in AWB knew of any money being channeled to the Iraqi regime through Alia. AWB had conducted an independent legal review which hadn’t turned up any wrongdoing”.’

DISCLOSURES TO THE IIC

  1. On 28 February 2005, Lindberg was interviewed by several investigators from the IIC. The interview was also attended by Cooper and Leonie Thompson of ABL. The record of interview, as subsequently revised by Lindberg and AWB’s lawyers, sets out the following exchange between Lindberg and an IIC investigator:
investigator said] ‘that it appeared that AWB had “dismissed” media reports that accused the company of engaging in sanctions-busting. [No basis was given for the assumption that AWB had been dismissive as alleged]. He asked LINDBERG what actions AWB had taken to determine if there existed any truth to these allegations. LINDBERG said that he had asked COOPER to conduct a “legal review” and that COOPER had assembled a team to look into the matter. The review, LINDBERG said, had found nothing that would substantiate claims of fraud or corruption and had identified no payments to individuals in the Government of Iraq by AWB or vice-versa. LINDBERG said that AWB would “obviously” have been concerned had COOPER’s team uncovered evidence of improper or unlawful conduct.’

Later in the interview, Lindberg said that AWB would certainly have taken corrective action had it uncovered evidence suggesting possible fraud or corruption, but no such evidence had come to light.

  1. Apparently, the IIC investigators interviewed a number of other AWB officers and employees, but their records of interview have not been tendered in evidence before me.
  2. AWB made its executives available for interview by the IIC, and also made documents available for inspection by the IIC, under the terms of a Memorandum of Understanding between the IIC and AWB dated 25/26 February 2005. The Memorandum records that AWB agreed to cooperate with the IIC and to disclose information in accordance with its terms. Relevantly, the Memorandum provided:
Document Production and Confidentiality – AWB will provide the IIC with access to the scheduled AWB documents (see attached). The IIC may request, in writing, further documents that it considers relevant. In responding to the IIC’s document requests, AWB has advised that it may take into account that certain documents may be commercially sensitive, subject to legal professional privilege, or expose AWB or its employees, officers, or representatives (past or present) to breaches of Australian law. In the event that AWB decides to withhold documents for any of the aforementioned reasons, it will so advise the IIC in writing, and the parties may agree to additional terms for production. The IIC’s review of all documents provided by AWB will be governed by the AWB Data Room Protocol, a copy of which is attached to this memorandum. At the IIC’s request, except in exceptional circumstances (addressed further in paragraph 7), AWB will furnish the IIC with copies of documents that the IIC reviews in the AWB Data Room and determines are necessary for purposes of its inquiry. The IIC will maintain in strict confidence the documents provided by AWB, and it will not provide copies of the documents to third parties. However, AWB agrees that the IIC may use documents provided by AWB for the purposes of its investigation and for any report. ...
  1. Witness Interviews and Confidentiality – The IIC will maintain in strict confidence the information gathered in the course of these interviews, and it will not provide any records of this information to third parties. However, AWB agrees that the IIC may use information that it gathers in the course of AWB interviews as well as the fact of these interviews for the purposes of its investigation and for any report. The IIC will provide AWB with reasonable notice of its request to interview any current AWB employee, officer, or representative as well as reasonable notice of any former AWB employee, officer, or representative for whom the IIC desires AWB’s assistance in locating and interviewing. With respect to the IIC’s interview of a person who worked for AWB in connection with the Programme, the parties understand that each interview will be on the record and for attribution. In advance of the interview, the IIC will submit a list of the subject areas to be addressed with the witness. At each interview, two representatives of the IIC will be present. A witness may have – at the witness’s choosing – a personal legal counsel. In addition, if the witness agrees, up to two representatives of AWB may be present at each interview. A witness will advise the IIC prior to the interview who will be present on his behalf.’

DISCLOSURES TO THE MINISTER FOR FOREIGN AFFAIRS

  1. On 4 October 2005, a conversation took place between Lindberg, the Minister for Foreign Affairs, the Honourable Alexander Downer MP, Brendan Stewart, the chairman of AWB, and others. A minute of this meeting prepared by the Department states:
Mr Downer said the IIC allegations were worse than he had thought. There was evidence presented by the IIC in the most recent letter. Mr Downer noted the letter claimed that Alia was a front company. He enquired what was the role of the Iraqi State Company for Water Transport (ISCWT). Mr Lindberg replied it was the port authority, which had responsibility for discharging goods from ships. Alia was not a front company and had provided transportation services. The AWB had been unaware of any wrongdoing and had used its services in good faith. Mr Downer said AWB needed to provide evidence. Mr Lindberg said AWB had been seeking additional information from the IIC about the claims, before providing a written response to the 26 September letter. The so-called evidence did not support the facts. AWB had provided explanations to the IIC which had been ignored. AWB could demonstrate that it had paid no kickbacks. Nor had AWB breached the sanctions regime. This had been confirmed by independent legal advice both in Australia and overseas (Richard Tracy in Australia and a Cornell University Professor who had previously participated in drafting the sanctions regime).’

The minute also records that later in the meeting Lindberg reiterated that ‘as far as AWB was aware, no one had been paid off nor any personal gain. AWB had acted in accordance with the sanctions regime and that this had been supported by legal advice.’

  1. AWB objected to the admissibility of the Department’s minute on the ground that the statements contained in it were hearsay. There is, in my view, no substance in this objection. The document constitutes a business record which is admissible under s 69 of the Evidence Act. The definition of ‘business’ in clause 1(1) of Part 2 of the Schedule to the Evidence Act includes an activity engaged in or carried on by the Crown in any of its capacities. The document was tendered by the Commonwealth as evidence of the fact that the statements it records were made by Lindberg. The minute was prepared by Marc Innes-Brown, the head of the Department’s Iraq Task Force, who was present at the meeting. The representation in the minute that Lindberg made the statements attributed to him was therefore made by a person who had personal knowledge of what statements were made by Lindberg. Lindberg was questioned about the minute at the Commission and did not dispute its accuracy in any respect.

BLAKES’ SLIDE PRESENTATION

  1. I have already referred to the presentation which Blakes made to AWB’s board on 25 May 2004. The slides recording Blakes’ presentation were originally withheld from production to the Commission on grounds of legal professional privilege. The objection was withdrawn in two stages. First, on or shortly before 6 April 2006, AWB withdrew its claim for legal professional privilege over the presentation, other than one page headed ‘Legal advice’. This page set out the advice given by Mr Tracey QC in conference on 25 May 2004. On 7 April 2006, AWB withdrew the balance of the claim, basically because of the presentations which Hargreaves made to the Australian Government.

SENIOR COUNSEL’S ADVICE

  1. When AWB revised its privilege claims and produced Blakes’ presentation to the Commission, it also produced a memorandum of advice by Mr Tracey QC dated 12 August 2005 confirming the advice he gave in conference on 25 May 2004, together with the instructions and bundle of documents on which he founded that advice. Mr Judd, senior counsel for AWB, informed the Commission that AWB had taken the view that, as Mr Tracey QC’s advice was based upon a review of documents, and turned on the question whether or not the documents disclosed evidence, the advice could not be separated from the documents. Therefore, AWB had determined to produce the bundle of material on which Mr Tracey QC had based his advice.
  2. Mr Tracey QC’s instructions from Blakes were dated 12 May 2000 but this appears to be an obvious error; the date should have read 12 May 2004. They requested him to advise whether, based on the documents and information provided to him, AWB and AWBI may have contributed to a contravention by Australia of its obligations under Resolution 661 or contravened any Commonwealth or State legislation.
  3. In the instructions to counsel, Blakes said that it had deliberately included a significant number of AWB’s documents for 1999 and 2000 as this was the key period during which the trucking fee was discussed. The documents included correspondence between AWB and GBI, AWB and other participants in the Iraqi wheat market, AWB and various shipping companies engaged to perform the ocean carriage of the wheat, and AWB and the Department. The instructions set out extracts from a number of AWB documents which, according to Blakes, contained comments as to the validity or otherwise of AWB’s payment of trucking fees to Alia.
  4. The instructions discussed the genesis of AWB’s payment of trucking fees to Alia. GBI’s invitation to AWB to tender dated 16 July 1999 requested a new price provision in the following terms:
– PRICE
free on truck to silo at all Governarate [sic]. Cost of discharge at Umm Qaser and land transport will be USD 12 per metric ton to be paid to the land transport co. For more details contact Iraqi Maritin [sic] in Basrah.”’
  1. The instructions noted that AWB included a clause in broadly this form in its contracts A4653, A4654 and A4655 (all dated 14 July 1999) and A4822 (dated 14 October 1999). For instance, contract A4653 included the following terms as to shipment and price:
To be shipped during 01 October 1999 to 31 December 1999 subject to receipt of appropriate UN approval.
...cargo will be discharged Free in to Truck to all silos within all Governates of Iraq at the average rate of ... The discharge cost will be a maximum of US$12.00 and shall be paid by sellers to the nominated Maritime Agents in Iraq. This clause is subject to UN approval of the Iraq distribution plan.
  1. The CIF, Free in Truck price per tonne of 1,000 kilos is ... UNITED [States] of America dollars as follows:’

In these contracts, the discharge cost of US$12 pmt was added to the sale price of the wheat but the contract made no specific reference to ‘land transport’.

  1. The instructions also stated that subsequent contracts between AWB and GBI (eg A4970, A4971 and A4972 dated 20 January 2000) continued to include a provision to the effect that the discharge costs would be a maximum amount (eg US$15 pmt) and was to be paid by the sellers to the nominated maritime agents in Iraq. However, the signed contracts that were submitted to the United Nations (eg A4970, A4971 and A4972) did not include the above provision. Omitting any reference to discharge costs, the shipment clause in the contract submitted to the United Nations merely stated that the ‘cargo will be discharged free into truck to all silos within all Governates of Iraq at the average rate of 3,000 mt per day.’
  2. From January 2000, all AWB contracts submitted to the United Nations followed the same format and made no specific reference to the payment of a discharge cost or a trucking fee.
  3. The instructions also said that the trucking fee in respect of contracts A4653, A4654, A4655 and A4822 was paid directly by AWB to Alia. For a time thereafter, payment of the trucking fee was effected by whichever shipping company had undertaken to provide the ocean carriage. However, after 25 July 2000 the procedure was then changed so that AWB remitted the funds direct to Alia. The instructions then set out the following observations:
Comments on the “trucking fee”
documents which instructing solicitors have examined do not indicate whether the trucking fees paid by AWB to Alia can be regarded as a genuine payment for the provision of inland freight services actually provided by Alia. We have not seen any contract between AWB and Alia. We have seen no evidence to indicate whether or not the trucks used to transport wheat after its discharge at Umm Qasr were provided by Alia. We have seen no explanation as to how the trucking fee was calculated or the basis upon which the trucking fee was subsequently increased. The trucking fee does not appear to have been calculated with regard to the differing distances between Umm Qasr and the various Governorates [sic] (cf. Tab 14).’
  1. In his memorandum of 12 August 2005 confirming his oral advice given in conference on 25 May 2004, Mr Tracey QC discussed his instructions and the documentary evidence provided to him. Mr Tracey QC concluded as follows:
however, the question that I was asked to advise on was whether there was evidence that AWB may have contributed to a contravention by Australia of its obligations under Resolution 661. A breach of that resolution would only have occurred if the trucking fees had been paid to the IGB or the Iraqi Government and then only if it was not paid for a legitimate commercial purpose. Whilst some of the material with which I have been briefed raises suspicions that there may have been a perception within the AWB that any payment of the trucking fee may have contravened Resolution 661 and that it was necessary to make the payment to Alia in order to avoid any suggestion that the payments, if made directly to the IGB, would have been in breach of the Resolution, there is absolutely no evidence in the material provided to me that any of the money paid by the AWB to Alia was ever forwarded to the IGB or any other arm of the Iraqi government. It was for this reason, that, despite some misgivings I answered the question posed for advice in the negative.’
  1. Additional advice was sought from Mr Tracey QC in about June 2004. On this occasion, Blakes instructed Mr Tracey QC that it had now ascertained the basis of calculation of the increase in trucking fees that was applied to AWB’s contracts after 2 November 2000. Specifically, Blakes instructed Mr Tracey QC that an additional 10 per cent had been added to the price of wheat by way of an increase in the trucking fee. All subsequent contracts were priced on the same basis, ie a base price inclusive of a trucking fee, with 10 per cent of the base price then being added to the trucking fee. Mr Tracey QC was asked to advise whether his previous advice, to the effect that there was no evidence of a breach of the relevant UN resolution on sanctions, and no evidence of a breach by AWB of Australian domestic law, remained unchanged.
  2. After Mr Tracey QC raised some queries, Quennell provided supplementary instructions as follows:
each and every contract pursuant to which AWB supplied wheat to the Grain Board of Iraq under the Oil for Food Program was approved by the UN Committee; however, the price of the wheat as expressed in the contract was not broken down so as to identify the different components of the price, eg ocean freight and inland transport costs;
there was no apparent commercial justification for the increase;... the circumstances please advise on the above basis.’
  1. On 8 June 2004, Mr Tracey QC provided the following advice by email to Quennell:
the absence of commercial justification for the introduction, increases and decreases in the trucking fee and the lack of specific approval for the fee and its quantum by the UN there is reason to suspect that the fee (or part of it) was used as a kick-back to the IGB or persons associated with it. Whether the money was so used can only be determined by an investigation of the finances of the Jordianian trucking company which was the recipient of the trucking fees.
further reason for suspecting the efficacy of the fee is Hogan’s assertion that UN approval for its payment had been obtained. If this was not the case then a question arises as to why the assertion was made. Was it a deliberate attempt to mislead AWB management or did he make an honest mistake?of this establishes that the AWB or any of its employees is guilty of any offence or of breaching UN resolutions. What it does suggest is the need for further enquiries (if this is possible) to determine all the facts surrounding the payment of the trucking fee and, in particular, whether any part of it found its way to the IGB or any Iraqi officials.’
  1. These communications between Blakes and senior counsel were marked ‘RE: Project Rose’. They were produced to the Commission after AWB determined that privilege over the documents had been waived by Hargreaves’ disclosures to the Australian Government.
  2. Mr Tracey QC provided a further memorandum of advice on 31 March 2005 confirming oral advice which he provided to his instructors the previous day. This memorandum is headed ‘Re AWB Limited – Project Rose’, and states:
This memorandum confirms oral advice provided to my instructor yesterday.
  1. I have been briefed with a series of documents which evidence various transactions and arrangements entered into by AWB Limited relating to the sale by it of wheat to Iraq. I have been asked to examine these documents with a view to advising whether the contents of any of them lead me to change [my] earlier advice that, on material earlier examined, there was no evidence of a breach by Australia (as a result of conduct by AWB) of UN Resolution 661 and no evidence of a breach by AWB, its officers and/or employees of Australian domestic law.
  1. I confirm that there is nothing in the documents which causes me to vary advice earlier given.
  1. There are some documents (for example the emails under tab 8A) which suggest that AWB paid port fees at the rate of US$1,500 per vessel in 2001 and that such payments were “technically in breach of sanctions”. The payments were known to the UN Sanctions Committee and to the Australian Mission to the United Nations. AWB was advised by the Australian Mission that this fee for normal port agency services did not violate current sanctions procedures. In confirming my earlier advice about breaches of Security Council Resolution 661 I have assumed that this advice was correct.
  1. Some of the documents also contain evidence of attempts by Iraqi Government agencies to obtain direct payment for port fees and payments through Alia for inland transportation (for example, faxes under tabs 8, 9 and 14). The terms of these communications add to the concern which I expressed in my email of 8 June 2004. However, I note my instructions that there is no evidence of any payments of the kind contemplated in the documents briefed having been made. There is also some comfort for AWB in the repeated refusals of its officers to agree to the paying of US50¢ per metric ton port fees as demanded by Iraqi authorities (for example, documents collected under tabs 8 and 8A) but AWB’s position was subsequently undermined by its agreement to incorporate the port fees into the inland transport fee which it paid to Alia (see under tab 11A).’
  1. The evidence tendered in this Court does not include any written instructions or other documents supplied to Mr Tracey QC in relation to this request for advice, and it is unclear whether that material has been produced to the Commission.

FURTHER REPORTS TO AWB’S BOARD OF DIRECTORS

  1. After 25 May 2004, the board of AWB received further reports concerning Project Rose. The evidence includes the redacted minutes of a meeting of the joint board committee of AWB and AWBI held on 27 April 2005 which is headed ‘Project Rose – Joint Board Committee’. The minutes note that the managing director briefed the committee on Project Rose, but the balance of this entry has been excised on the ground that it is protected by legal professional privilege. There was no suggestion before me that the complete minutes have been produced to the Commission.
  2. Cooper and Quennell exchanged emails on 27 July 2004. Scott Chesterman (‘Chesterman’) of Minters was copied into the exchange of emails. The subject matter of the emails was ‘RE: Project Rose – AWB Board briefing for tomorrow’. The emails show that Cooper consulted both Quennell and Chesterman about the contents of the proposed AWB board briefing. Two passages have been excised from Quennell’s email to Cooper of 27 July 2004 on the ground of legal professional privilege. The remaining passage states:
suggestion which was made at the last Board meeting was that we should conduct an investigation of Alia’s structure, shareholding etc (I think the idea may have come from Chris Moffatt). The decision was subsequently taken (by management) not to go down that route.’
  1. The evidence in this Court includes a slide presentation entitled ‘Project Rose – AWB Limited Board Briefing – 28 July 2004’. The document includes a page headed ‘Initial Legal Advice’ which is otherwise blank, presumably on the ground that it is still the subject of a claim for legal professional privilege. It also includes a page relating to Alia which states:
for Transportation and General Trade Company

The document concludes with a statement that AWB’s strategy includes the full engagement of Australian Government support.

  1. The evidence in this Court also includes a handwritten note dated 10 March 2005 of a joint meeting of directors of AWB and AWBI. The note is headed ‘Project Rose’ and it shows that the joint boards were briefed on matters relating to the payment of trucking fees to Alia and the question of any breach by AWB of Resolution 661.

LEGAL ADVICE CONCERNING RESOLUTION 661

  1. AWB also produced to the Commission the instructions which ABL gave to Sir Anthony Mason on 16 September and 20 October 2005, and Sir Anthony Mason’s expert opinion dated 24 October 2005. The specific questions upon which Sir Anthony Mason was asked to express an expert opinion were:
Did the inclusion, on the insistence of the Iraqi Grain Board, of an inland delivery payment term in its wheat contracts with AWB violate the UN sanctions against Iraq that started with Resolution 661 in 1990 and continued until the Oil-for-Food Program ended in 2003?
Did the UN sanctions Resolutions prohibit AWB from paying fees for the inland delivery of wheat to a transport company?’

The instructions summarised legal advice which AWB had already obtained both in Australia and in the United States as to the applicability of Resolution 661 and concluded with the following statement:

summary, AWB’s payment of the trucking fees to Alia, as directed by the IGB, was consistent with the 661 Resolution exemption for payments to commercial enterprises in Iraq in humanitarian circumstances for foodstuffs, and also with the overall humanitarian purposes of the OFF Program reflected in Resolution 986. That the IGB negotiated the trucking fees directly with Alia, without any involvement on AWB’s part, was also consistent with the IGB’s responsibility, on behalf of the MOT [Ministry of Transport], to ensure the equitable distribution of wheat throughout the country, in accordance with the state-controlled PDS [Public Distribution System] administered by MOT.’
  1. AWB’s revised list of documents includes two opinions dealing with the applicability of Resolution 661, namely Mr Tracey QC’s memorandum of advice dated 22 September 2005 (documents 541 and 543) and Professor David Wippman’s advice dated 27 September 2005 (document 544). I infer that Professor Wippman is the Cornell University professor who Lindberg identified in the course of his meeting with Minister Downer on 4 October 2005. AWB has maintained its claim that privilege attaches to these documents.
  2. The instructions to Sir Anthony Mason did not contain any specific reference to legal advice that AWB had obtained in the course of Project Rose. They did, however, state that there was no evidence available to AWB during the currency of the OFF Programme to suggest that payments made to Alia were, or might have been, remitted to the Iraqi regime or to individuals in the regime.

LINDBERG’S EVIDENCE TO THE COMMISSION

  1. The Commonwealth contended that in the course of his evidence to the Commission, Lindberg voluntarily, repeatedly and at times non-responsively disclosed the gist or substance of legal advice that AWB had obtained in the course of its Project Rose investigations.
  2. In support of this submission, the Commonwealth tendered relevant extracts from the transcript of Lindberg’s evidence to the Commission. AWB initially objected to the tender of any passages from the Commission transcript on the ground that it was hearsay, or irrelevant, or alternatively it reflected evidence given under compulsion that ought to be excluded by the Court in the exercise of its discretion under s 135 of the Evidence Act. However, AWB withdrew its objection during the course of the hearing.
  3. The transcript shows that Lindberg explained the origins of the Project Rose review, and the conclusions it reached, without any objection being raised by AWB’s counsel that the evidence intruded into areas protected by AWB’s legal professional privilege.
  4. Lindberg told the Commission that, following public allegations that AWB had paid kickbacks to the Iraqi regime, he asked Cooper to institute inquiries to ascertain whether any of those allegations could be substantiated. Lindberg said he understood that the review commenced in mid 2003 and that Cooper was assisted by legal advisers. The purpose of the review was to determine whether the allegations had any substance in fact, that is to say whether they were true. When asked when the review concluded, Lindberg said:
Well, it concluded in the – it concluded in the lead–up or as part of the overall inquiry process and, in fact, it continued through that process. So I’m not sure it’s accurate to say that it concluded; it undertook certain investigations and it reported periodically, and it didn’t find any evidence to substantiate the allegations.’
  1. When asked by the Commissioner whether there were any records concerning the establishment of the Project Rose review or its periodical reports to the board of AWB, Lindberg answered as follows:
My evidence is that I don’t recall there being a written record of the brief. There certainly were reports, oral reports, quite extensive reports given to both the boards of AWB International and AWB Limited and there were a number of reports, and the findings of those reports are recorded in the minutes and the basis of those findings has been communicated in letters that have been sent to the government and elsewhere.
But all of the reports to the two boards you mentioned were oral; is that right ? To the best of my knowledge, that is so.AGIUS:] Q. Can you recall whether or not, in the course of any of these oral reports, anything was said about whether or not the AWB had engaged in conduct in breach of the UN sanctions ? I can’t recall. Clearly we found nothing that led us to believe that we weren’t operating through the authorised process. The “authorised process” being the process which -- To get UN approval for contracts into Iraq.’
  1. Lindberg gave evidence that Project Rose had concluded that AWB’s contracts for the sale of wheat had been approved by the United Nations. He also said that he became aware during the course of Cooper’s legal review that trucking fees were incorporated into the contract price and paid to the trucking company.
  2. When asked about the allegation in the draft report by the IIC that contracts had been inflated by 10 per cent because of a direction from the Iraqi regime, Lindberg said he only became aware of that fact as a result of the IIC investigation and in preparation for the Commission. He said that Cooper’s review did not reveal the 10 per cent addition to the contract prices:
as I say, we had made inquiries and we found no evidence of that and no-one told me’.
  1. In the same context, Lindberg said that as the IIC had commented on the imposition of after sales service fees, he asked Cooper, who obtained the assistance of Ferrier Hodgson, to review all the payments. Lindberg said that ‘[t]hey found no evidence of payments being made by AWB so characterised ... There were inland transport payments, but no 10 per cent service fee payments’.
  2. Later in his evidence, Lindberg was asked about the findings recorded in AWB’s board minute of 26 May 2004:
Were you satisfied with those findings as at 26 May 2004?
Yes. Were you satisfied that, as at the date of that report, 26 May 2004, the transportation fee had never been used as a conduit for the payment of money by the AWB to any Iraqi entity? Well, that was the finding. Were you satisfied with that? I had no reason to question it.’
  1. The evidence tendered to this Court concerning Project Rose is obviously far from complete. It is likely to represent a fraction of the evidence available to the Commission. Nonetheless, it represents the evidence that the Commonwealth has relied upon for its contention that there has been a wholesale waiver by AWB of legal professional privilege in relation to the Project Rose investigations. The Commissioner has not adduced any additional evidence in this Court. Consequently, I must determine whether legal professional privilege has been waived in relation to Project Rose documents on the basis of the evidence before me.

AWB’S DISCLOSURES IN RELATION TO PROJECT WATER

  1. The Commonwealth contends that AWB has disclosed the gist of legal advice which it obtained in connection with Project Water and, consequently, it should be taken to have waived privilege over other documents associated with Project Water. It relies upon:
  2. I have already described the general nature and scope of Project Water. Acting on Cooper’s instruction, Quennell commenced the investigations known as Project Water on 12 August 2004 and those investigations resulted in a report to AWB’s board on 14 December 2004.
  3. In his evidence to the Commission, Cooper said that Quennell briefed him on his findings and that he relied on Quennell’s advice. On 10 September 2004, Cooper gave Lindberg a report on the state of the Project Water investigation. Cooper also said that, as a result of Quennell’s investigations, he learnt that wheat contracts had been inflated to incorporate an amount relating to the debt owed to Tigris by GBI.
  4. Cooper attended a board meeting of AWB on 14 December 2004 at which the board was briefed as to the results of the investigation of the Tigris matter. Cooper’s handwritten note of proceedings at the board meeting on 14 December 2004 includes a statement that:
have checked compliance with all necessary laws and confirm there have been no breaches.’

Cooper’s evidence to the Commission was that this statement recorded something that was said by Lindberg. On the other hand, the evidence given by Lindberg and Scales to the Commission attributed this statement to Cooper.

  1. Lindberg’s evidence to the Commission was that he asked Cooper to institute a legal review to determine how AWB should deal with the money it had received. Lindberg was cross-examined on the basis that the file note of 14 December 2004 recorded a statement made by Cooper. Lindberg told the Commission he could not recall who made the statement.
  2. Lindberg told the Commission that the contract price of wheat was inflated in certain contracts to allow for the recovery of the Tigris debt from GBI. The contracts were sent to the United Nations for approval and approval was obtained. Lindberg then referred to the legal advice that had been obtained after the money had been collected from the United Nations’ escrow account:
next time we considered the Tigris matter was when the money had been collected and the Oil-for-Food Program had ceased; that’s when the money was there. And the question arose what to do with that money. After taking advice, it was decided that the money should be paid because, after all, it was for a wheat debt and a wheat cargo delivered under the sanctions program, and people will say that that was done with the full knowledge ... of the United Nations and the government at the time.’
  1. Lindberg expanded somewhat on the legal advice that AWB obtained. He said that AWB took advice as to whether or not it was legal to make the payment to Tigris. He also said that the legal advice did not relate to the lawfulness or otherwise of the conduct of the AWB employees who had inflated the prices which were reflected in the contracts. When asked what he did when he found out that the United Nations had been deceived into approving contracts which had inflated prices for wheat, Lindberg answered:
the Oil-for-Food Program had ceased. Having a view that it was for the payment – basically the delayed payment for a wheat shipment, having the understanding that that had occurred - ... with the understanding of the UN and our government in the first place going in – we recovered the money and, having recovered the money, and there were various options talked about, and I wasn’t aware of what the final option was or how it occurred, the detail of how it occurred – having recovered the money, we took advice about what to do about it and it was decided to pay it.’
  1. Lindberg also confirmed in his evidence to the Commission that the payment to Tigris was only made after the matter had been reviewed by Cooper, legal advice had been considered, and the matter had been taken to AWB’s board.
  2. In her evidence to the Commission, Scales said that she went to see Cooper because she wanted to make sure that everything was legal and there was an agreement to support the payment to Tigris of the money that was sitting in AWBI’s account. She said that she wanted external legal advice because she was concerned about whether any United Nations’ sanctions had been breached and whether it was therefore appropriate for her to authorise payment to Tigris. She confirmed that Cooper set in train a process of obtaining external legal advice that involved a review of the whole Tigris event. She said that she believed that it was Cooper who made the statement to the AWB board that is recorded in Cooper’s file note of 14 December 2004.
  3. After legal advice had been obtained, Scales and Cooper signed the authorisation for the sum of US$7,087,202.24 to be paid out of AWBI’s account to Tigris on 6 December 2004. Scales’ evidence to the Commission was that:
authorised the payment because the recommendation from senior counsel was to do so, and I believe there was a period of time where there was some – I don’t know – confusion, certainly in my mind, as to whether it was a debt recovery or for services rendered, because of the half million to one million tonnes issue, and I was assured during that process that, you know, it was fine to authorise payment.’
  1. In the course of 2005, AWB made numerous disclosures concerning the outcome of the legal review which it had undertaken. The Commonwealth submits that these disclosures (which are discussed at [72] to [115] above) were expressed in such broad terms that they should be regarded as encompassing both the outcome of the Project Rose investigations and the outcome of Project Water.

IMPUTED WAIVER

  1. The crux of the Commonwealth’s case is that AWB has disclosed the gist or substance, and in some cases the entirety, of legal advices it obtained as a result of the Project Water and Project Rose investigations. In these circumstances, the Commonwealth contends that the law will impute a waiver of privilege over associated documents. It argues that the associated documents comprise documents that were brought into existence as a result of the Project Rose and Project Water investigations respectively or, at the very least, all of the investigatory reports, documents and communications that directly or indirectly represented the foundation for the advices that have been disclosed by AWB.
  2. The kind of waiver that is in issue in this case is commonly referred to as imputed or implied waiver. The former expression is preferable, as it reflects the way in which the High Court expressed the governing legal principles in Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 (‘Mann’).
  3. In Mann at 13 [29], Gleeson CJ, Gaudron, Gummow and Callinan JJ said:
may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is “imputed by operation of law”. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.’
  1. The concluding part of this passage draws attention to the fact that the test for imputed waiver had previously been expressed in terms of fairness: see Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 (‘Maurice’) at 481 per Gibbs CJ, 487–488 per Mason and Brennan JJ, 492–493 per Deane J, and 497–498 per Dawson J. Under the test propounded in Mann, it is inconsistency between the conduct of the client and the maintenance of the confidentiality that the privilege is intended to protect which effects a waiver of the privilege. Fairness has become a subsidiary consideration; it may be relevant to the court’s assessment of inconsistency in some contexts but not in others.
  2. In Commissioner of Taxation v Rio Tinto Limited [2006] FCAFC 86 (‘Rio Tinto’) at [44], the Full Court (Kenny, Stone and Edmonds JJ) said that there was a good deal of doubt whether the language used by the majority in Mann worked any real change in the principle which governs imputed waiver. This observation was made somewhat tentatively and was not material to the Court’s decision. My own view is that a test expressed in terms of inconsistency more readily accommodates the variety of situations in which questions of imputed waiver can arise than a test expressed in terms of fairness. The criterion of fairness is readily understandable in the context of inter partes litigation, but it is difficult to apply sensibly in other contexts: see the observations by McHugh J in Mann at 40 [128] and Toohey J in Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 (‘Goldberg v Ng’) at 110.
  3. AWB submitted that this Court should hold that there has been no imputed waiver because the Commonwealth has made no attempt to identify why it would be unfair or inequitable for AWB to maintain privilege in the underlying investigations. This submission immediately raises the question – unfair or inequitable to whom? I doubt that any question arises of fairness to the Commission – it is an arm of the executive government charged with the investigation of specified matters. Nor does any question arise of fairness to the Commonwealth. Fairness presupposes a balancing of interests between parties who are in dispute. In that context, partial disclosures raise a question of fairness because there is the capacity to mislead one party to the dispute to his or her detriment. These concepts do not translate easily to the present case: cf McHugh J in Mann at 40 [127]-[128]. There is also the difficulty that, outside the framework of an inter partes dispute, fairness is truly a term of ‘indeterminate reference’: Mann at 40 [129] per McHugh J, citing RJ Desiatnik, Legal Professional Privilege in Australia, 1999, p 122.
  4. Mann anticipated that there will be cases in which considerations of fairness have little or no role to play. This is such a case. The broad question posed by Mann is whether, and to what extent, AWB’s disclosures are inconsistent with the maintenance of confidentiality in the documents which are at issue in these proceedings. This question wraps up several subsidiary issues, in particular whether AWB’s disclosures involved, on each occasion, a disclosure of the gist or substance of its legal advice, whether AWB consciously deployed that advice so as to advance its own commercial or other interests, and, if so, whether that disclosure has resulted in an imputed waiver of privilege over any and what associated materials.
  5. In any application of Mann, the starting point must be an analysis of the disclosures or other acts or omissions of the party claiming privilege that are said to be inconsistent with the maintenance of confidentiality in the privileged material: see Rio Tinto at [45]. The disclosures in question here were made variously to the IIC, to the Australian Government, to the Commission and in some instances via the procedures of the Commission to the public at large. In my opinion, there is no reason why these disclosures cannot support a finding that AWB has waived legal professional privilege over associated material.
  6. AWB submitted that imputed waiver cannot arise in the context of a commission established under the RCA. Alternatively, it submitted that the coercive and inquisitorial context in which the alleged waiver has taken place is an important factor which strongly militates against waiver. These submissions ignore the voluntary disclosures that AWB made to the Australian Government. In any event, I am not persuaded that AWB’s disclosures to the Commission and the IIC are incapable of giving rise to an imputed waiver.
  7. Leaving aside any question of waiver, AWB was entitled to maintain legal professional privilege in the course of proceedings before the Commission and, by and large, it sought to do so. To the extent that AWB has already produced documents to the Commission containing legal advice or instructions, it did so because it recognised that actions it had taken outside the Commission had the consequence of waiving privilege over those documents. As for the oral evidence that the Commonwealth now relies upon, Lindberg, Cooper and Scales were senior executives of AWB when they gave that evidence to the Commission. There is nothing before me to suggest that they were not speaking as executives of AWB when they gave their evidence, or that their evidence fell outside the scope of their authority from AWB. Further, their evidence was given in the presence of AWB’s legal representatives, without any objection being raised on grounds of legal professional privilege. Lindberg, Cooper and Scales may have been compelled to give evidence at the Commission, but they were under no compulsion to reveal the gist or substance of legal advice that had been obtained by AWB.
  8. In these circumstances, I infer that the relevant evidence given by Lindberg, Cooper and Scales was given with the authority or acquiescence of AWB. I also infer that AWB was content for the evidence to be given at public hearings of the Commission, having regard to its own commercial interests. The evidence before me makes it clear that AWB was concerned to defend its integrity and commercial reputation in the course of the Commission’s hearings. I infer that AWB made the assessment that it would advance its commercial interests if it were to be known publicly that it had undertaken extensive legal reviews and that, as a result, it had obtained legal advice that there was no evidence that it had engaged in any improper or unlawful conduct in breach of the United Nations’ sanctions. AWB was content for information of this character to be disclosed publicly in relation to both Project Rose and Project Water.
  9. It would, of course, be a different case if the documents and information that the Commonwealth relies upon were disclosed under legal compulsion. On any view, the fact that documents and information were disclosed under compulsion would be very relevant to the question whether the person claiming privilege had engaged in inconsistent conduct. There is, moreover, authority to the effect that a production of documents or evidence under compulsion will not result in any waiver of privilege: Goldman v Hesper [1988] 1 WLR 1238 (‘Goldman’); Trans America Computer Co Inc v IBM Corporation 573 F2d 646 (9th Cir 1978) (‘Trans America’) at 651.
  10. AWB’s disclosures to the IIC were not made under legal compulsion. They were made by choice under a confidentiality regime negotiated by AWB. The Memorandum of Understanding between AWB and the IIC provided that AWB could withhold documents from the IIC on grounds of commercial sensitivity or legal professional privilege, or if there was a risk that AWB, its officers or employees would be exposed to breaches of Australian law. It also provided that any interviews conducted by the IIC of AWB officers or employees could be undertaken in the presence of a personal legal counsel and/or up to two representatives of AWB. AWB thereby retained the right to object to any question that intruded into areas protected by legal professional privilege. On the evidence before me, including in particular the various briefings which Hargreaves gave to the Australian Government, it is clear that AWB decided that it needed to cooperate, and be seen to cooperate, with the IIC so as to retain the support of the Australian Government and to protect and defend its commercial reputation.
  11. I do not agree with AWB’s submission that, even if its disclosures were not compelled by law, the inquisitorial context in which they took place is a factor which strongly militates against waiver. In Australia, legal professional privilege is a fundamental common law right that can be asserted outside the context of adversarial litigation. It can, for instance, be invoked to resist the production of documents in answer to a search warrant or the giving of information or the production of documents pursuant to coercive statutory powers or notices: Daniels at 552-553 [9]–[11] and 563 [44]; Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52. As legal professional privilege can be invoked outside the context of judicial or quasi-judicial proceedings, logic suggests that it should be capable of being waived if the claimant engages in conduct that is inconsistent with the maintenance of the confidentiality that the privilege is intended to protect. It should not matter whether the conduct takes place within, or outside, the framework of the proceedings or investigatory process in which a demand has been made for the production of privileged documents or information. The crucial question is whether the conduct is inconsistent with the maintenance of confidentiality.
  12. The disclosure of privileged communications to a third party can result in an imputed waiver of privilege, even if there is no intention of waiving privilege and the disclosure is for a limited and specific purpose. In Mann, the Chief Minister of the Australian Capital Territory conveyed legal advice, on a confidential basis, to a member of the Territory’s Legislative Assembly to enable him to consider the reasonableness of the Government’s decision to settle certain legal proceedings. The majority decision turned on the fact that the disclosure to a member of the Legislative Assembly was not regarded as disclosure to a third party. In their joint judgment, Gleeson CJ, Gaudron, Gummow and Callinan JJ said at 15 [35] that:
purpose of the privilege being to protect the Territory from subsequent disclosure of the legal advice it received concerning the litigation instituted by the appellant, there was nothing inconsistent with that purpose in the Chief Minister conveying the terms of that advice, on a confidential basis, to a member of the Legislative Assembly who wished to consider the reasonableness of the conduct of the Territory in relation to the litigation.’

However, their Honours also observed that, while the voluntary disclosure of privileged legal advice to a third party will not necessarily waive privilege, it can do so. They said that Goldberg v Ng illustrates that, depending on the circumstances, the disclosure of a privileged communication to a third party for a limited and specific purpose, and on terms as to confidentiality, can have the consequence of waiving privilege.

  1. McHugh J dissented. In his view, any disclosure of privileged material to a third party who is a stranger to the privileged relationship (ie to a person who is not the lawyer or the client) should have the consequence that privilege in that material is waived as against the world: at 34 [108], 37-38 [118], 42 [133]-[134]. As I read his Honour’s judgment, the key reason why his Honour preferred a bright line rule of this kind is that it would ensure that legal professional privilege was not extended beyond the rationales that support it (at 37 [117]-[118]):
candid communications between a lawyer and a client is unlikely to be endangered if a privilege holder is held to waive privilege because he or she has voluntarily disclosed the communication to a stranger. Whether the communication will be disclosed in the future to a stranger to the privilege is entirely within the control of the client. At that stage, the client will determine whether his or her interests are best served by retaining the privilege or disclosing the communication. But it is difficult to see how the possibility of voluntary disclosure will prevent the client being candid with his or her lawyer. ...
client who voluntarily discloses privileged information to a stranger to the privileged relationship has made a choice, based no doubt on considerations personal to him or her, that the purpose for which the communication is disclosed to the stranger is more important than protecting the absolute confidentiality of the communication by preventing the stranger from having knowledge of it. The person may be encouraged to do so, as in Goldberg v Ng, by an expectation that the stranger will not further disclose the communication. But in my opinion, if privileged material is voluntarily disclosed to a stranger to the privileged relationship, the fact that it may be received under an obligation of confidence should not be relevant to whether privileged is waived.’

On the facts, McHugh J considered that disclosure to a member of the Legislative Assembly who was not a member of the Executive Government was relevantly a disclosure to a stranger to the privileged relationship: at 44 [139].

  1. In Goldberg v Ng, the respondents sued their solicitor, Goldberg, for failure to account for monies received and disbursed by him as their solicitor. They also made a professional conduct complaint against him to the Law Society of New South Wales. In answer to the complaint, Goldberg prepared statements, with annexures that included a draft brief to counsel, and submitted them to the Society’s professional conduct department. In doing so, Goldberg told the Society that the statements and the annexures were confidential and he wished to retain his legal professional privilege in them. The Society dismissed the complaint on the ground that there was no evidence of professional misconduct or unsatisfactory professional conduct. Subsequently, in the course of the Supreme Court proceedings instituted by the respondents against Goldberg, the respondents served a subpoena on the Society requiring it to produce documents relating to the complaint against Goldberg.
  2. All of the members of the High Court held that there had been no express or intentional waiver by Goldberg of his legal professional privilege in the statements and annexures. The issue that divided the Court was whether waiver should be imputed by operation of law. Deane, Dawson and Gaudron JJ held at 100-102 that it should because the professional complaint and the Supreme Court proceedings were but different emanations of the one dispute, and Goldberg’s provision of the statements to the Society was voluntary and for the calculated purpose of demonstrating the reliability of his denial of the alleged failure to account. Their Honours analysed the issue in terms of ‘fairness’, but they could equally, and perhaps more appropriately, have done so in terms of inconsistency.
  3. Toohey and Gummow JJ dissented in separate judgments. Each expressed the view that waiver should not be imputed because the disclosures by Goldberg were made to a third party for a limited and specific purpose. Toohey J said at 110 that the following factors militated strongly against any implied or imputed waiver: first, Goldberg disclosed material to the Society because of a complaint against him on an undertaking by the Society that the contents would be kept confidential; secondly, the disclosure was made in the context of the Society’s investigation of a complaint in pursuance of its statutory powers and, consequently, it could be regarded as having been made for the purposes of the Act; and thirdly, the disclosure was confined to the Society. Gummow J said at 123 that, as the disclosures were made in the context of compulsory statutory processes, the circumstances of the case supplied no sufficient reason for depriving Goldberg of privilege, even allowing for the advantage he sought to gain by making the disclosure.
  4. The case of Restom v Battenberg [2006] FCA 781 provides an example of a case where disclosures to a third party triggered a waiver of legal professional privilege. In the course of bankruptcy proceedings, the debtor claimed privilege over a letter that passed between his Australian and Scottish solicitors. Stone J held that the disclosure of the contents of the letter to the Scottish Employment Tribunal was inconsistent with the maintenance of confidentiality in the letter and constituted a waiver of privilege.
  5. In Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275, which predated Goldberg v Ng and Mann, Giles J held that a limited and specific disclosure of privileged material, on terms of confidentiality, did not result in a loss of privilege. In Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253, Sackville J said that it follows from Goldberg v Ng that the disclosure of a privileged communication for a limited purpose and subject to a confidentiality requirement may, or may not, amount to a waiver of privilege, depending on the circumstances of the case: at 262-263 [42]-[43]. On the facts of that case, Sackville J held that a disclosure of legal advice to the solicitors and representatives of two other companies, on strict terms as to confidentiality and for the purpose of those other companies obtaining legal advice, did not result in an imputed waiver. His Honour distinguished Goldberg v Ng as a case in which the disclosure was made to gain an advantage over the opposing party in related litigation: at 263 [45].
  6. There are several English cases in which disclosure to a third party for a limited and specific purpose has not resulted in a loss of privilege: British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113 (‘British Coal’); Goldman; and Gotha City v Southeby’s (No 1) [1988] 1 WLR 1114.
  7. In British Coal, Neill LJ (with whom Stocker LJ and Dillon LJ agreed) held that the disclosure of documents by the plaintiff to the police to assist in a criminal investigation and criminal trial did not constitute a waiver of the privilege. Neill LJ said at 822:
my judgment the action of the plaintiff in making documents available for the purpose of the criminal trial did not constitute a waiver of the privilege to which it was entitled in the present civil proceedings. Its action in regard to both the category A and the category B documents was in accordance with its duty to assist in the conduct of the criminal proceedings, and could not properly be construed as an express or implied waiver of its rights in its own civil litigation. Indeed, it would in my view be contrary to public policy if the plaintiff’s action in making the documents available in the criminal proceedings had the effect of automatically removing the cloak of privilege which would otherwise be available to them in the civil litigation for which the cloak was designed.’
  1. In Goldman, the Court of Appeal considered the effect of a statutory requirement that a claimant for costs must disclose privileged materials to the Court’s taxing officers. Taylor LJ (with whom Woolf LJ and Lord Donaldson MR agreed) said that once a party puts forward privileged documents as part of his case for costs, the privilege is relaxed temporarily and pro hac vice. If the taxing officers felt compelled by natural justice considerations to disclose part or all of the contents of a privileged document to the opposite party, that disclosure would be for the purposes of the taxation only and would not amount to a waiver that prevented the owner of the document from reasserting privilege in any subsequent context: at 102. McHugh J took a stricter view in Giannarelli v Wraith (No 2) [1991] HCA 2; (1991) 171 CLR 592. His Honour noted that in Victoria, unlike in England, a litigant can refuse to produce documents to the taxing master on the grounds of legal professional privilege. However, McHugh J said that if the litigant choses to produce privileged documents to the taxing master, then the litigant will be taken to have waived privilege and must let the opposing parties see the documents. His Honour did not countenance any middle course under which privilege could be waived solely for the purposes of the taxation and then re-asserted in some other context: at 607.
  2. The general rule adopted in the United States is that any voluntary disclosure of privileged communications by a client to a third party breaches the confidentiality of the attorney-client relationship and therefore waives the privilege, not only as to the specific communication disclosed but as to all other communications relating to the same subject matter: see Weil v Investment/Indicators Research and Management Inc 647 F2d 18 (9th Cir 1981) at 24; United States v Aronoff 466 FSupp 855 (DC NY 1979) at 862 [9]-[10]; In re Sealed Case 676 F2d 793 (DC Cir 1982) (‘re Sealed Case’) at 809 [6]–[7]; United States v AT & T Co 642 F2d 1285 (DC Cir 1980) at 1299; cf Diotima Shipping Corp v Chase, Leavitt & Co., 102 F.R.D. 532 (D Me 1984); von Bulow v von Bulow, 114 F.R.D. 71 (SD NY 1987); and T Harman, Fairness and the Doctrine of Subject Matter Waiver of the Attorney-Client Privilege in Extrajudicial Disclosure Situations (1988) University of Illinois Law Review 999.
  3. The US courts have also considered whether a disclosure of privileged material to government investigators will have the consequence of waiving privilege. In re Sealed Case, the United States Court of Appeals for the District of Columbia considered whether a corporation that had submitted its own investigating counsel’s report into alleged bribes and improper payments to the Internal Revenue Service and the Securities and Exchange Commission (‘SEC’) pursuant to voluntary disclosure programs had thereby impliedly waived its privilege over documents which were clearly identified in the report. The Court held that, by revealing part of privileged communications to the agencies to gain a commercial advantage, the corporation had made a disclosure which was inconsistent with the maintenance of confidentiality. Accordingly, the Court held that the corporation had waived privilege as to all other communications relating to the same subject matter.
  4. The principle applied by the Court was that (at 818 [29]):
need not allow a claim of privilege when the party claiming the privilege seeks to use it in a way that is not consistent with the purpose of the privilege. Thus, since the purpose of the attorney-client privilege is to protect the confidentiality of attorney-client communications in order to foster candor within the attorney-client relationship, voluntary breach of confidence or selective disclosure for tactical purposes waives the privilege. Disclosure is inconsistent with confidentiality, and courts need not permit hide-and-seek manipulation of confidences in order to foster candor.’
  1. The Court rejected an argument that waiver should not be imputed because the corporation had disclosed the investigating counsel’s report for specific and limited purposes only. In doing so, it declined to follow the decision in Diversified Industries Inc v Meredith 572 F2d 596 (8th Cir 1977) (‘Diversified Industries’) at 611 in which the Eighth Circuit Court of Appeals held that disclosures to the SEC under a voluntary disclosure program did not constitute a waiver to anyone but the SEC. It noted that the decision in Diversified Industries was rejected in Permian Corp v United States 665 F2d 1215 (DC Cir 1981) at 1220-1222 on the ground that it unnecessarily expanded the scope of attorney-client privilege: see also In re Weiss 596 F2d 1185 (4th Cir 1979) at 1186. Like the District Columbia Circuit, the First, Third, Fourth, Sixth and Federal Circuit Courts of Appeal have rejected the approach adopted by the Eighth Circuit in Diversified Industries: see AM Pinto, Cooperation and Self-Interest are Strange Bedfellows: Limited Waiver of the Attorney-Client Privilege through Production of Privileged Documents in a Government Investigation (2004) 106 West Virginia Law Review 359, p 372; RH Porter, Voluntary Disclosures to Federal Agencies – Their Impact on the Ability of Corporations to Protect from Discovery Materials Developed During the Course of Internal Investigations (1990) 39 Catholic University Law Review 1007, pp 1029-1052.
  2. The US courts have accepted that there will be no imputed or implied waiver of privilege if the disclosure of the privileged material is involuntary and compelled by law: see eg Trans America.
  3. The Canadian courts apply a waiver test that is based on considerations of fairness and consistency: see S & K Processors Ltd v Campbell Ave Herring Producers Ltd (1983) CPC 146 (BCSC) at 150; Professional Institute of the Public Service of Canada v Canada (Director of the Canadian Museum of Nature) [1995] 3 FC 643; British Columbia (Securities Commission) v BDS (2000) BCJ No 2111 (BCSC), affirmed (2003) 226 DLR (4th) 393; and RD Manes and MP Silver, Solicitor-Client Privilege in Canadian Law, Butterworths, 1993, p 207. As in the United States, waiver will not be imputed if privileged material is produced to a government regulator under compulsion of law.
  4. Putting to one side its provision of Mr Tracey QC’s advices and instructions and its briefings to the Australian Government, AWB disputed that the disclosures it made to the IIC and the Commission disclosed the gist or substance of legal advice that AWB obtained as a result of Project Rose or Project Water. It contended that these disclosures did no more than refer to the existence of legal advice, without disclosing its substance. Alternatively, AWB argued that the record of Lindberg’s interview with the IIC, and the evidence given to the Commission by Lindberg, Cooper and Scales, cannot be related to any particular piece of legal advice, other than that provided by Mr Tracey QC.
  5. The applicable principles are set out in my decision in AWB v Cole at [135]–[139]. The authorities draw a distinction between a mere reference to the existence of legal advice, which will not usually amount to a waiver, and cases in which the gist or substance of the legal advice has been disclosed: see Maurice at 481, 488 and 493; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [1996] HCA 15; (1996) 70 ALJR 603 at 607; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12; Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 376-377; and Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101 (‘Bennett’) at 104-105 [6]–[9].
  6. In Bennett, the Full Court (Tamberlin, Emmett and Gyles JJ) held that legal representatives of the Australian Customs Service had waived privilege in legal advice by stating openly that they had given advice to Customs that a particular regulation did not prohibit public comment by an officer on matters of public administration. The trial judge had held that a disclosure of the legal position or stance that a lawyer had advised a client to take was not inconsistent with the maintenance of confidentiality in the communication giving the advice. The trial judge also appeared to draw a distinction between statements which disclose the conclusion or logical result of legal advice, and statements which disclose the content of the legal advice and its reasoning: see Tamberlin J at 105 [10] and Gyles J at 118 [61]. The Full Court rejected this approach. Gyles J stated at 119 [65] that the voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made, including the reasons for the conclusion. Tamberlin J said at 104 [6]:
my view, it would be inconsistent and unfair, having disclosed and used the substance of the advice in this way, to now seek to maintain privilege in respect of the relevant parts of that advice which pertain to the expressed conclusion. It may perhaps have been different if it had been simply asserted that the client has taken legal advice and that the position which was adopted having considered the advice, is that certain action will be taken or not taken. In those circumstances, the substance of the advice is not disclosed but merely the fact that there was some advice and that it was considered. However, once the conclusion in the advice is stated, together with the effect of it, then in my view, there is imputed waiver of the privilege. The whole point of an advice is the final conclusion. This is the situation in this case.’
  1. Subsequently, Tamberlin J was confronted with a case that was very similar to the one he hypothesised in Bennett. In Nine Films and Television Pty Ltd v NINOX Television Ltd (2005) 65 IPR 442, the applicant contended that the respondents had waived privilege in various legal advices because of the way in which the respondents had publicly referred to the advice. Tamberlin J held that there had been no waiver. He concluded that the mere assertion that advice had been taken, and the fact that action is then taken by the client, is not sufficient, unless the two are linked in such a way that it is apparent that the advice is that specified action should be taken. His Honour also made the following observations at 446-447 [26]:
I accept that, in some circumstances, a clear disclosure of the “bottom line” of the advice, and the course of conduct taken thereafter, may be sufficient to amount to waiver of legal professional privilege, I do not think these matters have been established in the present case. On a fair and reasonable reading, the statement to the effect that senior counsel had been engaged and that he had reviewed matters in detail and that steps were being taken based on his recommendations is not sufficient to amount to a waiver of the legal advice. The substance or content of the advice is not disclosed with specificity or clarity. Questions of waiver are matters of fact and degree and, in this instance, I am not persuaded that the conduct, assertions or admissible evidence are sufficient to warrant the necessary implication that legal professional privilege has been waived.’
  1. The principles discussed in Bennett were applied in Seven Network Ltd v News Ltd (No 12) [2006] FCA 348. The issue was whether a statement in a discovered document that ‘[o]ur legal advice is that the risk of damages being awarded against Optus is low’ had the consequence of waiving privilege in the legal advice that it referred to. Sackville J held that it did; the statement voluntarily disclosed the gist or conclusion of the legal advice: at [12].
  2. In Rio Tinto Ltd v Commissioner of Taxation (2005) 224 ALR 299, the Commissioner of Taxation filed particulars with the Court stating that the Commissioner would be relying on specified grounds ‘which have been confirmed by Senior Tax Counsel... and supported by AGS... and opinions obtained from counsel’. The taxpayer contended that the Commissioner had thereby waived privilege in the legal advice of the Australian Government Solicitor and the opinions of counsel. Sundberg J held that these references voluntarily disclosed the conclusion or substance of the advice and consequently privilege had been waived. Sundberg J’s decision went on appeal to the Full Court, but the Full Court’s decision turned on the alternative ground of issue waiver: Rio Tinto at [72]. The Full Court considered that, in the particulars, the Commissioner had made an assertion that put the contents of the documents containing legal advice in issue, or necessarily laid them open to scrutiny, with the consequence that there was an inconsistency between the making of the assertion and the maintenance of the privilege.
  3. AWB submitted that the reasoning in Bennett was unsound, particularly the holding that the disclosure of the conclusion stated in legal advice will amount to a waiver of the whole of the advice. AWB did not refer to any authorities that supported this submission and I reject it. In my view, it is well established that a voluntary disclosure of the gist, substance or conclusion of legal advice will amount to a waiver in respect of the whole of the relevant advice.

ASSOCIATED MATERIAL

  1. Turning to the scope of any imputed waiver, it is well established that a voluntary disclosure of privileged documents can result in a waiver of privilege over those documents and associated material. The test applied to determine the scope of any waiver of associated material is whether the material that the party has chosen to release from privilege represents the whole of the material relevant to the same issue or subject matter: Maurice at 482 and 484 per Gibbs CJ, 488 per Mason and Brennan JJ, and 498–499 per Dawson J.
  2. In Maurice, Gibbs CJ said at 482:
Similarly, where a party disclosed a document which contained part only of a memorandum which dealt with a single subject-matter, and then read the document to the judge in the course of opening the case, it was held that privilege was waived as to the whole memorandum: Great Atlantic Insurance Co v Home Insurance Co. In that case Templeman LJ said:
... the rule that privilege relating to a document which deals with one subject matter cannot be waived as to part and asserted as to the remainder is based on the possibility that any use of part of a document may be unfair or misleading, that the party who possesses the document is clearly not the person who can decide whether a partial disclosure is misleading or not, nor can the judge decide without hearing argument, nor can he hear argument unless the document is disclosed as a whole to the other side. Once disclosure has taken place by introducing part of the document into evidence or using it in court it cannot be erased.” same test must be applied in deciding whether the use in legal proceedings of one document impliedly waives privilege in associated material. In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation [No 2] Mustill J dealt with this question and suggested the following test: ... where a party is deploying in court material which would otherwise be privileged, the opposite party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.”’
  1. Dawson J discussed the authorities at 498-499:
Geo. Doland Ltd v Blackburn Robson Coates & Co waiver of privilege with respect to a conversation between solicitor and client, which took place before litigation was contemplated, was held to extend to any other communications in relation to the subject-matters of the conversation, although the implied waiver was held not to cover similar documents which came into existence for the purpose of prosecuting the litigation. This decision was not followed in General Accident Corporation Ltd v Tanter where a distinction was drawn between the waiver of privilege before a trial and the further waiver of privilege by calling evidence in a trial. In the latter situation the waiver was held to extend to the transaction constituted by the privileged communication but not to the subject-matter of that communication arising upon other privileged occasions. General Accident Corporation Ltd v Tanter has been criticized for the distinction which it draws between waiver by the tender of evidence of a privileged communication and waiver by the disclosure of the communication in some other way and for the restriction which it places upon the extent of associative waiver: see Phipson on Evidence, par 15-20. In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation [No 2], a broader view was taken by Mustill J that “ ... where a party chooses to deploy evidence which would otherwise be privileged the court and the opposition must, in relation to the issue in question, be given the opportunity to satisfy themselves that they have the whole of the material and not merely a fragment”. This view was approved by the Court of Appeal in Great Atlantic Insurance Co v Home Insurance Co. In the United States it has been widely held that voluntary disclosure of the content of a privileged attorney communication constitutes waiver of the privilege with respect to all other such communications upon the same subject-matter: Weil v Investment/Indicators, Research and Management and the cases there cited; Diotima Shipping Corp v Chase, Leavitt & Co; United States v Aronoff; In re Sealed Case.’
  1. AWB relied upon the way in which the principle was formulated by the Court of Appeal in British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524 at 564 [121]:
reference in one letter of advice to an earlier letter of advice does not expose the latter to scrutiny by the other party to litigation merely because legal professional privilege is waived in relation to the former: implied waiver is not so generous a doctrine. As we apprehend it, where legal professional privilege is waived in relation to one piece (or part) of advice, the privilege is impliedly waived in relation to another if - and only if - that other is necessary to a proper understanding of the first. As established by the High Court (at least since Mann v. Carnell) the test in such cases is whether it would be “inconsistent” for a party to rely upon, and so to waive legal professional privilege in respect of, the one without also being taken to have waived privilege in respect of the other.’

It is no doubt correct that a mere reference to the existence of legal advice in a disclosed document will not be regarded as a waiver of its contents, albeit a different conclusion would follow if the gist, substance or conclusion of the legal advice is voluntarily disclosed. But, with great respect to their Honours, the proposition concerning waiver of associated material is expressed too narrowly and in a way that is not consistent with the test propounded by the High Court in Maurice. The principle propounded by the Court of Appeal may work adequately enough in some circumstances, particularly where privilege is sought to be maintained over one part of a single piece of legal advice, but in other circumstances it will not give effect to the principles explained in Maurice.

  1. A common application of associated material waiver relates to the case where an expert report has been prepared in reliance upon other documents. In Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at 441-442 [21], Lindgren J summarised the applicable principles:
Ordinarily the confidential briefing or instructing by a prospective litigant’s lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 Ch D 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J.
  1. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client’s lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501 (Propend)...; Interchase, per Pincus JA; Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 at [17].
  1. Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness’s own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161-2 per Thomas J.
  1. Ordinarily disclosure of the expert’s report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 481... per Gibbs CJ, CLR 487—488... per Mason and Brennan JJ, CLR 492-493... per Deane J, CLR 497—498... per Dawson J; Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83 at 98... per Deane, Dawson and Gaudron JJ, CLR 109... per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870...; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89... at [46].
  1. Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148—150 per Pincus JA, at 161 per Thomas J.
  1. It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report: cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400;... ACCC v Lux at [46].’
  1. In Thomas v New South Wales [2006] NSWSC 380 (‘Thomas’), McClellan CJ at Common Law applied these principles to the documents which underpinned or supported the advice of counsel. His Honour stated at [17]:
in the present case the primary document for which privilege was expressly waived was the advice of counsel, I can discern no difference in principle between such an advice and the advice or report of an expert retained for the purpose of the litigation. As I have indicated, I am satisfied that counsel relied upon instructions which they were given and, it would appear, relied upon medical reports in a way which influenced the content of the advice which they gave. Accordingly, insofar as there are documents which were relied upon in the preparation of the advice falling within categories 1, 2, 3 and 5 of the notice to produce, the service of the affidavit impliedly waived privilege in those documents.’


Later at [20] his Honour said:

In the present case the plaintiff disclosed the advice in these proceedings for the purpose of obtaining whatever assistance he could from that advice in pursuit of his claim. To my mind, that disclosure waived his privilege both in the advice itself and the documents which were used by counsel and which influenced the content of the advice. Waiver having occurred, the fact that the advice was not ultimately tendered is, to my mind, not relevant. Having sought an advantage, the plaintiff was bound by the course he had taken and accordingly is amenable to producing the relevant documents in response to an appropriate notice to produce.’
  1. In Newcrest Mining (WA) Limited v Commonwealth (1993) 40 FCR 507, French J applied the principle of associated material waiver in a case where one joint venturer disclosed significant elements of legal advice it had obtained in relation to mining leases held by the joint venture partners. His Honour held that the disclosure brought about an implied waiver of other legal advices obtained by the other joint venturers in relation to the mining leases. His Honour said at 509 that it was significant that the disclosures were made for the benefit of the joint venture as a whole and, although there was no direct evidence on the point, he considered that it was difficult to imagine that the disclosures would have occurred against the wishes of the other joint venturers or indeed without their consent.
  2. In England, the principle has been applied to documents which underpin or support expert evidence: see Dunlop Slazenger International Ltd v Joe Bloggs Sports Limited [2003] EDWCA Civ 901; Mayne Pharma Pty Ltd v Debiopharm SA [2006] EWHC 164 (Pat); and L’Oreal SA v Bellure NV [2006] EWHC 1503 (Ch).
  3. Several English cases illustrate the practical operation of the principle. In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2) [1981] Com LR 138 (‘Nea Karteria’), a lawyer gave evidence that he had conducted an interview on the basis of a list of questions prepared by the plaintiffs’ lawyers. While privilege was waived with respect to the witnesses’ answers, the plaintiffs sought to maintain privilege with respect to the list of questions: at 139-140.
  4. Mustill J (as his Lordship then was) held at 140 that privilege over the list of questions had been waived by implication:
seems to me that the written questions were, so to speak, part of the meeting. They were in a sense an agenda for the meeting. They formed the basis for one-half of the exchange between the lawyer and [the witness]. Evidence to that effect having been given by the lawyer, it seems to me that privilege must have been waived for those questions. And I think the interests of justice, which I believe to underlie the authorities on this part of the case, demand that the opposition and the court should have an opportunity to satisfy itself as to the accuracy of the evidence given to the lawyer as to the way in which he conducted the interview.’

  1. Mustill J drew a distinction at 140 between the instructions to the lawyer who carried out the questioning and the questions themselves; the instructions did not play a part in the meeting, did not form part of the body of events upon which the Court had to reach conclusions of fact, and were merely part of the prior history of those events.
  2. In R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 at 599, Auld LJ made the following observations concerning the application of the test stated in Nea Karteria:
depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an “issue in question”, the expression used by Mustill, J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which material is withheld. The more confined the issue, for example as to the content of a single document or conversation, the more difficult it is likely to be to withhold, by severance, part of the document or other documents relevant to the document or conversation.’
  1. In Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] 2 All ER 599 (‘Fulham’) at 604 [11], Mann J suggested that it was helpful to approach the application of the test stated in Nea Karteria in three steps: first, identify the transaction in respect of which the disclosure has been made; secondly, ascertain from the nature of the disclosure or other evidence whether the transaction is wider than an advice given on a single occasion, if so, the whole of the wider transaction must be disclosed; and thirdly, the disclosure of the whole transaction may make it plain that further disclosure is necessary to avoid unfairness or misunderstanding of what has been disclosed. Mann J added at 607 [18] that once the transaction has been identified the cases show that the whole of the material relevant to that transaction must be disclosed. It is not open to a waiving party to say that the transaction is simply what the party has chosen to disclose; the court will determine objectively what the real transaction is so that the scope of the waiver can be determined. His Lordship also said that the application of these principles will be very fact sensitive and will vary from case to case: at 607 [19].

WAIVER HAS BEEN ESTABLISHED

  1. At [70] to [126] above, I set out my findings as to the precise terms in which AWB disclosed the results of its legal reviews and legal advice it had obtained to the Australian Government, the IIC and the Commission.
  2. Overall, I am satisfied that by means of these disclosures, AWB deployed the gist or substance of legal advice it had obtained. Moreover, I am satisfied that AWB made a conscious and voluntary decision to deploy this legal advice in its dealings with the Australian Government, the IIC and the Commission because it considered that it was in its commercial interests to do so. These actions are inconsistent with the maintenance of confidentiality in the legal advice. Having regard to the nature, purpose, terms and extent of its disclosures, I am also satisfied that AWB acted inconsistently with the maintenance of confidentiality over the associated material which underpinned the legal advice.
  3. While these overall conclusions are relevant and important, I have taken the view that it is necessary and appropriate for me to make specific findings as to the nature and consequences of each such disclosure. I turn to that task.
  4. In his various statements to the Australian Government, Hargreaves did not merely refer to the existence of legal advice. Nor did he simply disclose the legal advice which had been obtained by AWB from Mr Tracey QC. He described in some detail the findings and conclusions that had been arrived at by AWB’s own legal review. In my opinion, Hargreaves thereby disclosed to the Australian Government the gist or substance of legal advice that AWB had obtained (as at the relevant dates at which he made his disclosures) that there was no evidence of:
  5. When Hargreaves gave his briefings to officers of the Australian Government, he expressed himself in terms that were apt to refer, and which a reasonable listener would have understood as referring, to the combined effect of all of the legal advice that AWB had received as at the date of the relevant briefing. Hargreaves would not have been understood as referring only to a particular piece of historical advice, regardless of whether it was overtaken, or qualified, or supported by later advice. His assertions purported to represent the current state of affairs.
  6. Hargreaves’ memorandum of 25 June 2005 makes it quite clear that his statements to the Australian Government were based upon all of the legal advice AWB had obtained, and not simply the advice it had obtained from Mr Tracey QC. It cannot be disputed that Hargreaves disclosed the substance of the legal advice which Blakes provided to AWB’s board on 25 May 2004. AWB has already formed that view and acted on it by producing Blakes’ power point presentation to the Commission. But in my view the consequence of Hargreaves’ disclosures cannot be confined to Blakes’ advice of 25 May 2004 and Mr Tracey QC’s advices. Through the remainder of 2004 and until Hargreaves had his last meeting with Ms Carayanides in the period between 16 June 2005 and September 2005, Hargreaves met with Australian Government representatives several times and continued to make assertions that AWB’s independent legal review had not identified any wrongdoing by AWB. The evidence shows that Blakes and Minters continued the legal review in 2004 and 2005 and provided ongoing legal advice to AWB. It is not open to a waiving party to say that the disclosures relate simply to one advice and not others, or that the relevant transaction is simply what the party has chosen to disclose; the Court will determine objectively what has been disclosed: see Fulham at 607 [18].
  7. Hargreaves’ memorandum of 25 June 2005 makes it plain that he deliberately deployed AWB’s legal advice in his dealings with the Australian Government. He did so as part of AWB’s strategy to secure the continued support of the Federal Government, both generally and in relation to AWB’s dealings with the IIC and the United States Government. Hargreaves also deployed the advice in pursuit of the objectives that he set out in his memorandum; they included protecting and defending the reputation of AWB both within Australia and overseas, and minimising any attack by US wheat interests on AWB’s position as the exclusive manager of wheat exports from Australia. Given these strategic objectives, it was important for AWB to disclose, indeed to stress, that it had conducted an extensive independent legal review which had found no evidence of any wrongdoing by AWB in connection with its exports of wheat to Iraq. By disclosing its legal advice to secure these objectives, AWB assumed the risk that it would be held to have waived legal professional privilege in connection with legal advices it obtained in the course of the legal review.
  8. Having regard to the legal principles governing waiver, I consider that any legal advice that AWB obtained from Blakes or Minters prior to Hargreaves’ last meeting with Ms Carayanides on any of the subject matters, or relating to any of the issues, described at [180] above, has been waived by reason of the disclosures made by Hargreaves. Those subject matters and issues are wide enough to encompass the Tigris transaction and the iron filings claim. If AWB obtained legal advice during this period on those subject matters, or relating to those issues, from persons other than Blakes or Minters such as ABL, Mr Tracey QC or others, that advice has also been waived by Hargreaves’ disclosures.
  9. I am satisfied that the disclosures to the IIC involved a disclosure by AWB of the gist or substance of legal advice that it had obtained by 28 February 2005. The disclosure occurred at two points. First, when Lindberg was interviewed on 28 February 2005, the interview took place in the presence of AWB’s legal representative. AWB had the ability to object to any statements by Lindberg that intruded into areas covered by legal professional privilege. No objection was raised to Lindberg’s statement that the legal review conducted by Cooper had found nothing that would substantiate claims of fraud or corruption by AWB or payments by AWB to individuals in the Government of Iraq. Secondly, AWB was directly involved in providing the record of interview, as revised by Lindberg and AWB’s lawyers, to the IIC. In my opinion, the record of interview describes the gist or substance of legal advice which AWB had obtained as a result of its legal review. As with Hargreaves, Lindberg’s assertions purported to describe the current state of affairs, ie, as at 28 February 2005. There is no reason to read his assertions as if they were confined to legal advice obtained from Mr Tracey QC. It extends, in my view, to any legal advice obtained by AWB from Blakes, Minters and Mr Tracey QC, and any advice from others, prior to 28 February 2005 that deals with the same subject matters or relates to the same issues as the advice that Lindberg described.
  10. I am satisfied that the disclosures to the IIC were made deliberately and consciously by AWB with a view to obtaining a finding from the IIC that AWB had not engaged, or at least had not knowingly engaged, in conduct that involved making payments to the Iraqi regime in breach of the United Nations’ sanctions. Lindberg and AWB went out of their way to stress that the company had undertaken a legal review which had found nothing to substantiate claims of fraud, corruption or improper payments to the Iraqi regime. The disclosures were made with the knowledge and intention that they would be referred to by the IIC in its final published report. Accordingly, I find that AWB consciously and voluntarily deployed its legal advice with the object and intention of furthering the company’s commercial and other interests.
  11. AWB contended that the disclosures which Lindberg made at his meeting with the Minister for Foreign Affairs on 4 October 2005 were confined to the advice given by Mr Tracey QC. This is a possible interpretation of the Department’s minute, but in my view Lindberg’s statements are not to be read, and would not have been understood, so narrowly. Later in the meeting, Lindberg said that AWB had acted in accordance with the sanctions regime and that this had been supported by legal advice. This statement was expressed broadly and was not confined to ‘independent legal advice’. In my view, Lindberg disclosed, and a reasonable listener would have understood that Lindberg was disclosing, the gist or substance of all of the legal advice that AWB had obtained up to 4 October 2005 in relation to the question whether AWB had acted in accordance with the sanctions regime. The disclosure extends to Mr Tracey QC’s memorandum of advice dated 22 September 2005 and Professor Wippman’s advice dated 27 September 2005.
  12. At the meeting with the Minister for Foreign Affairs, Lindberg, Stewart and other representatives of AWB were providing AWB’s answer to the IIC’s draft findings, as communicated to AWB in the IIC’s letter of 26 September 2005. The minute shows that AWB’s representatives were very concerned to explain AWB’s claims of innocence and to secure the Government’s ongoing support. Lindberg told the meeting that the IIC had ignored AWB’s explanations and that the so-called evidence relied on by the IIC did not support its factual findings. In support of these contentions, Lindberg asserted that AWB had legal advice confirming that AWB had not acted in contravention of the sanctions regime. I infer that AWB made a conscious and voluntary decision to deploy this legal advice at the meeting with the Minister so as to secure the ongoing support of the Australian Government. In doing so, it assumed the risk of any consequential waiver of legal professional privilege.
  13. In my opinion, Blakes’ presentation to AWB’s board on 25 May 2004 constituted legal advice for the purposes of the doctrine of legal professional privilege. AWB withdrew its claim of privilege and produced the complete presentation to the Commissioner in April this year. The presentation not only discloses the substance of the legal advice from Blakes, but also some of its detail and foundations. In my opinion, one consequence of this disclosure is that AWB has waived privilege over any other legal advice that it obtained prior to 25 May 2004 in relation to the same subject matters or the same issues as Blakes addressed in its presentation.
  14. AWB contends that Lindberg’s evidence to the Commission on 17 January 2006 did not disclose the gist or conclusion of any legal advice. I disagree. In my opinion, it disclosed the gist or substance of legal advice that AWB had previously obtained as to whether AWB had engaged in conduct in breach of the United Nations’ sanctions and whether AWB had paid inland transportation fees to Alia as a conduit for the payment of money to the Iraqi regime. In the course of his evidence, Lindberg went out of his way to assert that the legal review that Cooper had instituted, assisted by external legal advisers, had reported periodically and did not find any evidence to substantiate the allegations that AWB had made payments in breach of the sanctions. In one instance at least, Lindberg’s assertions to this effect were not directly responsive to the question asked of him by counsel assisting the Commission. Lindberg gave these answers in the presence of counsel for AWB without any objection being raised on grounds of legal professional privilege. I am satisfied that, by means of this evidence, AWB voluntarily deployed the legal advice that it had obtained prior to 17 January 2006. I infer that it did so because it considered it was in its interests for it to be publicly known that AWB had conducted an extensive legal review which had found no evidence of any wrongdoing.
  15. In his evidence, Lindberg specifically referred to a series of periodical reports from those undertaking the legal review: ‘there were a number of reports, and the findings of those reports are recorded in the minutes and the basis of those findings has been communicated in letters that have been sent to the government and elsewhere’. I find that in his evidence to the Commission Lindberg was referring to the combined effect of all of the legal advice that AWB received during the course of the internal review as periodical reports were made to the boards of AWB and AWBI. It follows, in my view, that Lindberg’s evidence has the consequence that AWB has waived privilege over any legal advice that it obtained in the course of the review that goes to the same subject matters, or relates to the same issues, as the legal advice that Lindberg described in the course of his evidence.
  16. In relation to Mr Tracey QC’s advices, AWB produced his written advices of 8 June 2004, 31 March 2005 and 12 August 2005 to the Commission early in April 2006. In my view, the consequence of this production is that AWB must be taken to have waived legal professional privilege in any other legal advices that it obtained prior to Mr Tracey QC’s last advice of 12 August 2005 in relation to the same subjects or issues. As already mentioned, I also consider that, quite separately, AWB has waived privilege over the advice it obtained from Mr Tracey QC on 22 September 2005 in relation to Resolution 661.
  17. As a result of the Project Water investigations, the directors of AWB obtained legal advice from Cooper at the board meeting on 14 December 2004 that the Tigris transaction complied with all necessary laws and involved no breaches of law. A handwritten note of that advice has been produced to the Commission. AWB was entitled to claim that this note was protected from production to the Commission by legal professional privilege. It did not claim privilege. I infer that it did not do so because it wanted it to be known publicly that AWB had advice as of 14 December 2004 to the effect that the Tigris transaction complied with all necessary laws and involved no breaches by AWB. Having disclosed the gist or substance of its legal advice in this manner, it would be inconsistent to allow AWB to maintain confidentiality and privilege in any other legal advices that AWB obtained prior to 14 December 2004 dealing with the same subject matter or the same issues.
  18. The advice that Cooper gave to AWB’s board on 14 December 2004 related specifically to the Tigris transaction. However, I consider that the other disclosures that I have already discussed were expressed in such broad terms that they encompassed any advices concerning the Tigris transaction and/or the iron filings claim. As a result, I consider that there has been a waiver of other advices about the Tigris transaction, such as Mr Tracey QC’s memorandum of 26 October 2004 (document 353A).
  19. The cumulative effect of AWB’s disclosures is that, down to 17 January 2006 when Lindberg gave evidence to the Commission, AWB was openly claiming that its legal advice showed that there was no evidence that it had engaged in any wrongdoing in connection with its supply of wheat to Iraq under the OFF Programme, including wrongdoing of the kind described at [180] above. I find that AWB made these claims to advance its commercial interests. AWB’s conduct is inconsistent with the maintenance of confidentiality in any advices dealing with the same subjects or issues.
  20. In addition, Lindberg, Cooper and Scales gave evidence to the Commission that AWB obtained legal advice that the proceeds of the inflated prices in contracts A1670 and A1680 should be disbursed to Tigris to the extent of approximately US$7 million. That evidence was given in the presence of AWB’s legal representatives without any objection being raised on grounds of legal professional privilege. Again, I infer that AWB was content for it to be publicly known that it had obtained that legal advice. Having disclosed the gist or substance of that advice, AWB is bound to disclose any other legal advices it obtained in relation to the same subject or same issue.
  21. AWB’s revised list of privileged documents contains several advices relating to the Tigris payment. They include documents 337 and 385. Documents 1088, 1089, 1092, 1093 and 1094 record the substance of those advices in minutes of meetings held by the AWB and AWBI boards in December 2004 and February 2005 and the chairman’s running sheets for the February 2005 meetings. The evidence which Lindberg, Cooper and Scales gave in public before the Commission is inconsistent with AWB’s attempt to maintain privilege in these documents.
  22. One question which remains to be dealt with is whether the scope of the waiver that must, in my view, be imputed to AWB is to be confined to any other legal advice that AWB obtained prior to the date of the relevant disclosures that addressed the same subject matters or issues as the advice that AWB voluntarily disclosed. In my opinion, the waiver is not so confined. It extends to the documents and information which were taken into account in formulating, or which otherwise underpinned or influenced, the legal advice that AWB has chosen to disclose.
  23. The Commonwealth argued that AWB’s disclosures are broad enough to encompass any legal advice which AWB obtained, and any documents which AWB’s lawyers reviewed or created, in the course of the Project Rose and Project Water investigations. The difficulty with this way of approaching the boundaries of the waiver of associated material is that the terms ‘Project Rose’ and ‘Project Water’ have an indefinite and imprecise ambit.
  24. According to the authorities discussed above, the limits of any waiver of associated material depend upon the nature of the advice that has been disclosed, what was represented by means of the disclosure, and the character of the transaction that gave rise to the disclosed legal advice. Regard must also be had to the way in which AWB’s legal advice was described in the various disclosures. Essentially, by means of the disclosures, AWB was asserting that a detailed legal review had been undertaken, and that it had concluded that there was no evidence of any wrongdoing or other improper conduct by AWB in connection with its sale of wheat to Iraq under the OFF Programme. In my opinion, the nature and character of this disclosure is inconsistent with the maintenance of confidentiality in those documents which were taken into account by AWB’s legal advisers in arriving at the advice they gave. To adapt the language used by McClellan CJ at Common Law in Thomas at [17] and [20], AWB’s disclosures of its legal advice effect a waiver of privilege in the documents which were reviewed for the purposes of that advice or which influenced its content. Furthermore, AWB emphasised the breadth of its internal review in its various disclosures. In my view, AWB thereby waived privilege in documents which define the scope of the review or which reveal what investigations were in fact undertaken in the course of the review.
  25. Much the same answer follows if one asks what was the legal exercise or transaction that gave rise to the disclosed legal advice: see Factortame at 598-599; and Fulham at 604 [11] and 607 [18]. Having regard to the form of the legal advice disclosed by AWB, the relevant legal exercise or transaction encompassed a review of original documents and witness interviews, as well as summaries, chronologies or other analytical documents prepared by the lawyers, with a view to determining whether there was any improper or wrongful conduct by AWB. Material of this kind underpinned or influenced the legal advice which AWB has chosen to disclose, and it is not severable from that advice.
  26. There is a certain symmetry in defining the boundaries of the waiver of associated material in this way. Documents brought into existence in the course of a lawyer’s factual investigation are, prima facie, capable of attracting legal professional privilege where the investigation is being undertaken for the dominant purpose of providing legal advice. If the client voluntarily discloses the gist or substance of the legal advice that is founded upon such investigations, the rationale for according privilege to the investigative material will have disappeared.
  27. While I would go further, the approach that I have described is not unlike the approach that AWB has already taken in connection with the production to the Commission of Mr Tracey QC’s memoranda of advice and instructions. In the case of Mr Tracey QC’s oral advice of 25 May 2004 and his confirmatory memorandum of 12 August 2005, AWB determined, correctly in my view, that the underlying documents supplied to Mr Tracey QC must also be produced. AWB considered that the form of Mr Tracey QC’s advice (ie there was no evidence of wrongdoing) meant that it was impossible to separate his legal advice from the copy documents that were supplied to him as part of his instructions.
  28. The evidence before me does not reveal whether AWB adopted the same approach to Mr Tracey QC’s advice of 31 March 2005. When he was asked to provide this advice, copy documents were supplied to Mr Tracey QC as part of his instructions but there is no evidence, one way or the other, as to whether those copy documents have been produced to the Commission. The substance of Mr Tracey QC’s advice was that nothing in the documents supplied to him as of 31 March 2005 had caused him to vary his earlier advice of 25 May 2004. This advice cannot be separated from the documents that were supplied to him and, accordingly, AWB’s express waiver of privilege in his advice extends to all of the documents and instructions supplied to him.
  29. The applicable principle can also be illustrated by reference to the advice that Blakes gave in its presentation of 25 May 2004. The advice that there was no evidence of any wrongdoing by AWB that involved a breach of the United Nations’ sanctions was explicitly founded upon a review of a large number of documents and interviews of AWB personnel. Having regard to the form of its advice, it is impossible to separate Blakes’ advice from the underlying documentation and interviews. However, the witness interviews and other materials that Blakes relied upon to formulate its advice have not been produced to the Commission and are still the subject of claims for legal professional privilege. In my opinion, those claims of privilege are not maintainable; privilege has been waived by (inter alia) the production of Blakes’ advice. The same approach must be adopted to any advices that Blakes provided after 25 May 2004 on the question whether any evidence had emerged of any wrongdoing or improper conduct on the part of AWB.
  30. Another question which remains to be dealt with is the extent of any waiver that arises from AWB’s production to the Commission of the instructions to Sir Anthony Mason. In its particulars setting forth its objections to AWB’s privilege claims, the Commonwealth contended that these disclosures had brought about a waiver of legal professional privilege in relation to Project Rose. It tendered the instructions which ABL provided to Sir Anthony Mason on 16 September and 20 October 2005 and the expert opinion which Sir Anthony Mason provided dated 24 October 2005. However, the Commonwealth did not direct any submissions to this aspect of its waiver case, either orally or in its written submissions. Nor did AWB address any oral or written submissions to the consequences which flowed from its production to the Commission of the instructions to, and the advice obtained from, Sir Anthony Mason.
  31. It must be borne in mind that AWB is seeking a declaration that all of the documents set forth in its revised list of privileged documents are the subject of legal professional privilege. These documents include documents by which AWB obtained legal advice both in Australia and in the United States concerning the applicability of Resolution 661. The instructions to Sir Anthony Mason summarised the gist or substance of the very same legal advice. In these circumstances, I have concluded that the Court must take account of the evidence that has been placed before it. By disclosing the instructions given to Sir Anthony Mason, AWB has in my opinion disclosed the substance of legal advice it had obtained, as at 20 October 2005, both in Australia and in the United States, as to the applicability of Resolution 661. This disclosure encompasses Mr Tracey QC’s memorandum of 22 September 2005 and Professor Wippman’s advice of 27 September 2005.
  32. Thus far, I have identified the principles which define the boundaries of the waiver that is to be imputed to AWB, including the boundaries of any waiver of associated material. The remaining task in disposing of the waiver arguments is to determine precisely what documents fall within these boundaries. I have carried out that task by inspecting the documents over which claims of privilege have been made, reviewing the evidence concerning each document, and applying the principles identified above.
  33. As a result, I have determined that AWB has waived any legal professional privilege that would otherwise attach to the documents as listed under the heading ‘Conclusions’ below.

THE IRON FILINGS CLAIM

  1. Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. This principle is often referred to as the ‘fraud exception’ to legal professional privilege, but this does not capture its full reach: Attorney-General (NT) v Kearney [1985] HCA 60; (1985) 158 CLR 500 (‘Kearney’) at 515; Propend at 546; Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 (‘Clements’) at 521-522 [30].
  2. The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J’s review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a ‘crime or fraud’: R v Cox and Railton (1884) 14 QBD 153 (‘R v Cox’) at 165; a ‘criminal or unlawful proceeding’: Bullivant v Attorney-General (Vic) [1901] AC 196 (‘Bullivant’) at 201; ‘any unlawful or wicked act’: Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and ‘all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances’: Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney, the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a ‘deliberate abuse of statutory power’ to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that ‘legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.’ Some authorities have expressed the principle as applicable to prevent a ‘fraud on justice’ in a broad sense. The concept of a ‘fraud on justice’ was adopted by Lander J in Gartner v Carter [2004] FCA 258 (‘Gartner v Carter’) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140].
  3. The principle extends to ‘trickery’ and ‘shams’. A ‘sham’ refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (‘Beazley’). The recent case of Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors’ interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J’s decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (‘Barclays Bank’), his Honour stated at [95]:
is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the “restructure” of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.’
  1. Mansfield J drew a distinction at [96]-[100] between communications to obtain advice in relation to what, if anything, could lawfully be done to improve the prospects of being repaid or of obtaining the interest to which the client was entitled (which were privileged), and communications which have the effect of concealing the true nature of a transaction and which enable a client to present a picture which is not true (which were not privileged).
  2. Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees [1980] HCA 26; (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis & Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218].
  3. It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that ‘[t]he privilege takes flight if the relationship between lawyer and client is abused’: Clark v United States (1933) 289 US 1 at 15; see also Kearney at 514 and 524.
  4. In Barclays Bank, communications between the client and his lawyer in relation to the setting up of transactions at an undervalue so as to prejudice the bank were held to be ‘sufficiently iniquitous for public policy’ to require those communications to be discoverable. Schiemann LJ (with whom Aldous and Butler-Sloss LJJ agreed) stated at 524:
that view be correct, then it matters not whether either the client or the solicitor shared that view. They may well have thought that the transactions would not fall to be set aside ... either because they thought that the transactions were not at an undervalue or because they thought that the court would not find that the purpose of the transactions was to prejudice the bank. But if this is what they thought then there is a strong prima facie case that they were wrong. Public policy does not require the communications of those who misapprehend the law to be privileged in circumstances where no privilege attaches to those who correctly understand the situation.’
  1. For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of ‘reasonable grounds for believing’ that the relevant communication was for an improper purpose. The requirement has also been described as one of a ‘prima facie case’: Butler v Board of Trade [1971] 1 Ch 680 (‘Butler’) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O’Rourke v Darbishire [1920] AC 581 at 604, namely that ‘there must be something to give colour to the charge’; ‘the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact’. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J.
  2. It is not necessary to prove an improper purpose on the balance of probabilities. The ‘prima facie’ test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler; Propend; Beazley. It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. In Butler, Goff J found at 687 that a letter written by the plaintiff’s lawyer which volunteered a warning that the plaintiff may incur serious consequences if he did not take care was not shown to be ‘in preparation for or in furtherance of or as part of any criminal designs on the part of the plaintiff’: see also Zemanek v Commonwealth Bank of Australia (unreported, Federal Court, Hill J, 2 October 1997).
  3. In Propend, the High Court considered whether a charge of improper purpose must be based on evidence that is admissible in the proceeding. The only evidence of alleged illegality before the trial judge in Propend was the sworn information which supported the issue of a search warrant for the relevant documents. The Court held that, while the sworn information was admissible to establish the basis upon which the warrant was issued, it was not admissible to show that the copy documents were not privileged: see at 514 per Brennan CJ, 557 per McHugh J, 576 per Gummow J, 547 per Gaudron J, and 593 per Kirby J.
  4. The iron filings claim refers to a claim by GBI for a rebate of US$2,016,133.00 on account of the fact that earlier shipments of wheat by AWB to GBI had been contaminated by iron filings. Lindberg agreed to pay this sum to GBI in settlement of the iron filings claim in about October 2002 during the course of a visit to Bagdad. An email dated 7 November 2002 from Chris Whitwell of AWB (‘Whitwell’) to Lindberg and others reporting on the trip to Iraq in October 2002 stated that the responsible Iraqi Minister had asked for repayment of the iron filings rebate through the ‘inland transport mechanism’. The same email referred to the fact that the Iraqi Minister was seeking cabinet approval for repayment of the Tigris debt.
  5. At the outset of this case, the Commonwealth contended that any legal advice that AWB obtained in connection with the Tigris transaction was waived by virtue of AWB’s production to the Commission of a partly masked memorandum of 7 February 2003 dealing with the subject of the iron filings payment and Tigris petroleum fee. On the first day of the hearing, AWB announced that it was no longer seeking a declaration of privilege in respect of documents connected with the Tigris transaction which the Commonwealth sought to challenge on the basis of the fraud exception. Subsequently, AWB made it clear that this concession did not extend to six documents relating to the iron filings rebate payment.
  6. During the course of the hearing in this Court, AWB produced an unmasked copy of the memorandum of 7 February 2003 and provided it to the Commonwealth. The Commonwealth tendered the memorandum as an exhibit in this proceeding, without any objection from AWB. The memorandum contains a fairly full description of the way in which AWB planned to pay the iron filings claim to GBI.
  7. The memorandum, which was sent by Whitwell to Messrs Geary and Long, with copies to Scales, Johnson, Hogan, Johnstone, Cooper, Lyons, Hockey and Thomas, states:
AND CONFIDENTIAL
memo is in respect to refunding the Grain Board of Iraq the quality rebate of approx USD 2,016,133 through the inland transport payments for the new contract as requested by the Minister of Trade, Iraq. In addition, for the record IS & M has negotiated (through an uplift in price] the recovery of a USD 8.375 million outstanding debt to Tigris by IGB through this contract. AWB will repay this debt back to Tigris less an agreed recovery fee of USD 500 K on a pro rata basis as tonnage is shipped.Overviewled by Andrew Lindberg (August 2002) to Baghdad agreed to settle the contamination of the ‘Iron Filings’ vessels by paying them USD 6 pmt for each vessel total = USD 2,016,133being approached by Tigris Petroleum AWB and IGB have agreed to allow the new contract to be the conduit for a repayment of USD 8,375,000 owed to Tigris by IGB for a cargo of wheat shipped in 1996. IGB have agreed to raising the contract price by the debt amount and when payments are made under the Letter of Credit AWB will pay Tigris its debt less AWBs recovery fee.have suggested the following during our last two visits.
in discussion with the Minister of Trade he has continually, insisted on repayment directly as an addition to the inland transport and said that this was his understanding of the agreement with Andrew Lindberg - Michael Long was present and confirms that this was discussed. Now that the new contract has been concluded ISM need a sign off to organise this payment when shipments start.Issues
relevant UN Security Council Resolution is 661 (1990). This resolution provides at clause 4:States shall not make available to the Government of Iraq or to any commercial, industrial or public utility undertaking in Iraq any funds or any other financial or economic resources and shall prevent their nationals and any persons within their territories from removing from their territories or otherwise making available to that Government or to any such undertaking any such funds or resources and from remitting any other funds to persons or bodies within Iraq.... except payments exclusively for strictly medical or humanitarian purposes and, in humanitarian circumstances, foodstuffs.”summary, this means that the Government of the Commonwealth of Australia would be obliged to prevent AWB Limited from making any remittance of funds to the IGB.Legal opinion in this regard is set out below.does not mean, however, that a payment might not be able to be made which will comply with the terms of the UN Resolutions. As a minimum, if AWB management determines to make the payment, then it should be made in the following circumstances:The payment is made in installments over time and coincides with payments for future shipments of wheat (ie not a lump sum payment);The payments preferably be made to a company other than the IGB and in a jurisdiction other than Iraq; andThe payments be recorded as being made as a part of a settlement reached between AWB and IGB, the terms of which contemplated that IGB would agree not to take any action against AWB for the alleged contamination of the 8 vessels in 2002 with iron filings AND would agree to enter into contracts for the purchase of Australian bulk wheat in the future in exchange for a renegotiation of the price on the 8 vessels.we ensure that the above requirements are met, then Legal consider it will be at least arguable that we are not ‘making funds or financial resources available to the Iraqi Government’. Instead, we are repaying part of the contract price for the 8 vessels following a re-negotiation of the sale price due to a downgrading of the grain (which potentially contained iron filings).addition to the above the UN Security Council resolutions also require (resolution 986 (1995) clause 8) that the cost of food exports to Iraq must be met by draw down from the UN “escrow account”. Furthermore draw down from the escrow account is only allowable under strict conditions. Those conditions include, at clause 8(a)(iii) that the goods to which payment is referable shall have arrived in Iraq. In this case, the goods have already arrived in Iraq and HAVE been paid for in full. However, the Resolutions are SILENT on the procedure for any repayment of part of the price in circumstances where there has been a quality complaint (and a subsequent renegotiation of price).may therefore give us more scope to make the repayment to IGB.if we make payment as outlined above, there is still a risk that the Australian Government and/or the United Nations will take a contrary view on the interpretation of the above mentioned resolutions and declare that AWB has breached the terms of those resolutions by making the payment. This is a commercial and political issue, which AWB's management will need to consider.
Affairs also expressed concern that this would not be well received by the UN OIP office and that there was a reasonable chance of them finding out. IS & M on the other hand do not want them involved and feel confident that this issue could be handled without the need for the OIP to be consulted. It has been articulated to us and we have circumstantial evidence that other participants in the OIP program (Russian and Pakistani companies) have had to sort out quality problems in a similar way and it is unlikely either their national governments or the OIP were consulted
Actions
IS & M have received a number of different opinions from different areas of AWB and an informal opinion from DFAT we still feel this issue is a grey area with no prescriptive answers. Based on the opinions we do have and the commercial circumstances surrounding this issue IS & M recommend and seek approval for the following:

  1. The evidence before me establishes to the requisite prima facie standard that the price in contracts A1670 and A1680 was inflated to cover both the amount of the iron filings claim and the repayment by GBI of the debt which it owed to Tigris. A surcharge of US$8.375 pmt was added to each contract in respect of the Tigris debt, as shown by an email from Nigel Edmonds-Wilson to Scales and others at AWB dated 12 December 2002. The same email shows that in each contract the inland transportation fee was set at US$51.15 pmt. At the Commission, Mr Geary of AWB gave evidence that the prices in these two contracts were inflated to cover a component for the Tigris debt and a component for the US$2 million iron filings rebate. He also said that the United Nations was not advised at any stage that the prices for wheat in these two contracts had been inflated in this way so as to cover the Tigris debt and the iron filings claim. To adopt the words of Viscount Finlay in O’Rourke, the evidence gives ample ‘colour to the charge’ that the prices in these two contracts were falsely misrepresented.
  2. The evidence shows that the prices in the two wheat contracts were inflated as a means of extracting money from the United Nations’ escrow account. Having regard to the terms of the memorandum of 7 February 2003, there are reasonable grounds for believing that, having extracted approximately US$2 million from the escrow account to meet the iron filings claim, AWB planned to pay that money in instalments to GBI via the mechanism of inland transportation fees. The material before me, including Whitwell’s email of 7 November 2002 and his memorandum of 7 February 2003, indicates clearly that AWB knew that paying inland transportation fees to Alia was a means of making payments to the Iraqi Government. This plan was concealed from the United Nations.
  3. The planned payments of the iron filings claim were never carried into effect because the invasion of Iraq intervened. Scales gave evidence to the Commission that the iron filings money has never been paid and remains in AWBI’s accounts. However, the fact that the payments were never made to the GBI will not prevent the application of the fraud exception so long as there is sufficient evidence that the communications were in furtherance of, or preparatory to, the commission of the fraud or impropriety in the broad sense described above: see Butler; and Clements at 562 [213].
  4. In my view, the evidence establishes a more than adequate prima facie case that AWB knowingly and deliberately disguised the true nature of the prices in contracts A1670 and A1680. If it be relevant, I also consider that the evidence establishes the foregoing matters on the balance of probabilities and to a level of satisfaction commensurate with the seriousness of the allegation: see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362 per Dixon J. No question arises here of evidence which would not be admissible in a final hearing: cf Propend.
  5. AWB argued that there was no evidence that the transaction furthered any particular fraud, iniquity or illegality. It submitted that it is common ground that the United Nations’ resolutions were not in terms incorporated into Australian law. AWB submitted that, consequently, the fraud exception is not available to take the documents out of the operation of the doctrine of legal professional privilege. This narrow approach is at odds with the authorities that stress the wide range of fraudulent or iniquitous activities that fall within the principle.
  6. I have inspected the six documents that were said to relate to the iron filings claim. My inspection of AWB’s documents revealed a further four documents that fall within this category and are still the subject of a privilege claim. I am satisfied that these 10 documents are not privileged. The documents were, prima facie, brought into existence in furtherance of an improper and dishonest purpose, viz inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations’ escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI. Prima facie, the evidence establishes that the transaction was deliberately and dishonestly structured by AWB so as to misrepresent the true nature and purpose of the trucking fees and to work a trickery on the United Nations. It would be contrary to public policy for the privilege to enure in communications of this kind.
  7. The 10 documents in question are listed below in my conclusions.
  8. There is an alternative basis for rejecting AWB’s claim for privilege over the 10 iron filings documents. AWB’s disclosure of the memorandum of 7 February 2003 and its tender by the Commonwealth as an exhibit in these proceedings, without any objection or claim to confidentiality by AWB, effects a waiver over the subject matter of the legal advice set out in the memorandum. My inspection of the 10 documents relating to the iron filings claim confirms my view that those documents relate to the subjects and issues that are canvassed in the memorandum of 7 February 2003. If, contrary to my view, any privilege subsisted in any of the documents, it has been waived by AWB.
  9. When the Commonwealth tendered the unmasked version of the memorandum of 7 February 2003, I asked Mr Judd why AWB’s production of that document did not waive any privilege that subsisted in documents relating to the iron filings claim. Mr Judd’s response was that the Commonwealth did not put its case on that basis. I do not think that is entirely correct. In the particulars of its case, the Commonwealth contended that AWB’s disclosure of the masked version of the memorandum of 7 February 2003 worked a waiver of any privilege in documents relating to Project Water and the Tigris transaction. The Commonwealth has never varied from the position that the iron filings claim was an integral part of the Tigris transaction. However, the Commonwealth did not in its closing address make any submission that privilege over the six documents had been waived by the production of the unmasked memorandum. To that extent, Mr Judd’s response was correct.
  10. Despite these matters, I have concluded that the Court cannot ignore the effect of the evidence before it, especially as AWB is seeking a declaration that the 10 documents are privileged.

CONCLUSIONS

  1. It is not feasible in these reasons for judgment, when so many documents are at issue, to set out separate reasons for the decision I have reached on each particular document. I have reached the conclusions set forth hereunder after inspecting all of the documents in AWB’s revised list of privileged documents and by applying the legal principles and factual findings identified above.
  2. AWB has not made out its claim for privilege in respect of the following documents: 229, 245-247, 279, 280, 362B, 469A, 495, 542, 565, 586, 675, 784, 867, 872, 890AN, 1090, 1091, 1095, 1096, 1098, 1099, 1118 and 1262. These documents fall into the following categories:

If, contrary to my view, privilege does attach to any of these documents, there has been a waiver of privilege in respect of all of them, other than documents 362B, 784, 872 and 1118. The waived documents are included in the list at [237] below.

  1. In addition, there are 10 documents relating to the iron filings claims. They are as follows: 30, 31, 32, 32A, 33, 41, 594, 595, 595A and 596. Privilege does not attach to these documents as they were brought into existence in furtherance of a fraud or other impropriety. Alternatively, any privilege has been waived by AWB. These documents are included in the list at [237] below.
  2. AWB has waived any legal professional privilege that subsisted in the following documents: 12, 301-33, 41, 56, 77-79, 81-85, 100-106, 110-117, 120-124, 126, 127, 129-132, 136, 137, 139, 140, 161, 213, 229, 235, 240, 241, 245-247, 250, 252, 253, 257-259, 263, 265-268, 271, 279, 280, 283, 284, 290, 292, 294-301, 308-310, 313, 326, 327, 330-333, 335A-342, 344, 348, 353A, 355-357, 359, 361, 362A, 365, 375, 377-380, 385, 386, 394, 422, 423, 424, 425, 432, 443, 445-449, 455, 461, 463, 465, 469A, 486, 487, 495, 507, 508, 513, 523, 524, 533, 534, 541-544, 547, 548, 553-555, 557, 563, 565, 568-579, 582-590, 592, 594-596, 599, 601-603, 675, 681, 681A, 689A, 689B, 699-704D, 704J-704P, 704T, 704X, 704AA, 704FF, 704KK, 711-715, 721, 722, 725, 729-733, 736-739, 749, 753, 755-757, 762, 771, 788, 794, 798, 815, 817, 820, 823, 824, 837, 840, 847, 867, 890AA, 890AD, 890AE, 890AH, 890AI, 890AJ, 890AK, 890AM, 890AN, 890AP, 890AQ, 1005, 1006, 1009, 1011-1013, 1025, 1026, 1028-1030, 1032, 1033, 1051, 1056, 1059, 1070, 1088-1096, 1098, 1099, 1119- 1121, 1123, 1124, 1144-1152, 1161-1163, 1183-1187, 1221, 1222, 1262 and 1297.
  3. In broad terms, the documents over which privilege has been waived comprise documents falling within the following categories: documents which define the scope of AWB’s internal review or which identify what investigations were carried out; summaries, chronologies and other documents which record or analyse the results of those investigations; witness statements and other notes or records of interviews of AWB personnel; records of meetings and periodical reports concerning the findings of the review; and documents seeking advice, or comprising or recording advice provided to AWB, as to whether AWB or any of its employees engaged in wrongdoing in connection with wheat sales to Iraq under the OFF Programme, including any wrongdoing in connection with the Tigris transaction.
  4. As I have explained, waiver does not turn on whether the documents attracted the description ‘Project Rose’ or ‘Project Water’. On inspection, I determined that numerous documents marked ‘Re: Project Rose’ or the equivalent fall outside the scope of any waiver as they related to distinct matters about which AWB sought or obtained legal advice, such as the powers and jurisdiction of the PSI and IIC investigators, other US legal issues, the memorandum of understanding between the IIC and AWB, representation of AWB employees at IIC hearings, the powers of the Wheat Export Authority, and issues of directors’ and officers’ insurance and corporate governance.
  5. There are a number of documents where, on inspection, I have determined that the document is only capable of attracting privilege as to part (the balance of the claim for privilege not having been proved), but that such privilege has been waived. These documents require some further explanation:
  6. There are also a number of documents which I have determined to be privileged only as to part of the claim made by AWB. After inspecting the documents and applying the principles I have discussed, I have determined that certain parts of the documents are privileged, while privilege in another part or parts of the documents has not been proved or it has been waived. It is necessary to deal with each of these documents:
  7. Document 1297 is a redacted copy of an email from Cooper to Lindberg and Scales, copied to Quennell, dated 16 November 2004. It appears that the redactions mask those parts of the document over which a claim for privilege is made. Prima facie, the document appears to be within the scope of the waiver I have identified and applied in these reasons for judgment. However, I propose to invite further submissions from the parties as to whether document 1297 is in contest and, if so, I will direct that an unredacted version of the document be filed with the Court for its inspection.
  8. As for the remaining documents, AWB has in some instances claimed privilege over the entire document and in other instances it has only claimed privilege over a designated part or parts of the document. AWB has established that legal professional privilege attaches to the following documents to the extent claimed by it: 20, 21, 55, 89-98, 107, 108, 119, 133, 135, 143-146, 150-152, 154-160, 162-190, 194, 196, 197, 199-201, 204-211A, 215, 217-222, 224-228, 230-234, 237-239, 254-256, 260-262, 264, 269, 270, 273-278, 281, 282, 285, 286, 288, 293, 302-306, 311, 315-324, 334, 343, 345-347, 349-353, 354, 358, 362, 368, 374, 381, 382, 384, 387, 388-393, 395, 398-408, 410, 412-414, 416-421, 423A, 426-428, 430, 431, 433-442, 444, 450-454, 456, 457, 459, 460, 462, 464, 465A, 467, 468, 470-473, 475-485, 488, 490-494, 496-502, 504-506, 509, 510, 514, 515, 517-519, 521, 525, 529, 530, 536-540, 549-552, 556, 558-562, 564, 566, 567, 581, 591, 593, 600, 605, 671, 672, 673A, 679, 694, 696A, 704E – 704I, 704Q, 704R, 704U-704W, 704Y, 704Z, 704BB-704EE, 704GG, 704HH, 704JJ, 706-710, 724, 727, 740-745, 747, 748, 751, 752, 754, 758-761, 763-766, 768-770, 772, 773, 775, 777, 779-781, 785, 787, 790, 792, 797, 799-802A, 804, 806-814, 816, 818, 819, 821, 822, 826-831, 835, 849-852, 856, 857, 860, 861, 863, 865, 866, 868-870, 873, 876, 877, 879, 881-883, 885, 887-889, 890AB, 890AC, 890AG, 890AIA, 890AL, 890AR-AZ, 890BA-890BG, 937AJ, 937AP, 942, 947, 948, 950-953, 956-964, 966, 970-992, 994, 995, 997, 998, 1000-1004, 1071, 1073-1081, 1082A, 1083, 1086, 1087, 1112-1113A, 1114-1117, 1118A, 1152A, 1155, 1158-1160, 1190, 1195, 1196, 1200, 1206, 1213-1215, 1218, 1225, 1226, 1229, 1231, 1232, 1234, 1237, 1239, 1240, 1243, 1246-1250, 1252, 1255, 1256, 1260, 1261, 1293 and 1299-1301.

COPY DOCUMENTS

  1. AWB has filed a list of duplicate privileged documents. The list is Exhibit JM5 to the affidavit of John Mitchell sworn 28 July 2002. Each document in the list is a duplicate of an identified document in AWB’s list of privileged documents. The duplicates fill 17 lever arch folders. AWB has sought a declaration that the documents in this list are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege.
  2. At the hearing, neither AWB nor the Commonwealth directed any substantive submissions to the status of these duplicate documents. In its written submissions, AWB referred to the principles enunciated in Propend as to the circumstances in which a copy of an unprivileged document can itself attract legal professional privilege. In those written submissions, AWB contended that the qualification which Brennan CJ expressed in Propend at 512 does not represent the law. The Chief Justice’s qualification was that if the original unprivileged document is not in existence or its location is not disclosed or it is not produced, and if no unprivileged copy or other admissible evidence is available to prove the contents of the original document, then privilege cannot be maintained over the copy. However, AWB did not make any submissions as to how, or why, this qualification might be relevant to its claims.
  3. AWB adopted the position that the status of the duplicate documents depends on my decision as to the status of the corresponding original document. The Commonwealth did not make any submission to the contrary at the hearing, although its written submissions contended that AWB had failed to identify the purpose for which particular duplicates were created, or to establish that they were kept confidential. It would seem a harsh result if AWB were to lose the benefit of privilege in original documents simply because it has not explained or is unable to explain the circumstances in which copies were made. In large organisations and within law firms, it is hardly unexpected that multiple copies of privileged documents will be brought into existence and that, long after the event, it may be difficult to adduce evidence as to the circumstances in which the copies were made.
  4. The submissions of the parties were so cursory that I did not gain any meaningful assistance from them. However, I have reached the following conclusions. Where I have held that specified original documents do not attract legal professional privilege, no case has been made out that duplicates of those documents are entitled to privilege. Where I have held that specified original documents attract legal professional privilege, I have concluded that privilege attaches to the duplicates. The duplicates come from the custody of AWB, and there is nothing to suggest that the duplicates were dealt with, or communicated, in ways that would deny the privilege claim. Furthermore, the material before me does not identify any specific grounds for concluding that the duplicates do not attract privilege.
  5. A number of documents in AWB’s revised list of privileged documents are said to be duplicates of other documents in the list. There is no evidence as to some of those documents (documents 291, 307 and 580) and others have been removed (documents 26 and 1031). Consequently, I have not made any findings about those documents; it is unclear whether they remain in contest. It is necessary to make specific reference to a number of other duplicate documents in the list:

RELIEF

  1. I have determined that specified documents are not the subject of legal professional privilege and that other documents attract legal professional privilege. The Court has power to make declarations to this effect. I propose to give AWB and the Commonwealth an opportunity to make submissions as to the form of any declarations that should be made to give effect to these reasons for judgment.
  2. AWB’s second further amended application also sought declarations relating to the construction and validity of the Amending Act. In addition, AWB sought a declaration that the exercise of powers by the Commissioner under s 6AA(2) of the RCA, while these proceedings are pending before this Court, would constitute a contempt of Court, and injunctions restraining the Commissioner from making a decision under s 6AA(2) of the RCA. No live issues arise concerning these claims for relief: see AWB Ltd v Honourable Terence Rhoderic Hudson Cole (No 2) [2006] FCA 913. Neither AWB nor the Commonwealth put any submissions to me, whether orally or in writing, concerning these claims for relief. It is unnecessary to address them further.
  3. Accordingly, the only orders I propose to make at this stage are as follows:



I certify that the preceding two hundred and fifty-one (251) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.


Associate:

Dated: 18 September 2006

Counsel for the Applicant:
J Judd QC, P Corbett and Dr S McNicol


Solicitor for the Applicant:
Arnold Bloch Leibler


Counsel for the First Respondent:
The First Respondent did not appear


Counsel for the Second Respondent:
I Harrison SC, R Newlinds SC and NJ Beaumont


Solicitor for the Second Respondent:
Australian Government Solicitor


Date of Hearing:
7, 9, 10, 11 August 2006


Date of Judgment:
18 September 2006

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