Citation: R v Seller; R v McCarthy (No 4) [2014] NSWSC 1369
Court: Supreme Court of New South Wales
Date: 6 August 2014
Judge(s): Button J
Background
Two accused were charged by indictment with conspiring to defraud the Australian Taxation Office in connection with tax deduction schemes involving the production of whisky in Scotland. Each accused had previously been compulsorily examined by the Australian Crime Commission (ACC), and each had been compelled to provide documentary material. This compulsorily acquired material was subsequently accessed by a financial analyst (Mr Tang) and an ACC investigator (Ms Simpkin), both of whom then attended conferences with solicitors from the Office of the Commonwealth Director of Public Prosecutions (OCDPP) and privately retained counsel.
During a lengthy pre-trial hearing on notices of motion filed by the two accused, counsel for the accused called upon subpoenas for production of documents created in preparation for those conferences and recording their contents and outcomes. Both the Director of Public Prosecutions (the Director) and the ACC claimed legal professional privilege over those documents. Button J inspected the documents privately under section 133 of the Evidence Act 1995 (NSW) without disclosing them to the accused's counsel.
The accused sought orders prohibiting Mr Tang from giving evidence at trial and prohibiting the currently retained lawyers from appearing, on the basis that those lawyers may have been indirectly exposed to unlawfully supplied compulsorily acquired material through their conferences with Mr Tang and Ms Simpkin.
Legal Issues
- Whether the documents generated in connection with the conferences attracted client legal privilege under sections 118 and 119 of the Evidence Act 1995 (NSW), on the basis that they were made for the dominant purpose of legal advice or litigation preparation
- Whether any alleged unlawful conduct by the ACC in purporting to charge the accused defeated the claim of privilege
- Whether the ACC itself could claim privilege, even if it had acted beyond its powers
- Whether the Director's maintenance of the criminal prosecution, in circumstances where the accused were denied access to the privileged documents, was inconsistent with the claim for privilege under section 122(2) of the Evidence Act, having regard to the prosecution's duty of fairness articulated in Lee v The Queen
Decision
Button J upheld both claims of privilege. Having inspected the documents personally, his Honour concluded they were entirely orthodox conference preparation and attendance records that, on their face, supported the requisite relationships and dominant purposes required under sections 117, 118 and 119 of the Evidence Act. The Director was satisfied to be in a client relationship with both the OCDPP solicitors and the retained barristers, and Mr Tang and Ms Simpkin were third parties conferring with legal advisers for the dominant purpose of preparing for anticipated criminal proceedings against the accused.
On the question of alleged unlawful conduct by the ACC, Button J rejected the argument that the ACC had acted outside its functions under section 7A of the Australian Crime Commission Act 2002 (Cth). The Court found that the Court Attendance Notices filed in the Local Court did not, on the available material, demonstrate unlawful conduct by the ACC that would undermine the privilege claim.
Even if, contrary to his primary finding, the ACC had acted unlawfully, Button J considered this would not automatically defeat privilege. His Honour accepted that Grofam Pty Limited v Australia and New Zealand Banking Group Limited stood as authority for the proposition that an entity should remain entitled to claim privilege even where some illegality is alleged to have occurred on its part.
Finally, the Court rejected the argument that the principles in Lee v The Queen required the Director to either discontinue the prosecution or hand over the privileged documents. Button J accepted that the duty of a prosecutor to ensure a fair trial is an important and non-confined principle, but held that extending it to force disclosure of privileged documents, or compel discontinuance of proceedings, would constitute a very large extension of what the High Court had actually decided in that case.
Orders Made
No orders were made in this decision.
Key Takeaways
- Privilege claims under sections 118 and 119 of the Evidence Act 1995 (NSW) are assessed on the balance of probabilities under section 142, and a court may inspect disputed documents privately under section 133 to make that assessment.
- The relationship between the Commonwealth Director of Public Prosecutions and solicitors of the OCDPP, and counsel briefed by them, can constitute a client-lawyer relationship sufficient to ground client legal privilege.
- Alleged unlawful conduct by a claimant body does not automatically defeat a privilege claim; the Supreme Court confirmed that Grofam supports entitlement to claim privilege even where illegality is asserted.
- The prosecutorial duty of fairness articulated by the High Court in Lee v The Queen does not, without more, require a prosecutor to disclose privileged documents or abandon proceedings merely because an accused contends their trial preparation may have been infected by improperly obtained material.
- Where third parties such as expert analysts or investigators attend conferences with retained legal advisers for the dominant purpose of preparing for anticipated litigation, the communications connected with those conferences may attract litigation privilege under section 119.
Legislation and Cases Referenced
Legislation
- Evidence Act 1995 (NSW), ss 117, 118, 119, 122, 133, 142
- Australian Crime Commission Act 2002 (Cth), ss 7A, 59
- Director of Public Prosecutions Act 1983 (Cth), s 6
- Director of Public Prosecutions Regulations 1984, reg 3
- Crimes Act 1914 (Cth), s 13
Cases
- Lee v The Queen [2014] HCA 20; 88 ALJR 656
- Grofam Pty Limited and Others v Australia and New Zealand Banking Group Limited and Others (1993) 45 FCR 445
- Mann v Carnell [1999] HCA 66; 201 CLR 1
- R v Petroulias (No 22) [2007] NSWSC 692
- R v Bunting [2002] SASC 412; 136 A Crim 539
- Attorney-General for the Northern Territory v Maurice and Others (1986) 161 CLR 475
- DSE (Holdings) v Intertan Inc [2003] FCA 384; 127 FCR 499
- Telstra Corporation Ltd and Another v BT Australasia Pty Ltd and Another (1998) 85 FCR 152