Citation: Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Director of Public Prosecutions (Cth) [2020] NSWCCA 48
Court: NSW Court of Criminal Appeal
Date: 25 March 2020
Judges: Bathurst CJ; Fullerton J; Beech-Jones J
Background
The accused faced trial on two charges under the Criminal Code Act 1995 (Cth). The charges arose from alleged false statements made during compulsory tax examinations conducted by the Australian Taxation Office under s 264 of the Income Tax Assessment Act 1936 (Cth). The ATO subsequently shared transcripts of those examinations with the AFP and the CDPP as part of a referral for criminal investigation.
Before trial, the accused applied to permanently stay the proceedings on the basis that the dissemination of his compulsory examination transcripts was unlawful. To support that stay application, he issued subpoenas to the ATO, the AFP, and the CDPP seeking production of documents. Each agency claimed legal professional privilege (and its equivalents under the Evidence Act 1995 (NSW)) over the responsive documents.
At first instance, Adamson J rejected the accused's argument that privilege was defeated under the crime-fraud exception in s 125(1) of the Evidence Act. However, her Honour found that the CDPP's conduct in prosecuting the matter while withholding privileged documents potentially subject to prosecutorial disclosure obligations gave rise to an implied waiver of privilege over certain documents. The CDPP, the Tax Commissioner, and the AFP Commissioner all appealed that waiver finding. The accused separately appealed on three grounds, challenging the crime-fraud ruling, the independence analysis supporting one privilege claim, and the scope of partial waiver in respect of one document.
Legal Issues
- Whether disclosures of compulsory examination transcripts by the ATO to the AFP and CDPP were authorised by s 16(2A) of the ITAA (the performance-of-duties exception to the secrecy provision), such that no offence was committed and the crime-fraud exception in s 125(1) of the Evidence Act could not apply.
- Whether s 3E of the Taxation Administration Act 1953 (Cth) limited the operation of s 16(2A) so as to render those disclosures unlawful.
- Whether a document recording a communication between the CDPP and a member of her own office could attract legal professional privilege, given the question of whether the relationship was sufficiently "independent."
- Whether the CDPP's continuation of the prosecution, combined with its opposition to the stay application, constituted conduct inconsistent with maintaining privilege over documents within its prosecutorial duty of disclosure, so as to give rise to implied (imputed) waiver.
- Whether an implied waiver by the CDPP could also operate to defeat privilege held separately by the Tax Commissioner and the AFP Commissioner.
- The precise scope of any waiver in relation to a particular legal advice document (the "Shouldice advice").
Decision
Crime-fraud exception (s 125(1)): The Court of Criminal Appeal upheld the primary judge's rejection of this ground. The disclosures of examination transcripts to the AFP and CDPP were authorised by s 16(2A) of the ITAA, which permits disclosure in the performance of an officer's duties. The Court rejected the argument that s 3E of the Taxation Administration Act confined or displaced the operation of s 16(2A). Because the disclosures were lawful, no offence was committed, and the crime-fraud exception had no application.
Independence and privilege: The Court rejected the accused's argument that communications within the CDPP's own office lacked the requisite independence for privilege to attach. The relationship between the CDPP and members of her office was sufficiently distinct to support a valid claim for client legal privilege.
Imputed waiver: This was the central issue on the agencies' appeals. The Court of Criminal Appeal declined to follow the South Australian decision in R v Bunting (2002) 84 SASR 278, which had held that a prosecutor's duty of disclosure could give rise to an implied waiver of privilege. The Court found that the prosecutorial duty of disclosure under Australian law does not require disclosure of privileged material. Accordingly, there was no relevant inconsistency between maintaining privilege and continuing the prosecution, and no implied waiver arose. The waiver findings at first instance were set aside.
The Shouldice advice: The accused's notice of contention succeeded in part. Portions of the advice dealing with legal conclusions and reasoning that had already been disclosed were found to be severable but contextually linked to other parts, such that s 126 of the Evidence Act (which prevents selective reliance on part of a privileged communication) operated to require disclosure of those connected portions. Specific identified parts of the document were to be produced to the accused; the remainder retained its privilege protection.
Orders Made
Appeal by the accused:
- Leave to appeal granted; appeal dismissed.
Appeal by the CDPP:
- Appeal allowed.
- Orders 1, 2, and 3 made on 30 October 2019 set aside.
- Liberty to apply within 21 days for further orders to give effect to the Court's reasons.
Appeal by the Tax Commissioner and the AFP Commissioner:
- Leave to appeal granted (except on ground 2, which was refused).
- Appeal allowed.
- Orders 1, 2, 6, and 8 made on 23 October 2019 set aside.
- Order 8 varied to delete "orders 1 and 3" and substitute "order 3."
- Liberty to apply within 21 days for further orders to give effect to the Court's reasons.
Key Takeaways
- The Court of Criminal Appeal confirmed that disclosures of compulsory ATO examination transcripts to the AFP and CDPP were authorised by s 16(2A) of the ITAA. Section 3E of the Taxation Administration Act did not limit that operation, and the disclosures were therefore lawful.
- A prosecution's continuation, and its opposition to a stay application, does not by itself create an inconsistency with the maintenance of legal professional privilege sufficient to ground an implied waiver, even where the privileged documents may touch on prosecutorial disclosure obligations.
- In declining to follow R v Bunting, the Court held that the prosecutorial duty of disclosure in Australian law does not extend to privileged material, removing a potential mechanism by which continued prosecution could defeat privilege claims.
- Communications between the CDPP and members of her own office can attract client legal privilege where the relationship meets the requisite degree of independence. The mere fact that the parties share an institutional connection does not automatically negate that independence.
- Under s 126 of the Evidence Act, where a party has disclosed part of a privileged communication, a court may require production of other parts of that communication that are necessary for a proper understanding of the disclosed portions.
Legislation and Cases Referenced
Legislation:
- Evidence Act 1995 (NSW), ss 125, 126
- Income Tax Assessment Act 1936 (Cth), ss 16(2), 16(2A), 264
- Taxation Administration Act 1953 (Cth), s 3E
- Criminal Code Act 1995 (Cth), s 135.1(7)
- Criminal Appeal Act 1912 (NSW), ss 5F(2), 5F(3)
- Director of Public Prosecutions Act 1984 (Cth)
- Crimes Act 1914 (Cth)
Cases:
- R v Bunting (2002) 84 SASR 278 (not followed)
- Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
- Attorney-General (NT) v Maurice (1986) 161 CLR 475
- Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1
- Commissioner of Taxation v De Vonk (1995) 61 FCR 564
- Commissioner of Taxation v Tamarama Fresh Juice Australia Ltd (2017) 252 FCR 417
- Gould v Director of Public Prosecutions (Cth) (2018) 333 FLR 352; [2018] NSWCCA 109
- DPP (Cth) v Galloway (2014) 46 VR 809
- Grey v The Queen [2001] HCA 65
- Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR