Australian High Court Finds Legal Professional Privilege A Shield Not A Sword

In the world’s largest document leak, the “Paradise Papers” – comprising 13+ million files from Appleby, an offshore law firm – were leaked by an unknown source, exposing the complex inner workings of offshore tax havens and the details of hundreds of individuals and companies utilising these tax havens. The Australian Commissioner for tax obtained these documents, leading to the investigation of Glencore’s tax affairs. Glencore demanded return of the documents and asked the Commissioner to provide undertakings that they would not refer or rely upon any of the documents obtained, both of which the Commissioner refused. Glencore asserted that the documents were protected by legal professional privilege, asserting that the common law right gave rise to an actionable legal right which could be relied upon to seek injunctive relief preventing the Commissioner from using privileged material in his possession.

Glencore argued that:

  • legal professional privilege has been recognised by decisions of the High Court as a fundamental common law right;
  • an injunction in equity’s auxiliary jurisdiction requires that a plaintiff demonstrate an actionable legal right;
  • Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 is not to be understood as confining the scope of the privilege, and that no decision of the Court has held that the privilege operates only as an immunity;
  • the scope of the privilege should reflect the policy of the law upon which it is based. The rationale for legal professional privilege is the furtherance of the administration of justice through the fostering of trust and candour in the relationship between lawyer and client. It should be understood to have its basis in the rule of law. The recognition of an actionable right to restrain the use of and recover privileged documents advances this policy; and
  • the provision of a remedy may also be seen as necessary because it is unsound for the privilege to be recognised as a fundamental right but for confidentiality to provide the only basis for its enforcement.

See Glencore International AG & Ors v Commissioner of Taxation of the Commonwealth of Australia & Ors [2019] HCA 26.

The High Court referred to (without disapproval), two cases where the use of confidential information was restrained even though it was publicly available. Despite this, the High Court unanimously held that legal professional privilege is not, in and of itself, a cause of action providing a springboard to attract injunctive relief; instead, such privilege provides immunity from the exercise of power that would otherwise compel the disclosure of privileged documents. The High Court decided that the policy underpinning legal professional privilege did not require the creation of a new cause of action.

See the following reviews of the decision:

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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