Legal Professional Privilege

Professional Legal Privilege in Victoria: An Overview and Critical Analysis

Professional legal privilege, often termed ‘lawyer-client privilege’, stands as one of the pillars of the legal profession. At its core, it ensures that communications between a lawyer and client remain confidential, allowing clients to freely and candidly seek legal advice without fear of repercussions. In Victoria, the rules of legal privilege are codified under the Evidence Act 2008. Under Victorian law, a privilege is a right to resist disclosure that is otherwise mandatory rather than a rule of admissibility.

There are four types of privilege that a person can claim:

• Legal professional privilege (‘client privilege’) in s 117-126
• Religious privilege in s 127
• Privilege against self-incrimination in s 128 and s 128A
• Public interest immunity in s 129-131B

The Underpinning Philosophy of Legal Privilege

Legal privilege is founded upon the necessity for trust between lawyers and clients. Without such trust, clients might be reticent to fully disclose their situations, potentially hindering their right to fair representation.

The Betrayal of Privilege: The Lawyer X (Nicola Gobo) Incident

One of the most shocking breaches of this trust in Australian legal history involves Lawyer X, also known as Nicola Gobo. Representing high-profile criminals, including Carl Williams and Tony Mokbel, Gobo covertly shared privileged information with the police in her role as an informant, leading to the arrests and convictions of her own clients. Not only did this egregious breach undermine the integrity of the legal system, but it also posed pressing questions about the limits and exceptions to legal privilege.

The unprecedented Lawyer X case in Victorian history and the subsequent Royal Commission resulted in two convictions (including that of Faruk Orman, who spent more than a decade in prison and Zlate Cvetanovski, who spent 11 years in custody for drug trafficking) being quashed and several appeals affected by Ms Gobbo’s conduct.

The Parameters of Professional Legal Privilege in Victoria: Key Legislative Provisions

Professional legal privilege in Victoria is primarily governed by statutory provisions under the Evidence Act 2008. The basic rule under s 134 provides that evidence that is privileged is not admissible. Further, s 132 of the Act requires the court to inform persons with these rights of their entitlement to make applications and objections.

What are the relevant Legislative provisions of Legal Professional Privilege?

Section 118 – Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a) confidential communication made between the client and a lawyer; or

(b) a confidential communication made by 2 or more lawyers acting for the client; or

(c) the contents of a confidential communication (whether delivered or not) prepared by the client, lawyer or another person—

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

Section 119 – Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—

(a) a confidential communication made between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential communication (whether delivered or not) that was prepared—

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

Section 120 – Unrepresented parties

Evidence is not to be adduced if, on objection by a party who is not represented in the proceeding by a lawyer, the court finds that adducing evidence would result in disclosure of—

(a) a confidential communication between the party and another person; or

(b) the contents of a confidential document (whether delivered or not) that was prepared, either by or at the direction or request of, the party—

for the dominant purpose for preparing for or conducting the proceeding.

What evidence is protected?

Section 117 sets out the definitions of a ‘client’, ‘confidential communication’, ‘confidential document’, ‘lawyer’ and ‘party’.

A ‘client’ includes a lawyer who engages or employs a lawyer. It is not essential that there be a valid contract of retainer between the lawyer and client (Hawksford v Hawksford [2008] NSWSC 31 at [19] per White J)

In respect of ‘confidential communication/document’, the obligation of confidentiality (whether express or implied) had to exist at the time the communication or document was made or prepared (although subsequent circumstances may result in loss of privilege). Confidentiality will not be inferred from a mere failure to give permission to disclose (Drabsch v Switzerland General Insurance Co Ltd [1999] NSWSC 975 at [6] to [8] per Hamilton J).

‘Lawyer’ is a person who is admitted to the legal profession in an Australian jurisdiction or any other jurisdiction. A practising certificate is an important indicator but not conclusive on the issue of whether legal advice was sufficiently independent to constitute legal advice for the purposes of claiming privilege under the Act. Work by a lawyer that does not meet the dominant purpose test will not be covered by the privilege (Commonwealth v Vance (2005) 158 ACTR 47; [2005] ACTCA 35).

In the case Apple v Wily, it was discussed that where there is ‘a relationship of trust and confidence to the lawyer entailing duties of the lawyer to promote the person’s interests, protect the person’s rights and respect the person’s confidences’ it is likely they will have established a lawyer-client relationship.

In NSW v Jackson [2007] NSWSC 279, communication was discussed as being confidential when there is ‘an express or implied obligation not to disclose its contents, whether or not the obligation arises under law’.

‘Communication can extend to an unspoken obligation and an ethical, moral or social obligation.’ Ultimately, it turns on ‘the nature of the relationship in question and the circumstances, including conduct or conversations, surrounding the communications or documents in question’ and ‘the nature of the documents in question and the purpose and context of their communication’ (Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234).

S 118 – Legal advice privilege

Section 18 provides a privilege for confidential communications made for, and confidential documents prepared for, the dominant purpose of a lawyer (or lawyers) providing legal advice to a client and includes:

(a) confidential communications made between a client and a lawyer (or between two or more lawyers acting for a client) (s118(a) and (b)); and

(b) confidential documents prepared by a client, lawyer or third party (for example, a proposed expert witness or an accountant) (s118(c)).

S 119 – Litigation privilege

Section 19 provides a litigation privilege for:

(a) confidential communications between the client and another person, or the client’s lawyer and another person, made for; and

(b) confidential documents prepared for (whether delivered or not), the dominant purpose of providing the client with legal services which relate to an Australian or overseas proceeding (current, pending or anticipated) in which the client is, or might be, a party.

Sections 118 and 119 reflect the common law doctrine of legal professional privilege which is based on the rationale in Baker v Campbell (1958) 153 CLR 52 at 128 per Dawson J that “the proper functioning of our legal system depends upon a freedom of communication between legal advisers and their clients which would not exist if either could be compelled to disclose what passed between them for the purpose of giving or receiving advice…”

Sections 118 and 119 prohibit the adducing of evidence if it would result in the disclosure of confidential communications or documents that were made or prepared for the dominant purpose of providing legal advice to a client (s 118) or providing professional legal services to a client regarding a proceeding in which the client is or may be or was/might have been a party (s 119).

These sections also apply to specified pre-trial disclosure requirements, e.g. the production of documents pursuant to a subpoena or notice to produce  (Matthews v SPI Electricity Pty Ltd & Anor (No 5) [2013] VSC 285 at [23]).

The party claiming the privilege bears the onus. The onus can be met by evidence which allows the court to infer the reasons why a communication was made (Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305 at [29], [31] –[34]).

When is client privilege waived or lost?

Section 121-126 of the Act sets out situations in which client legal privilege can be waived or lost. Section 121 provides that client legal privilege can be lost generally where:

(1) The evidence is relevant to a question concerning the intentions, or competence in law, of a client or party who has died (s 121(1)).

(2) If the evidence were not adduced, the court would be prevented, or could reasonably be expected to be prevented, from enforcing an order (e.g. the location of the child in a recovery order) (s 121(2)).

(3) Where the communication or document ‘affects the right of a person’ (s 121(3)).

Section 122 provides that client legal privilege can be lost by consent or waived. This can be done by:

• Consent of the client or party concerned (s122(1))
• The client acting in a way that is inconsistent with their privilege (s 122(2)), for example:
  • Knowingly and voluntarily disclosing the substance of the evidence to another person (s 122(3)(a))
  • Giving consent, express or implied, to another person to disclose the information (s 112(3)(b))
  • Doing anything that shows they have given up the confidentiality.

Section 122(1) – ‘Consent’

Although s 122(1) refers only to ‘consent’, it has been held to include implied or imputed consent (Perpetual Trustees (WA) v EquuscorpPty Ltd [1999] FCA 925; see also Avanesv Marshall [2006] NSWSC 191 at [30]-[31] per GzellJ).

Section 122(2) – ‘Acted in a way that is inconsistent’

The underlying rationale for this provision is that client legal privilege ‘should not extend beyond what is necessary and…voluntary publication by the client should bring the privilege to an end’. ‘[I]t is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver’ (Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 at [28] per Gleeson CJ, Gaudron, Gummowand CallinanJJ).

‘[W]aiver may be express of implied’ and ‘what brings [it] about 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’ (at [29] of Mann v Carnell)

Section 122(3)(a), (4), (5) – ‘Knowingly and voluntarily disclosed’

To determine if the person “knowingly” made the disclosure, evidence of that person’s state of mind may be relevant and admissible (QUBE Logistics (Vic) v Wimmera [2013] VSC 659 at [96]).

‘Voluntary’ has been interpreted to mean something other than ‘under compulsion of law’ and disclosure that is not made by way of mistake (except in circumstances of formal discovery). For the privilege to be lost under this limb, the disclosure must be both knowing and voluntary. Inadvertent disclosure, for example, would not cause a loss of privilege.

‘Disclosed with express or implied consent’ – s 122(3)(b), (5)

For there to be effective consent under s 122(3)(b), that consent must be given knowingly and voluntarily.

S 122(5) sets out situations whereby privilege cannot be waived:

• as a result of duress or deception;
• under compulsion of law; or
• if the lawyer is also providing advice to the person, you tell or if you have a common interest relating to the proceedings.

S 124 deals with joint clients and permits one party represented by the same lawyer to adduce evidence of communications made by them to the lawyer or the contents of a confidential document prepared by or at the request of either of them.

S 125 provides that privilege is lost because of misconduct. Communications made in furtherance of a fraud or an offence or an act that renders a person liable to a civil penalty, or which relates to a deliberate abuse of statutory power.

S 126 provides that privilege is lost for related documents. Where it is ‘reasonably necessary’ to understand the unprivileged document, related documents are also not subject to privilege.

Relevant cases

Viterra Malt Pty Ltd v Cargill Australia Ltd [2018] VSCA 118 (11 May 2018)

• Client legal privilege – waiver – whether privilege in respect of pre-trial discovery waived.
• No waiver of privilege – appeal dismissed

Mann v Carnell [1999] HCA 66; 201 CLR 1; 168 ALR 86; 74 ALJR 378 (21 December 1999)

• Legal professional privilege, loss of privilege, waiver by disclosure to third party.
• The principal question in this appeal is whether legal professional privilege which attached to certain communications was lost by a subsequent disclosure of those communications.
• No loss of legal professional privilege through waiver.

Goldberg v Ng (1995) 185 CLR 83

• The High Court considered circumstances where a solicitor voluntarily disclosed privileged material to the Law Society in relation to an investigation of a complaint by a client against him meant that privileged material may be required to be produced for inspection in different proceedings between the solicitor and the same client.
• The majority of the High Court held that although the Law Society had the power to compel the production of documents, voluntary production of documents by the solicitor was regarded as significant and held to be an implied waiver of legal professional privilege.

Seven Network Ltd v News Ltd (no 12) [2006] FCA 348

• Sackville J dealt with the issue of whether the discovery of a document setting out a conclusion stated in legal advice waives privilege. He held that waiver occurred because there was voluntary disclosure of the gist or conclusion of the legal advice recorded in the document at [12].