• Any

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v THE DANIELS CORPORATIONINTERNATIONAL PTY LTD, MEERKIN & APEL (a firm)

N922 of 2001

WILCOX, MOORE and LINDGREN JJ

16 MARCH 2001

SYDNEY

CORRIGENDUM

Amendments to the Reasons for Judgment of the Honourable Justice Wilcox and theHonourable Justice Moore delivered on 16 March 2001.

The reference to the number of the matter is N992 of 2000 and should replacethe number N992 of 2001 wherever it appears.

Associate:

Sydney

3 April 2001

TRADE PRACTICES - Enforcement - Notice by Australian Competition and ConsumerCommission requiring provision of information or documents- Whether common lawlegal professional privilege applies.

Trade Practices Act 1974,s 155

Pyneboard Proprietary Limited v Trade Practices Commission[1983] HCA 9;(1983) 152CLR 328 applied

Baker v Campbell[1983] HCA 39;(1983) 153 CLR 52 discussed

Corporate Affairs Commission of New South Wales v Yuill[1991] HCA 28;(1991) 172 CLR319 referred to

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v THE DANIELS CORPORATIONINTERNATIONAL PTY LTD, MEERKIN & APEL (a firm)

N922 of 2001

WILCOX, MOORE and LINDGREN JJ

16 MARCH 2001

SYDNEY

THE COURT ORDERS AND DECLARES THAT:

1.The second respondent is not entitled to refuse to comply with either of thenotices issued to that respondent on 14 September1999 by the applicant on theground of legal professional privilege.

2.The costs of determining the said preliminary issue be paid by the firstrespondent.

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

WILCOX J:

1The question before the Court is whether common law legal professionalprivilege applies to notices issued by the Australian Competitionand ConsumerCommission ("ACCC") pursuant tos 155 of theTrade Practices Act 1974("theAct").

2Section 155 of theAct relevantly provides:

"(1)Subject to subsection (2A), if the Commission, theChairperson or the Deputy Chairperson has reason to believe that a personiscapable of furnishing information, producing documents or giving evidencerelating to a matter that constitutes, or may constitute,a contravention ofthisAct, or is relevant to a telecommunications matter (as defined bysubsection (9)) or is relevant to the making of a decision by the Commissionundersubsection 93(3) or (3A), a member of the Commission may, by notice inwriting served on that person, require that person:

(a)to furnish to the Commission, by writing signed by that person or,in the case of a body corporate, by a competent officer of thebody corporate,within the time and the manner specified in the notice, any suchinformation;

(b)to produce to the Commission, or to a person specified in the noticeacting on its behalf, in accordance with the notice, any suchdocuments; or

(c)to appear before the Commission at a time and place specified in thenotice to give any such evidence, either orally or in writing,and produce anysuch documents.

(2)...

(2A)...

(3)The Commission may require the evidence referred to in paragraph(1)(c) to be given on oath or affirmation and for that purpose anymember ofthe Commission may administer an oath or affirmation.

(4)...

(5)A person shall not:

(a)refuse or fail to comply with a notice under this section to theextent that the person is capable of complying with it;

(b)in purported compliance with such a notice, knowingly furnishinformation or give evidence that is false or misleading; or

(c)obstruct or hinder an authorised officer acting in pursuance ofsubsection (2).

(6)...

(6A)A person who contravenes subsection (5) or (6) is guilty of an offencepunishable on conviction:

(a)in the case of a person not being a body corporate - by a fine notexceeding $2,000 or imprisonment for 12 months; or

(b)in the case of a person being a body corporate - by a fine notexceeding $10,000.

(7)A person is not excused from furnishing information or producing orpermitting the inspection of a document in pursuance of this sectionon theground that the information or document may tend to incriminate the person, butthe answer by a person to any question askedin a notice under this section orthe furnishing by a person of any information in pursuance of such a notice, orany document producedin pursuance of such a notice or made available to anauthorised officer for inspection, is not admissible in evidence against theperson:

(a)in the case of a person not being a body corporate - in any criminalproceedings other than proceedings under this section;

or

(b)in the case of a body corporate - in any criminal proceedings otherthan proceedings under thisAct.

(7A)...

(8)...

(9)..."

3In these provisions, "the Commission" is ACCC. The limitation imposed bythe opening words of subs(1) is not presently relevant.

The facts

4On 15 July 1999 ACCC served on The Daniels Corporation International Pty Ltd("Daniels"), the first respondent, two notices. One of them was issuedpursuant tos 155(1)(a) of theAct; the other pursuant tos 155(1)(b). Nothingturns on the form of these notices, so I need not set them out.

5Daniels referred the notices to its solicitors, Meerkin & Apel. Thesolicitors arranged for production of certain documentsto ACCC but raisedquestions about some of the requirements of the notices. Correspondenceensued.

6On 15 September 1999 ACCC served two notices on Meerkin & Apel; onceagain, one notice was unders 155(1)(a) of theAct and the other unders155(1)(b). Once again, it is unnecessary to set out the notices. However, itis relevant to note that the information sought by the noticesincludedinformation about communications during 1998 between Meerkin & Apel andDaniels in respect of a particular subject.

7Meerkin & Apel produced some documents to ACCC in response to the noticesserved on 15 September. However, the solicitorstook the position that otherdocuments were covered by legal professional privilege. Those documents werenot produced.

8Protracted correspondence ensued about the availability of legal professionalprivilege, as an answer to as 155 notice. ACCC took the position thatinformation and documents described in as 155 notice are required to besupplied in response to the notice, whether or not they are documents that, inother circumstances, mightbe subject to legal professional privilege.

The proceedings

9Despite the exchange of numerous letters, the parties were unable to reachany agreement about the claim of legal professionalprivilege. Accordingly, on12 September 2000 ACCC moved to resolve the dispute by instituting a proceedingin this Court in whichit named Daniels as sole respondent. The applicationfiled by ACCC claimed the following declarations and orders:

"1.A declaration that the power conferred on the applicant bySection 155 of theTrade Practices Act 1974 extends to a requirementthat documents the subject of legal professional privilege be produced to theapplicant.

2.A declaration that the respondent is not entitled to refuse toproduce documents the subject of a notice issued undersection 155 of theTradePractices Act 1974 on the ground of legal professional privilege.

3.An order that the respondent forthwith produce the documents listedin Schedule 1 to the Statutory Declaration of David Pringle dated21 June 2000attached hereto and marked `A', to the applicant by delivering them to theoffice of the applicant situated at Level10, 500 Queen Street, Brisbane on thebasis that legal professional privilege does not ground a lawful refusal toproduce documentsin answer to a notice issued undersection 155 of theTradePractices Act 1974.

4.In the alternative, an order that the respondent forthwith producethe documents listed in Schedule 1 to the Statutory Declarationof DavidPringle dated 21 June 2000 attached hereto and marked `A', to the applicant bydelivering them to the office of the applicantsituated at Level 10, 500 QueenStreet, Brisbane on the basis that the documents listed in Schedule 1 toattachment `A' are not thesubject of legal professional privilege.

5.An order that the respondent pay the applicant's costs of andincidental to the application."

10The proceeding was assigned to my docket and listed for directions on 23October 2000. However, shortly before that date, theparties agreed upon someorders, including for separate determination, as a preliminary issue, of thequestions raised by claims1, 2 and 3 of the Application. I made an order inchambers to that effect. I also made directions regarding the filing andserviceof affidavits and written submissions and fixed a hearing date, 18December 2000.

11Having regard to the content of the written submissions, it appeared to methat this might be a case in which it was appropriatefor the Chief Justice torefer the preliminary issue to a Full Court pursuant to s 20(1A) of theFederal Court of AustraliaAct; the issue was purely a question of law,in relation to which an appeal seemed likely, whatever the result before asingle Judge.

12The parties agreed with this view, so the matter did not proceed on 18December 2000. The Chief Justice considered the matterand gave a directionpursuant tos 20(1A). By that route, the case came before a Full Court forhearing on 15 February 2001. However, what thereby came before us was onlythepreliminary issue presented by the first three claims in the Application. Theissues raised by the other claims remain beforeme at first instance.

13At the commencement of the hearing, the Court drew the parties' attention tothe fact that the notices that had given rise tothe dispute concerning theavailability of legal professional privilege were addressed to Meerkin &Apel, the solicitors, notto Daniels itself. The parties were asked toconsider whether Meerkin & Apel ought to be made an additional respondent.Theyagreed this would be appropriate. Subsequently, I made an order joiningMeerkin & Apel (a firm) as second respondent to theproceeding.

The High Court decisions

(i)Pyneboard

14During the course of argument, counsel referred to many decided cases; somefocusing on the obligations imposed bys 155, some concerned with the natureand ambit of legal professional privilege. I will discuss the more importantdecisions.

15InMelbourne Home of Ford Pty Ltd v Trade Practices Commission[1979] FCA 15;(1979)36 FLR 450, a Full Court of this Court (Smithers, Franki and Northrop JJ) heldthat a recipient of a notice unders 155 of theAct was not absolved fromcompliance on the ground that this might involve self-incrimination or exposureto a penalty. That decisionwas followed by other Full Courts, inPyneboardPty Ltd v Trade Practices Commission[1983] HCA 9;(1982) 57 FLR 368 andDunlopOlympic Ltd v Trade Practices Commission[1982] FCA 32;(1982) 62 FLR 145.

16The latter two decisions were the subject of High Court appeals. The HighCourt heard the appeals, together, in October 1982. Judgment was reserved. On10 and 11 February 1983 the High Court heardBaker v Campbell[1983] HCA 39;(1983) 153CLR 52, which I will later discuss. On 18 March 1983 the Court deliveredjudgment in respect of the appeals by Pyneboard Pty Ltd and DunlopOlympic Ltd:seePyneboard Proprietary Limited v Trade Practices Commission[1983] HCA 9;(1983)152 CLR 328. I will refer to the judgments dealing with those cases simply asPyneboard.

17The five Justices who decidedPyneboard were unanimously of theopinion that a person cannot refuse to comply with a notice unders 155 of theAct on the ground that the information or documents required to be furnished bythe notice might lead to exposure to a penalty. However,their Honoursdiffered in their reasoning.

18Mason ACJ, Wilson and Dawson JJ wrote a joint judgment in which theydiscussed (at 337-341) a submission "that the privilegeagainst exposure to apenalty is confined in its application to testimonial disclosures in judicialproceedings and is inherentlyincapable of application in non-judicialproceedings". Their Honours noted authority supporting that proposition. Theyalso notedcontrary authority. They considered the issue in terms of principleand stated their position (at 341) in this way:

"In the light of these competing considerations we are notprepared to hold that the privilege is inherently incapable of applicationinnon-judicial proceedings. The issue of its availability in these proceedingstherefore falls to be decided by reference to thestatute itself. In theconsideration of that question it is necessary to bear in mind the generalprinciple that a statute willnot be construed to take away a common law rightunless the legislative intent to do so clearly emerges, whether by expresswordsor by necessary implication."[References omitted]

19Mason ACJ, Wilson and Dawson JJ then said:

"In deciding whether a statute impliedly excludes the privilegemuch depends on the language and character of the provision and thepurposewhich it is designed to achieve. The privilege will be impliedly excluded ifthe obligation to answer, provide informationor produce documents is expressedin general terms and it appears from the character and purpose of the provisionthat the obligationwas not intended to be subject to any qualification. Thisis so when the object of imposing the obligation is to ensure the fullinvestigation in the public interest of matters involving the possiblecommission of offences which lie peculiarly within the knowledgeof persons whocannot reasonably be expected to make their knowledge available otherwise thanunder a statutory obligation. In suchcases it will be so, notwithstandingthat the answers given may be used in subsequent legalproceedings."

Later, at 342-343, the Justices added:

"That the privilege is impliedly excluded in such circumstancesis a conclusion which, as we have noted, may be more readily drawnwhere theobligation to answer questions or provide information does not form part of anexamination on oath. The obligation togive an answer not on oath at anexecutive inquiry provides an illustration. It will be less readily drawn incases where the obligationto answer questions and produce documents is anelement in an examination on oath before a judicial officer whether or not anobjectof that examination is to ascertain whether an offence has beencommitted with a view to the institution of a prosecution for thatoffence.

20The three Justices thought apposite some comments made inMortimer vBrown[1970] HCA 4;(1970) 122 CLR 493, a case concerning privilege on a publicexamination of company directors. Those comments related toself-incrimination. MasonACJ, Wilson and Dawson JJ said (at 343):

"It is significant that sub-s. (5) makes it an offence for aperson to refuse or fail to comply with a notice under sub-s. (1) `totheextent that the person is capable of complying with it' for these words inthemselves are quite inconsistent with the existenceof a privilege entitlingthe recipient of a notice to refuse to comply, whether on the ground thatcompliance might involve self-incriminationor otherwise. Moreover, it isapparent that the purpose of conferring the power and imposing the obligationis to enable the Commissionto ascertain whether any contravention of theActhas taken place, or is taking place, and to make the information furnished, thedocuments produced and the evidence given admissiblein proceedings in respectof contravention of theAct, a purpose which would be defeated if privilegewere available. As inMortimer the comment may be made that theprovision is valueless if the obligation to comply is subject to privilege.Without obtaining information,documents and evidence from those whoparticipate in contraventions of the provisions ofPt IV of theAct theCommission would find it virtually impossible to establish the existence ofthose contraventions. The consequence would be thatthe provisions ofPt IVcould not be enforced by successful proceedings for a civil penalty unders.76(1)."

21After some discussion about subs (7) ofs 155, the three Justicesconcluded the appeals should be dismissed.

22Murphy J held (at 346) that there is no privilege, outside judicialproceedings, against exposure to civil actions for penalties. However, he tooka different view about self-incrimination. At 347 he held the privilegeagainst self-incrimination is availablegenerally - that is, including inextrajudicial proceedings - "as part of the common law of the various States"and ought "also berecognized as federal common law which attaches to federalstatutory powers of obtaining information whether in judicial proceedingsorotherwise". He said: "It is available unless excluded by unmistakablelanguage". However, his Honour thought it was excluded,in relation tos 155notices, bys 155(5).

23Brennan J saw the issue as one of statutory construction. At 351 hesaid:

"Section 155 makes an inroad upon the right to silence. Atcommon law, there is no obligation to answer questions asked by an executiveagencyor to produce documents requested by an executive agency. But if thelegislature chooses to arm the Executive with a power of compulsoryinterrogation - and the frequency with which the Executive is armed with suchpowers appears to be increasing - it is the functionof the courts to ascertainthe extent of the power and to determine, by construing the language which thelegislature has used, whetherthe power is qualified by a privilege againstself-incrimination."

24After noting that the Commission's power and functions unders 155 are"wholly investigative", not judicial or quasi-judicial, his Honour referred tovarious authorities concerning the right to refuseto supply information toinvestigative agencies on the ground of possible self-incrimination. Heconcluded (at 354):

"... the better view is that a simple statutory obligation tofurnish information to a law enforcement officer is not qualified byaprivilege against self-incrimination."

25After expressing reasons for this view, Brennan J turned tos 155 itself.He said (at 356):

"Moreover, the purpose of investigating suspected contraventionsofPt IV would be frustrated by a qualification which makes the statuteineffective to compel the furnishing of information or the productionofdocuments tending to show such a contravention."

Brennan J referred toMortimer v Brown and went on:

"And so woulds. 155 be rendered relatively valueless ifprivilege against exposure to a penalty were allowed as a ground ofnon-compliance with sub-s.(5).Section 155 creates obligations in aid of aninvestigation `relating to a matter that constitutes or may constitute acontravention of thisAct' (sub-s. (1)). Proof of some of the practicesand of many of the elements of the practices proscribed byPt IV is likely tobe available only from persons who have contravened the relevant provision orwho have otherwise become liable to apenalty pursuant tos. 76(1). To allowsuch a person exemption from the obligations created by sub-s. (5) upon theground that compliance with the obligationmay tend to expose him to a penaltywould so hobble investigation as to render much ofPt IVunenforceable."

(ii)Baker v Campbell

26Baker v Campbell raised the question whether documents covered by asearch warrant, issued under s 10 of theCrimes Act1914, were immunefrom seizure on the ground of legal professional privilege. By majority(Murphy, Wilson, Deane and Dawson JJ, GibbsCJ, Mason and Brennan JJdissenting) the Court held the doctrine of legal professional privilege is notconfined to judicial andquasi-judicial proceedings. The Court also held that,as theCrimes Act did not evince any intention to oust the privilege, itapplied to documents that fell within the scope of a search warrant issuedunder s 10 of thatAct.

27The judgments in Baker v Campbellinclude some strong statementsabout the importance of legal professional privilege. For example, at 95Wilson J said:

"The multiplicity and complexity of the demands which the modernstate makes upon its citizens underlines the continued relevanceof theprivilege to the public interest. The adequate protection according to law ofthe privacy and liberty of the individual isan essential mark of a freesociety and unless abrogated or abridged by statute the common law privilegeattaching to the relationshipof solicitor and client is an important elementin that protection."

28Statements were also made about what was necessary to abrogate legalprofessional privilege. For example, at 116-117 Deane J said:

"It is a settled rule of construction that general provisions ofa statute should only be read as abrogating common law principlesor rights tothe extent made necessary by express words or necessary intendment. As hasbeen seen, the underlying principle thata person should be entitled topreserve the confidentiality of relevant communications between himself and hisattorney is regardedas of such importance by the common law that the courtsthemselves do not require disclosure of the content of such communicationsevenif it appears that such disclosure would be conducive to justice in aparticular case and even if the proceedings be betweenparties neither of whomis entitled to claim the protection of the privilege as regards the relevantdocuments or information. Bothlogic and authority support the present-dayacceptance of the preservation of that confidentiality as a fundamental andgeneral principleof the common law. It is to be presumed that if theParliament intended to authorize the impairment or destruction of thatconfidentialityby administrative action it would frame the relevant statutorymandate in express and unambiguous terms."

29Other Justices used similar language. At 90 Murphy J said "the privilegeshould apply to any form of compulsory seizure or productionof documents,unless Parliament unmistakably excludes or confines it". Dawson J recognisedthe legislature might "cut across thedoctrine of legal professional privilegeon occasions when it considers that it is more important to obtain informationthan to preservethe privilege"; but he did not think "the law should ease theway for the legislature to expand the practice nor should it disguisethe factthat a principle which the law regards as fundamental is involved": see 131.

(iii)Yuill

30InCorporate Affairs Commission of New South Wales v Yuill[1991] HCA 28;(1991) 172CLR 319 the High Court, again by majority (Brennan, Dawson and Toohey JJ,Gaudron and McHugh JJ dissenting), held that the power of an inspectortorequire information from an officer of a company pursuant to s 295(1) of theCompanies (New South Wales) Code was not subject to legal professionalprivilege. Section 296(2) of the Code provides:

"A person shall not, without reasonable excuse, refuse or failto comply with a requirement made under section 295."

31Brennan J thought the Code should be construed against the backgroundthat, when it was enacted, the rule was that legal professionalprivilegeapplied only to judicial or quasi-judicial proceedings; so Parliament would nothave contemplated that legal professionalprivilege would be a "reasonableexcuse". But he added (at 323):

"even if ss. 295 and 296(2) were construed in the light ofBaker v Campbell so that the privilege would be available unlessabrogated by express words or necessary intendment, the Code evinces anintentionthat legal professional privilege should not be a reasonable excusefor failure to comply with a requirement under s. 295. In theabsence oflanguage which expressly excludes the privilege, indicia of legislativeintention can be found in the nature of the statutorypower, the prescribedmanner of its exercise and the purpose which its exercise is designed toachieve."

32One indication of legislative intent discerned by Brennan J arose from thepurpose of a special investigation under the Code;it would frequently beimpossible for an inspector to carry out his function without disclosure ofcommunications between the corporationand its legal advisers.

33Dawson J held the legislation should be construed in the context of the lawenunciated inBaker v Campbell; even so there were sufficientindications of a legislative intent to exclude legal professional privilege.Dawson J referred tothe nature of the inspector's task and, at 336, commentedthat the term "reasonable excuse" "more aptly refers to any physical orpractical difficulties in complying with a request under s 295".

34Toohey J agreed with Dawson J.

35Gaudron J, in dissent, held at 338 that the expression "reasonable excuse"is "wide enough to cover any matter which the lawacknowledges by way ofanswer, defence, justification or excuse for refusing or failing to provideinformation pursuant to a requestof the type laid down by s 295(1)". Shethought legal professional privilege is such a matter.

36The reasoning of McHugh J followed a similar course to that of Gaudron J.However, as counsel for ACCC point out in this case,McHugh J contrasted thesituation then before the Court with that arising unders 155 of theTradePractices Act. At 350-351 McHugh J set out most of the passage from themajority judgment inPyneboard quoted by me in para 20 above. He wenton:

"This statement was intended as a general rule of constructionfor determining whether a statute had impliedly abrogated a commonlaw right orprivilege. ... It is applicable to the present case. Section 296(2) makes itclear that the general power conferredby s. 295 was intended to be subject tothe qualification that a requirement under that section need not be compliedwith if therewas a `reasonable excuse' available. Unlikes. 155 of theTrade Practices Act, therefore, the general terms of s. 295 show noimplied intention to abolish all relevant common law rights andprivileges."

37In the light of these observations, counsel for ACCC comment that "inYuill at least four of the members of the court would have decided thatlegal professional privilege had been displaced if words such asthose used insection 155 had been under consideration."

Federal Court decisions

(i)Income Tax AssessmentAct cases

38There has been a series of Federal Court decisions relating to the questionwhether legal professional privilege has been impliedlyabrogated bylegislation conferring coercive powers upon administrative bodies.

39InCommissioner of Taxation v Citibank Limited(1989) 20 FCR 403 aFull Court (Bowen CJ, Fisher and French JJ) held the power conferred upon theCommissioner of Taxation bys 263 of theIncome Tax Assessment Act 1936,to have access to books, documents and papers for any of the purposes of theAct, is subject to the doctrine of legal professional privilege.

40The Court's decision was based directly onBaker v Campbell. At416-417 Bowen CJ and Fisher J set out passages in the judgment of Deane J inthat case and commented:

"In our opinion like reasoning applied to s 263 leads to theconclusion that there is a restriction on the operation of s 263. Thepower ofthe Commissioner to search [for] and make copies of documents should be read asnot referring to documents to which legalprofessional privilege attaches.This conclusion follows as a matter of course from Deane J's reasoningparticularly as s 263, asthe High Court has indicated on a number ofoccasions, is in the most general of terms. Those general terms are not to beconstruedas granting an unrestricted power of search and entry but are subjectto the right to claim legal professional privilege in respectof the documentsto which the Commissioner seeks access. It is in our opinion nothing to thepoint that material obtained unders 263 is subject to the secrecy provisionsofs 16 of theAct.

See also per French J at 437.

41Stergis v Boucher(1989) 86 ALR 174 was a decision of Hill J, handeddown five days before delivery of the Full Court judgment inCitibank.Hill J held the privilege against self-incrimination is not an availableresponse to a written requirement, unders 264 of theIncome Tax AssessmentAct, that a person furnish specified information or attend an interview togive evidence and/or produce documents. In coming to hisconclusion, Hill Jdrew attention to 1984 amendments to theTaxation Administration Act1953 insertingss 8C and8D. These sections create offences, respectively,of failing to comply with a request to produce documents and failing to complywitha request to give evidence, in each case "to the extent that the person iscapable of" doing so. Hill J noted this was the sameformula as was used in s155 of theTrade PracticeActand considered in Pyneboard.

42Two months after his decision inStergis, Hill J was a member of aFull Court, with Lockhart and Burchett JJ, that considered the validity of a s264 notice issued by theCommissioner to the appellants: seeFieldhouse vCommissioner of Taxation[1989] FCA 397;(1989) 25 FCR 187.

43Fieldhouse was the solicitor for the other appellants. Counsel for theCommissioner told the Court it was "not contended thatthe doctrine of legalprofessional privilege is abrogated by s 264": see 191. Notwithstanding theconsequent absence of argumenton the point, Lockhart J held professionalprivilege was an available response to a s 264 notice. He reached thatconclusion bythe direct application ofBaker v Campbell andCitibank. Burchett J (at 203) and Hill J (at 208) assumed legalprofessional privilege was available. No member of the Court adverted toStergis or the significance of the wording ofss 8C and8D of theTaxation Administration Act.

44LikeStergis, Donovan v Commissioner of Taxation(1992) 34 FCR 355involved the question whether the rule about self-incrimination applied tonotices issued unders 264 of theIncome Tax Assessment Act. InDonovan, I was invited not to followStergis, on the ground thatit was erroneously decided, having regard to the High Court decisions.Fieldhousewas not cited. However, I followedStergis. In doingso, I noted the High Court's decision inPyneboard was given in March1983 and that ss 8C and 8D were inserted into theTaxation AdministrationAct in the following year. At 364 I referred to the statement inPyneboard, of Mason ACJ, Wilson and Dawson JJ, quoted in para 20 aboveand commented:

"It seems extremely likely that the drafter of the amendmenttreated their Honours' comments as authority for the proposition thattheformula `to the extent that the person is capable of complying with it'evidenced an intention to exclude the privilege againstself-incrimination."

45StergisandDonovanwere approved by a Full Court (Foster,Hill and Lindgren JJ) inCommissioner of Taxation v De Vonk(1995) 61FCR 564. At 564 Foster J said:

"Once it is accepted, as it must be, that despite thefundamental nature of the privilege against self-incrimination, it can,nevertheless,be excluded otherwise than by the use of express language, thenthe phrase `to the extent that the person is capable of doing so'achieves thatresult."

Hill and Lindgren JJ said (at 583):

"... we are of the view expressed inStergis that thecontext of the legislation combined with the terms ofss 8C and8D lead to theconclusion that the privilege has been abrogated. Clearly it is of the utmostimportance that a taxpayer disclose tothe Commissioner all sources of income.Failure so to do would constitute an offence. If the argument were to prevailthat the privilegeagainst self-incrimination was intended to be retained intax matters, it would be impossible for the Commissioner to interrogateataxpayer about sources of income since any question put on that subject mighttend to incriminate the taxpayer by showing thatthe taxpayer had not compliedwith the initial obligation to return all sources of income. Such an argumentwould totally stultifythe collection of income tax."

46Finally, in relation to s 264, I mentionCommissioner of Taxation vCoombes[1999] FCA 842;(1999) 92 FCR 240, a decision of a Full Court (Sundberg, Merkel andKenny JJ) concerning a s 264 notice issued to a solicitor. The Court stated,inpara 10 of its reasons, that s 264(1)(a) "is subject to legal professionalprivilege". No authority was cited. No reasons wereexpressed. The questionappears not to have been argued.

47It is possible to summarise the situation in relation toss 263 and264 oftheIncome Tax Assessment Act in this way:

(i)A Full Court has held thats 263 is subject to legal professionalprivilege:Citibank;

(ii)It has been determined, including at Full Court level (De Vonk),that the risk of self-incrimination is not an available response to a noticeunders 264;

(iii)It has been assumed by two Full Courts (Fieldhouse andCoombes) that legal professional privilege is available in respect of as 264 notice, but in neither case was the point argued. Neither of the FullCourt judgments refer toPyneboard or discussss 8C and8D of theTaxation Administration Act.

(ii)Corporations and bankruptcy cases

48In addition to the cases underss 263 and264 of theIncome TaxAssessment Act, there are Federal Court decisions relating to theavailability of legal professional privilege in respect of powers exercisedunders 597 of theCorporations Law (Re Compass Airlines Pty Ltd(1992) 35 FCR 447) and theBankruptcy Act1966(Re Steele; Exparte Official Trustee in Bankruptcy[1994] FCA 905;(1994) 48 FCR 236,Bond v Tuohy[1995] FCA 1085;(1995) 56 FCR 92 andWorrell v Woods[1999] FCA 242;(1994) 90 FCR 264). However, thosedecisions are of little assistance in the present case. Neither statutecontained the formula "to the extent thatthe person is capable of doing so",as ins 155 of theTrade Practices Actorss 8C and8D of theTaxation Administration Act.It is to be observed also, that, inCompass at 457-458, Lockhart J heldYuill was distinguishablefrom the position arising under s 597 of theCorporations Law becausethe latter provision is concerned with the affairs of a particular company,without there being any necessity for a priorfinding of fraud or other defaulton the part of the person to be examined. A notice may be given unders 155 oftheTrade Practices Act only where ACCC, or its Chairperson or DeputyChairperson, has reason to believe the proposed recipient is capable offurnishinginformation "relating to a matter that constitutes, or mayconstitute, a contravention of theAct"; in other words, unlike in relation tos 597 of theCorporations Law, there must be some suspicion ofwrongdoing. The situation in relation toBankruptcy Act examinations issimilar to that under s 597 of theCorporations Law.

Conclusions

49Six general propositions emerge from the authorities:

(i)InBaker v Campbell, Deane J described legal professional privilegeas "a fundamental and general principle of the common law". In none of thecasesto which I have been referred has any judge said otherwise.Consequently, acceptance of that proposition must be the starting pointin theresolution of this case;

(ii)Baker v Campbell firmly establishes the Australian common lawprinciple that the doctrine of legal professional privilege is not limited, inits application,to judicial and quasi-judicial proceedings; subject to theterms of the legislation relevant to a particular case, it is available,also,as an answer to statutory administrative investigations and procedures;

(iii)Such is the importance of the common law rule about legal professionalprivilege, that it is not to be taken as abrogatedin a particular case exceptby clear words;

(iv)However, it is not necessary for the relevant statute expressly to referto legal professional privilege. The intention toabrogate legal professionalprivilege will be sufficiently indicated if Parliament has used words that, intheir natural meaning,are inconsistent with retention of the privilege in theparticular case;

(v)It is immaterial whether Parliament in fact had legal professionalprivilege in mind when enacting the words. Consequently,it does not matterthat the statute may have been enacted at a time when it was generallyunderstood that the doctrine of legal professionalprivilege had no applicationto administrative procedures; thus making it unlikely the drafter or theParliament in fact had legalprofessional privilege in mind;

(vi)In determining whether the words used by Parliament impliedly excludelegal professional privilege, in a particular case, itis necessary to haveregard to the nature of the relevant statutory functions and powers and theextent (if any) to which legal professionalprivilege might impede thedischarge of those functions or the exercise of those powers.

50The above propositions are not in contest in this case. The problem in thepresent case, as in most cases involving the availabilityof legal professionalprivilege (or the privilege against self-incrimination) to a particularadministrative procedure, is whetherthe relevant statute has sufficientlyindicated Parliament's intention to exclude the privilege. As the authoritiesdemonstrate,the problem is one that readily generates differences of judicialopinion.

51In my view, the critical question in the present case is the meaning of thewords, ins 155(5)(a) of theAct, "to the extent that the person iscapable of complying with it", reading those words in the context ofs 155 as awhole. If the natural meaning of those words, in that context, is such as toexclude the doctrine of legal professional privilege,that is the end of thematter. If it is not, legal professional privilege is available in thiscase.

52Pyneboard strongly suggests that the natural meaning of the wordsused ins 155(5)(a) excludes legal professional privilege. It will be recalledthat Mason ACJ, Wilson and Dawson JJ stated (at 343) that these words"inthemselves are quite inconsistent with the existence of a privilege entitlingthe recipient of a notice to refuse to comply,whether on the ground thatcompliance might involve self-incriminationor otherwise". Theinclusion of the emphasised words is explicable only on the basis that theirHonours wished to make a statement, about theeffect of the words used in theparagraph, that went beyond the matter of self-incrimination. This is the wayMcHugh J, inYuill, understood their Honours.

53If that understanding is correct, it is impossible to doubt that theirHonours intended this statement to include reference tolegal professionalprivilege. Not only is that one of the most significant immunities in respectof a legal obligation to supplyinformation or produce documents; it hadrecently been debated before the High Court inBaker v Campbell.

54Legal professional privilege was not in issue inPyneboard.Consequently, in a technical sense, observations concerning the relationshipbetween that doctrine ands 155 of theAct wereobiter. But they wereconsidered observations by three members of the High Court. As such, theycommand great weight.

55My understanding of the importance attached inPyneboard to the words"is capable of complying with it" is consistent with the approach taken, inthis Court, tos 264 of theIncome Tax Assessment Act, in relation toself-incrimination. InStergis Hill J held that the adoption of thissame formula, inss 8C and8D of theTaxation Administration Act, waseffective to exclude the privilege against self-incrimination. That decisionwas followed inDonovanand approved inDe Vonk. The two FullCourt cases in which reference was made to s 264 and legal professionalprivilege are not authorities to the contrary;in neither case was the pointargued.

56Other considerations support the application of thePyneboardapproach to the relationship betweens 155 of theAct and legal professionalprivilege. First, in its natural meaning, the word "capable" refers to what aperson isable to do. It is not limited by reference to what a personisentitled not to do; a person may be capable of doing something,although entitled not to do it. A person who is called upon to discloseinformation,or produce a document, that is subject to legal professionalprivilege is able to comply with the demand, and may choose to do so,notwithstanding that he or she is entitled not to do so.

57Second, the policy considerations that influenced the High Court inPyneboard, in relation to self-incrimination, are equally apposite tolegal professional privilege. Conduct that involves a contraventionof theTrade Practices Act often comprises many separate acts, some of whichmay be effected through lawyers. Without information about contacts betweentheperson under investigation and that person's lawyer, it may be impossiblefor ACCC to see the whole picture. A comment made by MasonCJ, Wilson andDawson JJ inPyneboard applies. At 343 their Honours said:

"Without obtaining information, documents and evidence fromthose who participate in contraventions of the provisions ofPt IV of theActthe Commission would find it virtually impossible to establish the existence ofthose contraventions. The consequence would be thatthe provisions ofPt IVcould not be enforced by successful proceedings for a civil penalty unders 76(1)."

58Lockhart J made the point, inCompass at 455-456, that legalprofessional privilege does not extend to communications made in furtherance ofa criminal or fraudulent purpose. He said:

"This exception to legal professional privilege tends directlyagainst any implication that it is necessary for the effective conductof anexamination under s 597 that the privilege be ousted. If the examination ofthe examinee reveals that the assertion of legalprofessional privilege is infact being used to shield a criminal or fraudulent purpose which taints thecommunication itself, thenthe immunity is inapplicable."

59This may well be a decisive consideration in respect of legislationrelating to the examination of a witness, where there is anindependent personcapable of evaluating what is happening. It is more difficult to regard theexception as important in a casewhere a recipient of a notice is asked tosupply information or documents. The recipient is not in an independentposition. Moreover,a solicitor recipient may not know enough about theclient's actions and affairs to realise that those matters of which he or sheis aware, and which may seem innocent enough, are part of a course of conductthat, considered overall, is criminal or fraudulent.

60In my opinion, the better view is that a claim of legal professionalprivilege is not a valid answer to a notice unders 155 of theTradePractices Act. The preliminary issue ought to be resolved by making anappropriate declaration. Daniels should pay the costs relating todeterminationof the preliminary issue.

Associate:

Dated:16 March 2001

MOORE J:

Introduction

61The Australian Competition and Consumer Commission ("ACCC") is investigatingthe activities of The Daniels Corporation InternationalPty Ltd ("Daniels") todetermine whether that company has engaged in conduct in contravention of theTrade Practices Act 1974 (Cth) ("TPAct"). As part of theinvestigation, several notices were given by the Deputy Commissioner of theACCC to Daniels and its solicitors,Meerkin & Apel. A notice to producedocuments and another to furnish information, dated 14 September 1999, sent toMeerkin &Apel resulted in the production of some documents but not others.The documents not produced were the subject of a claim of legalprofessionalprivilege.

62On 12 September 2000 the ACCC made application to this Court unders39B(1A)(c) of theJudiciary Act 1903 (Cth). It sought orders to theeffect that a person could not resist the production of documents in responseto a notice issuedunder s 155 on the basis that the documents were thesubject of a claim of legal professional privilege. An order was made on 23October 2000 by Wilcox J raising as a preliminary question whether this was soand the question has been referred to a Full Courtfor determination: sees20(1A) of theFederal Court of Australia Act 1976(Cth). While Meerkin& Apel were not originally a party to the application, they have since beenjoined as a respondent.

The source of the power to issue a notice and related legislative provisions

63The notice was given under s 155 of the TPAct which relevantly provides:

"(1)Subject to subsection (2A), if the Commission, theChairperson or the Deputy Chairperson has reason to believe that a personiscapable of furnishing information, producing documents or giving evidencerelating to a matter that constitutes, or may constitute, a contravention ofthisAct, or is relevant to a designated telecommunications matter (as definedby subsection (9)) or is relevant to the making of a decisionby the Commissionundersubsection 93(3) or (3A), a member of the Commission may, by notice inwriting served on that person, require that person:

(a)to furnish to the Commission, by writing signed by that person or,in the case of a body corporate, by a competent officer of thebody corporate,within the time and in the manner specified in the notice, any suchinformation;

(b)to produce to the Commission, or to a person specified in the noticeacting on its behalf, in accordance with the notice, any suchdocuments; or

(c)to appear before the Commission at a time and place specified in thenotice to give any such evidence, either orally or in writing,and produce anysuch documents.

...

(5)A person shall not:

(a)refuse or fail to comply with a notice under this section to theextent that the personis capable of complying with it;

(b)in purported compliance with such a notice, knowingly furnishinformation or give evidence that is false or misleading; or

(c)obstruct or hinder an authorised officer acting in pursuance ofsubsection (2).

...

(7)A person is not excused from furnishing information or producing orpermitting the inspection of a document in pursuance ofthis section on theground that the information or document may tend to incriminate the person, butthe answer by a person to anyquestion asked in a notice under this section orthe furnishing by a person of any information in pursuance of such a notice, orany document produced in pursuance of such a notice or made available to anauthorised officer for inspection, is not admissiblein evidence against theperson:

(a)in the case of a person not being a body corporate - in any criminalproceedings other than proceedings under this section; or

(b)in the case of a body corporate - in any criminal proceedings otherthan proceedings under thisAct."

(Emphasis added.)

A notice can issue if the body or a person specified in subs (1) has formedthe requisite belief that a person is capable of furnishinginformation,producing documents or giving evidence: as to the formation of the belief seeMelbourne Home of Ford Pty Ltd v Trade Practices Commission andBannerman[1979] FCA 15;(1979) 36 FLR 450. The information, documents or evidence mustrelate to a matter which, relevantly for present purposes, constitutes, or mayconstitute,a contravention of the TPAct. Subsection (5), while expressed inthe negative as a prohibition on refusing or failing to furnish information orproduce documents,obliges the recipient of a notice to comply with it if therecipient is capable of complying with it.

64The ACCC is established by s 6A of the TPAct and can investigate whetherthatAct has been contravened and bring proceedings against persons orcorporations who are suspected of having contravened it. The mattersthatmight constitute a contravention of the TPAct are varied. They include beinga party to a contract, arrangement or understanding which contains anexclusionary provision or hasthe purpose or effect of substantially lesseningcompetition(s 45) (such as fixing, controlling or maintaining prices(s 45A)); engaging in a secondary boycott, with the purpose and effect ofeithercausing substantial loss or damage to a business (s 45D) orsubstantially lessening competition (s 45DA) or hindering trade andcommercebetween Australia and overseas (s 45DB); misusing market power(ss 46, 46A); engaging in exclusive dealing(s 47); engaging inresale price maintenance(s 48); acquiring shares or assets with theeffect of substantially lessening competition(s 50); engaging inmisleading and deceptive conduct in trade or commerce(s 52); making falseor misleading representations in connection with the promotion or supply ofgoods or services(s 53); engaging in misleading conduct as to the nature,manufacturing process, characteristics, suitability or quantity of goods(s 55) or services (s 55A); engaging in bait advertising(s 56);inducing a consumer to acquire goods or services by representing that theconsumer will receive a benefit in return for assistingthe corporation tosupply to other consumers, if the receipt of the benefit is contingent on anevent occurring after the contractis made(s 57); and engaging in pyramidselling(s 61).

The meaning of the expression "is capable of complying"

65A convenient starting point in ascertaining the nature of the obligationcreated bys 155(5) is what is meant by the expression "is capable ofcomplying". It is probable that its meaning is coextensive with the meaning ofthe expression "is capable of furnishing ... producing ... or giving" ins 155(1). The scope of subs (5), but not the meaning of the constituent words inthe expression, was considered by the High Court inPyneboard Pty Ltd vTrade Practices Commission[1983] HCA 9;(1983) 152 CLR 328 which will be discussedshortly. However the meaning of a similar expression in a similar statutorycontext has been consideredin several authorities concerningss 8C and8D oftheTaxation Administration Act 1953 (Cth). Those provisions make it anoffence to, amongst other things, refuse or fail to produce documents "to theextent that theperson is capable of doing so" if served with a notice to do sounders 264 of theIncome Tax Assessment Act 1936(Cth). As WilcoxJ noted inDonovan v Commissioner of Taxation(1992) 34 FCR 355 at 364,the legislature enacted ss 8C and 8D the year following the judgment ofthe High Court inPyneboard. His Honour said at 364:

"It seems extremely likely that the drafter of the amendmenttreated their Honours' comment[in Pyneboard] [the passage is set out inpar69 below]as authority for the proposition that the formula `tothe extent that the person is capable of complying with it' evidenced anintentionto exclude the privilege against self-incrimination."

66The first detailed discussion of the meaning of the words "is capable ofdoing so" is found inDe Vonk v Commissioner of Taxation(1995) 59 FCR203. Carr J considered the scope of the obligation created by the combinedoperation of the provisions of theIncome Tax Assessment Act and theTaxation Administration Actin circumstances where the recipient of thenotice (whose oral examination was sought) was facing criminal charges relatingto thematters the subject of the s 264 notice. As the meaning of the wordshis Honour said (at 211):

"Mr Martella submitted thatStergis andDonovanwere incorrectly decided. He submitted that the words `to the extent that theperson is capable of doing so' leave room for theassertion that a person isnot capable of doing so because the answer to the questions may lead toself-incrimination. The words`extent' and `capable' were, so it wassubmitted, words of degree. I reject that submission for two reasons. First,the word `capable'in this content must mean `having the ability, power orfitness for some ... activity' (theNew Shorter Oxford EnglishDictionary) or `having the ability, strength' (theMacquarieDictionary). The fact that his answers may tend to incriminate him doesnot, in my view, render Mr De Vonk incapable of answering the questions.Secondly the submission is squarely to the contrary of the passage from thejudgment of Mason ACJ, Wilson and Dawson JJ inPyneboard at 343 which Ihave set out above[the passage is set out in par69below]."

His Honour concluded that it was not open to the recipient of a notice torefuse to respond by invoking the privilege against self-incrimination.Nonetheless, his Honour concluded the proposed examination of the recipient ofthe notice would be unlawful to the extent that theasking of the questionswould be an interference with the administration of justice. That was notbecause the expression "to theextent that the person is capable of doing so"should be read down. Rather, it was because the exercise of the powerconferred bys 264 did not extend to questioning a person in circumstanceswhere to do so would interfere with the administration of justice.

67An appeal against this decision was, in substance, unsuccessful. The FullCourt did not express a different view about the meaningof the expression "iscapable of doing so". Foster J agreed with the observations of Carr J in thepassage set out above: see(1995) 61 FCR 564 at 567. In their jointjudgment, Hill and Lindgren JJ said at 583:

"As Wilcox J points out inDonovan,ss 8C and8D wereinserted shortly after the judgment of the High Court inPyneboard. Ashis Honour suggests, it is quite likely that the drafter of the amendmentregardedPyneboard as authority for the proposition that the words `tothe extent that the person is capable of complying with it' evidenced theintentionto exclude the privilege against self-incrimination. Certainly thechange of formulation from `just cause and excuse' to `capable'would seem tohave been deliberate and to reveal an intention on the part of Parliament toexclude as a defence, inter alia, theprivilege againstself-incrimination."

While Hill and Lindgren JJ did not do so expressly, they appear to haveaccepted the analysis of Carr J as to what is meant by theword "capable". TheFull Court concluded, as had the primary judge, that the provisions underconsideration did not authorise thecompulsory interrogation of a person incircumstances where the questioning might constitute an interference with theadministrationof justice, civil or criminal. In my opinion, the expression"capable of complying" in s 155(5) should be approached on the footingthat it comprehends, consistent with its ordinary meaning, circumstances wherethe recipient is physically able to comply as Meerkin& Apel is in thepresent case.

68In this matter the issues raised by claims 1, 2 and 3 concern the productionof documents in the possession of Meerkin &Apel. It is not suggested, asI understand the position, that apart from the claim of legal professionalprivilege raised on behalfof its client, Daniels, that firm cannot produce thedocuments. It is unnecesary to explore what might be the outer boundaries ofwhen a person is "capable of complying". It is sufficient to consider whetherMeerkin & Apel is capable of complying with thenotices served under s155by producing the contentious documents.

The scope of s 155(5) more generally

69No member of the High Court inPyneboard discussed the meaning of theexpression "is capable of complying" by reference to the specific languageused. However Mason ACJ,Wilson and Dawson JJ did say what the words incontext meant in the sense that their Honours identified what their effect was(at343):

"Sub-section (1) confers a power on the Commission to requirethe provision of information, the production of documents or the givingofevidence relating to contravention, or possible contravention, of theAct. Itis significant that sub-s. (5) makes it an offence for a person to refuse orfail to comply with a notice under sub-s. (1) 'tothe extent that the person iscapable of complying with it' for these words in themselves are quiteinconsistent with the existenceof a privilege entitling the recipient of anotice to refuse to comply, whether on the ground that compliance might involveself-incriminationor otherwise. Moreover, it is apparent that thepurpose of conferring the power and imposing the obligation is to enable theCommission to ascertainwhether any contravention of theAct has taken place,or is taking place, and to make the information furnished, the documentsproduced and the evidence given admissiblein proceedings in respect ofcontravention of theAct, a purpose which would be defeated if privilege wereavailable."

(Emphasis added.)

70At the timePyneboard was decided the High Court had not determinedthat legal professional privilege was not limited to judicial andquasi-judicial proceedings. That was not decided until judgment was given on26 October 1983 inBaker v Campbell[1983] HCA 39;(1983) 153 CLR 52. However the HighCourt heard the argument inBaker v Campbell on 10 and 11 February 1983,a little over a month before judgment was given inPyneboard. It may bethat Mason ACJ and Wilson and Dawson JJ had legal professional privilege inmind when using the words "or otherwise"in the above passage. That thepassage was intended to indicate that no privilege was available to resist thedisclosure of a communicationafter service of a notice unders 155, issupported by remarks of McHugh J inCorporate Affairs Commission of NewSouth Wales v Yuill[1991] HCA 28;(1991) 172 CLR 319. His Honour (by reference toanother passage fromPyneboard) said at 351:

"This statement was intended as a general rule of construction fordetermining whether a statute had impliedly abrogated a commonlaw right orprivilege. It was deduced from decisions such asMortimer v Brown[1970] HCA 4;(1970) 122 CLR 493 andKing v McLellan[1974] VicRp 92;[1974] VR 773. It is applicablein the present case. Section 296(2) makes it clear that the general powerconferred by s 295 was intended to besubject to the qualification that arequirement under that section need not be complied with if there was a`reasonable excuse' available.Unlikes 155 of theTrade PracticesAct, therefore, the general terms of s 295 showno implied intention toabolish all relevant common law rights and privileges."

(Emphasis added.)

71Even if the words "or otherwise" were included in the reasons of MasonACJ and Wilson and Dawson JJ in anticipation of the changesto the law effectedbyBaker v Campbell, Pyneboard cannot be treated as an authoritative andbinding pronouncement on the meaning ofs 155 as it might apply to thedisclosure of a communication for which legal professional privilege isclaimed. That was not an issuethat fell for determination inPyneboard. Nonetheless the decision of the High Court must be taken toindicate the expression "is capable of complying" imposes an obligationthat isunlikely to permit of any exceptions.

The scope ofs 155 in the present matter

72The task of this Court is to construes 155 and determine the width of itsoperation having regard to the change in the law brought about by the decisionof the High Court inBaker v Campbell. When enactings 155, Parliamentcould not have known that a claim of legal professional privilege might arisein relation to compliance with a noticeissued unders 155(1). Nor can itbe confidently assumed that the declaration of the meaning ofs 155(5) by theHigh Court inPyneboard was necessarily intended to relate to aprivilege that was not then recognised by the common law.

73In this setting, two approaches to the construction ofs 155(5) mightassist in resolving the meaning and effect of the words "is capable ofcomplying". The first is that at the times 155 was enacted Parliamentintended to require production of documents or the furnishing of informationnotwithstanding any common lawprivilege that then might be raised to resistcompliance with a notice. The other is that the intention was to requirecompliancein the face of any privilege then existing or that might later berecognised by the common law.

74Support for the first construction is the rulecontemporanea expositioest optima et fortissima in lege, a rule of construction recently appliedby a Full Court of this Court inKenneally v New Zealand[1999] FCA 1320;(1999) 166 ALR625. The Full Court had to determine the meaning of the expression "or for anyother reason, it would be unjust, oppressive or too severea punishment" ins34(2) of theExtradition Act1988 (Cth). The provision underconsideration was a product of amendments to theExtradition (CommonwealthCountries) Act 1966 (Cth) by theExtradition (Commonwealth Countries)Amendment Act 1985 (Cth). The expression was similar to a formulation intheService and Execution of Process Act 1901. That latter provisionhad been judicially considered on several occasions prior to the amendmentsmade in 1985 and its meaning hadbecome comparatively settled. One issuebefore the Full Court was whether that meaning was to be attributed to theexpression ins 34 of theExtradition Act 1988 (Cth). The Full Courtsaid (at [53]):

"It seems to us that the expression `or for any other reason, itwould be unjust, oppressive or too severe a punishment' in s 34(2)of the Actshould be construed in accordance with this line of authority, it being thestate of the law at the time the amendmentwas introduced. That approach tothe construction of this expression finds support in particular in the judgmentof Brennan J inCorporate Affairs Commission of New South Wales v Yuill[1991] HCA 28;(1991) 172 CLR 319 at 322-3;[1991] HCA 28;100 ALR 609 at 611. His Honour stated:

`The alteration of the law ... evokes an application of the rule contemporaneaexpositio est optima et fortissima in lege - thebest and surest mode ofconstruing an instrument is to read it in the sense which it would have beenapplied when it was drawn up: Broom's Legal Maxims, 10^th ed (1939),p 463.'"

75Applying this approach to the construction of s 155(5), the subsection mightbe viewed as having been intended to abrogate privilegesrecognized by thecommon law at the time it was enacted, namely 1974. As noted in the precedingparagraph, a similar approach wasadopted by Brennan J in Corporate AffairsCommission of New South Wales v Yuill to determine the content of the"reasonable excuse" exemption in s 296 (2) of theCompanies (New SouthWales) Code.

76However the above approach to the construction of a statute is rarelyappropriate. As a Full Court said inJoyce v Grimshaw[2001] FCA 52 atpar 66:

"The current practice is that the words of a statute arenormally interpreted in accordance with their ordinary and current meaning.This was not always so. The approach of the courts used to be that Acts wereconstrued in accordance with their natural meaningas at the date of theirenactment: DC Pearce and RS Geddes, Statutory Interpretation inAustralia4^th ed, at par [4.6] comment:

`This rule was given the Latin title, contemporanea expositio est optima etfortissima in lege. It is clear now, however, thatthe operation of this rulein its fullest extent had been abandoned except perhaps in the construction ofambiguous language usedin very old statutes where the language itself may havehad a rather different meaning. ...' (emphasis added)

Frances Bennion, Statutory Interpretation 3^rd ed, comments at p939:

`Rarely the legislator may use a term which is archaic or obsolete. Here theinterpreter must give the term what appears to beits intended meaning, havingregard to changes since it was current. ...

Sometimes (though very seldom) a term is inserted in an Act even though it isknown to be archaic. This may be a technical ornon-technical term. It ispresumed that the term is intended to have its archaic meaning, though thatdoes not prevent its meaningin the Act from being developed by the courts inthe ordinary way.' (emphasis added)

The position in Canada is that the courts draw a sharp distinction betweenordinary legislation and constitutional texts. Withrespect to ordinarylegislation, the original meaning is presumed to prevail. With respect toconstitutional texts the courts adopta dynamic or ambulatory approach.Constitutional texts are not tied to the framer's original understanding butevolve in responseto both linguistic and social change: R Sullivan, Driedgeron the Construction of Statutes 3^rd ed, at 137. A similar approachappears to prevail in this country."

77The second approach would treat s 155(5) as applying, in terms,notwithstanding changes to the law since it was enacted. Thatis, therecipient of the notice would be obliged to comply with it notwithstanding theassertion of a privilege not known to thelaw at the time the section wasenacted. Broadly analogous approaches to the construction of statutesoperating on the law fromtime to time can be found inAMS v AIF(1999)199 CLR 160 at 176 [par 36] and 232 [par 221],Pelechowski v Registrar,Court of Appeal[1999] HCA 19;(1999) 162 ALR 336 at 355[par 79] and 370 [par 137];Commonwealth v Evans Deakin Industries Ltd[1986] HCA 51;(1986) 161 CLR 254 at 263 andDownes v Williams[1971] HCA 45;(1971) 126 CLR 61 at 84. The observations of Dawson Jin Corporate Affairs Commission of New South Wales v Yuill at 331 areapt to apply to the language and content of s 155:

"The absence of an express provision excluding a claim for legalprofessional privilege in an investigation under Pt VII may be accountedfor bythe view of the law which the legislature at the time the legislation waspassed:cfAnnetts v McCann. And if the legislation otherwise evinces asufficiently clear intention to exclude the doctrine[of legal professionalprivilege], then effect must be given that intention: seeBropho vWestern Australia. It should, however, be emphasized that, in the absenceof an express exclusion, any implication to that effect must be a necessaryrequirement, for legal professional privilege is a doctrine of a fundamentalkind which is not to be abrogated except in the clearestterms: seeBaker vCampbell; Sorby v The Commonwealth; Balog v Independent Commission AgainstCorruption.

78It must be accepted, as recognised by Dawson J in the passage justquoted, that the common law privilege attaching to communicationsbetweenlawyers and their clients is now recognised as a fundamental one. As Wilson Jobserved inBaker v Campbellat 95:

"The multiplicity and complexity of the demands which the modernstate makes upon its citizens underlines the continued relevanceof theprivilege to the public interest. The adequate protection according to law ofthe privacy and liberty of the individual isan essential mark of a freesociety and unless abrogated or abridged by statute the common law privilegeattaching to the relationshipof solicitor and client is an important elementin that protection."

79A recent restatement of the rationale for the privilege (drawing togetherobservations from earlier authorities) is found in thejudgment of Kirby J inEsso Australia Resources Ltd v Federal Commissioner of Taxation[1999] HCA 67;(1999)168 ALR 123 at 155[par 111]:

"Sixthly, it is necessary to return to the fundamental purposeof the privilege. It arises out of `a substantive general principleof thecommon law and not a mere rule of evidence'. Its objective is `of greatimportance to the protection and preservation ofrights, dignity and freedom ofthe ordinary citizen under the law and the administration of justice and law'.It defends the rightto consult a lawyer and to have a completely candidexchange with him or her. It is in this sense alone that the facility isdescribedas `a bulwark against tyranny and oppression' which is `not to besacrificed even to promote the search of justice or truth in theindividualcase'."

80The means by which a court ascertains whether legal professionalprivilege has been abrogated by statute have been convenientlysummarised byMiller J inCorporations and Securities Panel v Bristile Investments PtyLtd[1999] WASC 183;(1999) 152 FLR 469 at 472:

"(A)s a head of privilege, legal professional privilege, is sofirmly entrenched in the law that it is not to be exorcised by judicialdecision:Grant v Downs[1976] HCA 63;(1976) 135 CLR 674 at 685. There must be aclear expression of legislative intent by express words or necessaryimplication for the privilege to beabrogated:Baker v Campbell (at 90)per Murphy J; (at 116) per Deane J and (at 123) per Dawson J andCorporateAffairs Commission (NSW) v Yuill[1991] HCA 28;(1991) 172 CLR 319 at 322-323 per BrennanJ; (at 331) per Dawson J; (at 338) per Gaudron J and (at 348) per McHugh J .In Yuill (at 323) Brennan J put it this way:

`In the absence of language which expressly excludes the privilege, indicia oflegislative intention can be found in the natureof statutory power, theprescribed manner of exercise and purpose which its exercise is designed toachieve...'."

81However several considerations in this matter lead to the conclusion thats 155(5) should be construed as requiring the recipientof a notice produce adocument or furnish information which might otherwise be the subject of a claimof legal professional privilege. First, the language of s 155(5) is, inmy opinion, emphatic and requires compliance with a notice if the recipient iscapable ofcomplying with it. That appears to have been the view of Mason ACJand Wilson and Dawson JJ in Pyneboardand also of Brennan J whodescribed it (at 355) as "a statutory provision, clear and absolute in itsterms". A person is capableof complying with a notice even if to do so is inderogation of a common law right, whether it is a right the person enjoys ortheperson asserts on behalf of another (as a solicitor does in relation to theclient's legal professional privilege).

82It is appropriate at this stage, to refer to the judgment of the Full CourtinRe Compass Airlines Pty Ltd (1992) 35 FCR 447. In that matter theFull Court concluded that the obligation to "not refuse or fail to produce [adocument] in[a person's] possession" arising from s 597 of theCorporationsLaw did not extend to the production of a document which was privilegedbecause of legal professional privilege. In the leading judgmentof Lockhart Ja detailed analysis was undertaken of the legislative history (and related caselaw and commentaries) of the provisionspermitting the examination of directorsand offices of companies. The analysis returned to the late 19th century. HisHonour noted(at 453) that with one recent exception, in no case of which hewas aware in Australia or the United Kingdom had it been held thatlegalprofessional privilege could not be called in aid by a person required to giveevidence or produce documents in the statutorycontext under consideration.That history together with the fact that the purpose for which the power wasconferred (to enable aliquidator to gain information regarding the affairs ofthe company) would not be stultified if legal professional privilege couldbeclaimed, appear to have been the two central factors leading his Honour to theconclusion that legal professional privilege wasnot abrogated by s 597.

83In the present matter there is no equivalent legislative history. Moreoverthe attainment of the purpose for which the poweris conferred by s 155 may behampered by treating the obligation imposed by s 155(5) as subject to claims oflegal professional privilege. Documents or information relevant to the inquirymight be denied to the person undertaking it. As was made clear by the HighCourtinPyneboard, a claim of privilege on the ground ofself-incrimination would substantially fetter an investigation and stultify thestatutorypurpose for which s 155 was enacted. It is true that differentconsiderations arise in relation to communications for which a claimfor legalprofessional privilege might be made. Privileged documents, for example, maybe sought by a notice under s 155 in circumstanceswhere the documentscould ultimately prove to have a limited bearing on whether there had or hadnot been a contravention of theTP Act. Documents or information resisted onthe grounds of the privilege of self-incrimination may be thought, in theordinarycourse, to be likely to have a greater bearing on the question ofwhether there had been contravention. Nonetheless the observationsof Dawson JinCorporate Affairs Commission of New South Wales v Yuill (at 333) are,to some extent, apt to apply to an investigation in respect of which a noticemight issue under s 155:

"Plainly, any investigation is likely to be hampered by a claimof legal professional privilege on the part of an officer of the companybeinginvestigated. This is the more so when the aims of the investigation includethe prosecution of offences and the institutionof civil proceedings. Inparticular, establishing such matters as fraud, negligence or breach of dutymay depend upon proof of thenature of any legal advice given. Legalprofessional privilege may not, of course, be claimed even at common law forcommunicationswhich amount to participation in a crime or fraud, but a claimof legal professional privilege may nonetheless seriously impede theinvestigation of those matters."

84Not only is the problem one associated with the denial, potentially, tothe investigator of relevant documents or information.If the recipient of anotice issued under s 155(1) can claim, and thus raise the issue of, legalprofessional privilege, it would,in many instances, create a significantpractical impediment to the investigation. The practical problems arising froma claim ofprivilege based on self-incrimination were adverted to inPyneboard. They would be no less if the asserted privilege was legalprofessional privilege. Mason ACJ and Wilson and Dawson JJ observedat 340:

"There is in addition the problem of deciding whether it is forthe authority requiring the answer, production of documents or theprovision ofinformation, or the court in subsequent proceedings by way of prosecution foran offence, to decide whether the claimfor privilege is correctly made. It isdifficult to suppose that the determination is to be left to an unqualifiedperson. Andthere are practical problems in leaving the determination of thecorrectness of the claim for privilege to a court in proceedingsby way ofprosecution for the offence of refusing to answer questions, provideinformation or produce documents."

85Similar problems were identified by Brennan J at 355:

"If a decision upon a claim of privilege were needed todetermine whether and to what extent there is an obligation to furnishparticularinformation or to produce particular documents to a law enforcementagency conducting an investigation into a contravention of thelaw, how and bywhom would the claim be decided? Would the obligation be defeated merely bythe person from to the information issought claiming privilege? Or would theclaim of privilege defeat the obligation only if it were admitted by the agencywhich isseeking to enforce the obligation? Neither of these solutions islikely to represent the intention of the legislature ...

Would the content of the obligation be ascertainable in practice only in andby a prosecution for its breach? Or in and by some otherjudicial proceeding?That is hardly a practicable solution when the statutory obligation falls to bedischarged within a time specifiedin the s 155 notice. Where judicial controlof privilege is not practicable, it is difficult to imply a qualification ofprivilegeaffecting the statutory obligation."

86It may be thought that proceedings of the type presently before the Courtcould be brought to test any disputed claim of legalprofessional privilege andthe matter decided expeditiously. Section 39B(1A) would now appear to providea mechanism for that tooccur. However that, itself, raises more practicalproblems that are unlikely to be intended. The most likely circumstance inwhichthe claim would be disputed would be if the investigator had cause tobelieve that the communication with the legal adviser was infurtherance of acontravention of the TP Act. The privilege would not ordinarily bemaintainable in relation to such a communication:see Zemanek v CommonwealthBank of Australia (unreported, Federal Court of Australia, Hill J, 2October 1997). If, in those circumstances, the ACCC sought to put in issue aclaim of legal professional privilege in proceedings under s 39B, it would bearthe burden of proving, with admissible evidence,thatprima facie thecommunication was for an unlawful purpose:Commissioner of AustralianFederal Police v Propend Finance Pty Ltd(1997) 188 CLR 501. That is, theACCC would have to establish the very thing it was seeking to investigate bythe issue of the notice under s 155.

87For the preceding reasons, I would make an order to the same effect as order2 sought by the ACCC.

Associate:

Dated:16 March 2001

REFERRED BY THE CHIEF JUSTICE FROM A SINGLE JUDGE OF THE FEDERAL COURT OFAUSTRALIA

LINDGREN J:

88I have read drafts of the Reasons for Judgment of Wilcox J and Moore J. Iam in general agreement with their Honours' reasons. Therefore, I agree that aclient served with a notice unders 155 of theTrade Practices Act1974 (Cth) ("theAct") is not rendered not "capable of complying with it"for the purpose of par (5)(a) of that section, by the fact that the clientenjoyscommon law legal professional privilege in respect of communicationscaught by the notice.

89The proposition just stated resolves a general question of law, although notone which arises directly on the facts of this case,because the notices herewere served, not on a client, but on its solicitors.

90In my view, in par 155(5)(a) of theAct, "to the extent" clearly means "tothe full extent", and "capable" seems to meanat least "immediatelyphysically able without unreasonable practical difficulty and without in anyrespect acting unlawfully or committinga legal wrong". Accordingly, to takethe most straightforward case, a client in possession of a privilegedcommunication from theclient's solicitor, such as a written advice, would beobliged to produce it in response to a notice given to the client under par155(1)(b) of theAct.

91At the commencement of the hearing, The Daniels Corporation InternationalPty Ltd ("Daniels") was the only respondent. The partiesmade clear that theysought a determination of the general question of law mentioned above. Butthere was a difficulty. Thes 155 notices in question were noticesrequiring the supply of information under par 155(1)(a) of theAct and theproduction of documents under par 155(1)(b) of theAct, both dated 14September 1999 and addressed to Daniels' solicitors, "The Partners Meerkin& Apel". But Meerkin & Apel werenot respondents to the presentproceeding. It was understandable that Daniels was a respondent since theprivilege, if it existed,was its privilege, not that of its solicitors, and nodoubt it was thought desirable that Daniels have the opportunity of assertingand defending its privilege, and be bound by the result in the case. But itwas also necessary that the solicitors, as the personsserved with the notices,be bound by the result.

92The Court raised these matters on the hearing and in consequence, byconsent, Meerkin & Apel were added as second respondents.

93Consistently with the parties' desire that we decide the general question oflaw mentioned, it was not submitted that we shoulddistinguish between thepositions of Daniels and its solicitors. In particular, it was not submittedthat if we should decide thatDaniels could not rely on its privilege to refuseto comply with a notice served on it, we should, nonetheless, decide thatMeerkin& Apel could refuse to comply with a notice served on them on thebasis that they could not waive Daniels' privilege, and, indeed,owed Daniels aduty to attempt to protect its privilege.

94Accordingly, we have been able to decide the general question of lawreferred to at the outset, unencumbered by any proceduraldifficulty.

95The Court is not required in this case to identify definitively the scope ofthe expression "capable of complying" in par 155(5)(a)of theAct. Inparticular, we are not called upon to decide whether "capable" refers tonothing more or less than physical capacity, or, onthe other hand, imports areference to legal concepts. If it does the latter, two questions would arise.First, would a person servedwith a notice be "capable of complying" with itif, although not immediately physically capable of doing so, the person had alegalright to compel another person to furnish the information or to producethe documents referred to in the notice? Secondly, woulda person served witha notice be not "capable of complying" with it if, by doing so, he or she wouldcontravene a statutory provision,infringe the rights of a third party (otherthan the legal professional privilege of a client of the person), or breach acourt orderor otherwise commit a contempt of court, such as by interferingwith the administration of justice (cfCommissioner of Taxation v DeVonk(1995) 61 FCR 564 (FC))? As I said, the Court is not called upon toexplore these questions and has been able to proceed as if the only suggestedincapacitatingfactor was legal professional privilege which, contrary to thefact here, the person served with the notice was at liberty unilaterallytowaive.

96It follows from the answer we are giving to the general question mentionedearlier, that is, that a client served with a noticeunders 155 is notentitled to refuse compliance on the ground of its legal professionalprivilege, that solicitors served with such a noticecannot do so on the groundthat they owe their client a duty to attempt to protect the client's privilege:they can be in no betterposition than their client.

97Since the hearing, Meerkin & Apel have drawn the Court's attention tothe decision of Conti J inJoel v Migration Agents RegistrationAuthority[2000] FCA 1919 given on 22 December 2000. It is sufficient tosay that the language of subs 308(1) of theMigration Act 1958 (Cth)("The Migration Agents Registration Authority may require a registered agent:(a) to make a statutory declaration in answerto questions in writing by theAuthority; or (b)...; or (c) to provide the Authority with specified documentsor records relevantto the agent's continued registration") is "weaker" thanthat of subs 155(1) and par 155(5)(a) of theAct, and, notably, lacks the words"to the extent that the person is capable of complying". I do not see hisHonour's view that theprovision with which he was concerned is subject to theclient's legal professional privilege as inconsistent with the view thatpar155(5)(a) of theAct is not subject to such privilege.

98The Court should make the orders proposed by Wilcox J.

Associate:

Dated:16 March 2001