Decision clarifies legal professional privilege for in-house lawyers

A matter was recently brought before the Supreme Court when two companies, Aquila Coal Pty Ltd and Bowen Central Coal Pty Ltd, were in dispute about a joint venture arrangement for the development of a proposed mine in central Queensland.

Justice David Boddice considered a claim by Aquila that certain documents in Bowen Central’s possession should be disclosed. Bowen Central contended that those documents, all email communications between the company and its in-house legal advisers, attracted legal professional privilege (LPP).

In identifying the applicable general principles, Justice Boddice stated:

[6] A document will attract legal professional privilege if it is a communication made or prepared for the dominant purpose [the ruling, prevailing, or most influential purpose] of obtaining or providing legal advice (legal advice privilege), or to conduct or aid in the conduct of litigation in reasonable prospect (litigation privilege). Privilege will also attach to documents which record earlier privileged communications) ...

[8] Where the legal advisers are employees of the party to the litigation, legal professional privilege may still attach, provided the claim relates to a qualified lawyer acting in the capacity of an independent professional legal adviser. Independence is crucial, as an important feature of in-house lawyers is that at some point the chain of authority will result in a person who is not a lawyer holding authority, directly or indirectly, over the in-house lawyer. The relevant question for consideration is whether the advice given is, in truth, independent. [Footnotes omitted.]

As a preliminary point, Aquila sought to argue that the documents were not privileged because Bowen Central’s General Counsel was not admitted as an Australian legal practitioner. However, Justice Boddice found that the previous authorities on the issue did not support Aquila’s argument, holding that the privilege could attach to communications involving an in-house lawyer (and his or her team) who is not admitted as a legal practitioner in Australia but who is a qualified lawyer admitted to practise elsewhere.

Furthermore, Justice Boddice stated that the lack of a current practising certificate, while a very relevant factor in determining whether legal professional privilege exists in respect of advice given by in-house legal representatives, is not determinative of the existence of privilege.

His Honour noted that LPP is the privilege of the client, not the lawyer; that it is afforded as it is in the public interest for clients to seek legal advice and make frank disclosure in doing so, and for legal advisers to be able to give full and frank advice, without fear of disclosure. He concluded that privilege attaches to advice by a legal adviser whether that adviser is admitted in Australia or elsewhere.

On the matter of the independence of the Bowen Central in-house legal team, Justice Boddice was satisfied that there was a sufficient level of independence to allow LPP to attach to instructions given to members of the defendant’s in-house legal team, and to any legal advice given by that team, provided the communication was made for a requisite dominant purpose.

Justice Boddice’s decision confirms that LPP may attach to communications involving an in-house lawyer, provided the dominant purpose test is satisfied and the requisite level of independence exists, even where the head of the legal team is only admitted to practise as a lawyer somewhere outside Australia.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}