Providing documents to ASIC without waving legal privilege: ASIC v RI Advice Group

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The Federal Court has ruled that certain documents that RI Advice Group (RI) provided to ASIC are admissible in ASIC’s case against RI, rejecting RI’s claims of client legal privilege.

Key Take outs

  • If you are responding to a notice to produce to ASIC that relates to privileged information, make sure you comply with the procedures set out here and seek legal advice.
  • If you are providing additional or multiple copies of documents to different bodies or agencies, make sure you assert privilege or object to production every time. If you fail to do this, you may waive privilege.
  • If you want to assert legal privilege, you ordinarily need direct evidence from the people involved in the creation of the documents that the dominant purpose of the document was legal advice.
  • The number of documents produced and the amount of resources required may support a claim that a waiver was inadvertent (and so cannot be relied upon by the other side) – but in this case 1174 documents is not sufficiently ‘out of the ordinary’ to justify this conclusion.

Legal Privilege

Evidence is generally inadmissible if admitting it in court would result in the disclosure of confidential information prepared for the dominant purpose of providing legal advice.

The documents in question relate to ASIC investigations initiated in 2016. The initial letter from ASIC stated that

“ASIC may accept, on a confidential basis, privileged information (or information that is claimed to be privileged) voluntarily.  The terms on which ASIC may elect to accept such information are set out in ASIC’s standard agreement … a full copy of which is available from ASIC’s website”

In the 2016 email submitting the relevant documents, the Authorised Representative stated that RI had

sought to provide the [documents] to ASIC in a manner which is consistent with the maintenance of legal professional privilege. The provision of documents to ASIC in response to the Notice is not a waiver of any legal professional privilege existing at the time of disclosure.

Note that not attempt was made at this point to comply with ASIC’s requirements or adopt the Regulator’s standard agreement.

When a formal investigation was commenced in 2018, a further notice to produce was issued by ASIC and both ANZ and RI provided additional copies of the relevant documents. Importantly, these documents were not identified as being privileged. Moreover, the documents in question has also been provided, without objection based on privilege, to the Banking Royal Commission. These versions were available on the Royal Commission’s website.

In the current litigation, RI (now no longer owned by ANZ) applied for a preliminary ruling that the evidence was privileged after all. To support this claim, one of RI’s new solicitors deposed an affidavit outlining what she said was the factual basis for the claim of legal privilege.

Dominant purpose test

O’Callaghan J found that there was insufficient evidence to support the privilege claim. The solicitor who gave evidence was not involved in the compilation of the original documents (which was done by an ANZ lawyer). This meant she was unable to give direct evidence that the documents were compiled for the dominant purpose of providing legal advice. This deficiency was underscored by the fact that RI’s CEO – who was involved in the original compilation – was available but did not give evidence.

The dominant purpose test is critical to sustain claims of privilege. In order to satisfy this test, it will often be necessary to adduce direct evidence from the person who requested or commissioned the document in question. In this respect, O’Callaghan J quoted Brereton J in Hancock v Rinehart (Privilege) who observed that:

a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made, or in other words ‘expose … facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable

Hancock v Rinehart (Privilege) at [7]

Waiver

ASIC also asserted that any legal privilege had been waived. While the finding that there was insufficient evidence to support the privilege claim meant that this question did not need to be resolved, O’Callaghan J found that there had been a waiver because they had produced the documents to ASIC the second time (in 2018) without raising the claim of privilege.

This meant that RI hadhas acted in a way that is inconsistent with [them] objecting to the adducing of the evidence‘. His Honour held that this was ‘as clear a case of waiver as one could imagine, short of an express waiver.’

RI tried to argue that this disclosure was inadvertent, due in part to the amount of material that was required to be produced. O’Callaghan J rejected this proposition out of hand – the numbers involved – 1174 documents in one particular tranche – were not sufficiently vast to support the claim of error.

RI also tried to link the assertion of privilege in the original 2016 email to the 2018 disclosures. However, this was rejected upon the basis that the documents had been resubmitted without any further privilege claim and that the same documents had been provided – without objection – to the Banking Royal commission and were available on it’s public website.

Lastly, his Honour observed RI had failed to comply with the procedures pursuant to which ASIC accepts documents subject to a notice to produce on a confidential basis – including terms as set out in ASIC’s standard agreement entitled ‘Voluntary confidential LPP disclosure agreement’

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