IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. G. No.29 of 1979 GENERAL DIVISION In the matter of - THE TRADE PRACTICES ACT 1974 Between TRADE PRACTICES COMMISSION Applicant and ALLIED MILLS INDUSTRIES PTY. LIMITED and OTHERS Respondents Im y i9go CORAM: SHEPPARD, J. REASONS FOR JUDGMENT The respondents in this matter, which was commenced by application filed on lst August, 1979, seek the production of a number of documents said by the applicant to be relevant to the issues to be determined but privileged from inspection by the respondents upon grounds stated in affidavits to which I shall in a moment refer. The applicant is not entitled to discovery from the respondents because the action is an action for penalties; The King v. The Associated Northern Colleries 11 C.L.R. 738 at pp.741-748. I raised with counsel the question of whether in those circumstances there was any basis for saying that the respondents were not entitled to discovery from the applicant. Counsel for the applicant said that he conceded that the respondents were entitled to discovery with the result that the provisions of Order 15 of the rules applied. The proceedings are proceedings instituted pursuant to ss.77 and 80 of the Act. In those circumstances the provisions of s.157 are applicable. It has occurred to me that the provisions of that section may be such as to limit the discovery which the applicant may otherwise have been obliged to make. No submission to this effect was made and I have put that matter aside. Although the respondents are not obliged to give dis- covery, they are bound by the provisions of s.155 of the Trade Practices Act 1974, which provides that where the Commission has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes or may constitute a contravention of the Act, it may, by notice in writing served on that person, require that person to furnish information, produce documents or give evidence. A number of such notices have been served, In consequence a number of documents have been produced to the applicant and a number of other documents have come into existence as the result of interviews which officers of the applicant have had with various people. These documents comprise statements, notes of interview and in at least one case formal evidence taken from a person upon whom a notice was served, The notices have been produced for the respondents' inspection. No claim for privilege from inspection of the notices was made; but such a claim has been made in respect of some (not all) documents which came into existence in consequence of the service of the notices. It is not possible to determine from a perusal of the documents produced for my inspection which documents fall into this category. There was no submission by the respondents that a document coming into existence by reason only of the operation of s.155 could not be the subject of a claim for privilege from inspection. That is not a matter with which I have therefore dealt. if the matter were to be considered fully, the provisions of s.157 of the Act might have a bearing upon the outcome of the problem. On 14th December, 1979, Mr. L. S. Conlan on behalf of the applicant swore what is entitled an affidavit of discovery. The schedule to the affidavit lists a large number of documents in numbered paragraphs. Privilege from inspection by the respondents is claimed in respect of the documents listed in paragraph 6, It is that claim which is challenged by the respondents, The respondents also challenge the claim for privilege made in respect of some documents in other paragraphs of the schedule, but I was informed by counsel that if I were to decide whether the respondents were entitled to see the documents listed in paragraph 6 it would probably not be ' necessary to deal with the claim for privilege made in respect of documents listed in other paragraphs of the schedule. Once 3. ° my decision on the documents specified in paragraph 6 was made, the balance of the matters in question between the parties would probably be resolved by agreement. Paragraph 6 is headed, "Records of communications between the staff of the Applicant, or its legal representatives, persons other than the Respondents, and witness statements and related documents", In paragraph 4 of the affidavit itself Mr. Conian said that the applicant would produce for inspection the documents listed in paragraphs 1, 2, 3, 4 and 7 of the schedule. It objected to the production of the documents listed in paragraphs 6 and 8 thereof. Paragraph 9 of the affidavit said that portions of documents asterisked in paragraph 5 of the schedule repeated material contained in documents referred to in paragraphs 6 and 8 thereof. Objection was made to producing those portions of the documents listed in paragraph 5 of the schedule which repeated material contained in documents referred to in paragraphs 6 and 8 of the schedule, Paragraphs 7 and 8 of the affidavit are as follows: "7, The documents referred to in the paragraph numbered 6 of the Schedule are documents relating to anticipated litigation passing between the Applicant and third persons and made at either the request of the Applicant's legal representatives or made for the purpose of being put before the Applicant's legal representatives with the object of obtaining advice or enabling the Applicant's legal represen- tatives to prosecute the action. 8. Additionally, as to the documents referred to in the paragraphs numbered 6 of the Schedule, such documents were prepared or obtained by the Applicant for the sole or dominant purpose of submission to legal representatives or for use in legal proceedings," On 5th March, 1980, Mr. Conlan swore a supplementary affidavit in which he referred to paragraphs 7 and 8 of his affidavit of 14th December, 1979. In paragraph 3 of that affidavit he said: " .... subject to the matters hereinafter referred to, the documents referred to in paragraph 6 of the Schedule to that Affidavit are documents pre- pared by me or at my request for the purpose of recording the evidence available to the Applicant so that it could be placed before the Applicant's legal advisers to enable them to advise as to whether or not there was sufficient evidence avail- able to the Applicant for the institution of contravention proceedings under the Trade Practices Act 1974," Paragraph 4 of Mr. Conlan's supplementary affidavit Was as follows: " It is my belief that the practice of the Applicant is not to commence contravention proceedings under the Trade Practices Act 1974 without taking legal advice as to the sufficiency of evidence." The principles which guide me in determining the outcome of this application have been recently stated by the High Court in Grant v. Downs 135 C.L.R. 674 and National Employers Mutual & General Insurance Association v, Waind 53 A.L.J.R. 355. These authorities establish that a party claiming that he is not bound to produce documents because they are the subject of legal professional privilege will not be entitled to maintain the claim unless he establishes that the sole purpose for which the documents came into existence was in connection with the prosecution or defence of legal proceedings or for the purpose of obtaining legal advice. It is to be observed that paragraph 8 of Mr. Conlan's first affidavit earlier set out says that the documents in paragraph 6 of the schedule were prepared or obtained by the 5e applicant for the sole or dominant purpose of submission to legal representatives or for use in legal proceedings. In my opinion it would not be sufficient for the applicant to establish that the documents came into existence for the dominant purpose of obtaining legal advice or for use in legal proceedings. That would presuppose that there was a secondary, if subsidiary, purpose for which the documents were to be used. The paragraph of the affidavit would suggest that some of the documents came into existence for the sole purpose of obtaining advice or for use in legal proceedings and others for a plurality of purposes the dominant one of which was for the purpose of obtaining advice or for use in legal proceedings, One is unable to ascertain from a reading of the paragraph and the schedule into which category the various documents in paragraph 6 of the schedule fall, The view could be taken that the applicant's evidence is accordingly unsatisfactory and that its claim for privilege from inspection in relation to all the documents in paragraph 6 is not made out. That was not, however, the view which any counsel asked me to adopt. The documents themselves were made available for my inspection and it was agreed by all counsel that I should reach a conclusion, having regard to the terms of Mr. Conlan's affidavits, to other evidence to which I shall in a moment refer and to the terms of the documents themselves, as to whether the applicant's claim for privilege from inspection had been made out as to all or some of the documents in paragraph 6 of the schedule. That is the course which I have taken, Before referring to the documents themselves I should say something about the relevant paragraphs of Mr. Conlan's second affidavit and mention some further evidence which there is. Objection was taken to paragraph 4 of Mr.Conlan's affidavit upon the basis that his belief as to the applicant's practice not being to commence proceedings without taking legal advice as to the sufficiency of evidence was irrelevant. The only relevant fact was whether the documents were pre- pared or did come into existence solely for the purpose either of obtaining legal advice or for the purpose of the proceedings. I agree with the submission and consider that paragraph 4 of the affidavit should be rejected. I have taken into account the provisions of paragraph 3 of Mr. Conlan''s second affidavit but do not think it takes the matter further than paragraph 8 of his earlier affidavit, particularly as he did- not in his second affidavit seek to correct or qualify what he had earlier said. Produced for the respondents' inspection was a copy of a report prepared by Mr. Conlan for the Regional Director of the applicant in Melbourne, It is dated llth April, 1978. It is amongst the documents listed in paragraph 5 of the schedule. Some of its contents are omitted because it apparently contained extracts or summaries of some of the documents listed in paragraph 6 of the schedule for which privilege is claimed. The document was tendered by the : respondents because, in their submission, it tended to show that many of the documents which are the subject of contention Te ea could not have come into existence for any purpose connected with the obtaining of legal advice or of the proceedings now pending. What it showed, so it was submitted, was that there had been a lengthy investigation by the Commission for the purpose of coming to a conclusion as to whether there had been on the part of the respondents a contravention of the Act. Up to the time that it was written no question of obtaining legal advice had arisen. Also produced for the respondents' inspection were minutes of meetings of the applicant held on 21st June,1978, and 22nd March, 1979. Before the first of those meetings was a recommendation that the matter be referred to counsel to consider whether proceedings should be instituted. It was resolved that the matter be referred to counsel. The matter was not again the subject of discussion at any meeting of the applicant until 22nd March, 1979, the second of the meetings referred to. By that time counsel's advice had been received and the decision was made to proceed. Despite the unsatisfactory form of the applicant's affidavits of discovery I think that this evidence establishes that statements taken and records of interviews had after 21st June, 1978, were for the sole purpose either of obtaining advice or of the proceedings which were to be instituted. I am reinforced in that conclusion by the increasing part which the applicant's solicitor, Mr.Alexander, began to play in the taking of statements and the conduct of interviews. On the other hand, the report dated 1lth April, 1978, 8. would tend to establish that none of the documents which came into existence up to that time were produced solely for the purpose of obtaining advice let alone for the purpose of the proceedings themselves. That view of the ' matter is, in my opinion, confirmed by the terms of the minute of 21st June, 1978. Accordingly, I have reached the conclusion that the respondents are entitled to inspection of all documents which came into existence before 21st June, 1978, and to none coming into existence thereafter. It is now appropriate to go to the various documents listed in paragraph 6 of the schedule to Mr. Conlan's first affidavit. I have inspected each of the documents. Sub-paragraphs 6.1 to 6,29 inclusive and 6.31, 6.32 and 6.33 refer to a number of statements, records of interview, notes of telephone conversations, notes of interview and letters. Many of these are dated in 1977. Some are dated , in 1976, 1978 and 1979. In broad terms each of the documents deals with the price which was being charged by one of the corporate respondents for glucose in and about the years 1976 and 1977. The persons interviewed or from whom statements were taken were employees of companies, usually engaged in the manufacture of confectionary, who regularly purchased glucose for their manufacturing process. I have decided that all the documents referred to in paragraphs 6.7, 6.16, 6.23, 6.28 and 6,31 are to be made 9. available for the respondents' inspection. That is because each of the documents came into existence prior to 2lst June, 1978. I have decided that none of the documents referred to in paragraphs 6.4, 6.5, 6.10, 6.11, 6.14, 6.20, 6.21, 6.22 and 6.24 are to be made available for inspection because all such documents came into existence after 21st June, 1978. The documents referred to in paragraphs 6.1, 6.2, 6.8, 6.9, 6.15, 6.17, 6.18, 6.25, 6.26, 6.27, 6.29, 6.32 and 6.33 are dated as to some of the documents prior to 21st June, 1978, and as to the remainder after that date. Those dated prior to 2ist June, 1978, will be made available for inspection. The others will not, The documents are in folders which bear the numbers of the paragraphs. I have not taken the documents from the folders but the applicant is ordered to produce to the respondents those documents which are dated prior to 2ist June, 1978. The documents which are referred to in paragraphs 6.3, 6.6, 6.12, 6.13 and 6.19 are undated, and are said to be undated in the schedule. If the applicant is unable to specify a date for these documents it is ordered to produce them to the respondents. If it is able to specify the dates of the documents it is directed to inform the respondents of those dates and to produce such of the documents as came into existence prior to 2lst June, 1978. If there is any dispute about the matter it is to be referred back to me. The schedule says that the documents included in 6.19 include documents provided by a Mr. Moschner. I cannot identify any such documents. The applicant is 10. directed to identify such documents and to produce them to the respondents, I should add to what I have said that the documents referred to in paragraph 6.23 do not appear to me to bear any date, but I have included them amongst those to be produced because, according to the affidavit, they relate to an interview which took place on 25th November, 1976. I should also mention that there are amongst the documents the production of which has been ordered, documents which various persons have produced to the applicant. I do not understand how a claim for privilege from inspection could possibly have been made in respect of those documents. I gather that that has since become the view of the applicant's advisers at least in some cases. Inspection of some of the documents to which I have referred has been offered in paragraph 7 of Mr. Conlan's second affidavit. That concludes what I need to say about the documents referred to in sub-paragraphs 6.1 to 6.29 inclusive and 6.31, 6.32 and 6.33. I would add, however, that the documents relate for the most part to prices being charged various users of glucose during the years 1976 and 1977. It may be necessary ultimately for the applicant to attempt to prove those prices. I would be disturbed if this task were attempted by the calling of large numbers of witnesses to give oral evidence about facts which could scarcely be in issue. This matter was discussed during the argument. In due course I would expect agreement to be reached, 11. subject to questions of relevance, upon the prices which were being charged during the relevant time. Failing agreement I would propose to make a direction that the applicant as to this part of its case have leave to prove it by affidavit evidence subject to necessary cross~ examination. As I say this matter was discussed during the argument. No party dissented from the course which I propose. The documents so far dealt with would not seem to me to be of critical importance, Even if I had decided that none ought to be made available for inspection by the respondents, the respondents would have had the information they contain well before the hearing either in affidavits or in the terms of admissions which I intend to direct the applicant to seek. In a different category are documents referred to in paragraphs 6.30, 6.34, 6.35 and 6.36 of the schedule to the first affidavit of Mr. Conlan, The descriptions of the documents which have been produced for my inspection and which fall within these paragraphs reveal that the documents referred to in each are not fully described, Documents have been produced in folders each bearing the number of the paragraph in the schedule to Mr. Conlan's affidavit where they are generally described. The most critical folder contains statements of and records of interview with Mr. A. H. Matthews who was formerly an executive of one of the respondents, Allied Millis Industries Pty. Limited. It appears plain, and the 1 12. respondents know this all too well, that it was Mr. Matthews who complained to the applicant about what he believed to be conduct on the part of his employer and other flour milling companies which was in contravention of the Act. He made a statement to officers of the applicant. They put it in an appropriate form and he signed it on 30th November, 1976. The folder contains the original of that statement, two copies and a draft of it. It is not necessary to develop detailed reasons why those documents could not be made the subject of a successful claim for privilege from inspection. All I say is that I am not at all satis- fied that they came into existence solely for the purpose of enabling the applicant to obtain legal advice. Indeed I doubt whether they came into existence at all for any purpose associated with the obtaining of legal advice. They represent the commencement of the investigation which the applicant was thereafter to carry out. Accordingly the statement, the two copies and the draft will be made available for inspection by the respondents. Before signing the statement Mr. Matthews had written a letter to the applicant dated 4th November, 1976. The folder contains the letter, the envelope in which it was contained, a copy of the letter and a copy of a card which was enclosed with the letter. Those documents also will be made available for inspection by the respondents, In the same category are notes of an interview dated 2nd November, 1976. These are stapled to some other handwritten 13. documents which are undated. There are three documents in all. They will be made available for inspection, There are then two documents dated respectively 24th June and 14th September, 1976. They are inter-office memoranda sent or handed to the applicant by Mr. Matthews on or about 17th May, 1979. To each he has appended a note bearing that date. The notes will not be made available for inspection but the respondents are entitled to see the two inter-office memoranda. There are a number of sheets of paper containing handwritten notes and bearing dates 24th November, 1976, 23rd January, 1977, 20th June, 1977, lst July, 1977, 16th January, 1978, 31st March, 1978 and 7th April, 1978. These are to be produced to the respondents as is also a letter written by Mr. Matthews to Mr.- Conlan on 2nd July, 1977. I next refer to 19 sheets of paper containing the handwriting of various persons. It is not possible to ascertain the date upon which each came into existence, I have said enough to indicate what my view would be if the date were known. It may be possible for the parties to agree upon which of the 19 sheets of paper (if any) should be made available for inspection by the respondents, if not, the matter can be put back in the list. If the matter is left as it is the sheets of paper will be made available for the respondents' inspection because, the date not being known, I could not be satisfied that they came into existence solely for the purpose of obtaining 14. legal advice or of the proceedings to be instituted. Other documents in the folder comprise a large number of handwritten notes on sheets of paper, two notes of interview with Mr. Matthews and records of telephone messages, All are dated after 21st June, 1978, and many after 22nd March, 1979. I am satisfied that all such documents came into existence solely for the purpose of enabling the applicant to obtain legal advice, They will not be made available for the respondents' inspection. Finally there are copies of parts of two documents dated 9th December, 1970, and 20th February, 1976. The documents were sent to the applicant by Mr. Matthews in May 1979. To each was appended a note. The notes were placed upon the top of the documents and part of each document obliterated in the copying process, The respondents are entitled the see the documents but not the notes. I have placed those documents which I consider the respondents entitled to see in a folder bearing the notation "for inspection" and those documents which I consider the respondents not entitled to see in a folder bearing the notation "not for inspection". Both those folders have been placed inside the folder containing the paragraph 6.36 documents, Also inside it are the undated documents earlier mentioned and the two documents dated 9th December, 1970, and 20th February, 1976, together with the notes attached to then. 15. It is next convenient to go to the documents referred to in paragraph 6,30. All these documents came into existence after 21st June, 1978. I am satis- fied that each came into existence for the sole purpose of obtaining legal advice or for the sole purpose of the proceedings. They will not be made available for inspection by the respondents. Paragraph 6.34 refers to statements and other documents relating to interviews and conversations with one Mr. J.S. Cleland. The earliest of these documents are a number of notes of interview dated 16th June, 1977, and records of a company search dated 17th Jume, 1977. Also bearing that date is a report of interview with Mr. Cleland. There are further notes of an interview which took place on 27th June, 1977, and some typed notes dated 30th June, 1977. There are notes of a further interview which took place on 27th July, 1977. There is a statement (and a copy thereof) signed by Mr. Cleland on 23rd August, 1977. The original statement is in an envelope pasted inside the cover of the folder which contains the documents. There is also an undated draft of the statement and notes of conversations with Mr. Cleland dated 8th August, 12th August, 16th August and 24th August, 1977. The notes of interview concern aspects of the statement which was ultimately signed. All documents to which I have referred will be made available 16. for inspection. The remaining documents in the file are records of interview dated 20th June, 1979, and 12th October, 1979,(two copies - one inside the envelope) neither of which will be made available. Paragraph 6.35 refers to a statement by Mr. Denholm dated 25th May, 1978, together with notes of interviews and notes of telephone conversations and documents provided by Mr. Denholm. Mr. Denholm's principal statement is dated 25th May, 1978, and will be made available to the respondents for their inspection, The statement appears to be based upon some handwritten notes of interview but not all these are dated. Those that are dated bear dates earlier than 25th May, 1978. The entirety of the notes and a handwritten draft of part of the statement will also be produced for the respondents! inspection. The remaining documents comprise a note of an interview which took place on 29th May, 1979, and a record of a telephone conversation dated 23rd or 28th June, 1979. Neither of those documents will be made available for the respondents' inspection. Further documents are specified in paragraphs 6.37 to 6.41 of the schedule to Mr. Conlan's first affidavit. For some reason these documents were not produced for ny inspection. Upon the basis of the description of the various documents which appears in the affidavit, however, I have decided that the documents referred to in paragraph 17. 6.37 will not be made available for inspection, the documents referred to in paragraphs 6.38 and 6.39 will be made available for inspection and the documents referred to in paragraphs 6.40 and 6.41 will not be made available. That concludes my consideration of the applicant's claim for privilege from inspection of the documents referred to in paragraph 6 of the schedule to Mr. Conlan's first affidavit. I propose to stand the matter over for a short time to enable counsel to consider what I have said. When the matter is again in the list I shall deal, to the extent that it is necessary to do so, with the applicant's claims for privilege from inspection made in relation to other paragraphs of the schedule to Mr. Conlan's affidavit. | certify that this andthe /7 preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Justice Sheppard. Sh YI Associate, , Dated 1 Mas 1430 18.