AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234

FEDERAL COURT OF AUSTRALIA AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234

EXPLANATORY STATEMENT

It is the practice of this Court in matters which are of significant public interest to make a brief explanatory statement when delivering judgment.

The statement I now make describes the main issues in the proceedings and the conclusions I have reached. As it is a summary statement only, it is necessarily incomplete. The only authoritative pronouncement of the Court's reasons and conclusions is that contained in the published reasons for judgment. This case arises from notices to produce documents under s 2(3A) of the Royal Commissions Act 1902 ('RCA') that Commissioner Cole directed to AWB and its employees between 23 November 2005 and 20 March 2006. AWB seeks a declaration that the documents specified in revised lists of documents that AWB has filed with the Court are, or record, confidential communications that are protected from production to the Commissioner by legal professional privilege. Although the Commissioner is named as the first respondent, he advised the Court that he would take no part in the proceedings and will abide any order made by the Court. The second respondent, the Commonwealth, has acted as AWB's contradictor. At the commencement of the hearing, some 1,450 original documents were in issue. During the course of the hearing, AWB withdrew its claim for a declaration that various documents were privileged and the Commonwealth accepted that other documents were the subject of legal professional privilege. As a result, the number of contested original documents was reduced by some 550 to approximately 900 documents occupying 28 lever arch folders. The documents at issue span a period of years from about 2002 to 2006. Over that period, AWB was involved in a number of investigations concerning its sales of wheat to Iraq under the United Nations' Oil-For-Food Programme ('OFF Programme'). AWB conducted two internal investigations, known as Project Rose and Project Water. In addition, AWB was exposed to investigations by the Permanent Investigations Committee of United States Senate ('PSI'), the Independent Inquiry Committee of the United Nations ('IIC') and ultimately the Commission. So far as AWB is concerned, these investigations focused on AWB's payment of inland transportation fees, totalling approximately US$222 million, to a Jordanian company called Alia for Transportation and General Trade Co ('Alia'). In its final report, the IIC concluded that Alia was a front company for the Iraqi regime headed by Saddam Hussein and that Alia channelled these payments to Iraq in contravention of the United Nations' sanctions. A key issue in the investigations was whether AWB or any of its employees knew or suspected that this was the case. AWB's internal investigations also involved a review of matters concerning The Tigris Petroleum Corporation Limited ('Tigris'). The Commonwealth contends that AWB and Tigris entered into a transaction whereby AWB agreed to inflate the prices in two contracts (A1670 and A1680) for the supply of 1,000,000 mt of wheat to the Grain Board of Iraq ('GBI') as a means of extracting funds from the United Nations' escrow account to repay a debt of approximately US$8 million which GBI owed to Tigris and to provide AWB with the funds required to make a rebate payment to GBI. As argued before me, the case focused on three issues: (1) whether AWB has established its claim that legal professional privilege attaches to each of the documents that remain in contest; (2) whether any privilege that attaches has been waived by virtue of AWB's disclosure of the gist or substance of certain legal advices which it obtained; and, if so, what is the extent of that waiver; and (3) whether legal professional privilege attaches to documents that came into existence in connection with AWB's settlement of a claim by GBI for a rebate of approximately US$2 million on account of the fact that earlier shipments of wheat by AWB had been contaminated by iron filings ('the iron filings claim'). ESTABLISHING DOMINANT PURPOSE AWB carries the onus of proving that each relevant communication was undertaken, or each relevant document was brought into existence, for the dominant purpose of giving or obtaining legal advice. Privilege is not established merely by the use of a verbal formula or by mere assertion that communications were undertaken for the purposes of obtaining or giving 'legal advice'. Dominant purpose is a question of fact that must be determined objectively. In determining AWB's claims of legal professional privilege, I have looked to the substance of the matter, having regard to the context, the nature of the document, the evidence that was lead in support of the claim of privilege and the content of the document as revealed by inspection. I have concluded that, quite apart from any question of waiver, AWB has not made out its claim for privilege in respect of 25 documents. The evidence does not establish that the documents were confidential communications brought into existence for the dominant purpose of obtaining or giving legal advice. If, contrary to my view, privilege does attach to any of these documents, it has been waived in respect of all but four of the documents.