Appeal Panel - Internal CITATION: McGuirk v Director General, Attorney General's Department (GD) [2007] NSWADTAP 38 APPELLANT PARTIES: Michael McGuirk RESPONDENT Director General, Attorney General's Department FILE NUMBER: 069063 HEARING DATES: 15 May 2007 SUBMISSIONS CLOSED: 15 May 2007 DATE OF DECISION: 26 July 2007 BEFORE: Hennessy N - Magistrate (Deputy President); Molony P - Judicial Member; Blake C - Non Judicial Member CATCHWORDS: Freedom of Information Act - access to documents - legal professional privilege - waiver - furtherance of wrong doing - Administrative Decisions Tribunal Act - discretion to disclose exempt documents - duty to give reasons - procedural fairness - extend to merits MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 053361, 053237 DATE OF DECISION UNDER APPEAL: 09/12/2006 Evidence Act 1995 Freedom of Information Act 1989 LEGISLATION CITED : Guardianship Act 1987 Interpretation Act 1987 Protected Disclosures Act 1994 Attorney-General (NT) v Kearney (1985) 158 CLR 500 AWB v Cole (No 5) [2006] FCA 1234 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Criminal Justice Commission v Connolly [1997] 2 Qd R 586 Daniels Corp International Pty Limited v Australian Competition and Consumer Commission [2002] HCA 49 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Eggins v Brooms Head Bowling and Recreational Club Ltd (1986) 5 NSWLR 521 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 Fitzgerald v Director of Public Prosecutions (unreported, September 1991, Court of Appeal) Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 Johnson v Johnson (2000) 201 CLR 488 K v K [2000] NSWSC 1052 CASES CITED: Klewer v Dutch [2000] FCA 509 Law Society of New South Wales v General Manager, Workcover Authority of New South Wales [2004] NSWADTAP 40 Leach v R (2007) 232 ALR 325 Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456 Mann v Carnell (1999) 201 CLR 1 Minister for Immigration & Ethnic Affairs v Wu Shan Liang & Ors (1996) 185 CLR 259 Neary v The Treasurer, New South Wales [2002] NSWADT 261 Obradovic v Commissioner for Fair Trading, Office of Fair Trading (No 2) (GD) [2006] NSWADTAP 45 Pettitt v Dunkley [1971] 1 NSWLR 376 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 Re Attorney General of New South Wales v Klewer [2003] NSWCA 295 Re R [2000] NSWSC 886 (17 August 2000) S v S [2001] NSWSC 146 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Trade Practices Commissioner v Sterling (1979) 36 FLR 244 University of New South Wales v McGuirk [2006] NSWSC 1362 APPELLANT In person REPRESENTATION: RESPONDENT J McDonnell, solicitor ORDERS: 1. The appeal on a question of law is dismissed.; 2. Leave is granted for the appeal to be extended to the merits of the Tribunal's decision in relation to the exercise of the discretion to give access to exempt documents.; 3. Leave is refused for the appeal to be extended to the merits of the Tribunal's decision in any other respect.; 4. The Appeal Panel makes the following directions:; a) The Applicant is to file and serve any further submissions in relation to the exercise of the discretion to give access to the exempt documents within 28 days of the date of these reasons.; b) The Respondent is to file and serve any submissions in reply within a further 28 days.; c) The Appeal Panel will make a decision on the paper pursuant to s 76 of the Administrative Decisions Tribunal Act 1997 having regard to the evidence that was before the Tribunal and the further submissions of the parties. REASONS FOR DECISION Introduction 1 In two separate applications, Mr McGuirk requested that the Attorney General's Department provide him with certain documents under the Freedom of Information Act 1989 (FOI Act). While some of the documents he requested were provided, 39 were withheld on the ground that they were exempt because they were protected by legal professional privilege. The Tribunal affirmed those decisions. Mr McGuirk has appealed to the Appeal Panel. The appeal was on a question of law. Mr McGuirk also sought the Appeal Panel's leave for the appeal to be extended to a review of the merits of the Tribunal's decision: Administrative Decisions Tribunal Act 1997 (ADT Act) s 113(2). 2 The background to the two requests for documents is that Mr McGuirk had initiated prosecutions for alleged breaches of the Protected Disclosures Act 1994 against five people who were, or had been, employed by the University of New South Wales. The matter was first listed before the Local Court in Newtown on 22 December 2003. Each of the defendants requested the University's solicitor to provide him with legal assistance. Those requests were referred to Mr Andrew Mullen, Assistant University Solicitor. On 16 December 2003, one of the Assistant Crown Solicitors with the Crown Solicitor's Office received a facsimile from Mr Mullen requesting that the Crown Solicitor act for the defendants in relation to the criminal proceedings. James Shevlin and subsequently Catherine Follent, had carriage of the matter. Counsel were briefed to represent the defendants. The trial commenced in February 2005. On the third day, Mr McGuirk agreed that he would not lead any further evidence if no costs orders were made and the matters were dismissed. 3 The two categories of documents Mr McGuirk requested under the FOI Act were as follows: Matter No 053237 "1.Copies of correspondence with the Crown Solicitor's Office (CSO) in regard to the cost of providing material subpoenaed by the CSO in regard to the McGuirk v Niland & Ors matter. 2. Copies of all correspondence between the Crown Solicitor's Office and the University of New South Wales in regard to the legal costs, and the payment of these legal cost, associated with the defence of Professors John Niland, John Ingleson, Roger Layton, Greg Whittred and Mr Neil Morris in the McGuirk v Niland & Ors matter concluded in the Downing Street Local Court on Friday 11 February 2005. 3. Copies of any applications for ex gratia assistance for legal representation made by Professors John Niland, John Ingleson, Roger Layton, Greg Whittred and Mr Neil Morris in relation to the above matter, in accordance with the "Guidelines for the Provision of Ex Gratia Assistance for Legal Representation for Ministers of the Crown, Public Officials and Crown Employees." Matter No 053361 l. Copies of all correspondence between the Crown Solicitor and the University of New South Wales in regard to the representation by the Crown Solicitor of Professor John Niland, Professor John Ingleson, Professor Greg Whittred, Professor Roger Layton and Mr Neil Morris ("Niland et al.") in the McGuirk v Niland & Ors matter which was heard in the Downing Street Local Court on 9, 10 and 11 February 2005. 2. Copies of all correspondence between the Crown Solicitor and Professor John Ingleson, Professor Greg Whittred and/or Mr Neil Morris in regard to their representation by the Crown Solicitor in accordance with Section 48(1)(g) of the Legal Profession Act 1987 in the McGuirk v Niland & Ors matter. 3. Copies of all correspondence between the Crown Solicitor and Professor John Niland and/or Professor Roger Layton in regard to their representation by the Crown Solicitor in accordance with Section 48(1)(g) of the Legal Profession Act 1987 in the McGuirk v Niland & Ors matter. 4. Copy of the application (or applications) made by the Crown Solicitor to the Attorney General seeking the approval of the Attorney General for the Crown Solicitor to represent Professors John Niland and Roger Layton in accordance with Section 48(1)(g) of the Legal Profession Act 1987 in the McGuirk v Niland & Ors matter, and the response (or responses) from the Attorney General. 5. Copies of any documents showing a line of delegation from the Attorney General to the Solicitor General which would enable the Solicitor General to approve on behalf of the Attorney General the representation of Professors John Niland and Roger Layton by the Crown Solicitor in the McGuirk v Niland & Ors matter. 6. Copies of any internal memoranda, emails, file notes, minutes of meetings and other similar documentation held by the Crown Solicitor in regard to the representation of Niland et al. by the Crown Solicitor in the McGuirk v Niland & Ors matter." Legal Professional Privilege 4 In relation to the 39 documents in dispute, the Department relied on the exemption in Clause 10 of Schedule 1 to the FOI Act: 10 Documents subject to legal professional privilege (1) A document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege. (2) A document is not an exempt document by virtue of this clause merely because it contains matter that appears in an agency's policy document. Tribunal's decision 5 It was not in dispute that the principles of legal professional privilege applicable to proceedings under the FOI Act are the common law principles, rather than those enunciated by the Evidence Act 1995. A confidential communication between a lawyer and his or her client is protected by legal professional privilege if it is made for the dominant purpose of contemplated or pending litigation, or for obtaining or giving legal advice: Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; Daniels Corp International Pty Limited v Australian Competition and Consumer Commission [2002] HCA 49; Law Society of New South Wales v General Manager, Workcover Authority of New South Wales [2004] NSWADTAP 40 at [22]. The privilege extends to communications between a lawyer or client and a third party if made for the purpose of actual or contemplated litigation. 6 In summary, the Department submitted that the defendants instructed the Crown Solicitor to act on their behalf through Mr Mullen, the Assistant University Solicitor. They said Mr Mullen was, in some respects, the agent of the defendants, in that he arranged for the Crown Solicitor to act for them, conveyed their instructions to the Crown Solicitor and conveyed the Crown Solicitor's advice to them. According to the Department, Lockhart J in Trade Practices Commissioner v Sterling (1979) 36 FLR 244 at 245-246 made it clear that privilege can arise and be maintained even where the solicitor and/or the party act through agents. In other circumstances the Department said that Mr Mullen was acting as a legal adviser to the defendants. He collected evidence and provided it to employees of the Crown Solicitor. Again, the Department relied on the decision of Lockhart J in Trade Practices Commissioner v Sterling (1979) 36 FLR 244 at 245-246 to submit that a person may have more than one legal adviser and that communications among the various legal advisers fall within at least one of the categories articulated in that decision. 7 Mr McGuirk's submissions were essentially that communications between the Crown Solicitor and the University's solicitor fall outside the solicitor/client relationship because the University was not the client of the Crown Solicitor's Office. Secondly, Mr McGuirk said that any privilege that may have existed has been waived because the communication has been disclosed to a third party, namely the University. Finally, Mr McGuirk said that the privilege was lost because of improper conduct on the part of the defendants and/or the University. 8 Below we set out the Tribunal's decision together with the grounds of appeal and our conclusions in relation to each of those grounds. Tribunal's role 9 After setting out the background to the application, the Tribunal identified its role as being to determine the "correct and preferable decision". Section 63 of the ADT Act sets out that test and goes on to state that the determination must be made "having regard to the material then before it, including ... any relevant factual material (and) any applicable written or unwritten law." The Tribunal also referred to 61 of the FOI Act which states that the agency has the burden of establishing that its determination is justified. In this case, the agency tendered both open and confidential evidence in order to justify its decisions. 10 One of Mr McGuirk's grounds of appeal was that the Tribunal did not have regard to the material that was before the Tribunal. He said that that material includes a document headed "Written Outline of Submissions for the Applicant" dated 12 December 2005 together with attachments. Apart from the content of that submission, there were five attachments. The attachments included correspondence between himself and the University's solicitor, Ms Kirby, the Hon RJ Carr, MP (as he then was) and the Hon R Debus MP (as he then was) in which Mr McGuirk narrates the history of his complaints about alleged breaches of the Protected Disclosures Act 1994 and corruption within the University, the Independent Commission Against Corruption (ICAC) and the public service generally. Another attachment is a letter from the University's solicitor responding to his letter which notes, among other things, that there was an investigation into matters raised by him conducted by external experts for the University and that both the Ombudsman and ICAC considered matters that he had raised. The attachments also include a copy of correspondence between Mr Mullen and Maurice Blackburn Cashman Lawyers who were acting for Mr McGuirk in the prosecution, about the cost of the University complying with a summons to produce documents. 11 At [10] to [44], the Tribunal sets out the applicable legislation and outlines the submissions of each party. The Tribunal summarised Mr McGuirk's submissions at [31] to [44]. It is apparent from that summary that the Tribunal had regard to the material presented by Mr McGuirk. We do not accept Mr McGuirk's submission to the contrary. Findings that legal professional privilege applied 12 The Tribunal's first finding was that each of the documents in dispute falls within one of the categories of legal professional privilege outlined by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245-246. The relevant passage from Sterling, with citations and footnotes deleted, is as follows: Legal professional privilege extends to various classes of documents including the following: (a) Any communication between a party and his professional legal adviser if it is confidential and made to or by the professional adviser in his professional capacity and with a view to obtaining or giving legal advice or assistance; notwithstanding that the communication is made through agents of the party and the solicitor or the agent of either of them. ... (b) Any document prepared with a view to its being used as a communication of this class, although not in fact so used. ... (c) Communications between the various legal advisers of the client, for example between the solicitor and his partner or his city agent with a view to the client obtaining legal advice or assistance. ... (d) Notes, memoranda, minutes or other documents made by the client or officers of the client or the legal adviser of the client of communications which are themselves privileged, or containing a record of those communications, or relate to information sought by the client's legal adviser to enable him to advise the client or to conduct litigation on his behalf. ... (e) Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence. ... (f) Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action. ... (g) Knowledge, information or belief of the client derived from privileged communications made to him by his solicitor or his agent. 13 The Department had categorised the 39 disputed documents into nine classes (A to I) depending on the character of the documents and the identity of the author and the recipient, if any. In its written submissions to the Tribunal, the Department submitted that each class of document fell within one of the categories of legal professional privilege identified in Sterling. Although the Tribunal did not say so expressly, it is apparent from the decision that it accepted those submissions. 14 Mr McGuirk's first ground of appeal in relation to the Tribunal's finding that legal professional privilege applied to each of the documents, is that the categories in Sterling are merely "possibilities". He said that it does not follow that if a document falls into one of those categories it is necessarily protected by legal professional privilege. We do not agree with that proposition. Lockhart J said, "[L]egal professional privilege extends to various classes of documents including the following". While the list that followed is not exhaustive, these are the classes of documents where the privilege has traditionally been held to apply: Criminal Justice Commission v Connolly [1997] 2 Qd R 586 at 594 per Thomas J. 15 Mr McGuirk's next ground of appeal was that the Tribunal found, incorrectly, at [51], that there was a solicitor/client relationship between Mr Mullen and the defendants. The correct finding, according to Mr McGuirk, should have been that there was a solicitor/client relationship between the University and the defendants. That is because he says Mr Mullen "has no legal standing other than as an officer of the University". The Department submitted that the Tribunal properly considered the nature of the relationship between Mr Mullen, the University, the defendants and the Crown Solicitor. The Tribunal found, as a matter of fact, that Mr Mullen was providing legal advice to the defendants. 16 There is no legal error in the Tribunal's findings at [51]. The University itself cannot be a lawyer – only one or more individuals can be the lawyers for a client. The fact that Mr Mullen is an employee of the University does not mean that he cannot be one of the lawyers for the defendants. Loss of the privilege - waiver 17 The Tribunal recognised that the protection of legal professional privilege may be lost in at least two circumstances. The first is where the privilege is waived because of an inconsistency between the conduct of the client and the maintenance of the privilege. The second is where the communication is made in furtherance of a wrongdoing. 18 In relation to waiver, the Tribunal correctly pointed out that privilege is waived if there is inconsistency between the conduct of the client (in this case the defendants) and the maintenance of the confidentiality: Mann v Carnell (1999) 201 CLR 1 at [28]. Mr McGuirk pointed out that the University is a separate legal entity from the five defendants. He said that it follows that any voluntary disclosure by the defendants to Mr Mullen in relation to legal advice, was a disclosure to a third party which waived any privilege attaching to the communication. The Department submitted to the Tribunal that the use of Mr Mullen as a conduit to pass information between the defendants and the Crown Solicitor is not inconsistent with the maintenance of confidentiality. 19 The Tribunal rejected Mr McGuirk's submission at [50]. The reasons are set out at [51]: In McGuirk v University of New South Wales [2006] NSWADT 256 I stated that I was satisfied that there was a solicitor-client relationship between Mr Mullen and the defendants. I remain of that view. Mr Mullen provided a number of services to the defendants. These included acting as the agent of the defendants, in that he arranged for the CSO to act for them, conveyed their instructions to the CSO and conveyed the CSO's advice to them. The function that Mr Mullen performed was to enable the defendants to obtain the legal advice they needed. It cannot be said that there is any inconsistency between the conduct of the client in providing the withheld documents to Mr Mullen and maintenance of the confidentiality. 20 The finding that Mr Mullen was acting at times as the agent and at times as the solicitor for the defendants and that there was no inconsistency between the conduct of the clients and the maintenance of the confidentiality, are findings of fact. Those findings were supported by the evidence and do not amount to an error of law. Loss of privilege - furtherance of wrong doing 21 Another way in which legal professional privilege may be lost is where the communication contained in the document furthers some wrong doing. The wrong doing may be a crime including fraud, an abuse of statutory power or some improper purpose. (See Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 545 and Attorney-General (NT) v Kearney (1985) 158 CLR 500.) In a decision handed down after the Tribunal delivered its reasons, Young J described the activities encompassed by this principle: The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes and extends to 'trickery' and 'shams'. As the fraud exception is based on public policy grounds, it is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest. ( AWB v Cole (No 5) [2006] FCA 1234, [210].) 22 The Tribunal summarised Mr McGuirk's allegations of wrong doing at [35], [39], [40] and [42]. 35 Mr McGuirk made specific allegations of improper conduct against the defendants. These included allegations of a course of action designed to frustrate the intent of the Protected Disclosures Act 1994 and to oppress people who make Protected Disclosures; alleged actions in breach of the University Code of Conduct, relevant University policies and procedures and the Higher Education Contract of Employment Award 1998; and the contention that the defendants avoided personal liability for the costs associated with the legal action by the payment of their legal expenses in breach of the Premier's Memorandum 99-11 and the "Guidelines for the Provision of Ex Gratia Assistance for Legal Representation for Ministers of the Crown, Public Officials and Crown Employees" ("the Guidelines"). 39 Mr McGuirk also contends that the Department did not follow the procedures outlined in the Premier's Memorandum 99-11 and the Guidelines. The Premier's memorandum No 99-11 makes provision for the grant of ex-gratia legal assistance to public officials where, amongst other things, legal proceedings have been commenced against them and where the proceedings relate to a person's official duties... 40 Mr McGuirk referred to the evidence of Ms Follent and Mr Mullen that the University paid the CSO's Solicitor's fees and disbursements, despite the fact that a formal grant of Crown representation was not pursued. He says that such an application was required before ex gratia legal assistance can be provided to public officials. He argues that the diversion of public monies for private purposes without official authorisation is corrupt conduct in the terms of Sections 7, 8 & 9 of the Independent Commission Against Corruption Act 1988. 42 Mr McGuirk further contends that in the matter of McGuirk v Niland & Ors, the prosecution case was extremely strong. He says that the financial resources available to the defendants were largely provided by the University in breach of government policy and that a decision was taken to defend the action by using those resources in an oppressive manner. 23 The Tribunal set out its approach when determining whether allegations of wrongdoing have been made out at [46]: With respect to Mr McGuirk's assertions of improper conduct and that the withheld documents are denied the protection of privilege, I agree with Ms Johnson that in order to resist the claim of privilege Mr McGuirk must be able to put cogent and reasonable evidence before the Tribunal which is sufficient to demonstrate a prima facie case of improper purpose. An improper purpose is not to be inferred lightly. Mere allegation is not enough. If the purpose of a decision has to be ascertained by inference, a presumption of regularity operates : Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 per Gaudron J at 671-2. 24 The Tribunal made its findings in relation to the improper conduct allegations at [47] – [49]: 47 I note that I found each of the witnesses who appeared for the Department credible witnesses. Their evidence was not significantly affected by the cross-examination. I make no findings of any impropriety in relation to the roles that they played in relation to this matter. 48 Clearly, the defendants instructed the CSO to defend the case brought against them. I agree with Ms Johnson that any conduct prior to the CSO receiving instructions from the defendants is irrelevant for the purposes of these proceedings. In regard to conduct after the CSO received instructions, it is my view that Mr McGuirk has done no more than suggest that the communication was made in furtherance of an improper purpose. I do not agree with his assertion that the University paying for the legal costs incurred by the defendants in defending the proceedings can affect the privilege. Similarly, a failure to follow the procedures outlined in the Premier's Memorandum 99-11 or the Guidelines is not conduct that affects the privilege. I do not consider that the Public Service Association case has any application to these proceedings. 49 I note Mr McGuirk's assertions with respect to the strength of his case against the defendants and that the conduct of the prosecution was oppressive. I have insufficient basis on which I could conclude that this was the case or that it could prevent a claim for privilege. I cannot be satisfied to the requisite standard that this was the case. In my view, the withheld documents attract legal professional privilege. 25 Mr McGuirk presented four grounds of appeal in relation to the Tribunal's approach to, and findings about, improper conduct. Firstly, he said that [46] does not set out the correct test in relation to the kind of evidence necessary to support an allegation of wrongdoing. Secondly, Gaudron J's statement in Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 was obiter dicta and Her Honour was in dissent. Thirdly, he says that the words underlined in [48] are not a correct statement of the law. Finally, Mr McGuirk submitted that the Tribunal should have accepted his evidence of wrongdoing. 26 Incorrect test. Mr McGuirk relies on a passage from the recent decision of AWB v Cole (No 5) [2006] FCA 1234 at [218] in support of his contention that the Tribunal misstated the principle in relation to the nature of evidence necessary to raise the issue of improper purpose: It is not necessary to prove an improper purpose on the balance of probabilities. The 'prima facie' test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler; Propend; Beazley. It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. 27 This passage is not inconsistent with the Tribunal's statement of the law at [46]. In that passage, the Tribunal adopted the "prima facie case' test referred to by Young J. 28 Presumption of regularity. Mr McGuirk's second point in relation to [46] of the Tribunal's decision was that Gaudron J was in dissent in Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 and her comment was obiter dicta. The fact that Gaurdron J was in dissent or that the comments were obiter dicta is irrelevant. It remains the fact that there is a presumption, which applies to official acts, that all necessary conditions and formalities have been satisfied until the contrary is proved. To the extent that any alleged conduct of the University or the Crown Solicitor's Office can be characterised as "official acts" that presumption applies. The Tribunal did not err in noting that that is the case. 29 Relevance of conduct prior to receiving instructions. Mr McGuirk's next ground of appeal relates to the words underlined in [48]. He submitted that that statement fails to correctly apply the legal principles relating to the furtherance of wrong doing as described by Young J in AWB Limited v Cole (No 5) [2006] FCA 1234. Mr McGuirk appears to be referring to the following passages at [214] to [215] of that decision (footnotes deleted): Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party. It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest. This aspect of the principle is reflected in the statement that '[t]he privilege takes flight if the relationship between lawyer and client is abused': Clark v United States (1933) 289 US 1 at 15; see also Kearney at 514 and 524. ... 30 This decision was handed down after the Tribunal's decision was delivered on 12 September 2006. The Department's submission was firstly that the applicable law is that which applies at the date of the trial. Unless the party wishing to take the point on appeal had conceded that the current state of the law was erroneous when the matter was argued below, any change to the law cannot be raised on appeal: Eggins v Brooms Head Bowling and Recreational Club Ltd (1986) 5 NSWLR 521 at 524-525. Before the Tribunal, Mr McGuirk had submitted that the conduct of the five defendants prior to the CSO receiving instructions was relevant, but did not submit that the reasoning of Gaudron J in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 545 was erroneous. 31 Alternatively, the Department submitted that there is nothing in the judgment of Young J in AWB Limited v Cole (No 5) [2006] FCA 1234 that was drawn to the Appeal Panel's attention, which is inconsistent with the Tribunal's findings. We agree with the Department's alternative submission. There is nothing in the decision of Young J which departs from Gaudron J's approach in Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501at 545 or the conclusion of the Tribunal when applying that decision. The Tribunal set out the relevant passage at [19] of the decision: Communications made in furtherance of future wrongdoing fall outside legal professional privilege, although there is no particularly precise statement as to the nature of the wrongdoing that produces that result. However, legal professional privilege clearly extends to the situation in which a person seeks advice with respect to past misdeeds. 32 In the AWB case the privilege was destroyed because lawyers were engaged to further an improper purpose. The Tribunal found that there was no prima facie evidence of improper purpose in this case. That finding was not affected by legal error. 33 Evidence of wrong doing. The Tribunal said that conduct prior to the CSO receiving instructions from the defendants is irrelevant. In our view, that is not correct. Conduct of the defendants prior to the CSO receiving instructions may be relevant if communications subsequently made to the lawyer are in furtherance of the improper purpose. Even if the Tribunal had regarded such conduct as relevant, there was no prima facie evidence of such an improper purpose. The Tribunal found at [48] that Mr McGuirk had "done no more than suggest that the communication was made in furtherance of an improper purpose" and at [49] that there was "insufficient basis on which I could conclude that" the conduct of the defence was "oppressive". According to Mr McGuirk, his 20 page submission entitled "Written Outline of Submissions for the applicant" and dated 12 December 2005 together with the attachments, provided ample evidence of wrong doing. He said that the Tribunal is not bound by the rules of evidence and the material he put before the Tribunal is sufficient to prove his allegations: ADT Act, s 73(2). Mr McGuirk said that if that evidence was not sufficient he could provide the Tribunal with further evidence of wrong doing. 34 While the Tribunal is not bound by the rules of evidence, that does not mean that it is bound to accept every uncontradicted assertion made by a party. The Tribunal had regard to the evidence that Mr McGuirk presented. It found that evidence to be either irrelevant or insufficient to make out a prima facie case of improper purpose. Those findings were open to it to make. It would be unfair to the University to allow Mr McGuirk to submit further evidence at the appeal stage when he had ample opportunity to do so before the Tribunal. 35 Mr McGuirk asserted that there was ample evidence of improper purpose to be found in materials he had filed in previous applications to the Tribunal. The Tribunal is required to determine an application on the basis of the material "then before it": ADT Act, s 63(1). Material is not "then before" the Tribunal if it is material filed in other proceedings. The material on which a party seeks to rely must be filed with the Tribunal and served on the other party. Discretion to disclose exempt documents 36 Since the Tribunal handed down its decision, the Supreme Court decided in University of New South Wales v McGuirk [2006] NSWSC 1362 at [102] per Nicholas J, that s 63 of the ADT Act provides the Tribunal with a discretion "to order access to be given to documents which are exempt documents under the FOI Act if it decides that to do so is the correct and preferable decision with regard to the material then before it." Previously, the view had been taken in several cases including Neary v The Treasurer, New South Wales [2002] NSWADT 261, that it was not open to applicants for review to seek an order that an agency release an otherwise exempt document. 37 The Tribunal referred to the discretion to give access to otherwise exempt documents at [53] and [54]: 53 The question of whether the Tribunal has any discretion under section 25(1)(a) of the FOI Act to release a document that has been found to be exempt has been raised in a number of matters before this Tribunal. To my knowledge it has not been resolved at the Appeal Panel level. Section 25(1)(a) provides that an agency may refuse access to a document if it is an exempt document. Arguably, while this section gives the agency discretion to release an exempt document, the Tribunal is not exercising power under section 25 when it is determining an application. In Neary -v- The Treasurer, New South Wales [2002] NSWADT 261 the Tribunal's President considered the issue in some detail and concluded at paragraph 83: "83 Accordingly in my view it is not open to applicants for review to seek an order, purportedly in exercise of powers conferred by s 25, that a Minister or agency release an otherwise exempt document. That discretion remains entirely with the Minister or agency." 54 I agree with that view, however if such discretion may be said to exist, I consider that it is not appropriate in the circumstances of this case to release the disputed documents in any event. 38 Mr McGuirk says that the Tribunal erred by not applying the principles set out by Nicholas J and, alternatively, if he did apply those principles, he gave inadequate reasons for his decision. 39 The Tribunal dealt with the possibility that the discretion identified by Nicholas J existed but decided that even if it did, it was not appropriate in the circumstances of this case to release the disputed documents. We are satisfied that the Tribunal made its decision, in the alternative, on the assumption that the discretion identified by Nicholas J did exist. We deal with Mr McGuirk's submission about adequacy of reasons at [44] to [49]. Failure to exercise jurisdiction 40 Mr McGuirk says that the following passage at [55] of the Tribunal's decision, demonstrates that the Tribunal failed to exercise the jurisdiction conferred by s 63 of the ADT Act. 55 It follows, in my view that the Department is entitled to assert that legal professional privilege attached to the withheld documents. Accordingly, the determination by the (sic) to withhold the documents in full should be affirmed. 41 Section 63 of the ADT Act states that (1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision. (3) In determining an application for the review of a reviewable decision, the Tribunal may decide: (a) to affirm the reviewable decision, or (b) to vary the reviewable decision, or (c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or (d) to set aside the reviewable decision and remit the matter for reconsideration 42 McGuirk submits in relation to the Tribunal's comment in [55], that even if the Department is entitled to assert that legal professional privilege attaches to the withheld documents, it does not follow from that proposition that the Tribunal should affirm the Department's decision. He said that the Tribunal erred by saying that it did. 43 While [55] read on its own, suggests that because the University is entitled to assert that legal professional privilege applies to the document, that determination should be affirmed, a reading of the decision as a whole suggests otherwise. Paragraph 55 follows [53] and [54] reproduced above, in which the Tribunal discussed whether or not it had a discretion to give access to exempt documents. It decided that if it did have such a discretion it was not appropriate to exercise it in the circumstances of this case. It follows from that conclusion that the exemption applies and the decision should be affirmed. It is clear when reading the decision as a whole, that the Tribunal was aware of its role. At [7] the Tribunal correctly pointed out that its role was to "determine the correct and preferable decision". It came to an independent view on the question of whether or not the documents were exempt. The Tribunal's choice of words in [55] does not reflect what the approach it actually took in practice. It is not our role to concern ourselves with looseness in the language or unhappy phrasing when considering whether an error of law has been made: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287. Similarly, in Minister for Immigration & Ethnic Affairs v Wu Shan Liang & Ors (1996) 185 CLR 259 the High Court warned against scrutinising too closely the words of a tribunal when reviewing its decision. Inadequate reasons 44 A more general ground of appeal was that the Tribunal failed to give adequate reasons for its decision. The examples quoted in support of that submission are underlined below: 45 I have examined the documents that have been provided to me on a confidential basis. I am satisfied that each of those documents falls within the categories of legal professional privilege outlined by Lockhart J in Trade Practices Commission v Sterling. I do not agree with Mr McGuirk's assertion that the documents in Category I do not attract privilege. While I accept that they are documents of an administrative character, in my view they are connected to the giving of the legal advice and are therefore privileged. 48 Clearly, the defendants instructed the CSO to defend the case brought against them. I agree with Ms Johnson that any conduct prior to the CSO receiving instructions from the defendants is irrelevant for the purposes of these proceedings. In regard to conduct after the CSO received instructions, it is my view that Mr McGuirk has done no more than suggest that the communication was made in furtherance of an improper purpose. I do not agree with his assertion that the University paying for the legal costs incurred by the defendants in defending the proceedings can affect the privilege. Similarly, a failure to follow the procedures outlined in the Premier's Memorandum 99-11 or the Guidelines is not conduct that affects the privilege. ... 54 I agree with that view, however if such discretion may be said to exist, I consider that it is not appropriate in the circumstances of this case to release the disputed documents in any event. 45 Section 89(2) of the ADT Act imposes a duty on the Tribunal to give reasons, either orally or in writing. Section 89(5) provides that written reasons are to set out: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. 46 Apart from the situation where a party requests written reasons for an oral decision, the Tribunal is not obliged by statute to give "adequate" reasons. Even though there is no statutory requirement governing the adequacy of reasons given under s 89(2), common law principles are relevant. At common law, there is a judicial duty to give adequate reasons: see, for example, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70; Pettitt v Dunkley [1971] 1 NSWLR 376; Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. That duty appears to apply to tribunals as well as courts. 47 In Absolon v NSW TAFE [1999] NSWCA 311, the New South Wales Court of Appeal considered whether appropriate reasons had been given for a decision of the Tribunal in the Equal Opportunity Division. In that case, Powell JA stated that: [66] Although there is no general rule of the common law, or principle or natural justice, that requires reasons to be given for administrative decisions (see, for example, Public Service Board of New South Wales v Osmond (1985-1986) 159 CLR 656, 662 per Gibbs CJ), it seems to be accepted that, at least in relation to administrative tribunals which, by the statutes creating them, are required to give reasons for their decisions, it is appropriate to apply the rules - and, in particular, the rules relating to the giving of reasons - which are ordinarily to be regarded as an incident of the judicial process. However, as Mahoney JA (as he then was) said in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 273: "There is, I think, no formula the application of which to the instant case will indicate what, in that case, the judge must do. Where, in the decision of an ordinary dispute, reasons are necessary, they are necessary because of the expectation that, being a judicial decision, a sufficient explanation will be given of why the order was made. And, in my opinion, it will ordinarily be sufficient if - to adopt the formula used in a different part of the law: see R v Associated Northern Collieries (1910) 11 CLR 738 at 740 - by his reasons the judge apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted. To require that a judge detail the way in which he has reasoned step by step to his conclusion is, in my opinion, to mistake the nature of the judicial process." [67] It should, however, be noted that an error of law in giving no, or in giving inadequate, reasons for judgment differs from an error of law in coming to a verdict or decision, for the latter directly vitiates the verdict or decision, either, in the sense that the verdict or decision thereby is legally wrong and reversible, or, in the sense that the verdict or decision is based on an error in the legal process so that a new trial is attracted. A failure to give any, or any adequate, reasons does not, without more, establish that the verdict or decision involved some error although there may be cases - of which it is submitted here that the present is one - which warrant the inference that the relevant Tribunal has failed in some respect to exercise its powers according to law (see, for example, Repatriation Commission v O'Brien (1984-1985) 155 CLR 422, 445-446 per Brennan J (as he then was)). 48 The Tribunal summarised the submissions and the evidence relied on by the parties and agreed with the Department that each class of document fell within one of the categories of legal professional privilege identified in Sterling. Although the Tribunal did not say so expressly, it is apparent that it accepted the categorisation put forward by the Department in its written submissions. Whether a document comes within one of the categories in Sterling is essentially a question of fact to be determined after examining the document. 49 Similarly, the findings at [48] are findings of fact. The Tribunal took the view that the fact that the University paid for the legal costs of the defendants was not a matter which gave rise to any improper purpose. Similarly a failure to follow certain policy guidelines does not affect the privilege in the circumstances of this case. No further explanation was necessary and the Tribunal's reasoning was adequate. 50 In relation to the Tribunal's conclusion at [54], the Tribunal did not expressly state the reasoning processes that lead to the conclusion that it is not appropriate in the circumstances of this case to release the disputed documents. That decision involved the exercise of a discretion. The Tribunal did not set out the considerations that it took into account in exercising that discretion, nor did it explain why it reached that conclusion. The Tribunal failed to comply with the requirement in s 89(5) to set out the reasoning processes that lead the Tribunal to the conclusions it made. That failure amounts to an error of law which justifies the Appeal Panel extending the appeal to the merits of the Tribunal's decision on this point. The parties have already put forward many of the public policy considerations in relation to the question of whether the documents should disclosed. We consider that this issue can be adequately determined on the basis of any further written submissions, in the absence of the parties: ADT Act, s 76. Procedural fairness – competency of Tribunal member 51 A further ground of appeal was that the Tribunal at first instance had breached the rule against bias. Mr McGuirk relied on the High Court's decision in Johnson v Johnson (2000) 201 CLR 488 referring to the International Covenant on Civil and Political Rights (ICCPR) to submit that the Tribunal was in breach of the rules of procedural fairness because it was not a "competent independent and impartial tribunal established by law." According to Mr McGuirk, the Tribunal Member hearing this case at first instance, Mr Montgomery, is not competent and a review of his decisions over the last three years would support that assertion. 52 The phrase "competent independent and impartial tribunal established by law" is taken from the International Covenant on Civil and Political Rights and is referred to in the following passage of the High Court's decision at 501 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ: It is a 'fundamental rule of natural justice' and an 'abiding value of our legal system' that every adjudicator must be free from bias. This same principle has been accepted in the international law of human rights, which supports the vigilant approach this Court has taken to the possibility that the "parties or the public might entertain a reasonable apprehension" that an adjudicator may not be impartial. Thus, Art 14.1 of the International Covenant on Civil and Political Rights, the starting point for consideration of the relevant requirements of international law, states: "All persons shall be equal before the courts and tribunals. In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent independent and impartial tribunal established by law." 53 The High Court is referring in this passage to the second limb of the rule of procedural fairness, that is, the rule against bias. It is firmly established in the Australian context that a decision maker should be, and should be seen to be, impartial and independent: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337. The High Court was making the point in Johnson v Johnson (2000) 201 CLR 488 that the principle that every adjudicator should be free from bias has also been accepted in the international law of human rights. In that context, the expression includes the notion of a "competent" tribunal. The use of that term in the ICCPR does not mean that an Australian tribunal member should be disqualified unless he or she displays a particular level of competence. The only qualification for appointment as a judicial member is that the person either "holds or has held a judicial office" or is "an Australian lawyer (within the meaning of the Legal Profession Act 2004) of at least 7 years standing": ADT Act, s 17. Procedural fairness – pro agency bias 54 Mr McGuirk said that the Tribunal displayed a "pro-agency bias" in this matter and in other matters involving himself and the University. The University's response was that there is nothing in the Tribunal's reasons to suggest actual or apprehended bias, nor should Mr McGuirk be able to rely on assertions of "pro-agency" bias in other cases without specifically bringing those matters to the attention of the Tribunal. Mr McGuirk said that the pro-agency bias is reflected in the transcripts and decisions of other proceedings to which Mr McGuirk has been a party. Mr McGuirk did not identify the proceedings to which he was referring, nor did he present transcripts or decisions to the Tribunal as evidence of his assertions. Instead, he appeared to be of the mistaken view that the Tribunal (and the Appeal Panel) should know what the Tribunal has done on previous occasions and that the details of those proceedings are 'constructively' before the Tribunal. 55 Even though the Tribunal is not bound by the rules of evidence, the rules of procedural fairness apply: ADT Act, s 73(2). Unless the University knows precisely what Mr McGuirk is asserting, in relation to the previous conduct of the Tribunal, and has a reasonable opportunity to respond to those assertions, the hearing rule will be breached. In this case Mr Mcguirk did not identify that conduct with any precision. Of course we are aware that Judicial Member Montgomery has made decisions adverse to Mr McGuirk on previous occasions. He has also made decisions in his favour. Even a series of adverse decisions would be unlikely to justify disqualifying Judicial Member Montgomery for bias: Re Attorney General of New South Wales v Klewer [2003] NSWCA 295; Klewer v Dutch [2000] FCA 509; Fitzgerald v Director of Public Prosecutions (unreported, September 1991, Court of Appeal.) 56 In those circumstances we have confined our consideration of Mr McGuirk's ground of appeal to any pro-agency bias demonstrated by Mr Montgomery in the current proceedings. The law on bias is set out in Ebner v Official Trustee in Bankruptcy and Ors (2000) 205 CLR 337. At [8] Gleeson CJ, McHugh, Gummow and Hayne JJ set out the two steps required to make out apprehended bias: First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. 57 Mr McGuirk suggested that if Montgomery JM had found against the Department, the Director General would not have reappointed him as a member of the Tribunal. It is the Attorney General and not the Director General who appoints members to the Tribunal: ADT Act, s 13(2). Furthermore, the mere fact that a judicial member's appointment is for a fixed term does not lead to an apprehension that he or she will make a biased decision in order to ensure re-appointment. Extension to the merits 58 Mr McGuirk requested that the appeal be extended to the merits of the Tribunal's decision: ADT Act, s 113(2)(b). We have already extended the appeal to the merits of the Tribunal's decision not to exercise its discretion to grant access to the documents it had found to be exempt. This part of our decision deals with the question of whether the Tribunal's decision that the documents are exempt should also be re-examined. 59 In Lloyd v Veterinary Surgeons Investigating Committee [2005] NSWCA 456, the Court of Appeal held that an Appeal Panel may grant leave under s 113(2)(b) for an appeal to extend to the merits without having first decided that an error of law exists or may exist in the decision under appeal. Mr McGuirk relied on the decision in Leach v R (2007) 232 ALR 325 to submit that the word "may" in s 113(2)(b) means "must" but only in the circumstances of this case. That decision does not assist Mr McGuirk's submission because it deals with legislation where a power is to be exercised upon the court being satisfied of certain matters. That is not the case here. The discretion in s 113(2)(b) is at large. It is not subject to the Tribunal being satisfied of any particular matter. In any case, it is contrary to the principles of statutory interpretation that the word "may" in a particular statutory provision means "must" in certain circumstances and "may" in other circumstances. In the context of s 113(2)(b) it means "may" – that is, the Tribunal has an unfettered discretion when deciding whether to extend an appeal to the merits of the Tribunal's decision: Interpretation Act 1987, s 9(1) and s 5(2). 60 The Supreme Court has provided some guidance in relation to matters which are relevant to the exercise of a discretion to extend an appeal to the merits: K v K [2000] NSWSC 1052; S v S [2001] NSWSC 146 and Re R [2000] NSWSC 886 (17 August 2000). Those cases interpret s 67 of the Guardianship Act 1987 which is the equivalent provision in relation to appeals from Tribunal decisions to the Supreme Court. In K v K, Young J observed at [10] that 'it has never been clearly decided what the circumstances are that should lead the Court to grant leave to appeal under s 67', but went on to make a number of observations on this point: see para [10]-[15]. After considering the relationship between the Court and the Tribunal, Young J observed at [15]: It would seem to me that s 67 of the Guardianship Act operates so that broad questions of administration and policy and the applicability of policy to individual cases, even if they are not questions of law, may well be subjects on which the Court will grant leave to appeal. On the other hand, it is very unlikely that the Court will grant leave to appeal when there is a problem with a fact finding exercise unless there are clear indications that the Tribunal has gone about that fact finding process in such an unorthodox manner or in a way which is likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 61 S v S [2001] NSWSC 146 (9 March 2001) involved an application for leave to appeal against a decision of the Guardianship Tribunal in relation to the appointment of a financial manager. Young J was of the view that, even in the parens patriae jurisdiction, the court should not interfere with the decision of the primary fact-finding tribunal unless there is an error in the process leading to the decision or the decision is clearly wrong. Mr McGuirk also referred to the Appeal Panel's decision in Obradovic v Commissioner for Fair Trading, Office of Fair Trading (No 2) (GD) [2006] NSWADTAP 45 (15 August 2006). In that case the Appeal Panel quoted Ritchie's Uniform Civil Procedure NSW which notes at 15,704, that an objective of leave provisions is 'to operate as a filter restricting access to the appeal procedure and thereby promote the efficiency of the court's appeal procedure and their availability for appropriate matters'. The Appeal Panel went on to say one approach to determining whether leave should be granted is to ask whether any 'substantial injustice' might arise if an extension of the appeal to the merits was not permitted. 62 In this case, the Tribunal did not go about its fact finding process in an unfair or unorthodox manner. Both parties were given a reasonable opportunity to present their evidence and the Tribunal's findings were open to it on the basis of that evidence. Mr McGuirk said that the Tribunal should have accepted his evidence and assertions about many matters including the improper conduct of the five defendants and the University summarised in his submissions. There is no doubt that the Tribunal considered the evidence and submissions made by Mr McGuirk. The fact that it did not agree with his conclusions about improper conduct and about other matters does not give rise to unfairness or injustice which would justify a re-determination of those issues. 63 Other than in relation to the reasons for declining to exercise the discretion to disclose exempt documents, Mr McGuirk has not persuaded us that we should extend the appeal to the merits of the Tribunal's decision. Orders 1. The appeal on a question of law is dismissed. 2 Leave is granted for the appeal to be extended to the merits of the Tribunal's decision in relation to the exercise of the discretion to give access to exempt documents. 3 Leave is refused for the appeal to be extended to the merits of the Tribunal's decision in any other respect. 4 The Appeal Panel makes the following directions: a) The Applicant is to file and serve any further submissions in relation to the exercise of the discretion to give access to the exempt documents within 28 days of the date of these reasons. b) The Respondent is to file and serve any submissions in reply within a further 28 days. c) The Appeal Panel will make a decision on the paper pursuant to s 76 of the Administrative Decisions Tribunal Act 1997 having regard to the evidence that was before the Tribunal and the further submissions of the parties. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.