Set aside by Appeal : CITATION: Law Society of New South Wales v General Manager, Workcover Authority [2004] NSWADT 4 DIVISION: General Division APPLICANT PARTIES: Law Society of New South Wales RESPONDENT General Manager, Workcover Authority FILE NUMBER: 033135 HEARING DATES: 27/08/2003 SUBMISSIONS CLOSED: 08/27/2003 DATE OF DECISION: 01/12/2004 BEFORE: Robinson MA - Judicial Member APPLICATION: access to documents - legal professional privilege - Freedom of Information Act - access to documents - legal professional privilege MATTER FOR DECISION: Prncipal matter Freedom of Information Act 1989 LEGISLATION CITED : Legal Profession Act 1987 Workers Compensation (General) Amendment (Costs) Regulation 2001 Workers Compensation (General) Regulation 1995 Charteris v General Manager, Leichhardt Municipal Council (No.2) (GD) [2001] NSWADTAP 39 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 CASES CITED: Gliksman v Director General, NSW Department of Health [2002] NSWADT 1 Mangoplah Pastoral Co Pty Ltd v Great Southern Energy [1999] NSWADT 93 Neary v The Treasurer, New South Wales [2002] NSWADT 261 APPLICANT REPRESENTATION: M Allars, barrister RESPONDENT J Griffiths SC, counsel ORDERS: 1 The reviewable decision is affirmed; 2 The confidential exhibit is to be made available to the respondent for collection forthwith 1 The applicant made an application dated 13 December 2002 to the respondent agency pursuant to section 17 of the Freedom of Information Act 1989 (NSW) ("FOI Act") for access to certain documents written by a lawyer and specialist legal costs assessor that were commissioned by the respondent in the context of a government review of a new workers compensation legal costs regime. Section 16 of the FOI Act provides that a person has a legally enforceable right to be given access to an agency's documents in accordance with the FOI Act. The respondent has refused access to the 5 documents caught by the FOI request on the grounds of legal professional privilege in clause 10 of Schedule 1 of the FOI Act and clause 9 (internal working documents) of that Schedule. 2 The respondent's refusal was by way of a letter dated 5 February 2003. A schedule was attached describing the 5 disputed documents. Privilege was the only ground claimed. The applicant applied for an internal review under the FOI Act and a different officer of the respondent made a decision affirming the original decision and adding the internal working documents ground. In addition, it was said: "The exempt documents were created as part of a review of Schedule 6 of the Workers Compensation (General) Regulation . Schedule 6 sets out the maximum costs recoverable for legal services in workers compensation matters and represents a new approach to the recovery of legal costs that was an integral component of the 2001 reforms to the workers compensation scheme. However, the Hon J Della Bosca, MLC, Special Minister of State and Minister for Industrial Relations, agreed that a review of the scale of costs would be undertaken in consultation with stakeholders in 2002 and again in 2003. A review panel, with Law Society representation, was established with a view to the preparation of a report to the Minister on the scale of costs to ensure prompt resolution of claims and adequate representation for workers and employers. Michelle Castle, the Principal of DG Thompson, legal costs consultant, was engaged by WorkCover to provide advice and assistance in responding to a submission by the Law Society. Documents prepared by Ms Castle were prepared for the purposes of the report and form an integral part of it. The documents prepared do not comprise purely factual or statistical material. The proposed methodology and reports were provided to WorkCover's Legal Group in connection with its advice to WorkCover on the Law Society's submissions." 3 The internal review decision then goes on to set out a number of factors going to the public interest that, it was argued, tended against release of the documentation. 4 At the hearing of the matter both parties were represented by counsel and the primary contest involved the question of legal professional privilege in circumstances where the applicant contended (with the difficulty of not having seen the subject documents) that the respondent merely sought government policy advice and not legal advice from a person who happened to be a lawyer as well as a legal costs consultant. It was argued that the respondent merely took up a device so as to save itself the costs of undertaking or paying for professional indemnity insurance (which might have become an issue if only the legal costs consultancy was to have been engaged). 5 At the hearing, the applicant read a large affidavit from the Chief Executive Officer of the applicant sworn 18 August 2003. He was not required to be cross-examined on it. The applicant also tendered a letter from the relevant Minister to the applicant dated 7 July 2003 regarding continuing group workers compensation consultation and the topic of events based costing. The respondent read a statement of Mr Rodney McInnes, Assistant General Manager, Insurance Group of the respondent, signed 22 July 2003. He also gave evidence and was cross-examined at the hearing. The respondent also tendered the subject disputed documents (exhibit 1) in respect of which I made a confidentiality order. 6 There is no significant contest between the parties as to the relevant background in these proceedings. It is set out in the two statements of evidence. Relevantly, the disputed documents were commissioned by the respondent in circumstances where the responsible Minister had announced major reforms to the workers compensation system in New South Wales in June 2000 and introduced to Parliament significant amendments on 29 Mar 2001. In mid 2001, the respondent commenced a fundamental review of the regulation of legal costs in the workers compensation jurisdiction. Costs in such matters were then assessed by the amount of time expended on particular a matter ("time-based costing)". In September 2001 the respondent decided to obtain external advice. 7 An agreement was entered into between the respondent and Michelle Castle, trading as Thomson Castle, solicitors and DTG Legal Services Pty Ltd, trading as DG Thomson Legal Costs Assessors in October 2001. A copy of the agreement is annexed to the affidavit of Mr McInnes. The "consultants" (as they were referred to in the agreement) were required to review a draft policy paper and a draft costs scale and provide advice on a number of matters set out in the Annexure to the agreement. The draft costs scale and policy paper related to events-based legal costing in workers compensation as opposed to time-based costing. The consultants were asked to provide advice on: "1 The effectiveness of the proposed cost scale in controlling legal costs within the workers compensation system; 2. Whether the proposed cost scale provides adequate remuneration for the provision of certain legal and agents services; 3. Whether the proposed cost scale will have any adverse impacts on the rights of injured workers to legal representation; 4. Whether the proposed cost scale creates adequate incentives to settle legal disputes within the workers compensation system, early and the dispute resolution system; 5. Possible adverse impacts of the proposed cost scale, including but not limited to incentives that may be created to provide unnecessary legal services, or create delays in the dispute resolution system; 6. Any other impacts of the proposed scale; Advice on options to address any problems or issues arising in relation to matters identified under 1 to 6." 8 This agreement plainly constituted the retainer between the solicitors and the respondent. It also provided for review of the relevant material to be undertaken "from time to time". 9 I presume that certain advice was given by the consultants as the respondent completed its review of legal costs and the Workers Compensation (General) Regulation 1995 was amended by the Workers Compensation (General) Amendment (Costs) Regulation 2001 which commenced on 1 January 2002 and introduced a system of events-based costing for workers compensation matters. Prior to the regulation being made, it was agreed between representatives of the New South Wales Government and the applicant that it there would be a review of the operation of the new regulation and formal arrangements were made which included participation of both the applicant and the respondent as well as the newly-established Workers Compensation Commission. A "review panel" was formed with these members to advise the responsible Minister by 30 September 2002. A number of meetings were held, some of which were attended by solicitors from the legal firm Thompson Castle. Mr McInnes was the Chairperson of the review panel. 10 In mid-September 2002 the agreement referred to above was extended between the parties so as to include advice and expert assistance in connection with the new review and, in particular, to advise the applicant in connection with its dealing with very lengthy submissions that were delivered by the applicant to the respondent on 9 October 2002. Under these contractual and retainer arrangements, Ms Michelle Castle consulted with nominees of the applicant. I am satisfied that this was only for the purposes of obtaining information from them, such as, various legal costs scenarios. At about the same time, the applicant engaged its own legal costs consultant, Ms Sharon Brabiner to advise it in the review process. 11 I have read the five disputed documents carefully. One of them is the proposed methodology for how the consultant can advise on the respondent on how to deal with the applicant's submission. The other documents comprise versions of an undated draft report by Ms Castle to the respondent, a cover letter and 4 "dummy" bills of costs for demonstration or explanation purposes. 12 In my view, this material is plainly the legal advice of a lawyer who is also experienced in matters concerning costs assessments. That is the very reason why Ms Castle was engaged in the first instance by the respondent. I consider that notwithstanding that a fair proportion of the subject documents contain material that could be considered as going to "policy" issues alone, they are largely also appropriately characterised as legal advice on legal issues. This is particularly so given that delegated legislation introduced by the New South Wales Government had already introduced events-based legal costing into workers compensation matters. The issue that remained for the consideration of the review panel was whether the new legislative system of events-based costing could be made better. 13 The applicant has a very keen interest in seeking access to the legal advice from Ms Castle. It wishes to view it for a number of reasons, including, possibly, in making further representations to the responsible Minister. In addition to having duties under the Legal Profession Act 1987, the applicant is a body representing 17,776 solicitor members in New South Wales. Of those members, 5,688 solicitors are directly affected by the cost scale changes made by the New South Wales Government. It has participated in the various reviews mentioned in this determination and it has been invited to continue to participate in the future (exhibit A). 14 However, on my reading of the documents and based on the uncontested evidence as to the manner in which Ms Castle was retained to provide advice, I consider that each of the disputed documents are subject to legal professional privilege. I find that the dominant purpose for their creation was for the obtaining of legal advice in respect of assisting the respondent to respond to the applicant's submissions on the new events-based legal costs system. The fact that policy issues were wrapped up in that request does not change the fact that legal advice was sought and obtained from a person fully qualified to give it. 15 It was suggested by the applicant that the respondent may have waived the privilege by Ms Castle delivering her advice under cover of the email internet domain name of the legal costs assessors "dgt.com.au". I do not consider that this fact alone constitutes evidence of any waiver in the present case. 16 In coming to this finding, I have applied the dominant purpose test approved in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 (see generally Charteris -v- General Manager, Leichhardt Municipal Council (No. 2) (GD) [2001] NSWADTAP 39). 17 Given this finding I do not need to consider the other ground of exemption relied on by the respondent, clause 9, the internal working documents exemption. The Section 25(1) Question 18 As to whether the Tribunal should release the exempt documents in any event as a matter of the Tribunal's discretion in section 25(1) of the Act (see, Mangoplah Pastoral Co Pty Ltd v Great Southern Energy [1999] NSWADT 93 at [76] to [85], referred to there as the "override discretion"), the respondent submitted I should not and the applicant argued that I should. I consider that to the extent that such a discretion may now be said to exist (Neary v The Treasurer, New South Wales [2002] NSWADT 261 at [67]), it is not appropriate in this case to release the disputed documents in any event as a matter of the Tribunal's discretion. 19 While the exempt documents here might be of some interest to the applicant and its solicitor members (as they concern its members' livelihood), the documents are held by this Tribunal to be properly the subject of legal professional privilege. That is a significant finding. The privilege is an important substantive common law right or immunity. As the President of the Tribunal has stated in Gliksman v Director General, NSW Department of Health [2002] NSWADT 1 at [51]: "The Tribunal should be extremely cautious in exercising any public interest "override" discretion that might be available under section 25 where legal professional privilege is involved: see Chief Executive, SAS Trustee Corporation v Daykin [2000] NSWADTAP 20 at [37]." 20 I do not consider the applicant has raised considerations sufficient as to warrant the general release of the documents under section 25 of the FOI Act. I cannot say that the documents here are innocuous. In addition. the evidence of the respondent's witness, which I accept, is that the government review of the 2001 costs regulation is a highly contentious issue and the respondent's review process has not yet concluded. The applicant and the respondent are said to hold "divergent objectives". I have also considered the arguments and evidence presented by the parties on the "public interest" questions from the clause 9 issue which, I was told, were also applicable in the exercise of the Tribunal's section 25 discretion. However, none of those submissions appear sufficient to override legal professional privilege in the present case. Accordingly, if a s 25(1) discretion exists, I would not exercise it in favour of the applicant. 21 The Tribunal determines: 1. The reviewable decision is affirmed. 2. The confidential exhibit is to be made available to the respondent for collection forthwith. 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.