By Louise Cantrill, Partner and Jack Robson, Law Graduate

In this Full Federal Court appeal, the court had to decide legal professional privilege had been waived over a PwC report that was provided by Noumi Ltd (Noumi) to the Australian Securities and Investment Commission (ASIC).[1] The report had been voluntarily provided to ASIC via Noumi’s retained lawyers, Ashurst, and related to the conduct of certain executive officers, including the CFO (Macleod), regarding the accounting of inventory.[2]

Facts

The report was provided pursuant to a “Voluntary Confidential Legal Professional Privilege Disclosure Agreement” (VDA) between Noumi and ASIC.[3] Pursuant to the VDA, ASIC would not seek to present the Disclosed Information as evidence in any proceedings without Noumi’s prior knowledge, and that the disclosed information would be treated as confidential by ASIC and would only be disclosed to a specific group of entities.[4]

Legal Professional Privilege

In the initial proceedings,[5] Shariff J found that the privilege attached to the PwC report had been waived in the circumstances,[6] as Noumi had voluntarily disclosed the PwC report to ASIC and that ASIC, pursuant to the VDA, would make “derivative disclosures” in order to conduct investigations.[7]

The Full Court agreed with the original finding that the report was privileged.[8] Specifically, their honours adopted the relevant legal principles that Shariff J highlighted in the previous judgment,[9] ultimately finding that the PwC report was created for the primary purpose of Noumi obtaining legal advice.[10]

Waiver of Legal Professional Privilege

The Full Court, however, disagreed that privilege had been waived by Noumi’s voluntary disclosure of the PwC report. Shariff J originally found that clause 4.1 of the VDA did not prevent ASIC from “engaging in, what may be best described as, derivative disclosure” of the disclosed information in the report.[11]

Their honours, in dissent of the original judgment, considered the recent case of Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd,[12] finding that the High Court had observed that a waiver of legal professional privilege is an “intentional act done with knowledge whereby a person abandons a right or privilege by acting in a manner inconsistent with that right or privilege”.[13] As a result, their honours considered that, in entering into the VDA, Noumi expressly prohibited the making of a disclosure of the information of the report, and as such preserved their right to privilege over the documents.[14]

Key Takeaways

This decision and its predecessor provide a clear and concise overview of the law on legal professional privilege generally, and specifically highlights the importance of conduct in maintaining legal professional privilege over some material.

The decision also highlights the ability for parties to ensure that documents remain covered by legal professional privilege insofar as express documented actions by the covered party communicate the intention to maintain the right to privilege. Overall, the case highlights the Court’s reluctance to dispense with legal professional privilege and to promote public interest in maintaining the confidentiality of client-lawyer professional privilege.

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[1] Australian Securities and Investments Commission v Macleod [2024] FCAFC 174, [1].

[2]

[3] Ibid [9].

[4] Ibid [36].

[5] Australian Securities and Investment Commission v Noumi Ltd [2024] FCA 349.

[6] Ibid [9].

[7] Australian Securities and Investments Commission v Macleod [2024] FCAFC 174, [9].

[8] Australian Securities and Investment Commission v Noumi Ltd [2024] FCA 349, [79]; Australian Securities and Investments Commission v Macleod [2024] FCAFC 174, [105].

[9] Australian Securities and Investment Commission v Noumi Ltd [2024] FCA 349, [57]-[66].

[10] Australian Securities and Investments Commission v Macleod [2024] FCAFC 174, [105].

[11] Australian Securities and Investment Commission v Noumi Ltd [2024] FCA 349, [180].

[12] (2013) 250 CLR 303.

[13] Australian Securities and Investments Commission v Macleod [2024] FCAFC 174, [138].

[14] Ibid [145].