Challenge to privilege claims made in AMP shareholder action

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This decision concerned a motion filed by the plaintiffs to force the defendant, AMP Ltd, to produce unredacted documents in respect of which it claimed client legal privilege.

The Court was asked to determine the claims for privilege in respect of 27 sample documents. The parties expected to resolve the remaining claims for privilege between themselves by applying rulings on the sample documents following the approach adopted by Ball J in Traderight (NSW) Pty Ltd v Bank of Queensland Ltd (No 16) [2013] NSWSC 418.

The documents over which privilege was claimed fell into two categories relating to either:

(a)    AMP’s retainer of Clayton Utz in respect of an investigation undertaken by ASIC, known as the “fees for no service” investigation; and

(b)    AMP’s engagement, via Clayton Utz, of another legal practice, Workdynamic Australia, to conduct an investigation and provide advice in relation to employment law matters, known as “Project White”.

AMP claimed legal advice privilege under s 118 of the Evidence Act 1995 (NSW) in respect of both categories of documents and litigation privilege under s 119 of the Evidence Act in respect of the Project White documents.

The relevant principles were not in dispute and were summarised in the judgment as:

(a)    The party claiming privilege bears the evidentiary and persuasive onus of proving the facts to support its claim: Grant v Downs (1976) 135 CLR 674 at 689 (per Stephen, Mason and Murphy JJ).

(b)    The party challenging the claim bears the onus of establishing that privilege has been waived: Archer Capital 4A Pty Ltd (as trustee for the Archer Capital Trust 4A) v Sage Group plc (No 2) (2013) 304 ALR 384; [2013] FCA 1098 at [100] (per Wigney J).

(c)    The standard of proof is on the balance of probabilities: Evidence Act, s 142.

The first issue for determination was whether AMP’s evidence in support of its claim for privilege failed to meet a “minimum threshold” such that the court should not inspect the documents but instead dismiss the claims. On this issue the Court did not agree with the plaintiff that Hancock v Rinehart (Privilege) [2016] NSWSC 12 (per Brereton J, as his Honour then was) established that the Court must first be satisfied of the detail and quality of evidence in support of a privilege claim before deciding whether to inspect documents the subject of the claim (at [9]-[10]). The Court was especially reluctant to reject the privilege claims in circumstances where there were reasons why AMP was unable to adduce detailed evidence, citing Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49.

The second issue for determination was whether the “dominant purpose” of the confidential communications was the provision of legal services to AMP. On this issue the Court concluded that Clayton Utz was engaged for the dominant purpose of providing legal advice to AMP on the basis that the letter of instruction “was a clear and contemporaneous statement of purpose”, which specifically stated that Clayton Utz’s work was privileged (at [40]-[44]). The Court also concluded that Workdynamic was retained by Clayton Utz for the dominant purpose of AMP obtaining legal advice, though it was more tenuous whether AMP could claim litigation privilege (at [89]). Turning to the specific documents over which privilege was claimed, the Court concluded (after inspecting many of them) that each was privileged (at [46]-[76], [90]-[93], [117]-[126].

The third issue for determination was whether privilege in the first category of documents had been waived by AMP’s production of an investigation report prepared by Clayton Utz (the CU Report) to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. On this issue, the Court concluded that, by waiving privilege in the CU Report, AMP did not thereby waive privilege in all communications made during Clayton Utz's broader retainer. The Court reasoned that Clayton Utz was retained some six weeks before the letter of instruction of Clayton Utz and by a retainer more broadly described than the terms of that letter (at [105]).

The Court made orders for the plaintiffs to pay AMP’s costs on the basis that the plaintiffs’ application had been unsuccessful (despite AMP producing 20 other sample documents over which privilege claims had previously been made). The Court noted that the plaintiffs advanced contentions of a “serious nature” which AMP was obliged to meet (at [130]).

Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525

Supreme Court of New South Wales, Rees J,
9 November 2022

Plaintiffs’ Solicitors: Maurice Blackburn
Defendant’s Solicitors: Herbert Smith Freehills
Plaintiffs’ funder: N/A

Austlii Link: Available here

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