An Investigation isn’t Legal Advice. You Waived Privilege!

Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525

The Defendant discovered ~29K documents in a piece of litigation and claimed ~9K were privileged.

The Court considered 27 representative documents. These included documents about an ASIC investigation regarding “fees for no service” claims.

The Defendant had to prove the documents were privileged. If privileged, the Plaintiffs had to prove privilege had been waived.

The Defendant had self-reported the “fees for no service” issue, engaged various large law firms, and itself had a big in-house legal team.

In 2017 the Defendant engaged one firm to provide the Defendant called findings and advice, claiming privilege would attach to both.

The Plaintiffs argued the firm was engaged to investigate, rather than provide advice, meaning that firm’s work would not be privileged.

The Court was also taken to an admission from the Defendant during the Hayne RC that “it did not need to receive legal advice to know that [it] cannot charge somebody for services that [it is] not providing”.

Importantly privilege is for legal advice rather than commercial or PR advice, though the concept of legal advice includes what a client should prudently or sensibly do, including in relation to an investigation.

The dominant purpose is the thrust of the privilege. A document prepared for a number of reasons, with none dominant, is not privileged.

In relation to a report sent by external lawyers, to Defendant’s in-house lawyers, and then to the Defendant’s senior executives, the Court found the dominant purpose of each email was legal advice to the Defendant. Therefore they were privileged.

Similarly, in relation to legal advice on the implications of the report, privilege attached.

The Defendant produced the report (but not the associated advice) to the ASIC without a claim for privilege.

The Plaintiffs claimed this was a waiver of privilege of all documents concerned with the firm’s engagement.

Reference to existence of privileged material is not enough for waiver, the contents of the privileged material must be relied upon for privilege to be waived.

The Court found that by waiving privilege in the report, the Defendant did not waive privilege in the advice. Privilege can by waived over the factual investigation report and maintained in the subsequent legal advice given based on that report.

The report could be understood without the help of the legal advice.

The Court found the sample documents were privileged with no waiver. Plaintiff was ordered to pay the Defendant’s costs.