Australia: Can there be privilege before there is a client?

Last Updated: 21 December 2016
Article by Daniella Ivanoska

Most Read Contributor in Australia, August 2019

In the recent Victorian Supreme Court decision of IOOF Ltd v Maurice Blackburn [2016] VSC 311 the Court found that certain documents prepared during the investigation period of a class action, prior to receiving instructions from a client, were subject to legal professional privilege. The Court found that there was no reason that the firm of lawyers could not be both the client and the lawyer in the period before it was retained by the first client. The decision is of particular significance to class action lawyers and is an interesting development in the area of privilege.


IOOF Holdings Ltd (IOOF) commenced proceedings on 14 December 2015 against Maurice Blackburn Pty Ltd (the Firm) and Harbour Litigation Funding (the Funder) alleging that the Firm and the Funder were in possession of whistleblower documents that contained confidential information to IOOF. Orders were sought requiring the defendants to deliver up all documents containing information confidential to IOOF and to restrain the defendants from using or disclosing such information. The Firm and the Funder claimed legal professional privilege over this information.

Documents in dispute

In June 2015 a number of articles were published in the media regarding allegations made by an employee of IOOF, including claims that IOOF were involved in insider trading and plagiarism. This subsequently resulted in a drop in shares which continued to fall for a further period of time. During this period, the Firm did not yet have a client with respect to the class action against IOOF, and were named applicant in the agreement with the Funder with the intention that the future plaintiff could also sign the agreement when the matter progressed. This period is referred to in the judgment as the "First Period."

The Firm claimed privilege over documents created during the First Period as part of the preliminary investigation, including draft and final brief to counsel, file notes of telephone conferences and meetings with the IOOF employee, emails and research notes. The Firm claimed that these documents were created for the dominant purpose of obtaining legal advice from Counsel at the Firm in relation to a confidentiality issue that arose out of the communications with the IOOF employee.

On the 17 July 2015, the Firm received instructions from its first client to investigate the class action on its behalf. Documents were prepared as part of the investigation including briefs and file notes of communication with counsel, copies of memorandum of advice from counsel regarding prospects of success, internal memos and file notes of discussion with the IOOF employee, and communications with the Funder regarding prospects of success. This period is referred to in the judgment as the "Second Period."

The Firm publicly announced the investigation into the class action in October 2015 and published an online registration portal, where further clients registered their interest into the potential class action. Following the establishment of the online portal, documents were created as part of the preparatory work for the potential class action, including documents relating to registrations, and communications with the IOOF employee and Counsel at the Firm. This period is referred to in the judgment as the "Third Period." The Firm argued these documents were privileged to their first and further clients under section 118 and section 119 of the Evidence Act 2008 (Vic) (the Act).

The Funder also made separate claims for privilege under section 118 and section 119 of the Act over documents comprising communications with the Firm.

IOOF challenge

In relation to the documents prepared during the First Period, including those prepared by Counsel at the Firm in giving advice to the Firm, IOOF claimed that the documents were not subject to privilege as there was no lawyer and client relationship. Further, IOOF submitted that even if there was found to be a lawyer and client relationship, the dominant purpose was not for providing legal advice, but rather to "work up" a potential class action and to assist in negotiations with the Funder in relation to funding.

IOOF submitted that the documents prepared during the Second Period were not prepared for the first client alone, and noted that the first client's name did not appear on any of the documents, nor was there any payment of fees by the first client. Alternatively, IOOF claimed that the documents were produced for prospective clients, and not for the dominant purpose of providing legal advice to the first client. Further, IOOF claimed that there was no real prospect of litigation at the time the documents were produced and therefore there was no "anticipated proceedings" as required under section 119 of the Act.


In deciding whether the Firm documents were subject to privilege, the Victorian Supreme Court turned to the relevant provisions of the Act, being section 117 to section 119, and applied the 'dominant purpose' test.

The Court rejected the submissions made by IOOF regarding the documents produced during the First Period and held that there was no reason to preclude the Firm from being the client receiving legal advice. In these circumstances, the documents were prepared by the client (being the Firm) for the dominant purpose of a lawyer (Counsel at the Firm) providing legal advice to the client regarding confidentiality issues and prospects of success, therefore falling within the scope of section 118 of the Act. For the sake of completeness, the Court added that if there were any documents created during the First Period prior to there being any meaningful view on prospects or before any intention to gain or give legal advice, these documents would not be subject to privilege.

The Court rejected IOOF's submission that the dominant purpose of the investigation was to "work up a class action." The commercial interest in the preparation of documents during the First and Second Period of the investigation did not override the first client's entitlement to claim privilege where documents were created for the dominant purpose of providing legal advice. The Court held that this privilege is that of the first client and not the Firm. Further, upon inspecting documents relating to "internal document management" and documents described as "administrative task lists," the Court found that these documents fall within section 119 of the Act as the documents were created for the management of an anticipated litigation, form part of professional legal services and are subject to privilege.

For the purposes of "anticipated or pending" proceedings as required under section 119 of the Act, the Court held that while there is no certainty to a class action until members have indicated they are willing to participate in the class action, the positive view on prospects and funding provide that the potential of a class action was more than just a mere possibility.

The proceedings have otherwise since been resolved on a walk away basis. As part of the resolution, the Firm agreed to no longer pursue the class action.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions