In October 2009, the Court of Appeal in Victoria
provided further guidance on the impact of the investigative powers
of the Australian Securities and Investments Commission (ASIC) on
the right to claim legal professional privilege (LPP)
(Australian Securities and Investments Commission v Lindberg
and Anor (2009) 261 ALR 207). The Court concluded that where
an authority seeks to take possession of documents under compulsory
powers it must allow the holder of LPP an adequate opportunity to
protect the privilege. This longstanding principle does not apply,
however, in circumstances where the authority has already taken
possession of the documents from a third party.
In August 2007, ASIC commenced an investigation into the affairs
of AWB Ltd (AWB) in relation to its wheat sales to Iraq under the
United Nations Oil-For-Food Programme. As part of its
investigation, ASIC examined various parties under section 19 of
the Australian Securities and Investments Commission Act 2001 (Cth)
(ASIC Act), including current and former employees and former legal
advisers of AWB, and obtained voluntary statements from others. As
a result of its investigations, ASIC commenced civil penalty
proceedings in the Supreme Court of Victoria against Andrew
Lindberg, the former CEO of AWB, for breaches of directors'
duties (specifically sections 180 and 181 of the Corporations Act
2001 (Cth)). Discovery orders were made requiring ASIC to provide
Mr Lindberg with all transcripts and examinations conducted under
section 19 and any other witness statements that related to
questions raised by the pleadings. AWB, who was not a party to the
proceedings, filed an application seeking orders that ASIC provide
the discovered materials to its external lawyers in order to enable
them to review the materials and assert and test claims for LPP.
The trial judge granted these orders (Re AWB Ltd (No. 6);
Australian Securities and Investments Commission v Lindberg
 VSC 330).
On appeal, the Court of Appeal found in favour of ASIC. It held
that where an authority seeks to take possession of documents under
compulsive powers from a person who may wish to claim LPP, either
on their own behalf or on behalf of another, the authority must
give that person a practical and realistic opportunity to claim
privilege. This principle does not apply to situations where the
authority has already obtained possession of the documents from a
third party. Nor does it create a right to be given the opportunity
to claim the privilege by some other person. Once documents come
into the possession of any party, the privilege is lost and cannot
be asserted except in the context of a claim in equity to protect
This decision is the latest in a line of cases concerning
AWB's attempt to protect communications that may be the subject
of a claim of LPP which were received by ASIC during the course of
its investigation (see, for example, AWB Ltd v Australian
Securities and Investments Commission  FCA 1877). The
decision highlights the importance for companies to take adequate
steps to limit the risk that a waiver of LPP occurs as a result of
employees or former staff being obliged to attend a compulsory
examination or disclose information to a regulator.
On 11 December 2009, the High Court granted AWB special leave to
appeal the decision. On 4 March 2010, ASIC announced that it has
agreed on a process for the settlement of AWB's claims for
privilege. ASIC indicated that this process would ensure that AWB
had an opportunity to protect any privileged information in the
transcripts before they were disclosed in ASIC's proceedings.
Accordingly, AWB's appeal to the High Court has been
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Peter Sise explores how your contractual clause for recovery of legal costs might not do what you think it does.
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”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).