On 14 August 2019, the High Court of Australia published the judgment in Glencore International AG v Commissioner of Taxation. The decision relates to “Paradise Papers”, which were a set of 13.4 million confidential documents obtained from the Bermuda law firm, Appleby, and leaked to journalists and the public at large.
Part of the “Paradise Papers” related to legal advice provided to Glencore regarding the restructure of its Australian business entities. The ATO obtained these papers as a result of the leak of Appleby’s documents. It was uncontroversial that these papers were subject to legal professional privilege.
To recap, legal professional privilege is a right to refuse to produce documentation created for the purpose of receiving legal advice, or in contemplation of legal action, such as letters, memoranda, reports and advice, to governmental bodies or parties in litigation.
Glencore applied for an injunction to restrain the ATO from making any use of the documents. Importantly for this decision, Glencore did not argue the injunction should be granted because of a breach of confidence (it was not clear that it could in this instance). Instead, it argued that the existence of privilege created a right to restrain use of the documents. The High Court disagreed. It found that the only way to seek to restrain use of privileged documents was on the basis of confidentiality, not simply the existence of privilege over the documents.
The decision confirms the existing law regarding legal professional privilege – that is:
- That legal professional privilege is an immunity held by a client against requests to produce documentation that has been created as part of receiving legal advice, or as part of preparing or engaging in litigation
- A business can apply to restrain the use of documents subject to legal professional privilege if the circumstances of the release of the documents support relief and the documents are likely to remain sufficiently confidential
Whether documents maintain a sufficient degree of confidentiality to support an injunction to stop a person using them depends on the circumstances of the specific case. For example, where a privileged document is emailed to a third party in error and the sender notifies the recipient that the document was sent in error, a court may well grant an injunction because of the circumstances in which the document was transmitted and given the document is likely to remain sufficiently confidential.
The decision is a timely reminder to businesses to act quickly if documents that may be subject to legal professional privilege fall into the hands of a third party (either inadvertently or by nefarious means).