TerraCom Limited v Australian Securities and Investments Commission

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 28 June 2022
• Neutral Citation: [2022] FCA 745
• Date: 28 June 2022

Federal Court of Australia

TerraCom Limited v Australian Securities and Investments Commission [2022] FCA 745

File number(s):	NSD 248 of 2022
Judgment of:	O’CALLAGHAN J
Date of judgment:	28 June 2022
Catchwords:	PRACTICE AND PROCEDURE – legal professional privilege – interlocutory application by respondent to an appeal on giving of certain undertakings to have access to a document in respect of which a claim for legal professional privilege was made and found by the primary judge to have been waived – whether court should appoint amicus curiae or independent third party to make submissions in respect of the appeal – application dismissed
Cases cited:	R (AHK) v Secretary of State for the Home Department [2009] 1 WLR 2049 Re Timor Sea Oil & Gas Australia Pty Ltd (in liq) [2020] NSWSC 1832; (2020) 389 ALR 545 Rinehart v Rinehart [2016] NSWCA 58 State of New South Wales v Public Transport Ticketing Corporation (No 3) (2011) 81 NSWLR 394 TerraCom Ltd v Australian Securities and Investments Commission [2022] FCA 208
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub‑area:	Regulator and Consumer Protection
Number of paragraphs:	48
Date of hearing:	27 June 2022
Counsel for the Appellant:	Mr MR Elliott SC
Solicitor for the Appellant:	Horton Rhodes Lawyers
Counsel for the Respondent:	Dr SB McNicol AM QC
Solicitor for the Respondent:	HWL Ebsworth Lawyers

ORDERS

		NSD 248 of 2022
BETWEEN:	TERRACOM LIMITED Appellant
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Respondent

order made by:	O’CALLAGHAN J
DATE OF ORDER:	28 JUNE 2022

THE COURT ORDERS THAT:

1. The appellant file and serve a redacted version of the “Project Rex Report” prepared by PricewaterhouseCoopers Consulting Australia Pty Ltd and dated 16 December 2019 by 4pm on 5 July 2022.

2. The respondent’s amended interlocutory application filed on 22 June 2022 be dismissed.

3. The respondent pay the appellant’s costs of the application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J:

Introduction

1. This is an interlocutory application by the Australian Securities and Investments Commission (ASIC), who is the respondent to an appeal brought by TerraCom Ltd (TerraCom) against an order of a judge of this court dismissing TerraCom’s application for a declaration that legal professional privilege attaches to a single document called “Project Rex Report” prepared by PricewaterhouseCoopers Consulting Australia Pty Ltd (PwC). See TerraCom Ltd v Australian Securities and Investments Commission [2022] FCA 208 (J).

2. TerraCom’s appeal is to be heard by a Full Court, comprised of Jackson and Halley JJ and myself, on 24 August 2022.

3. By an amended interlocutory application filed on 22 June 2022, ASIC seeks these orders:

1. An order that the Appellant provide an unredacted copy of the document entitled “Project Rex Report” prepared by PricewaterhouseCoopers Consulting (Australia) Pty Ltd and dated 16 December 2019 (PwC Report) to Senior Counsel and Junior Counsel for the Respondent subject to:

a. Senior Counsel for the Respondent providing a confidentiality undertaking in the form included as ‘Annexure A’ to this application; and

b. Junior Counsel for the Respondent providing a confidentiality undertaking in the form included as ‘Annexure B’ to this application.

2. In the alternative, an order that the Honourable Court appoint an independent third party or an amicus curiae so that the PwC Report can be provided to that person on a confidential basis for the purposes of providing assistance to the Honourable Court on the hearing of the appeal.

4. At the hearing of the application yesterday, Dr SB McNicol AM QC, who appeared for ASIC, proffered a revised version of the undertakings annexed to the amended interlocutory application, which added a new paragraph 6. I attach to these reasons marked “A” a copy of the undertakings proposed to be signed separately by both Dr McNicol and her junior.

5. The relevant history of the matter is as follows, and is derived primarily from the reasons of the primary judge.

6. The proceeding arose out of an investigation by ASIC of suspected contraventions of the Corporations Act 2001 (Cth) by TerraCom and its current and former officers and employees in relation to the testing, certification and sale of coal from late 2016 to early 2020.

7. As part of that investigation, ASIC executed a warrant at TerraCom’s Blair Athol mine site offices in March 2021. In May 2021, ASIC also issued a notice to TerraCom to produce books and documents.

8. The warrant caused the “Project Rex Report”, which I shall call the PwC report, to be seized by ASIC and thereby come into its possession. The report was also caught by the notice issued by ASIC.

9. TerraCom then claimed legal professional privilege over the PwC report.

10. ASIC disputed that claim. Pending resolution of the dispute, ASIC agreed not to inspect the copy of the report seized under the warrant and TerraCom did not produce the report in answer to the notice.

11. TerraCom then issued a proceeding seeking a declaration that legal professional privilege attached to the PwC report such that TerraCom was not obliged to produce it to ASIC and ASIC was not entitled to inspect it.

12. The proceeding was heard by the primary judge on 4 March 2022. The issues that called for resolution were:

1. Was the PwC report prepared for the dominant purpose of TerraCom’s lawyers providing TerraCom with legal advice or legal services?

2. If it was, and in that sense legal professional privilege attached to it, was privilege over the whole or any part of the PwC report waived by TerraCom?

3. If privilege over only part of the report was waived, does that have the result that privilege over the whole report is lost?

13. The primary judge answered those questions:

1. yes;

2. privilege was waived over part of the PwC report;

3. privilege over the whole report was lost.

Relevant facts

14. TerraCom is an ASX‑listed resource explorer with a large portfolio of operating assets in Australia and South Africa.

15. In August 2019, TerraCom terminated the employment of a commercial general manager, a Mr Williams, in circumstances where he made allegations against the company and its officers and employees about the falsification of certificates of analysis of coal exported by TerraCom.

16. TerraCom instructed Ashurst Australia to act for it and provide legal advice on the issues arising in relation to the allegations of misconduct made by Mr Williams.

17. By letter of engagement dated 29 August 2019, PwC was appointed by TerraCom, relevantly in the following terms:

We are writing to confirm that:

• The Board of TerraCom Limited (TerraCom) has engaged Ashurst Australia (Ashurst) to provide TerraCom with legal advice on matters arising in relation to a former employee, including allegations of misconduct that the former employee has made against TerraCom and certain executives thereof.

• Ashurst has been instructed to carry out an investigation into these allegations, for the purpose of providing legal advice to TerraCom.

• Ashurst will engage PwC on behalf of TerraCom to provide forensic support and services in connection with the investigation. We acknowledge and agree that we are being instructed by Ashurst on behalf of TerraCom, and that Ashurst’s advice is being given for TerraCom’s use and benefit.

• The purpose of PwC’s involvement and report is to enable Ashurst to provide the legal advice referred to above. …

18. On 5 December 2019, Mr...