TerraCom Ltd v Australian Securities and Investments Commission

• Jurisdiction: Australia Federal only
• Judgment Date: 11 March 2022
• Neutral Citation: [2022] FCA 208
• Date: 11 March 2022
• Court: Federal Court

Federal Court of Australia

TerraCom Ltd v Australian Securities and Investments Commission [2022] FCA 208

File number:	NSD 796 of 2021
Judgment of:	STEWART J
Date of judgment:	11 March 2022
Catchwords:	EVIDENCE – privilege – legal professional privilege – at common law – whether forensic report commissioned by lawyers attracts legal professional privilege – waiver of privilege – whether privilege is waived where report is referred to in correspondence with external communication advisor – whether privilege is waived where report is referred to in open letter to shareholders to disclaim wrongdoing – whether privilege is waived where report is referred to in ASX announcement to disclaim wrongdoing – whether privilege waived over whole or part of the report ; PRACTICE AND PROCEDURE – privilege – legal professional privilege – at common law – where the party opposing the privilege claim opposes the Court examining the document at the invitation of the party making the privilege claim – whether Court has power to examine document to determine issue of partial waiver
Legislation:	Corporations Act 2001 (Cth) s 311 Evidence Act 1995 (Cth) ss 122(2), 133 Evidence Act 1995 (NSW) ss 122(2), 133
Cases cited:	Ampolex Ltd v Perpetual Trustee [1996] HCA 15; 137 ALR 28 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 ASIC v Australia and New Zealand Banking Group (No. 2) [2020] FCA 1013 Attorney-General (NT) v Maurice [1986] HCA 80; 161 CLR 475 Australian Unity Health Ltd v Private Health Insurance Administration Council [1999] FCA 1770 AWB Ltd v Cole (No. 5) [2006] FCA 1234; 155 FCR 30 Barnes v Commissioner of Taxation [2007] FCAFC 88; 242 ALR 601 Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; 140 FCR 101 Cantor v Audi Australia Pty Ltd [2016] FCA 1391 Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86; 151 FCR 341 Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd [2021] FCA 511 Daniels Corporation International Pty Ltd v ACCC [2002] HCA 49; 213 CLR 543 DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; 127 FCR 499 Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; 201 CLR 49 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; 250 CLR 303 Federal Treasury Enterprise v Spirits International (No 6) [2019] FCA 337; 369 ALR 267 Grant v Downs [1976] HCA 63; 135 CLR 674 Hancock v Rinehart (Privilege) [2016] NSWSC 12 Legal Services Commission v JHW [2012] SASCFC 47; 223 A Crim R 534 Mann v Carnell [1999] HCA 66; 201 CLR 1 New South Wales v Betfair Pty Ltd [2009] FCAFC 160; 180 FCR 543 Osland v Secretary, Department of Justice [2008] HCA 37; 234 CLR 275 Queensland Law Society v Albietz [1998] QSC 231; [2000] 1 Qd R 621 Rinehart v Rinehart [2016] NSWCA 58 Ship Hako Endeavour v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21; 211 FCR 369 Switchorp Pty Ltd v Multiemedia Ltd [2005] VSC 425 University of Wollongong v Metwally (No 2) [1985] HCA 28; 60 ALR 68 Verde Terra Pty Ltd v Central Coast Council (No 2) [2020] NSWLEC 10
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	To be Completed for Commercial and Corporations, and IP NPAs
Number of paragraphs:	88
Date of hearing:	4 March 2022
Counsel for the Applicant:	M R Elliot
Solicitor for the Applicant:	Horton Rhodes Lawyers
Counsel for the Respondent:	S B McNicol and R Chaile (written submissions also by Y Shariff and R L Gall)
Solicitor for the Respondent:	HWL Ebsworth Lawyers

ORDERS

		NSD 796 of 2021
BETWEEN:	TERRACOM LTD Applicant
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Respondent

order made by:	STEWART J
DATE OF ORDER:	11 MARCH 2022

THE COURT ORDERS THAT:

1. The proceeding be dismissed with costs.

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

REASONS FOR JUDGMENT

STEWART J:

Introduction

1. This case relates to an investigation by the Australian Securities and Investments Commission (ASIC) of suspected contraventions of the Corporations Act 2001 (Cth) by TerraCom Ltd and its current and former officers and employees in relation to the testing, certification and sale of coal during a period from late 2016 to early 2020.

2. As part of the 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.

3. The warrant caused a particular document, a “Project Rex Report” by PricewaterhouseCoopers Consulting (Australia) Pty Ltd (PwC) dated 16 December 2019, to be seized by ASIC and thereby come into its possession. The report was also caught by the notice issued by ASIC. TerraCom has claimed legal professional privilege over the PwC report. ASIC disputes that claim. Pending the resolution of that dispute, ASIC has not inspected the copy of the report seized under the warrant and TerraCom has not produced the report in answer to the notice.

4. TerraCom seeks a declaration that legal professional privilege attaches to the PwC report such that TerraCom is not obliged to produce it to ASIC in answer to the notice dated 14 May 2021 and ASIC is not entitled to inspect it.

5. The issues that call for resolution are the following:

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 attaches to it, was privilege over the whole or any part of the 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?

The essential facts

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

7. On 13 August 2019, TerraCom terminated the employment of a commercial general manager, Justin Williams, in circumstances in which he made serious allegations against the company and its officers and employees with regard to the falsification of certificates of analysis of coal exported by TerraCom.

8. Craig Ransley, TerraCom’s Executive Chairman and one of its directors, who was not required for cross-examination, explained on affidavit that TerraCom instructed Ashurst Australia to act for and provide legal advice on the issues arising in relation to the allegations of misconduct that Mr Williams had made. Mr Ransley arranged for the engagement of Ashurst.

9. Mr Ransley said that at the time Ashurst was instructed, and at all times thereafter, he understood and intended that Ashurst would provide legal advice to TerraCom on the allegations of Mr Williams....