Esso Australia Resources Ltd v Federal Commissioner of Taxation

Facts

Esso Australia Resources Ltd sought discovery of documents from the Federal Commissioner of Taxation that it claimed were protected by legal professional privilege. The Commissioner contended that certain documents prepared partly for legal advice and partly for other purposes were not privileged. The question turned on whether Australian law required that the dominant purpose of a document's creation be the obtaining of legal advice, or whether the sole purpose was required.

Issues

1. Whether the test for legal professional privilege in Australian law is the 'dominant purpose' test or the 'sole purpose' test. 2. Whether the dominant purpose test should be adopted in preference to the sole purpose test previously applied in Grant v Downs.

Holding

The High Court held, by majority, that the dominant purpose test governs claims for legal professional privilege in Australian law, overruling the sole purpose test stated in Grant v Downs (1976) 135 CLR 674.

Ratio decidendi

A document attracts legal professional privilege where the dominant purpose for which it was brought into existence was the obtaining of legal advice or the provision of legal advice or its use in actual or anticipated litigation; the sole purpose test is no longer the law in Australia.

Obiter dicta

The majority remarked that the dominant purpose test better reflects the rationale underlying legal professional privilege by balancing the client's interest in candid communication with lawyers against the public interest in full disclosure in litigation. Some judges noted that the test aligns Australian law with the approach taken in England after Waugh v British Railways Board [1980] AC 521.

Significance

Esso Australia Resources is the leading Australian authority on the test for legal professional privilege, establishing that the dominant purpose test applies uniformly and displacing the stricter sole purpose test that had prevailed since Grant v Downs. It remains the authoritative statement of the privilege's scope for both litigation privilege and advice privilege in Australian courts.

Key authorities

• Grant v Downs Grant v Downs (1976) 135 CLR 674overruled
• Baker v Campbell Baker v Campbell (1983) 153 CLR 52considered
• Waterford v Commonwealth Waterford v Commonwealth (1987) 163 CLR 54considered
• Attorney-General (NT) v Kearney Attorney-General (NT) v Kearney (1985) 158 CLR 500considered
• Waugh v British Railways Board Waugh v British Railways Board [1980] AC 521applied
• Three Rivers District Council v Governor and Company of the Bank of England (No 6) Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610cited