In AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234 (here on Austlii) AWB applied to the Federal Court to exclude approximately 900 documents occupying 28 lever arch folders from Commissioner Cole's inquiry. After a detailed analysis Judge Young found that about 55o documents are protected on the basis of legal professional privilege.
The documents at issue span a period of years from about 2002 to 2006. Over that period, AWB was involved in a number of investigations concerning its sales of wheat to Iraq under the United Nations’ Oil-For-Food Programme (‘OFF Programme’). AWB conducted two internal investigations, known as Project Rose and Project Water. In addition, AWB was exposed to investigations by the Permanent Investigations Committee of United States Senate (‘PSI’), the Independent Inquiry Committee of the United Nations (‘IIC’) and ultimately the Cole Inquiry.
AWB’s internal investigations also involved a review of matters concerning The Tigris Petroleum Corporation Limited.
The rest were not protected either because:
- the dominant purpose was not for giving or obtaining legal advice;
- AWB disclosed the gist or substance of legal advice that it obtained and therefore AWB waived any privilege that attached to those documents;
- the documents were brought into existence in furtherance of an improper and dishonest purpose – inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations’ escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI for a rebate of approximately US$2 million on account of the fact that earlier shipments of wheat by AWB had been contaminated by iron filings (‘the iron filings claim’). 10 documents were not protected as they related to the iron filings claim.
Judge Young decided that privilege has been waived over 316 documents falling within the following categories: documents which defined the scope of AWB’s internal reviews or which identify what investigations were carried out; summaries, chronologies and other documents which record or analyse the results of those investigations; witness statements and other notes or records of interviews of AWB personnel; records of meetings and periodical reports concerning the findings of the review; and documents seeking advice, or comprising or recording advice provided to AWB, as to whether AWB or any of its employees engaged in any wrongdoing in connection with wheat sales to Iraq under the OFF Programme, including any wrongdoing in connection with the Tigris transaction.
In his Explanatory Statement Judge Young said:
The cumulative effect of AWB’s disclosures is that, down to 17 January 2006 when Lindberg gave evidence to the Commission, AWB was openly claiming that its legal advice showed that there was no evidence that it had engaged in any wrongdoing in connection with its supply of wheat to Iraq under the OFF Programme. Specifically, AWB claimed that there was no evidence of any corruption by AWB, any side payments or after sales payments by AWB to the former Iraqi regime, that AWB knew of any connection between Alia and the Iraqi regime or of any payments being channelled by Alia to that regime, or any conduct by AWB that resulted in breaches of the United Nations’ sanctions. The disclosures by AWB were expressed in such broad terms that they encompassed advices that AWB had obtained concerning the Tigris transaction and the iron filings claim.
I am satisfied that AWB made a conscious and voluntary decision to deploy the gist or substance of this legal advice in its dealings with the Australian Government, the IIC and the Commission because it considered that it was in its commercial interests to do so. These actions are inconsistent with the maintenance of confidentiality in the legal advice.
It is not yet known whether Commissioner Cole will seek a further extension of his existing reporting date of 29 September.
UPDATE 26 September: In response to AWB's application for an order for costs against the Commonwealth, Justice Young decided to make no order as to costs.
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