Express law No. 280

14 August 2019

High Court confirms legal professional privilege a 'shield' not a 'sword'

Glencore International AG & Ors v Commissioner of Taxation & Ors [2019] HCA 26

The High Court has unanimously declined an invitation by the plaintiffs (Glencore) to reform the doctrine of legal professional privilege so that, in addition to being an immunity from production, it also a basis for an actionable right to restrain the use of privileged materials.

Consequently, the High Court has held that legal professional privilege did not provide a basis to restrain the Commissioner of Taxation from using privileged documents already in the possession of the Australian Taxation Office in assessing Glencore's taxation liability.


Legal professional privilege protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or in the provision of legal services, such as representation in legal proceedings. The privilege is a creature of both common law and statute (under the Evidence Acts of the Commonwealth, States and Territories).

Legal professional privilege was historically regarded as an immunity from compulsory production to the courts. In Baker v Campbell [1983] HCA 39; 153 CLR 52, the High Court held that it extended to confer an immunity from compulsory production to the executive as well. This was held to be so because legal professional privilege is a 'rule of substantive law', not a mere rule of evidence: see Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; 213 CLR 543 at [9]–[11].

In 2016, documents known as the 'Paradise Papers' were leaked from a law firm in Bermuda. The leaked documents were the subject of extensive media reporting in Australia and around the world. Some of those documents related to the tax affairs of Glencore. Glencore commenced proceedings in the High Court seeking an order to restrain the Commissioner from using the Paradise Papers, which Glencore alleged were in the possession of the Australian Taxation Office. Glencore contended that those documents were disclosed without its authority and that legal professional privilege had not been waived.

The Commissioner resisted Glencore's application on the basis that legal professional privilege is limited to conferring an immunity from production and does not confer any actionable right to restrain the use of privileged materials and so did not support the remedy sought by Glencore. Further, the Commissioner contended that, even if it did, that right was subject to the duty of the Commissioner under s 166 of the Income Tax Assessment Act 1936 (Cth) (ITAA) to use all information in his or her possession in making an assessment.

High Court's reasoning

The High Court unanimously rejected Glencore's argument, holding that, on the current state of the law, '[legal professional] privilege is only an immunity from the exercise of powers which would otherwise compel the disclosure of privileged communications…' (at [12]).

The Court said that the policy considerations advanced by Glencore could not justify the creation of a new, actionable right to restrain the use of privileged material. Without engaging with the merit of those identified in the present case, the Court observed that policy considerations cannot justify an abrupt change to established principle in favour of a result that may be seen as desirable in a particular case (at [13], [40]–[42]).

The Court said that in providing an immunity from production, the law was concerned to enhance the administration of justice, not to further a client's personal interest in preventing the use which might be made by others of privileged communications and that it is the policy of the law that the public interest in the administration of justice is sufficiently secured by the grant of an immunity against disclosure (at [31]–[32]). The Court observed that once privileged communications are disclosed, a privilege holder must resort to the equitable doctrine of breach of confidence for protection (at [34]).

The Court said it did not need to decide whether s 166 ITAA was a bar to the relief sought by Glencore (at [14]) or to an action for breach of confidence (at [7]).


The decision provides greater certainty for regulators, law enforcement agencies and revenue bodies in the exercise of their statutory functions relating to the collection and use of information where legal professional privilege is claimed.

The decision confirms the orthodox view, most recently articulated in Federal Commissioner of Taxation v Donoghue [2015] FCAFC 183; 237 FCR 316, that legal professional privilege confers an immunity from compulsory production of privileged documents, but nothing more. Legal professional privilege cannot be used as a 'sword' to restrain an agency from using privileged material already in its possession. Rather, a claim can only be made defensively as a 'shield' to resist an attempt by a court or an agency to compel production.

It is possible to seek to restrain the use of privileged material by an action for breach of confidence in the hands of an agency where confidentiality in the documents is maintained. In this case, Glencore expressly disavowed an action for breach of confidence. Agencies should take care to distinguish between the distinct obligations that might arise from a claim of confidentiality as opposed to a claim of legal professional privilege and the effect of legislation on any such obligations, particularly as the concepts are often spoken about interchangeably. The High Court's judgment does not affect the well-settled proposition that a regulator might in certain circumstances be restrained from using confidential material.

Text of the decision is available at:

Kristy Alexander and Tristan Lockwood (AGS) acted for the Commissioner of Taxation.

For further information please contact:

Kristy Alexander
Senior Executive Lawyer
T 02 9581 7640

Tristan Lockwood
T 02 9581 7322

Simon Daley PSM
Chief Solicitor
T 02 9581 7490

Jane Lye
Senior Executive Lawyer
T 07 3360 5736


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