Background

In September 2022, Optus suffered a major cyber‑attack. In response, it engaged Deloitte to conduct a forensic investigation and to prepare a report on its findings. In subsequent class action proceedings, applicants sought discovery of the Deloitte report, and Optus claimed Legal Professional Privilege (LPP) over that report.

The Federal Court rejected Optus’ privilege claim over its commissioned Deloitte report primarily because Optus had not established that the Deloitte report was prepared for the dominant purpose of obtaining legal advice.[1] On hearing Optus’ appeal, the Full Court of the Federal Court of Australia affirmed the first-instance decision.[2]

Key Points

The Full Court’s decision in the Optus case provides a useful reminder that:

1. The party asserting LPP must discharge its onus of establishing that confidential communications were made for the dominant purpose of giving or obtaining legal advice, or providing legal services
2. Proof of dominant purpose can be achieved in a variety of ways. However, the asserting party must adduce focussed and specific evidence to establish that the dominant purpose for which the document was created, or communication was made, was for a legal purpose
3. A person’s intentions for the making or authorising of a document is not conclusive of its purpose. It is not enough that the privileged purpose is substantial or one of several equal purposes; it must be the predominant, paramount, and most influential purpose.[3] If two purposes are of equal weight, neither is dominant.

Although LPP must always be determined on the facts of each case, Optus’ shortcomings in establishing its LPP claim illustrates some important points.

Firstly, Optus placed considerable reliance on the affidavit evidence of its in-house counsel and his state of mind and conduct in procuring Deloitte’s report. The primary judge found, as agreed by the Full Court, that the in-house counsel’s evidence failed to adduce focussed and specific evidence to establish that the legal purpose was the dominant purpose.[4] Simply showing that one purpose for creation of the document was to obtain legal advice or assistance is not good enough.[5]

Secondly, the Full Court agreed with the primary judge that the state of mind of Optus’ CEO and other board members were also relevant to ascertaining the state of mind of Optus in procuring Deloitte’s report. As Optus did not offer the primary judge evidence of its CEO or the members of its board, the Court considered contemporaneous documentary evidence and inferences that arose from the evidence, namely Optus’ media release and a circular resolution passed by Optus’ board, which contradicted the evidence of Optus’ in-house counsel.

Key Takeaways

When engaging third‑party professionals to prepare reports on contentious issues, the Optus case is a reminder that the report will only attract legal professional privilege if commissioned for a predominant legal purpose. Beyond that general principle, clients should be aware that:

1. The Court will consider all surrounding circumstances, not just the subjective intention of the decision‑makers commissioning the report, when determining the dominant purpose of the report
2. Instructions to the third party should expressly state in clear and consistent terms that the predominant purpose of the report is to obtain legal advice or legal services. All internal and external communications about the engagement should reinforce this
3. If a privilege claim is challenged, the party asserting LPP must be prepared to produce focussed and specific evidence supporting that claim.

The above constitutes general commentary only. It is not intended to be comprehensive, nor does it constitute legal advice, and has been prepared based on applicable law at the date of publication. You should seek legal advice on specific circumstances before taking any action.

Further information / assistance regarding the issues raised in this article is available from the authors, Michael Gill, Partner, and Nicholas Revere, Senior Associate, or your usual contact at Moray & Agnew.

[1] Robertson v Singtel Optus Pty Ltd [2023] FCA 1392.

[2] Singtel Optus Pty Ltd v Robertson [2024] FCAFC 58.

[3] [2024] FCAFC 58, 27.

[4] [2024] FCAFC 58, 49.

[5] [2024] FCAFC 58, 27; Kennedy v Wallace [2004] FCAFC 337; Barnes v Commissioner of Taxation (Cth) [2007] FCAFC 88.