My great uncle Gerald Patrick Smith - one of the original crew of HMAS Australia
The ABC's official response to the Chris Kenny Hamster Wheel complaints


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Was he 'robyn' them? :-)

val majkus

Michael has had a couple of posts about what could be called 'the fraud exception to legal professional privilege'
I was looking for something else today and came across this nice summary of the 'fraud exception'

'Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. This principle is often referred to as the ‘fraud exception’ to legal professional privilege, but this does not capture its full reach: Attorney-General (NT) v Kearney [1985] HCA 60; (1985) 158 CLR 500 (‘Kearney’) at 515; Propend at 546; Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police [2001] FCA 1858; (2001) 188 ALR 515 (‘Clements’) at 521-522 [30].
211 The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J’s review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a ‘crime or fraud’: R v Cox and Railton (1884) 14 QBD 153 (‘R v Cox’) at 165; a ‘criminal or unlawful proceeding’: Bullivant v Attorney-General (Vic) [1901] AC 196 (‘Bullivant’) at 201; ‘any unlawful or wicked act’: Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and ‘all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances’: Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney, the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a ‘deliberate abuse of statutory power’ to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that ‘legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.’ Some authorities have expressed the principle as applicable to prevent a ‘fraud on justice’ in a broad sense. The concept of a ‘fraud on justice’ was adopted by Lander J in Gartner v Carter [2004] FCA 258 (‘Gartner v Carter’) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140].
212 The principle extends to ‘trickery’ and ‘shams’. A ‘sham’ refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471; see also Beazley v Steinhardt [1999] FCA 447; (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (‘Beazley’). The recent case of Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors’ interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J’s decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] EWCA Civ 29; [1995] 4 All ER 511 (‘Barclays Bank’), his Honour stated at [95]:

‘It is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.’
213 Mansfield J drew a distinction at [96]-[100] between communications to obtain advice in relation to what, if anything, could lawfully be done to improve the prospects of being repaid or of obtaining the interest to which the client was entitled (which were privileged), and communications which have the effect of concealing the true nature of a transaction and which enable a client to present a picture which is not true (which were not privileged).
214 Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees [1980] HCA 26; (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis & Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218].
215 It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that ‘[t]he privilege takes flight if the relationship between lawyer and client is abused’: Clark v United States [1933] USSC 52; (1933) 289 US 1 at 15; see also Kearney at 514 and 524.
216 In Barclays Bank, communications between the client and his lawyer in relation to the setting up of transactions at an undervalue so as to prejudice the bank were held to be ‘sufficiently iniquitous for public policy’ to require those communications to be discoverable. Schiemann LJ (with whom Aldous and Butler-Sloss LJJ agreed) stated at 524:

‘If that view be correct, then it matters not whether either the client or the solicitor shared that view. They may well have thought that the transactions would not fall to be set aside ... either because they thought that the transactions were not at an undervalue or because they thought that the court would not find that the purpose of the transactions was to prejudice the bank. But if this is what they thought then there is a strong prima facie case that they were wrong. Public policy does not require the communications of those who misapprehend the law to be privileged in circumstances where no privilege attaches to those who correctly understand the situation.’
217 For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of ‘reasonable grounds for believing’ that the relevant communication was for an improper purpose. The requirement has also been described as one of a ‘prima facie case’: Butler v Board of Trade [1971] 1 Ch 680 (‘Butler’) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O’Rourke v Darbishire [1920] AC 581 at 604, namely that ‘there must be something to give colour to the charge’; ‘the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact’. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J.
218 It is not necessary to prove an improper purpose on the balance of probabilities. The ‘prima facie’ test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler; Propend; Beazley. It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. In Butler, Goff J found at 687 that a letter written by the plaintiff’s lawyer which volunteered a warning that the plaintiff may incur serious consequences if he did not take care was not shown to be ‘in preparation for or in furtherance of or as part of any criminal designs on the part of the plaintiff’: see also Zemanek v Commonwealth Bank of Australia (unreported, Federal Court, Hill J, 2 October 1997).'
you can find the judgment here at paras 210 and following
the fraud exception was applied to certain documents - see paras 224 - 229


Yes, that struck me as well. But not too far off the mark as Joe is still swirling around in construction with Leightons in WA and advising Georgiou, also in construction.

Just to keep things in perspective when we think of public service, its servants and dedication. I refer to salaries of our regulators. Ben Bernanke, Chairman of the US Federal Reserve was said by Forbes in 2012 to be paid USD 180,000 pa and to be worth USD 2 million.

At least Ben puts in a solid days work for his 180K. Ours on much higher salaries seem to be asleep or junketeering to conferences all around the world.

Jane Smith more union trouble in NSW

Michelle Two

OT - A new inquiry by the ICAC into Eddie Obeid

Unions and bribes and murder??

Up The Workers!


In the whole of the last 100 years, the A.L.P. has been too dull-witted to manage to spell their own party name correctly.

In those circumstances, do you really think that their comical propaganda arm at Fauxfacts, is intellectually capable of understanding the subtleties of an ill-composed headline?

In any case, given that it is a Fauxfacts paper, there wouldn't have been more than a couple of dozen who would have seen it - and most of those would have been budgies who don't have a great reputation for studying the grammar of their cage liner.


Freudian slip?


I am older than 60 years and I am astonished by the revelations about the level of corruption in the corporate and government sectors. I suppose I shouldn't be, but I have assiduously been optimistic despite recent disclosures that at heart this country is peopled by honest people. It's almost devastating to learn the depth of the corruption in a country which most of us desperately want to be decent. I read these articles about Leighton and the post by Larry Pickering today and I have to say I'm disgusted.

I have revealed before on this blog that I was a Labor voter nearly all my life in the belief that, despite some rotten eggs in the machine, most of the members were decent, hardworking people who cared about and for their fellow men. In the past two years or so I have come to the utter conviction that the ALP is rotten to the core. Unionists corrupt corporations to enrich the heavies, corporations corrupt officials here and overseas, the ALP itself no longer welcomes workers/diverse experience in itself and has become corrupted on behalf of its parliamentary members and in the interests of power for its own sake. There are dynasties (Ludwig) which exist for no good purpose other than aggrandisement of the family name. Union officials urge the ALP conference to bind the PLP in votes which they know would fail in a referendum and would-be leaders consciously urge for quota systems to be introduced.

Where is democracy? Where is decency? Where is concern for the ordinary Australian in this nest of vipers?

Knowing that integrity is imposed from the top down, I can only hope that Tony Abbott steadfastly insists on the highest standards of his members and that he takes the appropriate step whenever someone displays a lesser standard. Should he do so and should the ALP maintain its current standards, I cannot see the NLP ever being voted out.


Questions Michael.
In Gillards and Wilson's up coming fraud trial, is Joe a witness for the prosocution or defense?
Or is he going to have his own private party (trial)?

john greybeard

Maybe like "The Hamster" they were being comical and innovative they might mind their P's and Q's but not their ABC's.


Val - another great summation from a legal perspective! :-)

But I do have a question - the sort of question that only a lay person would ask. The principle you are explaining is fairly straightforward: "Communications between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege."

But here's the question - how do you know whether a crime or fraud has even occurred until the matter has been tested in Court? Accused persons are assumed to be innocent until such time as a Court finds them guilty. Accordingly, on what grounds would or could material be seen as exempt from legal privilege if an accused person has not yet had his/her day in Court? I'm sure there's a perfectly good answer to this, but I would find it useful to know what it is. Kindest regards.

Wendy brown

If the Hole they are digging for themselves gets any bigger they
will all be in China soon.



You've hit the nail on the head with this. It's the dynasties of the Shortens, Howes, Ludwigs etc that have brought about this problem with the ALP. They individually could not care less about the average nurse, labourer, steelie, carpenter, tool maker etc etc but only care about their own money gain from the Union Offical job and later entry permit into politics.

The bunch of parasites will not learn their lesson until people like us demand they are accountable like companies.

The Australian Labor Party (of which I was once a member also)was founded in Queensland at a meeting of striking pastoral workers under a ghost gum tree (the "Tree of Knowledge") in Barcaldine, Queensland in 1891.

Now they're under the Gravy train instead of the tree of knowledge. The Caucus of the ALP is pure greed and Union run.

Jane Smith

Wow thanks Val. This would send shudders up a crooked lawyer's spine (if they had one).


O Sole Trio ;)

Old Rooster

Threesome might have unfortunate overtones—triumvirate might have done. Assuming their lexicon is that extensive, might have pressed a lot of their readers even some of the budgies though.

Steve J

John, your question is answered in paras 217 and 218 and the cases referred to there.
The principal extends beyond conduct which is criminal or fraudulent to anything which could be described as improper in the sense of offending "public policy".

217 For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of ‘reasonable grounds for believing’ that the relevant communication was for an improper purpose. The requirement has also been described as one of a ‘prima facie case’: Butler v Board of Trade [1971] 1 Ch 680 (‘Butler’) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney


Hi Val. A great link again. I think this is one which will figure prominently on October 15 and many other occasions in coming months.

214 'Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213].'

Hopefully, some of those judgments can be used to ensure the 11/9/95 Gillard termination interview is released in full.
Now there's a thought to send shivers up and down the spines of several S & G lawyers past and present and also cause major tremors amongst a coterie of former Maurice Blackburn practitioners!

O/T, but a humble thankyou to those I understand have recently expressed concern about my health and wellbeing. There have been some distractions on several fronts but I'm still fit and well and now ready to rejoin the fray.
Cheers to all the MSN family. H/B

val majkus

Hi John, another curly question
A finding of the exception from a judicial viewpoint comes from knowledge of the non disputed surrounding circumstances and the part that the documents in respect to which privilege is claimed played in those circumstances.
So the Court looks to the documents themselves and not the actions of the players

Born Free

I would say to that `The findings`.
Also the fact that Wilson went on Public TV to defend those findings, eg FOI documents that provide valid reason to believe fraud has been the detriment of the union payers where it was never accounted for but laundered via props and slush funds.
The spoa is just one example.A Finding being foundation of `reason to believe` it is defunct.Too serious (and numerous* breaches)given the peoples profession(responsibilty) to discard.
As with with the FWA H.Nowicki `findings` they were basis enough for legal action.Audit results showing financial failure to deliver the duty `intended`, and authorised to deliver, were not delivered or professional conduct of that duty`s propensity dictates.



Without 100% transparency and 100% accountability these things will go on happening.
Lying has become an art form for most all politicians, in varying degrees!

With the exception of honest Fred Nile and maybe a few others, politicians are obviously very troubled souls with one foot in HELL!

N.B. When are Liberal-Tony Abbott going to start sending back home those 30,000+ young "country shoppers"...that Liberal affirmed they would do at election time?

Afghan "country shoppers" are swarming around the Merrylands area, wandering around aimlessly, kitted up with expensive Apple I phones glued to their ears and with great big $$$$smiles on their faces!!

Born Free

Just as with a physical robbery for example, the premises are violated.. the neighbour or persons down the road are found storing the taken items, that would be findings.
The incidents have been reported to authorities, by `others` that the crime inadvertently affect, did affect eg R. Blewitt, B. Kernohan, Mr Smith,NS Browne, and union members and union member payers into that fund, and even businesses involved, or part involved(factually) with claims, that give basis to believe there was a crime , who it involved, where, when and now how ..That conclude` findings` that show it is worthy of investigation to determine how it happened and why and who and to return the funds or discipline the perpetrators.
Had there not been findings and accusations, or had they been taken to court for defamation and false fabrication(suggesting the claims) that may have been different, but they have not, by those involved.
Rather one chap went on public TV attempting to discern the matter, rather than a stat declaration, or take those accusing to court ,one person also repeatedly stated they `did nothing wrong`.Hardly an authorised response or resolve.


Hey Bushy, don't be too hard on corporations. I've worked in the private industry for 40 years ad for some very successful companies at senior levels. Integrity & honesty were highly regarded and infractions were dealt with expediently.

Liz of Vic

Welcome, great to see you are back with us, I missed you!

Liz of Vic


Could you please tell us why it is that Gillard was in New York
while our Foreign minister was there and again to-day, they are
both in Bali.

We know, why Julie Bishop is there, but why Gillard?

I do not trust Gillard, she has reasons for everything she does,
is she after another part-time job in Bali, or what is it, it is
giving me a creepy feeling, something not quite.......

Old Rooster

“Now what, I say now what’s that skinny old hen doin’ up on the barn”📢🐓

Probably not an asylum seeker…yet!

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