September 26, 2022

Volume XII, Number 269


September 23, 2022

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Check Your [Legal Professional] Privilege - a Timely Reminder from The Federal Court of Australia

In Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278, the Federal Court of Australia has found that the majority of 116 sample documents considered by it were not subject to legal professional privilege and therefore not shielded from production to the Commissioner of Taxation (the Commissioner).

PricewaterhouseCoopers (PwC) previously objected to producing some 15,500 documents to the Commissioner on the basis that they were privileged. In response, the Commissioner commenced a proceeding in the Federal Court of Australia seeking declaratory relief to the effect that those documents were not privileged. 

PwC's previous privilege claims will undoubtedly need to be revisited in light of Moshinsky J's judgment, subject of course to any appeal from it.


Whilst legal professional privilege judgments concerning large professional services firms and/or their clients often attract significant attention, they typically comprise a "refresher" of what are long-standing principles governing this issue as follows.

  • First, was the communication in question confidential? In other words, was the communication made in confidence, with its contents not generally known or widely disseminated?

  • Second, was the communication made in the context of a lawyer-client relationship

    Applying this element to the in-house context, was the in-house counsel (ie the lawyer) advising their employer company (ie the client) in their legal capacity?

  • Third, was the communication made for the dominant purpose of:

    • giving or receiving legal advice to the client; or

    • the client being provided with legal services relating to current or anticipated litigation to which they are or may be a party?


What makes Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278 particularly interesting? PwC Australia provided both legal and non-legal services to its clients, meaning the extent of the lawyer-client relationship was in issue.

The Commissioner disputed PwC's privilege claims on the basis that:

  • the "Statements of Work" detailing the terms of PwC Australia's engagements by its clients did not establish a lawyer-client relationship between them;

  • PwC Australia, "as a matter of substance", did not provide services to its clients pursuant to a lawyer-client relationship; and

  • the 15,500 documents over which a claim of legal professional privilege was made did not satisfy the "dominant purpose" test outlined above.

Moshinsky J was not satisfied that there was no lawyer-client relationship between PwC Australia and its clients whatsoever pursuant to the terms of engagement between them. One PwC Australia partner was an Australian legal practitioner and providing legal services to the clients, such that Moshinsky J held that a lawyer-client relationship existed in at least some circumstances between them.

As Moshinsky J declined to make a generalised finding that there was no lawyer-client relationship between PwC Australia and its clients, all that was left for the Federal Court of Australia to do was to assess whether each of the sample documents was made for the dominant purpose of giving or receiving legal advice.

Whilst a significant portion of Moshinsky J's findings on this issue have not been published to the public as they disclose the contents of documents over which privilege is claimed, his Honour noted that the provision of both legal and non-legal services by PwC was a "critical part of the context" in assessing the "dominant purpose" of each of the sample documents.

We infer from Moshinsky J's judgment that the role of the PwC person (eg lawyer, auditor, accountant) behind each communication with their clients was critical in assessing whether that communication was indeed made for the dominant purpose of giving or receiving legal advice.


As always, legal professional privilege must be at the forefront of the minds of lawyers (be they in private practice or in-house counsel) and their clients. 

Key considerations include:

  • The audience receiving the communication - will the communication remain sufficiently confidential if made to that audience?

  • The person sending and/or receiving the communication - is it in the context of a lawyer-client relationship? If an in-house lawyer is sending or receiving the communication, are they doing so in their legal capacity?

    If, for example, the in-house lawyer is also the company secretary, then there may be questions as to whether the communication was made in the context of a lawyer-client relationship.

  • The dominant purpose of the communication - was the ruling, prevailing or most influential purpose of the communication to provide or receive legal advice, or otherwise to receive legal services in relation to current or anticipated litigation?

  • The risk of privilege being waived over the communication - is there any prospect that the content of, and/or audience receiving, the communication is such that it is inconsistent with the maintenance of privilege?

Here, the Commissioner challenged the basis of PwC's lawyer-client relationship with its clients on grounds that it provided both legal and non-legal services to them and draw clear lines of division between legal and non-legal services to ensure the dominant purpose of each communication is in keeping with that division so as to avoid any unintended waiver of privilege.

Finally, this decision is also another example of a regulator challenging privilege claims made over documents otherwise responsive to a notice to produce issued by it. Parties must be readily able to "back up" their privilege claims with evidence.

The Federal Court of Australia's judgment can be accessed here.

Copyright 2022 K & L GatesNational Law Review, Volume XII, Number 89

About this Author

Christien Corns Litigation and Liability Attorney K&L Gates Law Firm Melbourne, Australia

Christien Corns has significant experience acting in insurance, professional indemnity and complex commercial litigation, as well as advising clients on defamation and related media issues. He provides clear and practical advice and regularly represents clients in all forms of advocacy and settlement negotiations.

Mark Dobbie Litigation lawyer Australia K&L Gates

Mark Dobbie has over 40 years experience as a litigator and has acted in some of the largest high profile litigation conducted in Australia, including multi party class actions and complex corporate litigation. He focuses on commercial litigation for corporate clients including matters in Victoria, interstate and overseas, concentrating mainly on major litigation involving trade practices, commercial and contracts, professional indemnity and directors and officers. Notably, Mark has acted as one of a select group of panel lawyers for the Victorian Legal Practitioners Liability Committee...

John Kelly Commercial Litigation Attorney K&L Gates Law Firm Melbourne Australia

John Kelly is a partner in the complex commercial litigation and dispute practice with more than 30 years experience. His practice focusses on large scale litigation which extends to all Australian superior courts. John has significant experience in dispute resolution by arbitration and other alternate dispute resolution procedures.

John has advised major clients on contractual disputes, class actions, tort claims, public inquiries and prosecutions by government and regulatory authorities. He has worked extensively in the energy and resources...

Sam Rappensberg Commercial Litigation Attorney K&L Gates Law Firm Melbourne Australia
Senior Associate

Sam Rappensberg is a lawyer in our commercial litigation and dispute resolution team. He acts on a wide range of corporate and commercial disputes across various industries and commercial sectors. His practice focuses in particular on litigation involving: breaches of commercial contracts, corporate governance and corporate transactional disputes, breaches of restraint of trade / confidential information clauses, building and construction disputes (including "Security of Payment" claims), consumer law disputes, defamation, equity issues and breaches of fiduciary duties,...