lls 9 1 9 2 lawcorners by H2yE7H

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9.1 Fiduciary Duties: Lawyer-Client Conflicts and Confidentiality

Fiduciary Duties
      in equity, certain relationships of trust give rise to onerous obligations
           o These arise to protect people from being taken advantage of by someone
               who stands in a position of ascendancy
      in equity, the relationship between a lawyer and client automatically gives rise to a
       fiduciary duty
           o lawyer’s ability to affect the legal status of the client, lawyer’s status as
               officer of the court and the confidential knowledge that the client must give
               the lawyer
      interpreted strictly by the court
           o no defence to a breach for the lawyer to maintain that they acted bona fide,
               that the client benefited by the breach, that the work was delegated or that
               the client was charged no fee
           o aspect of vulnerability in the relationship
           o fiduciary must act in absolute good faith and with the interests of the
               principal placed above theirs

lawyer’s responsibilities resulting from fiduciary position (Dal Pont)
    shun situations involving a conflict of interest.
    refrain from using the fiduciary relationship as a conduit to making personal gain or
       to secure a benefit at the client’s expense
    fully disclose to the client any of the aforesaid conflicts or gains and all material
       information coming into their possession concerning the client’s affairs
    make known any conflicts of interest e.g. in writing and as long as consent has been
       obtained, the duty may be complied with.
    maintain the confidentiality of information relating to the representation
    account for moneys held on behalf of another and for the costs of the matter
    when he serves two masters, he is required to provide full disclosure to both

4 mechanisms which regulate legal discliplinary actions of lawyers.
    1) Common law
    2) Statutory – LPA
    3) Rules – Solicitor and barrister rules. The rules are more codes of conducts which
         must be complied with. If in breach of the rules then subject to disciplinary action
         and the legislation kicks in (LPA chapter 4 496,497,498 – unsatisfactory professional
         misconduct)
    4) Regulations eg. Policies.
This is a disciplinary jurisdiction as opposed to a punitive or criminal jurisdiction. Courts can
exercise more than one jurisdiction but they will have to be different proceedings.




Lawyer-Client Conflicts
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         must make full and frank disclosure of personal interest in any mater and either
          cease to act, or have client’s informed consent and ensure client obtains
          independent legal advice
         if breach of these principles, lawyer can be disqualified from acting or transaction
          can be set aside

         areas of potential conflict
             o firm or practitioner is approached by an opposite party to an action,
                 requesting that the firm or practitioner act for them
             o conflict between the interests (financial or otherwise) of the lawyer and
                 those of the client
             o lawyer is a potential witness
             o solicitor is opposing a former client

Rules
Solicitor’s Rules

If an individual lawyer is disqualified from acting, the lawyer’s firm will also be disqualified
from acting
SR10 avoiding a conflict b/w a client’s and a practitioner’s own interest
10.1 A practitioner must not, in any dealings with a client -
10.1.1 allow the interests of the practitioner or an associate of the practitioner to conflict with those of the client;
10.1.2 exercise any undue influence intended to dispose the client to benefit the practitioner in excess of the practitioner's
fair remuneration for the legal services provided to the client;
10.2 A practitioner must not accept instructions to act for a person in any proceedings or transaction affecting or related to
any legal or equitable right or entitlement or interest in property, or continue to act for a person engaged in such
proceedings or transaction when the practitioner is, or becomes, aware that the person's interest in the proceedings or
transaction is, or would be, in conflict with the practitioner's own interest or the interest of an associate.


Lawyer not to draw a will in which lawyer receives substantial benefit, and must inform
client in writing of fees/commission for being executor (SR 11)
11.1 A practitioner who receives instructions from a person to draw a Will appointing the practitioner an Executor must
inform that person in writing before the client signs the Will -
11.1.1 of any entitlement of the practitioner or of a practitioner who is the attorney of the nominated executor to claim
commission;
11.1.2 of the inclusion in the Will of any provision entitling the practitioner or of a practitioner who is the attorney of the
nominated executor, or the practitioner's firm, to charge professional fees in relation to the administration of the Estate,
and;
11.1.3 if the practitioner has an entitlement to claim commission, that the person could appoint as Executor a person who
might make no claim for commission.
11.2 A practitioner who receives instructions from a person to -
11.2.1 draw a will under which the practitioner or an associate will, or may, receive a substantial benefit other than any
proper entitlement to commission (if the practitioner is also to be appointed executor) and the reasonable professional
fees of the practitioner or the practitioner's firm; or
11.2.2 draws any other instrument under which the practitioner or an associate will, or may, receive a substantial benefit
in addition to the practitioner's reasonable remuneration, including that payable under a conditional costs agreement,
must decline to act on those instructions and offer to refer the person, for advice, to another practitioner who is not an
associate of the practitioner, unless the person instructing the practitioner is either:
11.2.3 a member of the practitioner's immediate family; or
11.2.4 a practitioner, or a member of the immediate family of a practitioner, who is a partner, employer, or employee, of
the practitioner.
11.3 For the benefit of this rule:
"substantial benefit" means a benefit which has a substantial value relative to the financial resources and assets of the
person intending to bestow the benefit.
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The Lawyer is not to borrow money from client unless client is a bank/financial institution
etc (SR 12)

12.1 A practitioner must not borrow any money, nor assist an associate to borrow any money from a person -
12.1.1 who is currently a client of the practitioner, or the practitioner's firm;
12.1.2 for whom the practitioner or practitioner's firm has provided legal services, and who has indicated continuing
reliance upon the advice of the practitioner, or practitioner's firm in relation to the investment of money; or
12.1.3 who has sought from the practitioner, or the practitioner's firm, advice in respect of the investment of any money,
or the management of the person's financial affairs.
12.2 This Clause does not prevent a practitioner, or an associate of a practitioner borrowing from a client, which is a
corporation or institution described in the Schedule to this Rule, or which may be declared by the Council of the Law
Society to be exempt from this Rule.
12.3 A practitioner must not maintain a private finance company and invite, directly or indirectly, the deposit of money
with the company on the basis of a representation that -
12.3.1 the money is repayable at call, or on short notice, if that is not assured when the money is deposited; or
12.3.2 that the deposit of the money is, or will be, secured, unless the money is specifically secured by an instrument
identifying the lender, the amount deposited, and the security.
12.4 A practitioner must not borrow any money, or permit or assist an associate to borrow any money, from a private
finance company which is operated or controlled by the practitioner or the associate of the practitioner.
12.5 A practitioner must not cause or permit a private finance company to pay to any depositors of money to the company
a rate of interest on their deposits which is less than the rate charged by the company to borrowers.


Barrister’s Rules
B should not accept briefs where there may be a conflict of interest (BR87)

(e) the barrister has reasonable grounds to believe that the barrister’s own
personal or professional conduct may be attacked in the case;
(f) the barrister has a material financial or property interest in the outcome of
the case, apart from the prospect of a fee in the case of a brief under a
conditional costs agreement;
(g) the brief is on the assessment of costs which include a dispute as to the
propriety of the fee paid or payable to the barrister, or is for the recovery
from a former client of costs in relation to a case in which the barrister
appeared for the client;


Law Society of NSW v Harvey [1976] 2NSWLR15

Material Facts
   Solicitor was a director and shareholder in 3 companies [interest in the company
       conflicts with the interests of the client)
   Clients of the solicitor lent money to these companies at the suggestion of the
       solicitor
   full extent of interest was never disclosed to clients
   investments were of high risk
   clients were never given any real understanding of the investment or the risks
       involved
   clients placed heavy reliance on def as they were inexperienced in investment
   def failed to advise any of his clients to obtain independent legal advice

In this circumstance, the professional misconduct was serious as the D grossly preferred his
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own interests over his clients with deliberate and dishonest concealment. This was enough
to have him removed from the roll of solicitor.
Note: potential actions in contract, tort or equity may be available where a breach of duty
arises.

Street CJ:
     where there is any conflict between the interest of the client and that of the
        solicitor, the duty of the solicitor is to act in perfect good faith and to make full
        disclosure of his interest
            o this involves conscientious disclosure of all material circumstances
     A solicitor merely to disclose that he has an interest, without identifying the interest,
        may serve only to mislead the client into an enhanced confidence that the solicitor
        will be in a position better to protect the client’s interest.
     When there is a conflict, solicitor should advice the client to seek independent legal
        advice
     Solicitor ought neither to promote, suggest nor encourage a client to deal with him,
        but rather should take all reasonable steps positively to avoid dealing directly, or
        indirectly with his client.

Maguire v Makaronis (1997)
   solicitor lent money to clients on security of mortgage of land
   when solicitor tried to repossess, clients able to get recission of contract

Paths to Remedy Client Conflicts
Lawyers can avoid liability in the case of a conflict with their client, only if they have satisfied
the following criteria
     Consent
           o Full disclosure of the relevant facts giving rise to the conflict or potential
               conflict of interest is necessary. Once this is satisfied, they can obtain the
               informed consent of the client to act on their behalf. (DPC Estates Pty Ltd v
               Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443; Chan v Zacharia
               [1984] HCA 36; (1984) 154 CLR 178).
     Independent legal advice
           o As soon as any conflict arises, the lawyer is under an obligation to advise the
               client to seek independent legal advice. This is so the client can make a fully
               informed decision regarding the circumstances of their representation.
               (Harvey)
     Withdrawal
           o If the above avenues have been exhausted and the lawyer is unable to
               comply, they must withdraw immediately from all duties in representing the
               client. (Harvey)




Lawyer as Witness
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         a lawyer must not act in a case in which it is reasonable to believe that he or she will
          be required to give evidence material to the determination of contested issues
          before the court
         if it becomes evident during the case, the lawyer must withdraw and arrange for a
          new independent lawyer or be disqualified
         conflict of interest will arise if solicitor is to be a witness
         Corporate Systems Publishing Pty Ltd v Lingard (2004)
                o Court will intervene to prevent a solicitor from acting for a party in
                   proceedings in which the solicitor has an interest
                o Interest exists where he/she is aware:
                        That he/she may be called as a material witness (Clay v Karlson)
                                In such cases, solicitor must withdraw
                                must appoint another lawyer- duty is still there to serve
                                   client’s best interests
         R v Birks – A solicitor may still be called in support of some matter concerning the
          instructions given.
         Exception is where a client brings an action against you.

Rules
Barrister’s Rules (NSW) 87 (c) – (d)
Barrister must refuse a brief or instructions to appear before a court if:
(c) the barrister has reasonable grounds to believe that the barrister may, as a
real possibility, be a witness in the case;
(d) the brief is to appear on an appeal and the barrister was a witness in the
case at first instance;

Solicitors’ Rules
S19 – Practitioner a Material Witness in clients case
A practitioner must not appear as an advocate and, unless there are exceptional circumstances justifying the practitioner's
continuing retainer by the practitioner's client, the practitioner must not act, or continue to act, in a case in which it is
known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of
contested issues before the court.




Confidentiality
         Confidentiality applies to information given in the contract of a retainer between
          lawyer and client.
         This arises out of the Fundamental fiduciary relationship.
         In contract and equity there is an implied duty in the retainer from the fiduciary
          nature of the relationship between lawyer and client
              o Includes all info received by the practitioner in course of retainer and
                  continues after lawyer-client relationship terminated, even after client dies
         Want to ensure full and frank disclosure so that you can prepare the best possible
          case for the client.
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      The client on the other hand wants to make sure they can impart trust upon you .

H Stanke & Sons Pty Ltd & Cape Banks Processing Company Pty Ltd v Von Stanke
(2006)(p411)
     to obtain relief against a breach, applicant must show:
          o information has the necessary quality of confidence (assumption that info
              was provided in confidence)
          o imparted in circumstances importing an obligation of confidence
          o there was, or is threatened, an unauthorized use of that info to the detriment
              of the party communicating it

Spaulding v Zimmermann (1962)
Material Facts
     Spaulding (plaintiff) was involved in a car crash with Zimmermann (def)
     defence counsel had information which revealed that pl had an aorta aneurism
     this ailment was not known to pl and his solicitors at time of settlement
     pl sought to have settlement order vacated and set aside
     def argued that the court had no jurisdiction to vacate the settlement:
            o no mutual mistake of fact was involved
            o no duty rested upon them to disclose information to the pl (could assume it
                 had been disclosed by pl’s physician)
            o insurance limitations as well as physical injuries formed the basis for the
                 settlement
            o pl’s motion to vacate the order for settlement and to set aside the releases
                 was barred by the limitations in r60.02 of the Rules of Civil Procedure
                      sets out limited circumstance in which order can be set aside
Issue
did def’s solicitors have a duty to disclose info to pl?

Gallagher J:
     no rule or duty to disclose if parties in an adversary relationship
     must disclose if not in adversary relationship
           o HOWEVER agreement to settle is not characterised as an adversary
              relationship
           o Once the adversary relationship concluded in the settlement, this was N/A
     Was there a character of concealment? Ie. Was it done in such circumstances that
       the Ds must be charged with knowledge that P did not know of the injury
     court has a discretion to set aside a settlement even though it is not induced by
       fraud or bad faith (contrast with r60.02 Rules of Civil Procedure)

Exceptions:
        if the client consents
              o Rule 2.1.1 Solicitors Rules - The client authorises disclosure
              o Rule 103 Barristers Rules - A barrister must not disclose (except as
                  compelled by law) or use in any way in the course of practice confidential
                  information obtained by the barrister concerning any person unless or
                  until:
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             c) the person has consented to the barrister disclosing or using the
             information generally or on specific terms
         o Rule 104 Barristers Rules – A barrister must not disclose (except as
             compelled by law) or use confidential information under Rule 103(c) in
             any way other than as permitted by the specific terms of the person's
             consent.
   if the information is public knowledge
         o Rule 103 Barristers Rules - A barrister must not disclose (except as
             compelled by law) or use in any way in the course of practice confidential
             information obtained by the barrister concerning any person unless or
             until:
             (a) the information has been published;
             (b) the information is later obtained by the barrister from another person
             who
             is not bound by the confidentiality owed by the barrister to the first
             person
             and who does not give the information confidentially to the barrister;
   over-ridden by mandatory disclosures compelled by law (eg legal aid
    application), unless privilege applies
   doesn’t restrict communication incidental to the normal conduct of the matter
   can beach confidence to extent necessary to reply to or defend a charge of cri or
    unprofessional conduct or professional misconduct where client is
    complainant.(S171S of LPA)
   if client brings an action against their lawyers , then client treated as waiving
    right to confidentiality with respect to matters at issue.
   for the sole purpose of avoiding probable commission or concealment of felony
    (SR2.1)
   where a client informs a lawyer that he/she intends to disobey a ct’s order and
    the lawyer believes on reasonable grounds that he client’s conduct constitutes a
    threat to any person’s safety, must inform the ct or opponent. (advocate rule 34,
    PCPR)
         o 34. A barrister whose client informs the barrister that the client intends
             to disobey a court's order must:
             (a) advise the client against that course and warn the client of its
             dangers;
             (b) not advise the client how to carry out or conceal that course; but
             (c) not inform the court or the opponent of the client's intention unless:
                 (i) the client has authorised the barrister to do so beforehand; or
                 (ii) the barrister believes on reasonable grounds that the client's
             conduct constitutes a threat to any person's safety.
            - O’Reilly v Commissioners of State Bank of Victoria – duty of
                 confidentiality is subject to and overridden by the duty of any party to
                 comply with the law.
   when it is in the public interest, but only to the extent that it is necessary
         o balancing of pub interest in the protection of the public
         o proper admin of justice & need for a court to have access to all relevant
             evidence
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               o important pub interest of a client being able to talk freely to his/her legal
                 advisers with knowledge it will not be disclosed




9.2 Fiduciary Duties: Confidentiality (Legal Professional Privilege)

Legal Professional Privilege
    LPP protects from mandatory disclosure all confidential communications b/w
       solicitor and client made for the purpose of (1) advice or (2) in preparation for
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       litigation that is in reasonable contemplation.
            o The ‘litigation’ privilege also applies to communications b/w the lawyer or
                client and third parties in preparation for litigation.
            o extends to agents
      Is a fundamental common law right/immunity which safeguards the full and
       unreserved communication of a client and their lawyers (Baker v Campbell) . Extends
       to non judicial proceedings
      Applies also to self represented litigants in their communication with another party.
      ONLY applicable where the client or the lawyer OBJECTS. Thus duty of lawyer to
       object and exercise power where necessary.
      Where a claim for privilege is disputed, it is for the party seeking to rely upon the
       privilege to prove their entitlement. Need to consider purpose.
            o Ie that the relevant communication came into existence for a privileged
                purpose and that was the dominant purpose for the creation of the
                communication

Requirements
    Must be confidential
           o Look at the context in which the communication is given (stanke)
    May be written, oral or mechanically/electronically recorded
           o Not include doc that doc or evidence a transaction such as cont,
               conveyances, declarations of trust etc or that which has been already in
               existence or lodged with a lawyer for protection.
    Doesn’t usually cover communication of name and address.
    But covers material gathered in the preparation for litigation.
    Must be communicated in context of lawyer-client professional relationship ie
       existence of retainer
    Then determine whether disclosure of that information would prejudice client in
       some way.
    LPP—certain confidential communications between lawyer and client can be
       protected from disclosure even in court proceedings or police/regulatory
       investigations where there is normally a duty to disclose relevant info.
    it is open to a court to inspect documents where privilege is claimed, to determine
       whether they fall within the class that attracts the privilege (Trade Practices
       commission v Sterling)
    The competing interest is that the ATO, police, ACCC wants to have full access to
       information so they can administer their duties.
    LPP recognises these two tension and that in certain circumstances, there may be
       privilege of confidentiality, and in some cases it doesn’t apply.
    It is the lawyer’s duty to do their best to ensure that valid claims of privilege are not
       lost, and client can sue if lawyer discloses privilege material and advocates immunity
       will not protect the lawyer


Dominant Purpose Test
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      Communication is privileged if the dominant purpose was to obtain legal advice, or
       the provision of legal advice (Pratt Holdings v Commissioner of Taxation)
      Objective question of fact, however subjective intention is entitled some weight and
       may often be decisive.
      Sole purpose test re: Grant v Downs is no longer applied (see Esso)
      Reflected in s118 and 119 of EA
      It is the purpose in existence at the time that the communication or document was
       made which is determinative.
      documents prepared for the dual purpose of internal management and possible legal
       advice may be privileged (Esso v FCT)
      If a decision to bring a document into existence would have been made irrespective
       of an intention to seek legal advice it will not satisfy the dominant purpose test and
       will not be privileged (Sparnon v Apand)

Evidence Act 1995
118 Evidence is not to be adduced if, on objection by a client, the court finds that adducing
the evidence would result in disclosure of:
        (a) a confidential communication made between the client and a lawyer; or
        (b) a confidential communication made between 2 or more lawyers acting for the
client; or
        (c) the contents of a confidential document (whether delivered or not) prepared by
        the client of a lawyer:
        for the dominant purpose of the lawyer, or one or more lawyers, providing legal
        advice to the client.

119 Evidence is not to be adduced if, on objection by a client, the court finds that adducing
the evidence would result in disclosure of:
       (a) a confidential communication between the client and another person, or
       between a lawyer acting for the client and another person, that was made; or
       (b) the contents of a confidential document (whether delivered or not) that was
prepared;
       for the dominant purpose of the client being provided with professional legal
       services relating to an Australian or overseas proceeding (including the proceeding
       before the court), or an anticipated or pending Australian or overseas proceeding,
       in which the client is or may be, or was or might have been, a party


Influence of Third parties
     Must be shown that the client’s intention to use the 3rd party’s document to obtain
       legal advice was the primary or paramount reason that the document came into
       existence.
           o Not enough that the doc or communication was merely useful, provided in
               connection with a request for legal advice or prepared with the knowledge
               that it was to be provided to the lawyers.
Pratt Holdings v Commissioner of Taxation
     where a client directs or authorises a 3rd party to prepare a doc for the dominant
       purpose of it then being communicated by the client, without the direct involvement
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       of the 3rd party, to a lawyer to obtain legal advice, that doc attracts client legal
       privilege.
      non agent 3rd party’s communication with a client can potentially be protected by
       privilege, even where there is no relevant litigation pending
      but if the 3rd parties input and the legal advice can be regarded as 2 separate sources
       of assistance, then it will not likely be privileged.


Esso Australia Resources Ltd v The commissioner of Taxation
Material Facts
    dispute arose about certain documents which were claimed to be privileged on the
       ground that their disclosure would result in a disclosure of a confidential
       communication made between the company and a lawyer for the dominant purpose
       of the lawyer’s providing legal advice to the company

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby and Callinan JJ:
    LPP exists to serve the public interest in the administration of justice by encouraging
      full and frank disclosure by clients to their lawyers
    need to find appropriate balance between 2 competing considerations: the public
      policy reflected in the privilege itself and the public policy that in the administration
      of justice and investigative procedures, there should be unfettered access to
      relevant information
    confidential info b/w solicitor and client relevant to the assessment of income tax
    Applied dominant purpose test in Evidence Act
    Applied both to adducing of evidence in court and pre trial processes e.g. discovery
      and inspection
    Ruled sole purpose test too narrow and no longer appropriate
    An additional purpose, no matter how unimportant however will defeat privilege


Exceptions to the privilege
   1) Abrogation by statute
        Intention of the Parliament must be in clear and unambiguous terms
        Not in express and unambiguous termsct look to intention of Parliament by
          reference to public interest considerations (Yuill)
        No privilege in the doc relating to personal injuries in order to improve efficiency
          in the resolution (Parr)

       Australian Competition and Consumer Commission v Daniels Corporation
       International Pty Ltd
           o LPP is not limited to judicial or quasi judicial proceedings but extends to
              statutory administrative actions which are investigative
           o privilege is so fundamental that it is not to be abrogated unless by clear
              words or intent evinced by parliament
           o intent to abrogate may be evidenced by the use of words, the ordinary
              meaning of which is not inconsistent with the retention of the privilege in a
              particular case
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          o it is immaterial that parliament did not contemplate the possible application
            of legal professional privilege when enacting the legislation
          o the availability of LPP didn’t impair the investigation of contraventions of the
            Act
          o statutory provisions are to be construed by giving effect to their express
            terms unless that would result in some absurdity (Grey v Pearson)
          o meaning and effect of S155only one aspect of S155 of TPA which positively
            suggest a legislative intent to effect an abrogation of LPP ie. to cabinet doc
            and deliberations—no express abrogation of the privilege against self-
            incrimination.
          o no fraud and illegal conduct involving in PC
          o held S155 doesn’t abrogate the LPP

   2) Where the client waives the privilege
      o Can be expressed or implied (Mann v Carnell)
            o The waiver is a question of fact and is determined by the circumstances of
               each case (Secretary, Dept of Justice v Osland)
      o Lawyer can waive the privilege on the client’s behalf

   3) Where the privileged information may be able to prove someone’s innocence in a
      criminal trial

   4) Improper or illegal Purpose

          o No LPP protection of documents if they are used to further an improper or
            illegal purpose (Kearney)
          o Fraud in this context is construed broadly and encompasses confidentiality
            sought to frustrate the processes of law (Gartner v Carter, Kearney)
          o Also can encompass and is “sufficiently flexible” to include a range of
            situations where the protection of confidential communications between
            lawyer and client would be contrary to public interest (AWB v Cole)
          o purpose of committing a breach of K or furthering conspiracy to commit a
            breach of K [Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd] will not
            be privileged.

AG v Kearney
   o Communications by a client for the purpose of being guided or helped in the
       commission of a crime or fraud are not privileged from discovery
   o Exception to privilege not just related to mere fraud and crime
          o privilege wont display for unauthorised exercise for ulterior purpose
   o Meaning of unlawfulness
          o decision not dependent on whether its criminal fraud or civil fraud, main
             point is to decide the case by reliance on public interest argument ie.
             contrary to the proper process of the law.
   o Onus of proof on the client’s opponent in order for the privilege to be lost:
       unlawfulness of the matter and the meaning of unlawfulness
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In House Counsel
    o In house solicitors are, by reason of their position, more likely to act for purposes
       unrelated to legal proceedings than an external solicitor. (Sydney Airports
       Corporation ltd v Singapore Airlines Ltd and Queantas Airways ltd)
          o Need to act independently and consistently with their role as an office of the
              court when giving legal advice
          o Dual legal and commercial roles
                   Need to separate legal communications from non-legal ones and
                           Identify the legal communication

								
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