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01 February 2019

Why so privileged?

Practice Management
New South Wales

Asked

Section 72 Notice - Claim for privilege

Dear Mentor,

Our firm has been requested to provide client account and contact information under s 72 of the Taxation Administration Act 1996.

The client in question has retained us for his purchase of a property in NSW and has refused to pay the stamp duty due and payable on the contract. This is possibly why the NSW Revenue Office is requesting such information from our firm.

Please provide us with some guidance as to whether this information is privileged and whether we are bound to provide the above information to the Revenue Office.

Answered

Thank you for the question.

Yes, privilege can be claimed over documents which are responsive to a notice issued under s 72 of the Taxation Administration Act 1996 (NSW).

The process for claiming privilege is set out in the NSW Chief Commissioner of State Revenue's Legal Professional Privilege Guidelines (June 2018). There is a specific section at paragraphs 21 - 24 dealing with claims in relation to notices under s 72.

What is usually called ‘legal professional privilege’ is, except where the common law applies in certain limited circumstances, actually client legal privilege under the Evidence Act 1995 (NSW): see ss 117 – 126. It is so called because it is the client’s privilege, not the lawyer’s and only the client can claim or waive the privilege.

If the relationship of lawyer and client exists as defined in s 117 AND the document sought falls within the definition of a confidential communication in that section, then it will attract client legal privilege IF:

  • the document was created for the dominant purpose of the lawyer providing legal advice to the client, in which case it will be privileged under s 118, UNLESS the client has waived privilege;

           and/or

  • the document was created 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, in which case it will be privileged under s 119, UNLESS the client has waived the privilege.

Whether any documents caught by the notice are in fact privileged will require careful consideration of the legislative provisions in the full context of the matter. If instructions are received that a claim for privilege is to be made, then paragraphs 44 - 46 of the guidelines should be followed, with the effect that, if necessary, the Chief Commissioner will put the matter before a court for determination.

Regards,

Mentor