A recent judgement of the Western Cape Division of the High Court dealt with ‘legal professional privilege’ as it relates to invoices pertaining to legal work. The invoices – or fee notes – were sought by SARS, but the companies that had sought the legal advice and been invoiced, resisted and sought a High Court order stating that the notes were subject to legal professional privilege and were thus protected.
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The judgement provides a useful guide to the ambit of privilege in general, and in particular as it pertains to fee notes issued by legal practitioners. SARS had requested the notes as it believed they might contain proof that the applicants had knowledge of certain financial transactions that SARS wished to reassess.
The applicants contended that the fee notes contained narratives referring to specific advice sought and which, if disclosed, would have undermined the privilege of their communications with their legal advisors. Importantly, SARS did not seek to rely upon any provisions of the Tax Administration Act in order to override the applicants’ right to claim legal professional privilege. The issue was simply whether the privilege claimed had actually subsisted.
‘Certain requirements’
Citing a Constitutional Court case, the judge stated that “the right to legal professional privilege is a general rule of our common law, which states that communications between a legal advisor and his or her client are protected from disclosure, provided that certain requirements are met”. After thoroughly airing the relevant foreign pronouncements and various leading textbooks on the matter, the judge held that there is no blanket privilege attached to fee notes issued by legal advisors.
The judge then referred to the Pronouncement of Richard J in a Chancery Division case in the UK, and stated that a suitable test as to whether certain narratives in a fee note are in fact privileged is whether, upon any objective assessment, the references in the fee note disclose content and not only the existence of privileged communications. This is the nub of the matter. Does the narrative disclose content of communications between attorney and client? If so, it’s privileged. If the narrative merely discloses the existence of such communication, it is not privileged.
The judgement and the lesson
In order to ascertain whether such disclosure of content was made in the fee notes, the judge had to have recourse to a ‘judicial peek’ – an avenue of last resort that sees the judge reviewing the document. The judge ruled that only a small portion of the fee note narratives was privileged. The lesson here is that fee notes are not subject to a blanket privilege, but are privileged only in so far as references in the fee note somehow disclose content of privileged material.
Peter O’Halloran is an advocate in private practice. Phone him on 00267 390 2779.
