Clifford Chance

The Full Federal Court in ASIC v Macleod [2024] FCAFC 174 (ASIC v Macleod) has dealt with the operation and effectiveness of Voluntary Disclosure Agreements (VDAs) in preserving legal professional privilege (LPP) by finding that production of documents, pursuant to VDAs, will not necessarily waive any claim for legal advice or litigation related LPP.

On 20 December 2024, the Full Federal Court upheld the appeals brought by ASIC and Noumi against ASIC v Noumi Ltd [2024] FCA 349 (Noumi) with initial non-publication orders being lifted on 6 February 2025. The decision of the Full Court reversed the primary judge's finding that Noumi Ltd had waived legal advice privilege by providing a PwC Report to ASIC pursuant to a VDA. The appeal decision provides necessary clarification on the dominant purpose test and highlights the importance of determining the nature and intent of disclosed documents in establishing whether LPP has been waived.

In this post, we discuss the Full Federal Court decision of ASIC v Macleod, provide a comparison to the Full Federal Court decision of Singtel Optus v Robertson [2024] FCAFC 58 (Singtel Optus), and consider the more recent judgment of Justice Markovic in ASIC v ASX Limited [2025] FCA 552 (ASIC v ASX) with respect to LPP released on 27 May 2025. This post concludes with key takeaways concerning the maintenance of LPP, particularly in the context of commissioning a third-party investigative report and carrying out witness interviews during an investigation.

I. Background

ASIC does not have statutory authority to compel the production of privileged material. Instead, ASIC can use VDAs, which allow companies to disclose privileged information under a limited waiver of privilege as specified in the agreement.

Noumi is an Australian publicly listed company involved in the business of manufacturing and selling beverage and nutritional products. In 2020, Noumi engaged in discussions with ASIC regarding Noumi's quantification of inventory issues. Legal counsel for Noumi, Ms John at Ashurst, commissioned a report from PwC in relation to those inventory issues, which was later provided to ASIC under a VDA.

In 2023, ASIC commenced civil penalty proceedings against Noumi, Mr Macleod (Noumi's former CEO) and Mr Nicholas (Noumi's former CFO) for alleged contraventions of the Corporations Act 2001 (Cth). ASIC's case concerns the alleged accumulation of "unsaleable inventory" without having any or adequate policy for writing down the carrying values of that inventory within Noumi's accounts.

II. First instance decision

In Noumi, during the discovery process Noumi advanced a claim for privilege over the PwC Report. The primary judge considered: (1) whether LPP attached to the PwC Report, and (2) whether the disclosure of privileged material under a VDA to ASIC constituted a waiver of privilege.

The primary judge found that the PwC Report disclosed pursuant to a VDA was privileged because the dominant purpose for the creation and bringing into existence of the PwC Report was for Ashurst to provide legal advice to Noumi, and for Noumi to obtain that legal advice.

However, his Honour found that Noumi had waived privilege by disclosing the PwC report to ASIC under the VDA because the terms permitted the information in the report to be used in a derivative way against Mr Macleod. This conclusion was drawn with reference to a clause in the VDA that stated ASIC was permitted to make derivative use of the PwC Report "to obtain, and to present as evidence in proceedings against Noumi or third parties, material and information obtained as a result of Noumi having provided the PwC Report to ASIC".

In determining whether Noumi had waived privilege by providing the PwC Report to ASIC, the primary judge considered whether Noumi had engaged in any inconsistent conduct, taking into account both context and fairness. The primary judge concluded that unfairness of the requisite kind arose because Noumi had disclosed information that could be used in statutory investigations against Mr Macleod.

III. Full Federal Court appeal

On 28 May 2024, ASIC and Noumi filed notices of appeal contending that the primary judge erred in finding that Noumi waived LPP in the PwC Report by voluntarily disclosing it to ASIC pursuant to a VDA.

Mr Macleod also disputed the primary judge’s conclusion that the PwC Report was created for the dominant purpose of providing legal advice, contending that the primary judge erred in failing to find that there were other purposes for commissioning and obtaining the PwC Report, with the consequence that obtaining legal advice was not the dominant purpose.

In upholding the primary judge's application of the dominant purpose test in establishing LPP, the Full Federal Court considered that: (1) Ashurst's terms of engagement with PwC demonstrated that the preparation of the report was to be at the direction of Ashurst; (2) the scope of the PwC investigation was shaped and refined by Noumi's legal counsel, and (3) the services provided by PwC under this engagement were qualitatively different from the other engagements of PwC at the time.

On the issue of waiver, the Full Court found that the primary judge erred in concluding that by permitting ASIC to use the disclosed information in a derivative way against Mr Macleod, Noumi expressly or impliedly acted in a way that was inconsistent with the maintenance of confidentiality. The Full Court also held that unfairness could not be established, as Noumi had not disclosed the report to ASIC with intention to gain a forensic advantage over Mr Macleod.

In finding that the provision of documents to ASIC under a VDA does not necessarily waive any LPP claim, the Court emphasised the following points:

• In providing the PwC Report to ASIC, Noumi intended that it remain confidential, which was set out in the express terms of the VDA, that is, that the purpose of the disclosure was to assist ASIC being informed in relation to its investigation relating to Noumi's accounting issues while preserving privilege in the information disclosed.
• The Full Court distinguished between "derivative use" and "disclosure", noting that use of information does not amount to disclosure of it and that ASIC was expressly prohibited from making disclosure of the disclosed information under the VDA. The identification of chains of enquiry or witnesses to investigate do not amount to disclosure of the confidential information in the PwC Report.
• Information asymmetry between parties does not of itself amount to unfairness. The Full Court held that no disclosure was made by Noumi to gain an advantage over the opposing party in related litigation.
• The existence of a provision in the VDA recognising ASIC's obligations to disclose material to the Parliament or Executive in certain circumstances ought not to deprive the documents of LPP.

IV. Comparison with Singtel Optus v Robertson [2024] FCAFC 58 in the application of the document purpose test

In applying the dominant purpose test, the Full Federal Court in ASIC v Macleod referred to the statement of relevant principles in Singtel Optus at [24]-[32].

In Robertson v Singtel Optus Pty Ltd (2023) FCA 1392, a claim for LPP over a multi-purpose report, commissioned by Optus from Deloitte following a wide spread cyber-attack and data breach in September 2022 (Deloitte Report), was rejected on the basis that the report was not commissioned for the dominant purpose of obtaining legal advice or for use in litigation or regulatory proceedings. Singtel Optus and its subsidiaries filed an application for leave to appeal against the primary judge's orders made on 21 November 2023, and the Full Federal Court subsequently released its decision refusing Optus' application for leave to appeal on 27 May 2024.

a) Focused and specific evidence

The purpose for which a document was created is to be determined objectively, having regard to the evidence, the nature of the document and the parties' submissions. In Singtel Optus, the Full Federal Court held that the purpose "must be predominant and be the paramount or most influential purpose" and that in discharging the onus, "focussed and specific evidence is needed".

In Singtel Optus, the primary judge found that Optus had three distinct purposes for procuring the report, being (i) legal advice, (ii) to identify the root cause of the cyber-attack for management purposes, and (iii) to review Optus' management of the cyber risk in relation to changing its policies. The Court found that Optus did not adduce "focussed and specific evidence" to establish that the purpose under item (i) was the dominant purpose. In particular, Optus adduced little evidence as to the predominance of the legal purpose for procuring the Deloitte Report where there existed non-legal purposes and the evidence of Optus' General Counsel and Company Secretary, Mr Kusalik, did not address the non-legal purposes to establish that the legal purpose was the dominant purpose.

Comparatively, in ASIC v Macleod the Court considered other engagements Noumi had with PwC at the time and noted that the services provided by PwC under the engagement commissioned by Ashurst were qualitatively different from the other engagements of PwC, which focussed on accounting issues. The Court found that this was also consistent with the evidence provided by Noumi's legal counsel at Ashurst.

b) Totality of evidence

In Singtel Optus, the Full Federal Court relied on the principle that "The purpose for which a document was created is a matter of fact to be determined objectively, having regard to the evidence, the nature of the document, and the parties’ submissions. (…)."

The Full Court found that "To determine whether the evidence established that the legal purpose was Optus' dominant purpose the primary judge was required to consider the objective probabilities of the totality of the evidence, having proper regarding to both what Mr Kusalic's evidence said and what he did not say or adequately explain".

In Singtel Optus, the Full Court agreed with the primary judge:

• considering the evidence of Mr Kusalic as one of the relevant minds but nevertheless finding, on the totality of the evidence, that his state of mind and conduct was only part of the analysis;
• stating that the states of mind of the CEO and other board members were also highly relevant to ascertaining the state of mind of Optus; and
• examining primary documents and considering the evidence as a whole.

The Full Court considered Optus' media release on 3 October 2022 describing the proposed Deloitte investigation and a revised circular resolution passed by the Board on 11 October 2022, which referred to the non-legal purposes for undertaking the Deloitte review. The Full Court also agreed with the primary judge's analysis in taking into account "other contemporaneous documentary evidence and inferences that arose from the evidence as a whole". Ultimately, showing that one purpose for the creation of the Deloitte Report was a legal purpose was not sufficient.

By contrast, in finding that the PwC Report was privileged, the Full Federal Court in ASIC v Macleod relied on the engagement letter provisions specifying that (1) Ashurst have been retained to provide Noumi with legal advice in relation to certain matters; (2) to assist in the provision of that legal advice, the firm requests PwC to conduct enquires and analytical procedures; and (3) PwC's work will be performed at the direction of Ashurst in order to assist it in providing legal advice to Noumi. The Court agreed with the primary judge's finding that "Ms John's [Noumi's external legal counsel] subjective purpose accorded with an objective assessment of the purpose for [PwC's] engagement and the creation of the PwC Report". The Court also agreed with the primary judge's finding that "the Board's purpose, or that of Mr Allen [Noumi's Company Secretary] were not mutually exclusive to Ms John's purpose".

c) Timing for assessment of dominant purpose

In Singtel Optus, the Full Federal Court found that while it will depend upon the circumstances of each case, where a party has commissioned a report from a third-party provider, the relevant time to assess the purpose for doing so will be at the time of commissioning the report. However, the evidence may show that the purpose for the report changed between the commissioning of the report to its provision.

In Singtel Optus, the Deloitte Report was commissioned before the formal letter of engagement was issued, and the correct timeframe to assess the purpose for the commissioning of the Deloitte Report was in the period when the CEO publicly announced the commissioning of the report on 3 October 2022 and the Board resolved to procure the report on 11 October 2022. Even if the purpose was to be determined at a later date, the Court found there was no evidence of any change in Optus' purpose over time.

By contrast, in Noumi, the primary judge held that the purpose for engagement is not "anchored in time to (…) initial reactions" or initial discussions. The Full Court agreed with the primary judge that over the continuum of time leading to the creation of the PwC Report, Noumi's Board maintained the same purpose as Noumi's external legal counsel of providing legal advice to Noumi.

V. ASIC examinations and LPP

In ASIC v ASX Limited [2025] FCA 552 (ASIC v ASX), by way of an interlocutory application ASX sought production of documents from ASIC over which it asserted a claim of LPP. On 27 May 2025, the Federal Court found that LPP applied to the documents and ASIC had not waived LPP.

The documents concerned were witness statements of Mr Rooz and file notes prepared by ASIC's solicitors and officers during interviews with Mr Rooz, obtained by ASIC during its investigations of suspected contraventions by ASX of the ASIC Act 2001 (Cth) and Corporations Act 2001 (Cth) in relation to ASX's replacement of CHESS. Mr Rooz is the CEO of a technology provider engaged by ASX during the period of the investigation to develop and provide associated software for the replacement of CHESS. As Mr Rooz resides in the USA, ASIC was not able to examine him compulsorily and he agreed to participate in a voluntary interview.

Are the file notes privileged?

With respect to the file notes, ASX contended that ASIC's dominant purpose in conducting the interviews was to further the investigation, or ASIC had two purposes such that the communications during the interviews were not privileged.

In establishing the dominant purpose of the communications, the Court relied on the principles set out in Singtel Optus including that "the purpose for which a document was created is a matter of fact to be determined objectively, having regard to the evidence, the nature of the document, and the parties' submissions". The Court therefore considered that "the relevant inquiry is focussed on the documents in question, the File Notes, and not the purpose of the interviews with Mr Rooz" and focussed on "what was the dominant purpose for the creation of the File Notes".

The Court found that the evidence relied on by ASIC clearly establishes that the dominant purpose for preparing the file notes was to obtain legal advice, including that:

• ASIC's solicitor was instructed by ASIC to prepare the file notes, and they were marked as being confidential and privileged;
• ASIC's purpose in instructing its solicitor to prepare the file notes was for the dominant purpose of ASIC obtaining legal advice, so it could be provided to ASIC's lawyers and counsel for the purpose of them providing legal advice to ASIC in relation to the investigation; and
• members of ASIC's team with carriage of the investigation prepared file notes to record information to assist with the preparation of the file notes to be provided to ASIC's lawyers so ASIC's lawyers could provide legal advice to ASIC.

Has ASIC waived LPP in the witness statements because of its concise statement?

ASX contended that ASIC waived LPP in the witness statements and the file notes by way of its concise statement in the proceedings. ASX submitted that ASIC relied on or had regard to the witness statements and the contents of the voluntary interviews recorded in the file notes to support its concise statement.

The Court found that ASIC has not waived LPP over the witness statements or file notes by reason of its concise statement. The Court provided the following six reasons for its finding:

• the mere pleading of a fact does not waive privilege in every witness statement, draft outline of evidence or file note which referred to that fact. That the witness statements may be relevant is not sufficient to waive privilege in them;
• there is no express reference in the concise statement to the witness statements, their contents or the communications recorded in them;
• ASIC has not disclosed the contents of the witness statements or any communication recorded in the files in its concise statement or elsewhere and ASIC has not made disclosure in order to gain an advantage over ASX;
• ASIC has not acted inconsistently with the maintenance of confidentiality in the documents. Confidentiality in the witness statements was secured at the outset with Mr Rooz, the interviews were conducted on the basis they were confidential and all communications with Mr Rooz's solicitors were marked "confidential and privileged";
• No unfairness arises because ASIC has spoken with Mr Rooz and obtained a statement from him; and
• ASIC does no more than plead material facts and does not refer to the content of the meetings, the subject of the interviews, including what Mr Rooz said to ASX at the time.

Has ASIC waived LPP in the witness statements and file notes because of its production of s 19 examination transcripts?

ASX further submits that ASIC waived privilege by its inconsistent conduct in adopting a different stance compared to the transcripts of the s 19 examinations and notes of voluntary interviews of other people it interviewed as part of the investigation.

The Court found that the disclosure of the transcripts of the s 19 examinations of other witnesses is not inconsistent with the maintenance of LPP in the witness statements and file notes, on the basis that:

• the transcripts of the s 19 examinations and the witness statements and file notes are by their very nature different as the examinations undertaken pursuant to s 19 of the ASIC Act are subject to the statutory regime for such examinations in the ASIC Act, and Mr Rooz was outside that jurisdiction as he participated in a voluntary interview; and
• they also do not concern the same subject matter, as they relate to other people. It therefore cannot be said that by the disclosure of the transcripts of the s 19 examinations, ASIC has made any express or implied assertions about the content of the witness statements or the file notes.

VI. Key Takeaways

The Full Federal Court's decision of ASIC v Macleod reduces uncertainty with respect to the maintenance of LPP for parties considering whether to enter into VDAs with ASIC or other regulators in the future.

It is nevertheless important to be cautious when providing privileged documents to ASIC or to any other regulator pursuant to a VDA, including weighing any potential benefits of doing so against the risks which include potential waiver of privilege.

The comparison between the recent appeals in ASIC v Macleod and Singtel Optus demonstrates that the outcome of a claim for LPP will depend on the particular circumstances of each case. To avoid the risk that LPP does not apply, when commissioning a third-party investigative report, such as a report prepared by accounting or consulting firms, it is crucial to:

• engage external solicitors early, including for the purpose of engaging a forensic team;
• ensure that engagement letters clearly set out the purpose and scope of the engagement and that all other circumstances surrounding the engagement are well-documented to satisfy the dominant purpose test;
• ensure that the content of public statements and board resolutions are consistent with the dominant purpose of the engagement being the legal purpose; and
• commission separate reports for other non-legal purposes so that there is a clear division between reports commissioned for the dominant purpose of providing legal advice and reports commissioned for other purposes, such as to investigate accounting or management issues.

In the context of investigations, to ensure that LPP applies to witness statement/s and/or file note/s of witness interview/s, it could be helpful to:

• engage external solicitors early, including to carry out witness interviews and prepare file notes;
• mark any file notes as "confidential and privileged";
• ensure that the dominant purpose for the creation of the document itself, rather than the purpose of the interview, is to obtain legal advice;
• when preparing any pleadings or other Court documents when commencing proceedings and during proceedings, such as a concise statement in the Federal Court, ensure that there is no express reference to the witness statement/s and/or file note/s, their contents or the communications recorded in them; and
• when carrying out witness interviews, ensure that they are conducted on a confidential basis and all communications with the witness' solicitors, or the witness are marked as "confidential and privileged".