Request for advice relating to an independent review, including legal advice transferred between agencies
Request for information relating to independent review of PHARMAC’S Operating Policies and Procedures—some information withheld as it was considered legally privileged—legal advice transferred between agencies did not constitute a waiver of the privilege—common interest privilege applied
A request was made for information relating to the independent review which was to be conducted of PHARMAC’S own review of its Operating Policies and Procedures. Some information was released but further information was withheld on the basis that it was subject to legal professional privilege.
During the course of the investigation it was agreed that some of this information could be released. The remaining information comprised:
communications between either PHARMAC and its solicitor; or
the Health Funding Authority (HFA) and its solicitor; and
references to legal advice in communications between PHARMAC and the HFA.
With respect to the communications between solicitor and client, it was considered that the information was subject to solicitor/client privilege and therefore section 9(2)(h) of the OIA applied.
However, an issue arose regarding legal advice that had been referred to in communications between PHARMAC and the HFA. In certain circumstances, disclosure of privileged information to a third party may constitute waiver of that privilege. This does not apply in circumstances where those parties have a common interest. The test set out in Unilateral Investments Limited v VNZ Acquisitions Limited  1 NZLR 468 (HC) was applied when assessing whether common interest privilege extended to the legal advice passed between PHARMAC and the HFA. That case set out three prerequisites for the existence of common interest privilege in New Zealand:
the parties who are alleged to be entitled to the privilege must have a common interest in the subject matter of the communications in respect of which the claim is made;
the common interest must be identical or, if not identical, then closely related; and
the common interest may be either legal or commercial.
Once it is established that the doctrine of common interest privilege applies, the two parties are in effect treated as one. Any legal advice taken by one of them that is shared with the other retains its privilege.
In this case, the two relevant parties were the HFA and PHARMAC. PHARMAC was a wholly owned subsidiary of the HFA and the information at issue related to a review arranged by the HFA of PHARMAC’s internal review of its Operating Policies and Procedures. It was therefore concluded that the HFA and PHARMAC could be said to have a common interest. As such, the doctrine of common interest privilege protected the ability of the HFA and PHARMAC to pass to each other legal advice without waiving the legal professional privilege that attached to that advice.
On this basis, the view was formed that section 9(2)(h) applied to the remaining information at issue. An assessment then had to be made as to whether the withholding of that information was outweighed by other considerations which rendered it desirable in the public interest to make the information available. In this regard, it was considered that there was a public interest in the accountability of officials for the conduct of the review process that was the subject of the information at issue. This was not, however, considered to be a strong enough consideration to outweigh the need to protect legal professional privilege.
This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.