The Full Federal Court (Kenny, Stone and Edmonds JJ) has dismissed the Commissioner's appeal against the decision of Sundberg J that the Commissioner had impliedly waived his right to legal professional privilege in respect of certain documents by pleading, in the course of legal proceedings, that he had taken into account matters contained in the documents in coming to a decision and exercising a discretion relating to the applicant taxpayer's tax affairs. In finding that there was no error in Sundberg J's conclusion, the Full Court noted that the Commissioner had said in his particulars that, in exercising his discretion under s 46A ITAA 1936, he had taken into account matters evidenced by various documents, including the 8 documents in respect of which privilege was claimed. The Full Court said, at para 74:
"It follows that the Commissioner is to be taken to have waived privilege over the eight privileged scheduled documents, notwithstanding that, in his letter of 22 October 2004 and the accompanying lists, he disavowed any intention of so doing. In providing particulars that in substance state the bases for his satisfaction and exercises of discretion by reference to these documents, the Commissioner has waived such privilege as there would otherwise have been in them. As previously noted, the High Court made it clear in Mann (1999) 201 CLR 1 that, when inconsistency arises, it does not matter that the privilege holder did not subjectively intend to lose the benefit of the privilege..."
FCT v Rio Tinto Limited  FCAFC 86 (Full Federal Court; Kenny, Stone and Edmonds JJ; 2 June 2006).
For a copy of the decision, go here.