Ipsofactoj.com: International Cases [2001] Part 4 Case 2 [NZCA]


COURT OF APPEAL, NEW ZEALAND

Coram

Frucor Beverages Ltd

- vs -

Rio Beverages Ltd

THOMAS J

BLANCHARD J

McGRATH J

19 FEBRUARY 2001


Judgment

Thomas J

(delivered judgment of the court)

THE QUESTION IN ISSUE

  1. The question in issue in this appeal is whether s 34 of the Evidence Amendment Act (No 2) 1980 should be given its literal meaning or whether it is capable of a purposive construction which would depart from that meaning.

    THE SECTION

  2. Section 34 reads as follows:

    34.

    Communication to or by patent attorney, etc.—

    (1)

    A registered patent attorney shall not disclose in any proceeding any communication between himself and a client or any other person acting on the client's behalf made for the purpose of obtaining or giving any protected information or advice, except with the consent of the client or, if he is dead, the consent of his personal representative.

    (2)

    A person shall not disclose in any proceeding any communication between himself and another person made for the purpose of obtaining or giving any protected information or advice sought by that other person for submission to a registered patent attorney in his professional character, except with the consent of that other person, or if he is dead, the consent of his personal representative.

    (3)

    This section shall not apply to any communication made for any criminal purpose.

    (4)

    In this section "protected information or advice" means information or advice relating to any patent, design, or trademark, or to any application in respect of a patent, design, or trademark, whether or not the information or advice relates to a question of law.

    THE DISPUTE

  3. The principal parties in the proceeding brought in the High Court are fruit beverage manufacturers. Rio Beverage Ltd, the plaintiff, markets a beverage under the trademark "c2". It claims that the first defendant, Frucor Beverages Ltd, intends to market a similar product in Australia under the trademark "g2". In its statement of claim, Rio alleges passing off and contravention of the Fair Trading Act 1986 against Frucor and conspiracy against Frucor and its Directors and Chief Executive Officer, the remaining defendants.

  4. Frucor has claimed that a number of its listed documents are privileged under s 34 being communications between the company and its patent attorney made for the purpose of giving or obtaining information or advice relating to trademarks or applications for trademarks. Solicitor / client privilege was not invoked. Rio has resisted this claim. It contends that s 34 is to be read literally, and that it confers privilege on the patent attorney only, not the client, in respect of the documents in issue.

    THE JUDGMENT IN THE COURT BELOW

  5. The issue came before Williams J in the High Court. The learned Judge favoured Rio’s argument. He held that s 34 does not create a statutory privilege as between patent attorneys and their clients. Rather, it prohibits registered patent attorneys from disclosing communications which come within the ambit of the section. There being no common law privilege, the same communications in the hands of the client must be disclosed. As a result of this ruling Frucor was directed to produce for inspection a number of documents.

  6. Frucor has appealed against this decision.

    A PURPOSIVE APPROACH

  7. We have reached the view that a purposive construction is required. The privilege contemplated for the "protected information or advice" referred to in subs (4) extends to both patent attorneys and their clients.

  8. We do not question the literal meaning of s 34. Read literally it clearly prohibits a patent attorney from disclosing in any proceeding any protected communication between the patent attorney and a client or third person, except with the consent of the client or, if he or she is dead, his or her personal representative. Nothing in its express terms embraces disclosure by the client.

  9. The section follows the format adopted in the preceding sections in Part III under the heading, "Privilege of Witnesses". Section 31 provides that a minister shall not disclose in any proceeding any confession made to him in his professional character, except with the consent of the person who made the confession. Sections 32 and 33 provide that no medical practitioner or clinical psychologist shall disclose in any civil or criminal proceeding, respectively, any "protected communication" except with the consent of the patient. Mr. Judd, who appeared for Rio, stressed the significance of the fact that s 34 follows the format of these sections and adopts similar language to that contained in them. While these sections prohibit the minister, medical practitioner or clinical psychologist divulging confidences which they receive, they do not appear to confer any privilege on the person making the confession or the doctor or psychologist’s patient, as the case may be. It would follow, argued Mr. Judd, that s 34 cannot be construed in a different manner. The clients of patent attorneys cannot receive any greater protection than persons who have made confessions to clergyman or who are patients of medical practitioners or clinical psychologists.

  10. We would prefer to leave open the question whether Mr. Judd’s construction of ss 31 to 33 are correct. For present purposes, we consider that his argument loses its apparent potency when confronted with the legislative history of s 34. In our view, it is clear from this history that Parliament intended to confer privilege on the clients of patent attorneys in respect of the protected information defined in the section.

  11. Communications between patent attorneys and their clients has not attracted privilege at common law. See Moseley v The Victoria Rubber Co (1886) 3 RPC 351, at 355. For many years patent attorneys felt at a disadvantage in that, although effectively giving legal advice, the communications between them and their clients were not protected from production in any proceeding. Yet, at times these communications were highly confidential. Understandably, there was some agitation to reform the law.

  12. In parallel situations in the UK and Australia the legislatures of those countries enacted statutory provisions designed to equate the position of a patent attorney to that of a solicitor. See s 15 of the Civil Evidence Act 1968 (UK) in the United Kingdom, which was substantially repeated in s 104 of the Patents Act 1977 (UK), which was in turn superseded by s 280 of the Copyright Designs and Patents Act 1988 (UK); and s 200(2) of the Patents Act 1990 (Cth) in Australia.

  13. In March 1977, the Torts and General Law Reform Committee in this country presented a report to the Minister of Justice entitled "Professional Privilege in the Law of Evidence". A chapter was devoted to patent attorneys. The Committee recognised that a patent attorney is a professional person practising in a specialised area of law and that he or she is qualified to advise on particular legal matters. Their profession is regulated, and registration is required before a person can practice or hold him or herself out as a patent attorney (at 20-21). At times the patent attorney may take the role of counsel and represent his or her client in various proceedings, some of which involve contests between opposing parties. Nevertheless, continued the Committee, in spite of the patent attorney’s close identification with the law, neither the common law nor statute law in New Zealand recognised an evidentiary privilege in respect of confidential professional communications to a patent attorney (at 22). The analogy with the legal profession, however, did not stop with the "litigation" role. The functions and professional qualifications of the patent attorney showed him to be a practitioner in other areas such as preparing specifications or generally advising his clients. The Committee observed that "a legal quality permeates all his [a patent attorney’s] work" (at 23). As the common law had long recognised that the privilege for legal advisers to be effective must extend to communications to and from a legal adviser for the purpose of obtaining advice, irrespective whether proceedings are pending or contemplated, the same should be true of patent attorneys once their involvement in legal matters is acknowledged.

  14. The Committee then reviewed the UK and Australian legislation. Section 134(1A) of the Patents Act 1952-69 (Cth) (as amended by s 21 of the Patents Act 1960 (Cth)) is set out in full in the Report and it may be instructive to repeat it here. It reads:

    (1A)

    A communication between a patent attorney and his client is privileged to the same extent as a communication between a solicitor and his client.

  15. The Committee thought that this formula had the virtue of simplicity. It was designed to equate the position of the patent attorney to that of a solicitor and that was a desirable objective (at 26). It recommended that a provision be enacted reading as follows (at 27):

    A communication between a registered patent attorney and his client made for the purpose of obtaining or giving advice in relation to any patent design or trademark or to any application in respect of a patent design or trademark is privileged to the same extent as a communication between a solicitor and his client made for the purpose of obtaining or giving legal advice.

  16. A Bill to amend the Evidence Act 1908 was introduced into the House in 1979. The Explanatory Note to the Bill begins by explaining that, broadly, the Bill implemented the recommendations of the Torts and General Law Reform Committee. Clause 41, which was to become s 34, was explained in the following terms:

    Clause 41 sets out a privilege in respect of communications relating to patents, trade marks, and designs. It was recommended by the Law Reform Committee (see pp. 18 to 27 of its report), but is framed in a different manner. Following Australian precedent, the Law Reform Committee recommended that the privilege should be equated with, and expressed in terms of, the privilege granted in respect of communications between lawyer and client. However, the Bill attempts to prescribe the privilege in its own terms.

    Subclause (1) provides that, as a general rule, communications between a patent attorney and his client are privileged, and cannot be disclosed without the consent of the client (or his personal representative).

    Subclause (2) extends this privilege to communications between the client and a third party in respect of advice or information sought by the client for submission to his patent attorney.

    Subclause (3) excludes the rule in respect of communications made for an unlawful purpose.

    Subclause (4) defines the types of communication that are covered by the privilege.

  17. The Minister of Justice spoke to the Bill at both the first and second readings of its passage through the House. In his speech on the second reading the Minister referred to Part III and described privilege as "the term given to a situation in which a witness is excused from answering a question put to him on the grounds that it would break into a confidential relationship between the witness and a third party." He stated that the best known privilege, which exists in both civil and criminal proceedings, is that between a solicitor and his client. Having adverted to the position of clergymen and medical practitioners, the Minister concluded by stating that the Bill "also sets out the rules relating to a patent attorney’s privilege". Clause 41 was passed without relevant amendment and became s 34 of the Act.

  18. In the 20 years that have passed since s 34 was enacted it has been widely assumed that the section conferred privilege on clients. Patent attorneys and their clients have undoubtedly communicated on the basis that their communications are confidential and were, if within the definition of "protected information", privileged from discovery. Brown & Grant, The Law of Intellectual Property in New Zealand, at 6.85, at 556, state without reservation that such communications are privileged. Similarly, the editors of Cross on Evidence (New Zealand ed), 2000 at para 10.20, p 409 make the same unqualified statement. Then, the Law Commission in its Preliminary Paper No 23 entitled, "Evidence Law: Privilege" (May 1994) refers to s 34 as being the only specific provision protecting advocates other than lawyers in respect of a privilege based on "the litigant’s need for protection" (paras 66-67, at 28). Such references do not, of course, determine the correct interpretation of s 34, but it is as well for the Court to be aware that the literal meaning adopted by the Court below may cut across accepted practice. The fact that patent attorneys and their clients have relied upon and acted on the accepted meaning, and that some may be prejudiced by a departure from that meaning, is an added reason for the Court to adopt a purposive approach.

  19. We agree that nothing conclusive can be taken from the report in Hansard. The Explanatory Note, however, is undoubtedly directed to a provision which would extend the protection contemplated in the section to clients of patent attorneys. The clause, it is said, sets out a "privilege in respect of communications relating to patents, ...." It then states that, "It", that is, the privilege in respect of communications, was recommended by the Law Reform Committee. But that privilege, that is, the privilege recommended by the Law Reform Committee, is "framed in a different manner". The Note then states that the Law Reform Committee had followed the Australian precedent in recommending that the privilege should be equated with, and "expressed in terms of," the privilege granted in respect of communications between lawyer and client. However, the Note concludes, the Bill attempts to describe the privilege, that is, the same privilege referred to above, "in its own terms". The Explanatory Note to subcl (1) is awkwardly worded but makes it clear that, as a general rule, "communications between a patent attorney and his client are privileged".

  20. Mr. Judd sought to argue that the Explanatory Note recognised that the provision which was enacted departed from the recommendation of the Law Reform Committee. This is undoubtedly so, but the departure is from the form in which the privilege is expressed. The analysis of the Explanatory Note in the foregoing paragraph demonstrates that the privilege being addressed is the privilege in respect of communications relating to patents, etc., recommended by the Law Reform Committee. It is that privilege which is said to be "framed in a different manner" in the Bill and that privilege which the Bill is said to attempt to prescribe "in its own terms".

  21. We are therefore brought to the conclusion that Parliament intended to confer a statutory privilege on both patent attorneys and their clients in respect of the defined "protected information". A literal reading of the section would deprive it of that purpose. Indeed, it would be futile to seek to protect the confidentiality of communications between patent attorneys and their clients if a communication in the hands of a patent attorney was privileged but not privileged in the hands of the client. A patent attorney, for example, might be prohibited from disclosing a confidential report which he or she had written to their client but the client could not refuse to disclose that same report. Such a situation defeats the very purpose of professional privilege. Accepting, as we do, that Parliament’s intent is known by calling in aid the legislative history, the literal meaning of s 34 would render the privilege conferred in practice almost meaningless.

  22. Mr. Judd contended, however, that s 34 had only the more limited purpose of providing the client with the comfort or security of knowing that his or her confidential communications with their patent attorney could not be disclosed by the attorney, even under subpoena or by an order of the Court. The client’s claim to privilege would fall to be dealt with under the general law. As there is no legal professional privilege as between patent attorneys and their clients, any such claim would be considered under s 35 of the same Act. Sections 34 and 35 are therefore to be read together. They provide a legislative scheme. Section 34 would ensure that the client’s confidential communications could not be disclosed by the patent attorney without his or her consent, while the client’s claim to privilege is to be dealt with at the discretion of the Court under s 35.

  23. Williams J seems to have adopted this view in the Court below. He referred, first, however, to r 307 of the High Court Rules. Rule 307 provides that the Court may, unless the document is privileged from production, order a party or other person to produce the document for inspection. The Judge then addressed s 35, which he set out in full. He then adjourned the proceeding, reserving leave to the parties to seek a further fixture for argument as to whether the discretion conferred by r 307 should be exercised in Rio’s favour or whether s 35 has any application in the circumstances of this matter. Mr. Judd did not refer to r 307 in his submission, but for completeness it should be dealt with.

  24. While acknowledging that the power for the Court to order that a document is to be produced for inspection under s 307 is discretionary, we do not consider that it is a satisfactory vehicle for a determination that, although not privileged, production will not be directed, essentially on the ground that the client’s communications should be privileged from production. Where documents are privileged the Court has no power to order their production. Under r 311, where a claim is made that the document for which production is sought is privileged, the Court may inspect the document for the purpose of deciding the validity of the claim. Consequently, if the document is not privileged, the claim would be without validity. It is at least arguable that it would be a misuse of the discretion under r 307 to then refuse to order production on the basis that it should be privileged. The question of privilege is expressly covered. Other grounds for claiming immunity from production might exist, of course, but they are unlikely to assist the client seeking to rely on the confidential nature of his or her relationship with their patent attorney.

  25. Nor can we accept that s 35 applies. Section 35(1) provides that in any proceeding the Court may, in its discretion, excuse any witness (including a party) from answering any question or producing any document on the ground that to supply the information or produce the document "would be a breach by the witness of a confidence" that, having regard to the special relationship existing between him and the person from whom he obtained the information or document, the witness "should not be compelled to breach". The key words are "would be a breach by the witness of a confidence ...." which the witness "should not be compelled to breach". Hence, the section applies to those persons who receive confidences. It cannot apply to clients of patent attorneys who impart or receive confidential information to or from their attorney. The "confidence" is theirs and to give evidence of it could not be a "breach" of that confidence.

  26. This construction is confirmed by the Explanatory Note to the Bill and by the Minister of Justice’s comments in the House on its first and second readings. The Explanatory Note states that cl 42 (now s 35) is designed to give a general discretion to a Court in a particular case to excuse a witness from answering any question or giving any particular evidence if to do so "would involve breaking a confidence". It is intended to meet the case of people, such as accountants, bankers, psychologists, counsellors, social workers, teachers, journalists, and others without going so far as to confer a complete statutory privilege. It was confirmed by the Minister during the first reading of the Bill that the clause provides that a Court may allow a claim for privilege when to supply the information would be a breach by the witness of a confidence existing in a special relationship between the person who supplied the information and the witness. During the second reading the Minister said that cl 42 "sets up another but quite different form of privilege".

  27. We are therefore satisfied that the attempt to provide a rational basis for the literal wording of s 34 must fail. It is always attractive to seek to rationalise a basis for the grammatical or literal meaning of a statutory provision. Lawyers are ingenious at doing so. But care must be taken to ensure that in the process an intent is not attributed to Parliament which was demonstrably not its intent. We have already pointed out that the legislative history and, in particular, the Explanatory Note to the Bill, provides a strong indication of Parliament’s intention. Further than that, however, if Parliament’s intention had been to provide a prohibition on a patent attorney disclosing protected information, and to leave the privilege of the client to be determined as a matter of discretion, what is said in the Explanatory Note is not just inadequate, it is positively misleading. The concern which the Explanatory Note says Parliament has addressed would not have been addressed at all. Patent attorneys and their clients who had sought the advantage of communicating freely and in confidence in a relationship analogous to that of solicitor and client could well regard the Explanatory Note as duplicitous in leading them to believe that this was the case when it was not.

  28. Once satisfied that Parliament intended to confer privilege on both patent attorneys and their clients in respect of the defined protected communications, the Court should strive to arrive at a meaning which gives effect to that intention. The principles of interpretation which assist the Courts in that exercise are well-established. They reflect common sense propositions and should, therefore, be applied sensibly. Thus, it would be less than sensible to presume that Parliament intended to legislate in a manner which is absurd. Indeed, it would be uncharitable, if not presumptuous, for the Courts to approach the task of interpreting Parliament’s legislation on any other basis. Thus, the Courts have come to give the concept of "absurdity" a wide meaning, using it to include virtually any result which is unworkable or impracticable, inconvenient, anomalous or illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief. See Bennion, Statutory Interpretation (3rd ed) at 751; see also Laws of New Zealand — Statutes, para 181, at 177.

  29. The literal interpretation of s 34 fits many of these descriptions. For example, conferring a privilege as a witness on the patent attorney in respect of documents which are not privileged in the hands of the client is anomalous, illogical and futile in that it does not meet the concern which Parliament sought to address in the legislation. In such circumstances, and where the main legislative purpose of the statute is clear, the provision should not be reduced to a nullity by a literal adherence to the language, unless the language is "intractable". This principle recognises the reality that the defect may be due to the "want of skill or knowledge" on the part of the draftsperson. (Laws of New Zealand — Statutes, supra, para 182, at 178). The Court will strive for an interpretation which will make the Act work in the manner that the Court presumes Parliament must have intended. See Commerce Commission v Telecom Corp of NZ Ltd [1994] 2 NZLR 421, per Cooke P at 424-425; Capital Coast Health Ltd v NZ Medical Laboratory Workers Union Inc [1996] 1 NZLR 7, per Hardie Boys J at 18; and McDonald v Australian Guarantee Corporation (NZ) Ltd [1990] 1 NZLR 227, at 237.

  30. Allied to this tenet is the principle that the Courts will endeavour to avoid an interpretation of a section where that interpretation would lead to unworkable or inconvenient consequences. This case illustrates the undesirable consequences which would follow from a literal interpretation. Some of the communications in issue are with a patent attorney who is also a solicitor in a "litigation team", and Mr. Judd accepts that these communications attract legal professional privilege. Other communications are with a patent attorney in a "trademark" team in relation to trademark applications and strategic advice relating to trademark protection and have been held not to be privileged. Yet other communications directed to obtaining legal advice concerning trademark protection may or may not be subject to legal professional privilege and will require further consideration. It is obviously unsatisfactory that, say, a confidential report written by a patent attorney who is not a solicitor to his or her client may not be privileged but the same report written by a patent attorney who is also a solicitor would be privileged. It is equally unsatisfactory that the documents of a patent attorney who is in one "team" would not be privileged whereas the documents of a patent attorney who is a solicitor in another "team" working, perhaps, in the adjoining office, would be privileged. Although in the best of all worlds the problem might be managed, the scope for confusion is limitless. Parliament cannot readily be thought to have intended these impractical consequences.

  31. To sum up, a purposive interpretation is required to give effect to Parliament’s will. A problem existed relating to the confidentiality of communications between patent attorneys and their clients. The question was addressed by the Torts and General Law Reform Committee. It recommended that legislation be enacted analogous to the position as between solicitors and their clients. A Bill was introduced into Parliament to meet the problem. The Explanatory Note to the Bill confirms that it was intended to implement the recommendation of the Law Reform Committee, albeit in different terms. If the literal meaning of s 34 is adopted, Parliament will not have dealt with the problem — or mischief — giving rise to concern. Rather, it will have enacted a provision for which there is no sound rationale and, which in terms of Parliament’s objective is anomalous, illogical and futile. No such absurd intention should be attributed to Parliament. Moreover, the practical consequences will be inconvenient and confusing, and Parliament should not be thought to have intended to create those consequences. The Court should also bear in mind that patent attorneys and their clients appear to have relied upon and acted on the assumption that Parliament has done what it set out to do and, in the Explanatory Note to the Bill, said it was doing. The justification for a purposive interpretation is compelling.

    BUT IS THE LANGUAGE INTRACTABLE?

  32. Accepting (which he continued to deny) that Parliament intended to confer privilege on the clients as well as their patent attorneys, Mr. Judd made what we consider to be his strongest stand. He contended that the language of s 34 was so plain as to be "intractable", and that it is impermissible to adopt a purposive interpretation which would depart from the text of the section. He referred to the valuable admonition of Professor Burrows Statute Law in New Zealand (2nd ed) in that, in the enthusiasm engendered by the purposive or contextual approaches, it must never be forgotten that the task of the interpreter is to interpret the text of the statute: to say what the text means. "Certainly the older cases", Professor Burrows continues,

    could be said to have exhibited too great an attention to the text: an attention to literal meaning at the expense of everything else. But even if one relaxes that extraordinary literalism and takes into account purpose and context, one is still doing so with the objective of discerning the best interpretation of the statutory words. One is no longer confined to the words of the statute, but one is confined by them. The text of the Act is, quite simply, the law.

  33. Thus, Mr. Judd argued, had Mr. Miles been urging upon the Court a particular interpretation of ambiguous or obscure language, he would have been justified in asking the Court to consider the purpose of s 34. But Mr. Miles was not doing that. He was not pointing to any ambiguity or obscurity because he could not do so. One did not exist. Hence, Mr. Judd contended, there is here no possibility of s 34 fairly bearing the meaning which the appellants contend. One is confined by the words which Parliament has used.

  34. It is true that Mr. Miles was unable to point to any particular words which could be said to be ambiguous or obscure. He did suggest that the words "which is privileged" be inserted in subs (1) after the word "communication" on the basis of the principle that, in order to ensure the attainment of the clear purpose of a statutory provision, a Court may be prepared to read words into a statute. (See Burrows, supra, at 195). But, Mr. Judd pointed out, such an amendment would beg the question and still not give effect to Parliament’s intention. We tend to agree. Of course, words could be read into the section, but it would require something in the nature of rewriting rather than the insertion of a word or phrase. Rather, we accept that in this case the purposive interpretation which would give effect to Parliament’s intent must be founded on the section read as a whole. The section must be read as implicitly giving clients protection against disclosure in respect of the same category of documents as are defined in subs (4).

  35. We regard this interpretation as permissible without finding it necessary to either fix on any particular wording or the omission of any particular wording. The necessary implication can be made. It would frustrate Parliament’s intended purpose not to give effect to it merely because there are no particular words or phrases that are ambiguous or obscure to which the purposive interpretation can be attached.

  36. There are a number of reasons why it is legitimate for the Court to construe the section as implicitly conferring on the client the protection contemplated in subs (4) on the client. In the first place, it is recognised that, despite judicial dicta to the contrary, the finding of a proper implication within the express words of an enactment is a legitimate and, indeed, necessary function of the interpreter. The question whether an implication should be found depends on whether it is proper or legitimate to do so having regard to the accepted guides to legislative intention. Where the point is doubtful it will, as always in interpretation, call for a weighing or balancing of the relevant factors. See Bennion, supra, s 173, at 384. Similarly, the Court will imply words where that is necessary to "fill a gap" in the legislation. This principle is exemplified by the Northland Milk Vendors case. See Northland Milk Vendors Assn Inc v Northern Milk Ltd [1988] 1 NZLR 530; see also Pacific Industrial Corporation SA v Bank of NZ [1991] 1 NZLR 368 at 374. It is, of course, acknowledged that the Courts must be able to discern the intention of Parliament. They cannot make policy or "usurp the policy-making function, which rightly belongs to Parliament". See the Northland Milk Vendors case per Cooke P at 538.

  37. Secondly, there is something artificial in restricting the purposive approach to cases where the statutory provision contains particular words or phrases which are ambiguous or obscure when, as in this case, Parliament’s intention is otherwise ascertainable by reference to the legislative history. No premium should be put on poor drafting, and it cannot be right that, if the draftsperson confines his or her error to a word or phrase, Parliament’s intent will prevail as a result of a purposive interpretation but, if the draftsperson’s error relates to the format which is adopted, Parliament’s intent will be frustrated. It is not known, other than conjecture that the draftsperson followed the format in the earlier sections without addressing the particular situation of patent attorneys and their clients, why the section did not follow the Law Reform Committee’s recommendation. That knowledge is not necessary, however, when it is plain that the literal wording and format of the section does not reflect Parliament’s intention.

  38. Thirdly, there is no necessary reason when considering the legitimacy of an implication to regard the "text" as meaning particular words or phrases within the statutory provision rather than the text of the section read as a whole. The text of s 34, in this sense, could be said to be "ambiguous or obscure" in that it does not obtain a sensible meaning when read literally. Such an approach is within the purport of s 5(1) of the Interpretation Act 1999, which requires the meaning of an enactment to be ascertained from its text and in the light of its purpose. To determine the purpose of an enactment it is, of course, necessary to have regard to its context. As demonstrated above, when regard is had to the legislative history, Parliament’s intended purpose in enacting s 34 is clear, and it is the "text" of the section as a whole which fails to give effect to that purpose.

  39. Finally, recognising the implicit protection of the clients of patent attorneys in s 34 does not usurp Parliament’s legislative role or intrude into an area of policy which is properly the legislature’s. As Professor Burrows observes; there is no inexorable logic about the distinction between interpretation and judicial legislation. It is all a question of degree. Different minds may differ as to when the boundary between interpretation and judicial legislation is reached and where the line is to be drawn. The more compelling the considerations of purpose, the Professor states, the further the Courts may be prepared to venture from the primary meaning of the words in question. (Burrows, supra, at 137 and 193.) In this case, the Court is not usurping a legislative role nor intruding upon legislative policy-making because Parliament’s intent is known to the Court. The Court is performing its legitimate function in giving effect to that intent.

  40. It is not denied that there are real limits to the extent to which a purposive approach can be adopted. Numerous dicta testify to that proposition. But these dicta tend to emanate from cases where the legislative intent cannot be securely discerned from the statutory provision, the scheme of the Act, or by reference to legitimate aids to interpretation. The Court interpreting the provision in question is necessarily required to fall back on its literal meaning. The essential difference is that in this case the Court can be confident it has ascertained Parliament’s intent. Irrespective of how clear the language of s 34 may be, therefore, it is no more than common sense to give effect to that intent by recognising that the section implicitly confers protection on a patent attorney’s client. As Professor Burrows observes (supra, at 131):

    In a modern age accustomed to argument and reason myopic adherence to the letter of the law does not satisfy an inquiring mind. Moreover a purposive approach is more in line with democratic theory: the Courts avowed task is to co-operate with, rather than frustrate, the will of Parliament.

    In this case we entertain no doubt that the Court is co-operating with Parliament in seeking to give effect to its will.

  41. For the above reasons, this being the judgment of the majority, the appeal is allowed. We direct that all communications between the appellants (if clients) and their patent attorneys being information or advice which falls within subs (4) of s 34 is privileged. The appellant is awarded costs of $5,000, together with disbursements, including travel and accommodation expenses, which failing agreement is to be fixed by the Registrar.

    McGrath J

    (dissenting)

  42. The question is whether s 34 of the Evidence Amendment Act (No 2) 1980 implicitly confers, or recognises, a privilege in relation to communications between a patent attorney and client, made for the purpose of giving professional advice, which entitles the client to refuse to disclose the communications in Court proceedings.

  43. Section 34 provides as follows:

    34.

    Communication to or by patent attorney, etc.—

    (1)

    A registered patent attorney shall not disclose in any proceeding any communication between himself and a client or any other person acting on the client's behalf made for the purpose of obtaining or giving any protected information or advice, except with the consent of the client or, if he is dead, the consent of his personal representative.

    (2)

    A person shall not disclose in any proceeding any communication between himself and another person made for the purpose of obtaining or giving any protected information or advice sought by that other person for submission to a registered patent attorney in his professional character, except with the consent of that other person, or if he is dead, the consent of his personal representative.

    (3)

    This section shall not apply to any communication made for any criminal purpose.

    (4)

    In this section "protected information or advice" means information or advice relating to any patent, design, or trademark, or to any application in respect of a patent, design, or trademark, whether or not the information or advice relates to a question of law.

  44. On its ordinary meaning the language of s 34(1) expresses the privilege as relating to a patent attorney, who is prohibited from disclosure in Court proceedings of communications between the patent attorney and a client of the kind specified. If the section is to be read as confined to that ordinary meaning the privilege does not extend to the patent attorney’s client, who will, subject to any discretion in the hands of the trial Judge, be required to disclose or produce the material in litigation. That is the effect of the judgment of Williams J (CL17/99, Auckland, 6 December 1999) against which this appeal is brought.

  45. The background to the matter is that Rio Beverages Ltd, respondent in this Court, has sued Frucor Beverages Ltd, the first appellant, and others, alleging passing off, contravention of the Fair Trading Act 1986 and conspiracy between the first appellant and the directors and the chief executive officer of the first appellant. Privilege from inspection of certain documents, which it listed in the course of discovery, has been claimed by the first appellant. The claim, which was made under s 34, concerns communications between the first appellant and its patent attorney, made for the purpose of obtaining or giving information or advice relating to trade marks. Solicitor client privilege was not invoked and the question in issue accordingly turns on the scope of the privilege that is conferred by s 34. Does it in the circumstances protect the first appellant, as a client, from having to permit inspection in Court proceedings of material consisting of communications between it and its patent attorney?

  46. Had legal professional privilege been claimed there is no doubt that the material involved would have been regarded as falling within the scope of that privilege. That is because the head of legal professional privilege known as solicitor client or legal advice privilege covers all communications for professional purposes between a client and a legal adviser, regardless of whether the client is involved in or anticipates litigation. In New Zealand, however, it is plain that communications between patent attorneys and their clients are not covered by legal professional privilege nor indeed any other privilege at common law (Moseley v The Victoria Co (1886) 3 RPC 351, 355; Gane Milking Co v MacEwan Co [1914] 33 NZLR 1008, 1010.)

  47. The submission of Mr. Miles QC for the appellants is that by implication s 34 confers or recognises a privilege, similar in nature to that between solicitor and client, covering all communications between the client and a patent attorney made for the purpose of obtaining or giving "any protected information or advice" — that is, in terms of s 34(4), information or advice relating to any patent, design or trade mark. He argues that, given the common law position, unless such a privilege is implicitly created or recognised by s 34 no protection would be given to communications with a patent attorney which are in the possession of a client when, he says, it is the policy of the Act that there should be such protection. To this Mr. Judd QC, for the respondent, replies that the words of s 34 are incapable of being given a meaning which would confer on communications between a patent attorney and client a privilege equivalent to legal professional privilege.

  48. Much emphasis was put by Mr. Miles on the report of the Torts and General Law Reform Committee in March 1977 to the Minister of Justice on "Professional Privilege in the Law of Evidence". The recommendations in this report were largely implemented by the Evidence Amendment Act (No 2) 1980 in Part III of that Act. The report considers the basis on which the law of privilege should give protection from disclosure in Court proceedings to material derived from professional relationships. The Law Reform Committee considered the position in a number of professions starting from the premise that, because privilege always deprives the Court of material which might have influenced it in arriving at a decision, recognition of a privilege should always be regarded as exceptional; so there must be recognised and compelling overriding reasons outweighing the risk of injustice.

  49. The Law Reform Committee concluded different types of protection of confidences arising from professional relationships were required. The greatest degree of protection should be reserved for communications in the course of obtaining legal advice. No alteration was proposed to the common law of legal professional privilege which, as noted, protects communications between lawyer and client rather than just those held by the lawyer. For most other types of confidential material arising from occupational relationships the Committee proposed that the Court be given express discretionary power, by statute, to permit a witness to refuse to disclose information or produce documents where that would breach an obligation of confidence, and non disclosure would be unlikely to create serious injustice. There would be a balancing test applied to the circumstances of each case. This proposal was implemented, substantially in the form recommended, by the enactment of s 35 of the 1980 Amendment Act. An important feature of s 35 privilege is that it is applicable to a person who, in the circumstances, may be excused by the Court from breaching a duty not to disclose confidences. Unlike legal professional privilege, however, it does not give general protection from disclosure to all material of a prescribed class.

  50. Outside of these two categories the Committee recommended there be continuing specific provision for the clergy. It proposed that the existing provision prohibiting ministers from divulging a confession, without consent of the person making it, should be continued. That was implemented in s 31. The Committee considered any wider claims to privilege by clergy should be individually addressed under the proposed judicial discretion.

  51. The Committee also addressed, specifically, the position of patent attorneys and their clients. It expressed the firm view that the functions of patent attorneys showed them to be practitioners in a specialised field of law. As the Committee put it "a legal quality permeates all their work". It recommended that a privilege of the same nature as legal professional privilege should be extended to communications of patent attorneys, covering all communications between patent attorney and client and all work done by patent attorneys in the fields of patents, designs and trademarks. The privilege was not extended to copyright. A proposed provision similar to that applying in Australia was set out in the report.

  52. Against this context the completely different language of s 34 of itself indicates a different form of privilege was intended for confidential communications of patent attorneys than that proposed by the Law Reform Committee. Section 34 is not expressed as a general protection from disclosure of a class of material but as a protection, by way of prohibition, of members of an occupational group from being compelled to disclose a class of information in proceedings.

  53. There are other indications in the legislative history which point to s 34 expressing a different privilege for communications between patent attorneys and their clients from that which the Law Reform Committee had in mind. The text of s 34 first appeared in clause 41 of the Evidence Amendment Bill as introduced, when it had its first reading on 2 October 1979. The explanatory note in relation to clause 41 said:

    Clause 41 sets out a privilege in respect of communications relating to patents, trade marks, and designs. It was recommended by the Law Reform Committee (see pp 18 to 27 of its report), but is framed in a different manner. Following Australian precedent, the Law Reform Committee recommended that the privilege should be equated with, and expressed in terms of, the privilege granted in respect of communications between lawyer and client. However, the Bill attempts to prescribe the privilege in its own terms.

    Subclause (1) provides that, as a general rule, communications between a patent attorney and his client are privileged, and cannot be disclosed without the consent of the client (or his personal representative).

    Subclause (2) extends this privilege to communications between the client and a third party in respect of advice or information sought by the client for submission to his patent attorney.

    Subclause (3) excludes the rule in respect of communications made for an unlawful purpose.

    Subclause (4) defines the types of communication that are covered by the privilege.

  54. The words I have italicised in the above extract clearly indicate the difference in intention expressed in cl 41 of the Bill from that of the Committee. Not only was the privilege expressed in clause 41 "framed in a different manner" to that of the Committee it was also said to be prescribed "in its own terms" rather than those of the Committee. When the summary of subclause (1) in the Explanatory Note says communications cannot be disclosed it means they cannot be disclosed by a patent attorney

  55. Once this is appreciated it is clear the meaning of s 34 is not clarified by reference to the Committee’s proposals. It is a privilege, which protects patent attorneys from having to divulge professional confidences arising from their relationships with clients. The prohibition on disclosure extends to those communicating with others for the purpose of providing information that will be submitted to a patent attorney. But it does not extend to the client, or material in the hands of the client.

  56. Those responsible for the form of the Evidence Amendment Bill apparently took the view that to accord a broad privilege akin to legal professional privilege to patent attorney-client relationships went too far in depriving the Court of material. Nor did they consider patent attorneys should have to apply to be excused from obligations to make disclosures, in the course of legal proceedings, of protected information or advice. Instead they decided there should be a specific privilege covering such material, akin to that provided for in s 31, in relation to confessions to clergy. That privilege is also expressed as a prohibition on disclosure. The same concept can be seen, in sections 32 and 33 prohibiting disclosures of protected communications by medical practitioners and clinical psychologists in civil and criminal proceedings respectively.

  57. Accordingly the ordinary meaning of the words of s 34 accords with its context among the witness privilege provisions in Part III of the Act and the legislative history of s 34 itself. There is no basis for the first appellant as the client to claim privilege under s 34. Nor do I see scope for the use of the Court’s discretion under s 35 to give information in the client’s hands protection. That mechanism only applies in situations where disclosure would breach the client’s confidence. It is not apt to protect the client from the obligation of disclosure in litigation. It follows that in my view the appeal should be dismissed.

  58. Before concluding, however, I should add that I have reached this view with considerable reluctance. I agree with the Law Reform Committee that the nature of the specialised work undertaken by patent attorneys is conceptually indistinguishable from that of law practitioners under the Law Practitioners Act. They also give legal advice and the argument for extending to clients of patent attorneys the same type of privilege as is enjoyed by clients of lawyers remains very strong. Indeed I see no sound reason in principle why the scope of that privilege should be confined by the exclusion from s 34 of the field of copyright.

  59. However the provision in relation to patent attorneys is not the only area of present anomaly in the law of professional privilege. The problems encountered in this case, and others like it, would be addressed if proposals of the Law Commission on Evidence are enacted. It has included a new scheme for privilege and confidentiality in the proposed Evidence Code (1999 NZLC R55, Vol 2 Part 4). This accords legal privilege to communications with "legal advisers" — a term which encompasses patent attorneys. The focus in this respect is appropriately on the nature of the function undertaken by the professional person rather than on whether a person admitted as a law practitioner performs it. Reform, in this difficult area, should, in my view, be based on such principled proposals for legislation rather than on straining the techniques of statutory interpretation.

  60. I would dismiss the appeal.


Cases

Moseley v The Victoria Rubber Co (1886) 3 RPC 351; Commerce Commission v Telecom Corp of NZ Ltd [1994] 2 NZLR 421; Capital Coast Health Ltd v NZ Medical Laboratory Workers Union Inc [1996] 1 NZLR 7; McDonald v Australian Guarantee Corporation (NZ) Ltd [1990] 1 NZLR 227; Northland Milk Vendors Assn Inc v Northern Milk Ltd [1988] 1 NZLR 530; Pacific Industrial Corporation SA v Bank of NZ [1991] 1 NZLR 368; Gane Milking Co v MacEwan Co [1914] 33 NZLR 1008

Legislations

New Zealand

Evidence Amendment Act (No 2) 1980, s.31, s.32, s.33, s.34, s.35

Patents Act 1952-69, s.134(1A)

High Court Rules, r.307

Interpretation Act 1999, s.5(1)

Australia

Patents Act 1990, s.200(2)

United Kingdom

Copyright Designs and Patents Act 1988, s.280

Authors and other references

Torts and General Law Reform Committee, "Professional Privilege in the Law of Evidence" (March 1977)

Brown and Grant, The Law of Intellectual Property in New Zealand

The Explanatory Note to Evidence Act Amendment Bill 1979

Cross on Evidence (New Zealand ed), 2000

Law Commission Preliminary Paper No 23, "Evidence Law: Privilege" (May 1994)

Bennion, Statutory Interpretation (3rd ed) at 751

Laws of New Zealand — Statutes

Burrows, Statute Law in New Zealand (2nd ed)

Representations

J G Miles QC for Appellants (instructed by Baldwin Shelston Waters, Auckland)
G Judd QC for Respondent (instructed by Heugh Kelly, Wellsford)


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