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The applicants behind a class action that accused Westpac of alleged anti-money laundering breaches has asked a court to turn over key documents currently covered under legal professional privilege.
Back in September 2020, Westpac and AUSTRAC agreed on a $1.3 billion penalty for the bank’s breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 on over 23 million occasions. The breaches exposed the financial system to exploitation.
Westpac admitted it failed to properly report over 19.5 million international funds transfer instructions, amounting to over $11 billion to AUSTRAC. It also failed to pass information about the source of funds to other banks in the transfer chain.
Appearing in the Federal Court on Wednesday, 9 April, a class action filed prior to this settlement has sought chronologies prepared by the bank in the days after AUSTRAC filed the proceedings.
According to Westpac’s counsel, Matthew Darke SC, these documents were covered under legal professional privilege because they were created “for the dominant purpose of Westpac being provided with legal assistance” in relation to its AUSTRAC defence.
Darke said the documents may have been commissioned either on the day or day after the proceedings were lodged, but communications between the solicitors and executives was ongoing. When completed, the material was passed onto its advisory board.
In addition to its use as a defence, Darke submitted the documents largely addressed the allegations pleaded by AUSTRAC.
Nicholas De Young KC, appearing for the applicants, submitted the privilege protects communications, “not the documents per se”.
His argument was the commissioning of the documents did not mean privilege was “set in stone”. He also emphasised time spent communicating could not also be covered under this defence.
Further, De Young said it was in the class action’s favour that a number of Westpac employees were involved in the decision to hand over the chronologies to the advisory board.
However, Darke said it was “just wrong” to suggest the legal team was not involved in the decision, even if it was signed off by the CEO.
The decision was reserved.
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Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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