K & S Freighters Pty Ltd v King

In preparing for that hearing, K & S Freighters had covertly surveilled Mr King in September 2022 and August 2023. It obtained video footage and private investigator reports. It also obtained several orthopaedic reports, including a supplementary report dated 18 January 2024 after the surgeon was given surveillance material and asked to comment on it.

Only days before the hearing, on 2 February 2024, K & S Freighters applied ex parte for a confidentiality order under s 35(4) of the AAT Act. It wanted to lodge the surveillance footage, associated materials and supplementary medical report with the Tribunal without disclosing them to Mr King before the hearing. The Tribunal refused that application. It then held an inter partes hearing on 9 February 2024 and refused leave for K & S Freighters to rely on the surveillance and supplementary reports at the hearing.

K & S Freighters said it could not proceed, sought an adjournment, and then went to the Federal Court.

The Tribunal approached the matter differently. It treated the issue as one of confidentiality, late disclosure and leave to rely on material that had not been lodged and provided within the timetable contemplated by the Tribunal's practice directions. The Tribunal focused heavily on fairness to Mr King and on what it described as a trend towards a 'cards on the table' approach favouring disclosure.

It considered that cases justifying non-disclosure of surveillance material before hearing were likely to be exceptional or rare.

The problem, according to the Federal Court, was that the Tribunal did this without first deciding whether the material was in fact subject to legal professional privilege. That was the central issue. If the material was privileged, that could affect whether the practice directions applied in the way the Tribunal assumed, whether leave was required in the way the Tribunal thought, and how the confidentiality application should be determined.

The judgment explains why that mattered. Legal professional privilege was described as a rule of substantive law and also as an important common law right or immunity. The Court referred to the orthodox distinction between advice privilege and litigation privilege. The extract also records that, although there was authority pointing against litigation privilege extending to Tribunal proceedings, the Court was prepared to accept, without deciding, that litigation privilege applied in the Tribunal context.

The Court then applied the usual interpretive principle that statutes are not construed as abrogating important common law rights, privileges and immunities unless Parliament makes that intention unmistakably clear. That principle informed the Court's analysis of the AAT Act provisions, including ss 35, 37, 38AA and 18B, and the practice directions.

On the extract available, the Court considered that the statutory scheme did not unmistakably show an intention to abrogate litigation privilege in the way the Tribunal's approach effectively assumed.

This is the most important point for business readers: the case is about sequence. The Court did not hold that privilege definitely existed. It held that the Tribunal could not lawfully skip over the privilege question and proceed as if the material were simply ordinary late evidence governed in the usual way by practice directions and hearing management concerns. Privilege had to be addressed first because it could change the legal framework for the later decisions.

The Court also found that the Tribunal made material errors of law and failed to accord procedural fairness. In the Court's view, failing to decide the central privilege issue meant the Tribunal asked the wrong question and misapplied the legal framework it was supposed to use.

Just as important are the limits of the decision. The Court did not finally determine whether the surveillance material and medical reports were privileged. It expressly left that issue to be decided on remittal. The extract states that the ART would need to determine the confidentiality application on the basis that it must decide whether the materials were confidential because they were subject to legal professional privilege before deciding whether a confidentiality order should be made.

So this is not a blanket authority that surveillance material can always be withheld from the other side until hearing. Nor is it a final ruling that K & S Freighters was entitled to rely on the material. It is a strong authority on the proper order of decision-making where privilege is genuinely in issue.

The extract also shows that privilege analysis depends on purpose and context. The Court summarised the dominant purpose test for advice privilege and litigation privilege. It did not say that every surveillance package or every expert report obtained after surveillance is privileged. Whether privilege applies will depend on why the material was created, who commissioned it, and how it was used and handled.

For business owners and in-house teams, the practical reading is that surveillance, investigator work and expert evidence should be managed as part of a single dispute strategy. If lawyers are involved, document the purpose clearly. Limit unnecessary circulation. Check the procedural rules early. If confidentiality relief may be needed, do not assume it can be obtained at the last minute without risk.

From a business perspective, this sequence shows how quickly a dispute about evidence can become a dispute about jurisdictional error and procedural fairness. Once the Tribunal treated the matter as one governed by practice directions and late-evidence principles without first deciding privilege, the whole process became vulnerable to challenge. The Federal Court's intervention was therefore directed at the legal pathway the Tribunal took, not at the ultimate merits of the surveillance material itself.

That is why the case should be read carefully. It is not authority for tactical ambush. It is authority that where privilege is genuinely raised, the decision-maker must confront that issue first because it may shape the rest of the analysis.