Balancing the candid disclosure of information to regulators, with the desire to maintain privilege: Recent developments regarding voluntary disclosure agreements

A decision by the Federal Court last week in relation to an interlocutory application before it has highlighted the risk of disclosure of communications that otherwise might be privileged under so called limited purpose or voluntary disclosure agreements (VDAs) to Australian regulators.

Voluntary disclosure of privileged communications to regulators, in particular ASIC (Australia’s corporate regulator), has long been thought an accepted method of ensuring the disclosure amounts to a limited waiver of privilege but does not constitute a broader waiver of privilege. Regulators and companies alike have treated the use of VDAs entered into between regulators and companies as being a helpful means of seeking to achieve a public policy goal of furthering the regulators’ ability to conduct effective and efficient regulatory investigations and actions.  

The case highlights the risks for businesses who, on the one hand, want to be seen to co-operate with a regulator as it investigates an issue, and, on the other, may wish to maintain their claims of privilege over the documents when they are being prosecuted or involved in related litigation.

The case

In Australian Securities and Investments Commission v Noumi Ltd [2024] FCA 349, the Federal Court found that Noumi had waived privilege over a PwC report, by reason of its disclosure of the PwC Report to ASIC, and irrespective of the PwC Report being the subject of a VDA that sought to limit the purpose and use of the disclosure.

The substantive proceedings

ASIC commenced substantive proceedings against Noumi and its past directors, alleging contraventions of the Corporations Act 2001 (Cth), regarding issues to do with Noumi’s accounting practices. 

The privilege claim

Noumi sought a declaration that legal professional privilege attached to certain documents, and resisted production of those documents to the second defendant, Noumi’s former CEO. 

The second defendant sought to oppose a claim for privilege made by Noumi and ASIC over a PwC Report that investigated inventory valuation and other matters relating to accounting of cash and assets. The second defendant asserted that there were purposes for which the PwC Report was obtained or created other than the dominant purpose of obtaining legal advice.

Noumi argued that it had given ASIC a copy of the PwC Report on the basis that it was confidential, that it did not constitute a waiver of privilege, and that the PwC Report was ultimately provided by Noumi to ASIC pursuant to a VDA. The VDA provided as follows:

  1. Noumi sought to provide the PWC Report to ASIC in a manner consistent with the maintenance of any privilege. ASIC has agreed to receive specified disclosed information subject to the terms of the VDA.
  2. Neither the entry by ASIC into the VDA, nor its receipt of disclosed information subject to the terms of the VDA, indicates that ASIC accepts that the disclosed information is subject to privilege.
  3. ASIC is permitted to obtain, and to present as evidence in proceedings against the disclosing party or third parties, material and information obtained as a result of the disclosing party having provided the disclosed information to ASIC;

and, most relevantly, included acknowledgments by ASIC that:

  1. the disclosed information was provided to ASIC in confidence by Noumi; and
  2. the provision of the disclosed information to ASIC by Noumi was not a waiver of any privilege existing at the time of disclosure and is consistent with the maintenance of any privilege.

The waiver finding

The Court held that the second defendant, who sought access to the PwC Report, bore the onus of establishing that, in disclosing the PwC Report to ASIC, Noumi acted inconsistently with the maintenance of the confidentiality to which the privilege was intended to protect. 

The Court found that Noumi had established a valid claim of legal professional privilege over a tranche of documents that included the PwC Report, but that Noumi had, by its conduct, waived that privilege over a number of the documents, including the PwC Report. 

Having regard to the relevant context and circumstances in which the disclosure was made, the VDA between Noumi and ASIC, including the terms upon which it was made, the Court found that Noumi’s conduct was inconsistent with the maintenance of confidentiality on account of the following matters:

  1. The effect of the disclosure was that ASIC was given information which, though unable to be used in proceedings pursuant to the VDA, allowed it to identify witnesses, topics to be explored, the evidence such witnesses would give, the proper documents to obtain, and the evidence such documents would reveal. The VDA did not prevent ASIC using information derived from the PwC Report to separately compel such information; and
  2. An inappropriate unfairness to the second defendant arose because, on the one hand, Noumi had disclosed information to ASIC that it could consider and use in statutory investigations and potential proceedings against the second defendant, but, on the other hand, Noumi and ASIC maintained a claim of confidentiality over that same information as against the second defendant.

The Court acknowledged ASIC and Noumi’s reliance on public policy arguments, and noted that the underlying assumption of the arguments advanced were that regulated entities would be less willing to be candid with regulators, and share relevant privileged communications that would assist investigations, if sharing those privileged communications would lead to a waiver of privilege.


Companies under ASIC investigation or preliminary inquiry should not assume that any agreement as to confidentiality or the maintenance of a claim of privilege by reason of cooperation with a regulator will be upheld in a dispute.

The decision is of significant note as it appears to run counter to earlier authorities, which have held that limited waiver agreements (i.e. no waiver except for a very specific purpose) are an effective tool in maintaining privilege claims.

The Court did note that whether the sharing of that privileged material will give rise to waiver is a matter that will be determined on a case-by-case basis.

Following this case, significant care must be taken even in circumstances where a VDA or other similar agreement is proposed.  Companies dealing with ASIC, and contemplating or entering into VDAs (a common practice), should continue to seek legal advice prior to entering into any VDAs. Companies should weigh up the risk of waiver and the unintended consequences, for example, making the document available for use in resulting class actions or related litigation, against the importance of maintaining a good relationship with the corporate regulator.   


Given the potential impact on ASIC in terms of ongoing and future investigations, our team will keep a close eye on whether an application for leave to appeal is filed in relation to this recent decision. 

Our expert team is happy to assist with any questions relating to legal privilege or regulatory investigation matters.

This article was produced by Jonathon Ellis, Anna Davyskib and Jeremy Maybloom.