Appellant v Respondent

Appellant v Respondent - [2014] VSC 474 - VSC 2014 case summary — Zoe

[100]

(a) The unexplained failure of the Chair of the [BLSC] to give evidence as to his or her purpose in directing the technical analysis is significant, because his or her purpose is the critical driver of the preparation of the Technical Analysis Documents, and therefore the source of the corporate purpose;

(b) I am entitled to draw an inference that the Chair's evidence would not assist SPI's claim for privilege over the Technical Analysis Documents: Jones v Dunkel;

(c) There is evidence that a purpose of the preparation of the documents was for Freehills to represent SPI in some unidentified way. There was no anticipated litigation identified to which that representation could relate, so the inference is open that the representation was in relation to the ongoing police investigation, the only matter identified in the affidavits that was then on foot. That is not, and was not contended by SPI to be, a privileged purpose;

(d) Although there is no evidence of any other business or operational purpose for the preparation of the documents, given the general and somewhat vague evidence on the issue of purpose, an inference is open that there were other non-privileged purposes for the production of the documents;

(e) There is no evidence that any non-privileged investigation or analysis was conducted by SPI in relation to the alleged failure of its assets and any relationship to the Murrindindi fire in the ordinary course of its business, whether for the purpose of providing information to regulators or insurers, or other internal investigation or reporting requirements. In this regard, the plaintiff noted that discovery is not yet complete and if SPI was aware of any such documents existing, this could be clarified for the Court. The plaintiff has consistently requested more information about the investigation that was undertaken by SPI, but has not received a response to these requests. SPI offered no evidence of any other investigation notwithstanding the invitation to do so; and

(f) It is reasonable to infer from the nature of the business of SPI as a distributor of electricity and from the preceding Royal Commission (which I was told did not investigate the Murrindindi fires) and the very significant damage caused generally by the Black Saturday fires, that SPI would undertake investigations or analyses to determine whether the fires were caused by a failure of SPI's assets and for that purpose to have a proper understanding of those assets. As the plaintiff submitted, it is difficult to accept that a sophisticated and responsible organisation such as SPI would not have in place procedures for investigating and responding to any faults in their assets, so that management is armed with knowledge of what occurred.[19]

[113]

77.06 Appeals generally

Subject to section 17A of the Supreme Court Act 1986 and to Rule 16.5 of Chapter V of the Rules, an appeal from any judgment or order of an Associate Judge made under any Chapter of the Rules lies to the Trial Division constituted by a Judge of the Court, except in any case where an appeal lies to the Court of Appeal.

...

77.06.03 Contents of notice of appeal

(1) A notice of appeal shall state -

(a) whether the whole or part only and, if as to part, which part, of the judgment or order of the Associate Judge is the subject of the appeal; and

(b) specifically and concisely the grounds of appeal and the judgment or order sought in place of that from which the appeal is brought.

(2) A notice of appeal shall name each party or person upon whom it is proposed to serve the notice of appeal.

(3) A notice of appeal may be amended at any time by leave of a Judge of the Court.

...

77.06.9 Powers of Judge of the Court hearing appeal

(1) On an appeal under Rule 77.06, a Judge of the Court shall have all the powers of the Court constituted by an Associate Judge.

(2) On an appeal under Rule 77.06, a Judge of the Court shall have power to -

(a) draw inferences of fact; and

(b) give any judgment and make any order which ought to have been given or made; and

(c) make any further or other order as the case may require.

(3) On an appeal under Rule 77.06, a Judge of the Court shall have power to receive further evidence upon questions of fact, whether by oral examination in court, by affidavit, or by deposition taken before an examiner.

(4) The powers of a Judge of the Court under this Rule may be exercised notwithstanding -

(a) that no notice of appeal has been given in respect of any particular part of the judgment or order of the Associate Judge which is the subject of appeal under Rule 77.06 or by any particular party to the proceeding before the Associate Judge; or

(b) that any ground for allowing the appeal or for affirming or varying the judgment or order of the Associate Judge is not specified in the notice of appeal.

[140]

The failure of the CEO to give evidence was not explained. I assume that the CEO at the time was Mr Shane Breheny who also prepared a witness statement for the Royal Commission. There was no suggestion that he was not available to give evidence by affidavit of otherwise. He instructed Ms Rands to carry out the investigation which was likely to involve her obtaining information from experts. I can only infer what his purposes were in obtaining the report. His failure to give evidence in circumstances where it is central to the establishment of the privilege does give rise to the inference that his evidence would not have assisted Powercor's claim to privilege. As has been discussed, the plaintiffs seek to draw the inferences from the evidence that Powercor needed the information for multiple purposes and that legal advice from Ms Rands was not the dominant purpose. As the CEO failed to give evidence to rebut those inferences, the court is entitled to more readily draw those inferences.

I find that there were multiple purposes for which the information in the reports were to be used. I accept an important one was to give legal advice to Powercor and to use it in the anticipated legal proceedings in giving privileged advice about the Royal Commission. Nevertheless, Powercor bears the onus of establishing that the privileged purpose was the dominant purpose.

I find that Powercor has not done that. Powercor lead no evidence on its internal procedures that would have required or made use of the information in the reports. The Court can only imply that the requirement for the information would have been legally necessary and important to the operations of Powercor's business.

Powercor failed to produce evidence of the CEO or explain the requirements Powercor had for the information other than for legal advice. It failed to explain its legal obligations of reporting under the Electricity Safety Act 1998, WorkCover, the Coroners Act 1985 or the duty of its officers under the Corporations Act 2001 or otherwise at common law to have the information in the reports to carry out their duties whether legal or otherwise. Powercor failed to explain the variety of uses to which the information would be put and why it was needed.

Having regard merely to the duties placed on officers under the Corporations Act 2001 and in particular their duty to exercise their powers with care and diligence, the officers of Powercor were probably bound to find out what happened and the role Powercor's assets played in the Coleraine fire so that they could take proper steps to carry out their reporting obligations, make claims on their insurers, attend to maintenance issues, and attend to a myriad of other matters in the interests of Powercor. As I have said, Powercor has led no evidence on these matters to establish the privilege claim.

Accordingly, I am not satisfied that the dominant purpose Powercor had in obtaining the disputed reports was for privileged purposes. I find that the reports are not protected by legal professional privilege.[38]

[143]

That argument takes the matter no further. Granted, there was no dispute that Ms Rands' purpose in commissioning the reports was as she stated. But, as has been observed, because the purpose in question was the purpose of a corporation, it was necessary to understand not just Ms Rands' subjective purpose, but also, and in this case more importantly, the objectives of the person at the head of the corporation.

Counsel for the applicant submitted that, even if that were so, the only evidence of the purpose of the CEO was the evidence of Ms Rands that the CEO told her to commission the Rands Reports so that she could give him legal advice. Counsel argued that the CEO's direction to Ms Rands was, in effect, a contemporaneous statement of the CEO's state of mind and thus probative of his purpose.

The difficulty with that submission, however, is that, although the CEO's statement was admissible as evidence of his state of mind, it was not the only evidence on the point. There was as well a very significant body of evidence, of a multiplicity of purposes to which the Rands Reports were apt to be applied, from which it was open to infer that the CEO's objective in directing Ms Rands to commission the Rands Reports included not just legal advice but also obtaining information for those other purposes. It is true that the CEO did not disclose any such other purpose to Ms Rands. But that was not determinative of the issue. What was determinative was what he had in mind; and, for whatever reason, he was not called to give evidence about it. Well might one suppose, therefore, that whatever he might have been able to say on the subject would not have assisted the applicant's cause.

...

At the risk of repetition, the short answer to it is that, where the dominant purpose of the controlling mind of a corporation is in issue, it can ordinarily be established with tolerable clarity by that person giving evidence. If, without good reason, he or she chooses not to do so, rational inferences are open to be drawn.[40]

[181]

The Court of Appeal concluded that ASIC's failure to call Mr Robb had "consequences for the cogency of ASIC's case". By this the Court of Appeal meant that the cogency of ASIC's proof was diminished.

Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken to account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which the absence of evidence may be taken to account are confined by known and accepted principles which do not permit the course taken by the Court of Appeal of discounting the cogency of the evidence tendered by ASIC.

Lord Mansfield's dictum in Blatch v Archer that "[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted" is not to be understood as countenancing any departure from any of these rules. Indeed, in Blatch v Archer itself, Lord Mansfield concluded that the maxim was not engaged for "it would have been very improper to have called" the person whose account of events was not available to the court.

This Court's decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used... [T]he Court held "that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence".

The Court of Appeal concluded that ASIC's not calling Mr Robb founded an inference that his evidence "would not have assisted the ASIC case". There was no basis for drawing any inference that Mr Robb would have given evidence adverse to ASIC's case...[52]

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Cases Cited (20)