Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59

Court of Appeal (Vic)|2008-04-11|Before: MAXWELL P and REDLICH JA

DISCOVERY - Privilege - Legal professional privilege - Expert report into factory fire - Expert engaged by manager for operational purpose and re-engaged by in-house lawyer - Privileged purposes not shown to be dominant purposes - Leave to appeal refused.

**1 In our opinion the application for leave to appeal should be refused. The decision of the judge below was clearly correct. The reasons which his Honour gave are succinct and clear and speak for themselves. We add the following remarks in order to reinforce what his Honour said, given the frequency with which questions of legal professional privilege are litigated.

2 The application of the dominant purpose test, prescribed by the High Court decision in Esso,[1] involves two distinct steps. The first is the ascertainment of the subjective purpose(s) of the person(s) making or commissioning the communication in question. And, as in this case, that investigation will depend upon the evidence which is led about that purpose or those purposes. If the Court concludes that there was more than one purpose, at least one of which was a purpose capable of attracting legal professional privilege, the second step is to determine whether the party claiming the privilege has established that the privileged purpose was the dominant purpose.

3 The determination of dominant purpose is a matter for the Court, as the authorities make clear. We refer first to what Kenny J said in Commissioner of Taxation v Pratt Holdings:[2]**

The purpose for which a document is brought into existence is a question of fact. Where there are a number of purposes for the creation of a document, it can be difficult to identify the dominant purpose. The dominant purpose must be determined objectively, having regard to the evidence, the nature of the documents and the parties' submissions. The purpose will ordinarily be that of the maker of the document, but this will not always be the case.

We also refer to what Young J said in Australian Wheat Board v Terrence Cole:[3]

The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's maker, or of the person who authorised or procured it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication.

**4 In the present case the evidence disclosed that the applicant company had various purposes in commissioning the relevant reports. Both Mr Barlow, the manager, and Mr Woods, the in-house solicitor, evidently had authority on behalf of the company to commission a report of this kind into the factory fire. Each had his subjective purposes for commissioning the expert which, if accepted, were attributable to the applicant company. In the case of Mr Woods, these purposes were stated on affidavit. In the case of Mr Barlow, there was no affidavit, but his purposes were clearly identified in the internal e-mail communications which were before the court. Mr Woods's purposes, not surprisingly, concerned the giving of legal advice and dealing with anticipated litigation. Equally unsurprisingly, Mr Barlow's purposes concerned precisely the kinds of operational issues which would be expected to arise following a disastrous incident of this kind.

5 Mr Booth pressed the submission for the applicant that what purported to be a re-engagement of the expert by the solicitor, following the initial engagement by the manager, somehow nullified or rendered irrelevant Mr Barlow's stated purposes for retaining the expert. We reject that submission. Of course, circumstances can be imagined where the retainer of an expert for one purpose is expressly revoked and the letter of revocation and re-appointment makes clear that the new retainer is for a quite different purpose. But that is not what occurred here. Quite simply - and again, unsurprisingly - there were multiple purposes.

6 The evidence was overwhelming that Mr Barlow's operational concerns - to find out what had happened and why, and how well it had been responded to - continued throughout the engagement. Indeed, the inference of a multiplicity of purposes is the inference that would most likely be drawn - subject to evidence to the contrary - in circumstances such as this. After all, the engagement by Mr Barlow was made the day after the incident. As a senior manager, Mr Barlow naturally wanted an immediate investigation, in order to learn the operational lessons about how the fire started and how well it was responded to. There was no litigation on foot at the time, although the judge accepted that it was in contemplation.

7 In the circumstances, it is more probable that the dominant purpose for seeking an expert report was to inform management, as reflected in Mr Barlow's having commissioned the expert on his own initiative. But we need make no finding on that matter for the purposes of this application. We simply note what Branson J, then of the Federal Court, said in Sparnon v Apand:[4]**

If the decision to bring the document into existence would have been made irrespective of any intention to obtain professional legal services, I am inclined to doubt that the purpose of obtaining professional legal services could be regarded as the dominant purpose for the making of the document.[5]

The learned judge in the present case was, in our view, plainly right to say that there was no sufficient material before him to demonstrate that the privileged purposes were dominant.

**8 Finally, we draw attention to what the respondent contends, with some justification, was an attempt by the applicant to cloak the expert reports with privilege via the intervention of the in-house lawyer. Mr Woods says on affidavit that he told Mr Barlow, the manager, that it would be 'more appropriate' if he, not Barlow, commissioned the expert, albeit that Barlow had already done just that. Mr Woods says in his affidavit that he thought this was more appropriate because he considered that he needed a report to assist him with legal advice and the contemplated litigation.

9 But it was immaterial who commissioned the report. What mattered from Mr Woods's point of view was that whatever report was obtained should cover any matter on which he might be required to give legal advice or to brief external lawyers in relation to litigation. It appears that the purported rescission of the Barlow engagement and the purported re-engagement by Woods was done in the mistaken belief that if the letter of engagement came from a lawyer this would help to ensure that a claim for privilege would succeed. The same motivation apparently lay behind Mr Woods's request to the expert to mark his report 'Confidential and Privileged'.

10 We express no concluded view about what motivated the players in this particular case, but we do emphasise as a matter of general principle that questions of privilege will be decided as matters of substance, not matters of form. Mere use of a solicitor's letter, or the mere use of the label 'Privileged' on a document, will not affect the court's determination of the true purpose(s) for which a communication was made.

**MAXWELL P: We think there should be costs on the party-party basis. The order of the Court is:

[1] Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49.

At a glance

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Judgment (21 paragraphs)

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Cases Cited (2)