Filipowski v Island Maritime Limited & Anor

FILE NUMBER(S) : 50011 of 2002 and 50012 of 2002 CORAM: Lloyd J KEY ISSUES: Practice and Procedure :- notice to produce - claim of privilege Evidence Act 1995 s 57(1), Ch 3 Pt 3.10 Div 1 s 118 and s 119 LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 6 r 2 Supreme Court Rules 1970 Pt 36 r 13 and r 16, Pt 75 r 6 Attorney-General for the Northern Territory v Maurice & Ors (1986) 161 CLR 475; Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) 201 CLR 49; CASES CITED: Interchase Corporation Ltd (In liq) v Grosvenor Hill (Qld) Pty Ltd [1999] 1 Qd R 141; Linter Group Ltd v Price Waterhouse (A Firm) [1999] VSC 245; Mann v Carnell (1999) 201 CLR 1 DATES OF HEARING: 13/09/2002 DATE OF JUDGMENT: 10/04/2002

4 October 2002 BARBARA FILIPOWSKI Prosecutor v ISLAND MARITIME LIMITED SACHIN KULKARNI Defendants JUDGMENT

The prosecutor in each of two cases seeks an order that a notice to produce served on the prosecutor on behalf of the defendants be set aside. The prosecutor seeks, further or alternatively, a direction that any documents produced by the prosecutor in answer to the notice to produce be not open to inspection by any party until further order.
The defendant, Island Maritime Limited, is charged with an offence that it was the owner of a ship, namely the vessel "Pacific Onyx" from which a discharge of oil occurred into State waters being the waters of Botany Bay in contravention of s 27(1) of the Marine Pollution Act 1987.
The defendant, Sachin Kulkarni, is charged with an offence that he was the master of a ship, namely the vessel "Pacific Onyx" from which a discharge of oil occurred into the State waters being the waters of Botany Bay in contravention of s 27(1) of the Marine Pollution Act 1987.
The notice to produce issued by the defendants requires the prosecutor to produce the following documents: Documents in relation to both the investigation in relation to, and prosecution of these proceedings; all diaries and diary notes of all investigating personnel (including personnel who may have since left their employment with the Sydney Ports Corporation); chief investigators' notes; any draft reports and final reports of investigation; all divers' reports; all photographs, negatives and video tapes; all internal reports of the Sydney Ports Corporation in relation to the incident including recommendations; letters of initial instruction from the Sydney Ports Corporation to their legal advisers; letters of instruction to all experts retained for and on behalf of the Sydney Ports Corporation; any draft expert reports; any correspondence with third parties (including but not limited to Caltex) regarding the incident.
The prosecutor has produced a bundle of documents in part answer to the notice to produce, but claims legal professional privilege in relation to another bundle containing four categories of documents.
A preliminary question is whether the law which applies to claims for legal professional privilege in relation to notices to produce in the summary criminal jurisdiction of the Court is the Evidence Act 1995 or the common law. In Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) 201 CLR 49, 74 ALJR 339, the High Court held that ss 118 and 119 of the Evidence Act are concerned with adducing of evidence and do not apply to pre-trial interlocutory proceedings such as discovery and inspection. Mr C G Gee QC, who appears with Mr G J Grogin for the defendants, submits, however, that the present notice to produce is governed by the operation of Pt 36, rr 13 and 16 of the Supreme Court Rules 1970. Part 36 r 16 of the Supreme Court Rules states: (1) Subject to rule 13, where a party to any proceedings serves on another party notice requiring the party served to produce at any trial or hearing in the proceedings, or with the leave of the Court, on any day, or before any judge, officer, examiner or other person having authority to take evidence in the proceedings any document or thing for the purpose of evidence and the document or thing is in the possession, custody or power of the party served, the party served shall, unless the Court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production.
As can be seen, this rule is subject to r 13. Rule 13(1) provides that r 13 applies (inter alia) where a party is required by a notice served under r 16(1) to produce any document. Rule 13(2) relevantly states: (2) The Court shall not compel, and rule 16 shall not require, production of a document or an answer to a question, unless and until the Court directs that the production or answer shall not be prevented by this subrule: (a) over the objection of a person if evidence of the document, or of an answer to the question, could not be adduced in the proceedings over the objection of the person, by virtue of the operation of Part 3.10 Division 1 of the Evidence Act; …
Chapter 3, Pt 3.10, Div 1 of the Evidence Act (which includes ss 118 and 119) relates to legal professional privilege (which is called in that Act "client legal privilege"). So, it is said, the provisions of the Evidence Act relating to privilege apply to the production of documents in answer to notices to produce.
These prosecutions, however, are summary criminal proceedings to which Div 2 of Pt 75 of the Supreme Court Rules apply: see Pt 6 r 2 of the Land and Environment Court Rules 1996. Part 75 r 6 of the Supreme Court Rules specifies the rules that apply to proceedings to which Div 2 of that Part applies. Those rules provide that Pt 36 r 16 applies, except as if the words "Subject to rule 13, where" read "Where". That is, Pt 36 r 16 applies to summary criminal proceedings but not r 13.
It follows, in my opinion, that the Evidence Act does not apply in the summary criminal jurisdiction to the production of documents following the service of a notice to produce. The position is governed by the common law rules which determine the existence of privilege. In Esso Australia Resources Ltd v Commissioner of Taxation the High Court held that the test at common law should be applied to discovery and inspection of documents. By the same reasoning the common law test should apply to other pre-trial procedures, including the production and inspection of documents.
I have noted above the terms of the notice to produce (in par [4] above). As I have noted, the prosecutor has produced a bundle of documents in part answer to the notice to produce, but claims privilege in relation to another bundle containing four categories of documents.
The incident which gives rise to the prosecutions occurred on 14 November 1999 and is the alleged discharge of oil from the vessel "Pacific Onyx" into State waters in contravention of s 27(1) of the Marine Pollution Act. Mr Gee QC submits that the defendants are entitled, at the very least, to have the production of all documents which are in the possession of the prosecutor and which relate to the investigation of the incident, as distinct from documents which were brought into existence for the purpose of evidence. Moreover, it is submitted that there has been a sufficient voluntary disclosure of all the material so as to make producible everything in the prosecutor's possession which answers the description of documents in the notice to produce. It is submitted that considerations of fairness require the production of the documents.
Ms R S McColl SC, who appears with Mr A L Hill for the prosecutor, submits that all the four categories of documents in the bundle over which privilege is claimed were brought into existence as part of the evidentiary chain and not merely for the purpose of investigating the incident. Ms McColl submits that there has not been any waiver of the privilege, express or implied.
The documents over which privilege is claimed fall into four categories: (i) the minutes of the Sydney Port Corporation Prosecution Committee which recommends prosecutions for the spill; (ii) letters of instructions and briefs to advise addressed to various experts for the purpose of providing advice to the prosecutor; (iii) draft experts' reports; and (iv) correspondence between the solicitors for the prosecutor and various third parties. For the purpose of ruling on whether the prosecutor is bound to produce the documents it has been necessary for me to read them.
The prosecutor relies upon an affidavit of Mr Shane Hobday, General Manager Port Services of the Sydney Ports Corporation. Mr Hobday states that he is a member of the Prosecution Committee of the Sydney Ports Corporation. Mr Hobday further states: After becoming aware of the incident the SPC [Sydney Ports Corporation] instituted a clean up of the oil spill and an investigation of the cause of the spill. It is the policy of the SPC that from the moment the SPC is notified of an oil spill that the SPC acts as though a breach of the Marine Pollution Act has occurred and that a prosecution for that breach will be commenced. All subsequent actions by the SPC are conducted for the purpose of establishing whether there has been a breach of the Marine Pollution Act and to identify the person or persons responsible.
Mr Gee QC objected to the second sentence quoted above. I admitted it provisionally pursuant to s 57(1) of the Evidence Act, that is, subject to further evidence being adduced at a later stage to establish the fact and relevance of the statement. The first category in the bundle of documents over which privilege is claimed are minutes of the Prosecution Committee dated 2 June 2000 in which it is recommended that a prosecution be commenced for the spill. This evidence appears to be contrary to the statement of Mr Hobday, quoted above. It certainly does not support it. There being no other evidence to establish the fact deposed to by Mr Hobday, and there being evidence which suggests that a prosecution was not contemplated until 2 June 2000, I must now reject the sentence in the affidavit which was provisionally admitted. The category (i) document must, therefore, be produced.
The category (ii) documents all came into existence after the recommendation by the Prosecution Committee to prosecute. They are letters of instruction and briefs seeking the opinions of various experts. The letters and briefs include statements such as: "in preparing this matter for the issue of proceedings …", "in regard to the prosecution of Island Maritime Limited and Sachin Kulkarni …". It is clear that when the various letters and briefs were sent by the prosecutor's solicitors to the experts to whom they were addressed, it was for the purpose of the prosecution which had by then been recommended by the Prosecution Committee of the Sydney Ports Corporation. In my opinion the documents in category (ii) are privileged.
The documents in category (iii) are draft reports of the experts, all of which post-date the recommendation to prosecute. In Interchase Corporation Ltd (In liq) v Grosvenor Hill (Qld) Pty Ltd [1999] 1 Qd R 141, the Queensland Court of Appeal held that draft reports of a valuer were not privileged. The Court ordered the production of a number of documents which formed the basis of the expert's report together with all draft reports. However, the position in Queensland at that time was governed by the operation of O 35 r 5(2) of the Queensland Supreme Court Rules which says that a document consisting of a statement or report of an expert is not privileged from disclosure.
The position in Queensland may be contrasted with the approach in Victoria. In Linter Group Ltd v Price Waterhouse (A Firm) [1999] VSC 245, Harper J was required to decide prior to commencement of the trial whether a draft expert's report was required to be produced. Harper J said at par [16]: … an expert is surely permitted, indeed to be encouraged, to change his or her mind, if a change of mind is warranted. Just as a judge ought never to allow publication of a draft of judgment, in part because it is necessary to preserve the freedom to change his or her mind on further reflection about the case, so experts should not be inhibited by fear of exposure of a draft from changing their minds when such change is warranted by the material then before the expert. For these reasons the application for an order that the plaintiff produce the opinion of Mr Spencer of March 1997 is refused.
In Attorney-General for the Northern Territory v Maurice & Ors (1986) 161 CLR 475 the issue before the High Court was whether there had been on the facts of that case a waiver of legal professional privilege. Dawson J, however, went on to consider whether a draft document may be privileged (at 496): Before it emerged in its final form, successive drafts of a claim book may be privileged but this is not because of any privilege attaching to the final product. Draft pleadings in an action may be privileged, but I have never heard it suggested that a statement of claim or a defence or a reply is privileged so that the privilege is waived when it is filed or delivered to the other side. The reason why the draft may be privileged before the document is completed was early explained in Walsham v. Stainton [ (1863) 2 H. & M. 1, at p. 4 [71 E.R. 357, at p. 358] ] , upon the basis that, although after a pleading has been filed it becomes publici juris, the drafts "might disclose the precise character of confidential communications with the solicitor, by showing the alterations made from time to time". In the same way a letter to the other side in litigation which is drafted in a solicitor's office may be privileged before it is sent because it may reveal confidential communications between the solicitor and his client. Once it is sent, however, it ceases to be confidential and there is no privilege in it, not because privilege in the document is waived, but because no privilege attaches to it.
In Maurice the High Court held that the waiver of privilege over a claim book did not operate to waive privilege in relation to source materials which had been used to prepare it but which were not expressly referred to in the claim book.
The comparison by Harper J of a draft expert's report with a draft judgment is, in my opinion, valid. In my experience, it is not unusual for a judge to walk off the bench at the end of a case and prepare a draft judgment leading to a particular conclusion. However, as one's reading and thinking about the case develops over the ensuing weeks, it is not unusual for successive drafts to be completely re-written, leading to the opposite conclusion. I agree with Harper J that this is to be encouraged. So too, with experts. They may be discouraged from reformulating their opinions and conclusions, or changing their minds after further reading or examination if their drafts were not the subject to privilege.
Subject to any question of waiver, I find that the drafts experts' reports, which were forwarded by the experts to the prosecutor's solicitors, are privileged.
The defendants rely upon waiver, as explained in Mann v Carnell (1999) 201 CLR 1. In that case the High Court (Gleeson CJ, Gaudron, Gummow and Callinan JJ) said (at 13 [28]): "It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege". The High Court further stated (at 13 [29]): Waiver may be expressed or implied. … What brings about the waiver is inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
In Maurice the High Court held that disclosure of the final claim book did not amount to waiver of the privilege attaching to the draft document and that there was no unfairness in maintaining the privilege. In my opinion the same reasoning leads to the conclusion that fairness does not require an implied waiver of the privilege attaching to draft experts' reports in this case. The documents in category (iii) are privileged.
The documents in category (iv) are also clearly, in my opinion, privileged. They comprise correspondence and other communications passing between the prosecutor's solicitors and third parties in relation to the conduct of the litigation. They need not be produced.
I make the following orders: (1) The document being exhibit SH(i) to the affidavit of Shane Hobday sworn 12 September 2002 must be produced by the prosecutor to the defendants. (2) The documents being exhibit SH(ii), SH(iii) and SH(iv) to the affidavit of Shane Hobday sworn 12 September 2002, being documents to which legal professional privilege applies, need not be produced. (3) Costs reserved.

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