Firstnamed Plaintiff Secondnamed Plaintiff v Defendant

Supreme Court of Victoria|2011-07-04|Before: ROBSON J

PRACTICE AND PROCEDURE - Application for inspection of discovered reports on cause of fire at Coleraine on Black Saturday - Defendant's solicitor informed that fire allegedly caused by defendant's power line - Solicitor anticipated litigation against defendant - Solicitor consults CEO of defendant and instructed to carry out investigation - Solicitor seeks reports on cause of fire allegedly caused by defendant's power line - Solicitor says purpose of reports was to give legal advice to defendant - defendant needed information in reports for a range of purposes - Duty of defendant to report defendant's part in cause of fire to Energy Safe Victoria under the Electricity Safety Act 1998 - Duty of officers of defendant to act with reasonable degree of care and diligence under s 180 Corporations Act 2001 to ascertain defendant's part in cause of fire - Failure of defendant to prove dominant purpose was covered by legal advice or legal litigation privilege - Inspection ordered - ; ; and and .

1 On Black Saturday in February 2009,[1] devastating bush fires ravaged Victoria causing death and destruction on a massive scale. One of theses fires occurred to the north west of Coleraine causing damage to approximately seven hundred hectares of farming land and severely injuring a farmer.[2] Powercor is the distributor of electricity to Western Victoria and the operator of an electricity network through which it delivers electricity to domestic or residential and business consumers, including in and around Coleraine.[3]

2 Tracy Perry and Terrence Sagar, as representative of a class of property owners, have taken proceedings against Powercor[4] claiming damages for breaches of statutory duties and general duties of care in relation to loss and damage to property as a result of the bushfire at Coleraine. They allege that a faulty Powercor power line that passed over a farming property started the bushfire and Powercor was negligent in its maintenance of the powerline.

3 In this proceeding, Powercor discovered several reports on the cause of the fire at Coleraine. Powercor claims legal privilege for these reports. It claims its dominant purpose in obtaining these reports were to allow its in-house solicitor to provide it with legal advice and to use the reports in anticipated legal proceedings against it. It refuses to provide inspection of the reports to the plaintiffs. The plaintiffs seek an order for inspection of the reports.[5] The plaintiffs claim that the reports are not protected by legal professional privilege or if they are then that privilege has been waived.

(1) Report of Robin Hartrick of Trak Investigations entitled "Fire Investigation Report Coleraine Fire 7th February 2009" (incorporating transcript of a report by Dennis Clarke);

(2) Report of Donald Bainbridge entitled "Asset Failure Investigation Tie Wire Coleraine SWER" dated 10 March 2009 amended 24 June 2009;

(3) Supplementary Report of Dennis Clarke of Consulting & Power Pty Ltd entitled "Additional Calculations on Effect of Unbalanced Span Lengths on Tie Behaviour"; and

(4) Draft Report of Ken Woolhouse of Woolhouse & Associates entitled "Failed SWER Line Tie", dated 22 July 2009.

5 Powercor bears the onus of establishing that the four reports are protected by legal professional privilege.[6] The plaintiffs bear the onus of establishing that, if they are protected by legal professional privilege, the privilege has been waived.

6 I find that Powercor has failed to adequately explain the reasons why it obtained the reports in view of the many different purposes for which it needed the reports. Powercor has not satisfied me that the dominant purpose for which it obtained these reports is privileged. I find that Powercor has not established the reports are protected by legal professional privilege. Accordingly, Powercor must provide the reports to the plaintiffs for inspection. I will make orders accordingly.

7 Powercor's claim that the four documents are protected by legal professional privilege is supported by the affidavit evidence of its in-house solicitor Ms Kay-Frances Rands and Mr Robin Shute of Wotton + Kearney, the solicitor for Powercor in the proceeding.[7] The plaintiffs rely on several affidavits of Mr John Madden the solicitor for the plaintiffs in the proceeding and of Mr Justin Serong, solicitor of Maddens Lawyers.[8]

8 From June 1988, Ms Rands held the position of corporate solicitor for the State Electricity Commission until 1 January 1994 when she took up the position of legal counsel for Electricity Services Victoria. Later that year, she became legal counsel for CitiPower and, on CitiPower being sold to the owners of Powercor, she remained responsible as legal counsel for CitiPower. She also became legal counsel for Powercor and its related entities. She holds a current practising certificate.

9 Ms Rands says that her role is to provide legal advice on all matters to Powercor. She says that in acting as legal counsel for Powercor a part of her responsibilities requires her to commission and obtain reports to assist her in formulating her legal advice and for the purpose of providing such reports for the use of lawyers who are engaged to act on behalf of Powercor both in litigation and when providing legal advice to Powercor.

10 Ms Rands says that on the day after the fire at Coleraine, she was advised by Geoff Barby, an employee of Powercor, that Powercor's assets allegedly were the cause of the Coleraine fire. She says that she was informed by Mr Barby that approximately 700 hectares was burnt at that stage and that one man suffered burns to 40% of his body.

11 On the next day,[9] Ms Pauline Buckland, an employee of Powercor, advised Ms Rands that their liability insurers had been notified of the fires at Coleraine, Horsham and Weerite.

12 Ms Rands says that based upon her experience, she formed the view on 8 and 9 February 2009 that litigation against Powercor would ensue from the fires. She says that she believed that it was inevitable that litigation against Powercor would follow. She says she also held those views and beliefs since she knew that litigation had also ensued from the Ash Wednesday fires.

13 Ms Rands says that she discussed the legal implications of the fire with Powercor's CEO. She says that he asked her to arrange for an investigation into the fire so that she could give him legal advice on Powercor's overall exposure given the allegations that the source of ignition of the fires had involved Powercor's assets.

14 Ms Rands says that on Thursday 12 February 2009, she instructed an investigator, Robin Hartrick of Trak Investigations, to investigate the fire at Coleraine under legal professional privilege. She exhibits[10] a copy of her instructions to the investigator dated 12 February 2009 commissioning the investigation and the preparation and provision of the investigator's report to Powercor. She says that the exhibit is produced solely for the purposes of enabling the Court to determine the application made by the plaintiffs in this proceeding to compel production of the investigator's report.[11]

15 Ms Rands says that as part of his work, Robin Hartrick instructed Dennis Clarke to conduct an examination of the tie wires and to prepare a report. The tie wires are relevant to the allegations as to how the fire started. The tie wires affixed the conductor (the power line) to the insulator at the top of the power pole (Pole no 3) where the fire started. On the day of the fire, the tie wire is alleged to have broken allowing the conductor to fall where it came in contact with a tree and started the Coleraine fire.

16 Ms Rands says that Donald Bainbridge, a Powercor electrical engineer, also prepared a report for the purposes of giving Robin Hartrick information in preparation of his investigator's report. This is the report of Mr Bainbridge for which privilege is claimed. The report is dated 10 March 2009, amended 24 June 2009. The amended report was prepared after Ms Rands received Mr Hartrick's investigation report of 1 April 2009 as referred to next.

17 Ms Rands says that on 3 April 2009 she received from Robin Hartrick a copy of his investigation report dated 1 April 2009 entitled "Fire Investigation Report Coleraine Fire 7th February 2009." The report incorporates the transcript of a report by Dennis Clarke.

18 Ms Rands says that she is advised that in June 2009, Wotton + Kearney, solicitors, instructed Ken Woolhouse of Woolhouse & Associates to prepare a report with respect to the tie wire the subject of the fire at Coleraine. She says that she has been informed that Wotton + Kearney received Ken Woolhouse's report on 22 July 2009 and she received a copy on 23 July 2009.

19 Ms Rands says that she will produce to the court a copy of the investigation report, the Donald Bainbridge report, the Dennis Clarke report and Ken Woolhouse report if that is considered necessary for the purpose of enabling the court to determine the plaintiff's application challenging Powercor's claim resisting production of that report on the grounds of legal professional privilege. No further evidence is given about the circumstances in which Ken Woolhouse's report came into existence. In Powercor's written submissions Powercor says that Wotton + Kearney were retained by Powercor to appear for it in the Victorian Bushfires Royal Commission which had been established in February shortly after the fires. The submissions says that in June 2009 Wotton + Kearney instructed Woolhouse to prepare a report with respect to the tie wire.

20 Ms Rands says that in the circumstances Powercor maintains its claim that production of the Hartrick investigator's report, the Donald Bainbridge, the Dennis Clarke and the Ken Woolhouse reports are protected from disclosure in this proceeding.

21 The CEO of Powercor, who Ms Rands says asked her to arrange for an investigation into the fire that gave rise to the Hartrick investigators report, has not given any evidence of the meeting with Ms Rands or his purposes in seeking an investigation. I will discus the implications of this omission later.

22 At the time of the Coleraine fire, Powercor had in place a written procedure for the reporting and investigation of asset failures on Powercor's overhead and underground distribution network called "Powercor Asset Failure Reporting & Investigation" dated 11 August 2005.[12] Under the procedure, if the failed item required investigation, an investigator was to be assigned to the task. A flowchart sets out some fourteen steps that were required to be followed including appointing an investigator, updating the asset failure register and communicating the failure to several officers within Powercor.

23 The procedure requires a pole top fire or a ground fire to be reported. All details are to be filled in on a Failed Asset Tag by the attending linesperson. A copy of the Failed Asset Tag is to be sent to the local Asset Failure Representative or directly to the Asset Investigation Officer. A ground fire caused by a fallen conductor may be the subject of a review by the Asset Failure review team. A desired outcome of the procedures is that "identification of [the] root cause [of] failures will aid in the reduction of outage & frequency."

24 In summary, from this prescribed internal procedure it is apparent that an incident, such as happened at Coleraine, required reporting to many individuals within Powercor for further action. This written protocol was tendered by the plaintiffs as evidence. As discussed later, Powercor did not seek to tender any evidence about its internal procedures and the court is left to infer the many uses that the disputed reports may have been required for.

25 Powercor was also under a duty to report the incident to Energy Safe Victoria and WorkSafe.[13] The Electricity Safety (Network Assets) Regulations 1999, made under the Electricity Safety Act 1998, require Powercor to report to Energy Safe Victoria as soon as possible by telephone, all the details of the incident within its knowledge. Within two business days of the telephone call, Powercor must provide Energy Safe Victoria with a full schedule 1 report on the incident and within 20 days a schedule 2 report.[14] These reports required details of the cause of the fire.

26 On Sunday 8 February 2009, Powercor notified Energy Safe Victoria of the Coleraine fire; that a farmer was injured; and that there was significant property damage. Powercor said that the cause of the incident was under investigation.

27 On Monday 9 February 2009, Ms Pauline Buckland, an employee of Powercor, informed Ms Rands that Powercor had notified its liability insurers of the fires at Coleraine, Horsham and Weerite.[15] Although not relevant to this proceeding, Powercor's assets are also alleged to have caused fires at Horsham and Weerite on Black Saturday. I assume that Powercor needed full information about the incident to provide proper details of the potential claim to its insurers. No evidence was tendered by Powercor of its insurance claim procedures, what it needed to make a claim, or where it got that information.

28 Also on Monday 9 February the Premier Mr Brumby announced there would be a Royal Commission into the bushfires. It is public knowledge that the Black Saturday bushfires in Victoria destroyed hundreds of homes and tragically took almost two hundred lives.

29 On Thursday 12 February, Powercor instructed the investigator, Robyn Hartrick.[16]

30 On 16 February 2009, before Mr Hartrick completed his report, the Governor in Council appointed the Royal Commission of inquiry to investigate the causes and circumstances of the Coleraine and other fires.[17] Also on 16 February 2009, Powercor submitted to Energy Safe Victoria its schedule 2 report.[18] The report classified the incident as serious. The report said that the actual cause of the fire was unknown at that stage and continued; "It is understood the fire area covered approx 800 hectares, damaging grassland and private assets. Police advise that a person moving stock away from grass fire has suffered burns to 40% of their body from the fire, and was transferred to Melbourne's Alfred Hospital."

31 The report asks for details of action taken and by whom to which Powercor replied "investigation has been commenced." The only investigation that had been commenced that Powercor gave evidence of is that commenced by Mr Hartrick on the instructions of Ms Rands.

32 On Tuesday 10 March 2009, the report of Donald Bainbridge entitled "Asset Failure Investigation Tie Wire Coleraine SWER" was completed to assist Mr Hartrick with his investigation.

33 On Friday 13 March 2009, this proceeding commenced.

34 On Tuesday 31 March 2009, Mr Mike Ebdon, Executive Manager Infrastructure, of Energy Safe Victoria wrote to Mr Gary Audley the General Manager Network of Powercor informing him that Energy Safe Victoria had been requested to review possible causes of the fires alleged to have been caused by electrical distributions assets. He asked Powercor for a schedule 2 report about the Coleraine fire. The previous schedule 2 report had referred to the investigation being undertaken. The letter sought exhaustive details about the fire including details about the conductor tie wire, signed witness statements and photographs. Powercor have led no evidence as to how they complied with this request. Powercor led no evidence to suggest any other reports were used other than the disputed reports.

35 On Friday 3 April 2009, Ms Rands received a copy of Mr Hartrick's report dated 1 April 2009 entitled "Fire Investigation Report Coleraine Fire 7th February 2009" (incorporating transcript of a report by Dennis Clarke).[19]

36 On 17 April 2009, the Royal Commission granted Powercor conditional leave to appear.[20] Powercor instructed Wotton + Kearney to act for them in the Royal Commission. Ms Rand says she anticipated that the investigator's report would be employed by herself and Powercor's external lawyers to assist them on the issues being examined by the Royal Commission.[21]

37 On 22 July 2009, the Royal Commission subpoenaed Powercor to produce documents including the disputed documents.[22] Also on 22 July 2009, Ken Woolhouse completed his draft report entitled "Failed SWER Line Tie" was completed.

38 On 28 August 2009, Wooton + Kearney provided the Royal Commission with the witness statement of Vince Power, Manager of Network Safety, Environment and Compliance at Powercor.[23] This statement referred to and relied on the disputed reports. Wooton + Kearney also enclosed a statement from Mr Shane Breheny, Powercor's CEO. I assume he is the CEO that Ms Rands spoke to.

39 On 16 September 2009, Mr Clarke produced his supplementary report "Additional Calculations on Effect of Unbalanced Span Lengths on Tie Behaviour" the third of the disputed reports.

40 On 18 September 2009, Mr Power tendered his witness statement and was examined by counsel for the Royal Commission.[24] He relied on the disputed reports in giving his evidence.

41 During this hearing, the plaintiffs led further evidence about the chronology of events. That evidence essentially deals with the waiver issue. In view of my decision on privilege, I need not deal with that issue nor the facts surrounding it.

42 As mentioned above, Mr Power prepared and signed a witness statement for the Royal Commission. Although this witness statement was provided on 28 August 2009, it is dated 1 September 2009.[25] I can only assume this is an error. Powercor has discovered the witness statement. In his statement, Mr Power says that he is employed by Powercor and works within the "Electricity Networks Business Unit where he is the Manger of Network Safety, Environment and Compliance reporting to the General Manager Electricity Networks".[26] In his statement he says that the cause of the Coleraine fire has been investigated Robin Hartrick, Donald Bainbridge and Ken Woolhouse.[27] He refers to each of the disputed documents. He goes onto say that the investigation carried out by Powercor (presumably that of Mr Hartrick and Mr Woolhouse) indicates that the immediate cause of the loss of integrity of the conductor was a fracture of a tie wire during the extreme weather conditions of 7 February 2009. He says the tie wire had been weakened prior to 7 February 2009. He says that based on investigations of Ken Woolhouse (presumably reported in his report) the final fracture occurred only on the day of the fire. He says that the existence of the part fracture prior to 7 February 2009 would not have been established by Powercor's maintenance procedures since any part fracture would only have been apparent by examination after it had occurred using microscopic equipment.[28]

43 The High Court of Australia has held that legal professional privilege is indispensable to the proper functioning of the judicial system and affords a guarantee of fundamental, constitutional and human rights.[29] Absent waiver or abrogation by statute, the privilege is absolute.[30] The privilege may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.[31]

44 In this State, the Evidence Act 2008 seeks to codify the common law of legal privilege. The Act commenced operation on 1 December 2010. The Act applies[32] to all proceedings in a Victorian Court.[33] Chapter 3 of the Act concerns admissibility of evidence including client legal privilege.[34]

45 Powercor contends that Chapter 3 of the Act does not cover all the circumstances in which a claim for privilege might arise.[35] Powercor contends that since the Act does not affect the operation of a principle or rule of common law or equity about evidence in a proceeding to which it applies,[36] the common law principles developed about legal professional privilege continue to apply. Powercor contends that when evidence is adduced the common law affords protection against disclosure of those communications which attract privilege irrespective of whether a like protection is afforded by the Act.[37] Neither party suggested, however, that I need go beyond the Act, informed by the common law, in deciding the matters at issue in this case.[38]

46 Under the Act, s 118 provides for client legal privilege as follows:

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of -

(a) a confidential communication made between the client and a lawyer; or

(b) a confidential communication made between 2 or more lawyers acting for the client; or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person -

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

47 Section 119 provides for litigation privilege a follows:

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of -

(a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or

(b) the contents of a confidential document (whether delivered or not) that was prepared -

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

48 In this case, the plaintiffs concede that at the time the reports were sought, prepared and provided to Powercor legal proceedings against Powercor were anticipated by Powercor. The only issue I am required to address is whether or not the reports were a confidential document prepared for the dominant purpose of Powercor's lawyers providing legal advice to Powercor or for Powercor being provided with professional legal services relating to an anticipated Australian proceeding.

49 Powercor concedes that it bears the onus of establishing that the reports were prepared for that dominant purpose. Powercor asserts that it has done so. The plaintiffs contend that the dominant purpose test has not been satisfied. The plaintiffs argue that the investigation reports were prepared for a plurality of purposes and the evidence indicates that the dominant purpose for the creation of the reports was not for the provision of legal advice or for use in anticipated or contemplated litigation.

50 Ordinarily the purpose of preparing the document will be that of the maker of the document. That will not always be the case, as where some other person, such as a solicitor commissioning the provision of a technical report, calls the document into existence. In that case the relevant purpose will not be that of the author but the solicitor.[39] Further, where the document is produced for a corporation it may be necessary to examine the purpose of persons in the corporations hierarchy, other than the author or the person directly commissioning the document, to determine the purpose for which it is brought into existence.

51 The High Court of Australia has held that it is the purpose of the report and not the motive of the individual who made it that matters.[40] In Esso Australia Resources Ltd v Federal Commissioner of Taxation, Gleeson CJ, Gaudron and Gummow JJ said:

In many cases the reports would result from established corporate or bureaucratic procedures, and the individual who made the report would simply be following instructions. It may be necessary to understand the internal procedures, or the objectives of some person of higher authority, in order to identify the purpose or purposes for which reports were prepared.[41]

52 The importance of establishing the "objectives of some person of higher authority," such as the Chief Executive Officer of Powercor in this case, to identify the purpose or purposes for which the reports were prepared was repeated by Young J in AWB v Cole[42] in a passage that has been cited with approval by our Court of Appeal:[43]

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.[44]

53 The Court of Appeal in Carter Holt confirmed that a two step approach must be adopted in determining dominant purpose. The first is the ascertainment of the subjective purpose(s) of the person(s) making or commissioning the communication in question. That will depend upon the evidence that 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. The determination of dominant purpose is a matter for the Court and must be determined objectively.

54 The Court of Appeal[45] cited with approval what Kenny J said in Commissioner of Taxation v Pratt Holdings:[46]

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.

55 The Court of Appeal of this court and other courts have interpreted the word "dominant" as meaning that there must be a "clear paramountcy" of purpose.[47]

56 The plaintiffs contend that the affidavit[48] of Kaye-Frances Rands does not disclose all the purposes for which Powercor sought the disputed reports. Ms Rands describes Powercor's purpose in obtaining a report from Mr Hartrick as follows:

Based upon my experience, I formed the view on 8/9 February 2009 that litigation against Powercor would ensue from the fires. My belief was that it was inevitable that litigation against Powercor would follow. I also held those views and beliefs since I knew that litigation had also ensued from the Ash Wednesday fires**.** I discussed the legal implications of the fire with Powercor's CEO and he asked me to arrange for an investigation into the fire so that I could give him legal advice on Powercor's overall exposure given the allegations that the source of ignition of the fires had involved Powercor's assets.

57 The plaintiffs submit that in addition to purpose described in the affidavit of Ms Rands the evidence demonstrates that there were at least three other reasons for obtaining the disputed reports. The plaintiffs contend that these included assisting Powercor to deal with issues that would be raised at the Royal Commission; enabling Powercor to comply with its reporting requirements under the Electricity Safety Act 1998; and informing Powercor's management that its electrical distributing system caused the fire so that Powercor could take whatever steps it needed to take with regards to that information. Mr Riordan put it simply that Powercor "needed to know" what had happened as part of its normal business operations.

58 The plaintiffs argue that before the reports were commissioned the Royal Commission had been announced. Ms Rands admits in her affidavit that she anticipated the report she commissioned from Mr Hartrick would be employed by herself and Powercor's external lawyers to assist them in relation to issues being examined by the Royal Commission.[49] The plaintiffs contend that the only inference that can be drawn is that the investigation was critical for the purposes of the Royal Commission. The plaintiffs contend that the Royal Commission was not a legal proceeding for the purposes of s 119 (litigation privilege) although legal advice privilege is still available in connection with the preparation of evidence for possible use at the inquiry.[50]

59 There is no evidence that Powercor sought to inform itself of what happened at Coleraine with its equipment other than through the disputed reports. The evidence that Powercor gave to the Royal Commission of how the Coleraine fire started was solely based on the disputed reports. I put to Mr Kelly, senior counsel for Powercor, that there was no evidence that Powercor relied on any other source of information as to the cause of the fire other than the disputed reports. He said that he did not cavil with that.[51]

60 Secondly, the plaintiffs point to the statutory obligations on Powercor to investigate the fire and report to Energy Safe Victoria. Powercor also rely on the duties on officers of Powercor under the Corporations Act 2001 to act with reasonable diligence and care.[52]

61 Thirdly, the plaintiffs submit that as the fire injured a man and caused a large amount of damage there would be a need by the Powercor management to understand what the cause of the fire was so that if it was in fact a fault of Powercor's system, mechanical or otherwise, it could be corrected.[53]

62 The plaintiffs contend that the mere fact that the reports were provided to Ms Rands for her legal advice is not determinative of the dominant purpose for which the reports were created. They rely on the observations of Young J in AWB Ltd v Cole [No 1] where he said:[54]

The mere fact that the draft statement of contrition was sent by email to Mr Zwier, amongst others, for his legal advice is not determinative of the dominant purpose for which the draft statement was created. Nor does it determine that one intended use of the document was more dominant than other intended uses. As Brennan CJ said in Propend.... the test is anchored to the purpose for which the document was brought into existence..... I accept that the proposed statement of contrition had to be evaluated against legal advice. None of this evidence is inconsistent with, or causes me to doubt, my finding that the statement of contrition was brought into existence for multiple purposes and none was dominant.

63 Powercor draws attention to the pleadings and the admissions made by it. Powercor admits the allegations that at approximately 12.30pm on 7 February 2009 the tie wire holding the conductor to the insulator on Pole 3 on the swirl line broke; the conductor detached from the insulator and draped towards the ground whilst remaining suspended between Poles 2 and 4 on the SWER line; the insulator [sic conductor] came into contact with or sufficiently close proximity to a tree to the south west of Pole 3 so as to discharge electricity to the tree and the discharge of electricity causing burning material to drop from the tree to the ground below and ignite a fire which became the Coleraine bushfire.

64 Powercor asks the Court to infer that, in the circumstances that legal advice was sought and investigations were undertaken for the purpose of allowing Powercor prudently and sensibly to assess how it might properly deal with the likely litigation.[55]

65 Powercor contends that the rationale for the privilege should not be ignored. It says that the privilege exists to serve a recognised public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers. It says that in this case Powercor was entitled to seek and obtain legal advice as to how it should prudently and sensibly respond to allegations that its powerlines were the cause of the Coleraine Bushfires. Powercor argues that a necessary corollary of obtaining such advice was that its lawyers had access to equally full and frank disclosure from experts retained by them to assist in the evaluation of Powercor's potential liability.

66 Powercor says that in the present case, it can be seen that that recognised public interest serves to facilitate the administration of justice by allowing Powercor to obtain full and frank access to experts. Powercor says that as a consequence Powercor's pleaded defence to the statement of claim contains and reflects extensive admissions.[56]

67 Powercor accepts that there a number of statutory obligations that came into play as a result of the Coleraine fire including the Corporations Act 2001, the Coroners Act 1985, the Electricity Safety Act 1998 and WorkCover. Powercor asks rhetorically why would a person confronted with allegations that their power supply system had been the cause of the fires and exposing them to a legal liability, not in all of those circumstances, acting prudently and sensibly, want and seek legal advice to address any number of the legal issues presented by the incident and the damage which ensued.[57]

68 Powercor says that the serious criminal sanctions[58] imposed by the Electricity Safety Act 1998 demonstrates the necessity of getting legal advice on how "you might prudently and sensibly deal with the issue."[59] Powercor says that there were any number of legal issues arising from the fire for Powercor that would impel a person to get legal advice and that such issues and these various legal advice purposes were themselves a dominant purpose for the disputed reports. In other words, dominance is achieved by recognising from all the facts and circumstances that advice would be needed by Powercor for a multiplicity of different legal purposes.[60]

69 Thus, Powercor adopts a multiple purpose argument to support the privilege of the reports by pointing to a number of legal issues facing Powercor as a result of the Coleraine fire.

70 The fourth report was the subject of little evidence. Ms Rand says that she is advised that in June 2009, Wotton + Kearney instructed Ken Woolhouse to prepare a report with respect to the tie wire the subject of the fire at Coleraine. There was no evidence as to the purpose for which the report was obtained. During argument it was not differentiated from the other three reports and Powercor submissions did not seek to support its claim to privilege of this report using any arguments other than those advanced for the other three reports.

71 I infer as a fact that the disputed reports were and were intended to be the source of information that Powercor used and intended to use for its normal business purposes including; obtaining legal advice; providing information to the Royal Commission; providing information to the regulator under the Electricity Safety Act 1998; providing information to the Coroner, if need be; providing information to its insurer; providing information for its internal Powercor Asset Failure Reporting & Investigation procedure; and in reviewing its maintenance program and the continued use of the type of equipment that failed at Coleraine. As I have indicated, no evidence was led by Powercor to the contrary.

THE FAILURE TO CALL THE CHIEF EXECUTIVE OFFICER

72 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.[61]

73 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.[62]

74 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.

75 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.

76 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,[63] 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.

77 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.

78 I therefore order, on the plaintiffs' claim for inspection, that the disputed reports be produced. I order that the plaintiffs' costs including any reserved costs be paid by Powercor.

[2] The injury to the farmer is referred to in Powercor's report to Energy Safe Victoria of 8 February 2011, exhibit JFM-4B.

[3] Affidavit of Kaye-Frances Rands of 28 April 2011 (Rands 28 April affidavit).

[6] Conceded by Powercor in written submissions of 20 June 2011 at [17].

Kay-Frances Rands of 10 February 2011 in 09166 of 2009 (Rands 10 February affidavit);

Kay-Frances Rands of 28 April affidavit (Rands 28 April affidavit);

Robin Shute of 12 May 2011 (Shute 12 May affidavit);

Robin Shute of 22 June 2011 (Shute 22 June affidavit).

John Madden of 11 May 2011 (Madden 11 May affidavit);

John Madden of 13 May 2011 (Madden 13 May affidavit);

John Madden of 20 June 2011 (Madden 20 June affidavit);

Justin Serong of 22 June 2011 (Serong 22 June affidavit).

[10] Exhibit KFR-2 confidential to Rands 28 April affidavit.

[11] Ms Rand says that Powercor does not, by having to meet this application, waive the privilege which is inherent in that investigator's report or in the contents of the exhibit.

[12] Exhibit JFM-11 to Madden 11 May affidavit.

[13] Electricity Safety (Network Assets) Regulations 1999 and Occupational Health & Safety Act 2004.

[18] Exhibit JFM-2 to Madden 11 May affidavit.

[22] Exhibit RMS-2 to Shute 12 May affidavit.

[23] Exhibit RMS-3 to Shute 12 May affidavit.

[24] Transcript of the Royal Commission, 8608.

[25] Exhibit JMF-1 to Madden 11 May affidavit (Vince Power witness statement).

[26] Vince Power witness statement [1].

[29] Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 685; Smorgon v ANZ Banking Group Ltd [1976] HCA 53; (1976) 134 CLR 475 at 488; Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52 at 94; Carter v Northmore Hale & Leake (1983) 183 CLR 121 at 133, 161.

[30] Cadbury Schweppes Ltd v Amcor Ltd [2008] FCA 88 at [17] per Gordon J.

[31] Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 192 ALR 561, 564 [9]; cited in Vance v McCormack (2004) 154 ACTR 12, [9]; Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49, 64 [35] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. In Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 550 McHugh J said that the privilege also prevents disclosure of "confidential material that records the work of a lawyer carried out for the benefit of a client unless the client has consented to the disclosure".

[33] In the Dictionary, 'Victorian Court' includes the Supreme Court.

[34] Division 1 in Part 3.10 of that Chapter, which comprises ss.117-126, concerning client legal privilege.

[35] Compare Northern Territory v GPAO (1999) 196 CLR 553 at [16]. Powercor submits that the ambit of the common law doctrine of legal professional privilege exceeds that of ss.118 - 119: Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [20] - [27].

[36] Section 9(1). Except so far as the Act provides otherwise expressly or by necessary intendment.

[39] Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways Ltd [2005] NSWCA 47 at [6]- [9] Spigelman CJ; M_itsubishi Electric Pty Ltd v Victorian Workcover Authority_ [2002] VSCA 59; (2002) 4 VR 332 at 338 [14]. See also Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122 at [15-16], Finn J citing Barwick CJ in Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 677; Liquorland (Australia) Pty Ltd v Anghie (No 2) [2003] VSC 160; Commissioner of Taxation v Pratt Holdings [2005] FCA 1247; AWB v Cole [2006] FCA 1234; (2006) 155 FCR 30.

[40] Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 per Gleeson CJ, Gaudron and Gummow JJ.

[41] [1999] HCA 67; (1999) 201 CLR 49 at 66 [39]. Hence, in Waugh v British Railways Board [1979] UKHL 2; [1980] AC 521 at 543, the Court directed its attention not so much to the intentions of the British Railway Board officers who prepared the report, but to the board itself in directing them to prepare it and under whose auspices it was prepared.

[42] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at 45.

[43] Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 per Maxwell P and Redlich JA (Carter Holt).

[47] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 at 45 (5); Mitsubishi Electric Pty Ltd v Victorian Workcover Authority [2002] VSCA 59; (2002) 4 VR 332 at 337 [10]; Waugh v British Railways Board [1979] UKHL 2; [1980] AC 521 at 543; Dick Smith Electronics Pty Ltd v Westpac Banking Corp [2002] FCA 1040 at [34]- [35]; Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways Ltd [2005] NSWCA 47 at [7].

[50] AWB Ltd v Cole [2006] FCA 571 (2006) 152 FCR 382 (AWB Ltd v Cole [N0 1]) at [162] per Young J.

[56] Powercor written submissions at [27]-[28].

[58] 15,000 penalty points: see submission of Mr Kelly at transcript 86.

[62] Carter Holt [2]; conceded by Powercor in written submissions of 20 June 2011 at [17].

Energy Safe Victoria and WorkSafe.[\[13\]](#fn13) The Electricity Safety (Network Assets) Regulations 1999