Principles - waiver and instructions to experts
44 The present application relates to the response to a notice to produce. It is governed by the common law, and not by Part 3.10 (Privileges) of the Evidence Act 1995 (Cth): Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 at [18]-[28]; Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 at [27]. So much was accepted by senior counsel for ANIP at the hearing.
45 The basic principle, laid down in Mann v Carnell at [29] (Gleeson CJ, Gaudron, Gummow and Callinan JJ), is as follows:
Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is 'imputed by operation of law'. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. … What brings about the waiver is the 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.
46 Accordingly, after Mann v Carnell, the determining factor is the identified inconsistency, although fairness remains a relevant consideration in the assessment of inconsistency: DSE (Holdings) Pty Limited v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 at [14].
47 In Osland v Secretary, Department of Justice [2008] HCA 37; (2008) 234 CLR 275 at [45] (Gleeson CJ, Gummow, Heydon and Kiefel JJ) it was observed that deciding whether or not there has been an implied waiver of privilege:
… reflects a judgment that the conduct of the party entitled to the privilege is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. Such a judgment is to be made in the context and circumstances of the case, and in the light of any considerations of fairness arising from that context or those circumstances.
48 Their Honours approved at [49] a statement by Tamberlin J in Nine Films & Television Pty Ltd v Ninox Television Limited [2005] FCA 356 at [26] that 'questions of waiver are matters of fact and degree'.
49 However, in the context of experts' reports, further guidance can be found in a line of authorities that have expressly considered whether waiver of privilege over an expert report which is deployed in litigation extends to other privileged communications that might be directly or contextually linked to the report.
50 In Southcorp Lindgren J listed a number of common law principles relevant to this issue. His Honour said at [21]:
I will apply the following principles which I did not understand to be in dispute:
1. Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 ('Interchase') at 151 per Pincus JA, at 160 per Thomas J.
2. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ('Propend'); Interchase, per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17].
…
4. Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, 487-488 per Mason and Brennan JJ, 492-493 per Deane J, 497-498 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 ('ACCC v Lux') at [46].
51 In Watkins v State of Queensland [2007] QCA 430; [2008] 1 Qd R 564, Keane JA (with whom Mackenzie J agreed) said at [55]:
It must be said, however, that the broad proposition that waiver will be imputed to ensure equality of advantage would mean that, in every case where an expert report is based on instructions as to the factual basis on which expert opinion is sought and the report is relied upon by the party that commissioned it in relation to the negotiation of a legal claim, the other party would have 'a right' to see those instructions. There are reasons of principle and authority why I am unable to accept that broad proposition. In terms of principle, it seems to be inconsistent with the High Court's insistence upon the substantive nature of the right to confidentiality involved in legal professional privilege, [Baker v Campbell (1983) 153 CLR 52; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 552 [9]] that the right can be treated as so fragile as to be susceptible of abrogation in consequence of a judicial impression that the other party would be better informed than he or she might be if the confidential information were not provided. It is in the nature of things that a party who enjoys a right to keep information relevant to a forensic contest confidential will also enjoy an advantage over that party's opponent: the mere existence of that advantage cannot be a reason for the abrogation of the right. It is the abuse of the right by conduct apt to confuse or deceive the opponent which is the basis for an imputed waiver of privilege.
52 In New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 White J addressed the position in the context of the relevant discovery rule and s 122 of the Evidence Act 1995 (Cth) but acknowledged the significance of the qualification in [21(4)] of Southcorp. His Honour said at [45]:
The qualification in paragraph 4 of Lindgren J's statement of principles set out in Australian Securities and Investments Commission v Southcorp Ltd is significant. There are many cases in which it has been held that privilege in material provided to an expert is not lost merely because the expert is called, or the expert's report is served. In Bourns Inc v Raychem Corporation [1999] 3 All ER 154, Aldous LJ said (at 166-167):
'Service of a witness statement, whether it be a statement of an expert or a witness to fact, waives privilege in that statement. As stated in the Marubeni Corp case mere reference to a document does not waive privilege in that document: there must at least be reference to the contents and reliance. In the present case there was no reference and no reliance therefore no waiver.'
53 His Honour then cited the reasons of Foster J in in Dingwall v Commonwealth of Australia (1992) 39 FCR 521. Foster J, referring to Attorney-General (NT) v Maurice (1986) 161 CLR 475, said at 524:
I have come to the view, upon a close consideration of the judgments in Maurice's case that it cannot be regarded as authority for a wide principle that, whenever documents are sent to a potential witness as part of material being placed before him in order that he may provide a report of an expert kind to be used as evidence in a case, that those documents, ipso facto, although they had the protection of legal professional privilege, necessarily would lose it because of the doctrine of waiver. Maurice's case does not go as far as that. It requires, certainly, that there be an indication that the documents were used in the preparation of the evidentiary document in a way that could be said to influence the content of that document.
54 In Dingwall, a proposed medical witness was subpoenaed to produce all letters of instruction and related documents upon which his report had been prepared. Although the issue arose pre-trial, Foster J considered it as if the report had been received in evidence. The doctor said, and his Honour accepted, that the opinions expressed in his report had not been founded upon any information conveyed by the instructions or other subpoenaed documents. On that basis, his Honour concluded that the privilege in the letter of instructions and other documents had not been waived by the (assumed) tender of the expert report: there was no indication that they had been used in the preparation of the report in a way that could be said to have influenced its content.
55 White J in New Cap acknowledged the potential difficulty of assessing whether the contents of a privileged document have influenced the content of an expert's report, stating at [48]:
It may be said that the question of whether such privileged documents influenced the content of the expert's report is a matter which the opposite party should be entitled to test. However, questions of privilege inevitably involve the striking of a balance.
56 Similarly, in Watkins, Keane JA (with whom Mackenzie J agreed) said at [55]:
It is in the nature of things that a party who enjoys a right to keep information relevant to a forensic contest confidential will also enjoy an advantage over that party's opponent: the mere existence of that advantage cannot be a reason for the abrogation of the right.
57 The task of assessing whether the content of a privileged document has influenced the contents of an expert's report is one that can be undertaken by reference to (relevantly) the expert's report, despite the difficulties such a task may present. An example is provided by Fairhead v West Australian Newspapers Ltd [No 2] [2015] WASC 368 at [20] (Kenneth Martin J).
58 In this context, another matter relevant to the question is the obligation (for example by way of the Harmonised Expert Witness Code of Conduct) that an expert state, specify or provide 'the assumptions and material facts on which each opinion expressed in the report is based [a letter of instructions may be annexed]'.
59 In New Cap, White J said at [53]:
The question is not merely whether it could be said that the privileged materials were used in such a way that they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials. Where an expert's report is submitted to a party's legal advisers so as to be put into a form which will ensure that it is admissible, it can be said that the privileged communications between the expert and the lawyers have influenced the content of the report, in the sense of its form, although not in the sense of the formulation of the substantive opinions expressed by the expert. Likewise, privileged communications between an expert and the party's lawyers whereby material information is provided to the expert in the form of assumptions or documents may well influence the content of the report. However, an expert's report is required to state what material and assumptions are relied on. Use of a final report, which refers to such materials and assumptions, is not inconsistent with maintaining confidentiality in the communications which produced the final product.
60 I also note in this regard the observation of Doyle CJ in Cole v Dyer [1999] SASC 272; (1999) 74 SASR 216 at [56]:
A rule that privilege is waived if material is submitted to an expert for use in connection with an expert report, would be a very substantial intrusion on legal professional privilege. And such an intrusion would be for little gain, in terms of justice or efficiency, if particulars of any matter relied upon by the expert must be provided. The party to whom the report is disclosed will be able to identify privileged material upon which the expert has based the expert's opinion.
61 A number of authorities have considered the relevance of a statement by the expert to the effect that they have not relied on the privileged information in a manner that has influenced their report. Dingwall is one example. Another example, upon which ANIP relied and where there was a different outcome, is Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 2] [2018] WASC 71, in which Tottle J stated at [25]:
Fifth, I have reservations about determining questions of waiver by reference to statements made by an expert as to whether the expert relied on the content of privileged material for the purpose of forming opinions or whether the privileged material influenced the content of the report. There is potential unfairness in this approach. It denies the cross-examiner the opportunity to test the expert's opinion by exploring whether the expert was wrong to disregard the material upon which he or she says no reliance was placed or which had no influence on the formation of the relevant opinion. Further in my view there is inherent unfairness in taking a witness's own statement as to what he or she relied upon in forming opinions or as to what may have influenced the formation of those opinions as the criterion by reference to which waiver is determined when such statements cannot be tested properly without resort to the privileged materials.
62 It has also been observed that there is no obligation to disclose matters on which the opinion expressed in a report is not based: Finance & Guarantee Co Pty Ltd v Auswild (Expert Evidence Ruling) [2019] VSC 665; (2019) 59 VR 288 at [39].
63 Finally, I turn to ANIP's submission based on r 23.13(h) of the Federal Court Rules to the effect that an expert report must comply with the Practice Note.
64 Rule 23.13 requires compliance with the Practice Note but it also provides that an expert report must set out separately each of the factual findings or assumptions on which the expert's opinion is based: r 23.13(1)(e). The Practice Note provides that an expert shall attach or exhibit to their report copies of documents that record any instructions given to the expert: para 5.2(c)(i). Further to that, at para 5.1 the Practice Note specifies that the contents of expert reports must conform with the requirements of the Code. The Code specifies at para 3(d) that expert reports should provide 'the assumptions and material facts on which each opinion expressed in the report is based [a letter of instructions may be annexed]'.
65 Practice notes provide guidance as to the practices of the Court. Whilst they complement particular legislative provisions or rules of the Court, it would be artificial to elevate the status of this Practice Note to requiring production of documents without regard to the principles of privilege and implied waiver. Further, acknowledging that r 23.13 incorporates compliance with the Practice Note, it should be observed that any failure to comply with r 23.13 of the Federal Court Rules does not automatically make any expert evidence inadmissible: Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 5) [2015] FCA 571 at [11].
66 In support of its contention that r 23.13 requires all instructions to an expert to be disclosed (and that in this case this extends to separate instructions provided by A&O), ANIP referred to the reasons of Lee J in BrisConnections Finance Pty Limited (Receivers and Managers Appointed) v Arup Pty Limited [2017] FCA 1268; (2017) 252 FCR 450 at [71], cited by the Full Court in New Aim Pty Ltd v Leung [2023] FCAFC 67 at [88].
67 It is to be recalled that Lee J was addressing a slightly different point, being the manner in which questions to experts by the instructor requesting a report might be formulated (r 23.13(1)(d)) and the need for transparency in that regard. In this case the Expert Reports do not purport to identify or respond to any question from A&O. They purport to respond to the questions asked of them by Corrs. The work of the expert is to attend to the questions 'the expert was asked to address' (original emphasis): BrisConnections at [71]. The iterations of the Corrs instructions which contain the questions that the experts have been asked to address in the relevant reports have been disclosed.
68 However, that does not resolve the question of the relevance of the Documents in the context of privilege and waiver. The fact that A&O prepared the Documents and not Corrs does not of itself shield them from production. That the Documents were prepared by different lawyers and some years previously are matters that are relevant in considering whether to draw an inference as to the influence of those Documents on the Expert Reports, but the involvement of different lawyers does not determine the privilege issue. That task remains to be undertaken having regard to the implied waiver principles summarised above.
69 Against the backdrop of those principles, I turn to the circumstances of the Expert Reports.