James v WorkCover Qld [2000] QCA 507

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - PROCEDURE BEFORE HEARING - WorkCover Queensland Act 1996 provided for provision of documents between parties on giving and responding to notice of claim and on holding conference with view to settlement - legal professional privilege preserved subject to certain exceptions - copies of documents "that may help the claimant to make a proper assessment of the offer" required to be disclosed - whether limited to documents on quantum, or extends to documents on liability

PROCEDURE - DISCOVERY AND INTERROGATORIES - PRODUCTION AND INSPECTION - GROUNDS FOR RESISTING PRODUCTION - LEGAL PROFESSIONAL PRIVILEGE - PARTICULAR CASES - loss adjuster's report obtained by respondent's solicitors and sent to applicant's solicitors - statement attached to report not sent to applicant's solicitors on grounds of legal professional privilege - whether statement privileged

PROCEDURE - DISCOVERY AND INTERROGATORIES - PRODUCTION AND INSPECTION - GENERALLY - OF WHAT PARTICULAR DOCUMENTS - investigative reports required to be disclosed - whether statement attached to and referred to in report a part of the report

WorkCover Queensland Act 1996 (Qld), s 280, s 283, s 285, s 288, s 293

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, cited

Boyes v Colins [2000] WASCA 344, 10 November 2000, cited

Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239, cited

Clough v Tameside and Glossop Health Authority [1998] 2 All E R 971, considered

Cockerill v Collins [1998] QCA 76; [1999] 2 Qd R 26, cited

Crisford v Haszard [2000] NZCA 73, 1 June 2000, cited

Ehrmann v Ehrmann [1896] 2 Ch 826, considered

Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1998) 168 ALR 123, considered

General Accident Assurance Company v Chrusz (1999) 45 OR (3d) 321, cited

Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, considered

Interchase Corporation Limited (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141, cited

Jones v Andrews (1888) 58 LT 601, considered

National Employers' Mutual General Insurance Association Limited v Waind [1979] HCA 11; (1979) 141 CLR 648, cited

Stanfield v Rosin [1966] Qd R 10, considered

R M Stenson, with C C Heyworth-Smith, for the applicant

[1] PINCUS JA: The applicant asks for leave to appeal against an order of the District Court dismissing an application made under s 291 of the WorkCover Queensland Act 1996 ("the Act"). At the invitation of the Court, counsel, Mr R M Stenson and Ms C C Heyworth-Smith for the applicant and Mr W P D Campbell for the respondent, argued the case as if it were an appeal. The application raises among other points questions as to the interpretation of some rather difficult provisions of the Act. The essence of the problem is that the legislation made wide provision for disclosure of documents and information, but subject to legal professional privilege; the documents and information required to be disclosed are of a kind which would, in the main, ordinarily be privileged.

[2] The applicant served notice of a claim for damages under s 280 of the Act and subsequently a compulsory conference was arranged under s 293, in anticipation of which the solicitors for the respondent, WorkCover Queensland, sent the applicant's solicitors documents including a loss adjuster's report. The report had attached to it a statement by one Lampard; but that was not sent to the applicant's solicitors and the question is whether it should have been sent to them.

[3] Chapter 5 Part 5 of the Act makes provision, in s 280, for giving the notice of claim which, as I have mentioned, was given by the applicant's solicitors; that has to be responded to by WorkCover and then s 293 requires a conference to be held with a view to settlement. At each of these three stages - the notice of claim, the response to the notice of claim, and the conference - the Act provides for information or documents to be provided between the parties. The relevant provisions are s 280(8), s 283 and s 293(5).

[4] The principal issue raised is whether and to what extent these obligations of disclosure, of information or documents, are subject to the protection of legal professional privilege. Another question of some difficulty is whether the information and documents which must be supplied are confined to those which relate to the issue of damages, or include information and documents having to do with the question of liability. What I have said to be the major point, that of privilege, is alluded to in s 288 and also in s 283(2). Unfortunately the provisions to which I have referred are unclear in their effect.

[5] The provisions which are, on the face of it, potentially relevant to the question of disclosure by WorkCover of the Lampard statement are s 283, s 288 and s 293(5); another sub-section, s 280(8), is of peripheral relevance only; it does not deal with disclosure by WorkCover, but with disclosure by the applicant. Reference to it is necessary only because one might expect that the legislature would have created a degree of symmetry or mutuality between the disclosure obligations of each side.

"A party is not obliged to disclose information or a document if the information or document is protected by legal professional privilege".

Then s 288(2) excludes from that protection "investigative reports, medical reports and reports relevant to the worker's rehabilitation", subject to exclusion of "statements of opinion other than expert opinion". The report of the loss adjuster is plainly enough an "investigative report", but Mr Campbell says that the Lampard statement is not part of it - a contention whose correctness is discussed below. If the Lampard statement is not part of an "investigative report", then it may still be caught by s 285(4)(d), which requires the response of WorkCover to the notice of claim to:

"be accompanied by copies of all medical reports, assessments of cognitive, functional or vocational capacity, or other material in WorkCover's possession not previously given to the claimant that may help the claimant to make a proper assessment of the offer".

[7] The mention of medical reports and the like suggests that the drafter had in mind documents about quantum, but documents concerning liability such as statements of witnesses on liability may also "help the claimant to make a proper assessment of the offer".

[8] Is the Lampard statement within s 285(4)(d), or s 280(8), or s 293(5)?

The answer to this depends in part upon attempting to reconcile s 285(4)(d) with s 288, subs 1 of which preserves, in general, legal professional privilege. I can see no satisfying way of reconciling these two provisions; if s 285(4)(d) is read as being wholly subject to s 288, then it may add very little. On that view, the documents mentioned in s 285(4)(d) need not be disclosed, if subject to privilege, unless they also fall within the description in s 288(2).

[9] Turning back now to s 280, one finds that a similar problem arises; s 280(8) requires copies of "all documents supporting the claim including, but not limited to" certain specified categories of documents to be sent and if that is read as subject to s 288 it will have little or no effect, except insofar as the documents it mentions are also mentioned in s 288(2).

[10] I incline to the view that, despite the width of the expression "all documents supporting the claim", in s 280(8) and "material ... that may help the claimant to make a proper assessment of the offer", in s 285(4)(d), each of them should be read as relating only to documents about damages and s 288(1) should be read as not protecting such documents. It follows that, in my opinion, the applicant cannot rely on s 285(4)(d) as a ground for production of the Lampard statement; it is not alleged to be a document relating to quantum and from the context of its mention in the report one would not expect it to have that character. That leaves for consideration s 293(5), which requires each party to give the other before the compulsory conference "copies of any documents relevant to the claim not yet given to the other party". Again, despite the width of the expression just quoted, it appears to me that the true intention was to require only the giving of documents having to do with the issue of quantum.

[11] Is the Lampard statement within s 288(2)?

All else failing, then, the question is whether the Lampard statement is, if it would otherwise be privileged, required to be disclosed under s 288(2) as part of an investigative report. The statement is said to be attached to the report but was, I infer, detached from it before being sent by the solicitors for WorkCover to their opponents. The question simply becomes whether (again, assuming the statement would otherwise be privileged) it had to be disclosed as being part of the report. In support of the applicant's contention, one might say that it is odd if a distinction is to be drawn between a statement which is included in the body of the report and one which is attached to the body of the report and referred to in it.

[12] Authority assisting the applicant's case is to be found in Stanfield v Rosin [1966] Qd R 10. There one of the questions in issue was whether, under The Evidence and Discovery Acts 1867, s 42B, a cheque butt could be tendered as part of a statement made by a deceased person. The cheque to which the butt related was signed by the deceased but the butt was neither written nor signed by him. Lucas J took the view that the cheque and butt, which were detached from each other at the time the question arose, "are sufficiently closely connected to form one document for the purposes of the Acts". Here, the connection is closer, for when the report was delivered the whole was attached together and there could only be said to be two documents rather than one on the basis of inspection of the content of the report's text. In my opinion the investigative report included the witness statement and whether or not this statement would, considered separately, otherwise have been privileged, the whole was a document obliged to be disclosed under s 288(2) of the Act. An English case giving some support to this view, in an indirect way, is Clough v Tameside and Glossop Health Authority [1998] 2 All E R 971.

[13] Mr Stenson argued that, in any event, the Lampard statement was not shown by any affidavit to be privileged. In Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689, it is said that:

"It is for the party claiming privilege to show that the documents for which the claim is made are privileged. He may succeed in achieving this objective by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence". (emphasis added)

Mr Campbell argued in effect that one should infer from the nature of the document that it was privileged, as being a statement taken under instructions of the solicitors in anticipation of litigation. He also suggested that if the Court were not satisfied on that point the just course would be to allow the respondent to adduce some evidence. I can see that it is unsatisfactory to decide the question of privilege or no without any proper information as to the circumstances in which the report was obtained. Because of the view I have reached that, whatever its status would otherwise have been as to privilege, the Lampard statement is part of the investigative report and therefore must be disclosed, it is unnecessary to reach a conclusion on the point of whether it would otherwise be privileged; but, on the present state of the evidence, it has not in my opinion, been shown to be privileged.

(1) The Lampard statement is not shown to be one covered by s 285(4)(d) or s 293(5)(a) of the Act, because those provisions relate only to documents relevant to quantum.

(2) The Lampard statement must be disclosed because it is part of an "investigative report" within the meaning of s 288(2).

[15] I would grant leave to appeal and allow the appeal, with costs to be assessed. I would set aside the orders made by the learned primary judge and order in lieu that a copy of the statement of John Lampard referred to in Exhibit B to the affidavit of Peter Koutsoukis affirmed on 7 August 2000 be disclosed to the solicitors for the applicant, and that the respondent pay the applicant's costs of the application filed in the District Court on 17 August 2000, to be assessed.

[16] THOMAS JA: This application raises the question whether the respondent ("Workcover") was obliged to provide a claimant ("the applicant") with a statement taken by a loss assessor engaged by Workcover's solicitors. The solicitors were engaged after Workcover received a claim from the applicant under s 280 of the Workcover Queensland Act 1996 ("the Act"), following an accident on 26 October 1997 when the applicant injured his back in the course of his employment.

[17] It may be inferred that the statement which is now sought by the applicant concerns the issue of his employer's liability in the event that negligence is required to be proved or disproved.

[18] The relevant sections of the Act are s 280, s 283, s 288 and s 293. These provisions to some extent cut across rights of legal professional privilege, although such a right is generally preserved by s 288(1). However the extent to which particular documents are required to be produced under other sections of the Act should be taken as an exception to that general protection. The question here is the extent to which those provisions do so.

[19] I agree with Pincus JA's discussion and conclusions on the construction of these provisions as stated in paragraphs [1] to [10] of his Honour's reasons. However I have reached a different conclusion on the question whether the witness statement formed part of the investigative report which Workcover supplied to the applicant.

[20] At all material times it has been asserted on Workcover's behalf that it was entitled to legal professional privilege in respect of that statement. It is not suggested that any waiver has occurred. Even if the statement is regarded as an integral part of the report, its exclusion from the report sent to the applicant's solicitors was equivalent, in my view, to obliteration or sealing up of part or the whole of that document. Any party entitled to assert legal professional privilege is entitled, in my view, to act in that way. The practice of sealing up those parts of documents to which privilege attends has been recognised as appropriate in the process of discovery in proceedings in court.[1] There is no reason why a party may not use a similar practice in protecting itself in a context such as providing such documents as are required to be provided under the Act. For this reason, I do not regard the case of Stanfield v Rosin[2] as relevant. It was concerned with the question of the extent of a document that the court should receive under s 42B of the Evidence and Discovery Acts 1867. In my view Workcover or its agent was entitled to separate the attachment (which it regarded as privileged) from the report which it did not regard as privileged, and send the latter to the claimant in conformity with its obligation to do so under s 285(4)(d) of the Act.

[21] The remaining question is whether the statement was the subject of a valid claim of privilege. On behalf of the applicant, it is urged that the document fails because its dominant purpose was not that of submission to solicitors for the purpose of obtaining legal advice[3] or for use in anticipated or existing litigation. It was submitted that the dominant purpose would be for use in settling the claim pursuant to the pre-trial procedures of the Workcover Queensland Act rather than for use in eventual litigation if they failed. Such an issue needs to be approached in the knowledge that once the applicant suffered an injury of this kind which was alleged to be the fault of the employer, the ultimate liability of the employer, and in turn of Workcover would be to common law damages for negligence. Realistically, the desire of Workcover and its agents at all material times would be to get rid of the claim as cheaply as possible; but from day one the end liability was for common law damages even if that might be averted by preliminary procedures. I do not think that this is altered by the importance that is cast upon pre-litigation procedures by the Act. The taking of the statement on the question of liability, in my view, may properly be inferred to have been for the dominant purpose of protecting the employer and itself if litigation ensued. Litigation was anticipated and the use of the document in litigation was the dominant purpose even if all parties might be thought to have preferred a negotiated settlement to a court determination.

[22] Counsel for the applicant further submitted that the action would be against the employer rather than Workcover, and that for the purposes of this particular exercise the "client" was Workcover rather than the employer. However, Workcover is master of the litigation in such a case. Workcover is entitled to gather evidence and prepare for trial on behalf of the employer. If the privilege is truly that of the employer, Workcover is entitled to assert the employer's privilege.

[23] I therefore consider that a sufficient justification has been shown for the claim. I would grant leave to appeal but order that the appeal be dismissed with costs to be assessed.

In late September 1997, the applicant injured his back, lifting, at work. In May 1999,[4] he gave the respondent ("WorkCover") a "notice of claim for damages"[5]. Thereafter, the circumstances surrounding the injury were investigated.

[25] A loss adjuster's report dated 27 October 1999 concerning investigations into the applicant's claim was sent to WorkCover's lawyers in response to their "instructions".[6]

[26] The body of that report reveals that a co-worker, Mr Lampard, was nearby when the applicant hurt his back, and that he heard the applicant call out that he had done so. The report also records that a "statement" by Mr Lampard was "attached".

[27] In mid-March this year, WorkCover's lawyers furnished the applicant's lawyers with a copy of the report, minus the Lampard statement. An accompanying letter described the report as one of several documents "required to be disclosed pursuant to s 293". The letter also contained an assurance that "we shall respond to the notice of claim in the near future" - presumably, a reference to WorkCover's responsibilities under s 285 of the Act.

[28] Section 285(1) obliges claimants and WorkCover to "endeavour to resolve" a claim "as quickly as possible". By s 285(4), within six months of receiving a "complying" notice of claim for damages, WorkCover must respond, stating the extent to which liability is admitted, and by making a genuine offer of settlement. Sub-section (4)(d) requires that WorkCover's notice be:

"accompanied by copies of all medical reports, assessments of cognitive, functional or vocational capacity, or other material in WorkCover's possession not previously given to the claimant that may help the claimant to make a proper assessment of the offer."

[29] A compulsory conference of the kind envisaged by s 293 was held on 28 June 2000. Pursuant to s 293(1), such a conference was to take place within three months after WorkCover had given the claimant its s 285 written notice if the claim had not been "settled by negotiation" in the meantime.[7] So it seems that WorkCover had provided its s 285 response before the end of June.

[30] In early July, after the compulsory conference, the applicant's lawyers pressed to see the Lampard statement. The request was rejected, WorkCover's lawyers claiming that the document did not form part of the report itself and was "privileged".

"If a party fails to comply with a provision of this chapter, a court may order the party to comply with the provision. ..."

[32] That "chapter" includes s 283(1)(b), s 285(4)(d) and s 293(5)(a), which impose on WorkCover differently expressed disclosure obligations.

[33] By s 283(1)(b), WorkCover had to give the applicant "any relevant information" it had "received" "about"[8] him within 30 days of receiving the information, "subject to s 288".[9]

[34] By s 285(4)(d), WorkCover's s 285 notice was to have been accompanied by "other material" in its "possession ... that may help the claimant to make a proper assessment" of its genuine "offer" to compromise.

[35] By s 293(5)(a), at least four days before the s 293 compulsory conference was to be held, WorkCover was to furnish the applicant with "copies of any documents relevant to the claim not yet given ..." to him.

[36] The arguments proceeded on two assumptions: that liability is disputed; and that the Lampard statement contains information germane to that contentious issue. In these circumstances, the questions are:

a. is the statement comprehended by s 283(1)(b), s 285(4)(d) or s 293(5)(a);

b. if so, is it privileged from disclosure by the s 288(1) "legal professional privilege" exemption;

c. if the statement attracts such privilege, does s 288(2) nonetheless mandate its production as an "investigative" report that "must be disclosed even though otherwise protected by legal professional privilege"?[10]

[37] On the shared assumptions, the Lampard statement (i) contained "information" "relevant" to liability; (ii) very probably constituted "material in WorkCover's possession" that "may help" the applicant "to make a proper assessment" of WorkCover's offer; and (iii) was a copy of a relevant document that had not previously been provided when the compulsory conference took place.

[38] In other words, privilege aside, by the time of the s 291 application, all three disclosure obligations had been triggered in respect of the Lampard statement, at least if s 283(1)(b), s 285(4)(d) and s 293(5)(a) are not to be read down to restrict their reach to material concerned exclusively with quantum.

[39] The statutory disclosure obligations are designed to enhance the quality and efficiency of the processes of resolving damages claims. Consensus is encouraged through emphasis on pre-litigation negotiation, including a compulsory conference and mediation where other attempts at agreement fail. These steps are to be informed by exchanges of material to facilitate early, fair compromise.

[40] A proper appreciation of the strengths and weaknesses of the respective cases on the issue of liability would usually contribute to the prospects of reaching agreement quickly on just terms. To interpret the legislature's choice of words in accordance with their ordinary meaning would therefore conform with a regime that attaches significance to avoiding the costs, delays, uncertainties and other troubles of litigation. Such a meaning extends to material germane to liability. Moreover, the Act contains a textual indication that the disclosure obligations extend beyond information about quantum.

[41] The determination of a contest concerning disclosure is approached by asking (i) whether the information is comprehended by the provisions creating the disclosure duties; (ii) if so, whether legal professional privilege protects the material from disclosure; and (iii) if so, whether the information answers the description "investigative reports, medical reports and reports relevant to the worker's rehabilitation" within s 288(2). If the answer to the second question is no, or the answer to the third is yes, the information is to be disclosed. An "investigative report", like the loss adjuster's report here, can be expected commonly to touch upon liability. So unless at least one of s 283(1)(b), s 285(4)(d) and s 293(5)(a) comprehends "investigative" reports, there would be no need for s 288(2) to mention such documents.

[42] In my opinion, the required disclosure is not restricted to material relating to quantum.

[43] Accordingly, unless the Lampard statement is privileged from compulsory production, s 283(1)(b), s 285(4)(d) and s 293(i)(a) mandated its disclosure. It therefore fell to WorkCover, as the party claiming the benefit of privilege, to establish it.

[44] The privilege claim was not supported by an affidavit deposing to facts tending to prove that the information Mr Lampard conveyed to the loss adjuster was sought for the dominant purpose[11] of submission to WorkCover's lawyers for confidential legal advice or assistance, or for use in litigation then "reasonably anticipated".[12] Rather the burden was sought to be discharged solely in reliance on a contention that it was an irresistible inference from the report itself that the statement was obtained primarily for "anticipated litigation and/or the obtaining or giving of legal advice".

[45] On its face, the report reveals that it was commissioned by WorkCover's lawyers for an investigation of the injury. Nothing in the report suggests that WorkCover then had any reason to anticipate a contest about liability. And those were early days: the report was brought into existence several months before[13] WorkCover gave its s 285 notice. [14] At that stage, eventual litigation was no doubt a possibility. But there is nothing to show that litigation then presented as a likely outcome of the processes that had to be endured before proceedings could be commenced. There was not even material to suggest that many back injury claims surmount the pre-litigation hurdles the Act erects and become litigious these days.

[46] Whatever the scope of litigation privilege,[15] a speculative possibility[16] or "vague apprehension"[17] that litigation may ensue is not sufficient to attract its operation. Nothing more emerged.

[47] WorkCover was not shown to be in the habit of referring investigator's reports to lawyers for advice.[18] And there was no evidence to justify an inference that the Lampard statement was procured for confidential use in the giving of legal advice, let alone for the dominant purpose of doing so.[19]

[48] But it is unnecessary to express a concluded view on the privilege point. For if the Lampard statement formed part of an investigative report within s 288(2), it had to be produced even if it were protected by such a privilege.

[49] The "attached" Lampard statement was, in my opinion, as much a part of the report as if the information it contained had been set out in the body of the report. On this issue, I agree with what Pincus JA has written.

[50] Accordingly, I agree in the orders Pincus JA proposes.

[1] Ehrmann v Ehrmann [1896] 2 Ch 826; Jones v Andrews (1888) 58 LT 601, 605.

[2] [1966] QdR 10.

[3] Interchase Corporation Ltd (In Liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 QdR 141; Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67; (1999) 168 ALR 123.

[5] See s 280 WorkCover Queensland Act 1996. ("the Act").

[6] As the report puts it. According to the report, a copy of it was to be sent to WorkCover.

[8] The statutory obligation is to "give a claimant any relevant information WorkCover has about the worker in relation to whom a claim is made". As this responsibility is "subject to section 288", it should, it seems, be understood as a duty to give information relevant to the claim as well as pertinent personal particulars such as age and employment history where such things are "relevant".

"(1) A party is not obliged to disclose information or a document if the information or document is protected by legal professional privilege.

(2) However, investigative reports, medical reports and reports relevant to the worker's rehabilitation must be disclosed even though otherwise protected by legal professional privilege ..."

[10] Of the three provisions, only s 283(1)(b) is expressed to be subject to s 288. But s 288 does not say, nor is it to be implied, that the section does not have significance for s 285(4)(d) and s 293(5)(a). Anyhow, there is a pronounced disinclination to construe generally expressed statutory powers and duties as derogating from legal professional privilege: Cockerill v Collins [1998] QCA 76; [1999] 2 Qd R 26; DC Pearce & RS Geddes, Statutory Interpretation in Australia, 4th ed (1996), par 5.20.

[11] Esso Australia Resources Ltd v FCT [1999] HCA 67; (1999) 74 ALJR 339.

[12] Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, 682; Crisford v Haszard [2000] NZCA 73, 1 June 2000 par 18; Cross on Evidence, Aust ed, par 25235; Phipson On Evidence, 15th ed (2000), par 20-33.

[14] Presumably the notice put liability in issue, although the material before the judge neither included the notice nor tended to prove its contents by secondary evidence.

[15] Its boundaries are controversial. See Phipson pars 20-05,06; 20, 29-32; General Accident Assurance Company v Chrusz (1999) 45 OR (3d) 321, 330-331, 341, 363-365; Boyes v Colins [2000] WASCA 344, 10 November 2000, par 38; Interchase Corporation Limited v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141.

[16] cf Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, 559.

[17] S B McNicol, Law of Privilege, (1992), p 45.

[18] cf National Employers' Mutual General Insurance Association Limited v Waind [1979] HCA 11; (1979) 141 CLR 648, 656; Brambles Holdings Ltd v WMC Engineering Services Pty Ltd (1995) 14 WAR 239, 241, 249.

[19] The timing suggests that the report (including the statement) was procured primarily for the purpose of deciding on the content of WorkCover's s 285 response. Perhaps the information was sought (and the document recording it created) mainly for confidential use by lawyers in the pre-litigation negotiations. In either event, the statement would, it seems, be privileged: cf Esso at par 35, referring to the privilege embracing "the provision of legal services". The claim to privilege, however, was not sought to be supported on such a basis.