APPEALED FROM: Bellenjuc Pty Ltd v Kentish Council [2011] TASSC 12

Procedure - Discovery and interrogatories - Discovery and inspection of documents - Production and inspection - Grounds for resisting production - Legal professional privilege - Waiver of privilege - Implied waiver - Solicitor's instructions to expert - Proof of expert delivered - No express reference in proof to or incorporation of instructing material - Assumptions of fact set out - Rule of court requiring expert proof to contain facts, matters and assumption on which opinion expressed - Relevant principles - No implied waiver.

Supreme Court Rules 2000 (Tas), rr515 and 516(2)(d).

Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1; Cole v Dyer (1999) 74 SASR 216; Australian Securities and Investments Commission v Southcorp Ltd [2003] FCA 804; British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524 applied.

Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475; Clark v Boden [2004] TASSC 119; (2004) 13 Tas R 198; Dean v More Than a Morsel Pty Ltd [2002] ACTSC 101; (2002) 170 FLR 432, considered.

Judgment Number: [2011] TASSC 58

1 This is an appeal from a decision of the Associate Judge. Bellenjuc Pty Ltd ("the Company") has sued the Kentish Council for damages in negligence arising out of an accident in April 2004. The Company's employee was driving a semi-trailer on a road on which the Council was carrying out maintenance works. It is alleged that as a result of these works, mud, gravel and other debris were on the road. It is alleged that the Company's employee drove onto the debris which caused the employee to lose control of the truck, which rolled over causing injuries to the employee and extensive damage to the truck.

2 In the course of the action, the Company delivered an undated proof of evidence of Alan Thompson, a consulting engineer, as to the cause of the accident. In the proof, Mr Thompson states that he has assumed "matters of fact". The Council sought, but was refused, the production for inspection of the "brief of materials upon which his opinion is based". By an interlocutory application, the Council sought the following orders:

"That within 7 days the plaintiff produce for the inspection of the legal practitioner of the defendant all documents relied upon by Alan Thompson as forming the basis for any of the assumptions of fact expressed in his expert report dated 2 February 2010, including, but without limiting the generality of, the following documents;

(a) any letter of instruction to Alan Thompson for the preparation of his expert report;

(d) any other report or information provided to him for the purposes of the preparation of his report."

3 The application refers to documents relied upon as forming the basis for the assumed facts set out in the proof. This is more limited than what was initially sought from the Company's solicitors. That request related to documents upon which the opinion was based. In any event, the issue in the application was whether the Council had established an implied waiver of the Company's claimed legal professional privilege in respect of the "brief of materials" to the expert. The Associate Judge found that it had not established waiver, and dismissed the application. This appeal is one by way of rehearing in which the Council needs to show error: Pumptech Tasmania Pty Ltd v CB&M Design Solutions Pty Ltd (No 2) [2009] TASSC 78.

4 The question of the brief to Mr Thompson seems to have been raised at a compulsory conference attended by the solicitors for the parties. Each solicitor wrote to the other shortly after the conference, and the letters appear to have crossed. The Council's solicitors wrote in the following terms:

"1 the proof of evidence of Alan Thompson dated 2 February 2010 makes a large number of assumptions of fact. Those facts, doubtless, were not assumed in a vacuum. Someone must have provided those facts to him or have asked him to assume them. It is inconceivable that someone did not provide him with a brief of materials upon which his opinion is based. That brief of materials should be disclosed as part of his proof of evidence. It has not been. Please provide a copy of it;"

5 The Company's solicitor responded to the discussion at the compulsory conference by stating in a letter: "I have reviewed the proof of Alan Thomson.[sic] There are no documents referred to in his proof. He has been asked to assume certain facts which are set out in his proof, in compliance with Rule 516".

6 Rules 515 and 516 of the Supreme Court Rules 2000 ("SCR") are of some importance in this appeal. The relevant parts are as follows:

"515 Expert evidence

(1) Unless at or before the trial the Court or a judge otherwise orders or directs, the oral evidence of an expert relating to any fact in issue involving expert opinion is not receivable in evidence at the trial unless the provisions of this Division have been complied with.

...

516 Service of statement of expert evidence

...

(2) If a party intends at trial to adduce the oral evidence of an expert witness, the party is to serve on every other party a statement signed by the witness containing -

(b) the qualifications of the witness to give evidence as an expert; and

(c) the substance of the evidence that the party proposes to adduce from the witness as an expert; and

(d) the facts, matters and assumptions on which each opinion expressed in the statement is based (a letter of instruction may be attached); and

(e) the reasons for each opinion expressed in the statement; and

(f) references to any literature or other materials specifically relied on in support of each opinion expressed in the statement; and

(g) any examinations, tests or other investigations relied on in support of each opinion expressed in the statement; and

7 Two aspects of the application to the Associate Judge need to be mentioned. The first is that, as is apparent from the application itself, the Council sought production of all documents relied upon by the expert as forming the basis of any of the assumptions of fact made. This was expressed to include, but without limiting the generality, documents which can be fairly described as the solicitor's brief to the expert. I am told that the intention was to direct the application to documents independently obtained or generated by the expert. The argument before the Associate Judge seems, almost totally, to have been focussed on the question of implied waiver of privilege in respect of the brief. At the start of this appeal, the Council raised the point that the Associate Judge overlooked the existence of such documents which, it is said, plainly would not be privileged.

8 Bearing that in mind, the second aspect is the question of the actual existence of any relevant documents. Although it is not referred to in the Associate Judge's reasons, I am told that the Company took the point as to whether the Council had proved that there were in fact any relevant documents. Consistent with the solicitor's letter, the existence of any such documents was not conceded. As odd and unedifying as it may appear, the Company claimed privilege in respect of documents the existence of which it did not acknowledge. Care seems to have been taken not to assert that none existed; it was just that their existence had not been established. The Company's arguments seem to have proceeded along the lines that in the event that an inference could be drawn from all of the material that relevant documents existed, then privilege should be assumed to attach to such documents, and the Council had not established that the Company had waived that privilege. The Council did not argue that any instructing documents would not be privileged.

9 The Associate Judge did refer to this issue of fact in his reasons, but his Honour plainly inferred that relevant privileged documents existed, and proceeded on that basis. Normally, in a dispute about documents said to be privileged, a description is given to the court or they are offered for inspection. Under SCR, rr394 and 395, a court has the power, which it "should not be hesitant in using", to inspect documents in order to assist with the process of determining their status: Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 688 - 689; Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 at 70 [52]. Theoretically at least, the matter could have proceeded in two stages. First, by resolving the issue of the existence of documents, and then secondly by determining the question of waiver, perhaps assisted by calling for their production. However, the Company's position made that approach, at the least, rather awkward.

10 In this appeal, the Company maintains its position that there is no evidence of any documents, as sought, having been provided to the expert. This is despite the fact that the implicit finding of the Associate Judge is not the subject of a cross-appeal. I should say, however, that the point was not pursued with any vigour. The Company's submissions in this appeal about the question of waiver and the application of r516(2) expressly proceed "on the assumption that documents were provided to Mr Thompson which he relied on as forming the basis for any of his assumptions of fact and they have not been served with his proof ...".

11 Because of the arguments as to waiver and the consequences of r516(2)(d), I need to refer to the contents of the expert proof. It is oddly constructed. It first contains an introductory section in which Mr Thompson gives very brief details of the accident. He notes that he is asked "to advise on the likely effect of the debris on the road's surface and its effect on the ability of the driver ... to control his vehicle and the semi-trailer being towed", that the scene has been viewed on Google Earth, and that he has referred to the photographs which are appended to the proof. This section concludes with the words, "I assume the following matters of fact: ...". After that, the report is divided into further sections with different headings. The headings are: "The Incident", "Prevailing Conditions", "Road Cross Section", "Obligations of Council" and "Conclusion". However, it is quite clear that not all of what is contained in those following sections is assumed facts. For instance, the second sentence under the heading "Obligations of Council", is an express statement of opinion as to the Council's obligations in respect of warning signs and other preventative measures, and plainly enough, the conclusion section is the nub of the opinion.

12 The Company contends that the following parts of the proof are the stated assumptions of fact: everything which follows the statement about assumed matters of fact up until the end of the first of three paragraphs under the heading "Road Cross Section", and then including the later first sentence under the heading "Obligations of Council". The Council submits that it is simply not possible to determine from the document itself what are the assumed matters of fact, as distinct from other matters. For instance, under the heading "Prevailing Conditions", there is a note of a "dispute as a matter of fact whether or not warning signs were in place ...". Further, when dealing with the "Road Cross Section", Mr Thompson refers to his "interpretation of the actual cross section at the time of the accident".

13 The proof is ambiguous. Some assumed matters of fact are obvious, others are not so obvious, and in some parts, what may be taken as assumed statements of fact are plainly not so. The Company's submission is arguably correct, but only up to a point. I would also observe that r516(2)(d) is not limited to "assumptions of fact". The sub-rule has a broader operation and extends to requiring that the witness statement contain the facts, matters and assumptions on which the opinion is based. It may be that the proof does not clearly delineate what parts of it are which of those things mentioned in r516(2)(d), but I think that what is the actual opinion is plain enough. In any event, the application before the Associate Judge was not one dealing with the sufficiency of the proof in the context of a pre-trial decision on the admissibility of the expert's oral evidence.

14 As to the question of waiver of legal professional privilege, the Associate Judge said, relying on Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 that "[common law legal professional privilege] is implicitly waived if the conduct of the client is inconsistent with the maintenance of the confidentiality of the material. The assessment of whether conduct is inconsistent, where necessary, is informed by considerations of fairness." After referring to a number of other authorities, including Clark v Boden [2004] TASSC 119; (2004) 13 Tas R 198, Cole v Dyer (1999) 74 SASR 216, and Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, (all which I will mention later), and immediately before setting out r516(2), his Honour said:

"[10] No unfairness, such as to result in an implicit waiver of privilege, will occur where the expert witness statement includes the assumptions of fact and complies with the other requirements for the content of the statement. There was no assertion that the expert witness statement, under consideration here, lacked the required content."[1]

"[14] In short, if an expert witness statement is based upon privileged material and the expert witness has not picked out and recorded the assumptions of fact upon which the opinion is based the privilege will be lost with the delivery of the report but where the assumptions of fact are set out the confidentiality which the privilege protects is not abandoned.

[15] Here the statement contains no reference to the source materials and sets out the assumptions upon which the opinion is based. Accordingly, the delivery of the report is not inconsistent with the maintenance of the privilege."

It is true to say that the Associate Judge made no reference to any documents independently obtained or generated by the expert. His Honour's reasons were confined to the issue of implied waiver of privilege in respect of the solicitor's brief.

16 In his reasons, the Associate Judge set out the Council's basic submission, which was confirmed to me as the "essential argument". His Honour said:

"[9] Counsel for the defendant submitted that delivery of the report and the maintenance of the privilege is inconsistent when informed by considerations of fairness. He said:

'... but the question in this case, that is, inconsistency, considerations of fairness, is what did he rely upon; how has he reached his opinion; and for the purpose of preparing for trial do we put on an expert report contrary to his; do we seek to cross-examine him; how do we know if his reasoning process is soundly based; how do we know if he has made an erroneous assumption of fact; how do we know if he has assumed too much into the facts? None of that can be tested and that is inherently unfair'."

17 The grounds of appeal are that the Associate Judge erred in law in determining that the Company had not waived legal professional privilege in respect of documents and information provided by it to its expert, and in "failing to determine that considerations of fairness require the delivery, with the proof of evidence, of all material supplied" by the Company to the expert for the purpose of preparing his proof of evidence.

18 I should note at the outset that the debate concerns common law principles. Division 1 of Part 10 of the Evidence Act 2001 deals with client legal privilege. It concerns the adducing of evidence, and to the extent that it concerns civil proceedings, it does not apply to pre-trial steps and interlocutory matters except where evidence is adduced: Mann v Carnell (above); Esso Australia Resources Ltd v Commissioner of Taxation (above) at 59 [16], 100 [149].

19 As to the merits, counsel for each party quoted quite a number of passages from the judgments in Attorney-General (NT) v Maurice (above). Each said that the passages supported their respective position. This is no doubt because despite there being a broadly unified approach, the four separate judgments (Gibbs CJ, Mason and Brennan JJ, Deane J and Dawson J) reflect rather different treatments of the issue. The case can be taken as authority for the proposition that the determination of whether there has been waiver of legal professional privilege by imputation or implication of law, is based on notions of fairness.

20 Maurice involved a claims book filed and served in proceedings for the Aboriginal Land Commissioner, and which was required by virtue of a general practice direction. Privileged source materials had been used in preparing the book, but they did not form part of it and were not mentioned in it. In those circumstances it was held that by lodging and distributing the book and making limited reference to it in the actual proceedings, the claimants had not waived their legal professional privilege in relation to the source materials. The general principles to be applied were explained by Gibbs CJ at 481, Mason and Brennan JJ at 487 - 88, Deane J at 492 - 93 and Dawson J at 499.

21 Later, in Goldberg v Ng [1995] HCA 39; (1995) 185 CLR 83, fairness was confirmed as "the governing consideration" in whether the conduct of the person entitled to the benefit of the privilege, gave rise to a question of implied waiver: see Deane, Dawson and Gaudron JJ at 95 - 96. In the later case of Mann v Carnell (above), the emphasis was changed from one of fairness to that of inconsistency of conduct, although the process was said to be informed by considerations of fairness. In truth, the change was more fundamental with fairness giving way to inconsistency as the primary test. At 13 [29], the plurality said:

"Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which privilege is intended to protect. ...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."

22 The position was summarised by Gleeson CJ, Gummow, Heydon and Kiefel JJ in Osland v Secretary, Department of Justice (2008) 234 CLR 275 at 296 - 297 [45] as follows (omitting references):

"Waiver of the kind presently in question is sometimes described as implied waiver, and sometimes as waiver 'imputed by operation of law'. It 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."

23 Accordingly, after Mann v Carnell the determining factor "is the inconsistency between the relevant act of the holder of the privilege and the maintenance of the confidence that is essential, not a broad balancing process based on fairness", although fairness remains a relevant consideration in the assessment of inconsistency: see DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384; (2003) 127 FCR 499 at 505 [14] and following, Australian Agricultural Co Ltd v AMP Life Ltd [2006] FCA 371 at [28] - [29], and the discussion by Underwood J (as he then was) in Clark v Boden (above) at 200 - 202 [7] - [15].

24 In Legal Professional Privilege in Australia, 2nd ed, (2005) at 162, Doctor Desiatnik, described the operation of the test as follows:

"Thus, where maintaining legal professional privilege over communications is clearly inconsistent with the actions of privilege holder, the privilege will be found to have been impliedly waived, even where there is no unfairness in doing so. Conversely if such actions are clearly unfair whilst privilege is retained, waiver will still not be imputed if that conduct is nevertheless consistent with such retention. Fairness need only be resorted to where the inconsistency test is inconclusive, or to reinforce a finding over waiver based on the inconsistency test, for the two tests may certainly give the same result."

25 The role of "unfairness" was considered by Keane JA (with whom Mackenzie J agreed) in Watkins v State of Queensland [2007] QCA 430; [2008] 1 Qd R 564. This was in the present context; that is, asserted waiver of privilege in relation to the instructions and briefing material, by the delivery of an expert report. Statutory considerations arose, but the broader principles were discussed. At 590 [55], his Honour said:

"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] HCA 39; (1983) 153 CLR 52; The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (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." [My emphasis.]

26 His Honour went on to say that in point of authority, the broad proposition referred to was "distinctly inconsistent" with the High Court's decision in Attorney-General (NT) v Maurice (above), and later, at 593 [59], after discussing fairness issues, concluded that in the case before him, there was no "inconsistency" amounting to an abuse of the putative privilege.

Implied waiver of privileged instructions by delivery of expert proof

27 It is well settled that privilege in respect of a brief of instructions to an expert does not lose its privileged status by the mere delivery of the expert's report or proof of evidence. Even a mere reference to a privileged communication is not necessarily inconsistent with the maintenance of the privilege so as to amount to an implied waiver. Something more is required. As Aldous LJ in Bourns Inc v Raychem [1999] 3 All ER 154 at 166 put it, "there must at least be reference to the contents and reliance."

28 Where there has been reliance on or incorporation of parts of privileged material in the sense that I will shortly discuss, the question is whether it is inconsistent for a party to rely upon, and so to waive privilege in respect of one part of the materials, without also being taken to have waived privilege in respect of the other: British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197; (2002) 7 VR 524 at 564 [121].

29 At this point, it is convenient to refer to the summary of the relevant principles carried out by Lindgren J in Australian Securities and Investments Commission v Southcorp Ltd [2003] FCA 804. It has been referred to with approval on many occasions, and on ones not restricted to the Federal Court jurisdiction; see for instance Roads Corporation v Love [2010] VSC 253; Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd [2009] QSC 233; Integral Energy Australia v EDS (Australia) Pty Ltd [2006] NSWSC 971; ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859; (2007) 69 NSWLR 577; R v Ronen [2004] NSWSC 1305; Hughes v St Barbara Mines Ltd [2006] WASC 145.

30 Lindgren J's summary is at [21] and is in these terms (omitting references):

"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:

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:

3 Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications:

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;

5 Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents;

6 It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report;"

31 I would apply the principles set out to the necessary extent, subject to the one reservation that Lindgren J made no reference to Mann v Carnell (above). White J made the point in relation to paragraph number 4 of the summary in New Cap Reinsurance Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [53]. The question is not merely whether the 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 ... in such a way that the use or service of the report would be inconsistent with maintaining privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure ...". See also Watkins v State of Queensland (above) per Jerrard JA at 578 - 579 [14].

32 It is the use of the privileged material to "influence the content" of the report or proof which is the critical factor in Lindgren J's paragraph number 4. That same expression was used in Dingwall v Commonwealth of Australia [1992] FCA 627; (1992) 39 FCR 521, Sandvik Mining (above) adopting Lindgren J's summary; and also by Crawford J (as he then was) in Jessup v Gorjup unreported serial no 139/1997 referring to Dingwall.

33 However, the nature of the required connecting factor between the instructions and the proof or report has been described in various ways. As to this State, in Atkinson v T & P Fabrication Pty Ltd [2001] TASSC 38; (2001) 10 Tas R 57, Evans J at 58 - 59 [4], said that "The requisite inconsistency may be manifested when a party indicates an intention to rely upon evidence of a witness which is based upon privileged material provided to that witness." [My emphasis.] The same phrase was also used by Crawford J in Jessup v Gorjup (above), and by Underwood J in Clark v Boden (above) at 203 [18].

34 The Queensland Court of Appeal in Meninga (1992) 66 A Crim R 199 at 203, in ruling that privilege had been waived, referred to the opinion being "based" on the privileged material. Similarly, in Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397, Mansfield J at 400 spoke of whether the privileged documents provided "any foundation for the opinions expressed by the expert".

35 A different expression was used by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc (above) at 520 [61], where his Honour said that he would "express the matter as including the laying open of the confidential communication to necessary scrutiny, and by so doing (that is by expressly or impliedly making an assertion about the contents of the communication or laying the communication open to scrutiny) the inconsistency enunciated by Mann v Carnell is brought about." [My emphasis.] This formulation was approved of by the Full Court of the Federal Court (Kenny, Stone and Edmonds JJ) in Commissioner of Taxation v Rio Tinto Ltd [2006] FCAFC 86. At [52] their Honours said: "Where the privilege holder has put the contents of the otherwise privileged communication in issue, such an act can be regarded as inconsistent with the confidentiality that would otherwise pertain ...".

36 In whatever manner it is expressed, the notion is, I think, clear enough. Leaving aside for the moment consideration of compulsion and voluntariness, there is a sufficient level of inconsistency with the maintenance of privilege if there has been reliance on the privileged information as a basis or foundation of the opinion, or incorporation of it so as to make it part of the issue. This may have been a case in which it is too early to resolve factual the issue of reliance or incorporation: see par6 of the summary in Southcorp above. However, I do not understand there to be any argument from the Company, that if it be assumed that privileged documents and instructions exist, the proof of Mr Thompson has not been based on those instructions to the extent of establishing the existence of the required inconsistency in conduct.

37 In any event, I think it is reasonably clear that the proof has been based on, or incorporates, instructions given. The Company's list of documents which was delivered before Mr Thompson's proof, contains references to a number of reports from firms of insurance assessors. I would infer that at least some of the brief to Mr Thompson was made up of these reports. The terms of the proof itself suggest reliance on materials provided, and the solicitor's letter confirms that the expert was asked to assume certain facts. The debate comes down to the question of inconsistency of conduct, looked at in the light of fairness and the impact of rules 515 and 516(2). The Company argues that to the extent that the proof is based on privileged information, it is so because of compliance with r516(2). It says that the delivery of the proof is therefore not inconsistent with the maintenance of confidentiality, and no unfairness arises from its conduct. The Council has not argued that the proof goes beyond what is required by r516(2)(d). I turn to a consideration of the rules.

38 In Goldberg v Ng (above) the High Court made it clear that an important fact is whether the disclosure of the privileged material is made under compulsion or is voluntary. It is this aspect of the operation of the Rules which needs to be considered. Rule 515 makes oral expert evidence not receivable unless there is compliance with (amongst other provisions) r516(2). Rule 516(2)(d) makes it necessary for a party intending a trial to adduce evidence of an expert witness, to serve a statement signed by the witness containing "the facts, matters and assumptions on which each opinion expressed in the statement is based". The sub-rule specifically permits a letter of instruction to be attached.

39 I have already set out the relevant parts of the Associate Judge's reasons, in which his Honour said that if the expert has not picked out and recorded the assumptions of fact upon which the opinion is based, privilege will be lost with the delivery of the report, but where the assumptions of fact are set out the privilege remains. His Honour had earlier referred to Clark v Boden (above), at 203 [19]. There, Underwood J discussed r516. His Honour said:

"Preparation for trial is governed by the Supreme Court Rules 2000. Rule 516 requires a party to serve on every other party a reasonable time before trial, 'the substance of the evidence that it is proposed to adduce from the witness as an expert'. There would have been compliance with that rule if the substance of the contents of the statements had been asserted in the proof as assumptions of fact. In that event, it is unlikely that there would be a claim of inconsistent conduct."

40 The reference by Underwood J to compliance with the rule being achieved "if the substance of the contents of the statements had been asserted in the proof as assumptions of fact" needs to be explained in the context that at the time of the judgment, that was all which r516 essentially required, apart from the expert's personal details and qualifications. The rule was substantially amended to its present wording with effect from 2 May 2007. Rule 515 remained in the same terms. Underwood J went on to refer to Cole v Dyer (above), a case which his Honour said he found to be of no assistance in the matter before him because of the special rule of court involved (at [26]). However, Cole v Dyer may now have greater weight because of the changes effected to r516.

41 The court rules under consideration in Cole v Dyer required the delivery, within a certain time after the close of pleadings, of a full copy of all expert reports in the parties' possession. The rules provided that no party was to adduce expert evidence at trial unless (among formal things) the substance of the evidence and the particulars identifying the material on which the expert opinion was based, were set out. A proof was delivered by the defendants which referred to facts contained in statements made by a defendant to loss assessors, those statements being privileged. The plaintiff sought copies of the statements.

42 Remembering that the case was decided before Mann v Carnell (above), Doyle CJ referred to Maurice's case and to Goldberg v Ng (above) and said at 224 [35]:

"The fact that an expert report is required to be disclosed by operation of r38.01, and that the disclosure is not made voluntarily, is a relevant matter in deciding whether fairness requires that a waiver of privilege in relation to source materials be imputed. But the mere fact that the disclosure is not made voluntarily cannot be decisive, if the ultimate question is one of fairness. Each case has to be considered on its facts."

43 His Honour considered a number of other authorities, and noted the issue as relating to the provision of privileged material to an expert for use in conjunction with the provision of a report by that expert, which material has been relied upon in part as a basis for the opinion, and where the material is set out in a report delivered pursuant to the relevant rule. Having noted that the report in question appears to meet the requirements for its content, his Honour said:

"[46] As the ultimate question is one of fairness, it is not possible to lay down a universal rule that will determine whether or not waiver is to be imputed. ...

[47] The judgments of the High Court in Goldberg indicate that an important matter is whether the disclosure of the privileged material is voluntary. The relevant disclosure here is the disclosure of the expert report, pursuant to the requirements of r38.01. The privileged material in question is disclosed as the result of the disclosure of the report that is required by r38.01.

[48] However, because the ultimate issue is one of fairness, the question of whether the disclosure is voluntary or not cannot be decisive when considering whether a waiver of privilege is to be imputed. The fact that the disclosure is not voluntary is important, but not decisive."

44 One of the cases considered by Doyle CJ was Sevic v Roarty [1998] NSWSC 462; (1998) 44 NSWLR 287, in which case an order had been made for the filing of expert reports, as provided for in the rules. One report referred to a folder of documents provided to the expert, production of which was sought by the other party. Sheller JA decided the issue on the basis of the provisions of the Evidence Act, saying that the disclosure was under "compulsion of law" within the meaning of the Evidence Act 1995 (NSW), s122(2)(c). At 296, his Honour said he did not think that at common law it was important whether the disclosure was regarded as voluntary or involuntary. Fitzgerald AJA decided the case on the basis that the report was inadmissible, and so no question of fairness arose. Powell JA, however, dealt with the point on the basis of the common law, apparently taking the view that subject to overriding questions of fairness, waiver should not be implied because disclosure pursuant to a court order was not voluntary. At 301 his Honour said:

" ... the position would seem now to be that waiver is not to be implied or imputed where the document the delivery of which is relied upon to found the implication, ... of waiver was delivered - whether to the other party to the litigation or to a third party - pursuant to an order of a court or otherwise under compulsion of law unless the documents be later tendered in evidence on the hearing of the proceedings in which the parties are involved, or otherwise used in such a way on the hearing of those proceedings as would make it unfair to the other party not to treat the privilege as having been waived." (See also 308.)

45 In reaching this conclusion Powell JA referred to the decisions in British Coal Corporation v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113, in which it was held that for the purposes of civil proceedings, privilege should be maintained for documents made available by a party in accordance with a duty to assist in the conduct of criminal proceedings against the other party, as any notion of waiver, express or implied, would be contrary to public policy. A further case mentioned by Powell JA was Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529, in which it was held by a single judge that there had been no implied waiver of a claim for privilege over documents which had been produced to a local government inspector under the threat of the exercise of the power of compulsory disclosure.

46 From Sevic v Roarty (above), the possible distinction between compulsion by way of court order and compulsion by way of compliance with the court rules emerges. I observe at this point, that even in the case of a court order, it is usually in terms that the party, within a specified time, serve any report or proof (or the like) upon which it wishes to rely. Compliance with a court rule was discussed by Miles CJ in Dean v More Than a Morsel Pty Ltd [2002] ACTSC 101; (2002) 170 FLR 432. The relevant rules required that expert reports be served within a particular time, and that the oral evidence of any expert was not admissible unless the other evidence was covered by the report so served. The service of the report in accordance with the rule made the report admissible as evidence of the opinion, and made any evidence of any fact upon which the opinion was formed admissible as long as oral evidence by the expert of that fact would be admissible.

"I think that for the purpose of the present application the weight of authority and the extent to which principle can be derived from it is in favour of fairness being the over-riding consideration and the presence or absence of compulsion is simply one of the factors necessary to take into account when considering whether fairness requires the privilege to be regarded as waived. That seems to me to be the principle in the majority judgment in Goldberg v Ng." [My emphasis]

48 Later, having set out the terms of the rules, his Honour noted that there was no sanction for a failure to serve copies of reports except as provided for by way of a lack of admissibility of the oral evidence, and continued at 438:

"[24] On the other hand, compliance with the obligation gives the serving party a distinct forensic advantage (over and above not being disentitled from calling the expert to give oral evidence). That party will be entitled to have the report admitted as evidence of the author's opinion and also of any evidence of any fact upon which the opinion is formed so long as oral evidence by the author of that fact would be admissible.

[25] Accordingly, in my view, a decision to serve an expert's report in compliance with O 39 r 46 is not a decision made under compulsion. It is made consequent upon a tactical forensic decision to call the expert at trial or to tender the report at trial. The party does not have to make a decision to do either. Of course, a party may choose to serve a report for some other legitimate reason, but, by definition, the choice is not made under compulsion.

[26] The question for determination then becomes whether a party, having disclosed an expert's report, should be imputed to have disclosed documents containing information upon which the opinion expressed in the report is based. Or put another way, does fairness require disclosure of documents containing such information?"

49 This approach of regarding compliance with the rule as not involving compulsion, finds support in the earlier English case of Comfort Hotels Ltd v Wembley Stadium Ltd [1988] 1 WLR 872. In discussing a rule of court which enabled an order to be made requiring prior service of written witness statements, Hoffmann J (as he then was) said at 877 - 878:

"It does not mean that [the party] can be compelled to disclose any document or information. Anything which he does not wish to disclose he may still keep to himself. It is only if he wants to disclose the information by way of evidence at the trial that he may now be required as a pre-condition to disclose it in written form in advance. What the rule therefore does is to advance the moment at which a party must examine the information he has gathered for the purposes of the trial and decide what he is going to use and what he is going to withhold."

50 In this case I am dealing with an issue of asserted implied waiver in respect of material associated with a report which has been delivered in purported compliance with the rules, and without an order or direction having been made. Even assuming that the disclosure in such a case is involuntary, as suggested by Doyle CJ in Cole v Dyer, and not voluntary as explained by Miles CJ in Dean, it is common ground in that debate that compulsion or voluntariness is not decisive, but is a relevant factor. As has been shown, that was also the view of Powell JA in Sevic, a case in which an order had been made. The question remains though as to what weight is to be attributed to this factor, where an order or direction has not been made.

51 It seems to me, with respect to others who might have a contrary view, that there are elements of both compulsion and voluntariness in compliance with the rule. Looking at it from the perspective of inconsistent conduct, I would think that there is more of compulsion in the fact of compliance, than there is of voluntariness. Whilst it is true that the party makes a choice as to whether any report is to be served, the simple fact remains that unless a judge can ultimately be persuaded otherwise, the evidence is not admissible absent compliance.[3] I would follow the approach of Doyle CJ in Cole v Dyer, to the extent of accepting that there is a significant degree of compulsion in complying with the rule. That is a weighty factor in assessing inconsistency of conduct.

52 Notwithstanding Mr McElwaine's urgings to hold to the contrary, I respectfully agree with what Underwood J said in Clark v Boden as set out above at [39]. There is unlikely to be inconsistent conduct where a proof is served which sets out matters in compliance with the rules. In strict terms his Honour's comments in that case might amount to obiter dicta, but in my view they correctly describe the position. It is very difficult to conceive of the required inconsistency of conduct arising from setting out in a statement of the proposed evidence, the facts, matters and assumptions as required by r516(2)(d). If a letter of instruction is attached, then obviously the privilege in respect of that letter is waived. However, I agree with the Associate Judge's statements in par[14] of his reasons, set out at [15] above. That is, if an expert witness statement is based upon privileged material and the expert has not noted the assumptions of fact upon which the opinion is based the privilege will be lost with the delivery of the report, but where the assumptions of fact are set out the privilege is not waived. On that basis, the Council would fail in this case, although that is not the complete end of the matter. The question of fairness needs to be considered in the assessment of inconsistency.

53 The approach which Gibbs CJ took in Maurice at 484 was that unfairness would arise so as to imply a waiver of privilege where "the disclosure of a document, or the giving of evidence, without the disclosure of associated material, would give a partial or misleading picture, or would otherwise prejudice or embarrass the [party] in the conduct of the case".

54 Ordinarily, it is this type of unfairness which would be the subject of scrutiny in any particular case. In British American Tobacco Australia Services Ltd v Cowell (above) at 564 [121], the court said that, as their Honours apprehended it, privilege is impliedly waived if the associated material is necessary to a proper understanding of the disclosed material. Accordingly, where the associated material is necessary for a true understanding of the report or proof, or where the picture may be misleading or partial only if the associated material is not produced, waiver will be implied: see also Tirango Nominees Pty Ltd (above) at 400; Lovegrove Turf Services Pty Ltd v Minister for Education [2003] WASC 213 at [21].

55 In this case I am not able to accept that the expert proof provides a misleading or partial picture, or that a true understanding of what is being asserted cannot be obtained without reference to further material. For a start, and with respect to Mr Thompson, his opinion concerns a matter which might seem not to involve difficult or complex notions or thought processes. This is shown in the two key parts of the proof, one being contained in the section relating to the Council's obligations, the second being the very last paragraph in the conclusion section. In the first, Mr Thompson says that the effect of leaving excavated material, particularly clay which turned to mud on the road, without any warning of slippery conditions is, in his opinion, culpable. He concludes that the Council's conduct "in leaving debris on the roadway in particular as a result of their road works caused conditions that rendered the road surface unsuitable for the safe transit and passage of the ... vehicle and trailer". Further, a good proportion of the facts set out in the opinion, whether assumed or asserted, would be within the Council's own knowledge.

56 In the course of Mr Thompson's evidence, it might be revealed that facts, matters and assumptions not revealed were relied on, but that is a matter for the trial judge to deal with: see Cole v Dyer (above) at 227 [51]. Those matters seem to me to relate more to admissibility and weight than the present issue. An absence of a stated assumption about, for instance, the vehicle's speed, goes more to the validity and weight of the opinion than understanding what it is. It may also be that assumed facts, or matters on which the opinion is based are shown not to be true, or to have different implications. That again is a matter for the trial judge, and a common issue in relation to expert evidence at trial.

57 It does not take very much to divine that the plaintiff's case is that leaving clay and mud on the road makes the surface more slippery, and that this is something which would create a foreseeable risk to road users. In the circumstances, I do not think it would be difficult to decide whether any countering expert evidence would be required, if available.

58 Although clumsily formatted, the proof purports to comply with the rules. There is no argument to the contrary. More particularly, for the reasons I have given, it is capable of being understood and acted on to the extent necessary at this stage of the proceedings, without recourse to other documents. Accordingly, I take the view that there is no implied waiver with respect to any letter of instruction and accompanying documents.

59 In this appeal, Mr McTaggart for the Company submitted that the Council had not pursued this aspect of its application before the Associate Judge, and should not be permitted to pursue the matter on appeal. Mr McElwaine did not say anything in reply about this, and made no application to amend the notice of appeal. Generally speaking, I would not have thought that in this sort of situation, a party would be prevented on appeal from pursuing a point or raising a particular argument. The interlocutory application encompassed the matter. Even assuming that the scope of the application beyond the solicitor's brief to the expert was completely overlooked, the case may be one where the appellate court "may find it expedient and in the interests of justice to entertain the point": Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 497. No questions arise of the possibility of further evidence at the hearing having been required, or of the different conduct of the application by the Company in any relevant sense.

60 However, the difficulty I see with the Council's position is that it does not complain in the grounds of appeal that the Associate Judge has erred in any way in relation to this class of documents. Given that there seems to have been no argument about such documents, and absent any allegation of error, it seems to me that notwithstanding this is an appeal by way of rehearing, I am constrained to refuse to entertain the point.

61 It follows from what I have written that the appeal is dismissed.

[1] The version of the judgment which was in the appeal book does not contain the second sentence of this paragraph. The second sentence appears in the present Austlii online version. I have not been able to find any assistance from this version of the judgment, or from the file, as to when and why this addition was made. Nothing turns on the addition.

[2] These two paragraphs are numbered 13 and 14 in the version of the judgment which is in the appeal book. In the online version, a short paragraph consisting of a single sentence has been added, which is now par[13]. Again, nothing turns on this addition.

[3] I also note that compliance with rr515 and 516(2) would (indirectly) entitle the tendering of a certificate of expert evidence as provided for in the Evidence Act 2001, s177.