National Employers' Mutual General Insurance Association Ltd v Waind

I agree that, for the reasons appearing in the judgment of my brother Mason, this appeal should be dismissed.

This is an appeal from a judgment of the Court of Appeal dismissing an appeal from an order of Carmichael J. in the Supreme Court of New South Wales whereby his Honour disallowed a claim to legal professional privilege made in respect of documents listed in a subpoena duces tecum and ordered the production of those documents. By Pt 36, r. 13 of the Supreme Court Rules an objection to production of documents required to be produced on a subpoena may be made on grounds of privilege.

The action was one in which the plaintiff sued the defendant in negligence for damages for personal injury. At the trial the defendant issued and served on the appellant, a company carrying on business as a workers' compensation insurer, a subpoena duces tecum requiring it to produce to the Court.

All documents, records, statements, certificates, medical reports, x-rays and the like held by your Office in connection with the Workers' Compensation claim made by the abovenamed Plaintiff, whilst employed by Goodyear Tyre & Rubber Co., following the accident in which the Plaintiff was involved in on 27th June 1974 at Penrith.

The appellant produced, without objection, a file of documents in answer to the subpoena. But in relation to another file brought into court under the subpoena it objected to production upon the ground of legal professional privilege. The documents consisted of five reports from a firm of loss assessors, two reports on X-rays taken of the plaintiff and six reports from medical practitioners. In support of the claim, the trial judge heard evidence from Mr. Tritton, an officer of the appellant.

Mr. Tritton gave the following evidence in his examination-in-chief:

Q. What is the basis for payment of compensation for a person injured at work or what documents do you rely upon before payment is made to a worker? A. We require a medical certificate from the worker's treating doctor.

Q. Together with a claim form from his employer? A. Yes.

Q. And there are other documents obtained from other doctors and assessors, are there not? A. That's correct.

Q. What is the purpose of obtaining those documents? A. To decline liability and to defend the matter in the Workers' Compensation Commission.

Q. Is any payment made on those documents? A. A payment is made by the certificate produced by the worker and the claim form.

In cross-examination Mr. Tritton said that the plaintiff had not at any time made an application for a determination of compensation in the Workers' Compensation Commission. He went on to give this evidence:

Q. From your experience I think you will agree that about 90 per cent of the claims which are made by workers for compensation never in fact go to litigation in the Workers' Compensation Commission, do they? A. That's correct, yes.

Q. You have heard some things said about some documents which have been produced on subpoena? A. That's right.

Q. And those documents, the subject of the subpoena, are obtained by the insurance company purely as an administrative matter, are they not? A. The purpose for which they are obtained would be to decline liability. Now depending on what was received in the reports, obviously this has not been declined - and it would depend on the report coming in.

Q. At the time you order the various reports you do not know whether there will be litigation or not? A. No.

Q. As a matter of fact, you do this as a matter of administrative procedure, don't you? A. Well, not really, no. You assess the file when you see it and you give an opinion and you then obtain a report. The purpose of obtaining the report is to decline liability if the evidence obtained in that report is sufficient to decline liability.

Q. That is the insurance company which obtains that report? A. That's correct.

He then gave the following evidence in answer to the plaintiff's counsel:

Q. Mr. Tritton, is the situation this that periodically you obtain doctors' reports and investigators' reports for the purpose of determining whether or not there is material which would indicate that you should refuse to continue paying compensation? A. It is not a periodical - it is the assessment of the person handling the file as to whether or not, like, say for example I thought this was going on too long and I thought we should get a report and decline it if the evidence is sufficient.

Q. I suppose it was in your contemplation that if the report was such that you did decline liability, litigation would then in all probability follow? A. That's right, yes.

Q. Were the reports submitted to the company's solicitors? A. No. They never are. Well, when I say "never" in 99 per cent of the time they are decisions made by an officer with the company.

The documents here were brought into being as part of the business of the Workers' Compensation insurer, firstly to decide whether its insured was liable for claims made upon it; secondly, for use in opposing any application made by the claimant if and when the Workers' Compensation insurer refused to make payments as claimed, and if the claimant decided to make an application to the Workers' Compensation Commission. I see the first use of the medical reports and of the investigators' reports being to determine the Workers' Compensation insurer's liability to pay in the ordinary course of its business. Of course, if and when litigation came about, those documents would constitute the basis for the Workers' Compensation insurer's brief in opposing an application before the Commission. His Honour then applied the decision of this Court in Grant v. Downs [1] and concluded that the documents were not privileged. 1. (1976) 135 C.L.R. 674.

The Court of Appeal considered that there was ample evidence to justify the findings of fact made by the trial judge and that there was nothing to undermine the conclusion which he reached. The Court held that the case was covered by Grant v. Downs, in particular by the observations of Stephen, Mason and Murphy JJ. [2] .

The arguments which failed to win the acceptance of the Court of Appeal were reiterated in this Court. Once again a challenge was mounted to the trial judge's finding of fact. To this was added the submission that the Court of Appeal had misdirected itself by omitting to decide the issue of fact for itself: see Edwards v. Noble [3] . The appellant's case was then put on the footing that the documents were brought into existence for a single overriding purpose which included use in anticipated litigation and that Grant v. Downs does not deny to documents so brought into existence the protection of legal professional privilege.

Two preliminary comments should be made about the way in which the case for the appellant was presented. First, the argument at times seemed to suggest that it is the intended use of documents in litigation which attracts the relevant privilege. This of course is not so. The relevant head of privilege is legal professional privilege which attaches to communications passing between legal adviser and client. Documents submitted by the client to his solicitors for advice or for use in anticipated litigation attract the privilege, but it is very doubtful whether there is a privilege for documents coming into existence as materials for the purposes of an action to be conducted by a litigant in person (see Jones v. Great Central Railway Co. [4] ; In re Holloway [5] ; Wheeler v. Le Marchant [6] ; Kyshe v. Holt, Childs and Brotherton [7] ; Anderson v. Bank of British Columbia [8] ; Halsbury's Laws of England, 4th ed., vol. 13, p. 68). Of course it may be that privilege can be claimed on the ground that a document relates solely to the case of the party, a head of privilege still available in New South Wales. Secondly, the argument did not always make clear the distinction between the purpose for which information is obtained and the purpose for which a document recording information is brought into existence. It is the latter purpose with which the law of professional legal privilege is concerned.

1. [1910] A.C. 4. 2. (1887) 12 P.D. 167. 3. (1881) 17 Ch. D. 675, at p. 681. 4. [1888] W.N. 128. 5. (1876) 2 Ch. D. 644, at pp. 658-659.

The appellant says that the business of a workers' compensation insurer stands in a very special category. Under the Workers' Compensation Act, 1926 N.S.W., as amended, every employer is bound to take out an insurance policy in conformity with s. 18. By s. 53A an employer of more than twenty persons in an industry who has been served with a written claim for compensation in respect of an injury received by a worker shall give written notice of his refusal to pay within fourteen days of receiving the claim, otherwise his liability to pay compensation is taken to be admitted and the Commissioner may, on the worker's application, and without further notice to the employer, make an award in favour of the worker. The appellant submits that in view of this provision the written claim is to be likened to a summons or originating process. The comparison cannot be sustained. It is an application for a determination filed in the Commission, not the written claim, that commences proceedings for an award of compensation under the Act. Accordingly, on receipt of the written claim it is necessary for the employer, and consequently the insurer, to decide whether it will pay compensation or deny liability. Ordinarily that decision will be made before the worker commences proceedings by filing an application for a determination. However, the appellant says there are many cases in which an initial liability to pay compensation has been conceded and the issue subsequently arises whether payments to the worker should be stopped on the ground that his incapacity has ceased. In these cases it is said that an application must be made to the Commission for an order terminating the continuing liability to pay. We were informed by the appellant's counsel that the instant case was one in which the documents were brought into existence in these circumstances.

The evidence given in examination-in-chief and cross-examination by Mr. Tritton relates to cases in which written claims are received and applications for determinations are filed by workers. That evidence sustained the finding of fact made by Carmichael J. which was upheld by the Court of Appeal. Ninety per cent of the claims do not result in litigation and the documents are brought into existence so that the appellant can decide in the first instance whether it will pay compensation or dispute liability. In these circumstances the purpose of submitting the documents to solicitors is very much of a secondary consideration because a small proportion of the cases only proceed that far.

The evidence given by Mr. Tritton in response to the plaintiff's counsel related to documents brought into existence with a view to providing a basis for discontinuing payments of compensation in cases in which an initial liability had been conceded or established. In this instance again, documents are brought into existence to enable the appellant to decide what it will do. In this situation, if the appellant decides to discontinue payments, litigation is likely to ensue. Although there is a greater likelihood that documents of this class will be submitted to solicitors for use in litigation, the primary function for which they are called into existence is, as the trial judge said, to enable the appellant to make a decision in the ordinary course of its business. Only when the appellant has made a decision to discontinue payments will the documents be submitted to solicitors for use in the subsequent litigation.

These facts do not sustain the existence of an overriding purpose of the kind which the appellant seeks to set up. If it had been the practice of the appellant to refer every claim and every case with the relevant reports to its solicitor for advice or information, the appellant might have been in a position to establish the existence of an overriding purpose which would found a claim to legal professional privilege. But the facts fall far short of this.

This conclusion, so the appellant contends, is by no means fatal to its argument. If, on the facts, the documents are brought into existence for the dual purpose of deciding what it will do and for use in litigation by legal advisers when appropriate, that purpose should be considered as one purpose which, including as it does submission to legal advisers, would attract the relevant head of privilege. That is the argument. Unfortunately for the appellant, it is an argument which runs headlong into Grant v. Downs [9] . As Glass J.A. observed in the Court of Appeal [10] when he applied the remarks of Stephen, Mason and Murphy JJ. in Grant v. Downs :

If the purpose which actuates the party who commissions documents is not single but multiple each must be identified. Unless all of them fall within the protected group of purposes namely submission to legal advisers or use in litigation, no privilege attaches. The argument is not only inconsistent with the sole purpose test enunciated by Stephen, Mason and Murphy JJ. [11] ; it is also inconsistent with the dominant purpose test favoured by Barwick C.J. [12] and in my view it fails to satisfy the test proposed by Jacobs J. [13] - Does the purpose of supplying the material to the legal adviser account for its existence? It is also at variance with the speech of Lord Cross of Chelsea (with whom three other members of the House agreed) inAlfred Crompton Amusement Machines Ltd. v. Customs and Excise Commissioners [No. 2] [14] . His Lordship cast doubt upon the English cases which held that, if one purpose of bringing reports into existence was that they might, if necessary, be submitted to legal advisers in the event of anticipated litigation, that was enough to attract legal professional privilege. 1. (1976) 135 C.L.R. 674. 2. [1978] 1 N.S.W.L.R., at p. 376. 3. (1976) 135 C.L.R., at p. 688. 4. (1976) 135 C.L.R., at p. 678. 5. (1976) 135 C.L.R., at p. 692. 6. [1974] A.C. 405, at p. 432.

The cases on which the appellant relied to support the proposition that if one of the purposes of bringing a document into existence is to submit it to legal advisers that is enough to attract the privilege were the cases referred to by Lord Cross of Chelsea. Moreover, they were cases which this Court examined and declined to follow in Grant v. Downs.

The facts upon which this appeal depends are stated in the judgment of my brother Mason and for the reasons which he gives I agree that the documents in question are not the subject of legal professional privilege.

The evidence plainly shows that they were brought into existence for the purpose (or purposes) of assisting the appellant's employees to decide what the appellate should do in the ordinary course of its business, the courses of action available in the present case being to decide whether or not the facts ascertained warranted a decision to discontinue the periodical payments, and in the former case to discontinue and in the latter to continue making payments. If payments were discontinued then litigation might well follow or be threatened, in which case the documents in question would be furnished to the appellant's solicitors for advice and for use in the litigation if it were instituted. The evidence established that in ninety per cent of claims so investigated and considered there is no litigation.

Such a situation is in my opinion clearly covered by the decision of this Court in Grant v. Downs. It was argued that the present case was distinguishable, but I am unable to discern any basis for such a view. I agree with the reasons given by my brother Mason for this conclusion.

The judgment of Stephen, Mason and Murphy JJ. makes it clear that to attract legal professional privilege it is necessary that the sole purpose for bringing the relevant document into existence was its submission to legal advisers for obtaining legal advice or for use in litigation. It is plain that this test cannot be satisfied in the present case.