North Shore Real Estate Pty Ltd v Real Estate Property Management Services Pty Ltd

District Court of NSW|2017-03-06

Solicitors: Atkinson Vinden Lawyers (Plaintiff and First to Fourth Cross Defendants to the First Cross-Claim) Buckingham Lawyers (Defendant and Cross-Claimant) File Number(s): 2014/00328638

Judgment

Before me is a Notice of Motion filed on 24 October 2016 by the defendant, Real Estate Property Management Services Pty Ltd ("REPMS") against the plaintiff, North Shore Real Estate Pty Ltd ("NS"), seeking the following orders: "1. The documents produced in response to the subpoena filed by the plaintiff on 6 July 2016, addressed to Dennis Robertson, which have been placed in a sealed envelope marked "Privilege asserted by REPMS" are not to be inspected or uplifted by any other party other than the defendant. 2. The plaintiff pay the defendant's costs of this Notice of Motion. 3. Such further or other orders as to the Court seems fit."

The affidavit evidence relied upon

The defendant read two affidavits in support of the orders sought in the Notice of Motion as follows: 1. Affidavit of Dennis Robertson sworn 16 February 2017; 2. Affidavit of David Baker sworn 24 October 2016.
The plaintiff read one affidavit in relation to the Notice of Motion being the affidavit of Thomas Howard affirmed 22 November 2016.
Mr Howard is the solicitor acting in the matter for the plaintiff in the 2014 proceedings. He gives evidence in his affidavit that on 17 June 2016 the defendant in the proceedings sent the plaintiff an email serving expert reports. One of the expert reports enclosed in the email was a report by Mr Robertson which Mr Howard annexes to his affidavit. The report from Mr Robertson is dated 9 June 2016. Mr Robertson states as follows in his report: "We have been engaged to review financial records of the plaintiffs to determine costs and losses that have been incurred by the plaintiffs as a result of their purchase of the LJHL franchise business and the related property management business. Our instructions, from Buckingham Lawyers, are attached as Attachment #1."
It is clear that the reference to the plaintiffs should be a reference to REPMS.
The report from Mr Robertson refers in various paragraphs to matters of which he has been "advised" (see paragraphs 1.1 and 1.4 for example). In the report Mr Robertson also indicates that he has made certain assumptions: for example paragraphs 2.1(b) and paragraph 2.2(b). Annexed to Mr Robertson's report is a letter from Buckingham Lawyers instructing him which is undated. Whilst the letter requests Mr Robertson to base his opinion on materials referred to, the letter of instructions does not ask Mr Robertson to make any assumptions similar to the assumptions which Mr Robertson has made in his report. The letter of instructions also does not provide advice on the matters which Mr Robertson states in his report have been advised to him.
In his affidavit sworn 16 February 2017 Mr Robertson refers to two memory sticks of documents which he produced to the court in answer to the subpoena. One of the memory sticks contained documents which Mr Robertson considered may be privileged: paragraph 4 of his affidavit. Mr Robertson indicates that six files on the privileged data memory stick all relate to aspects of the preparation of a report by him dated 9 June 2016. He states that all documents included on the privileged data memory stick are either email communications, or documents that were communicated by one party to another, in the form of attachments to emails: paragraphs 5-6 of the affidavit. Mr Robertson states that he has seen the affidavit of Mr Baker sworn 24 October 2016 and says that the contents of each file on the privileged data memory stick are set out in the table in Mr Baker's affidavit in paragraph 10. In paragraph 10 of his own affidavit, Mr Robertson sets out in a table his purpose in preparing each of the documents referred to.
In paragraph 9 of his affidavit Mr Robertson refers to the contents of files 1-3 as being communications for the purpose of obtaining "legal advice" on the further preparation of his report. Mr Robertson was cross-examined briefly. His oral evidence was to the effect that this is incorrect and the communications were not to obtain legal advice on the further preparation of his report but to obtain further information or instructions.

Legal principles applicable

The court was assisted by helpful legal submissions as to the principles applicable made by counsel for both parties.
The subpoena in question was served on Mr Robertson: Robertson affidavit paragraph 3. Accordingly, it was not a situation where privilege was claimed by a party in the proceedings because of a Notice to Produce or a subpoena served on it. Rather, the matter involved legal professional privilege being claimed by a party in relation to a subpoena being served on a third party who produced documents.
It was accepted by the parties that common law principles as to legal professional privilege applied rather than the provisions of the Evidence Act 1995 (NSW).
In my view, this is correct. Where the objection to inspection by a party is taken by the person required to produce the documents pursuant to the subpoena, the objection is to be decided by reference to the Evidence Act. However, where the objection to disclosure is made by a person other than the respondent to the subpoena, the issue of legal professional privilege is to be determined according to common law principles: Singtel Optus Pty Ltd v Weston (2011) 81 NSWLR 526 at [27]-[28]; Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002 at [11].
It is important to set out the common law principles which are applicable to a claim for legal professional privilege.
In Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 at 490 Deane J stated as follows: "It is a substantive general principle of the common law and not a mere rule of evidence that, subject to defined qualifications and exceptions, a person is entitled to preserve the confidentiality of confidential statements and other materials which have been made or brought into existence for the sole purpose of his or her seeking or being furnished with legal advice by a practising lawyer or for the sole purpose of preparing for existing or contemplated judicial or quasi-judicial proceedings: see, generally, Baker v Campbell (1983) 153 CLR 52; 49 ALR 385."
Similar principles were stated by the other judges in the case.
In Esso Australia Resources Ltd v Commission of Taxation (1999) 201 CLR 49, the majority of the High Court held that the relevant purpose need not be the sole purpose (as was the previous law) but should at least be the "dominant" purpose: see at [35] and [61].
In Tavcol, above, at [20]-[22], McDougall J stated as follows: "[20] The essence of legal professional privilege at common law is that the communication (whether written or oral) should have been made for one of the requisite purposes - obtaining legal advice; or obtaining advice or evidence in connection with litigation, either reasonably anticipated or in fact commenced - and that the purpose should be "dominant". The "dominant purpose" test was established by the majority decision in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49. [21] A number of decisions on the "dominant purpose" test indicate that "dominant" does not mean merely "primary" or "substantial", but "clearly paramount". See Spigelman CJ (with whom Sheller JA and MW Campbell AJA agreed) in Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [7], citing, among other decisions, that of Batt JA (with whom Charles JA and, relevantly Callaway JA agreed) in Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [10]. [22] The relevant purpose is to be determined objectively. Nonetheless, the subjective intention of the person responsible for the creation of the document (or the making of the communication) is not irrelevant, as Spigelman CJ pointed out in Sydney Airports Corporation at [6]."
There are differences between client legal privilege under the Evidence Act and legal professional privilege at common law. An important difference is that common law privilege attaches to communications whereas client legal privilege under the Evidence Act may attach not only to privileged communications but also to privileged documents.
The issue in the present case relates to communications in documents held by an expert.
In Natuna Pty Ltd v Cook [2006] NSWSC 1367, Biscoe AJ stated as follows at [8]-[9]: "[8] The Southcorp and Interchase cases from which Barrett J quoted appear to have been concerned with legal professional privilege at common law, rather than under the uniform Evidence Acts. In Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at 79 [80] McHugh J emphasised that legal professional privilege at common law is concerned with communications and not with documents per se. This emphasis on communications in the common law privilege context led Barrett J to conclude in Ryder that legal professional privilege can only attach to documents which embody communications between the expert and the litigant by whom the expert is retained, or the litigant's lawyer, and thus that it does not attach to a draft expert report. [9] However, it has been accepted that if a draft expert report is brought into existence for the purpose of communication to the litigant or the litigant's lawyer then it is privileged. In Brookfield v Yevad Products Pty Ltd [2006] FCA 1180 at [15] Mansfield J said "I do not think that Lindgren J's principle (3) in Southcorp should be read as suggesting that a draft report provided by an expert to solicitors for the purpose of litigation is not itself privileged. It operates precisely as a communication for the purposes for which privilege exists … Provided that document was brought into existence for such a purpose, that is to record information to be submitted to a solicitor for the purpose of litigation, it may be privileged even in the hands of the expert." His Honour held that a draft expert report was privileged from production at an interlocutory stage. In the present case it appears from the terms of the notices to produce that the draft expert reports were in fact received by the plaintiff or its legal representatives for the purposes of litigation. Therefore, in my opinion, they were confidential "communications" under s 119(a) of the Evidence Act as well as for the purposes of common law legal professional privilege."
See also Attorney-General v Maurice, above, at 496 per Dawson J where his Honour considered successive drafts of a claim book. His Honour stated that the successive drafts may be privileged even though no privilege attaches to the final product. That is because the draft might disclose the precise character of confidential communications with the solicitor, by showing alterations made from time to time. The final version is not privileged because once it is sent it ceases to be confidential and there is no privilege in it, not because privilege in the document is waived.
In New Cap Reinsurance Corporation Ltd (In Liquidation) v Renaissance Reinsurance Ltd [2007] NSWSC 258, above, White J stated in relation to documents held by an expert as follows at [18]-[20]: "[18] Paragraph 119(b) is important. It has been held that common law legal professional privilege does not attach to an expert's own documents, prepared by him for the purpose of expressing an expert opinion in litigation but which were not communicated to the client or the lawyer of the client, and do not reveal communications between the expert and the client, or between the expert and the lawyer for the client (Interchase Corporations Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 at 150-151, 153 , 162; Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at [21]). [19] This view is based upon the fact that: "Legal professional privilege is concerned with communications, either oral, written or recorded, and not with documents per se." (Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 529 , 543 , 552 , 568 , 580-581 , 585). [20] Section 119 of the Evidence Act expressly applies both to confidential communications between the client and a third party, or between a lawyer acting for the client and a third party, for the dominant purpose of the client being provided with professional legal services relating to legal proceedings, and to the contents of a confidential document prepared with that dominant purpose, whether the document is delivered or not (Re Southland Coal Pty Ltd (recs and mgrs apptd) (in liq) (2006) 59 ACSR 87 at [16]-[19]; Natuna Pty Ltd v Cook [2006] NSWSC 1367 at [8], [15])."
This was quoted with approval by McDougall J in Tavcol.
A copy of a document prepared for a privileged purpose may be privileged even though the original was not privileged: Commissioner of the Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501. This is relevant where a copy of a document is created for the purposes of a letter or email for a privileged purpose.
In Re Southland Coal Pty Ltd (recs and mgrs apptd) (in liq) (2006) 59 ACSR 87 at [18], Austin J stated as follows: "[18] This difference in content or emphasis, between the Evidence Act provisions and the observations in Propend and AWB Ltd v Cole, may have no significant practical consequences. Take two examples. First, a confidential draft pleading or draft witness statement prepared for the requisite dominant purpose is protected from disclosure under both the Evidence Act and the general law, whether or not the draft reflects some communication that has occurred or is a wholly uncommunicated draft. Under the Evidence Act the result flows from the simple application of the statute, which applies to the contents of the confidential document "whether delivered or not". Under the general law, as propounded in Propend and AWB Ltd v Cole, the contents of the document are protected if their disclosure would reveal (or allow the reader to infer) the content or substance of a privileged communication that has been incorporated into the draft: AWB Ltd v Cole at [132]. Arguably the contents are also protected if the confidential draft, having been prepared for the purpose of legal advice or proceedings, is intended to be communicated in pursuit of that purpose."
Accordingly, the contents of a draft expert report may be privileged if their disclosure would reveal (or allow the reader to infer) the content or substance of a privileged communication that has been incorporated into the draft or if it was prepared for the dominant purpose of legal advice or proceedings.
In Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 Lindgren J stated the following principles in relation to expert documents at [21]: "[21] I will apply the following principles which I did not understand to be in dispute: (1) Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 Ch D 675 ; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246 ; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J. (2) Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ; 141 ALR 545 ; 91 A Crim R 451 (Propend); Interchase, per Pincus JA; Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 at [17] . (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: cf Interchase at 161-2 per Thomas J. (4) Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 ; 69 ALR 31 at 34 per Gibbs CJ, CLR 487-8; ALR 38-9 per Mason and Brennan JJ, CLR 492-3; ALR 42-3 per Deane J, CLR 497-8; ALR 46-7 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 ; 132 ALR 57at 66 per Deane, Dawson and Gaudron JJ, CLR 109; ALR 75 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; BC9506842 Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89; BC200300344 (ACCC v Lux) at [46]. (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; Interchase at 148-50 per Pincus JA, at 161 per Thomas J. (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: cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; 156 ALR 364 at 366; ACCC v Lux at [46]."
To determine whether privilege is attached at common law, as stated above, the purpose should be the dominant purpose of obtaining legal advice or obtaining professional legal services in connection with legal proceedings. Usually the purpose is determined objectively but the subjective purpose of the person creating the document in question is also relevant. Further, it may be the purpose of another person such as a solicitor who briefed the expert which must be considered.
In Tavcol, above, McDougall J stated as follows in paragraph [23]: "[23] In many - perhaps most - cases, the relevant purpose will be that of the person who creates the document or make the communication, as Batt JA recognised in Mitsubishi Electric at [14] (and compare Spigelman CJ in Sydney Airports Corporation at [20]). However, as Batt JA said in Mitsubishi Electric at [14] (and the primary judge in Sydney Airports Corporation in fact found), where an expert report is brought into existence because a solicitor has commissioned it, the relevant purpose will be that of the solicitor (see also Hartogen Energy Ltd v Australian Gas Light Co (1992) 36 FCR 557 at 568-569; Gas Light compare Barwick CJ in Grant v Downs (1976) 135 CLR 674 at 677)."
Mr Korman, counsel for REPMS, properly brought my attention to a decision of the Queensland Court of Appeal in Interchase Corporation Ltd (In Liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141. There the Queensland Court of Appeal held that draft reports of an expert were not privileged. However that decision appeared to turn on the applicable Supreme Court rules in Queensland at the time.
An opposite position appears to have been adopted in other cases. In Linter Group Ltd v Price Waterhouse [1999] VSC 245 Harper J noted that a draft expert report did not need to be produced as experts should not be inhibited by fear of exposure of a draft from changing their minds when such change is warranted by the material then before the expert: at [16].
In Ray Fitzpatrick Pty Ltd v Minister for Planning [2007] NSWLEC 833 Lloyd J held that at common law draft expert witness statements would be privileged: see at [12]. That case considered communications passing between the expert and a solicitor and included as attachments draft reports of another expert. His Honour held that the documents were privileged: at [13].
An issue arises whether service of the final report waives privilege in the previous drafts. I have referred above to various statements to the effect that the privilege may be retained: 1. Attorney-General v Maurice at 496 per Dawson J; 2. Linter Group Ltd v Price Waterhouse, above, at [16] per Harper J; 3. Southcorp, above, per Lindgren J at [21], although his Honour made a distinction between the expert's own drafts of his or her report where they do not expose privileged communications compared to documents and other drafts sent to the client's lawyers for the purpose of confidential communications which would ordinarily attract the privilege.

Waiver

In relation to the question of waiver of privilege at common law, the relevant test is one of fairness. The question which arises is whether there is an inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege whether express or implied. As was stated in Mann v Carnell (1999) 201 CLR 1 at [29]: "[29] … 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."
REPMS placed reliance on the following statement by Gibbs CJ in Attorney-General v Maurice, above, at 484: "The case is not one in which 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 appellant in the conduct of the case."
In New Cap, above, White J considered the question whether a draft expert report and letters of instruction from the clients' solicitors to the expert witness were privileged and whether any privilege had been waived. His Honour considered the question under the Evidence Act but his analysis reviewed a number of common law cases, many of which have been referred to by me above. His Honour stated as follows at paragraphs [45]-[54]: "[45] The qualification in para 4 of Lindgren J's statement of principles set out in Australian Securities and Investments Commission v Southcorp Ltd is significant. There are many cases in which it has been held that privilege in material provided to an expert is not lost merely because the expert is called, or the expert's report is served. In Bourns Inc v Raychem Corporation [1999] 3 All ER 154, Aldous LJ said (at 166-167): Service of a witness statement, whether it be a statement of an expert or a witness to fact, waives privilege in that statement. As stated in the Marubeni Corp case mere reference to a document does not waive privilege in that document: there must at least be reference to the contents and reliance. In the present case there was no reference and no reliance therefore no waiver. [46] In Dingwall v Commonwealth of Australia (1992) 39 FCR 521, Foster J, referring to Attorney-General (NT) v Maurice, said (at 524): I have come to the view, upon a close consideration of the judgments in Maurice's case that it cannot be regarded as authority for a wide principle that, whenever documents are sent to a potential witness as part of material being placed before him in order that he may provide a report of an expert kind to be used as evidence in a case, that those documents, ipso facto, although they had the protection of legal professional privilege, necessarily would lose it because of the doctrine of waiver. Maurice's case does not go as far as that. It requires, certainly, that there be an indication that the documents were used in the preparation of the evidentiary document in a way that could be said to influence the content of that document. [47] The same principle was applied by Mansfield J in Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; 156 ALR 364 at 367, and by Nicholson J in Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 at [46]. [48] It may be said that the question of whether such privileged documents influenced the content of the expert's report is a matter which the opposite party should be entitled to test. However, questions of privilege inevitably involve the striking of a balance. [49] In Thomas v State of New South Wales [2006] NSWSC 380, McClellan CJ at CL held that service of an affidavit attaching an advice of counsel which in turn referred to certain medical reports, waived privilege in the medical reports because they influenced the content of the advice (at [17]). The principle is the same. The same principle was applied by Young J in AWB Ltd v Cole [2006] FCA 1234 at [168]-[178] in holding that disclosure of the substance of legal advice impliedly waived privilege over associated material as the publication of the legal advice was inconsistent with the maintenance of confidentiality over such material which underpinned the advice. [50] As set out earlier in these reasons, Mr Smith, as he is required to do under the Expert Witness Code of Conduct, specified the materials used in support of his opinions. These did not include draft reports, or earlier letters of instruction, or communications with the plaintiffs' solicitors. [51] Following the course taken by Einstein J in Integral Energy Australia v EDS (Australia) Pty Ltd [2006] NSWSC 971, I thought it appropriate to inspect the documents for which privilege is claimed in order to consider whether such documents may have influenced the content of the report. There are limits to whether this is a useful exercise. It would be impossible, as a matter of practice, and inappropriate, as a matter of principle, for a judge to approach that question in the same way as a party might wish to do so if preparing a cross-examination of the expert. [52] I have also taken into account the observations of Harper J in Linter Group Ltd v Price Waterhouse [1999] VSC 245 at [16] that: I accept for these purposes the sworn statement by Mr Sawer that that opinion is a mere draft. As such it would only be of relevance to the first defendant if it could be shown that it differed from Mr Spencer's witness statement, not because Mr Spencer had had a genuine change of opinion but because he was motivated by a desire simply to improve the plaintiffs' case. Such would of course be entirely improper; but an expert is surely permitted, indeed to be encouraged, to change his or her mind, if a change of mind is warranted … experts should not be inhibited by fear of exposure of a draft from changing their minds when such change is warranted by the material then before the expert. [53] The question is not merely whether it could be said that the privileged materials were used in such a way that they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials. Where an expert's report is submitted to a party's legal advisers so as to be put into a form which will ensure that it is admissible, it can be said that the privileged communications between the expert and the lawyers have influenced the content of the report, in the sense of its form, although not in the sense of the formulation of the substantive opinions expressed by the expert. Likewise, privileged communications between an expert and the party's lawyers whereby material information is provided to the expert in the form of assumptions or documents may well influence the content of the report. However, an expert's report is required to state what material and assumptions are relied on. Use of a final report, which refers to such materials and assumptions, is not inconsistent with maintaining confidentiality in the communications which produced the final product. [54] Having considered the documents in respect of which privilege is claimed, I do not consider that it could be said that they have influenced the content of the final report in such a way that the service or use of the report would be inconsistent with maintaining confidentiality in the privileged materials." (Emphasis added.)
NS placed reliance on Shea v TruEnergy Services Pty Ltd (No 5) (2013) 303 ALR 230; [2013] FCA 937 at [60] where Dodds-Streeton J stated as follows: "[60] Recent persuasive authority, such as New Cap, makes clear that relevant inconsistency may subsist where the draft reports or communications may have influenced the content of the final report in a substantial sense, as in such a case, there would be inconsistency informed by notions of fairness between, on the one hand, withholding the documents or communications while, on the other hand, relying on the final report. If, however, the relevant documents or communications have not influenced the content of the final report, or may have influenced it but in relation only to form or peripheral matters, the inconsistency would be unlikely to be established."
Accordingly, the following principles appear to be applicable concerning privilege and waiver of privilege in relation to communications to an expert: 1. Generally, service of a witness statement or report waives privilege in that statement or report. That is because disclosure of the expert's report for the purpose of reliance on it in the litigation means the report and any instructions attached to the report are no longer confidential and thus no longer attract privilege; 2. However, in relation to other communications, the question is not merely whether the privileged materials held by the expert were used in such a way that they could be said to influence the content of the report. The question is whether it could properly be said that the materials in question influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials because it would be unfair for the party to rely on the report without disclosure of those materials; 3. A waiver does not occur when a draft expert's report is submitted to a party's legal advisers to be put in a form which is admissible, because it does not affect the formulation of the substantive expert opinions expressed by the expert. Similarly, where the communications may have influenced the content of the final report, but in relation only to form or peripheral matters, the inconsistency in the maintenance of the privilege would be unlikely to be established: Shea, above, at [60]. 4. Privileged communications between an expert and the party's lawyers whereby material information is provided in the form of assumptions or documents may well influence the content of the report. However, as stated whether a waiver occurs depends on whether the documents or communications have influenced the content of the final report in such a way that the service or use of the report would be inconsistent with maintaining confidentiality in the privileged materials: New Cap at [53]-[54].
The decision in New Cap has been referred to with approval in later cases including in Tavcol, above, and in Watkins v State of Queensland [2008] 1 Qd R 564 at [14]-[15], and I propose to follow it.
Accordingly, the issues for my consideration in the present case are: 1. Do the materials attract legal professional privilege; 2. Has privilege been waived? Are the communications over which privilege is claimed such that they have influenced the content of the final expert report of Mr Robertson in such a way that the service or use of Mr Robertson's report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials?

The documents over which privilege is claimed

Paragraphs 8 and 9 of the affidavit of David Baker, the solicitor for REPMS, sworn 24 October 2016 provide as follows: "8. To assist with understanding of the information provided below, Barbara Chang (BC) and Lucy Mannering (LM) are solicitors who are, or were at the time, employed by Buckingham. Fadwa Pettit (FP) and Martin Pettit (MP) are directors of the defendant, and themselves parties to this litigation. Jonathan Korman (JK) is counsel for the defendant. "Ananda" is a member of the staff at Monash Tax Accounting Services Pty Ltd, who provided an expert report as to the defendant's accounts in these proceedings 9. Further abbreviations used below are: a. Dennis Robertson (DR) b. David Baker (DB)"
Mr Baker thereafter sets out in his affidavit a table which records his understanding of the contents of each file of documents over which privilege is claimed by REPMS. That table over the six files is as follows, omitting the material in bold in the first and final columns. What I have inserted in bold in the final column is my ruling in relation to whether privilege is attracted to the document and whether that privilege, if it exists, has been waived in the present case. This ruling follows inspection of the documents and hearing submissions. File l.pdf Date From To Attachment Content Draft letter of instruction for DR Ruling

     3/6/2016    BC    JK, DR, FP, DB  Draft instructions to DR        The email in question sends the final version of the letter of instructions to the expert not a draft version.
                                                                       The communication being the final letter of instructions was privileged until service of the final report. It is no longer privileged as it is no longer confidential. The letter is a final not a draft letter of instruction.
                                                                       In the case of the email, any privilege would be waived because the communication has influenced the content of the final expert report of Mr Robertson in such a way that the service or use of Mr Robertson's report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged communication.
                                                                       Only the email dated 3 June 2016 at 9.42am need be disclosed together with the revised and final letter of instructions from Buckingham Lawyers.
                                                                       Draft letter of instruction for DR
                                                                       Ruling
                                                                       Documents numbered 2 to 4 are on their face not draft instructions to the expert but final instructions which were later replaced by later letters of instruction.
                                                                       REPMS submits that the final letter of instructions is the crucial document which is relied upon by the expert and the expert attaches the final letter to his report. It is submitted that the understanding of the report by a reader is not prejudiced by the failure to produce earlier letters of instructions even if they are final. The report and the material on which it is based can still be properly understood.

     25/5/2016   LM    DR              Draft instructions to DR        NS submits that the letters of instructions if final should be disclosed. Such letters may have influenced what is not in the report and why the change in instructions occurred. As a general principle all letters of instructions to an expert should be reviewed.
                                                                       In my view the submissions of NS in relation to documents 1-4 should be preferred. Final letters of instructions should be produced. Even if they are subsequently replaced they may have influenced the expert's report and the completion of the task for the report.
                                                                       The communications were privileged until service of the final report. They are no longer privileged. The letter appears to be a final not a draft letter of instruction. The email forwards it to the expert.
                                                                       Any privilege would be waived because the communications have influenced the content of the final expert report of Mr Robertson in such a way that the service or use of Mr Robertson's report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged communications.
                                                                       The communication relates to a letter of instructions which was not in draft form. The fact it was later amended does not affect its true character as a final letter of instructions.
                                                                       Disclosure should be made of the email dated 25 May 2016 at 3.24pm together with the letter from Buckingham Lawyers dated 25 May 2016.
                                                                       Draft letter of instruction for DR
                                                                       Ruling

     24/5/2016   LM    JK, DR, FP, DB  Draft instructions to DR        See the comments in relation to Document 2.
                                                                       Any privilege would be waived because the communication has influenced the content of the final expert report of Mr Robertson in such a way that the service or use of Mr Robertson's report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged communication.
                                                                       The communication relates to the letter of instructions provided at that time. There is no suggestion that it is a draft letter. The fact it was later amended does not affect its true character as a final letter of instructions.
                                                                       Disclosure should be made of the email dated 24 May 2016 at 4.09pm together with the letter from Buckingham Lawyers dated 24 May 2016.
                                                                       Draft letter of instruction for DR
                                                                       Ruling

     13/5/2016   BC    DR              Draft instructions to DR        See the comments in relation to Document 2.
                                                                       Any privilege would be waived because the communication has influenced the content of the final expert report of Mr Robertson in such a way that the service or use of Mr Robertson's report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged communication.
                                                                       The communication appears to be the provision of a letter of instructions which was not a draft. Disclosure is limited to the email dated 13 May 2016 at 1.11pm and the letter from Buckingham Lawyers dated 13 May 2016.
                                                                       Expert witness code of conduct to be included in report

     11/5/2016   BC    DR              Expert witness code of conduct  Ruling
                                                                       The communication between the lawyers and the expert is privileged as it was for the dominant purpose of actual proceedings. The copy sent is privileged under Propend.
                                                                       Privilege has not been waived as the communication could not have influenced the content of the final expert report in such a way that the service or use of the report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The matter involved is a matter of form only.
                                                                       Draft report for discussion and request for further information on various issues
                                                                       Ruling

     28/4/2016   DR    DB, JK, MP                                      The communication is privileged as it is between the expert and the solicitor and counsel for the dominant purpose of actual proceedings.
                                                                       The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials.
                                                                       Whilst the email which attaches the draft report seeks feedback and more information it is not apparent that the communication may have influenced the content of the final report in a substantial sense. The email does not include any response to the email or draft report.

File 2.pdf Date From To Attachment Content Draft report for discussion and request for feedback on various issues Ruling 7. 28/4/2016 DR DB, JK, MP Draft Report Business Plan The communication is privileged as it is between the expert and the solicitor and counsel for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Whilst the email which attaches the draft report seeks feedback and more information it is not apparent that the communication may have influenced the content of the final report in a substantial sense. The email does not include any response to the email or draft report. File 3.pdf Date From To Attachment Content Draft report for discussion and request for further information on various issues 8. 2/6/2016 DR JK, LM, BC Draft Report Ruling The communication is privileged as it is between the expert and the solicitor and counsel for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. File 4.pdf Date From To Attachment Content Response to email of 28/4/2016 in File 2.pdf 9. 28/4/2016 DB DR, JK, MP Ruling The communication is privileged as it is between the expert and the solicitor and counsel for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. It is a formal acknowledgment of receipt only. Request for information that was to have been provided 10. 25/5/2016 DR LM, DB, JK Ruling The communication is privileged as it is between the expert and the solicitor and counsel for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The email seeks further material to review for the report which was ultimately not included in the final report. Response to DB in relation to request for information that was to be provided and other comments as to conduct of the litigation 11. 23/5/2016 JK DR, MP, DB Ruling The communication is privileged as it is between the expert and the counsel retained in the matter by the solicitor and the solicitor himself for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. It is formal in nature. Request for information that was to have been provided 12. 23/5/2016 DR JK, MP, DB Ruling The communication is privileged as it is between the expert and the counsel retained in the matter and the solicitor for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. It is formal in nature. Provision of information and request for feedback 13. 17/5/2016 JK DR, MP Ruling The communication is privileged as it is between the counsel retained in the matter and the expert for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Provision of information relevant to litigation 14. 17/5/2016 BC MP,JK, DB Ruling The communication is privileged as it is between lawyers for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication consists of an email which is formal in nature. File 5.pdf Date From To Attachment Content Request for instructions from solicitor 15. 21/10/2015 DR DB, BC Ruling The communication is privileged as it is between the expert and the solicitors for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The email communication is formal in nature. Provision of initial information regarding brief 16. 19/10/2015 DB DR, BC, MP Ruling The communication is privileged as it is between the expert and the solicitors for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication provides no material of substance. Draft preliminary report for consideration by lawyers 17. 21/1/2016 DR DB, MP, JK Draft Report Ruling The communication is privileged as it is between the expert and the solicitor for the dominant purpose of actual proceedings. The communication over which privilege is claimed has not apparently influenced the content of the final expert report of Mr Robertson in such a way that the service or use of the report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. File 6.pdf Date From To Attachment Content Discussion of matters to include in report, and other arrangements 18. 7/6/2016 DR FP, BC, Ruling JK, The communication is privileged as it is between the expert and a director of REPMS which is also copied to lawyers and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The email contains communications of a formal nature. Details of items in a ledger provided to DR 19. 7/6/2016 FP DR Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings, including for review by the lawyers. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for further information Ruling 20. 7/6/2016 DR MP The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings, including for review by the lawyers. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Although lawyers have not been copied with the email the apparent dominant purpose of the communication is to prepare a draft report for the purposes of the review by the lawyers and for use in the actual proceedings. Response to provision of details of items in a ledger 21. 7/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for information about expense items 22. 7/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for information about expense items 23. 7/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to matters which appear no longer relevant and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Information from Ananda re MYOB ledger Ruling Privilege is claimed in relation to the email dated 6 June 2016 sent at 4.24pm and the email from "Ananda" from REPMS' external accountants dated 6 June 2016 sent at 4.06.35pm. I was informed by counsel for REPMS that no privilege was claimed in relation to documents produced by the external accountants Monash Tax Accounting. 24. 6/6/2016 FP JK, DR REPMS submits that a review of the expert report shows the precise documents which the expert has relied upon. See paragraph 4, first bullet point. It is also submitted that the annexure is protected by the principle in Propend, above. I note that the annexure is not included in the documents over which privilege is claimed. NS submits that the material was provided by the accountants to Mrs Pettit, a director of REPMS, to give to the expert. Accordingly, the communication must, it should be inferred, be relevant to the preparation of the expert report. In my view the submissions of NS should be preferred on this issue. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed has influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication forwards information to the expert for use in the report in a relevant manner. Waiver has occurred. Discussion as to who will go through information about expense items 25. 7/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for information about expense items Ruling These comments relate to documents 26-27 and 30-31 which are in similar terms. 26. 7/6/2016 DR FP REPMS submits that the material which has been relied upon by the expert as to legal fees is that referred to in paragraph 1.4 and Attachment 6 to the expert's final report. These materials provide a complete picture of how the expert calculated legal fees. Attachment 6 was prepared by the plaintiff's external accountants, Monash Tax Accounting Services Pty Ltd, and it is clear that the expert has relied on this: paragraph 1.3(a) of his report. NS refers to the commencing words of paragraph 1.4 of the report "I have been advised that the losses referred to in the paragraphs 1.2 and 1.3 … includes some expenses that are not costs of the business and/or the relevant periods and accordingly, I have excluded these from the net losses …". Any communications providing those instructions should be disclosed as they may have influenced the content of the final report such that service of the final report would be inconsistent with maintaining confidentiality in the privileged materials. In my view, the submissions of NS should be preferred on this issue. The emails in question provide instructions to the expert which, it is fair to conclude, have been taken into account in the preparation of the report. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed appears to have influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication seeks information for use in the report in a relevant manner. Waiver has occurred. Information about expense items Ruling 27. 1/6/2016 MP DR See the comments in 26. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed appears to have influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication provides information for use in the report in a relevant manner. Waiver has occurred. Information about expense items 28. 7/6/2016 DR FP; JK; Ananda Ruling The communication is privileged as it is between the expert and a director of REPMS which is also copied to lawyers and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Discussion re legal advice regarding expense items 29. 4/6/2016 MP JK Ruling The communication is privileged as it is between the expert and counsel and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for further information regarding expense items Ruling 30. 7/6/2016 DR FP See the comments in 26. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed appears to have influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication seeks information for use in the report in a relevant manner. Waiver has occurred. Information regarding expense items Ruling 31. 1/6/2016 MP DR See the comments in 26. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed appears to have influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication provides information for use in the report in a relevant manner. Waiver has occurred. Request for information regarding expense items 32. 7/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters apparently no longer in issue and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Forwarding email from Ananda regarding accounting information Ruling Privilege is claimed in relation to the email dated 6 June 2016 sent at 4.24pm and the email from "Ananda" from REPMS' external accountants dated 6 June 2016 sent at 4.06.35pm. I was informed by counsel for REPMS that no privilege was claimed in relation to documents produced by the external accountants Monash Tax Accounting. 33. 6/6/2016 MP JK, DR REPMS submits that a review of the expert report shows the precise documents which the expert has relied upon. See paragraph 4, first bullet point. It is also submitted that the annexure is protected by the principle in Propend, above. I note that the annexure is not included in the documents over which privilege is claimed. NS submits that the material was provided by the accountants to Mrs Pettit, a director of REPMS, to give to the expert. Accordingly, the communication must, it should be inferred, be relevant to the preparation of the expert report. In my view the submissions of NS should be preferred on this issue. The communication appears to be privileged as it is between the expert and a director of the defendant for the dominant purpose of preparing a report for consideration by lawyers and for use in actual proceedings. However, in my view the communication over which privilege is claimed has influenced the content of the final report of Mr Robertson in such a way that the service or use of that report by REPMS would be inconsistent with REPMS maintaining confidentiality in the privileged materials. The communication forwards information to the expert for use in the report in a relevant manner. Waiver has occurred. Advice to MP re sending information to his solicitors 34. 10/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials. Request for timing as to provision of information 35. 3/6/2016 DR FP Ruling The communication is privileged as it is between the expert and a director of REPMS and relates to the preparation of the expert report for the dominant purpose of the proceedings. The communication relates to formal matters and in my view there is no waiver as the communication over which privilege is claimed has not influenced the content of the final expert report such that service of the final report would be inconsistent with REPMS maintaining confidentiality in the privileged materials.

Accordingly, other than in relation to the documents which I have indicated above in my rulings where I have found that legal professional privilege has been waived, all other documents in the sealed envelope remain subject to legal professional privilege and are not to be inspected or uplifted by any party other than the defendant.
It will be seen that each party has had some success in relation to the Notice of Motion. I will hear the parties in relation to costs and will give leave to the parties to approach my Associate to relist the matter in relation to the issue of costs. My preliminary view, subject to submissions, is that the defendant should be awarded 75% of its costs of the Notice of Motion.
I make the following orders: 1. The documents numbered 1, 2, 3, 4, 24, 26, 27, 30, 31 and 33 to the extent indicated in the court's reasons for decision dated today are no longer subject to legal professional privilege and should be produced for inspection. The remaining documents are not to be inspected or uplifted by any party other than the defendant. 2. Liberty to apply in relation to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 April 2017

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