Orr v Hunter Quarries Pty Ltd

District Court of NSW|2018-04-27

Solicitors: McCullough Robertson (Prosecutor) Lancaster Law & Mediation (Defendant) File Number(s): 2016/266341

Introduction

This judgment concerns a claim for privilege in relation to documents produced by a third party on subpoena. The prosecutor has charged the defendant with a breach of its duty under s 19(1) of the Work Health and Safety Act 2011 (the Act).
The prosecutor has obtained the assistance of Mr Samuels of QMW Industries Pty Limited (QMW). Mr Samuels has provided two expert reports which have been served by the prosecutor upon the defendant.
By a subpoena issued on 16 March 2018, the defendant required QMW to produce: "1. A copy of this subpoena; 2. All Documents being or including correspondence sent by Q.M.W. Industries Pty Ltd (ACN 011 047 760) ("QMW") or its officers or received by QMW or its officers in regard to the death of Ryan Messenger, including but not limited to correspondence specific to the provision of an expert report; 3. All Documents being or including internal file notes, memoranda, agendas, minutes of meeting, internal communications including but not limited to emails between employees of QMW relating to the death of Ryan Messenger and or the proceedings against Hunter Quarries Pty Ltd; 4. All Documents being or including working papers produced relating to the death of Ryan Messenger including but not limited to the provision of any expert report; 5. All emails regarding the drafting and settling of charges in regard to the death of Ryan Messenger; 6. All drafts of any expert report regarding the death of Ryan Messenger; and 7. All invoices rendered in regard to the provision of any expert report regarding the death of Ryan Messenger."

Evidence for the Prosecutor

The prosecutor relied upon the affidavit of Ms Scarlet Rose Reid affirmed on 11 April 2017 (PX 11). Ms Reid is a partner of McCullough Robertson, the solicitors for the prosecutor. Ms Reid annexed, as Annexure 4, a table which set out information in relation to the privileged documents. In respect of each document Ms Reid identified the date, the document type, the author, the recipient, and the basis for the claim of privilege.
Annexure 5 to the affidavit was a folder containing 607 pages, provided on a confidential basis (MFI 12). This folder contained the documents over which the claim for privilege was made. The defendant objected to the court reading those documents.
The prosecutor sought and was granted leave to file an additional affidavit of Ms Reid, affirmed on 26 April 2018 (PX 15). That affidavit itemised the QMW documents over which privilege was still claimed and gave evidence in relation to the creation of those documents.
As necessary background to consideration of the privilege question, I read, with the concurrence of both parties, the expert reports of Mr Samuel and the documents to which he had reference in writing those reports. Those reports are contained in PX 6 and PX 7. At the time I read the reports, the admissibility of those reports had not been formally dealt with, and it was agreed that I should read that material as background only, to enable me to understand the evidence and submissions in relation to the privilege claim.

Common Law or the Evidence Act?

A preliminary question to be determined is whether the common law as to privilege applies, or whether the Evidence Act 1995 (NSW) provisions apply. I was referred to four authorities.
In ASIC v Southcorp Limited [2003] FCA 804, Justice Lindgren of the Federal Court dealt with a claim for privilege over documents sent to and obtained by an expert, in order to provide an expert report. His Honour noted that there was obviously considerable interaction between the expert and ASIC's lawyers in relation to the preparation of the final report. The evidence of Ms Reid demonstrates that this was so in the present case.
Justice Lindgren at par [21] set out the following principles which were not in dispute: "1. Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 ("Interchase") at 151 per Pincus JA, at 160 per Thomas J. 2. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ("Propend"); Interchase, per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17]. 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 - 162 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 per Gibbs CJ, 487 - 488 per Mason and Brennan JJ, 492-493 per Deane J, 497 - 498 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 ("ACCC v Lux") at [46]. 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 - 150 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; ACCC v Lux at [46].
While not explicitly stated, it appears that his Honour was considering common law principles. Those six principles have been applied and adopted in subsequent decisions. I will refer to them as the Southcorp Principles.
The second case to which I was referred was Newcap Reinsurance Corporation Ltd (In Liquidation) v Renaissance Reinsurance Limited [2007] NSWSC 258 (Newcap) which is a decision of Justice White. It was a civil case brought in relation to a voidable transaction within the meaning of Part 5.7B of the Corporations Act 2001 (Cth). Solvency was an issue in the case and the plaintiffs relied upon an expert report as to solvency. The plaintiffs claimed privilege in respect of 38 documents and also in respect of correspondence between the plaintiffs and their legal advisors. Thirteen of those documents were draft reports prepared by the expert.
The defendant submitted that the provisions of the Evidence Act did not apply. His Honour disagreed. He held that the privilege question was to be determined by reference to the provisions of the Evidence Act, and not by the common law. The case was a civil one, and thus the Uniform Civil Procedure Rules 2005 applied. At [15] of the judgment, his Honour considered r 21.3, r 21.5, r 1.2 and the Dictionary definition of "privileged document" and "privileged information". Since the Uniform Civil Procedure Rules 2005 applied, the provisions of the Evidence Act were made applicable by those Rules.
The third decision to which I was referred was Traderight (NSW) Pty Limited v Bank of Queensland Limited (No. 14) [2013] NSWSC 211 (Traderight), a decision of Justice Ball. The defendant bank applied for access to a number of documents produced by the plaintiffs' expert. There were two boxes of documents. Many were draft reports. Some of the documents recorded communications between the expert and the lawyers concerning the draft reports.
At [4] his Honour recorded that the parties accepted that whether the documents were properly the subject of a claim for privilege was to be determined by applying the provisions of the Evidence Act 1995. Again it should be noted that this was a civil case and thus the Uniform Civil Procedure Rules applied. Because of the concession made his Honour probably did not need to decide whether or not the common law had any application.
The fourth case to which I was referred was Tavcol Pty Limited v Valbeet Pty Limited [2016] NSWSC 1002 (Tavcol), a decision of Justice McDougall. Both parties were seeking access to documents produced by third parties on subpoena. Both parties claimed privilege over such documents. The third parties did not object to production, as contemplated by UCPR r 1.9. Nor did they object to inspection of the documents. Instead, it was left to the lawyers for each party to make the privilege claim and object to inspection. In that respect the case is similar to the present one.
His Honour referred to decisions to the effect that where the objection to inspection is taken by the person required to produce the document on subpoena, the objection is to be decided by reference to the Evidence Act (again noting that this was a civil case). However, there were authorities that where the objection was not taken by the party who had been subpoenaed, questions of privilege were to be resolved by applying the common law.
Legal professional privilege at common law is concerned only with communications and not with documents per se. On the other hand, s 119 of the Evidence Act applies to confidential communications which are privileged, and also to the contents of a confidential document prepared with the dominant purpose of the provision of professional legal services relating to legal proceedings, whether the document was delivered or communicated or not.
It is to be noted that in the Newcap and Traderight cases referred to above, the provisions of the Evidence Act only came into play because of the application of the Uniform Civil Procedure Rules.
Some of those cases also discuss s 131A of the Evidence Act which provides: "If: (a) a person is required by a disclosure requirement to give information, or to produce a document, which would result in the disclosure of a communication, a document or its contents or other information of a kind referred to in Div 1, 1A, 1C or 3, and (b) the person objects to giving that information or providing that document, the court must determine the objection by applying the provisions of this Part (other than ss 123 and 128) with any necessary modifications as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence." (emphasis added)
Section 131A(2) provides that a "disclosure requirement" includes a subpoena to produce documents.
My own research has led me to Derbas v The Queen [2012] NSWCCA 14. The Registrar of a Local Court was subpoenaed for documents. The Registrar produced the documents and took no objection to their production and inspection. The Commissioner of Police claimed public interest immunity on the ground that the production of the statement subpoenaed would disclose the identity of a police informer.
Thus the objection to inspection was not taken by the person who was subject to the subpoena. At par [8] Justice Meagher (with whom the other two judges agreed) held as follows: "Nor did s 131A operate to require the primary judge to determine the Commissioner's objection by applying the provisions of s 130. That is because s 131A only applies if the 'person' required to produce the document is 'the person' who objects to the provision of the document or the giving of information: s 131A(1)(a), (b).
His Honour referred to the civil case of New South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60 at [26-32] which was to similar effect. In that case a Registrar produced the documents but a Commissioner was making the claim for immunity. Those two persons were not the same and thus s 131A did not apply.
There seems no distinction to be made, as to the application of s 131A, depending upon whether the claim is one for public interest immunity or legal professional privilege. Both are in theory covered by s 131A(1)(a).
My conclusion is that the common law applies to determine legal professional privilege in this case and that the provisions of the Evidence Act have no role to play. Firstly, this is because the Uniform Civil Procedure Rules 2005 do not apply, as they did in several of the cited cases, so as to make the Evidence Act provisions applicable. Secondly, s 131A has no application, since the party subpoenaed (QMW) is not the party objecting to inspection of the documents on the grounds of privilege.
At common law, privilege protects confidential communications which took place for the dominant purpose of the obtaining or giving of legal advice or assistance, or of use in connection with legal proceedings, or both - Esso Australia Resources Limited v Commissioner of Taxation [1999] HCA 67; 201 CLR 49 at [35].
At common law, a person who would otherwise be entitled to the benefit of legal professional privilege may waive the privilege. Inconsistency between the conduct of the client and the maintenance of the confidentiality may effect a waiver of the privilege. Courts take into account considerations of fairness arising from inconsistency between the conduct of the client and the maintenance of the confidentiality - Mann v Carnell [1999] HCA 66; 201 CLR 1 at [28-29].
In the present case the main focus of the dispute about privilege concerns draft reports prepared by the expert and actions by the solicitors for the prosecutor to effect changes to those reports so as to put them in admissible form for use in this litigation. That situation was also the subject of the decision in Traderight, where Justice Ball at [23] held that privilege was maintained because of the following matters: 1. There was nothing in the evidence to suggest that the conclusions stated by the expert were not her own or were based on material other than the material disclosed in her report; 2. It is common for a party's legal advisors to communicate with an expert retained by the party for the purpose of giving instructions and commenting on the form of the expert's report; 3. In some cases legal advisors may suggest wording to be including in the report which expresses in admissible form an opinion stated by the expert in an inadmissible form; 4. The court depends heavily on the parties' legal advisors to assist experts to address properly the questions asked of them and to present their opinions in an admissible form and in a form which will be readily understood by the court; 5. The court depends heavily on the parties' legal advisors to ensure that any opinion expressed by an expert is an opinion the expert holds for the reasons that the expert gives; 6. The fact that legal advisors have communicated with an expert and provided comments on drafts of a report in a way which is consistent with discharging the first obligation, is not a reason of itself for supposing they have failed to discharge the second obligation.
Southcorp Principle 4 also dealt with the question of implied waiver of a privilege in respect of an expert's report if the report is disclosed for the purpose of reliance on it in the litigation. There is a distinction to be drawn between communications which influence the content of the report (which would result in a waiver of privilege) and communications which are for the sole purpose of dealing with admissibility of the report and putting the report into a form which will comply with the obligations of an expert in giving expert evidence. Ms Reid in PX 15 gives evidence of the nature and purpose of many of the communications between the solicitors and the expert.

Should the Court read the privileged documents?

In some of the cases previously referred to the court has examined the privileged documents to discern whether or not the claim for privilege is sustainable. However, there is no indication in the cases where that has occurred, that there was any objection to that course being taken. In Tavcol, Justice McDougall stressed that claims for privilege should be dealt with by admissible evidence concerning the documents themselves.
I was referred by counsel for the defendant to the decision of Justice Brereton in Hancock v Rinehart (Privilege) [2016] NSWSC 12 (Hancock). The following principles appear from [29] to [35]: 1. In the absence of a rule of court enabling the court to inspect privileged documents (such as UCPR r 1.9(5)(c)) the court has no more entitlement than anyone else to inspect a privileged document; 2. References to the ability of the court to inspect the documents usually appear in the context of scrutinizing a claim at the request of the party seeking production; 3. The preferable explanation of the court's power to inspect the documents is that it exists not to facilitate proof by a claimant of the facts required to sustain the claim, but to provide a means of enabling a claim to be scrutinized and tested; 4. A party is not entitled to insist on the court inspecting the documents, it being a matter for the discretion of the judge, who will only do so if there is good reason; 5. That principle applies where the claimant, having adduced insufficient evidence otherwise to sustain the claim, requests the court to inspect the documents, to the exclusion of the applicant; 6. As determination of privilege involves ascertaining the purpose of a person, the best direct evidence will be that given by the person whose purpose is in question; 7. While purpose may be inferred from the document, direct evidence of purpose can be given by the person whose purpose it is; 8. To allow the privileged documents to be used as evidence - let alone the sole evidence - in support of a claim for privilege, would be contrary to well-established practice; 9. It would also be grossly unfair to the other party if the only evidence of purpose is to be inferred from the document itself, and the party seeking access is deprived of any opportunity to test the asserted purpose, this would defeat rather than promote the intent of enabling claims to be tested and scrutinized; 10. A claim for privilege must be made on sworn direct evidence, not inadmissible hearsay or opinion, proving the facts on which the claim is founded.
In Tavcol Justice McDougall did not agree with this last proposition. His Honour said at [37] that an application of the present type is interlocutory in character and accordingly s 75 of the Evidence Act renders hearsay evidence admissible if there is evidence of the source. With respect to Justice Brereton and his Principle (10) above, I prefer the view of Justice McDougall as to hearsay evidence. In any event, I note that the evidence of Ms Reid is direct evidence by the lawyer representing the prosecutor, whose purpose is in question - see Principle (6) in Hancock.
Those principles lead me to the conclusion that I will not read the folder of privileged documents. I did telegraph this view to counsel for the prosecutor on 24 April 2018, which resulted in the application for a short adjournment and the preparation and service of the second affidavit of Ms Reid. I will proceed to determine the question of privilege on the basis of the evidence of Ms Reid and the submissions and concessions made during oral argument.

Documents in Issue

The first affidavit of Ms Reid attached a table which gave each document over which privilege was claimed a number. It also described the document by date, document type, author and recipient. The second affidavit of Ms Reid contained a similar table but also gave her direct evidence in relation to the particular documents over which privilege was still claimed.
I am grateful to counsel who by 27 April 2018 had cut down the number of documents in issue to the following (adopting Ms Reid's numbering): 22, 27, 29, 30, 48, 53, 54, 55, 56, 57, 58, 59 and 60.

Document 22

Document 22 consists of two emails. The first was an email from Mr Reaburn (solicitor for the prosecutor) to Mr Samuels (the expert) dated 6 December 2016 in which Mr Reaburn attached a re-formatted draft 2016 expert report. The amendments had been inserted by Mr Reaburn to deal with issues of formatting and admissibility. The second email was one from Mr Samuels to Mr Reaburn later on 6 December 2016 attaching the final version of the 2016 report.
These emails are part of a pattern of communication between the solicitors for the prosecutor and the expert, by which drafts and re-formatted drafts of expert reports went back and forward.
I find that privilege attaches to both emails and that there has been no waiver. In relation to the first email, it is a communication from the solicitor for the prosecutor to the expert dealing with re-formatting a draft report. In relation to the second email, it is in the nature of a "covering letter" attaching the final report. The final report has been served and no privilege is claimed in respect of it. I find that there has been no waiver of privilege in relation to either email. The dominant purpose of both emails was to obtain evidence in connection with litigation already on foot. The evidence of Ms Reid shows that the communications did not relate to the formulation of the substantive opinions expressed by the expert.

Document 27

This document consists of a chain of emails. Emails from Mr Samuels attached two drafts of the 2016 report which was sent to the solicitors for the prosecutor for their review. The two drafts are duplicates in different file formats. The evidence of Ms Reid is to the effect that the drafts were communicated to the lawyers for the prosecutor by the expert for their review which included ensuring that the reports had been put into an admissible form. Ms Reid deposes that the communications did not relate to the formulation of substantive opinions expressed by the expert.
I find that Document 27 is privileged and there has been no waiver of privilege.

Document 29

This document consists of a chain of emails back and forth between the solicitors for the prosecutor and the expert. An amended draft of the 2016 report was attached to one email dated 29 November 2016.
One of the emails attached additional documents that were to form attachments to the 2016 expert report. No privilege is claimed over these additional documents which were to be considered by the expert.
I find that the emails are privileged and that privilege has not been waived.

Document 30

This is an email from the expert to the solicitor for the prosecutor providing a draft of the 2016 report and attachments. The expert requested that the solicitors review the report to ensure it was in admissible form. The communication addressed only the issue of form of the report and did not influence the formulation of the substantive opinions expressed in the report.
I find that Document 30 is privileged and that privilege has not been waived.

Document 48

Document 48 is an email chain which includes the email at Document 40, over which no claim for privilege is maintained. It also includes an email from the expert to the solicitor for the prosecutor on 9 February 2018 seeking further information about excavators from the solicitor. There is then an email from the solicitor to the expert acknowledging his email and asking about timing.
The plaintiff submitted that these communications relate to preparation of the expert report. The defendant submitted that the email which came from the expert seeking information about excavators in effect operated as a waiver of privilege, because one could infer that this was information he was seeking in order to formulate his opinion. Reference was made to Southcorp Principle 1, but that concerns the briefing or instructions given by the lawyer to the expert. Reference was also made to Southcorp Principle 5, but that relates to documents used by an expert to form an opinion or write a report.
In my view neither document falls within those principles and there has been no waiver of privilege. It would be otherwise if, in response to the request for material about excavators, documents concerning excavators were sent to the expert. There is no suggestion of that in relation to Document 48.

Document 53

This consists of two draft 2016 reports. The first draft was amended by the solicitor for the prosecutor to put it into an admissible form and was then provided to the expert under cover of an email being Document 10 - the defendant has conceded that such email is privileged. The second draft report is a duplicate of the amended draft of the 2016 report, dated 27 October 2016, with some amendments in mark-up. This was not provided to the lawyers for the prosecutor. It was thus not communicated. It is a document which falls within Southcorp Principle 3, being a document generated unilaterally by the expert witness. Such a document is not in the nature of a communication and is thus not privileged. I will order that such document (described in paragraph 73 of PX 15) be provided to the defendant.

Document 54

This consists of three draft 2016 reports. One is a signed report on a letterhead, dealt within paragraph 75 of PX 15. This was communicated to the solicitor for the prosecutor in an email which is Document 30. Ms Reid deposes that the communication with respect to this signed draft report on letterhead was to ensure that the expert was acting in a way which was consistent with his obligation to ensure that his opinions are admissible and comprehensible to a court. The communication from the expert addressed only the issue of form of the report and did not influence the substantive opinions expressed by the expert in the report.
This document is privileged and there has been no waiver of privilege.
Document 54 also consists of two unsigned versions of an expert report which were not provided to the lawyers for the prosecutor - see par 78 of PX 15. These fall within Southcorp Principle 3 and are not privileged. I will order that they be provided to the defendant.

Document 56

During oral submissions the defendant indicated that it no longer pressed for production of this document.

Document 57

This consists of two drafts of the 2016 report, dated 6 December 2016. The draft marked "A" was not communicated to the lawyers for the prosecutor - see paragraph 88 of PX 15. The draft marked "B" was communicated to the lawyers for the prosecutor for the purposes of considering the admissibility of the content of the draft report - see par 89 of PX 15. The communication to the expert from the lawyers was to ask the expert to review the report after amendments had been made by the lawyers to deal with admissibility. There was no influence over the formulation of the substantive opinions expressed by the expert in the report.
I find that the draft marked "A" was not privileged and I will order that a copy be provided to the defendant.
I find that the draft marked "B" is privileged and that there has been no waiver of privilege.

Document 58

This document consists of two drafts of the 2016 report, dated 1 December 2016. One of those documents was provided to the lawyers for the prosecutor to deal with the issue of the form of the report. The second draft version of the report was not communicated to the lawyers for the prosecutor.
I find that the first version of the report (see par 95 of PX 15) is privileged and there has been no waiver of privilege. I find that the second draft version of the report (see par 98 of PX 15), since it was not communicated to the lawyers for the prosecutor, is not privileged and I will order that it be provided to the defendant.

Document 59

This is a draft of the 2018 report which is dated 26 February 2018. It is a copy of the draft 2018 report that was communicated to the lawyers for the prosecutor on 26 February 2018 to deal with admissibility.
The submission was made that this was an uncommunicated version of a draft report sitting on the hard drive of the expert which was not communicated to the lawyers for the prosecutor. Southcorp Principle 2 is that copies of documents made for the purpose of forming part of confidential communications between lawyers and the expert, ordinarily attract a privilege. It would be a surprising result if a version of the report was communicated by the expert to the lawyers to deal with admissibility, and was thus privileged, but a copy of the very same document, retained by the expert (whether as a hard copy or electronically) was not privileged. If the original is privileged then the copy is privileged.
I find that this document is privileged and that privilege has not been waived.

Paragraph 60

This is a draft of the 2018 report which was not communicated to the lawyers for the prosecutor - see par 105 of PX 15. It is therefore not privileged and I will order that it be given to the defendant.

Orders

My orders are as follows: 1. I find that the documents described or referred to in pars 73, 78, 88, 98 and 105 of Exhibit PX 15 are not privileged and thus may be inspected by the defendant. 2. I direct that the folder of documents which is MFI 12 be returned to the solicitors for the prosecutor. 3. Costs reserved.

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: 19 October 2020

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