Plaintiff v Defendants

Supreme Court of Victoria|2013-05-08|Before: DERHAM AsJ

PRACTICE and PROCEDURE - inspection of subpoenaed documents - client legal privilege - expert reports disclosed, used and relied on in pre-trial expert conclaves - express waiver of privilege in expert reports - production and inspection resisted of privileged documents subpoenaed from experts - documents produced with redactions - redactions record privileged conversations between expert and legal advisors of first defendant - whether notes redacted influencing or underpinning expert reports - whether privileged waived -- ss. 119, 122(2) and 126 Evidence Act 2008.

By Orders dated 26 March 2013 (amended on 15 April 2013), J Forrest J prescribed a process by which the plaintiff issued subpoenas for the production of documents addressed, inter alia, to AADI Defence Pty Ltd (the company through which Dr Barter was engaged) and to BMT WBM Pty Ltd (the company through which Mr Vasey was engaged) and by which SPI could inspect documents returned in answer to the subpoenas and seek orders objecting to their production to other parties.
By summons dated 22 April 2013 (the "Summons"), SPI sought orders which had the effect of restricting all parties other than SPI from inspecting 1,680 of the subpoenaed documents produced by BMT WBM Pty Ltd ("the Summons documents"). SPI did not object to other parties inspecting the subpoenaed documents produced by AADI Defence Pty Ltd.
Pursuant to Orders made by me on 24 April 2013 the Plaintiff's solicitors ("MBL"), by letter dated 26 April 2013, notified SPI that she pressed for inspection of 38 of the 1,680 Summons documents. Having considered the documents the subject of that letter, SPI maintained its objection to production of 9 documents, being:
- (a) 5 documents without redaction of part of the penultimate page (the "Unredacted documents"); and
- (b) 4 documents relating to matters that post-date Mr Vazey's second report (the "Post reports documents").
The Unredacted documents comprise 5 draft reports of Mr Vasey which, although not identical, had a section of text which was identical and identically redacted in each. The basis upon which SPI objected to production of the Unredacted documents is set out in its outline of submissions filed on 30 April 2013. Having considered those submissions, MBL, in their letter dated 26 April 2013, presses for production of the Unredacted documents on the basis that "[i]f information sought to be redacted was included in Mr Vazey's draft report because it was thought to be relevant to that part of the report, the information is not privileged merely because it was, at some stage, also presented in a briefing to solicitors".
The parties agreed that, having regard to the confined scope of the residual dispute, the most practical and efficient manner in which it may be resolved entails the Court examining the Unredacted documents and forming a view as to whether privilege has been waived by SPI in respect of them. In so doing, the parties agreed that the Court should be guided by the principles set out in my decision in Matthews v SPI Electricity Pty Ltd [2013] VSC 33.
I accepted this proposal and the documents were delivered to me for inspection on

3 May 2013. The text which SPI asserts should remain redacted appears on the tabbed penultimate page of each document, highlighted in yellow.

Mr Murphy's evidence in relation to the Unredacted documents is that the redacted sections record notes of a confidential expert/lawyer meeting, at which Mr Vazey provided to lawyers an informal briefing in relation to his field test and the data being produced. Mr Murphy deposed:

23. I am informed by my review of the subpoena documents and I believe that, from time to time, Herbert Smith Freehills requested Mr Vazey provide, on a confidential basis:

in relation to matters within the scope of his retainer. These briefings and queries sat outside Mr Vazey's obligations to formally report on Valley Span Field Test and his opinions thereon.

24. Documents which record the content or substance of these requests, informal briefings, queries and answers are included in the objection documents as they:

(a) record confidential communications passing between Mr Vazey and Herbert Smith Freehills made for the purpose of SP AusNet being provided with professional legal services relating to this proceeding, in respect of which there has been no waiver of privilege; and

(b) do not discuss or disclose consideration of the design and construction of the Valley Span Test;

25. Mr Vazey's notes from one informal briefing session are recorded on the final page of a draft report which appeared 5 times in the subpoena materials and on a document entitled "Project Notes.docx" (see item 2 of the Schedule entitled: "Redactions", page 161). These notes will be redacted for Client legal privilege in the copies of those documents to be provided to the solicitors acting for the plaintiff on 22 April 2013.

SPI relies upon s 119 of the Evidence Act 2008 (Vic) (litigation privilege) to make good its claim for privilege over the redacted notes. It contends that there has been no waiver in relation to the redacted sections, whether by s 122(2) or s 126 of the Evidence Act. In relation to s 122(2) of the Evidence Act, SPI submits that-
- (a) the proper enquiry is whether the applicant can establish as a fact, or as a reasonable inference, that the privileged documents influenced or underpinned the expert's report;[2] and
- (b) The redacted notes do not appear to contain matters which influenced or underpinned Mr Vazey's reports.
In relation to s 126 of the Evidence Act, whether or not disclosure is reasonably necessary to "enable a proper understanding" of the document, is to be determined objectively by the Court.[3] As the redacted sections record notes of a confidential expert/lawyer meeting, the redacted sections could not be "reasonably necessary to enable a proper understanding of the ... document". They form no part of the draft reports themselves, the contents of which are self-explanatory and require no elucidation by reference to the privileged meeting notes.
The parties agreed that if I formed the view from examination of the Unredacted documents that a waiver of privilege may have or has occurred, then a hearing would take place on 6 May 2013 as currently contemplated by the orders, in order that the parties may be heard further on the matter.
The parties agreed that if I formed the view from examination of the Unredacted documents that a waiver of privilege has not occurred, then the parties agreed that the orders sought by SPI in its Summons ought be made in respect of them, with costs of and incidental to the Summons to be costs in the proceeding, without any need for the parties to be heard.
Upon review of the Unredacted documents, each of which is a draft of Mr Vazey's First Report dated 22 August 2012, I was unclear as to whether there was potential for a part of the redacted material to influence Mr Vazey's First Report. I raised this matter with Counsel for SPI, Mr Quinn, as best I could without revealing the subject matter and was informed that on an analysis of the final version of that Report there was no basis for the matter in question to have influenced the Report. I undertook to make that analysis before handing down my decision.

I set out at some length the applicable law in my decision in Matthews v SPI Electricity Pty Ltd [2013] VSC 33 ("my earlier reasons").
The decisions to which I referred in paragraphs [42] to [54] of my earlier reasons on the question of waiver of privilege,[4] make it clear that waiver will occur where the privileged document (or the document recording a privileged communication, as is the case here), as a reasonable inference, underpinned or influenced the expert report that has been relied upon. This applies where, for example, there is a confidential briefing or instruction by the lawyer to the expert, "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",[5] or, put another way, "upon which that witness bases the expert opinion".[6]

The redacted parts of the 5 draft reports are notes added by Mr Vazey at the end of the draft reports during an "informal briefing session" with SPI's solicitors. Having inspected the notes, and examined Mr Vazey's First Report, I can see no basis for an inference that the matter recorded in the notes satisfies the test for waiver under s 122, or the associated materials waiver under s 126, of the Evidence Act. I cannot discern any influence that the notes might have had on the Report. I reiterate the comments I made in paragraph [85] of my earlier reasons in Matthews v SPI [2013] VSC 33 as to the limitation upon a non-expert in making this assessment.
For these reasons, I conclude that there has been no waiver of privilege in respect of the redacted parts of the 5 draft reports that comprise the Unredacted documents. In these circumstances the parties are agreed that the orders I should make are:
- (a) The documents produced by BMT WBM Pty Ltd to the Prothonotary on 9 April 2013 in response to subpoena dated 26 March 2013 and identified as documents 1 to 5 under the heading "redactions" on page 161 of exhibit SMM-2 to the affidavit of Shane Michael Murphy affirmed 22 April 2013 ("the unredacted documents") be placed in a sealed envelope marked "Confidential, Privileged Material, not to be opened except by Court Order" and subject to further order not be available to be inspected;
- (b) The First Defendant's summons filed 22 April 2013 be otherwise dismissed; and
- (c) The costs of and incidental to the First Defendant's Summons filed 22 April 2013 be costs in the proceeding.

[1] The background to this decision is the subject of a joint memorandum of counsel for the plaintiff and SPI.

[2] Towney v Minister for Land & Water Conservation (NSW) (1997) 76 FCR 401, 412 (Sackville J); Sugden v Sugden [2007] NSWCA 312 [94] (McDougall J (Mason P and Ipp JA agreeing)).

[3] Matthews v SPI Electricity Pty Ltd [2013] VSC 33, [81] (Derham AsJ).

[4] Towney v Minister for Land & Water Conservation (NSW) (1997) 147 ALR 402, 414; Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438; [2003] FCA 804, [21]; New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258; Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd [2000] VSC 353, [58]; Roads Corporation v Love [2010] VSC 253; Prince Removal & Storage Pty Ltd v Roads Corporation [2012] VSC 245; and AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 234 ALR 651.

[5] Australian Securities and Investments Commission v Southcorp Ltd [2003] FCA 804, [21.4]

[6] Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd [2000] VSC 353, [58].

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