Tavcol Pty Ltd v Valbeet Pty Ltd

The documents in dispute

By the time the notices of motion were heard, the disputes had been very substantially narrowed. The documents in respect of which Tavcol sought, and Valbeet opposed, access were: 1. a draft report prepared by Mr Hines of SGA Property Consultancy (SGA) addressed to Valbeet's lawyers, and dated 5 March 2014; 2. working notes prepared by Mr Barry, a building consultant then employed by a company known as Partridge Partners, during or immediately following meetings with Valbeet's lawyers, held for the purpose of discussing a draft report on which he was working at the instruction of those lawyers; 3. four iterations of Mr Barry's draft report prepared between August 2012 and January 2014; 4. staff timesheets of Partridge Partners; 5. a letter from a Mr Jones of Kellyville Plumbing to Valbeet's lawyers dated 15 August 2014; and 6. Kellyville Plumbing's tax invoice to Valbeet's lawyers dated 15 September 2014.
The draft reports of Mr Hines and Mr Barry were never finalised. Hence, no reports by them have been served as evidence to be relied upon.
Mr Jones' report has been finalised and served, and is to be relied upon.
As to the draft report of Mr Hines, the only evidence as to its commissioning is that between October 2013 and May 2014, Valbeet's lawyers instructed SGA, specifically asking that Mr Hines inspect the Collector Hotel and provide a report dealing with the allegedly defective mechanical services. That evidence was given on information and belief by a solicitor in the employ of Valbeet's lawyers. She identified her informant.
Ms Painter objected to even that evidence, on the basis (picking up what Brereton J had said) that what was required was direct evidence, not hearsay evidence. She relied also on what Brennan CJ had said in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 513-514. In that case, the question was one of access to a document obtained pursuant to a warrant. That context is important. By reference to it, Brennan CJ said that the question was not one of review of executive action - the issue or execution of the warrant - but of the claim for privilege, which was "a distinct controversy" between the parties. His Honour said that: To determine that controversy, the court must act upon admissible evidence, not upon hearsay.
Ms Painter also relied on what Brereton J had said in Hancock (Privilege) at [35(2)] - that there must be "sworn direct evidence - not inadmissible hearsay or opinion". She submitted, further that there should have been, but was not, "direct evidence… given by the person whose purpose is in question": Brereton J in Hancock (Privilege) at [32].
I do not accept that hearsay evidence may not be relied upon. The application is interlocutory in character. It is accordingly subject to s 75 of the Evidence Act, which renders admissible (although it says nothing about the weight of) hearsay evidence if there is evidence of the source: 75 Exception: interlocutory proceedings In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.
I do not think that it follows from what Brennan CJ said in Propend that a decision on an application for access to a document, resisted on the ground of privilege, is final rather than interlocutory. When one looks at the whole of the relevant portion of his Honour's reasons, the distinction drawn was one between judicial review of executive action on the one hand, and decision of a controversy between parties - as to privilege - on the other. Further, his Honour pointed out that the Court was required to act on "admissible evidence", and his Honour's following words "not upon hearsay" were clearly intended to stand in contrast to (properly) admissible evidence.
Nor, in my view, should the reasons of Brereton J in Hancock (Privilege) be read as suggesting that hearsay evidence is inadmissible on an interlocutory application such as the present one. His Honour referred to "inadmissible hearsay…": that is to say, hearsay, the reception of which would not be saved even by the application of s 75 of the Evidence Act.
Thus, in my view, the solicitor's evidence as to the content of the instructions given by others to SGA was admissible.
However, the solicitor's affidavit went further. She sought to give manifestly inadmissible conclusory evidence, again based on information and belief, as to the purpose of the retainer of SGA. That evidence was inadmissible because it was mere assertion. It did not expose the facts that were said to support the conclusion of which (she said) she was informed by someone else. That seems to me to be a reasonably good illustration of "evidence" falling within the description "inadmissible hearsay". (It could also be described as "inadmissible opinion" evidence.)
Mr Pope, the solicitor on the record for Valbeet who had given instructions to SGA, gave no evidence (either directly or through the solicitor who swore on information and belief) of facts that would support the claim of legal professional privilege. Nor did any other of the lawyers named as having been involved in the retainer of SGA. Mr Hines gave no evidence whatsoever; nor did anyone else from SGA.
Mr Weinberger submitted that it could be inferred, from the circumstances in which SGA was retained, the time at which it was retained and the purpose of the retainer (to prepare a report), that the report was required for use in connection with the then current litigation. No doubt, that inference is available. However, I am disinclined to draw inferences in favour of a party who could have proved the relevant facts by direct evidence, but neither did so nor explained the reason for failing to do so. On the contrary, as it seems to me, where that party hides behind evidence given on information and belief from someone not involved in the relevant transaction at the time, and does not explain the unavailability of the witnesses who could give direct evidence, the Court should, rather, infer that their evidence was unlikely to have assisted the party. See Handley JA in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418.
Mr Weinberger submitted that it was obvious that the SGA report had been commissioned for purposes connected either with then reasonably anticipated legal proceedings or providing legal advice. However, no one has said that. Valbeet owned what presumably are valuable commercial premises. It was being told by its tenant, in no uncertain terms, that there were serious defects in those premises. It was no doubt in Valbeet's interest to have its own expert reports as to the alleged defects, so that it could take appropriate steps to protect its investment.
Thus, whilst it might be possible to infer (as Mr Weinberger submitted I should) that a purpose of commissioning SGA to provide a report was to enable Valbeet's lawyers to give it legal advice, or for use in possible litigation, it does not follow that this was the only, or at least a dominant (clearly paramount) purpose. Again, this is a matter that could and should have been proved by direct evidence. Again, I do not see why the Court should draw inferences where the party who could have given evidence has neither done so nor explained its failure to do so.
I should add that the Court cannot but be aware that reports are often commissioned by lawyers even though they may be required for purposes that are not all (or at all) privileged. The facts in Sydney Airport Corporation themselves show this. The report commissioned by an in-house lawyer employed by the corporation was required both for the purposes of legal advice and for other, non-privileged, purposes. There was no evidence to enable the Court to identify any one of those purposes as "dominant". In those circumstances, the claim for privilege failed.
It follows, in my view, that the claim for privilege in respect of Mr Hines' draft report has not been made good. I add that the same result would follow even if, contrary to what I have said, the position fell to be analysed by reference to s 119 of the Evidence Act.
I note that Mr Weinberger submitted that I could look at the documents for the purpose of deciding the factual questions relevant to the claim for privilege. I agree that I could do so. However I do not propose to take that course. If there had been evidence on the topic then, consistently with what Brereton J said in Hancock (Privilege) at [32], it might be appropriate to look at the documents to confirm the impression otherwise gained from the evidence. But where the documents themselves are put forward as effectively the sole evidence in support of the claim, it would be inconsistent with practice, and "grossly unfair", for the Court to rely on them. That unfairness would enliven the general discretion given by s.135 of the Evidence Act.
Further, but only if the position is to be analysed according to the common law, there is another reason why there would be no privilege in the draft report. That is because, as Lindgren J said in ASIC v Southcorp at [21(3)], "[d]ocuments generated unilaterally by [an] expert witnesses, 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". I accept that there may be cases where a draft expert report might expose communications of the relevant kind. However, there is no evidence that the draft report of Mr Hines would fall into that category, rather than into the more general category to which Lindgren J referred.
I turn to Mr Barry's working notes. His (then) employer, Partridge Partners, was instructed on varying dates between September 2011 and November 2013 (again, this evidence comes on information and belief from the solicitor, who was not personally engaged in the process of instructing that company). Partridge Partners was first retained before proceedings were commenced. That retainer was to respond to an expert report from a Mr McDonald that Tavcol had provided to Valbeet. It is common ground that Mr McDonald's report referred to the Expert Witness Code of Conduct (even though there were then no extant proceedings), and also that he has now prepared two reports which have been served on the basis that Tavcol intends to call Mr McDonald to give evidence. Mr Barry prepared a draft report.
Mr Barry said, of his notes, that they were prepared by him either during or immediately following meetings with Valbeet's lawyers, and that the meetings were for the purpose of discussing his draft report. However, as I have said, his report was not finalised, and no report from him has been served.
There is no evidence as to when the meetings in question took place. Mr Barry (who presumably could have identified their dates) did not do so. Nor did the lawyers involved in the meetings do so, although one would have thought they would have records that would have enabled them to do so. All that is known is that the instructions to Mr Barry (or to Partridge Partners) were given at various times between September 2011 (before proceedings were commenced) and November 2013 (after).
Again, it might be said that the circumstances in which the report was commissioned suggest that it was required for some privileged purpose. However, the evidence is no more informative than was equivalent evidence in the case of the retainer of SGA, or Mr Hines' draft report (see what I have said at [44] to [46] above).
Of course, I am presently dealing with the meeting notes rather than the various drafts of the report. However, the various drafts of the report cannot be ignored. If the report was not prepared for a privileged purpose (perhaps more accurately, if the evidence does not show, on the balance of probabilities, that it was prepared for a privileged purpose), it is difficult to understand why the notes of meetings to discuss the draft report might record privileged communications.
In those circumstances, I conclude that Valbeet has not made good the case that Mr Barry's notes of his discussions with its lawyers are privileged. That conclusion reflects in fact the manifest inadequacies in the evidence, and my disinclination to draw inferences where a party could have, but did not, adduce proper evidence.
Again, having regard to the deficiencies in the evidence, I do not think it appropriate to go to the documents for resolving matters that Valbeet could and should have proved by its own direct evidence.
I turn to the draft reports. As to two of those reports - those numbered 18 and 20 in the relevant Schedule - Valbeet's solicitor has sworn that she "reviewed these documents in their electronic format, and confirm[s] that they contains [sic] track changes authored [sic] by [Valbeet's lawyers] and also Mr Barry". Thus, as to those two documents, there is evidence that to disclose them would disclose communications made between the lawyers and Mr Barry.
There is no equivalent evidence in respect of the other two draft report reports (numbered 16 and 19 in the Schedule).
The difficulty however is that to which I have referred already. There is no acceptable evidence of the dominant purpose for which the draft reports were prepared. Thus, there is no basis for concluding that communications in relation to those draft reports, even assuming them to have been "confidential", are for a privileged purpose.
That is enough to dispose of the claims at common law (and also, were it applicable, under the Evidence Act). Again, in the case of the draft reports (with the possible exception of numbers 18 and 20), to the extent that the position is governed by the common law, it would be covered by what Lindgren J said in ASIC v Southcorp at [21(3)].
I turn to Mr Jones' letter to Valbeet's lawyers and the tax invoice from Kellyville Plumbing to Valbeet's lawyers. There is no evidence as to the subject of either of those documents, or as to why they might attract privilege, save that Kellyville Plumbing was retained (well after proceedings were commenced) to prepare a report concerning the water penetration defects alleged by Tavcol. Again, Mr Weinberger submitted that I could rely on inferences. Again, I do not propose to draw inferences when the party asking me to do so could have led direct evidence, but did not do so.
I acknowledge that there is some distinction between these documents and the previous ones, because the time at which Kellyville Plumbing was retained makes it more likely than not that the retainer was dominantly at least, for the purpose of providing expert evidence to be used in the litigation. However, that does not get over the problem that there is no evidence as to the content of the two documents in question to suggest that inspection of them might divulge privileged material.

Valbeet's application for access

The dispute concerns two categories of documents. One is documents prepared by Loss Management International (LMI), a firm of loss assessors retained by Tavcol to assist in the preparation of its insurance claim. The other relates (as matters have evolved) to a chart prepared by Mr Adam Giliberti in January 2013, and his file note prepared on 31 January 2013.
LMI produced a bundle of documents, including emails passing between it (or its representative Mr Steve Smith), Mr Neil Honan of Tavcol, and partners in or employees of the law firm Coleman and Greig. Emails passing between those people had been redacted. They were generally emails forming part of a chain. The early emails in the chain were between Mr Honan and representatives of Valbeet, seeking information about the repair of the defects that Tavcol alleged.
There was no evidence as to the basis of the claim for privilege in respect of the redacted LMI documents, apart from what could be gleaned from the documents themselves. The only thing that can be gleaned is that they were communications between Tavcol's representative Mr Honan, Tavcol's loss assessor Mr Smith of LMI, and a law firm then apparently retained by Tavcol.
It may be that the emails between Tavcol and Valbeet had been passed on to Coleman and Greig for advice. They may have been passed on for the information of the relevant partners or employees. The evidence does not disclose the purpose of the communications. The only evidence is that, at the time, LMI was preparing Tavcol's insurance claim, and apparently Coleman and Greig had been retained in connection with that.
In the absence of direct evidence, I do not propose to infer that the communications were for a privileged purpose, or that disclosure of the communications would result in the loss of some otherwise available privilege.
I turn to Mr Giliberti's documents. As to the chart, he said only that it was prepared in January 2013 "after I received instructions from the solicitors for the plaintiffs". He sought to give some evidence, in wholly inadmissible and conclusory form, as to his understanding of the purpose of preparation of the chart. However, objection being taken, that evidence was rejected.
The only remaining evidence as to purpose is thus some post hoc propter hoc inference, based on the temporal sequence of instruction and preparation. In the absence of direct evidence, I do not propose to infer that the chart was prepared for some protected purpose, or that its disclosure would result in the revelation of otherwise privileged communications.
The file note was said to record Mr Giliberti's notes of matters discussed at a meeting with Tavcol's legal advisors and its representatives Mr and Mrs Honan. Mr Giliberti said that in the course of that meeting the lawyers "provided Mr and Mrs Honan with legal advice". He did not say that his note recorded any of that legal advice. In those circumstances, I think that the common sense approach is to direct that the notes be produced for inspection, but on the basis that if, unrevealed by the evidence, they did record privileged material, they could and should be redacted.

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (21)

Cited By (17)