Temwell Pty Ltd v DKGR Holdings Pty Ltd

RULING No 7 ON CLAIM OF LEGAL PROFESSIONAL PRIVILEGE IN RELATION TO COMMUNICATIONS TO AND FROM APPLICANT'S EXPERT WITNESSES 1 On 9 September 2003, I published a ruling in this matter on a claim advanced on behalf of the applicant ("Temwell"), that certain communications with expert witnesses were protected by legal professional privilege; see [2003] FCA 948. That ruling was focused on file notes made by Mr Pringle, one of Temwell's solicitors, of communications with two accounting or valuation experts, Ms June Wilson and Mr Peter Rayner. 2 A call has been made on behalf of the mCom respondents for production of further documents of the same general character recording communications with the same expert witnesses and two other witnesses, Mr Zeev Goldstein and Prof Goldschlager. Mr Goldstein's evidence included expert testimony going to the description or definition of "Application Software" developed in connection with the MTD 3000. Those communications were mainly between one or other of the four experts and Mr Pringle, Mr Godfred-Spenning, Mr Horsfall, who have all acted at relevant times as solicitors for Temwell and Mr Golvan SC, Senior Counsel for Temwell. The documents have conveniently been collated by Temwell's solicitors in five schedules, one devoted to each of the four expert witnesses identified above and a fifth "Schedule of Miscellaneous Documents Relevant to the Expert Witnesses." I have adapted those schedules for the purpose of indicating, in a manner corresponding with the schedule to my earlier ruling, [2003] FCA 948, whether the claim of privilege has been sustained or rejected. Except where the reasons for adopting one or other of those classifications have been expanded below, it may be taken that I have applied the principles outlined in the earlier ruling. 3 In respect of draft reports I have continued to apply, as I understood them, the principles distilled by Lindgren J in Australian Securities and Investment Commission v Southcorp [2003] FCA 804 from which I quoted extensively at [7]-[8] of my ruling of 9 September 2003. Where a draft report has been annotated in a way which seems to record instructions or further information supplied to the expert witness or records some development of the expert's own thinking, I have rejected the claim of privilege in respect of the draft as so annotated. On the other hand, if the annotations have appeared to record an understanding by Counsel or one of the applicant's solicitors of the effect of a passage in the draft or to record suggestions made for the preparation or conduct of the applicant's case which were not directed to the provision of a fresh or revised report by the expert, I have sustained the claim of privilege. 4 At first sight it may appear difficult to reconcile the approach taken in Southcorp, which I have followed in the present case, with the result reached by the Court of Appeal of the Supreme Court of Queensland in Interchase Corporation Ltd (In Liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 QdR 141 where a claim of legal professional privilege was upheld in respect of documents in Category A described as follows; 'Letters, facsimiles and enclosures passing between Feez Ruthning as solicitors for the plaintiff and Richard Ellis regarding the Retrospective Valuation, numbered 1 to 12 inclusive, contained in a folder marked with the letter "A" and entitled "Richard Ellis - Writ of Non-Party Discovery".' [Richard Ellis was a firm of real estate valuers.] 5 However, Thomas J in that case observed at 162; 'I would hold that in general, when an expert is engaged by a solicitor for the purpose of giving evidence in a case, documents generated by the expert and information recorded in one form or another by the expert in the course of forming an opinion are not a proper subject for a claim of legal professional privilege. Privilege may however be claimed in relation to communications between the expert and the solicitor (both ways) when such communication is made for the purpose of confidential use in the litigation. Beyond this there is no sufficient reason why any material relevant to the formation of the expert's opinion should be subject to a claim of legal professional privilege. It is as well to add that an expert or solicitor may not artificially manufacture privilege by, for example, the expert sending his or her file to the solicitor. Documents of this kind simply are not confidential.' 6 It is not clear from the description of the Category A documents or from the reasoning of either Pincus J or Thomas J (with both of whom de Jersey J agreed) what was regarded as permitting a conclusion that a communication between an expert witness and a party's legal adviser has been made "for the purpose of confidential use in the litigation". It may be that communications of the kind to which I have adverted in [3] above, such as explanations made to enable the legal advisers to better understand the expert's opinion or suggestions of lines of cross-examination of opposing expert witnesses were regarded as confidential in that sense. At all events, I consider that, in accordance with the principles enunciated by the High Court in Attorney-General (NT) v Maurice (1986) 161 CLR 475, it would be unfair for the claim of privilege to be sustained in respect of documents which record instructions, suggestions or information given or made to an expert witness or successive draft reports from which the development of his or her expert opinion can otherwise be inferred. That is particularly so in light of the Guidelines for Expert Witnesses in this Court published as a Practice Direction on 15 September 1998 which were in force when the relevant communications were recorded. Those Guidelines included this direction under the heading "The Form of the Expert Evidence": 'There should be attached to the report, or summarised in it, the following: (i) all instructions (original and supplementary and whether in writing or oral) given to the expert which define the scope of the report; (ii) the facts, matters and assumptions upon which the report proceeds; and (iii) the documents and other materials which the expert has been instructed to consider.' 7 In a passage from Southcorp at [5] which I have quoted at [8] of my ruling of 9 September 2003, Lindgren J discussed the treatment to be accorded to "marking up" or "tracking" which he described as having been made by a solicitor to highlight changes from one draft to another of the expert's report. That "marking up" or "tracking", his Honour regarded as a confidential communication from solicitor to counsel which attracts legal professional privilege. That may be unexceptionable as a matter of principle. However, since the same exercise could be carried out with no more than the expenditure of a little time by a reader of the two drafts, I have not undertaken the sterile task of trying to identify who "marked up" or "tracked" particular copies of draft reports which have apparently been so treated. In other words, where I have considered that, prima facie, a claim to privilege should be rejected in respect of a draft report, I have not departed from that conclusion simply because the relevant copy has been "marked up" or "tracked." 8 It was drawn to my attention in the course of oral submissions on the morning of 22 September 2003, that certain file notes made by Mr Pringle, a solicitor for Temwell, were divisible into discrete parts, only one or more of which recorded communications to or from expert witnesses so as to lose the legal professional privilege which has been claimed for the whole document. I have therefore ruled that the claim as to the file notes of 30 March 2001 at 9.30 am, 17 August 2001 and 20 May 2003 should be rejected only in respect of those parts recording communications to or from Prof Goldschlager. A similar approach has been taken to Mr Pringle's file note of 21 February 2003 and his conference note of 19 May 2003 in relation to Mr Rayner. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.