TransGrid v Members of Lloyds Syndicate 3210

Judgment 1By a notice of motion filed in these proceedings on 17 March 2011 the plaintiff, TransGrid, seeks an order preventing the fourteenth defendant, URS Australia Pty Ltd, from obtaining access to documents produced by Aurecon Australia Pty Ltd (formerly known as Connell Wagner Pty Ltd) in response to a subpoena served on it by URS. TransGrid does so on the basis that the documents in question are properly the subject of a claim by it of client legal privilege. 2These proceedings concern the construction for TransGrid by Walter Construction Group Limited of a cable tunnel from Sydney Park to a new substation at Haymarket as part of the upgrade of the Sydney CBD electrical grid. In connection with those works, TransGrid engaged Connell Wagner as a consultant. Under cl 3.14 of the consultancy agreement, Connell Wagner was required to appoint a representative who was responsible for all aspects of the services to be provided by it. That person relevantly was Ms Julie Filion. As contemplated by the consultancy agreement, Ms Filion was located in TransGrid's offices during the time that she occupied that position. 3The scope of the work to be undertaken by Connell Wagner was described broadly in Annexure 1 to the consultancy agreement. During the construction phase of the project, it included ensuring that "the Plans and Specifications are strictly followed and that the provisions of the Contract [that is, the construction contract] are professionally managed", assisting "to oversee and manage, through Contractors, the construction of all Contract Works" and assisting "to negotiate and manage contract disputes on behalf of [TransGrid] in accordance with [TransGrid's] requirements" (Appendix 1 cl 1.7). 4In connection with the project, TransGrid also retained Doyles Construction Lawyers to provide legal advice in relation to the project. The retainer was not in evidence, but it is clear from the material before me that Doyles provided advice in relation to a variety of issues arising under the construction contract including claims made by Walter Construction. 5In issue in this application are 43 documents. Documents 1 to 15, 18 and 20 to 40 are all letters from Doyles addressed to Ms Susan Leech and, in many cases, Mr Reg Laing. Ms Leech had various roles with TransGrid during the relevant time. Principally, she was employed to act as Project Manager/Superintendent's Representative under the construction contract. Mr Laing's role was not explained in the evidence, although it is clear that he was an employee of TransGrid. Documents 16, 17 and 19 are faxes from TransGrid to Mr T Ireland of Connell Wagner enclosing copies of letters from Doyles to TransGrid. Document 41 is a letter from Ms Leech to Doyles which encloses some additional material. Document 42 is a letter from Pells Sullivan Meynink Pty Ltd, another consultant engaged by TransGrid, to Doyles. According to an affidavit sworn by Mr James Doyle, the purpose of that communication was to provide Mr Doyle with information in order to enable him to provide advice to TransGrid. Document 43 is a letter from Doyles to Connell Wagner enclosing information concerning a number of "RFIs" (Requests for Information) to be discussed at a meeting between Doyles and TransGrid the following day. 6Ms Leech swore an affidavit in support of the motion. In that affidavit, she said that copies of each of the letters from Doyles were provided to Ms Filion so that she could assist Ms Leech in carrying out her (Ms Leech's) duties in connection with the letters. It appears that Ms Filion retained copies of the documents when she returned to Connell Wagner and that is how they came to be produced in response to the subpoena that is the subject of this motion. 7During the course of argument a question was raised whether the current application should be dealt with under the Evidence Act 1995 or in accordance with common law principles. Mr White, who appeared for TransGrid, submitted that the application was one made under UCPR rule 1.9 or at least was governed by the Evidence Act as a result of s 131A of that Act. UCPR rule 1.9 relevantly provides: (3) A person may object to producing a document on the ground that the document is a privileged document or to answering a question on the ground that the answer would disclose privileged information. A "privileged document" is defined in the dictionary of the UCPR as a document that contains privileged information. "Privileged information" is defined to include communications that are the subject of client legal privilege under the Evidence Act . 8Section 131A of the Evidence Act relevantly provides: (1) 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 Division 1A [dealing with client legal privilege]; and (b) the person objects to giving that information or providing that document; the court must determine the objection by applying the provisions of Division 1A with any necessary modification as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence. "Disclosure requirement" is defined to include a subpoena to produce documents. 9Mr Miller, who appeared for URS, on the other hand, says that the relevant documents have already been produced to the court so that UCPR rule 1.9 and the Evidence Act s 131A do not apply. Rather, the question is whether URS should be entitled to inspect the documents. The answer to that question, according to Mr Miller, is governed by UCPR rules 33.4 and 33.9. Rule 33.4 gives the court power to set aside or to grant other relief in respect of a subpoena. Rule 33.9 sets out the procedure to be followed if a person with sufficient interest objects to the inspection of documents produced in response to a subpoena. That objection (and any relief sought under rule 33.4), however, must be dealt with in accordance with the common law: see Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151 (Brereton J). 10Notwithstanding that submission, Mr Miller said that he was content for the issue to be determined by reference to the Evidence Act on the basis that there was no relevant difference between it and the common law. In those circumstances, it is not necessary for me to deal with the issue he raised. I should, however, say that, in my opinion, it would be most unfortunate if different principles were to apply depending on whether the documents had actually been produced to the court. The clear purpose behind UCPR rule 1.9 and its predecessor Part 36, r 13(2) of the Supreme Court Rules, and behind s 131A of the Evidence Act, is to bring the law of privilege in relation to pre-trial production into line with the law (stated in the Evidence Act) as it applies at trial. So far as s 131A of the Evidence Act is concerned, it may be that the reference in subs (1)(b) to an objection to "providing that document" can be read as covering a case where objection is taken to the document being made available for inspection. Moreover, it may be that the court could make an order under UCPR rule 33.8 for the return of documents produced in response to a subpoena so that the matter could be dealt with under UCPR 1.9. However, as I have said, it is not necessary to deal with these possibilities in this case. 11Section 118 of the Evidence Act provides: Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer; or (b) a confidential communication made between 2 or more lawyers acting for the client; or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. "Client" is defined in s 117 to include an employee or agent of a client. It seems clear as a result of the decision of the Court of Appeal in Meteyard v Love [2005] NSWCA 444 that "agent" can include an independent consultant. In that case, for example, Basten JA (with whom Beazley and Santow JJA agreed), held that independent consultants engaged by an insurer to investigate a loss were agents of the insurer: see [2005] NSWCA 444 at [124]. Basten JA did not seek to define the limits of the word "agent" in this context but it seems to me that, if the purpose of a communication between a client and a third party, such as an independent consultant, is to enable the third party to assist the client in some way and the third party has no interest in the communication other than to provide that assistance, then the third party is acting as the agent of the client for the purpose of that communication. The position is different where the purpose of the communication is to enable the third party to engage in an activity of its own - such as a communication to an auditor to enable the auditor to perform his or her statutory duties: see Westpac Banking Corporation v 789TEN Pty Ltd [2005] NSWCA 321. 12Mr White's primary contention was that Connell Wagner was relevantly an agent of TransGrid. If that is the case, then the provision of copies of the advices from Doyles to Connell Wagner was not a separate communication of those advices to Connell Wagner but was part of the communication of advice by Doyles to their client. It follows that the purpose of the communication should be determined by reference to the purpose of the communication to TransGrid. In the alternative, Mr White, relying on s 122(5)(a)(i) of the Evidence Act , submitted that, even if Connell Wagner was not an agent of TransGrid, the communication of the advices to Connell Wagner did not amount to a waiver of the privilege because they were part of a confidential communication which was not inconsistent with the maintenance of the claim for privilege. 13Mr White's primary submission raises two issues. The first is whether the communications between Doyles and TransGrid were privileged. The second is whether Connell Wagner received copies of those communications in its capacity as agent of TransGrid. The debate between the parties centred on the second issue. It was not seriously contended that the communications were not for the dominant purpose of providing TransGrid with legal advice. In any event, I have inspected the documents and am satisfied that they were. On their face, they were brought into existence for the dominant purpose of advising TransGrid on its rights and liabilities under the construction contract. 14I am also satisfied that Connell Wagner received copies of the communications in its capacity as agent for TransGrid. Many of the letters were prepared to advise TransGrid on claims under the construction contract. One of Connell Wagner's functions was to negotiate and manage contract disputes "on behalf of" TransGrid. The words "on behalf of" are clearly the language of agency. Mr Miller submitted that Connell Wagner must have used the documents for other purposes such as preparing reports that it was required to prepare under its consultancy contract and consequently it could not be said that Connell Wagner received the communications for the dominant purpose of negotiating and managing disputes under the construction contract. However, in my opinion, that submission addresses the wrong issue. The question is not whether Connell Wagner received copies of the documents for the dominant purpose of assisting TansGrid in connection with contractual disputes. The question is whether Connell Wagner received the documents as agent for TranGrid. The answer to that question depends on whether Connell Wagner received the documents to assist TransGrid. It does not matter whether that assistance was in relation to the resolution of disputes under the construction contract or to provide assistance in some other way in connection with that contract. Ms Leech's evidence was to the effect that she provided the documents to Ms Filion so that Connell Wagner could provide assistance of that sort. Although Ms Leech did not give evidence in relation to each document and the precise assistance that she expected to receive, I do not think that that matters in this case. It is clear having regard to the nature of the advice and the relationship between the parties that Connell Wagner had no interest in seeing the advice except to assist TransGrid in managing its rights and obligations under the construction contract. It follows that it received those communications as TransGrid's agent and that the communications are privileged. That analysis applies to documents 1 to 40. 15Document 41 is a communication between TransGrid and Doyles for the dominant purpose of enabling TransGrid to obtain legal advice from Doyles. It is privileged for that reason. 16Document 42 raises different issues. Pell Sullivan is described as a "consultant" engaged by TransGrid. However, the nature of the consultancy is not described and consequently it is more difficult to say that Pell Sullivan must have been acting as TransGrid's agent in receiving the communication from Doyles. In my opinion, the mere fact that Pell Sullivan can be described as a "consultant" does not establish that it was TransGrid's agent for the purpose of receiving the legal advice. However, s 118(c) of the Evidence Act provides that the privilege attaches to the "contents of a confidential document (whether delivered or not) that was prepared by the client, lawyer or another person" for the dominant purpose of the lawyer providing legal advice to the client. The words "or another person" were added following the decision of the Full Federal Court in Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122 (2004) 136 FCR 357. Prior to that decision, a communication with a third party was only privileged if it was made for the dominant purpose of providing a client with professional legal services in connection with actual or anticipated legal proceedings. It was not privileged if it was simply made for the purpose of providing legal advice to a client unconnected with court proceedings. Originally, that distinction was preserved by the Evidence Act. Section 118 covered advice privilege and only applied to communications between the client and its lawyer. Section 119 covered litigation privilege and extended to communications with third parties. In Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357, the Full Federal Court held that that distinction should not be maintained at common law so far as documents prepared by third parties were concerned. The Evidence Act was amended to reflect that change, although the privilege was only extended to documents prepared by third parties. It does not cover all communications with third parties made for the purpose of a lawyer giving legal advice: see S Odgers, Uniform Evidence Law (2010) 9 th ed, Thomson Reuters at 591. The evidence is that document 42 was prepared for the dominant purpose of enabling Doyles to provide legal advice to TransGrid. For that reason, it is privileged. 17Document 43 is a communication from Doyles to Connell Wagner. The document contains advice from Doyles on RFIs made by Walter Construction. For the reasons I have given earlier, Connell Wagner was acting as TransGrid's agent in receiving the communication. It follows that the communication was a communication between a lawyer and the lawyer's client for the dominant purpose of giving legal advice. Consequently, it, too, is privileged. 18There should be an order in terms of paragraph 1 of the notice of motion. URS should pay TransGrid's costs of the motion.