Ussia v Mirvac Real Estate Pty Ltd

Are the documents in question privileged?

1. Section 119 of the Evidence Act 1995 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 between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. [Emphasis added]
2. Section 117 of the Evidence Act relevantly provides: confidential communication means a communication made in such circumstances that, when it was made - (a) the person who made it, or (b) the person to whom it was made, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. confidential document means a document prepared in such circumstances that, when it was prepared - (a) the person who prepared it, or (b) the person for whom it was prepared, was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.
3. The Dictionary cross refers to these definitions in its own definitions of the same terms. "Document" is defined in the Dictionary of the Evidence Act as: document means any record of information, and includes - (a) anything on which there is writing, or (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them, or (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else, or (d) a map, plan, drawing or photograph. Note - See also clause 8 of Part 2 of this Dictionary on the meaning of "document".
4. Clause 8 of Part 2 provides: A reference in this Act to a document includes a reference to - (a) any part of the document, or (b) any copy, reproduction or duplicate of the document or of any part of the document, or (c) any part of such a copy, reproduction or duplicate.
5. For privilege under s 119 to attach to particular documents, the respondent must establish that they are: 1. confidential documents; and 2. prepared for the dominant purpose of the first defendant being provided with professional legal services relating to an Australian proceeding.
6. To the extent that different considerations apply to the draft reports and the chain of email correspondence, they are addressed separately below.

Confidential documents

1. Mr Carrigan, for the plaintiff, submitted that the email chain ought be treated as a confidential communication to which s 119(a) applies, to the exclusion of s 119(b). The effect of such a submission would be that no privilege could apply because the email chain records communications between Dr Smith (the expert) and Ms Harris, who is neither the client nor a lawyer acting for the client. There was no dispute that the draft reports are documents for the purpose of s 119.
2. In my view, the email chain ought properly be characterised as both a communication and a document, or a series of documents, in its or their own right. There is no warrant to read subss 119(a) and (b) as mutually exclusive. The plain application of the definition of "document" in the Dictionary of the Evidence Act is not excluded by the more particular definition of "confidential document" in s 117, which, in any event, picks up the term "document" as defined in the Dictionary.
3. The question then becomes whether the documents in question are confidential documents within the meaning of s 117 of the Evidence Act.
4. Mr Carrigan submitted that the claim for privilege must be proved by the party asserting it, and that this requires the provision of sworn or affirmed evidence making good the claim. I consider this more fully below in connection with the satisfaction of the dominant purpose test required by the chaussure of s 119. The question of whether an obligation of confidentiality exists is a separate and anterior factual question, albeit one which will usually overlap with the question of the purpose for which a document was brought into existence.
5. An obligation of confidence can be inferred. Matters relevant in assessing whether an obligation of confidence should be inferred in circumstances outside that of lawyer/client include the nature of the relationship in question, the nature of the communications or documents in question, and the purposes for, and context in, which they were made: see Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 at [33].
6. The only evidence before the Court on the present application was comprised in two affidavits of Ms Zorana Spasojevic, solicitor for the plaintiff, and the annexures or exhibits thereto. The exhibits comprised the contents of subpoena packet S-13, which is one of two packets of documents produced by Dr Smith to which the plaintiff has had access without objection. The annexures include the Report itself.
7. The evidence of the Report itself, together with the contents of packet S-13, establish that Dr Smith was instructed on behalf of the first defendant on 9 May 2022 to provide a report providing his opinion addressing seven enumerated questions in these proceedings. He was provided with copies of the pleadings and particulars in these proceedings, a copy of a report by John Tibbitts, the plaintiff's liability expert, dated 23 March 2022 ("the Tibbitts report") and various other contractual, maintenance and operational documents. Although counsel did not address me on this point, it is at the very least likely that the Tibbitts report would have been the subject of a Harman undertaking, which would constrain publication or use of any document which would disclose its contents.
8. In my view, the evidence is sufficient to establish that the circumstances in which Dr Smith created any documents that fall within the terms of paragraphs 3 and 4 of the subpoena were such that Dr Smith was under an express or implied obligation not to disclose their contents. The confidentiality requirement with respect to the documents in question is, therefore, satisfied.

Prepared for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding

1. For privilege to attach to the documents, they must not only have been created in circumstances in which there was an obligation of confidentiality with respect to their contents, but they must have been created for the dominant purpose of the client being provided with professional legal services relating to legal proceedings.
2. Unlike the old common law test, or the test in s 120 of the Evidence Act (which relates to litigants in person), what is commonly described as litigation privilege does not attach to documents because they have been prepared for the purpose of legal proceedings. For the privilege to attach, the documents must have been prepared for the purpose of the provision to the client of legal services relating to legal proceedings: New Cap Reinsurance Corporation Ltd (In Liq) & 1 Or v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [27].
3. In New Cap Re, White J, as his Honour then was, stated: 28 A lawyer will provide professional legal services in relation to a witness' statement of evidence where the lawyer is asked to advise on what the statement should contain and settle the form of the statement. The deployment of the final report by the plaintiff's lawyers through its service on the opposite party and its tender into evidence will also constitute the provision of professional legal services relating to the proceeding. 29 Section 119 directs attention to the dominant purpose for which each confidential communication or confidential document comes into existence. The dominant purpose for which a final expert's report or final witness statement is brought into existence would presumably be for the purpose of being laid before the Court as the witness' evidence. Prima facie, it would not be privileged (Attorney-General (NT) v Maurice at 480). However, draft reports, and notes used in preparing a report, may stand at a different position, particularly where the expert has been retained by the party's solicitors and it is expected that the party's lawyers will advise on the contents of, and settle the form of, the report. There is nothing improper in such a course. It is not inconsistent with the expert's paramount duty being the duty to the Court and not to the client retaining him or her. 30 It will be a question of fact, to which the expert may be required to put his or her oath, as to whether any draft reports prepared and kept by him, and working notes prepared by him or his staff, were brought into existence for the dominant purpose of the plaintiffs being provided with professional legal services. If they were prepared for the dominant purpose of a draft report being submitted for advice or comment by the plaintiffs' lawyers, then they would be privileged under s 119. However, if they were brought into existence for the dominant purpose of the expert forming his or her opinions to be expressed in the final report, then it could be arguable that they were not made for the dominant purpose of the plaintiffs being provided with professional legal services relating to the proceedings. … 34 Section 119(b) of the Evidence Act extends the privilege to confidential documents, whether communicated or not, provided they were brought into existence with the requisite dominant purpose. The question however is what that purpose is. If an expert prepares a draft report, or notes for the report, with the dominant purpose of a draft report (whether the precise draft then prepared by the expert or an intended later draft) being furnished for comment or advice by the lawyer, then it is privileged. If not, it is not. 35 The issue may not be an easy one to determine. In all probability, an expert witness retained by a lawyer for a party will prepare a draft report with the intention (and purpose) that it will set out the evidence which he or she expects to give, but also with the intention and purpose of its being considered and commented on by the party's lawyers. If the latter purpose is dominant, the document so produced is privileged. If not, it is not privileged.
4. In the present case, the only evidence before the Court is in the affidavits and exhibits relied upon by the plaintiff. The first defendant did not go into evidence at all.
5. Mr Whealing submitted on behalf of the first defendant that the nature of Dr Smith's retainer brought the documents in question within a general principle that draft expert reports and communications of a like nature with an expert witness will be privileged under s 119(b) of the Evidence Act. He cited in support of that proposition a number of authorities, including Natuna Pty Ltd v Cook [2006] NSWSC 1367, New Cap Re, ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859 and Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops (No 7) [2008] FCA 323.
6. Mr Whealing also submitted that an inference might be drawn as to the identity of the documents by reference to the categories of the subpoena to which they responded. There is some force to Mr Whealing's submission in this regard - if the documents in question were not draft reports or communications between Dr Smith and a third party, they would not have been produced in answer to paragraphs 3 and 4 of the subpoena. I accept that the documents in packet S-15 meet that description.
7. Finally, Mr Whealing invited the Court to inspect the documents in question, contending that the documents themselves would provide sufficient evidence as to the dominant purpose for which they were created. Mr Carrigan strongly objected to this course.
8. As a general proposition, it is true that the privilege will typically attach to draft expert reports and communications of a like nature with an expert witness. This depends, however, on the establishment of a dominant purpose within the terms of s 119 as a fact. The privilege does not attach simply by reason of the classification of a document as a draft report or its preparation by an expert witness retained for the purpose of the proceedings. As stated by White J in New Cap Re, purpose is a question of fact, which may require the expert to give sworn evidence as to his, her or their purpose in preparing the document.
9. In Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [32], Brereton J remarked on the need for evidence as to purpose: … the essential issue on a claim for privilege is the purpose for which the document or communication in question was made. As that involves ascertaining the purpose of a person, the best direct evidence will be that given by the person whose purpose is in question. While purpose may be inferred from the document, direct evidence of it can be given by the person whose purpose it is. While the documents themselves may well illuminate the purpose for which they were created, to allow them to be used as evidence - let alone the sole evidence - in support of a claim for privilege, would be contrary to well-established practice. It would also be grossly unfair to the other party: if the only evidence of purpose is to be inferred from the document itself, the party seeking access is deprived of any opportunity to test the asserted purpose, which would defeat rather than promote the intent of enabling claims to be tested and scrutinised.
10. After considering occasions on which the Court has inspected documents over which a claim for privilege was made in the absence of satisfactory affidavit evidence (including occasions on which he had himself adopted that course), Brereton J went on to say at [34]: Better informed now by the above analysis, in my view, such an approach is not merely unsatisfactory, but impermissible in principle. Whether the creature of judicial decision or, as I think more properly, rules of court, the court's power to inspect documents - and to require their production for that limited purpose - was a response to the potential injustice in treating the claimant's oath as conclusive. The power was not intended to detract from the requirement that a person claiming privilege prove, by admissible evidence, the grounds of the claim. While it is clear that the court may now require a document the subject of a claim of privilege to be produced so that it may inspect it for the purpose of ruling on the claim, that is quite a different notion from permitting a person claiming privilege to sustain the claim by adducing no testimonial evidence but asking the court to inspect the documents. …
11. On appeal in Rinehart v Rinehart [2016] NSWCA 58, the Court of Appeal expressly endorsed the position set out by Brereton J at paragraph [32] of the primary judgment, adding at [31] of the appeal judgment: That is not to deny that there may be occasions when it is appropriate for a court itself to inspect documents in order to resolve a contested claim of privilege, although, as the primary judge said, the unsatisfactory nature of that course has been remarked upon on many occasions. Much will depend on whether all parties consent to that course, the nature of the documents and the magnitude of the dispute.
12. The approach of Brereton J in Hancock v Rinehart (Privilege) has also been endorsed in a number of subsequent decisions, including Lila Foxall (by her tutor Robert Foxall) v Kristy Carter (No. 2) [2023] NSWSC 872 per Harrison AsJ.
13. In Komlotex Pty Ltd v AMP Pty Ltd [2022] NSWSC 1525, Rees J suggested a qualified approach to Hancock v Rinehart (Privilege) with respect to the discretion to inspect the documents as follows: [9] I do not consider that Hancock v Rinehart (Privilege) establishes a strict two-stage process for considering claims for privilege, where the Court must first be satisfied that the party claiming privilege has adduced evidence to a certain level of detail and quality before deciding whether to inspect the documents. In some instances, one may simply point to the nature of the documents in order to establish a claim for privilege: Grant v Downs at 689. In Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305; (2016) 339 ALR 635, whilst acknowledging Brereton J's statements in Hancock v Rinehart (Privilege), Beazley P and Macfarlan JA observed that the Court is not confined to express statements made in support of a claim for privilege and may draw inferences from other proven facts: at [33]-[34]. For example, in Neal v Neal [2018] NSWSC 1356, Hallen J accepted a simple and global description of the basis of a claim for privilege, where a subpoena sought production of a solicitor's file in a family law matter. The solicitor's affidavit, albeit brief, "would, as a matter of common sense, be more likely than not. It is an inference that can, and should, be drawn": at [15]. [10] The fact that a claim for privilege is devoid of supporting evidence - such that the burden of determining whether the claim for privilege is sound is, effectively, cast entirely on the Court - is certainly relevant to the exercise of discretion to inspect the document. Beyond this, however, the powers of the Court to inspect documents are "wide and should not be unduly circumscribed": Rinehart v Rinehart at [20]. [11] Further, where there is a reason why the party claiming privilege has been unable to adduce detailed evidence in support of the claim, the Court may be reluctant to reject the claim for privilege outright, given the importance of the privilege as a fundamental common law right: Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49; at [9]-[11]. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers: Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) 201 CLR 49; [1999] HCA 67 at [35]; Cantor v Audi Australia Pty Ltd [2016] FCA 1391 at [56] (per Bromwich J). As Lord Taylor CJ described it in R v Derby Magistrates' Court; Ex parte B [1996] AC 487, "Legal professional privilege … is a fundamental condition on which the administration of justice as a whole rests": at 507.
14. In the present case, the first defendant has adduced no evidence at all and has not explained its failure to do so. If it had elected to do so, there would have been ample time, since the service of the notice of motion and affidavit in support some six weeks ago, to prepare an affidavit explaining the factual foundation for its claim. In the circumstances, I do not see a sufficient basis for the exercise of the discretion to inspect the documents, and I decline to do so.
15. In the absence of evidence setting out the factual basis for the claim for privilege, in assessing that claim the Court is left to rely on such evidence as was tendered by the plaintiff and whatever reasonable inferences are available from known facts. Consistent with my findings as to confidentiality set out above, it is tolerably clear that Dr Smith was retained for the purpose of the litigation and I infer that the draft reports and email chain were prepared for the purpose of the litigation.
16. That inference is not sufficient, however, to meet the requirements of s 119(b) of the Evidence Act. As White J indicated in New Cap Re, it is a matter to be established on evidence if copies of draft reports, which were prepared by an expert and retained by him, her or them, were also to be provided to the client's legal advisors to be settled or commented upon, and that this latter purpose was the dominant one. On the material before me, I cannot draw an inference to this effect.
17. Similarly, the email chain is described as being only between Dr Smith and Ms Harris, neither of whom provided legal services to the first defendant. The evidence does not allow me to infer that the substance of those communications was passed on to, or originated from, the client's legal advisors, although if this had been established, an inference similar to that drawn by Hallen J in Neal v Neal might well have been available.
18. Accordingly, on the evidence before me, I find that the first defendant's claim for privilege over the documents in packet S-15 is not made out. It follows that the plaintiff is entitled to access to those documents.

Waiver

1. In light of my findings as to the existence of the privilege, the question of waiver does not arise.

Further relief sought: compliance with the subpoena

1. In addition to the claim with respect to the privilege asserted over packet S-15, the plaintiff sought an order requiring Dr Smith to comply fully with the subpoena of 2 May 2023.
2. There was evidence of the contents of packet S-13, but not of the contents of packet S-14, which was also produced on behalf of Dr Smith. I am not satisfied that there is any evidence that establishes non-compliance or incomplete production on Dr Smith's part. There is no basis to grant the relief sought in this respect.

Costs

1. As the plaintiff has been successful with respect to the principal issue before the Court, she is entitled to her costs of the motion.
2. Mr Carrigan sought indemnity costs on the basis that the conduct of the first defendant with respect to the motion was relevantly delinquent in that it did not specifically identify the documents the subject of the privilege claim or even respond to certain correspondence until the day before the hearing.
3. I do not consider the conduct of the first defendant to be delinquent in the sense that would warrant an order for indemnity costs. The position of the first defendant was unsuccessful, but I do not consider its conduct would justify the imposition of such a costs order.
4. The costs of the third defendant, who was represented at the hearing of the application but did not take an active role, will be costs in the cause.

Orders

1. The Court orders: 1. Pursuant to r 1.9 UCPR, the first defendant's objection to the production of subpoena packet S-15 on the ground that the contents of subpoena packet S-15 are privileged is overruled. 2. Grant the plaintiff general access to the documents produced by Clyde & Co on behalf of Dr Geoff Smith in subpoena packet S-15. 3. The first defendant is to pay the plaintiff's costs of the motion filed 11 October 2023 on the ordinary basis. 4. The third defendant's costs of the motion be costs in the cause. 5. The motion is otherwise dismissed.

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: 27 November 2023