Actone Holdings Pty Ltd v Gridtek Pty Ltd

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Supreme Court


New South Wales

Medium Neutral Citation: Actone Holdings Pty Ltd v Gridtek Pty Ltd [2012] NSWSC 991
Hearing dates:23 August 2102
Decision date: 30 August 2012
Jurisdiction:Common Law
Before: Harrison J
Decision:

The defendant's notice of motion filed 10 August 2012 is dismissed with costs.

Catchwords: EVIDENCE - client legal privilege - waiver of privilege - where service of expert's report refers to report of another expert whose report is not served - whether privilege waived by the plaintiff - privilege not waived
Legislation Cited: Civil Procedure Act 2005
Evidence Act 1995
Cases Cited: Akins and Others v Abigroup Ltd [1998] NSWCA 8; (1998) 43 NSWLR 539
Gillies v Downer EDI Ltd [2010] NSWSC 1323
New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258
Sevic v Roarty (1998) 44 NSWLR 287
Category:Procedural and other rulings
Parties: Actone Holdings Pty Ltd (Plaintiff)
Gridtek Pty Ltd (in liquidation) (Defendant)
Representation: R O'Keefe (Plaintiff)
D M Loewenstein (Defendant)
Vardanega Roberts (Plaintiff)
Hunt and Hunt (Defendant)
File Number(s):2007/265199

Judgment

  1. HARRISON J: The defendant seeks an order that the plaintiff provide it with a copy of an expert's report prepared by the late Dr K A Walshe in February 2002. The plaintiff opposes the order upon the basis that the report is a privileged document and that the privilege has not been waived.

Background

  1. The circumstances that give rise to the claim are uncontroversial. They are as follows. In October 2001 a fire destroyed or damaged part of a shopping complex at St Ives in Sydney. The plaintiff has sued the defendant alleging that it negligently caused the fire. The defendant disputes that claim. Experts have been marshalled by both sides proffering opinions about that issue. Directions for the service of reports were made by consent on 8 February 2008 in accordance with which the plaintiff was required to serve expert evidence by 16 July 2008. That was later extended by consent to 19 December 2008 and then to 29 May 2009. Finally, a consent order was made requiring the plaintiff to serve its expert evidence by 18 September 2009. The plaintiff would appear to have served at least some of the following reports in accordance with those directions:

(a) Dr Colin Grantham dated 3 September 2009 - served 16 September 2009.

(b) Dr Colin Grantham dated 25 June 2012 - served 3 July 2012.

(c) Mr David Plaister dated 1 July 2009 - served 6 July 2009.

(d) Mr David Plaister dated 29 November 2009 - served 9 December 2009.

(e) Mr David Plaister dated 6 August 2012 - served 8 August 2012.

  1. Dr Grantham and Mr Plaister refer to Dr Walshe's report in some, but not all, of their reports. It is important to record the terms of these references.

  1. In his 3 September 2009 report, Dr Grantham says this at paragraphs 17, 18 and 25:

"WALSHE AND ASSOCIATES REPORT
17 The report of the late K A Walshe…
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Details
Case
[2012] NSWSC 991
Decision Date

CaseChat Overview and Summary

In the matter of Actone Holdings Pty Ltd v Gridtek Pty Ltd, the plaintiff sought to recover damages from the defendant for various alleged breaches of contract and tortious acts. The primary dispute centred on the admissibility of expert reports and whether the privilege attached to these reports had been waived. The case was heard in the Supreme Court of New South Wales. The central legal issue was whether the plaintiff had waived client legal privilege by serving an expert's report that referred to another expert's report, which had not been served. The defendant argued that the requirement to serve all relevant materials utilised in support of an expert's opinion meant that privilege was waived if a referenced report was not also served.

The court examined the statutory and rule frameworks governing the service of expert reports and the waiver of privilege. White J considered the relevance of section 119 and section 122 of the Evidence Act 1995, as well as the rules under the Uniform Civil Procedure Rules 2005. The court found that the defendant's arguments were not supported by authority and were contrary to established case law. In particular, the court referenced the decisions in Akins and Others v Abigroup Ltd and Sevic v Roarty, which held that compliance with a court order for disclosure did not amount to a waiver of privilege under section 122(2)(c) of the Evidence Act. The court also noted that the preparation of expert reports was subject to specific rules, but found no authority to support the defendant's contention that the plaintiff's decision to serve a report at trial triggered the earliest consideration of the privilege issue.

Ultimately, the court held that the privilege in Dr Walshe's report had not been waived. The decision was based on the principle that if the reports had been served in accordance with court directions, they were provided under compulsion of law, and thus privilege was not waived. The court also rejected the defendant's argument that compliance with a direction for the pre-trial service of experts' reports was not compelled by law, finding it contrary to established authority.

The final orders of the court were that the defendant's application to strike out parts of the plaintiff's statement of claim and to adduce evidence of the contents of Dr Walshe's report was dismissed. The court ruled that the privilege in Dr Walshe's report had not been waived and thus the report and its contents could not be adduced as evidence.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Section 119 of the Evidence Act 1995 is relevant and provides as follows: It is accepted for the purposes of my deliberations that Dr Walshe's report is a document that falls within the terms of that section. Section 122 is the source of the expression "under compulsion of law". It is in the following relevant terms: In Akins and Others v Abigroup Ltd [1998] NSWCA 8; (1998) 43 NSWLR 539, the Court of Appeal determined that the disclosure of an otherwise privileged witness statement in accordance with an order of a court, even if the order is termed a procedural direction, is a disclosure under "compulsion of law" within the meaning of s 122(2)(c), so that client legal privilege is not thereby waived. Mason P said this at 550-551: Sevic v Roarty was decided later the same year. Sheller JA expressed his conclusion at 300 as follows: Powell JA expressed his views at 301: His Honour concluded his analysis at 308 in these terms: Recently in Gillies v Downer EDI Ltd [2010] NSWSC 1323, Garling J expressed some doubt at [46] about the continuing significance of these decisions: White J also considered the question in New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [53] as follows: Counsel for the defendant embraced the significance of the rules relating to the preparation of experts' reports in aid of his submission that the privilege in Dr Walshe's report had been lost. UCPR 31.27(1) provides as follows: The defendant argued that it was not enough for the report simply to refer to the materials utilised in support of the opinion but that it must provide or furnish copies of any such materials. This is said to follow from the phrase "an expert's report must ... include any literature or other materials utilised in support of the opinions". Neither party was able to take me to any relevant authority dealing with the proper interpretation of this rule. The defendant also embraced the proposition adverted to by Garling J in Gillies, to the effect that the s 56 Civil Procedure Act2005 imperative meant that it was potentially inconsistent with the overriding purpose for there to be any delay between the service of a particular report and the determination of whether or not privilege over it or its contents had been waived. In particular it was said to be inimical to the just, quick and cheap resolution of proceedings for there to be any possibility that a trial, for which all parties may have prepared at great length and considerable expense, might be derailed by an argument, or the outcome of an argument, about such an issue. The defendant contended that the combination of s 56 and UCPR 31.27 supported the notion that (in this case) the plaintiff's as yet unknown decision at the trial about whether or not to tender any expert's report that refers to Dr Walshe's report should not be the event triggering the earliest consideration of the issue. In lay terms, the earlier the issue is decided, the better for all concerned.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

White J also considered the question in New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 at [53] as follows: Counsel for the defendant embraced the significance of the rules relating to the preparation of experts' reports in aid of his submission that the privilege in Dr Walshe's report had been lost. UCPR 31.27(1) provides as follows: The defendant argued that it was not enough for the report simply to refer to the materials utilised in support of the opinion but that it must provide or furnish copies of any such materials. This is said to follow from the phrase "an expert's report must ... include any literature or other materials utilised in support of the opinions". Neither party was able to take me to any relevant authority dealing with the proper interpretation of this rule. The defendant also embraced the proposition adverted to by Garling J in Gillies, to the effect that the s 56 Civil Procedure Act2005 imperative meant that it was potentially inconsistent with the overriding purpose for there to be any delay between the service of a particular report and the determination of whether or not privilege over it or its contents had been waived. In particular it was said to be inimical to the just, quick and cheap resolution of proceedings for there to be any possibility that a trial, for which all parties may have prepared at great length and considerable expense, might be derailed by an argument, or the outcome of an argument, about such an issue. The defendant contended that the combination of s 56 and UCPR 31.27 supported the notion that (in this case) the plaintiff's as yet unknown decision at the trial about whether or not to tender any expert's report that refers to Dr Walshe's report should not be the event triggering the earliest consideration of the issue. In lay terms, the earlier the issue is decided, the better for all concerned. In my view the difficulty with the defendant's contentions is that they are currently not only not supported by authority but they are in any event contrary to authority from the Court of Appeal that I am bound to follow and to apply. If the reports referred to earlier that have been served by the plaintiff were served in accordance with directions of the Court, made by consent of both parties, they were provided under compulsion of law. I was at one point attracted to the proposition that compliance with a direction or a practice note for the pre-trial service of experts' reports was not something that occurred under compulsion of law, in the sense that the party concerned was free to make its choice, and could choose without penalty or sanction to serve or not to serve a particular report. The only restriction that applied in such a case was that any party that chose not to serve, and thereby to "disclose", a report or reports in accordance with the direction or practice note, would thereafter be precluded from later being able to do so without leave. Put another way, it could be argued that a party could not be compelled by law or otherwise to disclose any report by way of service in compliance with a direction or practice note if that party decided that it did not want to do so and was at the same time content to accept the consequences.