Allison Pty Ltd (ACN 056 940 437) t/a Pilbara Marine Port Services v Lumley General Insurance Ltd - [2004] WASC 232

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ALLISON PTY LTD (ACN 056 940 437) t/a PILBARA MARINE PORT SERVICES -v- LUMLEY GENERAL INSURANCE LTD [2004] WASC 232

CORAM: MASTER NEWNES

HEARD: 18 OCTOBER 2004

DELIVERED : 16 NOVEMBER 2004

FILE NO/S: CIV 2195 of 1995

BETWEEN: ALLISON PTY LTD (ACN 056 940 437) t/a PILBARA MARINE PORT SERVICES
Plaintiff
AND
LUMLEY GENERAL INSURANCE LTD
Defendant

Catchwords:

Practice and procedure - Discovery of documents - Adequacy of description of documents for which privilege claimed - Relevant principles - Turns on own facts

Legislation:

Nil

Result:

Further discovery to be provided

Category: B

Representation:

Counsel:

Plaintiff: Mr D M Stone
Defendant: Mr G R Hancy

Solicitors:

Plaintiff: Williams & Hughes
Defendant: Phillips Fox

Case(s) referred to in judgment(s):

Alfred Crompton Amusement Machines Ltd v Commissioners of Customs and Excise [1971] 2 All ER 843
Braegrove Pty Ltd v Bendeich [1993] 2 Qd R 239
Buttes Gas & Oil Co v Hammer (No 3) [1981] QB 223
Cape Wools SA v KPMG Corporate Finance (Vic) Pty Ltd [2002] VSC 571
Gardiner v Irvine [1879] 4 Ex D 49
Halliday v ACN 003 075 394 Pty Ltd, unreported; SCt of Vic App Div; 11 April 1994
Holmes v Deputy Commissioner of Taxation (1987) 19 ATR 1278
Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410
Water Authority of Western Australia v AIL Holdings Pty Ltd (1992) 7 WAR 135

Case(s) also cited:

Nil

MASTER NEWNES: The plaintiff has applied for an order that the defendant give discovery and inspection of, in substance, all documents relating to certain inquiries made by the defendant's solicitors after 2 November 1995 and the response to those inquiries. It was described by counsel for the plaintiff as being in substance an application for particular discovery.
In the action, put briefly, the plaintiff claims indemnity under a policy of insurance issued by the defendant, in respect of the loss of a vessel, the "Pilbara Pilot", in a cyclone on 23 February 1995. The defendant has denied liability under the policy on the ground that at the time of the cyclone, contrary to the terms of the policy, the mooring on which the Pilbara Pilot was moored was not a cyclone‑proof mooring approved by the Harbour Master. The plaintiff, on the other hand, says that the mooring was a cyclone‑proof mooring approved by the Harbour Master. Whether, within the meaning of the policy, the mooring was a cyclone‑proof mooring approved by the Harbour Master is therefore an important issue in the action.
The defendant gave discovery on 15 May 1996. In the list of documents, which is annexed to the defendant's affidavit of discovery, a claim for privilege is made in respect of the documents enumerated in Pt 2 of the first schedule. Part 2 of the first schedule describes the documents for which privilege is claimed in the following way:
"Correspondence passing between the Defendant and its Solicitors, statements from witnesses and others, proofs of evidence, memoranda, opinions and drafts prepared and produced in anticipation of litigation and for the sole purpose of obtaining legal advice or for use in legal proceedings including:
(1)correspondence between Phillips Fox and Manu Marine, including reports from Manu Marine to Phillips Fox [the defendant's solicitors] dated
•05/04/95
•20/04/95
•09/05/95
•21/09/95
•02/11/95
(2)Reports prepared by Maritime Engineers Pty Ltd for Phillips Fox dated
•13/03/95
•16/05/95
(3)Report prepared by Shipping and Navigation Services Pty Ltd for Phillips Fox dated 23/11/95.
(4)Correspondence between Manu Marine and third parties at the request and instruction of Phillips Fox."
Subsequently, on 25 August 2003, the plaintiff's solicitors obtained, on an application under the Freedom of Information Act, a copy of a letter from Manu Marine to the Dampier Port Authority of 29 September 1995 and the reply to that letter from Captain Hammond, the Harbour Master of the Port of Dampier, of 1 November 1995 ("the Captain Hammond correspondence"). The plaintiff's solicitors wrote on 25 August 2003 to the defendant's solicitors, enquiring why the Captain Hammond correspondence had not been discovered by the defendant.
The defendant's solicitors responded by letter of 3 September 2003 in which they said that the Captain Hammond correspondence was correspondence between Manu Marine, in its capacity as the defendant's investigator, and a potential witness, obtained at the request of the defendant's solicitors and as such privileged. They said that privilege was claimed pursuant to par 4 of Pt 2 of the first schedule of the list of documents, that is, "[c]orrespondence between Manu Marine and third parties at the request of Phillips Fox." The claim to privilege, however, was not maintained. The defendant's solicitors informed the plaintiff's solicitors that the Captain Hammond correspondence was largely irrelevant and the defendant waived privilege over it. The defendant's solicitors said the defendant also waived privilege over the report from Manu Marine to Phillips Fox of 2 November 1995.
The plaintiff subsequently made an application to amend its reply and on 4 November 2003 an affidavit of the defendant's solicitor, Ms Clapin, was filed in opposition to that application. In the affidavit, Ms Clapin said, among other things:
"8After receiving a copy of the fifth report from Manu Marine dated 2 November 1995, Phillips Fox made further enquiries in relation to the approval status of 'PILBARA PILOT'S' operational mooring.
9The additional enquiries did not disclose any evidence to substantiate that formal approval for the 'PILBARA PILOT'S' operational mooring was granted by the Dampier Port Authority.
10Further, additional enquiries were made of Captain Hammond and what he said suggested that no informal approval was granted by the Dampier Port Authority of the 'PILARA PILOT'S' usual mooring. He did not identify when, how and by whom informal approval was granted."
The plaintiff says that the defendant, by waiving privilege over the Captain Hammond correspondence, and by the above statements in the affidavit of Ms Clapin, has waived privilege over documents relating to the further inquiries referred to by Ms Clapin and to the matters disclosed in the Captain Hammond correspondence.
It was not in issue, as I understood it, that there are, in fact, such documents in the possession, custody or power of the defendant. The defendant says, however, that the documents are privileged and they fall within the terms of the description of the privileged documents in the first section of Pt 2 of the first Schedule of the defendant's list of documents; that is "[c]orrespondence passing between the Defendant and its Solicitors, statements from witnesses and others, proofs of evidence, memoranda, opinions and drafts prepared and produced in anticipation of litigation and for the sole purpose of obtaining legal advice or for use in legal proceedings … including [c]orrespondence between Manu Marine and third parties at the request and instruction of Phillips Fox."
The plaintiff submitted that, if that were the defendant's contention, then the description of the documents for which privilege was claimed was manifestly inadequate because it did not identify those documents in a way that would enable the plaintiff to challenge the claim to privilege.
The defendant's counsel submitted that the general terms of Pt 2 of the first schedule were sufficient and no greater particularity was required. The defendant's counsel also submitted that any greater specificity would be time consuming and costly and was not justified as being necessary in the present case. It was also submitted that further specificity such as the date of each document would be of no assistance to the plaintiff and greater detail than that would disclose privileged matters.
Counsel for the plaintiff submitted, and I accept, that the adequacy of the defendant's description of the documents for which privilege is claimed must be resolved before the plaintiff's application is determined. I should say that the plaintiff's complaint about the adequacy of the defendant's discovery in that respect was set out in some detail in its written outline of submissions filed and served before the hearing.
I indicated to counsel for the defendant that I thought the general description in Pt 2 of the first schedule of the defendant's list of documents did not comply with the Rules, but equally I was concerned that the defendant should not be put to unnecessary time and expense in itemising a large number of documents about which there was not, or there was not likely to be, any question but that they were privileged, such as confidential letters of advice, briefs to counsel and the like. I therefore encouraged the parties to confer to see if an agreement could be reached upon a specific class, or a period of time, to which the documents in contention could be confined to avoid that.
On 27 October 2004, I was informed that the parties had been unable to reach any agreement. It is therefore necessary to consider the obligation of the defendant in respect of documents for which it claims privilege.
Where a claim for privilege is made it is necessary that any documents for which privilege is claimed be properly described. Unless such documents are sufficiently described, it will be impossible for the other party to discern whether the claimed privilege is properly made. It is not sufficient merely to assert that the documents are privileged, which is a statement of law, but the facts relied upon as giving rise to the privilege must be set out so the claim for privilege can be tested, although the facts should not be set out in such detail as would enable the contents of the documents to be ascertained indirectly: Gardiner v Irvine [1879] 4 Ex D 49 at 53. That is, an adequate description is required of each of the document for which privilege is claimed, but not one which indirectly reveals its contents: Buttes Gas & Oil Co v Hammer (No 3) [1981] QB 223 at 265. Accordingly, traditional verbal formulae or incantations in general terms, although time‑honoured, may be inadequate to establish a claim to privilege.
Where more than one ground of privilege is relied upon, the specific ground or grounds relied upon for each document must be related to that document, and it is not sufficient to state a number of grounds without specifying which of them relate to which document. That does not mean that a number of documents cannot be grouped together in some way under one or more grounds of privilege. The form is not important so long as it is clear in respect of each document on what basis or bases the privilege is claimed: Cape Wools SA v KPMG Corporate Finance (Vic) Pty Ltd [2002] VSC 571 at [24].
In Halliday v ACN 003 075 394 Pty Ltd, unreported; SCt of Vic App Div; 11 April 1994, in respect of a general description of claimed privileged documents in terms similar to the general part of Pt 2 of the defendant's list of documents in this case, Ormiston J, with whom the other members of the court agreed, said [at 7]:
"It is not appropriate, as has been laid down on many occasions, for a claim for privilege to be made simply en globo and by reference to three classes of documents of the kind set out. It is of course not uncommon to see affidavits in this form, and often no objection is taken to them, but it is not a proper description, and one may look at work such at Atkins' Court Forms Vol 15 1983 ed. at 117 ‑ 119 to see that the appropriate method of describing privileged documents is to enumerate them, that is to list them, and then to identify the bases upon which the privilege is claimed.
It is not necessary for the purpose of this judgment to go further and identify precisely how Pt 2 should have been drafted, except to indicate … there should have been an enumeration and listing of the relevant documents so that, if necessary, the claim for privilege might be challenged … It is, of course, not required that the documents be listed in a manner which would result in the loss of the benefit of privilege, but that does not mean that some listing should not be required."
In Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410, White J said [at 414]:
"It is both necessary and desirable that the description of a particular document for which protection is claimed should be sufficient to disclose quite readily (without disclosing contents) whether or not it is in fact a document to which the head of privilege relied upon can extend … "
See also Holmes v Deputy Commissioner of Taxation (1987) 19 ATR 1278 per Davies J at 1286 and Alfred Crompton Amusement Machines Ltd v Commissioners of Customs and Excise [1971] 2 All ER 843 per Eveleigh J at 847 – 848, Cape Wools SA v KPMG Corporate Finance (Vic) Pty Ltd (supra), Water Authority of Western Australia v AIL Holdings Pty Ltd (1992) 7 WAR 135 at 140.
Therefore what is required adequately to describe a document will depend upon the nature of the document and the ground of privilege claimed. Normally, as a minimum, documents for which privilege is claimed will have to be enumerated and dated, unless doing so would defeat the privilege claimed: Braegrove Pty Ltd v Bendeich [1993] 2 Qd R 239 at 242.
The description of the documents for which privilege is claimed in this case is in a common form and in this jurisdiction normally no objection is taken to it, except when a dispute arises as to the claim for privilege. It is generally a convenient form for documents for which there could not be any reasonable contention that the documents are not privileged and serves to save the time and cost of itemising such documents. It is not, however, an appropriate form where there is any prospect that the claim for privilege might be the subject of a bona fide challenge by the other party or, where, as in this case, matters arise subsequently which lead to the claim for privilege being challenged. In those circumstances, the convenience of the general form must give way to a proper and adequate description of the documents for which privilege is claimed or, at least, of the documents in respect of which the claim of privilege is, or may be, in contention.
In the present case, I am satisfied that the plaintiff's complaint that the general description contained in Pt 2 of the first schedule of the defendant's list of documents is inadequate, is made out. It seems to me that the appropriate course is to require that Pt 2 be put in order before the substantive hearing of the plaintiff's application for production of the documents for which privilege is claimed proceeds. I would not, however, propose to order that all documents for which privilege is claimed be specifically described. That is not necessary for the purposes of the present application and, as I understood it, is not sought by the plaintiff. No complaint is made by the plaintiff except in respect of any documents which arguably fall within the present challenge to the claim of privilege.
I would therefore propose to order that the defendant provide a list, verified by affidavit, of any documents falling within the description set out in the schedule to the plaintiff's summons of 28 July 2004 for which privilege is claimed, describing each of the documents sufficiently to establish the basis upon which the claim for privilege is based. I will, however, hear the parties on the precise form of the order.