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Aquasure Pty Ltd v Thiess Pty Ltd

Aquasure Pty Ltd v Thiess Pty Ltd

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Case Copied 25 August 2021 47 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2018 02258

AQUASURE PTY LIMITED (ACN 135 956 393)	Plaintiff
v
THIESS PTY LIMITED (ACN 010 221 486) & ORS (according to the attached Schedule)	Defendants

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JUDICIAL REGISTRAR:	Steffensen JR
WHERE HELD:	Melbourne
DATE OF HEARING:	9 July 2021
DATE OF RULING:	25 August 2021
CASE MAY BE CITED AS:	Aquasure Pty Ltd v Thiess Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2021] VSC 525 (First Revision 31 August 2021)

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PRACTICE AND PROCEDURE – Client legal privilege claims over reports commissioned following a flashover incident at a desalination plant Evidence Act 2008 (Vic), ss 118 and 119 – Whether privilege sufficiently proved – Whether privilege has been waived - Evidence Act 2008 (Vic), s 122(2) - Whether Court should exercise discretion to inspect documents the subject of the claim to privilege – Evidence Act 2008 (Vic), s 133.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Plaintiff excused from attending	Wotton & Kearney
For the First and Second Defendants	Mr S. Hay QC with Mr R. Minson of Counsel	Lander & Rogers
For the Third Defendant	Mr A. McClelland QC with Mr A. Christopherson of Counsel	Kennedys (Australasia) Pty Ltd

TABLE OF CONTENTS

A.. Introduction

B... The Tractebel Reports

C.. Are the March Report and the Undisclosed Report Privileged?

(i)          Principles
(ii)         The Parties’ Arguments
(iii)        Consideration
March Report
Undisclosed Report

D.. Has Privilege been Waived?

(i) Issue Waiver
(ii) Partial Disclosure Waiver

E... Conclusion

JUDICIAL REGISTRAR:

A. Introduction

The Thiess Degrémont Joint Venture (TDJV) is a joint venture by Thiess Pty Limited and Suez Water Pty Limited. TDJV was engaged by the plaintiff, Aquasure Pty Limited (Aquasure) to design and construct the Victorian desalination plant, including its electrical assets and the assets required to supply power to the desalination plant. The power supply system included a component known as a gas insulated switchgear or ‘GIS’. Siemens Limited (Siemens) was retained by TDJV to design, manufacture, supply and install the gas insulated switchgear.
On 11 December 2016, there was a “flashover” event in the gas insulated switchgear. This incident left the desalination plant without sufficient power to enable it to produce desalinated water in the period from December 2016 to April 2017.
Two proceedings have been commenced which concern the liability for loss suffered in connection with the flashover incident, being:
(i)a proceeding commenced by TDJV against Siemens in 2017 by which TDJV seeks contribution or indemnity from Siemens for any loss or damage TDJV is required to pay Aquasure. TDJV also claims its costs incurred in rectifying and remediating the flashover event (proceeding S CI 2017 05135); and
(ii)this proceeding commenced by Aquasure in 2018 against TDJV and Siemens, by which Aquasure claims loss arising from its failure to meet its obligations to supply desalinated water during the period that the desalination plant was without power (proceeding S ECI 2018 02258).
The two proceedings…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSC 525
Decision Date: 25 August 2021

CaseChat Overview and Summary

Aquasure Pty Ltd brought proceedings against Thiess Pty Ltd in the Supreme Court of Victoria. Aquasure, a contractor, sought damages for the alleged negligence of Thiess, the principal contractor, in relation to a flashover incident at a desalination plant. Aquasure claimed that Thiess’s negligence caused the incident, which led to significant damages. The dispute included claims related to the preparation of reports following the incident, which Aquasure argued were subject to client legal privilege.

The primary legal issues before the court were whether Aquasure had sufficiently established the existence of client legal privilege over the contested reports and whether the privilege had been waived. The court also had to consider whether it should exercise its discretion to inspect the documents claimed to be privileged, as per the Evidence Act 2008 (Vic), section 133. Aquasure argued that the reports were prepared for the purpose of obtaining legal advice, and thus, they were privileged. Thiess, on the other hand, contended that the privilege did not apply as the reports were also used for operational and management purposes.

The court found that Aquasure had not provided sufficient evidence to establish the existence of client legal privilege over the reports. The court noted that the burden of proof for establishing privilege rested with the claimant, and Aquasure had failed to demonstrate that the reports were prepared solely for the dominant purpose of obtaining legal advice. The court also determined that the privilege had not been waived and declined to exercise its discretion to inspect the documents. Consequently, the court ruled in favour of Thiess, finding that the privilege claim was unsubstantiated.

As a result of the court’s decision, Aquasure’s claim for damages based on the alleged negligence of Thiess was dismissed. The court held that Aquasure had not met the evidentiary threshold required to establish client legal privilege over the contested reports, and thus, the reports could be subject to discovery and use in the proceedings.

Orders