Atlas Copco Australia Pty Ltd v Oxair Gases Pty Ltd
[2013] WASCA 43
ATLAS COPCO AUSTRALIA PTY LTD -v- OXAIR GASES PTY LTD [2013] WASCA 43
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASCA 43 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:53/2012 | 8 FEBRUARY 2013 | |
| Coram: | PULLIN JA NEWNES JA | 22/02/13 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed Leave to cross-appeal granted Cross-appeal upheld | ||
| B | |||
| PDF Version |
| Parties: | ATLAS COPCO AUSTRALIA PTY LTD OXAIR GASES PTY LTD |
Catchwords: | Appeal Whether discovered documents should be produced for inspection Whether redacted portion of discovered document should be produced for inspection |
Legislation: | Nil |
Case References: | Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3] [2009] WASC 67 Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 2] [2010] WASC 217 Minetec Pty Ltd v Frost [2011] WASC 145 Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341 Oxair Gases Pty Ltd v Atlas Copco Australia Pty Ltd [2012] WASC 167 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : ATLAS COPCO AUSTRALIA PTY LTD -v- OXAIR GASES PTY LTD [2013] WASCA 43 CORAM : PULLIN JA
- NEWNES JA
- Appellant
AND
OXAIR GASES PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
Citation : OXAIR GASES PTY LTD -v- ATLAS COPCO AUSTRALIA PTY LTD [2012] WASC 167
File No : CIV 2984 of 2009
(Page 2)
Catchwords:
Appeal - Whether discovered documents should be produced for inspection - Whether redacted portion of discovered document should be produced for inspection
Legislation:
Nil
Result:
Appeal dismissed
Leave to cross-appeal granted
Cross-appeal upheld
Category: B
Representation:
Counsel:
Appellant : Mr J Healy
Respondent : Mr L A Tsaknis
Solicitors:
Appellant : Corrs Chambers Westgarth
Respondent : Murfett Legal
Case(s) referred to in judgment(s):
Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3] [2009] WASC 67
Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 2] [2010] WASC 217
Minetec Pty Ltd v Frost [2011] WASC 145
Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341
Oxair Gases Pty Ltd v Atlas Copco Australia Pty Ltd [2012] WASC 167
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60
(Page 3)
1 REASONS OF THE COURT: These are interlocutory appeals:
(a) by the appellant against a decision of Master Sanderson who upheld a claim by the respondent that certain documents it discovered were privileged and did not have to be produced for inspection; and
(b) by the respondent (by cross-appeal) against the master's order requiring the redacted portion of one document (document 259) discovered by it be made available to the appellant for inspection.
The background
2 The background is conveniently set out in the master's reasons for decision: Oxair Gases Pty Ltd v Atlas Copco Australia Pty Ltd [2012] WASC 167. The master said:
By application to the case management registrar made 16 September 2011, the defendant in this action sought inspection of certain documents which had been discovered by the plaintiff but over which privilege had been claimed. To understand the nature of the application then made it is necessary to consider the statement of claim as it stood at that stage.
The plaintiff alleged that at various dates in May 2004 the parties entered into a partly-oral, partly-written agreement pursuant to which the defendant would manufacture, supply and commission a compressor and a dryer for use in the mining industry. Various terms are pleaded. The plaintiff then says in breach of the agreement the compressor and the dryer would not perform as they were supposed to. The plaintiff says as a consequence it has suffered loss and damage. The compressor and the dryer were to form part of an oxygen purification plant supplied by the plaintiff to Carpentaria Gold Pty Ltd (Carpentaria). The statement of claim defines the equipment supplied by the plaintiff to Carpentaria as 'the Plant'.
By par 12 of the further amended statement of claim, the plaintiff claimed loss and damage. Particulars were provided. Relevantly, those particulars were as follows:
(a) reimbursement of monies withheld by Carpentaria pursuant to its contract with the plaintiff dated 27 August 2004 by reason of the failure to properly commission the Compressor and Dryer $111,818.18;
(b) an order that the defendant do indemnify the plaintiff for any liability of the plaintiff to Carpentaria Gold Pty Ltd pursuant to the contract between the plaintiff and Carpentaria Gold Pty Ltd dated 27 August 2004.
(Page 4)
- When the plaintiff produced its list of discoverable documents, it claimed privilege over documents to do with its discussions with Carpentaria relating to the settlement of a claim made by Carpentaria against the plaintiff. It said these documents covered without prejudice negotiations and, consequently, should not be available for inspection by the defendant. The defendant objected. They said they were being called upon to meet a liability arising out of settlement negotiations between Carpentaria and the plaintiff. They said, in effect, the plaintiff had waived privilege by the way it had pleaded it case.
During the course of the special appointment, I indicated to counsel for the defendant I had difficulty seeing how the claim for privilege could be maintained given the way the pleading then stood. Counsel then sought to adjourn the hearing so the statement of claim could be amended. I granted the adjournment and relisted the matter for 27 March 2012.
By that date, the statement of claim had indeed been amended. Relevantly, par 12 had been amended by deleting subpar (b) of the particulars. Counsel for the defendant pointed out the removal of that subparagraph required some adjustment to the list of discoverable documents - some of the documents which had been discovered now no longer related to a matter in issue between the parties. Further, counsel indicated the plaintiff was considering its position with respect to some of the documents over which privilege had been claimed with a view to including those in the list of documents available for inspection. Accordingly, the matter was adjourned again, and was eventually heard on 2 May 2012.
By that date, the plaintiff had filed an affidavit of James Rodney Newell sworn 10 April 2012 verifying a list of documents. The amended list included under a heading 'Supplementary' certain documents which, it would appear, formally appeared in the list of documents over which privilege was claimed. In any event, there were some 25 extra documents in the list and these will be available for inspection.
In 'Part 3', privilege was claimed over 55 documents (the documents are listed 1 - 53, but there is a document numbered 14A and one numbered 17A). The amended list deletes 10 of these documents. Nine of those documents now appear in the discovery list and will be available for inspection. Document number 48, which is described as 'Copy letter from Murfett Legal to Carpentaria Gold Pty Ltd dated 13 December 2007', also appears in the available for inspection list, but in a redacted form. I will have more to say about this document in due course.
Part 3 of the first schedule to the amended list of documents sets out the basis upon which privilege is claimed over these documents. The defendant accepts privilege would attach to some of the documents over which privilege is claimed. For instance, there is no dispute the class of documents described in par 1, as professional communications between the plaintiff and its solicitors would be privileged. It is still the documents that
(Page 5)
- relate to the dealings between the plaintiff and Carpentaria in relation to the claim which the defendant wishes to inspect. So far as these documents are concerned, the basis of the claim for privilege is set out in par 4 of Part 3 of the first schedule. It is in the following terms:
Correspondence and file notes of without prejudice communications which have passed between the defendant and the Plaintiff and/or its solicitors and bundle of documents [sic] whose sole effect is to disclose the Plaintiff's own case, which bundle includes the following.
It is thereafter that the 55 documents are listed [1] - [9].
3 The master said that this background meant that 'two issues remained live: could the plaintiff claim privilege of the listed documents on the basis of so-called litigation privilege, and was document [259] properly redacted' [10].
The appeal
4 According to the master's reasons, an application was made by the appellant to the case management registrar seeking inspection of the 55 documents and this was referred to a special appointment with the master. The affidavit of James Rodney Newell dated 10 April 2012 deleted 10 documents from the list of documents over which privilege was claimed. In effect, the respondent's claim for privilege was in relation to a total of 45 documents.
5 The master upheld what he thought was the respondent's claim for litigation privilege. The master erred because the respondent never claimed litigation privilege. The respondent agrees that it never claimed litigation privilege. What was claimed was own case privilege. The master gave no consideration to that claim. Ground 1 must be upheld.
6 The respondent has filed a notice of contention claiming that the master's decision can be sustained because a claim of own case privilege can be substituted for litigation privilege. Both parties have filed submissions addressing the claim of own case privilege. The appellant submits that 'own case privilege' is 'not a valid ground of privilege'. The respondent contends that it is, and also contends that the documents did not have to be produced for inspection because the claim for own case privilege in relation to the particular documents should be sustained.
7 It is not appropriate for this court to embark on the task of determining whether the claim for own case privilege can be sustained when there has been no decision on the point by the master. It is not
(Page 6)
- appropriate for the parties to ask the Court of Appeal to embark, for the first time, upon an examination of 45 documents to determine an objection which was not in the mind of the master when he inspected the documents.
8 The proper course is to return the matter to the master for him to re-examine the documents in light of the arguments the parties now advance and which the appellant concedes were not advanced by either party in submissions to the master until the respondent's counsel spoke in reply.
9 It appears that no order was made by the master dismissing the appellant's application of 16 September 2011. As a result, there is no order for this court to set aside. The application remains on foot. If the master had made such an order, then the appropriate orders for this court to have made would have been to grant leave to appeal; to allow the appeal; to set aside the order of the master; and to return the matter to the master for determination. However, as no such order has been made, the appropriate order is to dismiss the appeal with the application to be determined by the master in light of the claim for own case privilege.
The cross-appeal
10 This dispute concerns one letter which has been discovered and produced for inspection in redacted form by the respondent. The letter is dated 13 December 2007. The letter is from the solicitors for the respondent to the company solicitor for Carpentaria. It has the number 259 in the discovery list.
11 The unredacted part of the letter relates to the circumstances of the dispute. It records the fact that Carpentaria and the respondent had previously agreed that, before Carpentaria commenced legal proceedings, Carpentaria would allow the respondent an opportunity to negotiate a settlement with the appellant. The letter states that a negotiated settlement had not been achieved and it invited Carpentaria to commence action against the respondent, and that when that occurred the respondent would join the appellant as a third party. It went on to state that the respondent suggested that there should be a procedure whereby Carpentaria would apply for judgment against the respondent and proposed that Carpentaria should then agree with the respondent to take no steps to enforce the judgment against the respondent until the respondent received payment of any judgment it obtained against the appellant.
(Page 7)
12 The redacted portion of the letter dealt with a different subject, namely, the respondent's financial circumstances. The basis for the redaction was set out in an amended list of documents filed by the respondent and verified in an affidavit by James Rodney Newell, who was a director of the respondent. The relevant part of the amended list of documents reads:
The relevant part of document numbered 259 … was produced for inspection but with a portion of the document redacted by reason that the redacted portion is not relevant to any matters in issue in this Action including paragraph 12(a) of the Further Reamended Statement of Claim, and because the redacted document is 'confidential', and is marked as such on its face. The redacted portion relates only to commercial matters which are not in dispute or otherwise in issue in this Action, and the disclosure of the redacted portion may prejudice the commercial interests of the Plaintiff.
13 Order 26 r 1B(1)(b) of the Rules of the Supreme Court 1971 (WA) allows a party making discovery to redact a document that contains information that is irrelevant or that the party objects to producing. Order 26 r 10 reads:
At any stage of the proceedings in any cause or matter the Court may subject to rule 11 order any party to produce to the Court any document in his possession, custody or power, relating to any matter in question in the cause or matter and the Court may deal with the document when produced in such manner as it thinks fit.
14 Order 26 r 11 reads:
No order for production of any documents for inspection or to the Court shall be made unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.
15 There is a conflict of opinion between members of the General Division as to whether the oath of a party who has covered up part of a document is prima facie conclusive in the absence of evidence from the other party who bears the onus of establishing that the redacted portion should be disclosed, or whether the party redacting bears the onus of satisfying the court that masking was appropriate.
16 As to the latter view, see Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3] [2009] WASC 67 [35] [39] (Martin CJ) and decisions which have followed Areva (namely, Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 2] [2010] WASC 217 [65] - [69] (Murphy JA); and Minetec Pty Ltd v Frost [2011] WASC
(Page 8)
- 145 [20], [26] (Corboy J)). As to the former view, see Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 [12] (Master Newnes) and other cases referred to by Martin CJ in Areva [33].
17 Order 26 of the Rules of the Supreme Court was amended to introduce r 1B after the decision in Areva. The only case which discusses the effect the amendment has on the Areva decision is Minetec [18], [19].
18 It is not necessary to consider the conflict in the cases decided in the General Division because the document in question was produced and examined by the master.
19 At the hearing before the master, the respondent submitted that the redacted material was irrelevant. As to that, the master said:
[T]he material [is not] irrelevant. I would accept it is commercially sensitive, but that is a different question. In my view, it relates to a matter in issue between the parties, as it goes to the matrix of facts relating to the plaintiff's dealings with Carpentaria. On that basis, the document, in its entirety, ought to be available for inspection [17].
- As a result, the master made an order, which was dated 5 June 2012, requiring the respondent to produce the letter for inspection in its unredacted form.
20 In Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341, 345, Menzies J said that whether a document is relevant to an issue is determined by the pleadings. However, that is an oversimplification. Documents are discoverable even though they are not directly relevant to an issue thrown up by the pleadings. Master Newnes, as he then was, observed in Youlden that:
In determining whether a document relates to a matter in question, and, therefore, whether it ought to have been discovered, the test is that set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (supra) as follows:
'It seems to me that every document relates to matters in question in the action which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in words 'either directly or indirectly' because it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance its own case or to damage the case of its
- adversary, if it is a document which may fairly lead to a chain of inquiry, which may have either of those two consequences.'
- The matters in issue are to be determined by reference to the pleadings: Mulley v Manifold (1959) 103 CLR 341 per Menzies J at 345. But regard must also be had to the conduct and admissions of the parties and the nature of the action: Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178 at 186 [4] [5].
21 The material in the redacted portion of the letter is not relevant to any pleaded issue, and it will not advance the case of the respondent or damage the case of the appellant. The appellant might be interested in the material, but mere interest in a document is no basis for ordering inspection. The master said that the material 'goes to the matrix of facts relating to the [respondent's] dealings with Carpentaria' [17]. That was an erroneous basis for determining whether the redacted material was relevant to any issue thrown up by the pleadings.
22 The master erred in making the order dated 5 June 2012 requiring the respondent to make the redacted material available to the appellant for inspection.
23 Leave to cross-appeal should be granted and the cross-appeal allowed. The master's order should be set aside.
24 The orders of the court will be:
(a) Appeal dismissed.
(b) The respondent's application for leave to cross-appeal be granted.
(c) The cross-appeal be upheld.
(d) The master's order of 5 June 2012 be set aside.
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