BIS Industries Limited v Kelso Pty Ltd - [2020] WASC 444

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   BIS INDUSTRIES LIMITED -v- KELSO PTY LTD [2020] WASC 444
CORAM:   MASTER SANDERSON
HEARD:   3 SEPTEMBER & 20 OCTOBER 2020
DELIVERED          :   3 DECEMBER 2020
PUBLISHED           :   3 DECEMBER 2020
FILE NO/S:   CIV 1173 of 2018
BETWEEN:   BIS INDUSTRIES LIMITED
Plaintiff
AND
KELSO PTY LTD
First Defendant
SOUTHCOTT PTY LIMITED
Second Defendant

Catchwords:

Discovery - Legal professional privilege - Documents created during testing by plaintiff's expert - Whether documents discoverable and available for inspection

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Second defendant's application granted

Category: A

Representation:

Counsel:

Plaintiff	:	P Mendelow
First Defendant	:	S Moore
Second Defendant	:	K R Lendich

Solicitors:

Plaintiff	:	McCabe Curwood
First Defendant	:	Wotton + Kearney Lawyers (Perth)
Second Defendant	:	Clyde & Co (Perth Office)

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

Absolute Analogue Inc v Sundance Resources Ltd [2008] WASC 259
CTC Resources NL v Australian Stock Exchange Ltd [1998] WASC 20
Interchase Corporation Ltd v Grovenor Hill (Qld) Pty Ltd (No 1) (1999) 1 Qd R 141

MASTER SANDERSON:

In this action the plaintiff seeks damages for the value of its prime mover which, it alleges, was damaged beyond repair by fire. The plaintiff says the fire was caused by the failure of a fitting manufactured by the second defendant and installed on the prime mover by the first defendant (Fitting). The failure of the Fitting is said to have caused a spray of hydraulic oil igniting a fire in the engine bay and thus destroying the prime mover.[1] One of the central issues for determination is whether the Fitting was manufactured in breach of the Australian Consumer Law or in breach of a duty of care.
[1] Plaintiff's amended statement of claim filed 22 November 2019, [10], [17] – [19].
In March 2020, inspecting and testing of parts of the Fitting took place. During that testing, documents were created. These documents included photographs or images of the Fitting or parts of it, both before and after inspection, cleaning and sectioning. Other documents included images taken during the metallographic examination of the Fitting. They also included documents recording data created by the scanning electron microscopy and energy dispersive X‑ray spectroscopy. These documents are referred to as the 'Images and Data Records'. The plaintiff has refused to provide to the defendants copies of these documents.
On 23 March 2020, the second defendant issued a chamber summons seeking further and better discovery. The second defendant amended the chamber summons on 24 August 2020 and moved on the amended chamber summons at the hearing. The orders sought in the amended chamber summons were as follows:
1 Within 7 days of the date of this order, the plaintiff:
a) disclose the following categories of documents which are or have been in its possession, custody or power. For the purpose of this application the term 'Fitting' has the same definition as that term is used in the Amended Statement of Claim (see…

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.

Continue reading BIS Industries Limited v Kelso Pty Ltd

Details

AGLC: BIS Industries Limited v Kelso Pty Ltd [2020] WASC 444
Case: [2020] WASC 444
Decision Date: 3 DECEMBER 2020

CaseChat Overview and Summary

BIS Industries Limited brought an action against Kelso Pty Ltd in the Supreme Court of New South Wales. The dispute involved issues of discovery and the extent of legal professional privilege concerning documents created during testing by the plaintiff's expert. Specifically, the plaintiff sought to limit the disclosure of certain documents to the defendants, arguing they were covered by legal professional privilege. The defendants, on the other hand, sought full disclosure of all relevant documents related to the expert's testing and opinion.

The central legal issue before the court was whether the documents created by the plaintiff's expert during testing were discoverable and available for inspection by the defendants. The court had to determine the extent of legal professional privilege that could be claimed over these documents. This issue was informed by the precedent set in Interchase Corporation Ltd v Grovenor Hill (Qld) Pty Ltd (No 1), where Thomas J established that documents generated by an expert in the formation of an opinion were generally not subject to legal professional privilege, unless they related to communications between the expert and the solicitor made for the purpose of confidential use in litigation.

The court followed the reasoning in Interchase and held that the Images and Data Records prepared in the course of the testing were not subject to legal professional privilege. The judge noted that while privilege could be claimed in relation to communications between the expert and the solicitor, there was no sufficient reason for the materials relevant to the formation of the expert's opinion to be subject to such privilege. The court concluded that any attempt to artificially manufacture privilege by, for example, the expert sending their file to the solicitor, was impermissible. Consequently, the plaintiff was directed to file and serve an affidavit of discovery listing all relevant documents, subject to any agreement between the parties. The court also indicated it would hear submissions on costs before making final orders.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

There is only limited authority on this question. Perhaps the most definitive statement of the position is found in the judgment of Thomas J in Interchase Corporation Ltd v Grovenor Hill (Qld) Pty Ltd (No 1) (1999) 1 Qd R 141. Pincus JA of the Queensland Court of Appeal stated the essential issue to be (145):If an expert witness provides a statement of his opinion to one of the parties to an action, are the documents in the possession of the expert, connected with the preparation of the opinion, subject of legal professional privilege? Thomas J said (162):I would hold that in general, when an expert is engaged by a solicitor for the purpose of giving evidence in a case, documents generated by the expert and information recorded in one form or another by the expert in the course of forming an opinion are not a proper subject for a claim of legal professional privilege. Privilege may however be claimed in relation to communications between the expert and the solicitor (both ways) when such communication is made for the purpose of confidential use in litigation. Beyond this there is no sufficient reason why any material relevant to the formation of the expert's opinion should be subject to a claim of legal professional privilege. It is as well to add that an expert or solicitor may not artificially manufacture privilege by, for example, the expert sending his or her file to the solicitor. Relying squarely on the Interchase decision, I am satisfied the Images and Data Records prepared in the course of testing are not the subject of legal professional privilege. Accordingly, they should be available to the defendants. Subject to agreement between the parties, it would now seem to be necessary for the plaintiff to file and serve an affidavit of discovery, which lists all of the relevant documents. However, I will hear from the parties before making final orders. I will also deal with submissions as to costs.