Caboolture Park Shopping Centre Pty Ltd v White Industries (Qld) Pty Ltd

[1989] FCA 816

NOT FOR DISTRIBUTION

JUDGMENT No. ..S. !!?....V.... *.., .

IN THE FEDERAL COURT OF AUSTRALIA )

)

QUEENSLAND DISTRICT REGISTRY	1	No. G198 of 1986
1
GENERAL DIVISION	1

BETWEEN:	CABOOLTURE PARK SHOPPING CENTRE PTY. LTD.
(Applicant)
AND :	WHITE INDUSTRIES (QLD.) PTY. LTD.
(Respondent)

AND BETWEEN: WHITE INDUSTRIES (QLD.)

PTY. LTD.

(First Cross-Claimant)

AND :	CABOOLTURE PARK SHOPPING CENTRE PTY. LTD.
(First Cross-Respondent)

Judge Making Order:	Ryan 3.
Date of Order:	31 August 1988
Where Made:	Brisbane

MINUTES OF ORDER

THE COURT ORDERS:

1. That the motion on notice dated 24 August 1988 by Caboolture Park Shopping Centre Pty. Ltd. ("Caboolture Park") be dismissed.

the Federal Court Rules.

2.  That Caboolture Park pay White Industries (Qld.) Pty. Ltd.'s costs of and incidental to the said motion.

NOTE : Settlement and entry of orders is dealt wi

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )

1

QUEENSLAND DISTRICT REGISTRY	1	No. G198 of 1986
1
GENERAL DIVISION	1

BETWEEN:	CABOOLTURE PARK SHOPPING CENTRE PTY. LTD.
(Applicant)
AND :	WHITE INDUSTRIES (QLD.) PTY. LTD.
(Respondent)

AND BETWEEN: WHITE INDUSTRIES (QLD-)

PTY. LTD.

(First Cross-Claimant)

AND :	CABOOLTURE PARK SHOPPING CENTRE PTY. LTD.
(First Cross-Respondent)

-	Coram: Ryan J.
Date: 31 August 1988 Place: Brisbane

REASONS FOR JUDGMENT ON MOTION
BY CABOOLTURE PARK SHOPPING CENTRE PTY. LTD.
THAT WHITE INDUSTRIES (QLD.) PTY. LTD.
GIVE PARTICULAR DISCOVERY

BY motion on notice dated 24 August 1988, amended by leave granted on 26 August 1988, the applicant, Caboolture Park Shopping Centre Pty. Ltd. ("Caboolture Park"), seeks, amongst other things, an order:-

"2. That the First Respondent, White Industries (Qld) Pty. Ltd. file and serve upon the applicant's solicitors an affidavit stating whether or not the First Respondent has in its custody, possession or power any of the documents referred to in paragraph 5(a) of the respective terms of settlement entered into between the First Respondent and each of the following companies:

(b) Environ Mechanical Services Pty. Ltd.

(C) Fred Pazotti Pty. Ltd.

(d) C.W. Norris & CO. ~ t y . ~td.

(e) Profile Roofing Pty. Ltd.
(f) Gay Holdings Pty. Ltd.
(g) Naturform Pty. Ltd.
(h) Eagle Concrete Services Pty. Ltd.

(i) Beavis & Bartels.

(I) Opat ~ecorating Services (Qld) Pty. Ltd.

excepting any such documents referred to rn paragraph 5(a) of the terms of settlement which have been discovered in Part 1 of the various lists of documents, verified by affidavit, filed by any of White Industries (Qld) Pty. Ltd. or F.F.E. Group (Qld) Pty. Ltd., Environ mechanical Services Pty. Ltd., Fred Pazotti Pty. Ltd., C.W.

Norris & Co. Pty. Ltd., Profile Roofing Pty. Ltd., Gay Holdings Pty. Ltd., Naturform Pty. Ltd., Eagle Concrete Services Pty. Ltd., Beavis & Bartels and Opat Decorating Services (Qld) Pty. Ltd. "

In reasons for directions which I gave on 22 August

1988, I outlined the history of this litigation to that date.

questions and issues between Caboolture Park and the first

I there referred to directions for the separate trials of all

respondent, White Industries (Qld.) Pty. Ltd. ("WIQ"), which respectively pertained to the subcontract of, or the performance of work by, each of the subcontractors which had been joined as respondents and issues raised by that subcontractor in its cross-claim (other than the question of the total amount if any payable to WIQ by Caboolture Park). I then noted that the separate trial of issues pertaining to the subcontract of, and the performance of work by, Paks Contractors Pty. Ltd. had commenced on 20 June 1988 and concluded on 21 July 1988. The separate trial related to the next subcontractor, Crestlite Glass & Aluminium Pty. Ltd., then commenced on 22 July 1988 and concluded on 26 July 1988. The reasons published on 22 August 1988 then continued, at p. 6:-

"Progressively since 26 July 1988, it has been announced that the cross-claim of each of the remaining ten subcontractors has been compromised as between that subcontractor and WIQ. An order has been made by consent that ludgment be entered in favour of each subcontractor against WIQ for a specified money amount, together with an agreed sum by way of interest, and that WIQ pay the subcontractor's costs to be taxed."

The ten subcontractors listed in paragraph 2 of the notice of motion which is set out above were those which compromised their claims as against WIQ. Each compromise was embodied in terms of settlement which were all substantially similar in form. I quote, by way of example, the relevant provisions of the terms of settlement between WIQ and Opat Decorating Service (Queensland) Pty. Ltd. (in the terms of

settlement called "the subcontractorn):-

"l.(a) The subcontractor warrants that it has credible evidence which, if adduced and accepted, would prove that $240,000.00 is properly payable to it under its subcontract for the subcontract works as varied, and it acknowledges that it has been paid the sum of $56,165.00 by WIQ.

3. In consideration of WIQ agreeing to these terms of settlement:

(C) if WIQ recovers payment from Caboolture

Park of:-

(i)   an amount for the work done under the subcontract;

(ii) interest thereon (which for the purpose of this subparagraph shall be calculated at 13% per annum);

(iii) the subcontractorrs costs mentioned
in paragraph 2;

the total of which is greater than $190,000.00 plus the amount of the costs mentioned in paragraph 2 hereof then the subcontractor shall be at liberty to enforce the said judgment and orders for such amounts so recovered.

5. The subcontractor will provide all reasonable assistance to WIQ in its proceedings against Caboolture Park. Without limiting the generality thereof, the subcontractor will:

(a) deliver t	o WIQ' S solicitors the subcontractor's and its solicitors' files, including all statements of witnesses and any other documents relating to the matters in issue in the proceedings by the subcontractor against WIQ and WIQ against Caboolture Park;
(h)	do all things reasonably required of it by WIQfs solicitors (including making its employees agents and documents available to
WIQrs solicitors or counsel at all reasonable times), which WIQ's solicitors
determine are necessary to assist WIQ in its defences and claims against Caboolture Park. WIQ shall reimburse the subcontractor or its employees or agents for any travelling costs reasonably incurred, and any other reasonable costs or expenses that may be incurred as a result of its employees or agents being engaged as required by WIQ;
(C)	do all things reasonably required of it by wlQrs solicitors to ensure the giving of evidence reasonably required of it by WIQ8s solicitors;
(d)	not seek to prevent its solicitors or counsel from communicating information to or acting on behalf of WIQ against Caboolture Park PROVIDED THAT WIQ shall be responsible for any fees properly incurred or chargeable by the subcontractorls
solicitors or counsel.

6. In the event that a court of competent jurisdiction finds that the subcontractor has failed to comply with any provision of the preceding clause:

(a)	the subcontractor shall not be at liberty to enforce the said judgment or orders by execution or otherwise for any amount;
(b)	WIQ shall be at liberty to apply to the court for an order setting aside the said judgments and orders, to which such application and order the subcontractor hereby consents;
(C)	the subcontractor will return the said bank guarantee to WIQ.

8.(c) Upon the delivery of the said bank guarantee to the subcontractor, the subcontractor will1 deliver to WIQ executed Notices of Withdrawal of Claim of Charge in Form 5 to the Subcontractors' Charges Regulations addressed respectively to Caboolture Park and WIQ, to be held by WIQ in escrow, and irrevocably appoints WIQ to give such notices on its behalf to Caboolture Park and to WIQ pursuant to Section 11(8) of the said Act upon determination (by agreement or otherwise) of the liability of Caboolture Park to WIQ for the work done under the head contract."

Caboolture Park's application is under 0.15 r.8 of the

Rules of this Court which provides:-

"Where, at any stage of the proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party-

(a)	to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it; and
(b)	to serve the affidavit on any other party. "

Hr Perry of counsel for Caboolture Park invited the Court to infer that documents relating to a matter in question in these proceedings were in the possession of each of the ten subcontractors listed in paragraph 2 of the notice of motion, and contended that, by operation of paragraph 5(a) of the terms of settlement set out above, those documents are now in the "power" of WIQ within the meaning of 0.15 r.8. I agree that the expression "power" means "a presently enforceable legal right to obtain from whoever actually holds the document inspection of it without the need to obtain the consent of anyone else". (Lonhro Ltd v. Shell Petroleum CO Ltd [l9801 1 W.L.R. 627 per Lord Diplock at 635). Accordingly, by virtue of paragraph 5 of the terms of settlement, there are in the power of WIQ the files of each of the ten subcontractors "and its solicitors' files,

including all statements of witnesses and any other documents	relating to the matters in issue in the proceedings by the
subcontractor against WIQ and WIQ against Caboolture Park".
It was submitted by Nr Fraser of counsel for WIQ that 0.15 r.8 is designed to provide a means for requiring a party to make good some deficiency in the discovery originally given by it. Clearly, that is one of the purposes, and probably the main purpose, for the insertion of the rule. AS Farwell L.J. observed in British Association of Glass Bottle Manufacturers, Limited v. Nettleford [l9121 1 K.B. 369 at 376, the rule:-

"enabled a person dissatisfied with the affidavit of documents, by way of suggestion of a specific document and his belief that the deponent had it, to compel that deponent to make a further affidavit. This is limited to a specific document which can be specifically described. The rule itself is, as I-said in Kent Coal Concessions, Ld. v. Duguid [l9101 1 K.B. 904, 915, not a modification but an enlargement of the general right of discovery."

It is also true, as Mr Fraser contended, that a party who makes a list of documents or affidavit of discovery, which is comprehensive at the time when it is made, is not obliged to make a further list, or affidavit, whenever another relevant document comes into his possession or power.

Like 0.32 r.9 of the High Court Rules which was

considered by a Full Court of this Court in TNT Management

Pty Ltd v. Trade Practices Commission (1983) 47 A.L.R. 693,

0.15 r.1 of the Federal Court Rules, read in conjunction with

Accordingly, as McGregor J. observed in that case, at 696,	r.6, contemplates discovery in response to a notice.
"once an appropriate affidavit is filed which, in terms, complies with [the notice], there is no continuing obligation except in respect of documents which should have been referred to in it". See also per Sheppard J. at 711 and Cooke v. Australian National Railways Commission (1985) 39 S.A.S.R.
146. However, McGregor J. went on, immediately after the passage which I have just quoted from his judgment in - TNT Management Pty Ltd v. Trade Practices Commission to point out, again at 696:-

"Further, that the scheme of 0 32 indicates that a party seeking further or other orders of discovery may have recourse to rr 13, 14 and 18; in the case of failure to give discovery as required by the rules, r 20(2)(a) may be

invoked. "

Order 32 r.18 of the High Court Rules is the counterpart of 0.15 r.8 of the Rules of this Court and Sheppard J. was equally clear that it was available to compel discovery of documents acqulred after orrginal discovery had been provided when he observed, at 710:-

" ~ u t	it seems clearly right to say that there is not in Australia, at the present time, in
jurisdictions having rules similar to those of
the High Court, any such continuing obligation as is referred to by Southey J. In many cases there will be no problem, because no relevant documents will come into existence after the original discovery except documents which may clearly be made the subject of a claim for privilege. In others, for example, claims involving continuing breaches of obligations or claims for damages which are ongoing, a party will produce the documents because he will need them for the purposes of his own case. Then there is always the right of the other party to make an
pursuant to a provision such as 0 32, r 18 of the application for further and better discovery
High Court Rules. The court would not require much persuasion to make an order under the rule if it were shown that there was reasonable ground for suspecting the existence of further documents; see -the Supreme Court practice (UK)
(1982) Pt 1, pp 449-50. Finally, a party may - -
always serve a subpoena upon his opponent to produce documents. There may be questions of abuse in such a case if the procedure is used in lieu of discovery, but it seems unlikely that that view would be taken if the subpoena were directed to the production of documents recently coming into the possession of the opposite party."

Those passages confirm my view that 0.15 r.8 is available not only to compel a party to remedy some deficiency in his original discovery, but also to give further discovery of some specified document or documents coming into his possession or power after original discovery.

In reasons for judgment which I published in this

matter on 19 August 1988, I adopted the test which Menhennitt

J. in Beecham Group Ltd v. Brlstol-I-lyers CO [l9791 V.R. 273

distilled from Mulley v. Manifold (1959) 103 C.L.R. 341 and other authorities and concluded that 0.15 r.8 requires the Court to have "reasonable grounds for being fairly certain" of the existence of a sufficiently specified material document. I am not able to infer, in the present case, that there has come into the power of WIQ any relevant document which was improperly omitted from discovery previously made by any subcontractor now obliged by the terms of settlement to produce to WIQ "all statements of witnesses and any other documents relating to the matters in issue in the proceedings by the subcontractor against WIQ and WIQ against Caboolture Park". Nor am I persuaded of the existence of any relevant

document which came into the possession or power of a

particular subcontractor after it gave discovery in these

proceedings, which, by operation of the terms of settlement, has now passed into the power of WIQ. However, I consider there are reasonable grounds for being fairly certain that at least some of the subcontractors have documents embodying or containing statements of witnesses or potential witnesses which those subcontractors claimed to be privileged from

production when they provided their own discovery in these
proceedings.

The question therefore remains whether WIQ should be required, in the exercise of the discretion which the Court clearly has under 0.15 r.8, to file an affidavit specifying documents which it has obtained or can obtain from the subcontractors containing statements of witnesses or potential witnesses which the subcontractors or their legal advisers prepared for the purposes of this litigation.

I have decided to exercise the discretion by refusing Caboolture Park's application under 0.15 r.8. I have been influenced in coming to that conclusion primarily by the view which I have provisionally but clearly formed that WIQ could successfully claim that any documents embodying or containing statements of witnesses which it could procure from the subcontractors are privileged from production to Caboolture Park.

It was argued by Mr Perry for Caboolture Park that, by waived the legal professional privilege in respect of the	entering into the terms of settlement, each subcontractor has
documents now under consideration, which it had claimed when itself giving discovery in these proceedings.
It is clear that some act constituting waiver must be shown since, without it, once professional privilege has attached to documents they remain privileged; (Calcraft v. Guest 118981 1 Q.B. 759 at 761). There is nothing in the
terms of settlement which amounts to an express waiver by the subcontractors of their rights to assert that the documents are privileged from production to Caboolture Park. Nor can I discern anything in those terms or the surrounding circumstances which constitutes an implied waiver of that privilege. As was demonstrated in Attorney-General for the Northern Territory v. Maurice (1986) 61 A.L.J.R. 92, the touchstone for the implication of waiver is some unfairness to the party against whom the privilege is sought to be invoked. Thus, Mason and Brennan JJ. observed in their joint judgment, at 96:-

"The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver. A litigant can of course waive hi S privilege directly through intentionally disclosing protected material. He can also lose that protection through a waiver by implication. An implied waiver occurs when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the

privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication. Professor Wigmore explains:

'[Wlhen his conduct touches a certain point

privilege shall cease whether he intended	of disclosure, fairness requires that his
that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.'

(Wigmore, Evidence in Trials at Common Law (1961) vol. 8, 2327 at p. 636). In order to ensure that the opposing litigant is not misled by an inaccurate perception o f the disclosed communication, fairness will usually require that - -

waiver as to one part of a protected communication should result in waiver as to the rest of the communication on that subject matter: see Great Atlantic Insurance v. ~ o m e Insurance [l9811 1 W.L.R. 529; [l9811 2 All E.R. 485.

Hence, the implied waiver inquiry is at bottom focused on the fairness of imputing such a waiver. On this principle, an American court refused to imply a waiver when the person entitled to the privilege, who had been subjected by court order to an exceptional accelerated discovery process, accidentally disclosed some protected communications: Transamerica Computer v. International Business Machines (1978) 573 F.2d 646. Likewise, a waiver was not implied bevond actuallv disclosed material when the pe;son entitled-to the privilege, in a spirit of co-operation, disclosed some confidential communications to opposing counsel, not to the

court. and the ~artial disclosure did not ~ ~ ~ ~~ ~ ~ - -- - .

.

prejudice the opposing litigant: Weil v. Investment/Indlcators, Research & Management (1981) 647 F.2d 18. As the court in Cham ion International Corporation v. I n t e r n a t i o n a h CO. (1980) 486 F. SUDD. 1328 at 1333 asked rhetoricallv. 'Can the- disclosure of a verv slight amount of privileged material, produced in a spirit of openness in discovery, be the basis for a waiver of a large amount of other privileged material?'"

Mr Perry, in seeking to demonstrate that unfairness would result if statements obtained by the subcontractors from witnesses or potential witnesses were not produced for inspection by Caboolture Park, was constrained to say that "these terms of settlement are relevant to the question as to whether a reasonable sum was payable to the subcontractor within the terms of clause 10.18" (of the contract between

question and Mr Fraser did not contend to the contrary of	Caboolture Park and WIQ). In my view, the terms of settlement could not be adduced in evidence by WIQ as going to that	that view.
Accordingly, if the claim to privilege in respect of these presumptive statements by witnesses or potential witnesses were upheld against Caboolture Park, it would be in no worse position than it would have occupied had the subcontractors continued to participate in this litigation. On the other hand, if Caboolture Park were given access to those statements, it would be provided with an insight into the strengths and weaknesses of the subcontractorsr respective cases and material for cross-examination of witnesses to be called in support of those cases. By a form of subrogation arising from its compromising the subcontractors' claims for substantial amounts, those cases have become part of WIQrs case and it seems to me that it would work a manifest unfairness to WIQ if Caboolture Park were allowed the advantage which I have just described.
That absence of unfairness to Caboolture Park and positive unfairness to WIQ has weighed with me in the exercise of my discretion under 0.15 r.8 independently of the likely success of the claim for legal professional privilege.
I have already indicated that the view which I have taken on whether the subcontractors have waived the legal professional privilege attaching to statements of witnesses prepared on their behalf is a provisional one formed to guide
nature of that view has been dictated by the fact that the the exercise of discretion under 0.15 r.8. The provisional
subcontractors have had no opportunity, at this stage, to be heard on the question. However, I also consider that additional support for refusing the motion is provided by the availability of a strong argument that the documents in question are protected by what Lord Denning E.1.R. described in
Buttes Gas and Oil CO v. Hammer (No 3) [l9811 Q.B. 223 at 243 as "a common interest privilege". It is true that WIQ and the subcontractors have never had a common solicitor but Donaldson L.J. suggested, without deciding, in Buttes Case, at 251 to 252 that the presence of a common solicitor was not an essential element of "common interest privilege".
The argument for recognition of such a privilege where the party producing and the party receiving the document have a common, although not co-extensive, interest in the outcome of the litigation, derives further support from Enthoven v. Cobb at first instance (5 De G & Sm. 595; 64 E.R. 1259) and on appeal (2 De G. M & G. 632; 42 E.R. 1019) as explained in Alfred Crompton Amusement Machines Ltd v. Customs and Excise
Commissioners (S) [l9741 A.C. 405 at 430.
In Trade Practices Commission v. Queensland Aggregates ~nthoven v. Cobb as so explained from the case thrown up by the documents which he there considered. However, it is far from apparent that the present case is similarly
~ t y ~ t d (1983) 47 A.L.R. 693, Sheppard J. distinguished
distinguishable from Enthoven v. Cobb.
Of the ten subcontractors listed in paragraph 2 of Caboolture Park's notice of motion, four have complied with directions given earlier in these proceedings that they file and serve affidavits containing the evidence on which they proposed to rely in support of their respective cross-claims. Any disadvantage to Caboolture Park as a result of the
remaining six subcontractors having ceased to participate in
these proceedings before complying with similar directions can be overcome by appropriate requirements for WIQ to furnish to Caboolture Park similar statements or outlines of evidence before commencing those parts of its case in support of its cross-claim which are related to the trade packages of those six subcontractors.
I have also been influenced to exercise my discretion adversely to caboolture Park by the fact that its application was not made as soon as practicable after the provisions of the terms of settlement became known to it. Related to that consideration is the burden which compliance with an order under 0.15 r.8 would impose on WIQ, even if the order were confined to documents for which the contractors have previously claimed privilege. WIQ would necessarily have to divert the energies of at least one of its legal advisers to the collation of the documents at a critical stage of the hearing of this litigation which commenced more than ten weeks ago. As well, the task of collating the documents and the hearing and resolution of the claims for privilege which
would inevitably be made, would occupy some time and further delay the determination of the remaining issues between
Caboolture Park and WIQ.
All of these factors have contributed to the conclusion, expressed earlier in these reasons, that the discretion conferred by 0.15 r.8 should be exercised so that wIQ is not required to make discovery of documents for which the subcontractors have previously claimed privilege. The motion by Caboolture Park is therefore refused with costs.

I certify that this and the preceding

fifteen (15) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Ryan.

A. r 4 ' w z o

Associate

Dated: 3 / A u g u s y /?'g9