Energy Resources Limited v Cactus Wellhead Australia Pty Ltd [No 3]
[2025] WASC 100
•27 MARCH 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ENERGY RESOURCES LIMITED -v- CACTUS WELLHEAD AUSTRALIA PTY LTD [No 3] [2025] WASC 100
CORAM: LUNDBERG J
HEARD: 25 FEBRUARY 2025
DELIVERED : 27 MARCH 2025
FILE NO/S: CIV 1620 of 2023
BETWEEN: ENERGY RESOURCES LIMITED
Plaintiff
AND
CACTUS WELLHEAD AUSTRALIA PTY LTD
Defendant
Catchwords:
Practice and procedure - Legal professional privilege - Investigation initiated by plaintiff's in-house legal team following incident at exploration well - Claims for privilege made by the plaintiff over around 500 documents forming part of the investigation process - Application by defendant seeking inspection of plaintiff's discovered documents - Defendant asserts that privilege claims mistaken or unfounded - Whether evidence of multiple purposes - Whether plaintiff has discharged ultimate onus of proof to demonstrate that the privileged purpose was the dominant purpose - Held that onus of proof not discharged - Application upheld - Turns on own facts
Practice and procedure - Legal professional privilege - Whether privilege has been waived over all documents by the plaintiff through the selective production of certain privileged documents - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 26 r 9, O 26 r 12, O 37 r 6(3A)
Result:
Application granted.
Category: B
Representation:
Counsel:
| Plaintiff | : | A J Tharby |
| Defendant | : | T J Porter |
Solicitors:
| Plaintiff | : | Bennett |
| Defendant | : | HWL Ebsworth Lawyers (Perth) |
Case(s) referred to in decision(s):
Ausnet Electricity Services Pty Ltd v Liesfield [2014] VSC 474
AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601
Carey v Korda [2012] WASCA 228
CMA Assets Pty Ltd v John Holland Pty Ltd [No 2] [2012] WASC 126
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543
Energy Resources Limited v Cactus Wellhead Australia Pty Ltd [No 2] [2025] WASC 22
Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49
Glencore International AG v Federal Commissioner of Taxation [2019] HCA 26; (2019) 265 CLR 646
GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266
Grant v Downs [1976] HCA 63; (1976) 135 CLR 674
GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123
Poland v Hedley [2023] WASCA 69
Powercor Australia Ltd v Perry [2011] VSCA 239; (2011) 33 VR 548
Pratt Holdings Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357; 207 ALR 217
Rinehart v Rinehart [2016] NSWCA 58
TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364
Trade Practices Commission v Sterling (1979) 36 FLR 255
Waterford v Commonwealth (1987) 163 CLR 54
Table of Contents
A. Introduction and summary
B. The nature of the action
(1) The parties
(2) Relevant pleadings
(3) Investigation
C. The Application
(1) The chamber summons
(2) Procedural history
(3) Evidentiary materials
(4) Evidentiary rulings in respect of the further objections
D. Evidence
(1) Relevant personnel
(2) The incident on 22 September 2021
(3) The investigation initiated by Mr Perry on 23 September 2021
(4) ICAM witness statements
(5) Notice of dispute issued by the plaintiff in January 2022
(6) Further steps in the investigation
E. Submissions
(1) Defendant's submissions
(2) Plaintiff's submissions
F. Relevant principles concerning privilege
(1) Relevant rules of the Court
(2) Nature and description of the privilege
(3) Test for dominant purpose
(4) Onus of proof
(5) Further principles
(6) Ausnet Electricity Services
(7) Inspection of the documents
G. Disposition
(1) Whether the privilege claims are sustained
(a) Was there a proper claim for privilege made by the plaintiff?
(b) Whether the defendant has satisfied the evidential onus?
(c) Has the plaintiff satisfied the ultimate legal onus?
(2) Has there been a waiver of the privilege?
H. Conclusion and orders
ATTACHMENT A Further evidentiary rulings
ATTACHMENT B Extracts from the Hardy Discovery Affidavit
ATTACHMENT C Extracts from the Coltrona Spreadsheet
LUNDBERG J:
A. Introduction and summary
This action has been provisionally listed for a trial commencing on 21 July 2025 for 22 days.
The defendant has applied by chamber summons to challenge the plaintiff's legal professional privilege claims (Application). The defendant challenges the privilege which has been claimed in respect of around 500 documents discovered by the plaintiff.
The plaintiff asserts that its in-house legal team commenced an investigation to assess the rights and obligations it might have in respect of a drilling incident which occurred on an exploration well. The plaintiff has discovered the documents relating to this investigation, but has objected to inspection of them on the grounds of legal professional privilege. By the present Application, the defendant seeks inspection of the vast majority of these documents.
In light of the nature of this Application, it was listed for hearing before a judicial officer other than the trial judge.
The Application was substantively heard on 25 February 2025. Given the proximity of the trial, and to accommodate any consequences arising from the Court's decision on this Application, it has been necessary to expedite my consideration of this matter.
For the reasons that follow, I have reached the view that the Application should be granted and orders should be made to require the plaintiff to produce the identified documents to the defendant for inspection. In summary, my conclusions are as follows:
(a)I find that the plaintiff has made out an apparently proper claim for legal professional privilege in respect of the documents which are the subject of the Application, having regard to the information contained in the document referred to in these reasons as the Coltrona Spreadsheet. See [123] to [139] of the reasons.
(b)I find that the defendant has discharged its evidential onus to show that the plaintiff's claims for privilege are unfounded or mistaken, having regard to the evidence which discloses the existence of multiple purposes for the investigation and the creation of the subject documents. See [140] to [143] of these reasons.
(c)I find that the investigation initiated by the in-house legal team was undertaken for at least the subjective purpose of the plaintiff and its parent company obtaining legal advice and for use in future legal proceedings. See [144] to [155] of these reasons.
(d)However, I am not able to positively conclude on the balance of probabilities that, objectively, the dominant purpose of the investigation initiated by the in-house legal team, which led to the creation of the subject documents in respect of which privilege has been claimed, was the asserted privileged purpose. The evidence discloses the existence of multiple purposes in this regard, and the plaintiff has not discharged its legal onus to satisfy the Court that the asserted purpose was the dominant one. My assessment of this issue was not ultimately assisted by inspecting the privileged documents. See [144] to [198] of these reasons. I should emphasise that this conclusion does not suggest any impropriety in making the claim for privilege, as will be apparent from my conclusion recorded at (c) above.
(e)Had it been necessary to determine whether the plaintiff had also waived any privilege over the subject documents, arising from its conduct in disclosing selected documents to the defendant, I would not have concluded that the plaintiff had waived that privilege, there being no inconsistency between that disclosure and the putative privilege holder's maintenance of the privilege. See [199] to [206] of these reasons.
As part of my consideration of the Application, I have had regard to the privileged documents which I ordered to be produced by the plaintiff for the Court's inspection. I should clarify that I have not made any reference within these reasons to the substance of any of those privileged documents.[1]
[1] I do note that at least one of the documents produced to the Court is entirely blank, being the two page document categorised as ERL.004.012.0791.
B. The nature of the action
(1) The parties
The plaintiff is a gas exploration and development company, and a wholly owned subsidiary of the listed entity Mineral Resources Limited (MinRes). The plaintiff holds a petroleum exploration permit known as EP 368 (which is located onshore), and is the operating party of a joint venture formed for the purpose of conducting exploration on the EP 368 area. There is an exploration site located on EP 368 which is known as 'Lockyer Deep-1'.[2]
[2] Third Further Amended Statement of Claim dated 31 October 2024 (3FASOC) [1], [3] and [4]; Amended Defence dated 5 December 2024 (AD) [1], [3] and [4].
The defendant manufactures, supplies and services equipment for onshore and offshore oil and gas drilling, fracking, completion and production.[3]
(2) Relevant pleadings
[3] 3FASOC [2]; AD [2].
The plaintiff alleges that the defendant supplied it with a defective part which caused the installation of part of the plaintiff's wellhead system to fail. The particular incident occurred on the evening of 22 September 2021 (and into the following morning). The pleaded position of the parties is briefly set out below.
The parties entered into a written contract in July 2020 entitled 'General Supply Agreement', by which the defendant agreed to supply to the plaintiff wellhead systems.[4]
[4] 3FASOC [5] – [6]; AD [5] – [6].
It is not in dispute that the defendant supplied a 'Primary Wellhead System' to the plaintiff on or around 11 June 2021.[5] The plaintiff alleges the 'Primary Wellhead System' was to include a 'unitised wellhead system to accommodate 20" x 13-3/8" x 9-5/8" x 5-1/2" casing strings and a nominal 2-7/8 tubing string'.[6]
[5] 3FASOC [7]; AD [7].
[6] 3FASOC [6.1].
The plaintiff asserts that the defendant breached the terms of the contract between them by failing to supply a 'Primary Wellhead System' that was compliant and which provided a 25-year service life expectancy for the Lockyer Deep-1 well, among other terms. The plaintiff claims loss and damage. The claims are denied.
As to the incident on 22 September 2021, the plaintiff alleges as follows:[7]
[8]By 22 September 2021, the plaintiff commenced drilling an exploration well at the Lockyer Deep-1 site and installed 5-1/2" casing string in an 8-1/2" hole section of well to a depth of around 4,262 metres.
[9] On 22 September 2021, the plaintiff commenced a cementing operation to isolate the annulus between the Lockyer Deep-1 well 8-1/2" hole and secure the 5-1/2" casing string.
[10]The cementing operation failed because 2 cement wiper plugs lodged in the top of the 5-1/2" casing hanger supplied by the defendant.
[11]The failure occurred because the internal diameter (ID) of 5-1/2" casing hanger had not been bored in accordance with Drawing 1 and was too small to allow the wiper plugs to pass through.
[7] 3FASOC [8] – [11], excluding all of the particulars subjoined to those paragraphs.
By way of particulars to the allegation at [11] of the 3FASOC, the plaintiff expressly relies upon a report prepared by Baker Hughes Company LLC dated 25 October 2021 (Baker Hughes Report).[8] The plaintiff also expressly relies upon a report prepared by Swan Fabricators (WA) Pty Ltd dated 19 October 2021 (Swan Fabricators Report).[9] Other particulars have been supplied which I need not address.
[8] The report is entitled 'Lockyer Deep-1 MIT Observations' dated 25 October 2021.
[9] The report is entitled 'Lockyer Deep 1 Drilling Report Project 5 HBPV, 4.660 Min Bore Measurement Casing Hanger Report' dated 19 October 2021.
The Baker Hughes Report and the Swan Fabricators Report were adduced in evidence by the plaintiff for the purposes of the Application.[10]
[10] Second Kennedy Affidavit, Attachment JOK-1. The two reports are attached to the notice of dispute which was issued by the plaintiff to the defendant on or around 19 January 2022.
The defendant denies (or does not admit) the principal allegations as to breach and points to the engagement of various contractors who were responsible for the management and operation of the Lockyer Deep-1 well, for performing works in connection with the casing hanger, for the installation of the casing string, and for the planning and performance of the cementing operation.[11] The defendant alleges, in part, that the failure of the cementing operation was caused by the conduct of the plaintiff or its contractors.[12]
[11] AD [7] – [12].
[12] AD [12].
A series of detailed technical responses to the defendant's allegations have been pleaded by the plaintiff in its reply pleading, which I need not traverse in these reasons.[13]
[13] Reply to the Defence dated 23 February 2024 (Reply) [7] – [10].
A technical drawing of the wellhead system is attached to the agreement executed by the parties, and is extracted below, together with an image of a casing hanger of the type supplied by the defendant, showing its approximate location in the wellhead system.[14]
(3) Investigation
[14] These images are drawn from the Girgenti SJ Affidavit, referred to below.
The plaintiff says that, upon the incident occurring, work was undertaken to assess the damage, to diagnose the cause of the problem and to fix the issue.[15] The plaintiff says that it has now discovered and given inspection of documents in this regard. These documents are not the subject of claims for privilege. The plaintiff emphasises it has given discovery and inspection to the defendant of some 4,722 documents.[16]
[15] Plaintiff's submissions dated 17 January 2025 (PS) [4] – [6].
[16] PS [15].
Separately, the plaintiff asserts that its in-house legal team commenced an investigation to assess the rights and obligations it might have in respect of the incident. The plaintiff has discovered the documents relating to this investigation, but has objected to inspection of them on the grounds of legal professional privilege. By the present Application, the defendant seeks inspection of the vast majority of these documents.
C. The Application
(1) The chamber summons
The Application has been brought pursuant to O 26 r 9 and O 26 r 12 of the Rules of the Supreme Court 1971 (WA) (RSC).
Initially, the chamber summons sought orders for inspection of the documents listed in Annexure B to Attachment DAH-1 to the affidavit of Darren Ashley Hardy affirmed on 22 May 2024 (the Hardy Discovery Affidavit). That is the plaintiff's discovery affidavit. The plaintiff has, within the Hardy Discovery Affidavit, claimed privilege in respect of some 519 documents.[17] The chamber summons expressly excluded 32 individual documents from the scope of the summons.
[17] PS [7].
The form of the orders set out in the chamber summons was revised by the defendant at the hearing. The documents sought to be produced for inspection are now those documents highlighted in green in the spreadsheet provided to the Court by the defendant's solicitors.
That spreadsheet is drawn from Attachment TAC 1 to the Second Coltrona Affidavit referred to below, but has been colourised by the defendant's solicitors.[18] I will refer to that document as the Coltrona Spreadsheet, for ease of reference. It appears the defendant seeks inspection of any document that is not an email with the external solicitors for the plaintiff.[19]
(2) Procedural history
[18] PS [12].
[19] PS [7].
It is apparent there has been a degree of written communication between the parties about the claims for privilege, which commenced on or about 12 June 2024.[20] The defendant raised concerns about the adequacy of the description of the documents and it appears further information was provided in this regard.[21] Ultimately, however, the defendant was not satisfied with the information provided and this Application was brought.
[20] PS [8].
[21] PS [9].
The Application was first heard on 29 January 2025. At that hearing, numerous objections to the plaintiff's affidavit evidence were dealt with, and rulings were made. A number of paragraphs of the affidavits of Justin Oriol Kennedy sworn 5 December 2024 (First Kennedy Affidavit) and Thomas Anthony Coltrona sworn 17 January 2025 (First Coltrona Affidavit) were ruled as being inadmissible. I refer to the orders of the Court made on 29 January 2025 and the reasons published on 3 February 2025.[22]
[22] Energy Resources Limited v Cactus Wellhead Australia Pty Ltd [No 2] [2025] WASC 22 [11] – [15].
Following the rulings, the Court acceded to the plaintiff's application for an adjournment and made orders permitting the plaintiff to file further affidavits within 14 days, with the question whether the plaintiff may rely on those affidavits to be held over until the resumed hearing.
On 12 February 2025, the plaintiff filed further affidavits sworn by Mr Kennedy and Mr Coltrona (both dated 12 February 2025), ostensibly in replacement of their earlier affidavits. I will refer to these affidavits as the Second Kennedy Affidavit and the Second Coltrona Affidavit.
At the resumed hearing on 25 February 2025, the defendant opposed leave being granted to the plaintiff to rely on the fresh affidavits. For the oral reasons I gave at the hearing, I granted the plaintiff leave to rely on the affidavits.
A decision has been made by the plaintiff to waive privilege over several of the documents in respect of which privilege was claimed for the purposes of this Application. It is apparent this was done in order to properly explain the claims for privilege. The balance of the privilege claims remain contested. So, other than: (a) the documents in respect of which privilege has been expressly waived, (b) the 10 documents provided by way of supplementary discovery on 15 October 2024, and (c) the witness statement completed by Mr Jeff Rooney (who is a representative of the defendant), the plaintiff maintains its claims for privilege over all documents set out in Part 1B of the Hardy Discovery Affidavit.[23]
(3) Evidentiary materials
[23] Second Kennedy Affidavit, [34].
At the hearing on 25 February 2025, the defendant relied primarily upon the affidavits affirmed by one of its solicitors, Ronan David Devahasdin, on 8 November 2024 and 24 December 2024 (First Devahasdin Affidavit and Second Devahasdin Affidavit).
For its part, the plaintiff relied upon the Second Kennedy Affidavit and the Second Coltrona Affidavit, both of which were subject to further objections at the hearing on 25 February 2025. The plaintiff also referred to and relied upon the Hardy Discovery Affidavit.
During the course of the hearing, I was also directed to the affidavits of Mr Hardy and Darrell Paul Girgenti, both of which were affirmed on 26 July 2023, which were originally filed for the purposes of the plaintiff's summary judgment application. I will refer to these affidavits as the Hardy SJ Affidavit and the Girgenti SJ Affidavit.
(4) Evidentiary rulings in respect of the further objections
I heard submissions from the parties on 25 February 2025 in support of, and against, the further objections to the Second Kennedy Affidavit and Second Coltrona Affidavit.[24]
[24] The objections were summarised in a schedule prepared by the defendant's solicitors, dated 26 February 2025.
I have now determined those objections in a manner which I consider is consistent with the rulings set out the reasons published on 3 February 2025. The rulings in relation to the objections raised by the defendant on 25 February 2025 are set out in Attachment A to these reasons.
D. Evidence
The affidavit evidence was adduced at the hearing without any cross-examination of the deponents. The admissible affidavit evidence, and the inferences which can be rationally drawn from that evidence, support the following summary of the key factual events.[25] My further findings are set out in section G of these reasons.
(1) Relevant personnel
[25] The summary is not intended to be an exhaustive recitation of the steps in the investigation, bearing in mind the length of time over which the investigation occurred and the number of documents involved.
It is convenient to start by identifying the roles of the relevant personnel who were involved in the matter. The personnel are employees of MinRes or the plaintiff, or of a contractor to those entities, such as Aztech Contractors Pty Ltd, or employees of the defendant.
I accept that MinRes and the plaintiff dealt with the employees of its contractors as though they were embedded personnel within the business. That much is evident from the email communications which passed between them, particularly those involving Mr Girgenti.
At the relevant time, and still today, MinRes had established an in-house legal function within its business, which was headed by Mr Nick Rohr. Mr Rohr held the title of Executive General Manager, Commercial & Legal. At the time of the incident, Mr Lance Perry held the role of Senior Legal Counsel within the in-house team. He reported to Mr Rohr. Both Mr Rohr and Mr Perry were certificated legal practitioners at the relevant times.
Mr Kennedy commenced at MinRes in March 2023, assuming the role of Mr Perry upon his departure from the business, and also reporting to Mr Rohr. Mr Kennedy's title was, and is, Manager of Legal Matters for the Iron Ore and Energy portfolios of MinRes.
MinRes conducts its energy business and projects through the plaintiff, which is its wholly owned subsidiary. The in-house legal function is centralised within the MinRes group, and provides legal advice to the plaintiff and, it would seem, other subsidiaries of MinRes.[26]
[26] Second Kennedy Affidavit [11].
Turning then to the non-legal personnel, the following people had involvement in the investigation which was initiated following the incident: Mr Sean Daniels (the then Operations Manager - Energy of the plaintiff), Ms Shelley Robertson (the then Executive General Manager - Energy of MinRes), and Mr Shaun Nagra of MinRes. I have earlier mentioned Mr Hardy, who was the Chief Executive Officer for the Energy Portfolio of MinRes.
Finally, I should mention Mr Girgenti and Mr Schenberg Mr Girgenti is a project manager with Aztech who had been contractually retained by the plaintiff in relation to its well operations. Mr Girgenti was present on site when the cementing operation occurred on 22 September 2021.[27] Mr Schenberg is a drilling engineer employed by Aztech who was involved in the investigation.
(2) The incident on 22 September 2021
[27] Girgenti SJ Affidavit [11].
An incident took place at the Lockyer Deep-1 exploration well site on 22 September 2021 during the cementing operation, which was unplanned. The operation which was being undertaken at that time involved the use of a casing hangar which had been supplied by the defendant. The precise manner in which that incident occurred, and its causes, will be a matter for the trial judge. The summary of the incident in these reasons is included to put the Application in context.
(3) The investigation initiated by Mr Perry on 23 September 2021
The affidavit material filed by the plaintiff makes reference to an investigation into the incident which is the subject of the action, which was said to be initiated by Mr Perry.[28]
[28] As explained at PS [11].
On 23 September 2021, at around 10.47am, an email was sent by Mr Perry to Mr Daniels, headed 'Lockyer Deep 1 Exploration Well incident – 23 September 2021: Confidential and Subject to Legal Professional Privilege'.[29] The email was copied to other personnel within MinRes and the plaintiff, to personnel within Aztech, and to the most senior lawyer within MinRes, Mr Rohr.
[29] Second Kennedy Affidavit, Attachment JOK-2.
The email records that a phone call had taken place that morning between Mr Perry and Mr Daniels at which the latter informed Mr Perry of the incident at the exploration well. The email indicates that some preliminary investigation had already been undertaken, indicating that no one had been hurt in the incident and the integrity of the exploration well was not compromised, and also highlights the role of the safety regulator.
Importantly, Mr Perry stated as follows:
To enable me to provide the MRL [sic] with legal advice regarding the incident, I confirm my instructions for you to arrange for an investigation to be carried out into the Incident. As part of the investigation, I would be grateful if you could please identify the contributing factor(s) and the root cause(s).
All documents created as part of the investigation (including but not limited to pictures, reports and emails) must be cleared [sic] marked 'Strictly Confidential & Subject to Legal Privilege: For the Purpose of Obtaining Legal Advice'.
Please ensure that the documents created are only distributed to those that are involved in, or need to know about, the investigation.
Please provide me with a copy of any information provided to Department of Mines, Industry Regulation and Safety (DMIRS) and please let me know if DMIRS issue any request for information with respect to the Incident. Also please provide me with copies of any documents provided to any other third parties regarding the Incident.
The above email was originally subject to a claim for privilege, which was subsequently waived by the plaintiff.[30]
[30] Second Kennedy Affidavit, [16].
On 22 October 2021, Mr Perry sent an email to Ms Robertson of MinRes, copied to personnel within MinRes and the plaintiff.[31] The subject heading of the email is 'Memo – Lockyer Deep incident on 24 September 2021 – Meeting with Mike Grey'. The email attached a document described as 'Memo re incident and key contractual provisions (Legal 22 October 2021)'. The email is marked confidential and subject to legal professional privilege.
[31] Second Kennedy Affidavit, Attachment JOK-4.
In substance, the email refers to a proposed meeting between Mr Grey and Ms Robertson and provides a memorandum apparently containing a brief summary of the incident, the agreement, the key contractual provisions and information on the defendant company. In the email, Mr Perry states that:
The costs incurred by ERL as a result of the incident also need to be collated and examined in detail.
However as discussed, on the information available to date, it would appear that there may be avenues available under the Agreement to seek recovery from Cactus Wellhead Australia Pty Ltd of some of the costs incurred by ERL as a result of the incident.
The above email was originally subject to a claim for privilege, which was subsequently waived by the plaintiff.[32] The plaintiff has not expressly waived privilege over the attachment to the email, however.[33]
[32] Second Kennedy Affidavit, [18].
[33] Second Kennedy Affidavit, [18].
On 27 October 2021, Mr Perry forwarded the above email to Mr Reynolds of the plaintiff, which he copied to other personnel within MinRes.[34] The email is also marked confidential and subject to legal professional privilege. The email confirms that Mr Daniels and Mr Nagra of MinRes will brief Mr Reynolds to enable him to assist with the investigation.
[34] Second Kennedy Affidavit, Attachment JOK-3.
The above email was originally subject to a claim for privilege, which was subsequently waived by the plaintiff.[35]
[35] Second Kennedy Affidavit, [17].
After the incident took place on 22 September 2021, Mr Perry, as well as Mr Daniels and Ms Robertson, directed Mr Girgenti to assist with the overseeing of the gathering of information for the purposes of a legal investigation into the incident.[36]
[36] Second Kennedy Affidavit, [9.3]
Mr Girgenti complied with those directions and provided updates on the progress of the remediation works and costs incurred for those works, as well as obtaining information and witness statements from employees and contractors of the plaintiff.[37] Mr Girgenti also prepared draft reports in relation to the incident.[38] Mr Girgenti provided information and documents through this process to Mr Perry, as well as to Mr Daniels and Ms Robertson, who provided that information to Mr Perry thereafter.[39] This process of obtaining information and evidence was undertaken by Mr Girgenti in parallel to the process of overseeing the remediation works required following the incident, for which Mr Girgenti had responsibility.[40]
[37] Second Kennedy Affidavit, [9.4].
[38] Second Kennedy Affidavit, [9.4].
[39] Second Kennedy Affidavit, [9.5].
[40] Second Kennedy Affidavit, [9.6].
On 3 November 2021, Mr Perry contacted the plaintiff's external solicitors, the law firm Bennett, to obtain legal and litigation advice regarding potential cost recovery by the plaintiff in relation to the incident.[41]
[41] Second Kennedy Affidavit, [23].
Then, on 5 November 2021, the plaintiff formally engaged Bennett to provide advice and representation to the plaintiff in relation to the incident and the subject matter of the current proceedings.[42]
(4) ICAM witness statements
[42] Second Kennedy Affidavit, [24].
In or around November 2021, Mr Daniels sent emails to various witnesses and personnel, at the instruction of the MinRes in-house legal team, providing them with a document template to fill in, so as to obtain witness statements from those persons.[43] Those statements were to be provided to the in-house legal team for their consideration.
[43] Second Coltrona Affidavit, [12]
An example of one of these communications was produced to the Court, being an email sent on 8 November 2021 by Mr Daniels to Mr Rooney.[44] The plaintiff also produced an example of a response email, being the email in reply from Mr Rooney sent on 11 November 2021.[45]
(5) Notice of dispute issued by the plaintiff in January 2022
[44] Second Coltrona Affidavit, Attachment TAC 3.
[45] Second Coltrona Affidavit, Attachment TAC 4.
On 19 January 2022, a notice of dispute was issued by the plaintiff to the defendant pursuant to cl 14.1 of the GSA. The notice describes an incident which occurred on 23 September 2021 at the Lockyer Deep‑1 exploration well. The notice states that the final casing string 'was cemented in place by a third party contractor, Schlumberger Australia Pty Ltd' and 'whilst attempting to displace the cement, a pressure spike caused the Schlumberger cement unit pumps to stop'. The notice then states that the 'pre-set pressure trips kicked the pumps out of gear as a safety measure designed to protect the system from over-pressuring'.
The notice states that the 'root cause of the failure' has been identified to be a failure on the part of the defendant 'to manufacture a verified supply of 5.5 inch casing hanger with an internal diameter of 4.66 inches to the agreed contractual and design specification identified in P/N 126698'. It is this failure which led, according to the terms of the notice of dispute, to the situation in which the cement could not be displaced and set hard, requiring rectification works of some considerable magnitude.
The notice of dispute attached the Swan Fabricators Report and the Baker Hughes Report. Those reports are both of a technical nature, recording the observations of the respective authors as a result of certain testing processes which were undertaken.
(6) Further steps in the investigation
On 25 November 2021, Mr Reynolds sent a written update to Mr Daniels and Mr Nagra, marked as confidential and subject to legal professional privilege.[46] In that communication, over which privilege is claimed, Mr Reynolds provided an update on the continuing investigation.
[46] Second Coltrona Affidavit, [17].
On 17 March 2022, the plaintiff's external solicitors sent a written communication to Mr Girgenti and Mr Schenberg of Aztech as to the preparation of a report into the incident, which was said to be for the purpose of giving advice to the plaintiff in contemplation of taking action against the defendant.[47]
[47] Second Coltrona Affidavit, [18].
On 17 March 2022, the defendant raised queries with the plaintiff regarding the incident. This resulted in the plaintiff's external solicitors, on 29 March 2022, sending a further written communication to Mr Girgenti and Mr Schenberg of Aztech to amend the report which had been prepared, to be provided to the plaintiff's solicitors for their consideration.[48]
[48] Second Coltrona Affidavit, [19].
Mr Coltrona has explained in his affidavit that the privileged documents include numerous drafts of reports prepared by Mr Girgenti and Mr Schenberg.[49] Mr Coltrona has identified 14 drafts of the reports, being Documents 4715 to 4721, 4723 to 4725, 4847, 5956, 5155 and 5204. Those reports appear to have been prepared between 21 March 2022 and 12 March 2024, which is around a two year period.
[49] Second Coltrona Affidavit, [20].
The investigation itself appears to stretch from 23 September 2021 through until around 5 August 2022.
E. Submissions
(1) Defendant's submissions
In challenging the privilege claims, the defendant contends as follows.[50]
[50] Defendant's submissions dated 24 December 2024 (DS) and defendant's reply submissions dated 24 January 2025 (Reply DS).
First, the defendant contends that the Hardy Discovery Affidavit filed by the plaintiff did not provide sufficient information to properly support the privilege claims and there is therefore no apparently proper claim for privilege.[51]
[51] DS [13] – [15].
Second, the defendant contends the documents in respect of which privilege is claimed were not prepared for the dominant purpose of legal advice or in anticipation of litigation. There is an inference that the purpose of the investigation initiated by the in-house legal team was operational, that is, to inform the plaintiff of what had happened.[52]
[52] DS [17] – [30] and [34] – [39].
Third, and allied to the second point, the defendant advances a criticism of the plaintiff's affidavit evidence, being a failure to expressly address whether the legal advice purpose was the dominant purpose associated with the documents.[53] As I apprehend it, this criticism represents a central aspect of the Application.
[53] DS [34], Reply DS [17] and [27], and ts 358.
To explain this point a little further - the defendant submits the evidence discloses the existence of multiple purposes for an investigation into the incident being undertaken. The purposes which are apparent are for legal advice to be provided, for information to be provided to the plaintiff's management regarding the incident, for gathering information to comply with reporting obligation to the relevant regulatory body (i.e. DEMIRS), and for insurance purposes.
The defendant submits that, given the existence of these multiple purposes, it was necessary for the plaintiff to adduce evidence in respect of the subject documents that the privileged purpose was the dominant purpose. It is contended the affidavit evidence does not do so, but simply deposes that the documents in respect of which privilege is claimed were prepared or created for the provision of legal advice.
Fourth, the defendant says that, even if the privilege claims can be sustained, the plaintiff nonetheless waived that privilege by providing a witness statement and certain reports to the defendant.[54] The defendant submits that the plaintiff cannot pick and choose which parts of the investigation record it wishes to disclose and which parts it does not.
(2) Plaintiff's submissions
[54] DS [40].
The plaintiff submits that there is a proper basis for its privilege claims and sufficient information has been provided to allow the claims to be assessed.[55] The plaintiff contends that the evidence conclusively establishes that the purpose behind the privilege documents was to obtain legal advice or for legal proceedings.[56]
[55] PS [13].
[56] PS [15].
The plaintiff submits that it is mere supposition for the defendant to assert that the investigation must have been carried out, and communications sent, for other or multiple purposes, based on selected non-privileged documents.[57] The plaintiff says that, in the absence of evidence to the contrary, its evidence should be accepted.[58]
[57] PS [16].
[58] PS [17].
F. Relevant principles concerning privilege
Generally speaking, the parties were not in dispute as to the principles which apply to the determination of the Application. I have set out below a summary of the relevant principles, drawing in part on the submissions prepared by both parties, as well as the rules of this Court which were referred to by the parties.
(1) Relevant rules of the Court
Order 26 r 9 RSC provides:
9. Order for inspection of documents
(1) Where a party who is required by rule 8(1) to serve the notice therein mentioned, or who is served with a notice under rule 8(3) —
(a) fails to serve the notice under rule 8(1) or as the case may be rule 8(3); or
(b) objects to produce any document for inspection; or
(c) offers inspection at a time or place which in the opinion of the Court is unreasonable for such purpose,
the Court may on the application of the party entitled to inspection make an order for production of the documents in question for inspection at such time and place, and in such manner as it thinks fit.
Order 26 r 12 RSC states:
12. Claim of privilege
(1)Where —
(a) on an application for production of a document for inspection or to the Court; or
(b) in any list of documents supplied on discovery,
a party claims privilege the party requiring production or discovery may traverse the claims to privilege by adducing evidence either that the claim to privilege is unfounded or mistaken, but in the absence of any evidence to that effect the claim to privilege shall be sustained.
(2) In determining any objection on the ground of privilege to the production or discovery of any document or class of document the Court may inspect the document.
Order 26 r 12 RSC applies where, on an application for production of a document for inspection to the Court, or in any list of documents supplied on discovery, a party claims privilege. Where the rule is enlivened, the party requiring production may traverse the claims by adducing evidence either that the claim is unfounded or mistaken, but in the absence of any evidence to that effect the privilege claim shall be sustained.
(2) Nature and description of the privilege
Legal professional privilege is both a rule of substantive law and an important common law immunity.[59] The privilege may be relied upon by a party to resist all forms of compulsory disclosure, including the requirement to give discovery of relevant documents in curial proceedings, subject to any statutory abrogation of the immunity.
[59] Glencore International AG v Federal Commissioner of Taxation [2019] HCA 26; (2019) 265 CLR 646; and Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 [9] - [11] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
There are two categories of legal professional privilege, namely legal advice privilege and litigation privilege. The former attaches to confidential communications between a lawyer and client or third party for the dominant purpose of giving or receiving legal advice.[60] Litigation privilege attaches to confidential communications passing between a legal adviser or client and a third party if made for the dominant purpose of use in, or in relation to, litigation, provided the litigation is existing or reasonably anticipated.[61]
(3) Test for dominant purpose
[60] AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 [44] (Young J) (AWB Ltd v Cole).
[61] Trade Practices Commission v Sterling (1979) 36 FLR 255 (Lockhart J).
As to the test for establishing a dominant purpose, the applicable principles were summarised by the Full Federal Court in Barnes v Commissioner of Taxation[62] as follows:[63]
The authorities emphasise the need for focused and specific evidence in order to ground a claim for legal professional privilege. In Kennedy v Wallace [2004] FCAFC 337; (2004) 142 FCR 185 at 189, Black CJ and Emmett J reiterated the principles that verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege: see also National Crime Authority v S (1991) 29 FCR 203 at 211 (per Lockhart J); Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 at 689 (per Stephen, Mason and Murphy JJ). Where possible the Court should be assisted by evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each particular document. The fact that generalised evidence is not challenged in cross-examination does not mean that such evidence must be accepted, particularly when it is as manifestly inadequate as it is in this case. As in Kennedy v Wallace, mere general assertions of the purpose of creation of the documents are insufficient to discharge this onus. Even though in that case some evidence as to the purpose of particular records was adduced, Allsop J at 216 considered that the onus had not been discharged because the evidence did not permit a conclusion to be drawn as to the dominant purpose of the creation of any particular document or entry in a document. Simply to show that one purpose for creation of the document was to obtain legal advice or assistance is not good enough.
[62] Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601 (Tamberlin, Stone and Siopis JJ) (Barnes).
[63] Barnes [18].
Further explanation of the principles can be found in the observations of Young J in AWB Ltd v Cole:[64]
The existence of legal professional privilege is not established merely by the use of verbal formula: Grant v Downs per Stephen, Mason and Murphy JJ. Nor is a claim of privilege established by mere assertion that privilege applies to particular communications or that communications are undertaken for the purpose of obtaining or giving 'legal advice': National Crime Authority v S per Lockhart J; Candacal Pty Ltd v Industry Research & Development Board ('Candacal'); Seven Network Limited v News Limited. If assertions of that kind are received in evidence in support of the privilege claim, their conclusionary nature can leave unclear what advice was really being sought. There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace ('Kennedy v Wallace') per Black CJ and Emmett J and per Allsop J; see also Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (No 6). (citations omitted)
[64] AWB Ltd v Cole [44(3)] (Young J).
Young J, in the foregoing decision, emphasised that the purpose for which a document is brought into existence is a question of fact that must be determined objectively. His Honour noted that evidence of the intention of the maker of the document, or of the person who authorised or procured it, is not necessarily conclusive. Further, his Honour recognised that it may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication.[65]
[65] AWB Ltd v Cole [44(2)] (Young J).
The applicable test to employ is a two-step test. The Victorian Court of Appeal in Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd[66] summarised the principles as follows:
The application of the dominant purpose test, prescribed by the High Court decision in Esso, involves two distinct steps. The first is the ascertainment of the subjective purpose(s) of the person(s) making or commissioning the communication in question. And, as in this case, that investigation will depend upon the evidence which is led about that purpose or those purposes. If the Court concludes that there was more than one purpose, at least one of which was a purpose capable of attracting legal professional privilege, the second step is to determine whether the party claiming the privilege has established that the privileged purpose was the dominant purpose.
(4) Onus of proof
[66] Carter Holt Harvey Wood Products Australia Pty Ltd v Auspine Ltd [2008] VSCA 59 [2] (Maxwell P and Redlich JA) (Carter Holt Harvey).
The general principle is that the party claiming privilege has the onus of establishing the facts on which the privilege is based. Mere assertion of the claim is not enough. What is required is exposure of facts from which an informed decision can be made as to whether the claim for privilege is supportable.[67]
[67] CMA Assets Pty Ltd v John Holland Pty Ltd [No 2] [2012] WASC 126, [23] (Allanson J).
Whilst the ultimate legal onus remains on the party claiming privilege, there is an evidential onus on the party seeking inspection if the claim for privilege is 'apparently proper'.[68]
[68] CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48 [33] – [34]; CMA Assets Pty Ltd v John Holland Pty Ltd [No 2] [24] (Allanson J); and Carey v Korda [2012] WASCA 228.
Both parties made reference to the decision of the Court of Appeal in Carey v Korda. In that case, Murphy JA (with whom Martin CJ and Newnes JA agreed) described the nature of the onus on the party claiming privilege, and the nature of the onus on the party seeking production – and the relationship between the two – in the following terms:[69]
What is required, for the purposes of establishing a privilege claim, will vary depending on the nature of the document and the particular ground on which privilege is claimed…Thus, for example, if in an affidavit claiming privilege, a document were described as a confidential communication from the lawyer to the client, it would be readily capable of sustaining a claim for legal professional privilege on the ground that it was made for the dominant purpose of giving legal advice. On the other hand, eg, a claim would not, generally, be apparently proper if it involved a bare assertion of a protected dominant purpose, in relation to a document which, by the description given to it in the affidavit, had no apparent connection with giving or receiving legal advice or actual or anticipated litigation. Each claim will need to be considered on its merits. Also, the sufficiency of the evidence relied on by a party disputing the claim for privilege for the purpose of meeting its evidential onus will no doubt vary according to the ground of privilege claimed and the description of the document given.
(5) Further principles
[69] Carey v Korda [71] (Murphy JA).
The plaintiff referred to certain propositions of law, which I accept as being supported by orthodox authority. In particular, the plaintiff noted that communications with lawyers employed within an organisation may be privileged if made for the requisite purpose,[70] and where documents are created by or emails are sent between individuals within a company for the requisite purpose, they are privileged,[71] even if the document or communication has not yet been communicated to the legal adviser.[72]
[70] Waterford v Commonwealth (1987) 163 CLR 54, 65 (Mason and Wilson JJ).
[71] Trade Practices Commission v Sterling (246) (Lockhart J); GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 [86] (Hollingworth J).
[72] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 25] [113] (Whitby J).
Further, when a communication is with or a document is prepared by a third party, it is the nature of the function the third party performs that is relevant, not the party's relationship with the third party.[73]
[73] Pratt Holdings Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357; 207 ALR 217 [41] (Finn J), [52] (Merkel J) and [105] (Stone J).
When a privileged communication provides copies of non‑privileged documents, the copies are privileged as part of the privileged communication.[74]
(6) Ausnet Electricity Services
[74] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501, 507-509 (Brennan CJ), 544 (Gaudron J), 554 (McHugh J), 571-572 (Gummow J) and 587 and 590 (Kirby J).
One of the authorities which was explored by counsel for the defendant during his oral address was the decision of Robson J in Ausnet Electricity Services Pty Ltd v Liesfield.[75] That case involved a class action arising out of the Black Saturday fires in Victoria, which started on 7 February 2009. The specific fire with which the case was concerned was known as the Murrindindi bushfires, which commenced near the Murrindindi Sawmill.
[75] Ausnet Electricity Services Pty Ltd v Liesfield [2014] VSC 474 (Ausnet Electricity Services).
The decision of Robson J concerned an appeal from a decision of an Associate Judge, by which the Associate Judge ruled that the appellant had failed to establish its claim for legal professional privilege in respect of various documents, including documents described as the 'technical analysis documents'. It was not disputed in the case that the request for the production of the technical analysis documents was made orally by the chair of a subcommittee of the board of the appellant. That request was made soon after the Victorian Police indicated to the appellant (some 2 ½ years after the fires occurred) that it was investigating the appellant's electrical assets as a cause of the fires.
Robson J dismissed the appeal and upheld the determination of the Associate Judge. Relevantly for present purposes, one of the grounds of appeal was whether the Associate Judge erred in finding that the appellant had failed to satisfy him on the balance of probabilities that the dominant purpose for the production of the technical analysis documents was a privileged one. It was contended that the Associate Judge had erred in finding that there were other non-privileged purposes for the preparation of the documents.
At the outset of his reasons, Robson J emphasised the following matters by way of context to the appeal:[76]
[11]…The appellant contended that the purpose of the documents was to instruct its lawyers Freehills for legal advice and representation that may arise out of the Murrindindi Bushfire. The appellant's claim hinged on the fact that this was the sole purpose of the relevant documents. At no point did the respondent accept that there were any – albeit less important or pressing – other purposes for commissioning the technical analysis documents.
[12] The appellant made no submissions and tendered no evidence, both before the associate judge and this court, as to whether legal advice and representation was the dominant purpose over that of another purpose.
[13] For the reasons that follow, I consider that it was open to the associate judge to find that there were non-privileged purposes for the production of the technical analysis documents and that thus the appellant had failed to satisfy him on the balance of probabilities that the dominant purpose for the production of the technical analysis documents was a privileged one.
[76] Ausnet Electricity Services [11] – [13] (Robson J).
In addressing the assertion that the Associate Judge found that other non-privileged purposes existed for the production of the technical analysis documents, Robson J observed that, where an accident occurs resulting in injury or death and a company obtains a report on the accident, there will often be two or more purposes to that report. His Honour stated:[77]
Often it will be claimed that the report is privileged in that it was purportedly produced to obtain legal advice about the corporation's legal position in regard to the accident. In those circumstances, where corporations have duties of care and responsibilities, and its officers have statutory duties to exercise care and skill, it is almost invariably the case that the corporation also requires the report to ascertain what happened and to ensure that steps are taken to avoid it happing again. The information may also be needed to inform a regulator, insurers, the coroner, the police, to comply with health and safety rules, and a myriad of other operational requirements of the company.
[77] Ausnet Electricity Services [134] (Robson J).
In assessing the findings of the Associate Judge, Robson J noted that the appellant's failure to lead evidence from members of the particular committee, including the chair, enabled the Judge to more readily draw inferences in assessing the available evidence.[78] The Judge was able to infer that the evidence of the committee members would not have assisted the appellant's case. Robson J noted that the appellant's failure to call evidence which was available was particularly relevant to whether or not the Court was satisfied that the appellant had met the requisite burden of proof.[79]
[78] Ausnet Electricity Services [146] (Robson J).
[79] Ausnet Electricity Services [146] (Robson J).
Ultimately, Robson J on appeal found it was open to the Associate Judge to find there were other non-privileged purposes for the production of the technical analysis documents, and it was open to conclude that the appellant had not discharged its burden in establishing that the dominant purpose for which the documents were produced was for privileged purposes.[80] His Honour held:[81]
[149] As indicated above, there was no suggestion by the appellant that if it did have another non-privileged purpose or purposes for producing the documents, the associate judge erred in failing to find that the appellant had established that the privileged purpose, rather than the non-privileged purpose or purposes, was the dominant purpose. No doubt this was dictated by the fact that the appellant's case was that there was only one purpose and that accordingly no evidence was led by the appellant on the issue of whether the privileged purpose was the dominant purpose rather than the non-privileged purpose or purposes.
[150] The appellant would have the Court infer that the reason espoused by the Chair according to Ms Reid (but not by Mr Drew) disclosed the Chair's subjective purpose and evidenced the sub-committee's dominant purpose. In my view, the evidence of Ms Reid and Mr Drew was vague and inconsistent and not 'focused and specific', as the respondent submitted. The appellant did not provide evidence of the thought process behind, or the nature of, advice being sought in respect of the technical analysis documents.
[151] In the face of such inadequate evidence, and the failure of the appellant to call other available evidence, in my opinion, it was open for the associate judge to find that the appellant had not satisfied him on the balance of probabilities that the dominant purpose for the production of the technical analysis documents was privileged.
[152] Accepting, however, that Ms Reid's evidence is an accurate recollection of what was said (and that Mr Drew's was not), there are three factors that lead me to find that it was open to the associate judge to infer that the production of the technical analysis documents had other non-privileged purposes. (footnotes omitted)
[80] Ausnet Electricity Services [148] (Robson J).
[81] Ausnet Electricity Services [149] – [152] (Robson J).
The three factors identified by Robson J were as follows. First, there was an absence of evidence that any non-privileged investigation or analysis had previously been conducted by the appellant in relation to the alleged failure of the appellant's assets and any relationship to the fires, in the ordinary course of its business, and thus, in those circumstances, it was open for the Associate Judge to infer that a purpose of obtaining the technical analysis documents was for operational reasons to inform the appellant of what had happened and whether there were operational and statutory matters flowing from this information that the appellant and its directors and officers were obliged or needed to attend to.[82]
[82] Ausnet Electricity Services [153] (Robson J).
Second, it was open to infer from the direction given by the chair that the technical personnel of the appellant did not have an understanding (or a full understanding) of events around the time of the fires. It was a wholly reasonable assumption that the appellant would need to undertake investigations and analysis to determine whether the fires were caused by a failure of the appellant's assets for operational reasons, and inform its board and relevant officers of any relevant findings.[83]
[83] Ausnet Electricity Services [157] (Robson J).
Third, Robson J pointed to the length of time it took the technical personnel to prepare the report. The evidence from one of the authors was that he worked on the report over a period of time from July through until mid-September 2011. The significant length of time with which it took to prepare the technical analysis documents in question suggests that considerable work was required to understand and record the relevant events surrounding the Murrindindi fire, and that the technical analysis documents they prepared contained information not previously known to the appellant that would be required for operational purposes.[84]
[84] Ausnet Electricity Services [159] (Robson J).
Robson J concluded his reasons with the following statement:[85]
[166]Although it was not necessary for me to decide this appeal, there is one further observation I wish to add. In my opinion, it was not necessary for the associate judge to find in this case that there were in fact other non-privileged purposes in order to establish that the appellant had not satisfied the burden of proving that its dominant purpose in producing the document was protected by legal professional privilege. In light of the onus the appellant bore, the appellant's case that there was only a privileged purpose for the production of the documents and the grossly inadequate evidence led by the appellant, it was open to the associate judge to find that the appellant had not satisfied the onus even if one could only infer that there may have been other non-privileged purposes.
[85] Ausnet Electricity Services [166] (Robson J).
This statement is consistent with the approach adopted by the Victorian Court of Appeal in Powercor Australia Ltd v Perry,[86] a decision on appeal from Robson J, also arising from the Black Saturday bushfires. The Court of Appeal refused the application for leave to appeal in that matter.
[86] Powercor Australia Ltd v Perry [2011] VSCA 239; (2011) 33 VR 548 (Warren CJ, Nettle and Tate JJA) (Powercor Australia).
The Court of Appeal concluded that where the purpose in question is the purpose of a corporation, it is necessary to have regard not only to the subjective purpose of the legal officer in question but also to the objectives of the chief executive who gave her instructions.[87] It is the purpose of the report and not the motive of the individual who made it that matters.[88] The Court of Appeal held:[89]
[W]here the dominant purpose of the controlling mind of a corporation is in issue, it can ordinarily be established with tolerable clarity by that person giving evidence. If, without good reason, he or she chooses not to do so, rational inferences are open to be drawn.
[87] Powercor Australia [20].
[88] Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 [39] (Gleeson CJ, Gaudron and Gummow JJ) (Esso Australia Resources).
[89] Powercor Australia [28].
Further, the Court of Appeal identified a real difficulty with the appellant's submission, namely that, although the chief executive's statement was admissible as evidence of his state of mind, it was not the only evidence on the point. There was a very significant body of evidence of a multiplicity of purposes to which the reports were apt to be applied. The Court of Appeal concluded that:[90]
…it was open to infer that the chief executive's objective in directing Ms Rands to commission the reports included not just legal advice but also obtaining information for those other purposes. It is true that the CEO did not disclose any such other purpose to Ms Rands. But that was not determinative of the issue. What was determinative was what he had in mind; and, for whatever reason, he was not called to give evidence about it. Well might one suppose, therefore, that whatever he might have been able to say on the subject would not have assisted the applicant's cause.
[90] Powercor Australia [26].
As will become apparent, there are close similarities between the contentions which were raised before Robson J in Ausnet Electricity Services and before the Victorian Court of Appeal in Powercor Australia, and I have been assisted by the analysis undertaken in both cases.
(7) Inspection of the documents
The Court has power to inspect documents which are the subject of a challenged claim for privilege. The purpose of inspecting the documents over which the defendant has claimed privilege is to determine whether, on the face of the documents, the nature and content of the document supports the claim for legal professional privilege.[91]
[91] TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd [2020] WASC 364 [5] (Hill J) (TEC Hedland), referring to AWB Ltd v Cole (No 5) [44(12)] (Young J).
There have been statements as to the breadth of the discretion to inspect from the High Court, and from the New South Wales Court of Appeal. As to the High Court, I refer to the statements in Grant v Downs[92] and Esso Australia Resources. In the former decision, the plurality noted that the power to examine documents had 'perhaps been exercised too sparingly in the past' and 'in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence'.[93] In the latter case, the plurality held that the court should not be hesitant to exercise the power to examine documents in respect of which there is a disputed privilege claim.[94]
[92] Grant v Downs [1976] HCA 63; (1976) 135 CLR 674 (Grant v Downs).
[93] Grant v Downs (689) (Stephen, Mason and Murphy JJ).
[94] Esso Australia Resources [52] (Gleeson CJ, Gaudron and Gummow JJ).
As to the New South Wales Court of Appeal, I refer to Rinehart v Rinehart,[95] and to the statement of Beazley P, Leeming and Simpson JJA that the Court's powers to examine the documents are 'wide and should not be unduly circumscribed'.[96]
[95] Rinehart v Rinehart [2016] NSWCA 58 (Rinehart).
[96] Rinehart [20] (Beazley P, Leeming and Simpson JJA).
Following the hearing on 25 February 2025, I formed the view that, in the particular circumstances of this case and having regard to the principles identified above, I should exercise the power in O 26 r 12(2) RSC to inspect the documents the subject of the application.
In forming the view the documents should be inspected, I recognised that, given I am not the trial judge, there was no risk that the inspection of the documents might preclude the trial judge from continuing to manage the actions and preside at the trial. I also recognised that a factor pointing against the decision to inspect these documents was the size of the task. I anticipated the process of reviewing around 500 documents would be somewhat time consuming and was acutely conscious the Court has limited resources to devote to such tasks.
However, on balance, I considered inspection should be undertaken by the Court and apprehended the inspection process would likely assist the Court to come to a more prompt determination of this matter than would otherwise have been the case.
Orders to facilitate the inspection process were made on 26 February 2025,[97] and the documents were produced to the Court on a confidential basis on 28 February 2025. The orders required the plaintiff to produce the documents the subject of the application, being the documents described in the schedule which is Attachment TAC-1 to the Second Coltrona Affidavit. The USB provided to the Court contained 533 individual files.
[97] Email from the Court to the parties dated 26 February 2025 and orders made by the Court on 26 February 2025.
Having now reviewed the documents produced by the plaintiff, and having regard to the principles set out in these reasons, I turn to the determination of the Application.
G. Disposition
The Application brought by the defendant, and the contentions raised by the parties, require that the Court address two broad questions. The first question is whether the claims for privilege advanced by the plaintiff are sustained. There are a number of sub-issues involved in this analysis. The second question is whether, assuming the privilege claims are sustained, the plaintiff has waived that privilege.
Before I directly address these questions, it is convenient to summarise the types of documents in respect of which privilege has been claimed. Drawing from the summary in Mr Kennedy's affidavit, the types of documents may be summarised as follows.
First, as to documents dated prior to 3 November 2021, being the date on which the plaintiff engaged external solicitors, the documents include:
(a)witness statements;
(b)emails to and from employees and contractors of the plaintiff and MinRes in relation to the preparation of the witness statements;
(c)emails to and from employees and contractors of the plaintiff and MinRes in relation to the investigation; and
(d)emails to and from members of the in-house legal team in relation to the investigation, in relation to works being carried out to rectify the incident, in relation to third party reports into the potential causes of the incident, and in relation to analysis of the plaintiff's contract with the defendant.
Second, as to documents dated after 3 November 2021, the documents include:
(a)emails to and from employees and contractors of the plaintiff and MinRes in relation to the investigation;
(b)emails to and from members of the in-house legal team in relation to the investigation, in relation to costs incurred by the plaintiff as a result of the incident, in relation to whether or not invoices issued by the defendant should be paid by the plaintiff;
(c)draft and final internal reports and schedules of remediation costs relating to the investigation into the incident;
(d)internal final notes of a meeting between representatives of the plaintiff and the defendant on 11 November 2021; and
(e)internal memoranda prepared by employees of MinRes and / or the plaintiff in relation to the investigation.
(1) Whether the privilege claims are sustained
The primary question raised by the Application is whether the plaintiff's claims for privilege can be sustained. The sub-issues which I propose to address, in order to answer this question, are as follows:
(a)First, whether there was an apparently proper claim for privilege made by the plaintiff? If so, then the defendant bears an evidential onus to show that the claims for privilege are unfounded or mistaken.
(b)Second, if there is an apparently proper claim for privilege, whether the defendant has satisfied the evidential onus to which I have just referred?
(c)Third, if the evidential onus has been satisfied, whether the plaintiff has satisfied the ultimate legal onus it bears to establish the facts which support the privilege claims? This issue primarily requires an analysis of the following matters:
(i)the nature of the investigation initiated by Mr Perry;
(ii)whether there was a privileged purpose to that investigation and the documents created as part of that investigation;
(iii)whether there were other purposes for the investigation and the documents created as part of the investigation; and
(iv)finally, objectively, what was the dominant purpose of the investigation and for the creation of the documents as part of the investigation.
(a) Was there a proper claim for privilege made by the plaintiff?
The defendant contends that the Hardy Discovery Affidavit filed by the plaintiff did not provide sufficient information to properly support the privilege claims and there is therefore no apparently proper claim for privilege.[98]
[98] DS [13] – [15].
Accordingly, the defendant submits the evidential onus in O 26 r 12 RSC was not engaged.
The defendant also submits that the further detail in the Coltrona Spreadsheet represents, at least in some respects, a change in position by the plaintiff as to the bases for the privilege claims.[99]
[99] Reply DS [12]
Further, the defendant criticises the information set out in the Coltrona Spreadsheet as failing to make any reference to a 'legal investigation' or a 'legal team' in any of the categories,[100] and observes that the first occasion on which the plaintiff made an express assertion that a 'legal investigation' took place was when the First Kennedy Affidavit was filed, on 5 December 2024.[101]
[100] Reply DS [13].
[101] Reply DS [14].
The plaintiff submits that a proper basis for the privilege claims has been explicated and sufficient information to allow the privilege claims to be assessed has been provided.[102] That submission rests on the process undertaken by Mr Coltrona, by which he reviewed and categorised the privileged documents and prepared the Coltrona Spreadsheet, rather than on the formal affidavit of discovery, which is the Hardy Discovery Affidavit.
[102] PS [13] – [14].
In the Hardy Discovery Affidavit, Mr Hardy deposes that the documents listed in Part 1A of Attachment DAH-1 are the documents in the possession, custody or power of the plaintiff.[103] At page 9 of the Hardy Discovery Affidavit, a table has been included, being Part 1A, which I have extracted in Attachment B to these reasons.
[103] Hardy Discovery Affidavit [8] and the schedule at pg 7.
Mr Hardy further deposes that the documents listed in Part 1B of Attachment DAH-1 to the affidavit are the documents which the plaintiff objects to producing, either in whole or in part, on the grounds stated therein.[104] At page 10 of the Hardy Discovery Affidavit, a table has been included, being Part 1B, which I have extracted in Attachment B to these reasons.
[104] Hardy Discovery Affidavit [9] and the schedule at pg 7.
I then turn to Annexure B to the Hardy Discovery Affidavit, which is in effect an annexure to Attachment DAH-1. That annexure runs from page 249 to page 258 of the affidavit, and lists the documents in respect of which privilege is claimed in the manner set out in the image I have extracted in Attachment B to these reasons.
The approach to claiming privilege in respect of documents which is evident from the above material, whether small in number or as sizeable as around 500 documents, places an opposing party in the position that it is unable to properly assess the claims for privilege, in my view. More is ordinarily required. Order 26 r 4(2) RSC requires that, if there is a claim that any documents are privileged from production, 'the claim must be made in the list of documents with a sufficient statement of the grounds of the privilege'.
Absent an express agreement between the parties, I would not be prepared to accept the plaintiff's approach as compliant with the requirements of the rules, and I consider it would be inadequate to make out an apparently proper claim for privilege. The claims for privilege within the Hardy Discovery Affidavit amount to little more than bare assertions of a protected dominant purpose.[105]
[105] As explained in Carey v Korda [71] (Murphy JA).
I recognise in the present action that the parties agreed a protocol for discovery. I have reviewed that protocol. It does not assist the plaintiff. By its terms, it required that a description must be included for any privilege claim which was sufficient to enable the other party to readily discern whether the claim for privilege was properly made.[106]
[106] Discovery Protocol, cl 32.2.
That leads me to the Coltrona Spreadsheet, at which point the plaintiff's argument as to the basis for its privilege claims becomes more attractive.
I am persuaded by the plaintiff's submission that the subsequent provision of the Coltrona Spreadsheet satisfies the plaintiff's obligation to make out an apparently proper claim for privilege.
The provenance of the Coltrona Spreadsheet is explained in the Second Coltrona Affidavit at [5] and [6]. As explained by Mr Coltrona, he has prepared a detailed schedule which sets out the additional information which was separately provided to the defendant, which includes the 'subject line for emails and provides the title of some of the individual documents'. In summary, the schedule provides:
(a)the details, including dates and parties to the correspondence which have been disclosed in Part 1A of the Hardy Discovery Affidavit;
(b)confirmation of the status of the claim for privilege, the basis for the claim and whether there is a whole or part objection to production; and
(c)a category that discloses further information supporting the basis for the plaintiff's claims for privilege, with Mr Coltrona deposing that each category was prepared by him based on his assessment of each document and he verily believes that categorisation to be true.[107]
[107] Second Coltrona Affidavit [6].
By way of example, I have included in Attachment C to these reasons two extracts from the Coltrona Spreadsheet. The categories set out within the spreadsheet include:
(a)'correspondence with in-house legal team';
(b)'correspondence between employees and contractors of the plaintiff in relation to collecting information about incident and remediation works for the purposes of legal investigation';
(c)'attachment to LPP Email';
(d)'attachment already provided as part of Non-Priv Family';
(e)'duplicate of Document excluded by Summons';
(f)'draft internal ERL report of casing hangar incident prepared for the purpose of obtaining legal advice and in anticipation of legal proceedings';
(g)'incident witness statement prepared for the purpose of obtaining legal advice and in anticipation of legal proceedings'; and
(h)'attachment to LPP Email Incident witness statement prepared for the purpose of obtaining legal advice and in anticipation of legal proceedings'.
The information and categories provided by the Coltrona Spreadsheet are sufficiently comprehensive, in my view. Although the information set out in the spreadsheet has been verified by an external solicitor, rather than by a member or officer of the defendant company (as to which, see O 26 r 4(4)(c) RSC), the information in the spreadsheet sufficiently satisfies the requirements of O 26 r 4(2) RSC.
I therefore consider the plaintiff has made out an apparently proper basis for the privilege claims which have been asserted and I reject the submission advanced by the defendant to the contrary.[108]
(b) Whether the defendant has satisfied the evidential onus?
[108] DS [13].
As the evidential onus has been engaged in the present circumstances, it is necessary to consider whether the defendant has satisfied this onus, to show that the plaintiff's claims for privilege are unfounded or mistaken.
In order to discharge this onus, the defendant is not restricted to reliance on its own affidavits but may rely on all of the evidence that is before the Court.[109] Where there is an absence of evidence to support the challenge to the claim for privilege, it would not be sufficient for the challenging party to have the Court inspect the documents to assess the validity of the claims for privilege.[110]
[109] Carey v Korda [70] (Murphy JA); TEC Hedland [16] (Hill J).
[110] CTC Resources NL v Australian Stock Exchange Ltd [37] (Owen J and Steytler J, as his Honour then was); TEC Hedland [16] (Hill J).
The defendant has adduced evidentiary material through the affidavits sworn by Mr Devahasdin, but also points to the affidavit material filed by the plaintiff, being the Second Kennedy Affidavit and the Second Coltrona Affidavit, to discharge its evidential onus.
I am comfortably satisfied the defendant has discharged that onus on the basis of the evidentiary material which discloses the existence of multiple purposes for the investigation into the incident which occurred on 22 September 2021. I will assess that evidentiary material in more detail below, but it is sufficient to observe at this stage that the defendant has identified the existence of additional purposes beyond the purpose of legal advice which has been advanced by the plaintiff.
(c) Has the plaintiff satisfied the ultimate legal onus?
It is unquestionable that, shortly after the drilling incident occurred at the plaintiff's exploration well, Mr Perry, in his capacity as a senior in-house lawyer at MinRes, instructed a representative of the plaintiff, being Mr Daniels, to undertake an investigation into the incident. A copy of the email by which Mr Perry initiated the investigation is before the Court, privilege over the email having been waived by the plaintiff.
No affidavit evidence has been adduced from Mr Perry as to his subjective purpose or purposes in respect of this investigation. The Court nonetheless has the email Mr Perry sent, to which I have just referred, as well as other emails which passed between Mr Perry and representatives of the plaintiff and its contractors in the period that followed. It is open to the Court to draw inferences from this documentary material.
There are some features of the investigation which Mr Perry initiated, and his email, which I should note. The email in question was marked confidential and subject to legal professional privilege in more than one location on the document. The email emphasised that the investigation was to be undertaken in a confidential manner, with all documents created being appropriately marked as confidential and subject to legal professional privilege, and with the distribution of documents being controlled.
The email sent by Mr Perry on 23 September 2021 expressly records the purpose of the investigation, which was to enable Mr Perry to provide MinRes (and the plaintiff as its wholly owned subsidiary) with legal advice regarding the incident. Mr Daniel is asked, in the email, to identify the contributing factors and the root causes of the incident, as part of the investigation.
I accept that, in order for Mr Perry to give legal advice to MinRes and the plaintiff concerning the incident, he would need to understand the cause of the incident and the contributing factors associated therewith, which the technical personnel would be well-placed to assess and explain to him.
A factual investigation of the incident itself, the events leading to the incident, observations of the personnel present at the site, and technical opinions of other personnel about the cause of the incident, would all be part of the necessary ingredients for a lawyer to be able to express views to a client as to the potential legal liability of the client and the potential claims which the client might be able to reasonably pursue.
Next, as a matter of fact, it is evident that an investigation was undertaken by Mr Daniels and others, including Mr Reynolds, Ms Robertson, Mr Nagra and Mr Girgenti.
As part of the investigation, the personnel involved communicated in writing with various employees of MinRes and with various contractors and subcontractors. Members of the legal team were not involved in every communication but I accept the proposition that it is strictly unnecessary for the legal representatives to be involved in every communication in order to sustain the privilege claims.
The investigation also led to various witness statements being obtained from personnel who were involved, which included a statement from Mr Rooney, a representative of the defendant.
I am satisfied that the investigation initiated by Mr Perry was undertaken for at least the purpose of the plaintiff and its parent company obtaining legal advice and for the potential use in future legal proceedings. Plainly there were no legal proceedings on foot when the investigation was initiated, but it can be inferred there was a reasonable possibility of proceedings being commenced in the future, either by the plaintiff or against the plaintiff in connection with the incident, and I also accept that the plaintiff and MinRes would reasonably wish to obtain legal advice in respect of an incident such as this.
In this regard, I recognise that the incident involved the failure of a cementing operation as part of the drilling of an exploration well. I consider it may be inferred that a company in the position of the plaintiff, which is a gas exploration and development company, would regard such a matter as serious and require legal advice about the liabilities associated with the incident.
I conclude that Mr Perry initiated the investigation with a subjective purpose of providing legal advice to the plaintiff and MinRes, and the documents which were thereafter created as part of that investigation were imbued with this purpose. Although Mr Perry has not given any evidence on the Application, he express terms of the email drafted by Mr Perry and dispatched on 23 September 2021, only some hours after the incident occurred, provide strong evidentiary support for an inference in this regard.
That conclusion does not complete the inquiry into the subjective purpose or purposes which underpinned the initiation of the investigation. The defendant submits that the available evidence also supports the conclusion that there were additional purposes for the investigation being undertaken. I have referred to these earlier in the reasons, but it is convenient at this point to summarise them.
The defendant submits that the investigation was undertaken (and documents were created as part of the investigation process) for the purpose of information being provided to the plaintiff's Board and management regarding the incident, for the purpose of providing updates to the plaintiff's contractors, for the gathering of information to comply with reporting obligations to and enquiries from DEMIRS, and also for insurance purposes. These asserted purposes have been identified by the defendant in its primary submissions,[111] its reply submissions,[112] the Second Devahasdin Affidavit,[113] and by counsel for the defendant at the hearing.[114]
[111] DS [30], [35], [37], and [38].
[112] Reply DS [22], [24], and [25].
[113] Second Devahasdin Affidavit [17].
[114] For example, ts 276, 278, 281, and 314.
I will address these asserted purposes in turn.
As to the asserted purpose of information being provided to the plaintiff's Board and management regarding the incident, I accept there is evidence which indicates that the Board and the management of the plaintiff (and, I would infer, MinRes as the parent company) wished to know what had occurred on 22 September 2021 as part of the drilling operation at the exploration wellhead.
This much is evident from the non-privileged material in the Girgenti SJ Affidavit and the Hardy SJ Affidavit (being the affidavits filed by the plaintiff for the purposes of its summary judgment application which was heard in 2023). I refer to the email communication from Mr Girgenti to the defendant's representatives on 13 October 2021[115] and the statement of Mr Hardy in his affidavit that he believed the defendant's primary wellhead system was defective.[116] It will be recalled that Mr Hardy is the chief executive officer for the Energy Portfolio of MinRes, and the person in management responsible for the assets held by the plaintiff subsidiary.
[115] Girgenti SJ Affidavit, Attachment DPG-2.
[116] Hardy SJ Affidavit [23].
Further, Mr Girgenti referred in an early email, sent on 30 September 2021 to the defendant's representative, that he was trying to 'get ahead of the inevitable investigation'.[117] The email, which was not copied to the in-house lawyers, raised the following query:[118]
Just trying to get ahead of the game for the inevitable investigation. Are you able to provide a work order or some traceability on the bore out of the mandrel hangar 3.5" ID to 4.66"? Would you expect there is some form of technical request for this to occur?
Appreciate any background detail you can provide in this regard.
[117] Second Devahasdin Affidavit, Attachment RDD-2.
[118] Second Devahasdin Affidavit, Attachment RDD-2.
As a project manager, I take it Mr Girgenti was here speaking from his experience as to the usual step which would be taken by entities such as this one, whereby a factual investigation would be undertaken following a serious incident on a drilling site.
There are other examples in the evidence of a parallel factual investigation being undertaken, or perhaps the same investigation with a different purpose, as can be seen from the following, none of which involved (or at least appear to involve) any legal representatives:
(a)the email communication from Mr Daniels to the defendant's representative on 8 November 2021 referring to an 'internal investigation into the 5½" casing hanger incident';[119]
(b)the email exchange between Mr Nagra and Mr Girgenti on 12 October 2021 referring to the 'investigation';[120]
(c)the meeting held on 20 October 2021 to 'go over the casing hanger investigation to date';[121] and
(d)the email exchanges between Mr Girgenti and Mr Rooney on 4 and 10 November 2021 regarding the investigation, in which Mr Girgenti states 'the drilling team has now been asked to provide technical information and responses to an ERL incident investigation in what has transpired that causes the significant time / cost overrun on this well'.[122]
[119] Second Devahasdin Affidavit, Attachment RDD-1.
[120] Second Devahasdin Affidavit, Attachment RDD-13.
[121] Second Devahasdin Affidavit, Attachment RDD-14.
[122] Second Devahasdin Affidavit, Attachment RDD-15, especially at pg 62.
The necessity for the Board and management of a public listed entity, and its subsidiary, to identify the causes of an incident such as the present, and to obtain technical material through an investigation, is a matter I would in any event be prepared to infer in all the circumstances.
I say that given the incident here was a significant one. It gave rise to a considerable amount of work on the part of the plaintiff's personnel, and led to the commissioning of independent reports at an early stage, being the Swan Fabricators Report and the Baker Hughes Report.
It would have been evident at an early stage that a significant amount of rectification work was required, together with associated expenditure and lost time. These are all matters which support the inference that an investigation was required to determine the causes of the incident and to inform the Board and management of the findings.[123]
[123] Ausnet Electricity Services [157] (Robson J)
This inference is supported by the indications in the disclosed documents that the immediate causes of the incident were not clear to the plaintiff's personnel or to the key personnel at Aztech, at least in the early stages following the incident, and an investigation would likely be needed for operational reasons at least, to enable the Board and management of the plaintiff and its parent to be informed.
As to the asserted purpose of providing updates to the plaintiff's contractors, I accept the submission of the defendant that there is evidence to support this purpose as well.
The defendant also emphasised the purpose of the gathering of information to comply with reporting obligations to, and enquiries from, DEMIRS. There is ample documentary material to support the inferential existence of this purpose. I will delineate some of this material below.
On 23 September 2021, at around 4.06am, an email was sent by Mr Girgenti to Mr Sandip Patel at DEMIRS.[124] Mr Girgenti made the following comments in that email:
Earlier this evening the cementing operation was being undertaken on the 5-1/2" production casing string at the Lockyer Deep-1 well. On completion of pumping cement the top plug was dropped and the cement unit commenced displacing the cement job however immediately pressured up at surface. Several attempts were made to regain circulation to displace the cement however these were unsuccessful. The outcome is the cement has set up on the inside of the casing string.
The casing hanger is landed out in the wellhead and the BOP is installed dressed with 2 x 5-1/2" ram sets and the annular. The annulus is being monitored on the trip tank.
The plan for tomorrow will be to source a suitable coil tubing unit to drill the cement out from inside the casing to allow for the 5-1/2" casing to be cemented into place as planned.
Will keep you informed as the forward plan develops.
[124] Second Devahasdin Affidavit, Attachment RDD-4.
The above email was sent only a matter of hours after the incident occurred. It concludes with the note that Mr Girgenti will keep the regulator updated as the 'plan develops'.
In the initial email dispatched by Mr Perry to Mr Daniels at 10.48am on 23 September 2021, Mr Perry expressly recognises the role played by DEMIRS, in that he requests Mr Daniels to supply him with any information provided to the regulatory body and to let him know if DEMIRS requests any information.[125]
[125] Second Kennedy Affidavit, Attachment JOK-2.
On 24 September 2021, Mr Girgenti sent another email to Mr Patel of DEMIRS, attaching a copy of the Management of Change form dated 24 September 2021 (commonly known as an MOC form), and stating:[126]
Further to our conversation this afternoon, please find attached a copy of the MOC for the upcoming milling operation. As of 16:00 hrs this afternoon, the 5-1/2" annulus packoff was successfully installed and pressure tested as planned. The next operation is to rig up to mill out the cementing plugs from the 5-1/2" casing hanger.
Feel free to call if you have any questions or require additional information.
[126] Second Devahasdin Affidavit, Attachment RDD-5.
There were further communications of a technical nature between Aztech personnel and Mr Patel of DEMIRS on 24 September 2021, and through to at least 15 October 2021, which included meetings and discussions, together with the provision of further MOC forms.[127]
[127] Second Devahasdin Affidavit, Attachments RDD-6, RDD-7, RDD-8, RDD-9, RDD-10, RDD-11, and RDD-12.
Finally, counsel for the defendant drew the Court's attention to documents which appear to indicate that another purpose of the investigation was for the provision of information to the plaintiff's insurer, or to assist in the preparation of an insurance claim. Counsel referred to the descriptions of several documents in the Coltrona Spreadsheet in this regard which are described as email communications from the in-house legal team at the plaintiff to representatives of the insurance company Marsh. I refer to:
(a)Document 1223 and its attachments being Documents 1224 and Document 1225, which was sent to Marsh on 23 September 2021; and
(b)Document 3393, which was sent to Marsh on 18 October 2021; and
(c)Documents 3411 and 3425, which were both sent to Marsh on 18 October 2021.
Counsel for the defendant submitted that it was apparent from the existence and description of Document 1223 that, on the same day that Mr Perry sent the email to initiate the investigation for the purpose of preparing legal advice (over which privilege has now been waived), Mr Perry sent another email for an apparently different purpose, but which has not been disclosed.[128]
[128] ts 314.
Taking the foregoing matters together, I am able to conclude, and I do so conclude, that there were additional subjective purposes for the undertaking of the investigation into the incident which took place on 22 September 2021, not only the asserted purpose which appears in Mr Perry's email being the preparation of legal advice.
I do not doubt that the provision of legal advice was one of the purposes which motivated Mr Perry to initiate the investigation, and which can therefore be ascribed to the plaintiff as a purpose for the communications which followed thereafter and the documents which came into existence.
But, having concluded there was more than one purpose, it is necessary to now address the second step, in the sense explained by the Victorian Court of Appeal in Carter Holt Harvey, namely to determine whether the plaintiff has established that the privilege purpose was the dominant purpose.
The determination of the dominant purpose for which documents are brought into existence is a question of fact, to be determined objectively. This must be determined having regard to the evidence before the Court, the nature of the documents, and the submissions of the parties. The question is also to be addressed as one of substance, not mere form, and not driven solely by the use of particular labels.
On my assessment of the materials, I am not able to positively conclude that the dominant purpose of the investigation which was initiated by Mr Perry, and which led to the creation of the numerous documents in respect of which privilege has been claimed by the plaintiff, was the asserted privileged purpose, namely for the purpose of obtaining legal advice and for use in anticipated litigation. That assessment can be explained as follows.
I have ruled as inadmissible various portions of the Second Kennedy Affidavit upon which the plaintiff relied to sustain its contentions as to the purpose of the investigation which was undertaken. However, even taken at their highest, the plaintiff's affidavits would not provide the necessary evidentiary platform to discharge the plaintiff's onus, in my respectful view. I say this because the evidence does not provide an assessment, or delineate matters from which an assessment could be made, as to the relative importance or interrelationship between the multiple purposes which I have found existed.
In essence, this is largely because the plaintiff posits a factual scenario in which it was able to categorise the relevant documents as falling into, or being associated with:
(a)the investigation initiated by Mr Perry on 23 September 2021, which was commenced in order to provide legal advice to the plaintiff and its parent company, or in anticipation of legal advice, on the one hand; and
(b)matters separate to the in-house legal team investigation, on the other hand.
As to the second of these matters, counsel for the plaintiff emphasised that the plaintiff had discovered 4,722 documents, which includes documents created for non-privileged purposes, such as the purposes which have been asserted by the defendant.
Counsel for the plaintiff submits that the documents which have not been produced, in respect of which privilege is claimed, represent the documents relating to the privileged investigation. Approaching the matter in this way, the plaintiff says the existence of these other purposes is irrelevant to the status of these privileged documents.
I am not satisfied the matter can be examined in such a clinical way, whereby the documents created after 23 September 2021 as part of the investigation into the incident can be characterised by the party claiming privilege in this manner. Accepting the validity of such an approach would have the potential to neuter many challenges to privilege.
It remains important for a party asserting a privilege claim where there exist multiple purposes to adduce material to support the contention that the potentially privileged purpose was the dominant purpose. Focused and specific evidence is needed in this regard, as the authorities make plain. As the Full Federal Court in Barnes emphasised, the Court should be assisted by evidence of the thought processes behind, or the nature and purpose of the advice being sought, in respect of each particular document. Generalised evidence will not be sufficient.
In the present case, the admissible evidence presented by the plaintiff suffered, in my view, from the absence of any direct evidence in this regard. Broad statements from persons who were not involved in the process, as to intended purposes, will tend to be insufficient.
It is notable that no evidence was led from Mr Perry, the lawyer who initiated the investigation. It is apparent that he left the plaintiff's business by around March 2023, and his role has been taken by Mr Kennedy. However, there has been no explanation for the failure to adduce direct evidence from Mr Perry (or, indeed, evidence on information and belief) for the purposes of opposing the Application and seeking to discharge the plaintiff's legal onus.
To be clear, Mr Perry's departure from the business is not an adequate explanation for the absence of his evidence. Some specific explanation would ordinarily be required to avoid the invocation of the Jones v Dunkel inference which, in the circumstances, I am prepared to draw. That is, I consider it appropriate and rational to draw the inference that the evidence of Mr Perry would not have assisted the plaintiff's position. That inference is appropriate because the evidence of Mr Perry is evidence that one could reasonably expect the plaintiff to have led in the context of this Application, which challenges the privilege in respect of documents created as part of an investigation process which Mr Perry initiated.
There are other persons whose evidence may have been led to assist the Court to assess the dominant purpose of the investigation, such as senior representatives of the plaintiff who were present at the time and had involvement in the investigation. Again, there is no explanation for the lack of this evidence and rational inferences may be drawn as a result.
The present case has similarities with the factual circumstances which existed in Ausnet Electricity Services. Indeed, it appears to me that the one of the difficulties which has arisen in this case (as it did in Ausnet Electricity Services) is that the plaintiff regards there as being only one purpose associated with the creation of the documents which are the subject of the privilege claim, as I have explained above.
As I have said, I do not accept this approach and I consider, from a review of the material which has been produced on affidavit, that it is not open to 'slice' the investigation in the manner which the plaintiff has done, and thus to 'ring fence' the subject documents as being the only documents which are solely attached to or connected with the privileged investigation.
The existence of numerous multi-addressee emails among the subject documents highlights the importance of specific evidence being led as to the purposes of particular communications, and material being adduced which permits the Court to assess the dominant purpose in this context. It has been held that multi-addressee emails should be considered as separate communications between the sender and each recipient, and the privilege which is claimed will not necessarily attach to those instances where the communication is to a non-lawyer.[129] In this respect, I accept the force of the submissions advanced by the defendant in its reply submissions.[130]
[129] TEC Hedland [26] – [29].
[130] Reply DS [20] – [22] and in [23] as amended by counsel at the hearing.
On the material available, the plaintiff's clinical approach is not supported by the course of events, in which it appears there was some degree of initial investigation prior to Mr Perry's email being dispatched, and there are references to several investigations in the materials which were created after the incident, which I have referred to in these reasons. It is open to infer that an important aspect of the investigation into the incident, particularly the technical analysis of the incident, was to supply the plaintiff and its management with clarity as to how this event unfolded from an operational perspective and how it would move forward to rectify the issue, again from an operational perspective, and gain lessons from the incident. This was a serious incident, impacting the drilling of an exploration well. I consider there is a strong inference which can be drawn that the company's management would need to understand these matters, what the implications of the incident were, and whether there were operational or statutory matters arising from the incident which needed to be actioned.
The Court cannot be satisfied in these circumstances that the purpose of seeking legal advice or for use in legal proceedings was the dominant purpose associated with all of the subject documents (recognising that the parties have agreed certain documents over which privilege has been claimed are excluded from the scope of the Application).
To summarise, I am satisfied that there were non-privileged purposes for the production of the documents which are the subject of the challenge. That is, it is apparent, on the balance of probabilities, that the documents created through the investigation process would be used for the purposes of informing the Board and management as to the causes of the incident and the steps undertaken to remedy the problem, to provide updates to contractors, to provide updates to DEMIRS, as well as to provide information to the plaintiff's insurer.
Further, having been unable to positively persuade the Court that the dominant purpose was a purpose capable of attracting legal professional privilege, it follows that the plaintiff has failed to discharge the ultimate legal onus of proof it bears on this Application. As was the case in Ausnet Electricity Services, the plaintiff's failure to call seemingly available evidence in this case has a negative impact on the Court's ability to be satisfied that party has met the requisite burden of proof.
(2) Has there been a waiver of the privilege?
In light of my conclusion on the first question above, it is strictly unnecessary to consider the second question raised by the defendant as part of the Application, namely whether the plaintiff has waived privilege over the documents. I observe that the arguments on this question did not represent a substantial part of the parties' written submissions,[131] nor did it occupy much time at the hearing.[132]
[131] DS [40] and PS [19].
[132] ts 347 - 348, 350.
Had it been necessary to determine this question, I would not have concluded that the plaintiff had waived privilege, whether by way of express waiver or as an implied waiver. My brief reasons are as follows.
I start the analysis with the proposition it is inconsistency between the conduct of the client and the maintenance of the confidentiality which effects a waiver of the privilege. The assessment of whether there has been a waiver of privilege is determined by considering whether, viewed objectively, the conduct of the privilege‑holder is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.[133] The test is fundamentally one of inconsistency between the privilege holder's conduct and its maintenance of the privilege, not one of general fairness or of relevance to an issue in the proceedings.[134]
[133] Poland v Hedley [2023] WASCA 69 [72] (Quinlan CJ, Murphy and Beech JJA) (Poland).
[134] GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266 [57] (Macfarlan JA, McCallum JA and Simpson AJA agreeing) (GR Capital).
The conduct which I understand is relied upon by the defendant to make good the waiver argument is the disclosure by the plaintiff of the following documents:
(a)the witness statement of Mr Rooney, a representative of the defendant;
(b)the Swan Fabricators Report;
(c)the Baker Hughes Report; and
(d)the further documents adduced in the Second Kennedy Affidavit, being Attachments JOK-2, JOK-3 and JOK-4, the substance of which I have described earlier in these reasons.
The witness statement of Mr Rooney contains information known to him. Indeed, he prepared the statement. Mr Rooney is a representative of the defendant.
The two reports I have identified contain technical conclusions based on testing undertaken by Swan Fabricators and Baker Hughes. The further documents adduced in the Second Kennedy Affidavit are documents which demonstrate the initiation of the investigation by Mr Perry, and the matters to be discussed at the meeting scheduled for 22 October 2021.
None of these documents reveal any legal advice which had been provided to the plaintiff, nor any detailed conclusions developed as part of the investigation. Further, I accept the additional documents adduced in the Second Kennedy Affidavit (Attachments JOK-2, JOK-2 and JOK-4) were disclosed in order to properly explain the existence of the investigation which was initiated by Mr Perry, in response to the defendant's attack on the privilege claims.
In my view, the very limited disclosure of these few documents is not, in all the circumstances, including having regard to considerations of fairness, inconsistent with the plaintiff's maintenance of confidentiality in the remaining documents which are said to form part of, or were created as a result of, the investigation initiated by Mr Perry. The balance of these documents have not, in some way, been laid open to scrutiny by the plaintiff's conduct.
H. Conclusion and orders
For the foregoing reasons, I consider the plaintiff has failed to discharge the onus of proof to demonstrate the documents in question were created for the dominant purpose of providing the plaintiff with legal advice, and the defendant's Application should accordingly be granted.
I have not delineated in these reasons the documents which both parties accepted were excluded from the scope of the Application (including the duplicates of those documents), and I proceed on the basis that those documents remain excluded.
I will hear from the parties as to the precise orders which should be made to require the plaintiff to produce the documents to the defendant for inspection, and the timing of that production.
As to the costs of the Application, my provisional assessment is that costs should follow the event and thus the plaintiff should pay the defendant's costs of the application, but I will hear from the parties in this regard.
ATTACHMENT A
Further evidentiary rulings
| Para | Extract from the Affidavit | Objection | Ruling |
| Second Kennedy Affidavit | |||
| 8.2 | Mr Perry, and employees and contractors of the plaintiff at Mr Perry's direction, investigated the Incident to facilitate the provision of legal advice to MinRes and the plaintiff in relation to the Incident. | Non-compliance with O 37 r 6(3A) RSC. | The objection is upheld.[135] The statement is made on information and belief as indicated at [8], and as further explained at [5] and [7] of the affidavit. The sources of the statement are apparent from those paragraphs. However, [8.2] purports to assert that the purpose or intention of Mr Perry was to investigate the incident to 'facilitate the provision of legal advice' when Mr Perry is not the source of the statements. |
| 9 | In or about July 2023, I had a conversation with Mr Darrell Girgenti, Project Manager of the Lockyer Deep 1 project who informed me, and I verily believe to be true: 9.1 events occurred on-site, while he was present, regarding the Incident as set out in his affidavit filed in these proceedings affirmed 26 July 2023; 9.2 remediation works were conducted (including as set out in his affidavit filed in these proceedings affirmed 26 July 2023) and significant costs were incurred as a result of the Incident; 9.3 after the Incident, Mr Girgenti was directed by Mr Perry, and Mr Sean Daniels (then Operations Manager - Energy of the plaintiff) and Ms Shelley Robertson (then Executive General Manager Energy of MinRes) on behalf of Mr Perry, to assist with and oversee the gathering of information for the purposes of a legal investigation into the Incident; 9.4 Mr Girgenti carried out the directions referred to in paragraph 9.3 by: 9.4.1 providing requested updates on the progress of remediation works and costs incurred for these works; 9.4.2 corresponding with and seeking and obtaining information and witness statements from the plaintiffs employees and contractors; and 9.4.3 preparing drafts of reports in relation to the Incident; 9.5 Mr Girgenti provided information and documents he obtained through this process to Mr Perry or to Mr Daniels and Ms Robertson, who Mr Girgenti believed provided that information to Mr Perry; 9.6 Mr Girgenti carried out the work referred to in paragraph 9.4 above in parallel to his work overseeing remediation works associated with the Incident; and 9.7 Mr Paul Reynolds, Mr Shaun Nagra and others were also involved in the process described in paragraph 9.3 and, to the best of Mr Girgenti's knowledge, did so in the same manner described in paragraphs 9.4 and 9.5. | Vague, inherently unreliable; [9.3] double hearsay | Objection overruled, save for [9.7] which is inadmissible.[136] The statements are made on information and belief within the scope of O 37 r 6(3A) RSC. The statements at [9.7] will be struck through as being outside the scope of O 37 r 6 (3A) RSC. Those statements are vague and attempt to convey what two other persons did, without any indication of the basis therefor. The bare reference to the knowledge of Mr Girgenti is insufficient. |
| 15 | I verily believe that the practice and procedure set out at paragraphs 11 to 14 above[137] was applied by the plaintiff at the time of the Incident based on: 15.1 my conversation with Mr Girgenti described in paragraph 9, as to the directions he was given by Mr Perry and the steps he told me he took to comply with those directions; and 15.2 my review of the documents I have read set out at paragraph 6 above; and 15.3 my review of documents ERL.004.013.4866 and ERL.004. 014.7009, discovered by the plaintiff. | Non-compliance with O 37 r 6(3A) RSC. | Objection is upheld.[138] This paragraphs conveys a conclusion drawn by the deponent, albeit one based on statements made to him. The expression of such a conclusion is not admissible. |
| 19 | I am informed by my July 2023 conversation with Mr Girgenti described in paragraph 9 and my review of annexures "JOK-2", "JOK-3" and "JOK-4", and verily believe, that from the morning of 23 September 2021, after the incident, Mr Perry gave instructions to Mr Daniels, copying these instructions to Ms Robertson and Mr Shaun Nagra of MinRes, and Mr Girgenti and other managers of Aztech, in relation to commencing a legal investigation into the Incident in order to enable Mr Perry to provide the plaintiff and MinRes with legal advice as to their rights and the potential liability of others regarding the Incident (Investigation). | Non-compliance with O 37 r 6(3A) RSC. | The objection is upheld in part. The statements are made on information and belief within the scope of O 37 r 6(3A) RSC, other than the final words: '…in order to enable Mr Perry to provide the plaintiff and MinRes with legal advice as to their rights and the potential liability of others regarding the Incident.' These final words of the paragraph are not admissible to convey the subjective purpose of Mr Perry. |
| 21 | I am informed by having read the documents the subject of the Application and verily believe that: 21.1 in so far as the communications were sent to or received by the Legal Team, they involved seeking or obtaining information from the plaintiffs and MinRes' employees and contractors regarding the Incident and works being performed to rectify the incident; 21.2 in so far as the communications were sent to or received by employees of MinRes or the plaintiff, or MinRes' or the plaintiffs subcontractors, (where a member of the Legal Team was not involved in the communication) they involved seeking or obtaining information regarding the Incident and works being performed to rectify the Incident, in order to provide this information to the Legal Team 21.3 in late October and early November 2021, witness statements were obtained from various personnel, including Mr Jeff Rooney of the defendant (Witness Statements). | Non-compliance with O 37 r 6(3A) RSC; vague. | Objection overruled. The statements are made on information and belief within the scope of O 37 r 6(3A) RSC. |
| 22 | I am informed by Mr Girgenti (on 6 February 2025), my review of "JOK-4", and my review of privileged document ERL.004.001.1835 (discovered by the plaintiff but of which privilege is not waived) and verily believe that: 22.1 the communications referred to at paragraph 21.1 and 21.2 above, in so far as he sent or received these communications, were sent for the purposes of the Investigation; and 22.2 the Witness Statements were obtained for the purposes of the Investigation. | Non-compliance with O 37 r 6(3A) RSC; vague (problematic use of 'Investigation'). | Objection overruled. The statements are made on information and belief within the scope of O 37 r 6(3A) RSC. |
| Second Coltrona Affidavit | |||
| 18 | Based on my review of privileged document ERL.001.001.2292, I verily believe that on 17 March 2022 the plaintiffs solicitors sent a communication to Mr Darrell Girgenti and Mr Rob Schenberg of Aztech in relation to the preparation of an investigation report into the Incident for the purpose of giving advice to the plaintiff in contemplation of taking action against the defendant (Report). | Competence (the deponent purports to give evidence about purpose, but he was not the sender of the communication and was not told anything about purpose by the solicitor who was the sender). | Objection upheld in part. The document should speak for itself. |
| 19 | On 17 March 2022, the defendant raised queries with the plaintiff about the Incident. Based on my review of privileged document ERL.001.001.2280, I verily believe that on 29 March 2022 the plaintiff's solicitors sent a communication to Mr Darrell Girgenti and Mr Rob Schenberg of Aztech in relation to amending the Report to create, and provide to the plaintiffs solicitors for consideration, a draft response to the defendant's queries. | Competence (the deponent purports to give evidence about purpose, but he was not the sender of the communication and was not told anything about purpose by the solicitor who was the sender). | Objection upheld in part. The document should speak for itself. |
| 20 | Based on my review of the following documents, which are drafts of reports prepared by Mr Girgenti and Mr Schenberg, I verily believe that these documents were prepared in response to the communications referred to at paragraphs 18 and 19 above. | Competence (the deponent purports to give evidence about purpose, but he was not the sender of the communication and was not told anything about purpose by the solicitor who was the sender). | Objection upheld. The documents should speak for itself. |
[135] ts 288.
[136] Ts 289 – 291.
[137] Those paragraphs contain Mr Kennedy's evidence as to the usual practices for investigation within the business.
[138] Ts 291 – 295.
ATTACHMENT B
Extracts from the Hardy Discovery Affidavit
Page 9 of the Hardy Discovery Affidavit:
Page 10 of the Hardy Discovery Affidavit:
Page 249 of the Hardy Discovery Affidavit:
ATTACHMENT C
Extracts from the Coltrona Spreadsheet
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IR
Associate to the Hon Justice Lundberg
27 MARCH 2025
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