Environment Protection Authority v Newcastle Port Corporation

[2019] NSWLEC 92

Land and Environment Court

New South Wales

Medium Neutral Citation:	Environment Protection Authority v Newcastle Port Corporation [2019] NSWLEC 92
Hearing dates:	13 May and 17 June 2019
Date of orders:	28 June 2019
Decision date:	28 June 2019
Jurisdiction:	Class 5
Before:	Robson J
Decision:	See orders at [69]
Catchwords:	PRACTICE AND PROCEDURE – subpoena filed by defendant seeking production of draft reports prepared by expert retained by prosecutor – prosecutor claimed privilege over and objected to access being given to draft reports on the grounds of legal professional privilege – whether draft reports privileged – whether privilege waived – privilege claim upheld and access not granted
Legislation Cited:	Evidence Act 1995 (NSW) ss 117, 118, 119, 122, 126, 131A, 142 Protection of the Environment Operations Act 1997 (NSW) s 120 Uniform Civil Procedure Rules 2005 (NSW) r 33.8
Cases Cited:	Buzzle Operations v Apple Computer Australia (2009) 74 NSWLR 469; [2009] NSWSC 225 Hancock v Rinehart (Privilege) [2016] NSWSC 12 Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557; [1992] FCA 322 Lubeck v NSW Police Force [2019] NSWSC 504 Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 ML Ubase Holdings Co Ltd v Trigem Computer Inc (2007) 69 NSWLR 577; [2007] NSWSC 859 New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 Shea v TruEnergy Services Pty Ltd (No 5) [2013] FCA 937; (2013) 303 ALR 230 Sugden v Sugden (2007) 70 NSWLR 301; [2007] NSWCA 312 Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways [2005] NSWCA 47 Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002 Towney v Minister for Land & Water Conservation (NSW) (1997) 76 FCR 401 Traderight (NSW) Pty Ltd v Bank of Queensland Ltd (No 14) [2013] NSWSC 211
Texts Cited:	NSW Department of Premier & Cabinet Memorandum M1997-26 Litigation Involving Government Authorities
Category:	Procedural and other rulings
Parties:	Environment Protection Authority (Prosecutor) Newcastle Port Corporation (Defendant)
Representation:	Counsel: Z Heger (Prosecutor) C R Ireland (Defendant)   Solicitors: Environment Protection Authority (Prosecutor) HWL Ebsworth Lawyers (Defendant)
File Number(s):	2018/00379993
Publication restriction:	Nil

Judgment

1. By summons dated 10 December 2018, the Environment Protection Authority (‘prosecutor’) alleges that Newcastle Port Corporation (‘defendant’) committed an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (NSW) (‘POEO Act’) by polluting waters. The matter presently before the Court concerns a subpoena filed by the defendant on 25 March 2019 seeking production from the prosecutor of draft reports of Dr Fleur Pablo, an expert eco-toxicologist retained by the prosecutor. The prosecutor objects to the inspection by the defendant of three draft reports on the grounds of legal professional privilege.

2. For the reasons that follow, I find that the three items remaining in dispute, being the incomplete draft of Dr Pablo’s expert report dated 31 March 2018 (‘Incomplete Draft’), the first draft of Dr Pablo’s expert report dated 12 September 2018 (‘First Draft’) and the second draft of Dr Pablo’s expert report dated 26 November 2018 (‘Second Draft’) (collectively ‘the Drafts’) are subject to legal professional privilege and that privilege over these documents has not been waived by the prosecutor. As such, the defendant is not granted leave to inspect the Drafts.

Background

3. The prosecutor alleges that the acts constituting the offence occurred in December 2017, when the defendant instructed a contractor to clean sediment dams on land owned by the defendant at William Allen Drive, Eden and that during this process, “sediment laden water” was pumped into an open table drain through which the water flowed into a sediment pond which overtopped and discharged into an unnamed intermittent creek. It is alleged that the “sediment laden water” then passed along the creek into an estuarine area from which it flowed into an open lagoon and into East Boyd Bay. The defendant has entered a plea of not guilty to the charge.

4. In March 2018, the prosecutor engaged Dr Pablo to provide an expert opinion in relation to the environmental harm allegedly caused by the offence. Consequent upon receiving instructions, on 31 March 2018, Dr Pablo sent an email to a legal officer in the office of the prosecutor attaching the Incomplete Draft. Consequent upon a further email of 24 August 2018, on 12 September 2018, Dr Pablo sent the prosecutor the First Draft and on 4 October 2018, a legal officer in the prosecutor’s office sent Dr Pablo a copy of the First Draft with various suggested edits and comments. On 26 November 2018, Dr Pablo provided the Second Draft to a legal officer in the prosecutor’s office.

5. By email dated 12 February 2019, the prosecutor’s legal officer requested that Dr Pablo exclude certain information that had been previously provided from her report. That information related to the analysis of water samples collected at a location identified as “AMS Culvert” (‘Culvert Sample’). Dr Pablo had been earlier provided with the results of water quality analysis relating to five sampling locations (including the Culvert Sample). Dr Pablo’s final report dated 22 February 2019 (‘Final Report’) was filed and served on 1 March 2019 and concluded that the incident the subject of the charge caused significant and actual harm to the environment by severely degrading the water quality and/or visual clarity of the water in the receiving waterways. In the Final Report, Dr Pablo referred to her instructions to exclude the Culvert Sample and attached as Annexure E the email dated 12 February 2019.

6. By subpoena filed 25 March 2019, the defendant seeks production from the prosecutor of the following:

Draft expert reports of Dr Fleur Pablo which contain the material excluded from the Expert Report of Fleur Pablo filed 1 March 2019, as a result of the email sent from Stacey Ella (Senior Legal Officer NSW Environment Protection Agency) to Fleur Pablo on 12 February 2019 (being Annexure E to the Expert Report of Fleur Pablo filed 1 March 2019).

7. In response to the subpoena, on 2 April 2019, the prosecutor produced the Drafts to the Court in a sealed packet and objected to the defendant inspecting them on the grounds of legal professional privilege.

8. The prosecutor states that it is not alleging that the defendant polluted waters at the AMS Culvert given that the waters at that location are some metres upstream of the point at which the “sediment laden water” was discharged into the table drain. The defendant has been provided with the laboratory analysis of the water collected at the AMS Culvert and contends that the quality of the water sampled at the AMS Culvert, as well as any expert analysis and opinion of Dr Pablo relating to that sampling, are relevant to the defendant’s defence of the charge. The defendant asserts that such material is particularly relevant in relation to the pre-existing quality of the water in the table drain, the potential for alternative discharge points upstream of the alleged discharge point affecting the table drain, and any alleged environmental harm caused to the table drain and areas downstream.

9. The defendant has not had access to the Drafts over which privilege has been claimed and the Court, at the behest of the parties, has examined the Drafts in order to scrutinise the privilege claim.

10. The prosecutor reads the affidavit of Stacey Leigh Ella affirmed 8 May 2019 which, inter alia, gives details of the conduct of the prosecutor and correspondence between the prosecutor’s lawyers and Dr Pablo. The prosecutor also reads two affidavits of Tristan James Johnston affirmed 5 December 2018 and 1 February 2019 respectively and tenders the Final Report and tabs 2 and 4 to the affidavit of Mr Johnston affirmed 5 December 2018.

11. The defendant relies upon the affidavit of Amanda May Fletcher affirmed 16 November 2018 (noting this is a prosecution affidavit).

12. The essential question is whether the defendant should be granted leave to inspect the Drafts pursuant to r 33.8 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) or otherwise, which depends on whether the prosecutor’s claim for legal professional privilege can be sustained.

Prosecutor’s position in relation to privilege

13. The prosecutor asserts privilege over the Drafts on the basis of ss 119 and 118 (in the alternative) of the Evidence Act 1995 (NSW) (‘Evidence Act’). The prosecutor submits that adducing the Drafts would result in disclosure of a “confidential communication” between the prosecutor’s lawyer and Dr Pablo, or alternatively a “confidential document”, that was “prepared for the dominant purpose of the [prosecutor] being provided with professional legal services relating an...anticipated...Australian...proceeding...”. In its submissions, the prosecutor deals with each of the Drafts separately.

Incomplete Draft

14. The prosecutor’s position is that the Incomplete Draft is privileged as it was prepared by an expert with the dominant purpose of being furnished for comment or advice by the prosecutor’s lawyer: New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 (‘New Cap’) at [20]. The prosecutor notes that when Dr Pablo provided the Incomplete Draft, it was styled “draft report” and Dr Pablo specifically noted that there were “a few gaps I had no time to write...I’ll fix them up when I return”. In these circumstances, the prosecutor submits that the document is clearly an incomplete draft and the reasonable inference is that it was provided to the legal officer for comment and discussion. The prosecutor contrasts these descriptions with Dr Pablo’s description of the Final Report which did not have any reference to “draft”.

15. The prosecutor submits that as at 31 March 2018, the proceedings had not been commenced, noting that the summons was not filed until 10 December 2018. As such, the Incomplete Draft could not have been brought into existence “for the purpose of being laid before the Court as the witness’ evidence” (New Cap at [29]) as the charges had not yet been articulated and lay evidence had not been finalised.

16. The prosecutor submits that the Incomplete Draft was nevertheless provided for the dominant purpose of the prosecutor being provided with professional legal services relating to “anticipated” proceedings and it is clear from the instructions initially given to Dr Pablo that the prosecutor was “investigating” the defendant “in relation to an alleged water pollution incident”.

17. In addition, the prosecutor relies upon the evidence of Ms Ella, a senior legal officer in the prosecutor’s Legal Services Branch. Ms Ella deposes that from around 13 March 2018, “it was clear that there was a real prospect of a prosecution being brought for an offence against s 120 of the POEO Act, in the sense of a prosecution being more than a mere possibility”, for the reasons which she gives including – that investigating officers had prepared reports which contained admissions regarding the alleged offence; water samples collected by investigators exceeded prescribed thresholds for water pollution; review of an environmental protection licence did not permit discharge into water from the premises; an eyewitness reported seeing “black liquid” in East Boyd Bay and alleged that the discharge was from the premises; laboratory analysis confirmed that some water samples taken by investigating officers were ‘eco-toxic’; and investigations were being carried out by operational staff.

18. Ms Ella also deposes that she understood that the prosecutor’s purpose in briefing Dr Pablo was, at that stage, to “inform the investigation and in particular to assist in identifying which charges could be particularised in any summons...”.

19. In the alternative, the prosecutor submits that even if the Court was not satisfied that the proceedings were “anticipated” (as at March 2018), the prosecutor was at that time being provided with “advice” in relation to the defendant’s suspected breach of the POEO Act, thereby engaging s 118 of the Evidence Act.

First Draft

20. In the email forwarding the First Draft to the prosecutor, the prosecutor notes that Dr Pablo stated “Please feel free to make comments and edits” and that she would be “back on 20th Sept to amend/finalise the report”. In those circumstances, the prosecutor submits that the First Draft was provided to the prosecutor’s lawyer for the purpose of advice or comment and this purpose is confirmed by the fact that a version of the draft with various suggested edits and comments marked up was emailed by a legal officer to Dr Pablo on 4 October 2018. Further, as at 12 September 2018, the date of the First Draft, these proceedings had not yet been commenced so the prosecutor does not accept that the First Draft was brought into existence “for the purpose of being laid before the Court as the witness’ evidence”: New Cap at [29].

21. As stated above in relation to the Incomplete Draft, the prosecutor submits that the First Draft was nevertheless provided for the dominant purpose of the prosecutor being provided with professional legal services relating to “anticipated” proceedings. Ms Ella’s evidence is that the First Draft was intended to be used by the prosecutor in preparing a “consultation minute” and a “prosecution minute”, each of which is prepared pursuant to the NSW Department of Premier & Cabinet Memorandum M1997-26 Litigation Involving Government Authorities (‘Memorandum’). The Memorandum provides for the preparation of a document to give a recommendation as to whether the prosecutor should consult with the Government authority against whom a prosecution is contemplated and to assist in any such consultation. Ms Ella prepared a consultation minute on 21 September 2018.

22. Ms Ella deposes to the prosecutor’s practice, which was adopted in this matter, to provide a “prosecution minute” to the Chief Environmental Regulator to advise on prospects of success. Ms Ella further deposes that the First Draft was to be used by the prosecutor in preparing the consultation minute and the prosecution minute and “in particular in identifying the charges that could be the subject of the Summons and advising on the prospects of success of those charges”.

23. In the alternative, the prosecutor submits that if the Court is not satisfied that the proceedings at that time were “anticipated”, it is clear that the prosecutor was being provided with “advice” and therefore s 118(c) of the Evidence Act applies.

Second Draft

24. The prosecutor notes that Dr Pablo described the Second Draft as a “Draft Report”, and again submits that Dr Pablo was providing a draft for advice and comment by the prosecutor’s lawyers. The prosecutor contends that this is confirmed by the fact that on 30 January 2019, an officer of the prosecutor emailed Dr Pablo attaching a version of the draft with various suggested edits and comments marked up.

25. The prosecutor again submits that as at 26 November 2018, these proceedings had not yet commenced so the Second Draft could similarly not have been brought into existence “for the purpose of being laid before the Court as the witness’ evidence”: New Cap at [29]. The prosecutor notes Ms Ella’s evidence that she had specifically requested that Dr Pablo’s further draft report be received before the summons was required to be filed on or before 11 December 2018 so that the report could assist in finalising the prosecution minute and preparing the summons.

26. Alternatively, the prosecutor repeats the submission above that if the Court is not satisfied that the proceedings at that time were “anticipated” at that time, it is clear that the prosecutor was being provided with “advice” at that time and therefore s 118(c) of the Evidence Act applies.

Defendant’s position in relation to privilege

27. The defendant submits that the Court would not be satisfied on the balance of probabilities that each of the Drafts is the subject of client legal privilege under ss 118 or 119 of the Evidence Act and that the prosecutor has not discharged its onus. The defendant contends that the Court should infer that Dr Pablo provided each of the Incomplete Draft, First Draft and Second Draft, setting out her considered expert opinion so that her opinion would be provided to the Court, rather than for the provision of professional legal services to the prosecutor. As such, the defendant submits that the prosecutor has not adequately rebutted the proposition that the dominant purpose of providing the Drafts was to provide Dr Pablo’s expert opinion to the Court in accordance with her obligations under the Expert Witness Code of Conduct: Buzzle Operations v Apple Computer Australia (2009) 74 NSWLR 469; [2009] NSWSC 225 (‘Buzzle’) at [22]-[28].

28. The defendant further submits that pursuant to s 119 of the Evidence Act, a document prepared by a witness for use in providing evidence will only be privileged “if prepared for the dominant purpose of the client being provided with professional legal services”: New Cap at [31]. A report created for the purpose of serving on a defendant will not necessarily have been prepared for the dominant purpose of providing legal services but rather the dominant purpose of informing the Court of the facts and opinions sought to be established by the report: Buzzle at [22]-[28]. As such, Dr Pablo was not providing “professional legal services” or giving her expert opinion so that the prosecutor’s legal team could provide “professional legal services”. The evidence before this Court is insufficient to establish that the dominant purpose of the Drafts was the provision of professional legal services. A reasonable inference arises that the material was prepared by Dr Pablo to set out her opinion and assumptions for the information of the Court and, as stated above, this inference has not been displaced by the prosecutor on the balance of probabilities.

29. Put simply, the defendant says that the prosecutor has not discharged its onus of demonstrating that the Drafts were brought into existence and provided for the privileged purpose because reasonable inferences are available that they were prepared for the purpose of Dr Pablo forming or documenting her own opinions to be expressed in the Final Report, or in accordance with Buzzle, for the purpose of informing the Court and ultimately the defendant of the scientific facts contained therein.

Consideration – has privilege been established?

30. The questions of whether the Drafts are privileged, and if so, whether privilege has been waived, are to be resolved by the provisions of the Evidence Act and not the common law. Section 131A of the Evidence Act applies because the objection to inspection of the Drafts is made by the prosecutor, the party required by the subpoena to produce the documents.

31. For the prosecutor’s claim for privilege to be made out, pursuant to s 142(1) of the Evidence Act, the Court must be satisfied on the balance of probabilities that each of the Drafts is subject to legal professional privilege under ss 119 or 118 (in the alternative) of the Evidence Act.

32. Sections 118 and 119 of the Evidence Act provide:

118    Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a) a confidential communication made between the client and a lawyer, or

(b) a confidential communication made between 2 or more lawyers acting for the client, or

(c)    the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

119 Litigation

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:

(a)   a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or

(b)   the contents of a confidential document (whether delivered or not) that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

33. Section 118 of the Evidence Act relates to privilege for confidential communications made, and confidential documents prepared, for the dominant purpose of a lawyer providing legal advice. Section 119 relates to privilege for confidential communications made, and confidential documents prepared, for the dominant purpose of a lawyer providing legal services relating to litigation. The provisions prevent the adducing of evidence which would result in disclosure of the privileged communication or document.

34. The expressions “confidential communication” and “confidential document” are defined in s 117 of the Evidence Act:

confidential communication means a communication made in such circumstances that, when it was made:

(a) the person who made it, or

(b) the person to whom it was made,

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

confidential document means a document prepared in such circumstances that, when it was prepared:

(a) the person who prepared it, or

(b) the person for whom it was prepared,

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

35. The essential question is whether the Drafts were brought into existence for the privileged purpose of providing professional legal services or, as the defendant asserts, there is a reasonable inference that the Drafts were prepared for the purpose of Dr Pablo forming or documenting her own opinion to be expressed in the Final Report, or as was considered in Buzzle, for the purpose of informing the Court and ultimately the defendant of the scientific facts contained therein.

36. The distinction between draft expert reports which will be privileged and those which will not was considered by White J in New Cap at [28]-[30], [34]-[35]:

[28] A lawyer will provide professional legal services in relation to a witness’ statement of evidence where the lawyer is asked to advise on what the statement should contain and settle the form of the statement. The deployment of the final report by the plaintiff’s lawyers through its service on the opposite party and its tender into evidence will also constitute the provision of professional legal services relating to the proceeding.

[29] Section 119 directs attention to the dominant purpose for which each confidential communication or confidential document comes into existence. The dominant purpose for which a final expert’s report or final witness statement is brought into existence would presumably be for the purpose of being laid before the Court as the witness’ evidence. Prima facie, it would not be privileged (Attorney-General (NT) v Maurice at 480). However, draft reports, and notes used in preparing a report, may stand at a different position, particularly where the expert has been retained by the party’s solicitors and it is expected that the party’s lawyers will advise on the contents of, and settle the form of, the report. There is nothing improper in such a course. It is not inconsistent with the expert’s paramount duty being the duty to the Court and not to the client retaining him or her.

[30] It will be a question of fact, to which the expert may be required to put his or her oath, as to whether any draft reports prepared and kept by him, and working notes prepared by him or his staff, were brought into existence for the dominant purpose of the plaintiffs being provided with professional legal services. If they were prepared for the dominant purpose of a draft report being submitted for advice or comment by the plaintiffs’ lawyers, then they would be privileged under s 119. However, if they were brought into existence for the dominant purpose of the expert forming his or her opinions to be expressed in the final report, then it could be arguable that they were not made for the dominant purpose of the plaintiffs being provided with professional legal services relating to the proceedings.

...

[34] Section 119(b) of the Evidence Act extends the privilege to confidential documents, whether communicated or not, provided they were brought into existence with the requisite dominant purpose. The question however is what that purpose is. If an expert prepares a draft report, or notes for the report, with the dominant purpose of a draft report (whether the precise draft then prepared by the expert or an intended later draft) being furnished for comment or advice by the lawyer, then it is privileged. If not, it is not.

[35] The issue may not be an easy one to determine. In all probability, an expert witness retained by a lawyer for a party will prepare a draft report with the intention (and purpose) that it will set out the evidence which he or she expects to give, but also with the intention and purpose of its being considered and commented on by the party’s lawyers. If the latter purpose is dominant, the document so produced is privileged. If not, it is not privileged.

37. His Honour concluded that drafts of the expert’s report which had been provided to the parties’ lawyers for the purpose of comment and settling the form of the reports were privileged.

38. Adopting the reasoning of White J in New Cap and accepting the submissions made by the prosecutor summarised above, I find that the Drafts are privileged pursuant to s 119 of the Evidence Act as they were prepared for the dominant purpose of the prosecutor being provided with professional legal services relating to an anticipated proceeding. This does not apply to the Final Report, which I consider must be “for the purpose of being laid before the Court as the witness’ evidence”. It is obvious that the prosecutor’s lawyers were to “advise on the contents of, and settle the form” of the Drafts as per New Cap at [29].

39. Although the relevant purpose of the communication or document is a question of fact to be determined objectively, the subjective intention of the person responsible for the creation thereof is not irrelevant: Sydney Airports Corporation Ltd v Singapore Airlines Ltd & Qantas Airways Ltd [2005] NSWCA 47 at [6] per Spigelman CJ. While in many cases the relevant purpose will be that of the person who creates the document or communication, where an expert report is brought into existence because a solicitor has commissioned it, the relevant purpose will be that of the solicitor: Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557; [1992] FCA 322 at 568-569 and Tavcol Pty Ltd v Valbeet Pty Ltd [2016] NSWSC 1002 at [23].

40. While the issue is not “an easy one to determine” (New Cap at [35]), I accept Ms Ella’s evidence of the prosecutor’s purpose and I note that the emails from Dr Pablo establish her purpose which is consistent with the prosecutor’s purpose. Given the intercourse that took place between the prosecutor’s lawyers and Dr Pablo and in particular the comments of Dr Pablo in the emails accompanying the Drafts which are before the Court, it is clear that the three reports were in draft form and were to be the subject of further advice and comment by the prosecutor’s lawyers. Further, the Drafts could not be considered to have been brought into existence for the purpose of being laid before the Court as it is clear that at the time the Drafts were produced, proceedings had not yet commenced, the charges had not been articulated, and lay evidence had not been finalised.

41. The defendant referred to Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [32] and submitted that the absence of evidence from Dr Pablo, the preparer of the Drafts, was significant. I do not accept this proposition. It would be an unusual course in the circumstances for Dr Pablo to put on evidence in an interlocutory matter such as the present given that she may be exposed to cross-examination. While it is true that various courts have cautioned against upholding client legal privilege in the absence of an adequate evidentiary foundation external to the subject documents themselves (Lubeck v NSW Police Force [2019] NSWSC 504 at [61]), I find that an affidavit from Dr Pablo is not essential to establish purpose and purpose can be established on the evidence before the Court, including Ms Ella’s affidavit. As noted above, Ms Ella’s evidence that she had formed the view that there was a real prospect of a prosecution being brought for an offence against s 120 of the POEO Act and that the prosecutor sought Dr Pablo’s view to assist it in identifying which charges could be particularised in any summons, is persuasive.

42. In the circumstances, I find that the prosecutor has discharged its onus as it has proven on the balance of probabilities that the Drafts were prepared for the dominant purpose required by s 119. For completeness, in addition to my finding that the Drafts are privileged under s 119 of the Evidence Act, given the uncontested evidence of Ms Ella, I find that the prosecutor was being provided with “advice” in relation to a suspected breach of the POEO Act, with the effect that s 118 of the Evidence Act is also engaged.

Defendant’s position in relation to waiver

43. The defendant submits that if the Court finds that the prosecutor has made out its claim for privilege, then privilege has been waived because the Final Report is “materially different” to the Drafts as the Final Report excludes the water sampling analysis at the AMS Culvert (and any observations or opinions of Dr Pablo in relation thereto) at the direction of the prosecutor. The defendant also contends that privilege has been waived on the basis that the Drafts incorporating that material are reasonably necessary to properly understand both the Final Report and Annexure E pursuant to s 126 of the Evidence Act.

44. The defendant submits that it would be inconsistent with the preservation of privilege to direct an expert to exclude key laboratory results from the Final Report and to disclose this direction, and then not to disclose the earlier drafts that the expert was being directed to change. This creates unfairness because the defendant cannot make the comparison of any effect of the exclusion of the material on Dr Pablo’s conclusions. To this end, the Court would infer that the instruction in Annexure E influenced the content of the Final Report and that this exclusion amounts to a change to the “substance” of the Final Report.

45. The defendant submits that the substance of Dr Pablo’s expert opinion has been influenced by the Annexure E direction and that this is different from a situation where legal advisers provide comments on drafts in a way which is consistent with discharging their obligation to assist experts to properly address the questions asked of them and to present their opinions in admissible form: Traderight (NSW) Pty Ltd v Bank of Queensland Ltd (No 14) [2013] NSWSC 211 (‘Traderight’) at [17], [23]. As such, the defendant submits that the instruction in Annexure E influenced the content of the Final Report in a material way that was not limited to the correction of matters of form or testing Dr Pablo’s opinions in the Drafts.

46. The defendant submits that it is inconsistent, within the meaning of that term in s 122(2) of the Evidence Act, for the prosecutor to maintain privilege as a matter of fairness. That is, the direction to Dr Pablo that the laboratory analysis of the AMS Culvert water samples be excised from her consideration after she had prepared the Drafts requires an acceptable explanation and part of any acceptable explanation must be, as a matter of fairness, for disclosure of the Drafts so that the precise difference caused by the exclusionary direction can be seen. Even in the event that there was no overt or expressed change in the wording of Dr Pablo’s conclusions, this would itself be material and have implications for the credibility of and weight to be accorded to Dr Pablo’s evidence.

47. As stated above, the defendant submits that disclosure of the Drafts is reasonably necessary to understand the Final Report within the meaning of s 126 of the Evidence Act. The defendant contends that it is “simply not possible to fully understand the final report (which includes the exclusionary direction in Annexure “E”) without disclosure of the earlier draft reports that actually contain this material referred to but not included in the final report”.

48. The defendant further submits that privilege in the Drafts has been impliedly waived because the disclosure of some material makes it misleading to protect other privileged material: Towney v Minister for Land & Water Conservation (NSW) (1997) 76 FCR 401 (‘Towney’) at 413-414. That is, the defendant cannot have a complete understanding of the Final Report without regard to the earlier Drafts which presumably contain the excluded material. The defendant submits that the Drafts should be disclosed as a matter of fairness to avoid “serious risk of the Court at hearing being misled by only having the final report of Dr Pablo from which she has been directed to exclude the laboratory analysis of the samples taken from the table drain, part of the allegedly polluted waters”.

49. The defendant further submits that the Drafts are needed not only to properly understand the Final Report, but to understand Annexure E itself.

Prosecutor’s position in relation to waiver

50. The prosecutor submits that the question of whether privilege has been waived by the service of Annexure E depends on whether s 122 of the Evidence Act would allow such evidence to be adduced notwithstanding ss 118 and/or 119. To the extent that the defendant seeks to rely upon s 122(2), the prosecutor refers to the commentary of White J in New Cap at [53], where his Honour observed that “the question is not merely whether...the privileged materials were used in such a way they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials”.

51. Adopting this approach, the prosecutor submits that is not enough to show that a document has influenced the content of the Final Report and that “something more is required”. The prosecutor submits that the defendant has provided no authority for the proposition that “unfairness” or “relevance to credibility” are sufficient to waive privilege and that the authorities have eschewed any general notion of “unfairness”. The prosecutor contends that the proper focus under s 122 of the Evidence Act is whether the service of the Final Report can be considered acting “inconsistently” with the maintenance of privilege over other documents.

52. The prosecutor submits that whether, and if so, the extent to which Annexure E influenced the Final Report does not establish waiver of privilege over the Drafts themselves and that the defendant has not established that the Drafts influenced the content of the Final Report. There is no suggestion that Dr Pablo’s opinions were based upon the analysis of the Culvert Sample given that she excluded it from her consideration.

53. In response to the defendant’s further argument that the Drafts are reasonably necessary to understand the Final Report, relying upon s 126 of the Evidence Act, the prosecutor submits that the proper approach is to consider the final document and ask whether, in order to understand it thoroughly, it is necessary to know what is in the “associated material”: ML Ubase Holdings Co Ltd v Trigem Computer Inc (2007) 69 NSWLR 577; [2007] NSWSC 859 at [46]. In the circumstances, the prosecutor submits that the defendant has not demonstrated which particular parts of the Final Report cannot be understood without knowing what is in the Drafts. The prosecutor contends that the defendant has failed to discharge its onus primarily because the Final Report does not address the analysis of the Culvert Sample at all and the opinions in the Final Report were not expressed to be in any way dependent upon an analysis of that material.

54. The prosecutor finally submits that the defendant’s aim in seeking access to the Drafts appears to be to test whether the exclusion of the AMS Culvert material reflects adversely on Dr Pablo’s credibility, which is not “within the concept of reasonable necessity contained in s 126”: Sugden v Sugden (2007) 70 NSWLR 301; [2007] NSWCA 312 at [112].

Consideration – has privilege been waived?

55. The test for waiver is set out in s 122(2) of the Evidence Act which the defendant submits aligns with the common law in Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 at [28]-[29]. Waiver of privilege occurs when the conduct of the party seeking to maintain the privilege is inconsistent with the maintenance of confidentiality.

56. The defendant bears the onus of establishing, on the balance of probabilities, that privilege has been waived: Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2017] NSWLEC 88 (‘Grafil’) at [41].

57. The defendant primarily relies on s 122(2) of the Evidence Act which provides:

122 Loss of client legal privilege: consent and related matters

...

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

...

58. Inconsistency was considered by White J in New Cap at [53] as follows:

The question is not merely whether it could be said that the privileged materials were used in such a way that they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials. Where an expert’s report is submitted to a party’s legal advisers so as to be put into a form which will ensure that it is admissible, it can be said that the privileged communications between the expert and the lawyers have influenced the content of the report, in the sense of its form, although not in the sense of the formulation of the substantive opinions expressed by the expert. Likewise, privileged communications between an expert and the party’s lawyers whereby material information is provided to the expert in the form of assumptions or documents may well influence the content of the report. However, an expert’s report is required to state what material and assumptions are relied on. Use of a final report, which refers to such materials and assumptions, is not inconsistent with maintaining confidentiality in the communications which produced the final product.

59. The commentary in New Cap was referred to in Shea v TruEnergy Services Pty Ltd (No 5) [2013] FCA 937; (2013) 303 ALR 230 at [60]-[61] where Dodds-Streeton J noted:

Recent persuasive authority, such as New Cap, makes clear that relevant inconsistency may subsist where the draft reports or communications may have influenced the content of the final report in a substantial sense, as in such a case, there would be inconsistency informed by notions of fairness between, on the one hand, withholding the documents or communications while, on the other hand, relying on the final report. If, however, the relevant documents or communications have not influenced the content of the final report, or may have influenced it but in relation only to form or peripheral matters, the inconsistency would be unlikely to be established.

The party asserting waiver of privilege has no automatic entitlement to test whether the privileged documents influenced the contents of the expert’s report in the relevant sense. Rather, it will be a balancing exercise in the circumstances of each particular case.

60. Further, in Traderight, Ball J observed at [23]:

Applying the approach adopted by White J, I am not satisfied that the OMB Parties have lost privilege in the communications their legal advisors had with Professor Burton and in the draft reports prepared by her. There is nothing in the material to which Mr Couper points to suggest that the conclusions stated by Professor Burton are not her own or are based on material other than the material disclosed in her report. It is common for a party's legal advisors to communicate with an expert retained by the party for the purpose of giving instructions and commenting on the form of the expert's report. In some cases, those advisors may test tentative conclusions that the expert has reached and in doing so may cause the expert to reconsider his or her opinion. In some cases, the legal advisors may suggest wording to be included in the report which expresses in admissible form an opinion stated by the expert in an inadmissible form. The court depends heavily on the parties' legal advisors to assist experts to address properly the questions asked of them and to present their opinions in an admissible form and in a form which will be readily understood by the court. Equally, the court depends heavily on the parties' legal advisors to ensure that any opinion expressed by an expert is an opinion the expert holds for the reasons that the expert gives and that the expert otherwise complies with the Expert Witness Code of Conduct. That requirement is reinforced by the acknowledgment that the expert is required to give concerning the code. The fact that legal advisors have communicated with an expert and provided comments on drafts of a report in a way which is consistent with discharging the first obligation is not a reason of itself for supposing that they have failed to discharge the second; and, as I have said, there is nothing else in the material Mr Couper points to suggest that the OMB Parties' legal advisors have failed to discharge that obligation in the case of Professor Burton's report.

61. Adopting the above approach, I do not accept the defendant’s position that disclosure of the Drafts is necessary “so that a comparison of the effect of the exclusion of the material on the expert’s conclusions can occur”; that disclosure is necessary to avoid unfairness and to “...allow a proper assessment of the weight and credibility of Dr Pablo’s conclusions...”; or that the exclusion of the relevant sampling material requires an explanation. This is because even if the non-reliance upon the laboratory analysis of the Culvert Sample “influenced” the Final Report, this does not bespeak the requisite inconsistency. An expert report will invariably, if not always, be influenced by the material provided to the expert. Here Dr Pablo has explained what she relied upon and, clearly, what she did not rely upon in accordance with her instructions and obligations. This, and the service of the Final Report, and indeed the intercourse between the legal advisors and Dr Pablo is not inconsistent with maintaining confidentiality. Again, there is nothing to suggest that Dr Pablo’s conclusions and opinion are not her own or based upon material other than material disclosed in the Final Report.

62. Further, I accept that there is no authority for the proposition that “unfairness” or “relevance to credibility” are sufficient to waive privilege as submitted by the prosecutor. The focus in s 122 of the Evidence Act is on whether the service of the Final Report can be considered acting “inconsistently” with the maintenance of privilege over other documents. I do not find that it can be so characterised.

63. The fact that the defendant seeks access to the Drafts so that it can ascertain whether, and if so, to what extent Annexure E influenced the Final Report does not establish waiver of privilege over the Drafts themselves. Further, I accept the prosecutor’s submission that the defendant would need to establish that the Drafts influenced the content of the Final Report and there is no suggestion that Dr Pablo’s final opinions were based upon the analysis of the Culvert Sample which she excluded from her consideration.

64. In addition, although not specifically raised by the parties, as considered by Ball J in Traderight at [23], it is clear that Dr Pablo was aware of the Expert Witness Code of Conduct and her obligations thereunder. In circumstances where the Court has been informed that the actual results of the Culvert Sample have been made available to the defendant, where that material may be used by the defendant in its preparation for trial and in considering and/or testing Dr Pablo’s opinions, and where Dr Pablo has clearly articulated both her opinion and instructions to exclude the subject sampling, I do not consider that the service of the Final Report is an act inconsistent with the maintenance of privilege over the Drafts or that that conduct is indicative of unfairness to the defendant.

65. Finally, I do not accept the defendant’s submission that the Drafts are reasonably necessary to understand the Final Report pursuant to s 126 of the Evidence Act.

66. Section 126 of the Evidence Act provides:

126   Loss of client legal privilege: related communications and documents

If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document.

...

67. I consider that the defendant is required to demonstrate that parts of the Final Report cannot be understood without knowing what is in the Drafts and I find that the defendant has failed to discharge its onus in this regard. This is not a case like Towney where privilege was lost in relation to particular documents which were specifically identified and relied upon for the purpose of completing the final report. In that case, access to those documents was reasonably necessary to enable a proper understanding of the final report. Similar to Grafil at [46], the Final Report does not identify the Drafts as having been relied upon for the purpose of completing the Final Report. Further, I do not accept that the Drafts are needed to understand Annexure E itself.

Conclusion

68. For the reasons above, I find that the three items remaining in dispute are each subject to legal professional privilege and that privilege over those documents has not been waived by the prosecutor. As such, the defendant is not granted leave to inspect the Drafts.

Orders

69. The orders of the Court are:

1. The defendant is not granted leave to inspect documents, being the Incomplete Draft Report prepared by Dr Pablo dated 31 March 2018, the First Draft Report of Dr Pablo dated 12 September 2018 and the Second Draft Report of Dr Pablo dated 26 November 2018.

2. Exhibit 3 containing the documents referred to in order (1) is returned to the prosecutor.

3. Costs are reserved.

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Decision last updated: 28 June 2019