Falland v Symbion Health Ltd - [2010] SASC 119

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
FALLAND & ORS v SYMBION HEALTH LTD & ANOR
[2010] SASC 119
Judgment of The Honourable Justice Bleby
28 April 2010
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION - GROUNDS FOR RESISTING PRODUCTION - OTHER GROUNDS
Plaintiff sought production of certain documents disclosed by second defendant – second defendant claimed documents subject to without prejudice privilege – documents said to be produced for the purpose of without prejudice negotiations – whether documents subject to an express or tacit agreement that they should not be used to the prejudice of either party – whether r 160 of the Supreme Court Civil Rules 2006 applies – whether r 161 can be retrospectively relied upon.
Held: no evidence to show documents subject to an express or tacit agreement that they should not be used to the prejudice of either party – no evidence to show documents used in any without prejudice communications or offers of settlement – documents not subject to without prejudice privilege – documents properly described as expert reports within the meaning of r 160 – not subject to legal professional privilege.
Supreme Court Civil Rules 2006 (SA) r 4, r 117(2)(b), r 160, r 161; Supreme Court Rules 1987 (SA) r 38.01, referred to.
Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285, applied.
Rabin v Mendoza [1954] 1 WLR 271, distinguished.
State Bank of South Australia v Ferguson (1995) 64 SASR 232, not followed.
Cutts v Head [1984] Ch 290; Hong Kong Bank of Australia v Murphy (2992) 28 NSWLR 512; Davies v Nyland (1975) 10 SASR 76; Rush & Tompkins v Greater London Council [1989] 1 AC 1280; Unilever Plc v Procter & Gamble Co [2000] 1 WLR 2436, considered.

FALLAND & ORS v SYMBION HEALTH LTD & ANOR
[2010] SASC 119
Civil

BLEBY J. By a list of documents filed on 16 February 2010, the second defendant, Toll Ipec Pty Ltd (“Toll”), claims privilege from production in respect of six documents. The main ground of privilege said to be relied upon is without prejudice privilege, but reliance is also placed on legal professional privilege. The plaintiffs (“Falland”) dispute this claim and seek the production of these documents.
Background
This action concerns industrial premises at 7 Hudson Court, Netley (“the Netley premises”), which were leased by Falland to the first defendant, then known as Mayne Group Ltd, and subsequently to Toll. Falland is seeking to recover from both lessees the costs of reinstatement and repair of the premises undertaken at the end of the leases.
Prior to the commencement of these proceedings, between October 2002 and March 2003, negotiations took place between representatives of Falland and Toll with a view to reaching a settlement. These negotiations resulted in a partial settlement but failed to resolve the entire dispute.
The documents which Toll objects to produce are described in its list of documents as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Falland v Symbion Health Ltd

Details

AGLC: Falland v Symbion Health Ltd [2010] SASC 119
Case: [2010] SASC 119
Decision Date: 28 April 2010

CaseChat Overview and Summary

In the matter of Falland v Symbion Health Ltd, the plaintiff sought the production of certain documents disclosed by the second defendant. The second defendant argued that the documents were subject to the without prejudice privilege, as they were produced for the purpose of without prejudice negotiations. The case before the court involved the determination of whether these documents were subject to an express or tacit agreement that they should not be used to the prejudice of either party. Additionally, the court had to decide whether rule 160 of the Supreme Court Civil Rules 2006 applied to this situation and whether rule 161 could be retrospectively relied upon.

The court found that the phrase "in the action" in rule 38.01(1) qualified the expression "any matter in issue" but did not qualify the expression "expert report." Therefore, an expert report that relates to "matters in issue in the action" falls under rule 38.01, regardless of how or when the report was obtained. The court held that the decision in Ferguson was wrongly decided, and that a report prepared for a pre-trial conference, especially where pleadings had already been filed, cannot be classified as anything other than "in the action." Furthermore, the court concluded that there was no evidence to suggest that the reports in question were used in any offer of settlement or any communication between the parties designed to reach a settlement. There was also no suggestion of an agreement, express or otherwise, that the documents should be treated confidentially.

The court held that the fundamental policy behind the without prejudice privilege is to encourage and facilitate negotiations by protecting communications and admissions by the parties from being adduced in any later litigation. In this case, there was no suggestion that the reports in question were used in any offer of settlement or any communication between the parties designed to reach a settlement. Furthermore, there was nothing to suggest that there was an agreement, express or otherwise, that the documents in question should be treated confidentially. The principles of full and frank disclosure of directly relevant documents, especially expert reports, are important to ensure the integrity of the litigation process. If Toll’s argument were to succeed, it would make a mockery of the principles surrounding rule 160. Consequently, the court found that the six documents were not subject to without prejudice privilege.

The court also rejected the argument that legal professional privilege could assist Toll in relation to these documents, as rule 160 of the 2006 Rules and its predecessor rule 38.01 of the Supreme Court Rules 1987 removed the protection of legal professional privilege from an expert report and from associated documents referred to in those rules. Additionally, the court held that rule 161 could not be retrospectively applied, as subrule (2) of rule 161 requires an expert to give a certificate certifying that they understand their role is not to provide evidence at trial and that they have not been previously engaged in any other capacity to give advice or an opinion in relation to the party’s case or any aspect of it.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

BLEBY J

However, r 38.01(1) provided:Within 28 days after the time limited by the Rules for making discovery in the action each party in an action shall deliver to all other parties a full copy of every expert report in the party's possession or power relating to any matter in issue in the action.The phrase “in the action” qualifies the expression “any matter in issue”. It does not qualify the expression “expert report”. In other words, an expert report that is caught by r 38.01 is one which relates to “matters in issue in the action”. It does not, as Legoe AJ appears to have found, speak to how or when a report was obtained. In my opinion Ferguson was wrongly decided. In any event, I find it difficult to accept that a report prepared for the purpose of a pre-trial conference, especially where pleadings had already been filed, could be classified as being anything but “in the action”.Conclusion I am unable to accept Toll’s contention that the documents in question are subject to without prejudice privilege. The fundamental policy behind the privilege is to encourage and facilitate negotiations by protecting communications and admissions by the parties from being adduced in any later litigation. In the present case there was no suggestion that the reports in question were used in any offer of settlement or, indeed, in any communication between the parties designed to reach a settlement. Further, there is nothing to suggest that there was an agreement, express or otherwise, that the documents in question should be treated confidentially. The principles of full and frank disclosure of directly relevant documents and especially that of expert reports are important to ensure the integrity of the process of litigation. If Toll’s argument were to succeed, all a party need do, in order to avoid the obligation to produce an expert report, would assert that the report was obtained for the purpose of conducting settlement negotiations. That would make a mockery of the principles surrounding r 160. Consequently, I consider that the six documents are not subject to without prejudice privilege.Other matters As I have already observed, r 160 of the 2006 Rules and its predecessor r 38.01 of the Supreme Court Rules 1987 removed the protection of legal professional privilege from an expert report and from associated documents referred to in those rules. Legal professional privilege cannot assist Toll in relation to these documents. Counsel for Toll submitted, in the alternative, that an extension of time pursuant to r 117(2)(b) ought to be granted in order for Toll to rely on the operation of r 161, which provides for the obtaining of shadow expert reports which need not be produced. However the terms of r 161 appear to predicate against such a retrospective application. Subrule (2) provides:An expert will not be regarded as a shadow expert unless at or before the time the expert is engaged, the expert gives a certificate, in an approved form, certifying that—(a) the expert understands that it is not his or her role to provide evidence at trial; and(b) the expert has not been previously engaged in any other capacity to give advice or an opinion in relation to the party’s case or any aspect of it.[Emphasis added]

Ratio Decidendi

Legal Principle Established

Established by: BLEBY J

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