Goldamere Pty Ltd v Metso Minerals Industries (No 2)
[2010] TASSC 14
•1 April 2010
[2010] TASSC 14
COURT: SUPREME COURT OF TASMANIA
CITATION: Goldamere Pty Ltd v Metso Minerals Industries (No 2)
[2010] TASSC 14
PARTIES:GOLDAMERE PTY LIMITED t/as AUSTRALIAN BULK MINERALS
v
METSO MINERALS INDUSTRIES INCMETSO MINERALS (AUSTRALIA) LIMITED
RCR HEAT TREATMENT PTY LIMITED
THE ENGINEERING COMPNAY PTY LIMITED
ACN 009 483 694 PTY LTD t/as HAYWARDS
FILE NO/S: 611/2007
DELIVERED ON: 1 April 2010
DELIVERED AT: Hobart
HEARING DATE: 19 February 2010
JUDGMENT OF: Evans J
CATCHWORDS:
Procedure – Discovery and interrogation – Production and inspection – Grounds for resisting production – Legal professional privilege – Waiver of privilege.
Aust Dig Procedure [449]
REPRESENTATION:
Counsel:
Appellant: P W Tree SC
Respondent: D J Barclay
Solicitors:
Appellant: Simmons Wolfhagen
Respondent: Page Seager
Judgment Number: [2010] TASSC 14
Number of paragraphs: 16
Serial No 14/2010
File No 611/2007
GOLDAMERE PTY LTD t/as AUSTRALIAN BULK MINERALS v METSO MINERALS INDUSTRIES INC and
METSO MINERALS (AUSTRALIA ) LIMITED and
RCR HEAT TREATMENT PTY LIMITED and
THE ENGINEERING COMPANY PTY LIMITED ACN 009 483 694 PTY LTD
t/as HAYWARDS
REASONS FOR JUDGMENT EVANS J
1 April 2010
The issue that is the focus of this appeal is whether the third defendant ("RCR") has lost its entitlement to claim legal professional privilege in relation to two documents by reason of waiver, implied by law. The background to the appeal is that the first and second defendants ("Metso") applied for an order that RCR produce for inspection a witness statement taken from Doug Fullarton and a report prepared by Malcolm Nelson. The Fullarton statement and the Nelson report relate to a fire at the premises of the plaintiff, this fire being the subject of the principal proceedings. It was not disputed that, when prepared, the Fullarton statement and the Nelson report were subject to legal professional privilege. However, on behalf of Metso, it was contended that, by reason of the subsequent partial disclosure of the contents of each of those documents, there had been an imputed waiver of that privilege. On this basis Metso applied to the Court for the production of those documents. That application was dismissed by the associate judge; see Goldamere Pty Ltd v Metso Minerals Industries Inc & Ors [2009] TASSC 52. Metso has appealed against that dismissal.
The law as to imputed waiver is as set out in Mann v Carnell (1999) 201 CLR 1, where Gleeson CJ, Gaudron, Gummow and Callinan JJ said, at par[29]:
"Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is 'imputed by operation of law' eg, Goldberg v Ng (1995) 185 CLR 83 at 95. This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. Thus, in Benecke v National Australia Bank (1993) 35 NSWLR 110, the client was held to have waived privilege by giving evidence, in legal proceedings, concerning her instructions to a barrister in related proceedings, even though she apparently believed she could prevent the barrister from giving the barrister's version of those instructions. She did not subjectively intend to abandon the privilege. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large."
The conduct of RCR which is said to be inconsistent with the maintenance of confidentiality, in relation to the Fullarton statement and the Nelson report, is RCR's disclosure of two emails, one of which refers to the statement, and the other to the report.
The first email relates to the Fullarton statement. The background to this email is that Malcolm Nelson had been requested by RCR's in-house lawyer to investigate and report on the fire, which is the subject of the principal proceedings. In the course of doing so, Mr Nelson interviewed Mr Fullarton and noted what he said. Mr Nelson provided his notes of that interview to Mr Fullarton, and Mr Fullarton, in turn, forwarded them to Warren Arthur of RCR for comment. The disclosure of the following email from Mr Arthur to Mr Fullarton ("the statement email") is that which gives rise to Metso's claim that Mr Fullarton's statement is no longer privileged:
"From: Warren Arthur
Sent: Friday, 30 June 2006 11:48 AM
To: Doug Fullarton
Cc: John Linden; John Noordhoek; Legal Counsel
Subject: RE: Savage River Fire
OK but I would also make the point in the appropriate section that 'at this point ABM were directing our personal [sic] on site. They were controlling the job, scope, work method, set up and preparation etc and your personal [sic] were simply following instructions from ABM whilst at all times working within the OH & S & E procedures set up for the job as far as they had control to do so.
The fact that we were not on site at the time of the incident confirms that ABM were not following these guidelines for the job themselves as there were no problems when we were there and if there were, we simply addressed them at the time, refer your own example of this. We had no control over the project process and we were not informed by the client of the changes to scope, method and pending fire or safety issues. Your tech's simply followed clients instructions and were there to provide a service of heat treatment to their job and 'not take responsibility of the entire work method, safety or risk elements on behalf of the client. It is their job, their site, their equipment and their responsibility to ensure all jobs and people are safe at their site. We were even told to leave site to save costs.
Your job was to provide a service whilst working within the guidelines and the procedures at all times we were on the site which we did without question at all times. This is the crutch [sic] of the matter and we need to make this point loud and clear where and when ever possible in reports and right through the investigation process.
If you feel you need to raise this again with MN, then please do so, but make sure you make this point in the appropriate manner in your report. MN can assist you.
Regards,
Warren
[original emphasis]"
As had been requested, Mr Nelson provided a report on the fire and that report is the subject of the following email from Greg Harris of RCR to Warren Arthur ("the report email"). Metso contends that the disclosure of the report email is inconsistent with RCR's maintenance of a claim of confidentiality in relation to the Nelson report. The report email is as follows:
"From: Greg Harris
Sent: Wednesday, 6 December 2006 3:33 PM
To: Warren Arthur
Subject: RE: Savage River Fire Report
Warren,
This report tells us very little.
It is basically a summary of the witness statements given by the guys with a free safety audit for Savage River. However, as per the report, he was hampered with access issues and provision of information.
The report on the general safety level at the mine could have been useful if we had been saddled with the blame. As for the $800.00 bill for writing the report??
Recommendation 9.0 is impractical unless we wish to give away 30% of our business. Today, for instance, we have our jobs running in WA unattended. If we refuse to offer that service then our competitors will jump in very quickly. However, we need to assess each job carefully to ascertain possible risks involved with leaving the job unattended.
Regards
Greg Harris
Operations ManagerRCR Heat Treatment"
Counsel for Metso submits that conduct inconsistent with the maintenance of a claim to confidentiality in relation to a document goes to the heart of imputed waiver, and it is only where an inconsistency relied upon to establish a waiver is inconclusive that resort may be had to considerations of fairness, when determining whether an asserted inconsistency gives rise to imputed waiver. In support of this submission, counsel for Metso cited a number of authorities, including the following.
Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101, where Gyles J said, at par68:
"Each of the Tribunal and the primary Judge correctly identified the decision in Mann v Carnell as providing appropriate guidance as to the law to be applied. However, in my respectful opinion, the test has been misunderstood at least in part. The test looks to inconsistency between the disclosure that has been made by the client on the one hand and the purpose of confidentiality that underpins legal professional privilege on the other. It is not a matter simply of applying general notions of fairness as assessed by the individual judge. The authorities to which I have referred show that it is well established that for a client to deploy the substance or effect of legal advice for forensic or commercial purposes is inconsistent with the maintenance of the confidentiality that attracts legal professional privilege."
Rio Tinto v Commissioner of Taxation (2005) 224 ALR 299, where Sunburg J said, at par[20]:
"It has been said (in R J Desiatnik, Legal Professional Privilege in Australia, 2nd ed, LexisNexis Butterworths, Sydney, 2005, p 163 (Desiatnik)) that:
… fairness as a test per se for implied waiver of privilege has given way to the primary test of inconsistency. This is not just a change in emphasis – it is a sea-change.
However, it has also been said (Desiatnik, p 162) that:
Fairness need only be resorted to where the inconsistency test is inconclusive, or to reinforce a finding over waiver based on the inconsistency test, for the two tests may certainly give the same result. [emphasis added]
In my opinion, the latter passage is an effectual reconciliation of the inconsistency principle in Mann with the role which the majority in that case sought to preserve for fairness. However, in applying the inconsistency principle to the circumstances presented by both motions, I have not found it necessary to resort to fairness. That is, I do not think that applying the inconsistency principle produces an inconclusive result. (I do not comment on whether inconsistency and fairness 'give the same result'.)"
AWB Ltd v Cole & Anor(No 5) (2006) 155 FCR 30 pars[130] – [134], where what Young J said included the following:
"Under the test propounded in Mann, it is inconsistency between the conduct of the client and the maintenance of the confidentiality that the privilege is intended to protect which effects a waiver of the privilege. Fairness has become a subsidiary consideration; it may be relevant to the court's assessment of inconsistency in some contexts but not in others.
…
The broad question posed by Mann is whether, and to what extent, AWB's disclosures are inconsistent with the maintenance of confidentiality in the documents which are at issue in these proceedings. This question wraps up several subsidiary issues, in particular whether AWB's disclosures involved, on each occasion, a disclosure of the gist or substance of its legal advice, whether AWB consciously deployed that advice so as to advance its own commercial or other interests, and, if so, whether that disclosure has resulted in an imputed waiver of privilege over any and what associated materials.
In any application of Mann, the starting point must be an analysis of the disclosures or other acts or omissions of the party claiming privilege that are said to be inconsistent with the maintenance of confidentiality in the privileged material: see Rio Tinto at [45]."
Counsel for Metso submits that the inconsistencies relied upon conclusively establish an imputed waiver of privilege in relation to the Fullarton statement and the Nelson report, and, that in consequence, there is no need to address considerations of fairness. Consistent with the authorities referred to, this submission calls for an examination of how each disclosure came about, and the extent and purpose of each disclosure.
The starting point is a list of documents filed in these proceedings by RCR in which RCR listed some 96 documents in respect of which it claimed privilege. The documents included the Fullarton statement, the statement email, the Nelson report, and the report email. By an interlocutory application Metso applied to the Court for orders that RCR produce for inspection 30 of the documents in the list. The 30 documents included the statement email and the report email. Against the event that RCR refused to produce any of the 30 documents, Metso also applied for an order that each of the documents be produced to the Court for inspection in order that the Court could determine the legitimacy of RCR's claim to privilege referable to each document. Not surprisingly, the interlocutory application did not seek to challenge the claim to privilege made in relation to the Fullarton statement and the Nelson report. RCR responded to the interlocutory application by consenting to an order that virtually all of the documents that were the subject of the application, including the report email and the statement email, be produced to Metso. Counsel for Metso submits that RCR's conduct in consenting to the disclosure of these two emails is inconsistent with the maintenance of its claim for confidentiality in relation to the Fullarton statement and the Nelson report. I am unable to see how this is so. Plainly, had RCR resisted Metso's interlocutory application and put the Court to the trouble of inspecting the two emails, and had the Court decided that it was appropriate to order their disclosure, it could not have been said that RCR's conduct was inconsistent with the maintenance of its claim to confidentiality in relation to the Fullarton statement and the Nelson report. That RCR took a pragmatic approach to Metso's request for the disclosure of the two emails is not inconsistent with the maintenance of a claim for privilege in relation to the Fullarton statement and the Nelson report.
Counsel for Metso, in effect, acknowledged the pragmatic nature of RCR's agreement to disclose the two e-mails, insofar as he said that one might imagine that they were the subject of some form of privilege. Counsel submitted that the disclosure of the two emails was a windfall for Metso. For this to be so, their disclosure must have been inconsistent with the maintenance of a claim for privilege in the Fullarton statement and the Nelson report. I am unable to see how this is so. I cannot see any way in which it can be contended that either disclosure was made for a forensic, commercial, or other purpose which was inconsistent with RCR's claim to privilege in the Fullarton statement and the Nelson report.
In so concluding, I am fortified by the limited extent of the disclosure made in each email. The statement email does not directly disclose the content of the Fullarton statement. An inference can be drawn as to what was not in the statement, from Mr Arthur's comment that he would add a point to the effect that ABM was directing RCR employees on site, and that those employees were simply following instructions from ABM. Little can be gleaned about the content of the Fullarton statement from the contentions advanced by Mr Arthur, on the basis of the fact that RCR was not on the site at the time of the incident. Similarly, the report email discloses very little about the substance of the content of the Nelson report. The report is described as a summary of witness statements with a free safety audit for Savage River, and it is noted that Mr Nelson was hampered with access issues and the provision of information. It can be inferred from the comment in the email about recommendation 9 that it is a recommendation against running jobs unattended. These disclosures reveal little of substance in relation to the content of the report. I reject Metso's contention that, by reason of RCR's disclosure of the statement email and the report email, it is to be imputed that RCR has waived privilege in relation to the Fullarton statement and the Nelson report.
If I am wrong in rejecting the asserted inconsistencies, and there is an element of uncertainty about whether RCR's conduct was inconsistent with its claim to privilege, then a decision as to whether waiver should be imputed as a matter of law would be informed by considerations of fairness. As to the application of those considerations in this case, I agree with the associate judge that they would not justify imputing waiver.
I should say that I have not addressed this appeal in the context of the Evidence Act 2001, PtX, Div1, as the parties did not do so.
The appeal is dismissed.
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