Goodrick, Campbell Robert v Nichols, J G and J E

[1998] TASSC 123

123/1998

PARTIES:  GOODRICK, Campbell Robert
  v
  NICHOLS, J G and J E

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  1004/1997
DELIVERED:  9 October 1998
HEARING DATE/S:  2, 5 October 1998
JUDGMENT OF:  Wright J

CATCHWORDS:

Procedure - Discovery and interrogatories - Production and inspection - Grounds for resisting production - Legal professional privilege - For purposes of or in contemplation of litigation - Signed statement obtained by loss assessor - Subsequent report - Whether implied or imputed waiver of privilege - Consideration of dominant purpose of the report.

Hunt v Hewitt (1852) 7 Exch 236; Simpson v Attorney-General (1997) 7 Tas R 61; Rank Film Distributors Ltd v ENT Ltd (1994) 4 Tas R 281, considered.
Grant v Downs (1976) 135 CLR 674; Flack v Pacific Press Ltd (1980) 14 DLR (3d) 334; Aydin v Australian Iron & Steel Pty Ltd (1984) 3 NSWLR 684; Reitler v NZI Insurance Australia (1992) 1 Tas R 173; Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337; Cataldi v Commissioner for Government Transport [1970] 1 NSWLR 65; National Employers Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648; ACCC v Safeway (1998) 153 ALR 393, followed.
Feuerheerd v London General Omnibus Co [1918] 2 KB 656, not followed.
Evidence Act 1910 (Tas), s26.
Aust Dig Procedure [445-446]

REPRESENTATION:

Counsel:
             Plaintiff/Applicant:  R J Phillips
             Defendants:  R J Lyon
Solicitors:
             Plaintiff/Applicant:  Phillips Taglieri
             Defendants:  Page Seager

Judgment category classification:
Court Computer Code:  
Judgment ID Number:  123/1998
Number of pages:  4

Serial No 123/1998
File No 1004/1997

CAMPBELL ROBERT GOODRICK v J G and J E NICHOLS

REASONS FOR JUDGMENT  WRIGHT J

9 October 1998

Pursuant to the Evidence Act 1910 ("the Act"), s26, the plaintiff/applicant seeks inspection of documents from the defendants' insurers, Mercantile Mutual Insurance (Australia) Ltd and Mercantile Mutual (Workers Compensation) Ltd ("Mercantile Mutual").  The documents in question are described in the application as:

"(a)Freemans report dated 8th March 1995.

(b)Such part of Freemans report dated 8 March 1995 as may contain a copy of a statement made by the plaintiff to Freemans."

The affidavits filed and read during the course of proceedings identified these documents more specifically as, (a) a report dated 8 March 1995 by Freemans Tasmania Pty Ltd, loss adjusters, to Mercantile Mutual Insurance (Workers Compensation) Ltd relating to an industrial accident which occurred on or about 12 November 1994 in which the plaintiff's leg was severely lacerated by a chainsaw which he had been using during the course of his employment with the defendants, and, (b) a statement signed by the plaintiff which he provided to Freemans' assessor during the assessor's investigation, approximately seventeen days after the accident.

I have already made ex tempore findings that the Act, s26, is an appropriate vehicle for this application and that the evidence establishes that the documents in question are relevant to the issues arising in the suit and are in the possession of Mercantile Mutual (see Hunt v Hewitt (1852) 7 Exch 236; Simpson v Attorney-General (1997) 7 Tas R 61 and Rank Film Distributors Ltd v ENT Ltd (1994) 4 Tas R 281). I should also record that I have examined the documents in question. Counsel for the parties were in agreement that the general common law rules of legal professional privilege apply in respect of documents which are being sought under the Act, s26. Counsel did not dispute that it was appropriate for me to inspect the documents (Grant v Downs (1976) 135 CLR 674 at 689). I have also ruled orally that the plaintiff's statement to the Freemans' loss assessor is not a privileged document and should be made available for inspection by the plaintiff's solicitor. In doing so, I declined to follow the decision in Feuerheerd v London General Omnibus Co [1918] 2 KB 656. That was a decision of a strong Court of Appeal but, as subsequent decisions and academic debate have illustrated, it cannot be supported. (See Halsbury's Laws of England, 4th edn, Vol 13, par81, note 4; Flack v Pacific Press Ltd (1980) 14 DLR (3d) 334; Aydin v Australian Iron & Steel Pty Ltd (1984) 3 NSWLR 684; Reitler v NZI Insurance Australia (1992) 1 Tas R 173 and Telebooth Pty Ltd v Telstra Corporation Ltd [1994] 1 VR 337.) The flaw in Feuerheerd's case arose, in part, from the fact that the confidentiality or otherwise of the subject document was not considered by the court.  Confidentiality is a prerequisite for privilege to exist — see discussions in Cross on Evidence 5th Aust Edn, par25,255.

In my opinion, the plaintiff's statement was not a confidential document, but, even if I am wrong as to this, it seems to me that any claim of privilege which otherwise may have attached to the document was waived when the assessor, having written out the statement in his own handwriting, (as I infer he did) submitted the same to the plaintiff for signature.  The only case to which I was referred by counsel in which waiver has been considered in this context was Aydin v Australian Iron & Steel Pty Ltd (supra).  In that case, Hodgson J found it unnecessary to resolve the argument advanced by the plaintiff's counsel that waiver had occurred in similar circumstances.  I am prepared to take the step which Hodgson J did not because it seems clear to me that in the circumstances leading up to the signature of the statement, a finding of implied or imputed waiver is inevitable.  (Attorney-General (NT) v Maurice (1986) 161 CLR 475 and Goldberg v Ng (1995) 185 CLR 83, per Deane, Dawson and Gaudron JJ at 95 et seq.)

I reserved for further consideration the question whether or not the assessor's report is privileged.  In Grant v Downs (supra), the relevant rule is correctly and succinctly stated in the first part of the headnote:

"Legal professional privilege is confined to documents which are brought into existence for the sole purpose of their being submitted to legal advisers for advice or for use in legal proceedings.  A document which would in any event have been brought into existence for another purpose is not privileged from production after discovery on that ground."

At 689, Stephen, Mason and Murphy JJ said, "privilege requires a combination of dedication to the stipulated purpose and reasonable anticipation that litigation will ensue before it is attracted."

Mr Lyon referred me to the judgment of the New South Wales Court of Appeal in Cataldi v Commissioner for Government Transport [1970] 1 NSWLR 65 at 68, where the following views were expressed:

"In some cases proceedings may have been regarded as 'anticipated' (or 'in contemplation', as it is put in some of the cases) when a document was obtained although, as yet, no claim had been made.  In common experience, happenings of some kinds very often lead to litigation, and the occurrence of such an event would found a sufficient anticipation of litigation: (Birmingham and Midland Motor Omnibus Co Ltd v London and North Western Railway, [1913] 3 KB 850 at p 861; Ankin v London and North Eastern Railway Co, [1930] 1 KB 527, at p 535; The Hopper No 13, [1925] P 52, at p 57: Westminster Airways v Kuwait Oil Co Ltd, [1950] 2 All ER 596; [1951] 1 KB 134)."

This opinion was given before Grant v Downs (supra) and the remarks reproduced above prefaced a statement of principle concerning the "sole purpose" test which is no longer tenable following the decision of the High Court in Grant v Downs (supra).  Nonetheless, I confess to having some discomfort with a rule which may be said to penalise a diligent insurer or investigator who, reasonably anticipating the institution of common law proceedings soon after an accident causing personal injury has occurred, commences an investigation even though no threat of action has been made by the injured party.  In such circumstances, the investigator's report may not be privileged, whereas, if the investigation had been postponed until after proceedings had been commenced, the resultant report would almost certainly be privileged if prepared for immediate submission to legal advisers.

It is, of course, upon the party seeking to establish privilege as a basis for withholding a document from inspection who bears the onus of persuading the Court that the relevant privilege exists.

It is clear from the evidence of the two defence witnesses, Karen Knowles and Christine Wright, that the possibility of a common law claim had been considered before the Freeman report was requested.  However, there had been no threat of proceedings and proceedings were not in fact instituted by the plaintiff until two and a half years after the date on which he was injured.  Although having no immediate bearing upon the plaintiff's claim for workers compensation which had been made and accepted before the Freeman report was requested, the report was primarily required by the officers of the insurer to obtain further information as to the facts and circumstances surrounding the occurrence of the plaintiff's injury and to preserve that information for possible future use.  It seems to me that the line of reasoning discussed by Mason J in National Employers Mutual General Insurance Association Ltd v Waind (1979) 141 CLR 648 at 656 applies in this case. Mason J said this:

"If it had been the practice of the appellant to refer every claim and every case with the relevant reports to its solicitor for advice or information, the appellant might have been in a position to establish the existence of an overriding purpose which would found a claim to legal professional privilege.  But the facts fall far short of this.

This conclusion, so the appellant contends, is by no means fatal to its argument.  If, on the facts, the documents are brought into existence for the dual purpose of deciding what it will do and for use in litigation by legal advisers when appropriate, that purpose should be considered as one purpose which, including as it does submission to legal advisers, would attract the relevant head of privilege.  That is the argument.  Unfortunately for the appellant, it is an argument which runs headlong into Grant v Downs (1976) 135 CLR 674. As Glass JA observed in the Court of Appeal (1978) 1 NSWLR, at p 376 when he applied the remarks of Stephen, Mason and Murphy JJ in Grant v Downs:

'If the purpose which actuates the party who commissions documents is not single but multiple each must be identified.  Unless all of them fall within the protected group of purposes namely submission to legal advisers or use in litigation, no privilege attaches.'

The argument is not only inconsistent with the sole purpose test enunciated by Stephen, Mason and Murphy JJ (1976) 135 CLR, at p 688; it is also inconsistent with the dominant purpose test favoured by Barwick CJ (1976) 135 CLR, at p 678 and in my view it fails to satisfy the test proposed by Jacobs J (1976) 135 CLR, at p 692 — Does the purpose of supplying the material to the legal adviser account for its existence?"

The approach taken by Mason J has been the subject of some academic criticism (eg, Law of Privilege (1992) by Suzanne McNichol at 72 - 73), but his Honour's opinion was unanimously endorsed by the other four members of the High Court and is thus of indisputable authority. 

Some useful views were expressed by Goldberg J in ACCC v Safeway (1998) 153 ALR 393 at 412 and 424:

"The process of investigation is logically anterior to, and a precursor to, the point at which it may be said that proceedings are prospective or reasonably anticipated. If evidence is required for proceedings it can be expected that until that evidence gathering process is well advanced, a view will not be able to be formed that proceedings are prospective or reasonably anticipated. That is a reason why it is difficult to ascribe a dominant purpose to the preparation of the anticipated proceedings before the evidence gathering process is well advanced and the evidence has been evaluated.
…
           The common law protection for documents brought into existence for the sole purpose of use in legal proceedings covers proceedings which are either existing or anticipated: O'Reilly v Commissioners of State Bank of Victoria (supra) 22-23; Baker v Campbell (supra) 86, 122, Commissioner, Australian Federal Police v Propend Finance Pty Ltd (supra) 576-577. Whether proceedings are anticipated must be determined by reference to objective criteria and not simply by reference to the subjective statements of a participant in the relevant information gathering or litigation preparing process. A document or communication cannot be given protection from production by the creator of the document or the person propounding it in the form of a communication uttering the litany - I brought it into existence for the purpose (be it sole or otherwise) of legal proceedings. Nor is it sufficient, in my view, for the person to say - I anticipated proceedings would be brought at the time I brought the document into existence and the purpose for which I did so was those proceedings. Of course, as the authorities to which I have referred establish, it is not the circumstances which give rise to the production or preparation of the document itself which invoke the privilege but rather the fact that it is brought into existence for the purpose of submission to legal advisers for advice or for use in legal proceedings.
…
           Whether legal proceedings are reasonably anticipated requires a consideration of the existing state of facts taken in conjunction with the subject-matter which gives rise to the context in which the document comes into existence or the communication is made. Where legal proceedings are in existence the relevant relationship between the proceedings and the document or communication is clear. Where the legal proceedings are anticipated one needs more than speculation as to the possibility of such proceedings; one needs a probability or likelihood that such proceedings will commence."

I am satisfied that although the dominant purpose for seeking the Freeman report, and for its preparation, was to have it available for the purpose of obtaining legal advice if and when the plaintiff sued the defendants for negligence, breach of statutory duty or otherwise, this was not the sole purpose according to the Grant v Downs test.  Additionally, I am unable to find that there was a probability or likelihood that such proceedings would be taken when the relevant document was brought into existence.

It follows that the Freeman report is not privileged and must be made available for inspection by the plaintiff's solicitors.  Obviously this ruling applies not only to the report itself but also to the annexures thereto and the photographs of the plaintiff taken by the Freemans' investigator.