Hardie Finance Corporation Pty Ltd v CCD Australia Pty Ltd

[1995] FCA 569

CATCHWORDS

EVIDENCE - documents - privilege - subpoena for production of documents - whether legal professional privilege applicable - third party communications - confidential communications between expert and other party - dominant purpose of communications.

Evidence Act 1995 (Cth), s117(1), s119(b)

National Employers Mutual General Association Limited v Waind and Hill (1978) 1 NSWLR 372
Trade Practices Commission v Sterling (1979) 36 FLR 244
Hartogen Energy Ltd (in liq) & ors v The Australian Gas Light Co & ors (1992) 109 ALR 177
Waterford v The Commonwealth of Australia (1987) 163 CLR 54
Grant v Downs (1976) 135 CLR 674

HARDIE FINANCE CORPORATION PTY LTD v CCD AUSTRALIA PTY LTD and ORS
NO WG 197 OF 1992

R D NICHOLSON J
PERTH
14 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA   )

WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION                   )     NO WG 197 OF 1992

B E T W E E N:         HARDIE FINANCE CORPORATION PTY LTD

(ACN 008 992 185)

Applicant

and

CCD AUSTRALIA PTY LTD

(ACN 008 721 471)

First Respondent

and

RODNEY COLLINS DREW

Second Respondent

and

CCD AUSTRALIA PTY LTD

(ACN 008 721 471)

Cross Claimant

and

MULTIPLEX CONSTRUCTIONS PTY LTD

(ACN 008 687 063)

First Cross Respondent

and

ENVAR (73) PTY LTD

(ACN 008 959 659)

Second Cross Respondent

and

ENVAR ENGINEERS & CONTRACTORS PTY LTD

(ACN 009 407 630)

Third Cross Respondent

CORAM:R D NICHOLSON J

DATE:14 JULY 1995

PLACE:PERTH

REASONS FOR RULING
R D NICHOLSON J:

The issue of privilege arises as the consequence of the delivery of a subpoena for production to an expert witness, Mr Hesford of Lincolne Scott Australia Pty Ltd.  Lincolne Scott were engaged as engineers to advise the applicant and its solicitors solely for the purposes of this litigation.  The applicant claims privilege in respect of certain documents which have been produced in response to that subpoena.  Such an objection to production on the grounds of privilege is, in my view, appropriate at the stage of the second step when the documents are produced to the Court by the witness; see National Employers Mutual General Association Limited v Waind and Hill (1978) 1 NSWLR 372 at 382 per Moffat P.

The claim of privilege is undisputed except with respect to three documents which I can describe as C6, L10 and N2.  This description is taken from annexure B of the affidavit of Graham John Hardie, a Director of the applicant, sworn on 13 July 1995.  In that affidavit in paragraph 4.2(c) there is a generic description given of the three documents which fall for consideration in relation to the claim.  That description is:

"Confidential communications between Mr Hesford and third parties pursuant to the suggestion by Blake Dawson Waldron that Mr Hesford communicate with those persons for the sole purpose of obtaining information to pass on to Blake Dawson Waldron for advice in connection with the litigation and/or for preparing expert reports to be reviewed by Blake Dawson Waldron for use in the litigation: File C No 6; File L No 10; File N No 2."

Mr Hesford is the recipient of the subpoena and is a Director of Lincolne Scott.  Blake Dawson Waldron are the solicitors for the applicant, and therefore the agents of the applicant. The claim of privilege on behalf of the applicant is supported, among other things, by reference to what was said by Lockhart J in Trade Practices Commission v Sterling, (1979) 36 FLR 244 at 246 and, in particular, to the two categories of privilege which he delineated as follows:

"(e)Communications and documents passing between the party's solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence.  See Wheeler v Le Marchant [(1881) 17 Ch D 675]; Laurensen v Wellington City Corporation [[1927] NZLR 510], and O'Sullivan v Morton [[1911] VLR 70].

(f)Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party's solicitor;  or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the  object of obtaining his advice or enabling him to prosecute or defend an action.  See Wheeler v Le Marchant [(1881) 17 Ch D 675]; Cork v Union Steamship Co [(1904) 23 NZULR 933], and In Re Holloway [(1887) 12 PD 167."

The description of categories given by Lockhart J in Sterling (supra) has been approved in Hartogen Energy Ltd (in liq) & ors v The Australian Gaslight Co & ors (1992) 109 ALR 177 at 180 and 189, and in Waterford v The Commonwealth of Australia (1987) 163 CLR 54 at 87.

Since the statement by Lockhart J, the Evidence Act 1995 has been enacted and come into operation at a time which makes it applicable to this proceeding.  I will return to the provisions of that act.

No issue of waiver is said to arise.  Furthermore it is not suggested here that the Court should inspect the documents in relation to which the claim to privilege is disputed.  The only evidence of the nature of those documents before the Court is therefore the description in the affidavit of Mr Hardie, which is not contested. 

I turn to each of the three documents.  Document C6 is described as:

"Correspondence between T. O'Connor & Sons and Hesford for the purpose of providing information relevant to expert advice to be provided by Hesford to HFC and its solicitors for the purpose of the proceedings."

It is to be noted that so far as that description talks of the expert advice being provided by Hesford to HFC in addition to the solicitors, it goes beyond the generic description in paragraph 4.2(c) of the affidavit of Mr Hardie.  It is apparent also from the description of the correspondence, namely that it is between T.E. O'Connor & Sons and Hesford, that it is not a communication which falls within either of the paragraphs (e) or (f) of the dicta of Lockhart J in Sterling (supra), the first of which requires a communication passing "between the parties solicitor and a third party" and the second of which requires a communication passing "between the party and a third person."  In my opinion, such evidence as there is in the affidavit of Mr Hardie does not entitle me to infer or to conclude otherwise than that Mr Hesford was acting as the agent of the solicitor for the purposes of the consideration of that matter. 

Document L10 is described as follows:

"Lincolne Scott brief outlining possible refurbishment or remedial works to the airconditioning for the purpose of obtaining Centigrade budget estimate for the sole purpose of use in Arnall's November 1993 report for the sole purpose of use in litigation and Centigrade budget estimate for Arnall's November 1993 report for the sole purpose of use in the litigation."

It has been conceded in the affidavit of Mr Hardie sworn on 12 July that no claim for privilege is made in respect of documentation prepared in relation to remedial works.  Although the description to which I have just referred makes reference to remedial works, it is contended and not contested on behalf of those seeking to dispute the claim for privilege that the dominant effect of the report referred to, which is the Addicoat Hogarth Wilson report of November 1993, is directed to matters which are not of a remedial character.

It is to be observed in relation to this description that it also appears to go beyond the generic description in paragraph 4.2(c) but I see no particular importance attaching to that. It is also apparent that the matters referred to in L10 are not communications passing between the parties referred to in either paragraph (e) or (f) in the dicta of Lockhart J in Sterling (supra). 

Turning to document N2, that is described as follows:

"Correspondence between T. O'Connor & Sons and Lincolne Scott created for the purpose of submission to legal advisers for the purpose of obtaining legal advice (and unrelated to stage 1 or 2 works and unrelated to the cost of restoring the original system)."

Again there is nothing from which I can infer any agency in Lincolne Scott on behalf of the solicitors and the correspondence referred to does not fall within the character of communications in either paragraph (e) or (f) of the dicta of Lockhart J in Sterling (supra). 

I should add that I have examined the authorities referred to by Lockhart J in each of those paragraphs and, in my view, they do not provide any assistance in taking what was said by Lockhart J beyond his formulation to apply to communications between third parties. 

However, I must turn to the Evidence Act 1995 (Cth), relevantly to section 119. That provides:

1. "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."

The term "client" is defined in subsection 117(1) in a way which relevantly applies to the applicant.  The term, "confidential document" is defined in the same subsection in a way which makes it applicable to the assertion in paragraph 4.2(c) that the communications in the three documents concerned were confidential communications.  That definition requires a document to be prepared in such circumstances that the person who prepared it or 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.  The factual assertion that the communications were confidential has not been put into issue, as I have previously stated.

Turning to the provisions of s119(b), it seems to me that that the section goes beyond the formulation of Lockhart J in paragraphs (e) and (f) of Sterling (supra).  It is clear that an objection by a client, in this case the applicant, to the adducing of evidence which would result in disclosure of the contents of a confidential document (and each of the documents in issue has that character) will be protected where the document was prepared for the dominant purpose of the client being provided with professional legal services relating to a relevant proceeding.  It will be noted that the new act uses the test of dominant purpose.  This represents an enactment into law of the view expressed by Barwick CJ in Grant v Downs (1976) 135 CLR 674. The reference in the earlier affidavit material to "sole purpose" is to be taken as having been formulated with reference to the majority reasoning in that case.

In my opinion, a reading of paragraph 4.2(c) and the description of the documents to which I have referred establishes that, in the case of each document, the dominant purpose for the preparation of each of those documents was for the purpose of providing the applicant with professional legal services relating to this proceeding. Accordingly, I am of the opinion that s119(b) requires that the claim of privilege be upheld and the objection disallowed.

I certify that this and the preceding 6 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.

Associate:

Date:

APPEARANCES

Counsel for the Applicant:         Mr C L Zelestis QC

& Mr G H Murphy

Solicitors for the Applicant:        Blake Dawson Waldron

Counsel for the First and Second

Respondent:  Mr C J L Pullin QC

and Mr R Gladding

Solicitors for the First and Second

Respondent:  Parker & Parker

Counsel for the First Cross

Respondent:  Mr M P Hollingdale

Solicitors for the First Cross

Respondent:  Hollingdales

Counsel for the Second & Third

Cross Respondents:                 Mr C G Colvin

Solicitors for the Second & Third

Cross Respondents:                 Hammond Worthington Prevost

Date of Hearing:                   14 July 1995

Date of Judgment:                  14 July 1995