Health & Life Care Ltd (in Liq) v Price Waterhouse No. Scgrg-93-289 Judgment No. S5821
[1996] SASC 5821
•26 September 1996
HEALTH & LIFE CARE LTD. (IN LIQUIDATION) V PRICE WATERHOUSE AND OTHERS AND MERINGALE PTY. LTD. & ORS V FAI GENERAL INSURANCE CO. LTD.
Judge Burley
By application dated 23rd July1996, the third parties, Robert Lister & Co. Pty. Ltd. and Robert Ian Lister, have applied for the following order:-
"That the plaintiff produce for inspection and copying to the third parties … document No. 73 in Schedule 1, part II of the plaintiff’s first list of documents described as "statement of Robert Ian Lister"."
The parties submitted a statement of agreed facts for the purposes of the application which is as follows:-
The document of which Robert Ian Lister & Company Pty. Ltd. and Robert Ian Lister seek production, is described in the plaintiff’s first list of documents dated 14 April 1994 as "73 00/06/88 Statement of Robert Ian Lister"
In June 1988, Federal Court proceedings (South Australian Registry Action No G45 of 1988) were on foot between the plaintiff and others as applicants and Dr Ian McGoldrick and others as respondents by which HLC, as purchase of 21 private hospitals ("the new assets") was claiming damages in contract and pursuant to the Trade Practices Act 1974 (Commonwealth) against McGoldrick and the other respondents as vendors of the new assets. During the course of negotiations for the purchase of the new assets, Lister, a valuer, was engaged by HLC to provide and did provide valuations of each of the new assets.
The said Federal Court proceedings were commenced on 23 May 1988.
The solicitors on the record of HLC in the said Federal Court proceedings was the firm of solicitors then known as Thomson Simmons & Co.
One of the solicitors at Thomson Simmons & Co. who had the conduct of the said Federal Court proceedings on behalf of HLC was Mr Skip Lipman.
Mr Skip Lipman attended upon Mr Lister for the purpose of obtaining a statement from Mr Lister which would be used as the basis of a proof of the evidence which Mr Lister would give if called as a witness in the said Federal Court proceedings. This statement is the document referred to in paragraph 1 hereof.
The said Federal Court proceedings were discontinued without trial on a date in January 1989.
Lister did not swear any affidavit in the said Federal Court proceedings and did not give any oral evidence in the said Federal Court proceedings.
Neither Lister nor Robert Lister & Company Pty. Ltd. were joined as parties to the said Federal Court proceedings at any time.
The plaintiff claims that it is not required to produce the document because it is protected by legal professional privilege. The agreed facts disclose that the statement was obtained by Mr Lipman from Mr Lister during the course of Federal Court proceedings. It is not in dispute that the document was privileged as between the parties to the Federal Court proceedings because it was prepared by the solicitors for one of the parties to those proceedings in respect of the actual litigation and thereby came within one of the categories of privilege referred to by the High Court in Grant v Downs (1976) 135 CLR 674. It was not contended that the privilege attaching to the document was brought to an end merely by the conclusion of the Federal Court proceedings. If authority for that proposition is needed, it is to be found in Webb v FCT (1993) 44 FCR 312 and Ingle v The Commonwealth Development Bank (1989) 91 ALR 239. However, counsel for the applicants submitted that, on the authority of Telebooth Pty. Ltd. v Telstra Corporation Ltd. [1994] 1 VR 337, the privilege could not be maintained as between the plaintiff and the third parties. In that case, Hedigan J declined to follow the decision of the Court of Appeal in Feuerheerd v London General Omnibus Company Ltd. [1918] 2 KB 565 which decided that a signed statement given by one party to subsequent proceedings to the other party was privileged from production by reason of legal professional privilege in those proceedings. The English Court of Appeal declined to follow a decision of the Irish Court of Appeal, which upheld the decision of Gibson J in Tobakin v Dublin Southern Districts Tramways Co. [1905] 2 IR 58.
In Telebooth, Hedigan J had to deal with an application for the production of a tape-recording of a non-confidential conversation between opposing parties to litigation which was in contemplation at the time of the conversation. His Honour concluded that they were not subject to legal professional privilege and ordered them to be produced. His Honour said, at page 344:-
"It should be said at the outset that Feuerheed has been the subject of sustained critiscm over a long period of time by some text book writers and Judges. …
"In the notes of Sir Edward Bray to the 1920 Annual Practice (the White Book), under the heading of "Order XXI Discovery and Inspection", the comment appeared, at page 498: "Confidential - Communications with the opposite party - in Feuerheed v London General Omnibus Co. Ltd. … a statement … was held to be privileged on the ground that having been obtained for the purpose of being laid before the defendant’s solicitor for the defence of the action, it fell within Southwark Co. v Quick and the above conditions and an Irish case Tobakin v Dublin Tram Company (1905) 2 IR 58 was disapproved. It is submitted that the decision was erroneous. It is an essential element of the principle that the communication should be confidential and one of the Judges in S Co. v Quick which was an earlier case stated that no communication made even directly to the solicitor by or on behalf of the opposite party can be confidential.
"It is to be noted that in Feuerheed, none of the cases such as Spencley v Schullenberg or Kennedy v Lyall were cited and the point of confidentiality was not even raised. Later editions of the Annual Practice submitted that the decision is wrong. The decision has been criticised in Wigmore on Evidence, 3rd Edition at pages 620-4; the English Cross on Evidence, 6th Edition, at page 397; Hallsbury, 4th Edition, Vol 13, para.81, note 4, at page 65, and in the judgment of Robertson JA in Flack v Pacific Press Ltd. 14 DLR (3d.) 334, at pages 342-50. In the same Judge’s detailed analysis of the authorities, at pages 337-42, his Honour described the proposition in Feuerheed as repugnant to common sense"."
After a detailed analysis of all of the relevant cases in a number of jurisdictions, Hedigan J came to the conclusion that the tape recording and the transcript thereof were not privileged because they constituted a communication between opposing parties to contemplated litigation. It was crucial to his decision that the recorded conversation was not confidential. Among other cases, he referred to the decision of Hodgson J in Aydin v Australian Iron and Steel Pty. Ltd. [1984] 3 NSWLR 684. In that case, a signed statement was given by the plaintiff worker to his corporate employer. It was held by Hodgson J that the statement was not confidential and that that precluded legal professional privilege from applying to the statement.
Telebooth was followed by Judge Kelly in Pegasus Leasing Ltd. v Tieco International Australia Pty. Ltd. & Ors., an unreported decision delivered on 6th October 1995. Judge Kelly also referred to Jamieson v Government Insurance Office 7 MVR 209 where Carruthers J came to the conclusion that "the public interest [which supports legal professional privilege] could never require that a communication between the legal advisor of one party and the person who was opposed to his client be immune from disclosure, for there could never be any element of confidentiality in such a communication".
In Pegasus Leasing Ltd. a request for production was made of a statement taken from a Mr O’Connor, or the handwritten notes relating to such statement. Like the facts of this case, at the time the statement was taken, there were no proceedings in existence between the plaintiff and Mr O’Connor but, unlike the facts of this case, Mr O’Connor subsequently found himself as a defendant to an action brought by the plaintiff. In this case, Mr Lister and his company are third parties, having been joined by a defendant.
The approach taken by Judge Kelly was approved by Bollen J in Tieco International (Aust.) Pty. Ltd. & Ors v Arthur Young (No. 288 of 1993), an unreported decision delivered ex tempore on 11th September 1996. I have had the advantage of reading his Honour’s reasons. To the extent that they are in accord with Telebooth, I consider that the decision is to be distinguished for the reasons referred to below.
It is clear from the cases that if legal professional privilege is to apply, it may only apply in relation to communications, whether those communications be oral or written. The communication between Mr Lister and Mr Lipman was an oral communication. The written statement itself cannot constitute the communication between those two individuals because it has not been signed. This application cannot, in any event, apply to any oral communication between Mr Lister and Mr Lipman because it is an application relating to a discovered document in respect of which legal professional privilege has been claimed. The only inference that I can draw from the agreed statement of facts is that Mr Lipman prepared a "statement" based on his conversation with Mr Lister and retained that statement on his file for the purposes of advising his client as to what Mr Lister would say if he was called to give evidence. That being the case, such a communication between Mr Lipman and his client is privileged as satisfying the second test referred to in the judgments of the High Court in Grant v Downs. Although the conversation between Mr Lipman and Mr Lister may not have been confidential, Mr Lipman’s report to his client as to what was said, as contained in the statement prepared by Mr Lipman, was and remains confidential. In Aydin, Hodgson J said at page 691:-
"Had the document been originally prepared simply as a record of the conversation between an investigator and the plaintiff with no intention to have it signed by the plaintiff, but with the sole purpose of submitting this record to a solicitor, then it may well be that privilege would have initially attached to such a document."
In my view, that conclusion is equally applicable to the facts of the case before me. It follows that the decision in Telebooth must be distinguished from the application before me because in Telebooth, the Court was dealing with a tape recording of the conversation as opposed to a statement later prepared by Mr Lipman setting out his recollection of what was said by Mr Lister. Such a distinction was not drawn by Judge Kelly in Pegasus Leasing Ltd. and, although it is not clear from his reasons, it may not have been appropriate to do so in the circumstances of that case. However, once the distinction is drawn, it requires the conclusion that, in the circumstances of this case, the unsigned statement remains subject to legal professional privilege and therefore cannot be the subject of an order for production.
For the above reasons, the application by the third parties will be dismissed. I will hear counsel as to costs.
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