Hunter New England Local Health District v Munters Pty Limited

[2018] NSWSC 788

Supreme Court

New South Wales

Medium Neutral Citation:	Hunter New England Local Health District v Munters Pty Limited [2018] NSWSC 788
Hearing dates:	23 November 2017
Date of orders:	01 June 2018
Decision date:	01 June 2018
Jurisdiction:	Common Law
Before:	Bellew J
Decision:	1. The proceedings are listed for further directions before me at 9.15 am on Friday 8 June 2018. 2. The parties are to prepare short minutes of orders to be made on the next occasion incorporating orders: (a) giving effect to the conclusions reached in this judgment; (b) for the ongoing management of these proceedings. 3. The costs of the amended notice of motion are reserved.
Catchwords:	PRACTICE AND PROCEDURE – Discovery – Application for further discovery – General principles – Balancing exercise to be conducted in face of assertions by the plaintiff that compliance with an order for further discovery would be unduly onerous   PRACTICE AND PROCEDURE – Evidence – Privilege – Where claims for privilege made over documents which would otherwise be discoverable – List of documents to properly set out the basis of any claim made – Necessity for the evidence relied upon in support of a claim for privilege to be fulsome, focused and specific – Verbal formulae and conclusory assertions not sufficient – Necessity for evidence to be adequate and compelling – Necessity for evidence to address the purpose for which documents were created or communications were made – Whether discretion should be exercised in favour of inspection of the documents over which privilege was claimed
Legislation Cited:	Civil Procedure Act 2005 (NSW) Evidence Act 1995 (NSW) Health Services Act 1997 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 Asahi Holdings (Australia) Pty Ltd v Pacific Equity Parties Pty Ltd [2013] FCA 998 ASIC v Rich [2004] NSWSC 1089 Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333; [2009] NSWCA 100 Barnes v Commissioner of Taxation [2007] FCAFC 88; 242 ALR 601 Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101; [2004] FCAFC 237 Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 52 LJQB 181 Con Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 1200 Dingwall v Commonwealth of Australia (1992) 39 FCR 521; [1992] FCA 627 Ensham Resources Pty Ltd v AIOI Insurance Co Ltd (2012) 209 FCR 1; [2012] FCAFC 191 Esso Australia Resources Ltd v FCT (1999) 201 CLR 49; [1999] HCA 67 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46 Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 Harman v Home Department State Secretary [1983] 1 AC 280; [1982] 2 WLR 338 Hutchinson v Glover (1875) 1 QBD 138 In the matter of Felan’s Fisheries Pty Ltd [2017] NSWSC 1262 Kennedy v Wallace (2004) 142 FCR 185; [2004] FCAFC 337 Mulley v Manifold (1959) 103 CLR 341; [1959] HCA 23 National Crime Authority v S (1991) 29 FCR 203; [1991] FCA 234 New South Wales v Jackson [2007] NSWCA 279 Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264 R v Rogerson; R v McNamara (No 31) [2016] NSWSC 195 Re Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 611 Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178 Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380 Sparnon v Apand Pty Ltd (1996) 68 FCR 322 Tirango Nominees Pty Ltd v Dairy Vale Foods Pty Ltd (1998) 156 ALR 364
Category:	Procedural and other rulings
Parties:	Hunter New England Local Health District (Plaintiff) Munters Pty Limited (Defendant)
Representation:	Counsel: P Gow (Plaintiff) B Docker (Defendant)   Solicitors: Robertson Saxton Primrose Dunn (Plaintiff) Lander and Rogers (Defendant)
File Number(s):	2014/18337
Publication restriction:	Nil

Judgment

INTRODUCTION

1. By an amended notice of motion filed on 15 June 2017 Munters Pty Limited (“the defendant”) seeks orders against Hunter New England Local Health District (“the plaintiff”) in the following terms:

1. An order pursuant to r 21.2(1)(a) of the Uniform Civil Procedures Rules 2005 that the plaintiff give discovery to the defendant within 28 days of documents within the classes specified in the further revised categories of discovery documents set out in annexure “A”.

2. Further, or in the alternative, an order pursuant to r 21.3 of the Uniform Civil Procedures Rules 2005 that the plaintiff serve on the defendant a verified list of all documents which should be, and which should have been discovered, within 28 days of the date of the order, or such other period as the court decides.

3. An order that the plaintiff’s claim for privilege in respect of the documents in items 1 – 8 and 11 – 16 in the plaintiff’s list of privileged discovered documents be disallowed, and that the documents be made available to the defendant for inspection pursuant to r 21.5 of the Uniform Civil Procedures Rules 2005.

4. An order that the plaintiff serve on the defendant within 7 days of the date of the order, or such other period as the court decides, a copy of the briefing folder referred to on page 27 under [19(i)] of the report of Dr Cameron Jones dated 19 September 2015, and in paragraphs 12, 17 and 31 of the instruction letter from Robertson Saxton Primrose Dunn to Dr Jones dated 28 July 2015, which is referred to on page 2 of Dr Jones’ report and is annexed to it.

5. An order that the plaintiff’s claim for privilege over the following documents produced on subpoena be disallowed and that access to the documents be granted to the defendant:

1. the documents numbered 1, 9-10, 12-16, 18, 20 and 22-27 in the list of privileged documents produced by Cunningham Lindsey Australia Pty Limited attached to the letter from Robertson Saxton Primrose Dunn to Lander & Rogers dated 29 July 2014;

2. the documents numbered (i)-(iv) on the first page of the letter from Robertson Saxton Primrose Dunn to Lander & Rogers dated 23 October 2014, being further documents produced on subpoena by Cunningham Lindsey Australia Pty Limited;

3. updated written commentary of Vince Neil produced by Network Cleaning and Restoration Services; and

4. the documents numbered 1 and 2 in the list of privileged documents produced in response to the subpoenas issued to Mycologia Pty Limited, Nycolab Pty Limited and Dr Heike Neumeister-Kemp.

2. I was informed at the hearing that paragraph 4 of the amended notice of motion was no longer pressed. Accordingly:

1. paragraphs 1 and 2 raise the issue of further discovery;

2. paragraph 3 raises claims for privilege by the plaintiff in relation to discovered documents; and

3. paragraph 5 raises claims for privilege by the plaintiff in relation to documents produced under subpoena.

3. I was also informed at the hearing that of the 22 categories of documents set out in annexure “A” to the amended motion, nine were no longer in dispute. In respect of those categories of documents which remain, annexure “A” is in the following terms:

The Court orders that the Plaintiff give discovery to the Defendant of all documents (as defined in section 21 of the Interpretation Act 1987 (NSW)) in its possession, custody or control:

1.   relevant to the determination of the services the Defendant agreed to provide the Plaintiff, the terms on which those services would be provided and the Defendant’s provision of those services, in respect of water affected medical records held at the Plaintiff's storage facility located at what is now known as 5A Pennant Street, Cardiff, New South Wales (Storage Facility) following a water leakage on or around 20 January 2008, including but not limited to:

(a)   proposals, quotations, invoices, statements of account, notes, memoranda and reports in respect of those services or further services;

(b)   notes, reports or minutes of meetings (which includes both telephone conferences and meetings in person) with, and communications and records of communications to and from the Defendant, as well as internal reports concerning, the nature, extent, cost, adequacy and standard of those services or further services; and

(c)   complaints about the services.

2.   relevant to whether and, if so, to what extent and where the Plaintiff experienced, mould contamination of records, the air, surfaces or items other than records (including but not limited to shelves and furniture) or it was observed or detected by testing or otherwise (including by employees, contractors or consultants) at the John Hunter Hospital or any of its storage facilities, including the Storage Facility, the storage facility at 15 Belford Place Cardiff (New Cardiff) and the storage facility at Waratah during the period January 2002 to January 20 January 2014.

3.   (no longer in dispute)

4.   relevant to the air quality (including but not limited to carbon monoxide and carbon dioxide), airborne mould, formaldehyde, temperature, humidity, moisture or other environmental conditions in or around the John Hunter Hospital or any if its storage facilities, including the Storage Facility, New Cardiff and the storage facility at Waratah from January 2002 to 20 January 2014, including but not limited to:

(a)   results of tests, data loggers (including but not limited to by the Engineering Department of the John Hunter Hospital) and air monitoring, as well as chain of custody records;

(b)   records (including graphs as well as text) of the air quality (including but not limited to from Mycologia’s or other air quality measuring devices and/or Air-O-Cell cassettes);

(c)   records of airborne mould (including but not limited to STVS Spore Trap reports, records from spore catchers, and/or Air-O-Cell cassettes and Mycologia reports on mould spore levels) and/or formaldehyde testing, as well as chain of custody records;

(d)   records of temperature, humidity, moisture and/or environmental conditions (including but not limited to by ENSR’s and the CID Manager’s readings, and of Dr Neumeister-Kemp’s testing on 28 November 2008);

(e)   Mycologia testing reports from 2008 to March 2013 referred to in paragraph 107 of the affidavit of Darienne Scanes sworn 28 July 2016; and

(f)   emails, reports, memoranda and minutes, reports or notes of meetings (whether by teleconference or in person) in respect to such results, records and reports.

5.   (no longer in dispute)

6.   relevant to:

(a)   the appropriateness of John Hunter Hospital, the Storage Facility, New Cardiff and the storage facility at Waratah for the storage of documents;

(b)   the adequacy, existence and performance of climate control, heating, ventilation or air conditioning within the Storage Facility, New Cardiff, the storage facility at Waratah and storage facilities at John Hunter Hospital,

(c)   records (graphs and text), readings and data (including airflow readings and ductwork measurements), service and maintenance records, and records concerning any review or modification (including the installation of variable air zone controls and/or the provision of negative airflow) of climate control, heating, ventilation or air conditioning at the Storage Facility, Pacific Linen Service facility, New Cardiff, the storage facility at Waratah or John Hunter Hospital (including but not limited to the building maintenance system and the air-conditioning system servicing the CID),

during the period January 2007 to January 20 January 2014.

7.   (no longer in dispute)

8.   (no longer in dispute)

9.   (no longer in dispute)

10.   (no longer in dispute)

11.   (no longer in dispute)

12.   being or recording communications by it or on its behalf on the one hand to its insurer, the Government Insurance Office, the Treasury Management Fund, Suncorp, GAB Robins Australia Pty Ltd, Cunningham Lindsay Australia Pty Ltd, Corporate Protection Services International Pty Ltd and any other loss adjuster, any agent of its insurer, any claims manager or insurance broker on the other hand, and vice versa, concerning:

(a)   water damage and/or mould damage or contamination to medical records at John Hunter Hospital, the Storage Facility, New Cardiff and/or the storage facility at Waratah;

(b)   reports of or reports of complaints of itchy skin, sore or swelling eyes, fatigue, shortness of breath, sore throat or headache symptoms suffered by staff;

(c)   remediation of the Clinical Information Department at John Hunter Hospital the Storage Facility, New Cardiff and/or the storage facility at Waratah and/or the medical records stored at any such place, or the scanning and destruction of such medical records;

(d)   the insurance claim to the Treasury Managed Fund referred to in paragraph 33 of the affidavit of Heather Jose dated 2 September 2016;

between 21 January 2008 and 14 September 2009.

13.   being, recording or relating to health complaints and/or physical symptoms (excluding trauma injuries or other injuries arising from workplace accidents) suffered by staff working in the John Hunter Hospital CID and/or the Infusion Lounge, the Storage Facility, New Cardiff, Waratah, the facility at James Fletcher Campus in Watt Street Newcastle or the warehouse at Dangar Street Wickham during the period between January 2007 and 20 January 2014, including but not limited to:

(a)   WorkCover certificates or reports submitted by or on behalf of staff;

(b)   Advanced Incident Management System (AIMS), IIMS or other reports, notes or complaints made or submitted by or on behalf of staff;

(c)   sick leave forms and records;

(d)   medical certificates, letters or reports by medical practitioners submitted by or on behalf of staff;

(e)   reports to the staff nurse;

(f)   Eye Clinic appointments and records;

(g)   the log or record kept in the CID for registering staff symptoms as well as the request by executive management for staff to no longer complete AIMS reports;

(h)   results of any medical tests (including but not limited to mould or other allergy testing), examinations and reviews;

(i)   each WorkCover improvement notice received by the plaintiff;

(j)   records from which the documents behind tabs 34 and 36 to Exhibit DS1 to the affidavit of Darienne Scanes sworn 28 July 2016 was prepared; and

(k)   emails, reports, issues or options papers, records of other communications and meeting notes, reports or minutes (which includes both telephone conferences and meetings in person) in respect such complaints and/or symptoms.

14.   being or recording health complaints and/or physical symptoms (excluding trauma injuries or other injuries arising from workplace accidents) suffered by staff working in the John Hunter Hospital (other than the CID or the Infusion Lounge) during the period from 1 January 2008 and 31 December 2008, including but not limited to:

(a)   WorkCover certificates or reports submitted by or on behalf of staff;

(b)   Advanced Incident Management System (AIMS) or IIMS reports submitted by or on behalf of staff;

(c)   sick leave forms and records;

(d)   medical certificates or reports by medical practitioners submitted by or on behalf of staff;

(e)   reports to the staff nurse; and

(f)   emails, reports, issues or options papers, records of other communications and meeting notes, reports or minutes (which includes both telephone conferences and meetings in person) in respect to such complaints and/or symptoms.

15.   results of tests, reviews or examinations by, meeting minutes, reports or notes of meetings (which includes both telephone conferences and meetings in person) with, and reports, emails or records of other communications from or to the following concerning the existence and cause of physical symptoms and/or health complaints suffered by staff working within the John Hunter Hospital CID and/or the Infusion Lounge, the Storage Facility, New Cardiff or Waratah during the period from 1 January 2008 to 31 December 2009, including:

(a)   immunologist review of affected staff through the Immunology Department within Hunter New England Health, including family histories and skin test results;

(b)   Dr Michael Boyle;

(c)   Dr Sandra McBurnie;

(d)   Hunter Industrial Medicine;

(e)   Peter Devey;

(f)   Hunter Occupational Health;

(g)   Dr Mary McGinty;

(h)   Chromis Medical;

(i)   the Occupational Health and Safety physician at the John Hunter Hospital;

(j)   ENSR;

(k)   Network Solutions;

(l)   Mycologia;

(m)   Dr Heike Neumeister-Kemp; and

(n)   Professor Wark.

16.   meeting minutes, reports or notes (which includes both telephone conferences and meetings in person) involving, and emails, reports and other communications to and from the plaintiff (including its predecessor or predecessors) from and to, the following in respect of health complaints and/or physical symptoms (excluding trauma injuries or other injuries arising from workplace accidents) suffered by staff working in the John Hunter Hospital CID and/or the Infusion Lounge, the Storage Facility, New Cardiff or Waratah during the period from 1 January 2008 and 20 January 2014:

(a)   Health Services Union;

(b)   NSW Nurses Association;

(c)   WorkCover Authority of NSW;

(d)   Union Specific Consultative Committee; and

(e)   CID staff and/or John Hunter Hospital management.

17.   in the plaintiff’s file in respect of:

(a)   the proceedings in the Industrial Relations Commission, being matter number IRC 2327 of 2008, commenced in December 2008 by the Health Services Union, as well as reports and records of all hearings and compulsory conference proceedings, and all plans, memoranda, issues or options papers, emails and meeting minutes, reports or notes of meetings (which includes both telephone conferences and meetings in person) concerning the plaintiff’s position, response or submissions in those proceedings or the issues raised by them;

(b)   the legal claim by Kimberley Chambers against the plaintiff (or its predecessor) in respect of illness while she worked for the plaintiff referred to in paragraph 31 of her statement dated 27 October 2010; and

(c)   any other legal claim by a staff member against the plaintiff (or its predecessor) in respect of illness while he or she worked for the plaintiff (including but not limited to Alan Bennett and Sandra Morgan (Bertram)).

18.   which relate to investigations into the cause (excluding mould) of staff health complaints and/or physical symptoms (excluding trauma injuries or other injuries arising from workplace accidents) suffered by staff working within the John Hunter Hospital CID and/or the Infusion Lounge, the Storage Facility, New Cardiff or Waratah and the plaintiff’s management response (whatever the cause) to such complaints and symptoms between 1 January 2008 and 30 June 2009, including:

(a)   (no longer in dispute);

(b)   (no longer in dispute);

(c)   (no longer in dispute);

(d)   (no longer in dispute);

(e)   (no longer in dispute);

(f)   records relating to the return of Sandra Morgan (also known as Sandra Bertram) from secondment in about July 2008 as well as emails, reports, memoranda and minutes, reports or notes of meetings (which includes both telephone conferences and meetings in person) in respect to her return.

19.   (no longer in dispute)

20.   which:

(a)   identify all persons involved with design, installation, maintenance, monitor and upgrade of climate control, heating, ventilation and air conditioning systems in existence at the Storage Facility, Pacific Linen Services, New Cardiff and Waratah between January 2002 and 20 January 2014 ;

(b)   record the design, installation, maintenance, monitoring and upgrade of all climate control, heating, ventilation and air conditioning systems, in existence at the Storage Facility, Pacific Linen Services, New Cardiff and Waratah between January 2002 and 20 January 2014, including but not limited to design specifications, scope of works, diagrams, workshop drawings, structural and architectural plans/drawings, contracts, quotations, invoices, maintenance logs and repair logs.

(c)   record and identify all persons involved with the design, installation, maintenance, monitor and upgrade of climate control, heating, ventilation and air conditioning systems in existence at the John Hunter Hospital, including but not limited to the building maintenance system for the John Hunter Hospital and the A400 air-conditioning system serving CID, between January 2007 and 20 January 2014, including but not limited to design specifications, scope of works, diagrams, workshop drawings, structural and architectural plans/drawings, contracts, quotations, invoices, maintenance and repair logs, data logs.

21.   (no longer in dispute)

22.   which relate to decisions about and the cost of the storage of medical records between 1 January 2007 and 20 January 2014, including:

(a)   leases and hire agreements for the Storage Facility, New Cardiff, Grace, the facility at James Fletcher Campus in Watt Street Newcastle and the warehouse at Dangar Street Wickham, and payments or notional allocations in respect of those facilities as well as the CID;

(b)   the decisions to replace file covers at New Cardiff and dividers at the CID, records relating the files in respect of which such replacements occurred, the assignment of staff to these tasks and the cost of such replacements;

(c)   staff and contractor costs in the CID and for staff and contractors working at the Storage Facility, New Cardiff, the storage facility at Waratah, the facility at James Fletcher Campus in Watt Street Newcastle and the warehouse at Dangar Street Wickham;

(d)   security, maintenance, cleaning, electricity, other utilities and air-conditioning costs for the CID, the Storage Facility, New Cardiff, the storage facility at Waratah, the facility at James Fletcher Campus in Watt Street Newcastle and the warehouse at Dangar Street Wickham;

(e)   costs relating to the transport of medical records to and from the CID, the Storage Facility, New Cardiff, the storage facility at Waratah, the facility at James Fletcher Campus in Watt Street Newcastle and the warehouse at Dangar Street Wickham;

(f)   the closure of New Cardiff and the storage of records kept there, including emails, reports, memoranda and minutes, reports or notes of meetings (which includes both telephone conferences and meetings in person);

(g)   the decision to reallocate the area known as CID Area B for a use other than storage of records, including for a laboratory, including emails, reports, memoranda and minutes, reports or notes of meetings (which includes both telephone conferences and meetings in person).

4. A Joint Court Book which was tendered at the hearing of the motion contains the entirety of the evidentiary material relied upon by both parties.

An overview of the proceedings

5. The plaintiff is a Local Health District, and a body corporate constituted by s 17 and Schedule 1 of the Health Services Act 1997 (NSW). At all material times it controlled the John Hunter Hospital, a public hospital located at New Lambton Heights, near Newcastle (“the hospital”). The defendant operated a business in moisture control, remediation and restoration of property damage, and document drying and restoration.

6. In 2008, the plaintiff used part of premises at 54 Pennant Street, Cardiff (“Old Cardiff”) as a storage facility in which it kept medical records of patients who had been treated at the hospital. Approximately 300,000 records were stored at Old Cardiff, many of which were old and had not been required for some years. Other, more current, records were stored on site at the hospital, within locations known as Area A and Area B. Those locations were situated within what was known as the hospital’s Clinical Information Department (“CID”). As one might expect, records were brought from Old Cardiff to the hospital from time to time for the purpose of treating patients, and were then returned to Old Cardiff for storage when they were no longer needed.

7. Approximately 10% of the Old Cardiff housed the document storage area. The remaining 90% housed the hospital’s laundry facility. There is some evidence that records were stored at Old Cardiff with an emphasis on their security, as opposed to an emphasis on keeping them dry and in good order.

8. On or about 20 January 2008, a faulty fire sprinkler burst at the Old Cardiff premises, causing a number of the records which were stored there to become wet. The plaintiff’s case is that on the following day it entered into a contract with the defendant to advise upon, and remediate, those records which had been affected by the water.

9. The defendant was paid a little over $122,000.00 for the work which it subsequently carried out. That work included taking away approximately 20,000 of the 300,000 records which were stored at Old Cardiff, treating them, and then returning them over a period of approximately two months. All of the records treated by the defendant were returned to the plaintiff by about March 2008.

10. The plaintiff alleges that in about April 2008, it commenced to receive complaints from people working in the ClD of various physical symptoms including itchiness, rashes and shortness of breath. Those complaints continued sporadically over the ensuing months. There is said to be evidence which establishes that at least one person experienced the symptoms whilst working at the hospital, but not whilst at Old Cardiff.

11. The plaintiff commenced various investigations in an effort to determine the cause of the reported symptoms. Those investigations ranged from looking for paper mites in the patient records, to investigating whether there had been sufficient cleaning of the Old Cardiff premises. The Health Services Union then foreshadowed industrial action on behalf of its members who worked at the hospital, following which the Industrial Relations Commission ordered the plaintiff to develop a remediation plan. The plaintiff sought the advice of Dr Heike Neumeister-Kemp, a mould expert, who expressed the opinion that it was mould that was causing the reported symptoms. Other experts, including Dr Sandra McBurnie, an Industrial Physician, expressed doubt as to whether that was the case. The plaintiff formed the view that mould was the cause of the physical symptoms which had been reported, and determined that the electronic scanning of all of the records was the most appropriate way to deal with the issue.

12. Between about May and June 2008 Old Cardiff was decommissioned as a storage facility. The patient records which had been stored there were transferred to another facility (“New Cardiff”) and from that point onwards, no records passed between Old Cardiff and the hospital.

13. The plaintiff’s case relies on the results of scientific testing, which it will assert establishes that the cause of the reported physical symptoms was mould. It alleges that the defendant breached its contractual and common law duties of care, as a consequence of which there was a growth of mould on the medical records stored at Old Cardiff, which spread to records which were stored at the hospital, as a consequence of which a number of those working at the hospital suffered physical symptoms. The plaintiff claims more than $11,000,000.00 in damages.

14. It is common ground between the parties that the defendant’s retainer was oral. However, there are significant issues between the parties regarding (inter alia) the scope of that retainer. It is the plaintiff’s case that the defendant was required to advise in respect of remedying any damage which had been caused, as well as in respect of steps to be taken to prevent mould growth. The defendant asserts that its retainer was limited to being asked to dry the particular records that it had been given.

15. There are related issues between the parties as to whether the defendant breached its common law or contractual duties to take care by (inter alia) failing to:

1. assess, remove and remediate the affected records;

2. properly treat such records;

3. conduct mould testing; and

4. warn the plaintiff of the risk of mould growth.

16. There is also an issue as to whether any act or omission on the part of the defendant was causative of any loss suffered by the plaintiff. In particular, there is an issue as to whether anything done (or not done) by the defendant was the cause of a proliferation of mould. Contributory negligence is also pleaded. There may also be an issue as to whether the State of New South Wales, who employed the staff at the hospital, is a concurrent tortfeasor.

17. It should be noted that discovery has already been given by the plaintiff. The amended motion before me seeks an order for further discovery.

the application for FURTHER discovery

The relevant provisions of the Uniform Civil Procedure Rules 2005 (NSW)

18. Rule 21.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“the Rules”) is in the following terms:

21.2 Order for discovery

(1) The court may order that party B must give discovery to party A of:

(a) documents within a class or classes specified in the order, or

(b) one or more samples (selected in such manner as the court may specify) of documents within such a class.

(2) A class of documents must not be specified in more general terms than the court considers to be justified in the circumstances.

(3) Subject to subrule (2), a class of documents may be specified:

(a) by relevance to one or more facts in issue, or

(b) by description of the nature of the documents and the period within which they were brought into existence, or

(c) in such other manner as the court considers appropriate in the circumstances.

(4) An order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue.

19. The parties were generally in agreement as to the principles which apply to an order for discovery. In the context of the present case, those principles may be summarised as follows:

1. discovery cannot be ordered other than in respect of documents that are relevant to a fact in issue. It is therefore necessary to demonstrate a connection between the class of documents of which discovery is sought, and a fact or facts in issue. Where a class is specified in some manner other than by relevance to a fact in issue, it must be apparent that the class so described will capture only documents that are so relevant: Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 at [22];

2. the facts in issue will be primarily identified by an examination of the pleadings: Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178; Mulley v Manifold (1959) 103 CLR 341; [1959] HCA 23;

3. for the purposes of discovery, a document need not be admissible, and need not be directly probative of the existence of the fact in issue, to be relevant. It follows that in a general sense, the test for discovery under the rule is relatively wide: Hutchinson v Glover (1875) 1 QBD 138;

4. the relevance of a document to a fact in issue is to be determined by its capacity to rationally affect the assessment of the probability of the existence of the contentious fact: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 52 LJQB 181;

5. discovery will be ordered only where it is reasonably required for the fair disposition of the proceedings, and where its legitimate purposes include to obtain evidence and to avoid surprise: In the matter of Felan’s Fisheries Pty Ltd [2017] NSWSC 1262;

6. discovery involves an “inroad”, in the interests of justice, upon the right of the individual to keep his own documents to himself: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46, citing Harman v Home Department State Secretary [1983] 1 AC 280; [1982] 2 WLR 338;

7. the discretion conferred by r 21.2 must be exercised having regard to the provisions of ss 56-60 of the Civil Procedure Act 2005 (NSW). In this regard, case management principles become relevant, although they are not necessarily determinative: Expense Reduction Analysts Group Pty Ltd (supra);

8. although proper compliance with a party’s obligations of discovery is an important and necessary part of modern litigation, the court necessarily has the capacity under the rules to limit discovery, or control the process of giving discovery, so that it does not become unduly onerous: Con Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 1200;

9. there is no entitlement to “chain of enquiry” discovery. If the process of discovery is abusive, or compliance with an order too onerous, the court can (and should) control it: Palavi v Radio 2UE Sydney Pty Limited [2011] NSWCA 264.

20. Against a background of these general principles, I turn to consider each of the categories which remain in dispute.

CATEGORY 1

Submissions of the defendant

21. Counsel for the defendant submitted that the documents in category 1 were necessarily relevant to the terms of the defendant’s retainer, which counsel described as a “pivotal issue” in the proceedings. Counsel also pointed out that the documents sought in category 1 were limited in time.

22. It was further submitted that the documents in this category were reasonably required for the fair disposition of the proceedings, particularly having regard to what he described as the defendant’s “lack of corporate memory”. In that regard, counsel explained that in 2010 the plaintiff wrote to the defendant indicating that proceedings may be commenced, and putting the defendant on notice that any documents in relation to the matter needed to be retained. Counsel for the defendant appeared to concede that this was not done (or at least was not done to any proper extent), following which the defendant closed its restoration business. Counsel accepted that the plaintiff’s reliance on these factors was of some force. However, he submitted that these matters were outweighed by the fact that the documents in category 1 were relevant to a fundamental issue in the proceedings.

Submissions of the plaintiff

23. Counsel for the plaintiff submitted that the words “and the Defendant’s provision of those services” as they appear in category 1 meant that the plaintiff would be required to examine its records for classes of documents relating to the result of the defendant’s alleged acts and/or omissions. Counsel further submitted that category 1(c) was vague.

24. Counsel further submitted that the task of giving discovery of the documents in category 1 would place an unacceptable burden upon the plaintiff. In this regard, he relied upon an affidavit of Alexander Trevena of 18 August 2017 which sets out the work that would be required to comply with any order made.

25. Counsel further submitted that there was no reason why this category could not have been included in the previous application for discovery. Finally, he submitted that the plaintiff was, in effect, being asked to shoulder the burden of the defendant not having kept its records when it had been put on notice of the necessity to do so.

Consideration

26. As I have already outlined, the scope of the defendant’s retainer is a principal issue in these proceedings. The documents in category 1 go directly to that issue. The importance of the issue is further heightened by the fact that the defendant’s retainer was oral. That necessarily renders documentation which goes to the issue of the scope of the retainer even more important.

27. I am unable to accept the submission advanced on behalf of the plaintiff that, as drafted, an order for discovery of the documents in category 1 would require the plaintiff to re-examine documents relating to the results of its alleged acts and/or omissions. Nothing in the terms in which category 1 is drafted suggests that this is the case. To the extent that category 1 may be directed to discovery of documents going to the plaintiff’s post contractual conduct, such conduct may well be relevant to the scope of the retainer.

28. I have taken into account the work that will be required to give discovery of category 1. I also accept that discovery could have been sought of the documents in this category earlier in the proceedings, and that the defendant did not retain its records when put on notice of a potential claim. Those are all relevant factors in the balancing exercise. However in my view, they are outweighed by the importance of the issues in the proceedings concerning (inter alia) the scope of the defendant’s retainer, as well as considerations of overall fairness in the disposition of the proceedings. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 1.

CATEGORY 2

Submissions of the defendant

29. Counsel for the defendant submitted that these documents went to the issue of causation, as well as to the issue of what observations may have been made of mould at different times. He also submitted that they were relevant to the question of what records may have been made as to the location of any mould. He submitted that these matters were necessarily relevant to the question of whether the mould originated from the Old Cardiff premises, or from somewhere else. To the extent that the period in category 2 extended to 2014, counsel submitted that documents produced on subpoena suggested that there were ongoing symptoms reported up to that time, which was also relevant to the issue of causation.

Submissions of the plaintiff

30. Counsel for the plaintiff again relied on what was said to be onerous nature of giving discovery of the documents in category 2. He further submitted that because of the fact that the allegations against the defendant arise from events which occurred in 2008, there was an insufficient connection between those events and alleged events in 2014.

31. Counsel further submitted that discovery of these documents could have been sought at a far earlier time.

Consideration

32. As I have noted, causation is an issue in these proceedings. The circumstances in which documents were transferred between Old Cardiff and the hospital are inextricably linked to that issue.

33. I accept that there is material produced on subpoena which is suggestive of ongoing symptoms being reported up to and including 2014. I also accept that in the event that discovery is ordered of the documents in category 2, the plaintiff will be required to examine a large number of documents, although the affidavits of Mr Trevena and Mr Davis which were relied upon in this regard would tend to suggest that the documents have already been identified, and are largely arranged in a systematic fashion. Bearing in mind the principles to which I have previously referred, and the importance of the causation issue, the plaintiff should be ordered to give discovery of the documents in category 2.

CATEGORIES 4 AND 6

Submissions of the defendant

34. Counsel for the defendant submitted that categories 4 and 6 essentially went to different aspects of the same issue, namely the conditions under which the documents were stored. He explained that category 4 dealt with environmental conditions, whilst category 6 dealt with the effects (including human interaction and intervention) on those conditions. Counsel submitted that both categories were therefore relevant to the issue of the source of the mould, and the conditions in which the documents were kept. It was submitted that such matters were, in turn, relevant to the issues of causation and contributory negligence.

Submissions of the plaintiff

35. The submissions made by counsel for the plaintiff did not suggest that the documents in these categories were irrelevant or unimportant. Counsel’s submissions concentrated on what was said to be onerous nature of compliance with an order for discovery.

Consideration

36. I again accept, having regard to the affidavit of Mr Trevena, that there will be significant work involved in complying with any order in respect of either of these categories. However, in my view that is outweighed by the fact that these categories obviously go to significant issues in the proceedings. Accordingly, the plaintiff should be ordered to give discovery of the documents in categories 4 and 6.

CATEGORY 12

Submissions of the defendant

37. Counsel for the defendant submitted that the documents in category 12 went to issues of causation and contributory negligence. He submitted that any suggestion that the documents were so voluminous as to render compliance with an order for discovery oppressive was not apparent from the evidence.

38. Counsel for the defendant emphasised that what was being sought were documents passing between the plaintiff and its insurer, or that insurer’s agent(s) and that in those circumstances, the category was necessary confined. To the extent that an issue was taken to the date range specified in the category, counsel pointed out that such a range was referrable, not to the dates of events set out in documents, but to the dates of the documents themselves.

Submissions of the plaintiff

39. Counsel for the plaintiff again submitted that the complexity associated with complying with an order for discovery of documents in this category was significant, and covered a wide period. He also pointed out that subpoenas had been issued to the relevant insurer and loss adjuster.

40. However more fundamentally, counsel for the plaintiff submitted that the defendant’s rationale behind seeking discovery of the documents in category 12 was misconceived, and based upon an incorrect assertion as to who made the decision to scan the records, and when.

Consideration

41. To begin with, the date range of documents sought in this category is relatively limited. Moreover, given the terms in which the category is drafted, it is apparent that the date range relates to the dates of documents, not the dates of events. So much was confirmed by counsel for the defendant in the course of oral submissions. Further, the documents sought, namely documents passing between the plaintiff and its insurer and/or loss adjuster, are narrowly confined. That tends against a suggestion that compliance with an order that they be discovered would be overly onerous.

42. The fact that subpoenas have been issued to the relevant insurer and loss adjuster does not, of itself, militate against an order for discovery being made. It cannot be assumed that the documents held by the plaintiff duplicate those held, and produced under subpoena by, some related organisation: Re Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 611 at [86].

43. Finally, even if it is accepted that the defendant misapprehends matters surrounding the decision to scan the documents, that does not lead to the conclusion that the documents in this category do not go to a fact in issue. Clearly, they go to issues of causation and contributory negligence. The submissions of counsel for the plaintiff did not appear to suggest otherwise.

44. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 12.

CATEGORIES 13 AND 14

Submissions of the defendant

45. Counsel for the defendant submitted that these documents again went to the issues of causation, and the symptoms said to have been suffered by the hospital employees. Counsel submitted that the scope of the documents in this category was narrow and that properly understood, the task involved in complying with an order for their discovery was not onerous.

Submissions of the plaintiff

46. The submissions of counsel for the plaintiff centred upon the date range of seven years, in circumstances where the hospital obviously employed many members of staff. Against this background, counsel specifically relied upon the affidavit of Mr Trevena, as well as that of Ms Robertson, in support of a conclusion that compliance with an order for discovery of the documents in this category would be overly onerous. The overly onerous nature of that task was said to be reflected in (inter alia) the fact that it would require the plaintiff to make enquiries of former staff members, and physically review documents.

Consideration

47. Given the terms in which these categories are drafted, it is not apparent to me why an order for discovery would require the plaintiff to interview staff members. What is sought are records of complaints. To that extent at least, compliance with an order would not appear to be as onerous as was suggested.

48. The submissions advanced by counsel for the plaintiff did not suggest that the documents in this category were irrelevant. Clearly, they go to principal issues in the proceedings. I accept that these matters could have been raised by the defendant before now. However in my view, the just disposition of the proceedings outweighs that factor, as well as the time (such as it might be) which might be involved in complying with an order for discovery.

49. Accordingly, the plaintiff should be ordered to give discovery of the documents in categories 13 and 14.

CATEGORY 15

Submissions of the defendant

50. Counsel for the defendant submitted that what was sought in this category were, in effect, results of investigations. Counsel emphasised that discovery was not being sought of private medical records of individuals.

Submissions of the plaintiff

51. Counsel for the plaintiff repeated, in part, the submissions made in respect of categories 13 and 14, and again relied upon the affidavit of Mr Trevena as to the work which would be required in complying with an order for discovery of documents in this category. In particular, counsel submitted that the onerous nature of such compliance was reflected in the fact that it would require the plaintiff to undertake extensive enquiries with staff members’ medical and allied professionals. Counsel also relied upon the fact that discovery of these documents could have been sought at a much earlier time.

Consideration

52. Once again, it was not suggested on behalf of the plaintiff that the documents in this category were irrelevant or unimportant. Moreover, this category essentially seeks the results of investigations. Understood in that way, I am not satisfied that compliance with an order for discovery of these documents would be as onerous as the submissions of counsel for the plaintiff suggested. Whilst I accept that the order could have been sought at an earlier stage, the balance lies in favour of the order sought being granted.

53. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 15.

CATEGORY 16

Submissions of the defendant

54. Counsel for the defendant pointed out that the entities named in these categories had varying roles in the management of the complaints of symptoms made by those employed at the hospital. It was submitted that the documents sought were relevant to the issue of causation.

Submissions of the plaintiff

55. Counsel for the plaintiff relied on the fact that subpoenas had already been issued to at least some of the named entities. He also relied upon the affidavit of Mr Trevena in support of the submission that compliance with an order for discovery of these documents would be overly onerous and would require (inter alia) a review of “all documentation already received from Hunter Health”.

Consideration

56. I have already noted (at [43] above) that It cannot be assumed that the documents held by the plaintiff duplicate those held, and produced under subpoena by, some other relevant organisation. Moreover, the proposition that an order that documents in this category be discovered would require the plaintiff to review “all” documentation it has received must be viewed in the context of the named entities in the category. Approached in that way, and taking full account of Mr Trevena’s affidavit, it appears to me that the proposition that compliance with an order for discovery would be onerous overstates the position. Clearly, the documents in this category are relevant to the issue of causation.

57. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 16.

CATEGORY 17

Submissions of the defendant

58. Counsel for the defendant submitted that, as with category 16, the documents in category 17 went to the issue of causation. In large measure, counsel relied upon the submissions made in respect of category 16.

Submissions of the plaintiff

59. Counsel for the plaintiff submitted that in the absence of a date range, the provisions of the rules had effectively been breached and that discretionary considerations warranted refusal of an order for discovery of the documents in this category.

Consideration

60. Nothing in the rules requires a date range to be applied to a class of documents of which discovery is sought. As counsel for the defendant pointed out, r 21.2(2) simply provides that a class of documents must not be specified “in more general terms than the court considers to be justified in all of the circumstances”.

61. In my view, the scope of the documents which are sought in category 17 is appropriately and clearly defined by the description of the documents themselves, as well as the issue to which they are obviously relevant.

62. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 17.

CATEGORY 18(f)

Submissions of the defendant

63. In light of the indication given by counsel for the plaintiff that the only dispute in this category was in respect of paragraph (f), counsel for the defendant submitted that there was evidence that Ms Morgan had a managerial role in the CID and, having been seconded to work elsewhere, had been brought back to the CID “because of this problem”. It was submitted that documents relating to the decision to have her return to the CID were “expected (to) bear some light on what was considered to be the problem”.

Submissions of the plaintiff

64. Counsel for the plaintiff submitted that leaving aside the “multitude of documents” involved, matters surrounding Ms Morgan’s departure and return were not relevant to any fact in issue.

Consideration

65. I am unable to ascertain the relevance of any document in 18(f). Documents relating to a decision to have Ms Morgan return to work in the CID do not, in my view, have any bearing upon any fact in issue in the proceedings. The terms in which counsel for the defendant put his position in support of an order for discovery of these documents tended to highlight what appeared to me to be the somewhat nebulous nature of the asserted relevance of such documents.

66. Accordingly, the plaintiff should not be ordered to give discovery of the documents in category 18(f).

CATEGORY 20

Submissions of the defendant

67. Counsel for the defendant submitted that the documents in this category went to the issues of causation and contributory negligence. They appear to arise from an expert opinion sought by the defendant Ian Mitchellhill, a mechanical engineer, in relation to environmental conditions inside both the hospital and the storage facilities, including Old Cardiff.

Submissions of the plaintiff

68. The principal objection taken by counsel for the plaintiff to this category was that it could have been included in the original categories for discovery.

Consideration

69. The simple answer to the principal submission advanced by counsel for the plaintiff is that at the time of formulating the original categories of documents, the defendant did not have Mr Mitchellhill’s report.

70. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 20.

CATEGORY 22

Submissions of the defendant

71. Counsel for the defendant submitted that the documents in this category went to quantum and, more specifically, to the costs saved by the documents being scanned.

Submissions of the plaintiff

72. Counsel for the plaintiff submitted that the breadth of the documents of which discovery was sought was “enormous” and again relied upon the affidavit of Mr Trevena.

Consideration

73. In my view, the “enormity” of the task which was relied upon by the plaintiff was somewhat overstated. What is sought are documents relating to the cost of storage. That is clearly relevant to quantum.

74. Accordingly, the plaintiff should be ordered to give discovery of the documents in category 22.

The privilege claimS

75. Paragraphs (3) and (5) of the amended notice of motion seek access to documents in the possession of the plaintiff over which claims for privilege have been made. It is appropriate to commence consideration of this aspect of the matter by setting out the relevant statutory provisions.

The relevant statutory provisions

76. Section 118 of the Evidence Act 1995 (NSW) (“the Act”) is in the following terms:

118 LEGAL ADVICE

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 made between the client and a lawyer, or

(b) a confidential communication made between 2 or more lawyers acting for the client, or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

77. Section 119 of the Act is in the following terms:

119 LITIGATION

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.

78. Further, r 21.3 of the rules provides (inter alia) as follows:

21.3 LIST OF DOCUMENTS TO BE PREPARED

(1) Party B must comply with an order for discovery by serving on party A a list of documents that deals with all of the documents (other than excluded documents) referred to in the order.

(2) The list of documents:

(a) …

(b) …

(c) … and

(d) must identify any document that is claimed to be a privileged document, and specify the circumstances under which the privilege is claimed to arise (my emphasis).

(3) …

General principles

79. The principles which govern a claim for privilege under s 118 and/or s 119 of the Act include the following:

1. the party who claims the privilege bears the onus: ASIC v Rich [2004] NSWSC 1089;

2. the purpose of r 21.3(2)(d) is to provide sufficient particulars to a party seeking to inspect documents of the basis of any claim for privilege, so that such a claim can, if thought appropriate, be contested. Although a failure to comply with that rule does not preclude a party from claiming privilege, the rule is there for a purpose, and the failure to comply with it is not to be encouraged: Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333; [2009] NSWCA 100 esp. at [39]-[41] per Tobias JA;

3. the party claiming the privilege must recognise the need for focused and specific evidence in order to ground the claim. Verbal formulae, and bare conclusory assertions of purpose, are insufficient. A court determining a claim for privilege should, where possible, be assisted by evidence of the thought processes behind, or the nature and purpose of, the document(s) or communications(s) over which the claim is made: Barnes v Commission of Taxation [2007] FCAFC 88; 242 ALR 601 at [18]-[19] (Tamberlin, Stone and Siopsis JJ) citing Kennedy v Wallace (2004) 142 FCR 185; [2004] FCAFC 337, and National Crime Authority v S (1991) 29 FCR 203; [1991] FCA 234;

4. where privilege issues arise in the context of discovery, every effort should be made to ensure not only that there is compliance with relevant provisions of the rules, but also that the evidence adduced in support of the claim for privilege is, in all respects, adequate and compelling. It is both inappropriate and risky for inadequacies in the evidence to be ignored on the basis that a judge can inspect the documents and decide the issues for himself or herself: Bailey v Department of Land and Water Conservation (supra) at [45] per Tobias JA;

5. the Court has a discretion under s 133 of the Act to inspect any documents over which a claim for privilege is made: ASIC v Rich (supra); Bailey v Department of Land and Water Conservation (supra) at [57] per Tobias JA;

6. bearing in mind the importance of proper evidence being provided to the court which fully and fairly discloses the basis of a claim for privilege, the court should not normally be asked to fill gaps by exercising its discretion to inspect documents which are kept from the other party: Ensham Resources Pty Ltd v AIOI Insurance Co Ltd (2012) 209 FCR 1; [2012] FCAFC 191 at [111] per Buchanan J;

7. ss 118 and 119 apply a dominant purpose test. The word “dominant” is used in that sense to describe a purpose that is the ruling, prevailing and most influential purpose: ASICv Rich (supra); R v Rogerson; R v McNamara (No 31) [2016] NSWSC 195;

8. whether a particular purpose is dominant will be a question of objective fact: Singapore Airlines v Sydney Airports Corporation Ltd [2004] NSWSC 380 at [35] citing Sparnon v Apand Pty Ltd (1996) 68 FCR 322 at 327-328. That said, the subjective purpose of a communication or document, although not conclusive, may remain a relevant consideration: Asahi Holdings (Australia) Pty Ltd v Pacific Equity Parties Pty Ltd [2013] FCA 998;

9. the relevant time for ascertaining the purpose is the time at which the document or communication was made: ASIC v Rich (supra).

The documents in paragraph (3) of the amended notice of motion

80. Documents 9 and 10 in paragraph (3) of the amended notice of motion are no longer the subject of any dispute). The evidence placed before this Court in support of the claim for privilege over the remaining documents consisted of:

1. annexures “AD”, “AE” and “AF” to the affidavit of Ms Waring-Lambert of 17 March 2017; and

2. the affidavit of Jonathan Charles Davis of 21 April 2017.

81. Annexures AE and AF are correspondence between the parties in which they state their respective positions in relation to the privilege claim. They throw little light on the issues I am required to determine.

82. Annexure AD is the list of documents prepared by the plaintiff’s solicitor which includes those documents set out in paragraph 3 of the amended notice of motion. In respect of documents 3 to 8 and 11 to 15, the list does nothing more than assert client legal privilege. As emphasised by Tobias JA in Bailey, r 21.3(2)(d) is there for a purpose, namely to provide sufficient particulars to a party seeking to inspect documents (in this case, the defendant) as to the basis of any claim for privilege, so that such a claim can, if thought appropriate, be contested. Merely asserting the privilege, as the plaintiff has done in this case, is not sufficient to comply with the rule. By reference to the list of documents, both the defendant and the Court are largely, if not completely, uninformed as to the basis of the claim.

83. Further, in the case of documents 1 and 2, the list states:

“Client legal privilege refers to legal advice”.

84. The inherent ambiguity in that statement will be obvious. I am left to assume that the plaintiff’s solicitor was intending to assert that the fact that those documents refer to legal advice was sufficient for the purposes of r 21.3(2)(d), and thus provided a sufficient basis upon which to make a claim for privilege. A number of observations need to be made about those matters. To begin with, an assertion of privilege is, as I have already pointed out, insufficient for the purpose of r 21.3(2)(d). Such a bare assertion provides no proper particulars to the defendant, or to the Court, as to the basis of the claim which is made. In particular, and in circumstances where both s 118 and 119 of the Act apply a dominant purpose test, the bare assertion in the present case says absolutely nothing about the purpose for which either document was brought into existence. Further, for the reasons discussed at [89] and following below, the fact that a document refers to legal advice may well tend to defeat a claim for privilege, rather than support it.

84. Moreover, and quite apart from the deficiencies in the list, the affidavit of Mr Davis falls short, and indeed substantially short, of containing the focused and specific evidence of which the authorities speak as being necessary to ground a claim for privilege.

85. Paragraph 22 of the affidavit deals with the claim made in respect of the documents in paragraph 3 of the amended motion. In some cases, the affidavit does nothing more than describe a particular document. In other cases it describes some of the information contained in a particular document. In no case does the affidavit address, in any way at all, the issue of the purpose for which any of the documents were brought into existence, in circumstances where that is pivotal to the resolution of the claim. It could hardly be said that this constitutes evidence which is either focused or specific.

86. Moreover, in respect of each of documents 1 and 2, and consistent with what appears in the list of documents, Mr Davis states that each document “refers to the results of a legal opinion obtained by our client”. Once again, it could hardly be said that such evidence falls within the definition of “focused and specific evidence” which was said by the Court in Barnes to be necessary in order to ground a claim for privilege. As Black CJ and Emmett J pointed out in Kennedy v Wallace (at [13]), it is not sufficient for a party to merely assert a claim for privilege, nor will an affidavit asserting the purpose for which a document was brought into existence, followed by a statement about the category of legal professional privilege, necessarily be sufficient. I reiterate that the evidence in the present case does not make a single reference to the issue of the purpose for which any of the documents in paragraph 3 were brought into existence.

87. Further, the assertion that documents 1 and 2 are privileged because they each refer to the result of a legal opinion may tend against the conclusion for which the plaintiff contends, and in favour of a conclusion that any privilege which might otherwise have attached to the documents has been lost. In that regard, s 122 of the Act is in the following terms:

LOSS OF CLIENT LEGAL PRIVILEGE: CONSENT AND RELATED MATTERS

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.

(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.

(3) Without limiting subsection (2), a client or party is taken to have so acted if:

(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or

(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.

(4) The reference in subsection (3) (a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party, or of a lawyer of the client or party, unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.

(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because:

(a) the substance of the evidence has been disclosed:

(i) in the course of making a confidential communication or preparing a confidential document, or

(ii) as a result of duress or deception, or

(iii) under compulsion of law, or

(iv) if the client or party is a body established by, or a person holding an office under, an Australian law--to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held, or

(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or

(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.

(6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness's memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).

89. Under s 122(3), the knowing and voluntary disclosure of the substance of privileged information will result in loss of the privilege. Whether particular disclosure amounts to disclosure of the substance of a privileged communication, thus resulting in the loss of the privilege, will necessarily involve a question of degree. However in Bennett v Chief Executive Officer of the Australian Customs Service (2004) 140 FCR 101; [2004] FCAFC 237 Tamberlin J observed (at [5]-[6]) that once the conclusion of legal advice is stated, along with the effect of it, there is a waiver of privilege. A similar approach was taken by Rolfe J in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 at 19:

In my opinion the substance of the advice may well be disclosed if the ultimate conclusion, without the supporting or reasoning process, is revealed. At that stage there has been, in my opinion, a disclosure of the substance of the advice, ie what the advice is.

90. It follows that in my view, parts of the affidavit of Mr Davis which are relied upon to substantiate the claim for privilege in respect of documents 1 and 2 tend to support the opposite conclusion.

91. For all of those reasons, the evidence adduced in support of the claim for privilege in respect of the documents in Order 3 of the amended notice of motion is grossly deficient, and fundamentally at odds with what the authorities have made clear is required.

92. It remains open to me to exercise the discretion conferred by s 133 of the Act and inspect the documents. Notwithstanding the numerous shortcomings in the evidence adduced by the plaintiff, I have done so. My conclusions are as follows.

93. Documents 1 and 2 form an email chain from Tony Brown, the team leader at TMS General Claims Management, to various named persons. The email chain does make reference to a discussion between Mr Brown and a loss adjuster, Mr Mills. The email refers to the result of a legal opinion obtained by the plaintiff. For the reasons I have outlined, that part of the document is not privileged. However, the final paragraph of the document sustains an inference that it was brought into existence for the dominant purpose of obtaining legal advice. I therefore uphold the claim for privilege in respect of the balance of documents 1 and 2.

94. Document 3 is an email from Greg Jackson who is the manager (information technology and communications) for the plaintiff. It is clear from the contents of that correspondence that it was prepared for the dominant purpose of obtaining legal advice, or alternatively for the dominant purpose of the plaintiff being provided with professional legal services in respect of anticipated proceedings. In that latter respect, the document makes specific reference to potential proceedings against the defendant. I therefore uphold the claim for privilege in respect of document 3.

95. Document 4 is further email correspondence between Mr Jackson and Mr Mills. Again, it refers to potential proceedings against the defendant. Whilst it also makes reference to previous legal advice, it does not disclose the substance of that advice so as to bring about a loss of the privilege. I am satisfied that the document was prepared for the dominant purpose of obtaining legal advice. I therefore uphold the claim for privilege in respect of document 4.

96. Document 5 is an email from Mr Jackson to a Mr Allen (who I infer is a representative of the plaintiff) and Mr Mills. It requests that Mr Allen undertake certain enquiries in the context of possible proceedings being brought against the defendant. I am satisfied that the claim for privilege in respect of this document is made out.

97. Document 6 is a letter from a Mr Hart, a claims officer at TMF, to the plaintiff’s solicitor seeking advice in relation to proceedings against the defendant. It plainly falls within s 118 of the Act and I uphold the claim for privilege in relation to it.

98. Document 7 is an email chain created in April 2009 seeking the clarification of “some issues” in relation to reports provided by Dr Heike Neumeister-Kemp who has been retained by the plaintiff as an expert. The email chain makes reference to reports of 3 December 2008 and 5 February 2009. The reports annexed to the affidavit of Dr Neumeister-Kemp of 16 April 2016 which is before me are dated 29 October 2008 and 2 December 2008. Document 7 therefore postdates those two reports. There is no indication that a further report was served following the clarification which was sought in the email chain. There may be an implied waiver of privilege in respect of a letter of instruction to an expert in circumstances where that expert says that the letter of instruction was a source of his knowledge. In other words, for principles of waiver to apply in such a circumstance there must be some indication that the documents were used in the preparation of the evidentiary document in a way that could be said to influence the content of the document: Dingwall v Commonwealth (1992) 39 FCR 521, cited in Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 at [46] per Nicholson J; see also Tirango Nominees Pty Ltd v Dairy Vale Foods Pty Ltd (1998) 156 ALR 364 at 367 per Mansfield J. There is no such evidence in the present case, nor is there any evidence that a third report was served from Dr Neumeister-Kemp incorporating any matters of clarification. In these circumstances I am of the view that there has been no loss of privilege and the claim should be upheld.

99. Document 8 is a statement made by Mr Jackson to an investigator on 21 August 2009. It is evident, particularly from paragraph (2), that the document is a confidential communication which was brought into existence, either for the dominant purpose of a lawyer providing the plaintiff with legal advice, or alternatively for the dominant purpose of the plaintiff being provided with professional legal services. In either case, the document is privileged.

100. Document 11 comprises a series of reports from Corporate Protection Services International addressed to the plaintiff’s solicitor in response to a request to “investigate the potential for recovery against Munters Pty Limited”. The reports are clearly confidential documents brought into existence for the dominant purpose of a lawyer providing the plaintiff with legal advice. I uphold the claim for privilege in relation to them.

101. Document 12 is similar to document 8, albeit involving another person. For the reasons expressed in respect of document 8, I uphold the claim for privilege in respect of document 12.

102. Document 13 is a note of a conference with Mr Jackson on 10 January 2014. It is apparent that the note was prepared for the dominant purpose of the plaintiff being provided with professional legal services in relation to what were obviously anticipated proceedings against the defendant. I am satisfied that the notes are privileged under s 119 of the Act.

103. Document 14 is an email chain between Mr Jackson and the plaintiff’s solicitor in June 2014 which the plaintiff’s solicitor seeks instructions about a series of matters in the context of the current proceedings. Plainly, the documents are privileged under s 119 of the Act.

104. Document 15 is an email from Mr Jackson to Mr Davis in December 2014. It is clear that it is in the nature of a response to a request by Mr Davis for instructions about particular matters, such request having been made in the context of the present proceedings. I am satisfied that the documents are privileged under s 119 of the Act.

The documents in paragraph 5(a) of the amended notice of motion

105. Of the documents set out in paragraph 5(a), only documents 1, 12, 13 and 14 are in issue. They are documents produced on subpoena by Cunningham Lindsay, Loss Assessors. They documents appear in a list of documents which is annexure “O” to the affidavit of Ms Waring-Lambert of 17 March 2017. Once again, that list does not comply with r 21.3(2)(d).

106. Annexure S to the same affidavit is a letter from Mr Davis to those acting for the defendant setting out the basis of various claims for privilege. That letter states (inter alia) that:

1. Document 1 was created “in anticipation of legal proceedings”;

2. Documents 12, 13 and 14 constitute “confidential communications ….. (created) in anticipation of the current legal proceedings”, as a consequence of which they were “made for the dominant purpose of the provision of legal services relating to reasonably anticipated legal proceedings….”.

107. Two matters should be observed about Annexure S. Firstly, the fact that a document is created “in anticipation of legal proceedings” says nothing about the dominant purpose for which it was created. Secondly the fact that a document is created in such anticipation does not lead to the conclusion that it was made for the dominant purpose referred to in ss 118 and 119 of the Act. Nothing in the correspondence says anything at all about the dominant purpose for which any of the documents were created.

108. Finally, reliance is placed upon paragraphs 24 to 26 of the affidavit of Mr Davis. Those paragraphs do nothing more than:

1. confirm that a claim is made;

2. describe document 1 and documents 12 to 14.

109. The evidence thus suffers from precisely the same shortcomings as the evidence relied upon in respect of the documents in order 3. Once again however, I have exercised my discretion in favour of examining the documents pursuant to s 133 of the Act.

110. Document 1 is the same document as document 8 in [100] above. It follows that the same conclusion should be reached and the claim for privilege upheld.

111. Documents 12 and 13 constitute an email chain created for the stated purpose of providing “information requested by the legal team” in April 2013. In light of the date of the correspondence, I am prepared to infer that it was brought into existence for the dominant purpose of the plaintiff being provided with professional legal services in respect of anticipated proceedings against the defendant pursuant to s 119. I therefore uphold the claim for privilege.

112. Document 14 is an email from Mr Jackson to a number of persons in March 2013. Like documents 12 and 13, it was created for the stated purpose of “providing information requested by the legal team”. For the reasons expressed in respect of documents 12 and 13 I uphold the claim for privilege in respect of this document.

The documents in paragraph 5 (b) of the amended notice of motion

113. Of the documents set out in paragraph 5(b), documents (i), (ii), (iii) and (iv) remain in issue. They are documents produced on subpoena by Cunningham Lindsay, Loss Assessors.

114. The plaintiff relied upon annexure “U” to the affidavit of Ms Waring-Lambert of 17 March 2017 in support of this claim. That is a letter from Mr Davis to those acting for the defendant of 23 October 2014. It does nothing more than state that a claim is made. It gives no indication at all of the basis of the claim.

115. The plaintiff also relies upon paragraphs 27 to 30 of the affidavit of Mr Davis. In those paragraphs Mr Davis asserts that documents (i), (ii) and (iii) “refer to legal advice received by our client”. Leaving aside the fact that such an assertion says nothing about the purpose for which the documents were created, it prima facie tends against the claim which is made for the reasons I have previously expressed. However, notwithstanding the deficiencies in the evidence relied upon by the plaintiff to support the claim, I have again exercised my discretion to examine the documents.

116. Documents (i) and (ii) are in the nature of reports provided to GIO General Limited, NSW Treasury Managed Funds. Document (i) does little more than set out the factual circumstances of the flooding of the Old Cardiff premises. There is nothing whatsoever which suggests that the document was created for the dominant purpose referred to in either s 118 or s 119 of the Act. To the extent that it refers to legal advice received, the document states the nature of that advice and thus discloses its substance. I therefore reject the claim for privilege in respect of document (i).

117. Document (ii) is even more remote. I infer that its dominant purpose was not a purpose referred to in s 118 or 119, but a purpose relating to authorising a progress payment to the defendant for the work it carried out. Once again, to the extent that the document refers to legal advice it discloses the substance of such advice. For these reasons the claim for privilege in respect of document (ii) is rejected.

118. In respect of document (iv), Mr Davis asserts that it is part of an email chain “that asks questions for purposes of referral to lawyers for possible recovery”. Whilst that at least makes some reference to the purpose for which the document was brought into existence, it is neither focused nor specific. An examination of the document makes it apparent that it is a communication from Mr Mills to the plaintiff’s insurer dated 5 December 2008 in which the possibility of proceedings against the defendant is discussed, in the context of retaining legal representation. I am satisfied that the document is a confidential one, created for the dominant purpose referred to in s 119. I therefore uphold the claim for privilege in relation to it.

The document in paragraph 5(c) of the amended notice of motion.

119. The document in paragraph 5(c) was produced on subpoena by Network Cleaning and Restoration Services and is described as a “written commentary” of a Mr Vince Neil. The plaintiff again relied upon annexure “S” to the affidavit of Ms Waring-Lambert in which Mr Davis asserted that:

1. Mr Neil was a representative of Network Cleaning;

2. Network Cleaning had been retained by the plaintiff to provide services in relation to the remediation works “in reasonable anticipation of legal proceedings”;

3. Mr Neil expressed certain observations in relation to the remediation works which were “shared” with the plaintiff’s legal representatives;

4. the plaintiff’s legal representatives consulted in conference with Mr Neil prior to the creation of this document for the purposes of seeking his view as an expert;

5. as a consequence, Mr Neil was under an implied obligation not to disclose the advice he had provided to the plaintiff’s representatives;

6. the document is therefore privileged.

120. The plaintiff also relies upon paragraphs 31 to 33 of the affidavit of Mr Davis which set out the circumstances of Mr Neil’s retention.

121. I have had regard to the matters in [120] above, and I have inspected the document. I am satisfied that it is a confidential document created for the dominant purpose set out in s 119(a) of the Act. I therefore uphold the claim for privilege in respect of the document.

The documents in paragraph 5(d) of the amended notice of motion

122. There are two documents in paragraph 5(d) of the amended notice of motion. They are each in the nature of email chains between a number of persons including Heike Neumeister-Kemp. The claim for privilege in relation to them is supported by an affidavit of Mr Davis of 18 May 2017. That affidavit annexes a separate list of documents. Under the heading “circumstances under which privilege is claimed” the document simply states (in each case) “legal professional privilege”. Yet again that does not comply with r 21.3(2)(d).

122. The first of the documents is the same as document 7 referred to in paragraph [99] above. The second document is a duplicate of the first. For the reasons I have stated, I reach the same conclusion as in [99] above in respect of these documents. The claim for privilege should be upheld.

Conclusion and orders

124. As I discussed with the parties on the hearing of the amended notice of motion, it will be necessary for these proceedings to be closely case managed form this point onwards in light of their history. Accordingly, I make the following orders:

125. The proceedings are listed for further directions before me at 9.15 am on Friday 8 June 2018.

126. The parties are to prepare short minutes of orders to be made on the next occasion incorporating orders:

1. giving effect to the conclusions reached in this judgment; and

2. for the ongoing management of the proceedings.

127. The costs of the amended notice of motion are reserved.

*********

Decision last updated: 01 June 2018