Integral Energy Australia v EDS (Australia) Pty Ltd

[2006] NSWSC 971

CITATION:	Integral Energy Australia v EDS (Australia) Pty Limited & Ors [2006] NSWSC 971
HEARING DATE(S):	15/9/06
JUDGMENT DATE :	20 September 2006
JURISDICTION:	Equity Division Technology and Construction List
JUDGMENT OF:	Einstein J
DECISION:	Waiver of privilege established.
CATCHWORDS:	Waiver of client legal privilege - Letter of instruction to expert
CASES CITED:	ASIC v Southcorp Ltd (2003) 46 ACSR 438 Attorney-General (NT) v Maurice (1986) 161 CLR 475 Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 Dingwall v Commonwealth of Australia (1992) 39 FCR 521 Goldberg v Ng (1995) 185 CLR 83 Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870 Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 Trade Practices Commission v Sterling (1979) 36 FLR 244 Wheeler v Le Marchant (1881) 17 Ch D 675
PARTIES:	Integral Energy Australia (Plaintiff) EDS (Australia) Pty Limited (First Defendant) ACN 007 443 165 Pty Limited (Second Defendant) Indus International Inc (Third Defendant)
FILE NUMBER(S):	SC 55025/05
COUNSEL:	Mr K Andronos (Plaintiff/Respondent) Mr R Brender (First Defendant) Mr M O'Meara (Second Defendant) Mr Nixon (Third Defendant/Applicant)
SOLICITORS:	Holding Redlich (Plaintiff/Respondent) Baker & McKenzie (First Defendant) Freehills (Second Defendant) Blake Dawson Waldron (Third Defendant/Applicant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

Einstein J

Wednesday 20 September 2006

ACN 007 443 165 Pty Ltd and Indus International Inc

JUDGMENT

The notice of motion

1 There is before the Court a notice of motion filed on 29 August 2006 by which the third defendant seeks:

i. a declaration that the plaintiff has waived privilege over the entirety of the letter from Holding Redlich to Mr John Beichman dated 15 July 2006;

ii. an order that the plaintiff provide the third defendant with an un-redacted copy of that letter.

2 The whole of the un-redacted letter has been provided to the Court for examination.

The principles

3 In ASIC v Southcorp Ltd (2003) 46 ACSR 438 Lindgren J set out the relevant principles governing the question of whether material in the possession of an expert witness is properly the subject of a claim for client legal privilege. At 441–442 his Honour set out the principles which for present purposes I adopt as presently representing the state of the law in New South Wales:

(1) Ordinarily the confidential briefing or instructing by a prospective litigant’s lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 Ch D 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J.

(2) Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client’s lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; 141 ALR 545; 91 A Crim R 451 (Propend); Interchase, per Pincus JA; Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 at [17].

(3) Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness’s own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161 – 2 per Thomas J.

(4) Ordinarily disclosure of the expert’s report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481; 69 ALR 31 at 34 per Gibbs CJ, CLR 487–8; ALR 38–9 per Mason and Brennan JJ, CLR 492–3; ALR 42–3 per Deane J, CLR 497–8; ALR 46–7 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98; 132 ALR 57 at 66 per Deane, Dawson and Gaudron JJ, CLR 109; ALR 75 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; BC9506842; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89; BC 200300344 (ACCC v Lux) at [46].

(5) Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148–50 per Pincus JA, at 161 per Thomas J.

(6) It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report: cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; 156 ALR 364 at 366; ACCC v Lux at [46].

Decision

4 Having carefully examined the redacted sections of the letter of 15

July 2005 it is plain that there has been an implied waiver of client legal privilege in respect of:


1. the heading appearing immediately after paragraph 12 (e);

ii. that part of paragraph 14 which has been redacted.

5 These sections of the letter may have influenced the content of the later reports. In that regard the submissions to the effect that all that appears is a comment rather than an instruction are rejected.

6 The finding is that there has not been any implied waiver of client legal privilege in respect of the other parts of the letter which have been redacted.

7 The Court orders as follows:

1. Declare that the plaintiff has waived privilege over so much of the letter from Holding Redlich to Mr John Beichman dated 15 July 2006 as comprises:


i. the heading appearing immediately after paragraph 12 (e);

ii. that part of paragraph 14 which has been redacted.


2 Order that the plaintiff provide the third defendant and each other of the defendants to the proceedings with a copy of the letter disclosing the detail referred to in the declaration.

3 Costs are reserved.

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