Interchase Corp Limited (in Liq) v Colliers Jardine (Q) P/L
[1997] QSC 254
•24 February 1997
IN THE SUPREME COURT
OF QUEENSLAND
Writ No. 520 of 1994
Brisbane
Before Mr Justice Ambrose
[Interchase Corp. Limited (In Liq) v. Colliers Jardine (Q) P/L & Ors]
BETWEEN:
INTERCHASE CORPORATION LIMITED
(IN LIQUIDATION) A.C.N. 010 663 993
Plaintiff
AND:
COLLIERS JARDINE (QLD) PTY LTD
First Defendant
AND:
MICHAEL GEORGE TIDBOLD
Second Defendant
AND:
GROSVENOR HILL (QUEENSLAND) PTY LIMITED
(formerly known as HILLIER PARKER (QUEENSLAND)
PTY LTD
Third Defendant
AND:
BRIAN MOFFAT WAGHORN
Fourth Defendant
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 24/02/1997
CATCHWORDS: RSC O. 35 RR. 5, 6, 13, 16 & 18 - CLAIM FOR PRIVILEGE - essential matters to be included in affidavit for claim for privilege - identification of documents - grounds for which claims for privilege based - formal disclosure of documents - effect on admissibility at trial - expert reports not privileged - documents to which expert has had regard also not privileged.
Counsel:Mr J. McKenna for the plaintiff
Mr D. Fraser Q.C. & Mr T.W. Quinn for the third and fourth defendants
Solicitors: Feez Ruthning for the plaintiff
Ebsworth & Ebsworth for the third and fourth defendants
Hearing Dates: 7 & 8 March 1996
IN THE SUPREME COURT
OF QUEENSLAND
Writ No. 520 of 1994
Brisbane
Before Mr Justice Ambrose
[Interchase Corp. Limited (In Liq) v. Colliers Jardine (Q) P/L & Ors]
BETWEEN:
INTERCHASE CORPORATION LIMITED
(IN LIQUIDATION) A.C.N. 010 663 993
Plaintiff
AND:
COLLIERS JARDINE (QLD) PTY LTD
First Defendant
AND:
MICHAEL GEORGE TIDBOLD
Second Defendant
AND:
GROSVENOR HILL (QUEENSLAND) PTY LIMITED
(formerly known as HILLIER PARKER (QUEENSLAND)
PTY LTD
Third Defendant
AND:
BRIAN MOFFAT WAGHORN
Fourth Defendant
REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 24/02/1997
This is an application by the third and fourth defendants for an order that the plaintiff make disclosure of the specified documents and that it also make and file a further affidavit claiming privilege in respect of documents which it has not disclosed on that ground.
The plaintiff opposes the making of either order.
The plaintiff claims against each of the first and second defendants and against each of the third and fourth defendants damages for negligence. The first and second defendants are valuers as are the third and fourth defendants.
The third and fourth defendants who are the applicants made valuations upon which the plaintiff alleges it relied when embarking upon a commercial development contract. It is the plaintiff's case that the third and fourth defendants (as did the first and second defendants) each negligently over-valued a commercial development and that as a result of relying upon that over-valuation the plaintiff suffered damages.
The third and fourth defendants seek further disclosure of documents relating to the plaintiff's claim for damages for loss of use of moneys which it asserts is attributable to the defendants' negligence. This loss is claimed in para. 31 of the amended statement of claim of which the plaintiff has given particulars referring to specified documents. Notice to produce those documents for inspection was given by the third and fourth defendants on 5 October 1995 pursuant to O.35 r.13 of the Rules of the Supreme Court.
Documents disclosed under O.35 must be produced at trial upon notice and are admissible as relevant to the matters in issue without formal proof - vide RSC O.35 r.18. A consequence of non-disclosure is that the party failing to make disclosure may not without leave tender or rely upon the contents of the document not disclosed at the trial.
It is clear therefore that there are practical advantages to the third and fourth defendants if all documents relevant to the plaintiff's claim are properly disclosed as required by O.35. The defendants may be assisted in proving their case at trial by proper disclosure. Similarly they will be in a position to oppose the plaintiff attempting to rely upon documents not properly disclosed.
In my view the material shows that the documents specified in para. 1 of the third and fourth defendants notice to produce served on the plaintiff on 5 October 1995 probably exist and it is probable that many documents of the category specified in para. 2 of that notice to produce also exist.
In my view it is unarguable that the orderly conduct of the trial will be advanced if such documents are formally disclosed in accordance with O.35 so that the defendants may take advantage of O.35 r.16 and O.35 r.18 in preparing for and conducting the trial.
One of the issues raised by the plaintiff in para. 26C of its amended statement of claim is the negligence of the defendants in assessing sustainable rental from the commercial development which they valued. Particulars of negligence provided suggest that rental in fact being paid by various tenants ought not to be have been relied upon in determining the level of sustainable rental. The material discloses that documents which have been provided to the defendants on an informal basis but not formally disclosed in compliance with O.35 may arguably constitute evidence touching on the issue of what opinion was reasonably open to the defendants at the material time as to the realisable rental for the commercial premises which they were valuing. It is not clear to me whether the informal production of some documents to the defendants was sufficient to enable them to give notice to produce all such documents pursuant to RSC O.35 r.18; that rule purports to apply only to documents disclosed under O.35.
This documentary evidence, some of which has already been informally produced, will arguably be admissible as original evidence of the demand for rental accommodation in the commercial development at various rental levels which arguably will have at least a peripheral relevance to the weight to be given to rentals which were actually negotiated, the reliability of which for the purposes of valuing the premises in question will be one of the issues in the trial. Informal disclosure of only some of the documents to date will be insufficient to support a notice to produce at the trial. The formal disclosure of the documents in accord with the requirements of O.35 will permit the defendants to take the necessary steps to facilitate proof of the documents in the event that they are not produced at the trial.
The second order sought by the applicant/defendants in essence is one which requires the plaintiff to make a further affidavit sufficiently identifying documents in respect of which it claims privilege and stating precisely the grounds necessary to support the claim of privilege.
A number of affidavits claiming privilege have been filed, the latest on behalf of the plaintiff sworn 24 January 1996 being filed on 31 January 1996. Because the defendants complain of the way in which the affidavit has been drawn I will set forth the relevant part of that document.
Interchase objects to producing the documents set out in the attached schedule on the ground(s) that:-
(i)document numbered A1 consists of a confidential communication between Interchase and its legal advisers for the sole purpose of giving or receiving legal advice;
(ii)documents numbered B1 to B140 were brought into existence solely for use in this litigation since its commencement; and
(iii)documents numbered C1 to C5 were brought into existence solely for use in litigation when it was reasonably anticipated by Interchase.
SCHEDULE
__________________________________________________________________
No Date Document
__________________________________________________________________
1.18 10 941 Correspondence marked A1, in part of a folder entitled in this litigation (volume 1) marked "A", passing between Interchase's legal advisers and Interchase.
2.14 04 94 - Documents and correspondence marked B1 to B140, inclusive, 12 01 96 in parts of folders, entitled in this litigation (being volumes 1 & 2), marked "B", which have passed between Interchase's legal advisers and Interchase and/or others in relation to the matters in question in this case and with a view to Interchase's prosecution of its claim since the issue of the writ.
3.January 93 Documents and correspondence marked C1 to C5, inclusive 19 in a part of a folder entitled in this litigation (volume 2), January 94 marked "C", which have passed between Interchase's legal advisers and Interchase, and/or others in relation to the matters in question in this case, with a view to Interchase's prosecution of its claim during the period in which this litigation was reasonably contemplated."
Before embarking upon an examination of the content of the affidavit in question about which the defendants complain, it is convenient to state the requirements of a proper and effective claim of privilege under O.35 r.6(1).
Each document in respect of which the claim is made must have been prepared in confidence. The assertion that the document is a confidential one must be deposed to in the affidavit; as Hedigan J observed in Telebooth Pty Ltd v. Telstra Corporation Ltd [1994] 1 VR 337 at 341 l. 43: "The principle underpinning legal professional privilege is confidentiality." He went on to point out of course that the confidentiality is one between the client and his adviser.
The communication must have been prepared solely for the purpose of obtaining legal advice. If prepared for any other or additional purpose the document is not privileged - Grant v. Downs (1976) 135 CLR 674, National Employers' Mutual General Assurance Association Ltd v. Waind (1979) 141 CLR 648 and Brambles v. TPC (1981) 58 FLR 452 at 457-8.
With respect to a document containing expert opinion evidence - even if obtained solely for the purpose of legal advice or preparation for litigation - that document is no longer privileged having regard to the express terms of RSC O.35 r.5(2) which provides: "(2). A document consisting of a statement or report of an expert is not privileged from disclosure." This new rule of court alters radically the old rule which would have protected such a document as one prepared "in anticipation of litigation". However that ground of privilege is no longer available in Queensland. Indeed in this case expert reports prepared by parties to the litigation with a view to it have already been disclosed and copies exchanged.
It is contended that any document to which the expert report refers and which could be said to influence the content of the document containing the expert opinion is not privileged and must be disclosed. The authority for this proposition is Dingwall v. Commonwealth of Australia (1992) 39 FCR 521 - per Foster J at p.524 and Crawford v. Bailey, unreported decision of Enderby J, Supreme Court of NSW 26 October 1990.
It is clear that to the extent that expert opinion is based upon the existence of facts those relevant facts must be established upon the evidence; the expert of course if required must state all the facts which he has taken into account in arriving at his opinion. In my view, if for the purpose of obtaining an expert report to support the case of a party in anticipated litigation the legal representative of that party provides instructions to the expert and the expert has regard to those instructions in arriving at his expert opinion, those instructions lose their privilege. Of course to the extent that the legal adviser provides "instructions" either written or verbally to a potential witness who is not an "expert", that communication would obviously be made on behalf of the client in anticipation of litigation and would be privileged. Under the new Queensland rule however communications made to and received from experts are in a special category when considering the question of privilege by virtue of the provisions of O.35 r.5(2). Expert reports and documents to which the expert had regard in making them which are relevant to an issue in that action are disclosable and are not privileged whether or not such reports and documents were prepared in anticipation of litigation.
Each document in respect of which privilege is claimed must be clearly and individually identified so that if subsequent to privilege being claimed, the question whether in respect of any document it was properly claimed must be determined by the court the document (or documents) in question and the ground upon which privilege was claimed in respect of it are both clearly stated in the affidavit filed pursuant to O.35 r.6(1) - see Mansard Properties Ltd v. Builders' Registration Board of Queensland (Full Court Queensland unreported 30 June 1989 per Williams J at p. 67) and Braegrove Pty Ltd v. Bendeich [1993] 2 Qd R 239 at 242. If there are a large number of documents which may be accurately categorised or put into a class indicating their nature then of course they may be described under that category or class as being contained in a folder etc, although even in that case each document ought be individually marked or described by reference to date, author etc and if this is insufficient or might in the special circumstances of the case disclose privileged information each ought be marked separately so as to distinguish it from others in the same category or class. The object of so marking each document in respect of which privilege is claimed is to enable that specific document to be extracted from any bundle in which it is incorporated should the claim for privilege need to be argued prior or subsequent to the commencement of the trial; upon that argument it may be necessary for a judge to inspect the document or documents in question to determine the question of privilege. There may well be some documents in a category or class of documents contained in a folder in respect of which the claim for privilege is not maintainable while other documents in that class may be privileged. It is quite unsatisfactory procedurally to embark upon determination of a dispute relating to the existence of privilege in respect of some only of a number of documents without being able to identify precisely the documents in question and to ascertain from the affidavit as to privilege the precise grounds upon which privilege is claimed in respect of those documents.
I will turn now to the terms of the affidavit filed on behalf of the plaintiff claiming privilege in respect of various documents which the defendants contend to be insufficient in that they fail to comply with one or more of the rules to which I have referred.
The grounds for privilege claimed in para. 2(i) of the affidavit must of course be read with the schedule to which it refers.
The affidavit referring to the "document" dated 18 October 1994 described as "correspondence ... passing between Interchase's legal advisers and Interchase", upon its face complies with all rules to which I have referred. It purports to refer to a single document being a confidential communication between the plaintiff and its legal advisers for the sole purpose of giving or receiving legal advice. It is dated about 6 months subsequent to the issue of the writ of summons commencing the action. There is nothing in the material to suggest that the claim for privilege in respect of this single document has not been properly made.
The claim for privilege in para. 2(ii) which is to the effect that documents numbered B1 to B140 were brought into existence "solely for use in this litigation since its commencement and which have passed between Interchase's legal advisers and Interchase and/or others in relation to the matters in question in this case ..." does not on its face comply with the rules required for a proper claim for privilege to be made. It does not assert that the documents and correspondence were confidential. It purports to include documents and correspondence between Interchase's legal advisers and persons other than Interchase. To the extent that the "others than Interchase" may include experts whose reports are not privileged from disclosure and that the correspondence between Interchase's legal advisers and those experts may contain instructions to which regard was had by the experts in preparing reports which are disclosable it is impossible to consider from the content of the affidavit whether or not on its face the claim for privilege has been properly made.
The problem with the form of the affidavit in my judgment is that there has been a failure to categorise or put into separate classes any of the 140 documents and correspondence marked B1 to B140 inclusive. No hint of the nature or category of any document is given by asserting that the documents and correspondence "relate to the matters in question" and were prepared "with a view to Interchase's prosecution of its claim since the issue of the writ".
In my view the failure to classify with more particularity each of the documents or at least each of the categories into which the document presumably may be placed to enable the defendants to consider whether objectively it is arguable that privilege has been wrongly claimed in respect of some of them in my view highlights the deficiency in the affidavit.
One need refer only to the facts debated before Hedigan J in Telebooth v. Telstra (supra) and before Enderby J in Crawford v. Bailey (supra) and before Foster J in Dingwall v. Commonwealth of Australia (supra) to appreciate the necessity for describing more precisely the documents encompassed in the folder marked "B" and marked B1 to B140 inclusive to appreciate that the description used prevents the defendants from giving any consideration to whether privilege has been properly claimed. Upon affidavit material in this case, to which I will not refer in detail, it emerges that certain material relating to valuation reports prepared before and after the institution of this action may be encompassed within para. 2(ii) of the affidavit. If they are then of course the question as to whether those documents are privileged is a matter which the defendants have the right to argue. In my view nothing has been raised to suggest that disclosure of the identity of "the others" to whom the plaintiff's legal advisers addressed correspondence and the date of that correspondence apparently contained in folder "B" might in any way disclose the content or effect of privileged information. At least it would not do so if it were addressed to persons either directly or indirectly involved in the provision of information considered by any valuer preparing a valuation report in the possession of or under the disposition and control of the plaintiff or its legal advisers.
In my view the failure to sufficiently particularise or identify the documents marked B1 to B140 is a very serious deficiency in the affidavit.
Paragraph 2(iii) of the affidavit refers to "documents and correspondence" marked "C1 to C5 inclusive" in part of the folder entitled volume 2 marked with "C". Apart from identifying these documents as 5 documents marked C1 to C5, para 2(iii) simply describes them as having:"passed between Interchase's legal advisers and Interchase and/or others in relation to the matters in question in this case with a view to Interchase's prosecution of its claim during the period in which this litigation was reasonably contemplated."
Presumably one may infer from this terminology that these "documents and correspondence" came into existence prior to the issue of the writ in the action on 13 April 1994, in contrast to the documents referred to in para.2(ii) which came into existence after the issue of the writ.
Apart from that information para.2(iii) of the affidavit of privilege gives no intimation whatever as to the nature of the documents or the identity of the "others" to whom or from whom the documents or correspondence may have passed. It does not assert that the documents and correspondence are confidential.
In my view the content of para.2(iii) of the affidavit of privilege is also seriously deficient for the reasons I gave with respect to the deficiency in respect of para.2(ii).
One might expect from the terms of the voluminous correspondence and affidavit material that has been placed before me that some of the material at least contained in the folders marked "B" and "C" touch and concern the content of valuation reports prepared prior and subsequent to the issue of the writ in these proceedings. It may also involve documents whether or not by way of instructions from the plaintiff's legal advisers to valuers to which the valuer or valuers have paid regard in the preparation of their reports. It is unlikely that that material is privileged. At least having regard to the terms of O.35 r.5(2) it will be strongly arguable that such material is not privileged.
In my view apart from the omission to depose to the confidentiality of documents referred to in para.2(ii) and (2iii) of the affidavit both those paragraphs of the affidavit are seriously deficient in failing to sufficiently identify the documents involved to enable the defendants to consider objectively whether it is arguable that the claim for privilege is baseless. In coming to this conclusion I have regard to material read upon the application that suggests that there has been some uncertainty on the part of the person making disclosure on behalf of the plaintiff concerning whether some of the documents in respect of which privilege has been claimed in the latest affidavit were privileged.
While a court will not lightly embark upon examination of documents in respect of which privilege has been claimed to determine whether it has been properly claimed, it will do so if persuaded that reasonable grounds are made out to query whether privilege has been properly claimed. Reference need only be made to cases such as Dingwall v. Commonwealth of Australia and Crawford v. Bailey for illustrations as to circumstances where a sufficient identification of documents in respect of which privilege was claimed enabled the propriety of that claim to be tested. These were matters which Williams J obviously had in mind in Mansard Properties.
For the plaintiff in this case the question is raised as to whether the applicant/defendants have a right to seek to have a further affidavit claiming privilege made. The onus of course is on the plaintiff in this case to make out its claim for privilege. It has disclosed the existence of certain documents and has indicated that it declines to make disclosure of the contents of those documents. Unless it can show that prima facie its claim for privilege is properly made out the defendants can require production and/or seek an order for disclosure under O.35 r.14. Upon the making of such an application in my view the affidavit as to privilege challenged by the defendants in this case would be insufficient - at least with respect to folders "B" and "C" (referred to in para.2(ii) and 2(iii) of the affidavit) to support a claim for privilege and an order for disclosure might be made if no further steps were taken to support the claim. I infer that the material in respect of which a claim for privilege is made is relevant to the issues.
In my view the applicant/defendants were justified in bringing the application to have determined the matters canvassed upon it which were argued at some length by the plaintiff.
The defendants at close of argument also sought an order that the plaintiff disclose to the defendants all that class of documents comprising instructions and documents provided to the plaintiff's valuer which had not already been disclosed. This presumably was based upon the claim in the summons for "such further or other order as made to the court may seem meet".
Although on the material there may be reason to suspect that there has not at this stage been full disclosure of such documents, I take the view that the likelihood is that if there has been such a non-disclosure it has probably been on the basis that they were thought to be privileged - perhaps overlooking the effect of O.35 r.5(2). This will emerge no doubt if a proper affidavit as to privilege is filed where the documents and correspondence involved is sufficiently described to enable this claim to be determined before the court.
In the exercise of my discretion I will not at this stage make such an order pending the filing of a further affidavit claiming privilege. An application for disclosure of non-privileged material generally touching on expert valuation reports may be made by any party to the action pursuant to O.35 r.14.
I therefore make an order granting the relief claimed in paras. (i) (ii) and (iii) of the summons filed on behalf of the third and fourth defendants on 13 February 1996. I give the applicants liberty to apply for further disclosure if so advised.
I order that the plaintiff pay to the third and fourth defendants their costs of an incidental to the application to be taxed.
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