KYLE NEENAN and AUSTRALIAN POSTAL CORPORATION Mr John Handley, Senior Member

[2011] AATA 372

Administrative Appeals Tribunal

INTERLOCUTORY DECISION AND REASONS FOR INTERLOCUTORY DECISION [2011] AATA 372

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/4941

GENERAL  ADMINISTRATIVE   DIVISION		)
Re		KYLE NEENAN

Applicant

And AUSTRALIAN POSTAL CORPORATION  

Respondent

INTERLOCUTORY DECISION

Tribunal Mr John Handley, Senior Member  

Date31 May 2011

PlaceMelbourne

Decision

The following documents produced by the Transport Accident Commission (the TAC) are protected by legal professional privilege and must not be released to the parties in this application:

1.     the investigators’ reports dated 19 February 2010 and 23 February 2010 prepared by the LKA Group; and

2.     the TAC estimates both dated 19 January 2010.

(sgd) John Handley

Senior Member

PRACTICE AND PROCEDURE – summons served on Transport Accident Commission ‑ legal professional privilege – documents described as investigation reports and estimate of damages and legal costs payable – whether created for the dominant purpose of existing or anticipated litigation.

Administrative Appeals Tribunal Act 1975

Transport Accident Act 1986 (Vic)

Grant v Downs (1976) 135 CLR 674

Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49

Daniels Corporation International Pty Limited and Another v Australian Competition and Consumer Commission (2002) 213 CLR 543

AWB Ltd v Cole and Another (No 5) (2006) 155 FCR 30

Telstra Corporation Limited v Minister for Communications Information Technology and the Arts (No 2) [2007] FCA 1445

Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd and Another (2005) 225 ALR 266

Pratt Holdings Pty Limited v Commissioner of Taxation (2004) 136 FCR 357

O’Reilly and Others v The Commissioners of the State Bank of Victoria and Others (1983) 153 CLR 1

Waterford v The Commonwealth (1987) 163 CLR 54

Seven Network Limited v News Limited [2005] FCA 142

Re Farnaby and Military Rehabilitation and Compensation Commission (2007) 97 ALD 788

REASONS FOR INTERLOCUTORY DECISION

31 May 2011 Mr John Handley, Senior Member

1.The application is listed for hearing between 25 and 29 July 2011.  The applicant has alleged that he suffered injuries in motor vehicle accidents that occurred in the course of his employment with the respondent on 10 January 2006 and 24 January 2006.  He lodged two claims for compensation which the respondent refused.  The respondent made a reviewable decision which is challenged by the applicant in these proceedings.

2.At the request of the respondent’s solicitors, the Tribunal issued a summons on 29 March 2011 pursuant to s 40(1A) of the Administrative Appeals Tribunal Act 1975 (the Act). The summons was subsequently served on the Transport Accident Commission (TAC) and required the TAC to produce its files relating to the applicant in respect of all injuries suffered by him, including those sustained in the motor vehicle accidents. 

3.An officer of the TAC produced a number of documents under cover of letter dated 13 April 2011.  The officer advised that the TAC claimed legal professional privilege over some of the documents and objected to their release to both parties.  Leave was not given to the parties to inspect the documents pursuant to s 40(1D) of the Act and a directions hearing was convened on 17 May 2011. 

4.Mr Carey of counsel, who appeared on behalf of the applicant, objected to the claim for legal professional privilege and sought access to all of the documents provided by the TAC.  Mr Valiotis appeared on behalf of the TAC and maintained the TAC’s objection over some of the documents.  Ms Heffernan who appeared on behalf of the respondent, notified the District Registrar on 16 May 2011 that her client would not contest the claim by the TAC for privilege over its documents.

5.The letter of 13 April 2011 recorded that the TAC was prepared to release two documents enumerated as N°1 and N° 2 and described as the TAC’s electronic file for claim number 09/11760 and TAC printout of payments dated for claim 09/11760.  The letter also listed 14 documents over which privilege was claimed, with a short description of each.

6.At the directions hearing, the TAC agreed to release 10 documents.  Accordingly, there were four documents over which it continued to claim privilege, namely:

TAC Internal Task – Review Common Law Estimate - 19/01/2010;

TAC Estimate dated 19/01/2010;

L K A Group Investigators Report dated 19/02/2010; and

L K A Group Investigators Report dated 23/02/2010

TRANSPORT ACCIDENT ACT 1986 (Vic)

7.I am indebted to the representatives for their comprehensive submissions in relation to the relevant provisions of the Transport Accident Act 1986 (Vic) (the TAC Act). A brief overview of relevant legislation is required to comprehend the submissions that were made by the representatives at the directions hearing.

8.If a person suffers injuries in a motor vehicle accident in Victoria, a claim can be made to recover damages pursuant to s 93 of the TAC Act, provided that the TAC has determined a degree of impairment and the injury is a serious injury (s 93(2) of the TAC Act). A serious injury is an injury that results in an impairment of 30 per centum or more (s 93(3) of TAC Act).

9.If the TAC determines that the degree of impairment is less than 30 percent, an application may be made to a court for leave to bring proceedings against that decision.  The Court must not give leave unless it is satisfied that the injury is a serious injury (s 93(4) and s 93(6) of the TAC Act).

10.If the TAC issues a serious injury certificate to the claimant, the parties enter into negotiations in an attempt to settle.  Negotiations are guided by the TAC’s resolution protocol.  If the parties are unable to reach a settlement, the claimant may institute legal proceedings to determine the quantum of compensation.

11.A serious injury is defined in s 93(17) of the TAC Act as either:

(a)       serious long-term impairment or loss of a body function; or

(b)       permanent serious disfigurement; or

(c)severe long-term mental or severe long term behavioural disturbance or disorder

(d)…

THE SUBMISSIONS

12.Mr Valiotis submitted that the estimate documents were prepared by an impairment manager in the employ of TAC.  They contain an estimate of the damages that might be recovered by the applicant in proceedings and an estimate of the costs payable to his solicitor.  He said he was not aware whether those documents were prepared at the request of the TAC’s in-house solicitors but were produced for the use by those solicitors.

13.Mr Valiotis submitted the investigators’ reports were completed by an investigation agency engaged by the TAC to investigate the applicant and the motor vehicle accidents.  The TAC engaged the investigators to prepare reports to assist the in-house solicitors.

14.Mr Valiotis submitted that the investigators’ reports and the estimate documents were confidential in nature, were prepared in anticipation of litigation and assisted the in-house solicitors to assess the liability and exposure of the TAC to damages.  He submitted that having regard to the dominant purpose for which they were prepared, the documents are privileged.  He also submitted that the TAC held a reasonable apprehension of litigation because the applicant did suffer injuries in a motor vehicle accident, the TAC was notified of those injuries and a serious injury application had been made. 

15.Mr Carey, on behalf of the applicant, submitted that the assertion by the TAC of privilege was based only on its mere apprehension of litigation which was not sufficient to support its contentions.  He submitted that litigation was only permitted in the event that a determination was made to refuse to issue a serious injury certificate.  As the TAC had not yet made any determination, there was no basis for it to assert that it apprehended that the applicant would commence litigation.  Furthermore, there was nothing before the TAC to indicate that if the applicant received an adverse decision, he would seek leave to challenge the refusal. 

16.In reply, Mr Valiotis submitted that the TAC appointed investigators to prepare reports.  This pointed to an apprehension, reasonably held by the TAC, that it was exposed to potential litigation.

17.At the conclusion of the submissions, I asked the representatives whether the documents in issue, namely the estimate documents and the investigators’ reports would be discoverable if litigation did commence.  I made the enquiry to determine the validity of the TAC’s objection.  That is to say, if the documents withheld in this application were – in the experience of the practitioners – likely to be released, either by consent or by determination of the court, I could not see any reason why those documents should not be released immediately.

18.Mr Valiotis advised that if a serious injury certificate is issued, the practice of the TAC is to release all documents in its possession and waive legal professional privilege.  It was suggested that that practice exists to facilitate negotiations in an attempt to reach a resolution.  However, if a claimant seeks leave to institute legal proceedings to challenge the denial of a serious injury certificate, the TAC continues to assert privilege.

CONCLUSION

19.Previously, documents prepared or communications undertaken for the sole purpose of giving or obtaining legal advice were protected by legal professional privilege (Grant v Downs (1976) 135 CLR 674 at 685).  From 1999 when the High Court delivered its judgment in Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49, the privilege protects documents prepared and communications had, for the dominant purpose of giving or obtaining legal advice.  In Esso, the High Court stated at [35] that privilege:

… (or client legal privilege) protects the confidentiality of certain communications made in connection with giving or obtaining legal advice or the provision of legal services, including representation in proceedings in a court… The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers…

20.In Daniels Corporation International Pty Limited and Another v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [9], the majority of the High Court affirmed the law as set out in Esso.

21.In AWB Ltd v Coleand Another (No 5) (2006) 155 FCR 30, Young J discussed the nature of the documents to which the privilege may apply. He said at [44(8)] that:

Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries of documents, chronologies and the like ...

His Honour said at [44(9)]:

Subject to meeting the dominant purpose test, legal professional privilege extends to notes, memoranda and other documents made by officers or employees of the client that relate to information sought by the client’s legal adviser to enable him or her to advise…

22.The purpose for which communications (whether oral or in writing) are made will be dominant if it was the ruling, prevailing or most influential purpose (Telstra Corporation Limited v Minister for Communications Information Technology and the Arts (No 2) [2007] FCA 1445 at [25]; and Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd and Another (2005) 225 ALR 266 at 279-280). In Pratt Holdings Pty Limited v Commissioner of Taxation (2004) 136 FCR 357 at 366, Finn J said that when applying the dominant purpose test, the obvious starting point is with what was the intended use (or uses) of that document which accounted for it being brought into existence.  Finn J said this is a question of fact.  A document or communication for which legal professional privilege is claimed may relate to either the giving or obtaining legal advice or provision of legal services.  There is no requirement that legal proceedings have commenced.  The document or communication may have been created or obtained because litigation is anticipated (O’Reilly and Others v The Commissioners of the State Bank of Victoria and Others (1983) 153 CLR 1 at 22-23) or reasonably contemplated (Waterford v The Commonwealth (1987) 163 CLR 54)).

23.Any exclusion of legal professional privilege from curial or administrative proceedings must be clear from applicable legislation.  If in the construction of legislation there is uncertainty, a Court or Tribunal must determine whether there is an intention to abrogate or deny the common law right of legal professional privilege (Baker v Campbell (1983) 153 CLR 52 at 122). Section 33(1)(c) of the Act provides that the Tribunal is not bound by the rules of evidence. However, it does not follow that reliance upon legal professional privilege is extinguished. That legal professional privilege applies in proceedings before this Tribunal was confirmed in Re Farnaby and Military Rehabilitation and Compensation Commission (2007) 97 ALD 788. In Re Farnaby the Tribunal was constituted by the Tribunal President His Honour Downes J and Deputy President Groom.

24.Having regard to the above, I am satisfied that the estimate documents were prepared by officers of the TAC for the purpose of obtaining legal work (refer AWB) or legal services (refer Esso).  The documents quantified the TAC’s potential liability to pay compensation in the event proceedings are instituted.  

25.Legal Professional Privilege also applies to the documents created or communications undertaken by in-house lawyers, subject to their independence from personal loyalties and the absence of any influence in the professional legal advice that is given (Telstra at [35]; Seven Network Limited v News Limited [2005] FCA 142 at [38] )

26.The investigators’ reports have been provided by third parties at the instruction of the TAC.  The purpose of preparing the reports was to permit the lawyers to assess liability, if any and either defend a decision to deny a serious injury certificate or in the event that a certificate is issued, to contest a claim for compensation if settlement negotiations are unsuccessful.  

27.I am satisfied that the documents have come into existence in anticipation of litigation.  This was the intended use (Pratt (2004)).  The dominant purpose of the documents is the giving of legal advice to facilitate representation of the TAC by its lawyers (Grant at 685). The refusal to disclose the documents by reliance upon legal professional privilege, entitles the TAC to preserve the confidentiality of the documents in the event of litigation.

28.I acknowledge that the applicant has not yet commenced proceedings by way of litigation against the TAC.  I understand that he continues to wait for the TAC to make a decision over his application for a serious injury certificate.  I also acknowledge that in the event that the certificate is denied, he may resile from litigation and not pursue a claim for compensation.  However, it is reasonable for the TAC to believe, whether based on experience or practice with other claimants, that a decision, if adverse, may precipitate the institution of proceedings. 

29.Additionally, the right to assert privilege over documents is not confined to their creation in anticipation or contemplation of litigation.  It is sufficient that they were brought into existence in connection with legal advice or to permit the giving of legal advice or provision of services (Esso).

30.There is presently nothing which would satisfy the TAC that the applicant will not commence litigation should he be denied a serious injury certificate.  The TAC can, in my view, properly and reasonably anticipate that litigation may commence and it is entitled to seek legal advice.  I am satisfied that the investigation reports and the estimate documents were prepared for the purpose of obtaining legal advice in anticipation of litigation.  Therefore, they are protected by legal professional privilege.

31.In the circumstances, the TAC’s claim to legal professional privilege is upheld and I order that the investigators’ reports and estimate documents not be released to the parties in these proceedings. 

I certify that the thirty-one [31] preceding paragraphs are a true copy of the reasons for the interlocutory decision herein of  

Mr John Handley, Senior Member

Signed:          Olympia Sarrinikolaou

Legal Assistant

Date of Interlocutory Hearing       17 May 2011
Date of Interlocutory Decision      31 May 2011
Counsel for the Applicant            Mr M. Carey
Solicitor for the Applicant             Clark Toop and Taylor
Counsel for the Respondent        Ms P. Heffernan
Solicitor for the Respondent        Australian Government Solicitor

Counsel for the
Traffic Accident Commission        Mr J. Valiotis