Matthews v SPI Electricity Pty Ltd

[2013] VSC 33

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IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 4788 2009

CAROL ANN MATTHEWS	Plaintiff
v
SPI ELECTRICITY PTY LTD (ACN 064 651 118) & ORS (according to the schedule of parties)	Defendants

AND BETWEEN:

SPI ELECTRICITY PTY LTD (ACN 064 651 118)	Plaintiff by Counterclaim
v
ACN 060 674 580 & ORS (according to the schedule of parties)	Defendants by Counterclaim

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 January 2013
DATE OF JUDGMENT:	13 February 2013
CASE MAY BE CITED AS:	Matthews v SPI Electricity Pty Ltd & Ors and SPI Electricity Pty Ltd v ACN 060 674 580 & Ors (formerly Utilities Services Corporation Ltd)
MEDIUM NEUTRAL CITATION:	[2013] VSC 33

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PRACTICE AND PROCEDURE – Discovery and inspection - Client legal privilege – expert reports disclosed, used and relied on in pre-trial expert conclaves – express waiver of privilege in expert reports – production and inspection resisted of other privileged documents - associated materials waiver – documents influencing or underpinning expert reports – whether privileged waived – whether disclosure and reliance on expert reports at experts conclaves inconsistent with maintenance of privilege over other materials – timing of any waiver - ss. 122 (2) and 126 Evidence Act 2008.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr AJ Keogh SC	Maurice Blackburn Lawyers
For the First Defendant SPI Electricity Pty Ltd	Mr DJ Farrands with Mr JH Kirkwood	Herbert Smith Freehills
For the Second Defendant	Ms EM Brimer	Holman Fenwick Willan

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

Background......................................................................................................................................... 2

Discovery............................................................................................................................................. 5

The disputed documents.................................................................................................................. 6

Expert evidence regime..................................................................................................................... 7

Mr Vazey’s Reports............................................................................................................................ 7

Expert Conclaves................................................................................................................................ 8

The Design and Set Up of the Test Conductors........................................................................... 9

The Law.............................................................................................................................................. 10

Affidavits and Submissions........................................................................................................... 18

Plaintiffs Affidavits and Submissions....................................................................................... 18
SPI Affidavit and Submissions................................................................................................. 24

Decision.............................................................................................................................................. 29

Is there a Waiver?..................................................................................................................... 29
Clearly no waiver – Categories 1, 2 and 3................................................................................ 31
Categories 4 and 5.................................................................................................................... 32
Timing of any waiver............................................................................................................... 34
Conclusion............................................................................................................................... 34

HIS HONOUR:

Introduction

1. By Summons dated 7 December 2012, the plaintiff seeks orders that the first defendant (“SPI”) produce to the parties certain specified discovered documents in respect of which SPI claims client legal privilege (“privilege”).[1]  The plaintiff contends that privilege over the documents was waived by the service of the expert reports of SPI’s experts Mr John Vazey and Dr Simon Barter, and reliance on those reports in the conclaves of experts ordered by the trial judge, J Forrest J.

   [1]For the purposes of this application, the plaintiff does not dispute the existence of privilege.  The plaintiff reserves her position on that matter.

1. The documents are alleged by the plaintiff to concern the design, setup and conduct of the Valley Span field test which was (and is) set up between poles 38 and 39 beneath the Single Wire Earth Return (“SWER”) line, which is part of the system known as the Pentadeen Spur SWER system, which was constructed in or about 1966.  It was this powerline, called a conductor, strung between poles 38 and 39 of the SWER line (the “Valley Span”) that is alleged to have failed and to have started the fire known as the Kilmore East-Kinglake bushfire that started on 7 February 2009 in Kilmore East (“KEK bushfire”).

Background

1. This group proceeding is brought by the plaintiff under Part 4A of the Supreme Court Act1986 (Vic) on behalf of persons who have suffered loss and damage in the KEK bushfire, the largest and most destructive of the Black Saturday bushfires. It destroyed a number of towns, including Kinglake, destroying 1,242 properties and killing 119 people.

1. The plaintiff sues SPI, Utility Services Corporation Ltd (now called ACN 060 674 580 Pty Ltd), the Secretary to the Department of Sustainability and Environment, the Country Fire Authority and the State of Victoria.[2]  The plaintiff alleges, among other things, that the KEK bushfire was caused by breaches of duty by SPI in the management, inspection and engineering of the Valley Span.[3]

   [2]Plaintiff’s Seventh Amended Statement of Claim dated 30 November 2012 (‘Statement of Claim’).

   [3]Ibid [19].

1. The Valley Span consisted of one conductor made of three strands of galvanised 12 gauge steel wire helically wound together and was approximately 1050m long. 

1. Among other things, the plaintiff alleges that the Valley Span fell into a high risk category for vibration—high-frequency low-amplitude vibration induced by wind[4] (“Aeolian vibration”)—and that SPI should have installed spiral vibration dampers on the span to prevent or reduce vibration.[5] The plaintiff also alleges that industry guidelines require fitting a damper on conductors that are more than 300m long, operating in the conditions of the failed conductor.[6]  The Valley Span was over 1000m long and was not fitted with such a damper.  The plaintiff alleges that the Valley Span failed due to Aeolian vibration and if a damper had been installed this conductor would not have failed on 7 February 2009 (“the plaintiff’s vibration case”).[7]

   [4]Ibid [19(b)(iii)(h)].

   [5]Ibid [19(b)(xxii)]; a spiral vibration damper is a plastic spiral placed on the conductor to disrupt vibration and to decrease the stresses caused by it.

   [6]Plaintiff’s written Outline of Submissions dated 18 January 2013 [2.9] (‘Plaintiff’s Submissions’).

   [7]Affidavit of Rory John Walsh, 7 December 2012. [7] (‘First Walsh Affidavit’).

1. The plaintiff also alleges that the failure of the Valley Span resulted from the misalignment of the ‘helical wrap’ at pole 39.  The helical wrap grips the conductor and is attached to a ‘termination assembly’, which is in turn attached to the pole.  The termination assembly includes a clevis and thimble structure.  The plaintiff alleges that the misalignment of the helical wrap, such that it was not properly seated in the thimble but was jammed between the outside edge of the thimble and the inside edge of the clevis, increased the fretting and fatigue of the conductor strands, such that the strands progressively weakened and fractured.[8]

   [8]Statement of Claim, above n 2, [19(xvii-a)], [24M].

1. The conductor failed near the fittings at pole 39 and, it is alleged, the failure was due to metal fatigue in the conductor wires.  Fatigue can occur when metal is subject to repeated stress.  The repeated stress can initiate a crack in the metal, cause an existing crack to propagate or both.  The plaintiff alleges that the fatigue cracks leading to failure were propagated by Aeolian vibration.  It was submitted that this sort of vibration may occur on conductors when a steady, relatively slow wind blows across a conductor.  That sets the conductor vibrating at a high frequency, but with low amplitude of vibration.

1. Whether Aeolian vibration will occur and how strong that vibration will be depends on a multitude of factors.  It was submitted[9] that, according to expert opinion and industry literature, those factors include, among others:

(a)Wind conditions: which in turn depend on the terrain in which the conductor is strung, the conductor position above the terrain and the predominant wind direction vis-à-vis the conductor;

(b)Tension of the conductor: conductors that are tightly strung will vibrate more strongly, akin to a guitar string;

(c)Age of the conductor: ageing and rusting of the conductor affects its ability to resist vibration;

(d)The fittings by which the conductor is fixed to the pole; and

(e)Length of the conductor: highly tensioned long spans are at greater risk of strong vibration.

[9]Plaintiff’s Submissions, above n 6, [2.7].

1. SPI denies that the conductor failed due to Aeolian vibration.  The expert reports filed on behalf of SPI acknowledge that the fracture in the conductor propagated due to metal fatigue but say that the fatigue was caused by something other than Aeolian vibration.  SPI’s defence in this regard relies substantially upon the results of a field test (“the Valley Span test”), which has been reported on by its independent expert, Mr John Vazey.  That test involved SPI stringing three test conductors between poles 38 and 39 of the Valley Span, about three metres below the original conductor, and measuring stresses generated on the test conductors near the conductor fitting where the failure occurred on the original conductor.  Thus, the test was intended to replicate and measure the conditions that existed on the original conductor.

1. The plaintiff submitted that SPI’s experts, Mr Vazey and Dr Barter, rely heavily on the results of the tests to suggest that the conductor failure could not have occurred by the mechanism alleged by the plaintiff (Aeolian vibration) because the tests did not detect levels of stress sufficient to have caused the failure and it must therefore have been some other mechanism that caused the conductor to fatigue and fail.[10]

   [10]Plaintiff’s Submissions, above n 6, [3.3].

1. The plaintiff now contends (or seeks to contend) that the Valley Span test was not designed and set up so as to enable it to detect the vibration stressors that would have existed on the original conductor at the location where it fatigued and failed.  The test cannot, therefore, be relied on in the manner that SPI purports.  One of the plaintiff’s experts, Mr Harry Better, makes a number of criticisms of the setup and operation of the Valley Span test.  It was submitted that the joint report of expert Conclave Number 3 indicates that concerns about the tests were also raised by other experts.  This contention, however, is not critical to the application and both parties agreed that it did not affect the question whether there was a waiver of privilege.   That is, it provides a motivation for the application, but is otherwise irrelevant.

Discovery

1. The process for discovery in the proceeding was described by Zammit AsJ in Matthews v SPI Electricity Pty Ltd & Ors[11] and by orders made on 30 August 2011.  Discovery was framed by reference to identified repositories of documents that were most likely to contain documents that are most relevant to the issues in the proceeding, with discovery to occur in tranches.[12]  On 23 March 2012, J Forrest J ordered that, subject to further order, discovery by SPI be limited to those documents the subject of discovery orders made by Zammit AsJ or as agreed by the parties.[13]

   [11][2011] VSC 401.

   [12]On 17 February 2012, Zammit AsJ made orders by consent varying the timetable for discovery: Orders 1–3 of Zammit AsJ dated 17 February 2012.

   [13]Order 10 of J Forrest J dated 23 March 2012.

1. SPI has filed and served six lists of documents.  The lists separately identify documents that are the subject of a claim for privilege.  The lists of documents, and the claims for privilege, were verified by Ms Susan Taylor, SPI’s General Counsel and Company Secretary, by an affidavit of documents sworn on 8 June 2012.

The disputed documents

1. The plaintiff seeks the production of documents concerning the design, setup and operation of the Valley Span test.  There are 115 documents identified in the Summons: 

(a)All documents in Schedule 1 Part 2 of SPI’s list of documents dated 18 May 2012;

(b)Documents numbered 159 to 177 and 184 to 186 in Schedule 1 Part 2 of SPI’s list of documents dated 11 April 2012; and

(c)Documents numbered 361 to 376, 381 to 383, 394, 395, 400 to 403, 416 to 424, 436 to 447, 624 to 626 and 726 to 735 (inclusive) in Schedule 1 Part 2 of SPI’s list of documents dated 30 March 2012.

1. The plaintiff contended that the documents identified in the Summons fall into three categories:

(a)Communications or documents internal to SPI;

(b)Communications between SPI and its solicitors;

(c)Communications between SPI or its solicitors and third parties concerning the design, setup or operation of the Valley Span tests.

1. It was likewise submitted that there may be two additional categories that the plaintiff is unable to identify from SPI’s lists of documents, being:

(a)communications between Mr Vazey (or his firm) and SPI;  and

(b)communications between Mr Vazey and third parties concerning the design, setup or operation of the Valley Span tests.

1. However, the plaintiff is, by its Summons, seeking to advance a point of principle and does not wish to be limited to the documents it can identify from SPI’s lists as falling within the general description of documents ‘concerning the design, setup and operation of the Valley Span test’.  Indeed, it emerged clearly in argument that a significant part of the documents sought to be produced as a result of the alleged waiver were those documents concerning the ‘infrastructure’ designed and installed by SPI for the purpose of the Valley Span tests being undertaken.   

1. In contrast, SPI pointed out that to go further than the identified documents opened up what is best described as an application for further discovery, a matter not agitated by the application.  SPI pointed to the regime for discovery ordered Zammit AsJ, and that it maybe that documents concerning the infrastructure upon which the tests are being conducted have not been discovered because they fall outside the ‘repositories’ by reference to which the discovery is to be made.

Expert evidence regime

1. On 16 December 2011, J Forrest J put in place a process for the filing and service of expert evidence.  That process required the parties to settle lists of questions for the expert witnesses, file and serve their experts’ reports and then for the experts to participate in conclaves and prepare joint reports.[14]  His Honour also ordered the parties to exchange, in respect of each expert witness that the party intended would participate in an expert conclave, any letter(s) of instruction, list of documents and details of any facts or assumptions provided to the expert.

   [14]Orders 3–6 of J Forrest J dated 16 December 2011, as amended by orders dated 4 May 2012.

Mr Vazey’s Reports

1. On 22 August 2012, SPI served an expert report of Mr Vazey, an engineer employed by an engineering company called BMT WBM Pty Ltd (“First Vazey Report”).   In that report, Mr Vazey described a field test he had designed and conducted on three test conductors strung between poles 38 and 39 underneath the Valley Span.  It is these 3 test conductors that are the ‘infrastructure’, referred to above, in relation to which some of the privileged documents are said to concern.

1. On the first test conductor (“A”), the helical wrap at the termination assembly at Pole 39 was aligned in the thimble, and no vibration damper was fitted.  On the second test conductor (“B”), the helical wrap (again at the termination assembly at Pole 39) was misaligned, and no vibration damper was fitted.  On the third test conductor (“C”), the helical wrap (again at the termination assembly at Pole 39) was misaligned, and spiral vibration dampers were fitted.[15]

   [15]Expert Report of Mr John Vazey (22 August 2012), section 4.2, 11–15 (‘First Vazey Report’).

1. Mr Vazey installed on the 3 test conductors:

(a)strain gauges to measure the strain in the conductor, from which the stress in the conductor during vibration could be calculated;[16] 

(b)accelerometers to measure acceleration in the conductor, from which the amplitude of vibration could be calculated;[17] and

(c)load cells to measure the tension in the conductor.[18]

[16]Ibid section 4.3.1, 18–20.

[17]Ibid section 4.3.2, 21–2.

[18]Ibid section 4.3.3, 23.

1. In the First Vazey Report, Mr Vazey presented the results of the test for the period from 2 April 2012 to 12 July 2012.[19]  On 19 October 2012, SPI served a supplementary expert report of Mr Vazey (“Second Vazey Report”).[20]  In this second report, Mr Vazey presented updated data from the test[21] and further interpretation of the data from the first report.[22]  Mr Vazey also dealt with several matters raised in another expert’s reports.[23]

   [19]Ibid sections 5.4, 5.5, and 6, 33–6.

   [20]Supplementary Expert Report of Mr John Vazey (19 October 2012) (‘Second Vazey Report’).

   [21]Ibid section 2.2, 7–9.

   [22]Ibid sections 2.2.1 and 2.3, 9–12.

   [23]Ibid sections 3 and 4, 13–17.

Expert Conclaves

1. Mr Vazey participated in an expert conclave (“Conclave 3”) on the quantitative impact of loads or stresses on the primary fractures in the Valley Span.  The conclave occurred on 3, 12 and 13 October 2012 and the participating experts presented a joint report on 7 November 2012 (“Conclave 3 Joint Report”).  Conclave 3 is ongoing and is being facilitated by Zammit AsJ.  Her Honour has held several directions hearings[24] in relation to Conclave 3 in which she has described the ongoing assistance and information being provided by experts (including Mr Vazey) to each other as part of that conclave.  Action item 7 from the telephone conference held between all Conclave 3 experts and Zammit AsJ states that ‘the experts have made arrangements to provide information to one another directly arising from Conclave 3.  This arrangement is to remain in place until the Court directs the experts otherwise’.[25] 

   [24]28 November 2012, 10 December 2012, 19 December 2012.  Her Honour also sat jointly with Justice Forrest at a directions hearing on 14 December 2012.

   [25]Email from Associate to Associate Justice Zammit to the parties, 20 December 2012, attaching document titled ‘Action items from teleconference held on 18 December 2012’.

1. Conclave 3 has reconvened (from 29–31 January 2013)[26] and the participating experts are due to present a further joint report on 14 February 2013.[27]

   [26]Transcript of hearing before Zammit AsJ on 19 December 2012, T-2.16.

   [27]Order 2 of J Forrest J dated 14 December 2012.

The Design and Set Up of the Test Conductors

1. It is common ground that Mr Vazey did not himself design and set up the 3 test conductors for the Valley Span tests.  That design and setup was undertaken by SPI.[28] 

   [28]Affidavit of Ruth Elizabeth Overington, 17 January 2013, [15] and [23]; Counsel representing the parties agreed in the course of the hearing of the application that this was the case.

1. This is clear, in any event, from Mr Vazey’s Reports.[29]  In particular, Mr Vazey refers to ‘external assistance’ provided by ‘Noel Baumgarten and the team of linesmen from SP AusNet who designed, installed and rigged the test conductors’;[30] that ‘[t]he test conductors were strung, rigged and assembled by SP AusNet’;[31] and that Vazey ‘instructed SP AusNet to string these conductors as per a typical installation ensuring that all of the test conductors had a similar level of tension and sag.  SP AusNet maintained responsibility for clearances, and used a surveyor to measure the position of the conductors as outlined in Figure 5’.[32] 

   [29]The First Vazey Report and Second Vazey Report, collectively. 

   [30]First Vazey Report, above n 15, 6.  

   [31]Ibid 10.

   [32]Ibid.

1. This fact also appears from Appendix R to the First Vazey Report, which reproduces an SPI specification for the proposed works to be undertaken to install the 3 test conductors between poles 38 and 39 of the Pentadeen Spur to enable the Valley Span test to be conducted.  This specification ‘was provided by Noel Baumgarten, Design Engineer, SP-AUSNET Benalla’.[33] 

   [33]Ibid Appendix R.

1. The plaintiff relied on this Appendix R to establish a waiver in respect of documents and communications relating to the process of design and installation and construction of the test conductors (which happened over a significant period of time beginning before Mr Vazey’s engagement by letter dated 18 November 2011). The plaintiff contended that the claim for privilege over the drafts of the design of the infrastructure, and its components, is inconsistent with reliance on Mr Vazey’s Reports and thus results in a waiver of the privilege attaching to those documents.  This is based on the inference that the drafts influenced or underpinned the final design described in Appendix R.

The Law

1. It is common ground that the issues raised by the plaintiff’s application are governed by the provisions of the Evidence Act 2008 (Vic) (“Evidence Act”), in particular Part 3.10, Division 1, which applies to interlocutory proceedings.[34] 

   [34]Evidence Act 2008 (Vic) ss 4(1)(b) and 131A.

1. The application is made on the assumption that the documents identified in the Summons are properly the subject of privilege.

1. The plaintiff claims that SPI has lost the privilege in the Summons documents by the operation of s 122, or by a combination of that section and s 126, of the Evidence Act. For present purposes, only sub-section 122(2) need be considered. It provides:

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 sections 118, 119 or 120.

1. The origin of this sub-section is the provision in the same terms introduced into the Commonwealth and New South Wales Uniform Evidence Acts following the Australian Law Reform Commission Report 102, prepared with the New South Wales and Victorian Law Reform Commissions.[35]  Because the Victorian Act post-dated those amendments, the sub-section appeared in the Victorian legislation from enactment. 

   [35]The Report was tabled in the Victorian and NSW Parliaments in February 2006, before the enactment of the Victorian Evidence Act.

1. The object of the sub-section was to adopt the approach of the High Court in Mann v Carnell, in which case Gleeson CJ, Gaudron, Gummow and Callinan JJ stated:[36]

What brings about the waiver is inconsistency, which the courts, where necessary informed by the consideration of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality; not some overriding principle of fairness operating at large.

[36](1999) 201 CLR 1; [1999] HCA 66. See Stephen Odgers, Uniform Evidence Law (Thomson Reuters Australia, 10^th Ed, 2012), 1.3.11070, 667.

1. Although sub-section 122(2) is formulated a little differently from the formulation of the common law principle by the High Court in Mann v Carnell, in that it works on inconsistency between the conduct of the party and a claim of legal entitlement to confidentiality, whilst the High Court formulation works on inconsistency between the conduct of the party and the maintenance of confidentiality,[37] for present purposes nothing turns on this difference. The relevance, however, of the origin of the formulation is that the common law cases on the question of waiver of privilege continue to be relevant to the question arising under s 122 of the Evidence Act.[38]

   [37]See the comments in Odgers, above n 36, 667.

   [38]Subject to, however, a difference arising from the inclusion in s 119(b) of the contents of confidential documents, whether delivered or not, prepared for the dominant purpose of, in effect, use in litigation, a matter not within the common law privilege: see the observations of White J in New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258, [18]–[20].

1. So, under the test propounded in Mann v Carnell it is inconsistency between the conduct of the client and the maintenance of the confidentiality that the privilege is intended to protect which effects a waiver of the privilege.  The test for imputed waiver had previously been expressed in terms of fairness: see Attorney-General (NT) v Maurice (1986) 161 CLR 475 (‘Maurice’) at 481 per Gibbs CJ, 487–8 per Mason and Brennan JJ, 492–3 per Deane J, and 497–8 per Dawson J. Fairness has become a subsidiary consideration; it may be relevant to the court’s assessment of inconsistency in some contexts but not in others.[39]

   [39]AWB Limited v  Cole (No 5) (2006) ALR 651; [2006] FCA 1234 at [130] per Young J; Perhaps an ‘unfair inconsistency’: See also Byrne J in Liquorland (Australia) Pty Ltd v Anghie (2003) 7 VR 27, [41]

1. In any application of Mann v Carnell, the starting point must be an analysis of the disclosures or other acts or omissions of the party claiming privilege that are said to be inconsistent with the maintenance of confidentiality in the privileged material.[40]

   [40]AWB Limited v  Cole (No 5) [2006] FCA 1234, [134] per Young J.

1. It is well established that a voluntary disclosure of privileged documents can result in a waiver of privilege over those documents and associated material.  The test applied to determine the scope of any waiver of ‘associated material’ is whether the material that the party has chosen to release from privilege represents the whole of the material relevant to the same issue or subject matter: Maurice at 482 and 484 per Gibbs CJ, 488 per Mason and Brennan JJ, and 498–9 per Dawson J.

1. Associated material waiver brings into play s 126 of the Evidence Act, the related communications and documents provision.  That section provides:

If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document.

1. Sections 4(1)(b) and 131A of the Evidence Act have the effect of applying s 126 to the interlocutory questions raised by the plaintiff’s Summons.

1. In Towney v Minister for Land & Water Conservation (NSW),[41] Sackville J made a number of pertinent observations about this section. First, that the test set out is an objective test; secondly, that its operation must be assessed according to its terms and not on the basis that it in some way reflects the pre-existing common law; and thirdly that it was clear in his view that a mere reference in a subject document to another communication or document, of itself, does not necessarily result in a loss of privilege attaching to the subject document. The application of s 126 ultimately depends on the degree and manner in which the subject document assists in a proper understanding of the other communication or document. In relation to the meaning of ‘proper understanding’, Sackville J said:

The dictionary definition of ‘proper’ includes ‘complete or thorough’; the definition of ‘understand’ includes ‘to apprehend clearly the character or nature of’ and ‘to grasp the significance, implications or importance of’: Macquarie Dictionary.

[41](1997) 147 ALR 402 at 414.

1. Sackville J’s views were essentially accepted as correct by the NSW Court of Appeal in Sugden v Sugden.[42]

   [42](2007) NSWCA 312.

1. A common application of associated material waiver is where an expert report has been prepared in reliance on other documents.[43]  In Australian Securities and Investments Commission v Southcorp Ltd,[44] Lindgren J helpfully summarised the following principles derived from his analysis of the case law, in relation to the waiver of privilege in connection with expert evidence, in the following terms:

   [43]As Young J described it in AWB v Cole(No 5) (2006) 234 ALR 651; [2006] FCA 1234, [168].

   [44](2003) 46 ACSR 438; [2003] FCA 804, [21].

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; BC200300344 (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 (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].

1. Notwithstanding the reference to client legal privilege, Lindgren J was speaking of common law principles of legal professional privilege.[45]

   [45]New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258, [41].

1. Similar principles apply to imputed waiver of material relied on in legal advice disclosed in litigation, so that if an advice of a lawyer is revealed for a particular purpose in a case, then all the material relied on by the lawyer in giving that advice must also be revealed, if called for: Thomas v New South Wales [2006] NSWSC 380, McClellan CJ at Common Law; Newcrest Mining (WA) Limited v Commonwealth (1993) 40 FCR 507, French J.

1. The decision of McClellan CJ in Thomas v New South Wales is relevant for another reason as well, namely the timing of any waiver.  In that case an advice of counsel (to the plaintiff) had been attached to an affidavit in support of an application by the plaintiff to remove the proceedings from the District Court to the Supreme Court, but the advice had not been read in any proceedings and was not relied upon when the application was litigated.  The plaintiff argued that it would be unfair if the defendant was given access at that time to documents relied on for the purposes of the advice.  Although it was accepted that the plaintiff advanced the advice with the intention of relying upon it, it was submitted that because no advantage has ultimately been obtained, the Court should decline to require the plaintiff to produce the documents underlying it.  McClellan CJ rejected that argument.   He held that by including the advice in the affidavit, an act of express waiver was undertaken; and at that point the implied waiver also took place in relation to the documents underpinning the advice.  It was plain that the plaintiff sought to have the advantage of the advice and use it in the proceedings.  That step was taken consciously.  His Honour said (at [20]):

In the present case the plaintiff disclosed the advice in these proceedings for the purpose of obtaining whatever assistance he could from that advice in pursuit of his claim.  To my mind, that disclosure waived his privilege both in the advice itself and the documents which were used by counsel and which influenced the content of the advice.  Waiver having occurred, the fact that the advice was not ultimately tendered is, to my mind, not relevant.  Having sought an advantage, the plaintiff was bound by the course he had taken and accordingly is amenable to producing the relevant documents in response to an appropriate notice to produce.

1. In England, the principle has been applied to documents which underpin or support expert evidence: see Dunlop Slazenger International Ltd v Joe Bloggs Sports Limited [2003] EDWCA Civ 901; Mayne Pharma Pty Ltd v Debiopharm SA [2006] EWHC 164 (Pat); and L’Oreal SA v Bellure NV [2006] EWHC 1503 (Ch).[46]

   [46]Young J in AWB v Cole (No 5) (2006) 234 ALR 651; (2006) FCA 1234, [171].

1. In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2)[47] (‘Nea Karteria’), a lawyer gave evidence that he had conducted an interview on the basis of a list of questions prepared by the plaintiffs’ lawyers.  While privilege was waived with respect to the witnesses’ answers, the plaintiffs sought to maintain privilege with respect to the list of questions: at 139-140.  Mustill J (as his Lordship then was) held (at 140) that privilege over the list of questions had been waived by implication.[48]

   [47][1981] Com LR 138.

   [48]See also R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 at 599, Auld LJ; and Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] 2 All ER 599 (‘Fulham’) at 604 [11].

1. In New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258, White J said, at [45]-[47]:

Service of a witness statement, whether it be a statement of an expert or a witness to fact, waives privilege in that statement.  As stated in the Marubeni Corp case mere reference to a document does not waive privilege in that document: there must at least be reference to the contents and reliance. In the present case there was no reference and no reliance therefore no waiver.

[46]In Dingwall v Commonwealth of Australia (1992) 39 FCR 521, Foster J, referring to Attorney-General (NT) v Maurice, said (at 524):

I have come to the view, upon a close consideration of the judgments in Maurice’s case that it cannot be regarded as authority for a wide principle that, whenever documents are sent to a potential witness as part of material being placed before him in order that he may provide a report of an expert kind to be used as evidence in a case, that those documents, ipso facto, although they had the protection of legal professional privilege, necessarily would lose it because of the doctrine of waiver.  Maurice’s case does not go as far as that.  It requires, certainly, that there be an 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 that document.

[47]     The same principle was applied by Mansfield J in Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No. 2) (1998) 83 FCR 397 at 400; 156 ALR 364 at 367, and by Nicholson J in Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 at [46].

1. Both parties relied (albeit for different purposes) on the observations of Warren J (as her Honour then was) in Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd:[49]

As a fundamental principle, when a witness is called in order to provide expert opinion evidence all of the facts and instructions upon which that witness bases the expert opinion are admissible and subject to production: see R v Meninga (1992) 66 ACLR 199; also, Cross on Evidence, Aust ed, para 2535.  Furthermore, under the doctrine of fairness that applies to the claim for legal professional privilege with respect to a document, where it is fair so that the relevant evidence may be tested, a claim for legal professional privilege ceases to apply; it is taken to have been waived: Attorney-General (Northern Territory) v Maurice (1986) 161 CLR 475; Burnell v British Transport Commission (1956) 1 QB 187 (CA). Ultimately, the effect of upholding a claim for privilege necessarily involves withholding important information from the court that may in turn be at the expense of the administration of justice to one of the parties to the proceeding. Hence there must be good cause for the existence of any privilege: see Cross on Evidence, Australian ed, para 25045; also, 8 Wigmore, para 2190. 

[49][2000] VSC 353, [58].

1. It is pertinent, however, to observe the context in which these remarks were made.  In that case it became apparent in the course of the cross-examination of an expert accountant called by the defendant that a draft of his report had been produced that was more favourable to the plaintiff than the report relied upon.  Changes had been made to the report in a conference with counsel.  This prompted a call for the draft, over which privilege was claimed.

1. In Roads Corporation v Love[50] Vickery J held that privilege was waived over notes of a meeting involving several experts, the respondent and his legal representatives and a number of other documents, including, a communication recording statements or feedback made by the respondent directly to one of the experts.  His Honour stated that:

However, I am compelled to the conclusion that this is a clear case where the respondent, by calling the relevant experts as witnesses in support of his cause, has acted in a way that is inconsistent with him objecting to the adducing of the evidence which he seeks to protect.  Further it would be both unfair to the applicant, and contrary to the interests of justice, to insulate the relevant witnesses from a full examination of all of the information which they took into account and the various influences to which they were exposed in the preparation of their evidence.[51]

The expert report presented in evidence should also be transparent in providing the facts or assumptions upon which the expert opinion is based and the information relied upon. This is essential to enable the opinions to be adequately tested.[52]

[I]t would be unfair for the respondent to maintain the privilege in respect of the communications. To do so would inhibit the capacity of the applicant to cross examine the respondent’s expert witnesses as it should to properly test the evidence presented against it. Waiver of privilege is, therefore, imputed. In this case the interests in disclosure prevail over legal professional privilege.[53]

[50][2010] VSC 253

[51]Ibid [26]

[52]Ibid [35].

[53]Ibid [51].

1. In Prince Removal & Storage Pty Ltd v Roads Corporation[54] Emerton J assumed a similar formulation of the relevant test, namely that documents in fact contained instructions or facts that have influenced or found their way into the expert reports,[55] for the purpose of determining whether a waiver had occurred when the expert reports were filed, or only later when the expert is called to give evidence.  However, as there was no argument that the documents in fact contained instructions or facts that influenced or found their way into the expert reports, she did not have to decide the issue.  In relation to the timing of the waiver, Her Honour did hold, however, that:

I consider that in this case, however, privilege was waived when the expert reports were filed. Interlocutory orders are routinely made by the court, particularly in the Valuation, Compensation and Planning List, requiring expert reports to be filed and served well in advance of the trial date as part of the active case management of compensation proceedings by the court. Case management of this kind is directed to securing the orderly and efficient conduct of proceedings and to reducing the cost to the parties. It will often include a requirement for the parties to attend mediation and for expert witnesses to confer and report jointly to the court with a view to refining or narrowing the issues in dispute. This is consistent with the overarching purpose in s 7 the Civil Procedure Act 2010 (Vic) to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute. Viewed in the light of these routine interlocutory processes, the filing of the expert reports in the proceeding involves reliance on them at an early stage for the purposes of the proceeding.[56]

[54][2012] VSC 245.

[55]Ibid [11]

[56]Ibid at [13].

1. In AWB Ltd v Cole (No 5),[57] after a detailed examination of authority, Young J held that privilege will be waived over ‘documents and information which were taken into account, or which otherwise underpinned or influenced’ the content of a document that the party chose to deploy to advance its own interests.[58] His Honour found that privilege had been waived in documents that had a connection with the subject matter of the legal advice that AWB chose to disclose.  These included other connected legal advices that were obtained.

   [57](2006) 234 ALR 651

   [58]Ibid [198] and [200]–[205].

Affidavits and Submissions

Plaintiffs Affidavits and Submissions

1. The plaintiff relies on two affidavits of Rory John Walsh, a solicitor employed by Maurice Blackburn Lawyers, sworn 7 December 2012 and 18 January 2013.  The first affidavit gives an account of the relevant issues in the proceeding (as referred to above), and exhibits the correspondence between solicitors regarding the plaintiff’s request for production of the disputed documents.  The second affidavit exhibits further material relied on by the plaintiff, including correspondence between Freehills (as it was) and Mr Vazey, and the Orders of J Forrest J setting up the expert evidence regime referred to in paragraph 20 above.

1. In the plaintiff’s written outline of submissions,[59] the argument was advanced that the design of the Valley Span Field test, and not just the design and set up the 3 test conductors for the Valley Span test, was undertaken by SPI prior to Mr Vazey’s engagement.  This was said to be an available inference from a range of matters:

   [59]Plaintiff’s Submissions, above n 6, section 6.

(a)the references in the First Vazey Report identified in paragraphs 28 and 29 above;

(b)Further, in the First Vazey Report, in relation to minimising ‘noise’ in the data obtained, Mr Vazey states ‘[p]rior to our installation I requested SP AusNet to directly link the earth of the measuring system (and the SWER transformer) to the earth for the test conductors to minimise the line frequency noise. I was informed that this was not possible…’;[60]

[60]First Vazey Report, above n 15, 27.

(c)Further again, in the First Vazey Report, he says that data relating to technical specifications and stringing specifications of the test conductors, ‘was provided by Noel Baumgarten, Design Engineer, SP-AUSNET Benalla’;[61]

[61]Ibid, Appendix R.

(d)In the Second Vazey Report, in response to Mr Better’s report containing several criticisms of the design and setup of the Valley Span test, Mr Vazey’s response is that SPI made the decisions or provided the relevant components the subject of criticism:

(i)In response to the criticism that thimbles used on the test span were different to that on the original conductor and that one of them was not misaligned to the extent found on the original conductor, Mr Vazey says ‘[t]he thimbles were provided by SP AusNet and were understood to be geometrically similar to the thimbles used on the failed conductor. The lack of jamming experienced was also understood to be similar to the failed conductor’;[62]

(ii)In response to the criticism that the test conductors were strung too closely to achieve valid results Mr Vazey says ‘[t]he vertical separation distance between the conductors was chosen by SP AusNet to achieve the clearance restrictions from both the energised conductor, and the ground’.[63]

(e)The privileged documents discovery by SPI reveal correspondence, between early-August and early September 2011, between SPI and Herbert Smith Freehills, and internal to SPI, concerning ‘Pentadeen Spur testing’, ‘Test lines at Pentadeen spur to support bushfire class action’,[64] ‘Test combinations and related issues’,[65] and ‘Scope of Works - Monitoring equipment’, and ‘Scope of Monitoring Steel Conductor Test Spans’;[66]

(f)In August 2011 or earlier SPI engaged a Dr David Jones to provide a design for the test.  Dr Jones provided a scope of works for the test, which appears to have been considered by SPI, and steps were taken to obtain supplies of equipment for the test;[67] and

(g)SPI’s discovered financial documents appear to show that expenditure for project number 74323079, which has a project description ‘Kilmore test line for bushfire class action’, commenced in August 2011.[68]

[62]Second Vazey Report, above n 20, Appendix G, [130].

[63]Ibid [129].

[64]First Walsh Affidavit, above n 7, Exhibit RJW-42 list of documents 30 March 2012 items 439, 443, 445 to 447, 624; list of documents dated 11 April 2012 items 159 to 162, 169 to 177.

[65].         Ibid,  exhibit RJW-42 list of documents 30 March 2012, item 369.

[66]Ibid, exhibit RJW-42 list of documents 30 March 2012 items 364, 372 to 376, 388–9, 732 to 734.

[67]Ibid, exhibit RJW-42 list of documents 30 March 2012 items 366, 368, 381, 440, 444, 727 and 730; list of documents 18 May 2012, items 2 to 5 and 30.

[68]SPI discovered document SPN.833.050.0571, spreadsheet titled “Oracle Report”, row 621; First Walsh Affidavit, above n 7, Exhibit RJW-52. That spreadsheet, although hard to read, appears to show expenditure in August of over $4.7 m.

1. The plaintiff submitted that this material showed that not only had SPI done the work to design the test but that it did so before it engaged Mr Vazey, and that the final design had been arrived at more than 2 months before his engagement.  It was further submitted that:

(a)The design and setup of the Valley Span test cannot be separated from the reports and analysis of its results.  This is especially so in the circumstances where the design and setup of the Valley Test are key issues of contention;

(b)the design of the Valley Span test forms part of his assumptions—he assumes that the design and setup are correct and appropriate.  When challenged about the design, he refers to the decisions of SPI in that regard as though they are a complete answer to the challenge;

(c)The design of the Valley Span test and Mr Vazey’s analysis of the data and descriptions of the test were provided as ‘assumptions’ to both Dr Barter and Dr Potts.[69]  Dr Barter opined that the results of the test are representative of operating conditions on the original conductor and relied on the results obtained to opine that the conductor failed by something other than the plaintiff’s alleged mode.  Dr Barter uses the results of the test to suggest that modelling done by other experts is incorrect because it does not produce results consistent with the test. Those opinions involve an acceptance of the design and setup of the Valley Span test as being correct;

(d)The design and setup of the test forms a part of ‘instructions or facts that have influenced or found their way into the expert reports’[70] and ’documents and information which were taken into account, or which otherwise underpinned or influenced’ the content of those reports.[71]  It is precisely the aspect of the Valley Span test that is disputed by the plaintiff; and

(e)To allow SPI to deploy the results of the test, while withholding the documents relevant to its disputed aspects is to ‘risk injustice through its real weight or meaning being misunderstood’[72], or indeed being misrepresented. 

[69]See paragraphs 7.1 (d), (f) and (k) of the Plaintiff’s Submissions, above n 6.

[70][2012] VSC 245, [11].

[71]AWB Ltd v Cole (No 5), (2006) 234 ALR 651, [198]

[72]         Attorney-General (NT) v Maurice (1986) 161 CLR 475, 482.

1. In oral argument the initial focus of submissions was on the documents that underpinned, or lay behind, the final design, and specifications for, the infrastructure on which the Valley Span tests are undertaken, that is the 3 test conductors and associated equipment.  Mr Keogh likened the process by which the two aspects of the test came into existence to the virgin birth.[73]  In relation to the infrastructure for the test, what was available was the plan document in Appendix R with no documents which are part of the process of the development of that plan and which underpin, influence and inform the development of that plan.  It was submitted that the infrastructure is so centrally and critically important to the opinions expressed by Mr Vazey, that the distinction drawn by SPI between the design and installation of the infrastructure and the design and carrying out of the testing, was artificial.

   [73]Transcript, page 9, lines18-21.

1. In respect of design and carrying out of the testing, that is the work undoubtedly carried out by Mr Vazey, the process of design (of the infrastructure and the testing) which predates his engagement on 18 November 2011, and which is said by Ms Overington to be the First Field test design-Scope of Works, which did not proceed,[74]  it was submitted that the separation of that from Mr Vazey’s work is an artificial delineation, particularly in the context that Mr Vazey certainly has possession of the First Field test design-Scope of Works.  He came into possession of that document, according to Ms Overington, in mid-September 2011.  Although Ms Overington says in her affidavit that when engaged, Mr Vazey ‘was not asked to adopt, use or amend any previous design’,[75] the provision to Mr Vazey of material relating to First Field test design-Scope of Works prior to embarking on his own design, leads to the inference, the plaintiff submitted, that, likely as not, he used it in some way for his own design.

   [74]See paragraph 71 above.

   [75]Overington Affidavit, above n 28, [22].

1. In relation to the drafts of the First Field test design-Scope of Works, the plaintiff relied on the application of s 126 of the Evidence Act. It could not be explained at this stage, prior to inspection of the First Field test design-Scope of Works, why it is reasonably necessary to a proper understanding of that document to see the drafts.  It seems to me, however, from the nature of a draft, that it is unlikely to be so reasonably necessary.

1. In relation to the timing of any waiver, the plaintiff submitted:

(a)that the approach adopted by Emerton J in Prince Removal & Storage Pty Ltd v Roads Corporation,[76] to which I have referred above, is applicable to this case.  In this case deliberate measures have been taken by J Forrest J to ensure that the expert evidence is revealed at an early stage.  The orders his Honour made in this regard were made after consideration of detailed submissions by the parties.  Expert witnesses on whom the parties rely and their areas of expertise had to be communicated in advance.  His Honour ordered advance exchange of instruction materials so ’that the parties should all be on the same page from the start’.[77]  Conclaves were ordered in order to assist in resolving any ambiguities in expert evidence, reports of the conclaves have been filed as evidence in the proceeding and Mr Vazey’s evidence was and continues to be discussed by the largest of the conclaves, Conclave 3.

(b)The Procedural and other matters referred to in the written Outline of Submissions[78] point squarely to the conclusion that reliance has been placed on Mr Vazey’s evidence and the results of the Valley Span test.  The results of the test were provided as assumptions to two further experts for the purposes of their reports.  The results were discussed by eight experts in Conclave 3 and will continue to be discussed.  Further production of results, throughout the time of trial has been foreshadowed by SPI’s senior counsel.  It is inevitable that the evidence will be presented at trial.[79]  The only thing that may be achieved by delaying the production of disputed documents is disruption of orderly conduct of trial and of concurrent evidence sessions of experts;

(c)the disputed documents have relevance to lay witness evidence, not only to the concurrent evidence sessions of experts.  SPI’s proposal to ‘reconsider’ the issue of waiver during the period when lay evidence is timetabled ‘in say April 2013’ will unfairly prejudice the plaintiff because Mr Noel Baumgarten, the person Mr Vazey says ‘designed, installed and rigged the test conductors’ is nominated by SPI to give lay evidence;[80]

(d)SPI’s proposal may well lead precisely to the disruption of trial that His Honour Forrest J warned against at the hearing on 25 May 2012 when SPI sought to delay identification of documents provided to experts.[81]

[76][2012] VSC 245.

[77]Transcript of hearing of 25 May 2012, page 46, lines 16 to 20.

[78]In particular, paragraph 7.1 of the Outline.

[79]See Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419 at page 438, where inevitability of evidence been presented was one of the factors in determining that waiver occurred prior to presentation of evidence at trial.

[80]SPI Electricity Pty Ltd’s list of witnesses (excluding expert witnesses) filed 26 October 2012.

[81]Transcript of 25 May 2012, page 39, lines 16 to 27

SPI Affidavit and Submissions

1. SPI relies on the affidavit of Ruth Elizabeth Overington, a solicitor employed by Herbert Smith Freehills (formerly Freehills), sworn 17 January 2013.  She swears that she has reviewed the ‘Summons Documents’, being the 115 documents identified in the plaintiff’s application, says that they comprise confidential communications sent or received in the period from 15 March 2011 and 22 September 2011 between Herbert Smith Freehills and SPI, or within SPI in relation to instructions to be given to Herbert Smith Freehills, or the preparation of evidence for use by SPI in defence of the proceeding. 

1. Her affidavit identified the subject matter of the communications in the documents.  Ms Overington divides the documents into the following categories:[82]

(a)inquiries made of SPI by members of Victoria Police in connection with a coronial investigation into the cause of the KEK bushfire (‘Category 1’);

(b)the briefing of Herbert Smith Freehills in relation to SPI’s defence of the proceeding (‘Category 2’);

(c)the briefing of an independent expert, Dr David Jones (‘Category 3’); and

(d)the preparation of evidence for use by SPI in its defence of the proceeding, being the first design of a field test (‘Category 4’).

[82]Affidavit of Ruth Elizabeth Overington, 17 January 2013, [7].

1. Although it is not in issue in this application, it can be seen from these descriptions that the privilege claimed is either “advice” privilege or “litigation” privilege, or both: See sections 118 and 119 of the Evidence Act.

1. In subsequent paragraphs of her affidavit, Ms Overington identifies by discovery number the documents falling within each category, save that where any document contained within the Summons Documents is not identified by its identification number in the affidavit, it comprises a communication concerning the preparation of what is called the first design of a field test, which is a reference to a design prepared by SPI in conjunction with Dr Jones prior to the engagement of Mr Vazey to undertake his field tests on 18 November 2011.

1. The first three categories (being those described in paragraphs 8 to 13 of the affidavit) comprise 23 documents identified and described by Ms Overington in her affidavit and conveniently summarised in a table in the written submissions of SPI as follows:[83]

   [83]SPI written Outline of Submissions dated 21 January 2013, [40].

Category of document	Document numbers
Confidential communications relating to the Victoria Police coronial investigation	SPN.824.005.6567, SPN.824.005.6596, SPN.824.005.6599, SPN.824.005.6601, SPN.824.005.6605, SPN.824.005.6606, SPN.824.005.6608.
Confidential communications relating to the briefing of Herbert Smith Freehills in relation to SPI’s defence of the proceeding	SPN.824.005.1932, SPN.824.005.1938.
Confidential communications relating to the briefing of Dr David Jones	SPN.824.005.6265, SPN.824.005.6266, SPN.824.005.5009, SPN.824.005.5010, SPN.824.005.5026, SPN.824.005.5031, SPN.824.006.1858, SPN.824.006.1859, SPN.826.141.0020, SPN.824.005.4320, SPN.824.005.4325, SPN.826.141.0018, SPN.824.006.3294, SPN.826.142.0001.

1. Ms Overington has sworn that these 23 documents are unrelated to the field test.[84]  She also swears that none of the documents the subject of specific identification in the plaintiff’s Summons, which she defines as the ‘Summons Documents’ (115 in total) were ‘addressed to, or was sent by, or copied to, Mr Vazey pursuant to the Vazey field test engagement.’[85] 

   [84]Affidavit of Ruth Elizabeth Overington, 17 January 2013, [10], [11] and [13].

   [85]Affidavit of Ruth Elizabeth Overington, 17 January 2013, [16].

1. SPI therefore submitted that the plaintiff’s ‘waiver’ arguments have no application to those documents, but that it is open to the Court to inspect them for the purpose of determining that question.[86] 

   [86]Evidence Act s 133.

1. In relation to the remaining 92 documents, it was submitted by SPI that there was nothing to indicate that any of those documents had been provided to Mr Vazey pursuant to his engagement as an expert in this proceeding.[87]  I emphasise the last phrase as it is clear that some documents were provided to Mr Vazey, albeit not for the purpose of his task of preparing an independent expert report pursuant to his engagement by letter dated 18 November 2011. 

   [87]SPI written Outline of Submission dated 21 January 2013, [41] and [49].

1. Ms Overington swears the ‘First Field test design-Scope of Works’ (identified in paragraph 17 of her affidavit as SPN.824.006.0679 and a Category 4 document) was provided to Mr Vazey by Kingdom Pty Ltd, a company engaged by SPI to procure, install and log the output of, equipment that was proposed to be installed in accordance with the First Field test design- Scope of Works, had it proceeded (which it did not).  That document was given to Mr Vazey as Kingdom proposed that some equipment would be supplied by Mr Vazey’s employer, BMT WBM Pty Ltd.  Of the documents in Category 4, 18 are drafts of the First Field test design- Scope of Works, or of its component parts.[88] 

   [88]Affidavit of Ruth Elizabeth Overington, 17 January 2013, [20].

1. In addition, Ms Overington deposes, after the test spans had been constructed, Mr Vazey was given a copy of the construction design drawings, early drafts of which are in the Summons documents (three documents identified in paragraph 23 of Ms Overington’s affidavit) (‘Category 5’).  The final construction drawing is the drawing comprised in Appendix R to the First Vazey Report.[89]

   [89]SPI’s Outline of Submissions dated 21 January 2013, [60].

1. In relation to the documents in Category 4, concerning the First Field test design-Scope of Works, SPI submitted[90] that the evidence of Ms Overington lead to the result that:

(a)Prior to the Vazey field test engagement, SPI had prepared its own field test design in conjunction with Dr David Jones;

(b)On 14 September 2011, SPI engaged a company called Kingdom Pty Ltd to procure, install and log the output of, equipment that was proposed to be installed in accordance with the First field test design – a Scope of Works, had it proceeded;

(c)On 27 September 2011, Kingdom Pty Ltd proposed that the equipment would be supplied by both it and BMT WBM Pty Ltd.  The contact person at BMT WBM Pty Ltd was Mr Vazey;

(d)a copy of the First field test design – a Scope of Works was provided to Mr Vazey by Kingdom Pty Ltd in mid September 2011.  Drafts of this document, or its component parts, are in the documents identified in the Summons (and are listed in paragraph 20 of Ms Overington’s affidavit);

(e)The First field test design – a Scope of Works did not proceed; and

(f)On 18 November 2011, Mr Vazey was engaged to prepare his own field test design.  He was not asked to adopt, use or amend any previous design.

[90]SPI written Outline of Submission dated 21 January 2013, [57].

1. Further, SPI submits that Mr Vazey’s field test engagement did not extend to the selection of electricity distribution equipment to be used on the test spans and, as none of the documents in Category 5 (other than the final construction drawing in Appendix R to his First Report) were given to Mr Vazey pursuant to his engagement, they cannot have been used or relied on by Mr Vazey in the preparation of his report in a way that could be said to have influenced the content of the report.

1. SPI submitted that the matters identified by the plaintiff from Mr Vazey’s reports, and from the descriptions of the privileged documents, as related above in paragraph 57, involved no inconsistency with the maintenance of the privilege, as the test conductors were being installed beneath a live conductor, and required the use of specific electricity distribution equipment, thus the test conductors were supplied by SPI engineers and linesmen.  Mr Vazey’s brief was to design a field test to be installed on the three test conductors.[91]  By these statements, Mr Vazey is doing no more than transparently identifying in his reports that the supply of the test conductors themselves was conducted by SPI, and that certain equipment was supplied by SPI.  None of these statements indicates reliance by Mr Vazey on the contents of any of the documents identified in the plaintiff’s Summons.

   [91]First Vazey Report, above n 15, section 1 page 5; Appendix S. 

1. It is significant, SPI submitted, that the fact that the test conductors were installed by SPI or that the thimbles were supplied by SPI is not to the point.  Privilege attaches to particular communications or documents, not to facts or assumptions.[92]  It will often, if not always, be the case that behind the facts or assumptions provided to or identified by an expert will lie a body of privileged documents and communications, many if not all of which will not have been provided to or relied on by the expert.  The mere identification of those facts or assumptions in an expert report does not give rise to a waiver of privilege in any document that could theoretically be relevant to those facts or assumptions, whether or not the document has been provided to or relied on by the expert. 

   [92]Evidence Act2008 (Vic) ss 118, 119.

1. SPI further pointed out the consequence of the “basis rule”[93] that it falls upon a party seeking to rely upon the expert’s opinion at trial to prove any facts or assumptions on which the opinion is necessarily based.  But that does not mean that the party waives privilege in any document that might be relevant to a fact or assumption to be proved at trial.  It submitted that the identified certain facts and assumptions that underlie Mr Vazey’s test do not, and cannot, give rise to a blanket waiver of all documents that relate to those facts or assumptions.  The same goes for the Barter Report.

   [93]See, for example, Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305, per Heydon JA ( as he then was) at [6]–[10] and [85].

1. Thus there is, according to SPI, a clear divide between these documents (Category 4 or 5) and Mr Vazey’s work, or in other words, they are unrelated to his reports, and that there is no basis to infer that Mr Vazey later relied on the documents or that they influenced the content of his reports.  It was conceded by SPI, again, that it is open to the Court to inspect these documents for the purpose of determining this question.[94]

   [94]Evidence Act s 133.

1. Further, SPI submitted that the plaintiff had not established that any of the privileged documents in fact influenced or underpinned the testing undertaken by Mr Vazey.

1. Finally, SPI submitted that the plaintiff’s application is entirely premature.  In Cobram Laundry Services Pty Ltd v Murray Goulburn Co-operative Co Ltd[95] Warren J (as her Honour then was) stated that any waiver arises when a witness “is called” to give evidence.  If Mr Vazey were to be called to give evidence, on present estimates this would not occur until at least October 2013.  In addition SPI sought to distinguish Prince Removal & Storage Pty Ltd v Roads Corp[96] on the basis that documents sought in Prince Removal comprised the very documents provided to the experts setting out their instructions and facts. 

   [95][2000] VSC 353 at [58],

   [96][2012] VSC 245

Decision

Is there a Waiver?

1. The authorities to which I have referred, particularly the observations of Lindgren J in the Southcorp Case, and Young J in the AWB Case focus on the applicant establishing as a fact, or as a reasonable inference, that the privileged documents influenced or underpinned the expert’s report (or legal advice in the AWB Case).  As Lindgren J said in Southcorp: 

[o]rdinarily 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’.   In the AWB Case, Young J referred to associated material waiver as extending to documents or information which was taken into account in formulating, or otherwise underpinned or influenced, the legal advice that AWB chose to disclose.[97]

[97](2003) 46 ACSR 438; [2003] FCA 804, [21].

1. Ordinarily, for ‘influence’ to be shown there must be knowledge by the expert of the privileged documents or communications, otherwise there is no basis for them to influence the report.  If Mr Vazey was not given the documents in question (which appears to be the case with the exception of the First Field test design – Scope of Works referred to in paragraph 17 of Ms Overington’s affidavit and the construction design in Appendix R), it can only be by an extended meaning of ‘influence’ that the waiver could be achieved.  It is the extended meaning that is put on behalf of the plaintiff.  She contends that because the design and construction of the three test conductors used for the tests conducted by Mr Vazey would or may influence the outcome of the tests, that amounts to the influence and is the underpinning that gives rise to inconsistency, and because of the disclosure of Appendix R, attracts the associated materials basis for a waiver.

1. I have not found a case that is quite like this one.  However, as a matter of principle it seems to me that the design and construction of the test conductors, the infrastructure on which the tests are conducted, could provide an underpinning that, if kept from the plaintiff, is inconsistent with the reliance by SPI on the Vazey Reports.   That is because, at the least, the materials used in the test conductors, the tensions at which they are installed and possibly a range of other matters, could have influenced the outcome of the tests undertaken.

1. I therefore decided after the conclusion of argument that I would accept the invitation of SPI to inspect the disputed documents, a course adopted in a number of authorities.[98]   I did so because it seemed to me that the design and installation of the 3 test conductors is the infrastructure for the carrying out of the tests and, as I have said, could provide an underpinning for the carrying out of the tests by Mr Vazey, and for the interpretation of the results of those tests by the other experts.  This inference was available, it seemed to me, because the specifications for the 3 test conductors are presently known only by reference to what appears in Appendix R.  The descriptions of the documents pointed to by the plaintiff (see paragraph 57 above) raised the prospect that the privileged documents included other material that related to that infrastructure.

   [98]Integral Energy Australia v EDS (Australia) Pty Ltd [2006] NSWSC 971 (Einstein J); New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258, [51] (White J).

1. I made the decision to inspect in order to consider whether any of the documents did so underpin the expert reports or, conceivably, could be said to have influenced them.  In doing so I am conscious of the difficulty facing a non-expert in considering technical material and whether it underpinned or influenced the testing regime disclosed in the First Vazey Report, in particular.   As White J observed in New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd:

There are limits to which this is a useful exercise.  It would be impossible, as a matter of practice, and inappropriate, as a matter of principle, for a judge to approach that question [whether the documents influenced the content of the Report] in the same way as a party might wish to do so if preparing a cross-examination of the expert. [99]

[99][2007] NSWSC 258 at [51].

1. Before turning to the results of my inspection of the disputed documents, it is appropriate to deal with aspects of the plaintiff’s contentions that are resolved by the affidavit of Ms Overington.

Clearly no waiver – Categories 1, 2 and 3

1. It is clear from Ms Overington’s affidavit that the 23 documents set out in the table in paragraph 67 above cannot have any relation or connection to the field tests the subject of the expert reports of Mr Vazey, or Mr Barter, and cannot, accordingly, be the subject of any ‘waiver’ arising out of inconsistency between the claims for privilege and the filing and reliance on their expert reports, nor are these documents capable of being associated materials reasonably necessary to enable a proper understanding of the Vazey Reports under s 126 of the Evidence Act.  I did not understand Mr Keogh SC, who appeared for the plaintiff in the application, to contend otherwise.  My inspection of the documents did not indicate anything to gainsay this conclusion.

1. Moreover, the plaintiff’s contention that the description of the documents showed that SPI had done the work to design the test, including the design of the test conductors, before Mr Vazey was engaged, is met by the evidence of Ms Overington.  My inspection of the documents reveals that the greatest part of them concerned establishing the design for the tests, including the infrastructure, to be undertaken by Dr Jones, being tests that did not proceed.

Categories 4 and 5

1. In the upshot, there are 2 classes of documents identified in the summons which the plaintiff contends are the subject of waiver in consequence of the reliance by SPI on the Vazey Reports.  The first class comprises the documents relating to the First Field Test design - Scope of Works referred to in paragraphs 17–21 of Ms Overington’s affidavit (see paragraphs 70–74 above), being the Category 4 documents.  The second is the documents which go to the design and construction of the test infrastructure referred to in paragraph 23 of Ms Overington’s affidavit and which relate to Appendix R to the First Vazey Report, being the construction design drawing (called by Mr Keogh the ‘Baumgarten documents’).  These are the Category 5 documents and comprise three drafts of Appendix R.

1. The First Field Test design - Scope of Works is admitted to have been given to Mr Vazey before his engagement for an unrelated purpose.  There is nothing in the evidence, beyond the fact that he was given it, to indicate that it influenced or underpinned his Reports.   My inspection of it does not take the matter any further.  There is nothing in it that could, conceivably, have influenced his report or provided anything other than another person’s design of a testing regime.  More importantly, the document does not expose any detail information about the infrastructure for the carrying out of the tests.  Accordingly, I find that there is no waiver of privilege in respect of this document, or any of the drafts of it, arising out of the disclosure of the Vazey Reports. 

1. With respect to the Category 5 documents, comprising three drafts of Appendix R, there is no basis to conclude that Mr Vazey has ever seen the drafts.  My inspection of the documents and surrounding emails does not reveal that they were ever given to him.  The question is, therefore, whether because they are drafts of Appendix R, is the disclosure of the Appendix inconsistent with the maintenance of the privilege in the drafts, or are the drafts ‘reasonably necessary to enable a proper understanding’ of the Appendix?

1. So far as is revealed in this application, and in the Vazey Reports, Appendix R is the only document disclosed by SPI that contains the specifications for the construction and installation of the 3 test conductors.  It is the design and set up plan for the infrastructure which is the ‘underpinning’ for the tests, so far as presently revealed.  The cases dealing with drafts of expert reports[100] do not seem to me to have any application to the question whether a waiver arises in the case of the drafts of Appendix R.

   [100]For example, Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd(supra); New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258; Temwell

1. Given the fundamental nature of the common law and statutory right to legal professional and client legal privilege, a privilege that can be asserted outside the context of adversarial litigation,[101] there needs to be established a clear inconsistency between disclosure in question and the maintenance of the privilege. 

   [101]Baker v Campbell (1983) 153 CLR 52; Daniels Corp International Pty Ltd v ACCC (2002) 213 CLR 543 at [9]-[11] & [44]; AWB Ltd v Cole (No5) (2006) 155 FCR 30 at [140].

1. The plaintiff’s submission in relation to the infrastructure for the test, was that what was available was the plan document in Appendix R with no documents which are part of the process of the development of that plan and which underpin, influence and inform the development of that plan.  It was submitted that the infrastructure is so centrally and critically important to the opinions expressed by Mr Vazey, that the distinction drawn by SPI between the design and installation of the infrastructure and the design and carrying out of the testing, was artificial.

1. That submission begs the question, however.  The question is whether the process of the development of that plan does underpin, influence or inform the Vazey Reports.  My inspection of the three drafts of the Appendix R plan do reveal differences between the drafts and the final plan, but it is apparent that they reveal the addition in the final plan of greater specificity and changes in measurements, angles and the like.  They do not seem to me to add anything to an understanding of the infrastructure.  More to the point, there is no reason to suppose that they in anyway influence or underpin the Vazey Reports in a way that adds to the plan in Appendix R.

1. In my opinion, there is no inconsistency of the relevant kind in the maintenance of privilege over the drafts of the plan in Appendix R, nor is there any unfairness in that privilege being maintained.

Timing of any waiver

1. For completeness, if the matter goes further, I should express a conclusion as to the timing issue, that is whether the waiver, or loss, of privilege properly arises now or only when Mr Vazey is called as a witness.

1. In my view the authorities are strongly in favour of the conclusion that by deploying the Vazey Reports in accordance with the orders of J Forrest J, a course which SPI was not compelled to do - in that it had a choice whether to rely on the Reports or not – and then building on that use by its other experts, Barter and Potts, placing reliance on the Reports, both for their own expert reports and in the conclave of experts, any waiver of privilege occurs now and does not need to wait for Mr Vazey, or the other experts, to be called to give evidence.

1. The observations of McClellan CJ Thomas v New South Wales [2006] NSWSC 380 are apt to this case. SPI has disclosed the Vazey Reports in these proceedings for the purpose of obtaining whatever assistance it can from them in pursuit of its defence of the plaintiff’s claims. That is reliance on them at this stage.[102]  That disclosure waived privilege in the Reports themselves and documents which were used by Mr Vazey and which influenced the content of the reports.  Having sought an advantage, SPI is bound by the course taken and accordingly is amenable to waiver and production of such documents as may be found to have lost their privilege.

   [102]Prince Removal & Storage Pty Ltd v Roads Corp [2012] VSC 245 at [13].

1. Thus, if I had found a waiver, or loss, of privilege, that waiver would have occurred at the time of reliance on the reports of Mr Vazey, at the latest for the purpose of Conclave 3.   As it happens, of course, I have not found any such waiver of privilege in respect of any of the documents in question.

Conclusion

1. For these reasons, I conclude that privilege over the documents identified in the plaintiffs summons has not been lost by reason on reliance by SPI on the Vazey Reports, or indeed SPI’s other expert reports.

1. The summons will, therefore, be dismissed.  I will hear the parties as to the costs of the summons.

Schedule of parties

CAROL ANN MATTHEWS	Plaintiff
- and -
SPI ELECTRICITY PTY LTD (ACN 064 651 118)	First Defendant
(ACN 060 674 580)	Second Defendant
SECRETARY TO THE DEPARTMENT OF SUSTAINABILITY AND ENVIRONMENT	Third Defendant
COUNTRY FIRE AUTHORITY	Fourth Defendant
STATE OF VICTORIA	Fifth Defendant
- and -
SPI ELECTRICITY PTY LTD (ACN 064 651 118)	Plaintiff by Counterclaim
- and -
(ACN 060 674 580)	First Defendant to Counterclaim
SECRETARY TO THE DEPARTMENT OF SUSTAINABILITY AND ENVIRONMENT	Second Defendant to Counterclaim
COUNTRY FIRE AUTHORITY	Third Defendant to Counterclaim
STATE OF VICTORIA	Fourth Defendant to Counterclaim
CAROL ANN MATTHEWS	Fifth Defendant to Counterclaim

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