MGICA (1992) Ltd v Kenny & Good Pty Ltd (No 2)

[1996] FCA 45

CATCHWORDS

EVIDENCE - legal professional privilege attaching to draft report prepared by expert witness for party's solicitors to be used by them as basis for preparing his affidavit - party reads affidavit of expert who is cross examined - whether privilege lost where expert has read through his draft report to refresh his memory for purpose of giving evidence.

Evidence Act 1995 (Cth), s 122.

Attorney General for the Northern Territory v Maurice (1966) 161 CLR 475.
Trade Practices Commission v TNT Management Pty Limited (1984) 56 ALR 647 (FCA/Franki J).
Mancorp Pty Limited v Baulderstone Pty Limited (1991) 57 SASR 87 (Debelle J).
Crawford v Bailey unreported, Supreme Court of New South Wales, Enderby J, 26 October 1990.
Instant Colour Pty Limited v Canon Australia Pty Limited, unreported, Federal Court of Australia, RD Nicholson J, 30 October 1995.

MGICA (1992) LIMITED v KENNY & GOOD PTY LIMITED & ANOR (No 2)

No NG 420 of 1994

Lindgren J
Sydney
8 February 1996

IN THE FEDERAL COURT OF AUSTRALIA    )
NEW SOUTH WALES DISTRICT REGISTRY    )    No NG 420 of 1994
GENERAL DIVISION  )

BETWEEN:

MGICA (1992) LIMITED (Formerly MGICA LIMITED) (ACN No 000 488 362)
  Applicant

AND:

KENNY & GOOD PTY LIMITED
  First Respondent

AND:

LANCE KENNY
  Second Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:8 February 1996

REASONS FOR JUDGMENT (No 2)
        (Ruling on loss of legal professional privilege)

The respondents have read an affidavit sworn 13 December 1994 by an expert witness, Terry Ponton, a professional valuer.  That affidavit has been read by the respondents in support of their valuation dated 19 April 1990 of a property at 10 Campbell Street Hunters Hill ("the Property").  That valuation is the subject of the applicant's attack in the proceedings.

On 6 December 1994, Mr Ponton sent a report which he had prepared marked "DRAFT" and an identical report not so marked (nothing has been made of the distinction in argument) to the respondents' solicitors, Colin Biggers and Paisley.  He provided the documents
to them in performance of his retainer by them and on the understanding that they would use the documents in the preparation of an affidavit to be sworn by him in the proceedings.  This is true of both the document marked "DRAFT" and the one not so marked.  It will be convenient to refer to the documents as Mr Ponton's "draft reports", although in substance they are one document.

Yesterday, Mr Steele QC, for the respondents, called for production of the draft reports for inspection by him without penalty.  The call followed the giving of the following evidence by Mr Ponton:

"Q.Have you had access to that [the draft reports] for the purpose of refreshing your memory?

A.Yes."

Although the respondents did not concede that legal professional privilege attached to the draft reports, argument proceeded on the question whether, if it did, that evidence of Mr Ponton's showed that the privilege had been lost.  The cross examination of Mr Ponton was able to proceed yesterday without determination of that question.

The issue has been explored by reference to authorities over night.  On the voir dire this morning, Ms Chapman, a senior associate with Colin Biggers & Paisley, gave evidence that she had retained Mr Ponton with a view to his swearing an affidavit
in the interests of the respondents.  She said that she asked him to inspect documents of the respondents which were in her possession concerning the respondents' valuation, to inspect the Property and to report back to her.  She said that the draft reports were received by her from Mr Ponton as a result of those instructions and were used by her in the preparation of, and as the foundation for, his affidavit.

Further, on the voir dire Mr Ponton himself said this:

"Your Honour, I would have read the document through in conjunction with all the other documents I had in preparation to come into court the day before I appeared so that would have been the extent of refreshing my memory."

To my mind this makes clear one matter which was less than clear yesterday, namely, that Mr Ponton read through the whole of the draft reports for the purpose of refreshing his memory.

This morning I have been taken to several authorities on the loss of legal professional privilege arising from refreshment of memory by the reading of the privileged documents.  In particular, the respondents have referred me to Attorney General for the Northern Territory v Maurice (1966) 161 CLR 475; Trade Practices Commission v TNT Management Pty Limited (1984) 56 ALR 647 (FCA/Franki J) at 687-689; Mancorp Pty Limited v Baulderstone Pty Limited (1991) 57 SASR 87 (Debelle J) at 94-95; Crawford v Bailey unreported, Supreme Court of New South Wales, Enderby J, 26 October 1990, at 9; and Instant Colour Pty Limited v Canon
Australia Pty Limited, unreported, Federal Court of Australia, RD Nicholson J, 30 October 1995, at 2-6.

In my view, the authorities show that the interests of fairness prima facie require that legal professional privilege be treated as lost where a witness, including an expert witness, has refreshed his or her memory for the purpose of giving evidence by reading a document to which the privilege attaches, and is called to give evidence by the party benefited by the privilege. The reason is that an important aspect of the fair treatment of the interests of the other party is that that party have adequate opportunity to test the witness's evidence by comparing with the document the evidence which the witness gives.

Mr Davies of counsel for the respondents submits that there is a residual discretion in the Court, and refers, for example, to the passage in the judgment of Debelle J in the Mancorp case to which I referred.  He says, correctly, that the principle underlying the loss of privilege, at least in a case such as this where there is no intentional waiver, is one of fairness; cf Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475.

The expert has given evidence that he used his draft report by reading it through, admittedly with other documents, for the purpose of refreshing his memory in preparing to give oral evidence.  Mr Davies has put, in his usual persuasive manner, that this evidence is consistent with a minimal refreshment of
memory from the draft reports.  This is true, but it is also possible that the witness relied heavily on them.  The witness's evidence does not distinguish in this respect between the draft reports and the other documents which he read.  It is reasonable to think that a convenient, and perhaps the most obvious, direct and effective means of refreshment of memory of an expert witness would be for him to read a report in the form in which he had drafted it and in which he had stated his evidence and opinion on an issue, rather than, for example, to re-read documents which he had read prior to the writing of that draft report. 

In my opinion, on the evidence, fairness to the applicant requires, rather than denies, that I should hold that the privilege has been lost in accordance with the prima facie position to which I referred.

Before departing from the point I should refer to two other matters. Submissions addressed s 122 of the Evidence Act 1995 (Cth), and in particular sub-s 122 (6) which is to the following effect:

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

It is put by Mr Davies that the language "try to revive the witness's memory" suggests a higher hurdle than that posed by the general law formulation of "refreshment" of memory.

I am not persuaded, however, that there is any difference between the two tests.  The Australian Law Reform Commission's "Report No 26 (Interim) Evidence" states (vol 1, para 614) that the term "refreshing memory" is not accurate because:

"The use of materials to assist a witness will either assist in recall and thus revive a memory or introduce new matter and thus create a new memory." (see also para 286)

In this way the Report recognises a difference between what is intended to be referred to by the "refreshing" or "reviving" memory on the one hand, and the creation of a "new memory" on the other hand.  The Commission considered that the word "revive" was more apt than "refresh", to denote the stimulation or sharpening of existing memory.  In my view it is at least questionable whether the Commission was correct, but what matters for present purposes is that the Commission chose "revive", not to signify something different from "refresh", but in an attempt to indicate more accurately that to which "refresh" was intended to refer.

In the result, I do not accept the submission that in order to show that Mr Ponton used the draft reports to "try to revive" his memory within the meaning of Evidence Act 1995 (Cth) sub-s 122 (6), the applicants were not required to satisfy a stricter test than the general law test of "refreshment" of memory.

Finally, Mr R W White of counsel, who made submissions on the present issue for the applicant, submitted that privilege should be held to have been lost on a further ground.  This was that Mr Ponton had used the draft reports in the course of the preparation of his affidavit which has been read by the respondents.  In view of my decision in favour of the applicant on the first ground advanced by it, I do not find it necessary to deal with this alternative submission. 

In the result I hold that any legal professional privilege attached to the draft reports has been lost.  It has been agreed that in these circumstances the draft reports are to be produced to the applicant without penalty.  I so direct.

I certify that this and the preceding 6 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:February 1996

Heard:         8 February 1996

Place:         Sydney

Decision:      8 February 1996

Appearances:    Mr J J Steele QC with Mr R W White of counsel instructed by Hickson Lakeman & Holcombe appeared for the applicant.

Mr D Davies of counsel instructed by Colin Biggers & Paisley appeared for the respondents.