Mickeyblu Australia Pty Ltd v Kenyon Family Pty Ltd t/as Riviera WA as Trustee for the Kenyon Family Trust
[2023] WADC 141
•22 NOVEMBER 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: MICKEYBLU AUSTRALIA PTY LTD -v- KENYON FAMILY PTY LTD t/as RIVIERA WA as Trustee for the KENYON FAMILY TRUST [2023] WADC 141
CORAM: PALMER DCJ
HEARD: 15 NOVEMBER 2023
DELIVERED : 22 NOVEMBER 2023
FILE NO/S: CIV 3340 of 2021
BETWEEN: MICKEYBLU AUSTRALIA PTY LTD
Plaintiff
AND
KENYON FAMILY PTY LTD t/as RIVIERA WA as Trustee for the KENYON FAMILY TRUST
First Defendant
TREVOR PAUL KENYON
Second Defendant
DALE WILLIAM GAVENLOCK
Third Defendant
KRISTY MARIE GAVENLOCK
Fourth Defendant
Catchwords:
Objection to inspection of documents produced pursuant to a subpoena - Claim for legal professional privilege
Legislation:
Nil
Result:
Orders made regarding inspection of documents
Representation:
Counsel:
| Plaintiff | : | Ms Y Zhang |
| First Defendant | : | Mr C D Clifton |
| Second Defendant | : | Mr C D Clifton |
| Third Defendant | : | Mr C D Clifton |
| Fourth Defendant | : | Mr C D Clifton |
Solicitors:
| Plaintiff | : | Vogt Legal |
| First Defendant | : | Clifton Legal Group |
| Second Defendant | : | Clifton Legal Group |
| Third Defendant | : | Clifton Legal Group |
| Fourth Defendant | : | Clifton Legal Group |
Case(s) referred to in decision(s):
Allen Tod Architecture Ltd (in Liquidation) v Capita Property and Infrastructure Ltd (Previously known as Capita Symons Ltd) [2016] BLR 592
Australian Securities & Investments Commission v Southcorp Ltd [2003] FCA 804; (2003) 46 ACSR 438
Beck v Ministry of Defence [2005] 1 WLR 2206
BMG (Mansfield) Ltd v Galliford Try Construction Ltd [2013] EWHC 3183 (TCC)
Brookfield v Yevad Products Pty Ltd [2006] FCA 1180
Coyne v Morgan [2016] BLR 491
New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258
Rogerson (t/a Cottesmore Hotel, Golf and Country Club) v Eco Top Heat & Power Ltd [2021] EWHC 1807 (TCC)
Vasiliou v Hajigeorgiou [2005] 1 WLR 2195
Vilca v Xstrata Ltd [2017] BLR 460
PALMER DCJ:
Introduction
By way of a letter dated 6 September 2023, the defendants object to the plaintiff being entitled to inspect documents that have been produced to the District Court pursuant to a subpoena issued by the plaintiff to Mr Daniel Christopher Simms.
Mr Simms is a consulting mechanical engineer who inspected a gooseneck trailer the subject of this litigation on 20 January 2022 at the request of the defendants. The defendants have never filed or served a report prepared by Mr Simms, however. Instead, they have filed and served a report prepared by another expert, Mr Rodney Styles.
The documents sought by the subpoena are as follows:
(a)any report(s) or opinions (draft and final), prepared by Mr Simms in relation to the trailer he inspected;
(b)any document relied upon by him to prepare that report; and
(c)any documents between Mr Simms and any of the defendants in relation to the trailer.
Mr Simms has produced the documents the subject of the subpoena to the court in a sealed envelope. The defendants contend that the plaintiff should not be permitted to inspect those documents because they are subject to legal professional privilege.
The defendants' objection was listed for hearing before me on 15 November 2023. At that hearing the parties made submissions about the scope of legal professional privilege in relation to draft expert reports and documents relied upon to prepare such reports. At the time, I indicated to the parties that I considered it necessary for me to inspect the documents produced to allow me to determine the claim for privilege. In light of the parties' submissions, I also made some observations about the principles that I proposed to apply when I reviewed the documents.
As these proceedings are set down for a trial beginning on 4 December 2023, I indicated that I would review the documents and give judgment by no later than 24 November 2023. This is that judgment.
Principles regarding legal professional privilege and draft expert reports
Both parties referred to and relied upon a summary of the relevant legal principles regarding legal professional privilege and expert reports given by Lindgren J in Australian Securities & Investments Commission v Southcorp Ltd.[1] In that case, Lindgren J summarised the relevant principles as follows: [2]
(a)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;
(b)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 privilege;
(c)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;
(d)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 [7(a)] and [7(b)] 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;
(e)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; and
(f)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.
[1] Australian Securities & Investments Commission v Southcorp Ltd [2003] FCA 804; (2003) 46 ACSR 438 [21].
[2] Australian Securities & Investments Commission v Southcorp Ltd [21].
The defendants submitted that where a report is brought into existence for the purpose of communication to a solicitor for the purposes of the litigation, the privilege can attach to the copy in the hands of the expert. They referred to the judgment of Mansfield J in Brookfield v Yevad Products Pty Ltd,[3] where His Honour observed:[4]
I do not think that Lindgren J's principle (3) in Southcorp should be read as suggesting that a draft report provided by an expert to solicitors for the purpose of litigation is not itself privileged. It operates precisely as a communication for the purposes for which privilege exists. That says nothing about the status of the expert's copy of such a document. However, if a draft of a report (as distinct from working notes and field notes and other documents used by an expert to form an opinion) encompassed within principle (3) is not in fact communicated to solicitors, the draft of that report may nevertheless have been prepared for the purpose of recording the views of the proposed expert and intended by the expert as a means of communication to a party's legal adviser. Provided that document was brought into existence for such a purpose, that is to record information to be submitted to a solicitor for the purpose of litigation, it may be privileged even in the hands of the expert. That is an issue as to characterisation, a point recognised both by Lindgren J in Southcorp and by Barrett J in Ryder upon a careful reading of their Honour's respective remarks. Some drafts may not have that character, so in some cases evidence may be necessary as to the characterisation of the particular document held by the expert. In Interchase Corporation Limited (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 at 162, Thomas J pointed out the reason why neither principle nor policy should protect from inspection documents which an expert generates from the information which the expert collects in order to form an opinion. His Honour did not indicate that the formation of the opinion itself would not itself be privileged, as he did not need to. Pincus JA in that case at 148-149 suggested that the formation of the opinion of the expert itself is not privileged, but a report on that information communicated to the party's legal adviser is privileged.
[3] Brookfield v Yevad Products Pty Ltd [2006] FCA 1180.
[4] Brookfield v Yevad Products Pty Ltd [15].
The reference to Lindgren J's principle (3) is a reference to the principle at [7(c)] above. With respect, I agree with Mansfield J's observations.
In another case referred to by the defendants, New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd,[5] White J observed that it will be a question of fact, to which the expert may be required to put his or her oath, as to whether any draft reports prepared and kept by him or her, and working notes prepared by their staff, were brought into existence for the dominant purpose of the plaintiffs being provided with professional legal services. With respect, I also agree with these observations.
[5] New Cap Reinsurance Corporation Ltd (In Liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 [30].
Imposing a condition on the grant of leave to adduce expert evidence
The plaintiff submitted that even if the court were to find that the documents sought are privileged, where there has been a change in experts, the court should order that the defendants waive their privilege in relation to the original expert, as a condition of granting permission to adduce evidence from a different expert. In this regard, the plaintiff relied upon a decision of the Technology and Construction division of the High Court of England and Wales in Rogerson (t/a Cottesmore Hotel, Golf and Country Club) v Eco Top Heat &Power Ltd.[6] That decision involved the application of a principle developed by the Court of Appeal in England and Wales following its 2005 decision in the case of Beck v Ministry of Defence,[7] where such a condition was imposed to discourage 'expert shopping'.
[6] Rogerson (t/a Cottesmore Hotel, Golf and Country Club) v Eco Top Heat &Power Ltd [2021] EWHC 1807 (TCC).
[7] Beck v Ministry of Defence [2005] 1 WLR 2206 (Beck).
The Court of Appeal's decision in Beck appears to have been followed by a number of cases in England and Wales.[8] I was not referred to any authority applying the principle in Beck in Australia, however.
[8] Vasiliou v Hajigeorgiou [2005] 1 WLR 2195; BMG (Mansfield) Ltd v Galliford Try Construction Ltd [2013] EWHC 3183 (TCC); Coyne v Morgan [2016] BLR 491 and Allen Tod Architecture Ltd (in Liquidation) v Capita Property and Infrastructure Ltd (Previously known as Capita Symons Ltd) [2016] BLR 592.
The principle developed in Beck was developed by a Court of Appeal in a different jurisdiction under a different procedural framework. I have reservations about the appropriateness of a judge in the District Court developing what appears to me to be a novel approach (at least in this jurisdiction) to address 'expert shopping'.
In any event, the defendants already have leave to rely on Mr Styles's report. On 19 April 2022 Deputy Registrar Hewitt granted the parties leave to adduce expert evidence at trial without limiting that grant of leave to the evidence of any particular expert. Therefore, even if the principle in Beck could have application in this jurisdiction, it is too late to make the grant of leave conditional.[9] It is therefore unnecessary for me to consider whether there has been expert shopping as alleged.
[9] Vilca v Xstrata Ltd [2017] BLR 460 [25] (Stuart-Smith J).
Determination of the claim for privilege
I have reviewed the documents over which privilege has been claimed. Those documents may be divided into four categories:
(a)letter of instruction from the defendants' solicitors to Mr Simms including covering email and various enclosures (Expert Brief);
(b)a draft report;
(c)a bundle of photographs; and
(d)emails between Mr Simms and Trevor and Carol Kenyon with information regarding steel used in the gooseneck trailer.
The Expert Brief is a confidential communication between the defendants' solicitors and Mr Simms. As such that communication is subject to legal professional privilege.
The draft report is marked 'draft for discussion'. The defendants have also filed an affidavit of Mr Simms in which he deposes that he submitted his draft report to the defendants' solicitors 'for the purposes of discussion' and spoke to the defendants' solicitors about the draft report shortly after he sent it.
It seems to me that the draft report was drafted so that Mr Simms might provide it to the defendants' solicitors to discuss it with them. It was therefore prepared for the purposes of a confidential communication between the defendants' solicitors and Mr Simms and is also subject to legal professional privilege.
The plaintiff filed an affidavit from Shona Wearne who witnessed Mr Simms's inspection of the gooseneck trailer. That affidavit attached a note made by Ms Wearne on 22 January 2022[10] in which Ms Wearne records witnessing Mr Simms taking photographs.
[10] Attachment "SW6". The note is dated 22 January 2021, but this appears to be a typographical error as it refers to an inspection conducted on 20 January 2022.
I infer that the photographs produced under the subpoena are the photographs that Ms Wearne refers to Mr Simms taking. It seems to me that those photographs are not in the nature of, and would not expose, communications and are therefore not subject to legal professional privilege.
Finally, it seems to me that the emails between Mr Simms and Trevor and Carol Kenyon were not confidential communications between the defendants' solicitors and Mr Simms. It seems to me that those emails are also not subject to legal professional privilege.
Therefore, the plaintiff should have leave to inspect the bundle of photographs and the emails between Mr Simms and Trevor and Carol Kenyon but no other documents.
My preliminary view is that as both parties have been partly successful, the costs of the challenge to the subpoena should be in the cause. I will hear from the parties on the question of costs if they wish, otherwise I will order that costs be in the cause.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
FN
Associate to Judge Palmer
22 NOVEMBER 2023
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: MICKEYBLU AUSTRALIA PTY LTD -v- KENYON FAMILY PTY LTD t/as RIVIERA WA as Trustee for the KENYON FAMILY TRUST [2023] WADC 141 (S)
CORAM: PALMER DCJ
HEARD: ON THE PAPERS, WRITTEN SUBMISSIONS 30 NOVEMBER 2023
DELIVERED : 1 DECEMBER 2023
FILE NO/S: CIV 3340 of 2021
BETWEEN: MICKEYBLU AUSTRALIA PTY LTD
Plaintiff
AND
KENYON FAMILY PTY LTD t/as RIVIERA WA as Trustee for the KENYON FAMILY TRUST
First Defendant
TREVOR PAUL KENYON
Second Defendant
DALE WILLIAM GAVENLOCK
Third Defendant
KRISTY MARIE GAVENLOCK
Fourth Defendant
Catchwords:
Costs of objection to subpoena
Legislation:
Nil
Result:
Plaintiff ordered to pay defendants' costs
Representation:
Counsel:
| Plaintiff | : | Ms Y Zhang |
| First Defendant | : | Mr C D Clifton |
| Second Defendant | : | Mr C D Clifton |
| Third Defendant | : | Mr C D Clifton |
| Fourth Defendant | : | Mr C D Clifton |
Solicitors:
| Plaintiff | : | Vogt Legal |
| First Defendant | : | Clifton Legal Group |
| Second Defendant | : | Clifton Legal Group |
| Third Defendant | : | Clifton Legal Group |
| Fourth Defendant | : | Clifton Legal Group |
Case(s) referred to in decision(s):
Mickeyblu Australia Pty Ltd v Kenyon Family Pty Ltd t/as Riviera WA as Trustee for the Kenyon Family Trust [2023] WADC 141
PALMER DCJ:
On 22 November 2023, I made orders regarding the inspection of documents the subject of a subpoena over which legal professional privilege was claimed: Mickeyblu Australia Pty Ltd v Kenyon Family Pty Ltd t/as Riviera WA as Trustee for the Kenyon Family Trust [2023] WADC 141 (Mickeyblu [No 1]).
At the time, I indicated that my preliminary view was that as both parties had been partly successful, the costs of the challenge to the subpoena should be in the cause. I indicated, however, that I would hear from the parties on the question of costs if they indicated they wished to be heard.
On 24 November 2023, the solicitors for the plaintiff indicated that they did wish to be heard on the question of costs. I then directed the parties to file written submissions limited to five pages by 30 November 2023 and indicated that I would determine the question of costs on the papers.
On 30 November 2023, both parties filed short written submissions.
The plaintiff submitted that the court should order the defendants to pay half of the plaintiff's costs because:
(a)the defendants' claim for privilege was indiscriminate. It was submitted that the defendants had access to the documents the subject of the subpoena and should have properly assessed any privilege claims before making them;
(b)the onus in respect of any claim for legal professional privilege lay with the defendants as the party asserting the privilege. It was submitted that the defendants failed to sustain their claim for privilege in respect of the categories of documents for which leave to inspect was granted and the plaintiff had been successful in respect of the majority of the documents;
(c)the plaintiff had been put to the cost of defending the objection to the subpoena;
(d)costs will usually follow the event; and
(e)it is appropriate to account for the defendants' success in respect of the claims of legal professional privilege by reducing the costs that the plaintiff might otherwise be entitled to recover.
The defendants submitted that:
(a)the plaintiff's submissions focused on whether Mr Simms's draft report was privileged;
(b)English authority was relied on in support of that proposition and that proposition was rejected by the court as being a novel approach;
(c)leave to inspect was only granted over two categories of documents;
(d)the costs will normally follow the event; and
(e)there is no basis for saying that the plaintiff should have half of its costs for being successful in part without also allowing the defendants half of their costs for being successful in part.
In Mickeyblu [No 1] I indicated that my preliminary view was to order that costs be in the cause because both parties had been partly successful. Having reflected on the matter and considered the costs submissions made, I am persuaded that my initial analysis may have been overly generous to the plaintiff.
The heart of the dispute before me concerned whether or not Mr Simms's draft report was privileged. While the subpoena also sought the production of other documents, when those other documents are considered in the context of the matters in issue in this litigation, the looming trial and the argument before me, they are of peripheral relevance.
Thus, which party was successful is best considered not by counting the number of categories of documents over which privilege was sustained but instead by considering whether Mr Simms's draft report was privileged. As I determined that the plaintiff should not have access to the draft report because it was privileged, it was the defendants who were the substantially successful party.
I also note that the plaintiff's submissions on the subpoena contended that the defendants should be sanctioned for 'expert shopping' and that they had elected to brief another expert because the draft report was unfavourable. As the defendants submitted, this submission both highlighted the centrality of the draft expert report to the dispute and was ultimately unsuccessful.
I do not consider that the plaintiff's assertion that the defendants had access to the documents the subject of the subpoena but still made an indiscriminate privilege claim is established by the evidence before me. I accept that the defendants' solicitor would have had access to his communications with Mr Simms but privilege was sustained over those communications. The affidavits filed do not establish that the defendants were permitted to inspect all of the documents the subject of the subpoena.
As both parties' costs submissions noted, the ordinary rule is that costs should follow the event. I am now inclined to proceed on the basis of that rule.
As I consider that the defendants were in substance the successful party, I will order that the plaintiff pay the defendants' costs of the objection to the subpoena. The plaintiff should also pay the defendants' costs of preparing their submissions dated 30 November 2023.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
FN
Associate to Judge Palmer
1 DECEMBER 2023
0