Singapore Airlines v Sydney Airports Corporation - [2004] NSWSC 380

No judgment structure available for this case.

CITATION: Singapore Airlines v Sydney Airports Corporation & Anor [2004] NSWSC 380

HEARING DATE(S): 27 April 2004

JUDGMENT DATE:
7 May 2004

JUDGMENT OF: McDougall J at 1

DECISION: See paras [74] to [77] of judgment

CATCHWORDS: EVIDENCE - discovery - where corporate counsel commissioned expert report into accident soon after accident occurred - claim for discovery of expert report - whether report privileged - s 119 Evidence Act 1995 - Pt 23 r 1(c) Supreme Court Rules - whether dominant purpose and existence of anticipated proceedings to be assessed at time report commissioned or when report brought into existence - where report had multiple purposes - whether there was a dominant purpose -where report commissioned by corporate counsel on behalf of company within the scope of employee's authority - whether relevant dominant purpose is that of corporate counsel or company - distinction between employee's purpose in commissioning report and company's purpose - whether at time report was commissioned there was an anticipated legal proceeding - if privilege existed, whether subsequently lost - ss 122 and 123 Evidence Act 1995 - whether common law of waiver relevant - whether privilege lost by voluntary disclosure - distinction between disclosure of substance and effect relating to an expert report - whether disclosure of substance

LEGISLATION CITED: Supreme Court Rules
Evidence Act 1995 (NSW)

CASES CITED: Baker v Campbell (1983) 153 CLR 52
Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332
Galway v Constable [2001] QSC 180
Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49
Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557
Sparnon v Apand Pty Ltd (1996) 68 FCR 322
Mann v Carnell (1999) 201 CLR 1
Adelaide Steamship Company Ltd v Spalvins (1998) 81 FCR 360
Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152
Garratt's Ltd v Thanga Thangathurai [2002] NSWSC 39
Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925
Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501
Sovereign v Bevillesta [2000] NSWSC 521
Ampolex Limited v Perpetual Trustee Company (Canberra) Ltd (1996) 40 NSWLR 12
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705

PARTIES :
Singapore Airlines Limited (Plaintiff)
Sydney Airports Corporation Limited (First Defendant)
Bovis Lend Lease Pty Limited (Second Defendant)
Sydney Airports Corporation Limited (First Cross-Claimant)
Qantas Airways Limited (First Cross-Defendant)
Sydney Airports Corporation Limited (Second Cross-Claimant)
Bovis Lend Lease Pty Limited (Second Cross-Claimant)
Bovis Lend Lease Pty Limited (Cross-Claimant to the Third Cross-Claim)
Sydney Airports Corporation Limited (First Cross Defendant to the Third Cross-Claim)
Airport Equipment Limited (Third Cross-Defendant to Third Cross-Claim)

FILE NUMBER(S): SC 50006/03

COUNSEL: G Curtin (for Singapore Airlines Limited)
N A Nicholls (for SACL)
M J Darke (for Qantas)

SOLICITORS: Riley Gray-Spencer (for Singapore Airlines)
Sparke Helmore (for SACL)
Ebsworth & Ebsworth (for Qantas)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

7 May 2004

50006/03 SINGAPORE AIRLINES LTD v SYDNEY AIRPORTS
CORPORATION LTD & ANOR

JUDGMENT (On application for discovery)

HIS HONOUR:

Introduction

1 On 1 February 2001, there was an incident at Sydney Airport when an aerobridge at Bay 61 (“the aerobridge”) came into contact with a door of a Boeing 747-400 aircraft owned and operated by the plaintiff (“Singapore Airlines”). Singapore Airlines claims to have suffered substantial loss, including damage to the aircraft, loss of revenue and costs of accommodation, transportation and other expenses incurred in relation to passengers who were delayed.

2 Sydney Airport is owned by the first defendant (“SACL”). The aerobridge was constructed by the second defendant (“BLL”). At the time of the incident, it is alleged that the aerobridge was being operated by employees of the cross-defendant to the first cross-claim (“Qantas”).

3 On 2 February 2001, and shortly after the incident occurred, SACL commissioned Mr Peter Reardon of Peter Reardon Enterprises Pty Ltd to prepare a report. A report (“the Reardon report”), dated 23 March 2001, was prepared. Mr Reardon was assisted, in the preparation of the Reardon report, by Mr John Guselli of JCG Aviation Services.

4 Singapore Airlines and Qantas seek orders for verified discovery of the Reardon report and what I will call, for convenience, ancillary documents (there is some difference in the description of the ancillary documents sought, on the one hand, by Singapore and, on the other, by Qantas).

5 SACL says that the Reardon report is privileged. It relies on Pt 23 r 1(c) of the Supreme Court Rules, in conjunction with s 119 of the Evidence Act 1995.

Commissioning the report: Ms Wilder’s evidence

6 Mr Reardon (the corporate veil is, for present purposes, irrelevant) was commissioned by Ms Jane Wilder (then Wallace), a senior corporate solicitor employed by SACL at the time of the incident. Ms Wilder says that she was informed of the incident by Mr Peter Adams, the occupational health and safety manager of SACL, on the morning of 1 February 2001. She then spoke to Mr Peter Lawrence, head of terminal operations, and Mr Greg Russell, director of aviation. She was told that a meeting was scheduled with parties (including Qantas and Singapore Airlines) “to discuss the incident, how it happened and what further action was required”.

7 Ms Wilder says that when she was informed of the incident, she “formed the view that litigation was likely”. She thought it was likely that Singapore Airlines would claim against SACL and perhaps other parties involved; and that if such a claim were made, SACL would cross-claim against Qantas and BLL.

8 Ms Wilder therefore says, in paragraph 9 of her affidavit sworn 16 April 2004:

“In contemplation that a claim would be made for damages against SACL by [Singapore Airlines] as a result of this incident, and in order to be in a position to advise SACL in respect to its potential liability to [Singapore Airlines] and any rights it may have against other parties, I decided that an expert report was required and that it should be commissioned immediately. I formed the view that the expert engaged to prepare the report would also be used to give evidence on behalf of SACL in any future proceedings.”

9 Accordingly, Ms Wilder commissioned Mr Reardon. This was done by letter dated 1 February 2001 but sent by facsimile transmission (as a transmission report shows) at 1.05 pm on 2 February 2001. The letter said, relevantly:

(SACL)

PURPOSE OF REPORT

The report is commissioned in contemplation of litigation and anticipated legal liability on SACL’s behalf. Its contents are to be kept strictly confidential and its circulation is to be limited.

…

SCOPE OF REPORT

Your report should address the following:-

1. Establish all relevant circumstances (time, date, equipment owners and operators, prevailing conditions etc) leading to the incident. This should include the location and time of the incident, personnel involved and any injuries sustained;

2. Identify items of relevant equipment and their condition prior to the incident;

3. Identify relevant witnesses and where necessary, take statements from each witness;

4. Identify relevant references or established procedures that influence the operation of the relevant aerobridge at Bay 61;

5. Estimate the damage sustained by equipment involved in the incident. Unless your expertise allows you to comment, you are not required to comment on the cost of repairing such damage;

6. Identify any breach of operational regulations or procedures;

7. Identify the cause(s) of the incident and any contributing factors;

8. Make recommendations for eliminating or reducing the instance of similar incidents in the future; and

9. Comment and make recommendations if necessary on the response to the incident and any improvements that could be made in future.

…

Due dates for report

1. A draft interim report is to be provided to the writer and copied to Peter Lawrence by 1800 hr 10 February 2001.

2. The final report is to be provided to the writer and copied to Peter Lawrence by 1800 hr on 17 February 2001.

Please note that if the final report cannot be presented due to outstanding evidence or witness reports, you should contact the writer for further directions. Should any witness be unwilling to provide a statement this fact should be included in the report.”

10 At 5.04 pm on 2 February 2001 (according to a facsimile transmission note), SACL received a written claim from Singapore Airlines for reimbursement of costs relating to the incident. Singapore Airlines made a further claim for reimbursement by letter dated 16 February 2001.

11 Ms Wilder said in cross-examination that there was a body known as the Airline Operations Committee (“AOC”) at Sydney Airport at the relevant time. The AOC included representatives of airlines. Ms Wilder believed that it had the power to direct that the aerobridge not be used. She “supposed” that it would be necessary to satisfy the AOC that the aerobridge was safe before the aerobridge could be put back into practice.

12 Ms Wilder said that she thought that litigation was “highly likely” (as opposed to “possible”). Her reasons were that the events spoke for themselves in that a malfunctioning aerobridge had sheered the door off an aircraft. She did not know whether this was as a result of mechanical error or operating error. As to the former: the aerobridge had been rebuilt by BLL (and was still under warranty). She said that “SACL is the operator of the whole airport and the party that subcontracted the construction of the aerobridges; I viewed that as being a significant potential liability for SACL”. As to the latter: the aerobridge was being operated by Qantas personnel at the time. Ms Wilder said further that she “operated in a litigious environment”.

13 The following further points emerged from Ms Wilder’s evidence:

(1) She was seeking Mr Reardon’s advice because she did not know what had caused the accident.

(2) She had no factual information or expert opinion that might have “pointed the finger” at SACL.

(3) Prior incidents had been investigated by SACL employees, but “there was something different about this incident”.

(4) Mr Lawrence identified the need for a report to satisfy the AOC that the aerobridge (after repairs) was in a fit state to be put back into service.

(5) Messrs Reardon and Guselli made a “presentation” to the members of the AOC: they met them and talked about the incident.

(6) Some at least of Mr Reardon’s recommendations in the report were communicated to the AOC to allay their concerns.

(7) Part of the purpose of engaging Mr Reardon was to make SACL’s response to the concerns of the AOC “of greater weight”, or “imbue the recommendations with a higher level of trust than if they had come from a SACL employee”.

(8) Accordingly, there was a disclosure of at least some parts of the Reardon report to members of the AOC, although Ms Wilder could not recall the extent of the overlap between the report overall and what was put to the AOC by Messrs Reardon and Guselli.

(9) The Reardon report was copied to Mr Lawrence because he dealt with airlines and the AOC, and because Ms Wilder had asked Mr Lawrence to conduct his own investigation into the causes of the incident, what SACL knew, and what changes were necessary. She said that this investigation was required so that SACL could review the Reardon report.

(10) Mr Lawrence was also required to conduct the investigation “to … look at our experience and our internal expertise and look at the causes and anything that we should be doing in future to prevent something like this happening again”.

(11) She agreed that two of the major matters to which she desired Mr Reardon to attend were, first, “to identify the cause of the incident and any contributing factors” and, second, to “make any recommendations for eliminating or reducing the instance of similar incidents in the future”.

(12) She instructed Mr Guselli to summarise the conclusions of Mr Reardon’s investigation, including factual findings: this he did, and the result was a PowerPoint presentation that Mr Guselli made to the AOC.

(13) Mr Reardon or Mr Guselli prepared a recommended action plan which was designed to make formal documented recommendations to the AOC. The factual matters set out in that plan were taken from the Reardon report. The recommendations made in the plan were taken from the Reardon report. The plan was given to the AOC.

14 I accept Ms Wilder’s evidence that, when she was informed of the incident, she formed the view that litigation was likely. I do so because I accept her as a witness of truth. Her evidence on this point was unshaken. It was not put to her that her reference, in her letter of instructions to Mr Reardon, to “litigation and anticipated legal liability”, was a merely colourable device to seek to attract privilege where otherwise it might not be available.

The issues

15 The “litigation privilege” for which s 119 provides attaches, relevantly, to confidential communications made, or the contents of a confidential document prepared, “for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding … , or an anticipated or pending Australian or overseas proceeding, in which the client is or may be … a party.”

16 The claim for discovery gives rise to four issues:

(1) What is the time at which questions of dominant purpose and whether there are anticipated proceedings must be assessed?

(2) What was the dominant purpose in relation to the Reardon report?

(3) Was there, at the relevant time, an anticipated proceeding?

The relevant time

17 The submissions for Singapore Airlines appeared to proceed on the basis that the relevant time was the time when Ms Wilder commissioned Mr Reardon to investigate and report. The submissions for Qantas did not separately address this issue. However, the submissions for SACL took the stance that the relevant time was the time at which the Reardon report was prepared.

18 The wording of s 119 is neutral on this point: “a confidential document that was prepared for the dominant purpose of the client being provided with professional legal services … “. The common law position as analysed by Deane J in Baker v Campbell (1983) 153 CLR 52, 112 could be seen to support SACL’s position. His Honour referred to privilege protecting “a person from disclosure of oral or written confidential communications, between himself and his solicitor or barrister, made or brought into existence for the sole purpose of seeking or giving advice or for the sole purpose of use in existing or anticipated litigation” (emphasis supplied). His Honour said further, at the same reference, that privilege does not “extend to protect things lodged with a legal adviser for the purpose of obtaining immunity from production”. See also (again, of course, in relation to the position at common law), Grant v Downs (1976) 135 CLR 674, 688, where Stephen, Mason and Murphy JJ referred to “documents which are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings” and to “the requirement that documents be brought into existence in anticipation of litigation” (emphasis supplied).

19 Thus, at common law, the relevant (now dominant) purpose must exist at the time the document is brought into existence. But it does not follow from this that the relevant purpose need only arise at that point. In Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332, 337 [12], Batt JA (with whom Charles and Callaway JJA agreed) accepted the proposition “that the relevant time … was in the circumstances of this case when the reports were commissioned”. That was a case where the reports were commissioned by a solicitor. The relevant purpose was said to be that of the solicitor. What his Honour said would support the submissions of Singapore Airlines on this point.

20 The question of what was the relevant time to assess purpose was considered by Holmes J in Galway v Constable [2001] QSC 180. That too was a case where an in-house lawyer commissioned a report. Her Honour looked at the question of the relevant time at paras [33] to [36]. Her Honour did not resolve the issue, concluding that she was “content to proceed on the basis that it is the time of the document’s production that is relevant”. I do not regard this as requiring me to come to a conclusion that the basis assumed by her Honour applies in all cases.

21 Where a report is commissioned by an external solicitor, so that the relevant purpose is that of the solicitor, it follows that the time at which that purpose is to be assessed is the time when the report is commissioned. Of course, if the solicitor acquires further information, and gives further instructions to the person from whom the report has been commissioned, then the time at which the relevant purpose is to be assessed (and the material by reference to which it is to be assessed) might be extended accordingly.

22 I therefore think that the submission for Singapore Airlines on this point is correct. But even so, it does not follow that, in assessing the dominant purpose, it is not legitimate to look at anything that occurs after the report is commissioned up until the time when the document is brought into existence. In the present case, I think that it is legitimate to have regard to the events that occurred (including the two demands made by Singapore Airlines) between 1 February 2001, when the incident happened, and 23 March 2001, when the Reardon report was prepared. That is because SACL was continuing to involve itself in enquiries and other activities relating to, or arising out of, the incident. In particular, SACL was conducting its own investigations; it was, through an employee Mr Mario Bayndrian, giving information or instructions to Messrs Reardon and Guselli; and it was dealing with both Singapore Airlines and the AOC.

The dominant purpose

23 The purpose for which a document is prepared, or a communication made, may be equated with its intended use: Grant at 692 (Jacobs J). On the evidence of Ms Wilder, it is possible to assign at least four purposes (or intended uses) to the report:

(1) For use in the litigation that Ms Wilder thought was “likely” (including, in this, to qualify Mr Reardon as an expert who could give evidence in such litigation).

(2) To enable SACL to understand what caused the incident.

(3) To enable SACL to allay the concerns of the AOC, both in relation to the particular aerobridge and in relation to other similar aerobridges, so as to persuade the AOC to allow the aerobridge to be put back into service.

24 Although I have referred, as a separate purpose, to enabling SACL to understand what caused the incident, it is clear that this purpose could be seen as part of, or ancillary to, the first and the fourth stated purposes. In some cases, the process of investigation, or of gathering evidence, will be distinct and anterior to the point in time at which it may be said that proceedings are “anticipated”. See Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526, 545-546. However, there is no necessary distinction between the two processes and, as Batt JA said in Mitsubishi at 342 [23], “[t]here must be many cases where it can be said that litigation is likely before the evidence gathering process has even begun”. In the present case, I do not think that it is possible to draw a clear distinction between first and second purposes, or between the second and fourth purposes. In a sense, the second purpose is a necessary part of each.

25 Thus, if the claim for privilege is to be sustained, SACL must show that the first of these purposes (including, for the reasons just given, the second purpose insofar as it related to the first purpose) was the dominant purpose.

26 The concept of “dominant purpose” appears to reflect what Barwick CJ (who dissented as to the test to be applied, although not as to the outcome) said in Grant at 678:

“For my part, I prefer the word “dominant” to describe the relevant purpose. Neither “primary” nor “substantial” in my opinion, satisfies the true basis of the privilege.”

27 In Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49, 72, Gleeson CJ and Gaudron and Gummow JJ said that the following test “appears close to a dominant purpose test”:

“[I]f a document is created for the purpose of seeking legal advice, but the maker has in mind to use it also for a subsidiary purpose which would not, by itself, have been sufficient to give rise to the creation of the document, the existence of that subsidiary purpose will not result in the loss of privilege.”

28 Batt JA dealt with the meaning of “dominant” in Mitsubishi at 336-337 [10] as follows (omitting citations):

Grant v Downs

Esso Australia Resources,

Waugh [v British Railways Board

,

29 The purpose, or intended use, for which a document is brought into existence is a question of fact: Mitsubishi at 338 [14] (Batt JA); Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557, 568.

30 Consideration of dominant purpose requires not only that the purpose, or intended use, be characterised, but attention to the question: whose purpose? In the ordinary case, the purpose would be that of the person who brings the document (in which the relevant communication is embodied) into existence. However, where the document is commissioned (as was the case in Mitsubishi) by an external solicitor, then the relevant intention will be that of the solicitor: Mitsubishi at 338 [14] (Batt JA); Hartogen at 568-9. In Grant, Barwick CJ at 677 referred to the dominant purpose as being “of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence”.

31 In the present case, it was Ms Wilder who commissioned the Reardon report. I think the proper inference to be drawn from her evidence is that it was her decision to do so, notwithstanding that she discussed the matter with her superior, and notwithstanding that Mr Lawrence was involved. As to the former: it was not put to her, and there is no evidence otherwise, that it was her superior who directed the preparation of the Reardon report. As to the latter: it was Ms Wilder’s evidence that she and Mr Lawrence were of coordinate authority. Notwithstanding that the report, both in draft and in final form, was to be given to Mr Lawrence as well as to Ms Wilder, I do not think that his decision, rather than hers, is the relevant one.

32 What I have just said does not exclude the possibility that the relevant decision may be that of Ms Wilder and Mr Lawrence (ie, rather than that of one or the other of them). However, that would require evidence that Ms Wilder had discussed with Mr Lawrence the question of instructing Mr Reardon for their joint (or several) purposes. Ms Wilder did not say that this was so, and there is no other basis in the evidence for finding that it is so. Nor does it follow, from my finding that it was Ms Wilder’s decision to commission the report, that it is her purpose alone (or the intended use for which she required the report) that is determinative.

33 In the case of a corporation, the relevant purpose is that of the corporation. When an employee such as Ms Wilder, acting within the scope of her authority, commissions a report such as the Reardon report, the purpose of the employee may be imputed to the employer. Nonetheless, the relevant purpose (in the context under discussion) is that of the corporate employer and not that of the employee. The purposes set out in para [23] include a purpose specific to Ms Wilder in her capacity as an in-house solicitor: the first purpose. However, they include purposes that are, more generally, SACL’s purposes: the third and fourth. Whether this is because Ms Wilder was not acting only in her capacity as a solicitor, or because she consulted with other employees (including Mr Lawrence) in relation to the commissioning of the Reardon report, is unnecessary to decide. The privilege (if it exists) is SACL’s privilege, not Ms Wilder’s. The relevant purpose must, I think, be SACL’s purpose, regardless of the particular employee or employees through whom it was articulated. In the ordinary case, SACL’s purpose or purposes may be gathered from the individual purposes of particular employees acting within the scope of their authority.

34 Ms Wilder denied that, in her mind, the third purpose (allaying the concerns of the AOC) was of equal or greater importance than the first (use in “likely” litigation). I accept that, in her mind, this was so. However, that does not dispose of the issue.

35 The question, which of competing purposes was “dominant”, was considered by Branson J in Sparnon v Apand Pty Ltd (1996) 68 FCR 322, 327-328. The way the issue arose before her Honour involved s 119 of the Evidence Act 1995 (Cth). Her Honour concluded that the dominant purpose test set out in s 119 reflected what Barwick CJ had said in Grant at 678. Her Honour then said at 328 (omitting citations):

“It will be a question of objective fact whether in any case any one purpose “dominated” the decision to bring the document into existence. Such objective fact shall not necessarily be ascertained by reference solely to the intention of the author of the document, or solely to the intention of the individual upon whose instruction the document was brought into existence: …

Grant v Downs,

36 In the present case, SACL called no evidence from any employee other than Ms Wilder, notwithstanding that it is clear, on Ms Wilder’s evidence, that the relevant purposes included purposes other than for particular concern relating to “likely” litigation. Ms Wilder’s denial that the third purpose was of equal or greater importance to her than the first cannot resolve the issue, because it does not follow from this that other officers of SACL would have ranked the importance of the purposes in the same way.

37 Nor, in my judgment, is it possible, looking at the matter objectively, to say that one of the purposes is inherently such that it should be regarded as dominant. In some cases, no doubt, it will be clear even without evidence of subjective intention that one purpose is “paramount” (to use an expression favoured by Batt JA as a synonym for “dominant”), or that one is “ancillary” (to use an expression favoured by Barwick CJ and Branson J as an antonym). In the present case – and accepting that the second purpose may inform, or be ancillary to, the first and fourth purposes - I do not think that it is possible, by some process of objective assessment, to characterise one of the first, third or fourth purposes as paramount and the others as ancillary.

38 The process of classification is not resolved by Ms Wilder’s evidence. There are two reasons for saying this. The first is that, as I have indicated, the relevant purposes (of SACL) clearly go beyond her own specific purpose relating to litigation; and Ms Wilder’s denial of equality or primacy was limited to her own perception. The second is that Ms Wilder was not questioned at all (even as to her own perception) as to equality or primacy as between the first and fourth purposes.

39 It may very well be the case that Ms Wilder regarded use in litigation as the most important purpose. It does not follow that other employees of SACL, or SACL generally, would have had the same view. In this context, I regard as significant the failure of SACL to call Mr Lawrence, in circumstances where, clearly, he was closely involved in the investigation of the incident and where he was one of the two people specifically named as intended recipients of the report. Nor (in the absence of evidence) do I think it is possible to arrive at the conclusion, as to dominance, by some process of objective assessment.

40 The relevant purposes (which, in this context, may be confined to the first, third and fourth purposes set out in para [23] on the basis that the second purpose is ancillary rather than independent) are those of SACL. Those purposes go beyond the purpose in the mind of Ms Wilder, namely the first purpose. It must follow that Ms Wilder’s evidence, as to the predominance in her mind of her purpose, cannot be conclusive of the question of dominance from the perspective of SACL.

41 I therefore conclude that SACL has not shown that the dominant purpose for which the Reardon report was prepared was for use in “likely” litigation.

42 This conclusion makes it unnecessary to consider the question of whether there were, at the relevant time, anticipated proceedings and whether, if privilege were otherwise made out, it has been lost. However, in case I am wrong in the conclusion to which I have come, I will set out my findings on these issues.

Was there an anticipated proceeding?

43 Batt JA considered the requirement that litigation be “anticipated or in contemplation” in Mitsubishi at 339–341 [16]–[19]. Although that discussion was in the context of the common law concept of legal professional privilege, I do not think that the legislature intended, in s 119, to embody some different test when it used the word “anticipated”.

44 Batt JA said that litigation must be “reasonably anticipated”: 339 [16]. He said that what was required was more than “a mere vague apprehension of litigation”, and that “litigation is reasonably anticipated or in contemplation if its initiation is likely or reasonably probable”: 339-340 [16]-[17]. However, he said, it was not necessary that it be more probable than not that proceedings would be commenced: 340 [17], on this point disagreeing with what Goldberg J had said in Australian Safeway Stores at 559. Batt JA concluded at 341 [19] that “as a general rule at least, there must be a real prospect of litigation, as distinct from a mere possibility, but it does not have to be more likely than not.” The test, his Honour said, “is to be determined by the Court, viewing objectively the circumstances existing at [the relevant] time”: 341 [20].

45 It follows from this last point that the question of “anticipation” is not to be judged solely by reference to Ms Wilder’s views. Nonetheless, I think, substantial weight is to be placed on her evidence in this regard.

46 Ms Wilder said that she operated in a “litigious environment”. I take it that what she meant was that, where there was an accident or incident causing damage, litigation was likely to follow.

47 The circumstances in which the incident occurred suggest that there was either human or mechanical fault. There is no evidence of the amount claimed by Singapore Airlines, but I am prepared to infer that the claim is substantial. Singapore Airlines announced its intention to claim reimbursement the day after the incident, and reiterated this intention a fortnight later.

48 If the dispute were simply between Singapore Airlines and SACL, then it is possible that it should be viewed as one likely to be resolved without litigation. However, the dispute is, as Ms Wilder pointed out, multipartite. Singapore Airlines’ primary claim might be against SACL as the owner and operator of the aerobridge. However, it also asserts a claim against BLL as the constructor of the aerobridge. In turn, and as Ms Wilder contemplated might be the case, SACL has cross-claimed against Qantas (whose employees were operating the aerobridge at the relevant time) and against BLL. BLL in turn has cross-claimed against SACL, Qantas and a company named Airport Equipment Limited, which appears to have been BLL’s subcontractor for the design and construction of the aerobridge.

49 In all the circumstances, I would conclude – were it necessary to do so – that, at the time Ms Wilder commissioned the Reardon report (and, if it be relevant, at the time the Reardon report was delivered to her and to Mr Lawrence), there was a real prospect, as distinct from a mere possibility, of litigation in relation to the incident. I would therefore have concluded, for the purposes of s 119, that there was, at either and both of those times, an “anticipated Australian proceeding” in relation to the incident.

Loss of privilege

50 The present question arises in the scope of an application for discovery, not in the course of a hearing. Section 122 (and other relevant provisions of the Act) apply through Part 23 r 1(c). The question is, therefore, whether the Reardon report is a document in respect of which evidence could not be adduced, over the objection of (in this case) SACL, by virtue of the operation of Part 3.10 Division 1 of the Evidence Act.

51 The submissions for Singapore Airlines on this issue focussed on the common law concept of waiver, as demonstrated in cases such as Mann v Carnell (1999) 201 CLR 1. SACL and Qantas focussed on ss 122 and 126 of the Act. Singapore Airlines submitted, in reply, that ss 122 and 126 embodied, or was the statutory expression of, the common law concept of waiver (including, relevantly, by reason of unfairness).

52 There is some division in the authorities on the application to s 119 of the basis on which the common law would, in some circumstances, imply waiver of privilege. Thus, in Adelaide Steamship Company Ltd v Spalvins (1998) 81 FCR 360, the Full Federal Court said, at 371, that sub ss (2) and (4) of s 122 “are not concerned with any principle of “fairness” such as that developed by the common law and by which waiver may be imputed.” However, in Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152, 168, Branson and Lehane JJ (Beaumont J dissenting) held that the “consent” referred to in s 122(1) included implied or imputed consent (their Honours noting that the two terms were used interchangeably) where the implication is based on considerations of fairness.

53 In Garratt’s Ltd v Thanga Thangathurai [2002] NSWSC 39, Bergin J concluded “that “consent” in s 122(1) of the Act includes conduct amounting to imputed or implied waiver”. Her Honour referred to Telstra, and to the decision of the Full Federal Court in Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925. What her Honour said was adopted by Hely J in Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501. His Honour said at [10]:

Evidence Act

Garratt’s

Mann

54 In Sovereign v Bevillesta [2000] NSWSC 521 at [12], Austin J, having referred to Mann, said:

Attorney General v Maurice

Goldberg v Ng

55 It seems to me that the balance of authority is in favour of the proposition that the common law test, as enunciated most recently in Mann, can be applied to the statutory concept of consent referred to in s 122(1) of the Act. It follows, I think, that in asking whether there has been a consent for the purposes of s 122(1):

(1) The search for consent extends to implied as well as express consent; and

56 It remains only to note that, as the majority pointed out in Mann at 13 [29], the question is not to be determined by reference to “some overriding principle of fairness operating at large”, but by perceived inconsistency “between the conduct of the client and maintenance of the confidentiality”. In asking whether there is inconsistency it is, however, legitimate to have regard to considerations of fairness as they have been explained and developed in the authorities, including (as Austin J noted in Sovereign), Mauice and Goldberg.

57 As the majority made clear in Mann at 15 [34], the initial question is (putting aside questions of “substance”) whether SACL’s conduct in relation to the Reardon report is inconsistent with the confidentiality protected by the privilege that SACL now asserts. At common law, voluntary disclosure to a third party does not necessarily waive privilege: Goldberg at 120; Mann at 14 [30]. However, disclosure, even for good commercial or other reasons, will waive privilege if the disclosure is inconsistent with the continuing confidentiality of what is disclosed.

58 The evidence does not show that such disclosure as has occurred of the contents of the Reardon report was done on the basis that it, or what was disclosed, should remain confidential to those to whom the disclosure was made. Nor does it show that those persons were expressly made free to use what was disclosed in such manner as they thought fit. SACL and the AOC each had an interest in knowing what had caused the incident and what assurances could be given that a similar incident would not occur in the future. It is apparent (both from the terms of Ms Wilder’s instructions and from the terms of the recommended action plan, its link to the Reardon report being explained by Ms Wilder) that the Reardon report addressed, at least, these matters. The AOC included representatives of airlines who used Sydney Airport. It must have been within the contemplation of SACL that those representatives might discuss with their colleagues, in their respective airlines, what had happened, why it had happened, and whether it was likely to happen again. It must, therefore, have been within the contemplation of SACL that those representatives were at least likely to discuss with others what was disclosed to them (including that which was drawn from, or based on, the Reardon report).

59 In those circumstances, I think, SACL’s action in disclosing part of the Reardon report (leaving aside again, for present purposes, the question of substance) is inconsistent with the continued maintenance of confidentiality in that which was disclosed.

60 The submissions for Singapore Airlines made reference to considerations of fairness. However, I do not think that those considerations are of any present relevance. They would normally apply where a party’s election to make use of some part of a privileged communication requires, in fairness to the other party or other parties, that the whole of that communication (or a whole series of privileged communications upon the same point) be disclosed. As Deane, Dawson and Gaudron JJ explained it in Goldberg at 102:

“not involve a question”

61 In Maurice, Mason and Brennan JJ said, at 487-488, that it would be unfair to maintain privilege where, part of a document having been put into evidence, there was a risk that an inaccurate perception of the whole would be created, so as to mislead the opposing litigant. In the same case, Deane J said, at 492-493, ordinary notions of fairness required that an assertion of the effect of privileged material, or a disclosure of part of its contents, should be treated as a waiver of any right to resist scrutiny of the whole.

62 The concept of fairness (bearing in mind that, despite some of the comments in Maurice, it is not the determinant of waiver at common law) applies as between parties to litigation. In the present case, it is not suggested that SACL has sought to adduce evidence of part of the Reardon report, in circumstances where its failure to allow the whole to be considered might create an inaccurate perception. That situation could arise in the course of the hearing of the issues between the parties. It has not arisen at this stage. No relevant unfairness has been created by the circumstance that SACL (to whatever extent) has disclosed part of the Reardon report to the AOC.

63 The remaining question would then be whether the substance of the Reardon report has been disclosed to the AOC.

64 In Adelaide Steamship at 371, the Full Federal Court said that this was a “quantitative” test “which asks whether there has been sufficient disclosure to warrant loss of the privilege”.

65 SACL submitted that I could inspect the Reardon report, compare it to the disclosures to the AOC that have been made, and decide for myself whether there was disclosure of the “substance” of the report. There is no doubt that s 133 of the Act would authorise this course; and, generally, as the majority said in Esso at 70 [52], “[a] court … should not be hesitant to exercise such a power”.

66 In the present case, however, Singapore Airlines and Qantas objected to my inspecting the Reardon report. I have decided that I should not do so. There is, I think, a significant distinction between inspecting a document to see whether it contains a privileged communication, and inspecting a document for the purpose of making a quantitative assessment of the contents of that document with the contents of some other document or documents. The former is a question on which, it might be thought, minds could not reasonably differ (for example, it would ordinarily be quite obvious if the document contained a record of communications between client and lawyer for a protected purpose). However, the latter involves not just an assessment of the communication, but a comparison of that communication with another document or documents for the purpose of seeing whether one can be said to embody the “substance” of the other. Whilst I think that s 133 is wide enough to allow this, I do not think that, in the exercise of my discretion, it is appropriate that I should undertake that task: particularly, as I have noted, over the objections of Singapore Airlines and Qantas.

67 The evidence did not reveal the extent of the correspondence between the Reardon report and the recommendations to the AOC embodied in Mr Guselli’s PowerPoint presentation or in the recommended action plan. It would appear, by a comparison of the instructions given by Ms Wilder to Mr Reardon with the documents to which I have referred, that there was not disclosed to the AOC the entirety of the matters that should have been covered by the Reardon report.

68 More importantly, however, what was disclosed was, at most, some of the recommendations embodied in the Reardon report. The evidence does not support a finding that there was disclosed, as well, the material facts as found by Mr Reardon (it being remembered that his job was to investigate as well as to express opinions on the various questions submitted to him) or assumed by Mr Reardon for the purpose of expressing his opinions. Nor is there a basis for concluding that there was disclosed, in relation to any conclusion set out in the Reardon report that was disclosed, the reasoning process underlying, or leading to, that conclusion.

69 It was submitted for Singapore Airlines that disclosure of the underlying material was not necessary. Reliance was placed on the judgment of Rolfe J in Ampolex Limited v Perpetual Trustee Company (Canberra) Ltd (1996) 40 NSWLR 12. One of the questions considered by his Honour was whether the substance of certain legal advice had been disclosed. The submission for Ampolex (the party asserting the privilege) was that there was distinction between the “substance” and the “effect” of advice, and that a disclosure of the effect of advice was not a disclosure of its substance. His Honour said, at 18, that “as a matter of language the two words are interchangeable. One may say, conformably with ordinary English, that “the substance of the advice is you will win” or “the effect of the advice is you will win”. Each word will accommodate an expansive or restricted version of what the advice says … . Accordingly, depending on the way in which the advice is structured, the “effect” of the advice may also be its “substance”.”

70 Accordingly, at 19, his Honour said that “the substance of the advice may well be disclosed if the ultimate conclusion, without the supporting reasoning process, is revealed. At that stage there has been … a disclosure of the substance of the advice, that is, what the advice is. Further the ultimate conclusion, whilst it may be a “result” or “consequence” of the reasoning is more than that: in its own right it is the essence or vital part of the advice.”

71 It will be noted that his Honour did not say that, in all circumstances, substance and effect are the same; although it is correct to say that, on his Honour’s analysis, the ultimate conclusion reached is the advice: “the essence or vital part of the advice”. However, in the present case, Mr Reardon is not a lawyer. Nor was he retained simply to advise. As is apparent from the letter of instructions, the scope of his retainer included conducting a full factual investigation so as to attempt to determine what had happened, and why. I do not think that a summary of his conclusions, relating to operational matters, could possibly be regarded as conveying the substance of a report of the kind called for by the instructions given to him.

72 Nor, in the case of an expert, do I think that it is correct to say that the advice can be separated from the assumptions and reasoning process on which it is based. I think, by analogy with the analysis of Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 729 and following, that the substance of the advice necessarily involves not only the conclusions but the relevant factual bases (either as determined by the expert or as assumed) and the reasoning process of the expert proceeding from those factual bases to the conclusions reached.

73 I would therefore conclude, were it necessary to do so, that there had been no loss of privilege by the operation of s 122 of the Act. In those circumstances, it is not necessary to consider the operation of s 126.

Conclusion and order

74 I have concluded that the Reardon report was not prepared for the dominant purpose of SACL being provided with professional legal services relating to an anticipated Australian proceeding. It follows that SACL should discover the Reardon report. (I note that discovery was not opposed on any ground other than that of privilege.)

75 As the matter was argued, SACL accepted that, if I concluded that the Reardon report was discoverable, then what I have called the ancillary documents would also be discoverable. Because, as I have noted in para [4] above, there is some distinction between the formulation of the kinds of ancillary documents that should be discovered, and because it is desirable that there be no relevant difference in the discovery given to Singapore Airlines on the one hand and Qantas on the other, I shall not formulate an order for discovery at this time. The better course is to leave it to the parties to bring in short minutes of order to give effect to these reasons. It would seem that the orders should include an order that SACL pay the costs of Singapore Airlines and Qantas of the application for discovery. However, I will, if required, hear argument on that point.

76 I direct the parties to bring in short minutes of order to give effect to these reasons. That is to be done at a time convenient to the parties and arranged with my associate, but no later than Friday, 14 May 2004.

77 I will return, uninspected, the copy of the Reardon report that was provided to me.

******

Last Modified: 05/10/2004

Citations

Singapore Airlines v Sydney Airports Corporation [2004] NSWSC 380

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CITATION:	Singapore Airlines v Sydney Airports Corporation & Anor [2004] NSWSC 380
HEARING DATE(S):	27 April 2004
JUDGMENT DATE:	7 May 2004
JUDGMENT OF:	McDougall J at 1
DECISION:	See paras [74] to [77] of judgment
CATCHWORDS:	EVIDENCE - discovery - where corporate counsel commissioned expert report into accident soon after accident occurred - claim for discovery of expert report - whether report privileged - s 119 Evidence Act 1995 - Pt 23 r 1(c) Supreme Court Rules - whether dominant purpose and existence of anticipated proceedings to be assessed at time report commissioned or when report brought into existence - where report had multiple purposes - whether there was a dominant purpose -where report commissioned by corporate counsel on behalf of company within the scope of employee's authority - whether relevant dominant purpose is that of corporate counsel or company - distinction between employee's purpose in commissioning report and company's purpose - whether at time report was commissioned there was an anticipated legal proceeding - if privilege existed, whether subsequently lost - ss 122 and 123 Evidence Act 1995 - whether common law of waiver relevant - whether privilege lost by voluntary disclosure - distinction between disclosure of substance and effect relating to an expert report - whether disclosure of substance
LEGISLATION CITED:	Supreme Court Rules Evidence Act 1995 (NSW)
CASES CITED:	Baker v Campbell (1983) 153 CLR 52 Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 Galway v Constable [2001] QSC 180 Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557 Sparnon v Apand Pty Ltd (1996) 68 FCR 322 Mann v Carnell (1999) 201 CLR 1 Adelaide Steamship Company Ltd v Spalvins (1998) 81 FCR 360 Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 Garratt's Ltd v Thanga Thangathurai [2002] NSWSC 39 Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [1999] FCA 925 Fort Dodge Australia Pty Ltd v Nature Vet Pty Ltd [2002] FCA 501 Sovereign v Bevillesta [2000] NSWSC 521 Ampolex Limited v Perpetual Trustee Company (Canberra) Ltd (1996) 40 NSWLR 12 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
PARTIES :	Singapore Airlines Limited (Plaintiff) Sydney Airports Corporation Limited (First Defendant) Bovis Lend Lease Pty Limited (Second Defendant) Sydney Airports Corporation Limited (First Cross-Claimant) Qantas Airways Limited (First Cross-Defendant) Sydney Airports Corporation Limited (Second Cross-Claimant) Bovis Lend Lease Pty Limited (Second Cross-Claimant) Bovis Lend Lease Pty Limited (Cross-Claimant to the Third Cross-Claim) Sydney Airports Corporation Limited (First Cross Defendant to the Third Cross-Claim) Airport Equipment Limited (Third Cross-Defendant to Third Cross-Claim)
FILE NUMBER(S):	SC 50006/03
COUNSEL:	G Curtin (for Singapore Airlines Limited) N A Nicholls (for SACL) M J Darke (for Qantas)
SOLICITORS:	Riley Gray-Spencer (for Singapore Airlines) Sparke Helmore (for SACL) Ebsworth & Ebsworth (for Qantas)