Spark v IAMA Ltd
[2000] WASC 150
•13 JUNE 2000
SPARK & ANOR -v- IAMA LTD & ANOR [2000] WASC 150
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 150 | |
| Case No: | CIV:2046/1999 | 15, 31 MAY & 1 JUNE 2000 | |
| Coram: | MASTER SANDERSON | 13/06/00 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Inspection refused | ||
| PDF Version |
| Parties: | DONALD SPARK MARGARET ANNE SPARK IAMA LTD (ACN 008 724 052) RODNEY LEIGH BUTCHER |
Catchwords: | Practice and procedure Claim for privilege of assessor's reports "Dominant purpose" test Whether dominant purpose litigation |
Legislation: | Nil |
Case References: | Di Pietrantonio v Austin Hospital - Heidelberg [1958] VR 325 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67 Grant v Downs (1976) 135 CLR 674 McIlwraith McEacharn Operations Ltd v C E Heath Underwriting & Insurance (Australia) Pty Ltd (No 2) [1995] 1 Qd R 363 Morlea Professional Services Pty Ltd v South British Insurance Co Ltd, unreported; NSW SCt; BC 8400253; 27 September 1984 National Employers' Mutual General Insurance Association Limited v Waind (1979) 141 CLR 648 Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44 Re Rothwells Ltd (In Liq) (1991) 5 ACSR 462 Wheeler v Le Marchant [1881] 17 Ch D 675 Attorney General for the Northern Territory v Maurice (1986) 161 CLR 475 Australian Mutual Provident Society v Kschammer, unreported; DCt of SA (Kitchen DCJ); D3432; 15 May 1996 Carlton Cranes Ltd v Consolidated Hotels Ltd [1988] 2 NZLR 555 Dingle v Commonwealth Development Bank of Australia (1989) 91 ALR 239 Edwards v Lewis, unreported; HCNZ (Jeffries J); Napier A9/84; 30 June 1986 General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd (1987) 4 ANZ Ins Cas 60-792 Guardian Royal Exchange Assurance of NZ Ltd v Stuart [1985] 3 ANZ Ins Cas 60-671 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 Harrison v Attorney-General [1989] 4 PRNZ 122 Hickman v Taylor (1946) 39 US 495 Johnston v Charteris, unreported; HCNZ (Doogue J); A58/84; 26 May 1988 Ohope Chartered Club v Bay of Plenty Electric Power Board, unreported; HCNZ (Master Gambrill); CP 3/93; 30 May 1994 Protean (Holdings) Ltd v American Home Assurance Co, unreported; SCt of Victoria (Marks J); 5 September 1985 Ridsdale v Royal Insurance Australia Ltd, unreported; SCt of Victoria - Practice Court (Eames J); BC9300962; 26 July 1993 State Government Insurance Commission v Thissen (1993) 60 SASR 444 Tegel Foods Ltd v Franklin Electric Power Board (1995) 8 ANZ Ins Cas 61-266 Tooheys Ltd v Housing Commission of NSW (1953) 53 SR (NSW) 407 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- MARGARET ANNE SPARK
Plaintiffs
AND
IAMA LTD (ACN 008 724 052)
First Defendant
RODNEY LEIGH BUTCHER
Second Defendant
Catchwords:
Practice and procedure - Claim for privilege of assessor's reports - "Dominant purpose" test - Whether dominant purpose litigation
Legislation:
Nil
Result:
Inspection refused
(Page 2)
Representation:
Counsel:
Plaintiffs : Ms S Edwards
First Defendant : Mr T E Elisara
Second Defendant : Mr T E Elisara
Solicitors:
Plaintiffs : Hammond Worthington
First Defendant : Minter Ellison
Second Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Di Pietrantonio v Austin Hospital - Heidelberg [1958] VR 325
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67
Grant v Downs (1976) 135 CLR 674
McIlwraith McEacharn Operations Ltd v C E Heath Underwriting & Insurance (Australia) Pty Ltd (No 2) [1995] 1 Qd R 363
Morlea Professional Services Pty Ltd v South British Insurance Co Ltd, unreported; NSW SCt; BC 8400253; 27 September 1984
National Employers' Mutual General Insurance Association Limited v Waind (1979) 141 CLR 648
Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44
Re Rothwells Ltd (In Liq) (1991) 5 ACSR 462
Wheeler v Le Marchant [1881] 17 Ch D 675
Case(s) also cited:
Attorney General for the Northern Territory v Maurice (1986) 161 CLR 475
Australian Mutual Provident Society v Kschammer, unreported; DCt of SA (Kitchen DCJ); D3432; 15 May 1996
Carlton Cranes Ltd v Consolidated Hotels Ltd [1988] 2 NZLR 555
Dingle v Commonwealth Development Bank of Australia (1989) 91 ALR 239
Edwards v Lewis, unreported; HCNZ (Jeffries J); Napier A9/84; 30 June 1986
(Page 3)
General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd (1987) 4 ANZ Ins Cas 60-792
Guardian Royal Exchange Assurance of NZ Ltd v Stuart [1985] 3 ANZ Ins Cas 60-671
Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027
Harrison v Attorney-General [1989] 4 PRNZ 122
Hickman v Taylor (1946) 39 US 495
Johnston v Charteris, unreported; HCNZ (Doogue J); A58/84; 26 May 1988
Ohope Chartered Club v Bay of Plenty Electric Power Board, unreported; HCNZ (Master Gambrill); CP 3/93; 30 May 1994
Protean (Holdings) Ltd v American Home Assurance Co, unreported; SCt of Victoria (Marks J); 5 September 1985
Ridsdale v Royal Insurance Australia Ltd, unreported; SCt of Victoria - Practice Court (Eames J); BC9300962; 26 July 1993
State Government Insurance Commission v Thissen (1993) 60 SASR 444
Tegel Foods Ltd v Franklin Electric Power Board (1995) 8 ANZ Ins Cas 61-266
Tooheys Ltd v Housing Commission of NSW (1953) 53 SR (NSW) 407
(Page 4)
1 MASTER SANDERSON: This is the plaintiffs' application for an order allowing inspection of certain documents detailed in the chamber summons. To understand the nature of the application it is necessary to say something about the nature of the plaintiffs' claim against the defendants.
2 The plaintiffs are farmers who, inter alia, carry on the business of growing Danja Lupins for commercial sale. The first defendant is a company which carries on the business of selling agricultural crop products and providing advice associated with the use of those products. The second defendant is an agronomist in the employ of, or acting as agent for, the first defendant in giving advice. In or about June 1998 it is alleged that the second defendant, on behalf of the first defendant, visited the plaintiffs' farm and gave advice to the plaintiffs as to herbicides to be used by the plaintiffs on their crops. It is alleged by the plaintiff that the second defendant recommended the use of a certain herbicide. It is said no warnings were given in relation to the use of this herbicide, nor did the second defendant provide the plaintiffs with any literature relating to the herbicide which would have disclosed the risks. It is alleged that acting on the advice of the second defendant, which it is said was misleading and deceptive, the plaintiffs used the recommended herbicide. They alleged that as a result of the use of this herbicide their crop was damaged and they have suffered loss. As the claim is pleaded, the action is framed as being based on the Trade Practices Act, breach of a duty of care and breach of contract. However, the claim arises out of the one simple, rather straightforward set of circumstances.
3 When the plaintiffs realised their crop had been damaged they contacted the first defendant who in turn reported the matter to their insurers. I will detail the circumstances surrounding this report to the first defendant's insurers below. It is central to the application. However, before doing so I should set out what relief the plaintiffs seek in their chamber summons. By par 1 they seek to inspect the following documents:
"1. Reports by Agricultural Law Management Group ('ALMG')
(a) Preliminary report 25/09/98
- (b) Second report 01/02/99
(c) Third report 19/02/99
(d) Fourth report 16/03/99
(Page 5)
- 2. Correspondence, notes and documents prepared by the party, in anticipation of litigation and/or for the purposes of this action including:
(a) Fax from second defendant to
- ALMG approx 10/03/99
- ALMG 10/03/99"
5 In late July 1998 a representative of the first defendant, Mr David Pfeiffer, and the first-named plaintiff inspected the crop. The first-named plaintiff was advised by Mr Pfeiffer that he would "do something about a claim". In late September 1998 a representative of the first defendant met with the first-named plaintiff with a Mr Don McDougall ("McDougall"). McDougall was introduced to the first-named plaintiff as being from the Agricultural Loss Management Group. McDougall explained that he was a loss assessor who was "acting as a mediator" between IAMA and their insurance company. McDougall said he wished to inspect the crop and gather some evidence "so that a claim could be sorted out". McDougall inspected the crop accompanied by the first-named plaintiff.
6 Nothing further having happened, in October 1998 the first-named plaintiff spoke with McDougall. He asked what was happening with the claim. McDougall told him that "it is being processed. You will hear from me shortly." Nothing further happened for a couple of weeks and the first-named plaintiff again contacted McDougall. He again was told that the matter was progressing and that the first defendant was trying to work out a method for quantifying the claim. Thereafter, the first-named plaintiff rang McDougall at regular fortnightly intervals but received not satisfactory response. On 31 March 1999 McDougall sent a fax to the first-named plaintiff saying that he (McDougall) had not received any instructions. He went on to offer a view that the delay in processing the
(Page 6)
- claim appeared to be associated with a potential contribution from the manufacturers of the herbicide.
7 On 8 April 1999 the first-named plaintiff received a further facsimile from McDougall. This fax said that the first defendant's insurers were working through a number of policy issues and the potential contributions from the manufacturer and that he (McDougall) would revert to the plaintiffs in the near future. On 9 April 1999 the defendants' present solicitors contacted the plaintiffs saying that they were acting for the first defendant and advising the claim had been rejected. This contact of 9 April 1999 was the first indication the plaintiffs had had that solicitors were involved in relation to the claim.
8 All of the above is taken from an affidavit of the first-named plaintiff sworn 28 April 2000 and filed in support of the application.
9 In further support of the application the plaintiffs filed an affidavit of Nicholas John Spark, also sworn 28 April 2000. Nicholas Spark is the son of the plaintiffs and he has the day-to-day running of his parent's farm. He says that in mid August 1998 the second defendant came to see him. During the meeting the second defendant asked if he (Nicholas) would assist the second defendant with a crop inspection, plant counts and the taking of photographs of the damaged crop. The second defendant advised Nicholas that the information was for a report which was to be compiled and submitted to the first defendant so they could assess the amount of the damage. The second defendant advised Nicholas that this was standard practice to obtain information for the purpose of assessing a claim. In addition to these two affidavits, the plaintiffs also relied upon an affidavit of Michelle Lorraine Birrell sworn 28 March 2000. Ms Birrell is a solicitor employed by the firm of solicitors acting for the plaintiffs. She has conduct of this action. Ms Birrell details the circumstances in which it came to light that the documents, the subject of this application, were in existence. She also makes reference to a number of photographs, some of which have been discovered. While the affidavit is useful by way of background, it does not in any way advance the plaintiffs' case.
10 When this matter was first called on for hearing on 15 May 2000 the only affidavit before the court in opposition to the application was an affidavit of Titiimaea Eugene Elisara ("Elisara"), sworn 14 April 2000. This affidavit dealt with certain aspects of the affidavit of Ms Birrell, but did not deal directly with the evidence of the first-named plaintiff and Nicholas Spark. The basis upon which the defendants opposed the application was a claim of privilege. During the course of the hearing it
(Page 7)
- became apparent that the affidavit of discovery sworn by Rodney Leigh Butcher ("Butcher") on 9 March 2000 and filed on behalf of the defendants, was inadequate. It did not properly describe the documents over which privilege was claimed. I therefore adjourned the matter and ordered the defendants to file a further affidavit of discovery setting out a proper description of the documents said to be privileged. I also ordered the affidavit should detail the number of photographs taken, the dates of those photographs and nominating which photographs were said to be privileged. A supplementary affidavit of discovery of Butcher was sworn 25 May and was before the court on the resumed hearing.
11 In addition to the further affidavit of discovery, the defendants also filed a second affidavit of Elisara sworn 25 May 2000. They also filed an affidavit of McDougall sworn 25 May 2000, an affidavit of John Jesse Harry ("Harry") sworn 25 May 2000 and a further affidavit of Butcher sworn 25 May 2000. All three of these affidavits were filed without leave. At the resumed hearing counsel for the defendants sought leave to rely on these affidavits. There was no adequate explanation for why these affidavits were not before the court on the first return date of the chamber summons. However, over the plaintiffs' objection, I gave the defendants leave to rely upon these affidavits because I was satisfied that it was in the interests of justice to do so. I indicated to counsel at the time that the late filing of the affidavits would have consequences in costs.
12 Dealing, first, with the affidavit of Butcher, he produces a copy of a document entitled "IAMA Investigation Report" which he prepared and over which privilege is not claimed. That report was dated 6 August 1998. He then outlines the first defendant's complaints handling procedure and the philosophy that underpins that procedure. He confirms the evidence of Nicholas Spark that he attended at the property and he took 16 photographs, 14 of which "came out". Butcher was advised by the first-named plaintiff that it was the plaintiffs' intention to seek compensation from the first defendant. Butcher does not say on what date he became aware of this fact. Butcher was not responsible for the preparation of any of the reports the subject of the claim for privilege.
13 McDougall says he is a loss assessor and a director of Agricultural Loss Management Group ("ALMG") based in Queensland. In September 1998 he was instructed by the first defendant's insurers to investigate the plaintiffs' claim. At par 4 of his affidavit he says:
"As with the majority of matters I deal with, I was fully aware that my report might be used in litigation. That is always the
(Page 8)
- case in professional indemnity matters when a third party claims against an insured."
14 McDougall says that he met with the first-named plaintiff and the second defendant before preparing any report. He says that at this meeting he became aware that if the claim by the plaintiffs was not settled to their satisfaction litigation would ensue. His evidence on this point is thin, as he appears to have no clear recollection of the discussion that took place. I doubt much weight can be placed on this aspect of his evidence. McDougall visited the property in September 1998 and he took around 30 photographs. He inspected the property in company with the first-named plaintiff and discussed with the first-named plaintiff and Nicholas Spark what chemicals had been used in what concentrations.
15 His first report was prepared and dated 25 September 1998. It is the first of the documents sought in the plaintiffs' application and it is referred to as the "Preliminary Report". This report incorporated three photographs taken by McDougall and four which had been taken by the second defendant. The report was sent to the first defendant's insurers. The three subsequent reports which were prepared by McDougall were all commissioned by the first defendant's solicitors. In par 12 of his affidavit, McDougall says:
"In my third report I recorded that, after conversations with Mr Spark, 'the claimant has indicated that unless they receive some guarantee from IAMA they will be adequately compensated for losses arising out of the use of (the herbicide) on their lupin crop, they would put the matter in the hands of their solicitors'."
16 Finally, there is the affidavit of Harry. In August/September 1998 Harry was a legal and claims manager for the first defendant's insurers. He says that on 31 August 1998 he received a letter from the first defendant's insurance broker advising that a claim was possible. He reviewed the policy of insurance and formed the preliminary view that the claim would fall within the terms of the policy. He therefore arranged for McDougall to provide a report which he says, gratuitously, was to assist the insurers "in the conduct of contemplated litigation". He also says (at par 15):
"There was no doubt on my part that the report would be subsequently forwarded to solicitors to obtain an advice on the future management of Mr Spark's claim against IAMA."
(Page 9)
17 Harry says that in October 1998, shortly after receiving McDougall's preliminary report, Minter Ellison, the defendants' present solicitors, were instructed to advise in relation to the plaintiffs' claim. The letter of instruction to Minter Ellison included a copy of McDougall's preliminary report.
18 On 27 November 1998 the first defendant's insurance broker forwarded a 15 page fax to the insurers which included a completed notification form. It is of interest to note that the insurers instructed solicitors prior to receiving the completed notification form. The writ was issued on 21 September 1999 and the defendants entered their appearances on 5 November 1999.
19 During the course of argument, reference was made by both counsel to the policy of insurance pursuant to which the defendants were insured. A copy of the policy was not annexed to any of the affidavits, but I was provided with a copy by the defendants' solicitors. The policy is in a form which, in the insurance industry, is known as a "claims made and notified". In the policy the term "Claim" is defined in par 5.4 to mean:
"any writ, summons, application or other originating legal or arbitral proceedings, cross claim or counter claim or third or similar party notice claiming compensation against and served upon the Insured."
20 Pursuant to s 4.1, the insured is required to notify the insurer of circumstances which may give rise to a Claim and this is deemed to then be a Claim for the purposes of the policy. Clause 4.1 reads as follows:
"If during the Period of Insurance, the Insured becomes aware of any fact, situation or circumstance, including any written or verbal notice of demand for compensation, that may give rise to a Claim and elects during the Period of Insurance to give written notice to Pacific Indemnity of such fact, situation or circumstance then any Claim which may subsequently arise out of such fact, situation or circumstance shall, for the purposes of this Policy, be deemed a Claim notified to Pacific Indemnity during the currency of this Policy."
21 It is worth noting that Harry's evidence is that notification of a claim was received by the insurers on 31 August 1998. This was in the form of a letter from the first defendant's insurance brokers. That letter, on the date upon which it was received, was not a "Claim" as that term is defined by the policy of insurance. A claim arose when the writ in this action was
(Page 10)
- served upon the insured. However, once the writ was served on the insured, notice having been given of the circumstances of the Claim, then the Claim was deemed to have arisen during the currency of the policy.
22 Whether or not the documents in question are discoverable is to be measured against the so-called "dominant purpose test" as set out by the High Court in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67. All members of the court appear to approve of the statement of principle as set out by Barwick CJ in Grant v Downs (1976) 135 CLR 674 at 677. His Honour said:
"Having considered the decisions, the writings and the various aspects of the public interest which claim attention, I have come to the conclusion that the Court should state the relevant principle as follows: a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection."
23 Both counsel, during the course of their submissions, appeared to agree on the applicable principles. They disagreed on how the principles should be applied to this case.
24 In Cross on Evidence 5th ed, the learned author sets out (at par 25210) three kinds of communication which is said to be privileged. They are:
"(a) communications between the client or the client's agents and the client's professional legal advisers;
(b) communications between the client's professional legal advisers and third parties, if made for the purpose of pending or contemplated litigation; and
(c) communications between the client or the client's agent and third parties, if made for the purpose of obtaining information to be submitted to the client's professional legal advisers for the purpose of obtaining advice upon pending or contemplated litigation."
(Page 11)
25 It is only the last two of these categories which are presently of concern. As I understand the defendants' submissions, it is said that the second, third and fourth reports of McDougall fall in the second category and the remaining documents fall in the third category.
26 As I have indicated above, both McDougall and Harry made statements to the effect that when the reports were prepared they subjectively anticipated litigation. I think the authorities make it clear that the purpose for which the reports were produced is to be ascertained by reference to all of the evidence and the intention of the parties is, itself, of little relevance: see Di Pietrantonio v Austin Hospital - Heidelberg [1958] VR 325; Re Rothwells Ltd (In Liq) (1991) 5 ACSR 462 at 463. The inquiry must be focused on why the document was commissioned.
27 Since 1976 and Grant v Downs (supra), the sole purpose test has been applied to deciding whether or not discovered documents attract privilege. That means Australian cases must now be treated with some caution. However, there are a number of decisions which are of assistance. Before dealing with these decisions, I should refer to the English decision of Wheeler v Le Marchant [1881] 17 Ch D 675. In that case, the documents in question comprise letters passing between solicitors and surveyors to enable them to better advise their clients. As Jessel MR observed (at 680 - 681), the respondents to the application intended that:
" ... documents communicated to the solicitors of the defendants by third parties though not communicated by such third parties as agents of the clients seeking advice, should be protected because these documents contain information required or asked for by the solicitors for the purpose of enabling them the better to advise the clients."
- His Lordship continued (at 682):
" ... the evidence obtained by the solicitor, or by his direction, or at his instance, even if obtained by the client is protected if obtained after litigation has been commenced or threatened, or with a view to the defence or prosecution of such litigation. So, again, a communication with a solicitor for the purpose of obtaining legal advice is protected though it relates to a dealing which is not the subject of litigation, provided it is a communication made to the solicitor in that character and for that purpose. But what we are asked to protect here is this. The solicitor, being consulted in a matter as to which no dispute has
(Page 12)
- arisen, thinks he would like to know some further facts before giving his advice, and applies to a surveyor to tell him what the state of a given property is, and it is said that the information given ought be protected because it is desired or required by the solicitor in order to enable him the better to give legal advice. It appears to me to give such protection would not only extent the rule beyond what has been previously laid down, but beyond necessity warrants."
28 That statement of principle has been consistently followed in Australia: Morlea Professional Services Pty Ltd v South British Insurance Co Ltd, unreported; NSW SCt; BC 8400253; 27 September 1984; McIlwraith McEacharn Operations Ltd v C E Heath Underwriting & Insurance (Australia) Pty Ltd (No 2) [1995] 1 Qd R 363; Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44. In the last of these cases Wood J dealt, in passing, with the submission that solicitors were, in reality, retained simply to provide a veneer of protection through legal professional privilege when in fact litigation was not in contemplation. His Honour said (at 56):
"I have no difficulty in accepting that it was because of the contemplation of litigation that the solicitors were retained to act in the matter. Although it was argued that the retainer of the solicitors was a device and that they were interposed between the defendant and the loss adjuster to present an appearance in form of a relationship of privilege, but in substance to act merely as a conduit for information, I reject that submission. While I have no doubt that the defendant and the solicitor were well aware of the benefits of privilege, that is not a sufficient reason for concluding that the retainer was a sham, or that the solicitors were not retained to deliver an advice to the defendant. I have no doubt that it was understood and expected by the defendant and the solicitors, that the latter would deliver an advice, would direct and co-ordinate the inquiries needed for this purpose and would act throughout in a relationship of confidence. I have no reason to disbelieve the evidence that ... the solicitors were retained to advise in relation to the defendant's rights under the policy of insurance, and thereafter to act for it in relation to the litigation which was commenced."
29 In this case counsel for the plaintiffs did not submit directly that the appointment of the solicitors by the insurers was a sham. There was certainly no evidence to that effect. I think it is possible to go further an
(Page 13)
- say that, considered objectively, in October 1998 the insurers had reached the view that litigation might flow. In reaching that conclusion I am mindful of what was contained in the policy of insurance. By 31 August 1998 the insurer had received notification of a possible claim through the first defendant's insurance broker. Because of the way the policy was worded, receipt of that advice could give rise to a Claim, as it were, retrospectively pursuant to the provisions of cl 4.1. Harry thereupon commissioned McDougall's first report. Having received that report and bearing in mind the notification of the claim, he then instructed solicitors. It seems clear to me from all this that from October 1998, to paraphrase Wood J, the solicitors were retained to advise in relation to the defendants' rights under the policy of insurance and thereafter to act for it in relation to the litigation which was commenced. It follows, in my view, that the second, third and fourth reports commissioned while Minter Ellison were acting for the defendants attract privilege.
30 The position with respect to the preliminary report is somewhat more difficult. As at 31 August 1998, Harry had in his possession the letter from the first defendant's insurance broker which contained the first defendant's report prepared by Butcher and dated 6 August 1998. He also had a copy of the policy and was aware of its terms and conditions. In reality he could not possibly have been certain that a "claim", as defined in the policy, would be made. After all, he may have received advice from McDougall which made it plain the first defendant was liable, there was no possible defence to any demand for compensation and it was simply a matter of paying out the plaintiffs. But looking at the position objectively, he must also have been aware that the lupin crop was damaged and the plaintiffs said it was because of bad advice from the first defendant. Following on from that, he must also have contemplated the prospect that if payment of the damages claimed was not made proceedings would be issued and a claim would arise. Viewed in the light of subsequent events, I think it is reasonable to say that McDougall's preliminary report was commissioned with litigation in mind. It certainly could not be said that the report was obtained for that sole purpose. But I am satisfied that the dominant purpose for which the report was obtained was for submission to legal advisers and it should therefore attract privilege.
31 During the course of argument I was referred to the decision of the High Court in National Employers' Mutual General Insurance Association Limited v Waind (1979) 141 CLR 648. The facts in this case, taken from the headnote, were as follows:
(Page 14)
- "Following a motor car accident in which an employee had been involved, a workers' compensation insurer obtained five reports from a firm of loss assessors and six medical reports. All reports were obtained in the course of the insurer's business, first, to decide whether its insured was liable for claims made upon it and, secondly, to use in opposing any application that might be made by the employee if the insurer were to refuse to make payments and the employee applied to the Workers' Compensation Commission."
32 The court concluded that the reports did not attract legal professional privilege. This conclusion appears to have been a direct application of the test in Grant v Downs (supra). To that extent I am not sure that Waind is any longer good authority. However, Mason J, in the course of his judgment, did make a number of observations which are relevant to the present application. At 654, his Honour said:
"The relevant head of privilege is legal professional privilege which attaches to communications passing between legal adviser and client. Documents submitted by the client to his solicitors for advice or for use in anticipated litigation attract the privilege, but it is very doubtful whether there is a privilege for documents coming into existence as materials for the purposes of an action to be conducted by a litigant in person."
33 That is the question to be asked in this case. Did the preliminary report come into existence for the dominant purpose of submission by the insurer to its legal advisers? On the facts, I am satisfied that it did. The way in which Waind was eventually disposed of can be seen from the following passage (at 656):
"If, on the facts, documents are brought into existence for the dual purpose of deciding what it will do and for use in litigation by legal advisers when appropriate, that purpose should be considered as one purpose which, including as it does submission to legal advisers, would attract the relevant head of privilege. That is the argument. Unfortunately for the appellant, it is an argument which runs headlong into Grant v Downs."
34 In all the circumstances, I am satisfied the preliminary report is privileged from production.
(Page 15)
35 That leaves the two communications from the second defendant to ALMG, both on 10 March 1999. On the date of these communications solicitors had been instructed. By this time the claim had been with the insurers for eight months. Three of the four reports had been obtained from McDougall. Communication passed between the first defendant and the assessors to allow the assessors to report further to the defendants' solicitors. Viewed objectively, I think it can be said that the dominant purpose of these communications coming into existence was the prospect of litigation. I am therefore satisfied that the letters are privileged from production.
36 It is appropriate, then, I dismiss the plaintiffs' chamber summons. I will hear the parties as to the form of order and as to costs.
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