Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2)

[1998] FCA 741

TIRANGO NOMINEES PTY LTD, ALLEN JAMES WILLIAMS and PAULINE ANNE STOCKMAN v. DAIRY VALE FOODS LIMITED

DAIRY VALE FOODS LIMITED (Cross-Claimant) v. TIRANGO NOMINEES PTY LTD, ALLEN JAMES WILLIAMS and PAULINE ANNE STOCKMAN (Cross-Respondents)
No. VG 123 of 1997
FED No. 741/98
Number of pages - 6
Evidence
(1998) 156 ALR 364

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

MANSFIELD J

Evidence - client legal privilege - application for inspection of letter of instructions to expert witness - whether privilege in instructions waived when expert witness gives evidence - whether substance of letter of instructions disclosed in evidence - consideration of s 122(4) Evidence Act 1995 (Cth).

Evidence Act 1995 (Cth), s 122(4)

R v King [1983] 1 All ER 929, considered

Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475, considered

Dingwall v Commonwealth of Australia (1992) 39 FCR 521, considered

Towney v Minister for Land and Water Conservation for New South Wales (1997)

147 ALR 402, considered

Truth About Motorways Pty Ltd v Macquarie Infrastructure Management Ltd

(Federal Court, 2 April 1998, unreported), considered

ADELAIDE, 2 June 1998 (hearing and decision)

#DATE 2:6:1998

Counsel for the Applicants and Cross-Respondents: Mr P Bick

with him Ms M Loughnan

Solicitors for the Applicants and Cross-Respondents: Slater & Gordon

Counsel for the Respondent and Cross-Claimant: Mr T Anderson QC

with him Mr T Mellor

Solicitors for the Respondent and Cross-Claimant: Mellor Olsson

MANSFIELD J

These reasons relate to my ruling that the respondent, during cross-examination of an expert witness called by the applicants, was not entitled in the circumstances to inspect the written instructions given to that expert witness by the applicants' solicitors upon which the expert's report had been prepared.

The issue arose in the course of the evidence of Peter Haslock ("Mr Haslock"), an expert accountant called by the applicants. Cross-examining counsel called for and asked him to produce the letter of instructions upon which he had provided his report, an exhibit in the proceedings. He acknowledged there was such a letter. He had produced a supplementary report, also an exhibit in the proceedings, shortly before his evidence commenced. In the course of being cross-examined on that supplementary report, he answered a question indicating that the supplementary report also had been provided in response to a facsimile request from the applicant's solicitors. The call during cross-examination was also for that facsimile request to be available to cross-examining counsel. In respect of each of those documents the applicants, through their counsel, have objected to those documents being produced to cross-examining counsel, on the ground of client legal privilege.

It was the submission of counsel for both the applicants and for the respondent, and in my view correctly so, that the law applicable to determine the questions thereby raised falls under Pt 3.10 of the Evidence Act 1995 (Cth) ("the Act"), rather than under the common law: see Adelaide Steamship Co Ltd v Spalvins (1998) 152 ALR 418; BT Australasia Pty Ltd v State of New South Wales (No 7) (1998) 153 ALR 722 per Sackville J at 736.

The general rule at common law is that, in the case of expert witnesses, legal professional privilege, or client legal privilege as it is called in the Act, attaches to confidential communications between the legal adviser to a party and an expert witness or a proposed expert witness, but does not attach to the chattels or documents on which the expert based the opinion or to the independent opinion itself of the expert. So much has been held, for example, in R v King [1983] 1 All ER 929. In that case, under subpoena, a handwriting expert was consulted by an accused person to provide an opinion as to the authenticity of certain documents held by the prosecution. The prosecution sought that the expert produce to the Court any 'control documents' produced by the accused person for the purposes of the proposed comparison. The accused person did not intend to call the expert consulted. It was held that the expert was obliged to produce the primary documents provided by or on behalf of that accused person to the handwriting expert for the purposes of comparison. The use of those documents enabled the Crown, by reference to other documents, to establish or seek to establish through that handwriting expert that certain documents in issue had been prepared by the accused person. The Court accepted that legal professional privilege attached to the confidential communications between the solicitor for the accused and the expert: see Harmony Shipping Co v Davis [1979] 3 All ER 177 at 181, but that the privilege did not extend to the primary documents sent to the expert for consideration.

The application of ss 117 and 119 of the Act in the present circumstances in my view produces the same result. The communications between the legal adviser and the expert for the purposes of obtaining that expert's opinion on matters relating to certain of the maters in issue in the proceeding were confidential, as that term is defined in s 117. Accordingly evidence of such communications may not be adduced in evidence, as their purpose was for the client being provided with professional legal services: s 119.

The real debate between the parties is whether, by virtue of the applicant having called Mr Haslock to give evidence, or by virtue of material adduced in evidence from him, the privilege in that material has been lost by reason of s 122 of the Act. That is, has the substance of the evidence been disclosed to the Court with the express or implied consent of the client?

Counsel for the respondent submitted as a general proposition that, at common law, the document containing the instructions to the expert upon which the experts' report is given is available once the expert is presented to give evidence, because privilege in the letter of instructions necessarily is thereby waived. I do not accept that contention.

In the limited time available, no authority directly on point has been referred to. I suspect each counsel, for different reasons, would say that that is because the point is so obviously in favour of the argument which each advanced. I note that the common law position on the issue has been discussed in Phipson on Evidence (Street & Maxwell, 1990, 14ed, par 20-37 at 529). That learned author recognises the problem, but does not indicate that it has been the subject of judicial determination one way or the other. The commentary concludes with the following:

"Accordingly it is submitted that the mere reference to another document by an expert will not of itself necessarily amount to a waiver. In many cases, the facts will be irrelevant because the expert's opinion will be formed on hypothetical facts. There will be cases, however, when it will be necessary to establish exactly what was the basis of an expert's opinion or the terms of a previous inconsistent statement by a witness of fact. There may well be other circumstances where it would be desirable that the material relied upon by the expert is revealed to the other party and the court. All we would urge in advance of the problem presenting itself in practical form is that a bare reference by an expert to the materials furnished by the solicitor to him should not of itself necessarily destroy any privilege which would otherwise exist over any part of that material."

The question bears some similarity to that which arose in Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475. Aboriginals claiming to be the traditional owners of certain land filed with the Aboriginal Land Commissioner and served a claim book which set out particulars of the claim. The appellant sought inspection of certain field notes and working records used in compilation of the claim book. The High Court held that the provision of the claim book did not constitute a waiver of the privilege in respect of the documents which formed some of its sources. In the events which happened, the claim book was not actually used in evidence. That feature appears to have been of some relevance: see per Gibbs CJ at 483, Mason and Brennan JJ at 489 and Deane J at 492 although Dawson J at 499 took a different view. As Gibbs CJ said at 483-484:

"The 1982 Claim Book was a document of a kind that would not be admissible in ordinary proceedings, but if it had been admissible in the proceedings before the Aboriginal Land Commissioner, and if it had in fact been admitted as evidence, the appellant would have been entitled to test its accuracy and weight, and since that could hardly be done unless it was known on what sources it was based, considerations of fairness might have required those sources to have been produced. However it was not unfair or misleading for the claimants to make some reference to the book during the opening of the case before Kearney J. and to put some questions in the course of the examination of two of the witnesses, without making the source materials available. . . . The contents of the source materials were not revealed, and the 1982 Claim Book does not show how any particular source document was used. The case is not one in which the disclosure of a document, or the giving of evidence, without the disclosure of associated material, would give a partial or misleading picture, or would otherwise prejudice or embarrass the appellant in the conduct of the case."

However, I do not consider that the High Court determined that invariably once such a document does become evidence all the documents giving rise to its creation are or should be available for inspection. Whether they should or should not be so produced will depend upon whether they do provide any foundation for the opinions expressed by the expert or whether the picture may be misleading or partial only if they are not produced. I agree with the reasons of Foster J in Dingwall v Commonwealth of Australia (1992) 39 FCR 521 on that topic. In that case, a proposed medical witness was subpoenaed to produce all letters of instruction and like documents provided to him upon which his detailed medical report had been prepared. Although the issue arose pre-trial, Foster J considered the issue as if the medical report had in fact been received in evidence. At the time of his Honour's consideration of the question, he accepted the doctor's explicit statement in response to the question asked of him that the opinions expressed in his report had not been founded upon any information conveyed by the instructions or in any of the other subpoenaed documents. That being so, his Honour concluded that the privilege in the letter of instructions and other subpoenaed documents had not been waived by the (assumed) presentation of the expert medical opinion into evidence. There was no indication that those documents were used in the preparation of the medical report in a way that could be said to have influenced the content of the medical report. His Honour recognised that the issue might be raised again during the course of the doctor's evidence.

As noted above, in any event the approach to the present issue is to be within the confines of Pt 3.10 of the Act. Under s 122, the test of waiver is not predicated upon fairness but "is a quantitative one, which asks whether there has been sufficient disclosure to warrant the loss of privilege" (Adsteam, at 426). Considerations of fairness may nevertheless be available to ensure a party is not disadvantaged by a claim for client legal privilege: s 126 of the Act, as discussed by Sackville J in Towney v Minister for Land and Water Conservation for New South Wales (1997) 147 ALR 402 . In Towney, the question confronting the Court was whether documents, produced to the Court under subpoena and which were in themselves the subject of client legal privilege, should nevertheless be available to the party who caused the subpoena to be issued for its inspection. The claim involved a native title claim brought by the applicant. The subpoenaed documents related to the preparation of an expert anthropological report which had been filed in accordance with an order of the Court. It was claimed that it was necessary to examine the subpoenaed documents to properly understand that final anthropological report. Sackville J ordered that the documents be made available for inspection on that basis. Section 126 does, however, have an incidental significance to this matter. Counsel for the applicants expressed in argument the concern that if the two documents called for are no longer the subject of client legal privilege in the circumstances, there will be great difficulty in knowing "where the line is to be drawn". The spectre of waiver with respect to drafts, notes of discussions and other incidental materials, was raised, and not simply with respect to expert witnesses but to any witness. Part of the answer to that concern may lie in the proper application of s 126 in the circumstances of any particular case.

In this matter, it was argued only that s 122(4) in the circumstances led to the waiver of privilege in the two letters of instruction. Section 122(1) and (4) relevantly provide:

"(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. . . . (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party; or (b) if the client or party is a body established by, or a person holding an office under, an Australian law - the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held."

The issue is whether, because of the presentation of Mr Haslock as a witness or because of the terms of his evidence-in-chief or, indeed, because of evidence which has been permitted to be adduced in cross-examination without objection, the substance of the instructions given to him has been disclosed to the Court with the express or implied consent of the client.

In my view, the calling of an expert witness does not of itself amount to disclosure of the substance of the instruction or instructions given to that witness. There will be cases where the nature of the issue being addressed may involve such a conclusion. There will be cases where the operation of s 126 may mean that materials provided to that expert, even if not identified by the expert, should be disclosed notwithstanding that they may be the subject of client legal privilege. This is not necessarily such a case.

The only material pointed to within the evidence of Mr Haslock which may amount to disclosure of the instruction given to him is in par 6 of his report and in two brief passages of oral evidence during cross-examination. Paragraph 6 of his report reads:

"I have been requested by the solicitors for [the applicants] to quantify the economic loss suffered by the applicants as a result of actions taken or not taken by Dairy Vale Foods".

It does not otherwise refer in any detail to the nature of the letter of instructions. In the course of his evidence he referred to the fact that he had been instructed to quantify the loss suffered by the business of milk vendor which Tirango conducted. He confirmed that not only had he been instructed to assess the loss on that basis, that is the loss of value in the business as distinct from the loss to Tirango itself, but that it was his opinion that it was appropriate to proceed in that way. I have referred to the only evidence on the topic of the facsimile of instructions for the later supplementary statement. He did not identify any material contained in the two instruction documents which he had taken into account in forming his views as expressed in evidence.

In my view, his evidence does not amount to disclosure of the substance of his instructions to the Court with the express or implied consent of the client. If, by having called Mr Haslock, the terms of the letter of instructions or communications with him were disclosed in a substantial way, I would find that that disclosure was with the implied consent of the client. However, as I have indicated, on the material presently before me, I do not think that the substance of that communication has been disclosed in the evidence referred to.

I note that the approach which I have adopted is consistent with the approach of Foster J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Management Ltd (Federal Court, 2 April 1998, unreported). In that case Foster J was confronted with a claim that access to documents otherwise the subject of client legal privilege should be permitted under s 122(4) of the Act. The motion before the Court was for security for costs. An affidavit of a cost consultant deposed to the estimated legal costs and disbursements in respect of legal work to be performed to the completion of the matter. It was sought to have access to the documents emanating from the solicitors upon which that estimate was based. As Foster J observed:

". . . the matter is not to be determined on the basis of fairness, a concept introduced under the common law, but simply on a quantitative basis . . ."

His Honour concluded, after careful consideration of the affidavit, that apart from the reference to two specific documents (which had been made available ) there had not been a "sufficient substantial disclosure" of any information as to constitute a waiver; the costs consultant may have brought her own experience to bear in arriving at the estimated costs.

Accordingly, I rule that the claim for privilege is properly maintained.