Webber v N & E Enterprises No. DCCIV-20-1733

WEBBER V N & E ENTERPRISES
[2002] SADC 40
Judge Kitchen
Civil

This is an appeal against an order of a Master refusing an application by the defendant that a non-party, Royal & Sun Alliance Workers Compensation (S.A.) Limited (Royal & Sun), produce for inspection by the defendant certain documents discovered by and in the possession of Royal & Sun for which Royal & Sun claimed privilege on the grounds that they were brought into existence “for the dominant, if not the sole, purpose of investigating the potential for an action for recovery against the defendant pursuant to Section 54 of the Workers Rehabilitation and Compensation Act”, (“the Act”).
In his Reasons for Decision the Master identified, and on this appeal counsel for the parties agreed, the relevant documents to be reports by McKenzie & Associates, loss assessors, dated 23^rd June 1998, 7^th September 1998, 3^rd December 1998, 22^nd March 1999 and 19^th April 1999 which had been provided following a written request on 13^th May 1998 by Ms Mary Mackay, a recovery officer employed by the Claims Recovery Unit of Workcover Corporation. Before the Master the defendant did not persist with the application in relation to the report dated 19^th April 1999 which came into existence shortly after Royal & Sun appointed solicitors to act for it concerning a claim against the defendant pursuant to Section 54 of the Act.
The plaintiff’s claim against the defendant is for damages for injuries he allegedly suffered at the defendant’s premises on 8^th January, 1998 when, in the course of his employment by Allied Engineering Pty Ltd (“Allied Engineering”), his left arm was trapped by a steel beam which shifted as he was securing a sling around it preparatory to the beam being lifted for transport to Allied Engineering. Various allegations are made by the plaintiff of negligence on the part of the defendant, all of which are denied.
In an affidavit filed on 12^th November, 2001 in support of the claim for privilege Mr Alastair Spiers deposed that on 14^th January, 1998, Royal & Sun accepted a claim by the plaintiff, made on 12^th January 1998, for income maintenance under the Act for his incapacity for work as a consequence of his injuries on 8^th January, 1998. In 1998 Mr Spiers was employed as a technical officer in the Workcover Recovery Unit (“the Unit”); in his affidavit he stated that the Unit was responsible “for recovery of compensation payments in accordance with Section 54 of the Act” until 1 December, 1998 when “Workcover Corporation outsourced its claims recovery function to nominated claims agents” including Royal & Sun. He deposed that “the potential for the plaintiff’s compensation payments …. to be the subject of a claim for recovery pursuant to the provisions of the Act was identified in May 1998”, it was referred to the Unit, Ms Mackay in her position as recovery officer in the Unit opened a file and on 13^th May, 1998 Ms Mackay in a facsimile to Mr John McKenzie of McKenzie & Associates (“McKenzie”) instructed McKenzie to investigate the plaintiff’s accident on 8^th January, 1998 at the defendant’s premises. The facsimile which is exhibit AS-3 to Mr Spier’s affidavit, reads:
“Your Ref.:       New Referral – possible P/L recovery
Claim No.:29537/07555095/02R
Worker:         Dennis John Webber
Employer:         Allied Engineering
John,
Please investigate the accident a (sic) Nick Crane Services’ premises on 8 January 1998 when this Worker suffered a crush injury to his left arm. A steel beam slipped from a sling during loading operations. A tendon repair has been required and he will be unable to work for some weeks yet. Dr Darren Waters, Orthopod specialising in upper limb surgery, has sent Mr Webber for physio, so please telephone the Worker for an appointment to obtain his statement and that of the witness Bill Richie, also anyone else Mr Webber can name as involved in the accident.
Unfortunately we have no other information than the scant details on the Worker’s claim form, but Allied’s John Stavrinakis will be able to assist you in your inquiries.”
Enclosed with the facsimile was a copy of a document headed “Notice Of Work Related Injury” (Exhibit AS-1) dated 12^th January, 1998 apparently signed by the plaintiff, in which, in a section headed “What Happened”, this appears:
“What were you doing at the time?
Loading Steel Beams.
What led to the injury or the disease?
Slipping of steel.
What exactly caused the injury or the disease?
Steel beam crushing arm (left).”
In his affidavit Mr Spiers stated, concerning the facsimile,
“5. From my inspection of the recovery file relating it is noted that Ms Mackay instructed John McKenzie of McKenzie & Associates, loss assessors, to undertake inquiries in relation to the circumstances in which the plaintiff sustained his injuries on 8 January 1998. The facsimile transmission sheet, whereby Ms Mackay instructed Mr McKenzie to undertake the inquiries concerned, and dated 13^th May 1998, is annexed hereto and marked with the letters “AS-3”. From my experience as the technical officer within the Workcover Corporation I am aware that Ms Mackay’s referral where the words “possible P/L recovery” are referred to, means that Ms Mackay was instructing Mr McKenzie to undertake investigations into a potential public liability recovery against a third party, in this case being Nick’s Crane Services, which I understand to be a commonly used name for the defendant in this action …”
And as to Ms Mackay’s duties:
“6. As of 13 May 1998 Ms Mackay, as part of her role as a recovery officer, was responsible for the ascertaining of potential claims for recovery pursuant to the provisions of the Act, and thereafter the investigation, institution and pursuing of claims for recovery. It was not part of the role of the recovery officer at that time to institute enquiries in relation to matters of a claims management nature, including the initial or subsequent investigation into the compensability of any claim for compensation that might be lodged under the provisions of the Act.”
On 1^st December 1998, Mr Spiers states, Ms Mackay retired from employment, and he became responsible for the “conduct of the recovery file”.
In his Reasons for Decision the Master set out the nature of the defendant’s application, summarised the pleadings and (in more detail than I have) paraphrased the contents of Mr Spiers’ affidavit which was the only evidentiary material Royal & Sun relied upon in opposing the defendant’s application.
It is for the party claiming privilege “to show that the documents for which the claim is made are privileged”: Grant v Downs (1976) 135 CLR 674 at 688.
In Taylor v Gittilla (1992) 59 SASR 361, King CJ wrote, at 364:
“Legal professional privilege protects from production all documents brought into existence for the purpose of use in litigation or of obtaining evidence for use in litigation.”
Lander J in Health & Life Care v Price Waterhouse (1997) 69 SASR 362 at 369 referred, with approval, to the classes of documents or communications identified by Lockhart J in TPC v Stirling ((1979) 36 FLR 244 at 245-246) to be those giving rise to legal professional privilege; they included
“(e)Communications and documents passing between the party’s solicitor and a third party if they are made or prepared when litigation is anticipated or commenced, for the purposes of the litigation, with a view to obtaining advice as to it or evidence to be used in it or information which may result in the obtaining of such evidence …
(f)Communications passing between the party and a third person (who is not the agent of the solicitor to receive the communication from the party) if they are made with reference to litigation either anticipated or commenced, and at the request or suggestion of the party’s solicitor; or, even without any such request or suggestion, they are made for the purpose of being put before the solicitor with the object of obtaining his advice or enabling him to prosecute or defend an action…”
The Master cited these and other cases in setting out the extent of legal professional privilege.
Of course, since Esso Australia v Federal Commissioner of Taxation (1999) 201 CLR 49, the common law test for legal professional privilege is the dominant purpose test.
In Southern Equities Corporation v Arthur Andersen (2001) SASC 398 (unreported) Debelle J wrote at (at paras [13A] and [14] )
“A claim for privilege in a list of documents can constitute no more than a prima facie presumption that the document is privileged. The claim amounts to no more than a bare assertion. It has not been verified by affidavit.
If the opposing party adduces evidence which is capable of rebutting the prima facie presumption that the documents are privileged, the party asserting the claim for privilege must lead evidence to establish the claim. If he fails to do so, the claim for privilege will not, in all likelihood, be upheld. In addition, there is the power of the court itself to examine the documents to see if the claim for privilege has been properly made. That power would be exercised if there is any doubt as to the propriety or validity of the claim for privilege: Alfred Crompton (supra) at 129; Grant v Down (supra) 608, 609.”
The Master judged it was unclear whether the relevant reports were privileged, that is whether Royal & Sun “requested the reports in anticipation of legal proceedings or for the purpose of obtaining legal advice”; he inspected the reports, summarised what they were and concluded:
“[47]Each report is clearly made for the purpose of providing information to the Workcover Recovery Unit and each report and each statement goes to the facts. It is clear that all of the information would be of great assistance to the defendant in defending this action. However that is the relevant test. It seems clear to me that each of these reports were presented to the non party for the purpose of considering material and putting it to a solicitor for advice on chances of recovery.”
Before the Master it was contended by the defendant that the words “possible P/L recovery” in the facsimile to McKenzie dated 16 May 1998 meant “the dominant purpose of the document was to investigate the scant details of the worker’s claim. Therefore the defendant says the dominant purpose of the investigation was for a purpose other than in the context of existing or anticipated legal proceeding.” The Master dealt with that submission:
“52. However I think that it overlooks the simplicity of the non-party’s position. The non-party had no information, save for the circumstances, an injury occurring at the defendant’s premises where the alleged slippage of a sling being used to lift heavy objects caused an injury. This could easily suggest, in the circumstances, a claim for recovery of the workers compensation payments made.
53.    The issue is the “purpose” of the report. If it is obtained with a view to seeking legal advice then it is privileged. The purpose does not need to be expressly stated, although often it will be.
54.    In my view the ”legal” purpose of the documents can be ascertained from:
(i)the basis for the claim of privilege as expressed in the list of documents or supporting affidavits;
(ii)the basis of the request made to obtain the report;
(iii)the scope and nature of the enquiry actually pursued; if the other steps above did not made it clear.
See Grant v Downs (supra) on this topic at page 688-9.
55.    Clearly this information was being ascertained by the non-party so that the recovery section could put it before a solicitor for advice on whether recovery should be pursued. If that is the case then the documents are protected by a claim for legal professional privilege.
56.    At this stage of the investigation a solicitor does not have to be involved. Even if the litigation is only being contemplated there is no doubt that the information in the reports is being collected for the purposes of obtaining legal advice on the chance of recovery.
57.    In my view the work being performed comes precisely within the definition of legal professional privilege protecting the disclosure of confidential communications. There is no doubt that the contents of the document are confidential as it is being obtained for the purpose of advice, even though at that stage recovery was not certain. There is no doubt that the dominant purpose of the investigation is to pursue a right to recovery.
…
63.    Accordingly I am of the view that the four reports are subject to a claim for privilege and are protected from disclosure.
64.    It is correct from the material presented, in particular Exhibit ‘AS3”, which suggests that the dominant purpose is to collect information that the information it will go to a solicitor for legal advice. The position is also clear that the documents are protected when one looks at the surrounding facts and the reports, in particular, the fact that the claim later went to the recovery unit and proceedings were instituted.”
The grounds of the defendant’s appeal against the Master’s order are brief:
“1. That (the Master) erred in holding that the four reports from McKenzie & Associates dated on and after 23^rd June 1998 but before 19^th April 1999 were subject to a claim for privilege.
2. That (the Master) should have ordered that the documents referred to in paragraph 1 above should be produced to the appellant.”
The defendant submits that from the information disclosed in the facsimile, and the accompanying documents, it could be inferred Ms Mackay, the author of the facsimile, thought there might be a possibility of recovery from the defendant under Section 54, but it is urged that was only one of four possibilities, the other three being that the accident occurred without fault on the part of anyone, or it was entirely the fault of the plaintiff, or it was the fault of the plaintiff’s co-workers, in none of which cases could there be a possibility of recovery. Accordingly, the defendant argues, Royal & Sun failed to show that the dominant purpose for bringing the reports into existence was either to obtain legal advice or for use in reasonably anticipated legal proceedings.
In Grant v Downs (supra) Stephen, Mason and Murphy JJ said, at 682-3:
“Although to sustain the privilege it is not necessary that the document has been brought into existence on the advice of the solicitor, it is essential that the circumstances are such that the court can subsequently conclude, viewing them objectively, that litigation can be reasonably anticipated … and this at the time when the preparation of the document is undertaken. However, the fact that the document is brought into existence in anticipation of litigation is not sufficient, without more, to attract privilege; the document must be called into being for use in litigation or for advice and it is the extent to which this purpose is intended to be served by the preparation of the document that is in question.”
In that case reports had been prepared concerning the death of a patient in the grounds of a psychiatric hospital. The patient had been detained in the hospital; he was left alone and escaped, through a window, into the hospital grounds where he died of broncho-pneumonia. In an action brought by the deceased’s widow, legal professional privilege was claimed for the reports. The affidavit in support of the claim stated the reports were prepared for three purposes – whether there had been breaches of discipline by staff, whether there were faults in the security and general running of the institution concerned and, third, to obtain advice concerning the department’s legal position and so that the report would be available for legal representatives of the department should civil proceedings be brought. In their joint judgment Stephens, Mason and Murphy JJ wrote (at 689):
“There was no doubt a reasonable anticipation that litigation might arise out of the accident. This, however, does not overcome the deficiency in point of purpose which is revealed by the affidavits and the character of the documents, for, as we have already observed, the privilege requires a combination of dedication to the stipulated purpose and reasonable anticipation that litigation will ensue before it is attracted.”
In ACCC v Safeway (1998) 153 ALR 393 Goldberg J wrote at 424:
“Whether legal proceedings are reasonably anticipated requires a consideration of the existing state of facts taken in conjunction with the subject matter which gives rise to the context in which the document comes into existence or the communication is made. Where legal proceedings are in existence the relevant relationship between the proceedings and the document or communication is clear. Where the legal proceedings are anticipated one needs more than speculation as to the possibility of such proceedings; one needs a probability or likelihood that such proceedings will commence. It is putting it too highly, in my view to say that a decision must have been made by the moving party or authority that such proceedings will be commenced. It is sufficient in my view, that the moving party or authority has made a decision, for example, that subject to being satisfied as to the strength of the case, proceedings be issued or that, short of such a decision, it can be reasonably anticipated on the facts as known, that legal proceedings are likely. The concept of anticipated proceedings involves a notion that there is a reasonable probability or likelihood that such proceedings will be commenced – not that they will be but rather more probably than not they will be.”
That case concerned whether a claim by the Commission that written statements obtained by a Mr Eva, an employee of the Commission, from persons relating to possible breaches of the Trade Practices Act on the part of corporate retailers were protected by legal professional privilege. His Honour found (at page 413):
“The evidence discloses that Mr Eva was interviewing Sunicrust and Quality Bakers employees to obtain information as to whether those companies had breached the Act and to put that information before the Commission to enable it to decide whether or not to institute proceedings against those companies. Although Mr Eva was also seeking to find out if they had any information against Safeway, the evidence is not such as to satisfy me that the dominant purpose of preparing witness statements from information supplied by these employees was for the purpose of use in prospective or reasonably anticipated legal proceedings. Having regard to the nature and extent of the investigation into Sunicrust and Quality Bakers it seems to me that if there was a dominant purpose for obtaining information and putting it into the form of witness statements that purpose was to obtain information and material for consideration and to place it before the Commission so that it could make a decision whether or not to institute proceedings against those companies.”
In his reasons the Master canvassed whether the documents were brought into existence for the purpose of legal advice as well as whether they were for use in litigation.
The defendant submitted that in the absence of evidence by Ms Mackay of her intention, either directly attested to or plainly expressed in some form contemporaneously with the creation of the documents, a claim for privilege on the ground that the purpose for the creation of the documents was for advice, cannot be sustained. It is urged that Ms Mackay, who sought the documents, has not asserted anything to that effect and neither is it apparent from the material exhibited to Mr Spiers’ affidavit that Ms Mackay had any such intention.
In my opinion just as an assertion of the purpose for which a document was created is not decisive and all the surrounding circumstances must be considered (see ACC v Safeway supra at page 400) so the absence of an assertion is not fatal to a claim for privilege where the claim is that the document was called into being for the purpose of obtaining advice. It is for the court, viewing the circumstances objectively, to conclude whether or not at the time the document was prepared the dominant purpose was to obtain legal advice (Grant v Downs supra 682-3). It is in my view a very relevant circumstance that the documents in question were submitted to solicitors and soon after the date of the last of them proceedings were then commenced against the defendant pursuant to Section 54 of the Act.

The defendant further submitted that absent any “evidence” that the reports were created for the purpose of obtaining advice, it could be that , rather than intending to obtain advice, Ms Mackay intended to make a decision herself whether or not a claim could or should be made, or to determine if advice should be sought. Again in my view it is for the court to objectively consider all the circumstances to decide whether the claim for privilege is made out. The defendant points to there being a series of reports over the space of many months, June 1998 to March 1999, before, it would appear, the reports were sent to solicitors. That, it is urged, is consistent with a decision being made to evaluate each of the reports as they came to hand to determine whether to obtain legal advice and in the absence of evidence it cannot be inferred that, for example, the several reports were but parts of one report the submission of which to solicitors for advice was deferred until the receipt of all parts.
The Master determined to inspect the reports; he set out in his reasons (paragraph 47) his conclusion concerning them. I also have read the reports. In my view the content of them is of a kind which can be characterised to be of the nature of that which, objectively, would be created for the purpose of obtaining legal advice or for the purpose of legal proceedings, and the reason for delivery of them successively is patently clear; as to the latter matter suffice to say that persons are not always easily located by, or readily available to, those who would wish to gather the facts concerning an industrial or other accident. In my opinion the fact that there were a number of reports does not, in this case, support the defendant’s submission.
In relation to the issue of whether or not the documents were brought into being for the purpose of reasonably anticipated litigation, the defendant submits that so little information was available to Work Cover that what was embarked upon by its officer, Ms Mackay, in calling for the creation of the documents is to be seen as an investigation when recovery proceedings were a mere possibility; that is on the facts known when the documents, or at least the first of them, were created it has not been shown it was reasonably anticipated that legal proceedings were likely.
The information which Ms Mackay had, concerning the circumstances of the plaintiff’s injury when she engaged McKenzie in May 1998, appears to have been only that contained in the facsimile which she described as “scant details”.
In his affidavit Mr Spiers deposed that a potential for a claim to be made, pursuant to the Act, for the recovery of compensation payments made to the plaintiff was “identified” in May 1998. He also stated that Ms Mackay as part of her role as a recovery officer “was responsible for the ascertaining of potential claims for recovery” pursuant to the Act. It is not clear whether the decision of there being a potential claim for recovery was made by Ms Mackay , as part of her role, or by someone else before the matter was referred to Ms Mackay.
The defendant contended that it may be there are criteria against which all matters, where payments of compensation for a work injury have been made, are compared to decide which of them should be labelled “a potential public liability”; for example all matters where a worker has been injured on the premises of a person other than his employer and in such a case it could not be found that at the point where an investigation is set in train the report of such an investigation was for the dominant purpose of reasonably anticipated proceedings. Only upon receipt, and a consideration, of the report could it be decided there would be, more likely than not, legal proceedings and therefore the report could not be privileged.
There is nothing in the material before the court to indicate that Ms Mackay, as a member of the Unit, had any role other than to decide in which of the matters referred to the Unit there was a potential for some person to be pursued under Section 54 of the Act. The facsimile which Ms Mackay sent to McKenzie prominently stated “possible P/L recovery” which is consistent with a decision having been made, in the words of Goldberg J. “that subject to being satisfied as to the strength of the case” proceedings be issued under Section 54 of the Act.
The defendant submits that just as there is no assertion by Ms Mackay, or anyone else on behalf of Royal & Sun, that the documents were brought into being for the purpose of obtaining legal advice neither is it asserted (in evidence) that subject to there being a strong case, legal proceedings for recovery were anticipated, and absent such an assertion privilege has not been proved.
In my opinion the absence of such an express assertion is not fatal to the claim for privilege, any more than if made it would be determinative of it. The issue is whether the court can conclude, viewing all the circumstances objectively, that the documents were brought into existence for the dominant purpose of use in litigation, reasonably anticipated, or for advice.
On the evidence before the Master the purpose of the Unit was to pursue claims for recovery. The matter of the payments made to the plaintiff was identified to be such a claim. The facsimile sent by Ms Mackay, by the words “possible P/L recovery” and its whole context, confirmed that identification. The contents of the reports evinced no other purpose than that they were for use in legal proceedings The reports were provided to Royal & Sun’s solicitors. Proceedings were commenced against the defendant. In my opinion each of those factors viewed as a whole lead to the conclusion, on the balance of probabilities, that the reports were brought into existence “for thepurpose of obtaining … legal advice or … for use in litigation that is … intended or reasonably apprehended” (Commissioner, Australian Federal Police v Propend Finance Pty Ltd. (1996) 141 ALR 545 Brennan CJ at 549).
There was no certainty that proceedings would be commenced but that is not necessary. It is sufficient that in all the circumstances it can be concluded that the dominant purpose for the creation of the reports was to obtain legal advice or for use in legal proceedings which were likely. In my view Royal & Sun showed that that conclusion should be drawn. The Master’s Order on the material before him was correct.
The appeal is dismissed.

[2002] SADC 40

17 April 2002