Ziverts v City of Albany
[2016] WASC 94
•30 MARCH 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ZIVERTS -v- CITY OF ALBANY [2016] WASC 94
CORAM: BEECH J
HEARD: ON THE PAPERS
DELIVERED : 30 MARCH 2016
FILE NO/S: CIV 3001 of 2012
BETWEEN: CATHERINE ZIVERTS
Plaintiff
AND
CITY OF ALBANY
Defendant
Catchwords:
Practice and procedure - Discovery and inspection - Legal professional privilege - Whether discovered documents are the subject of litigation privilege
Legislation:
Rules of the Supreme Court 1971 (WA), O 26 r 4, O 26 r 12
Result:
Inspection of certain documents ordered
Claim to privilege otherwise upheld
Category: B
Representation:
Counsel:
Plaintiff: No appearance
Defendant: No appearance
Solicitors:
Plaintiff: Douglas Cheveralls Lawyers
Defendant: DLA Piper Australia
Case(s) referred to in judgment(s):
AW v Rayney [2010] WASCA 161
AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30
Bond v West Australian Newspapers Ltd (No 3) [2009] WASC 129
Carey v Korda [2012] WASCA 228
Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] 225 ALR 266; (2005) FCA 1247
CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48
Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 213 CLR 543
Esso Australia Resources Ltd v Commissioner of Taxation of (Cth) [1999] HCA 67; (1999) 201 CLR 49
Grant v Downs (1976) 135 CLR 674
Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410
Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332
National Employers Mutual General Insurance Association v Waind (1979) 141 CLR 648
Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357
Trade Practices Commission v Sterling (1979) 36 FLR 244
BEECH J:
Introduction
In this action the plaintiff, Ms Ziverts, sues the City of Albany in nuisance and negligence, claiming that the City's acts and omissions have caused flooding and other damage to her land. The plaintiff disputes a number of the claims of legal professional privilege made by the City in its discovery. By consent, the case manager ordered that another judge determine the disputed privilege claims on the papers.
Legal principles
Legal professional privilege protects the confidentiality of certain communications made in connection with the giving or obtaining of legal advice or the provision of legal services, including representation in proceedings in court.[1]
[1] Esso Australia Resources Ltd v Commissioner of Taxation of (Cth) [1999] HCA 67; (1999) 201 CLR 49 [35].
Privilege attaches to communications, not to documents as such. However, a document created for the dominant purpose of giving or seeking legal advice will be privileged.[2]
[2] Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 [9]; AWB Ltd v Cole (No 5) [2006] FCA 1234; (2006) 155 FCR 30 [41]; Bond v West Australian Newspapers Ltd (No 3) [2009] WASC 129 [14].
Litigation privilege applies to confidential communications passing between a client, the client's legal adviser and third parties for the dominant purpose of use in litigation which is either pending or in contemplation.[3] For a claim to litigation privilege to succeed when no action was pending, evidence must establish there was a real prospect of litigation, but it is not necessary to show that litigation was considered more likely than not.[4]
[3] AW v Rayney [2010] WASCA 161 [17].
[4] Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332 ; AW v Rayney [17].
Legal professional privilege extends to material prepared for the dominant purpose of communication to the legal adviser even if the communication has yet to occur.[5] Communications passing between a party and a third person made for the purpose of being put before the solicitor to obtain the solicitor's advice or to enable the solicitor to prosecute or defend an action will be privileged.[6]
[5] Grant v Downs (1976) 135 CLR 674, 690; AW v Rayney [18].
[6] Trade Practices Commission v Sterling (1979) 36 FLR 244, 246.
The person claiming legal professional privilege must prove that the information or documents in question are privileged.[7] While the ultimate legal onus is on the party claiming privilege, an evidential onus may be cast upon the party seeking inspection if a claim for privilege is 'apparently proper'.[8]
[7] Grant v Downs, 689; Schreuder v Murray (No 2) [2009] WASCA 145; (2009) 41 WAR 169 [60]; AW v Rayney [23].
[8] CTC Resources NL v Australian Stock Exchange Ltd [2000] WASCA 19; (2000) 22 WAR 48 [33] ‑ [34]; Carey v Korda [70].
What is required for the purpose of establishing a privilege claim will vary depending on the nature of the document and the particular ground on which privilege is claimed.[9] It may be proved by evidence as to the circumstances and context in which the communications occurred or in which the documents were brought into existence, the nature of the document, or by evidence as to the purposes of the person who made the communication, authored the document or procured its creation.[10] A claim of privilege will not be established by verbal formula, or by mere assertion in general terms that communications were undertaken for the purpose of obtaining or giving legal advice without a statement as to the subject matter of the advice said to have been sought.[11]
[9] Carey v Korda [2012] WASCA 228 [71]; Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410, 415.
[10] Grant v Downs (689); AWB Ltd v Cole (No 5) [44 (1)].
[11] Esso Australia Resources [52]; AWB Ltd v Cole [44 (3)].
The purpose for which a document is put into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's author or the person who procured it is not necessarily conclusive.[12] In determining whether a document was created for the dominant purpose of giving or obtaining legal advice or the provision of legal services, an appropriate starting point is to ask what was the intended use or uses of the document which account for its being brought into existence.[13]
[12] AWB Ltd v Cole (No 5) [44 (5)]; AW v Rayney [25].
[13] Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357 [35]; AWB v Cole (No 5) [44(6)]; AW v Rayney [24].
A court may examine documents where there is a disputed claim to privilege.[14] A court should not be hesitant to exercise the power.[15] I have done so in this case.
[14] Rules of the Supreme Court 1971 (WA) O 26 r 12(2).
[15] Esso Australia Resources [52]; Grant v Downs 689; Schreuder v Murray (No 2) [61].
A dominant purpose is one that predominates over other purposes; it is the prevailing or paramount purpose.[16] Where there are two purposes of equal weight, neither can be said to be dominant. If the decision to bring the document into existence would have been made irrespective of any intention to obtain legal advice, the purpose of obtaining legal advice cannot be the dominant purpose for the making of the document.[17]
[16] AWB Ltd v Cole (No 5) [44 (5)] and cases there cited; AW v Rayney [24].
[17] Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] 225 ALR 266; (2005) FCA 1247 [30(8)].
Joint privilege arises where two or more persons jointly communicate with a lawyer for the dominant purpose of obtaining or providing legal services. Joint privilege also arises if one of two or more persons communicate with a lawyer for the dominant purpose of obtaining or providing legal services, if the other person or persons share an interest in the subject matter of the services. In those circumstances, the communication of privileged material between them does not involve any waiver.[18]
[18] Schrueder v Murray (No 2) [64] ‑ [65].
The purpose of assisting an insurer to decide, in the course of its business, how it would deal with an insured's claim under its insurance policy is not a purpose that attracts legal professional privilege.[19]
[19] National Employers Mutual General Insurance Association v Waind (1979) 141 CLR 648, 655 ‑ 657.
General background
The City has filed an affidavit of Luke Mettimano in opposition to the application for inspection. Mr Mettimano is the Senior Claims Consultant for the self insurance scheme known as LGISWA (LGIS). LGIS is a self insurance fund scheme for local government authorities in Western Australia. Under agreements made with its local government members, LGIS has management of claims for legal liability made against members. In managing claims, LGIS often appoints solicitors to provide advice as to liability and to defend and negotiate the settlement of claims.[20]
[20] Affidavit of Luke Mettimano [3] ‑ [5].
On 6 December 2007, Ms Ziverts wrote to the City alleging that it was legally liable for the flooding of her property and demanding compensation. On 18 November 2008, the City lodged a claim with LGIS for indemnification against Ms Ziverts' demand. That claim is discovered document 147, which is one of the documents in respect of which the City's claim to privilege is disputed.
Mr Mettimano says that upon receiving the City's claim and the letter of demand, he formed the view that there was a real possibility that Ms Ziverts would commence legal proceedings against the City. He organised for LGIS to appoint Echelon Australia Pty Ltd (Echelon) to investigate the factual circumstances of Ms Ziverts' claims against the City. He did that in order to brief solicitors to assist with the defence or resolution of the claim, collate information for use in defending and potentially negotiating settlement of the claim and to inform LGIS's decision‑making regarding the defence or settlement of the claim.[21]
[21] Affidavit of Luke Mettimano [13].
On 23 September 2009, Ms Ziverts wrote a further letter of demand to the City threatening to commence legal action within seven days of that letter.[22]
[22] Affidavit of Luke Mettimano [7.3], annexure LM2.
Mr Mettimano says that all of the communications the subject of the disputed documents were 'created solely to collate information for use in defending or potentially settling the anticipated litigation'.[23]
[23] Affidavit of Luke Mettimano [32].
The disputed documents
The plaintiff disputes the City's claim to privilege in relation to documents 147 ‑ 164 and 236 on the City's list of discovered documents. I will outline the character of each of the disputed documents in the course of resolving whether, in each case, the claim for privilege should be upheld.
It is convenient to group the disputed documents into three categories: the claim forms; documents created prior to October 2009; and documents from October 2009.
The resolution of the application
The claim forms
Documents 147 and 154 are the documents by which the City gave notice to LGIS under the City's insurance policy of the claims made against the City by Ms Ziverts. For the reasons that follow, I am not satisfied that these documents were created for the dominant purpose of being communicated to solicitors for advice or being communicated to solicitors for use in defending anticipated litigation.
Document 147 is described in the discovery list as follows:
147.
Copy of letter from Erin Williamson (City of Albany) to Luke Mettimano (Local Government Insurance Services), attaching:
147.1 Copy of document titled 'Municipal Liability Scheme, Public Liability Claim Form', with handwritten annotations, dated 18 November 2008
147.2 Bundle of copy photographs, undated
147.3 Copy of handwritten letter from Catherine Ziverts to the City of Albany, with handwritten annotations, dated 6 December 2007
18.11.2008
Mr Mettimano's evidence in relation to document 147 is as follows. The letter that is part of document 147 was from the City to him providing notification of Ms Ziverts' claim. The letter annexed a public liability claim form. That is a pro forma document produced by LGIS. LGIS generally requires all members to complete a public liability claim form when providing notification of claims. Mr Mettimano outlines various categories of information provided by members in the public liability claim form.[24] He says the information in the public liability claim form is requested in order to collate information from the member to use in defending or potentially settling a claim against the member in anticipated litigation.
[24] Affidavit of Luke Mettimano [17].
Mr Mettimano does not say anything specifically about whether the public liability claim form is also used in order to enable the City to notify LGIS of its claim and to enable LGIS to make a decision as to whether it indemnifies the insured local government. I infer, from the nature of the document, and from my inspection of it, that those are also substantial purposes of the document. I do not accept Mr Mettimano's apparent assertion that this document was 'created solely to collate information for use in defending or potentially settling the anticipated litigation'.[25] The inherent nature and evident purpose of the claim form belies that assertion.
[25] Affidavit of Luke Mettimano [32].
I am not satisfied that document 147, including the claim form and its attachments, was created for the sole or dominant purpose of obtaining legal advice or to assist solicitors in defence of a contemplated claim by Ms Ziverts. I am not satisfied that that purpose predominates over the purposes of the making of the claim by the City and of enabling LGIS to assess whether it would grant indemnity under the LGIS scheme. I infer that the letter and the claim form, filled in by the City, would have been brought into existence irrespective of the purpose of obtaining legal advice and defending the contemplated action by Ms Ziverts.
For these reasons I will order inspection of document 147.
Document 154 is a public liability claim form in respect of an incident on 7 September 2009 giving notice of a further claim by Ms Ziverts. For corresponding reasons, I am not satisfied that this document is privileged.
Documents prior to October 2009
Documents 148 and 149 are emails dated 27 November 2008 between employees of the City and Echelon. The nature of the documents and Mr Mettimano's evidence[26] suggest, and inspection of the documents confirms, that Echelon was making factual enquiries on behalf of LGIS in relation to Ms Ziverts' claim.
[26] Affidavit of Luke Mettimano [19].
Document 150 is a chain of two emails ending with an email from Ms Williamson, an officer of the City, to an officer of LGIS. The email discusses what communications have been received by the City from Ms Ziverts.
Document 151 is an email between employees of the City seeking information requested by Echelon.
Document 236 is a report dated February 2011 by Echelon which was provided to Mr Mettimano concerning Ms Ziverts' claim for compensation.
For the reasons that follow I am not satisfied that any of the documents created before October 2009, namely documents 148 ‑ 151 and 236, are the subject of legal professional privilege.
Mr Mettimano says the purposes for which Echelon was engaged to collect information relating to the claim were to:
(1)brief solicitors to assist with the defence or resolution of Ms Ziverts' claim;
(2)collate information to use in defending and potentially settling the claim;
(3)inform LGIS decision‑making regarding defence or settlement of the claim.[27]
[27] Affidavit of Luke Mettimano [13].
Mr Mettimano's evidence does not identify whether, when he appointed Echelon, he had decided to engage solicitors. His evidence is that, when a claim is made, in managing the claim, LGIS 'often' appoints solicitors. Thus, some claims are managed to completion without the involvement of solicitors.
I infer that up until October 2009, LGIS was pursuing the prospect of settling Ms Ziverts' claim without involving solicitors in any way. From my inspection of the documents, I infer that LGIS only decided to brief solicitors in October 2009 after Ms Ziverts' second claim was received. The purpose of assisting LGIS to settle a claim without involving solicitors does not attract legal professional privilege. Nor, in itself, does the purpose of enabling LGIS to decide whether to brief solicitors in relation to the claim. A purpose of submitting a document to solicitors to assist in defending or settling a case does attract legal professional privilege. Mr Mettimano's evidence does not satisfy me that these documents were created for the dominant purpose of being submitted to LGIS' solicitors, as distinct from the first two purposes.
For these reasons I would order inspection of documents 148 ‑ 151 and document 236.
Documents from October 2009
Document 152 is a chain of two emails from October 2009 between an employee of the City and Mr Mettimano discussing information requested by Echelon.
Document 153 is a chain of seven emails from October 2009 between an employee of the City and Mr Mettimano discussing correspondence from Ms Ziverts regarding the alleged flooding of her property, the appointment of solicitors on behalf of the City, the inspection of Ms Ziverts' property and the provision of information by the City to LGIS regarding Ms Ziverts' claim.[28] Inspection of the emails reveal that in October 2009 Mr Mettimano decided to appoint solicitors to Ms Ziverts' claim.
[28] Affidavit of Luke Mettimano [23].
Document 155 comprises copies of documents 152, 153 and 154, and an email from Mr Mettimano requesting the City to obtain specified further information or material.
Documents 156 and 157 are emails sent in May 2011 from an employee of the City to Mr Mettimano providing information about Ms Ziverts' correspondence with the City regarding the alleged flooding of her property.
Document 158 is a chain of two emails from May and June 2011 between an officer of the City and Mr Mettimano concerning Ms Ziverts' correspondence with the City and the steps being taken by the City's lawyers.
Document 159 is a chain of two emails from early July 2011 between an employee of the City and Mr Mettimano in which the City's employee raises the possibility of town planning issues being relevant to Ms Ziverts' claim.
Documents 160 to 164 are emails sent in the second half of 2011 from an employee of the City to Mr Mettimano. In each case the email attaches Ms Ziverts' correspondence with the City concerning the alleged flooding of her property.
I am satisfied by Mr Mettimano's evidence, and from my inspection of the documents, that apart from document 154, documents 152 ‑ 164 all either relate to communications for the sole or dominant purpose of obtaining information to be put before the solicitors to enable the defence or settlement of Ms Ziverts' claim, or record confidential communications from the solicitors. I have considered all of the emails in each chain and am satisfied that each email is privileged.[29] Having inspected the documents, I am satisfied that none of them was created for the purpose, even in part, of assisting LGIS to decide whether to accept liability under the insurance policy.[30]
[29] cf Plaintiff's Submissions [21].
[30] cf Plaintiff's Submissions [20].
For these reasons, in my view, documents 152, 153, and 155 ‑ 164 are privileged.
Conclusion
For these reasons I would:
(1)order inspection of documents 147 ‑ 151, 154 and 236; and
(2)uphold the claim for privilege in relation to the rest of the disputed documents, namely documents 152, 153, and 155 ‑ 164.
On the face of it, the plaintiff's success in challenging a significant number of claims to privilege would seem to mean that the City should pay her costs of the application. I would hear from the parties as to costs.
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