New South Wales Supreme Court CITATION : Mackinnon v BHP Steel (AIS) P/L & Anor [2004] NSWSC 459 HEARING DATE(S) : 5 May 2004 JUDGMENT DATE : 31 May 2004 JURISDICTION: Common Law JUDGMENT OF : Master Harrison DECISION : (1) The Appeal is dismissed; (2) The decision of Assistant Registrar Howe dated 14 November 2003 is affirmed; (3) The notice of motion filed 26 November 2003 is dismissed; (4) The plaintiff is to pay the first defendant's costs as agreed or assessed. CATCHWORDS : Review of Registrar's decision - production of documents - privilege LEGISLATION CITED : Evidence Act 19995( NSW) - s 122 Supreme Court Rules (1970) (NSW) - Part 36; Part 61 r 3 Abram v National Australia Bank Limited [2001] NSWSC 916 Akins v Abigroup Ltd (1998) 43 NSWLR 539 Attorney General (Northern Territory) v Maurice & Ors (1986) 161 CLR 475; (1986) 69 ALR 31 Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438; [2003] FCA 804 Beaufort Air-Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (unreported, NSWSC, Master Malpass, 18 December 1992) Bell Group Ltd (in liq) v Westpac Banking Corporation (1998) 86 FCR 215 CASES CITED : Brijeski v Sunbeam Corporation Limited (unreported, NSWSC, Master Greenwood, 29 January 1997) Dubbo City Council v Patrick Joseph Barrett [2003] NSWCA 267 Lampson & 2 Ors v McKendry & Anor [2001] NSWSC 373 Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 Mariala Estates Limited v Athanasi & Ors [2001] NSWSC 1013 Modern Woodcraft Pty Ltd v Nott (unreported, NSWSC, Young J, 7 March 1997) Sevic v Roarty (1998) 44 NSWLR 287 Westpac Banking Corporation v Abemond Pty Ltd and Westpac Banking Corporation v Cameron (unreported, NSWSC, Santow J, 3 November 1994) Angus Mackinnon (Plaintiff) PARTIES : BHP Steel (AIS) Pty Limited (First Defendant) Dalmau & Associates Pty Ltd (Second Defendant) FILE NUMBER(S) : SC 20429/1999 Mr D E Baran with Mr P Castley (Plaintiff) COUNSEL : Ms V Heath (First Defendant) Ms F Morphett, Keddies (Plaintiff) SOLICITORS : Ms S Jones, Sparke Helmore (First Defendant) LOWER COURT Supreme Court JURISDICTION : LOWER COURT 20429/1999 FILE NUMBER(S) : LOWER COURT Assistant Registrar Howe JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON MONDAY, 31 MAY 2004 20429/1999 - ANGUS MACKINNON v BHP STEEL (AIS) PTY LIMITED & ANOR JUDGMENT (Review of Registrar's decision – production of documents – privilege) 1 MASTER: By notice of motion filed 26 November 2003 the plaintiff seeks firstly, that the orders made by Assistant Registrar Howe on 14 November 2003 be set aside pursuant to Part 61 r 3 of the Supreme Court Rules 1970 (NSW) (SCR); secondly that access be granted to all documentation briefed to experts whose reports have been served whether or not pursuant to any order or direction of this Court upon the solicitors for the plaintiff; and thirdly, an order that the first defendant pay the costs of the application before Assistant Registrar Howe and of this review. The plaintiff is Dr Angus Mackinnon. The first defendant/first cross claimant is BHP Steel (AIS) Pty Ltd. 2 The plaintiff was employed by the first defendant as an occupational physician. On 24 September 1996 the plaintiff attended a training group for the purpose of undertaking a leadership course. The course has also been described as an "encounter group" (the course). The course was arranged by the first defendant and conducted by the second defendant. The plaintiff in the course of his employment, and during the period of his attendance at the course alleges that he was subjected to verbal and emotional abuse and as a result he sustained severe psychiatric injuries. The plaintiff alleges that he suffered these damages as a result of the breach of statutory duty, breach of contract and negligence of the defendants. The main issue at trial will be the cause of the plaintiff's psychiatric condition. At trial it will become necessary for the Court to evaluate the evidence given by the expert psychiatrists. Review 3 There are some cases that are authority on the consideration that ought to be given on review. They are Beaufort Air-Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (Unreported, NSWSC, Master Malpass, 18 December 1992); Brijeski v Sunbeam Corporation Limited (Unreported, NSWSC, Master Greenwood, 29 January 1997); Westpac Banking Corporation v Abemond Pty Ltd and Westpac Banking Corporation v Cameron (Unreported, NSWSC, Santow J, 3 November 1994); Modern Woodcraft Pty Ltd v Nott (Unreported, NSWSC, Young J, 7 March 1997); Mariala Estates Limited v Athanasi & Ors [2001] NSWSC 1013; and Abram v National Australia Bank Limited [2001] NSWSC 916. 4 From these decisions, the approach I should take is that I should inform myself of all the material before the Registrar at the time when he made the decision, the Registrar's decision and on that basis make my own decision. No new evidence was sought to be relied upon. The Registrar's decision 5 The issue that was before Assistant Registrar Howe was whether access should be granted to documents which had been produced under subpoena addressed to Dr Rob Milton and Professor Chris Tennant. The documents which are the subject of the claim for client legal privilege are those which have been supplied to the two experts for the purpose of compiling their reports (the source documents). Professor Tennant in his report lists the source documents he was given. Dr Milton refers to a videotape and Dr Klug, the treating psychiatrist's reports (the treating psychiatrist's report is not one which in the normal course attracts a claim for privilege). Both reports have been served by the first defendant upon the plaintiff's solicitors pursuant to directions of this court in these proceedings. The first defendant claimed and maintains its claim for client legal privilege in respect of those source documents. The plaintiff submitted, as I understand it, before the Registrar, that because of the reliance on the documentation (the source documents) by the doctors in formulating their opinions, there has been an implied waiver of privilege. The plaintiff's counsel also referred to Schedule K and submitted that in complying with the obligation in Schedule K the doctors are obliged to make available to the plaintiff those source documents relied upon in the preparation of their reports. 6 Part 36 r 13(1) and (2) of the SCR state: "13 Privilege (1) This rule applies where: (a) the Court, by subpoena or otherwise, orders any person to produce any document to, (b) … (c) …, the Court or a Judge or any officer of the Court, or any examiner, referee, arbitrator or other person authorised to receive evidence and neither Part 3.10 of the Evidence Act nor Part 3.10 of the Evidence Act 1995 of the Commonwealth is applicable. (2) The Court shall not compel, and rule 16 shall not require, production of a document or an answer to a question, unless and until the Court directs that the production or answer shall not be prevented by this subrule: (a) over the objection of a person if evidence of the document, or of an answer to the question, could not be adduced in the proceedings over the objection of the person, by virtue of the operation of Part 3.10 Division 1 of the Evidence Act, … (h) in the case of the answer to a question—if an answer would disclose or result in disclosure of information the disclosure, admission or use of which in the proceeding would be contrary to any Act or Commonwealth Act other than the Evidence Act or the Evidence Act 1995 of the Commonwealth." 7 Part 36 r 16 of the SCR refers to a notice to produce. 8 Recently the Court of Appeal in the decision of Dubbo City Council v Patrick Joseph Barrett [2003] NSWCA 267 at paragraph 12 explained the purpose of Part 36 r 13 of the SCR as follows: "Part 36 r 13 of the Supreme Court Rules 1970 says that where the court by subpoena or otherwise orders a person to produce any documents and Part 13.10 of the Evidence Act is inapplicable, then the court shall not require production of a document where evidence of that document could not be adduced in the proceedings because Part 3.10 Division 1 of the Evidence Act. The purpose of the rule is to make the rules as to privilege set out in the Evidence Act and relating to the giving of evidence also to the pre-trial procedures; cf Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49." 9 In Akins v Abigroup Ltd (1998) 43 NSWLR 539, the Court of Appeal determined experts' reports to be served on other parties in compliance with a practice note were disclosed under compulsion of law. This meant that any privilege which attached to them was not lost. The decision was followed by the Full Federal Court in The Bell Group Ltd (in liq) v Westpac Banking Corporation (1998) 86 FCR 215 and Sevic v Roarty (1998) 44 NSWLR 287. 10 At a status conference the court ordered the defendant to serve reports. Thus the reports of Professor Tennant and Dr Milton were served under compulsion of law. 11 At paragraph 10 Assistant Registrar Howe held that: "10 …the reports of Dr Milton and Professor Tennant were served pursuant to directions given at a Status Conference. Although the direction was in the terms of 'The 1st and 2nd defendants shall serve all expert's reports to be relied upon at trial on or before …', there is no compulsion on any party to tender those reports at trial. All the direction does is to require a party to disclose to the served party the extent of experts' reports which may be relied upon at trial by the serving party so that the opponent is not 'ambushed' at the trial. … 12 In the absence of being informed of any decision of the High Court of Australia contrary to the principles specified in either Sevic or Akins, the court is bound to follow what the Court of Appeal has declared to be the position in New South Wales concerning the client legal privilege which attaches to documents supplied by a client's lawyer to an expert for the purpose of commissioning a report for possible use in litigation." 12 The plaintiff's counsel submitted that Assistant Registrar Howe did not undertake a process of seeking to distinguish the facts before him as opposed to the facts in the cases of Sevic and Abigroup. Since Sevic was decided and in the light of Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66, the NSWSC has clarified by way of amendment to Part 36 r 6 of the SCR that the rules related to privilege as set out in the Evidence Act are applicable to the pre-trial procedures. 13 In Sevic the respondent served a medical report upon the applicant in accordance with a direction by the court. The report referred to documents not annexed to the report in relation to which the respondent claimed privilege. This is essentially the same factual circumstance as the case before me. The Court of Appeal held that privilege had not been lost and dismissed the appeal. Sheller JA examined the issue of waiver with regard to s122 Evidence Act 1995 (NSW). Both Powell JA and Fitzgerald AJA applied the common law. It is the consideration of the Evidence Act which is now relevant. 14 Section 122 of the Evidence Act is headed "Loss of client legal privilege: consent and related matters". Subsections (2), (4) and (5) are as follows: "(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: … (c) under compulsion of law … (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 … (5) Subsections (2) and (4) do not apply to: (a) a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or (b) a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to a proceeding or an anticipated or pending proceeding in an Australian court or a foreign court." 15 It was held by Sheller JA that the disclosure of the report was not made voluntarily but under compulsion of law and any legal professional privilege, which was attached to those source documents, was not lost. The Registrar was correct to apply Servic and reach the same conclusion as in Servic that the source documents do not have to be disclosed. 16 Alternatively, the plaintiff submitted that paragraph 4 from the following passage from Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438; [2003] FCA 804; per Lindgren J, provided support for the view that there was an implied waiver of privilege over the source documents provided to Dr Milton and Professor Tennant. At 21 Lindgren J stated: "1. Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corp Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 ('Interchase') at 151 per Pincus JA, at 160 per Thomas J. 2. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ('Propend'); Interchase, per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17]. 3. Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161-162 per Thomas J. 4. Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, 487-488 per Mason and Brennan JJ, 492-493 per Deane J, 497-498 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 ('ACCC v Lux') at [46]. 5. Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148-150 per Pincus JA, at 161 per Thomas J. 6. It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report; cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; ACCC v Lux at [46]." 17 Southcorp (para 4 excerpted above) gives support to the plaintiff's submission in that if the defendant relies on either of the reports of Dr Milton and Professor Tennant in litigation, an inference is to be drawn that they were used in a way that could be said to rely on the report without disclosure of the brief, instructions or documents. 18 Assistant Registrar Howe stated [at para 9]: "Put colloquially, when the court directs all litigants to expose their hands, the parties must place their cards face up on the table. Such a compulsion does not strip away any privilege which may be claimed for the reports or the documents behind those reports. At trial, a litigant is free to play one or more cards from the exposed hand, but not play a card plucked mysteriously from thin air. Since it will be the free choice of the litigant to use one or more of those exposed cards at the trial, then any claim for privilege for the documents behind that report also falls away, in line with the principle (4) in ASIC [Southcorp] above." 19 At this stage, it is still open to the defendant to choose not to rely upon these reports at trial. Thus, at this stage, paragraph 4 in Southcorp does not come into operation because there is, as yet, no reliance sought to be placed upon those reports. I agree with the decision of Assistant Registrar Howe. 20 According to the plaintiff, the form and structure of the experts' reports relied on by the serving party made reference to external documents and required the Registrar to determine an "implied waiver" regarding access to such material for the purpose of the party receiving the expert report and referred to Attorney General (Northern Territory) v Maurice & Ors (1986) 161 CLR 475, (1986) 69 ALR 31 and this submission was made to the Registrar. The submission made to the Registrar was not as clear as that. It was that the documents over which a claim for legal professional privilege was sought to be asserted should be dismissed because there had been an implied waiver of privilege. 21 In Maurice Mason and Brennan JJ stated [at 487-488]: "The limiting effect of legal professional privilege on the availability of evidence otherwise relevant is confined, inter alia, by the doctrine of waiver. A litigant can of course waive his privilege directly through intentionally disclosing protected material. He can also lose that protection through a waiver by implication. An implied waiver occurs when, by reason of some conduct on the privilege holder's part, it becomes unfair to maintain the privilege. The holder of the privilege should not be able to abuse it by using it to create an inaccurate perception of the protected communication." 22 Gibbs CJ [at 484] put it another way: "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." 23 In Mann v Carnell the majority of the High Court (per Gleeson CJ, Gaudron, Gummow and Callinan JJ) stated at para 29: "Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect… What brings about the waiver is the inconsistency, which the courts, where necessary informed by the considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principles of fairness operating at large." 24 After reading the reports of Professor Tennant and Dr Milton, it is my view that the source material that the experts have relied upon as a basis for their opinions has been particularised in their reports. It is it not unfair to the opponent if the source records are not disclosed to the plaintiff. The contents of the report appraise the plaintiff of the psychiatric opinion and issues he will be called upon to address at trial. It may be different if and when the experts actually give evidence in the witness box and answer questions referring to material that has not been particularised their reports. 25 In Lampson & 2 Ors v McKendry & Anor [2001] NSWSC 373 I considered whether the source documents submitted to Dr Wilkinson for use in preparation of his report should be supplied to the plaintiff. The plaintiff in Lampson made the same submissions in relation to Schedule K that has been made here. As in this case, the plaintiff submitted that in order to meet the matters raised in the report it was vital that the plaintiffs have access to all documents from which the report was prepared. I declined to grant access to those documents for the same reasons referred to above. This submission also fails. 26 The appeal is dismissed. The decision of Assistant Registrar Howe dated 14 November 2003 is affirmed. The notice of motion filed 26 November 2003 is dismissed. 27 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the first defendant's costs as agreed or assessed. 28 The court orders: (1) The appeal is dismissed. (2) The decision of Assistant Registrar Howe dated 14 November 2003 is affirmed. (3) The notice of motion filed 26 November 2003 is dismissed. (4) The plaintiff is to pay the first defendant's costs as agreed or assessed. ********** Last Modified: 06/07/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.