Zardo v Ivancic [2002] ACTSC 23 (5 April 2002)

Last Updated: 12 April 2002

Nick Zardo v Mate Ivancic [2002] ACTSC 23 (5 April 2002)

CATCHWORDS

PRACTICE AND PROCEDURE - Discovery - legal professional privilege - surveillance tapes

EVIDENCE - waiver of privilege - material to be adduced at trial - privilege not waived until evidence adduced at trial

Evidence Act 1995, (Cth), s119

Motor Accidents Act 1988 (NSW), s 66

Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, (1999) 162 ALR 123

J Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 110 ALR 510

Konig v Casino Canberra Pty Ltd [2000] ACTSC 67

Pfeiffer v Rogerson [2000] HCA 36; (2000) 172 ALR 625

Sevic v Roarty [1998] NSWSC 462; (1998) 44 NSWLR 287

Zardo v Ivancic [2001] ACTSC 4

Zardo v Ivancic [2001] ACTSC 40

No. SC 772 of 2000

Coram: Master T Connolly

Supreme Court of the ACT

Date: 5 April 2002

IN THE SUPREME COURT OF THE )

) No. SC 772 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: NICK ZARDO

Plaintiff

AND: MATE IVANCIC

Defendant

ORDER

Coram: Master T Connolly

Date: 5 April 2002

Place: Canberra

THE COURT ORDERS THAT:

1. The notice of motion is dismissed

2. Costs reserved

1. This is an application by way of notice of motion of 26 February 2002 that the plaintiff produce certain documents identified in the affidavit of documents. The plaintiff opposes the notice of motion on the basis that the documents are properly subject to legal professional privilege. The substantive matter has a long history. Mr Ivancic claims to have been injured in a motor vehicle accident on 3 July 1997 as a consequence of the negligence of Mr Zardo. The motor vehicle accident is alleged to have occurred in New South Wales, but he issued proceedings in this Court on 29 August 1997. The matter progressed in the ordinary way with a Statement of Particulars and exchanges of certain medical reports, and settlement negotiations took place, with the result that on 14 August 2000 Mr Ivancic and Mr Zardo, through their respective solicitors, executed terms of settlement, and pursuant to these terms of settlement judgment was pronounced by this Court on 15 August 2000 in favour of Mr Ivancic in the sum of $425,000, with an order that Mr Zardo pay Mr Ivancic's costs agreed in the sum of $30,000. Judgment was formally entered on 16 August 2000.

2. It should be recalled that, until the decision of the High Court of Australia in Pfeiffer v Rogerson [2000] HCA 36; (2000) 172 ALR 625, which was delivered in June 2000, it was assumed that the law to be applied in this Court in relation to claims in tort, wherever occurring, was the law of the Australian Capital Territory. It is now established by that case that the law to be applied is the law of the place of the accident, where the accident occurred in another Australian jurisdiction. Accordingly, the law to be applied to the claim was the law of New South Wales, and in particular the Motor Accidents Act 1988 (NSW).

3. On 9 November 2000 the present plaintiff, Mr Zardo, issued proceedings seeking relief against the present defendant, Mr Ivancic, pursuant to s 66 of the Motor Accidents Act 1988 (NSW). That section relevantly provides:

"SECTION 66 REMEDY AVAILABLE WHERE CLAIM FRAUDULANT

66(1) [Financial benefit obtained] This section applies to a claimant if it is established that, for the purpose of obtaining a financial benefit, the claimant did or omitted to do any thing (including the making of a statement) concerning a motor accident or any claim relating to a motor accident with knowledge that the doing of the thing or the omission to do the thing was false or misleading.

66(2) [Relief or recovery of financial benefit] If this section applies to a claimant:

a) person who has a liability in respect of a payment, settlement, compromise or judgment relating to the claim is relieved from that liability to the extent of the financial benefit so obtained by the claimant; and

b) person who has paid an amount to the claimant in connection with the claim (whether under a settlement, compromise or judgment, or otherwise) is entitled to recover from the claimant the amount of the financial benefit so obtained by the claimant and any costs incurred in connection with the claims."

4. In the course of preparation for the hearing of the application pursuant to s 66 of the Motor Accidents Act 1988 (NSW) the defendant required the plaintiff to prepare an affidavit of documents. This was done in proper form on 18 December 2001. The affidavit of documents identifies in part 2 certain documents which it says are privileged from production due to legal professional privilege.

5. The plaintiff applicant makes two substantial arguments at this application. The first relates to video surveillance films identified as category N item 548 in the affidavit of documents. It is argued that this type of material cannot attract legal professional privilege. It further argues that, for those documents which may be capable of attracting legal professional privilege, that privilege has been waived. It is convenient to deal separately with these arguments.

The Video Material.

6. Item N document 548 is described as " box containing surveillance films of various dates." It was argued that such material cannot attract legal professional privilege, or, as better described, in the Evidence Act 1995 (Cth), litigation privilege. It was common ground that the relevant provision is s119 which provides that confidential documents or communications passing between a client and another person (or the clients lawyer and another person) may not be adduced if the documents or communications were "for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding...or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party."

7. It is of course established in an application for discovery (as opposed to the question of adducing the evidence at the trial) the test to be applied is the common law test, which since Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, (1999) 162 ALR 123 is also the dominant purpose test.

8. Mr Blumer, for the defendant, took me to the decision of French J in J Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (1992) 110 ALR 510. In that case His Honour had to consider an application for discovery of a tape made by the union of the happenings outside of the premises of the company during an industrial dispute. The union claimed legal professional privilege. His Honour determined that such a tape did not attract legal professional privilege, saying (at 515):

"The videotapes have, it may be accepted, been brought into existence for the sole purpose of possible litigation. They are in one sense analogous to witness statements. But they are more than that. They are real evidence of events which occurred in public. They were not taken in circumstances to which any confidentiality attached. To attach legal professional privilege to these materials would be to accord excessive respect to the adversarial aspects of litigation and insufficient weight to the objective of determining in litigation the facts in issue. To allow inspection of these materials, in my opinion, infringes no public interest and no established category of privilege."

9. Mr Blumer submitted that this case stands as authority for the proposition that a video tape cannot be a confidential communication. With respect I do not agree. Justice French was considering whether legal professional privilege extended to a tape of public events. I note that a similar argument was developed before me in Konig v Casino Canberra Pty Ltd [2000] ACTSC 67 in relation to an application for preliminary discovery of a surveillance tape held by a casino of events in the foyer of the casino where an assault allegedly occurred. Although J Corp was not brought to my attention in that case, I came to the same conclusion that that type of video tape did not amount to a confidential communication, and I ordered discovery.

10. The tapes in question in this application are described as surveillance tapes, and I accept that they are of the type so often encountered in personal injuries litigation where a person who claims to be disabled by a tortfeasor is filmed in the hope, no doubt, of obtaining film showing the person undertaking activities which they claim not to be able to undertake by reason of their claimed injury. Such surveillance is of its nature covert and confidential. It is a fact that all of the scientific and medical knowledge available today cannot in many cases prove or disprove the extent to which a claimed injury produces a disability. In such cases a court is dependent upon the credit of the claimant. Surveillance video in many cases can be the only way by which a defendant can test that credit and can impugn claims of disability. It seems to me that the public interest considerations which went against extending privilege in J Corp and Konig v Casino Canberra go in this case towards retaining the privilege that I consider has always been thought to attach to surveillance films commissioned by a party to personal injuries litigation.

11. I am of the view that surveillance video material of a claimant commissioned for the dominant purpose of preparing for personal injuries litigation is material that is properly the subject of a claim for legal professional privilege or litigation privilege.

Waiver

12. Mr Blumer submitted that, even if the documents in part 2 of the affidavit of documents were all to be considered as capable of attracting legal professional privilege, that privilege should be deemed to be waived. This is because, he says, it will be necessary for the plaintiff to put all of this material before the court for the substantive hearing of the application.

13. This matter had previously been before me and in Zardo v Ivancic [2001] ACTSC 4 where I had stuck out the statement of claim. The matter went on appeal to the Full Court (Zardo v Ivancic [2001] ACTSC 40) where the appeal was upheld, and the plaintiff was given leave to file an amended statement of claim. In the course of their reasons the Full Court said that, at the trial

"the party asserting relief from liability will need to establish the relevant false statements and omissions, the fact that the relevant payment, settlement, compromise or judgment was based at least in part upon such statements or omissions and the extent of the benefit thereby obtained." (at para 11)

14. Mr Blumer argued, and Mr Garling SC largely agreed, that it would be necessary at the hearing of this matter for the plaintiff to give evidence as to how and in what respect it claims to have been mislead, and that to do this much of the material, by way of medical examinations, expert reports, and surveillance material, would need to be before the court. Mr Blumer submitted that, as this material would eventually be before the court, the privilege should be taken to have been waived.

15. Mr Garling argued that, while privilege would be waived at the point at which the material is put in to evidence, it does not follow that, because material may be placed in evidence in the future, it is to be taken to amount to a waiver of privilege before the trial. If this were the case, it would follow that, in all cases where a burden of proof fell on a party, material relevant to that would be deemed to have privilege waived. All medico legal reports, on this argument, would be discoverable before trial. This is not the law.

16. I accept that privilege is capable of being waived at common law, and that the relevant principles are to be found in Attorney General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, and Mann v Carnell [1999] HCA 66, (1999) 168 ALR 86. What is necessary for waiver is an intentional act inconsistent with the maintenance of the confidentiality of the information. It would be wrong in principle for a court to make an assumption that a party will inevitably have to disclose some material in the future, and so deem this to be an implied waiver. As Mr Garling noted in argument, forensic decisions will always be taken up to and during the trial which could mean that any assumption that material will inevitably be released at trial may well prove to be unfounded.

17. While Mr Blumer asserts that, as a matter of fairness it is more appropriate, if the material is to be disclosed at trial for the material to be disclosed before trial to enable full examination to occur, it remains the law that

"What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality; not some overriding principle of fairness operating at large" (per Gleeson CJ, Gaudron, Gommow and Callinan JJ in Mann v Carnell at [29]).

18. In Sevic v Roarty [1998] NSWSC 462; (1998) 44 NSWLR 287 the Court of Appeal held that the fact that an experts report had been served pursuant to the requirements of the District Court case management regime did not mean that privilege had been waived at that point, because the compulsory service of a report was not a voluntary disclosure. It was accepted that, if the report was adduced in evidence at trial the privilege would be lost at that point.

19. I am therefore satisfied that there has been no waiver of privilege at this point of time.

20. Mr Garling indicated that it could facilitate the running of the hearing if orders were to be made in relation to evidence being given by affidavit. There is merit in this suggestion, and if the parties seek such orders, it would facilitate the plaintiff giving evidence, in effect through the relevant officers of the insurer, as to their thought process in reaching the settlement, and the manner and extent to which they claim to have been mislead. It would then be an option for the hearing to commence for a short proceeding in which that affidavit would go in, at which point all the material referred to in leading to the decision would be subject to discovery. The matter could then be adjourned to enable the defendant to fully consider the material.

21. I should add that there was an issue as to whether certain internal communications within the plaintiff's insurer occurring just after the time of the consent judgment should be considered to be subject to legal professional privilege. I have examined document 460, the first document following the communication to the insurer of the terms of the settlement. I am satisfied that this document was brought into existence in contemplation of legal proceedings pursuant to section 66 of the Motor Accidents Act 1988 (NSW), and that privilege accordingly can run from this point.

22. I dismiss the notice of motion. I reserve the question of costs.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master, Mr T Connolly

Associate:

Date: 5 April 2002

Counsel for the Plaintiff: Mr P. R. Garling SC

Solicitor for the: Phillips Fox

Counsel for the Defendant: Mr M. Blumer

Solicitor for the: Blumers

Date of hearing: 21 March 2002

Date of judgment: 5 April 2002