Re Australian Bank Employees' Union v Westpac Banking Corporation [1988] FCA 44 (2 March 1988)

FEDERAL COURT OF AUSTRALIA

Re: AUSTRALIAN BANK EMPLOYEES' UNION
And: WESTPAC BANKING CORPORATION
No. 3 of 1987
Discovery

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Beaumont J.(1)

CATCHWORDS

Discovery - claim to legal professional privilege - whether document brought into existence for purpose of litigation reasonably anticipated.

HEARING

SYDNEY
2:3:1988

Counsel for the Applicant: S. Rothman with J. Wallace

Solicitors for the Applicant: Turner Freeman

Counsel for the Respondent: J.H. West

Solicitors for the Respondent: Freehill Hollingdale & Page

ORDER

The respondent's claim to legal professional privilege in respect of document No. 387 in the respondent's list of documents be disallowed.

Make no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

In these proceedings under s.119 of the Conciliation and Arbitration Act 1904, Australian Bank Employees Union alleges that Westpac Banking Corporation terminated the employment of Miss Kylie Anne Robertson in breach of the Bank Officials (Federal) (1963) Award. The parties have exchanged lists of documents. Included in Westpac's list is a document there described as follows:

"387. Report prepared by Warren Lee & Co. Pty.
Limited Investigators and Assessors and dated 24
July, 1986."

2. Westpac has objected to the production of the document on the ground that it is privileged: the claim, which is disputed by the Union, is for legal professional privilege. It arises in the following circumstances.

3. Miss Robertson commenced employment with Westpac on 3l January 1985. On 4 April 1985, Miss Robertson submitted to Westpac a workers' compensation claim and report of an injury suffered to her left knee when she fell at a railway station on her way to work. On or about 12 April 1985, Westpac received a certificate from Dr. Webb indicating that Miss Robertson should be fit to resume work on 15 April. On about 11 July Westpac's workers' compensation claims manager (Westpac is self-insured) noted that Miss Robertson had been absent from work from 17 June and was expected to return to work on 19 July. On about 18 July 1985, Westpac received a certificate from Dr. Bosanquet indicating that Miss Robertson would be unable to work from 19 July until 16 August. On about 16 August, Westpac received another certificate from Dr. Bosanquet indicating that Miss Robertson would be unable to work until 13 September. On about 28 October, Westpac received a number of documents from Miss Robertson: (1) A further certificate from Dr. Bosanquet dated 16 September stating that Miss Robertson would be fit to resume work on 16 September and that the injury to her knee had healed; (2) a report from Dr. Bosanquet to Dr. Webb dated 13 September; (3) a claim for workers' compensation dated 2 October reporting a further injury on 28 September; (4) a further report from Dr. Bosanquet to Dr. Webb dated 4 October referring to a further injury to her left knee recently suffered by Miss Robertson at home. On about 3 January 1986, Westpac received a further workers' compensation claim form from Miss Robertson dated 11 December 1985, enclosing a number of medical certificates dated November and December to the ultimate effect that Miss Robertson could not resume work until 23 December. Miss Robertson was absent from work between 27 November and 23 December. Westpac accepted that the period of absence between 27 November and 23 December should be treated as workers' compensation leave.

4. On about 28 April, Westpac received three medical certificates from Dr. Webb ultimately stating that Miss Robertson was unable to work until 1 May. Westpac then arranged for Miss Robertson to see Dr. Berns, a consultant physician. At that time, Westpac had not accepted the latest absence from work as compensable. By a report dated 5 May, Dr. Berns stated that Miss Robertson "may be able to resume her usual work-duties later in May 1986." Westpac then decided to pay workers' compensation benefits up to 6 May. Upon receipt of further certificates from Dr. Webb, the compensable period was extended to 16 June 1986.

5. On 23 June, Westpac's claims manager, Ms. C.B. Murray, was informed by Mr. Smallbill, a manager to whom Miss Robertson reported, that she did not return to work on 16 June "but was on recreation leave and was expected to return on 7 July 1986." On 8 July, Ms. Murray was informed that Miss Robertson had still not returned to work. On 9 July, Ms. Murray was informed that Miss Robertson had complained of the treatment by Westpac of the period between 16 June and 7 July as recreation leave, rather than workers' compensation leave. Ms. Murray then arranged for Miss Robertson's workers' compensation leave entitlement to be "reinstated".

6. When Miss Robertson did not resume work, Westpac arranged for her to see Dr. Berns again. Miss Robertson did not keep the appointment arranged with Dr. Berns for 1 August. On that date, Westpac received a number of certificates from Dr. Webb and Dr. Bosanquet dated July to the effect, ultimately, that Miss Robertson could not work until 15 August. On 13 August, Westpac received a certificate from Dr. Bosanquet dated 4 August indicating that Miss Robertson would be unfit until 29 August.

7. In early August, Westpac arranged for Dr. Wearne to see Miss Robertson. Dr. Eggins, who is an assistant in the medical practice to which Dr. Wearne is a consultant, reported to Westpac on 7 August that Miss Robertson should be "fit to perform sedentary work from 1 September 1986 at the latest." He believed that she had a condition called chondromalacia of the patella which had been aggravated by her fall. He suggested that the Bank decline further liability.

8. Having considered this request, Ms. Murray decided to deny any claim for workers' compensation as from close of business on 4 September and issued an instruction that Miss Robertson report for sedentary work on that date. On 15 August, Westpac wrote to Miss Robertson to this effect, adding that from 4 September "absences will be sick leave within your entitlement and then on a leave without pay basis." On about 18 August, Ms. Murray ascertained that Miss Robertson had used all her sick leave entitlement to that date.

9. On about 9 September, Westpac received a claim by Miss Robertson for workers' compensation dated 2 September. By letter dated 17 September, Westpac informed Miss Robertson that it was considering terminating her employment in the light of her failure to report for work on 5 September, and invited her comments. On 4 November, Miss Robertson filed an application in the Compensation Court of New South Wales seeking compensation under the Workers Compensation Act 1926.

10. The document now in contention is dated 24 July 1986. Although O.15 r.14 empowers the Court to inspect it for purpose of deciding the claim for privilege, it was agreed that it was unnecessary to do this because counsel for Westpac was prepared to give us the following information about it. It appears that the document is a surveillance report prepared by a firm of investigators and assessors. The report is addressed to Moray & Agnew, solicitors, and is entitled "Re: Workers' Compensation Claim." The claimant, Miss Robertson, her address and occupation are mentioned, as is "the insured" (i.e. Westpac as self-insured). Warren Lee & Co. Pty. Ltd. report on their surveillance of Miss Robertson and express their thanks to Moray & Agnew for their instructions. There is no direct evidence of any antecedent retainer of Warren Lee & Co. Pty. Ltd. by Westpac. However, attached to the report was an invoice to Westpac as follows:

"Westpac Banking Corporation
Workers' Compensation Division
5th Floor, 154 Phillip Street
SYDNEY NSW 2000

PLEASE QUOTE INVOICE NUMBER 3579

Re: Workers' Compensation Claim
Kylie-Anne Robertson e/b Westpac
To travel to the vicinity of the Claimant's
residence in Westmead on two occasions,

To make enquiries and hold surveillance,

Initial Enquiries 34.00
22 Hours including Travelling
time 561.00
72 Kilometres 27.36
Disbursements 4.00
To Report as Attached 25.00
$651.36"

11. It is now settled that legal professional privilege is confined to documents which are brought into existence for the sole purpose of their being submitted to legal advisers for advice or for use in legal proceedings (see Grant v. Downs [1976] HCA 63; (1976) 135 CLR 674; Baker v. Campbell [1983] HCA 39; (1983) 153 CLR 52). As Deane J. said in Baker v. Campbell, supra (at p 112):

"This privilege, ordinarily described as legal
professional privilege, protects a person from
disclosure of oral or written confidential
communications, between himself and his solicitor
or barrister, made or brought into existence for
the sole purpose of seeking or giving advice or for
the sole purpose of use in existing or anticipated
litigation."

12. On behalf of Westpac, it is submitted that, at the time the report in question was given, litigation between it and Miss Robertson with respect to her workers' compensation claim was "reasonably apprehended"; alternatively, it is said, litigation was "threatened". The Union disputes that such an inference may properly be drawn from the events which occurred in July with the consequence, it contends, that the claim for privilege must fail.

13. In Grant v. Downs, supra, Stephen, Mason and Murphy JJ. said (at p 682):

"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."

14. They added (at p.683) that the fact that the document is brought into existence in anticipation of litigation is not sufficient, without more, to attract the privilege. The document must be called into being for use in litigation. It is the extent to which this purpose is intended to be served by the preparation of the document that was in question there.

15. In National Employers' Mutual General Insurance Association Limited v. Waind [1979] HCA 11; (1979) 141 CLR 648, a workers' compensation insurer obtained a number of reports from a firm of loss assessors and several medical reports after an employee had been injured in an accident. The reports were obtained for the purposes first, to decide whether its insured was liable for claims made upon it; and, secondly, to use in opposing any application that might be made by the employee in the event that the insurer were to refuse to make payments and the employee applied to the Workers' Compensation Commission. A claim for legal professional privilege was disallowed. Mason J. said (at pp.655-6):

"The evidence given by Mr. Tritton in response to
the plaintiff's counsel related to documents
brought into existence with a view to providing a
basis for discontinuing payments of compensation in
cases in which an initial liability had been
conceded or established. In this instance again,
documents are brought into existence to enable the
appellant to decide what it will do. In this
situation, if the appellant decides to discontinue
payments, litigation is likely to ensue. Although
there is a greater likelihood that documents of
this class will be submitted to solicitors for use
in litigation, the primary function for which they
are called into existence is, as the trial judge
said, to enable the appellant to make a decision in
the ordinary course of its business. Only when the
appellant has made a decision to discontinue
payments will the documents be submitted to
solicitors for use in the subsequent litigation."

16. Mason J. added (at p.656) that even if documents were brought into existence for the dual purpose of deciding what to do and for use in litigation by legal advisers when appropriate, the privilege would not be attracted.

17. In the present case, looking at the matter towards the end of July 1986, it is not possible to conclude that the circumstances were such that, viewed objectively, litigation could reasonably be anticipated. It is true that Westpac's management had by then begun to question the validity of Miss Robertson's claim for compensation. But it did not by any means follow that litigation could reasonably be anticipated. The most that could be said was that litigation was a possibility.

18. But, even if it be assumed, for the sake of argument, that, viewed objectively as at July 1986, litigation could be reasonably anticipated, there remains the question of the purpose or purposes for which the report was brought into existence. It is true that the report is addressed to a firm of solicitors. Yet the evidence does not explain their role in the matter. Certainly, on the part of Westpac's management, there was no suggestion of litigation at that stage. Nor does it appear that legal advice was sought from Messrs. Moray & Agnew. Their involvement in the matter remains unexplained and therefore curious. Given the absence of any attempt to clarify their role and the absence of any suggestion of litigation on Westpac's part, an inference that the report was prepared for the sole purpose of using it in litigation is not open. On the contrary, it should be inferred that at least one of Westpac's purposes in commissioning the report, even if done through Messrs. Moray & Agnew, was to decide what it, Westpac, should then do.

19. On behalf of Westpac, reliance is placed upon observations made in Taylor v. Commissioner for Railways (1974) Qd R 131 (at p 135) to the effect that documents may be privileged "even if they are obtained before any claim is made or litigation commenced or threatened or foreshadowed." But it would seem that, in the light of the reasoning in Grant v. Downs, these observations should no longer be followed.

20. In the result, the claim to privilege is disallowed.