Harden Shire Council v Curtis [2009] NSWCA 179 (21 July 2009)

Last Updated: 28 July 2009

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Harden Shire Council v Curtis [2009] NSWCA 179


FILE NUMBER(S):
40439/08

HEARING DATE(S):
29/06/2009

JUDGMENT DATE:
21 July 2009

PARTIES:
Harden Shire Council ACN 563 306 165 - Applicant/Cross-Respondent
John Curtis - Respondent/Cross-Applicant

JUDGMENT OF:
Hodgson JA Campbell JA Handley AJA

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
3605/2007

LOWER COURT JUDICIAL OFFICER:
Elkaim SC DCJ

LOWER COURT DATE OF DECISION:
11/12/2008


COUNSEL:
R Sheldon and G Glascott - Applicant/Cross-Respondent
H Marshall SC and AS Macri - Respondent/Cross-Applicant


SOLICITORS:
DLA Phillips Fox - Applicant/Cross-Respondent
McCabe Partners Lawyers - Respondent/Cross-Applicant

CATCHWORDS:
CLIENT LEGAL PRIVILEGE - dominant purpose - non privileged document reproducing privileged communication.

LEGISLATION CITED:
Evidence Act 1995

CATEGORY:
Procedural and other rulings

CASES CITED:
AWB Ltd v Cole [2006] FCA 571; (2006) 232 ALR 743
Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501

TEXTS CITED:


DECISION:
(1) Leave to appeal granted.
(2) Notice of appeal to be filed and served within 10 days. Otherwise dispense with further compliance with the rules.
(3) Appeal allowed in part.
(4) Leave to cross appeal granted.
(5) Dispense with further compliance with the rules.
(6) Cross appeal dismissed.
(7) Order that a redacted copy of the memorandum of the General Manager of the Council of 18 January 2005 in the form provided to the legal representatives of the parties at the time of delivering these reasons, be deemed to have been produced, as on subpoena, to the solicitors for the respondent.
(8) Respondent to pay the appellant’s costs of the appeal and cross appeal, but have a certificate under the Suitors Fund Act with respect to the cost of the appeal.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40439/08

HODGSON JA

CAMPBELL JA

HANDLEY AJA

21 July 2009

Harden Shire Council v John Curtis

CATCHWORDS

CLIENT LEGAL PRIVILEGE - dominant purpose - non privileged document reproducing privileged communication.

ORDERS

(1) Leave to appeal granted.

(2) Notice of appeal to be filed and served within 10 days. Otherwise dispense with further compliance with the rules.

(3) Appeal allowed in part.

(4) Leave to cross appeal granted.

(5) Dispense with further compliance with the rules.

(6) Cross appeal dismissed.

(7) Order that a redacted copy of the memorandum of the General Manager of the Council of 18 January 2005 in the form provided to the legal representatives of the parties at the time of delivering these reasons, be deemed to have been produced, as on subpoena, to the solicitors for the respondent.

(8) Respondent to pay the appellant’s costs of the appeal and cross appeal, but have a certificate under the Suitors Fund Act with respect to the cost of the appeal.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40439/08

HODGSON JA

CAMPBELL JA

HANDLEY AJA

21 July 2009

Harden Shire Council v John Curtis

Judgment

1 HODGSON JA: I agree with Handley AJA.

2 CAMPBELL JA: I agree with Handley AJA.

3 HANDLEY AJA: The Council’s application for leave to appeal, and the plaintiffs’ application for leave to cross appeal arose from the decision of Elkaim SC DCJ to uphold the Council’s claim to client legal privilege for one document, and to overrule its claim for another. In each case the claims, properly characterised, would have been within s 119 of the Evidence Act 1995. This section does not apply in terms to the production of documents on subpoena before the trial, but UCPR Pt I r 1.9 enables an equivalent objection to be taken.

4 On 20 August 2004 a single vehicle accident occurred on Kingsvale Road Harden about 3 kms north of its intersection with Wombat Road. There were no eye witnesses and the driver, Ms Paterson was alone in the vehicle. It appears that she lost control of the car on a bend and it left a carriageway and collided with two trees causing injuries from which she later died.

5 At the time the Council was resurfacing two sections of the road in this area and the work had not been finished. There was loose gravel on the surface in those areas which may have contributed to the accident. One of the Council’s warning devices on a guidepost before the bend had been knocked down by Council staff the day before and not repaired or replaced. There had been another single vehicle accident in that area earlier that day or the day before. The documents in evidence relating to the two accidents contain inconsistencies but they could not affect the result of these applications.

6 The Council was a member of a mutual insurance scheme established by a number of Councils which was administered by Jardines Lloyd Thompson Pty Ltd (Jardines) on behalf of the members. Jardines were responsible for arranging appropriate reinsurance in the London market and for the administration of any claims. The officer who was then responsible for the scheme was Mr Colin Barber. On 24 August Mr Ellis, the Council's Director of Works, sent Mr Barber a facsimile notifying him of the two accidents, and attaching relevant reports.

7 Mr Barber had been involved in another claim against the Council which was either still pending or had only recently been resolved. He read Mr Ellis's report and on 9 September instructed Colgan & Associates, a firm of insurance investigators, to investigate the accident involving Ms Paterson and provide him with a report.

8 The investigator's report dated 11 November 2004 was the first of the two documents for which privilege was claimed. In January 2005, after Mr Barber had been transferred to other duties, his successor sent a copy of the Colgan Report to the Council. This was reviewed by Ms Miller, its General Manager shortly after 11 January. Because of her concerns she prepared a memorandum dated 18 January containing her comments which she sent to Mr Ellis and Mr Crisp, the Project Manager for the relevant roadworks. This is the second document for which a claim of privilege was made.

9 The Judge accepted Mr Barber's evidence that he commissioned the Colgan Report to obtain information and evidence for the use of lawyers in proceedings which he anticipated would be brought against the Council arising from the death of Ms Paterson. The Judge also found that Mr Barber was entitled, in the circumstances as he knew them, to conclude that there was a real prospect of such litigation. Accordingly he upheld the claim of privilege. The plaintiff seeks leave to cross appeal from this decision.

10 Ms Miller said she would have prepared and distributed the memorandum even if litigation had not been anticipated, in order to correct the record. The memorandum was not itself a confidential document within para (b) of s 119 of the Act, or the corresponding rules of court, because it was not prepared for the dominant purpose of being used in anticipated litigation. The Council did not challenge that finding.

11 The Judge considered that the memorandum probably reproduced privileged material from the Colgan Report. He said:

"A point which troubled me ... is that if the original document, the factual report, was privileged ... would the disclosure of the memorandum effectively destroy the privilege which has been found in the first document. I do not know what is contained in the memorandum but I was told it is a three-page document and, no doubt, it examines and describes in some detail the contents of the factual report. It may be that the effect of the plaintiff seeing the memorandum will be to ‘give away’ the contents of the report. ...

Although the memorandum is a commentary on a privileged document I do not think that privilege can be extended through to the memorandum when on the clear evidence of Ms Miller it would have been created in any event and as a matter of record. Accordingly I am of the view that no privilege attaches to the memorandum and the plaintiff is entitled to access to it.

12 The Judge ordered production of the memorandum without inspecting it himself. During argument (T5) both counsel said that they did not object to the Judge looking at the documents, and that this was a matter for his discretion, but the plaintiff's counsel drew attention to the problem he would face in addressing the Court on documents he had not seen, and he referred to the onus of proof on the Council. The Judge said (T5):

"Well, I won't look at them until somebody asks me to look at them or I make a decision that I can't proceed without looking at them and I will give you notice of that."

The Colgan Report

13 Mr Marshall SC who appeared with Mr Macri for the plaintiffs challenged the Judge's findings that litigation arising from the death of Ms Paterson was anticipated in September 2004, and that the Report was prepared for the dominant purpose of being used in that litigation.

14 The facts known to Mr Barber in September 2004 included that Ms Paterson was first taken to Young Hospital but was “later airlifted to Canberra Hospital in a serious condition”, that “by the ... damage to the vehicle and the force needed to KO the tree her injuries would be fairly serious” and the facts in Mr Ellis's communication of 25 August. The latter referred to the presence of loose gravel on the bend from unfinished roadworks being carried out by the Council, another single vehicle accident nearby shortly before, and the loss of a warning device on a guard post before the bend which had been knocked over by the Council's crew the day before and not repaired or replaced. Mr Barber was also aware of the earlier case against the Council in the Supreme Court arising from an accident on 22 March 2001 associated with unfinished roadworks. Given that knowledge the finding that litigation was anticipated was inevitable.

15 Mr Marshall's other point was that Mr Barber sent the report to the London reinsurers and had always intended to do so. This was therefore, he submitted, an independent purpose for commissioning the report which should have excluded a finding that his dominant purpose was for the report to be used in anticipated litigation.

16 The reinsurers were potentially at risk for any claims arising out of this accident and would want to know the facts about liability. They would also want to know that the reinsured were taking prompt and adequate steps to investigate the accident and obtain information and evidence for use in any litigation.

17 The need to send such a report to the reinsurers was not an independent or primary purpose for its creation, but was a secondary or consequential purpose. It was sent to London because it had been prepared for use in anticipated litigation. The Judge’s decision upholding the Council's claim of privilege for this document should therefore be upheld. Leave to cross appeal should be granted, but the cross appeal should be dismissed.

The Miller Memorandum

18 The Judge correctly held that this document was not created for the dominant purpose of being used in anticipated litigation, and therefore was not itself a confidential document within s 119(b) and the corresponding rules of court. In the passage from his reasons quoted above the Judge inferred that its disclosure would probably reveal the contents of the Colgan Report but he does not appear to have asked himself whether such disclosure attracted a derivative or secondary privilege for those parts of the memorandum which did this. This derivative or secondary privilege could protect the whole of the memorandum from disclosure, but possibly only parts of it, and in that case disclosure of a redacted copy could be ordered.

19 Legal professional privilege at common law protected confidential communications, not documents as such. In AWB Ltd v Cole [2006] FCA 571; (2006) 232 ALR 743, 766-7 Young J (of the Federal Court) held that this was established by Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3; (1997) 188 CLR 501. He said:

"... it must be kept firmly in mind that the privilege protects confidential communications, and not documents as such. As Dawson J. said in Propend (above) at 515 ‘to say that a document is privileged is merely a shorthand way of saying that the communication constituted by the document is privileged’: see also per Toohey J at 525, Gaudron J at 543, McHugh J at 552, and Gummow J at 569. The decision in Propend turned fundamentally on the proposition that legal professional privilege protects communications rather than documents. This explains why, as the High Court held ... legal professional privilege can attach to copies of non-privileged documents; the purpose of bringing the copy into existence may be different from the purpose of bringing the original into existence, and may attract legal professional privilege."

20 Both those cases dealt with the position at common law because the Evidence Act did not apply in the AWB Royal Commission, but the principle was incorporated in the text of s 119 which relevantly provides:

"Evidence is not to be adduced if, on objection by a client, the Court finds that adducing the evidence would result in disclosure of

(a) ...

(b) the contents of a confidential document ... that was prepared,

for the dominant purpose of the client being provided with professional legal services relating to ... an anticipated ... proceeding ..."

21 The section, and the rules of court which incorporate it, prevent "disclosure of ... the contents of a confidential document". This protection extends, not only to the document itself, but also to other "evidence" which, if produced, "would result in disclosure" of the contents of a confidential document.

22 Accordingly the memorandum, to the extent to which it disclosed the contents of the Colgan Report, was also protected by the privilege. The Judge does not appear to have considered this basis for a claim for privilege, possibly because the point was not squarely taken before him. Nevertheless the error was fundamental, and this part of his decision must be set aside. Leave to appeal should be granted and the Court must consider what orders it should now make.

23 Mr Marshall submitted that any secondary privilege for the memorandum or any parts of it was lost when it was sent to Messrs Ellis and Crisp. They were senior employees of the Council under implied obligations to maintain the confidentiality of such communications (s 117(1)) who had not been authorised to disclose their contents (s 122(3)). There was nothing in this point.

24 This Court has determined that, given the Judge's findings about the contents of the memorandum, he erred in ordering disclosure of the whole document without inspecting it. This Court cannot determine, without an inspection, whether the privilege covers the entire document or only parts of it. If inspection revealed that the privileged material was severable the Court would order production of a redacted copy.

Conclusion

25 As the Judge correctly inferred, Ms Miller’s memorandum discloses, expressly or by implication, substantial parts of the Colgan Report, but other parts do not. The Court has removed the privileged material (and also some material that is irrelevant) and a redacted copy annexed to the orders will be produced to the solicitor for the plaintiffs.

26 The appeal was substantially successful and the cross appeal failed. In these circumstances the respondent should pay the Council’s costs of the appeal and cross appeal. The following orders should be made:

(1) Leave to appeal granted.

(2) Notice of appeal to be filed and served within 10 days. Otherwise dispense with further compliance with the rules.

(3) Appeal allowed in part.

(4) Leave to cross appeal granted.

(5) Dispense with further compliance with the rules.

(6) Cross appeal dismissed.

(7) Order that a redacted copy of the memorandum of the General Manager of the Council of 18 January 2005 in the form provided to the legal representatives of the parties at the time of delivering these reasons, be deemed to have been produced, as on subpoena, to the solicitors for the respondent.

(8) Respondent to pay the appellant’s costs of the appeal and cross appeal, but have a certificate under the Suitors Fund Act with respect to the cost of the appeal.

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LAST UPDATED:
24 July 2009