FEDERAL COURT OF AUSTRALIA

Collins Debden Pty Ltd v Cumberland Stationery Co Pty Ltd [2005] FCA 1194

EVIDENCE – privilege – legal professional – party’s solicitors retain private inquiry agent to purchase desk calendar refills – inquiry agent submits draft report to party’s solicitors – whether solicitors’ letter of instruction to the agent and draft of agent’s report to the solicitors attracted legal professional privilege – whether privilege waived by reason of filing and service of agent’s affidavit.

PRACTICE AND PROCEDURE – privilege – legal professional – party’s solicitors retain private inquiry agent to purchase desk calendar refills – inquiry agent submits draft report to party’s solicitors – whether solicitors’ letter of instruction to the agent and draft of agent’s report to the solicitors attracted legal professional privilege – whether privilege waived by reason of filing and service of agent’s affidavit.

PRIVILEGE – legal professional – party’s solicitors retain private inquiry agent to purchase desk calendar refills – inquiry agent submits draft report to party’s solicitors – whether solicitors’ letter of instruction to the agent and draft of agent’s report to the solicitors attracted legal professional privilege – whether privilege waived by reason of filing and service of agent’s affidavit.

Trade Practices Act 1974 (Cth) s 52

Evidence Act 1995 (Cth) ss 118 and 119

Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 applied

Mann v Carnell (1999) 201 CLR 1 applied

Seven Network Ltd v News Ltd [2005] FCAFC 125 cited

Australian Securities and Investment Commission v Southcorp Ltd (2003) 46 ACSR 438 cited

Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 cited

COLLINS DEBDEN PTY LIMITED v

CUMBERLAND STATIONERY CO PTY LIMITED

N 1397 of 2004

LINDGREN J

5 AUGUST 2005

SYDNEY

THE COURT ORDERS THAT:

1.         The parties’ costs of the argument in relation to legal professional privilege be the parties’ respective costs of the proceeding.

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

REASONS FOR JUDGMENT

1                     The applicant (‘Collins’) sues the respondent (‘Cumberland’) for alleged contravention of s 52 of the Trade Practices Act 1974 (Cth) and for passing off.  Both companies are in the business of manufacturing and selling desk calendar refills.

2                     Collins’s solicitors, Bradfield & Scott, instructed a private inquiry agent, Grierson (Aust) Pty Ltd (‘Grierson’), to buy calendar refills.  Grierson’s Managing Director, Charles Asomatianos, bought refills in shops, while Grierson employee, Miriam Neill, bought them online through a website of ‘Office National’.  Grierson sent four reports of their work to Bradfield & Scott.  On the basis of the reports, Bradfield & Scott prepared affidavits, which were sworn by Mr Asomatianos and Ms Neill, which were then filed and served.

3                     Cumberland caused a subpoena to be issued to the proper officer of Grierson to produce documents.  In response, Grierson has produced documents to the Court.  Collins makes a claim of legal professional privilege in respect of some of the documents.  Its claim is supported by an affidavit sworn 27 June 2005 of David Richard Baldry, a solicitor of Bradfield & Scott.  In his affidavit, Mr Baldry identifies the classes of documents over the claim of privilege is made. 

4                     The parties have reached agreement in relation to several classes of documents, but remain in the dispute in relation to:

·        the letter of instruction from Bradfield & Scott to Grierson; and

·        the reports by Grierson to Bradfield & Scott intended to form the basis of the affidavits.

With the parties’ consent, I have inspected these documents.

5                     The legal principles relating to determination of the present issue are common law principles, ss 119 and 122 of the Evidence Act 1995 (Cth) being directed to the adducing of evidence, not the earlier stage of access to documents discovered or produced on subpoena:  cf Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 (‘Esso’); Mann v Carnell (1999) 201 CLR 1.  The applicable common law test is whether the communications from or to the solicitor (in this case, the solicitors’ letter of instruction and the inquiry agent’s reports to the solicitors) were made for the dominant purpose of Bradfield & Scott’s providing legal services to Cumberland in connection with the proceeding:  Esso at [61] per Gleeson CJ, Gaudron and Gummow JJ; at [167]–[173] per Callinan J. 

6                     Order 33 r 11 of the Federal Court Rules does not effect a departure from these principles established in Esso in their application to production of documents to the Court pursuant to a subpoena in advance of the hearing:  that rule applies only where the documents are produced to the Court on an occasion when evidence is being adduced:  Seven Network Ltd v News Ltd [2005] FCAFC 125.

7                     In Australian Securities and Investment Commission v Southcorp Ltd (2003) 46 ACSR 438 (‘ASIC v Southcorp’), I set out (at [21]), with reference to authorities, the way in which the general principles which govern the existence of legal professional privilege have been applied in respect of instructions to, and reports by, expert witnesses retained by a litigant’s solicitors to provide opinion evidence.  Generally speaking, a private inquiry agent engaged to do things directed to eliciting factual evidence stands in no different position as to the arising of the privilege.  In both cases the law’s concern is to protect confidential communications by and to a party’s solicitor, which are created as part of the solicitor’s provision of legal services to the client-litigant.

8                     Ordinarily, the letter of retainer from the solicitors to the prospective expert witness is privileged: ASIC v Southcorp at [21] para (1).  There may, however, be an implied or imputed waiver of the privilege by the client:  Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475, Mann v Carnell, above, at [28], [29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ.  There will be a waiver if the client’s conduct is inconsistent with the client’s insistence on the privilege; and the court, in its perception of inconsistency, may be ‘informed by considerations of fairness’:  Mann v Carnell, loc cit.

9                     In the usual case, disclosure of an expert’s report for the purpose of reliance on it in the litigation will result in waiver of the privilege attached to the letter of instructions to the expert:  ASIC v Southcorp, above, at [21] para (4).  This is so because the letter may be expected to set out the assumptions on which the expert was to proceed in forming his or her opinion.  For this reason, the letter will have had some influence on the content of the report, and a reading of the letter may be necessary to a proper understanding of the report.

10                  There is no reason, however, to think that the content of the two affidavits in the present case have been influenced by Bradfield & Scott’s letter instructing Grierson to purchase calendar refills.  The affidavits do not express opinions based on assumptions: they simply recount the facts of particular purchases.

11                  In filing and serving the two affidavits (and later in reading them), Collins has not acted (and will not be acting) inconsistently with its maintenance of its privilege in respect of the letter.  I uphold the claim of privilege in relation to Bradfield & Scott’s letter of engagement of Grierson.

12                  The other documents, four in number, are in the nature of reports by Grierson to Bradfield & Scott which were  intended to provide the basis for the preparation of the affidavits.  Cumberland submits that privilege has been waived because it is ‘unfair’ that the affidavits be relied upon unless the reports are made available for inspection.  It is not, however, ‘some overriding principle of fairness operating at large’ that determines whether there is an imputed waiver: Mann v Carnell, above, at [29].

13                  Cumberland submits that for all it knows, Mr Asomatianos may have attended at many more stores than the ten report on his affidavit.  Assume that he attended 100 stores, his affidavit being silent as to the other ninety.  Cumberland suggests that it would be unfair that privilege be maintained in relation to Grierson’s reports to Bradfield & Scott relating to the 100 stores, no doubt because, according to the submission, it should be inferred that what happened in the ninety would not assist Collins and may assist Cumberland.

14                  I do not accept Cumberland’s submission.  There is no ‘inconsistency informed by the court’s perception of unfairness’, just because maintenance of the privilege might result in concealment, whereas a conclusion that it has been waived might result in exposure, of documents supportive of the other party’s case.

15                  In cross-examination, it will be open to counsel for Cumberland to explore with the two Grierson witnesses matters of the kind mentioned.  Indeed, it will remain open to Cumberland to renew its application to inspect the documents in the light of further evidence that may emerge.  There is, however, no inconsistency involving unfairness between Collins’s reliance upon the affidavits as to the factual circumstances of particular purchases, and its maintenance of its privilege in respect of the confidential reports which formed the basis of them and which may relate also to other purchases or proposed purchases.

16                  I therefore also uphold the claim of privilege in relation to the four reports made by Grierson to Bradfield and Scott.

17                  Although Collins has succeeded on the privilege argument, I was informed that Cumberland did obtain production of a number of other documents, in respect of which Collins had been insisting on its claim of privilege.  The costs of the argument in relation to legal professional privilege should be the respective parties’ costs of the proceeding.

Associate:

Dated:              26 August 2005