FEDERAL COURT OF AUSTRALIA

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 7) [2008] FCA 323

PRACTICE & PROCEDURE – privilege – whether waived

Evidence Act 1995 (Cth) ss 119(b), 122(2)

Natuna Pty Limited v Cook [2006] NSWSC 1367 cited

New Cap Reinsurance Corporation Ltd (In Liq) & 1 Or v Renaissance Reinsurance Ltd [2007] NSWSC 258 cited

ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859 cited

CADBURY SCHWEPPES PTY LTD v DARRELL LEA CHOCOLATE SHOPS PTY LTD

VID 555 OF 2005

HEEREY J

11 MARCH 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  The respondent’s claim for privilege and the documents sought in the subpoena addressed to Dr Constantino Stavros is upheld.

2.                  The applicant pay the respondent’s costs thrown away in relation to the subpoena.

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

REASONS FOR JUDGMENT

1                     Darrell Lea has served a subpoena on Cadbury’s expert witness Dr Constantino Stavros who is giving evidence today.  The subpoena sought the following documents: 

1.                  Originals of all correspondence and notes evidencing communications between you and Mallesons Stephen Jaques and/or counsel retained for the Applicant in relation to each of your retainer or instructions to provide expert evidence in relation to the subject matter of this proceeding, or relating to your evidence to be given in this proceeding, including letter(s) of engagement, drafts of your affidavits, file notes of any meetings which took place between Mallesons Stephen Jaques and/or counsel retained for the Applicant with yourself and any other communications regarding the contents of your affidavits sworn and filed in this proceeding.

2.                  Originals of all correspondence and notes evidencing communications between you and QBrand Consulting in relation to your expert evidence in relation to the subject matter of this proceeding, or relating to your evidence to be given in this proceeding, including letter(s) of engagement, drafts of your affidavits, file notes of any meetings which took place between QBrand Consulting and any other communications regarding the contents of your affidavits sworn and filed in this proceeding.

2                     Originally the objection was taken that any draft witness statements of Dr Stavros would be privileged.  However, the argument has now developed on more general lines.  Senior counsel for Cadbury relies on s 119(b) of the Evidence Act 1995 (Cth) which 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:

…

(b)        the contents of a confidential document (whether delivered or not) that was prepared;

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), 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.

3                     There is a clear line of authority which establishes that draft documents and other communications of a like nature with an expert witness proposed to be called in litigation are privileged under s 119(b) whatever may have been the position at common law:  Natuna Pty Limited v Cook [2006] NSWSC 1367; New Cap Reinsurance Corporation Ltd (In Liq) & 1 Or v Renaissance Reinsurance Ltd [2007] NSWSC 258; and ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859.

4                     Senior counsel for Darrell Lea does not dispute this proposition but relies on waiver, or rather its statutory equivalent in s 122(2) of the Evidence Act which provides: 

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:

(a)        in the course of making a confidential communication or preparing a confidential document; or

(b)        as a result of duress or deception; or

(c)        under compulsion of law; or

(d)        if the client or party is a body established by, or a person holding office under, an Australian law—to the Minister, or the Minister of the State or Territory, administering the law, or the part of the law, under which the body is established or the office is held.

5                     The same question has been dealt with by Brereton J in ML Ubase at [45]-[46] where his Honour says:

[45]  In my view, what Enderby J said in Crawford v Bailey [(unreported, NSWSC, Enderby J, 26 October 1990)] is no longer the law, if it ever was. What his Honour said is inconsistent with Dingwall [v the Commonwealth (1992) 39 FCR 521] and with Tirango [Nominees Pty Ltd v Dairy Vale Foods Ltd (1998) 156 ALR 364].  Moreover, it is not the test enunciated by Evidence Act [1995 (NSW)] s 126.  In my opinion, service and tender of an expert witness’ report in proceedings does not constitute a waiver of the privilege which attaches to communications between the expert and the solicitors who instructed him or her, save to the extent that those communications are associated documents reasonably necessary to an understanding of the report.  “Proper understanding” of a document or communication will sometimes, but not always require that documents to which it responds or refers be available.  It may very likely be so when the primary document contains a summary or excerpt from an earlier communication, or responds to questions which are not themselves restated in it.  But I do not accept that “a proper understanding of the communication or document” involves an appreciation of the manner in which the opinions contained in the document have been formed over time, or the iterations and evolutions through which they have passed.  The test is concerned with the comprehensibility of the primary communication or document: if it can be completely or thoroughly understood without more, then access to the related communications or documents is not reasonably necessary.

[46]  Accordingly, for the purposes of s 126, one starts by looking at the substantive document (made admissible under s 122 or another of the applicable sections) and asking whether, in order to understand it thoroughly, it is necessary to know what is in the associated material.

6                     In the present case senior counsel for Darrell Lea has not been able to point to any particular part of Dr Stavros’ report of which it can be said that some further document is required to enable the report to be understood.  Still less has it been possible to identify any such document.

7                     Reference was made to the role played by the firm QBrand Consulting, which was referred to in paragraph 19 of Dr Stavros’ first affidavit.  He deposes there that in preparing this affidavit he has been assisted by staff members of QBrand Consulting,

… with which firm I have a support arrangement in relation to this type of work.  This assistance took the form of administrative tasks, assisting with drafting, preparation of exhibits and obtaining copies of relevant research materials.  All opinions expressed in this affidavit are my own.  

That does not to my mind indicate any uncertainty or ambiguity or confusion in the body of Dr Stavros’ affidavit.  In any event, the fact that QBrand Consulting is a third party, neither the expert nor the client, does not exclude the situation from the reach of s 119(b). 

8                     As a result, I uphold the claim of privilege.

Associate:

Dated:         11 March 2008