FEDERAL COURT OF AUSTRALIA

Clifford v Vegas Enterprises Pty Ltd (No 3) [2010] FCA 287  

THE COURT ORDERS THAT:

1.                  The documents enumerated in section 4.0 of the Harvey Pickup report dated 3 November 2008 be produced.

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

1                                             On 11 March 2010 subpoenas were issued in this proceeding on the application of the first respondent ahead of the trial listed to commence on 22 March 2010, to Pickup Investigative Accounting & Forensics Pty Ltd (PIAF) and to Harvey Eastwood Pickup seeking documents comprising instructions that Mr Pickup received to produce a report dated 3 November 2008 concerning shares held in the first respondent, which report was used in Family Court of Western Australia proceedings involving the applicant and his then spouse.

2                                             The subpoenas were listed for early return before a Deputy District Registrar of this Court.  They were then adjourned for the consideration of the trial judge at the commencement of the trial in this proceeding on 22 March 2010.

3                                             The applicant claimed privilege in the documents the subject of the subpoena.

4                                             On 22 March 2010, I ruled that certain documents the subject of the privilege claim were not privileged and gave the first respondent access to the relevant documents. These are the short reasons for that decision.

5                                             The documents in question, on the face of it, were relied upon by Mr Pickup and PIAF to produce a report dated 3 November 2008 and provided to Leach Legal, solicitors for the current applicant, who was then the husband in proceedings in the Family Court of Western Australia.

6                                             In Clifford v Vegas Enterprises Pty Ltd (No 2) [2010] FCA 36 I ruled that the privilege in an affidavit held by the applicant to which the report of Mr Pickup was annexed, and which was a copy of that produced in the Family Court of Western Australia proceedings, was no longer attended by legal professional privilege.  The privilege that had once existed in it had been waived.

7                                             The question now is whether the documents provided to Mr Pickup or PIAF for the purpose of preparing the report by the applicant’s then solicitor are privileged.  In my view they are not.

8                                             In Australian Securities & Investments Commission v Southcorp Limited (2003) 46 ACSR 438;[2003] FCA 804, at [21], Lindgren J stated the relevant principles, in terms which I now adopt, as follows:

1.              Ordinarily the confidential briefing or instructing by a prospective litigant’s lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege:  cf Wheeler v Le Marchant (1881) 17 ChD 675;  Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246;  Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J.

2.              Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client’s lawyers and the expert witness, ordinarily attract the privilege:  Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (Propend); Interchase, per Pincus JA;  Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70, at [17].

3.              Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness’s own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications:  cf Interchase at 161—162 per Thomas J.

4.              Ordinarily disclosure of the expert’s report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents;  cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, 487—488 per Mason and Brennan JJ, 492-493 per Deane J, 497—498 per Dawson J;  Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J;   Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870;  Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 (ACCC v Lux) at [46].

5.              Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents;  Interchase at 148—150 per Pincus JA, at 161 per Thomas J.

6.              It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report; cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521;  Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400;  ACCC v Lux at [46].

9                                             In this case the report prepared by Mr Pickup no longer attracts privilege as it was waived when produced in the course of the Family Court proceedings: see Clifford v Vegas (No 2) [2010] FCA 36.

10                                          The question is whether as a result of this waiver finding the documents relied on by the report’s author are also by implication affected by the waiver finding.  Ordinarily, as explained in Lindgren J’s point 4 the answer is yes.  Usually, however, the party claiming privilege does so in litigation in which it has revealed the main report but is reluctant to provide the background documents which help to explain the report’s contents. Not to produce the underlying documents has in such circumstances usually has demonstrable elements of inconsistency and unfairness.

11                                          In this case the background documents to the report are subpoenaed for use in proceedings in which the parties seeking to consider or use them and possibly the report itself in proceedings where the value of the shares the subject of the report are in issue, are different from the parties to the litigation in which the report was initially produced as a result of which privilege in the report was waived.

12                                          Nonetheless, I see no difference in principle arising in the different factual settings.  If in litigation between parties who are not identical (even not the same in any respect) with those to the earlier litigation, an expert opinion which was raised in relation to the earlier proceeding and which does not attract privilege, is required to be produced under compulsion of law because it may be relevant to the later proceeding, and background documents are important to its understanding because they inform the opinions expressed in the expert report, then it should also follow that the background documents do not attract any privilege.  To rule otherwise would potentially result in inconsistency and unfairness to the party wishing reasonably to rely on the non‑privileged report in the later proceeding.  It would be but a partial account of the report and the reasons underlying it.

13                                          In this case, section 4.0 of the report makes it plain that the documents there listed form the basis of the opinions expressed.  Indeed, they may even be said to have been incorporated by reference in the report.  For these reasons they should be produced.  They do not attract any privilege just as the primary report does not.

14                                          I am not satisfied on the evidence before me that the author of the report was influenced in producing the report by any other written communications.  Accordingly to the extent that the subpoena seeks production of any other documents I would disallow it.

order

15                                          I therefore order that:

1.                  The documents enumerated in section 4.0 of the Harvey Pickup report dated 3 November 2008 be produced.

Associate:

Dated:  25 March 2010