Prince Removal & Storage Pty Ltd v Roads Corporation [2012] VSC 245

Introduction

On 12 June 2012, the Supreme Court of Victoria held that legal privilege over instructions and facts forming the basis of an expert report is impliedly waived upon the filing of that expert report in a proceeding.

Background

The proceeding in which the decision was handed down involved a claim for compensation by Prince Removal & Storage Pty Ltd (Prince) in connection with the development of a housing estate. Prince had retained civil engineers, Reeds Consulting and Marshall Day Acoustics, to provide experts reports in connection with the proceeding. 

During the discovery process, Prince withheld from production two categories of documents on the basis that the documents were subject to legal privilege, as Prince claimed they were confidential communications or documents passing between Prince or their consultants and Prince’s legal advisers for the purpose of Prince obtaining legal advice in connection with the preparation of Prince’s case in the proceeding. The two categories of documents were:

  1. Documents constituting, evidencing, recording or relating to communications and instructions provided to Reeds Consulting by Prince, Prince’s solicitors or Counsel in relation to reports and/or draft reports prepared by Reeds Consulting; and
  2. Documents constituting, evidencing, recording or relating to communications between Reeds Consulting or Prince’s solicitors and Marshall Day Acoustics in connection with the development of the housing estate.

Roads Corporation applied for an order that Prince produce for inspection the two categories of documents on the basis that they contained the facts and instructions which formed the basis of expert reports filed in the proceeding. Prince objected to production and contended that there could be no implied waiver of privilege over the documents until the experts were called to give evidence at trial. Prince asserted that even though the reports had been filed in the proceeding, it was still open to Prince to not rely on the reports at trial. Therefore, Prince contended that there had been no disclosure of the expert reports for the purpose of relying on them in litigation and privilege was maintained.

The parties accepted that the documents that Prince had withheld from production were privileged and the sole issue for determination by the Court was whether an implied waiver of privilege had occurred upon the filing of the expert reports or whether it would only occur later when, and if, the witnesses were called to give their evidence in Court.

Decision

In accordance with the decision in Cobram Laundry Services Pty Ltd v Murray Gouldburn Cooperative Co Ltd [2000] VSC 353, the Court confirmed that when a witness is called to provide expert opinion evidence, all of the facts and instructions upon which that witness bases the expert opinion are admissible and subject to production, and a claim for legal professional privilege ceases to apply and is taken to have been waived.

The Court also noted that in Australian Securities & Investments Commission v Southcorp Ltd [2003] FCA 804, the Federal Court held that the following principles apply in relation to the implied waiver of privilege over the instructions and facts upon which an expert report is based:

  1. The brief or instructions provided by a litigant’s lawyers to an expert for the purposes of providing a report to be used in litigation usually attracts legal privilege;
  2. Service of the expert’s report in litigation will result in an implied waiver of the privilege over the brief or instructions provided to the expert, but only insofar as they can be said to have influenced the content of the report; and
  3. Privilege cannot be maintained in respect of any documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents. 

The Court rejected Prince’s submissions that the filing of expert reports in the proceeding did not constitute disclosure of the expert reports for the purpose of relying on them in litigation and held that to the extent that the privileged documents contained, constituted, evidenced or related to instructions given to the experts, privilege had been impliedly waived when the expert reports had been filed in the proceeding.

Case management considerations underpinned the Court’s decision that the filing of expert reports involved relying upon the reports, including that:

  1. Court’s often make interlocutory orders requiring expert reports to be filed and served in advance of trial and requiring the parties to mediate;
  2. For the efficient, timely and cost effective conduct of trials, it is in the interests of justice that the instructions and facts provided to an expert are revealed to the other party to the litigation when the expert’s report is filed; and
  3. The disclosure of instructions and facts forming the basis of an expert’s report prior to the expert entering the witness box will reduce the likelihood of trials being adjourned. 

Also relevant to the Court’s decision was the relatively new Civil Procedure Act 2010 (Vic), the overarching purpose of which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute in a proceeding.

As a consequence of the decision, privilege over any instructions and facts forming the basis of an expert report will be impliedly waived upon the filing of the expert report in a Court proceeding. It is not necessary for the expert to give evidence at trial for the privilege to be impliedly waived.

This means that an expert’s brief will be available to opposing parties prior to mediation and experts should ensure that their reports reflect the instructions and facts provided. Lawyers also need to be aware of the documents forming the basis of an expert’s report and be prepared to discover those documents when filing the expert’s report.