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  •   Notable Unreported Decision

Zavodny v Couper (No 2)

 

[2018] QSC 259

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Zavodny v Couper & QBE (No 2) [2018] QSC 259

PARTIES:

ALAN FRANK ZAVODNY

(Applicant)

v

KEVIN RAYMOND COUPER

(First Respondent)

and

QBE INSURANCE (AUSTRALIA) LIMITED

(ACN 003 191 035)

(Second Respondent)

FILE NO/S:

SC 523 of 2016

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

9 November 2018

DELIVERED AT:

Cairns

HEARING DATES:

Applicant’s written submissions 12 October 2018

Respondents’ written submissions 23 October 2018

JUDGE:

Henry J

ORDERS:

  1. The applicant will pay the respondents’ costs thrown away by the adjournment on 7 September 2018 of the application filed 27 August 2018 (Court doc 36) to be assessed on the standard basis unless agreed.
  1. The respondents will pay the applicant’s costs of and incidental to the application filed 27 August 2018 (Court doc 36) to be assessed on the standard basis unless agreed, excluding the applicant’s costs thrown away by the adjournment of that application on 7 September 2018.

CATCHWORDS:

 

PROCEDURE CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS COSTS GENERAL RULE: COSTS FOLLOW EVENT OTHER PARTICULAR CASES AND MATTERS – where there was an application for inspection of surveillance reports  where the application was adjourned – where the provision of the respondents’ outline of argument prompted the applicant’s request for the adjournment – whether the applicant should have been prepared to meet the arguments in the outline – whether the substance of the respondents’ argument should have been flagged in the respondents’ rule 445 letter – whether Uniform Civil Procedure Rules 1999 (Qld) r 445 requires an applicant or respondent to include arguments to be advanced in support of the specified explanation as to why the applicant should have the relief. 

Nolan v Marson Transport Pty Ltd (2001) 53 NSWLR 116, cited.

Parr v Bavarian Steakhouse Pty Ltd [2001] 2 Qd R 196, cited.

Schofield v Hopman & Anor [2017] QSC 297, cited.

Uniform Civil Procedure Rules 1999 (Qld) r 213, r 213(1)(b), r 393 (2), r 444, r 445

Motor Insurance Act 1994 (Qld) ss 47, 48

COUNSEL:

AR Philp QC for the applicant

R Morton for the respondents

SOLICITORS:

Roati Legal for the applicant

Barry Nilsson for the respondents

  1. [1]
    It is necessary to determine orders as to costs in respect of the application granted in this matter on 16 October 2018.
  2. [2]
    That application, filed 27 August 2018, sought the production for inspection of the surveillance reports referred to in respondents’ updated list of documents dated 22 February 2018.
  3. [3]
    The application came before the Court for hearing on 7 September 2018.  It was adjourned at the request of the applicant’s counsel (who is not the present counsel), with the determination of liability for costs thrown away by the adjournment reserved.
  4. [4]
    Setting aside the question of those costs, it is not suggested that the costs otherwise of the application ought not follow the event.
  5. [5]
    On the face of it, the applicant ought pay the respondents’ costs thrown away by the adjournment of 7 September 2018.  The respondents attended ready to proceed.  Having seen what was in the respondents’ outline of argument, provided (as often happens) on the morning of the listed hearing, the applicant’s junior counsel sought an adjournment.  He sought an adjournment to another date as distinct from an adjournment to later on the same day.  He explained the outline raised matters not hitherto exposed in correspondence and counsel needed further time to formulate argument in response.  There had been no last minute change to the evidentiary material to be read at the hearing.  The facts were tolerably clear.  The hearing’s outcome was always going to turn upon whether, as a matter of law, the content of the surveillance reports came within an exception to the legal professional privilege claimed to attach to them.  The applicant ought have been ready to advance its legal arguments in support of its application and, in so doing, meet such legal arguments as were advanced against it.  It was not ready, or at least made an assessment it was not ready enough, to then argue its application.  Prima facie, the applicant ought bear the respondents’ costs thrown away by the indulgence of an adjournment procured by the applicant to allow it an opportunity to better prepare for argument.
  6. [6]
    The applicant contends the equation is not as simple as that, because:
    1. (a)
      the respondents’ pre-hearing correspondence should have but did not allude to the argument it was now advancing at the hearing; and
    2. (b)
      the respondents’ outline contained erroneous propositions requiring proper consideration.

The pre-hearing correspondence issue

  1. [7]
    The respondents’ initial list of documents dated 24 May 2017 listed a number of documents for which privilege was claimed, including:

         “Part 2 – Documents for which privilege is claimed

No.

Description of document

Person who made document

Date

(if any)

 

  1.  

Letters and memoranda passing between the defendant or its solicitors and third parties relating to the conduct of this action

Various.

Various

 

  1.  

Statements and proofs of witnesses and other persons obtained by the defendant or its solicitors in preparing for the conduct of this action

Various

Various

  1.  

Letters, diary notes, memoranda briefs, loss adjuster’s reports, instructions to counsel, statements of witnesses and any other documents brought into being or created for the purpose of obtaining or giving legal advice

Various

Various”

  1. [8]
    On 1 February 2018 the applicant wrote to the respondents referring to the documents listed in paragraphs 3, 6 and 7 above and asserting they were “not adequately particularised to enable” the applicant to properly and reasonably consider the claim for privilege.  The letter asserted that pursuant to r 213(1)(b) of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) the applicant challenged the privilege claim and looked forward to receiving the respondents’ affidavit as required by UCPR
  2. [9]
    The respondents replied by letter dated 7 February 2018, asserting the request for an affidavit pursuant to r 213 was misconceived.
  3. [10]
    By letter dated 9 February 2018 the applicant responded, insisting its request was not misconceived and flagging an intention to write pursuant to r 444 of UCPR if the request was not met.
  4. [11]
    True to the applicant’s word, a r 444 letter dated 15 February 2018 was directed to the respondents.  The letter documented the abovementioned complaint and facts, explaining the respondents ought file and serve an affidavit pursuant to s 213(2), being obliged so to do by reason of the challenge of that claim by the applicant. 
  5. [12]
    The respondents’ letter of reply dated 22 February 2018 stated, inter alia:

“While we remain of the view that the description of the documents and the list of documents is adequate, in order to resolve this dispute and avoid further costs being incurred unnecessarily, we now enclose, by way of service, an updated list of documents dated 22 February 2018 which contains a further description of the privileged documents in Part 2.”

  1. [13]
    It went on to assert that any application requiring the affidavit requested by the applicant would be inappropriate.  It was, of course, the list of documents attached to that correspondence which contained reference to the surveillance reports that became the focus of the eventual application.
  2. [14]
    The applicant’s response dated 23 February 2018 was to refer to the updated list of documents and announce that the applicant challenged the respondents’ privilege claim in respect of the documents listed in paragraphs 10 and 11 thereof, namely the surveillance reports, and looked forward to receiving the respondents’ affidavit pursuant to r 213(2).
  3. [15]
    On 2 March 2018 the applicant received an affidavit from the respondents’ solicitor deposing, in respect of the applicant’s challenge to the respondents’ claim of privilege over the documents:

“14.  Documents numbered 10 and 11 in part 2 of the schedule in the updated list of documents are privileged on the grounds that they:

  1. (a)
    Were brought into existence after the plaintiff issued the proceedings in this Honourable Court;
  2. (b)
    Were brought into existence for the dominant purpose of the proceedings and obtaining legal advice; and/or
  3. (c)
    Constitute professional communications between the person who made the document and the first and second defendants’ solicitors.

15.  As such, the first and second defendants maintain their objection to producing the documents listed in paragraphs 10 and 11 of part 2 of the schedule in the updated list of documents.”

  1. [16]
    The applicant responded by a fresh r 444 letter dated 19 April 2018.  After stating the relevant facts and asserting that the appropriate relief was disclosure of the documents, the letter asserted the relief ought be given because the documents were investigative reports with the consequence that legal professional privilege in respect of them is abrogated by s 48(2) Motor Insurance Act 1994 (Qld).  It also asserted that r 393(2) UCPR implicitly abolished the common law right of privilege in respect of video recordings brought into existence for the purpose of litigation.
  2. [17]
    The respondents replied by letter dated 26 April 2018, maintaining their objection to producing the documents explaining, under the heading “Why the plaintiff should not have the relief requested”:

“Documents numbered 10 and 11 in part 1 of the schedule of the updated list of documents are privileged on the grounds set out in paragraph 14 of the affidavit claiming privilege of Stewart James Boland sworn 2 March 2018.”.

  1. [18]
    As discussed below, the applicant contends this was not a sufficiently detailed explanation.  By letter dated 1 May 2018 the applicant wrote to the respondent indicating dissatisfaction with the response to its r 444 letter and flagging an intention to proceed with an application to the Court, which application was ultimately filed on 27 August 2018.
  2. [19]
    By letter dated 29 August 2018 the respondents wrote to the applicant referring to the application and saying:

“We enclose copies of the following documents:

  1. (a)
    Decision in Schofield v Hopman & Anor [2017] QSC 297.
  2. (b)
    A transcript of Justice McMeekin’s ruling in Schofield regarding the surveillance material in that matter.

We respectfully suggest that your client withdraw his application. …”

The applicant responded by letter dated 31 August 2018 effectively explaining why the decision in Schofield was not on point and explaining the applicant remained of the view the material was liable to disclosure and that the application would proceed.

  1. [20]
    By email of 3 September 2018 the respondents requested the applicant consent to their counsel appearing by telephone at the forthcoming application.  The applicant responded by letter of the same date, confirming there was no objection and also saying:

“We note that you have not addressed the specific matters in our letter dated the 31st of August 2018.  We ask that you please provide a specific response to that letter.”

No response was forthcoming.

  1. [21]
    The respondents’ outline of submissions provided on the morning of the listed application, did not press Schofield as relevant and rather advanced various arguments, with references to other cases, why s 48 did not abrogate the privilege claimed.[1] 
  2. [22]
    The application was obviously always going to turn upon the interpretation of ss 47 and 48 Motor Accident Insurance Act, including whether “surveillance reports” were “investigative reports”.  An elementary digital search of those two terms would have identified the very cases referred to in the outline.
  3. [23]
    The outline sought to summarise and advance quite predictable argument about the relevant statutory provisions and cases focussing upon why s 48(2) Motor Accident Insurance Act did not apply.  That should not have surprised the applicant’s counsel.  His own side’s r 444 letter of 19 April 2018 referred to that section.  It was ever thus that the applicant would have to persuade the Court that s 48(2) Motor Accident Insurance Act did abrogate the claim for privilege in this case.  The respondents’ reference in correspondence to some largely irrelevant case law was not a concession that the applicant would not have to address the operation of s 48 in advancing its application or that the respondents would not argue about the proper interpretation of that section.
  4. [24]
    The applicant contends that the substance of the respondents’ argument should have been flagged in the respondents’ rule 445 letter of 26 April 2018.  It asserts that alleged non-compliance resulted in surprise and thus necessitated the adjournment.  The respondents’ obligations in responding to a r 444 letter are identified in r 445(1):

445  Respondent’s reply

  1. (1)
    If the respondent receives a letter from the applicant written under this part, the respondent must write to the applicant, specifying the following matters –
  1. (a)
    that the letter is a reply to the applicant’s letter under this rule;
  1. (b)
    what, if anything, the respondent proposes to do in response to the applicant’s complaint;
  1. (c)
    if applicable, why the applicant should not have the relief to be sought. …” 
  1. [25]
    The applicant complains there was a failure to comply with r 445(1)(c), submitting:

“In the circumstances, it is reasonable to have expected the Defendants to have provided a considered response to the Plaintiff’s contentions.  The Defendants really gave no reason other than the asserted claim of privilege and did not engage in responding to any of the Plaintiff’s reasons against the claim of privilege until the morning of the hearing.”

  1. [26]
    The applicant submits in effect it was incumbent upon the respondents to not merely specify an explanation why the applicant should not have the relief sought, but to specify its reasoning in support of the explanation.  In imputing such a broad interpretation to r 445(1) the plaintiff:
    1. (a)
      emphasises UCPR r 5(1) and its emphasis upon facilitating the just and expeditious resolution of the real issues;
    2. (b)
      submits chapter 11 part 8 of UCPR is a code for interlocutory issues designed to keep parties out of Court until they comply with the correspondence requirements in an attempt to resolve interlocutory disputes; and
    3. (c)
      highlights judicial observations about the importance in personal injury cases of the parties putting their cards on the table.[2]
  2. [27]
    None of these considerations provide a basis for elevating the interpretation of r 445(1)(c) beyond the plain meaning of words of the rule.  Rule 445(1)(c) simply requires that a respondent specify why an applicant should not have the relief to be sought.  Rule 445(1)(c) does not require that a respondent should include arguments in support of the specified explanation why the applicant should not have the relief sought, just as r 444(1)(d) does not require an applicant to include arguments to be advanced in support of the specified explanation as to why the applicant should have the relief. 
  3. [28]
    Questions of degree and professional judgment will obviously arise from case to case as to how detailed the explanation need be in order to be understood.  In the present case explaining that the document in question was subject to legal professional privilege, for the reasons deposed to in the cited affidavit, left no room for misunderstanding.  It adequately specified “why the applicant should not have the relief to be sought”.  As it turns out, the explanation was unsustainable but that is not to the point.  The explanation served r 445(1)(c)’s evident purpose of allowing the prospective applicant to have regard to why an opponent asserts the prospective relief ought not be given before deciding whether to apply for the relief.   It was for the applicant to make his own legal assessment of the merits of that explanation in making his decision, not for the respondents to provide arguments in support of the merits of its explanation. 
  4. [29]
    Of course a prospective respondent with powerful arguments in support of the merits of its explanation would be wise to disclose them in the hope of dissuading a prospective applicant and avoiding the unnecessary cost of a futile application.  However r 445(1)(c) only mandates the provision of an explanation, not arguments as to the merits of that explanation.
  5. [30]
    There is no substance to the complaint of non-compliance.

The errors in outline issue

  1. [31]
    Complaint is also made that factual and legal assertions advanced in the outline were erroneous, with the implicit consequence that the applicant was somehow misled into thinking more time was needed to properly meet them. 
  2. [32]
    It is unnecessary to recite the list of complaints.  To the extent they relate to factual assertions they are no more than a complaint that other facts, including some rival facts, could have been included.  In the context of an outline of argument, such facts as were asserted, largely in summary, were fairly arguable as fact.  It was well within the knowledge and skill of a prepared opponent to highlight other facts, all of which were ascertainable from the documents filed in the proceeding.
  3. [33]
    As to assertions of law, the extent to which weaknesses in those assertions or rival assertions were not identified by the outline’s author fell well short of being misleading.  This was, after all, an “outline” and, as per the relevant practice direction,[3] it contained “argument”.  That an argument is weak or does not prevail in the end does not render it misleading and certainly not misleading in the sense of providing hindsight justification for seeking an adjournment.  An opponent familiar with the statutory provisions and cases of predictable relevance to the application should have been well able to forthwith meet the arguments in the outline and identify any flaws in the assertions of law advanced.
  4. [34]
    There is no substance to the complaints of error.

Orders

  1. [35]
    It follows that while the applicant should generally have its costs as the successful party, the applicant should nonetheless bear the costs thrown away by the adjournment.  My orders are:
  1. The applicant will pay the respondents’ costs thrown away by the adjournment on 7 September 2018 of the application filed 27 August 2018 (Court doc 36) to be assessed on the standard basis unless agreed.
  2. The respondents will pay the applicant’s costs of and incidental to the application filed 27 August 2018 (Court doc 36) to be assessed on the standard basis unless agreed, excluding the applicant’s costs thrown away by the adjournment of that application on 7 September 2018.

Footnotes

[1]  A copy of that outline has been provided to me by consent.  I order that copy be placed on the Court file as per a read and filed document.

[2]  Citing Nolan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 [21-32]; Parr v Bavarian Steakhouse Pty Ltd [2001] 2 Qd R 196 [13].

[3]  Amended Practice Direction Number 6 of 2004.

Close

Editorial Notes

  • Published Case Name:

    Zavodny v Couper & QBE (No 2)

  • Shortened Case Name:

    Zavodny v Couper (No 2)

  • MNC:

    [2018] QSC 259

  • Court:

    QSC

  • Judge(s):

    Henry J

  • Date:

    09 Nov 2018

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2018] QSC 238 16 Oct 2018 Application for the defendants to disclose copies of the surveillance reports listed in their list of documents granted: Henry J.
Primary Judgment [2018] QSC 259 09 Nov 2018 Costs order: Henry J.

Appeal Status

No Status