Tam Yuk Kwan v. Chu Cheuk Tao and Others

HCA002818/1987

1987, No. A2818

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H E A D N O T E

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AN ACCIDENT REPORT PREPARED FOR THE DOMINANT PURPOSE OF SUBMISSION TO A LEGAL ADVISOR FOR ADVICE ON, OR USE IN, LITIGATION IN REASONABLE PROSPECT WOULD BE PRIVILEGED IN RELATION TO A CLAIM FOR DAMAGES AT COMMON LAW EVEN IF THE LITIGATION IN REASONABLE PROSPECT WHEN THE REPORT WAS COMMISSIONED WAS CONFINED TO A CLAIM FOR EMPLOYEES' COMPENSATION. A DOCUMENT ONCE PRIVILEGED IS, AS A GENERAL RULE, ALWAYS PRIVILEGED.

1987, No. A2818

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Bokhary J, in Chambers

Date of hearing: May 31, 1989

Date of delivery of judgment: May 31, 1989

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J U D G M E N T

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1. This is an appeal from an order of a Master ordering the production of an accident report in respect of which legal professional privilege is claimed.

2. The case arises out of a tragic accident which occurred some 3 1/2 years ago on December 5, 1985, in a railway goods yard. The yard is one operated by the Kowloon & Canton Railway Corporation, which is sued as the 2nd Defendant, and to which I will refer as 'the KCRC'. The Plaintiff was a tally clerk employed by the 3rd Defendant, a company of forwarders. That afternoon, he was in the yard on its behalf marking empty wagons to reserve them for its use. The picture I get is one of him moving about the yard with a clipboard in one hand and a piece of chalk in the other. While he was engaged in such work, he was struck by one of the KCRC's shunting trains, driven by one of its train drivers, the 1st Defendant. He was very badly injured. His injuries included the crushing of both of his feet. As a result, both of his legs had to be amputated below the knee.

3. Shortly after the accident, a report thereon was prepared by adjusters by the name of Simon Tse Associates (Adjusting) Ltd. The report is dated 30th January 1986. It was commissioned by the 3rd Defendant's insurers.

4. Taking the view that it was covered by legal professional privilege, the 3rd Defendant's solicitors listed the report in Part 2 of Schedule I of the 3rd Defendant's List of Documents.

5. This claim of privilege was challenged. The Plaintiff applied for the production of the report for the purposes of inspection and copying. The 3rd Defendant resisted the application, claiming privilege.

6. On the 9th of this month, Master Woolley ordered production, awarding the costs of the application to the Plaintiff in any event. The 3rd Defendant appeals against that order. The appeal came before me earlier this morning.

7. Whether a report of this sort attracts privilege depends on the dominant purpose for which it was brought into existence. An accident report is privileged from production if - but only if - at least the dominant, even if not the sole, purpose for which it was prepared was that of submitting it to a legal advisor for advice in connection with, or use in, reasonably anticipated litigation arising out of the accident. It is true that the actual report in the casein which the House of Lords so held, namely, Waugh v. British-Railways Board [1980]AC 521 was an internal report. But there is no reason in principle why the ambit of the rule should be limited to internal reports. Indeed, It is not confined to reports at all. For example, in Guinness Peat Properties v. Fitzroy Robinson [1987]l WLR 1027 the rule was applied to a letter written by a party to its insurers at the time when litigation was in reasonable prospect.

8. The party claiming privilege has the onus of making out that claim.

9. Subject to that, I approach the case without any predisposition to believe either that the report is, or that it is not, privileged. It is true that in Waugh v. British Railways Board Lord Edmund-Davies (at p 544 F-H) said that:-

"Dominance again is not claimed by the board, but merely that use in litigation was 'one of the principal purposes'. Such moderation is only to be expected in the face of a claim arising out of a fatal accident. Indeed, the claims of humanity must surely make the dominant purpose of any report upon an accident (particularly where personal injuries have been sustained) that of discovering what happened, and why it happened, so that measures to prevent its recurrence could be discussed and, if possible, devised. And, although Barwick C.J. in Grant v. Downs, 135 C.L.R. 674, observed, at p. 677, that

'...the circumstance that the document is a 'routine document' will not be definitive. The dominant purpose of its production may none the less qualify it for professional privilege,'

the test of dominance will, as I think, be difficult to satisfy when inquiries are instituted and reports produced automatically whenever any mishap occurs, whatever its nature, its gravity, or even its triviality." It is necessary, however, to bear in mind the context in which Lord Edmund-Davies made those observations. In that case, the report was one made by the railway authority pursuant to a practice under which an enquiry was instituted, and a report made, whenever an accident occurred. If the KCRC follows a similar practice, and a report on the accident in the present case was the result, then Lord Edmund-Davies' observations would appear to be wholly on point. But there is no suggestion that any comparable practice was, followed by the 3rd Defendant or its insurers.

10. I turn now to the evidence filed in the application before the learned Master.

11. In support of the summons by which he applied for production of the report, the Plaintiff filed an affidavit sworn on March 1, 1989, by Mr Patrick Michael Burke. Mr Burke is a solicitor in the Legal Aid Department. That department acts for the Plaintiff. In his affidavit, Mr Burke says:-

"6. I anticipate that this report will contain statements taken from witnesses of the accident, etc., and also, possibly, photographs and/or sketch plan of the scene of the accident, as well as a covering report setting out the comments on in the accident.

7. In my experience such reports are prepared, by loss adjustors, in order to :

(a). Provide information to assess the loss, which would be used for the assessment of employees' compensation; and

(b) So that steps can be taken to ensure that such incidents do not occur again, i.e. by making recommendations on what steps can be taken to improve safety.

8. Another possible reason for preparing reports, and in my experience, very much a secondary purpose, is for use in any subsequent proceedings.

9. In the present case, the 3rd Defendant is claiming privilege for this report, on the basis as set out in paragraph 2 of its List of Documents, dated 9th February 1989. It is my respectful submission, that though this may have been one of the purposes of such report, it was certainly not the main or substantial purpose, which would be one or both the reasons set out in paragraph 7 above."

12. The 3rd Defendant answered by filing an affirmation sworn by Mr Wong Chung Wing on May 6, 1989. Mr Wong is the manager of the insurance department of the 3rd Defendant's insurers. In his affirmation, Mr Wong says:-

3. Upon receiving notice of the accident to the Plaintiff on the 5th of December 1985, being the accident referred to in paragraph 3 of the Amended Statement of Claim, on the 7th of January 1986, the Insurance Company instructed Messrs. Simon Tse & Associates (Adjusting) Limited to prepare a report on the accident.

4. The report concerned was compiled for the following purposes which were and remain the sole purposes, or at least the dominant and substantial purposes:-

(1) It was in the reasonable contemplation of the insurance Company that the Plaintiff would institute proceedings to claim against the 3rd Defendant under the Employees' Compensation Ordinance. The purpose of the report was to enable the Insurance Company to decide whether or not to contest such proceedings and if not, how much would be the likely compensation payable thereunder; and

(2) It was also in the contemplation of the Insurance Company that the Plaintiff would also seek to recover in common law proceedings for damages for personal injuries and that the 3rd Defendant might be named as a defendant in such proceedings. With the reasonable prospect of such litigation in mind, the report was intended to be used to obtain legal advice and to Conduct and aid in the conduct of that litigation."

13. No evidence in reply to Mr Wong's affirmation has been filed.

14. Mr Burke in his affidavit spoke on the basis of a belief which he had formed in light of his general experience. Mr Wong, on the other hand, answered from his knowledge of what actually happened in this particular instance; and what he has affirmed has not been contradicted, by any evidence in reply. In such circumstances, it is right, in my judgment, to proceed on the basis of what is no Mr Wong says. Needless to say, that reflection whatsoever on Mr Burke.

15. The question then arises: what is the effect of what Mr Wong says? Mr Burke, who appears for the Plaintiff, declines to Plaintiff, declines to take any point on the fact that paragraph 4 of Mr Wong's affirmation is divided into two sub-paragraphs, one dealing with the claim for employee's compensation and the other with the claim at common law. That is a reasonable attitude to adopt. As Ormrod, J. said in Re Dunaon [1968] P 301 at p. 313E, "...the correct approach ... is to look at the substance or reality of the matter and not to allow oneself to sink into formalism". Adopting that approach, it seems to me clear that what Mr Wong is saying is that the dominant purpose for which the report was commissioned was submission to the insurers' legal advisors for advice on claims which the Plaintiff may bring against the 3rd Defendant for employees' compensation and at common law. The letter to the adjusters only refers to employees' compensation; but that is merely an imperfect carrying out of the insurers' intention. I do not think anybody was mistaken about what was really intended. Certainly, the report is wider in ambit than one confined to employee's compensation. It is not suggested, not could it properly be suggested, that the 3rd Defendant's right to claim privilege is defeated by the fact that it was the insurers rather than the 3rd Defendant t itself f who commissioned the report. That, I think, is clear enough.

16. Even if the Plaintiff is right in his argument that the dominant purpose here pertained to a claim for employees' compensation alone, the report would, in my judgment, be privileged in the present proceedings for damages at common law. I arrive at this conclusion on the general principle that a document once privileged is always privileged. That is the rule seen in operation in cases such as Goldstone v. Williams, Deacon & Co. (1989[1 Ch. 47; Re Duncan (supra) and The Aegis Blaze [1986] Lloyd's Rep. 203. The learned editors of the 1988 Supreme Court Practice cited the last of those three cases for this proposition:-

"If the privilege, which prevail in the original action is properly claimed to be subsequent action by the person originally entitled to it or the successor, there is no additional requirement that the subsequent action should between the same parties and involved the same subject matter provided there is sufficient connection for the document to be relevant, the party entitled to privilege is able to assert it in subsequent action".

17. In my judgment, this appeal must be allowed and the learned master's order for discovery set aside. I will now hear the parties as to costs.

[Argument as to costs]

18. No order as to costs before the Master. Costs of the appeal to the 3rd Defendant in any event.

Representation:

Ms M. Yuen (Cheng, Yeung & Co.) for Appellant (3rd Defendant)

Mr P. Burke, Senior Legal Aid Counsel, for Respondent (Plaintiff)