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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

No. 10185 of 2007

PROTEC PACIFIC PTY LTD Plaintiff

BRIAN CHERRY Defendant

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JUDGE: HABERSBERGER J
WHERE HELD: MELBOURNE
DATE OF HEARING: 30 JANUARY 2008
DATE OF JUDGMENT: 19 MARCH 2008
CASE MAY BE CITED AS: PROTEC PACIFIC PTY LTD v CHERRY
MEDIUM NEUTRAL [2008] VSC 76
CITATION:

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PRACTICE AND PROCEDURE – Expert witness – Legal professional privilege – Confidentiality of


instructions – Contractual obligation to keep information confidential – Whether expert witness in
possession of privileged or confidential information – Whether privilege or confidentiality waived by
serving of expert witness statement pursuant to court order – Whether expert witness able to speak to
lawyers for opposing party about his reports and reports of other experts – Whether there was real
and sensible possibility of the misuse of privileged or confidential information – Opposing party free
to call expert witness at trial.

INJUNCTION – Interlocutory injunction – Likely to be final in effect – Degree of likelihood of success


at trial - Balance of convenience.

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APPEARANCES: Counsel Solicitors

For the Plaintiff Mr P. Riordan SC with Middletons


Mr I. Percy

For the Defendant Mr D. Harrison Alan Wainwright J. Okno & Co


For Steuler Mr P. Cosgrave SC with Anderson Rice
Industriewerke GmbH Mr F. Tiernan
HIS HONOUR:

The Application
1 This is an application by Protec Pacific Pty Ltd (“Protec”) for an order that the defendant,

Brian Cherry, be restrained, pending the hearing and determination of this proceeding or

further order, from making any further contact with Steuler Industriewerke GmbH, its servants

or agents, including its solicitors Anderson Rice and counsel retained on its behalf, in

connection with the Supreme Court proceedings No. 5797 of 2000 and No. 7268 of 2007.

Alternatively, that he be restrained from using, copying or dealing with any information

confidential to Protec in connection with the said proceedings in his possession, custody or

control or from communicating the said information directly or indirectly to Steuler or its said

servants or agents.

2 Thus, the order sought was interlocutory in form. Counsel for the defendant submitted,

however, that I should “exercise great caution” before accepting the submissions of the

plaintiff because any order made would likely be final in effect, as the two proceedings are

fixed for trial at the same time in a hearing commencing before me on 31 March 2008. I agree

that, given this circumstance, the plaintiff has to establish that there is a degree of likelihood

that it would be successful at trial in obtaining a permanent injunction against the defendant. 1

3 In order to understand why Protec had considered it necessary to commence this proceeding

against its expert witness, Professor Cherry, it is necessary to set out the factual background in

some detail.

The Factual Background


4 In proceeding No. 5797 of 2000 (“the principal proceeding”), which was commenced by

Protec against WMC (Olympic Dam Corporation) Pty Ltd, now known as BHP Billiton

Olympic Dam Corporation Pty Ltd (“WMC”), WMC counterclaimed against Protec and a

German company, Steuler Industriewerke GmbH (“Steuler”). The dispute concerned work

carried out by Protec in connection with the supply and installation of high density

polyethylene (“HDPE”) lining material to process tanks at WMC’s Olympic Dam mine in

1 See Hartleys Ltd v Martin [2002] VSC 301, [33] – [40] (Gillard J)
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1998 and 1999. The HDPE lining material known as “Bekaplast” was manufactured and

supplied by Steuler. WMC alleged that the Bekaplast was not a suitable lining material and

that it had failed prematurely with the result that it had been replaced with a fibreglass lining at

considerable cost to WMC.

5 In 2002, Professor Cherry was an Honorary Professorial Fellow in the Centre for Advanced

Materials Technology, Department of Materials Engineering at Monash University. He had

recently retired from the position of Professor and Associate Dean (Research and

Development) in the Faculty of Engineering at Monash University. By an agreement dated 17

October 2002 and made between Protec and Professor Cherry (“the Consultancy Agreement”),

Protec engaged Professor Cherry to provide “advice concerning the suitability of High Density

Polyethylene as a Tank Lining Material”. The written agreement had been proffered by

Professor Cherry following discussions with Protec’s then solicitors, which now practise under

the name Pilley McKellar Pty Ltd. Clause 5 of the Consultancy Agreement provided that:

5.1 The Consultant shall keep confidential all information, particulars and
results of all the Work carried out under this Agreement.

5.2 Each party acknowledges that all documents (other than any report
issued in the course of this consultation) and information disclosed by or
received from the other party remain the property of the party which
disclosed or produced them.

6 A draft “brief to expert” was provided to Professor Cherry by Protec’s solicitors on 15 October

2002. Pursuant to the Consultancy Agreement, Professor Cherry carried out a number of tasks.

According to his affidavit in opposition to Protec’s application, sworn on 25 January 2008,

Professor Cherry visited WMC’s site at Olympic Dam in about March 2003 in the company of

Howard Smith, Protec’s managing director, and another person, Claudio Sesia, to observe the

repair work that was being carried out on the damaged portions of the mixer and settler tanks.

Professor Cherry said that Mr Smith, Mr Sesia and he:

discussed the construction and inadequacies in the construction of the concrete


shells of the mixer/settler tanks, damage to the concrete caused by the leakage
of the solvent extraction chemicals, the repairs that had already been effected in
the uranium solvent extraction portion of the plant using fibre reinforced plastic
linings.

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Professor Cherry then prepared a report dated 26 May 2003. This was a commentary on a

report by WMC’s expert, Dr Ian Peggs. Initially, there was a degree of co-operation between

Protec and Steuler on a “common defence” to WMC’s counterclaim against them. In June

2003, when in Europe on other business, Professor Cherry met with representatives of Steuler

in Germany, at the suggestion of Mr Alexander McKellar of Protec’s former solicitors.

Professor Cherry prepared a report of this meeting for Protec’s solicitors, which was dated 1

July 2003. According to Professor Cherry, he subsequently corresponded with Dr Andreas

Hopp, an employee of Steuler, regarding test methods for environmental stress cracking of

semi-crystalline polymers. In December 2003, Professor Cherry attended a mediation in the

principal proceeding on behalf of Protec. He delivered a presentation containing a simplified

account of the technological issues involved. Before the mediation, Professor Cherry had

spent “a considerable time” in Melbourne with Michael Steuler, the managing director of

Steuler, discussing these issues. Professor Cherry then prepared a second report for Protec,

which was dated 22 August 2005. An order 44 expert witness statement of Professor Cherry

was filed by Protec in the principal proceeding on 15 September 2005. It referred to both of

Professor Cherry’s earlier reports. Finally, Professor Cherry participated in a Court ordered

experts’ conclave in January and February 2006, which led to the preparation of a Joint Report

of Experts’ Conference dated 7 February 2006.

7 Just prior to the experts’ conclave, Professor Cherry copied to Mr McKellar an email dated 19

January 2006 which he had sent to Mr Steuler, in response to an email from Mr Steuler dated

18 January 2006 advising Professor Cherry of “an important analysis” which Mr Steuler had

come across “in preparing our experts” for the conclave. In his email to Mr Steuler, Professor

Cherry stated that:

I have been instructed by means of an email from Howard Smith dated 5th
January that in view of “a probable settlement negotiated between myself and
BHP Billiton” to “cease any further work (that I) may be doing on this matter”.

8 By an email dated 20 January 2006, Mr McKellar instructed Professor Cherry as follows:

UNDER NO CIRCUMSTANCES ARE YOU TO EVER DIRECTLY


CORRESPOND WITH ANOTHER PARTY TO ANY LITIGATION.

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FURTHR DISCLOSURE OF CONFIDENTIAL SETTLEMENT
DISCUSSIONS BETWEEN OUR CLIENT AND BHP BILLITON IS A
GROSS BREACH OF SOLICITOR/CLIENT PRIVILEGE AND IT IS
UTTERLY INAPPROPRIATE THAT YOU HAVE DONE SO.

PLEASE NEVER EVER DO THIS AGAIN.

Mr McKellar said in affidavit in reply sworn on 29 January 2008 that he had informed WMC’s

solicitors, Middletons, about the direct contact between Mr Steuler and Professor Cherry, that

an exchange of correspondence between the solicitors for the three parties followed, and that

by an email dated 25 January 2006 he had informed Anderson Rice that Professor Cherry had

been told that the solicitors for Protec considered his conduct “inappropriate” and that they had

“advised him as to the appropriate course of conduct in future”.

9 In March 2006 Protec and WMC did indeed settle their dispute. However, for reasons which

are not relevant to this proceeding, Protec and WMC reached a further settlement in May 2007.

This settlement resulted in a consent judgment on the counterclaim in the principal proceeding

for $15 million in favour of WMC against Protec. Part of the May 2007 terms of settlement

required Protec to issue proceedings against Steuler seeking indemnity and damages arising out

of the subject matter of the principal proceeding. (In 2004, Protec had issued, but not served,

proceedings against Steuler. In April 2007, Protec’s application for leave to extend the time

for service of that proceeding was refused. 2 ) Accordingly, Protec issued proceedings against

Steuler on 16 July 2007 (“the 2007 proceeding”). Pursuant to the terms of settlement, the

solicitors acting for WMC in the principal proceeding, Middletons, act for Protec in the 2007

proceeding. As already mentioned, both the principal proceeding and the 2007 proceeding are

fixed for trial at the same time. I have previously ordered that the witness statements in the

principal proceeding stand as witness statements in the 2007 proceeding and that the evidence

in one proceeding be evidence in the other.

10 According to Professor Cherry, he was told by Mr McKellar in about July 2006 that WMC’s

claim against Protec had been settled. As he understood that he was not required further in the

matter, he disposed of all of the paper and compact disc documents that he held in relation to

the matter.

2 Protec Pacific Pty Ltd v Steuler Industriewerke GmbH [2007] VSC 93 (Hansen J).
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11 On or about 15 June 2007, Professor Cherry received a telephone call from Anderson Rice,

indicating a possible desire to discuss a report that he had written dated 26 May 2003

concerning the environmental stress cracking of polyethylene. Professor Cherry was told that

Anderson Rice were the solicitors for Steuler and he was asked if he would be willing to meet

to talk about the report. Professor Cherry said that there was no mention of legal proceedings.

He said that it occurred to him that other cases of the environmental stress cracking of HDPE

may have become of interest to Steuler and as he had dealt with Steuler in the past he felt that

he would be happy to do so again. No date was fixed for the meeting. Professor Cherry heard

nothing further until late in October 2007 when he was telephoned again by Anderson Rice to

set up a meeting. The appointed time was confirmed by an email dated 18 October 2007. He

said that there was nothing in that email which indicated to him that there was any litigation

involved.

12 A meeting took place on 7 November 2007 between Professor Cherry and Steuler’s solicitors

and counsel. During the meeting he asked what was the purpose of the meeting. He said that

he was then informed that there was a court case in which Protec was suing Steuler. He

questioned the extent to which this might involve him in a conflict of interest. He said that he

was informed that there was no legal property in a witness and that any party to litigation was

free to approach any witness and the witness was at liberty to decide whether or not to talk to
any party. Professor Cherry said that as he believed that everything in his report, and indeed

everything that had transpired in his dealings with Protec and with Steuler, involved the

discussion of, and the formation of, opinions which were based upon published information

freely available in the peer reviewed technological press, he felt happy to continue the

discussions, but he said that as a matter of courtesy, he would inform Mr McKellar that such

discussions were taking place.

13 Gustavo Catalogna, a partner in the firm of Anderson Rice, the solicitors for Steuler, swore an

affidavit in opposition to Protec’s application on 25 January 2008. In his affidavit,

Mr Catalogna said that at the meeting on 7 November 2007 Steuler’s lawyers discussed with

Professor Cherry certain matters and information contained in:

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(a) Professor Cherry’s report dated 26 May 2003,

(b) the other expert reports served in the principal proceeding, and

(c) the Joint Report of Experts’ Conference dated 7 February 2006.

According to Mr Catalogna, Steuler’s lawyers also requested Professor Cherry to explain and

assist them in understanding various technical matters raised in the above reports.

Mr Catalogna said that, in the future, Steuler’s lawyers wished to discuss with Professor

Cherry the contents of his second report dated 22 August 2005. He said that they were only

interested in Professor Cherry’s opinions on scientific and technical issues. They did not ask

about, did not intend to ask about, and were not interested in, instructions or information which

Professor Cherry received from Mr McKellar or Mr Smith on behalf of Protec, or discussions

between Professor Cherry and Mr McKellar or Mr Smith.

14 On 16 November 2007, Professor Cherry telephoned Mr McKellar. According to

Mr McKellar, Professor Cherry told him, in substance, that he had been contacted by the

solicitors for Steuler who had requested him to meet with counsel for Steuler, and that

Professor Cherry had asked him to obtain instructions from Protec as to whether or not it had

any objection to him doing so. Mr McKellar told Professor Cherry that his firm no longer

acted for Protec in relation to the principal proceeding, but that he would contact Protec’s new
solicitors and that he expected that they would take the matter up with Professor Cherry.

Mr McKellar said that he contacted Middletons to tell them what had occurred on the same

day. On 19 November 2007, he sent an email to Professor Cherry, part of which read as

follows:

We do note for the record that:

(a) you were engaged by Protec Pacific to provide expert reports, attend a
conference of experts ordered by the Supreme Court and give evidence
on its behalf. When you were engaged we provided you with a
substantial brief containing important confidential information in respect
if [sic] certain aspects of our client’s position in the litigation. This brief
was provided under the cover of legal professional privilege and such
privilege continues to attach to the brief despite the fact we are no longer
involved in the case;

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(b) pursuant to the brief you have provided expert reports which have been
filed in the proceeding and you attended the conference of experts;

(c) the matters upon which your expert opinion was sought are still live
matters as between the original parties in proceeding 5797 of 2000 and a
further proceeding initiated by our former client (which we understand
will be heard concurrently with the original proceeding);

(d) it may well be that our former client wishes to continue to retain you as
an expert in relation to the ongoing issues upon which you have
previously expressed an opinion;

(e) it would be most unusual and it may well be improper for an expert who
has received confidential and privileged information on behalf of one
party to discuss (or give) evidence on behalf of another party in the same
proceeding, irrespective of the overriding duty you have to the court as
an expert witness; and

(f) it would also be most unusual and it may well be improper for an expert
whose retainer has not been formally terminated to discuss (or give)
evidence on behalf of another party in the same proceeding.

We strongly suspect that both Protec Pacific and its current solicitors would
object to you discussing any of the issues in this proceeding with the solicitors
for Steuler at all, or at least until the above issues are resolved with Protec
Pacific and its solicitors.

15 By an email dated 20 November 2007 from Mr Tony Watson, a partner of Middletons, to

Professor Cherry, Mr Watson explained the above background to Professor Cherry. The email

continued:

In this regard we are instructed that our client requests that you refuse the
approach from Steuler’s solicitors for the following reasons:

1. Your retainer in respect of the matters of which you have already


expressed an opinion has not been terminated by our client and it may
ultimately transpire that Protec Pacific may call upon you to give
evidence in Proceeding No. 7268 of 2007 and as detailed above, those
proceedings are brought by Protec Pacific directly against Steuler.
Accordingly, we do not consider it appropriate for Steuler’s solicitors to
seek to speak with you in those circumstances.

2. As part of your original retainer, we are instructed that you were


provided with, amongst other things, documents and had disclosed to
you information which is both confidential to our client and which
would attract legal professional privilege. Indeed, communications
between and [sic] independent expert and the client’s legal
representatives do attract legal professional privilege and that privilege
resides with and can only be waived by the client, that is, Protec Pacific.
In this case, our client does not consent to the waiver of any matter the
subject of legal professional privilege or which is otherwise confidential

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in nature. Again, Steuler’s solicitors would be appreciative of this and it
is inappropriate for them to seek to speak with you direct in
circumstances where material provided and/or disclosed to you in
confidence or otherwise the subject of legal professional privilege may
be compromised if you were to speak with Counsel retained on behalf of
Steuler.

Accordingly, our client requests that you refuse the invitation by Steuler’s
lawyers to meet with Counsel retained on behalf of Steuler. Please confirm that
you will abide with this request.

16 Professor Cherry responded on 22 November 2007 by advising Mr Watson that “as a matter of

courtesy” he was forwarding a copy of Middletons’ letter to Anderson Rice. Professor Cherry

further advised that “after taking independent legal advice” he would decide on his “further

course of action”.

17 On 17 December 2007, Professor Cherry sent an email to Mr Watson advising as follows:

I write in connection with your letter of the 20th November in which you
informed me that your client requests that I refuse the invitation by Steuler’s
lawyers to meet with Counsel retained on behalf of Steuler. I am, of course
concerned to ensure that confidentiality of information to Protec Pacific, where
properly claimed, is maintained and assure you and your client that I will make
the strongest endeavour to maintain that confidentiality. However now that I
have taken advice on this matter I have to inform you that I do not wish to
accede to your client’s request.

18 Mr Watson replied to Professor Cherry by email the following day. He stated that his client

was “of the view that you cannot speak with Steuler’s Counsel and/or lawyers without

disclosing, in breach of your obligations to our client, confidential or privileged information”.

Mr Watson sought an undertaking from Professor Cherry that he would not “meet with or

otherwise communicate with Steuler’s Counsel or lawyers in respect of the subject matter of

either of Proceeding Nos. 5797 of 2000 or 7268 of 2007”. If such an undertaking was not

forthcoming, he would obtain his client’s instructions to commence injunctive proceedings.

19 Mr Watson’s email of 18 December 2007 brought forth two responses. One from Professor

Cherry, early on 19 December 2007, was that he had sought further advice and, on its receipt,

he would respond. The other was from Anderson Rice, later on the same day. Anderson Rice

said that they had been provided with a copy of Mr Watson’s letter to Professor Cherry. They

sought a response to their allegation that Middletons had breached Rule 17.5 and 17.6 of the

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Professional Conduct and Practice Rules 2005 by purporting to forbid Professor Cherry from

conferring with them. Anderson Rice pointed out that Professor Cherry had advised

Middletons that he was “prepared to assist the court” and that he was “concerned to ensure that

confidentiality of information to Protec Pacific where claimed is maintained”. Anderson Rice

added that they understood “the principles of client legal privilege” and they would not breach

those principles.

20 Middletons replied to Professor Cherry by two emails dated 19 December 2007. They sent

him a copy of the Consultancy Agreement and drew his attention to clauses 5.1 and 5.2 (set out

above). They also repeated their reference to the foreshadowed injunction application, unless

he gave the requested undertakings.

21 Middletons replied to Anderson Rice by a facsimile dated 19 December 2007. They said that:

Our client takes the view that its retainer of Professor Cherry has not been
terminated and it may wish to call him to give evidence on its behalf. Further,
confidential information was provided to him to assist him in providing advice
and to prepare his expert reports and contribute to the Expert Conclave.
Furthermore, information provided to him and the report produced, in all
probability, attract legal professional privilege.

In the facsimile, Middletons also said that:

Whilst we readily accept that there is no property in a witness, you will equally
appreciate in the circumstances outlined, it is inappropriate for you, counsel or
your client to discuss the circumstances of this case with Professor Cherry. We
go further and suggest that to do so might also make the person or persons
concerned a party to a breach of the confidence owed to our client.

22 By an email dated 20 December 2007, Anderson Rice wrote to Middletons as follows:

Let us make the following points clear:


(a) we met with Professor Cherry on 7 November 2007;

(b) we intend to confer with him further;

(c) in relation to the above, we did not on 7 November 2007, and have no
intention to do so in any future meetings, discuss any matters with
Professor Cherry, or seek any information from him, other than in
relation to:

(i) Professor Cherry’s Report dated 26 May 2003, which Report was
served upon all parties to the proceeding;

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(ii) the other Expert Reports served on behalf of the other parties in
the proceeding;

(iii) the contents of the Joint Report of Experts dated 7 February


2006, signed by the experts who attended, and produced in
conjunction with the facilitator of the Experts’ Conference,
Dr Donald Charrett;

(iv) questions and issues relating to the above, in respect of which


Professor Cherry may be requested to give his expert opinion, or
may be requested to explain and assist us in understanding
technical matters raised in the Expert Reports and in the Joint
Report of Experts.

We have not breached, and have no intention of breaching, the confidentiality


regarding information which is confidential to Professor Cherry and Protec.
Accordingly, as there is no risk of a breach of confidentiality there is no basis to
your client’s proposed injunction application.

Mr Watson said in his affidavit that it was only upon receipt of this email that he became aware

that Professor Cherry had already met with Steuler’s lawyers.

23 Also on 20 December 2007, Professor Cherry sent the following email to Middletons:

I acknowledge receipt of the letter of the 19th December, written on your behalf
by Mr Travis Payne. I have had no legal training and claim no expertise in the
interpretation of the law, so what follows is a matter of opinion and not of fact.

1. My understanding is that the primary obligation of an “Expert Witness”


is to inform the Court on matters pertaining to his or her expertise and to
avoid advocacy for any of the parties involved in the dispute.

2. My sole activity in case 5797 of 2000 has been the interpretation for the
Court of evidence presented to the Court.

3. I have carried out no experimental investigations for any party to the


dispute.

4. I acknowledge that I have become aware of publicly available


knowledge that would not have been part of my general experience other
than as a result of my engagement by one of the parties to the dispute. I
undertake not to publicise such knowledge further unless directed
otherwise by the Court.

5. Nevertheless, under the duress of a ridiculously short time limit, and in


the firm belief that this has been imposed with the sole aim of
preventing the deposition to the Court of opinions that might not be in
accord with interests of your client, I undertake to avoid any discussion
with Steuler’s Counsel or lawyers of the technological matters involved
in the subject matter of either of the Proceeding Nos 5797 of 2000 or
7268 of 2007 between now and the time of the Court’s decision

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regarding your client’s injunction application. If an injunction is
obtained by your client, I will of course abide by its terms.

6. I have been provided with a copy of a letter by Anderson Rice (Steuler’s


solicitors) to your firm of today’s date. I say that the contents of the
letter are entirely accurate both in relation to the meeting that took place
between myself and Steuler’s legal representatives on 7 November 2007,
and in relation to my intentions concerning any future meetings. I have
not, and will not be disclosing to Steuler’s legal representatives any
information at all of a confidential nature relating to my communications
with Protec or its lawyers, Pilley McKellar.

24 Not being satisfied with the qualified undertaking offered by Professor Cherry, WMC

commenced this proceeding on 21 December 2007. By a consent order made on 24 December

2007, directions were given for the filing of further affidavits and the matter was adjourned to

be heard by me on 30 January 2008. As part of the consent order, Professor Cherry undertook,

until further order, not to:

a. use, copy or deal with the information (as referred to the Schedule
hereto) and any further information confidential to the plaintiff in
connection with proceedings no 5797 of 2000 and no 7268 of 2007 in
this Court in his possession custody or control (save for the purposes of
obtaining legal advice and representation); or

b. communicate the information or any further such information directly or


indirectly to Steuler Industriewerke GmbH, its servants or agents
Anderson Rice and counsel retained on its behalf.

The information referred to in the schedule to the order was:

the information particulars or results of the Defendant’s work carried out under
or in any way connected with the consultancy agreement between the Plaintiff
and the Defendant dated 17 October 2002.

Consideration of the Issues


25 Mr Riordan SC, who appeared with Mr Percy of counsel for Protec, submitted that the

injunctive relief sought by Protec was justified on any of three bases – legal professional

privilege, the equitable concept of confidentiality and the express contractual obligation to

keep information confidential. First, he submitted that instructions given to Professor Cherry

and any reports prepared by him were documents brought into existence for the purposes of

litigation and were therefore the subject of legal professional privilege, which Protec had not

waived. Secondly, Mr Riordan submitted that, in equity, where someone was engaged in

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circumstances of trust and confidence, that person was not free to breach the confidentiality.

Thirdly, he submitted that Professor Cherry had expressly agreed that “all information,

particulars and results of the work carried out” under the Consultancy Agreement would be

kept confidential. He submitted that the Court should restrain Professor Cherry from breaching

that contractual obligation.

26 Mr Harrison of counsel, who appeared for the defendant, opposed the granting of any restraint

on Professor Cherry talking to Steuler’s lawyers. He submitted that Protec had not

demonstrated by evidence that any confidential information existed. Alternatively,

Mr Harrison submitted that any confidential information imparted to Professor Cherry was no

longer confidential because Protec had waived the claim to confidentiality by filing and

serving Professor Cherry’s reports and by asking him to participate in the experts’ conclave. In

addition, Mr Harrison relied on the principle that there is no property in a witness. He also

submitted that Protec’s involvement in the principal proceeding having ended, there was no

longer a confidence to protect. Further, Mr Harrison submitted that, as there was no evidence

of any existing or threatened dissemination or misuse of confidential information, there was no

serious question to be tried. Finally, he submitted that the balance of convenience did not

favour the granting of the injunction because it was difficult to see what damage would flow to

Protec from any breach, even if Professor Cherry were to breach Protec’s confidence.

27 Counsel for Steuler were granted leave to intervene and make submissions on its behalf in

opposition to Protec’s application. Mr Cosgrave SC, who appeared with Mr Tiernan of

counsel on behalf of Steuler, submitted that Protec had not shown that there was confidential

information which it had communicated to Professor Cherry. Alternatively, he submitted that,

even if Protec did communicate confidential information to Professor Cherry, there was no real

and sensible possibility of Professor Cherry revealing that information, and that even if the

information were revealed, its revelation would not cause any loss or damage to Protec.

Mr Cosgrave submitted that preventing Steuler from talking with Professor Cherry would

overturn the principle that there was no property in a witness.

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28 The competing submissions, therefore, raise a number of issues to which I now turn. The first

issue to consider is whether Protec has established that there was any confidential information

communicated to Professor Cherry. In the particulars given under paragraph 6 of its

endorsement of claim, Protec stated that the confidential information “included but was not

limited to”:

(a) “the Plaintiff’s knowledge and experience in relation to the effects of


solvents on HDPE”,

(b) “the Plaintiff’s attitude strategy and approach to the principal


proceeding”, and

(c) “at least until late 2005 early 2006 its common approach with Steuler to
the defence to the counterclaim …”

29 Protec further stated in the particulars to paragraph 6 that the confidential information was

provided by it to Professor Cherry in the course of:

(a) “providing instructions to him in connection with and to enable him to


perform the services required by the consultancy agreement (which
included the preparation of an expert report by the Defendant for use in
the principal proceeding)”,

(b) “a mediation between the parties to the principal proceeding in


December 2003”, and

(c) “preparation for a conclave of experts in the principal proceeding held


during January and February 2006”.

30 In his affidavit on behalf of Protec sworn on 21 December 2007, Mr McKellar stated as

follows:

7. From October 2002 I had numerous discussions with Professor Cherry


in connection with the various services he provided on behalf of the
plaintiff. I provided instructions to him to enable him to produce his
expert report of 26 May 2003. I believe those instructions included
information confidential to Protec, which I am not presently at liberty to
divulge to the court. To do so in this affidavit would be to provide that
information to Steuler and its advisors and thus destroy the
confidentiality sought to be protected by this proceeding.

10. A second mediation was held in the principal proceeding in December
2003. Professor Cherry attended and participated in the mediation on
behalf of Protec, at least for part of the time. In the course of the
mediation Professor Cherry was likely to have been privy to information
confidential to Protec. …
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11. In 2004 and 2005 the parties to the Principal proceeding served various
further expert reports. Professor Cherry provided advice to counsel and
I [sic] for Protec on the significance of the reports provided by Steuler
and WMC. In turn, both Mr Smith Protec’s managing director, and I
continued to provide information to Professor Cherry to enable him to
properly undertake his work on behalf of Protec.

31 Mr McKellar also referred to the “common defence” with Steuler which Protec followed for a

time and to Professor Cherry’s meeting in June 2003 with representatives of Steuler to discuss,

amongst other things, “issues relevant to the common defence”, and to Professor Cherry’s

participation in the conclave of experts in the principal proceeding.

32 In his affidavit sworn on 25 January 2008, Professor Cherry stated that:

I appreciate that there may be matters, particularly in the sphere of commercial


competition in which one party to an action may be disadvantaged if
information peculiar to that party is revealed to the other side. As my
discussions with, and the briefings that I received from Protec were concerned
solely with technological matters, I do not believe that I have ever been made
aware of any commercial information in connection with this case; nor do I
believe that if I have, I would or could have remembered it.

33 In response to Mr McKellar’s affidavit, Professor Cherry said that initially what he was being

asked by Protec’s solicitors to comment upon:

was the application of existing technological knowledge. Neither at that time


nor since, have I seen any evidence of the development of any new technology
by Protec. Nor have I seen any technology that I have been told is confidential
to Protec.

Professor Cherry also said that the brief that was provided to him contained information which

he regarded “as common general knowledge in the hands of one skilled in the use of polymeric

materials”. He went on to say that he did not recall Mr McKellar telling him that any of the

information provided to him was confidential. He further said that he found it difficult to

understand how any of that information could be “confidential” and that he did not know to

what information Mr McKellar was referring when he talked about “information confidential

to Protec” which he, Mr McKellar, was not at liberty to divulge to the Court.

34 Professor Cherry referred to his visit to Steuler’s headquarters in Germany. He said that he

“learned much about the problem of which I was previously unaware” as this was “the first

14 T0076
occasion upon which I had been able to have detailed discussions with anyone about the

technology of the environmental stress cracking of high density polyethylene involved in this

matter”. He further said that, other than information that he had “gleaned” from Dr Peggs’

report, he had “learned little from anyone on behalf of Protec about these issues”. Professor

Cherry said that, because he thought the discussions at Steuler’s premises were “of such

importance” he had prepared a “visit report” which he submitted to Mr McKellar. Professor

Cherry then exhibited that report to his affidavit. He said that he subsequently discussed with

Mr McKellar “the different emphases (within an area of considerable general agreement)

placed on different aspects of the technology involved in the dispute by the Steuler

representatives and myself”.

35 With respect to the mediation, Professor Cherry said that he was present for part, if not all, of it

and that representatives of WMC and Steuler were present at all times. He said that he did not

know what information he was allegedly “privy to” that was confidential to Protec. He further

said that he did not know what information of any description he could have received at the

mediation, which information was not also heard by representatives of Steuler and WMC. In

his affidavit in reply, Mr McKellar stated that it was his “recollection that Professor Cherry

was present during private sessions with Mr Smith, Mr Shnookal of counsel and I [sic] during

the mediation”.

36 Counsel for both Professor Cherry and Steuler emphasised the lack of precision in the

description by Mr McKellar of the alleged confidential information and the qualified nature of

the statements that such information was imparted to Professor Cherry. In one case, it was

simply Mr McKellar’s “belief” about unidentified confidential information that was deposed

to, in another it was said that it “was likely” that Professor Cherry became privy to such

information, whilst nothing specific was said about what or how Professor Cherry obtained

confidential information prior to the experts’ conclave.

37 Mr Riordan’s response was that, given the contractual obligation to keep confidential “all

information, particulars and results” of all of the work to be carried out under the Consultancy

Agreement, namely, “the provision of advice concerning the suitability of High Density

15 T0076
Polyethylene as a Tank Lining Material”, it did not matter that Protec had not been more

specific in identifying the confidential information said to be involved. He submitted that

Professor Cherry was contractually bound to keep everything he was told or learnt during his

work for Protec confidential.

38 In Carindale Country Club Estate Pty Ltd v Astill, 3 Drummond J said:

It is a basic requirement that before material will be recognised as having the


character of confidential information, the information in question must be
identified with precision and not merely in global terms: Corrs Pavey Whiting
& Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443 and cf O'Brien
v Komesaroff (1982) 150 CLR 310 at 327. The requirement is insisted upon
even though it may necessitate disclosing to the court the very information the
confidentiality of which it is sought to preserve by the action. This requirement
has its foundation in the need for the court to be able to frame a clear injunction,
should relief against misuse of confidential information be granted. There are
procedures available that will minimise the risk that confidentiality will be lost
by the litigation process, although the applicant did not seek to invoke them
here.

39 In Yunghanns v Elfic Ltd, 4 Gillard J said that:

The degree of particularity of the confidential information must depend upon all
the circumstances. Often, it cannot be identified for fear of disclosure.

40 In Sent v John Fairfax Publications Pty Ltd, Nettle J (as his Honour then was), having quoted

the above passage from the judgment of Drummond J, went on to say that it was important to
bear in mind that what was said:

was in the nature of a statement of principle and that, when it comes to the facts
of a particular case, the principles which his Honour adumbrated need to be
applied with a degree of flexibility. 5

Nettle J concluded that in certain cases:

less precision of description may be required where more would annihilate the
confidence sought to be protected... 6

3 (1993) 42 FCR 307, 314-315. See also Smith Kline & French Laboratories (Aust) Ltd v
Department of Community Services and Health (1990) 22 FCR 73, 87 (Gummow J).
4 Unreported, Supreme Court of Victoria, Gillard J, 3 July 1998.
5 [2002] VSC 429, [67].
6 [2002] VSC 429, [69].
16 T0076
41 In Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd, 7 Johnson J

referred with approval to the conclusion by Templeman J in Gugiatti v City of Stirling 8 that, in

cases where the description of the alleged confidential information was lacking in precision,

the appropriate course was not to require the applicant to provide further detail of the

inadequately identified confidential information but to consider the application on the basis of

the evidence as it stands. 9 That is how I propose to approach this issue.

42 Often, the question of the defining of the alleged confidential information arises in the context

of whether or not the court could be satisfied that the information so described was imparted in

circumstances giving rise to an obligation of confidence and whether or not the information

contained material which was common knowledge. In Independent Management Resources

Pty Ltd v Brown, 10 Marks J said that:

[T]he more general the description of the information which a plaintiff seeks to
protect, the more difficult it is for the court to satisfy itself that information so
described was imparted or received or retained by a defendant in circumstances
which give rise to an obligation of confidence.

43 I agree with Protec’s submission that the first of these questions does not arise here because of

the contractual obligation. In any event, it seems to me that information given to a professional

person for the purposes of receiving that person’s advice would normally import an obligation

of confidence so long as the information was not common or public knowledge.

44 On that second question, I accept Professor Cherry’s evidence that most of the information

provided to him by Protec was “common general knowledge” to an expert such as himself.

But the evidence did not stop there. He said that he “learned much about the problem” of

environmental stress cracking of HDPE from his visit to Steuler’s headquarters and that he had

“learned little from anyone on behalf of Protec about these issues” (emphasis added).

Significantly, he did not say in his affidavit that he had learned nothing from Protec about

7 [2005] WASC 255.


8 [2002] WASC 33, [50].
9 [2005] WASC 255, [88].
10 [1987] VR 605 at 609.
17 T0076
these issues. On the other hand, at the conclusion of his affidavit Professor Cherry said that he

was:

not made aware of any knowledge and experience in relation to the effects of
solvents on HDPE that Protec would have had other than information that was
available publicly.

45 In respect of the first of the alleged categories of confidential information, namely, Protec’s

“knowledge and experience in relation to the effects of solvents on HDPE”, I find it a little

surprising that Professor Cherry can be so definite that the little he learned from Protec about

its relevant knowledge and experience was already “available publicly”. As referred to above,

Professor Cherry was initially briefed by Mr McKellar, he visited the WMC site with

Mr Smith, Protec’s managing director, in about March 2003, and he received information from

both Mr Smith and Mr McKellar in 2004 and/or 2005. I consider it more than likely that, at

least in his discussions with Mr Smith, Professor Cherry was given some information about

Protec’s relevant knowledge and experience which was not publicly known. Whilst, in

Professor Cherry’s opinion it may not have been very important technologically, it would

nevertheless be confidential information.

46 I also consider that Professor Cherry has failed to understand the significance of the third

category of alleged confidential information, namely, Protec’s “common approach with Steuler

to the defence to the counterclaim”. At the conclusion of his affidavit, Professor Cherry said

that he was “unable to understand this claim”, and that as far as he was aware it “would have

been public knowledge” that Protec and Steuler were following a “common defence”. That is

not the information which Protec is seeking to keep confidential. As previously mentioned,

Professor Cherry said that he learned much from his visit to Steuler’s headquarters. His views

on what he had learned were, however, confidential to Protec, unless Protec chose to share

them with Steuler. Thus, if his report dated 1 July 2003 had not previously been disclosed by

Protec to Steuler, in all probability Professor Cherry will have breached his obligation of

confidentiality in respect of that report by exhibiting it to his affidavit in this proceeding, or if

he discussed his report or the views contained in it with Steuler’s lawyers at their meeting on 7

November 2007.

18 T0076
47 Further, it is clear, in my opinion, that it is no answer to a claim of confidentiality to say that

some other person or limited group also knows the alleged confidential information. Johnson J

dealt with this issue in Rapid Metal Developments as follows:

In the authorities, the issue of whether certain information is confidential is


often dealt with by identifying circumstances in which information cannot be
confidential. Information which is "public property", "public knowledge",
"public" or "common knowledge" does meet the requirement of confidentiality:
see Saltman Engineering v Campbell Engineering Co Ltd… 11 ; O'Brien v
Komesaroff… 12 ; Coco v AN Clark… 13 . It is apparent from the interpretation of
the notion of confidentiality in the various authorities that confidentiality
involves some degree of secrecy whereby a person seeking to protect
information keeps it to himself or herself or allows it to be communicated only
to a limited group. Therefore, the fact that others within a group are privy to the
information does not conflict with the notion of confidentiality. In the instant
case, the fact that certain information was communicated in the presence of
others involved in the construction of the building does not impair
confidentiality unless it was communicated in a way or in circumstances which
indicate that it was intended to become public property: see Australian
Broadcasting Corporation v Lenah Game Meats Pty Ltd… 14 where Gleeson CJ
observed that confidentiality extends to a matter which a reasonable person
would understand to be intended to be secret, or to be available to a limited
group.

48 Finally, I found Professor Cherry’s response to the second category of alleged confidential

information, namely, Protec’s “attitude strategy and approach to the principal proceeding”

rather disingenuous. Professor Cherry said that he did not know “the meaning of the words

‘attitude strategy’ ”. Whilst the punctuation can be criticised, I would have thought that any
reader would understand that a comma had to be added between “attitude” and “strategy”, and

that when that was done the meaning of Protec’s “attitude, strategy and approach to the

principal proceeding” became quite clear.

49 Further, whilst I accept that Professor Cherry genuinely believes that he “was not made aware”

of Protec’s attitude, strategy and approach to the principal proceeding, I find it surprising that

this would be the case. It seems to me that, during his discussions with Mr McKellar and

Mr Smith, particularly in the private sessions of the mediation when counsel was also present,

11 Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215.
12 (1982) 150 CLR 310 at 326.
13 Coco v AN Clark (Engineering) Ltd [1969] RPC 41 at 47.
14 (2001) 208 CLR 199 at 224-5.
19 T0076
Professor Cherry would have heard something about Protec’s “attitude, strategy and approach

to the principal proceeding”. Obviously, this is information that would not be known to

Steuler. Probably Professor Cherry paid little attention to it as it was of no interest to him and

he probably forgot what he heard. Nevertheless, as Nettle J said in Sent, “[r]ecollections are

liable to be revived”. 15

50 Further, I do not accept that it is an answer to Protec’s claim for Professor Cherry to say that he

did not recall Mr McKellar telling him that any of the information provided to him was

confidential. If it was not a matter of common general knowledge, such as Protec’s reaction to

Professor Cherry’s report on his meeting in Germany with Steuler representatives or

Mr Smith’s attitude towards the risks of litigation, then, in my opinion, he should have

realised, as a reasonable person would have, that this information was being provided in

confidence. 16 And in any event, he had expressly agreed in the written agreement proffered by

him that all such information would be kept confidential.

51 Despite the generality of Protec’s evidence, I have concluded that it has established that there

was some confidential information communicated to Professor Cherry.

52 A separate, but related, question is whether Protec has established that Professor Cherry is in

possession of information which is subject to legal professional privilege. As I understood the


submissions on behalf of Professor Cherry and Steuler, they did not dispute that legal

professional privilege may once have applied, for example, to Professor Cherry’s reports dated

26 May 2003 and 22 August 2005 respectively. Rather, they submitted that any privilege or

confidentiality had been waived by Protec serving those reports upon the other parties and/or

by Protec asking Professor Cherry to participate in the conclave of experts which led to the

preparation of the Joint Report dated 7 February 2006.

53 I turn, therefore, to the issue of waiver. Mr Riordan submitted that there had been no waiver of

the privileged and confidential nature of Professor Cherry’s instructions and his reports simply

15 [2002] VSC 429, [88].


16 Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community
Services and Health (1990) 22 FCR 73, 96 and 98 (Gummow J).
20 T0076
by the serving of his expert witness statement on the other parties pursuant to orders made by

the Court. He referred to the judgment of King CJ in State Bank of South Australia v

Smoothdale (No. 2) Limited. 17 In that case, the defendant/appellant sought the production of

expert witness statements delivered by a subsidiary of the plaintiff bank to the opposing party

in another proceeding, in the Supreme Court of New South Wales, in compliance with an order

made pursuant to a Practice Note. The defendant conceded at first instance that the statements,

when prepared, were privileged but contended that the privilege had been waived by their

delivery to the solicitors for the opposing party in the New South Wales proceeding.

54 King CJ said:

Statements of witnesses are by their nature confidential documents. Their


communication to another party for a limited purpose pursuant to a court order
does not appear to me to deprive them necessarily of every element of their
confidential character. They retain the character, except as to use by the other
party for the limited purpose, “until either the witness makes the statement
public by verifying it on oath in the witness box or the party who served the
statement waives the privilege”, Fairfield-Mabey Ltd v Shell UK Ltd [1989] 1
All ER 576 at 577, or a party puts the statement in evidence pursuant to leave
granted under par 3(e) of the Practice Note. 18

His Honour then went on to consider whether, once privilege was waived, it was waived for all

purposes or whether there could be waiver which was “partial or limited only.” 19 After

referring to a number of authorities, his Honour held that they clearly established that “waiver
of privilege may be limited to a specific situation or purpose”. 20 King CJ continued:

There is a general waiver of privilege if the party expressly waives privilege for
all purposes or intentionally uses the documents in a manner which is
incompatible with the retention of confidentiality. These witness statements,
however, were never used in the public arena as they would have been if
introduced into evidence; Springfield Nominees Pty Ltd v Bridgelands
Securities Ltd (1992) 38 FCR 217 at 222 - 223. The delivery of statements
pursuant to the order of the Court is for the limited purpose contemplated by the
Practice Note namely "the just, quick and cheap disposal of the proceedings".
The object is to provide advance notice to the other parties of the evidence
which the witnesses are expected to give and thereby to facilitate the hearing
perhaps even to the point of the use of the statements as evidence in chief.

17 (1995) 64 SASR 224. Mullighan and Nyland JJ agreed with King CJ.
18 (1995) 64 SASR 224, 226-227.
19 (1995) 64 SASR 224, 227.
20 (1995) 64 SASR 224, 228.
21 T0076

I can find nothing in the circumstances to indicate a use of the statements which
is incompatible with the retention of confidentiality except to the extent that
confidentiality must be modified to achieve the purpose of the Court Order
namely to acquaint the other parties in advance with the evidence which the
witnesses were expected to give. There was therefore no intentional waiver of
privilege except to the extent of permitting use of the documents by the other
parties for the purpose of preparing the case. 21

Accordingly, the Chief Justice concluded that:

… the delivery of the statements pursuant to the order did not place the
statements in the public domain and did not amount to a use of them in a
manner incompatible with the retention of confidentiality and privilege except
so far as waiver was necessary to permit their use for the purposes of the case in
which they were delivered in accordance with the Practice Note and ordering
the court.

There being no express waiver or intentional use of the statements in a manner


incompatible with the retention of privilege, the law will impute waiver only if
the maintenance of privilege would, in the circumstances, be unfair to the party
seeking discovery: Attorney-General for the Northern Territory v Maurice.

I can see no unfairness to the appellant in the maintenance by the respondent of


its privilege in the statements. Their disclosure to other parties in other
proceedings is quite fortuitous as regards the appellant. If there is a question of
fairness, it might be thought that the forced disclosure of the respondent's
statements while the appellant retains privilege with respect to its statements
would not be without some element of unfairness to the respondent.

In my opinion there was no express waiver, nor intentional act amounting to


waiver, nor any basis for implying or imputing waiver, of the legal professional
privilege attaching to the statements. 22

55 Mr Harrison submitted that the authority of the judgment in Smoothdale was lessened by the

fact that it was decided before the decision of the High Court in Mann v Carnell. 23 However,

there is nothing in that judgment, in my opinion, which contradicts or detracts from the

reasoning of King CJ in Smoothdale. Protec’s conduct in serving on the other parties Professor

Cherry’s witness statement, which contained his two reports, was not inconsistent with the

maintenance of the confidentiality in those reports. 24

21 (1995) 64 SASR 224, 228-229.


22 1995 64 SASR 224, 231.
23 (1999) 201 CLR 1.
24 (1999) 201 CLR 1, [28-29] (Gleeson CJ, Gaudron, Gummow and Callinan JJ).
22 T0076
56 Mr Harrison also referred to the decision of Evans J in Atkinson v T & P Fabrications Pty

Ltd. 25 His Honour stated:

In the course of preparing a matter for trial, it is common for parties to provide
privileged documents to other parties with a common interest and to potential
witnesses. Without more I am unable to conceive how, in the ordinary course,
conduct such as this would be inconsistent with the preservation of the
confidentiality of the material. The requisite inconsistency may be manifested
when a party indicates an intention to rely upon evidence of a witness which is
based upon privileged material provided to that witness. This, not infrequently,
occurs when a party delivers an affidavit or proof of expert evidence of a
witness. In that situation, the inconsistency between the party's conduct and the
maintenance of a claim for privilege in relation to the material relied upon by
the witness is compounded by the unfairness of allowing the party's witness to
refer to that material whilst also allowing that party to shield the material from
scrutinisation and testing by a claim of privilege. [Emphasis added]

Three points should be noted. The first is that his Honour’s statement of principle is qualified,

not absolute. Secondly, much depends on the timing because consideration of the questions of

inconsistency and unfairness may change if Protec calls Professor Cherry to give evidence.26

But that stage has not been reached. Thirdly, despite the terms of his statement of general

principle, Evans J held that in the instant case there has been no waiver of the privilege in

relation to the statement in question. I do not consider, therefore, that there was anything said

by Evans J in Atkinson which requires me to find that privilege in Professor Cherry’s expert

reports had been waived.

57 Mr Harrison also submitted that, by asking Professor Cherry to participate in the conclave of

experts, Protec waived any privilege or confidentiality in respect of his reports and his views

on the suitability of HDPE as a tank lining material.

58 I do not agree. The meeting of the experts was not a public forum. Apart from the various

experts, the only other person present during the discussion was the Court appointed facilitator,

Dr Donald Charrett of counsel. Paragraphs 1(e) and (f) of my order made on 7 October 2005

provided as follows:

25 (2001) 10 Tas R 57, [4].


26 See Cobram Laundry Services Pty Ltd v Murray Goulburn Co-operative Co Ltd [2000] VSC
353, [58] (Warren J)
23 T0076
(e) subject to sub-paragraph (f) below, no evidence shall be admitted at the
trial of this proceeding of anything said or done by any person at the
conference of experts;

(f) the report shall be admitted into evidence at the trial of the proceeding
but no part of the report shall bind any party except insofar as the party
agrees in writing.

59 Further, part of the agreed Directions for Experts Conference read as follows:

5. Proceedings and discussion at the conference to be “without prejudice”.


No transcript to be taken at the conference.

6. The experts are not permitted to discuss the details of the conference
discussions with their engaging parties or lawyers at any time during the
proceedings, except as agreed by the facilitator.

7. The facilitator is to prepare a report on the outcome of the experts’


conference by the conclusion of the conference. This report to be signed
by the experts attending the conference:

(i) specifying matters agreed and matters disputed;

(ii) identifying the expert or experts who remain in disagreement;


and

(iii) which identifies the reasons for any dispute.

Thus, in my opinion, the disclosure of Professor Cherry’s views was not communicated to the

world at large but only to a very limited group for a specific purpose and in circumstances

where it was clear that there was no intention to waive privilege or confidentiality generally.

60 Reliance was also placed on the fact that Mr McKellar exhibited to his first affidavit the initial

letter of instructions to Professor Cherry dated 15 October 2002 and the enclosed “Brief to

Expert on Material Selection Issue”. Mr McKellar also exhibited Professor Cherry’s letter in

response dated 17 October 2002 which contained “a series of initial thoughts on this matter” as

well as two copies of the Consultancy Agreement. This was said to be further evidence of

waiver by Protec of its claims to privilege and confidentiality.

61 I do not accept this submission. It seems to me that the original instructions given to Professor

Cherry probably should have been included in his witness statement dated 15 September 2005

pursuant to r.44.03(2)(d) of the Supreme Court (General Civil Procedure) Rules 2005, even if

they were not required to be included in his May 2003 report by the Rules then in force.

24 T0076
Certainly, his instructions in 2005 were included in his second report. Disclosure of this 2002

correspondence between Mr McKellar and Professor Cherry in this proceeding, therefore, was

not inconsistent, in my opinion, with a claim that the reports and related documents continued

to be privileged and confidential.

62 Therefore, I reject the submission that Protec has waived the privileged and confidential nature

of Professor Cherry’s reports, thereby allowing him to discuss their contents with Steuler’s

lawyers.

63 The next issue is whether Protec has established that there is a risk that there will be an

unauthorised use of the privileged or confidential information by Professor Cherry to the

detriment of Protec.27 Counsel for Professor Cherry and Steuler both stressed that their clients

had stated that in their discussions they had not, and would not, stray into the area covered by

legal professional privilege or confidentiality. The discussions were limited to seeking

clarification from Professor Cherry about the technological aspects of his reports, the reports of

the other experts, and the Joint Report.

64 I accept Mr Harrison’s submission that Protec’s solicitors were not correct when they said in

their letter of 18 December 2007 that Professor Cherry “cannot possibly” speak with Steuler’s

lawyers without breaching confidence. In my opinion, that did overstate the position, but only
marginally. As I have already held, Professor Cherry’s reports and the Joint Report and his

views on the reports of the other experts are privileged and confidential to Protec. Therefore,

Professor Cherry should not be speaking to Steuler’s lawyers about these matters. They want

to talk to him about information which I consider is privileged and confidential. This case is,

therefore, distinguishable from Elliott v Ivey, 28 where Sperling J was satisfied that the expert

did not bring to account what he was told or learned about the clients in 1994 when writing his

report for a different purpose in 1997, and that there was, therefore, no disclosure of a

protected confidence in the 1997 report. I do not accept Mr Harrison’s submission that the

27 Coco v AN Clark (Engineers) Ltd [1969] RPC 41, 47-48 (Megarry J).
28 [1998] NSWSC 116.
25 T0076
facts in Elliott v Ivey are more analogous to the present case than those in Rapid Metal

Developments.

65 It is not to the point, in my opinion, that Professor Cherry and Steuler argued that Protec could

not point to any detriment to it in Professor Cherry speaking to Steuler about the technological

aspects of the suitability of HDPE as a tank lining material. As Gummow J said in Smith Kline

& French Laboratories (Aust) Ltd Secretary, Department of Community Services and
Health: 29

The obligation of conscience is to respect the confidence, not merely to refrain


from causing detriment to the plaintiff. The plaintiff comes to equity to
vindicate his right to observance of the obligation, not necessarily to recover
loss or to restrain infliction of apprehended loss.

66 Or, as Lord Millett described the duty of confidentiality in Prince Jefri Bolkiah v KPMG (a

firm): 30

It is a duty to keep the information confidential, not merely to take all


reasonable steps to do so. Moreover, it is not merely a duty not to communicate
the information to a third party. It is a duty not to misuse it, that is to say,
without the consent of the former client to make any use of it or to cause any
use to be made of it by others otherwise than for his benefit.

67 Even if the dichotomy sought to be drawn by counsel for Professor Cherry and Steuler,

between discussing the various reports on the one hand and discussing privileged or
confidential matters on the other, were correct, I consider that there would be an unacceptable

risk that there might be an unauthorised disclosure of the privileged or confidential

information. As Hayne J held in Farrow Mortgage Services Pty Ltd (In Liq.) v Mendall

Properties Pty Ltd: 31

It is not necessary to conclude that harm is inevitable (or well nigh inevitable)
before acting to restrain a possible breach of the duty that a solicitor owes to
clients and former clients to keep confidential information given to the solicitor
in confidence and not use that information against the interests of the client who
gave it to the solicitor. … I consider that injunction should go if there is a real
and sensible possibility of the misuse of confidential information.

29 (1990) 22 FCR 73, 112.


30 [1999] 2 AC 222, 235-236.
31 [1995] 1 VR 1, 5.
26 T0076
Although that case involved a solicitor and client relationship, I see no reason why the

principle stated by his Honour should not also apply to the relationship of expert witness and

client.

68 I am satisfied that there would be a real and sensible possibility of the misuse of confidential

information, if Professor Cherry were not to be restrained from speaking further with Steuler

lawyers about the technological issues raised in these proceedings, in particular the question of

the suitability of HDPE as a tank lining material. In saying this, I am not to be taken to be

suggesting any lack of bona fides or integrity on the part of either Professor Cherry or Steuler’s

lawyers in stating that they would avoid contentious topics. I accept the honesty of their stated

intentions. Nevertheless, it seems to me that situations could occur where privileged or

confidential information would be imparted before it was realised what was going to be said.

69 Further, what is to happen if Professor Cherry unwittingly blurted out some privileged or

confidential information? Will Steuler’s lawyers then withdraw from the case? One only has

to ask these questions to see, in my opinion, that the only way to avoid the drastic

consequences of the real and sensible possibility of the misuse of the privileged and

confidential information is to prevent Professor Cherry speaking any further with Steuler’s

lawyers.

70 I do not consider that granting Protec’s application involves any infringement of the principle

that there is no property in a witness, because Steuler would still be entitled to call Professor

Cherry as a witness, if Protec did not. This issue was considered by Johnson J in Rapid Metal

Developments. After referring to a number of authorities, his Honour held that:

a court will not intervene to prevent an expert witness from giving evidence on
behalf of another party but will take appropriate action to prevent the witness
from disclosing confidential or privileged information. 32

Part of the appropriate action which Johnson J thought necessary in that case was, in broad

terms, to restrain the equivalent party to Steuler, through its solicitors or otherwise, from

utilising, in the course of preparing its case, the reports of the expert witness and any document

32 [2005] WASC 255, [151]. See also Harmony Shipping v Davis [1979] 3 All ER 177; R v R
[1994] 4 All ER 260; R v Ward (1981) 3 A Crim R 171.
27 T0076
in his files, which he had provided to it, other than documents which it had obtained from

another source not involving any breach of confidentiality. 33 His Honour made the point that:

pre-trial discussions, held as they are in the absence of a representative of the


opposing party protecting that party’s interest, would run the risk of a breach of
confidentiality.

Consequently, his Honour held that, in his view, the trial process was “the more appropriate

arena” to deal with the relevant issues, as the equivalent party to Protec, through its counsel,

would “then be in a position to immediately raise any issue of breach confidentiality [sic]

arising from a specific question put to the witness”. I respectfully agree with and adopt that

approach.

71 I turn next to the issue of whether the privilege or confidentiality still existed given that

Protec’s involvement in the principal proceeding ended when it settled with WMC. An

associated argument was that in these circumstances no loss or damage would be caused to

Protec, even if there were a breach of privilege or confidentiality, because it no longer had any

real interest in the outcome of the two proceedings as its financial position remained the same.

72 In my opinion, these submissions are misconceived in that they are based on a

misunderstanding about Protec’s continued interest in the two proceedings following its

settlement with WMC. First, the privileged or confidential nature of information does not

cease merely because a proceeding is concluded. 34 It is still not publicly known information.

Secondly, the contractual promise to keep the information confidential was unqualified, it was

not linked to the principal proceeding. Thirdly, as part of the settlement, Protec was required

to commence the 2007 proceeding, so that it is still involved in litigation, if that were the

requisite criterion. Fourthly, the settlement with WMC did not remove Protec’s very real

financial interest in the outcome of the two proceedings. As I read the terms of settlement, any

recovery by WMC against Steuler in the principal proceeding may assist Protec in not having

the consent judgment for $15 million enforced against it. Alternatively, any recovery by

Protec against Steuler in the 2007 proceeding will assist Protec in meeting the $15 million

33 [2005] WASC 255, [137].


34 Giannarelli v Wraith (No 2) (1990) 171 CLR 592, 601 (McHugh J)
28 T0076
judgment against it. Finally, as previously stated, it is not necessary for Protec to prove

detriment to it. Its entitlement to protection arises from the obligation of conscience not to use

confidential information without authorisation.

73 For all of the above reasons, I have concluded that there is a serious question to be tried and

that there is a degree of likelihood that Protec would be successful at trial in respect of it. With

respect to the balance of convenience, I am satisfied that this favours the granting of Protec’s

application. I do not accept Mr Harrison’s submission that it was difficult to see that damage

would flow to Protec from any beach. The whole point of recognising that certain information

is privileged or confidential is to prevent those on the other side becoming aware of it. Once

disclosed, it is obviously known to them and cannot be retracted. Damages are not a

satisfactory remedy in that situation. On the other hand, all Professor Cherry stands to lose is

the inability to earn some more fees for advising on this issue. The loss to him, if my decision

subsequently turns out to be incorrect, is significantly less than the potential damage to Protec,

were I to decide the matter the other way, and subsequently that turned out to be an incorrect

decision. In any event, Professor Cherry is covered by the usual undertaking as to damages

given in interlocutory applications such as this.

Proposed Order
74 Subject to hearing from counsel about the precise wording of the injunction, the order I would

propose making is that:

Pending the hearing and determination of this proceeding or further order, the

defendant be restrained from communicating in any way with Steuler Industriewerke

GmbH (“Steuler”), its servants or agents, including in particular its solicitors, Anderson

Rice and counsel retained on its behalf, in connection with the Supreme Court

proceedings No. 5797 of 2000 and No. 7268 of 2007, save and except all necessary

communication between Anderson Rice and the defendant concerning arrangements for

the latter being called by Steuler as an expert witness in the said proceedings.

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29 T0076

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