FEDERAL COURT OF AUSTRALIA
Tyco Australia Pty Limited v Leighton Contractors Pty Limited
[2005] FCAFC 115
PRACTICE AND PROCEDURE – Appeal from single judge – whether there is power to issue notice to produce under Order 33 rule 12 where applicant for notice is a respondent to pre-action discovery under Order 15A – whether Order 15A is a self-contained Order – appeal allowed.
Federal Court of Australia Act 1976 (Cth)
Federal Court Rules
Aitken & ors v Neville Jeffress Pidler Pty Limited (1991) 33 FCR 418 - discussed
Australian National Airlines Commission v The Commonwealth (1975) 132 CLR 582 – referred to
Bank of Western Australia Limited v Commissioner of Taxation (1994) 55 FCR 233 – referred to
CCA Beverages (Adelaide) Ltd v Hansford [1991] FCA 925 – distinguished
Conrock Ltd v CSR Ltd (1990) 96 ALR 690 - discussed
CGU Insurance Limited v Malaysia International Shipping Corporation Berhad [2001] FCA 681 – discussed
Global Intertrade Pty Ltd v Adelaide Festival Centre Trust [1999] FCA 162 – referred to
Gull Petroleum (WA) Ltd v Tah Land Pty Ltd [2001] FCA 1531 – referred to
Hooper v Kirella Pty Ltd (1999) 167 ALR 358 – referred to
Kimberley Mineral Holdings Ltd (In Liq) v McEwan (1980) 1 NSWLR 210 – cited
Legent Corporation v Fundi Software Services Pty Ltd, unreported, Lockhart J, 13 July 2002 - discussed
Limited v Malaysia International Shipping Corporation Berhad [2001] FCA 681 – referred to
McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 – referred to
Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd (1992) 23 IPR 456 – referred to
Seven Network Limited v News Limited (No 5) [2005] FCA 510 – discussed
St George Bank Limited v Rabo Australia Limited (2004) 211 ALR 147 – referred to
TYCO AUSTRALIA PTY LIMITED (ABN 80 008 399 004) v LEIGHTON CONTRACTORS PTY LIMITED (ABN 98 000 893 667)
N 363 OF 2005
HILL, HELY & CONTI JJ
SYDNEY
10 JUNE 2005
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
N 363 OF 2005 |
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
TYCO AUSTRALIA PTY LIMITED (ABN 80 008 399 004) trading as WORMALD FIRE SYSTEMS (registration No. H1974343) APPELLANT
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AND: |
LEIGHTON CONTRACTORS PTY LIMITED (ABN 98 000 893 667) RESPONDENT
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HILL, HELY & CONTI JJ |
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DATE OF ORDER: |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
- The appeal be allowed.
- The matter be remitted to the primary judge to deal with any objection to the extant notice to produce.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
N 363 OF 2005 |
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
TYCO AUSTRALIA PTY LIMITED (ABN 80 008 399 004) trading as WORMALD FIRE SYSTEMS (registration No. H1974343) APPELLANT
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AND: |
LEIGHTON CONTRACTORS PTY LIMITED (ABN 98 000 893 667) RESPONDENT
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JUDGES: |
HILL, HELY & CONTI JJ |
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DATE: |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
1 Tyco Australia Pty Limited (ABN 80 008 399 004) trading as Wormald Fire Systems (“Tyco”) appeals from the judgment of a judge of this Court pursuant to leave granted on 4 March 2005.
2 Leighton Contractors Pty Ltd (ABN 98 000 893 667) (“Leighton”) had, in the proceedings initiated by it, applied to the Court for pre-action discovery against Hilton Group Plc and companies associated with it (“the Hilton interests”) and Tyco. The application was made under both Order 15A rule 3 of the Federal Court Rules (“the Rules”) and Order 15A rule 6 of the Rules being, respectively, for the making of an order for discovery to enable Leighton to identify potential respondents in prospective proceedings and to ascertain whether it might be able to obtain relief in the Court against those parties. The Hilton interests and Tyco served upon Leighton, separate notices to produce under Order 33 rule 12. Leighton then challenged the right of a respondent to proceedings brought under Order 15A to serve notices to produce under Order 33 rule 12 or, perhaps, other rules. It sought thus to set aside the notice to produce. It should be noted that at least one of the documents the subject of the notice to produce was a document referred to in an affidavit filed in connection with the Leighton application for pre-action discovery.
3 The motion to set aside the notice was heard as a matter of urgency. The learned primary judge was of the view that the notice should be set aside. His Honour followed the decision of O’Loughlin J in CCA Beverages (Adelaide) Ltd v Hansford [1991] FCA 925 on the basis that while there were arguments which could be advanced to the contrary of the decision, it was not clearly or plainly wrong and accordingly should be followed. It is from this decision that the Hilton interests and Tyco were granted leave to appeal.
4 Subsequent to the hearing of the appeals, the proceedings brought by the Hilton interests were settled and by leave, the Hilton interests discontinued their application to the Court and in the result, their appeal. Accordingly, the present appeal is an appeal by Tyco only. However, as the two appeals were by consent argued together, there were written submissions filed not only by Tyco but also by the Hilton interests and counsel for Tyco adopted in its appeal, the oral submissions made by senior counsel for the Hilton interests. Hence, in the course of these reasons, reference will be made to submissions by senior counsel for the Hilton interests being the submissions which were adopted by counsel for Tyco.
The decision in CCA Beverages Ltd v Hansford
5 In CCA Beverages, the applicant had sought pre-action discovery. It served a notice to produce certain documents relying upon Order 33 rule 12. It also sought an order under Order 17 rule 1(1)(e) to permit nominated persons to observe a manufacturing process. It argued that the application for pre-action discovery was a “proceeding” before the Court and in consequence, it was entitled to invoke Order 33 rule 12 and Order 17 rule 1(1)(e). His Honour held that while the word “proceeding” was a wide word and an application for pre-action discovery was a “proceeding” before the Court, Order 15A was never intended to have effect “beyond its own boundaries”. In his Honour’s view, the provisions of Order 15A rule 10 suggested that Order 15A was “self-contained”. His Honour said, at 5-6:
“… it expressly incorporates Division 2 of O.15 (dealing with inspection of documents) stating that the Division shall, ‘with any necessary modifications, apply to the inspection’ of the documents that are referred to in the list of documents made and served in accordance with O.15A.
Order 15A also includes in rule 12 a power to order inspection etc of property. This rule is similar to O.17 r 1(1), the provision pursuant to which the applicant has moved the Court for orders permitting its personnel to observe the production process of ‘Hi-Fruit’. Although there are differences in the language of the two provisions, there is sufficient similarity of subject-matter to justifiably ask why there was a need to insert rule 12 as part of O.15A if the general provisions of the Rules of Court and, in particular, the provisions of O.17 r 1 were available at the ‘pre-action’ discovery stage. In my opinion these comments lead to the conclusion that the applicant is not entitled to an order under O.17 and to the further conclusion that it should not have issued the Notice to Produce. I dismiss that application…”
The relevant rules
6 Order 15A was inserted into the Rules in 1988.
7 Rule 3 provides, relevantly:
“(1) Where an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person (in this rule called the person concerned) and it appears that some person has or is likely to have knowledge of facts, or has or is likely to have or has had or is likely to have had possession of any document or thing, tending to assist in such ascertainment, the Court may make an order under subrule (2).
(2) The Court may order that the person, and in the case of a corporation, the corporation by an appropriate officer, shall–
(a) attend before the Court to be examined in relation to the description of the person concerned;
(b) make discovery to the applicant of all documents which are or have been in the person’s or its possession relating to the description of the person concerned.
(3) Where the Court makes an order under paragraph (2)(a), it may–
(a) order that the person or corporation against whom or which the order is made shall produce to the Court on the examination any document or thing in the person’s or its possession relating to the description of the person concerned;
(b) direct that the examination be held before a Registrar.”
8 Rule 6 provides:
“Where–
(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;
(b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and
(c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision–
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).”
9 Rules 5 and 7 provide that rules 3 and 6, respectively, will apply with necessary modifications where the applicant is a party to proceedings and wishes to make in the proceedings, a claim against a non party or obtain relief against a non party, which could have been claimed in the proceedings had the non party been a party.
10 Rule 8 provides:
“The Court may order that a person who is not a party and in respect of whom it appears that the person has or is likely to have or has had or is likely to have had in the person’s possession any document which relates to any question in the proceeding shall make discovery to the applicant of any such document.”
11 The rules then provide for the procedure to be adopted, namely that an application is to be served supported by an affidavit:
“9(3)(a) stating the facts upon which the applicant relies; and
(b) specifying or describing the documents or any class of documents in respect of which an order is sought.”
12 Finally, rule 10 provides that Division 2 of Order 15 is to apply with any necessary modification to the inspection of documents referred to in a list of documents made and served under Order 15A.
13 Order 15 covers the normal procedure of discovery and inspection of documents. Order 15 rule 10 (part of Division 2 of the Order) permits a notice to produce being served where a pleading or affidavit filed by a party refers to a document. Order 15 rule 11 (also part of Division 2 of the Order) empowers the Court to require production of documents for inspection in any one of three cases, namely; where it appears from a list of documents filed that documents are in a party’s possession or power; where a pleading or affidavit filed refers to a document; or where it appears from evidence that there are grounds for believing that a document is in the possession or power of a party. Order 15 rule 13 (still part of Division 2) permits an order to be made by the Court requiring production of any document relating to any matter in question in the proceeding.
14 Order 17 of the Rules is concerned with inspection of property. The word “property” is widely defined and so far as presently relevant, extends to documents. It is not necessary here to set out the Order, save that it may be observed that it enables the Court, for the purpose of enabling the proper determination of any matter in question in any proceedings, to make orders, inter alia, for the inspection of any property and for the copying of any document.
15 Order 33 rule 12 is concerned with notices to produce. The rule says, so far as is relevant here:
“(1) Where a party to any proceedings serves on another party notice, in accordance with Form 45, requiring the party served to produce at any trial or hearing in the proceedings, or before any Judge, officer, examiner or other person having authority to take evidence in the proceedings any document or thing for the purpose of evidence and the document or thing is in the possession, custody or power of the party served, the party served shall, unless the Court otherwise orders, produce the document or thing in accordance with the notice, without the need for any subpoena for production.”
16 It is common ground that the definition of “proceeding” contained in s 4 of the Federal Court of Australia Act 1976 (Cth) (“the Act”) applies to the Rules. This follows from the combination of s 59(4) of the Act and ss 13 and 9 of the Legislative Instruments Act 2003 (Cth). The definition reads as follows:
“proceeding means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal”.
The submissions
17 Senior counsel for the Hilton interests submitted that CCA Beverages was wrongly decided. He relied upon the historical background to the insertion into the Rules of pre-action discovery and submitted that there was nothing in the context of Order 15A or its interrelationship with Order 15 which required the conclusion that Order 15A was an exclusive code thus denying to the respondent to the pre-action discovery application the right to issue a notice to produce. Indeed, the submission went further to argue that in an appropriate case, the applicant for pre-action discovery could issue a notice to produce documents. It was submitted that if Order 15A was self-contained, as his Honour had held, then it would follow that the rules relating to such matters as pagination of affidavits would not be applicable to an application under Order 15A. More significantly, it was submitted that a respondent should, in an appropriate case, have the right to argue that pre-action discovery should not be given because it was not made in good faith. In aid of this argument, it was submitted the respondent should have the ability to require production of documents that might show, or tend to show, a lack of bona fides. It would, it was submitted, follow from CCA Beverages that the Court would, without recourse to documents the subject of a notice to produce, make the order for pre-action discovery and then and only then could the respondent move the Court to set aside the order on grounds of lack of good faith when, presumably, a notice to produce documents could be ordered in support of the motion to set aside. It was said further that the right to have documents produced was an important common law right and should only be seen to be excluded by words that are express or are necessarily to be implied. No such exclusion was evident.
18 Senior counsel for Leighton on the other hand, supported the reasoning of O’Loughlin J in CCA Beverages. It was submitted that both the history and the context of Order 15A supported the conclusion that there was no right to issue a notice to produce in pre-action discovery applications. Order 15A was, as O’Loughlin J held, self-contained. But for the provisions of Order 15A rule 10, the provisions of Order 15 providing for inspection of documents would not be applicable to a pre-action discovery application. The very existence of rule 10 therefore led to the conclusion, so it was submitted, that the general inspection rules relating to inspection of documents that had been discovered and were listed in a discovery list or were referred to in an affidavit or pleading would have no application to Order 15A without their being made applicable by rule 10. This supported the view that Order 15A was self-contained. Further, the very nature of the procedure invoked by Order 15A supported the view that a respondent to the application should not be permitted to stultify what was intended to be a simple procedure by a prolonged adversarial hearing. Historically, a challenge to an application for discovery proceeded, it was said, by way of demurrer, where evidence was not admitted. The Court did not, in an application for discovery, go behind what was alleged on behalf of an applicant, but rather, the grounds of demurrer were very limited. While some limited cross-examination might now be permitted in a pre-action discovery proceeding (and this was not conceded by senior counsel for Leighton), that today would be tightly controlled – assuming that it was permitted at all. It was for an applicant for pre-action discovery to assert the basis of his case in support of an order and if he did so, it was not contemplated that allegations of fact would be put in issue. Hence, procedures such as the giving of notices to produce could not be utilised. It was submitted that this view of the procedure was reinforced by the language of Order 15A rule 9, which required merely that there be filed a supporting affidavit “stating” the facts upon which the applicant relied.
The historical argument
19 The history of discovery is set out in Bray, Principles and Practice of Discovery, 1885. As the learned author points out at 4, originally the common law courts had no general power to order discovery, although an order could be made in limited circumstances for inspection of particular documents. However, the courts of Chancery could grant general discovery and did so, dating back to the time of Henry VI. For this purpose, a party to common law proceedings could file a bill solely for discovery. After the passing of the common law procedure Acts conferring upon the common law courts powers of discovery, the court of Chancery would still entertain bills of discovery in aid of actions in those courts.
20 Pre-action discovery was also not available in the common law courts. Even where orders for discovery were granted, a person could not be made a party for the purpose of obtaining discovery (Bray, at 20). However, a bill of discovery could be brought in the courts of Chancery, again in limited circumstances, against a person in order to discover the names of other persons for the purpose of bringing an action against them (Bray, at 20). The learned author (at 612) sets out the various circumstances where a party could file a bill of discovery before commencement of action.
21 There were two general heads of objection which historically could be raised by a defendant to a bill of discovery. These were that the particular discovery which was required was objectionable and that there was no right to require any discovery at all. One example of the latter class of case was where the court in aid of the proceedings for which discovery was sought was not a court which a court of equity would assist (eg an inferior court). Another was where the person that was seeking discovery was under some personal disability. Another was where the person that was seeking discovery did not have the interest or character which he alleged himself to have (eg, that he was a beneficiary or executor. Details are set out at 615-6). Presumably, evidence would have been necessary in some cases, at least to enable it to be determined whether the person that was seeking discovery did not have the relevant interest. It might also be noted that the learned author refers to costs being awarded in matters where an order was obtained for a commission to examine witnesses. This suggests that the procedure on a bill of discovery might have involved a factual dispute.
22 Prior to the Court of Chancery Act 1852 (UK), the initiating process in Chancery took the form of a subpoena to which was attached a statement of claim with interrogatories for the defendant to answer. Proceedings for discovery in aid of a common law case were commenced in the Chancery courts, as already noted, by a bill of discovery. No relief was sought in such a bill other than that the defendant provide the information requested. If discovery was resisted, the appropriate procedure was a demurrer. There were a limited number of grounds. Cooper’s Equity Pleadings (at 189) sets out 12 grounds of demurrer.
23 There may be a question whether the old procedure by way of bill is still available in the Supreme Court of New South Wales or other state courts for pre-action discovery. The question was adverted to but not decided by Young J in McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623. His Honour in that case referred to the decision of the House of Lords in Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 and British Steel Corporation v Granada Television Ltd [1981] AC 1096, which had discussed the circumstances where discovery would be granted of the names and addresses of potential defendants. It is not suggested that what is said in these cases would exhaustively define the matters to be taken into account in proceedings by way of a bill of discovery. However, these decisions make clear that discovery would be granted unless there was a public reason why it should not be granted, that in cases where the plaintiff had established wrong-doing discovery was needed so that the plaintiff would not be denied justice, that discovery was necessary and perhaps, that the wrong-doing involved was more than a mere tort. Obviously, evidence was necessary to prove these matters.
24 It must be said against the attempt to rely upon the procedural limitations in Chancery litigation that the modern procedure in this Court for pre-action discovery, as now provided for in Order 15A of the Rules is not limited by the procedural limitations of the past. Such limitations as there are applicable will be found in the Rules themselves and the context in which they are promulgated rather than in the interstices of outmoded procedures. It is thus difficult to see why the historical background assists either party, save that it demonstrates that, generally, factual matters were not relevant to an application by way of a bill of discovery, although there may, perhaps, have been exceptional cases where evidence was taken, if relevant.
Argument from context
25 As suggested, the present appeal will fall to be resolved by reference to the context in which Order 15A appears in the Rules and the terms of the Order itself.
26 Clearly, the generalisation that Order 15A is completely self-contained can not be correct in that rules concerning the form of documents, headings and the like will apply to an application for pre-action discovery as they apply to other proceedings in the Court. However, it is not necessary for the respondent’s argument to go so far. It would be sufficient, if it be the case, that Order 15A evinced an intention to exclude the application of Order 33 rule 12 or such other rule as the appellant might call in aid to authorise the giving of a notice to produce. Since I am of the view that the argument would be the same whether the giving of a notice to produce is grounded in Order 33 rule 12 or some other rule, I do not propose to examine whether any other rule would, in the present circumstances, give power to serve a notice to produce documents.
27 One of the factors relied upon by O’Loughlin J in CCA Beverages for the view that Order 15A excluded the giving of notices to produce was the provision of Order 15A rule 10 incorporating some of the provisions of Order 15. His Honour asked rhetorically why such a need arose if the general provisions of the rules otherwise applied. The answer, however, seems quite clear. Order 15 is concerned with discovery and inspection. Rule 1 (and rules 2 to 4 are consequential upon it) is concerned with the general power to obtain discovery by the giving of notice, although with leave of the Court. The rule obviously conflicts with Order 15A and could have no application when the latter order applied. The same is true of Order 15 rule 5 and the consequential rules 6, 6A and 7. Division 2 is incorporated by reference. However, unless so incorporated, the Division might well have been read as limited by the general context of Order 15 to proceedings not encompassed by Order 15A. Alternatively, the incorporation by reference of Division 2 might well have been thought desirable and by way of an abundance of caution. Certainly some parts of Division 2 are clearly limited to cases where an order has been made for discovery or inspection after discovery under Division 1. That is true of Order 15 rule 11, which refers to a list of documents filed under Order 15. It is also true of Order 15 rules 12 and 14. It may not be the case with Order 15 rule 13. The fact that it was necessary to incorporate Division 2 into Order 15A as an alternative to setting out similar rules in Order 15A, in my view, tells nothing as to whether Order 15A should be seen as self-contained.
28 The other reason given by O’Loughlin J in CCA Beverages in support of his view that Order 15A was self-contained was Order 17 rule 1 and the similarity it had to Order 15A rule 12. His Honour again asked rhetorically why there was a need to insert rule 12 as part of Order 15A if Order 17 rule 1(1)(e) was available at the pre-action discovery stage. Senior counsel for the Hilton interests submitted that Order 17 rule 1(1) did not cover the same field. It applied only for the purpose of enabling the proper determination of a matter in question in a proceeding. That is to say, it applied before the question in the proceeding was determined. Accepting that a pre-action discovery was a “proceeding” in the sense used in the Rules, Order 17 rule 1 could not allow an order for the production of documents in a pre-action discovery proceeding for the reason which senior counsel rightly submitted. Order 17 rule 1(1) could never be relevant to pre-action discovery proceedings because once discovery is ordered the proceedings come to an end, thus discovery would not be to enable the proper determination of the matter in question in the proceedings; whereas Order 15A rule 12 is applicable in the pre-action discovery proceeding.
29 While I can accept the submission so far as Order 17 rule 1(1) extends to the production of documents that was not the context in which it was considered by O’Loughlin J. As noted earlier, the applicant for pre-action discovery in CCA Beverages had sought an order that it be permitted to inspect a manufacturing process, and it was this order which his Honour rejected, not an order under Order 17 rule 1(1) relating to the inspection of documents. It might be said that it is far from clear from the report just precisely what relevance such an inspection would have to the pre-action discovery proceeding, but that is another question.
30 It is somewhat difficult to follow his Honour’s argument in regard to the relationship between Order 17 rule 1(1) and Order 15A rule 12 so far as it relates to inspection of a manufacturing process. I have difficulty in seeing that Order 15A rule 12 would permit the making of an order for inspection of a manufacturing process at all, or, for that matter, to understand the relationship between inspection on the one hand and the issues that would arise in pre-action discovery on the other. If Order 15A rule 12 did authorise the making of an order to inspect a manufacturing process, then, subject to relevance, his Honour could have made an order under Order 15A rule 12 anyway. Hence, when his Honour refers to similarity between Order 17 rule 1 and Order 15A rule 12, his Honour was speaking of similarity between some parts of the two rules generally, rather than the similarity brought about because both rules deal with inspection of documents.
31 It is obvious that Order 15A rule 12 covers some of the field covered by Order 17 rule 1. Both cover inspection of property and copying as well as some aspects, at least, of observation. If Order 17 is to apply, it will be limited to circumstances where the order is for the proper determination of any matter in question in the proceeding. There is no reason why it might not (absent, at least, Order 15A rule 12) permit inspection, observation or copying for the purpose of determining issues in the pre-action discovery proceedings. Clearly Order 15A rule 12 is concerned, at least generally, with either the inspection, photocopying etc of property that relates to the subject matter of the proceedings or as to which any question arises in the proceedings. The rule, at least where it concerns “preservation”, might well be in aid of ensuring that discovery, if ordered, be not fruitless because documents, for example, have been lost or destroyed.
32 However, I do not think that because there is some overlap between Order 15A rule 12 and Order 17 rule 1, it follows that Order 15A is entirely self-contained. It seems to me that the view that Order 15A rule 12 is self-contained gives greater significance than is justified to what might be called logical consistency in the rules. There are a number of examples that can be given where there is overlap in the rules. The fact that the power of the Court to require production of documents can be found in more than one rule is just one example (see Order 15 rule 13, and Order 33 rule 13. Order 33 rule 13 provides for the making of an order requiring a person to attend and produce documents. Order 15 rule 13 authorises the Court to order a party to produce any document in the person’s possession, custody or power relating to any matter in question in the proceeding. There is obvious overlap. But it does not follow from this overlap that Order 15 and Order 33 are self-contained. All that follows is that there are two rules each of which might be availed of in some circumstances).
33 One reason for permitting the issue of a notice to produce and thus the opening of an evidential issue would be, as submitted by Tyco, where the respondent to the pre-action discovery proceeding wishes to argue that the application constituted an abuse of process. Clearly, if an order for pre-action discovery were granted it would be open to the respondent to those proceedings to commence proceedings to set aside the order for discovery on the ground that it constituted an abuse of process: cf CGU Insurance Limited v Malaysia International Shipping Corporation Berhad [2001] FCA 681. In such proceedings it would be open to the Court to issue a notice to produce. Why could that point not be taken at the hearing of the pre-action discovery proceeding, thereby obviating the need for fresh proceedings to be initiated to allege the breach of process argument? It would be strange if this were not the case.
34 In the CGU case, it appears to have been suggested that CCA Beverages should be taken as having decided only that an applicant in proceedings for pre-action discovery could not issue a notice to produce. That certainly was the matter before O’Loughlin J. However, while it would be clearly an abuse of process for an applicant for pre-action discovery to issue a notice to produce the very documents sought by the application for pre-action discovery that is not a matter necessarily going to the power to issue a notice to produce. Rather, it would go to whether the Court would decline to order compliance with the notice on the basis of abuse of process. Nor, in principle, would it seem tenable to say that Order 15A authorised a respondent to the pre-action discovery proceeding, i.e. one party, but not the other party, the applicant, to issue a notice to produce. Rather, it seems to me that either there is power in both parties to give a notice to produce or there is no power in either. Whether the giving of a notice is appropriate may, however, differ in the two cases.
35 It was submitted on behalf of the appellant that it is central to the administration of justice that documents relevant and material to issues that arise in litigation could be obtained by means of a notice to produce as part of a right all parties to litigation have to present all relevant and material evidence: Australian National Airlines Commission v The Commonwealth (1975) 132 CLR 582. This is a common law right. It can only be abrogated by express words or by necessary implication. The proposition of law that a common law right can only be abrogated by express words or necessary implication is not in dispute. However, at the heart of the present dispute is whether there are issues that arise in the course of pre-action discovery proceedings that give rise to the common law right. It is essentially the case for the respondent that no such issues arise. The proceeding is interlocutory and involves, or so the respondent says, a “summary process designed to provide a quick and efficient means of assisting an applicant”.
36 It is obvious that the issues which will arise in an application for pre-action discovery are and indeed should be, very limited. However, it is not true that those issues cannot involve a factual dispute. Indeed, it is clear in my mind that there are raised contestable issues of both objective and subjective fact. In St George Bank Limited v Rabo Australia Limited (2004) 211 ALR 147, Hely J sets out a number of propositions emerging from the authorities dealing with Order 15A rule 6 and the issues that are required to be determined. It is for the applicant to show in an application made under Order 15A rule 3, for example, that the applicant has made reasonable inquiries and that the respondent is “likely” to have knowledge of facts or to have, in his or her possession, documents of the kind specified in the rule. Likewise, if application is made under rule 6, it will be necessary for an applicant to show that all reasonable inquiries have been made as well as, if relevant, that there is reasonable cause to believe that a person has, in his or her possession, documents of the kind specified. In the latter case it would be possible, for example, for a respondent to contest the application by arguing that all reasonable inquiries had not been made, for example, that none at all had been made. It is for an applicant seeking pre-action discovery to make out each of the requirements or “elements” for the relief sought: Hooper v Kirella Pty Ltd (1999) 167 ALR 358, St George Bank Ltd at [26].
37 Because, as noted earlier, it will be for an applicant under rule 3 to establish that reasonable inquires have been made, it would be possible for a respondent to call this matter into question. A notice to produce addressed to the applicant and relating to inquiries said to have been undertaken would be forensically possible where this was an issue.
38 It is true that an application for pre-action discovery does not determine substantive rights in the normal sense. It does not follow from this that factual matters may not be in dispute. No doubt, there is a right to keep documents private and an order for discovery acts to abrogate that right. This suggests that in an appropriate case it should be appropriate for the Court to investigate the claim for discovery and whether it is warranted. Indeed, the suggestion that no cross-examination would be possible in a proceeding for pre-action discovery was put, but faintly. Once it is accepted that cross-examination, even to a limited extent, may be undertaken, it must follow that it must be possible to require documents to be produced in aid of that cross-examination.
39 It was submitted for the appellants that Order 15A required no more than that the applicant state that the requirements of the relevant rule under which the application is made are satisfied. This is said to come from the language of Order 15A rule 9, which requires the applicant to file an affidavit “stating the facts upon which the applicant relies”. That affidavit has to be served on all persons upon whom the application has been served. Given the need to make out the requirements for relief, it cannot be sufficient that the affidavit merely allege this to be the case, it must be proved. The test to establish the matters under rule 6(a) may be at a low level: Gull Petroleum (WA) Ltd v Tah Land Pty Ltd [2001] FCA 1531. Further, the Court may control the extent of cross-examination that may be permitted in respect of a particular issue. That, however, is not to say that the affidavit seeking relief is no more than a “pleading” containing an assertion. In my view, there is no reason to give particular emphasis to the words “stating the facts” so that the evidential requirement is reduced to an assertion.
40 An examination of the Rules does not show consistency of usage nor does it support the submission. Order 4 rule 6, dealing with the filing of an affidavit or a statement of claim with an application states that the affidavit is to “show” the material facts upon which the claim is brought. Order 5 rule 8 dealing with cross-claims provides that there be an affidavit “stating” the material facts on which the cross-claimant relies, including the facts “showing” that the cross-claim is one to which Order 5 rule 1 applies. Order 19 rule 1, dealing with affidavits in support of a motion, provides that there shall be an affidavit “setting forth the facts relied upon”. Order 28 rule 2, provides that an affidavit in support of an application for security for costs be one “stating the material facts” and grounds relied upon. Order 31 rule 1(2) dealing with motions for jury trial, refers to the need for an affidavit in support of the motion to be one “stating the particular facts and grounds”.
41 Order 33 rule 16, made for the purposes of s 67 of the Evidence Act 1995 (Cth), requires that the affidavit “sets out” evidence of the previous representation. Order 48 rule 10A requires an application for an inquiry or ballot to be accompanied by an affidavit “stating” the nature of the claim and the material facts relied upon. Order 52 rule 4 requires an application to be accompanied by an affidavit “showing” the nature of the case and questions involved. Order 52 rule 36 simply requires an applicant, in support of an application for fresh evidence to be adduced on an appeal, to give by affidavit, the necessary evidence. There are countless other examples.
42 What these examples and the many others not listed here show is that the rules generally use the word “show” when concerned with an affidavit dealing with both facts and grounds upon which a particular application is made, but that “state” is used in cases which include both circumstances where the facts are essentially formal assertions as well as cases where the requirement is that an affidavit state factual matters which must be proved to ground the application. In many of these cases the facts so stated will be the subject of contest and the affidavit may be the subject of cross-examination and circumstances might well arise where a notice to produce would be appropriate in support of one side or the other in resolving a dispute of fact.
43 Reference to rules of other jurisdictions concerned with actions for pre-action discovery is likewise unhelpful. The rules of the Supreme Court of Victoria (Order 32 rule 32.08) require an originating motion for preliminary discovery to be accompanied by an affidavit “stating the facts on which the application is made”. There is similar wording to be found in Order 34A rule 7 of the rules of the Supreme Court of the Australian Capital Territory. The Supreme Court Act 1981 (UK) requires no more than that “the application must be supported by evidence” (rule 31.16(2)).
44 While there is nothing in the procedural requirements of Order 15A rule 9 that deal with the filing by a respondent to an application for pre-action discovery of affidavit evidence in opposition, it has never been suggested that such affidavits could not be filed. One example where affidavits were filed was Conrock Ltd v CSR Ltd (1990) 96 ALR 690. In that case, Pincus J finally made no order for costs against the respondent, notwithstanding that the applicant was successful. The affidavits went to the question of confidentiality of documents as well as a claim that compliance with the pre-action discovery would be oppressive and onerous. In Legent Corporation v Fundi Software Services Pty Ltd (unreported, Lockhart J, 13 July 2002), affidavit evidence was filed by both the applicant and respondent and cross-examination was foreshadowed. However, the matter settled. Justice Lockhart observed (at 7) that the parties could not necessarily assume that they would have a right to cross-examine. His Honour cites no authority for this proposition. Perhaps what his Honour meant was that the Court would control, in its discretion, the extent of cross-examination, having regard to the issue between the parties. One can only speculate.
45 It would seem, also, that notices to produce have been issued in other pre-action discovery proceedings. It seems that Gummow J in Aitken & ors v Neville Jeffress Pidler Pty Limited (1991) 33 FCR 418 allowed the issue of a notice to produce and that it was answered. Likewise, it would seem that a notice to produce was issued in Legent and in CGU. It is not clear from the report of Aitken or Legent that any argument was directed at the question whether a notice to produce could issue and in those circumstances it is difficult to treat these cases as authority for the view that there is power to issue a notice. On the other hand, it is perhaps not irrelevant that it is only since CCA Beverages that there was thought to be a difficulty with that power.
46 However, for the reasons I have given, I am of the view that there is power to issue, in an appropriate case, a notice to produce in pre-action discovery proceedings. Whether the notice should be confined clearly depends upon the issues that are said to arise and in respect of which the production of documents is sought. An applicant who seeks to use a notice to produce, in effect, to gain production of the very documents which are the subject of the pre-action discovery will not have given the notice to produce in good faith, but rather, will have acted in a way that is an abuse of process. Otherwise, in principle at least, the notice to produce procedure may be exercised by both parties if otherwise relevant to issues in dispute. However, I would emphasise that it clearly is not contemplated that a pre-action discovery proceeding become a full-blown factual contest between the parties. The judge hearing the application will, no doubt, confine cross-examination and examine the subject matter of any notice to produce to ensure this does not become the case.
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I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill. |
Associate:
Dated: 10 June 2005
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
NSD 363 OF 2005 |
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
TYCO AUSTRALIA PTY LIMITED (ABN 80 008 399 004) trading as WORMALD FIRE SYSTEMS (registration No H 1974343) APPELLANT
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AND: |
LEIGHTON CONTRACTORS PTY LIMITED (ABN 98 900 893 667) RESPONDENT
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JUDGE: |
HILL, HELY & CONTI JJ |
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DATE: |
10 JUNE 2005 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
HELY J:
47 This is an appeal from a decision of Moore J in which his Honour set aside notices to produce issued by the respondents (the Hilton interests and Tyco) in proceedings instituted by Leighton Contractors Pty Ltd (‘Leighton’) against those respondents seeking preliminary discovery under O 15A of the Federal Court Rules (‘the Rules’). Moore J set aside the notices to produce because in an earlier judgment in CCA Beverages (Adelaide) Ltd v Hansford [1991] FCA 925 (‘CCA’) O’Loughlin J held that a notice to produce could not be issued in proceedings under O 15A as O 15A is ‘self-contained’ and ‘was…[not] intended to have effect beyond its own boundaries’ with the result that the rights (and obligations) of parties to proceedings under O 15A are, as a matter of construction of the Rules as a whole, exhaustively identified in that Order. In that case, the notice to produce had been issued by the applicant, but his Honour’s reasoning was not dependent upon that fact.
48 Whilst Moore J saw force in arguments presented by the Hilton interests and Tyco that O’Loughlin J was wrong in the decision which he reached, his Honour was not satisfied that the judgment in CCA was plainly wrong, and consistent with the usual practice in those circumstances, followed that decision. Moore J granted leave to appeal from his decision setting aside the notices to produce. The principal issue on the hearing of the appeal was the correctness of the decision of O’Loughlin J in CCA.
49 I have had the advantage of reading the judgment of Hill J in draft form. I agree with his Honour’s conclusions, and generally with his Honour’s reasons, but consider that I should give brief reasons why I disagree with the decision in CCA.
50 O’Loughlin J implicitly accepted that textually the right given to a party by O 33 r 12 of the Rules to issue a notice to produce to another party is applicable in relation to an application under O 15A, as the parties to such an application are parties to proceedings. However, his Honour pointed out that O 15A r 10 incorporates by reference the provisions of Division 2 of O 15 into O 15A, and that O 15A r 12 contains a power to make orders for inspection of property and the like which is in terms similar to the power conferred by O 17 r 1. His Honour asked rhetorically why there was a need to insert rules 10 and 12 as part of O 15A, if the general rules of Court are available at the pre-action discovery stage. That led his Honour to conclude the O 15A was ‘self-contained’, and the right given to a party by O 33 r 12 to issue a notice to produce was impliedly excluded in relation to proceedings under O 15A. Presumably (although O’Loughlin J does not deal with this) the right given to a party by O 15 r 10 to give a notice to produce a document referred to in a pleading or other affidavit filed by another party would, by parity of reasoning, also be inapplicable in proceedings under O 15A, except to the extent of the incorporation of O 15 r 10 effected by O 15A r 10.
51 With respect, the reasons given by O’Loughlin J for his conclusion are unpersuasive. As Hill J points out, the generalisation that O 15A is completely self-contained cannot be correct in that rules concerning the form of documents, headings and the like will apply to an application for pre-action discovery as they apply to other proceedings in the Court. Further, as Mansfield J noted in Global Intertrade Pty Ltd v Adelaide Festival Centre Trust [1999] FCA 162, O 15A r 6 does not itself specify the manner in which discovery ordered pursuant to that rule is to be given. Given its juxtaposition to O 15 dealing generally with discovery, Mansfield J concluded that the means by which discovery is to be given should be those prescribed generally by O 15. That finding is inconsistent with the notion that O 15A is ‘self-contained’. Rather, the decision implies that where necessary and appropriate O 15A operates in conjunction with, and as part of, the Rules generally.
52 There are explanations for the presence of r 10 in O 15A other than that advanced by O’Loughlin J. It is at least arguable that the provisions of Division 2 of O 15 as to inspection of documents operate within the framework of discovery pursuant to O 15 r 2, and that the discovery for which O 15A provides is different in character. In its terms, O 15A r 10 assumes that this is so, but extends the O 15 framework so as to embrace discovery pursuant to O 15A as well as under O 15 r 2. Order 15A r 10 is thus designed for more abundant precaution to remove a possible argument that Division 2 of O 15 is confined in its operation to discovery within the framework of O 15. It makes express provision to deal with a problem of incompleteness of O 15A which Mansfield J solved, in a similar context by fleshing out the provisions of O 15A by recourse to O 15.
53 Nor is it correct to say that O 15A r 12 and O 17 r 1 cover the same field. Order 17 r 1 applies only for the purpose of enabling the proper determination of any matter in question in any proceeding, whereas O 15A r 12 is not so confined. O’Loughlin J held, in reliance upon the word ‘also’ in O 15A r 12, that an order can only be made under that rule if an order for ‘pre-action’ discovery has first been made. Heerey J disagreed with that view in Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd (1992) 23 IPR 456 at 467. Whatever view be taken on that question, it throws no light upon the issue of whether provisions of the Rules in relation to notices to produce have application to proceedings for preliminary discovery under O 15A.
54 Contestable issues of fact may arise in proceedings under O 15A for preliminary discovery: St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147. There is no reason why the ordinary interlocutory procedures should not be available to assist in the resolution of those contestable issues of fact, subject to the overriding consideration that the invocation of those procedures does not amount to an abuse of the process of the Court: Kimberley Mineral Holdings Ltd (In Liq) v McEwan (1980) 1 NSWLR 210. Thus, at least prima facie, it would be an abuse of process for an applicant for preliminary discovery to seek to compel the production of documents by notice to produce, when the production of those documents is sought under O 15A r 6. But it does not follow, for example, that a subpoena sought to be issued by an applicant for preliminary discovery against a third party would necessarily be an abuse, depending upon the scope and purpose of the subpoena.
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I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. |
Associate:
Dated: 10 June 2005
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IN THE FEDERAL COURT OF AUSTRALIA |
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NEW SOUTH WALES DISTRICT REGISTRY |
N 363 OF 2005 |
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
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BETWEEN: |
TYCO AUSTRALIA PTY LIMITED trading as WORMALD FIRE SYSTEMS APPELLANT
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AND: |
LEIGHTON CONTRACTORS PTY LIMITED RESPONDENT
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JUDGE: |
CONTI J |
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DATE: |
10 JUNE 2005 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
CONTI J
55 In this matter I have had the advantage of reading in draft the respective reasons for judgment of Hill and Hely JJ, and after initial hesitation, I have reached the same conclusion as their Honours that the appeal must be allowed, and the proceedings remitted to the primary judge to address any objections otherwise to any discrete documentary material the subject of the controversial notice to produce.
56 It is understandable that consistently with judicial comity between justices of this Court at first instance, the primary judge below would have adopted the ratio of the earlier judgment of O’Loughlin J of this Court in CCA Beverages (Adelaide) Limited v Hansford [1991] FCA 925, the primary judge not having been satisfied that O’Loughlin J had been clearly or plainly wrong in reaching the conclusion that he did (see Bank of Western Australia Limited v Commissioner of Taxation (1994) 55 FCR 233 at 255 where numerous authorities for that judicial precept are cited). The approach taken by the primary judge was perhaps further understandable, once consideration is given to the potential for occasioning a measure of frustration of the Order 15A pre-trial discovery process by way of initiation of interlocutory proceedings in turn by a prospective respondent (or a cross-respondent to a cross-claim) for the production of documents by an Order 15A applicant (or cross-claimant).
57 As Hill J has recorded at [16] of his reasons, it is common ground between the parties that the meaning of ‘proceedings’ in the Federal Court Act 1976 (Cth) operates also in the context of the Federal Court Rules. That definition provides that a proceeding means a proceeding in a court, whether between parties or not…. Order 15A contains various references to the word proceeding. It is only however the references to be found in Order 15A rules 11(1) and 12(a)(i) that appear to address the ‘Order 15A proceeding’. The word proceeding, where used elsewhere within Order 15A appears to refer either to a prospective or contemplated substantive proceeding (as in rule 3(1)), or to a substantive proceeding currently on foot (as, for example, in rule 5). I would therefore acknowledge that an application for preliminary discovery brought pursuant to either rule 3 or rule 6 of Order 15A is a proceeding for the purposes of the Federal Court Rules, and accordingly the terms of Order 33 rule 12(1) have present application.
58 I would further observe that Order 33 rule 12(1) provides that the sole justification for requiring, per medium of a notice to produce in that context, the production of documents is for the purpose of evidence. In Seven Network Limited v News Limited (No 5) [2005] FCA 510, Sackville J considered whether a notice to produce could be set aside on the basis of irrelevance. His Honour endorsed the reasons for decision of Cooper J in CCom Pty Ltd v Jiejing Pty Ltd (1992) 37 FCR 1 at 3 and of Lindgren J in Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 at 380, both of which postulated the view that a notice to produce has the same coercive effect as a subpoena duces tecum. Sackville J considered moreover that the test for relevancy was the same as that which applied in the context of applications to set aside subpoenas generally, that is, ‘whether the documents sought are of “apparent relevance to the issues” in the proceedings’. A respondent to an Order 15A proceeding who engages in the service of a notice to produce must therefore address the question whether the documentary or other material minded to be sought is truly ‘of apparent relevance’ to issues apparently raised by or involved in the application for preliminary discovery in order to obviate the need for what might eventuate in a further layer of adjectival litigation.
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I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. |
Associate:
Dated: 10 June 2005
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Counsel for the appellant: |
R Rana |
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Solicitor for the appellant: |
Phillips Fox |
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Counsel for the Respondent: |
LG Foster SC and AS McGrath |
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Solicitor for the Respondent: |
Mallesons Stephen Jaques |
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Date of Hearing: |
1 April 2005 |
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Date of Judgment: |
10 June 2005 |
