CATCHWORDS
DISCOVERY - complaint that extent of discovery was excessive and oppressive - inadequate description of documents - inadequate explanation of schedule headings - non-compliance with Order 15 - discretion of Court - attempt to avoid excessive costs
Federal Court Rules O 15 rr 6, 2(2) and
Taylor v Batten (1878) 4 QBD 85
Kadlunga Proprietors & Ors v Electricity Trust of South Australia (1985) 39 SASR 410
The Minister for Community Services and Health v Carter and Gribbles Pathology Pty Ltd (unreported, 29 August 1990, Full Court, Supreme Court of South Australia
Walker v Poole (1882) 21 Ch D 835
Hill v Hart-Davis (1884) 26 Ch D 470
Compagnie Financiere Du Pacifique v Peruvian Guano Co
(1882) 11 QBD 55
Mulley v Manifold (1959) 103 CLR 341
No SG 16 of 1996
AUSTRALIAN FLIGHT TEST SERVICES PTY LTD Applicant
-and-
THE MINISTER FOR INDUSTRY,SCIENCE
AND TECHNOLOGY First Respondent
-and-
THE COMMONWEALTH OF AUSTRALIA Second Respondent
-and-
THE FLINDERS UNIVERSITY OF
SOUTH AUSTRALIA Third Respondent
-and-
JORG MICHAEL HACKER Fourth Respondent
-and-
PETER SCHWERDTFEGER Fifth Respondent
O'Loughlin J
Adelaide
20 November 1996
IN THE FEDERAL COURT OF AUSTRALIA)
)
SOUTH AUSTRALIA DISTRICT REGISTRY) No SG16 of 1996
)
GENERAL DIVISION )
B E T W E E N:
AUSTRALIAN FLIGHT TEST SERVICES PTY LTD
Applicant
- and -
THE MINISTER FOR INDUSTRY, SCIENCE AND TECHNOLOGY
First Respondent
- and -
THE COMMONWEALTH OF AUSTRALIA
Second Respondent
- and -
THE FLINDERS UNIVERSITY OF SOUTH AUSTRALIA
Third Respondent
- and -
JORG MICHAEL HACKER
Fourth Respondent
- and -
PETER SCHWERDTFEGER
Fifth Respondent
MINUTES OF ORDER
Coram: O'Loughlin J
Place: Adelaide
Date: 20 November 1996
THE COURT ORDERS THAT:
1. The applicant make discovery on oath by listing in separate categories those documents:-
(a) That it will tender as exhibits in the trial
(b) That it might tender as exhibits in the trial
(c) That will or might assist the case of the respondents or any one or more of them.
2. The applicant pay the costs of the third, fourth and fifth respondents to be taxed in default of agreement.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA)
)
SOUTH AUSTRALIA DISTRICT REGISTRY) No SG16 of 1996
)
GENERAL DIVISION )
B E T W E E N:
AUSTRALIAN FLIGHT TEST SERVICES PTY LTD
Applicant
- and -
THE MINISTER FOR INDUSTRY, SCIENCE AND TECHNOLOGY
First Respondent
- and -
THE COMMONWEALTH OF AUSTRALIA
Second Respondent
- and -
THE FLINDERS UNIVERSITY OF SOUTH AUSTRALIA
Third Respondent
- and -
JORG MICHAEL HACKER
Fourth Respondent
- and -
PETER SCHWERDTFEGER
Fifth Respondent
REASONS FOR DECISION
Coram: O'Loughlin J
Place: Adelaide
Date: 20 November 1996
In these proceedings the third, fourth and fifth respondents, who for convenience can be described as "the University", have challenged the methodology used by the applicant in making Discovery.
The applicant's case against the University includes claims based on allegations of misleading and deceptive conduct and breach of fiduciary duty. The applicant's have also joined the Commonwealth and the Minister of Industry, Science & Technology as Respondents alleging that it has causes of action against them in consequence of an alleged breach of natural justice and an alleged promissory estoppel. I will refer those respondents as "the Commonwealth".
According to the applicant's pleadings it has, for many years been a joint applicant with the University to the Commonwealth and to instrumentalities of the Commonwealth for research grants with respect to a project or projects that may be described as airborne research. The gravamen of the applicant's claim centres upon a particular joint application in respect of an airborne research project that was lodged in the names of the applicant and the University with the Major National Research Facilities Program in 1994. The applicant claims that, unknown to it, in June 1995, the University lodged, and the Commonwealth accepted a second competing application in respect of the same project. That second application was successful. It excluded the applicant from participation in the grant of about $8.5m that was ultimately made in respect of the project exclusively to the University.
The applicant filed its List of Documents verified on oath by Peter Anthony Goon, one of its Directors, on 6 June 1996. In addition, the solicitor for the applicant had certified, as required by O 15 r 6(8), that "according to his instructions, the list and the statements in the list are correct". The applicant stated that it had in its possession custody or power, the documents numerated in Schedule 1 to the list. Part I of Schedule 1 contains seven entries. The last four entries identify specific items of correspondence and are unobjectionable. I list hereunder the first three entries:-
1. "The documents contained in the files listed in the schedule annexed hereto and entitled "Schedule A" which files are more particularly described in that Schedule."
Seven hundred and fifteen files are listed. Presumably each file contains one or more documents, but the list does not give any further details.
2. "The documents listed in the schedule annexed hereto entitled "Schedule B" which documents are more particularly described in that schedule."
There are thirteen separate entries in Schedule B. Numbers 1, 2, 3 and 4 relate to the applicant's financial statements and financial records. The fifth entry refers to the work diaries of Mr Goon for the years 1988 to 1995 and those in pars 6 to 12 refer to specific documents by description. None of these were the subject of complaint by the University. The thirteenth entry in Schedule B was a reference to various documents described as documents "held in the AFTS reference library." Putting to one side the issue of relevance (particularly the documents listed as being held in the library) the documents listed in Schedule B do not warrant further comment.
3. "The documents listed in the schedule annexed hereto and entitled "Schedule C" which documents are more particularly described in that schedule."
Five hundred and thirty two documents were so listed.
By Notice of Motion filed 21 October 1996 the third, fourth and fifth respondents have challenged the manner in which the applicant has made discovery. They seek an order that applicant file and serve a fresh list of documents that provides a sufficient description of each of the items that would be covered by Schedule A and C but limited to those items that are relevantly discoverable.
As I have said, Schedule A does not contain a list of documents. It contains a list of seven hundred and fifteen files. The information which is contained in Schedule A with respect to those files is typified by the following entries:-
"F3 Conditions of Service, Employment Deed
F18 Income
F45 Expenses, Telex and Cables
F98 Expenses, Tools
F203Recruiting
F242Works and Facilities
F248Liaison and Seminars
F312Engineering Data"
The letter "F" and the numbers following it appear under a heading which is identified only by the letters "LSN". There is no legend in the document to explain the meaning of that heading nor is the last mentioned heading
"BO explained.
X"
Schedule C also contains a series of headings none of which are explained. They include the letters "LSN" once again together with a heading "SHT - NO" (which probably stands for "sheet number") and headings "ISS" and "SHT" neither of which are explained.
An example of some of the entries in Schedule C is the series D17 to D36 inclusive. Each of those twenty entries has the same document number 804 10 21.1001. Each of the twenty entries has the same document title "Assembly: IDAC". Under the heading "SHT - NO" there are sequential numbers from 1 to 20. Either the figure 2 or the figure 1 appears under the heading "ISS". The symbol "A2" appears under the heading "SHT" in 19 of the cases. In the remaining case the symbol is "A0". Save for D19 the "date" of each entry is 30 April 1991. The relevant date for D19 is 9 April 1991. I find those entries meaningless, an observation which, regrettably, holds good for the greater number of the entries in Schedule C.
The obligation on a party to litigation to give discovery is contained in O 15 r 2(2) of the Federal Court Rules. The prima facie obligation is to file and serve:-
"a list in accordance with r 6 of documents relating to any matter in question ... "
Order 15 r 6 states that the list of documents "shall enumerate the documents which are or have been in the possession custody or power of the party." The enumeration is to be in a convenient sequence and as short as possible but it shall describe each document or, in the case of a group of documents of the same nature, shall describe the group sufficiently to enable the document or group to be identified.
Despite these primary propositions there remains an overriding discretion in the Court. Order 15 r 3(2) specifically empowers the Court to "make such orders ... as are necessary to prevent unnecessary discovery."
It is a well established rule that discoverable documents must be
described and identified in such a way that will enable the other party to
determine whether it wishes to examine them or not: Taylor
v Batten (1878) 4 QBD 85. Although
the description of a document should be brief, it must nevertheless be
sufficiently detailed so that the other party may know from its description
whether or not it should be inspected, a requirement that also extends to
documents that are the subject of a claim of privilege; Kadlunga
Proprietors
& Ors v Electricity Trust of South Australia (1985) 39 SASR 410 at
414 per White J: The Minister for Community Services and Health v Carter and
Gribbles Pathology Pty Ltd (unreported, 29 August 1990 per Duggan J with
whom King CJ and Mohr J agreed). Issues
such as a claim for privilege also warrant an adequate description of the
document so that a court may adjudicate if production of the document for
inspection is disputed. As Duggan J
pointed out in The Minister for Community
Services and Health (supra):
"In order to satisfy these requirements the description of a document may have to include details such as the date, a description of the document itself and some other information relating to the content or provenance of the document to enable it to be identified subsequently."(p4)
Discovery can, of course, be made by reference to bundles and, in some cases, it is only proper that this method be used; see for example, Walker v Poole (1882) 21 Ch D 835 where the defendants, solicitors, were ordered to pay the costs because of their failure to utilise the system of identifying documents by bundles. In that case Kay J said:-
"The ordinary mode of setting out such letters has been settled after an immense amount of litigation, and the proper method is to refer to them as contained in a bundle, each document in the bundle being identified by a letter or some other method of identification; that is all that is necessary."(p836)
The same view was expressed by Cotton LJ in Hill v Hart-Davis (1884) 26 Ch D 470 at 472 where His Lordship said:-
"[T]hey are set out at unnecessary and improper length. They ought to have been set out in bundles, and scheduled and numbered in such a way that the defendant might have asked for those which he wanted to see, specifying them by their numbers."
There is a heavy task placed on a litigant and his or her solicitors in the discovery process. The decision in Compagnie Financiere Du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 still remains the authority which lays out the parameters for discovery. Brett LJ, with whom Baggallay LJ agreed, expressed the principle in these terms:-
"It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary."(p63)
Even so, the width of that observation does not mean that there are no constraints upon a litigant. A subjective assessment must be made so that only those documents that relate to a matter in question are discovered. Discovery of unreasonable length, of irrelevant documents, of unnecessary prolixity, can be the subject of an order that the affidavit be taken off the file (see Walker v Poole (supra)) and such an order could be accompanied by heavy cost consequences.
The approach to discovery must be directed towards a consideration of the pleadings. As Menzies J explained in Mulley v Manifold (1959) 103 CLR 341 at 345:-
"I now turn to the pleadings to determine what are the matters at issue between the parties, because discovery is a procedure directed towards obtaining a proper examination and determination of these issues- not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary."
The examples that I have given and which have been extracted from Schedule A and Schedule C are, in my opinion, self evidently, examples of the inadequacy of discovery. In the first place, the reference to documents in a file is in most cases inadequate because the title of the file does not even suggest that its contents relate in some way to a matter in question. In the second place the descriptions of the documents in Schedule C, relying quite often on technical language would not permit the Court to make any assessment of relevance.
I credit the applicant with making a genuine attempt to contain the very expensive exercise of discovery and inspection. However, I believe that its attempts have been misguided. Rather than containing costs it would, in a sense, duplicated costs. If it has not already done so, it will ultimately be necessary for the applicant to make its individual assessment of the contents of each file that is referred to in Schedule A and each document that is listed in Schedule C for the purposes of determining, on an advice on evidence, whether it will or may be used in the presentation of the applicant's case. In the course of that exercise, the applicant could also make a subjective assessment of the documents which would be discoverable by it in the proceedings. I venture to suggest that such an exercise would reduce, substantially, the extent of the present parameters of the discovery material and would thereby reduce, substantially, the costs of the University in an examination of documents. To reduce the costs of a litigant is a salutary exercise and is to be encouraged, for at this interlocutory stage one does not know which of the litigants will ultimately bear such costs. In other words, it would be as much in the interests of the applicant as it is in the interests of the University to ensure that all costs of the discovery process are contained. A proper reassessment of the contents of the files and the descriptions of the documents utilising, where appropriate, references to bundles, would substantially reduce the costs of the discovery process in my opinion.
However, there is another approach to the problem. This litigation already bears the hallmarks of a long and expensive trial. Estimates that it might take up to four months have been given. The applicant has submitted that, because of denials in the University's defence of the existence of joint ventures between the parties, it will be necessary to lead oral and documentary evidence covering many years of business activities between the parties. Accepting the concerns as justifiable, it seems to me that they should encourage the parties and the Court to give special consideration to the
subject of discovery. Whilst it might be true to say that every piece of paper that has been generated over the years on the subject of the business relationship between the applicant and the University might be discoverable, it does not mean that the parties, or either of them, would contemplate tendering all such material in the trial. As I have come to the opinion that the applicant's discovery has not complied with the Rules, it is open to me to use the discretionary powers that are available under O 15. During the course of argument I suggested to counsel for the applicant that an appropriate order might be in terms that:-
"The applicant make discovery on oath by listing in separate categories those documents:-
(a) That it will tender as exhibits in the trial
(b) That it might tender as exhibits in the trial
(c) That will or might assist the case of the respondents or any one or more of them."
Counsel for the applicant responded by informing the Court that his client would be amenable to such an order so long as identical orders were made in respect of the Commonwealth and University. That would pose difficulties. Both sets of respondents have given discovery and neither discovery has been challenged. Furthermore, the Commonwealth was not represented on the hearing of the Notice of Motion. I will make the orders set out above against the applicant who must pay the University's costs. Although I will not make the same orders against the respondents they are matters that are worthy of further consideration under case management principles.
I certify that this and the preceding pages are a true copy of the reasons for Judgment of the Honourable Justice O'Loughlin
Associate:
Dated:
Counsel for the University : Mr M Rice
Solicitors for the University : Fisher Jeffries
Counsel for Australian Flight
Test Services : Mr D Greenwell
Solicitors for Australian Flight
Test Services : Mouldens
Hearing Dates : 5 and 8 November 1996
