FEDERAL COURT OF AUSTRALIA

Taylor v Saloniklis (No 3) [2014] FCA 744

THE COURT ORDERS THAT:

1.    The applicants give discovery on oath in accordance with r 20.22 of the Federal Court Rules 2011 (Cth) of the following documents:

(a)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the first applicant with respect to the period from 1 July 2007 to 31 March 2012;

(b)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the third applicant with respect to the period from 1 July 2007 to 31 March 2012;

(c)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the second applicant, in the name of the second applicant or on the second applicant’s behalf;

provided that production of any document within 1(a), (b) or (c) above which shows entries for deposits showing monies received by the applicants as the outcome of a legal dispute which are the subject of an obligation of confidentiality on the applicants is subject to the provision of a confidentiality undertaking by the respondents to be agreed between the parties, or, in default of that, fixed by the Court;

(d)    the itemised billing records in relation to the following:

(i)    each and every mobile telephone service held in the name of, or operated principally by, the first applicant; and

(ii)    each fixed line telephone service held in the sole or joint name of the first applicant and to which the first applicant had regular access,

    for the dates or periods identified in paragraphs 351, 352, 364, 369, 398, 411, 422, 423, 438, 439, 469, 472, 474, 478, 481, 484, 489, 490, 500, 502, 505, 509, 535, 547, 562, 569, 592, 599, 604, 620, 647, 659, 660, 679, 692, 716, 719 and 851 of the affidavit sworn by the first applicant on 11 November 2013; and

(e)    the itemised billing records in relation to each and every mobile telephone service held in the name of, or operated principally by, the third applicant for the following dates: 23 March 2011, 24 March 2011, and 25 March 2011.

2.    Liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

introduction

1    This is an interlocutory application by the respondents in which they seek the following orders:

2.    An order pursuant to Rule 5.23(1)(a) of the Federal Court Rules 2011 that the Applicants comply with the obligations upon them pursuant to:

a.    Order 1 made on 10 July 2013 (standard discovery); and

b.    Rule 20.20 of the Federal Court Rules 2011 (continuing discovery obligations)

by giving discovery of the categories of documents set out in Appendix 1 to this Application within 21 days of this order;

3.    In the alternative to paragraph 2, an order pursuant to Rule 20.15 that the Applicants give more extensive discovery of the categories of documents set out in Appendix 1 to this Application within 21 days of order;

…

2    The documents identified in Appendix 1 to the application fall into two categories, which are described as “Banking records” and “Telecommunications records”.

3    The Banking records which are sought by the respondents are bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by:

(1)    the first applicant;

(2)    the second applicant, or in the name of the second applicant, or on the second applicant’s behalf; and

(3)    the third applicant,

in relation to the period from 1 July 2007 to 31 March 2012.

4    The significance of the dates referred to in the application is that it was from about the middle of 2007 that the second applicant joined the partnership identified in the Third Amended Statement of Claim as Radiology SA (“the partnership”), and it was on 31 March 2012 that the second applicant’s notice of intention to retire from the partnership took effect.

5    The Telecommunications records fall into three sub-groups. All of them involve itemised billing records.

6    The first sub-group is itemised billing records in relation to each and every mobile telephone service held in the name of, or operated principally by, the first applicant in relation to the period from 1 May 2007 to 31 March 2012. The second sub-group is itemised billing records in relation to each and every mobile telephone service held in the name of, or operated principally by, the third applicant, pertaining to the months of March and April 2011 and relating to that period. The third sub-group is itemised billing records in relation to each fixed line telephone service held in the sole or joint name of the first applicant, and to which the first applicant had regular access, in relation to the period from 1 May 2007 to 31 March 2012.

7    As will become clear later in these reasons, the applicants are willing to provide discovery of some of the documents identified in Appendix 1 of the application, but not others.

the evidence

8    The respondents’ application was supported by an affidavit sworn by their solicitor, Ms Elizabeth Perry.

9    On 10 July 2013, the Court made an order that each party make standard discovery. On or about 13 August 2013, the respondents served on the applicants a list of documents, which was verified by an affidavit sworn by the first respondent. On or about 8 November 2013, the respondents served on the applicants a supplementary list of documents, which was also verified by an affidavit sworn by the first respondent. On or about 22 August 2013, the applicants served on the respondents an executed copy of their list of documents. On or about 17 December 2013, the applicants served on the respondents an executed copy of a supplementary list of documents.

10    There then followed correspondence between the solicitors for the parties wherein the respondents requested discovery of further documents, including, by letter dated 20 December 2013, certain banking records and telecommunications records.

11    By letter dated 17 March 2014, the applicants’ solicitors advised the respondents that a second supplementary list of documents would be served, and that was done on 14 April 2014.

12    In the period between those events, the applicants’ solicitors wrote a detailed letter, dated 27 March 2014, to the respondents’ solicitors advising the respondents of the applicants’ attitude to the discovery of certain categories of documents sought by the respondents. As to the Banking records, the applicants said:

6.    Bank accounts maintained by the First and Third Applicants for the period 1 July 2007 to 31 March 2012.

    To the extent that these documents have not been discovered they will be discovered.

13    As to the Telecommunications records, the applicants said:

4.    Dr Taylor’s telephone billing records for the period May 2007 to March 2012.

These documents do not fall within the ambit of standard discovery.

We note that Ms Perry’s affidavit sworn 25 February 2014 states that these documents are “directly relevant to a number of factual matters going to the financial resources and physical capacity at all pertinent times”. We do not agree, and do not understand how it can be said that Dr Taylor’s telephone billing records are relevant to “financial resources and physical capacity”.

The phone records of the Applicants that relate to conversations about which Dr Taylor gives evidence have been discovered.

5.    Mr Curiel’s telephone billing records for the period May 2007 to March 2012.

These documents do not fall within the ambit of standard discovery.

We note that Ms Perry’s affidavit sworn 25 February 2014 states that these documents are “directly relevant to a number of factual matters going to the financial resources and physical capacity at all pertinent times”. We do not agree, and do not understand how it can be said that Mr Curiel’s telephone billing records are relevant to “financial resources and physical capacity”.

The phone records of the Applicants that relate to conversations about which Dr Taylor gives evidence have been discovered.

14    The respondents’ solicitors replied to this letter by letter dated 1 April 2014. They addressed the Telecommunications records in considerable detail. Their response on this matter is lengthy, but I propose to set it out because it sets out the respondents’ arguments in support of their contention that the Telecommunications records fall within the existing order for standard discovery, or should be the subject of an order for more extensive discovery:

4.    The facts and content of communications between Dr Taylor and our clients, principally Dr Saloniklis, in the period 1 May 2007 and 1 July 2007 are disputed in multiple respects. We note the prior discovery of Optus records for the period May to June 2007. Your clients have self-evidently assessed those records against the parameters of ‘standard discovery’ and, appropriately, determined that they are discoverable.

Your clients have pleaded or deposed to conversations by telephone spanning the period July 2007 to March of 2012 during the period in respect of which their records are sought which will or may be disputed, including (but not limited to) the telephone conversations referred to in:

    paragraphs 351 & 352, 369, 411, 469, 502, 535, 592, 645 and 706 of Dr Taylor’s affidavit of 11/11/13; and

    paragraphs 68, 69, 74, 92, 95, 101, 109, 110, 117, 140 and 141 of the Third Amended Statement of Claim

In a number of instances, the parties are in disagreement about whether telephone conversations took place at all. Of the discussions that our clients agree took place, the content of such discussions will be in dispute in a number of cases. The duration of such discussions will be a clear and probative indicator of such details in a number of instances.

The telephone records over the period requested would tend to prove or disprove the existence of disputed telephone conversations and confirm details such as duration, time and date of conversations that the parties do not dispute occurred. We query what cogent basis your clients could have for denying the direct relevance to factual matters in issue, given that you obviously concede the direct relevance of phone records for the period May to June of 2007 where similar matters are in dispute.

Your clients have deposed further to various matters pertaining to Dr Taylor’s health ranging from 2009, through the second half of 2010, and from the second half of 2010 onwards. Dr Taylor’s reliability as a historian and the extent to which she was and is suffering any of the symptoms or conditions pleaded or deposed to is firmly in issue in these proceedings. The phone records over the period sought would tend to prove or disprove:

    Dr Taylor’s level, frequency and intensity of engagement in social, business or other activities during the relevant periods; and

    The time of day and night that Dr Taylor was typically active and attending to personal or business matters during the relevant periods.

These matters are directly relevant not only to the existence and extent of pleaded symptoms or conditions, but to the alleged causation of incapacity, lost earning capacity and past and future losses pleaded in the Third Amended Statement of Claim (reflected in paragraph 255B).

At this time, we do not press for discovery of Mr Curiel’s personal telephone records for periods other than March of 2011. With reference to paragraphs 133 and 134 of the Third Amended Statement of Claim and paragraphs 182 to 184 of Mr Curiel’s affidavit of 11 November 2013, your clients plainly rely on communications Mr Curiel claims to have initiated as being probative of the Respondents’ level of knowledge as to Dr Taylor’s status in the period subsequent to the events referred to.

Mr Curiel’s telephone records for March of 2011 will prove or disprove that such communications were in fact initiated. As such, they will either adversely affect your clients’ case, or adversely affect the respondents’ case and are directly relevant and discoverable.

Further, and for clarity, we press for discovery of your clients’ home telephone records for the period 1 May 2007 to 31 March 2012, for the same reasons set out above in relation to Dr Taylor’s own telephone records.

    (Footnotes omitted.)

15    In order to complete the narrative of events, I set out the applicants’ response to the respondents’ arguments as contained in a letter from the applicants’ solicitors dated 14 April 2014:

4.    Dr Taylor’s telephone billing record for the Period May 2007 to March 2012.

Dr Taylor’s evidence does not refer to where telephone calls are made, and thus the production of the Applicant’s telephone records are not probative as to whether the telephone calls were made. Accordingly, these records do not fall within the ambit of general discovery.

Your arguments in relation to the relevance of Dr Taylor’s telephone records are not consistent with the Respondent’s own discovery where, consistent with that argument the telephone records of the Partnership, the relevant clinics, Dr Saloniklis, Dr Roache, Dr Hall, Dr Pathi, Dr Chan and Ms O’Sullivan would have been discovered by the Respondents. They have not been discovered.

The comments that are made in relation to the relevance of these records to Dr Taylor’s health are not logical or probative.

5.    Mr Curiel’s telephone billing record for the Period May 2007 to March 2012, and his home telephone records.

We repeat our comments at 4 above, and note also that the Second Supplementary List of documents has already identified that Mr Curiel does not have in his possession the text message referred to in paragraph 134 of the Third Amended Statement of Claim.

16    The only Telecommunications records actually discovered by the applicants are described in their list of documents as follows:

81.    Optus records for the First Applicant’s telephone accounts May to June 2007.

17    Pursuant to orders of the Court, each of the first and third applicants have filed and served an affidavit of the evidence which they will give at trial. The first applicant deposes to a number of conversations with doctors involved in the partnership in her affidavit of evidence sworn on 11 November 2013. The respondents contend that, in relation to some of these conversations, it is unclear whether the conversation was in person or by telephone and, if the latter, the identity of the participant who made the telephone call. The respondents contend that, in addition to establishing whether the telephone call took place, the Telecommunications records will establish the precise date, duration, and origin of the calls. This is what I will describe as the first category of Telecommunications records sought by the respondents. They relate to specific conversations and can be identified by reference to the affidavits of evidence filed in the proceeding and include, in one case, a telephone call which is in dispute on the pleadings. I include in this first category the Telecommunications records of the third applicant that also relate to specific conversations which can be identified on the evidence and pleadings.

18    In addition to this first category, the respondents also seek, in the case of the first applicant, Telecommunications records over a period of almost five years. This is what I will describe as the second category of Telecommunications records sought by the respondents. The basis upon which they seek this second category is as follows. The respondents point to the fact that it is part of the applicants’ case that the first applicant’s health, capacity, and presentation has been affected by the respondents’ conduct as identified in the Third Amended Statement of Claim. The allegations include:

(1)    an allegation of severe nausea, vomiting, physical discomfort, fatigue, tiredness and exhaustion from at least 25 February 2009 until 28 September 2009;

(2)    an allegation of exhaustion in the second half of 2010; and

(3)    allegations of symptoms and/or occurrences associated with pregnancy, miscarriage, anxiety, agitation, stress, feelings of disassociation from her body, nausea, shaking, increased heart rate, difficulty breathing, sweating, chest tightness, abdominal discomfort, sleeplessness, nightmares, lethargy, and physical exhaustion, all arising in 2011 and existing for various time periods.

19    The respondents point to the fact that the respective affidavits of evidence of the first and third applicants contain evidence directed to these matters. In addition, the applicants have filed medical reports of consultant psychiatrists on which they propose to rely at trial. These reports provide evidence of the first applicant’s health, capacity, and presentation.

20    The respondents contend that the first applicant’s Telecommunications records over the five year period are directly relevant to these allegations, or should be the subject of an order for more extensive discovery under r 20.15 of the Federal Court Rules 2011 (Cth).

21    With respect to the Banking records, the respondents’ solicitor states that banking and financial records discovered to date by the applicants either pertain to particular and limited periods where they relate to facilities held or maintained privately by the first or third applicant, or pertain to loan facilities established by the first and/or third applicants or one or more entities on trust structures with which they are or were associated. The respondents’ solicitor states that the applicants have not discovered statements for normal, everyday transactional bank accounts maintained by the first or third applicants over the period July 2007 to March 2012, and such records as have been discovered relate to discrete periods, or to investment or financing facilities.

22    In their Third Amended Statement of Claim, the applicants plead that their loss and damage includes the loss of the first applicant’s ability to take up an alternative position, and the loss, in the case of the first and third applicant respectively, of the ability to make alternative investments. They also plead that the first applicant has sustained a loss of earning capacity, pain and suffering, and a loss in terms of the amenities and enjoyment of life.

23    The applicants’ solicitor filed and served an affidavit in response to the respondents’ application. She annexes a letter to her affidavit which she states is in accordance with her instructions from the applicants. The applicants’ position is set out in that letter. They state that they have complied with their obligations to make standard discovery as far as their Banking records and Telecommunications records are concerned. However, to avoid further disputes, the applicants’ solicitor states that the applicants are prepared to provide some further discovery in relation to both Banking records and Telecommunications records.

24    As far as the Banking records are concerned, the applicants’ solicitor states that there are two accounts in respect of which the applicants have not given discovery of all statements covering the period from 1 July 2007 to 31 March 2012.

25    The first account is the third applicant’s BankWest Telenet Saver Account. The applicants hold statements for this account for the period from 15 December 2009 to 31 March 2012 and state that they are prepared to make discovery of these statements.

26    The second account is a Westpac loan account and related transactional account. The applicants state that they are prepared to make discovery of all statements not previously discovered for the period up to 31 March 2012. The offer by the applicants is conditional on the redaction of those parts of the statements showing withdrawals for personal expenses and for deposits unrelated to wages or earnings. The applicants contend that these entries are not relevant. They also seek an undertaking of confidentiality from the respondents or the redaction of entries for deposits showing monies received by the applicants as the outcome of a legal dispute, which are the subject of an obligation of confidentiality on the applicants.

27    The applicants also offer (if requested) to give discovery of complete copies of all statements in relation to three Westpac loan accounts identified in their solicitor’s letter.

28    The applicants’ solicitor states that she is instructed that the applicants do not have any overseas bank accounts.

29    As far as the Telecommunications records are concerned, the applicants are prepared to make discovery of documents falling within category 1, subject to the redaction of irrelevant entries. They are not prepared to make discovery of documents falling within category 2.

the RESOLUTION OF THE issues

30    An order for standard discovery has been made. That means that the applicants must make discovery of documents that are directly relevant to the issues raised by the pleadings within the meaning of r 20.14. To be “directly relevant” a document must have one or more of the following characteristics. It must be a document upon which the applicants intend to rely, or which adversely affects the applicants’ case, or which supports the respondents’ case, or adversely affects the respondents’ case (r 20.14(2)). It is well-established that the test for standard discovery results in a narrower class of documents being discoverable than the train of inquiry test formulated in Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company (1882) 11 QBD 55 (see Spyer v Cuddles ‘N’ Mum (Franchise) Pty Ltd (No 3) [2002] FCA 1563, at [4] per Lindgren J; Australian Competition & Consumer Commission v Advanced Medical Institute Pty Ltd [2005] FCA 366, at [19]-[23] per Lindgren J).

31    In the alternative and in the event that the categories of documents they seek do not fall within the order for standard discovery, the respondents seek an order for non-standard and more extensive discovery under r 20.15. That rule is in the following terms:

20.15    Non-standard and more extensive discovery

(1)    A party seeking an order for discovery (other than standard discovery) must identify the following:

(a)    any criteria mentioned in rules 20.14(1) and (2) that should not apply;

(b)    any other criteria that should apply;

(c)    whether the party seeks the use of categories of documents in the list of documents;

(d)    whether discovery should be given in an electronic format;

(e)    whether discovery should be given in accordance with a discovery plan.

(2)    An application by a party under subrule (1) must be accompanied by the following:

(a)    if categories of documents are sought—a list of the proposed categories; and

(b)    if discovery is sought by an electronic format—the proposed format; and

(c)    if a discovery plan is sought to be used—a draft of the discovery plan.

(3)    An application by a party seeking more extensive discovery than is required under rule 20.14 must be accompanied by an affidavit stating why the order should be made.

(4)    For this Division:

category of documents includes documents, or a bundle of documents, of the same or a similar type of character.

32    The applicants submit that the respondents have not complied with the requirements in r 20.15(1) and that, insofar as their application relies on r 20.15, it should be dismissed on that ground. I reject that submission because the respondents have identified clearly the categories of documents they seek and I think that in this way they have complied with r 20.15(1), in particular paragraphs (a), (b) and (c). Whether an order should be made is, of course, another matter.

33    As far as the Banking records are concerned, I think it is appropriate to make an order because it seems to me that the documents are directly relevant within r 20.14. The applicants advance a case that, but for the respondents’ wrongdoing, they would have done various other things which would have resulted in a benefit to them. As I have already said, the first applicant alleges that she would have taken up an alternative position. The first and third applicants allege that they would have returned to live in Melbourne. They allege that they would have made investments in property which would have produced certain returns. I will not set out paragraphs 57, 57A and 57B of the Third Amended Statement of Claim, but a recurring theme in the pleas in those paragraphs is the financial capacity of the first applicant and of the third applicant. Plainly, the applicants put forward as part of their case on loss and damage a hypothetical or counter-factual based on the absence of the respondents’ wrongdoing. I think that that makes their actual financial position relevant, and that includes their whole financial position and not simply that part of it which excludes, for example, personal expenses and deposits unrelated to wages or earnings.

34    The applicants’ solicitor makes assertions in her letter about the documents which exist. She states that she makes those assertions on instructions. I accept that, but I do not think that it is relevant. Discovery must be given on oath, and it is the oath of the litigant, and not his or her solicitor, which is significant (rr 20.17 and 20.22).

35    As far as the Telecommunications records in category 1 are concerned, subject to the issue of the redaction of irrelevant entries, I think an order should be made in relation to the category 1 documents. I think that the discovery of this category of documents will facilitate the just resolution of the proceeding. I do not pause at this stage to determine if the documents in category 1 fall within the order for standard discovery or should be the subject of an order under r 20.15. The applicants submit that a decision on that question will be relevant on the issue of the costs of the application. I am not at this stage satisfied that that is so, but, if the parties persuade me otherwise, I will consider the question then.

36    As far as the Telecommunications records in category 2 are concerned, I do not think an order should be made. I do not think that such records are directly relevant. At best, these records might be captured by the train of inquiry test, but they are not directly relevant. An example given in the course of submissions makes the point. If the records establish that the first applicant was having long telephone conversations on a regular basis, then that might be the first link in a chain of facts suggesting that her disabilities did not lead to her alleged detachment from the ordinary affairs of life. But it would only be the first link, because one would have to inquire as to whether it was the first applicant having the conversation, who the conversation was with, (possibly) the content of the conversation, and what it suggested to a relevant expert about her medical condition. Counsel for the respondents suggested that, in the alternative, the records might advance the applicants’ case, but I think that most unlikely.

37    With respect to the Telecommunications records in category 2, I would not make an order for more extensive discovery under r 20.15. On the facts, I am not satisfied that there is sufficient reason to do so.

38    I turn finally to the issue of redaction. The applicants referred to authorities which have considered the redaction of material from documents that are produced following discovery. A party producing a document might seek to redact part of a document on the ground that material is privileged, or on the ground that the material is private and irrelevant. Although the application before me concerns orders for discovery, the applicants submitted that it is convenient to address the issue of redaction at this stage.

39    The issue of redaction does not arise in relation to the Banking records because I have decided that the records are discoverable and there is no exception for entries showing withdrawals for personal expenses and entries showing deposits unrelated to wages and earnings.

40    As far as the Telecommunications records are concerned, the issue arises only in relation to category 1. The issue of redaction has been considered in a number of authorities and I was referred to only some of them (see, for example Egglishaw v Australian Crime Commission (No 2) (2009) 253 ALR 354). It may be that it proves to be of no great significance in relation to the Telecommunications records in category 1. In the circumstances, I will not address it, but rather will give the parties liberty to apply.

41    Assuming the issue of redaction can be resolved, then, subject to one matter, the production of documents should follow discovery in the normal way. The one matter is that I will include in the orders an appropriate mechanism to deal with the applicants’ claim for confidentiality in relation to entries in the Banking records for deposits showing monies received by the applicants as the outcome of a legal dispute, which are the subject of an obligation of confidentiality on the applicants.

CONCLUSION

42    I will make the following orders:

1.    The applicants give discovery on oath in accordance with r 20.22 of the Federal Court Rules 2011 (Cth) of the following documents:

(a)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the first applicant with respect to the period from 1 July 2007 to 31 March 2012;

(b)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the third applicant with respect to the period from 1 July 2007 to 31 March 2012;

(c)    all bank balance and transaction statements pertaining to all accounts held with Australian and/or offshore banking and/or financial institutions by the second applicant, in the name of the second applicant or on the second applicant’s behalf;

provided that production of any document within 1(a), (b) or (c) above which shows entries for deposits showing monies received by the applicants as the outcome of a legal dispute, which are the subject of an obligation of confidentiality on the applicants, is subject to the provision of a confidentiality undertaking by the respondents to be agreed between the parties, or, in default of that, fixed by the Court; and

(d)    the itemised billing records in relation to the following:

(i)    each and every mobile telephone service held in the name of, or operated principally by, the first applicant; and

(ii)    each fixed line telephone service held in the sole or joint name of the first applicant and to which the first applicant had regular access,

    for the dates or periods identified in paragraphs 351, 352, 364, 369, 398, 411, 422, 423, 438, 439, 469, 472, 474, 478, 481, 484, 489, 490, 500, 502, 505, 509, 535, 547, 562, 569, 592, 599, 604, 620, 647, 659, 660, 679, 692, 716, 719 and 851 of the affidavit sworn by the first applicant on 11 November 2013; and

(e)    the itemised billing records in relation to each and every mobile telephone service held in the name of, or operated principally by, the third applicant for the following dates: 23 March 2011, 24 March 2011, and 25 March 2011.

2.    Liberty to apply.

43    I will hear the parties as to costs.

Associate:

Dated:    15 July 2014