FEDERAL COURT OF AUSTRALIA

Eggerth v Piccardi [2015] FCA 977

THE COURT ORDERS THAT:

1.    Application for disclosure or production is dismissed.

2.    Costs reserved.

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

REASONS FOR JUDGMENT

1    On 7 August 2015, this court entered orders requiring the parties to attend a mediation. The parties have agreed to a mediation to be held on 16 September 2015. The mediation will be a private mediation conducted by Mr Barlow QC.

2    The applicant’s solicitors were concerned that their client’s participation in the mediation will be impaired in the absence of disclosure of various documents. Counsel for the applicant submitted, with some merit based upon my review of the pleadings, that the respondents are in exclusive control of the documents relevant to his case.

3    The mediation will involve substantial expense to the applicant because he will incur costs of (i) travelling to Brisbane from Germany for the mediation, (ii) obtaining an interpreter for the mediation (he speaks German), (iii) his lawyers’ travel and accommodation in Brisbane and (iv) his lawyers’ preparation for the mediation. The documents sought by the applicant fall into eight categories which are set out in Schedule A of the applicant’s proposed orders.

4    The process which has led to this application has been most unfortunate. Counsel for the respondents (and I make no criticism of either instructed counsel in this case) submitted, in concise and proper submissions, that the “difficulty is one of personalities”. Unfortunately, this submission was not directed to the personalities of the clients. Where there is a clash of personalities between clients the legal representatives for the parties can lower the temperature by polite, civil, and respectful treatment of each other and their opposing clients. But matters become grave where, as appears to be the case here, it is the relationship between the solicitors that interferes with the orderly conduct of litigation. This is particularly so in a case such as this where hundreds of thousands of dollars have already been spent on legal fees and there is a danger that the parties will dissipate the value of the underlying asset in this dispute in legal fees.

5    I do not comment on those particular accusations and allegations between the solicitors outside the scope of this application. It suffices to say that in contrast with the relationship between the solicitors it appears that the clients have had a longstanding friendship and the respondents have asserted that they wish to maintain that friendship. The applicant, who does not speak English, has understandably not put on any affidavit evidence yet.

6    To deal only with the matters directly relevant to this application, the applicant’s evidence is that between 11 and 24 August 2015 no responses were received to communications from the applicant’s solicitors to the solicitors for the respondents. The applicant issued a draft notice to produce to the respondents. The respondents objected to it, including to its form. They said that it was marked “draft” and not signed. They said that it was in the incorrect form under the Federal Court Rules 2011 (Cth). The tone of correspondence between the solicitors became more and more aggressive.

7    For this very short hearing, the solicitors have also produced numerous affidavits and substantial submissions. But the point was a very short one: should the respondents be required to provide discovery or to produce documents to the applicant prior to mediation where those documents will assist the parties to resolve their dispute? If documents could be given without much cost or expense then it is difficult to see why that discovery or production should not occur.

8    The respondents made some surprising written submissions on this application. They said that their defence is not due until 7 September 2015 so that orders for discovery of these particular documents would be premature: r 20.13(a). That rule, however, can be waived in the interests of justice: r 1.34. It is hard to see why r 1.34 of the Federal Court Rules 2011 would not have been applied if the production of some documents, the discovery of which would be ordered at a later date in any event, could have assisted the parties to understand the contours of their dispute. The respondents also said that an order for discovery should not be sought unless the making of the order would facilitate the just resolution of the proceeding as quickly, inexpensively, and efficiently as possible: r 20.11. Again, it is hard to see how a stance of refusing to provide some documents that might be readily available, and which could assist the mediation process, could do anything other than delay the proceeding and increase the legal costs in the long run.

9    Ultimately, the difficulty with making the orders for production or discovery that the applicant seeks is that despite their rhetoric the respondents have gone considerably further than any order that I would have made. They have performed an electronic search of every document in their control that responds to the applicant’s request. They have done so with considerable personal cost and with considerable personal stress. Electronic disclosure was made by yesterday of all the documents that they located. A “dropbox” of around 2,000 documents was created after their considerable work and effort. They say that the only exception to their provision of all documents requested is the current year’s financial documents which are in the hands of the respondents’ accountants. Counsel for the respondents said that those financial documents would be provided by 11 September 2015.

10    The applicant, nevertheless, still pressed this application. Counsel for the applicant submitted that although his client has access to the dropbox, his client’s current lack of familiarity with the technology means that he has not yet seen the documents. Counsel also pointed to various correspondence which he said suggested an intention by the respondents not to disclose all documents. There is, however, no sufficient basis to go behind the sworn evidence for the respondents that all documents have been provided apart from the current year’s financial reports. The application is dismissed.

11    There should have been no need for this hearing. Acting properly, and respectfully, the legal representatives for both parties should have resolved this issue. Instead, the legal representatives have increased their clients’ costs substantially. The tone of correspondence has degenerated. It can only be hoped that a different, and conciliatory, approach between solicitors will be taken at the mediation in the interests of their clients.

12    Both parties sought costs of this application. My present inclination is that each party should bear their own costs of this application. But, in light of the amount of time and money wasted on this application, I do not want to invite any further delay by inviting submissions or even evidence on this issue especially before mediation. I will make the common order reserving costs of this application.

Associate:    

Dated:    3 September 2015