FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal (No 2) [2017] FCA 1539

ORDERS

THE COURT ORDERS THAT:

The matter be adjourned to a date to be fixed.

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

REASONS FOR JUDGMENT

COLLIER J:

Introduction

1    By interlocutory application filed on 3 May 2017, the applicant (CFMEU) sought the following orders:

1.    An order pursuant to rule 1.34 of the Federal Court Rules 2011 (Cth) (Rules) dispensing with compliance with rule 20.13(3).

2.    An order pursuant to rules 20.13(1) and 20.15 of the Rules that each of the Respondents give discovery of documents falling within the categories contained in Annexure 1 to this application.

(Original emphasis.)

2    Annexure 1 lists 13 categories of discovery.

3    The procedural background to the interlocutory application can be summarised as follows:

    The CFMEU commenced the proceeding against the respondents by way of originating application and statement of claim on 8 December 2015. The CFMEU filed an amended statement of claim an amended originating application on 28 January 2015.

    On 22 February 2016 the respondents filed an interlocutory application seeking orders that various paragraphs of the amended statement of claim be struck out and the claim dismissed.

    In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2016] FCA 987, I made various orders including that certain paragraphs of the amended statement of claim be struck out, granting the applicant leave to re-plead those paragraphs, and refusing to dismiss the applicant’s claim.

    An application for leave to appeal the decision was dismissed on 23 March 2017: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50.

    On 28 March 2017, the applicant informed the respondents that it would seek discovery to facilitate the pleading of a further amended statement of claim.

    On 31 March 2017, the lawyers for the respondents informed the applicant that the respondents did not agree to an order for discovery being made prior to finalisation of the pleadings.

    As a result the applicant has filed the current interlocutory application.

Categories of discovery sought

4    In order to understand the current interlocutory application, it is necessary to understand the gravamen of the claim the applicant wishes to make. This was referred to in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2016] FCA 987, and subsequently explained by the Full Court as follows:

3    The applicant’s claim is for pecuniary penalties and other relief against the respondents on the basis that each of them contravened s 340(1)(a)(i) of the Fair Work Act 2009 (Cth) (“the FWA”) by either taking or being involved in adverse action against the employees of the first respondent (“BHP Coal”).

4    The second respondent (“BMA”) operates the Blackwater Mine, located near the town of Blackwater in central Queensland. BMA and BHP Coal are related entities. The ASOC alleges that BMA had a contract with BHP Coal under which BHP Coal would supply its employees to do particular work at the mine.

5    The third respondent (“Downer Mining”) is a mining contractor. It is the owner of the fourth respondent (“Downer Blasting”). The ASOC alleges that Downer Mining and Downer Blasting were also contracted by BMA to supply labour to perform work of the same kind as BHP Coal’s employees, but at different locations within the mine. The ASOC pleads that, under their respective enterprise agreements, Downer Mining and Downer Blasting pay their employees substantially less than BHP Coal pays its employees.

6    Until it was struck out, paragraph 28B of the ASOC pleaded that prior to August 2015, Downer Mining and Downer Blasting approached BMA and proposed that they be given the work performed by BHP Coal’s employees and indicated that they would do the work at a lower cost than BHP Coal.

7    Paragraph 29 of the ASOC alleged that in or about August 2015, BMA “agreed” with Downer Mining and Downer Blasting “for the supply of labour to carry out the Work...in replacement of BHP Coal and the Employees”.

8    Paragraphs 30-33 of the ASOC alleged that BMA contravened s 340(1)(a)(i) of the FWA by taking adverse action against the employees of BHP Coal because those employees had a “workplace right”. That workplace right was said to consist of the benefit of BHP’s enterprise agreement. In oral submissions, the applicant’s counsel explained that the applicant’s case is that BMA took “adverse action” against BHP Coal’s employees within the meaning of s 342(1) Item 3 of the FWA by injuring BHP Coal in relation to the terms and conditions of its contract with BMA, altering BHP Coal’s position to its prejudice and refusing to make use of services offered by BHP Coal.

9    Paragraphs 38, 40, 40A and 41 of the ASOC pleaded that BMA also contravened s 340(1)(a)(i) of the FWA through the operation of s 362. By making and implementing the agreement between BMA, Downer Mining and Downer Blasting, BMA was said to have advised, encouraged, incited or coerced BHP Coal to take adverse action against its employees. That adverse action was alleged to be redeploying employees, transferring or dismissing them, or proposing that they accept voluntary redundancies.

10    Paragraphs 33A, 34, 35, 42 and 43 of the ASOC pleaded that Downer Mining and Downer Blasting contravened s 340(1)(a)(i) of the FWA as they were persons “involved in” the contraventions by BMA within s 550 of the FWA.

11    Paragraphs 44 and 45 of the ASOC alleged that BHP Coal contravened s 340(1)(a)(i) of the FWA as a person “involved in” the first of the contraventions by BMA.

5    Against the background of the case, in particular its procedural history, the categories of discovery sought by the applicant to assist it to finalise its statement of claim are as follows:

1.    Documents in the period 1 January 2015 to 18 August 2015, recording or containing or evidencing any communications between Downer and BMA whereby Downer offered, proposed or indicated its readiness, to perform the Work at a lower cost to BMA than BHP Coal (the Proposal).

2.    Documents recording the identities of the servants or agents of Downer who:

(a)    made the decision to make the Proposal;

(b)    communicated the Proposal to BMA.

3.    Documents in the period 1 January 2015 to 18 August 2015, recording or containing or evidencing any arrangement or understanding (howsoever described) between Downer and BMA to the effect that, or providing for, Downer to replace BHP Coal in performing the Work at a lower cost to BMA than BHP Coal (the Arrangement).

4.    Documents recording the identities of the servants or agents of Downer who made the Arrangement.

5.    Documents recording the identities of the servants or agents of BMA who made the Arrangement.

6.    Documents recording or containing or evidencing any decisions made by BMA to:

(a)    make the Arrangement;

(b)    sign the Contracts.

7.    Documents recording or containing or evidencing any decisions made by Downer to:

(a)    make the Arrangement;

(b)    sign the Contracts.

8.    Documents in the period 21 August 2015 and 31 December 2015, recording or containing or evidencing any communications between BMA and BHP Coal in relation to the redeployment, transfer or termination of employment of the surplus of Employees referred to in paragraph 29E of the FASOC.

9.    In relation to each of the Employees redeployed at the Mine between 21 August 2015 and 31 December 2015, documents identifying:

(a)    the Employee;

(b)    the position (including its location at the Mine) held by the Employee immediately before the redeployment;

(c)    the position (including its location at the Mine) to which the Employee was redeployed

(d)    the notification of the redeployment to the Employee.

10.    In relation to each of the Employees transferred from the Mine between 21 August 2015 and 31 December 2015, documents identifying:

(a)    the Employee ;

(b)    the position (including its location at the Mine) held by the Employee immediately before the transfer;

(c)    the location and position to which the Employee was transferred;

(d)    the notification of the transfer to the Employee.

11.    In relation to each of the Employees whose employment was terminated between 21 August 2015 and 31 December 2015, documents identifying:

(a)    the Employee;

(b)    the position (including its location at the Mine) held by the Employee immediately before the termination;

(c)    notification to the Employee of the termination

12.    Documents in the period 1 January 2015 to 18 August 2015, recording or containing or evidencing any communications between BMA or BHP Coal and Downer informing Downer of decisions about of implementation of, the redeployments, transfers or terminations of employment of the Employees referred to in paragraphs 29G and 29H of the FASOC.

13.    Documents in the period 1 January 2015 to 18 August 2015, recording or containing or evidencing any communications between BMA and Downer, referring to:

(a)    any examination by BMA of ways to reduce costs at the Mine;

(b)    concerns by BMA about BHP Coal’s labour costs;

(c)    any comparison between by BMA or Downer of the respective labour costs of BHP Coal and Downer;

(d)    BMA’s reasons for making the Arrangement; and/or

(e)    the BMA Enterprise Agreement 2012.

(Original emphasis.)

Contentions of the parties

6    In submissions, the applicant sought orders for discovery under r 20.15 in accordance with the categories of documents set out in its interlocutory application and dispensation with r 20.13(3), on the basis that:

    Because of the manner in which the case has progressed, the applicant has not yet got to the stage of finalising its statement of claim. In summary, the applicant is unable to plead its case in a way capable of addressing the criticisms set out in [2016] FCA 987;

    The Court has found that the case the applicant wishes to agitate raises triable issues;

    The Full Court expressly identified that the applicant’s ability to seek discovery of the documents needed to plead its case told against there being any substantial injustice warranting a grant of leave to appeal ([2017] FCAFC 50 at [64]);

    An order for discovery enabling the applicant to precisely plead the triable issues it wishes to agitate is just and appropriate;

    The applicant cannot at this stage seek an order for standard discovery pursuant to r 20.14 because the pleadings have not closed;

    An order for discovery will facilitate the just resolution of the proceedings quickly, inexpensively and as efficiently as possible, consistent with r 20.11 of the Rules and s 37M of the Federal Court of Australia Act 1976 (Cth); and

    The Court’s power to dispense with the Rules arises from r 1.34 (Eggerth v Piccardi [2015] FCA 977 at [8]).

7    In his affidavit affirmed 3 May 2017, Mr Tiley deposed as follows:

13.    Pursuant to the Court’s orders of 3 April 2017, the Applicant has prepared a draft Further Amended Statement of Claim (FASOC) and a draft Amended Originating Application. Annexed to this affidavit and marked LMT5 is a copy of the FASOC.

14.    In relation to several of the critical deficiencies identified in the ASOC at first instance and on appeal, I am instructed that the applicant remains in a position where it does not know certain necessary facts in order to re-plead the ASOC. Those matters are identified in the FASOC.

15.    The applicant requires discovery in order to ascertain the facts necessary to enable it to re-plead the ASOC to address the matters raised in the Judgments, particularly the Strike Out Judgment. The applicant notes at [63] of the Full Court Judgment, the Full Court suggested potential resort to an application for discovery under Rule 20.13.

8    Mr Tiley annexed to that affidavit correspondence between the applicant’s solicitors and lawyers for the respondents sent in November 2016. He gave evidence to the effect that all respondents declined to consent to discovery as an alternative to the appeal to the Full Court proceeding, and that through their lawyers the respondents again in March 2017 refused to consent to discovery.

9    In his affidavit affirmed 28 August 2017 Mr Tiley deposed that he had received correspondence from the lawyers for the respondents explaining why the respondents opposed the categories of discovery proposed by the applicant. That correspondence was annexed to the affidavit.

10    The first and second respondents submitted, in summary:

    Orders 1 and 2 should be heard together;

    This was not an application for discovery in the ordinary course. The applicant effectively assumes an entitlement to discovery in [64] of the Full Court’s judgment, whereas the correct approach is to ask why they should have discovery at all at this point of time when the pleadings have not opened;

    The proceedings are a long way from the point where an application for discovery in the ordinary course could ever be justified;

    Even if the Court found in favour of the applicant and dispensed with compliance with r 20.13 of the Rules pursuant to r 1.34, the next question is whether any discovery should be ordered;

    This is not an occasion for the applicant to conduct a fishing expedition to see whether it in fact has a case, or whether it might possibly be able to widen its case; and

    The ultimate question is whether the applicant should have the necessary dispensation and, if so, on what terms.

11    The first and second respondents relied on an affidavit of Ms Tamara Lutvey, a lawyer with Ashurst Australia acting on behalf of the first and second respondents. In this affidavit sworn 13 September 2017, Ms Lutvey deposed, in summary:

    Within the scope of the documents sought by the applicant there could be documents in respect of which the first and second respondents would be entitled to claim privilege;

    Documents are kept by the first and second respondents in a variety of forms including emails and other electronic documents, soft copies of documents stored on central electronic document databases, soft copies of documents kept on individual staff members’ computers, and hard copy documents and records;

    Documents relevant to the applicant could be at five individual sites;

    The practice of the first and second respondents is that emails are automatically archived six months after the date the email was sent or received, and archived emails can only be retrieved by third party expert PwC;

    A comprehensive search of the documents in the possession of the first and second respondents to identify any documents that may be relevant to the application would involve:

    Engaging PwC to search for and, where necessary, restore all relevant electronic records from the exchange server used by the first and second respondents;

    Engaging PwC to complete a search of individual staff members’ computers at the Brisbane head office and at each of the Mines for soft copies of documents saved “locally” on their computers;

    Arranging for electronic searches to be conducted of documents stored on central electronic document repositories/databases; and

    Arranging for physical searches to be conducted of all files held at the Brisbane head office and at each of the Mines.

12    Ms Lutvey gave further evidence as to the complexity and likely high cost of the task the first and second respondents would face if discovery were ordered against them in the terms sought in the interlocutory application. In particular Ms Lutvey deposed:

13.    In order to identify any relevant electronic records, the Search Criteria to be given to PWC would need to:

(a)    specify a date range:

(i)    For categories 1, 3, 12 and 13 of Annexure 1 to the Application, a date range of 1 January 2015 to 18 August 2015 would be required; and

(ii)    For categories 2, 4, 5, 6 and 7 of Annexure 1 to the Application, a date range of a number of months would be required. For example, a date range of approximately eight months would be from 1 January 2015 to 18 August 2015 inclusive; and

(iii)    For categories 8, 9, 10 and 11 of Annexure 1 to the Application, a date range of 21 August 2015 to 31 December 2015 would be required.

(b)    name all relevant authors whose mailboxes and computers are to be searched; and

(c)    specify key words, which would need to include a number of very frequently used words, including the names of all four Mines and words such as “contract”, “offer”, “lower cost”, “arrangement”, “understanding”, “decision”, “replace”, “drill”, “blast”, “maintenance”, “pre-strip”, “redeployment” I “redeploy”, “transfer”, “redundancy”/ “redundancies”, “contractor”, “termination” and “surplus”.

14.    I am informed by Ms Gamble and believe that there are approximately 150 employees who may possibly have had some involvement with the matters the subject of categories of documents sought by the Applicant and therefore whose mailboxes and computers would need to be searched.

15.    I am informed by Ms Gamble and believe that she estimates, based on using Search Criteria similar to that described in paragraph 13 above, it would likely take:

(a)    approximately two business days to complete a search of all relevant electronic records from the exchange server used by BHP and BMA; and

(b)    approximately an additional 50 business days after the completion of the search to process (ie extract, restore and generate) the electronic records returned by the search.

16.    Further time would also be required to search central document repositories I databases and individual staff members’ computers at the Brisbane head office and at each of the Mines for soft copies of documents saved “locally” and to process the results of those searches. Based on the estimate at paragraph 13(b) above that there are over 150 relevant custodians, I am informed by Ms Gamble and believe that:

(a)    it could take anywhere between a number of days and a number of weeks or months in order to search central document repositories / databases and to process the results of those searches; and

(b)    there would be at least approximately 150 individual computers that would be required to be searched as part of this process. It would take between approximately 25 to 30 business days in order to search the individual computers and to process the results of those searches.

17.    I am informed by Ms Gamble and believe that the approximate cost of PWC conducting this process in accordance with the search terms, date ranges and authors identified in paragraph 13 would likely be as follows:

(a)    engaging PWC to undertake searches of all relevant electronic records from the exchange server used by BHP and BMA and to process the results of those searches would likely be between approximately $120,000 and $170,000;

(b)    engaging PWC to undertake searches of central document repositories/ databases and to process the results of those searches would likely be between approximately $70,000 and $160,000; and

(c)    the likely cost of engaging PWC to complete searches of individual staff members’ computers and to process the results of those searches would be between approximately $80,000 and $85,000.

18.    Based on the estimates set out in paragraph 17 above and the estimates of the number of total authors and computers to be searched in paragraphs 13 and 16 above, I am informed by Ms Gamble and believe that she estimates that the total cost of engaging PWC to search for and process all relevant documents could potentially be between approximately $270,000 and $415,000. This estimate does not take into account any storage costs associated with the collection, processing and storage of the data returned by the relevant searches, or any travel costs associated with engaging PWC to conduct searches of individual staff members’ computers at the Mines (if required).

19.    Based on my experience outlined above, I believe that completing a search conducted using Search Criteria similar to that described in paragraph 13 above would likely return a very large number of electronic documents, likely numbering into the many tens of thousands.

20.    Each of the documents returned by any such search would then need to be reviewed by lawyers for the First and Second Respondents for relevance and to determine whether any documents are subject to privilege.

21.    It takes approximately eight hours for one lawyer to complete a preliminary review of approximately 500 documents. This is so even if the majority of the documents are not, in fact, relevant and discoverable.

22.    If, for example, only 50,000 documents were returned by any such search, it would take one lawyer approximately 100 days, or four lawyers approximately 25 days each, based on working 8 hours per day, to complete a preliminary review of the documents.

23.    I am informed by Ms Gamble and believe that in order to identify any relevant hard copy records (including any diary notes of the authors identified in paragraph 14 for the time period specified in 13(a)), the First and Second Respondents would also need to arrange for physical searches to be conducted of all files held at the Brisbane head office and at each of the Mines. I am informed by Ms Gamble and believe that this process would require significant numbers of staff at each of the Mines and the Brisbane head office to be assigned full -time to the task, rather than their normal duties, and would take at least two (2) months to complete.

24.    I am also informed by Ms Gamble and believe that in addition to the approximately 150 employees identified in paragraph 14, there are an additional approximately 800 employees who may have had communications relevant to the matters the subject of categories of documents sought by the Applicant. Based on the estimates outlined in paragraphs 15 to 18 above, I believe that searching the mailboxes, computers and electronic databases of those approximately 800 additional employees would take an inordinate amount of time and would involve exorbitant costs.

13    Finally, Ms Lutvey gave evidence that if the categories of documents were limited in the manner contended for by the first and second respondents, the burden of compliance, while still significant, would be greatly reduced. In particular Ms Lutvey deposed:

(a)    Even though the specific key words would still include frequently used words:

(i)    The date range would be limited to searches for documents between 17 April 2015 and 18 August 2017; and

(ii)    The names of all relevant authors would be significantly reduced to a total of approximately 14 management, senior management and support function personnel;

(b)    On the basis of only approximately 14 relevant authors, it would take approximately half of a business day to complete a search of all relevant electronic records from the exchange server used by BHP and BMA. It would then take approximately an additional five (5) business days after the completion of the search to process (ie extract, restore and generate) the electronic records returned by the search.

(c)    On the basis of only approximately 14 relevant authors, there would only be approximately 14 individual computers to be searched, which would take approximately 10 business days to search and to process the results of those searches;

(d)    It would take anywhere between approximately a few days and a number of weeks or months to search central document repositories/ databases; and

(e)    The approximate total cost of PWC conducting this process in accordance with the search terms, narrowed date ranges and narrowed authors could potentially be between approximately $34,000 and $52,000:

(i)    Between approximately $10,000 and $15,000 to undertake searches of all relevant electronic records from the exchange server used by BHP and BMA and to process the results of those searches;

(ii)    Between approximately $17,000 and $19,000 for engaging PWC to complete a search of individual staff members’ computers and to process the results of those searches; and

(iii)    Between approximately $7,000 and $18,000 for engaging PWC to undertake searches of central document repositories I databases and to process the results of those searches.

14    Ms Lutvey concluded:

26.    Based on my experience outlined above, while I believe that completing a search conducted using Search Criteria similar to that described in paragraph 25 above would still likely return many thousands of electronic documents, I believe there will be significantly less documents returned for manual review as a result of such a search as compared to the search that would be required in order for the First and Second Respondents to comply with the proposed orders for discovery contained in the Application.

15    The respondents made separate submissions concerning each category of discovery sought by the applicant. However the first and second respondents accepted that an order for limited discovery could be made.

16    The third and fourth respondents relied on affidavits of lawyers Mr Nicholas Le Mare and Mr Ian Briggs. Mr Briggs, the Chief Legal Counsel of the third respondent, made his affidavit in response to the interlocutory application and in support of the orders proposed by the third and fourth respondents as to confidentiality and redaction of documents.

17    The third and fourth respondents submitted that if any order for discovery was made, they would seek an express confidentiality undertaking. I understand that the question of confidentiality had been resolved between these respondents and the applicant, and therefore no orders were sought from the Court regarding confidentiality. However, I will return to this issue later in the judgment.

18    I understand that the first and second respondents reserved their position on confidentiality pending orders by the Court about discovery, and to that extent sought liberty to apply.

Consideration

19    Rule 20.13 of the of the Federal Court Rules 2011 (the Rules) provides:

20.13    Application for discovery

(1)    A party may apply to the Court for an order that another party to the proceeding give discovery.

(2)    The application must state:

(a)    whether the party is seeking standard discovery; or

(b)    the proposed scope of the discovery.

(3)    An application may not be made until 14 days after all respondents have filed:

(a)    a defence; or

(b)    an affidavit in response to the affidavit accompanying the originating application.

(4)    The Court may order that discovery be given by an electronic means.

(5)    If a party who is required to give discovery wants an order under paragraph 43(3)(h) of the Act, the party must file an affidavit stating:

(a)    the orders sought; and

(b)    the party’s calculation of the cost of making discovery; and

(c)    why the orders should be made.

Note:    Section 43 of the Act provides for the Court or a Judge to do any of the following in relation to discovery:

(i)    order the party requesting discovery to pay in advance for some or all of the estimated cost of discovery;

(ii)    order the party requesting discovery to give security for the payment of the cost of discovery;

(iii)    make an order specifying the maximum cost that may be recovered for giving discovery or taking inspection.

20    Rule 20.15 provides that a party can seek an order for discovery other than standard discovery. The applicant seeks discovery pursuant to that rule. Rule 20.15(3) provides that where a party seeks more extensive discovery than is required under r 20.14 the application must be accompanied by an affidavit stating why the order should be made. The applicant relies on affidavits of Mr Tiley for this purpose.

21    The interlocutory application was brought pursuant to r 1.34 of the Rules which permits the Court to dispense with compliance with any of the Rules either before or after the occasion for compliance arises. Rule 1.34 recognises the general proposition that:

… the relation of rules of practice to the work of justice is intended to be that of handmaid rather than mistress, and the Court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case

Re Coles & Ravenshear [1907] 1 KB 1 at 4; see also Gummow and Hayne JJ in Jackamarra v Krakouer (1998) 195 CLR 516 at [66].

22    Applications for discovery by parties to litigation pursuant to rr 20.13 and 20.15 are not uncommon. I note that applications for preliminary discovery pursuant to Div 7.3 of the Rules are also not uncommon. The uncommon feature of this case is that a substantive application has been filed, the respondents are identified, and the applicant seeks non-standard discovery prior to the opening of the pleadings to assist it to properly frame its pleadings. As the respondents correctly submitted, the pleadings have barely opened, much less closed.

23    Fundamentally, the interlocutory application raises two intertwined questions. First - should the Court relieve the applicant of the obligation to comply with r 20.13(3) in the circumstances of this case and allow the applicant to discover documents of the respondents before the pleadings have closed? Second – should the Court order discovery of the categories of documents sought by the applicant?

24    Principles relating to applications for discovery under the Rules are well-settled. Historically, discovery has been recognised as an invasive procedure, aiding in the determination of litigation on merits rather than by ambush and surprise (Austal Ships Pty Ltd v Incat Australia Pty Ltd (2009) FCA 368 at [129] per McKerracher J; BrisConnections Finance Pty Limited (Receivers and Managers Appointed) v Arup Pty Limited [2015] FCA 1077 at [12] per Flick J). As Gleeson J explained in Rinehart v Rinehart (No 2) [2015] FCA 339 at [36] – another case in which a party sought an order under r 1.34 referable to the time requirements in r 20.13(3) – the Court will not order discovery as a matter of course unless discovery is necessary for the determination of issues in the proceeding: Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd (No 4) [2013] FCA 1044 at [33]; Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462; (2014) 232 FCR 560 at [92]. This principle is recognised in r 20.11 which provides that a party must not apply for an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible.

25    In circumstances where the Court orders a party to give standard discovery pursuant to r 20.14 the primary issue is one of relevance – namely documents which are relevant to the issues raised by the pleadings or in the affidavits. However r 20.15 permits a party to seek an order for discovery other than standard discovery, including by reference to categories of documents, provided that the application for discovery is accompanied by an affidavit stating why the order should be made. The Court is not required to make orders for non-standard discovery under r 20.15, and is further not required to relieve an applicant for discovery from the requirement imposed by r 20.13 unless satisfied that it is appropriate to do so.

26    Paragraphs 28B, 29, 29A, 29G, 29H, 29I, 29J, 30, 33A, 33B, 42 and 42A of the draft further amended statement of claim (FASOC) annexed to the first affidavit of Mr Tiley refer to the applicant’s claimed inability to finalise the statement of claim without further discovery. In summary:

    At [28B] the applicant proposes to plead that the second respondent was approached by the third and fourth respondents (collectively: Downer) with a proposal to do the relevant work instead of the first respondent at a lower cost. Paragraph 28B particularises a consultation meeting held on 21 August 2015 in an approach was discussed. The applicant states that it is unable to provide further particulars of Downer’s approach to the second respondent and proposal, including the identity of the persons involved, until after discovery.

    At [29] the applicant proposes to plead that in the period prior to 18 August 2015 the second respondent and Downer entered into “the Arrangement” as defined, however the applicant is unable to provide further particulars until after discovery.

    At [29A] the applicant proposes to plead the terms of the Arrangement, however is unable to provide further particulars until after discovery.

    At [29G] the applicant proposes to plead that in or about November and December 2015 the second respondent determined that 46 employees would be dismissed, 63 employees would be transferred to other mines, and 100 employees would be redeployed to other roles within the mine, however further particulars would be supplied after discovery

    At [29H] the applicant proposes to plead that the first respondent acted in accordance with this determination of the second respondent, however further particulars would be supplied after discovery

    At [29I] the applicant proposes to plead that the first respondent acted in accordance with this determination of the second respondent at its direction, request or advice. There is some particularisation of this claim however the applicant states it is unable to provide further particulars until after discovery.

    At [29J] the applicant proposes to plead that, at the direction of the second respondent, from about December 2015 the first respondent ceased to provide employees to the second respondent to perform the work. There is some particularisation of this claim however the applicant states it is unable to provide further particulars until after discovery.

    At [30] the applicant proposes to plead that, pursuant to the arrangement and contracts, from about December 2015 Downer provided its employees to perform the work, however further particulars would be supplied after discovery.

    At [33A] the applicant proposes to plead that, by reason of the matters referred to in paragraphs 14, 28B, 29, 29A, 29B, 30 and 30A, in and after August 2015, Downer had certain knowledge. There is some particularisation of this claim however the applicant states it is unable to provide further particulars until after discovery.

    At [33B] the applicant proposes to plead that a substantial and operative reason for the second respondent doing the things referred to in paragraph 33A(a)-(e) was that Downer would perform the work at a lower cost than the first respondent, and that in turn this was because the first respondent was bound to pay employees remuneration under the BMA Agreement which provided higher remuneration. The applicant particularises that this knowledge is to be inferred from the matters referred to in paragraphs 18-28, 28B, 29, 29A, 29B, 29C, 30 and 30A, however the applicant states it is unable to provide further particulars of Downer’s knowledge and which of Downer’s servants or agents had the knowledge until after discovery.

    Under the heading “Accessory liability of Downer”, at [42] the applicant proposes to plead that, by reason of matters referred to in paragraphs 14, 28B, 29, 29A, 29B, 30 and 30A, in and after August 2015 Downer had certain knowledge, however the applicant states it is unable to provide further particulars until after discovery.

    Again under the heading “Accessory liability of Downer”, at [42A] the applicant proposes to plead that Downer had certain knowledge in and after August 2015 referable to action to be taken by the second respondent to direct, request or advice the first respondent. The applicant states it is unable to provide further particulars of Downer’s knowledge and which of Downer’s servants or agents had the knowledge until after discovery

27    I consider it appropriate that, pursuant to r 1.34, the Court should relieve the applicant of the time requirements imposed by r 20.13(3) and grant discovery at this point of the proceedings.

28    First, the applicant submitted that it cannot properly plead its case in relevant respects without discovery. This is because the details of events central to its case, and which could be the subject of requests for particulars by the respondents, are outside its knowledge.

29    I note the submission of the first and second respondents that this is not an occasion for the applicant to conduct a fishing expedition to see whether it has a case, or whether it might possibly be able to widen its case. In my view this is a powerful point, relevant to the case to be met by all respondents. Where claims are essentially speculative in nature the Court will not order discovery in order to assist the applicant in a fishing exercise: Carmody v McKellar (1996) 68 FCR 265 at 280; Bailey v Beagle Management Pty Ltd [2001] FCA 60; (2001) 105 FCR 136 at [13]; Jilani v Wilhelm [2005] FCAFC 269; (2005) 148 FCR 255 (Jilani) at [108]. So, for example, where an applicant has made bare allegations without the necessary basis to support them and it is plain that it hopes to find something on discovery which will enable it to support the existing allegations, or perhaps to raise new ones, it is likely that the Court will find the application to be in the nature of fishing: Jilani at [113].

30    However overall I am satisfied that the purpose of the application is not fishing, or an exercise by the applicant to ascertain whether it has a case. As appears from the FASOC, the applicant has a case. The FASOC pleads facts of substance, beyond mere allegations. An example is in paragraph 28B of the FASOC where the applicant pleads that in the period prior to 18 August 2015 the second respondent was approached by Downer, and refers in particulars to a consultation meeting on 21 August 2015 between Mr Frans Knox, the General Manager of the Blackwater coal mine, and employees where Mr Knox stated that:

Downers came to us and said they can make a step change in productivity performance for us, in pre-strip and the package that goes with that in maintenance as well as the drilling and blasting, that will guarantee – are guaranteeing us a performance outcome and a low cost.

31    Other examples are pleadings of fact in paragraph 29B by reference to specific contracts and their dates; communications identified in paragraphs 29C, 29D, 29E, and events identified in paragraphs 29G and 29H.

32    In substance, the applicant seeks discovery at this stage to refine its case, rather than validate it.

33    Second, I consider the present circumstances to be apt for the exercise of the Court’s discretion pursuant to r 1.34. Deficiencies in the applicant’s pleadings were identified in my earlier judgment in this matter, and in the decision of the Full Court. I have previously expressed the view that the applicant raises triable issues in its draft pleadings - this view remains unchanged. While the observation of the Full Court at [64] of its decision did not constitute a direction to entertain an application for discovery, nonetheless it is apparent that the Full Court considered this case one susceptible to the proper filing of an interlocutory application of the kind before me.

34    Third, the benefits in facilitating the just resolution of proceedings as quickly, inexpensively and efficiently as possible, recognised by r 20.11 of the Rules and s 37M of the Federal Court of Australia Act 1976 (Cth), apply in this case. The proceedings have already been the subject of delay because of difficulties associated with the pleadings. The purpose of the orders sought by the applicant is to assist it to complete the FASOC. I note that, during the hearing, Counsel for the first and second respondents informed the Court that, in the event that the Court refused the application for discovery, they would be in a position to plead to the FASOC in its current form without the need to seek further particulars (transcript p 32 ll 20-36). This may be so. However while the capacity of the respondents to plead to the current FASOC is relevant to the expeditious determination of the proceedings, it does not necessarily mean that such determination would be just from the perspective of the applicant. In the circumstances of this case, there are likely efficiency gains in progressing this litigation by making discovery available now.

35    Having said that, I have concerns about the burden the categories of documents sought by the applicant will place on the respondents at this stage of the proceedings. I am mindful that the applicant seeks discovery at this stage to enable it to properly plead the case it wishes to plead. To that extent I am concerned at the breadth of documentation sought by the applicant for that purpose.

36    As the third and fourth respondents correctly submit, discovery based on the applicant’s “substantive case” involves discovery that is more extensive than standard discovery under r 20.14, which only provides for discovery of documents directly relevant to issues raised by the pleadings or in affidavits. Because the pleadings are not finalised, it is possible that the applicant will seek further discovery depending on the scope of the finalised statement of claim, requiring further expense and time to be incurred by the respondents at a later date in respect of searches for different documents.

37    Further, I am concerned at the significant time and expense the accumulation of documentation currently sought by the applicant to finalise its statement of claim will require of the respondents. I note in particular the evidence of Ms Lutvey in respect of the first and second respondents. To that extent there is a real prospect that orders in the terms sought by the applicant are oppressive to the respondents.

38    In dealing with these issues the applicant relies on observations of Siopis J in Galati v Potato Marketing Corporation of Western Australia (No 2) [2007] FCA 919 at [59]. His Honour considered the meaning of Order 15 rr 2(3) and 2(5) of the Federal Court Rules (as they then were) which provided as follows:

(3)    Without limiting rule 3 or 7, the documents required to be disclosed are any of the following documents of which the party giving discovery is, after a reasonable search, aware at the time discovery is given:

(a)    documents on which the party relies; and

(b)    documents that adversely affect the party’s own case; and

(c)    documents that adversely affect another party’s case; and

(d)    documents that support another party’s case.

…

(5)    For subrule (3), in making a reasonable search, a party may take into account:

(a)    the nature and complexity of the proceedings; and

(b)    the number of documents involved; and

(c)    the ease and cost of retrieving a document; and

(d)    the significance of any document likely to be found; and

(e)    any other relevant matter.

39    In the course of examining an application for discovery, his Honour noted:

11    In its list of discovered documents, which was verified by an affidavit sworn by Mr John Dawson, the respondent’s Chief Executive Officer, on 25 September 2006, the respondent identified in Pt 3 of the First Schedule to the list, a number of categories of documents in respect of which it had not undertaken a search. Mr Dawson deposed that the respondent has not conducted a search of those categories because of the burden thereby imposed. The respondent, he said, had 11 full-time employees, and he believed that there were in the order of 100,000 documents that would need to be searched in relation to several of the categories identified. Mr Dawson went on to say that given the number of employees that the respondent has and the volume of documents to be searched, it would be necessary to engage external assistance to carry out this task. Accordingly, said Mr Dawson, he believed a search for those documents would be “very onerous, time consuming and expensive”.

40    Relevantly, his Honour continued:

59    Firstly, the evidence of Mr Dawson demonstrates that he appears to have misapprehended the nature of the search which needs to be carried out under the Rules, namely, a reasonable search. This is demonstrated particularly by his statement that in order to conduct a search in respect of the documents relating to the respondent’s threats in February 2006 to cancel the first and second applicants registration and permits respectively, it would be necessary to review “all documents” to confirm that there was only one document which related to this category. No explanation is given in Mr Dawson’s affidavit as to why it would be necessary to review documents going back to 2003, or the files of unrelated growers, in order to confirm whether documents exist in relation to an event which occurred in February 2006 and did not affect other growers.

60    Secondly, Mr Dawson’s affidavit does not disclose the internal processes adopted by the respondent when making a decision to refuse an application for an area licence or any of the other licences referred to in category [12(a)]. Nor does it disclose the processes adopted by the respondent in response to the circumstances described in [12(c)]; nor in relation to deciding on the appropriate response to breaches or suspected or reported breaches of s 22 of the MOP Act…. However, there is no evidence from Mr Dawson of having had, or attempting to have, specific discussions with Mr Hegarty or Mr Dickson as to the likely whereabouts of relevant documents within the respondent’s filing system with a view to avoiding the need to search all the documents; or if such discussions did take place, why neither Mr Hegarty nor Mr Dickson was unable to assist Mr Dawson in identifying measures to narrow the scope of the search. On Mr Dawson’s evidence, Mr Hegarty is a current employee of the respondent. In my view, inquiries of this nature would be made by a party conducting a reasonable search of the documents in its custody or possession. In the absence of evidence of such inquiries having been made, I am unable to conclude that a reasonable search for the documents in categories [12(a)] to [12(e)] above, would of necessity require a search of all the respondent’s documents, and would result in so burdensome a task for the respondent that it outweighs the forensic utility to the applicants in discovery being given of the relevant documents.

(Emphasis added.)

41    In this context, in relation to Ms Lutvey’s affidavit the applicant submitted in summary:

    Ms Lutvey or her informant should have spoken to the management people at BMA who are identified in the FASOC as having been the people who announced the arrangement to the workforce and seemed to have had a role in the implementation of the arrangement, and should have asked them about the location of various of the categories of documents the applicant was pursuing. The outcome of that inquiry would have provided a basis for the court to make an informed decision about the true level of oppression, if any, which was imposed on the respondent by these categories of documents;

    Ms Lutvey’s affidavit is general in nature, particularly in light of the fact that different categories of documents will be limited. The applicant gives, as an example, categories 9-11 which relate to employees who were retrenched or moved. The applicant submits that, as a matter of common sense, it could be assumed that someone in the first and second respondents knows the identity of these people, and could provide a list of them, and to that extent it would be unnecessary for a third party such as PwC to be engaged.

    Examining each category of discovery in turn, there was no explanation of any inquiry of the likely persons who would have been involved in these communications, and it is reasonable to assume that these communications would have been between a relatively limited number of people on both sides.

42    The principle of a “reasonable search” in Order 15 r 2 was replicated in r 20.14 of the Rules as they now are. It is incorporated into non-standard discovery by r 20.15(1)(a): see Shoreform (Qld) Pty Ltd v Millenium Coal Pty Ltd [2013] FCA 645 at [18]. To that extent respondents against whom orders are made for non-standard discovery pursuant to r 20.15 are required to conduct reasonable searches to locate documents.

43    However as Counsel for the first and second respondents correctly submitted at the hearing, the respondents are required to address categories of documents in the form those categories are expressed. In particular I note the following submission:

Inferences about how many people – about the limited number of those people, and to apply tests so indistinct and foreign to the law and practice of this court as people “involved in a primary sense” in those events; or people who “announce those events”; or to people who “had a role in their implementation”. What do they mean, we ask rhetorically, and how could a solicitor apply tests so indistinct to eventually put themselves in a position to give a certificate of the kind that discovery requires. We take these categories on their face. For example, if one looks at category 13, where our learned friend’s submissions on this point concluded:

Any document in the relevant period recording, containing or evincing any communication between any person at BMA and any person at Downer referring to five distinct subject matters.

Any reference in any such communication to examination by BMA of ways to reduce costs at the mine would be included. If an employee or agent of BMA wrote to Downer and said, “I think we could save a little money if we used this machine in a particular way, rather than that way” – any suggestion to that kind would be caught. We can only deal with the categories that are proposed to us and the - when we make an assessment, as Ms Lutvey has done, of the time, trouble and expense that would be occasioned to search for those documents.

(Transcript p 35 ll 27-46)

44    In my view this submission accurately and succinctly rebuts the submission of the applicant that the task of the respondents in discovering documents described in the thirteen categories is simple and straightforward.

45    I find that, contrary to the submission of the applicant, Ms Lutvey did turn her mind to the question of whose documents would need to be searched in order to respond to the discovery that had been sought across the thirteen categories. In particular I note paragraph 14 of her affidavit, in which Ms Lutvey referred to information received from Ms Kristin Gamble (Manger Legal – Employee Relations of BHP Legal) to the effect that there were approximately 150 employees who could possibly have had some involvement with the matters the subject of categories of documents sought by the applicant. This evidence is unchallenged.

46    Ms Lutvey also gave evidence that emails in all exchange server mailboxes used by the first and second respondents are automatically archived six months after the date the email was sent or received and would require an expert such as PwC to retrieve it. This evidence is unchallenged. Even if the applicant is correct in submitting that only a limited number of people would have been involved in relevant communications, this supposition does not appear to address the fact that the retrieval of emails from the dates sought by the applicant would require time-consuming and expensive expert assistance.

47    Finally I note that, unlike the deponent whose evidence was considered by Siopis J in Galati, Ms Lutvey is a solicitor acting for the first and second respondents, giving evidence of the steps that would be required to legally comply with proposed orders set out in the interlocutory application. There is nothing before me to indicate that Ms Lutvey “misapprehended the nature of the search which needs to be carried out under the Rules, namely, a reasonable search”. Not only is her evidence unchallenged, I consider it should be given considerable weight in these circumstances.

48    So far as the first and second respondents are concerned, I consider that the categories of documents sought by the applicant are burdensome on them, and oppressive. However I note that, while the first and second respondents oppose the application for discovery in total, they nonetheless accept that an order for discovery could be made in the following terms:

Within 60 days of the date of this order, the First and Second Respondents provide discovery of documents in the period 17 April 2015 to 18 August 2015, recording or containing or evidencing any arrangement between Downer and BMA relating to the Blackwater Mine that Downer would replace BHP Coal in doing the Work at a lower cost to BMA than BHP Coal (the Arrangement).

49    The rationale of the first and second respondents for limiting discovery in this fashion, and from 17 April 2015 to 18 August 2015, is that:

    The Downer EDI Mining Blasting Services Queensland Coal Greenfields Agreement 2015 (Downer Blasting Agreement), being an enterprise agreement applicable to blast crew, operators and leading hands engaged by Downer Blasting at the Blackwater Mine, came into operation on 17 April 2015. This is set out at paragraph 25 of the FASOC. Paragraph 22 of the FASOC pleads a later enterprise agreement approved by the Fair Work Commission on 1 July 2015 (the Downer EDI Mining Blackwater Mine Enterprise Agreement 2015).

    It follows that 17 April 2015 was the earliest date from which Downer might be expected to have made a proposal to the second respondent.

    The premise of the applicant’s case is that, because it was able to pay lower rates as a result of the enterprise agreement it had with its employees, Downer was able to make the proposal that it alleged that it did.

    The applicant has not explained how Downer could have made such a proposal unless and until the enterprise agreements came into operation.

50    While the third and fourth respondents make specific submissions referable to categories of documents, they adopt the response of the first and second respondents as to an acceptable draft order for discovery and the relevant time frame, based on the fact that any potential liability of the third and fourth respondents is as accessories based on the alleged knowledge of the conduct of the second respondent.

51    The applicant resists limitation of the time frame of discovery as proposed by the respondents, on the basis that:

    there is no self-evident reason why proposals from Downer to the first and second respondents about doing the work more cheaply than the first respondent was necessarily commenced on the date when the relevant enterprise agreement was approved by the commission;

    dating the discovery time frame from 1 January 2015 allows a lead-in period into the events which happened in terms of the enterprise agreement, and then subsequently the consummation of the arrangement or understanding between Downer and the second respondent over the movement or the transfer of the work from one to the other;

    the discussions between Downer and the first and second respondents on this topic may well have predated the actual date on which the enterprise agreement was approved.

52    I am not persuaded by the submissions of the applicant on this point. In my view:

    1 January 2015 as nominated by the applicant is an arbitrary date. No facts are pleaded as relevant to that date, or as between 1 January 2015 and 17 April 2015;

    There is logic in the submissions of the respondents that, if there were communications between the parties, they would have commenced after the first enterprise agreement was approved on 17 April 2015 when the cost of labour employed by Downer was confirmed as lower; and

    There is force in the submission of Counsel for the third and fourth respondents that:

    the applicant seeks discovery in order to complete its pleading;

    the pleading that has been put forward refers to a lower cost;

    the lower cost appears from the approved enterprise agreements; and

    anything in respect of anterior discussions is not in the FASOC, is purely speculative on the part of the applicant, and is not relevant to issues of discovery in this case.

53    It follows that I am not prepared to make orders for discovery of the thirteen categories of documents sought by the applicant in its interlocutory application. I am, however, prepared to make an order for discovery in the terms advanced by the respondents.

Conclusion

54    As I noted earlier in this judgment, I understand that the third and fourth respondents at one point sought confidentiality undertakings from the applicant in respect of discovered documents, as well as redaction in respect of irrelevant or privileged material. I also understand that the third and fourth respondents may no longer be pressing for such qualifications on any discovery orders. However, I understand that the first and second respondents seek liberty to apply in respect of confidential undertakings in respect of their discovered documents.

55    While I will order that the respondents provide discovery of the documents in the terms they proposed, I will hear the parties as to the precise terms of that order.

Associate:

Dated:    19 December 2017

SCHEDULE OF PARTIES