Bloom v Legend Corporation Pty Ltd

1. The interlocutory application filed by the applicant and dated 26 April 2022 is dismissed.
2. The applicant must pay the respondent's costs of the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

JACKSON J: 1 The applicant, Mr Bloom, seeks an order of the kind often associated with Sabre Corporation Pty Ltd v Russ Kalvin's Hair Care Company (1993) 46 FCR 428, requiring the respondent to make inquiries concerning allegedly relevant documents that may be in the possession, power or control of a third party. 2 In this proceeding, Mr Bloom is pursuing the respondent for damages for what he alleges are catastrophic injuries he suffered as a result of breaches of the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)). The respondent was in the business of importing cable ties into Australia which were branded as Cabac Cable Ties. Mr Bloom alleges that he acquired a pack of the Cabac Cable Ties (subject cable ties), on which it was represented that they had a minimum strength of 22.2 kilograms. Mr Bloom's claim is that on 22 December 2014, when he was on a ladder installing Christmas lighting, he tried to fasten a subject cable tie to secure an electrical extension cord to a metal roof batten in a carport. He alleges that the subject cable tie snapped, causing him to lose balance and fall off the ladder, suffering, as I have said, catastrophic injuries, including tetraplegia. 3 Mr Bloom's allegation is that he relied on the strength of the subject cable tie that snapped, which he says would have withstood a force of at least 22.2 kilograms, had it been of acceptable quality, grade or composition. He alleges that the subject cable tie which snapped and is said to have caused him to lose balance did not have that minimum strength. 4 Mr Bloom claims that these circumstances were materially contributed to by the respondent's breaches of various provisions of the ACL, including: s 18, prohibiting misleading or deceptive conduct; s 29, prohibiting false or misleading representations in connection with the supply of goods; s 33, prohibiting misleading conduct as to the nature of goods; s 54, providing a statutory guarantee that goods are of acceptable quality; and s 138, which provides that a manufacturer of goods is liable to compensate an individual if the manufacturer supplies goods in trade or commerce, and the goods have a safety defect, and the individual suffers injuries because of the safety defect. 5 The allegations of breach of these provisions are broadly denied by the respondent, save that the respondent does admit that because it imported cable ties, including the subject cable ties, into Australia, it comes within the meaning of the term 'manufacturer', as defined in s 7 of the ACL, which includes at s 7(1)(e): a person who imports goods into Australia if: (i) the person is not the manufacturer of the goods; and (ii) at the time of the importation, the manufacturer of the goods does not have a place of business in Australia. 6 While evidence as to the identity of the actual manufacturer of the subject cable ties has not been produced to the Court, counsel for the respondent gave the name of that manufacturer as Jet Success/Hua Wei Industrial Co Limited. 7 The interlocutory application seeks discovery of a variety of documents concerning the process used by the manufacturer of the subject cable ties, including quality control records in relation to that manufacturer. The applicant's wish to obtain discovery of documents of that kind principally arises because of the content of an expert report the applicant has filed, being a report of Dr Duane Priddy of Plastic Failure Labs. Dr Priddy has extensive experience in relation to the science of plastics. He has expressed the opinion that the subject cable tie which is alleged to have snapped was defectively manufactured as it was not uniform in its composition. He bases this principally on his microscopic examination of the surface of the alleged subject cable tie, as compared with fracture surfaces of other cable ties which were snapped under laboratory conditions. 8 After expressing that opinion in his report dated 19 November 2021, Dr Priddy goes on to indicate more testing which, in his opinion, is required in order to achieve a 'higher level of certainty regarding the cause of embrittlement of the material in the core of Incident Tie #2'. Dr Priddy then states that '[i]t would be very helpful to know' various details and results which correspond to the bulk of the list of documents or information that are sought in the interlocutory application. The balance of that list appears to have come from an email from another expert, Dr John Scheirs, who, after having reviewed the list of information proposed by Dr Priddy, suggested a couple of additions in an email to Mr Bloom's solicitor, dated 22 April 2022. 9 The respondent opposes the application. The respondent accepts that if documents of the kind described in the application did exist, then they would be relevant to the issues in the proceedings, at least on the broader Peruvian Guano test of relevance that was traditionally applied in relation to discovery (Compagnie Financiére et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55). However, the respondent submits that there is no real evidence that documents of the kind sought in the application do exist. The respondent submits further that some of the information sought in the application does not identify any documents at all, but rather is in the nature of interrogatories. The respondent also submits that the applicant must establish by evidence that there is a real likelihood that if it did make request of the manufacturer, Jet Success, for documents of that kind, the manufacturer would provide access to the documents. 10 To demonstrate that the respondent has knowledge of the manufacturing methods of the subject cable ties, and so (potentially) has access to documents about those methods, Mr Bloom relies on correspondence which the respondent's solicitors sent to their own expert, Dr Armand Zurhaar, on 22 June 2016. Under cover of that correspondence, the respondent's solicitors said that they supplied to Dr Zurhaar for testing purposes: [Five] cable ties from another packet of cable ties manufactured by the same manufacturer using the same materials and the same production method together with a copy of the label of the packet from which they were taken[.] 11 Counsel for Mr Bloom points out that the cable tie bag supplied under cover of that statement says on its label that the cable ties were made in Thailand. The bag of subject cable ties including the one alleged to have snapped is marked as having been made in China. Mr Bloom submits that the respondent could only have said that the cable ties apparently manufactured in Thailand were manufactured using the same materials and the same production method as that of the subject cable ties if the respondent was aware of the manufacturing method which was used to produce the subject cable ties which appear to have been made in China. 12 I do not consider that that inference necessarily follows from the evidence on which the applicant relies. While one would expect that the solicitors for the respondent had a proper basis for making that statement in their letter to Dr Zurhaar, it is entirely unclear what that particular basis was in this case. It could, for example, have been based on brief instructions from their client, the respondent, who the solicitors reasonably expected to know what the manufacturing process was. But even that is speculation. In the end, the making of that statement in the letter does not reveal anything about the nature and extent of the respondent's knowledge of the manufacturing process that was used to produce the subject cable ties, let alone anything about the ability of the respondent to obtain documents that might pertain to that manufacturing process. 13 Counsel for the applicant frankly and properly accepted that there was no evidence that would enable her to submit that the respondent has possession, power or control of, or over, any of the documents now sought. While the application was, in form, an application for further discovery of documents which may be in the possession, custody or power of the respondent, it was confirmed in oral submissions for the applicant that in fact what the applicant seeks is a Sabre order. I have already indicated the basis on which the respondent opposes that order. 14 Relevant principles concerning when it is appropriate to make an order of that kind are set out in SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 2) [2006] FCA 931; (2006) 155 FCR 150 at [31]-[33], which have been applied by Le Miere J in Rafferty v Amaca Pty Ltd (Formerly James Hardie & Co Pty Ltd) [2017] WASC 18 at [62]-[68]. In SPI Spirits, Edmonds J said by way of obiter that for a Sabre order to be made there must be a real likelihood that the party who is to take steps to obtain access to and discover documents which are in the possession, power or control of a third party would be given access to the documents upon request: at [31]. His Honour said that this likelihood must be established by evidence, relying on Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [2002] FCA 581 at [8], [17]-[19]. Edmonds J would have dismissed the application for a Sabre order in SPI Spirits for the reason, among others, that in the case before him, the applicant for the Sabre order had made no attempt to establish that access to the documents would have been given. 15 The same may be said here. I was informed from the bar table by counsel for the respondent, and it was not contested by counsel for the applicant, that general discovery which has already been provided by the respondent includes discovery of documents concerning the purchase of the subject cable ties by the respondent, such as invitations to tender and/or purchase orders. Neither party referred me to any document in the nature of an agreement between the respondent and Jet Success which might impose obligations on the latter company to provide access to documents. There is simply no evidence as to the relationship between the respondent and Jet Success that existed at the time of the provision of the subject cable ties, let alone any evidence that any such relationship continues. So there is no basis for the Court to make any finding that if the respondent were to make inquiries of Jet Success, it is likely that access to any relevant documents would be provided. The probability of that is further weakened by the fact that the subject cable ties are likely to have been manufactured at least nine years ago now. Therefore, the first criterion outlined in SPI Spirits for the making of a Sabre order has not been fulfilled. 16 The second criterion in SPI Spirits is that there must be a likelihood that the documents sought are in fact in existence and in the possession of the third party. That criterion, as well, has not been fulfilled. Counsel for the respondent accepted that as a matter of common sense, it might be thought that some of the documents sought are in existence, or were at one time. He referred specifically to maintenance data records for equipment used in the manufacturing process and maintenance logs, as well as records of quality control tests and test frequency. But beyond that, there is no evidence that permits the Court to infer or conclude that the other documents sought are, in fact, in the possession of Jet Success. Counsel for the applicant properly accepted that. 17 A third requirement which can be derived from SPI Spirits is that the order in question must be in an appropriate form, which only requires the respondent to take reasonable steps to obtain access to the documents. That could, of course, be resolved in the drafting of the order. 18 It must be recalled that in Sabre the power to make orders of the kind sought is grounded in the Court's broad power under s 23 of the Federal Court of Australia Act 1976 (Cth) to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate in the circumstances of the proceeding. As Le Miere J said in Rafferty v Amaca at [62], the categories are not closed. The three matters derived from SPI Spirits, to which I have averted, should not therefore be taken to be some rigid list of rules which must be satisfied in all cases. 19 Nevertheless, the respondent submits that it should not be required to make inquiries of the kind sought unless those matters have been established. I accept that submission in the circumstances of this particular case. The power to make Sabre orders under s 23 of the Federal Court Act is not a power at large to authorise inquiries that could be beneficial to a party in a proceeding if they were to bear fruit. The powers of the Court should generally not be exercised if there is no evidence or other circumstance from which to expect that orders made pursuant to the exercise of those powers may have some utility. 20 In this situation, because of the absence of such evidence - in particular, any evidence as to the relationship between the respondent and the manufacturer, Jet Success - the applicant as the party moving for the exercise of the Court's coercive power has not made out an adequate case for it. I note, as well, as a matter relevant to the exercise of the discretion that, as I have outlined, the desirability of obtaining information of the kind sought was noted by Dr Priddy at the end of his discussion of further tests which in his view would give a higher level of confidence as to his conclusion. Dr Priddy does not, however, suggest that that information is in any way necessary for that further testing to be conducted. His wording was that the further information would be 'very helpful to know'. But he does not say the extent to which obtaining that information (or not) may bear upon his ultimate opinion. There is therefore not a strong case in any event for thinking that the information is essential to the proper presentation of the applicant's case. 21 For those reasons, the interlocutory application dated 26 April 2022 will be dismissed, with costs. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.