Procedure - Discovery and interrogatories - Interrogatories - Upon what matters - What questions disallowed - Irrelevance - Question whether document received and if so whether its contents were disputed - Whether failure to dispute capable of amounting to an admission as to a fact in issue.

Whiting v Whiting [1947] SASR 363; Wiedemann v Walpole [1891] 2 QB 534; Young v Tibbits (1912) 14 CLR 115, applied.

Judgment Number: [2007] TASSC 103

C B & M DESIGN SOLUTIONS PTY LTD (ABN 15 090 729 132) v PUMPTECH TASMANIA PTY LTD (ACN 101 091 187)

1 The plaintiff, Pumptech, sued the defendant, C B & M, for monies owing for equipment and materials supplied and work and labour done, by the plaintiff at the defendant's request, together with interest. Interrogatories (a second set) were administered by the plaintiff. The defendant objected to answering interrogatories 21 - 33. The Master ordered that they be answered and the defendant appealed.

2 It is convenient to deal in some detail with the issues surrounding interrogatory 21. The issues surrounding the other interrogatories are similar.

3 A total of $166,599.88 was claimed, made up of 12 separate amounts, some of which were claimed for equipment, materials and work done by the plaintiff at the request of the defendant in connection with the Kentish Council's sewage treatment plant at Sheffield. For example, by pars2 - 5 of the statement of claim, the plaintiff claimed that on or about 11 or 12 September 2003, the defendant, by its servants or agents, Vince Lamin and Drew McNeil, orally requested the plaintiff, through its director, Grant Petterwood, to install an ultra-violet disinfectant system at the plant, that the plaintiff did so on or about 13 September 2003, and that it rendered an invoice to the defendant for $1746.69, but the defendant failed to pay.

4 In its defence, par6, the defendant asserted that the plaintiff, the defendant and Testech Engineering Pty Ltd ("Testech") entered into a partly oral and partly implied agreement, by which they agreed to jointly tender for the upgrading of the council's Sheffield plant and if successful in that tender, to jointly undertake that upgrade. By par7, the defendant pleaded (inter alia) that it was an agreed term of the joint venture agreement that, in the event the joint tender was successful, the plaintiff would be responsible for the overall plant engineering design, installation and commissioning of a Testech Biojet System in the plant, that the plaintiff would install an ultra-violet disinfectant system in the plant and that the plaintiff would be paid for the design, installation and commissioning of the Testech Biojet System and the installation of the ultra-violet disinfectant system from an amount allocated by the plaintiff. By par8, the defendant pleaded that pursuant to the joint venture agreement, the plaintiff, Testech and the defendant tendered for the upgrading of the council's Sheffield plant. It was stated that the tender was in a letter from the defendant to Sinclair Knights Merz ("SKM") dated 30 October 2002, SKM's tender form of the same date and other identified documents. By par9, it was pleaded that the tender was successful, being accepted by the council in correspondence to the defendant dated 13 December 2002, correspondence from SKM to the defendant and a contract dated 9 January 2003. By par10, the defendant pleaded that the ultra-violet disinfectant system, for which the plaintiff claimed $1746.69 from the defendant, was that which the plaintiff was obliged to install pursuant to the joint venture agreement.

5 In the alternative, the defendant pleaded by par11 of the defence, that by a written agreement dated 9 January 2003 between the defendant and Testech, it was agreed that Testech would install the ultra-violet disinfectant system in the Sheffield plant. By pars12 and 13, the defendant pleaded that the plaintiff was the agent of Testech in respect of that work, and any request made by the defendant to the plaintiff for work to be done was made to the plaintiff only in its capacity as agent for Testech.

6 By its reply, the plaintiff joined issue with the defendant about the matters raised in the defence. Those matters are also important because of claims made by the defendant against the plaintiff by way of setoff and counterclaim. It claimed that it entered into the joint venture agreement relying on misrepresentations made by the plaintiff, and suffered losses as a consequence. It also claimed that the plaintiff breached its obligations under the joint venture agreement, causing loss to the defendant.

7 Interrogatory 21 is in these terms:

"Look at the document annexed hereto and marked "i" and state whether the original document (of which the annexure is a copy) was received by the Defendant or an employee or agent of the Defendant and, if so, whether the Defendant communicated to the author of the document or to the person from whom it was received (if that person was not the author) the Defendant's disagreement with or dispute of the contents of the document, stating when, where and by what means the communication was made, identifying any document by which the communication was made, and stating the substance of the words used if the communication was oral."

8 The document marked "i" is a letter dated 13 December 2002 from the General Manager of the Kentish Council to Mr David Hillier of the defendant. The letter was headed "SHEFFIELD WASTEWATER TREATMENT PLANT TENDER". It advised that at its meeting on 10 December, the council resolved to award the tender to the defendant in conjunction with Testech, in the amount of $403,626. Mr Hillier was requested to liaise with SKM (the council's agent) to execute the contract and commence the project. It concluded that the "Council looks forward to working with your company and Testech towards the successful completion of the project". The plaintiff points to the letter and other documents, as evidence supporting its case that it was not a member of a joint venture with the defendant or Testech, and that it was not a party to the making of a joint tender to the council. By the interrogatory, it seeks to obtain evidence that having received the letter of 13 December 2002, the defendant made no communication with the council to correct the statement in the letter that the tender had been made by the defendant and Testech, or to point out that the tender was made jointly by the plaintiff as well. If the defendant says that it made no such communication, the plaintiff will seek to use its failure to so communicate as evidence of an admission, or acceptance, by the defendant that the plaintiff was not a party to the tender or the resulting contract with the council. The plaintiff says that the purpose of the interrogatory is to obtain an answer as to "any fact, the existence or non-existence of which is relevant to the existence or non-existence of any fact directly in issue between the parties" (see the Supreme Court Rules 2000, r405(1)(b)(ii)).

9 The Master noted that an issue which arose was whether or not the plaintiff was a joint venturer with the defendant and Testech in the supply of materials and services that went to the construction of the Sheffield Wastewater Treatment Plant. The Master also referred to the argument of counsel for the plaintiff that the point of the interrogatory is that if there was no dispute or disagreement as to the contents of the letter, or if there was dispute or disagreement as to a part of it only and not the part that went to the question whether the plaintiff was one of the tenderers, then there would be evidence supporting the plaintiff's contention that it was not a party to a joint venture and that the defendant admitted it by acquiescing in, and not disputing, the material parts of the letter.

10 The defendant objected to answering interrogatory 21 on the following basis:

"The defendant objects to answering this interrogatory on the basis that it does not relate to any issue between the parties, is unnecessary, unduly prolix, embarrassing and oppressive. The defendant also says that the document referred to in this interrogatory is discovered document 97 in the defendant's list of documents. In addition the issues which this interrogatory seeks to raise are not proper matters for interrogatories in that it amounts to cross examination on the document and seeks to deal with matters of evidence."

The objections to the other disputed interrogatories were effectively in the same terms.

11 Statements made to a party in correspondence may be evidence against that party of the truth of the matters stated, if by that party's answer or silence it acquiesced in their contents. Whiting v Whiting [1947] SASR 363. A failure to dispute or challenge matters of fact asserted in correspondence received, may amount to an admission of the accuracy of those matters. Whether it does or not will depend on the circumstances, including the conduct of the parties before and after the date of the correspondence in question. Wiedemann v Walpole [1891] 2 QB 534. If a reply could reasonably have been expected if the matters of fact were inaccurate, and no reply was forthcoming, then it may amount to an admission. Young v Tibbits [1912] HCA 23; (1912) 14 CLR 114.

12 Whether any failure on the part of the defendant to respond to the material in the document marked "i" in fact amounted to an admission will depend on all of the circumstances demonstrated by the evidence at the trial. All that can be said at this time is that a failure to respond to the council's letter, by pointing out that the plaintiff was a party to the making of the tender, and the contract formed by its acceptance, is capable of amounting to evidence of an admission that the plaintiff was not a party. Whether it should be treated as an admission will be a matter for the trial judge to determine.

13 It was submitted for the defendant that even if it is established that the plaintiff was not a party to the making of the tender to the council and to the resulting contract with the council, that will not establish that there was not a joint venture agreement in the terms pleaded by the defendant. Nevertheless, if it is a fact that the plaintiff was not a party to the tender and was not a party to the contract with the council, that would be some evidence that the plaintiff was not a party to a joint venture agreement of the kind pleaded, for it would be unlikely if the defendant agreed that there would be a joint tender, that it would make the tender in its own name and not on behalf of the plaintiff as well.

14 Counsel for the defendant submitted that the interrogatory is vague and unclear because it cannot be understood whether it is merely asking if the defendant communicated that it disagreed with or disputed that the document it received was the same as the one annexed to the interrogatory. There is no merit in that submission. The interrogatory cannot be read to mean that. It is also submitted that it is unclear just what is the difference between "disagreement" and "dispute". There will be no need for the person answering the interrogatory to resolve that issue. There is nothing unclear about the question whether the defendant communicated disagreement with or dispute of the contents of the document. Anything communicated that fell within either or both of those descriptions would have to be disclosed. It was further submitted that the interrogatory is vague and unclear, and too wide and oppressive, because parts of the document are incapable of being the subject of a dispute and disagreement, for example "congratulations on winning the tender". There is absolutely no merit in that submission. If something was incapable of being the subject of dispute or disagreement then obviously, the defendant would not have disputed or disagreed concerning it. It does not make the interrogatory vague, unclear, too wide or oppressive.

15 Under the heading of "vague and unclear, too wide and oppressive", counsel for the defendant submitted that some parts of the document have nothing to do with issues in the proceedings but nevertheless, an answer is required. The issue is one of relevance. My initial response to the interrogatory was that it was too wide for the reason submitted, for it seeks to be informed whether the defendant disagreed with or disputed anything in a letter that was over a page long and contained a number of sums of money making up the total amount of the tender sum and other details. Disputing some of the contents, for example one of the sums of money, could not alone amount to evidence of the making of a relevant admission by the defendant. However, I am persuaded by the argument of counsel for the plaintiff that if the defendant challenged some inaccuracy in the letter that may have been immaterial to the issues in the proceedings, the failure to challenge a matter that is material to those issues is more likely to have amounted to an admission as to its accuracy. For that reason, I reject the submission.

16 It was submitted that the interrogatory is oppressive because the defendant will have to make an unreasonable level of enquiries to obtain the answers. Counsel submitted that every sentence will have to be checked and every implication from every statement considered. He submitted that searches of all the discovered documents will be required and enquiries will have to be made of every person who may have been involved in the administration of the matter. Such an investigation will exceed the legitimate requirements of the proceedings, it was claimed. I respectfully concur with the Master's view of the submission:

"In my view, if an objection on oppression is to be taken ... there has to be evidence of that oppression, that is to say the affidavit taking the objection should explain that answering the question would require the defendant to undertake those sorts of detailed enquiries, which in the context of the importance of the interrogatory and its answer and in the context of the litigation generally is oppressive. No factual basis for the oppression was put forward in the affidavit and I do not accept the submission from counsel for the defendant that the interrogatory, either on its own or in combination with the other interrogatories 22 to 33, which were along the same lines, are self-evidently oppressive."

17 It was submitted for the defendant that a meaningful answer to the interrogatory cannot be given because it is so framed that all it calls for is a "yes" or "no" answer. There was no merit in the submission. To suggest such an interpretation is to suggest that the defendant would be entitled to give an answer which is not meaningful. It will have no such entitlement. What is required is clear from the interrogatory itself. The truth will direct the defendant to the answer which must be responsive to all that is asked. Statements of principle by Woodward J in Aspar Autobarn Cooperative Society v Dovala Pty Ltd (1987) 74 ALR 550 at 552 - 553 may usefully be cited in the context of the submission:

"If the use of interrogatories is to be effective, the task must be approached responsibly on both sides. It should not be seen as a battle of wits, or indeed as any form of contest. It is an opportunity to assist the parties and the court to have the matter prepared for trial as quickly and as cheaply as possible. ... So far as persons interrogated are concerned, it is my view that they also have a responsibility, to the court and to their opponents, to do their best to answer interrogatories in an open and helpful way, not in a clever or grudging way. ... I believe that expense and delay is often caused by practitioners taking clever or pedantic objections to interrogatories which could, in fact, be answered without difficulty."

18 Next, it was submitted for the defendant that the interrogatory is objectionable because it only seeks to test the truth of the defendant's claim concerning the joint venture. Allhusen v Labouchere (1878) 3 QBD 654 at 661 was cited as an authority for that proposition, but it is not. What was said there by James LJ was that an interrogatory must ask a question relevant to the matter in litigation, and a question cannot be put to a party merely for the purpose of discrediting that party. (See also Coal Cliff Collieries Pty Ltd v C E Heath Insurance Broking (Australia) Pty Ltd (1986) 5 NSWLR 703 at 709 and Sharpe v Smail (1975) 5 ALR 377 at 381.) That is not what happened here. The interrogatory is relevant to a fact in issue and it was not administered merely to discredit the defendant.

19 It was claimed that the interrogatory was premature and should not be permitted. It was argued that instead, a formal notice to admit receipt of the document marked "i" should have been issued before an interrogatory could properly have asked about the defendant's response to the document following receipt. The argument seeks to invoke the Court's discretion under r410(3) to disallow an interrogatory "on any other grounds". The submission is rejected. The point of the interrogatory is not so much to establish receipt of the document, but to discover facts to prove the making of an admission following receipt. There is no justification for requiring the expense and inconvenience of a two-step process to discover those facts.

20 For these reasons, the Master was correct to order that the defendant answer interrogatory 21. Counsel for the defendant conceded that in the light of the Master's ruling concerning interrogatory 21, the same result should apply to interrogatories 22 and 23.

21 Argument was then addressed concerning interrogatory 24 and it is that interrogatory I will consider next. It was in identical terms to interrogatory 21 except that it referred to the document annexed and marked "iv". The interrogatory was in these terms:

""Look at the document annexed hereto and marked "iv" and state whether the original document (of which the annexure is a copy) was received by the Defendant or an employee or agent of the Defendant and, if so, whether the Defendant communicated to the author of the document or to the person from whom it was received (if that person was not the author) the Defendant's disagreement with or dispute of the contents of the document, stating when, where and by what means the communication was made, identifying any document by which the communication was made, and stating the substance of the words used if the communication was oral."

22 The document marked "iv" is a letter dated 9 April 2003 from Testech, under the hand of Mr Anthony Doig, to Mr Drew McNeil of the defendant. The letter included the following: "This letter serves as acknowledgement of the change in design from circular to square tanks for the reactor at Sheffield with dimensions as follows". There then follows information concerning the size and dimensions of the tanks. The letter continues: "This change necessitates an alteration to the floating construction priced as per previous correspondence and will result in a short delay to shipping. I acknowledge that an extension has been granted to accommodate this delay and that no penalty will be incurred."

23 The only argument advanced to the Master by counsel for the defendant was one of relevance. No doubt counsel was conscious of the reasons of the Master for ruling that interrogatory 21 should be answered, and because of that did not seek to raise arguments that had been rejected. What counsel for the defendant submitted to the Master about interrogatory 24 was that it sought an answer that was not relevant to any fact in issue between the parties, because the letter in question merely contained technical details about a change in design. It was submitted that a failure to disagree with or dispute any of its contents could not be relevant to the issue concerning who were parties to any joint venture agreement.

24 The plaintiff's counsel pointed to par7a of the defence and counterclaim which pleaded (inter alia) that the plaintiff would be responsible for the overall plant engineering design, installation and commissioning of the Testech Biojet System in the Sheffield plant. He also pointed to pars86, 89, 96b, 101, 102, 117, 118 and 119 which pleaded (inter alia) that the plaintiff represented to the defendant that the plaintiff would undertake the overall plant engineering design, installation and commissioning; that it was a term of the joint venture agreement that the plaintiff would exercise reasonable skill and care when doing so; that the plaintiff undertook the overall plant engineering design and commenced to undertake the installation and commissioning; that between 9 January 2003 and October 2004, the plaintiff represented to the defendant that the plaintiff was undertaking the overall plant engineering design, installation and commissioning and designing a process that complied with or exceeded the Sheffield effluent quality criteria and that was suitable for use in the plant; that the plaintiff held itself out as having the skills and expertise to assess and undertake the overall plant engineering design, installation and commissioning; that, as the plaintiff knew, the defendant relied on the skills and expertise of the plaintiff to undertake the overall plant engineering design, installation and commissioning; and that the defendant's reliance on the plaintiff was reasonable. It was submitted once again, that if document "iv" was not contradicted or disputed as being inaccurate, it was capable of amounting to an admission that the plaintiff was not responsible for design, installation and commissioning. It was also submitted that it established that the defendant and Testech dealt directly with each other in respect of matters of design, and that it contradicted the defendant's claims that the plaintiff made representations that it would undertake the design, that the defendant relied on those representations, and that the plaintiff undertook to design a process that would comply with quality criteria. Essentionally, the Master accepted those submissions, saying that the letter "goes to design matters and if there was no disagreement or dispute with that letter it would tend to indicate that the plaintiff was not part of the design team".

25 With respect, I disagree and instead agree with the submission of counsel for the defendant that while the letter might amount to evidence that Testech was providing advice to the defendant concerning design, a failure on the part of the defendant to disagree with or dispute any of the contents of the letter could not have amounted to an admission in support of the plaintiff's case or against the defendant's case, viz a viz each other. For that reason, the defendant should not have been ordered to answer interrogatory 24.

26 Once the Master ruled that interrogatory 24 should be answered, counsel for the defendant did not seek to make further submissions concerning interrogatories 25 - 33, observing that on the basis that the same ruling would be made concerning them, there was nothing additional he could submit. The Master then ordered that interrogatories 21 - 23 should be answered. In view of my disagreement with the Master concerning interrogatory 24, it becomes necessary to consider interrogatories 25 - 33 on their merits.

27 The parties know what documents are referred to in those interrogatories and what the contents of those documents are. It is not necessary to relate them or to laboriously state my reasons in relation to each. The defendant should not have been ordered to answer interrogatories 25 to 31. They concern letters and invoices from Testech to the defendant. They may well be evidence contradicting the defendant's case and supporting the plaintiff's case, but a failure to disagree with or dispute their contents could not be evidence of an admission in support of the plaintiff's case or against the defendant's case, viz a viz each other.

28 Interrogatory 32 concerns document xii, a letter from Testech to the defendant of 19 November 2002. Relevantly, Testech asserted that it was subcontracting to the defendant. A failure to dispute that might well be evidence of an admission contrary to the defendant's assertion of a joint venture. The interrogatory should be answered.

29 Interrogatory 33 concerns document xiii. It is a letter from the plaintiff to the defendant of 23 April 2004 forwarding a letter from Testech dated 21 April 2004 which authorised the plaintiff to act as Testech's agent. It may well be evidence, as claimed by the plaintiff's counsel, tending to suggest that the agency only commenced then, and that there was no such agency in 2002 and 2003 as asserted by the defendant in its pleading. Nevertheless, a failure to disagree with or dispute what is stated in the document could not amount to the making of a material admission by the defendant. The defendant should not have been required to answer the interrogatory.

30 Accordingly, it will be ordered that insofar as the Master ordered on 15 June 2007 that within 21 days the defendant cause to be filed and served an affidavit verifying its answers to interrogatories 24 - 31 and 33, it is set aside. The Master's order that interrogatories 21, 22, 23 and 32 be answered will remain.