Chapel Road Pty Limited v Australian Securities Investments Commission

Judgment 1By motion filed in October 2010, the plaintiff sought orders as to discovery. The motion was supported by an affidavit sworn by the plaintiff's solicitor, Ms Polin. The orders sought were opposed, the defendant relying for its part on an affidavit sworn by its solicitor, Ms Goodman. 2The history of the proceedings include a decision given by Registrar Bradford in May 2008, where it was concluded that the defendant was not obliged to give discovery of documents relating to its investigation of a number of named corporate entities, which had resulted in them giving the defendant enforceable undertakings. The Registrar took the view that the documents sought were not relevant to the pleaded case and involved a fishing exercise. 3Subsequently the pleadings were amended and in November 2008 a further request for discovery was made, albeit in relation to a number of different corporate entities. Thereby the plaintiff pursued discovery of documents relating to third parties to the proceedings, which the defendant again resisted.

The parties' cases 4The plaintiff's case was that there was a real issue lying between the parties as to its claim that there had been differential or discriminatory treatment of the plaintiff by the defendant during the relevant period, in relation to policies which the defendant had implemented. 5In written submissions it was explained that the plaintiff seeks to establish a factual matrix of the defendant's co-operation and dealings with other companies, at the same time and in relation to similar types of matters to those with which it dealt in relation to the plaintiff; namely, training, supervision and compliance matters; to make good its case of improper motive, bad faith and the defendant's exercise of regulatory powers in a discriminatory manner, in relation to the plaintiff. It was argued that the documents sought in relation to the third parties identified are relevant to establishing the factual foundation of the defendant's treatment of other companies, as well as to establish that the defendant was aware or reckless as to the inevitable and dire consequences of a misuse of its powers in relation to the plaintiff. 6The plaintiff said that comparison was 'the essence of its case'. 7In oral submissions, it was explained for the plaintiff that it was paragraph [13] of the further amended statement of claim to which the documents sought were presently relevant; that at present the plaintiff suspected, but could not prove that there had been inconsistent application of the practice relied on; and that if the documents, when produced, established such inconsistency, which the plaintiff wished to rely on at trial, the pleadings would have to be amended, to expressly advance that claim. 8Even so, it was submitted that the discovery now sought involved no impermissible fishing exercise. The plaintiff had provided documents to the defendant, which explained why the third parties in question had been nominated. They were other companies in respect of which the defendant had similar, or even more serious concerns, to those held in relation to the plaintiff, but in respect of whom the defendant had accepted undertakings, rather than revoking their licenses. This would establish the practice alleged and, it was believed the inconsistent treatment suspected, which the plaintiff wished to rely on in advancing its case. 9In its written submissions the defendant argued that the plaintiff's further amended statement of claim made no case by way of any comparison to other companies; that the documents sought were irrelevant to the case advanced; and that the productions sought involved a fishing exercise. 10The defendant's case is that the documents sought should not be discovered, because they concern its investigations and dealings with third parties, only one of whom, Financial Wisdom Ltd, is even referred to in the pleadings. That reference is not made in such a way so as to make its circumstances relevant to the case which the plaintiff seeks to advance. 11It was argued that the only relationship which could conceivably be seen to exist between the plaintiff and the third parties in respect of whom discovery was sought, was that the defendant had conducted investigations into those companies, at the same time as its investigation of the plaintiff. Any comparison of those investigations with that conducted in relation to the plaintiff were irrelevant to the issues raised in the pleadings. 12The defendant argued that what was sought to be pursued was a fishing expedition, of the kind considered in Carroll v Attorney-General for New South Wales (1993) 70 A Crim R 162 where it was observed at 181: "... the court must, in general, be satisfied that the documents are relevant to an issue for decision by the court in the litigation. It is not open to a party, as on a "fishing expedition", to subpoena documents merely in order to determine whether they may be relevant and may be of assistance to his case in the proceeding."