Categories of Documents Sought on Discovery
16The first category sought is described in the following terms:
"All payroll records relating to Mr Gillies from 1 July 1998 to 2 August 2007".
17I accept that the definition of a document which is relevant to a fact in issue is a broad one: See ACD Tridon v Tridon Australia Pty Ltd [2004] NSWSC 77 at [26] per Austin J. Nevertheless, a category expressed in a way that covers a period of slightly in excess of nine years runs the risk that it would not comply with rule 21.2(2), which provides that:
"A class of documents must not be specified in more general terms than the Court considers to be justified in the circumstances."
18This is a statutory formulation which is capable of, and which does, limit the category of documents which may be the subject of an order for discovery, in order to reduce, but not eliminate, any issue of oppression: See Priest v State of New South Wales [2006] NSWSC 12 at [137] per Johnson J.
19The parties are agreed that this category ought be limited in the following way:
"Payroll records which tend to prove or disprove the particular payments analysed in the affidavit of Mr Jeffrey Bruce sworn 2 March 2011."
20Specific payments can be identified by reference to particular paragraphs of that affidavit. I have read that affidavit and considered those payments.
21In my view all the payments are relevant to facts in issue. Accordingly, documents which relate to those payments and which tend to prove or disprove the payment are relevant to a fact in issue and it is appropriate that in accordance with the parties' agreement, a formal order for discovery in respect of this category is made.
22The second category of documents sought is described in these terms:
"All documents relating to interest payments made by Mr Gillies on the car loan and all documents relating to payment and disclosure of fringe benefit tax in relation to the car loan."
23The car loan, and the payment of interest and fringe benefits tax in relation to it, are all matters in issue.
24The parties are agreed that Downer EDI should give discovery of documents falling within this category, but to exclude from that discovery any documents which solely concern the mechanism by which any payment of interest was made by the plaintiff, or fringe benefits tax was paid by the defendant. Examples of the documents excluded would be such things as cheque requisition forms and other "process documents".
25So limited, the documents sought in this category are relevant to a fact in issue. Proper discovery of them ought be given. I will fashion an appropriate order.
26The third category of documents sought, which is contentious, is described in this way:
"All correspondence that passed between the ATO and Deloitte which responded to or related to, the ATO letter or any matter raised in the ATO letter."
27As a matter of context, the ATO letter described is a letter dated 15 May 2008 from Deloitte Touche Tohmatsu to the Australian Taxation Office, written by Deloitte on the instructions of Downer EDI. It constituted a voluntary disclosure by Downer EDI with respect to certain payments made to Mr Gillies.
28I have referred to this ATO letter at some length in an earlier judgment and do not think it necessary to repeat the matters which are there set out: See Gillies v Downer EDI Ltd [2010] NSWSC 1323.
29As the judgment makes clear, the ATO letter deals with matters which are relevant to the current proceedings: See [27]-[29].
30The central feature of the ATO letter was the voluntary disclosure by Downer EDI to the Australian Taxation Office that it had not paid an amount of $318,525 by way of taxation deduction which it was obliged to do with respect to the bonus payments made to Mr Gillies.
31It is now conceded by Downer EDI that the sum of $318,525 has not been paid.
32The figure had been taken into account by Downer EDI's expert, Ms Jenny Wheatley, in a table at paragraph 131 of her report, as being a credit in favour of Downer EDI when calculating the balance of the retained bonus account presently held by Downer EDI, which belongs to Mr Gillies.
33In her amended report of 14 February 2011, Ms Wheatley says this:
"137. Following a voluntary disclosure made by Deloitte to the ATO on 15 May 2008, PAYG withholding amendments were sought to be made in relation to the year ended 30 June 2003 to take into account additional bonus payments made to Mr Gillies from the 'retained bonus' account.
138. I am instructed that the amendments sought were not made by the ATO."
34In the second further amended defence and cross-claim, Downer EDI makes no reference to either a payment of $318,525 by it to the ATO, or alternatively, any debt which has accrued by which it owes that sum to the ATO, nor to any liability by way of a contingency to represent the fact that it may be called upon by the ATO to pay that sum.
35In light of the changed assertions of fact, Mr Gillies submits that he: " ... is entitled to know why it has not been paid ".
36He says:
"23. The question of the amount of tax which should have been deducted and paid to the ATO is clearly of central importance to the plaintiff's claim for the recovery of money representing the amount to which the retained bonus account is in credit. If the defendant has not remitted tax on behalf of the plaintiff, then the plaintiff may be required to remit tax to the ATO out of any amount which is awarded in these proceedings. Accordingly, the question is plainly of importance in relation to the quantum of this part of the plaintiff's claim."
37As it seems to me, the principal issue to which the sum of $318,525 relates, and therefore the principal issue to which the requested documents in this discovery category go, is the balance of the retained bonus account. It is clear from the affidavit of Ms Wheatley of 14 February 2011 and the report which she attaches to it, that her reconciliation of the sum in the retained bonus account does not include the subject amount. Nowhere in her report is it suggested that Downer EDI is entitled to a credit, in whatever form, in its favour in respect of that sum.
38In light of the fact that Downer EDI no longer makes a claim in its favour for a credit of that sum, I do not think that it can be successfully argued, as Mr Gillies attempts to, that issues surrounding that sum remain relevant to facts in issue.
39I would not uphold the claim for discovery on this ground.
40As well as the submission to which I have just referred, Mr Gillies puts his claim for discovery of documents in this category on a second basis, namely, that he is entitled to know:
"What response was made by the ATO to the ATO letter because the defendant has pleaded in its second further amended defence and cross-claim (see the defence at paragraphs 49(ii) and the cross-claim at paragraphs 9 and 10) that the defendant was exposed to fringe benefits tax liabilities in relation to unpaid interest payments, which matters were also the subject of the ATO letter."
Downer EDI disputes the availability of this ground for discovery on the basis of relevance, but makes no specific submission about it.
41The second further amended cross-claim includes this pleading:
"10. By reason of the matters pleaded in paragraphs 5 to 9 inclusive of this cross-claim, the plaintiff/defendant to the cross-claim has caused the defendant/cross-claimant to suffer loss and damage.
Particulars
(i) The defendant/cross-claimant has incurred or been exposed to:
(a) $83,048 in respect of fringe benefits tax liability in relation to unpaid interest on the loan amount for the period 1 April 2004 to 31 March 2010; and
(b) $26,072 in respect of general interest charges imposed by the Australian Tax Office on the late payment of fringe benefits tax liabilities for the years ended 31 March 2005 to 31 March 2010 in relation to the Loan Amount."
42Documents which relate to this issue are, notwithstanding the assertion of lack of relevance to the contrary in the submissions of Downer EDI, relevant to a fact in issue. I do not regard a request for discovery of documents relating to this pleaded cross-claim as being a fishing expedition.
43It is appropriate that Downer EDI give discovery of documents in this category limited in relevance to the issue which I have just identified.
44The fourth category of documents which Mr Gillies seeks by way of discovery is this:
"All documents relating to the withholding and remittance of PAYB withholding tax from bonus payments made to Mr Gillies for the period 1 January 1998 to date."
45At the directions hearing on 1 April 2011, I was informed by senior counsel for Mr Gillies that he anticipated that a full and proper production of the documents in respect of the first category should cover documents in the fourth category. In those circumstances, he indicated that there was no reason to give any separate ruling on this particular category.
46I refrain from so doing.
47In summary, I have determined that it is appropriate for Downer EDI to give further discovery.
48Given the proximity of the hearing date to this order, it will be necessary for that discovery to occur promptly.