Guy Carpenter & Company Pty Ltd v Grove

PRINCIPLES 4 The parties agreed that I should adopt the principles Besanko J identified in Procter v Kalivis [2009] FCA 1518 (Procter v Kalivis) (albeit on the basis that counsel for the Executives formally submitted that the approach to cross-examination on orders for preliminary discovery, in principle, should be more onerous than that for discovery generally). 5 In Procter v Kalivis at [29]-[40], Besanko J summarised the principles applicable to challenges to affidavits of discovery. Besanko J concluded that the relevant test, including for preliminary discovery, is whether there exist "reasonable grounds for being fairly certain that there are other relevant documents" (at [33]). If there are no such grounds, the affidavit of discovery is conclusive. His Honour also noted (at [35]) that, if such reasonable grounds exist, the usual order is to require further discovery verified by affidavit. To permit cross-examination has been described as "unusual" (citing Olympic Airways SA v Spiros Alysandratos & Consolidated Travel (Vic) Pty Ltd (Unreported, Supreme Court of Victoria, Harper J, 26 May 1997)), being a power available in limited circumstances and only as necessary "in order to do justice between the parties or to prevent an abuse of the Court's processes" (citing Moore J in Finance Sector Union of Australia v Commonwealth Bank of Australia Limited [2000] FCA 1389 at [16]).

THE CASE FOR CROSS-EXAMINATION 6 The evidence in support of the application for cross-examination establishes that: - (i) the Executives each served a verified list of documents on or around 15 July 2011; (ii) other than Mr Carroll, the Executives each served a further verified list of documents on or around 15 August 2011, (iii) despite the communication of instructions via their solicitor that they had produced all relevant documents, the Executives each served a further verified list of documents on 11 October 2011, and (iv) the Executives have not acted in accordance with a request from Guy Carpenter that they each serve another affidavit explaining what steps they have taken to comply with their discovery obligations. 7 Guy Carpenter has also examined the text and telephone records of the Executives in the context of the sequence of events that preceded their simultaneous resignation from Guy Carpenter for the purpose of taking up employment with Aon Benfield. According to the submissions for Guy Carpenter: - (i) the Executives have discovered significantly fewer documents than Aon Benfield, (ii) despite the representations to the contrary made (on instructions) by their solicitor, three of the Executives have thrice conceded the need for further discovery (and one has done so twice), (iii) the Executives have not explained the steps they have taken to comply with their discovery obligations, (iv) the Executives have provided no adequate sworn explanation of the circumstances regarding documents which are no longer in their control, and (v) "there is an appearance that many more documents did or do exist, in light of what [Guy Carpenter] has been able to determine from [Aon Benfield's] discovery and its own phone records". 8 Guy Carpenter submitted that in the circumstances described above, particularly where discovery by the Executives has been by degrees and only in belated response to Guy Carpenter proving the deficiencies in their initial discovery, no purpose would be served by requiring yet a further affidavit of discovery. Accordingly, Guy Carpenter contended that the Executives' explanation (through their solicitor) for the discrepancy between their discovery to date and the large number of communications in which the evidence shows they were involved in the period leading up to their resignation - namely, that the communications are not relevant as they involved either work for Guy Carpenter or social contact between friends - was inadequate. It was in the interests of justice to permit the limited cross-examination proposed in order to ensure compliance with the Court's orders for preliminary discovery.

DISCUSSION 9 The submissions for the Executives disclose the difficulty this application confronts. Guy Carpenter accepted that, unless there exist "reasonable grounds for being fairly certain that there are other relevant documents" (Procter v Kalivis at [33]), the discovery affidavits are conclusive. None of the matters on which Guy Carpenter relied, whether considered cumulatively or in isolation, supports the conclusion that such reasonable grounds exist. For example, it may be acknowledged that (as Guy Carpenter submitted) the Executives have filed multiple affidavits of discovery. If anything, that fact supports an inference that the Executives have understood and done their best to comply with their discovery obligations. It may also be acknowledged that each of the Executives filed a further affidavit of discovery the night before the hearing of this application. However, and as explained in the affidavit sworn by the Executives' solicitor on 6 September 2011, those affidavits concerned two aspects of the discovery. First, they concerned the fact that each of the Executives had failed to include in his initial verified list documents which he once had, but no longer has, in his possession or control. Second, the affidavits concerned the fact that the Executives had provided itemised claims for legal professional privilege as requested by Guy Carpenter. The omission of certain documents from the earlier verified lists of documents, by reason of the failings of human memory, raises no suspicion of the existence of still further documents, let alone a reasonable ground for being fairly certain that such other documents exist. The reason for the provision of itemised claims for privilege in the further affidavits is adequately explained by the Executives' solicitor. Similarly, it may be acknowledged that Guy Carpenter's solicitor has carried out a detailed analysis of the telephone and text records of the Executives, which disclose many more communications than those discovered. Again, however, there is a cogent explanation for this in the affidavit of the Executives' solicitor. This affidavit, in respect of each occasion in relation to which a suspicion of the existence of additional documents might arise, provides not only an explanation of the relevant circumstances but also express confirmation of instructions from the Executives that there are no such documents. 10 In these circumstances it is apparent that the case for cross-examination is founded on circumstances giving rise to no more than a suspicion that further documents might exist. On analysis of the evidence, each of the circumstances by which it could have been said that there existed reasonable grounds for being fairly certain that there were other relevant documents has been addressed (and any such grounds removed) by the affidavit of the Executives' solicitor containing the explanations identified above and noting the further verified list of documents which was to be (and in fact was) served by each of the Executives. Once that evidence is taken into account, there remains nothing but suspicion to support the application for cross-examination. This is insufficient. On the evidence, I am not persuaded that there exist any (let alone reasonable) grounds for being "fairly certain" that there exist other documents than those which have already been discovered. 11 For these reasons, the application for leave to cross-examine the Executives must be dismissed. The parties otherwise agreed that the application, insofar as it seeks orders relating to the claims for privilege, should be adjourned. I make orders accordingly, with costs reserved. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.