Lavigne v Garrett & Anor

Supreme Court of NSW|2023-11-09|Before: Chen J

Introduction

These reasons deal with a dispute about discovery in a professional negligence claim brought by the plaintiffs against their former solicitor.
The plaintiffs, by notice of motion filed 11 August 2023, seek an order against the defendants that they provide, in effect, "all the plaintiffs' client documents held by Unsworth Legal in relation to legal services provided under the costs agreements dated 4 July 2019 and 29 January 2020" (prayer for relief, par 1(a)); or, in the alternative, those documents "that fall within the period 1 January 2020 and 28 February 2020" (prayer for relief, par 1(b)) pursuant to s 472 of the Legal Profession Uniform Law 2004 (NSW) ('LPUL') or, alternatively, pursuant to s 728 of the Legal Profession Act 2004 (NSW) ('LPA').
By notice of motion filed 29 August 2023, the defendants seek orders for discovery of documents from the plaintiff, and in connection with an agreement reached with the plaintiffs to provide discovery seek orders to limit the timing of when that discovery is to be provided - essentially as follows: 1. first, that the plaintiffs give discovery of documents specified as within category 13 of Annexure A - namely, documents in connection with the house purchased by them in Point Piper in or around mid-2020, as well as in connection with any purchases made by them with a value in excess of $100,000 from funds that the plaintiffs had available to them as at 6 February 2020 so as to complete the purchase of that property (prayer for relief order 2, category 13 in Annexure A to the notice of motion); and 2. secondly, that the defendants give discovery of those categories of documents that have been agreed between the parties and as reflected in Annexure B at prescribed times - some are to be discovered "before service of the plaintiffs' lay evidence in chief", but others are to be provided "after service of the plaintiffs' lay evidence in chief" (prayer for relief order 4).

Background facts

The background facts are within narrow compass and, for the purposes of the present applications, there was no dispute about them - except in one (significant) respect. I will identify, and resolve, that contested issue when I address the submission of the defendants that raised it.
I have, to a large degree, drawn the matters of fact that follow from the statement of claim (or 'SOC') filed by the plaintiffs on 7 July 2022.

The Deed of Put and Call Option

Jason and Mia Lavigne ('the plaintiffs') entered into a Deed of Put and Call Option ('the deed') dated 19 December 2014 in connection with a property located in Bellevue Hill, NSW ('the property'). The deed was prepared by a solicitor - Peter Garrett, who was then a partner of the law firm HWL Ebsworth Lawyers - and he provided advice to the plaintiffs in connection with the property and the deed. (For completeness, it should be noted that from at least July 2019, the solicitor - who is the first defendant - was employed by Unsworth Legal Pty Limited - the second defendant: SOC, par 5; amended defence filed 20 January 2023, par 4).
Pursuant to the deed, the plaintiffs secured a call option to purchase the property. They were also entitled, upon terms and conditions, to go into occupation of the property during what was defined in the deed as the 'Occupation Period'.
The plaintiffs went into occupation in January 2015: SOC, par 19.
The plaintiffs exercised the call option in December 2019 - with the consequence that a contract for the sale of the property came into effect: SOC, par 22. The purchase price was $12 million.

The dispute with the vendor and the further involvement of the defendants

The contract was scheduled to complete on 20 January 2020 (SOC, par 23), but it did not occur: SOC, par 24.
On 22 January 2020 the vendor served a notice to complete upon the plaintiffs - requiring completion by 6 February 2020, 5pm (SOC, pars 25 and 26) - but it did not occur.
It appears that the parties were in dispute across a number of matters, one of which was whether the vendor was obliged to provide an occupation certificate. The plaintiffs' case is that Mr Garrett provided advice to them that the vendor was required by Special Condition 41 of the deed to supply an occupation certificate to them before they would become obliged to complete: SOC, par 29. That advice, the plaintiffs allege, was provided to them on or around 3 February 2020 by Mr Garrett.
Put broadly, the plaintiffs allege that in the period 3 to 6 February 2020 Mr Garrett: 1. did not advise or warn them that the vendor's obligation to provide an occupation certificate only arose where alterations or additions to the property had been carried out "immediately prior to and after" the entry into the deed: SOC, pars 30 and 36; 2. did not seek instructions from the plaintiffs about whether there were any alterations or additions and, if there were, whether they had been carried out in that time period: SOC, pars 31 and 38; and 3. specifically advised them that the words "immediately prior to and after" contained within Special Condition 41 were "superfluous and irrelevant"; that the Special Condition required the vendor to provide an occupation certificate; and the failure to provide an occupation certificate under Special Condition 41 "provided a sound legal basis for the plaintiffs not to complete settlement" of the property under the contract: SOC, par 35.
The vendor did not provide an occupation certificate to the plaintiffs on or before 6 February 2020 - or at all: SOC, par 39.
On 6 February 2020 the plaintiffs filed an urgent ex parte application that sought, inter alia, an order for short service of a statement of claim filed in Court on 6 February 2020 and an injunction to restrain the vendor from terminating the contract until 11 February 2020, 5pm: SOC, par 40. (On 6 February 2020 the Court refused to grant the injunction sought by the plaintiffs).
The statement of claim that was filed on 6 February 2020 had, as the sole basis pleaded for the plaintiffs not completing the contract, the allegation that the vendor was in breach of the contract by failing to provide an occupation certificate under Special Condition 41: SOC, par 41.
On 11 February 2020, the vendor served a notice of termination and rescission upon the plaintiffs: SOC, par 44.
Although the plaintiffs disputed the validity of the termination and rescission, Darke J held, by reasons for judgment delivered on 21 August 2020, that the vendor had validly terminated the contract: Lavigne v Kumar [2020] NSWSC 1120. Shortly stated, in connection with Special Condition 41, his Honour rejected the construction of that Special Condition argued on behalf of the plaintiffs, holding that the obligation to provide an occupation certificate "would only arise where alterations or additions had in fact been carried out to the property 'immediately prior to and after' the entry into the Option Deed" (at [103]) and that he was "unable to accept the submission of the plaintiffs that Special Condition 41.1 simply requires the vendor to provide an Occupation Certificate prior to completion" (at [106]).
On 26 November 2020 the property was sold for $16.1 million, being $4.1 million above the purchase price in the contract: SOC, par 48.
Part of the claim for damages advanced by the plaintiffs includes the difference in value between the contract price and the subsequent value of the property at least as at 11 February 2020: SOC, par 64.

The claim against the solicitor

Central to the plaintiffs' case before Darke J, and central to the one they seek to bring against the defendants, is Special Condition 41.1. I have provided, earlier, a broad outline of the case advanced in each respect.
Although it will be necessary to return to the way in which the claim is put by the plaintiffs in more detail, later in these reasons, the nub of the case against the solicitor is that he negligently advised them in connection with the deed - specifically in connection with Special Condition 41.1 - with the consequence that the vendor validly terminated the contract.
The plaintiffs allege that they did not complete settlement based upon the advice they received from the first defendant (SOC, par 62) and that, had the defendants not breached their duty, they would have completed the contract on or before 11 February 2020: SOC, par 63.

The disputed documents

The defendants have agreed to give discovery of documents to the plaintiffs. Those documents over which there is agreement are contained in Annexure B to the defendants' notice of motion filed 29 August 2023. From the terms of the defendants' notice of motion, the defendants are content to give the plaintiffs discovery of those documents forthwith subject to the following: … any documents (such as contemporaneous file notes or the like) which: (i) have not already been made available to the plaintiffs; and (ii) which evidence or concern the occurrence and content of disputed conversations between the plaintiffs and their legal advisers, including as to the instructions which the plaintiffs gave orally, and the oral advice they received (as to which, see statement of claim at [28]-[31], [35]-[38], [43], and [58]-[61]).
The defendants seek an order that the documents referred to above (the 'disputed documents') "be provided after service of the plaintiffs' lay evidence in chief" (defendants' notice of motion, prayer 4(b)).

The issues for determination: introductory remarks

The applications filed by the parties essentially involve three issues: first, the nature of the 'disputed documents'; secondly, whether those documents are "client documents" within s 472 of the LPUL or s 728 of the LPA; and, thirdly, whether there should be staged discovery.
As to these matters, the following should be noted.
First, in relation to the application for access to "client documents", the parties arguments focused upon s 472 of the LPUL - it being agreed that that section was relevantly indistinguishable from s 728 of the LPA.
Secondly, at the hearing, the focus of the submissions was principally upon whether there should be staged discovery. For the defendants it was argued the question of whether there should be staged discovery should be considered first: it was submitted that if discretionary considerations favour staged discovery (or otherwise), then identifying those documents and making findings about whether they are client documents falls away, at least practically so, given the defendants accept that the disputed documents were discoverable.
The plaintiffs were content to argue the matter in this way and, accordingly, these reasons largely reflect the approach of the parties. I will, however, say something about the disputed documents.

The nature of the documents

The respective applications seek orders in connection with what I have described in these reasons as the "disputed documents": a description which stems from the written submissions of the defendants which referenced prayer 4(a) of the defendants' notice of motion. There, relevantly, the documents were described as "documents (such as contemporaneous file notes or the like) which … evidence or concern the occurrence and content of disputed conversations".
Although the defendants foreshadowed seeking to make these documents available to the Court, by way of a confidential affidavit, in order to permit an assessment of them for the purposes of making findings (see, for example, the affidavit of Malcolm Cameron affirmed 7 September 2023, par 26), that course was ultimately not pursued. I was advised, however, that there was approximately 30 pages of material, and 15 separate documents.
During the course of submissions, I invited the defendants to identify precisely, or as specifically as the evidence permitted, the nature of the disputed documents and my attention was drawn to what was contained in a letter from the defendants' solicitor dated 7 August 2023. That letter was sent following a direction by the Court that the defendants set out "their position in relation to ownership of documents which constitute our client's files concerning the legal matter which is the subject of the … litigation". That letter identified the existence of an unknown number of file notes, and thereafter identified 5 sub-categories. The letter then set out the defendants' position about ownership of those documents in connection with those 5 sub-categories.
It is appropriate at this point to note two matters.
First, it may well be that some of the disputed documents include file notes, but as the terms of the defendants' notice of motion make clear (see [32], above) the nature of the documents is not so confined; rather, it extends to "documents (such as contemporaneous file notes or the like) …". Secondly, to the extent that the documents extend beyond file notes, it is not self-evident why it necessarily follows that there is a dispute over those documents even if, as is alleged, such documents may "evidence or concern" disputed conversations.
The plaintiffs were somewhat critical of the way in which they were, in effect, being asked to deal with this aspect of the applications. That is, without any precise knowledge of the documents that the defendants were withholding. In this respect, the plaintiffs submitted that all that they had to deal with in terms of what these documents are - and in fact, all that the Court has been provided with - is what was submitted to be the exceedingly general evidence of the solicitor for the defendants describing, at least some, of those documents. Those concerns are understandable.
A possible explanation for why the evidence was in the state that it was perhaps lay in the defendants' position that it was unnecessary to resolve the question on the current application: the defendants' position was that if the plaintiffs were successful, the documents would be provided; and that if the defendants were successful then there was only a question about the timing of when those documents would be provided. Although I recognise the practical considerations that informed the approach adopted by the defendants, the approach does not readily permit full assessment of whether, given the content of all of those documents, the "risks" or "concerns" argued by the defendants are soundly based or as extensive as was claimed.
The defendants also submitted that to be any more specific in their evidence would undermine the very application they sought to bring. I disagree. I am unable to accept, particularly given what is pleaded in their defence (as to which see, by way of example, what the defendants pleaded in their amended defence at par 15 to SOC, par 29: set out in [73]ff, below) that it would have been destructive of the defendants' application brought to provide sufficient details - for example, to have identified the date upon which a file note was taken, the circumstances in which it was taken and those involved in the discussions that led to its creation. That is, in effect, what the defendants have done in their amended defence.

Introduction

As I have noted, the defendants submit that the Court should order that discovery in connection with what was described as the disputed documents be deferred until after the plaintiffs have served their evidentiary statements. They argue that the interests of justice support an order of that kind for three reasons: first, because the plaintiffs intend to impermissibly and improperly use that material in the preparation of their evidentiary statements; secondly, because of the nature of the disputed documents themselves; and, thirdly, because broader considerations - the forensic context - justify staged discovery.
The plaintiffs opposed an order for staged production: they contested the reasons - and any facts underpinning them - advanced by the defendants to support the making of the order. The plaintiffs (and, to be clear, their legal representatives) firmly rejected the suggestions that they would impermissibly and improperly use the material discovered.

The power to make the order sought

Each party accepted that the Court has the power, when determining the applications, to make the orders sought by the defendants.
In the context of an application for - and orders about - discovery pursuant to r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW) ('the UCPR'), the Court is empowered, in my view, to make an order that only requires the giving of discovery after the evidentiary statements of (relevantly here) one party - by the terms of r 21.2 and, if necessary, by ss 61(1) and 61(2)(c) of the Civil Procedure Act 2005 (NSW) ('CPA'), and rr 2.1 and 2.3 of the UCPR. Those powers are not, however, "unlimited" and if not otherwise constrained by their terms, are to be exercised having regard to ss 56-58 of the CPA: Halpin v Lumley General Insurance Ltd (2009) 78 NSWLR 265; [2009] NSWCA 372 at [90]-[92].
In the context of an application for production of client documents under s 472 of the LPUL, it was accepted by the parties (correctly in my view), given the text of the section, that the exercise of the power to order production of client documents was discretionary. The interests of justice were also accepted to be a relevant consideration in the exercise of that discretion: thus, in an appropriate case, when considering the interests of justice, an order for staged discovery could also be made on an application under s 472 of the LPUL.
The result was that the applications were argued without distinction between the respective motions brought by the parties. And, so far as the defendants are concerned, their arguments reduced to a consideration of the interests of justice: they relied upon the three matters earlier identified (see [40], above) to support the conclusion that the interests of justice favoured staged production.

The contest about the use of the material

The defendants' principal submission was that the plaintiffs intend to use the disputed documents in the preparation of their lay witness affidavits and, further, the defendants submitted that this intention was not in dispute (defendants' submissions dated 7 November 2023 at [6]). Building upon this, the defendants argued that, given it was accepted that the plaintiffs intend to use that material in a manner that contravenes the proper and accepted practice for the preparation of the evidentiary statements, it would be both "improper" and "not in the interests of justice" to do other than make the orders sought by the defendants (defendants' submissions dated 7 November 2023 at [17] and [25]).
The defendants then called in aid a range of well-known authorities that prescribe what is - and what is not - acceptable in terms of proper and accepted practice in connection with the preparation of evidentiary statements: Majinski v The State of Western Australia (2013) 226 A Crim R 552; [2013] WASCA 10 at [29]-[32] ('Majinski') and R v Momodou [2005] 1 WLR 3442; [2005] EWCA Crim 177 at [61]. The practices identified are thoroughly well established and reflected in professional rules.
It goes without saying that if what was alleged was established, then that would necessitate the Court taking appropriate steps to preserve the integrity of the evidence, and its processes more generally. But that is not this case, as I seek to explain.
The plaintiffs took issue with the defendants' submission in, broadly, two respects.
First, the plaintiffs argued that, although the defendants submitted that it was "not in dispute" that the "plaintiffs" intend to use the disputed documents in the preparation of their evidentiary statements, the opposite was so. Ms Lenigas, who appeared for the plaintiffs, contested the suggestion - indeed any suggestion - that the plaintiffs or their legal representatives intend to use the disputed documents in any impermissible or improper way. The contesting of the defendants' submission extended to the plaintiffs' legal representative because, although the defendants sought to confine the submission to "the plaintiffs", given what was alleged would occur, that inevitably extended to those representing the plaintiffs. Secondly, and in any event, there was no proper evidentiary basis to make the finding sought by the defendants.
During the course of submissions, the defendants moved some way away from this argument - nevertheless, the submission was not (at least not clearly) withdrawn so I will deal with it.
The defendants' written submissions did not identify the evidence to support the finding that the plaintiffs intend to use the disputed documents in the preparation of their evidentiary statements. Nor was any evidence identified directed to establishing that specific fact during the course of submissions. I do not accept there is any basis to find - and to be clear I do not find - that the plaintiffs or their legal representatives "intend", assuming discovery is ordered, to use any discovered documents impermissibly, as the defendants submitted. A finding to that effect would be a most serious one - or, as the plaintiffs submitted, a "strong finding" - that would require clear evidence before making it. It would be particularly so where that finding extended to involving the legal representatives for the plaintiffs. I have extended this discussion beyond "the plaintiffs" and to their legal representatives, because it is difficult to see how this submission could not extend to them: any discovered documents would be provided to them, with the consequence that, based on what was submitted, inevitably the only way that the plaintiffs themselves could have access to the discovered documents would be because their legal representatives either provided those documents to them, or conveyed their content.
As I have said, the defendants moved some way away from this argument during the course of submissions. The argument advanced was that "the defendants" consider there to be a "risk" or "concern" that access to the disputed documents would or could be used "deliberately or inadvertently in a way that would taint the plaintiffs evidence" - that is, be used in contravention of the proper and acceptable way in which evidentiary statements are to be secured from witnesses. The defendants argued that this "risk" or "concern" is evident from the following.
First, the defendants submitted that the very fact that the plaintiffs were seeking the disputed documents and the fact that the plaintiffs did not consent to the orders proposed by the defendants make good this submission: it was argued, by posing a rhetorical question, that if there was no sinister reason for seeking the documents then "what are we doing here?". The submission appeared to be that, having posed that question - or a similar one - the Court should infer, and find, the prospect of the "deliberate or inadvertent" tainting of the evidence of the plaintiffs. The submission, in fact, went further: the defendants submitted that the failure of the plaintiffs to put on evidence about their purpose and "how they're planning to use the documents" was such that an adverse inference could and should be drawn against them - thereby permitting a finding that the disputed documents would be used for an improper purpose.
In my view, contrary to what the defendants argued, there is nothing sinister in the plaintiffs seeking client documents - something they are quite entitled to do under s 472 of the LPUL. It was not suggested by the defendants that there was no (or were no) legitimate forensic reasons to seek the documents at the present time, and I am satisfied that there are. Further, in the present context, the position that the plaintiffs adopted in connection with discovery accords with the usual practice in connection with the Common Law Division Professional Negligence List and the terms of the Common Law Division Professional Negligence List Practice Note (Practice Note SC CL 7) more generally. Given these matters, it is not entirely clear how that conduct amounts to some form of admission, less still an admission that the plaintiffs intend to use the documents for a nefarious purpose. Nor is there, in and of itself, some "adverse inference" to be drawn against the plaintiffs, as the defendants argued, based upon the plaintiffs' "silence". In my view, having raised these serious matters and invited findings about them in connection with a consideration of the "interests of justice", it is for the defendants to adduce some evidence to support a finding that the interests of justice favour the exercise of the discretion in the way they seek. If they adduce such evidence then, of course, there may be a basis to consider what (if anything) the plaintiffs (or those that represent them) have said by way of response in order to determine what finding to make. But that orthodox analysis is propositionally distinct from what was submitted.
Secondly, the defendants relied upon parts of a letter from the solicitors for the plaintiffs dated 12 July 2023. The defendants submitted that the content of this letter - in particular, four words used - demonstrated the "risk" or "concern" referred to: "… our clients have no intention of putting into lay evidence documents or matters that were not known to them at the time". It was argued that the words "putting into lay evidence" rather than using the words "referring to" was "quite a different thing". I do not accept this submission nor that these words evidence that documents will be used for an improper purpose or support a finding that they convey a risk or concern that that will occur. In my respectful view, it is reading far too much into those four words to suggest that this letter objectively lends credence to support a finding that there is the risk or concern as argued. In my view it does not.
The defendants also made reference to the possibility of witnesses potentially accessing "contemporaneous materials they had access to at the time" (which is unremarkable) and the exchange between the solicitors for each party (in correspondence) about an "example". It is not overly helpful, in my view, to be drawn into the debate between the solicitors (which extended over the course of many letters, and many months) about an "example". To the extent the example might, in general terms, be said relate to one or other "disputed document" (no such submission was advanced, it should be noted), I would simply add that I am not placed to make any findings about such a matter for the reasons earlier given (see [32]-[39], above). In my view the limits of what is permissible in connection with the preparation of witness statements are very well established and specifically identified in authorities such as Re Equiticop Finance Ltd; Ex parte Brock [No 2] (1992) 27 NSWLR 391, 395 and Majinski at [30]. Nothing that has been advanced in the current application leads me to doubt there will be any contravention of these limits in the preparation of evidence by any party or those that represent them or that there is an appreciable "risk" or "concern" of that occurring, as the defendants submitted.
To be clear: the expectation of the Court, in all instances where orders are made for the service of evidence - relevantly here, as the proceedings were commenced by statement of claim - in the form of a witness statement (rr 31.1(1) and (3) and 31.4 of the UCPR) is that the practices referred to in the above authorities concerning the preparation of evidentiary material will be strictly adhered to.
To the extent that the defendants submitted that the nature of the documents - so far as they can be discerned - supports the orders they seek, I do not accept the submission. The proper and accepted way in which regard may be had to whatever material is discovered, for the purposes of preparing witness statements, provides the appropriate safeguards to ensure the integrity of any evidence prepared by the parties. Further, as I have earlier addressed, I am not placed to make any blanket findings about the nature of the documents that the defendants seek to withhold.

The forensic context

The defendants also rely upon authorities which suggest that a reason to defer discovery until after evidentiary statements have been served is to enhance the actual recollection of a witness by avoiding any attempt to reconstruct the past by reference to contemporaneous documents (Commonwealth Bank of Australia v Goater [2016] NSWSC 710 at [33] ('Goater')) or, as has been said, "to avoid the mischief of parties constructing their affidavit evidence around the discovered documents": Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 at [13].
In relation to this submission, and the defendants' reliance upon these decisions, it should be noted that the situation here does not neatly fit within them: these decisions, amongst other matters, concern the deferral of discovery altogether before the service of evidentiary statements. That is not this case: the defendants have not only agreed with the plaintiffs to discovering "contemporaneous documents" (except for the disputed documents) but they have agreed to provide that discovery forthwith.
The plaintiffs (correctly) pointed out that, having commenced these proceedings in the Common Law Division Professional Negligence List, the usual practice is that discovery is provided before evidentiary statements are served, and emphasised (also correctly) there is nothing in the Common Law Division Professional Negligence List Practice Note (SC CL 7) that requires, as a general rule, evidence to be served before discovery is ordered. The position in that respect may be contrasted to proceedings in the Equity Division: see Practice Note SC Eq 11 - Disclosure in the Equity Division, cl 4. Nevertheless, the guidance provided by the decisions to which reference has been made remains relevant - albeit the significance of that guidance will, of course, be fact sensitive and case specific.
The defendants submitted that the facts of this case do, however, involve the considerations raised in Goater because the present dispute involves issues of "credibility and reliability" - something that was said to result from the fact that there was a contest about the advice given by the defendants to the plaintiffs.
I do not accept this submission. That is essentially for the following reasons: first, contrary to what - at least implicitly - was submitted by the defendants, I regard the respective cases advanced by the plaintiffs and the defendants to be clear and, to that end, each side has committed to their respective versions; and, secondly, I do not accept that, necessarily, any issue of credibility will arise and, to the extent that there may be a question about the reliability, it is appreciably less pronounced than what the defendants submitted. It follows, therefore, that I am unpersuaded that the interests of justice arguments raised by the defendants support the orders the defendants seek. I explain these matters further in what follows.
From the terms of the order sought by the defendants in the notice of motion - no specific submissions were directed to the terms of what was alleged in the SOC, nor the nature of the dispute - the argument turns upon what are alleged to be disputed conversations between the plaintiffs and the defendants in connection with the instructions they gave and the advice they received. Specific paragraphs of the statement of claim were identified and it is evident, from a consideration of those paragraphs, that the disputed events and conversations are alleged to have occurred as follows: on around 3 February 2020 (pars 28-31); between around 3 and 6 February 2020 (pars 35-38) and between 6 February and 11 February 2020 (par 43).
It appears that the defendants were, at least implicitly, suggesting that the plaintiffs had not committed to a version and thus were susceptible to tailoring their evidence. (That same assumption at least partly underpinned the earlier submissions about "risk" or "concern" about the plaintiffs' tailoring their evidence, and what follows necessarily applies to that argument too). Given that submission, it is important to look carefully at what is alleged. In my view, once that is done, it is evident that each side has firmly committed to their version - as I next explain.
In pars 28-31 of the SOC, the case for the plaintiffs is that, on or around 3 February 2020, the first defendant provided advice to them, in effect, that the vendor was obliged to supply an occupation certificate before they would become obliged to complete settlement of the contract for the purchase of the property (par 29); that that advice did not extend to warning them that the obligation of the vendor to provide the occupation certificate would only arise where alterations or additions had been carried out "immediately prior to and after" the entry into the deed (par 30); and that the first defendant did not seek instructions from them about what alterations and additions (if any) were carried out on the property immediately prior to and after entering into the deed (par 31).
In pars 35-38 of the SOC, the case for the plaintiffs is that, in the period between 3 and 6 February 2020, the first defendant provided advice to the plaintiffs about the meaning of Special Condition 41.1 - to the effect that the vendor was required to provide an occupation certificate and that the failure of the vendor to provide an occupation certificate was a "sound legal basis" for the plaintiffs not to complete and the vendor could not require them to do so (par 35); that the first defendant did not warn the plaintiffs that Special Condition 41.1 would only provide a basis for not completing settlement of the contract where alterations or additions had been carried out to the property "immediately prior to and after" the entry into the deed (par 36); that the first defendant did not warn the plaintiffs that the obligation of the vendor to provide the occupation certificate would only arise where alterations or additions had been carried out "immediately prior to and after" the entry into the deed (par 37 - this is essentially the same allegation made in par 30 albeit that this alleged omissions occurred at a later point in time); and the first defendant did not seek instructions from the plaintiffs as to what alterations and additions, if any, were carried out on the property immediately prior to and after the entry into the deed (par 38).
In par 43, the plaintiffs allege that between 6 February and 11 February 2020, the first defendant did not alter the advice that he gave them (par 43(a)); did not warn them that there was a risk that Special Condition 41.1 would only be engaged if the alterations and additions were carried out on the property immediately prior to and after entering into the deed (par 43(b); and did not seek instructions from the plaintiffs as to what alterations and additions, if any, were carried out in the property immediately prior to and after the entry into the deed (par 43(c)).
The defendants also referred (in their notice of motion) to what was alleged in par 58 of the SOC. In my view that paragraph can be put to one side: it does not add to any of the allegations that are contained in what has been set out above and, separately, the function of that paragraph is largely to plead a counterfactual so as to comply with the pleading requirements of s 5B of the Civil Liability Act 2002 (NSW).
It should be noted that in relation to each of these paragraphs the defendants have, in the amended defence filed 20 January 2023, provided a detailed pleading by way of response that included the advice that the defendants allege was provided to the plaintiffs.
It is useful to illustrate how the parties have joined issue. I will do that by reference to the allegations that relate to the period on or around 3 February 2020.
As I have indicated, above, the case for the plaintiffs is that the first defendant provided advice to the plaintiffs to the effect that the vendor was required by Special Condition 41.1 to supply an occupation certificate to the plaintiffs before the plaintiffs would be obliged to complete settlement of the contract (SOC, par 29) and, further, the first defendant did not warn the plaintiffs that this obligation would only arise where alterations or additions had in fact been carried out to the property "immediately prior to and after" the entry into the deed (SOC, par 30). This last pleading reflects the conclusion reached by Darke J in the proceedings between the plaintiffs and the vendor: see [19], above.
The defendants' defence to the allegations made in SOC, par 29 include the following (amended defence, par 15): 1. They accept the construction reached by Darke J about Special Condition 41.1 (amended defence, par 15(a)). 2. In relation to that construction, the defendants then specifically plead: "say the defendants advised the plaintiffs accordingly" and then give detailed particulars of when that advice was given and by whom - which, given the range of other arguments raised, I will set out: ● Email sent from Senior Counsel to [the] first defendant on 5 February 2020 at 12:00pm sent by the defendants by email to the plaintiffs. ● Conference between [the first plaintiff, the first defendant and senior counsel] on 5 February 2020 (by telephone). ● Conference between [the first plaintiff, the first defendant, and senior and junior counsel] on 6 February 2020 (in person). ● Conference between [the first plaintiff, the first defendant and the second plaintiff] on 6 February 2020 (by telephone). 1. The defendants specifically plead the timing of that advice: "say that the advice was given between about 3 February 2020 and 11 February 2020" (amended defence, par 15(c)). 2. The defendants "say that at no point did the plaintiffs tell the defendants that no alterations or additions had been done at the property immediately prior to and after entering into" the deed (amended defence, par 15(d)).
In relation to SOC, par 30, the defendants deny that paragraph "and repeat their answer to paragraph 29": amended defence, par 16.
In my view it is clear what the competing cases are: the plaintiffs contend that erroneous advice was given about whether the vendor was required to provide an occupation certificate to the plaintiffs before they would be obliged to complete settlement and the defendants did not advise them that that obligation would only arise in the circumstances that were the subject of the finding by Darke J; the defendants' case is that they gave the advice and full particulars are given as to when that advice was given, and by whom.
Further, and by way of emphasis, not only are the respective cases clear, but in my view, the plaintiffs have fully committed to a version of what advice was given by the first plaintiff in the relevant period (and what advice was not provided); what instructions were sought from the first plaintiff (and what instructions were not sought); and what warnings were given by the first defendant (and what warnings were not given). The defendants have done likewise in the amended defence filed. It is difficult to reach a view other than that the "battlelines" have been clearly drawn between the parties by the pleadings, and in my respectful view that is the characterisation that is appropriate to this case.
There is a further matter. It is also important to note that the statement of claim is itself verified by the first plaintiff. The pleading is, by the fact that it has been verified, a sworn version of what (at least the first plaintiff) contends occurred. I consider that to be of some importance. Put simply, the plaintiffs have not only committed to a case in the statement of claim in what I consider to be in clear terms (as I have explained, above) - with the consequence that if, at any later point, they seek to depart from that case then they inevitably would be called upon to explain that departure when giving evidence - but, further, they have sworn an affidavit verifying that version. I add: in my view, these matters significantly negate any "risk" or "concern" of tailoring evidence, as argued by the defendants. Given the above matters I do not accept that the considerations referred to in Goater require, in this case, staged discovery.
I do not consider that the submission about "credibility and reliability" dictates a different result. That is because I am not satisfied that issues of credibility will necessarily arise (in my respectful view, merely because there is a contest between witnesses does not inevitably result in there being a credibility issue) and, to the extent that issues of reliability might arise, I am unpersuaded that they are as pronounced as the defendants (implicitly) have submitted.
For the reasons that I have given, I do not accept that any of the matters raised by the defendants support a conclusion that the interests of justice favour the orders they seek. Given the parties otherwise agree that discovery should be ordered, I propose to make an order to that effect.
The dispute about discovery has dragged on for some considerable period of time - from at least around May 2023. Given the delay that the discovery dispute has generated, the fact that the proceedings were filed some 18 months ago, and the fact that there are limited numbers of documents to be discovered (which have been identified, at least by the parties), I consider it appropriate for discovery to be promptly finalised. The orders that I propose to make reflect the need for the parties to expeditiously progress the preparation of the matter towards a hearing.

Discovery sought by the defendant: category 13 of Annexure A

The defendants sought an order that the plaintiffs provide discovery in accordance with category 13 of Annexure A. The plaintiffs' consent to the making of that order albeit that they have indicated that there are no documents to discover.
I consider it is appropriate to make the order for discovery in the terms agreed upon by the parties.

Orders

For the above reasons I make the following orders: 1. Note the agreement of the parties in connection with discovery in prayer 1 of the defendants' notice of motion filed 29 August 2023, and that those documents should be discovered by 22 November 2023, 5pm. 2. Order, pursuant to r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW), that the plaintiffs give discovery of those documents falling within category 13 of Annexure A to the defendants' notice of motion filed 29 August 2023 by 22 November 2023, 5pm. 3. Order, pursuant to r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW), the defendants give discovery of the documents specified in Annexure B to the defendants' notice of motion filed 29 August 2023 by 22 November 2023, 5pm. 4. Otherwise than reflected in the above notation and orders, order that defendants' notice of motion filed 29 August 2023 be dismissed. 5. Order that the plaintiffs' notice of motion filed 11 August 2023 be dismissed. 6. Order that the defendants pay the plaintiffs' costs of and incidental to the plaintiffs' notice of motion filed 11 August 2023 and the defendants' notice of motion filed 29 August 2023.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 November 2023

Legal Profession Act 2004(NSW)

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