Luxon v SC

Supreme Court of NSW|2016-09-23|Before: Beech-Jones J, Mr P, Schmidt J

Solicitors: Lee & Lyons (Plaintiffs) Curwoods (Defendants) File Number(s): 2014/172517

ex tempore Judgment (REVISED FROM TRANSCRIPT)

HIS HONOUR: On 14 July 2016, the plaintiffs, Peter and Cheryl Luxon, filed a Notice of Motion seeking an order that the technical manager employed by the second defendant, Sony Australia Limited ("Sony"), attend this Court to give evidence and to submit to cross-examination upon the affidavits he swore verifying discovery given by Sony.
The Notice of Motion was fixed before me today. At the hearing of the Notice of Motion, counsel for Mr and Mrs Luxon, Mr Lloyd, sought and was granted to file an Amended Notice of Motion. Argument proceeded by reference to the relief sought in that document, although it was not in substance any different to the original Notice of Motion.

The Affidavit Verifying Discovery

The considered submissions of both counsel referred the Court to the relevant authorities governing whether or not leave would be granted to a party to cross-examine the deponent of an affidavit verifying discovery. Ultimately, the principles were not much in dispute, save for one which I will identify. What I might call the traditional principle was succinctly stated by Hunter J in Proctor and Gamble v Medical Research [2001] NSWSC 183 at [64]: "I think the true rule in resolving a question of sufficiency of discovery is as follows: The affidavit verifying discovery is conclusive of the question unless it can be shown (i) by recourse to the documents discovered; (ii) from the content of the affidavit verifying discovery; (iii) from the pleadings, or "from any other source that constituted an admission of the existence of a discoverable document" that the discovery has been insufficient. Further, where the discovering party has misconceived the nature of the obligation of discovery it is not necessary to infer the existence of relevant documents other than those discovered (see Mulley v Manifold(1959) 103 CLR 341 at 343 and Falk v Finlay, Supreme Court of New South Wales, Austin J, 24 December 1999, unreported)."
The area of possible dispute concerns whether the relative strictness with which the Courts have approached any application for leave to go behind an affidavit verifying discovery has been relaxed since the passage of the Civil Procedure Act 2005 (NSW), specifically s 56 (see for example Barescape Pty Limited (as trustee for the V's Family Trust), v Bacchus Holdings Pty Limited as trustee for the Bacchus Holding Trust [2011] NSWSC 437 at [7] to [8] per Bergin CJ in Eq; and Con Ange v Fairfax Media Publications [2010] NSWSC 1200 at [42] per Garling J).
Counsel for Sony, Mr Dodson, referred the Court to a passage from the Court of Appeal's judgment in Dai v Zhu [2013] NSWCA 412 [124ff], which albeit in a different context, appeared to endorse the continuing relevance of the stricter approach that I have identified. Ultimately, I will address the matter in accordance with that strict approach.
Specifically, Mr Dodson submitted that the relevant test is ultimately that stated, or at least endorsed, by Hoeben J as his Honour then was, in Preston v Star City Council Pty Limited [2007] NSWSC 293 at [21], namely whether the Court "has reasonable grounds for being fairly certain that there were other relevant documents which ought to have been disclosed".
In that context it is appropriate to identify the significance or otherwise of the history of discovery in relation to the matter. Mr Dodson submitted that not much can be drawn from the delays that his client experienced in complying with various timetables for the provision of discovery. I agree. However, I consider that the history of discovery means that the weight that the Court might attach to the verification of the various lists of documents given by Mr Harris is substantially diminished. Further, given the repeated attempts to comply with the discovery application and the repeated identification of further repositories of documents, I do not think that one can readily conclude from the fact that Sony may have had the complaints made in Annexure W to Mr Nguyen's affidavit drawn to its attention, that it has properly satisfied itself that any safety reports are not in its possession.

The Examples

Counsel for Mr and Mrs Luxon, Mr Lloyd, sought to make good the proposition that the Court would be satisfied to the relevant standard that there are documents not yet discovered, not only by reference to the history of the matter but by reference to five "examples" based on the documents that were discovered. These examples were based on the first five entries in Annexure W to Mr Nguyen's affidavit.
The first example arose from discovered document 146 in Sony's original list of documents. This is a document entitled "CSS Escalation System". It is a form of report concerning an incident involving the overheating of a Bravia television on or about 8 October 2007, that being approximately eight months before the incident that gave rise to these proceedings.
The document is of a standard form which one would expect in a significant organisation when a safety complaint is raised. It reveals some form of initial inspection had been undertaken of the relevant television set. It indicates that the television unit is currently at a service centre and "the original sets be held for TSG investigation". It is not clear what "TSG" stands for. Under the heading "Response History" the document indicates that "sent report O/S", which I would infer is a reference to sending the report overseas.
Discovery document 148 includes an email from Mr Harris to a Mr Takayuki, who appears to be an employee of at least a related entity overseas, attaching a report of the incident. The email was sent on 11 October 2007. Within this chain of emails is an email sent by Mr Takayuki to Mr Harris on 15 October 2007 advising him to send the "defective board to TVOPA and they will check once returned on 18 October".
The entity "TVOPA" appears to be, or to contain, a product safety department. It is located in Malaysia. Within the first list of documents provided by Sony there is no report or document that post-dates that email in relation to that incident. The ultimate contention is that the Court should be satisfied to the relevant standard that there is or is likely to be a report from TVOPA concerning that incident in the possession of Sony.
The second example arises out of document 136. Document 136 includes a document headed "Reliability Incident Report" ("RIR") which is a report on an incident involving a Bravia TV on 17 December 2007 when a TV was switched on for the first time and smoke emitted from the back of the television. The date of that incident was approximately six months before the incident that gave rise to this litigation.
A "CSS Escalation System" form was prepared in relation to that incident which indicates that the television set was sent to "TSS". TSS appears to be an electronics firm in West Burleigh, Queensland. On 19 October 2007, they forwarded a brief note saying they had inspected the unit and located a circuit which had "burnt all the way through the board".
On 21 December 2007, Mr Harris sent an email to a person overseas within Sony saying, "please find attached an RIR case for your information". He inquired whether the recipient needed the "board as otherwise it would be disposed of within one month". He received an email reply saying, "I will come back to you middle of next week whether TVOPA needs the board for investigation".
It was contended that was the last chronological document dealing with this incident. It was submitted that the Court should be satisfied to the relevant standard that it was likely that a report upon an investigation into the burnt circuit was sent back to Sony.
The third example arises out of discovered documents 123 and 124. Included within discovery document 123 is an RIR dated 13 June 2008 concerning an incident on 18 April 2008, where the customer turned on the television and smoke came out of the unit. The customer noticed a burnt wiring smell and heard a crackling sound when the unit was turned on.
A CSS Escalation System form was provided in relation to this incident. On 13 June 2008, Mr Harris sent the RIR form by email overseas. He received a response on 19 June 2008, requesting that he send the circuit board to "TVOPA for investigation". Again Mr Lloyd submitted that the Court should be satisfied to the relevant standard that a report on that investigation was sent back to Sony. No such report has been discovered.
The fourth example arises out of discovered document 111. It is a CSS Escalation System document concerning an incident on 14 April 2010. The form records an incident where the customer watching the television set noticed black smoke came from the television set and heard a sparking noise. Mr Lloyd submitted that this was the only document concerning that incident. He submitted that, in light of what is revealed by the other documents, the Court should be satisfied of the existence of further documents being by way of investigation and follow-up.
The fifth example arises out of discovery document 103 which is another document entitled "CSS Escalation System". It concerns an incident on 15 February 2012, where a customer detected an abnormal or "weird" smell coming from a television set. The report includes an entry where a Sony employee requested that the "ASC send me a report". It is not clear who the "ASC" is but one would expect it to be some form of technical follow-up. The CSS Escalation System document also records an entry that at some point the unit had been assessed and "Ian from IBIE will send you a report on it soon". Mr Lloyd submitted that, in light of those entries, the Court should be satisfied to the relevant standard that Sony received a report from "ASC" and received a report from "IBIE".
Mr Lloyd also contended that this material is capable of suggesting that a flaw in Sony's discovery is a misconception as to its obligations on discovery, specifically, a misunderstanding of the extent of its obligations to obtain documents that are within its possession and control. He contended that merely because a document was overseas and perhaps located at premises or on a computer server controlled or owned by on overseas entity, did not necessarily mean that it was not within the possession and control of Sony. That may or may not be correct. It is not necessary for me to determine that on this application. As Mr Harris will be required for cross-examination that matter can be asked of him.

Assessment

As stated, I have approached the matter on the basis that the relevant test is that indicated by Hoeben J in Preston v Star City Council, namely, whether the Court has reasonable grounds for being fairly certain that there are other relevant documents which ought to have been disclosed. The history of discovery does not give me much confidence that the existing lists represent a complete answer to Sony's discovery obligations. Further, that history does not give me much confidence that, even if the complaints made in Annexure W to Mr Nguyen's affidavit were brought to Sony's attention, it has made the relevant inquiries to ascertain whether it is in possession of the type of reports the documents suggest it received. Most importantly, a consideration of the discovered documents means the Court has reasonable grounds for being fairly certain that there are other relevant documents which ought to have been disclosed.
The fifth example specifically identifies two reports that were due to be provided to Sony and there is no explanation for why they have not been discovered. The first two examples reveal reasonably serious potential safety incidents which were the subject of specific referrals to the entity TVOPA in Malaysia, accompanied with a clear expectation that a response would be received. It is not a matter of simply saying that it seems likely that Sony would have received a response in these circumstances. Instead, in circumstances where a safety concern is raised and where officers within Sony have specifically sought an investigation by that overseas entity, I am more than satisfied that there are reasonable grounds for being fairly certain that Sony received documents from that overseas entity reporting on the outcome of its investigation into the relevant incidents. There is no basis in the material for believing that having received those reports somehow they have been lost and cannot on appropriate search be found.
Accordingly, I will grant the relief sought in the Notice of Motion. I think the appropriate course will be to make the orders but to list the matter for mention before a Registrar in the short-term to allow that date to be fixed. I can indicate that I consider that the cross-examination should occur before a Judge or an Associate Judge. The utility of this exercise requires that there be a judicial officer who, following the questioning of Mr Harris, will be able to make reasonably focused orders for supplementary discovery if that is required. Accordingly, the Court will make orders 1 and 2 in the Amended Notice of Motion filed 23 September 2016.
[Discussion re dates and submissions on costs]
Accordingly, the Court orders that: 1. David Harris, Technical Manager employed by the Second Defendant, is to attend the Supreme Court of NSW to give evidence on a day assigned by the Court. 2. Leave for the First and Second Plaintiffs to cross-examine David Harris in respect of his Affidavit sworn 20 July 2015 and Affidavits of Discovery sworn 8 October 2015, 10 February, 18 May and 5 August 2016. 3. Second defendant to pay costs of the plaintiff's motion up to today. 4. Reserve the costs of the cross-examination of Mr Harris. 5. Matter listed for directions before the Common Law Registrar on 6 October 2016.

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: 05 October 2016

Trade Practices Act 1974(Cth)

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