Malik v Insurance Australia Limited

Catchwords: CIVIL PROCEDURE — Notices to produce — Before hearing — Relevant to a fact in issue
CIVIL PROCEDURE — Court administration — Case management — Practice Notes – Use of Generative Artificial Intelligence

Legislation Cited: Uniform Civil Procedure Rules 2005, r 21.10
District Court General Practice Note 2

Cases Cited: David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Limited (No 2) [2025] NSWSC 7

Category: Procedural rulings

Parties: Shahid Malik (plaintiff)
Insurance Australia Limited (defendant)

Representation: Counsel:
Mr N Simone (defendant)
Solicitors:
Hall & Wilcox (defendant)

File Number(s): 2025/00218062

Publication restriction: Nil

JUDGMENT – ex tempore

1. By notice of motion filed 18 December 2025, the defendant seeks three orders. First, an order that the plaintiff's purported Notice to Produce dated 17 August 2025, to the extent that it is a Notice to Produce pursuant to r 21.10 of the Uniform Civil Procedure Rules 2005 (“UCPR”), be set aside.

2. Secondly, the defendant seeks that the plaintiff be directed to declare, in any further affidavit sworn or affirmed by him, that Generative Artificial Intelligence (“Gen AI”) has not been used in the preparation of that document.

3. Thirdly, the defendant seeks an order that the plaintiff declare, in any further submissions prepared by him, whether GenAI has been used in the preparation of the document, and if so, that he has carried out the steps of verification set out at para 16 of District Court General Practice Note 2 (“the Practice Note”).

4. The plaintiff has not appeared. That is notwithstanding that on 18 December 2025 the motion was listed for hearing today. I have reviewed the court file, including communications with the parties, which discloses the following.

5. On 18 December 2025, the motion presently before me was listed for hearing today. On the same day, the proceedings were listed for directions before the Registrar at 9.30am. When I became available to hear the matter today, the commencement time for the motion was moved from 9.30am to 10am and it was listed before me.

6. At 1.08pm yesterday, the defendant's solicitor filed with the court registry and emailed to the Registrar, copied to the plaintiff, a copy of the defendant's written submissions. Ten minutes later, the Registrar asked if the parties were ready to proceed with the motion today and what the hearing estimate was. At 2.40pm, the defendant's solicitor responded, copied to the plaintiff, that the defendant was ready to proceed today with an estimate of 30 to 60 minutes. There was no response from the plaintiff until 11.13pm, when the plaintiff responded to the Registrar that the listing for today had been vacated and the next date is 25 March.

7. This was not correct because the listing of the motion for hearing was never vacated; it was simply moved from 9.30am to 10am before me. The plaintiff then went on to note that the defendant had filed written submissions and he sought a timetable for the preparation and filing of submissions by him in reply.

8. At 8.38am today, the Registrar responded to the plaintiff, copied to the solicitor for the defendant, that it was only the directions hearing that was vacated; the notice of motion remained listed before me at 10am today. The plaintiff did not respond to that email and he has not appeared today. The solicitor for the defendant tried telephoning him at 10.15am without success. An email was sent at 10.35am, to which the plaintiff has not responded. The plaintiff was called outside the Court at about 10.35am and no appearance was noted. In my view, the plaintiff has had ample notice of today's hearing and his non-attendance has not been explained or excused. Accordingly, I have proceeded to hear the defendant's notice of motion ex parte.

9. I will now move on to the evidence on the notice of motion and my reasons for its determination. The defendant relies on an affidavit affirmed by Grace Burcher on 17 December 2025, and written and oral submissions by Mr Simone of counsel.

10. In his Statement of Claim filed 7 June 2025, the plaintiff alleges as follows:

11. He held a Home Plus insurance policy issued by the defendant in respect of a property at Woodville Road, Granville;

12. On about 6 August 2022, a severe rainstorm caused damage to the insured property;

13. As a policyholder, he made a claim on the defendant in respect of damage to the property caused by the rainstorm;

14. In breach of various contractual and statutory obligations, the defendant declined coverage; and

15. Specifically, the plaintiff makes the following allegations:

(a) That “the proximate cause of the damage to the insured property was an intense, heavy, persistent and prolonged catastrophic weather event” which fell within the risks to which the policy responds; (b) There was no alternate proximate cause for the damage sustained other than the severe weather event; (c) The damage claimed does not fall within the exclusions outlined in the product disclosure statement; and (d) The insurer's denial of the claim is contrary to the express provisions of the policy.

11. The Statement of Claim further repeats, and expands on, these allegations and refers to expert reports, evidence, utility records, planning documents, legislation and other supporting materials.

12. The defendant has not taken issue with the Statement of Claim, but rather, filed a defence on 25 July 2025. In its defence, the defendant admits the existence of the policy and the declinature of the plaintiff's claim. It says that the damage observed at the property by experts engaged to inspect it and assess the alleged damage was due to factors unrelated to the rainstorm.

13. The defendant relied on the allegedly poor condition of the building, its roof and front porch and poor site drainage. Accordingly, the damage was "Long-Term Damage" to which the policy did not respond. Further, the defendant contends that damage arose from water leaking from a shower recess or shower base to which the policy also did not respond, or the damage otherwise fell within enumerated exclusions for rust, corrosion, gradual deterioration, depreciation, wear and tear, loss or damage from faulty workmanship or previous damage which had not been repaired.

14. Presently irrelevant disputes have also arisen between the parties concerning a Notice to Produce issued by the defendant and Notices to Admit Facts. Those disputes are not before me today.

Notice to Produce

15. On 17 August 2025, the plaintiff served on the defendant a six-page document purporting to be a Notice to Produce for Inspection under UCPR 21.10. It sought the production of 67 categories of documents.

16. On 8 September 2025 the defendant, by its solicitors, responded to the plaintiff's Notice to Produce. In its response, the defendant provided a OneDrive link to a small number of documents which they considered to be both responsive to the Notice and relevant to the issues in the proceedings. Otherwise, the defendant objected to the categories as overly broad, vague and irrelevant to the pleadings. As the solicitors set out in their letter, the defendant considered the issues in dispute between the parties to be the cause of the damage, whether or not the home insurance policy for the relevant policy year provided cover for the damage to the property, and if so, how much cover is available.

17. Having considered the pleadings, I agree that the issues in dispute are those set out in the defendant's letter of 8 September 2025.

18. Rule 21.10 of the UCPR provides that a party to proceedings may require another party to produce for inspection:

(a) any document or thing that is referred to in any originating process, pleading, affidavit or witness statement filed or served by party B, and

(b) any other specific document or thing that is clearly identified in the notice and is relevant to a fact in issue.

19. The principles that apply to a Notice to Produce under r 21.10 are not controversial. They were recently collected by McGrath J in David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Limited (No 2) [2025] NSWSC 7 at paras 187 to 199. Relevantly, they include that a notice may not call for classes of document or subject the recipient to a kind of general discovery obligation; the document must be clearly defined; the notice must not be oppressive; the notice must have a legitimate forensic purpose and must therefore be capable of rationally affecting the assessment of the probability of a fact in issue; and the notice must be deployed only to facilitate the just, quick and cheap resolution of the real issues in the proceedings conformable with ss 56 to 58 of the Civil Procedure Act 2005.

20. The defendant contends the plaintiff's Notice to Produce is wholly defective. Notwithstanding its defects, the defendant made available to him:

21. The policy documents for the relevant policy year, in part answer to request 1(a);

22. The product disclosure statement for the relevant policy period, in part answer to request 2(b);

23. The renewal notice for the relevant policy year, in part answer to request 1(g);

24. Documents recording complaints, disputes or feedback logs relating to the handling of the subject claim, in answer to request 2(I); and

25. Instructions provided to experts or assessors, including briefs, questions posed, and any revisions, in answer to request 3(g).

26. The Notice to Produce was otherwise objected to. The defendant's objections were broadly that the categories were extraordinarily broad, called for classes of documents or documents according to their placement in particular files, and were unlimited by date range, subject matter, author or recipient. Any obligation to comply with it would exceed even permissible obligations on discovery, given the inherently oppressive nature of the searches required.

27. The defendant's objections are well taken. In my view, the Notice to Produce is wholly defective and should be set aside. Each category suffers from at least one, and sometimes all, of the following vices:

28. It calls for documents which are irrelevant, in that they would not rationally affect the assessment of the probability of any fact in issue. Those documents go beyond the dispute between these parties and often go even beyond their non-litigious relationship. General documents relating to internal policies and practices and similar fact evidence is sought. This is well outside the scope of a properly drawn Notice to Produce.

29. It seeks documents by way of discovery. The documents are not referred to in any pleading and are not clearly identified. Often, whole files are sought, which is not generally a permissible purpose for a Notice to Produce.

30. It seeks documents which are not limited as to time, author, issue, recipient or any other limiting factor. This is generally too wide an approach, even for discovery. It is completely inappropriate on a Notice to Produce.

31. It seeks documents which relate to the whole of the parties' relationship, which went for 25 years. On its face, this is oppressive.

32. It seeks documents which may be privileged. Privileged documents may be sought and the question of whether a privilege claim can be made out would then be determined before any production. However, the documents sought must be identified with precision and not simply trawled for by seeking impossibly wide classes of documents.

33. Having considered the submissions of the parties and reviewed the Notice, I find that the whole of the categories in requests 1(a) to (o), 2(a) to (k), 3(a) to (h), 4(a) to (i), 5(a) to (k), 6(a) to (e) and 7(a) to (g) are defective. That is the entirety of the Notice to Produce other than request 2(l), which has been answered.

34. I reiterate that the subject matter of these proceedings, on the pleadings, is the declinature by the defendant of the plaintiff's claim made in 2022. Almost all of the categories go to general matters of process, corporate policy and procedure, comparative cases, finance and regulation. Those matters are irrelevant to the proceedings. I note - and Mr Simone accepts - that there is no reason why the plaintiff cannot serve another Notice to Produce compliant with the UCPR*.* If he does so, he will not be precluded by my rulings on the current Notice to Produce unless he seeks to reagitate categories which I have found are impermissible. I, therefore, set aside the Notice to Produce.

Use of Generative Artificial Intelligence

25. I now turn to the question of the use of Gen AI. Paragraphs 10, 12 and 13 of District Court General Practice Note 2 set out the obligations of a party with respect to the use of Gen AI in the preparation of affidavits and other documents such as submissions. I will not set those out in their entirety today. The defendant suspects that the plaintiff's affidavits and submissions to date have been prepared by the use of Gen AI. Mr Simone points, in his submissions, to episodes of the misuse of principle, the hallucination of cases which do not exist, and the misquoting of public documents.

26. Given the Practice Note specifically precludes parties from using Gen AI in the manner outlined in Mr Simone's submissions - and the parties are already bound by the Practice Note - it is unnecessary to determine whether the plaintiff has, in fact, used it. It is clear, however, that he has not made the disclosure required by para 13 of the Practice Note, notwithstanding his obligation to do so. In that context, I consider it appropriate to make the directions sought.

Costs

27. The defendant has succeeded on its motion. Costs ordinarily follow the event, so the defendant should have its costs of the motion. Further, I note the defendant set out, in September 2025, its position with respect to the Notice to Produce and provided access to documents notwithstanding the invalidity of the Notice. Further, in October 2025 the defendant's representative and the plaintiff discussed narrowing the ambit of the Notice and it was foreshadowed that the present motion would be brought if the Notice were not withdrawn. The plaintiff did not do so, and the present motion was not filed until December. There is no reason that the plaintiff should not be ordered to pay the defendant's costs of the motion, which are only sought on the ordinary basis.

Orders

28. I, therefore, make the following orders:

29. The document entitled "Notice to Produce for Inspection under UCPR 21.10" issued by the plaintiff to the defendant and dated 17 August 2025 is set aside to the extent that the document is a Notice to Produce for Inspection pursuant to Uniform Civil Procedure Rule 21.10.

30. Direct the plaintiff to:

(a) declare in any further affidavit sworn or affirmed in the proceedings that Generative AI has not been used in the preparation of the document in accordance with paragraph 13 of District Court General Practice Note 2; and (b) declare in any further submissions prepared by the plaintiff whether Generative AI has been used in the preparation of the document and, if so, that the plaintiff has carried out the steps of verification set out at paragraph 16 of District Court General Practice Note 2.

3. Order the plaintiff to pay the defendant's costs of this Notice of Motion as assessed or agreed on the ordinary basis.
4. Note that the proceedings are listed for directions before the Judicial Registrar on 25 March 2026 in Sydney District Court.

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