Moon v AA Holdings Pty Ltd

Supreme Court of NSW|2020-08-28|Before: Wright J

Solicitors: Stephen Smart & Associates (Plaintiff) McCabe Curwood (Defendant) File Number(s): 2018/00307818

Judgment

By an amended notice of motion filed on 14 August 2020, the plaintiff, Mr Glenn Moon, seeks orders to the effect that the defendant, AA Holdings Pty Ltd: 1. pay the plaintiff's costs of the proceedings to date on an indemnity basis forthwith; and 2. write to three nominated companies requesting certain information relating, in substance, to who is the proper defendant in the matter, and provide the responses from those companies to the plaintiff. In addition, a direction is sought that the defendant's solicitor file an affidavit showing compliance with the order to write to the nominated companies and to provide the responses.
In light of the somewhat unusual nature of the orders sought, it is necessary to review what has occurred in relation to these proceedings in some detail.

The notice of motion

On 15 June 2020, the plaintiff filed a notice of motion seeking an order that the defendant pay the plaintiff's costs of the proceedings to date on an indemnity basis forthwith. The Registrar made directions for the preparation for hearing of the motion.
On 20 July 2020, the plaintiff was directed to file and serve any amended notice of motion by 14 August 2020 and the matter was listed for hearing on 28 August 2020.
In addition to the order for indemnity costs, the amended notice of motion sought the following orders: "2. Order that the Defendant either by itself or its solicitor within seven (7) days of the making of these Orders write to the following entities: (a) Wallan Enterprises Pty Ltd. (b) McDonald's Australia Limited. (c) Panagakis Nominees Pty Ltd, requesting as at the date of the Plaintiff's accident, confirmation of which person or entity owned or otherwise had the control of the chair in the area where the Plaintiff sustained injury. 3. Direct the Defendant that within fourteen (14) days to furnish the Plaintiff with the responses received from the entities referred to in the preceding Order. 4. Direct the Defendant's solicitor file an Affidavit within fourteen (14) days of the making of these Orders and serve same upon the solicitors for the Plaintiff showing compliance with the Orders made herein."
The defendant opposed the making of these orders as well as the indemnity costs order.

Submissions

As to the order made on 27 April 2020, the plaintiff submitted that it was: "an Order in the nature of a Sabre order available under the general law and also in accordance with the provisions of s.61 of the Civil Procedure Act 2005 (NSW). The origin of the Sabre order derives from Sabre Corp Pty Ltd V Russ Kalvin's Hair Care Company (1993) 46 FCR 428 where His Honour Lockhart J made orders requiring a party to request various documents for an overseas entity and to subsequently produce them to the Court." (emphasis in original)
On this basis, it was then contended as follows: "It was insufficient for the Defendant simply to provide its own interpretation of who it believed were the correct entities to sue, rather the specific nature of the making of the Sabre order required enquiries to be made of all the third parties to determine on the balance of probabilities, who had the care, conduct and control of the chairs and it would have been a very easy task for the Defendant to undertake, and undertake expeditiously." (emphasis in original)
More specifically, it was submitted that: 1. "contrary to the specific requirements of the Order being a Sabre order, the Defendant does not reveal at all any enquiries that it made with the Defendant"; 2. "What they were required to do was to make enquiries with all of the entities concerned so that there is absolute certainty so far as the commencement of proceedings are concerned or the joinder of another defendant to the proceedings in strict compliance with the relevant provisions of the Legal Profession Uniform Law".
Finally, in relation to the defendant's solicitors letter of 29 May 2020 in which they said that "we made enquiries with the Defendant regarding the response to particulars", the plaintiff submitted: "This is precisely what the Defendant was not required to do. The Defendant was required to make enquiries with all of the relevant stakeholders who were involved in the care, control and maintenance of this particular chair and to identify which of those entities had the day-to-day obligation to exercise reasonable care to guard against the risk of foreseeable injury either by express delegation or in their own right." (emphasis in original)
As to indemnity costs, the plaintiff submitted in effect that it was entitled to indemnity costs: "as the entirety of the proceedings have effectively been an exercise involving the incurring of unnecessary legal cost so far as the Plaintiff is concerned in circumstances where there has been significant delays by the Defendant in obstructive behaviour in its obligations to comply with the provisions of the Civil Procedure Act in order to achieve a just, quick and cheap resolution of legal proceedings pursuant to ss.56-58 of the Act."
In substance, the defendant submitted, consistently with what the order of 27 April 2020 actually provided, that: 1. the order was not a Sabre order; and 2. the order as made was complied with.
As to the claim for indemnity costs of the whole proceedings, the defendant effectively submitted that: 1. the costs of the amended notice of motion should follow the event; and 2. otherwise, there was no basis for an indemnity costs order and even though the defendant was late in filing its defence, the plaintiff has been and is also in default of a number of orders in relation to the filing of his evidence. There was no relevant delinquency on the defendant's part such as to justify an award of costs, let alone indemnity costs.
The defendant submitted that the plaintiff's position appeared to be founded "upon the basis that it is the Defendant's responsibility to advise the plaintiff who he should sue, what subpoenas he should issue and what enquiries (including by way of preliminary discovery) he should make".

Consideration

The foundation of the plaintiff's case is that the order made on 27 April 2020 was a Sabre order and, as a result, the defendant was required to make enquiries of others in order to comply with the order.
As Mr Baran correctly noted, Sabre orders derive their name from the decision of Lockhart J in Sabre Corp Pty Ltd v Russ Kalvin's Hair Co (1993) 46 FCR 428. In that case, his Honour was dealing with an application for orders intended to ensure the production of documents which recorded details of the ingredients, manufacture and characteristics of certain JOICO hair care products of which the applicant, Sabre Corporation Pty Ltd (Sabre), was the exclusive distributor in Australia. Sabre alleged that the respondents were passing off their products as JOICO products and engaging in misleading and deceptive conduct.
The solicitors for the respondents had served a notice to produce directed to Sabre to produce the types of documents referred to above. No documents were, however, produced in answer to the notice because no such documents were in Sabre's possession, power or control.
In these circumstances, the respondent filed a notice of motion seeking, inter alia, that Sabre request Joico Laboratories Inc (Joico), a United States corporation which manufactured the JOICO products in the United States, to provide Sabre with those documents. When this was done, the documents "could then be, under the guidance of the Court, made available to the respondents for their inspection, with confidentiality being suitably protected by an order of the Court".
Sabre's position was that there was no objection in principle to an appropriate order being made requiring it in effect to take steps to obtain access to and discover documents from Joico in the United States and to produce them to the Court.
Against this background, Lockhart J said: "In my opinion the Court has power to direct a party to take steps to obtain access to and discover documents which are in the possession, power or control of a third party where there is a real likelihood that the party to the proceeding would be given access to the documents upon request. Section 23 of the Federal Court of Australia Act confers ample power upon the Court to make orders of the kind sought in paragraph (2) of the notice of motion, namely, an order that the applicant be required to request Joico to take steps to obtain access to and discover documents in the possession, power or control of Joico (the third basis relied on by the respondents and mentioned earlier). Section 23 provides: 'The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.' This power may be exercised where there is a real likelihood that the party to the proceeding against whom the order is made would be given access to the documents by the third party upon request. [Various cases where similar orders were made were referred to]. This is a case where there is a real likelihood that the applicant will be provided access to the relevant documents by Joico should it request it. Joico manufactures the products in the United States and the applicant is the exclusive Australian distributor of them in Australia and has held that distributorship since 1985. My view is strengthened by certain of the provisions of the current distributorship agreement between them, in particular clause 11.3, which I shall not recite because it was marked at the request of the parties as a confidential exhibit."
Significantly, the form of order which Lockhart J proposed expressed the obligation on Sabre as being to "make such requests and do such things as may reasonably be necessary to obtain from Joico" the relevant documents. Having indicated in those broad terms what the orders should contain, Lockhart J did not make specific orders on that occasion but the parties were to bring in short minutes to give effect to his Honour's reasons.
It can be seen that the original Sabre order: 1. related to obtaining specified types of relevant documents with a view to their being produced to the Court and then access being given to the party seeking the documents; 2. would specify the steps that the party bound by the order was required to take in order to attempt to obtain the documents; and 3. was made only because it had been established that there was a real likelihood that the party to the proceeding against whom the order was made would be given access to the documents by the third party upon request.
Similar orders have been made in subsequent cases in relation to discovery of documents as well as notices to produce. In Bova v Avarti [2009] NSWSC 921 (Bova), Ward J (as her Honour then was), at [373], described the relevant power to make a Sabre order as "[t]he ability of the court, in appropriate cases, to direct a party to take reasonable steps to procure documents from a non-party": citing Palmer J in Sogelease Australia Limited v Griffin [2003] NSWSC 178 at [37]. The applicable principles concerning Sabre orders have been usefully collected in McGoldrick v SportsTG Pty Limited [2019] NSWSC 1154 (McGoldrick) by Ierace J.
The considerations that are relevant to the making of Sabre orders include: 1. at least where it relates to discovery of documents, a Sabre order should only be considered after inter-parties discovery has taken place: Bova at [371]; McGoldrick at [23]; 2. there must be a likelihood that the documents sought are in fact in existence in the possession of the third party: SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 2) (2006) 155 FCR 150; [2006] FCA 931 (SPI) at [32] (Edmonds J), Bova at [370]; McGoldrick at [25]; 3. there must be a "real likelihood" that the party to the proceedings would be given access to the documents upon request and this likelihood must be established by evidence: Bova at [370]; McGoldrick at [26]; 4. the order must be restricted to requiring the person against whom it is made to take all reasonable steps to obtain the documents: McGoldrick at [27]; 5. the documents must be relevant to the issues in dispute: McGoldrick at [28]; 6. a Sabre order will not be appropriate where the documents are not necessary for disposing fairly of the proceedings: Bova at [372]; McGoldrick at [28]; 7. the degree of hardship and oppression which would be occasioned to the third party if a Sabre order is made is a relevant consideration: McGoldrick at [29].
The defendant did not contend that there was no power under s 61 of the Civil Procedure Act 2005 (NSW) (CP Act) to make the order of 27 April 2020 and there is no cause to consider that issue on this application.
Nonetheless, in my view, the order of 27 April 2020 could not properly be classified as a Sabre order. The order of 27 April 2020 did not concern the production of documents at all. It concerned information which involved legal opinions or conclusions of mixed fact and law as to who had "care, control and obligations of maintenance of the chair". Further, and even if a Sabre order could relate to obtaining information as opposed to documents, the order in the present case did not specify that the defendant was to make enquiries of any third parties, identified or not. Nor did it require the defendant to take all reasonable steps to obtain the opinion or conclusion sought based on information from identified third parties rather than its own documentation and sources of information.
At this point it can be noted that there was one aspect of this matter which has remained entirely unclear. There was no evidence, for example by way of relevant company or business name searches or otherwise, as to the connection, if any, between AA Holdings Pty Ltd, on the one hand, and Wallan Enterprises Pty Ltd and Panagakis Nominees Pty Ltd or the BP Wallan Outbound service centre, on the other. The inference was available from the IAG Longtail Claims' email of 9 October 2018 at 8:50 AM, that AA Holdings Pty Ltd had a connection with the BP Wallan Outbound service centre but what the nature of that connection was and whether it included a corporate or other relationship with Wallan Enterprises Pty Ltd and Panagakis Nominees Pty Ltd was not addressed in the evidence before me. There was no sufficient evidentiary basis to find that Wallan Enterprises Pty Ltd, Panagakis Nominees Pty Ltd or McDonald's Australia Ltd was obliged to, or would be likely to, provide information to AA Holdings Pty Ltd on request.
In the absence of some express requirement in the Registrar's order of 27 April 2020 that the defendant make enquiries of specified third parties, the defendant could not be criticised for not doing so. In addition, prior to the making of that order: 1. the defendant had pleaded its contentions as to who was the owner and the occupier of the relevant area and as to the fact that the dining area was sub-leased to various persons; and 2. the defendant had provided documentation relevant to the issue of who had "care, control and obligations of maintenance of the chair" and provided information as to who had purchased and supplied the chair although it could not now locate an invoice for the chair.
In response to the order of 27 April 2020, the defendant provided its opinion as to who had "care, control and obligations of maintenance of the chair" in its letter of 8 May 2020, identified the relevant entities and their roles, and properly brought to the plaintiff's attention factors that might lead to a need to qualify that opinion.
In all the circumstances, it seems to me that the defendant's solicitors' letter of 8 May 2020 amounts to full and sufficient compliance with the Registrar's order of 27 April 2020.
In addition, in my assessment, the defendant, whom the plaintiff concedes "in all probability, now does not play a role in these proceedings", has not only complied with the order, it has also discharged its duty, under s 56 of the CP Act, to assist the Court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the Court.
The plaintiff's submission appears to be, in effect, that the defendant should, in order to comply with the 27 April 2020 order and with its duties under the CP Act, have conducted its own enquiry into who was liable for the alleged failure of the chair and provided the answer to the plaintiff so that the plaintiff was saved the time and expense of determining whom it should properly join as a defendant.
The plaintiff contended that the order of 27 April 2020 required the defendant "to make enquiries with all of the entities concerned so that there is absolute certainty so far as the commencement of proceedings are concerned …" (emphasis added). I do not accept that the Registrar's order, given its terms, required any such thing.
Furthermore, the plaintiff submitted that the 27 April 2020 order "required enquiries to be made [by the defendant] of all the third parties to determine on the balance of probabilities, who had the care, conduct and control of the chairs" (emphasis added). If this were correct, it would involve the defendant being required to duplicate, at least in part, the adjudicative role of the Court. This, however, would likely be a pointless exercise since the defendant's determination, even if made on the balance of probabilities after full enquiries, would not bind the plaintiff or any third parties and the determination would be unlikely to be admissible at the substantive hearing.
If the plaintiff's contentions were correct it would, at best, shift the burden of determining who should be joined as defendants onto a party who has no apparent role to play in the proceedings, given the absence of any basis disclosed on the evidence for finding that AA Holdings Pty Ltd was potentially liable as a defendant or was related to the other companies which, on the documentation, had a direct role to play in relation to the BP Wallan Outbound service centre.
There does not appear to be anything which would prevent or inhibit the plaintiff or the plaintiff's solicitors writing to Wallan Enterprises Pty Ltd, McDonald's Australia Limited and Panagakis Nominees Pty Ltd requesting confirmation, as at the date of the plaintiff's accident, of which person or entity owned or otherwise had the control of the chair in the area where the plaintiff sustained injury. Mr Baran suggested, in oral submissions, that ethical obligations prevented the plaintiff's solicitors from doing so. However, it was not suggested that the solicitors for the defendant also represented either Wallan Enterprises Pty Ltd or Panagakis Nominees Pty Ltd nor was it suggested that those solicitors acted for McDonald's Australia Limited. It is difficult to see how there could be any ethical prohibition on such enquiries being made by or on behalf of the plaintiff.
For all of these reasons, it does not appear to me that the orders and directions sought in prayers 2, 3 and 4 of the plaintiff's amended notice of motion should be made either to remedy the defendant's alleged failure to comply with the Registrar's order of 27 April 2020 or to ensure the defendant complied with its obligations under Pt 6 of the CP Act.
My conclusions at this point can be summarised as follows: 1. the defendant has complied with the Registrar's order of 27 April 2020; 2. the defendant has complied with its duty under s 56(3) of the CP Act in relation to these proceedings; and 3. the defendant should not be ordered to write to the three entities seeking information as set out in prayer 2 of the amended notice of motion filed on 14 August 2020 or to provide that information to the plaintiff in accordance with prayer 3 nor should the defendant's solicitors be required to provide an affidavit of compliance as sought in prayer 4.

Costs

The only significant remaining prayer for relief was that the defendant should pay the plaintiff's costs of the proceedings to date, which naturally includes the costs of the amended notice of motion, on an indemnity basis.
The plaintiff has, however, been unsuccessful on the substantive part of its amended notice of motion. There were no circumstances identified by the parties or by me which would render it inappropriate for costs of this aspect of the amended notice of motion to follow the event. Accordingly, I am satisfied that the plaintiff is not entitled to its costs in this regard, on an indemnity basis or on the ordinary basis.
As to whether any other costs should be ordered to be paid on an indemnity basis, the relevant principles were helpfully summarised by Black J In the Matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356 at [8] as follows: "… Section 98(1)(c) of the Civil Procedure Act 2005 (NSW) permits the Court to order costs on an ordinary or indemnity basis. Rule 42.2 of the Uniform Civil Procedure Rules 2005 (NSW) provides that, unless the Court otherwise orders or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. Rule 42.5 of the Uniform Civil Procedure Rules deals with an order for costs on an indemnity basis. Costs are awarded on the ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful party for persisting with a case that fails, but to compensate a successful party fully for costs incurred, when the Court takes the view that it was unreasonable for the other party to have subjected the successful party to the expenditure of costs: Hamod v New South Wales [2002] FCAFC 97; (2002) 188 ALR 659 at [20]. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency on the part of the unsuccessful party: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199; (2008) 65 ACSR 324 at [24]; Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6]. That is to be determined by reference to the conduct of the proceedings, not the conduct that is the subject of the substantive dispute."
In the present case, the plaintiff contended that the costs of the proceedings to date should be ordered on an indemnity basis because the defendant's conduct in the proceedings was unreasonable in that: 1. the defendant refused to answer a very obvious question at a very early stage; 2. the defendant refused to engage with the plaintiff; 3. the defendant compelled the plaintiff to seek interlocutory relief to reveal additional entities who ought to be sued; 4. the defendant refused to comply with an order in the nature of a Sabre order; and 5. the defendant continued to refuse to comply with an order of the Court.
As to whether costs of the proceedings to date should be paid forthwith, the general rule is that costs of any application or other step in any proceedings do not become payable until the conclusion of the proceedings: UCPR r 42.7(2). Under that subrule, however, the Court may otherwise order.
The principles relevant to whether an order for payment before the conclusion of proceedings would be made include: 1. proper exercise of the discretion conferred by r 42.7(2) to order otherwise depends upon a consideration of all the circumstances of the case having regard to the interests of justice: Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 (Pavlovic) at [16]; 2. some of the relevant circumstances may include: 1. the interlocutory decision or stage reached represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect of the case: Pavlovic at [15] citing Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432; 55 NSWLR 1 (Morningstar) at [11]; 2. the conduct of the unsuccessful party may be seen as unreasonable: Pavlovic at [15]; Morningstar at [12]; and 3. there is still some considerable distance to go in the litigation so that it may be appropriate that the successful party obtain the fruits of its costs order now: Pavlovic at [15]; Morningstar at [13].
As indicated above, the defendant has been successful in opposing the substantive relief sought in the amended notice of motion and is entitled to its costs in that regard. In addition, the proceedings have not reached a stage where it can be said that a discrete aspect of the case has been completed. This is especially so in circumstances where it is a distinct possibility that AA Holdings Pty Ltd has no role to play in these proceedings as a defendant and it may well be necessary for it to be removed as a party by some appropriate means, which may have costs consequences. The interests of justice do not require or even support the making of an order that the defendant pay the plaintiff's costs of the proceedings to date.
Furthermore, I do not accept that the defendant's response to the 27 April 2020 order was unreasonable or amounted to a failure to comply with the order, for the reasons given above. Nor do I find that the defendant or its solicitors have behaved unreasonably, noting that the defendant has: 1. filed a defence which alerted the plaintiff to who might be the proper defendant or defendants and why; 2. provided relevant documents concerning who was the owner of the land, who was the head lessee and who was the relevant sublessee; and 3. responded quite constructively to the order of 27 April 2020 in the letter of 8 May 2020.
It is true that the defence was not filed within the time set in the original directions of the Registrar but an extension of time was, in effect, granted in the consent directions made on 20 June 2019 and the defendant filed its defence within the time specified in those consent directions. It can be noted, to the extent relevant, that the plaintiff has also failed to comply with some of the Registrar's directions concerning the filing of his evidence.
In all the circumstances, it does not appear to me that the plaintiff is entitled to any costs order against the defendant for the proceedings to date. Nor has there been any delinquency or unreasonableness on the part of the defendant such as could justify ordering the defendant to pay the plaintiff's costs to date on an indemnity basis.

Conclusion and orders

For all of these reasons, the orders of the Court are: 1. The plaintiff's amended notice of motion filed on 14 August 2020 is dismissed. 2. The plaintiff is to pay the defendant's costs of the amended notice of motion.

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: 04 September 2020

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