Plaintiff v Defendant

Supreme Court of Victoria|2007-11-16|Before: HOLLINGWORTH J

Practice & procedure - Notice to produce documents - Whether affidavit made reference to deponent's entire diary or only certain entries - Whether party entitled to seal up non-relevant parts of diary - Whether plaintiff required to produce entire diary for inspection - Supreme Court (General Civil Procedure) Rules 2005 rr 29.10, 29.11 and 35.08

1 The plaintiff ("Jefferson Ford") sells and distributes Ford vehicles and parts through several dealership businesses, including the City Ford dealership in Melbourne and the Jefferson Ford dealership in Braeside. It does so under dealer agreements with the defendant ("Ford"), dated July 2002.

2 Until recently, Ford has accepted and delivered separate orders for spare parts to each dealership. In a letter to Jefferson Ford dated 8 June 2007, Ford indicated that, with effect from 1 September 2007, it would only accept spare parts orders from the City Ford dealership, and would only deliver those parts to the Jefferson Ford dealership. Jefferson Ford alleges that the proposed arrangements would be in breach of the dealer agreements, and that each dealership is entitled to order and receive delivery of its own spare parts. Ford alleges that it is contractually entitled to impose the proposed single point ordering and delivery system.

3 This proceeding was commenced on 24 August 2007. Jefferson Ford issued a summons seeking interlocutory injunctive relief, compelling Ford to continue for the time being to receive orders from and deliver parts to both dealerships. The injunction application came before me in the Practice Court on 29 August 2007. It was resolved by the provision of mutual undertakings, including an undertaking by Ford to continue the current ordering and delivery arrangements until trial or further order.

4 The proceeding was then entered into the Commercial List. At a directions hearing on 14 September 2007, I made orders for, amongst other things, the delivery of pleadings and the discovery of documents.

5 On 20 September 2007, Ford served on Jefferson Ford a notice to produce, requiring the latter to produce for Ford's inspection by 26 September 2007 certain specified documents, being the original diaries of Simon Jefferson, managing director of Jefferson Ford, referred to in paragraphs 22, 30 and 32 of his affidavit sworn 27 August 2007 in support of the interlocutory injunction application ("the first Jefferson affidavit"). The current application relates to the nature and extent of Jefferson Ford's obligation to comply with the notice to produce.

6 The first Jefferson affidavit makes the following references to Mr Jefferson's diaries:

(a) Paragraph 22 deals with two conversations between Mr Jefferson and a Ford manager, on 30 and 31 January 2002. After deposing to the matters discussed in the conversations, Mr Jefferson says: "I kept notes of the conversations in my diary." Copies of the relevant diary pages, and his typewritten version of them, are then exhibited;

(b) Paragraph 30 deals with a meeting between Mr Jefferson and a different Ford representative in May 2003. After deposing to the substance of the conversation, Mr Jefferson says: "I also noted this conversation in my diary." A copy of the relevant diary page and his typewritten version is exhibited;

(c) Paragraph 32 deals with a meeting in September 2004. Once again, after deposing to the matters discussed in the meeting, Mr Jefferson says: "I also made a note of this conversation in my diary." He then exhibits a copy of the relevant diary page and typewritten version.

7 Mr Jefferson has sworn a second affidavit, dated 25 September 2007, in which he deposes that the only other pages in the 2002, 2003 and 2004 diaries which have any relevance to this proceeding are dated 12 November 2003 and 10 November 2004, respectively. Jefferson Ford has provided a copy, and offered to produce for inspection the originals, of those two additional pages.

8 Jefferson Ford says that Ford is only entitled to inspect the specific diary entries referred to in the two Jefferson affidavits. Jefferson Ford says it is entitled to seal the remainder of the diaries, as they are not relevant to this proceeding.

9 Ford says that it is entitled to inspect the entire diaries, pursuant to rule 29.10(2) of the Supreme Court (General Civil Procedure) Rules 2005. Rule 29.10(2) provides:

Where, in the originating process filed by a party or in any pleading, interrogatories or answers, affidavit, or notice filed by a party, reference is made to a document, any other party may, by notice to produce served on that party, require that party to produce the document for inspection.

10 Ford seeks an order under rule 29.11, compelling Jefferson Ford to produce the entire diaries.

11 It has long been the practice that, if only certain parts of a document are relevant to the issues in a proceeding, a party making discovery may be entitled to seal up those parts of the document which are not relevant and refuse to produce them for inspection.[1] Jefferson Ford argues that the same principle should be applied in the case of notices to produce under rule 29.10.

12 Ford accepts that for the purposes of providing discovery and inspection of documents, Jefferson Ford could produce the original diaries for inspection with irrelevant pages masked. But Ford argues that rule 29.10 provides for a completely different procedure, and its rights under the notice to produce procedure should not be limited by reference to that to which it would be entitled on discovery.

13 Rule 29.10 is contained within order 29, which is headed "Discovery and inspection of documents". Most of the rules contained within that order relate only to the discovery process.[2] The inspection of documents referred to in an affidavit of documents is specifically dealt with in rule 29.09.

14 Rule 29.10 is headed "Inspection of documents referred to in pleadings and affidavits". On its face, it appears to be a discrete provision, which does not form any part of the discovery process. Whilst a notice to produce under this rule is commonly used before the discovery obligation has arisen (for example, to assist a party to prepare its pleading or answering affidavit in advance of discovery), its operation is not limited by reference to the discovery process or to a particular stage of the proceeding. Further, unlike the discovery rules, which generally apply only to some types of proceeding,[3] rule 29.10 may be used in any proceeding.[4]

15 Rule 29.10(4) excuses compliance with a notice served under rule 29.10 on the basis of privilege, or because the document is not in the party's possession. It sets out the requirements for the supporting affidavit which must be filed and served if production is refused on either ground.

16 Rule 29.11 provides:

(a) fails to make discovery of documents in accordance with Rules 29.03 and 29.04;

(b) fails to serve a notice appointing a time for inspection of documents as required by Rule 29.09 or 29.10;

(d) offers inspection unreasonable as to time or place; or

(e) objects to allow any document to be photocopied or to supply a photocopy of the document -

the Court may order the party to do such act as the case requires.

17 Both parties agree that rule 29.11 confers a broad discretion on the court, the nature and extent of which will be considered shortly.

18 Rule 29.13 provides that where an application is made under rule 29.11, and there is an objection to production on the basis of privilege "or any other ground", the court may inspect the document for the purpose of deciding the validity of the claim or objection.

19 Rule 29.10 is not the only rule which entitles a party to serve a notice to produce documents. Rule 35.08 permits a party to serve on any other party a notice requiring the other party to produce specified documents on any application in, or at the trial of, the proceeding. In earlier times, such a notice to produce did not compel the production of the documents, it merely provided a foundation for proof of the documents by secondary evidence if they were not produced in answer to the notice. Rule 35.08(2) now compels production unless the court otherwise orders. The procedure has the same effect as a subpoena for production, and considerations which are applicable to the setting aside of a subpoena are applicable to such a notice to produce.

20 There have been surprisingly few cases which have considered what is required for a document to be referred to in a court document. I accept and adopt the following general principles, which emerge from the cases relating to the pre-1988 English Supreme Court and current Federal Court rules, which are relevantly similar:

(a) There must be some "direct allusion" to the document or class of documents; mere inference that some such document must exist is not sufficient;[5]

(b) The rule is not restricted to cases in which the pleader or deponent says that the text of the document is to be treated as incorporated in the pleading or affidavit;[6]

(c) The documents need not be individually identified or described. It may be sufficient that they are referred to generally or compendiously.[7]

21 There is no dispute between the parties that the relevant paragraphs in the first Jefferson affidavit make "reference ... to a document". The dispute is as to what "the document" is. Ford says Mr Jefferson referred to his entire diaries, as well as the specific parts which he exhibited to his affidavit. Jefferson Ford says that the references should be read as references only to the specific extracts, because that is all Mr Jefferson sought to rely upon.

22 Ford argued that s38 of the Interpretation of Legislation Act 1984 supports its argument, in so far as it provides that, in all subordinate legislation, a reference to "a document" includes, in addition to "a document in writing", "any book". In fact, the section is irrelevant here: there is no doubt that each of the diary (a book) and the individual extracts may be "a document" for the purposes of s38. The real question is: to which document or documents does the first Jefferson affidavit in fact make reference?

23 On a literal reading of paragraphs 22, 30 and 32 of the first Jefferson affidavit, Mr Jefferson clearly refers both to "my diary" and to specific entries. Ford argues that such a result is neither unfair nor inappropriate, because it was Jefferson Ford's choice to refer to the entire diaries in the first Jefferson affidavit. Ford accepts that had Mr Jefferson merely said "I made a note of the conversation on the piece of paper, a copy of which is exhibited and marked X", Ford could not have called for production of the entire diary, even if the piece of paper came from a diary. But, because Mr Jefferson said he made a note in "my diary", he therefore opened up the possibility that his entire diary would be called for.

24 I was initially concerned that such a conclusion would involve favouring form over substance. I was also concerned that such a conclusion could lead to undesirable, unintended consequences in other cases.[8] With the benefit of further written submissions from the parties, those concerns have been allayed, for the following reasons.

25 A party (usually through its lawyers) makes a choice as to what affidavits it will put before the court, based on a variety of forensic considerations. If an affidavit simply says "I made a note" or "I made a note on a piece of paper", that may carry less persuasive weight than a statement that "I made a note in my diary". For example, the latter may involve some sort of suggestion or inference that the note was made contemporaneously with the event to which it relates, and is therefore more reliable. Persons drafting affidavits should do so with care and precision. A party needs to decide in each case whether the forensic benefit of referring to a particular document in an affidavit outweighs any forensic disadvantage of exposing the entire document to a notice to produce.

26 It is not uncommon for a deponent to refer to documents with varying degrees of specificity and for different purposes. At one end of the drafting spectrum, affidavits commonly commence with introductory words to the effect that the deponent makes the affidavit based on matters within the deponent's personal knowledge and "on information and belief from the party's books and records". Read literally, the deponent has thereby "made reference to" the party's entire books and records, all of which may be the subject of a notice to produce. In many, if not most, cases, such a result would be oppressive, unreasonable and totally unintended by the party. However, the court could take such matters into account, in determining an application made under rule 29.11 to compel the production of documents sought in the notice to produce.

27 The only case which seems to have considered the possibility of sealing up part of a document caught by a notice to produce was the decision in the 1883 case of Quilter v Heatley.[9] In that case, the plaintiff referred in his statement of claim to certain entries in his own books, and to four pieces of correspondence to which he was a party. The defendant sought production of the documents prior to delivery of defence; the plaintiff refused to comply. When the matter was heard by the Court of Appeal, Jessel MR said that he would order the production of certain items "with the usual liberty to seal up such parts of the books as do not contain the entries referred to by the plaintiff in his statement of claim."[10] It is not clear whether the question of sealing up was in fact argued; certainly, the other members of the court, in their brief reasons for decision, did not address the question of sealing up, and the final orders are not set out in the report.

28 In so far as it is possible to tell from his brief reasons for decision, it seems that the Master of the Rolls took the view that all that the plaintiff had referred to was the particular book of account entries, not the complete book of account. That is to say, he did not suggest that one could seal up a document which had been referred to in its entirety, on the basis that some parts were not relevant.

29 Although the decision in Quilter has been subsequently approved in other decisions, they do not relate to the question of sealing up. Rather, they have approved the following general statements of principle: that the notice to produce procedure is not the same as the discovery procedure; that the rule was designed to give the opposite party the same advantage as if the documents in question had been fully set out in the pleadings; and that a party serving such a notice in respect of a document referred to in a court document has a right to see the documents "unless good cause to the contrary is shown".

30 If a party chooses to refer to a document in a court document, such as an affidavit, the other side is entitled to serve a notice to produce that document under rule 29.10. A party served with such a notice may refuse to provide inspection in the two circumstances set out in rule 29.10(4).

31 If a party refuses to provide inspection, either pursuant to rule 29.10(4) or on some other ground, the other party may bring an application under rule 29.11, seeking to compel the production.

32 The harshness which might otherwise flow from a strict, literal reading of rule 29.10 can be alleviated by the breadth of the court's discretion under rule 29.11. Where an application is made under rule 29.11, for an order compelling compliance with rule 29.10, the court "may order the [defaulting] party to do such act as the case requires."

33 In Crown Joinery v Lyleho[11], Maxwell P held that the obligations which a notice to produce imposes are similar to those imposed by a subpoena, and the considerations which apply to setting aside a subpoena are equally applicable to a notice to produce.[12] In particular, a notice to produce can be set aside on the grounds that it is too wide, oppressive or "fishing".[13] Similar principles were applied by Habersberger J in Verduci v Macquarie Bank Limited[14], in relation to notices to produce under either rule 29.10 or rule 35.08. In deciding whether a notice to produce involves impermissible "fishing", the court must obviously have regard to the issues in the case and the possible relevance of the document. Similarly, in KC Park Safe Pty Ltd v Commissioner of State Revenue,[15] Beach J refused to order the production of documents in answer to a notice under rule 29.10, on the grounds of public interest immunity.

34 Whilst the court's discretion is broad, the party resisting the production of a document to which it has referred in a court document, bears the onus of establishing why production should not be ordered.

35 It has frequently been said that the rationale for a rule such as rule 29.10, as far as pleadings is concerned, is that reference to the document has the same effect as if the document were fully set out in the pleading. The position is not quite the same with an affidavit, particularly one relied upon for an interlocutory application.[16] A party refers to a document in an affidavit as evidence in support of its case. Ordinarily, an opponent is entitled to test evidence through various means.

36 Ford says it wishes to inspect the entire diaries to form a view as to the authenticity of the particular diary entries upon which Jefferson Ford relies. For example, if there are no other entries in the diaries, or if there is something unusual about the entries relied upon, then Ford may be able to test the authenticity of the entries. There is authority for the proposition that a notice to produce is not the appropriate means by which to obtain an original document for forensic examination[17], because all that the rule requires is the provision of the document for inspection and copying; there are other rules for obtaining the delivery up of a physical object for testing. But Ford does not seek to have the original examined by an expert, merely to inspect and form its own opinion. This does not seem to be an improper use of the notice to produce procedure, particularly in a list such as the Commercial List, where the court is keen to ensure that issues are resolved as early as possible and not left until trial.

37 There is no suggestion that production of the diaries would be oppressive in the ordinary sense. However, in the course of argument, counsel for Jefferson Ford argued that the diaries also contained information of a personal or commercially confidential nature, which was irrelevant to this case and ought not to be disclosed. No affidavit to that effect has been filed, but I accept from the nature of the diaries and Jefferson Ford's business that such may well be the case. Even though Jefferson Ford really ought to have filed such an affidavit by now, I do not propose to deny it the opportunity to put its arguments as to confidentiality before the court in the proper way.

38 Given the broad nature of the court's discretion, and balancing the competing interest of the parties, I propose to adopt the following general course.

(1) If Jefferson Ford wishes to make any claim for the covering up of any part of Mr Jefferson's 2002, 2003 and 2004 diaries on the basis of commercial or personal confidentiality, it must do so by filing and serving an application within, say, 14 days of the publication of these reasons.

(2) There must be exhibited to an affidavit filed in support of such an application, a copy of each diary entry in respect of which confidentiality is claimed. Any such exhibit will, until further order, be kept confidential to named barristers and solicitors engaged by Ford, upon their giving appropriate undertakings as to confidentiality.

(3) If the parties are unable to reach agreement as to the confidential status of such entries, any disputed entries will need to be the subject of determination by the court.

(4) Jefferson Ford will be required to produce to Ford for inspection within, say, 14 days of the final determination of any dispute as to confidentiality, those parts of the three diaries which have been agreed or held not to be confidential. Confidential entries will be covered over for the purposes of inspection.

39 I will hear from the parties as to the precise form of orders and as to costs.

[1] See Kettlewell v Barstow (1872) 7 Ch App 686 and Bray's Digest of the Law of Discovery (2nd edn, 1910) at pp55-56. For more recent discussions of the practice see GE Capital Corporate Finance Group Ltd v Bankers Trust Co & Ors [1995] 2 All ER 993 and Harris Scarfe Limited (Receivers & Managers Appointed) (In liq) & Ors v Ernst & Young & Ors (No 11) [2006] SASC 389.

[2] Rules 29.02-29.08, 29.12, 29.14-29.16.

[3] Rule 29.01 provides that, unless a particular rule otherwise provides, the rules in order 29 only apply to a proceeding commenced by writ and a proceeding in respect of which an order has been made under rule 4.07(1).

[5] Dubai Bank v Galadari (No 2) [1990] 2 All ER 738; King v GIO Australia Holdings Ltd [2001] FCA 1487 at [13]- [18].

[6] King v GIO Australia Holdings Ltd, op cit at [17].

[7] Smith v Harris (1883) 48 LT 869 at 870, approved and applied in Dubai Bank v Galadari (No2), op cit, and King v GIO Australia Holdings Ltd, op cit.

[8] For example, in the case of a reference to something in a company's minute books. A company is legally required to keep "minute books", containing a record of all resolutions passed by the directors or members (Corporations Act 2001 section 251A). The resolutions may be passed over disparate periods of time and in relation to completely different matters. Yet they are required to be kept in the same physical book or books. In fact, it is not necessary for me to determine whether a minute book is a single document or a series of separate documents, for the purposes of rule 29.10.

[12] At [31]. Although Maxwell P referred to the commentary on rule 35.08 as authority for this principle, he was in fact dealing with a notice to produce under rule 25.10, and clearly intended the principles to apply to both procedures.

[16] As recognised by Sanderson M in Buyquick.Com Ltd v Foxgold Pty Ltd [2004] WASC 180.

[17] See for example Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd [1992] 1 Qd R 91.

Court (General Civil Procedure) Rules 2005

Legislation Act 1984

Court (General Civil Procedure) Rules 2005

Legislation Act 1984

Court (General Civil Procedure) Rules 2005

Legislation Act 1984

At a glance

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Judgment (72 paragraphs)

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Legislation Cited (6)