Plaintiff v Defendants

Supreme Court of Victoria|2011-08-23|Before: J FORREST J

Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 3)

DISCOVERY - Civil Procedure Act 2010 - Provision of background material to the Associate Justice to assist in managing discovery - Final Report of Victorian Bushfires Royal Commission - Implementation of the purposes of the Civil Procedure Act.

1 A curious issue has arisen in this group proceeding which arises out of the tragic Kilmore East bushfire on Black Saturday 2009. To facilitate the work of Associate Justice Zammit in managing what is a massive discovery exercise, I asked that the parties consider providing her Honour with material emanating from the Victorian Bushfires Royal Commission ("VBRC") which provided an interim report in 2009[1] and a final report in 2010 ("the Final Report").[2]

2 With the exception of the CFA, DSE and the State of Victoria (which are jointly represented),[3] the parties (Mrs Matthews, SPI and USC[4]) reached agreement as to the provision of the appropriate material relevant to her Honour's task.

3 The State parties, however, maintain that only an extraordinarily limited number of documents should be provided to her Honour. After hearing argument, I determined that the State parties' objections could not be sustained and that orders should be made as sought by the other three parties.

4 My reasons for making those orders are now set out.

5 Mrs Matthews' case as to the origin of the fire is simple: she alleges it commenced as a result of faulty power infrastructure on a rural property at Kilmore East. However, the issues are far wider than the investigation of the failure of that particular asset of SPI. Her case is now brought against five defendants and the issues raised include the following:[5]

(a) What was the extent of SPI's obligation to take reasonable care to ensure that parts of its electricity network (including the SWER line) were safe and operating safely?

(b) What was the extent of SPI's obligation to take reasonable care to ensure that all parts of the SWER line were safe and operated safely?

(c) What was the cause of the fire?

(d) Was the fire an unreasonable interference in group members' interests in land, created by SPI or persons for whom SPI is responsible, in nuisance?

(e) Did USC take reasonable care in the discharge of its obligations under its contract with SPI to inspect and maintain the power line?

(f) Was the fire or its consequences caused by a lack of care of USC?

(g) Did DSE carry out proper and sufficient work for the prevention and suppression of fire?

(h) Was the fire or its consequences caused by lack of care on the part of DSE?

(i) Did CFA take reasonable steps for the prevention and suppression of fires and for the protection of life and property in case of fire ?

(j) Did CFA ensure, or alternatively take reasonable steps to ensure, that it implemented the effective fire suppression measures?

(k) Was the fire or its consequences caused by a lack of care on the part of CFA?

(l) What were the obligations of members of the Victoria Police on the day of the fire?

(m) Did members of the Victoria Police take reasonable steps to warn residents of the approach of the fire?

(n) Were any acts or omissions by members of Victoria Police a cause of any injury or death?

6 My previous rulings set out some of the history of this litigation.[6] The case has now progressed to a point where advertising the opt out process[7] will occur in the next two months; a trial date is fixed for 17 July 2012.

7 At a previous hearing on 17 June 2011, I determined that SPI and USC should make discovery of all the documents provided by those parties to the VBRC, subject to any claim of privilege. Those documents have now been identified and disclosed.

8 After that hearing, Associate Justice Zammit assumed responsibility for the management of discovery issues in this proceeding. Her Honour is presently considering the question of further tranches of discovery by SPI and USC. The question of discovery by the State parties has not yet been addressed.

9 The Non-State parties are agreed that the following documents should be provided to her Honour for the purpose of facilitating the discovery process:-

Volume 1: Chapter 1 - Conditions on 7 February; 2. Volume 1: Chapter 2 - Arrangements on 7 February;

Volume 2: Chapter 2 - Emergency and Incident Management; 2. Volume 2: Chapter 3 - Fire Ground Response; 3. Volume 2: Chapter 4 - Electricity-Caused Fire; and 4. Volume 2: Chapter 7.1-7.4 - Land and Fuel Management.
Counsel Assisting the Royal Commission submissions:
1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 22 December 2009
2. Regarding Systemic Issues - Electricity dated 17 February 2010

Maurice Blackburn submissions to the Royal Commission:
1. Regarding the Causes and Circumstances of the Kilmore to Kinglake Bushfire dated 27 January 2010
2. Regarding Systemic Issues - Electricity dated 16 March 2010

SPI submissions to the Royal Commission:
1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 27 January 2010
2. Regarding Systemic Issues - Electricity dated 17 March 2010
USC submissions to the Royal Commission:
1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire (undated)
2. Regarding Systemic Issues - Electricity (Training of Asset Inspectors) dated 16 March 2010
State Parties submissions to the Royal Commission:
1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 27 January 2010
2. Regarding Systemic Issues - Electricity dated 18 March 2010.

10 It was also sensibly agreed between the Non-State parties that should any of the parties wish to make short submissions regarding the use of such material it would be appropriate to do so.

11 The position of the State parties is that her Honour should only have Chapters 1 and 2 of Volume 1 of the Final Report, and only four pages of the chapters dealing with the Kilmore East fire. The State also stipulated as follows:

The State parties consent to provision of this material on the basis it does not become evidence in the proceeding does not constitute an admission that the information is accurate, relevant or admissible in the proceeding; and the material provided does not extend to exhibits referred to therein.

12 Two of the main purposes of the Civil Procedure Act 2010 (Vic) ("the Act") are

'to reform and modernise the laws, practice, procedure and processes relating to civil proceedings in the Supreme Court...' and also 'to provide for an overarching purpose in relation to the conduct of civil proceedings to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute'.[8]

13 Section 7 of the Act sets out the overarching purpose:

(1) The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.

(2) Without limiting how the overarching purpose is achieved, it may be achieved by -

(a) the determination of the proceeding by the court;

(b) agreement between the parties;

(c) any appropriate dispute resolution process -

14 The Court's power to make directions to assist in the case management is set out generally in section 9, which provides as follows:

(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects -

(a) the just determination of the civil proceeding;

(b) the public interest in the early settlement of disputes by agreement between parties;

(c) the efficient conduct of the business of the court;

(d) the efficient use of judicial and administrative resources;

(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for -

(i) the fair and just determination of the real issues in dispute; and

(f) the timely determination of the civil proceeding;

(g) dealing with a civil proceeding in a manner proportionate to -

(i) the complexity or importance of the issues in dispute; and

(2) For the purposes of subsection (1), the court may have regard to the following matters -

(a) the extent to which the parties have complied with any mandatory or voluntary pre-litigation processes;

(b) the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;

(c) the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;

(d) the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;

(e) the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;

(f) any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;

(g) the public importance of the issues in dispute and the desirability of a judicial determination of those issues;

(h) the extent to which the parties have had the benefit of legal advice and representation.

(a) limit any other power of a court to make orders or give directions; or

(b) preclude the court from considering any other matters when making any order or giving any direction.

15 Section 47 of the Act sets out the judicial powers of case management in the following terms:

(1) Without limiting any other power of a court, for the purposes of ensuring that a civil proceeding is managed and conducted in accordance with the overarching purpose, the court may give any direction or make any order it considers appropriate, including any directions given or orders made -

(a) in the interests of the administration of justice; or

(b) in the public interest.

(2) A direction given or an order made under subsection (1) may include, but is not limited to, imposing any reasonable limits, restrictions or conditions in respect of -

(a) the management and conduct of any aspect of a civil proceeding; or

(b) the conduct of any party.

(3) Without limiting subsection (1) or (2), a court may actively case manage civil proceedings by -

(a) giving directions to ensure that the civil proceeding is conducted promptly and efficiently;

(b) identifying at an early stage the issues involved in the civil proceeding, including any issues that have not been resolved in accordance with any mandatory or voluntary pre-litigation processes;

(c) deciding the order in which the issues in dispute in the civil proceeding are to be resolved including -

(i) deciding promptly which issues need full investigation and a hearing; and

(i) to co-operate with each other in the conduct of the civil proceedings;

(ii) to settle the whole or part of the civil proceedings;

(e) controlling the progress of the civil proceeding, including, but not limited to -

(ii) dealing with as many aspects of a civil proceeding as it can on the same occasion;

(iii) dealing with the civil proceeding without the parties needing to attend court;

16 There are then the specific powers related to pre-trial procedure contained in section 48, of which the following are relevant:

(1) In addition to any other power a court may have, a court may make any order or give any direction it considers appropriate to further the overarching purpose in relation to pre-trial procedures.

(2) Without limiting subsection (1), a court may give any directions or make any orders it considers appropriate with respect to -

(a) the conduct of proceedings;

(b) timetables or timelines for any matters to be dealt with, including -

(ii) the time within which specified steps in a civil proceeding must be completed;

(g) any other matter specified in rules of court.

17 Finally, I should mention the regime for making orders as to discovery as provided by section 55:

(1) A court may make any order or give any directions in relation to discovery that it considers necessary or appropriate.

(2) Without limiting subsection (1), a court may make any order or give any directions -

(a) requiring a party to make discovery to another party of -

(i) any documents within a class or classes specified in the order; or

(ii) one or more samples of documents within a class or classes, selected in any manner which the court specifies in the order;

(b) relieving a party from the obligation to provide discovery;

(c) limiting the obligation of discovery to -

(i) a class or classes of documents specified in the order; or

(ii) documents relating to one or more specified facts or issues in dispute;

(d) that discovery occur in separate stages;

(e) requiring discovery of specified classes of documents prior to the close of pleadings;

(f) expanding a party's obligation to provide discovery;

(g) requiring a list of documents be indexed or arranged in a particular way;

(h) requiring discovery or inspection of documents to be provided by a specific time;

(i) as to which parties are to be provided with inspection of documents by another party;

(j) relieving a party of the obligation to provide an affidavit of documents;

(k) modifying or regulating discovery of documents in any other way the court thinks fit.

(3) A court may make any order or give any directions requiring a party discovering documents to -

(a) provide facilities for the inspection and copying of the documents, including copying and computerised facilities;

(b) make available a person who is able to -

(i) explain the way the documents are arranged; and

(ii) help locate and identify particular documents or classes of documents.

18 These provisions make it clear that in managing a proceeding a court is to have regard to the most efficient, effective and cost efficient disposition of pre-trial issues, including that of discovery. This is especially so in litigation of the complexity and size of this case.

19 In my view, particularly having regard to the provisions of the Act to which I have adverted, the opposition of the State parties to the orders sought cannot be seriously countenanced.

20 First, there is the fundamental need to ensure that the discovery process is contained within manageable limits. This has been a matter of ongoing concern in recent years. Any process which assists in promoting this aim should be facilitated.

21 In 2000, the Australian Law Reform Commission noted that:

In almost all studies of litigation, discovery is singled out as the procedure most open to abuse, the most costly and the most in need of court supervision and control.[9]

22 In March 2008, the Victorian Law Reform Commission, chaired by the Commissioner in Charge, Dr Cashman, published "Civil Justice Review".[10] That review provided the basis for the implementation of the Act. I have extracted parts of Chapter 6 of that review, appearing under the heading "Expense, scale and delay" (part 5.4.1):

The principal criticisms about discovery are that the objectives of the process are either not being achieved or can only be achieved at great cost.

Chief Justice Spigelman of the NSW Supreme Court has remarked on the cost of discovery:

When senior partners of a law firm tell me, as they have, that for any significant commercial dispute the flag-fall for discovery is often $2 million, the position is simply not sustainable.

These concerns have been echoed by Chief Justice Michael Black of the Federal Court, who believes that courts 'need to take a more interventionist role to avoid having trolley loads of documents being wheeled into court when hardly any of them are likely to be referred to and when every page will add to the cost of the litigation'. It has been observed 'that the scope of discovery is generally where costs blow out: if you say you're going to discover everything, the process essentially becomes endless.'

Chief Justice Doyle of the South Australian Supreme Court expressed alarm that 'the average person can't afford to get involved in substantial civil litigation, even a fairly well-off person; to me it would be an absolute nightmare personally to be involved in a significant civil case'. Chief Justice Doyle is critical of discovery and believes 'discovery has become a scourge. We have to rein it in if we can'. (citations omitted)

The Bar suggested that a possible reason for the excessive cost of discovery is a culture within some sections of the legal profession not to leave any stone unturned, or to search for the smoking gun. The Bar cited Justice Ipp's comments that this attitude

results in mountains of documents being produced (sometimes hundreds of thousands) that require weeks or even months to read, analyse and digest, and then to copy and index. In the end, the usual result is that the number of those documents that are critical to the result of the trial are substantially less than fifty.

The Chief Justice of the Western Australian Supreme Court, Wayne Martin, has similarly commented that 'the "no stone unturned" approach to litigation is very expensive, often more expensive than the parties can afford, and entirely disproportionate to the value of the subject matter in issue'.

...

In addition to legal costs, discovery also consumes the time and resources of the discovering party. The ALRC has estimated that 'the cost of executive and management time involved in complying with discovery obligations may be as great as, or greater than, the legal costs'.

In BT Australasia Pty Ltd v State of New South Wales & Telstra, discovery was costly, wasteful and unmanageable. In a judgment arising out of an application for further and better discovery, Justice Sackville stated:

...A second [consequence of the approach taken by the parties] is that the parties are in continuous disputation as fresh discovery issues are raised, each said to require the time of the Court to resolve. Not only is this extraordinarily costly and, in my opinion, wasteful, but it diverts attention from the need, in a case that has now been going for three years, to prepare for trial. It also imposes a disproportionate burden on the Court.

24 In March of this year the Australian Law Reform Commission published its final report on Managing Discovery and Discovery of Documents in Federal Courts.[11] It said as follows:

The sheer volume of data available today - running into 'terabytes' - tests the historical rationale of discovery as being to facilitate fact-finding, save time, and reduce expense. The commercial realities of discovery in the context of possibly 'too much information' may represent a significant barrier to justice for many litigants as well as amounting to a huge public cost. As noted in a submission to this Inquiry, '[t]he cost of litigation is borne not by those who choose to litigate but by the broader community, and may impede access to justice'. (citations omitted)

25 Finally, it is worth noting what was said extra judicially by Finkelstein J in relation to the management of group proceedings in the Federal Court:

The key to discovery reform lies in active and aggressive judicial case management of the process. The most effective cure for spiralling costs and voluminous productions of documents is increased judicial willingness to just say no.[12]

26 The problem therefore is well documented. The real test for any court is to give effect to the principles spelt out in the Act. This can only be done by carefully crafted management of the discovery process. Any tool or process which can assist in managing and limiting the exercise so that it does not become an uncontrolled behemoth is to be both welcomed and facilitated.

27 As I have already indicated, the discovery process in this case is extraordinarily complex and difficult. No-one can hazard a guess as to its size if not controlled. Terabytes loom large. It may, on a worse case scenario, take 12 months. Any step which can be taken to assist the Associate Justice in managing and containing discovery is for the good. By this I mean that the complexity of the issues demands that any background information which can help her Honour to determine what material is germane to the issues to be litigated at trial can only be of assistance.

28 One of her Honour's most difficult tasks will be to ensure that the discovery process does not thwart the real purpose of the litigation, the trial, and become the most disputed (and costly) part of the whole process.

29 The extracts, which the Non-State parties have agreed upon, from the VBRC final report are on their face patently relevant. I anticipate that they will provide real assistance to her Honour in determining the limitations which should be placed on classes of documents, as well as in determining the staging of the discovery process. They will assist her Honour in understanding what the real issues are and what documents are truly relevant.

30 Whilst it may be that the submissions made by the relevant parties to the VBRC do not provide any greater factual understanding of the issues, they will, I think, provide her Honour with guidance as to what are the real arguments between the parties in this case.

31 Second, the context in which her Honour will have access to the material needs to be understood. The Associate Justice is not the trial judge and will be managing aspects of the interlocutory procedures, including discovery. She will not have to make any determination of fact bearing upon the liability of any of the parties. It is in this context that I remain bemused by the attitude of the State parties. As the trial judge (at least for the moment), I am content to abide their wish that I do not have regard to any parts of VBRC material. However, the Associate Justice is performing a totally different task - one which I would have expected all parties to be willing to assist her Honour to complete.

32 The State parties' stipulation, set out above at [11], which I will adopt in substantially the same form, was well understood by each of the other parties and myself as providing the basis for the provision of the material. There is no quibble with it. The material is simply to provide her Honour with additional information to enable her to better understand the arguments put by the parties in relation to the discovery process.

33 Third, the argument of the State parties that in some way the provision of the material is counterproductive and that her Honour would be distracted by the material is misplaced and misunderstands the judicial function. Even assuming some of the information is irrelevant, her Honour will be able to put it to one side. There is an underlying assumption that a judicial officer, particularly one with the expertise and skill of the Associate Justice dealing with this issue, will be able to determine what material is germane to his or her inquiry and to put to one side the matters that are irrelevant. As the High Court said earlier this year in British American Tobacco Australia Services Limited v Laurie and Ors:[13]

Of course judges are equipped by training, experience and their oath or affirmation to decide factual contests solely on the material that is in evidence. Trial judges are frequently required to make rulings excluding irrelevant and prejudicial material from evidence. Routine rulings of this nature are unlikely to disqualify the judge from further hearing the proceeding.

34 I do not accept the contention of the State parties that the other parties have not justified provision of the material to the Associate Justice. There is no need for them to do so: one only need look at the particular chapter headings within the VBRC final report and the description of the submissions to see that such material is patently relevant to a consideration of the issues that will arise in this litigation and necessarily the obligations upon the parties to make discovery. Even if there is material within either the chapters or the submissions that is irrelevant to her Honour's considerations, then her Honour undoubtedly will identify and exclude that material. Common sense, not legal sophistry, requires that this material be provided so that her Honour can do her job.

35 Next, there is the suggestion that her Honour has been able to cope with the discovery task to date without the assistance of such material. To date her Honour has held two case conferences in relation to discovery and has reserved her decision concerning the first disputed discovery argument. This latter exercise alone, solely concerning the extent of SPI's second tranche of discovery, occupied three sitting days. It seems to me, from afar, that this in itself is sufficient to demonstrate that anything that will assist her Honour in dealing with further discovery arguments should be encouraged, not resisted.

36 Finally I should add this. The provisions of the Act should put an end to arguing and bickering over points such as these. It is essential that in pre-trial management a court gets to the core of a complex case as best it can, using whatever means available. If that requires a Court, in the course of the pre-trial management, to look at documents not admissible at the trial then so be it, provided that the interests of justice are protected - as they are in this case by the Associate Justice considering the material.

37 I propose to make the orders sought by the Non-State parties which I now set out.

That the plaintiff's solicitors provide forthwith to Associate Justice Zammit the following documents:

Victorian Bushfire Royal Commission ("VBRC") Final Report extracts

Volume 1: Chapter 1 - Conditions on 7 February; 2. Volume 1: Chapter 2 - Arrangements on 7 February;

Volume 2: Chapter 2 - Emergency and Incident Management; 2. Volume 2: Chapter 3 - Fire Ground Response; 3. Volume 2: Chapter 4 - Electricity-Caused Fire; 4. Volume 2: Chapter 7.1-7.4 - Land and Fuel Management. 2. Counsel Assisting the VBRC submissions: 1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 22 December 2009 2. Regarding Systemic Issues - Electricity dated 17 February 2010

Maurice Blackburn submissions to the VBRC: 1. Regarding the Causes and Circumstances of the Kilmore to Kinglake Bushfire dated 27 January 2010 2. Regarding Systemic Issues - Electricity dated 16 March 2010

SPI submissions to the VBRC: 1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 27 January 2010 2. Regarding Systemic Issues - Electricity dated 17 March 2010 2. USC submissions to the VBRC: 1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire (undated) 2. Regarding Systemic Issues - Electricity (Training of Asset Inspectors) dated 16 March 2010 3. State Parties submissions to the VBRC: 1. Regarding the Causes and Circumstances of the Kilmore East to Kinglake Bushfire dated 27 January 2010 2. Regarding Systemic Issues - Electricity dated 18 March 2010.

38 I will, as I indicated at the hearing, stay the operation of these orders for 24 hours to enable the State to consider whether it wishes to seek leave to appeal.

[1] Victoria, 2009 Victorian Bushfires Royal Commission Interim Report (2009), No. 225-Session 2006-2009.

[2] Victoria, 2009 Victorian Bushfires Royal Commission Final Report (2010), No. 332-Session 2006-2010.

[4] Referred to as "the Non-State parties".

[5] This list is by no means exhaustive: it merely restates a number of the allegations made in the pleadings.

[9] Australian Law Reform Commission, Managing Justice: a Review of the Federal Civil Justice System, Report No 89 (2000) [6.67].

[10] Victorian Law Reform Commission, Civil Justice Review, Report No 14 (2008).

[11] Australian Law Reform Commission, Final Report No 115 (2011), 13.

[12] R Finkelstein, Discovery Reform: Options and Implementation (2008), prepared for the Federal Court of Australia, 12.

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