Plaintiff v Defendants

1 This ruling relates to a dispute between the seventh defendant (Mazzeo) and the first defendant (Mordialloc) with respect to the inspection of Mordialloc's discovered documents. The solicitors for Mazzeo and Mordialloc have each filed affidavits and written submissions and have agreed that the dispute be resolved without the need for a hearing.

2 Ordinarily, the resolution of a dispute of this kind would be dealt with by order with short reasons in 'Other Matters'. This case, however, calls for a statement of the applicable principles to provide some guidance to the solicitors as to their respective responsibilities under the Civil Procedure Act 2010 (Vic) (CPA).

3 Mazzeo was added as the seventh defendant pursuant to leave granted by order of the Court made on 5 June 2019. An amended writ and statement of claim was filed on 17 June 2019. Mazzeo filed an appearance on 19 July 2019. Before Mazzeo was joined as a defendant, Mordialloc gave discovery of documents by an affidavit of Braden Williams made on 24 May 2019.

4 By orders made on 30 July 2019, an application by the plaintiff to file and serve a further amended statement of claim (FASOC) was set down for hearing on 26 September 2019. The directions hearing was adjourned to the same day. Mazzeo has complained to the plaintiff about the present amended statement of claim (ASOC) and will shortly file a summons which he will seek to have made returnable on 26 September 2019, seeking to have the ASOC, as against him, struck out (as a pleading). In order to determine whether an application should be made for summary judgment, Mazzeo's solicitor, Mr Manno (Manno) deposes that he and Counsel need to have access to the documents that have been discovered in the proceeding, including those discovered by Mordialloc.

5 On 2 August 2019, Manno, who practices at Daylesford in Victoria, sought inspection of discovered documents from the plaintiff's solicitor. He sought that they be provided electronically, either by USB or a drop box. Initially the plaintiff's solicitor maintained that although Mazzeo was only entitled to the documents referred to in the FASOC, the plaintiff would co-operate and provide unfiled documents deemed 'appropriate and relevant'. After discussions the plaintiff agreed to provide both the documents referred to in the FASOC and those discovered by the plaintiff. The plaintiff's solicitor declined to provide copies of Mordialloc's discovery.

6 On Monday 5 August 2019, Manno sought from Mordialloc's solicitor (Fitzpatrick) copies of the documents which Mordialloc had discovered electronically, either by USB or a drop box. The request was said to be urgent because of the need to review the documents for the purpose of determining whether a summary judgment application should be made. Fitzpatrick responded on 8 August 2019 that the documents were not in electronic form and the appropriate method was to attend Fitzpatrick's office and inspect pursuant to r 29.09 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules). Inspection dates of 13 or 15 August 2019 were proposed. Manno responded the same day that he wanted all the documents (in Schedule 1, Part 1 of the affidavit), asked for them to be copied and offered to pay an appropriate amount per page. There was no response until after a further request on 9 August 2019. On Monday 9 August 2019 Fitzpatrick replied:

The Rules prescribe the manner in which access to discoverable documents is to be made, as set out in our 8 August 2019 correspondence.

We will discuss with you the cost of copying after you have inspected same and identified the documents you require to be copied.

7 On 12 August 2019, Mordialloc served a supplementary affidavit of documents. Copies of the documents referred to in that affidavit were sought by Manno (by letter dated 14 August 2019, referred to below).

8 On 13 August 2019, Manno had a telephone discussion with Fitzpatrick in which he said that he did not know why Fitzpatrick needed Manno to inspect the documents when Manno wanted them all. Fitzpatrick said that is what the rules require, that he was going to require the rules be complied with and, after Manno had inspected the documents then he will 'consider it'. Manno asked him if that meant Fitzpatrick may then not give him copies of all the documents if that is what he requested after inspecting them. Fitzpatrick responded, 'No, I am only saying that I will consider it'.

9 Fitzpatrick, in his affidavit, does not disagree with Manno's account of the conversation but maintains that Manno misunderstood him. He meant that he would comply with the Rules by considering his request and taking appropriate steps to comply with copying the requested documents. One of the issues for consideration was the extent of the documentation sought which would impact on the cost.[1]

10 On 14 August 2019, Manno sent an email to Fitzpatrick in the following terms:

I refer to previous communications and our phone call yesterday. I note that you continue to refuse to provide copies of the documents originally requested on 5 August 2019 unless I first follow the procedure outlined in rule 29.09.

I note also that in our phone call yesterday, I asked that if I come in and inspect the documents and then ask for copies of the documents described in my letter of 5 August, would you then provide them. Your response was only that you would consider it.

As a result my client has instructed me to issue a summons to compel you to provide copies of the documents requested.

The summons will be issued this afternoon. If in the meantime, you confirm that you will provide copies of the documents described in my letter to you of 5 August, that will obviously save unnecessary costs and expense.

Also, in relation to your client's supplementary affidavit of documents dated 12 August 2019, I advise that my client requests copies of the documents enumerated in Schedule 1 Part 1 except documents numbered 885, 886 or 887.

So there is no misunderstanding, so long as you comply with the Supreme Court (General Civil Procedure) Rules 2015 and the Civil Procedure Act 2010 and inspect the documents in accordance with same, copies of the documents requested thereafter will be provided. The cost of same will be discussed after you have inspected the documents and requested documents in relation to the issues raised in the proceedings, as they relate to your client.

In such circumstances, it is not appropriate for you to issue a summons and, if you proceed with same, this email will be produced on the matter of costs.

In relation to your assertion as to urgency, I have been informed by Siobhan Luck of our offices that you stated to her in a telephone conversation on 12 August 2019 that there was no immediate urgency to your request for delivery of the documents.

Furthermore, you are incorrect in your assertions as to our telephone conversation yesterday. In the future, please conduct all correspondence with our office via email.

12 On 14 August 2019, Manno received from Fitzpatrick the documents requested from his client's supplementary affidavit of documents. They were provided in electronic form by Fitzpatrick. They were small in number and held in electronic form.[2] Manno has not received any of the documents set out in the affidavit of documents sworn by Braden Williams on 24 May 2019 as requested.

13 On 14 August 2019 at 4.22pm, my chambers received from Manno an email request for the hearing of an application for Mordialloc to provide copies of the documents set out in the affidavit of documents of Braden Williams sworn 24 May 2019. The request was accompanied by a draft summons and draft affidavit in support to be sworn by Manno. That request was copied to Fitzpatrick.

14 My chambers responded by email at 4.50pm that the summons may be made returnable on Monday 19 August 2019 at 10.30am. That email was copied to Fitzpatrick. In response, Manno called my chambers to seek an earlier or later time on Monday 19 August 2019 as Counsel engaged was otherwise engaged at 10.30am. In consequence, my chambers responded by email informing Manno, and copied to Fitzpatrick, that the matter could be listed at 9.30am.

15 Mazzeo's summons was filed on 14 August 2019 seeking orders that the first defendant provide copies of documents discovered by it and referred to in the affidavit of discovery made by Braden Williams on 24 May 2019. In doing so Mazzeo relied on ss 20, 25, 26 and 29 of the CPA.

16 On 15 August 2019 at 10.22am, Fitzpatrick emailed my chambers referring to the fact that the Court had agreed to list Mazzeo's application at 9.30am and stated that Mordialloc had no objection to the matter being dealt with on the papers without the necessity of an appearance on 19 August 2019. My chambers responded at 12.16pm that I was minded to deal with the matter on the papers and requested that Manno submit a proposed form of order and any submissions in relation to costs. My chambers also requested that Mordialloc send any submission as to costs as well.

17 On 15 August 2019 at 1.05pm, Fitzpatrick emailed Manno offering to resolve the dispute by having the discovered documents scanned by an independent litigation support company upon Manno undertaking to pay the cost. A quotation was provided which showed a cost much lower than that offered to be paid by Manno. The offer was made on the basis that Manno withdraw the summons and each party bear their own costs of it. Fitzpatrick noted that the dispute was unnecessary and inappropriate to be before the Court.[3]

18 Manno responded that Mazzeo would only agree to withdraw the summons upon payment of his costs on an indemnity basis. Manno agreed that it ought to have been unnecessary to issue the summons but that was due to the approach Fitzpatrick had taken. The provision of the documents by 19 August 2019, after scanning, was accepted by Manno, and it was stated that the costs of scanning could be set off against Mazzeo's costs of the summons.

19 Mazzeo submits that the position taken by Mordialloc was inexcusably obstructive and served to simply delay the efficient progress of this proceeding. The application should never have been necessary:

(a) Fitzpatrick's response to the request for copies of discovered documents was misconceived and in blatant disregard of ss 7, 16, 20, 24, 25 and 26 of the CPA;

(b) to state that a party requires strict compliance with the rules (for no particular reason) ignores the purpose and words of the CPA. Mazzeo's position was always that the documents ought to be provided by reason of the provisions of the CPA;

(c) in any event, the approach taken by Mordialloc was legally flawed. It was never Mazzeo's position that the documents ought be supplied in accordance with Order 29. Mazzeo has not filed a defence and therefore it is not able to seek copies of any affidavit of documents under r 29.06 (and, therefore inspection under r 29.09);

(d) it was not until the court indicated that it would make a decision on the papers, and requested a copy of the proposed order sought from Mazzeo, that the first defendant changed its position and did what it ought to have done on 5 August 2019. By that time substantial costs had been wasted owing to the approach taken by Mordialloc;

(e) in the circumstances, and having regard to ss 28 and 29(1)(a) of the CPA, it is appropriate that costs be paid on an indemnity basis;

(f) Mordialloc, by its solicitor, has engaged in unmeritorious and deliberate conduct such as to warrant the Court showing its disapproval and at the same time preventing the successful party being left out-of-pocket;[4]

(g) properly advised, Mordialloc should have known that its approach to the request for inspection ought never to have been put forward;[5]

(h) it may be that it is Fitzpatrick who should pay the costs given that, regardless of what instructions he may have been given, the obligations under the CPA bind the solicitor. However, even the process of seeking such orders potentially places the solicitor in a position of conflict of interest and may unnecessarily prolong the application. As such, the orders are sought only against Mordialloc.

(a) at no point has Mordialloc refused or otherwise indicated that it would not comply with the inspection and copying requirements of discovered documents pursuant to the Rules, and relies on s 54 of the CPA and r 29.09;

(b) in compliance with the overarching obligation under the CPA in relation to parties cooperating, Mordialloc sought confirmation that Mazzeo would comply with his obligations to inspect under the Rules and offered two inspection dates, so that the matter could be dealt with expeditiously;

(c) Mazzeo was advised that it would be premature to issue a summons in the circumstances in which he did, referring to the letter at [11] above;

(d) upon being notified of the summons being issued, Mordialloc sought to take reasonable steps to resolve the issue, without unnecessary recourse to the Court, including obtaining a quotation from Lit Support to expedite Mazzeo's access to the documents and clearly identifying the costs involved;

(e) the rate obtained through Lit Support is cheaper than the rate offered by Manno of $0.25 per page and has the further advantage of being provided expeditiously. It would take Fitzpatrick's staff some considerable time to copy documents, noting that they comprise some 19 folders and an estimated 8,000 pages;

(f) the application for costs by Mazzeo is, in the circumstances, inconsistent with the parties' obligations under the CPA. There should be no order as to costs.

21 In taking the stand he did, Fitzpatrick (on behalf of Mordialloc) relied on s 54 of the CPA and r 29.09 of the Rules. Section 54 is contained in Part 4.3 of the CPA, which deals with disclosure and discovery, and provides:

54 Discovery of documents to be in accordance with rules of court

Unless a court otherwise orders, discovery of documents in a civil proceeding is to be in accordance with the rules of court.

22 Rule 29.09 provides, so far as presently relevant:

(1) A party upon whom an affidavit of documents is served in accordance with Rule 29.03 or in accordance with an order made under Rule 29.07 or 29.08 and a party to whom an affidavit of documents is supplied in accordance with Rule 29.06 may, by notice to produce served on the party making the affidavit, require that the party produce the documents in that party's possession referred to in the affidavit (other than any which that party objects to produce) for inspection.

(2) A party upon whom a notice to produce is served in accordance with paragraph (1) shall, within seven days after that service, serve on the party requiring production a notice appointing a time within seven days after service of the notice under this paragraph when, and a place where, the documents may be inspected.

(3) A notice to produce under paragraph (1) shall be in Form 29C.

(4) A party to whom documents are produced for inspection under this Rule may take copies of the documents.[6]

23 In this case, none of the conditions upon which r 29.09(1) operates is applicable. Mordialloc's affidavit of documents has not been served on Mazzeo in accordance with r 29.03 or in accordance with an order made under rr 29.07 or 29.08. The current situation, where Mazzeo has been added as a party after Mordialloc has made discovery of documents, is intended to be covered by r 29.06, which deals with discovery between co-defendants and third parties, and provides (so far as relevant) that:

(1) A defendant who has pleaded shall be entitled to obtain from the party making discovery a copy of any affidavit of documents served on-

(a) the plaintiff by any other defendant to the proceeding;

(b) any other defendant by the plaintiff.

24 Mazzeo has not yet pleaded to the ASOC. Thus r 29.06 is not applicable to enable him to obtain a copy of Mordialloc's affidavit of documents. But once Mazzeo is made a party he is able to view and download that affidavit of documents via RedCrest, the Court's electronic filing system. Thus, the Rules relating to discovery and inspection of documents do not adequately deal with the circumstances where an added defendant seeks to have inspection of documents for the purpose of considering and, if appropriate, making an application to dismiss the claims made against him on the basis that they have no reasonable prospects of success. There is no dispute that the documents may be necessary or desirable to be inspected to enable Mazzeo to make that decision.

25 In my view, the provisions of the CPA fill this gap. In pressing for inspection of documents discovered in the proceeding by Mordialloc, Mazzeo relied on ss 20, 25, 26 and 29 of the CPA.

26 Sections 20, 25 and 26 are contained in Part 2.3 of the CPA which sets out the general and specific overarching obligations applicable to parties and practitioners, amongst others referred to in Part 2.2 of the CPA. I note, before setting out the particular obligations relied on by Mazzeo, that s 16 provides that each person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to any civil proceeding in which that person is involved, including, but not limited to any interlocutory application or interlocutory proceeding.

27 Sections 20 and 25 provide:

1. Overarching obligation to cooperate in the conduct of civil proceeding

A person to whom the overarching obligations apply must cooperate with the parties to a civil proceeding and the court in connection with the conduct of that proceeding.

For the purpose of ensuring the prompt conduct of a civil proceeding, a person to whom the overarching obligations apply must use reasonable endeavours in connection with the civil proceeding to -

(a) act promptly; and

(b) minimise delay.

28 Section 26 provides, so far as relevant:

1. Overarching obligation to disclose existence of documents

(1) Subject to subsection (3), a person to whom the overarching obligations apply must disclose to each party the existence of all documents that are, or have been, in that person's possession, custody or control -

(a) of which the person is aware; and

(b) which the person considers, or ought reasonably consider, are critical to the resolution of the dispute.

(2) Disclosure under subsection (1) must occur at -

(a) the earliest reasonable time after the person becomes aware of the existence of the document; or

(b) such other time as a court may direct.

29 Section 29 is contained in Part 2.4 of the CPA dealing with sanctions for contraventions of the overarching obligations. So far as relevant, it provides:

(1) If a court is satisfied that, on the balance of probabilities, a person has contravened any overarching obligation, the court may make any order it considers appropriate in the interests of justice including, but not limited to -

(a) an order that the person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of the overarching obligation;

....

(2) An order under this section may be made -

(a) on the application of -

(i) any party to the civil proceeding; or

(ii) any other person who, in the opinion of the court, has a sufficient interest in the proceeding; or

(b) on the court's own motion.

(3) This section does not limit any other power of a court to make any order, including any order as to costs.

30 The question whether Mordialloc must disclose to Mazzeo the discovered documents pursuant to s 26 of the CPA was not debated, but rather assumed, by the parties. The operation of that section, in the current circumstances, turns on whether Mordialloc 'considers, or ought reasonably consider' the documents are critical to the resolution of the dispute. In this instance the relevant dispute is between the plaintiff and Mazzeo. There is no reason why the section should not apply to documents in the possession of Mordialloc that are critical to the resolution of the dispute between the plaintiff and Mazzeo. The section is general in its terms and is capable of so applying, particularly having regard to the obligation being imposed on 'each party'.

31 Mazzeo proceeded with the request to inspect the documents on the basis that they were needed to assess whether an application for summary judgment against the plaintiff should be made, and this has not been contested by Mordialloc. I have not set out the nature of the proceeding and the substance of the claims made by the plaintiff against Mazzeo. They are reasonably complex and will be the subject of the contested hearing on 26 September 2019. Suffice it to say that in my view Mordialloc's discovered documents are, on the current pleadings, likely to be critical to the claim made against Mazzeo. Moreover, this is a matter where the documents ought reasonably be considered by Mordialloc to be critical to the resolution of the dispute between the plaintiff and Mazzeo. In these circumstance, it is my opinion that the obligation under s 26 of the CPA applies to the disclosure of Mordialloc's discovered documents to Mazzeo.

32 The approach taken by Fitzpatrick when asked to provide copies of Mordialloc's discovered documents was, in my view, legally flawed. The response from Fitzpatrick on 8 August 2019 to Manno's request that the documents were not in electronic form and the appropriate method was to attend Fitzpatrick's office and inspect pursuant to r 29.09 of the Rules, is remarkable for its lack of good sense and any spirit of co‑operation. The inspection dates of 13 or 15 August 2019 proposed were sufficiently far away to enable the scanning of all the documents, as was requested (and has now happened). The conduct of Mordialloc and Fitzpatrick in this regard discloses a breach of the overarching obligations to cooperate with Mazzeo in connection with the conduct of this proceeding (s 20 of the CPA) and to use reasonable endeavours to act promptly and minimise delay (s 25 of the CPA).

33 As I have made clear, r 29.09(1) of the Rules was not applicable. To insist on personal inspection of discovered documents at Fitzpatrick's offices, in the face of a request for all the discovered documents, is unduly pedantic - even if r 29.09 were applicable. When Fitzpatrick wrote on 14 August 2019, over a week after the first request, repeating his demand that Manno inspect the documents in accordance with r 29.09 and saying that 'copies of the documents requested thereafter will be provided', the heresy was repeated. It must have been obvious to Fitzpatrick that for a solicitor practising from Daylesford to undertake a review of about 8000 pages of documents at Fitzpatrick's premises, or even for Mazzeo himself to undertake that review, was likely to be very time consuming, expensive and productive of error where it is also intended that Counsel review the documents for relevance to an application for summary judgment. In the circumstances of the request, Fitzpatrick's response was obstructive rather than cooperative.

34 The Court moved to the electronic filing of court documents in July 2018. Before that, in Commercial Court matters, electronic filing had been required for some years. In January 2017 the Chief Justice issued the first edition of Practice Note SC Gen 5 entitled Technology in Civil Litigation.[7] It provides much that is relevant to the approach adopted by Mordialloc in this matter, including:

(a) the use of technology in civil litigation facilitates the just, efficient, timely and cost-effective resolution of the real issues in dispute;

(b) the Court expects parties to acquit their obligation to ensure costs are reasonable and proportionate by employing technology to save time and costs wherever possible;

(c) the Court also expects parties to cooperate in the use of technology in civil litigation consistent with their obligations under the Civil Procedure Act 2010 (Vic);

(d) across the broad spectrum of proceedings before the Court, different uses of technology will be appropriate. This will change over time as technologies develop and evolve. It is therefore incumbent on the parties to consider which use of technology will best serve the needs of an individual proceeding in terms of efficiency and cost;

(e) as a matter of principle:

(i) dealings in hard copy are to be the exception rather than the rule in all aspects of civil litigation in the Court;

(ii) the inability or reluctance of a lawyer to use common technologies should not occasion additional costs for other parties;

(iii) sourcing technology services through a third party provider is accepted practice;

(iv) wherever possible, parties are to exchange documents in a useable, searchable format or in the format in which the documents are ordinarily maintained. The exchange format should allow the party receiving the documents the same ability to access, search, review and display the documents as the party producing the documents;

(v) an unreasonable failure to cooperate in the use of technology which occasions additional costs will constitute a breach of the overarching obligations of the parties;

(f) It is assumed that large number of discoverable documents are stored by parties electronically.

35 In the light of the principles expressed in the Practice Note, the expected response to a request of the kind made by Mazzeo should have been to engage with Manno as to the scanning of the documents, as happened after the summons was issued. I think it is reasonable to conclude that the threat of issue, or the issue, of the summons provoked the response from Fitzpatrick of the kind that ought to have been given at the outset.

36 In these circumstances, Mordialloc should pay Mazzeo's costs of the summons and those costs should be assessed on an indemnity basis. In my view, Mordialloc has engaged in unmeritorious and deliberate conduct such as to warrant the Court showing its disapproval and at the same time preventing the successful party being left out-of-pocket. I am also of the view that Fitzpatrick should have known that Mordialloc's response to the request for inspection ought never to have been put forward. I therefore will order that the costs should be assessed on the indemnity basis.

37 In light of the submission made by Mazzeo, I will not order an inquiry as to whether Fitzpatrick should himself bear those costs. In order to undertake such an inquiry (and call on Fitzpatrick to show cause why he should not pay those costs) it may be necessary to disclose communications between solicitor and client and that is not desirable at this stage of the proceeding.

[1] Affidavit of David John Fitzpatrick sworn 15 August 2019, [6].

[2] Affidavit of David John Fitzpatrick sworn 15 August 2019, [8].

[3] Affidavit of David John Fitzpatrick sworn 15 August 2019, [9], exhibit DJF-1.

[4] Australian Guarantee Corp Ltd v De Jager [1984] VicRp 40; [1984] VR 483, 502; PCRZ Investments Pty Ltd v National Golf Holdings Ltd [2002] VSCA 24; Fountain Selected Meats (Sales) Pty Ltd v Int Produce Merchants Pty Ltd (1988) 81 ALR 397, 401.

[5] Fountain Selected Meats (Sales) Pty Ltd v Int Produce Merchants Pty Ltd (1988) 81 ALR 397, 401; Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233, 244.

[6] Sub-rules (5) and (6) of the rule deal with the methods and costs of taking copies.

[7] The Practice Note was issued on 30 January 2017 and replaced Practice Note No 1 of 2007. It was reissued on 29 June 2018 with effect from 2 July 2018.