O'BRYAN J:
1 This is a representative proceeding in relation to certain consumer credit insurance policies issued to ANZ's customers between 1 January 2010 and 30 June 2019 (relevant period). The proceeding concerns two types of consumer credit insurance policies issued during the relevant period: the "ANZ Credit Card Insurance" policy (which was also known, prior to 1 April 2012, as "ANZ CreditCover Plus") which insured certain liabilities under credit cards issued by ANZ; and the "ANZ Loan Protection" policy which insured certain liabilities under personal loans advanced by ANZ. The applicants seek to recover, for themselves and on behalf of group members, the amount of the premiums charged to them in respect of the acquired consumer credit insurance policy plus any interest charged on the premium (where the premium was typically debited to the applicable credit card or personal loan account).
2 On 5 November 2020, I made orders for discovery to be given by the respondents in this proceeding and published reasons for those orders: Reilly v Australia and New Zealand Banking Group Limited (No 3) [2020] FCA 1609.
3 By interlocutory application dated 6 November 2021, the applicants sought orders for further discovery to be given by the respondents in respect of identified categories. I heard that application on 12 November 2021 and made rulings and orders in respect of most of the categories of discovery sought.
4 Category 3 in the applicants' interlocutory application was left unresolved. Category 3 sought data from the respondents' databases containing, where available, detailed information in respect of each relevant insurance policy in force since 1 January 2009 including the policy identifier, the policy type, the date of issue, the channel of sale, policyholder details including date of birth and employment status, total premiums paid and information about claims made on the policy.
5 The applicants' request for discovery in respect of category 3 was supported by a short report dated 3 November 2021 prepared by the applicants' intended actuarial expert, Michael Tripp. Mr Tripp is a senior actuary, non-executive director and insurance market adviser to the financial services industry. Until retiring on 30 April 2021, Mr Tripp was Partner and Head of the Actuarial Services Department and Insurance Sector of Mazars LLP. Mr Tripp has nearly 45 years' experience in the insurance industry gained both as a senior executive and a consultant, covering all aspects of general and life insurance. He is a Fellow of the Institute and Faculty of Actuaries. Mr Tripp's report sets out the questions on which the applicants have asked him to opine and explains the data Mr Tripp requires (and therefore seeks) in order to answer those questions. The data sought by Mr Tripp forms discovery category 3.
6 It was apparent from the evidence filed in advance of the hearing on 12 November 2021 that there had been limited engagement and conferral between the parties about discovery category 3 prior to the hearing. In particular, the respondents provided very little evidence about their data systems, whether the data being sought existed, how it was stored and how it might be extracted. At the hearing, I proposed deferring any ruling on category 3 to afford the parties more time to confer in relation to the data sought, including as to the extent of data available and how it might be extracted, with the aim of either reaching agreement about the discovery to be given or adducing evidence about the availability (and, if contested, relevance) of the data sought. The parties agreed to that proposal and I made the following orders (among others):
2. On or before 26 November 2021, the parties are to confer in relation to discovery category 3 in annexure A and B to applicants' interlocutory application dated 6 November 2021 and seek to agree a form of order in respect of that category.
3. On or before 29 November 2021, the parties are to file an agreed form of order as contemplated by order 2 or, in the absence of agreement, competing proposed orders together with supporting outlines of submissions and affidavits that they wish to rely upon.
4. Any dispute in relation to the form of orders contemplated by order 2 will be determined on the papers.
7 On 29 November 2021, I made consent orders extending the date for conferral until 3 December 2021 and the date for filing material to 6 December 2021.
8 The outcome of that process is that the applicants and the fourth respondent (QBE) have reached agreement as to the scope of discovery in category 3 and I will make orders as proposed by those parties. The applicants and the first to third respondents (ANZ and OnePath) have ultimately reached a position where their disagreement in respect of category 3 is in a relatively narrow compass. In support of their respective positions, the applicants rely on an affidavit of Andrew Paull affirmed 6 December 2021 and written submissions of the same date and ANZ and OnePath rely on an affidavit of Ruth Elizabeth Overington affirmed 7 December 2021 and written submissions of the same date.
9 Before considering the relatively narrow remaining area of disagreement between the applicants and ANZ and OnePath, it is appropriate to make some observations about the failure of ANZ and OnePath to confer properly with the applicants. The evidence discloses the following sequence of events following the hearing on 12 November 2021:
(a) On 22 November 2021, not having heard from the solicitors to ANZ and OnePath, Herbert Smith Freehills (HSF), the solicitors for the applicants, Slater & Gordon (S&G) sent a letter to HSF seeking a response to category 3 proposed by the applicants.
(b) HSF replied on 25 November 2021 stating that ANZ and OnePath had not completed their investigations into the availability of the category 3 data and sought an extension of the conferral period. After some to-ing and fro-ing between the parties, an extension was agreed and, as indicated above, the Court made orders by consent extending the relevant dates.
(c) On 3 December 2021, HSF sent a letter to S&G stating what ANZ and OnePath "proposed to produce" by way of discovery. The letter identified the data to be produced and the databases from which the data would be produced. In respect of certain categories of data, the letter stated that the data "is not available to be exported". The letter enclosed a proposed form of order, which differed considerably from the order sought by the applicants, and asked the applicants to advise whether the form of order was acceptable.
(d) On 6 December 2021, S&G replied to HSF's letter expressing numerous criticisms of HSF's response. In my view, the criticisms were justified. The criticisms included the facts that:
(i) the HSF letter did not explain why there would be any practical issues caused by the form of orders proposed by the applicants, or why the form proposed by ANZ and OnePath would be either more efficient or effective;
(ii) the HSF letter provided no information regarding the data that is available for production from each database maintained by ANZ and OnePath but instead simply declared what ANZ and OnePath proposed to produce;
(iii) the result was that it was not possible for the applicants to assess the problems around producing the data sought, including whether data fields had been omitted because they were not available for production, were difficult to extract, or because the data did not exist in any form.
(e) HSF replied later on 6 December 2021, rejecting the criticisms made. The letter asserted that ANZ and OnePath "have made every effort to investigate the availability of the data that you seek in order to provide a clear and practical solution to the data problems that were previously identified by our clients". The letter also asserted that HSF's previous letter of 3 December 2021 "makes clear the data that is available to be exported and the data that is not". HSF maintained that the form of order originally proposed by ANZ and OnePath was to be preferred to the applicant's proposed form of order. The letter was combative and declaratory in tone. It could not be described as conferral and did not assist the process of conferral.
(f) On 6 December 2021, the applicants filed their original form of order, deleting one category which they accepted was not available from ANZ and OnePath (interest charged on premiums paid).
(g) On 7 December 2021, ANZ and OnePath filed a proposed form of order which contained relatively minor amendments to the applicant's proposed form of order and abandoned the form of order that had been proposed in correspondence.
10 The evidence shows that ANZ and OnePath never engaged in a proper process of conferral with the applicants. By its correspondence, HSF declared what ANZ and OnePath proposed to produce without providing clear information about the data held by ANZ and OnePath, the different locations or databases in which the data may be held, the costs of extracting the data from different locations and any means by which data from different locations or databases could be merged to create a single coherent set of data. Further, conferral usually involves legal practitioners speaking with each other (which nowadays is commonly done via videoconferencing). In the course of a conversation, questions can be asked and answers given, clarifying the parties' positions and increasing understanding. No explanation was provided why that did not occur in this case.
11 Litigation in this Court frequently requires the discovery of data. An applicant seeking data is at a disadvantage to the respondent holding the data because only the respondent will know if, where, in what form and at what cost the data is available to be produced. There is undoubted power in the Court to require a respondent to disclose information as to those matters, including on affidavit. However, that is usually not required in cases such as the present involving experienced practitioners and litigants. An order to confer, or agreement to confer, should result in the litigants, through their legal advisers, engaging in a frank and meaningful exchange of information about the availability and location of data (including across multiple data sets) and the means by which the data can be retrieved and discovered and potentially merged, and the costs of doing so. The exchange of that information enables the parties to reach a cost-effective solution to the discovery task, consistently with their obligations under s 37N of the Federal Court of Australia Act 1976 (Cth). Following such consultation, a respondent may properly maintain an objection to giving discovery either on the ground of relevance or on the ground of insufficient relevance having regard to the cost involved in giving discovery. The information revealed through the process of consultation will enable the Court to rule on any such objection.
12 The correspondence sent by HSF to S&G referred to above fell a long way short of a process of conferral that was contemplated by the Court's order on 12 November 2021 and that would fulfil the obligations of ANZ and OnePath under s 37N. As noted above, the correspondence was declarative and combative in tone and uninformative in content.
13 One final matter, with respect to the merger of data, should be mentioned. The process of discovery ordinarily does not require a party to bring into existence documents (including data) that do not exist. Discovery requires production of existing documents (and data). However, the proper limits of discovery orders are not fixed and the Court has undoubted power to require a litigant to produce on discovery data in particular formats, which may include straightforward data merging.
14 There are three remaining areas of disagreement between the applicants and ANZ and OnePath. The first issue concerns the definition of "policies" in respect of which data is to be produced. The applicants seek data in respect of "each Policy in force since 1 January 2009", where "Policy" takes its meaning from the pleading, being the "ANZ Credit Card Insurance" policy (which was also known, prior to 1 April 2012, as "ANZ CreditCover Plus") and the "ANZ Loan Protection" policy. ANZ and OnePath propose that data be given in respect of "each consumer credit insurance policy associated with an ANZ branded credit card or an ANZ issued personal loan credit facility, which was in force on and from 1 January 2009". In their submissions, ANZ and OnePath state that the change has been proposed on the basis that the OnePath respondents are not able to export claims data relating only to ''Policies'' as that term is defined in the pleading. In that respect, the HSF letter dated 3 December 2021, referred to above, stated as follows in respect of data available from the relevant OnePath database (OPSCC):
The data to be exported will be data for claims made under insurance policies linked to ANZ issued credit cards or personal loan facilities issued by ANZ where the linked policy commenced on or after 1 January 2009. The data to be exported will be the available data from the following fields:
• Policy number;
• Date of notification;
• Date of claimable event;
• Head of claim;
• Claim payments and dates of payment;
• Status of claim.
The data associated with insurance policies linked to ANZ issued credit cards is not stored within OPSCC in a way which enables the extract to be targeted to include only ANZ CreditCover Plus or ANZ Credit Card Insurance products. Rather, the data includes all claims associated with any insurance policy in existence at the time of the claim which was associated with an ANZ issued credit card. As a result, the proposed export will likely include claims data associated with policies which are not held by group members in the current proceeding.
15 Thus, ANZ and OnePath propose the change to the applicants' category because OnePath proposes to produce data in respect of insurance policies that are not the subject of the proceeding. It goes without saying that that is unhelpful and will occasion wasted costs for the applicants to sort the relevant from the irrelevant data. The obvious question is whether that is necessary or whether a cost-effective solution exists. Earlier, the HSF letter explained that ANZ was able to export data from the relevant ANZ database in respect of Policies as defined in the pleading and the data to be exported would include the policy number. The letter did not explain why the data to be exported from the OnePath database could not be limited to data for policies which had the same policy numbers as exported by ANZ. In the absence of such an explanation, I consider that ANZ and OnePath have not provided a sufficient justification to amend the discovery category sought by the applicants, and I do not accept the change.
16 The second issue concerns data about the policyholder, including the date of birth and employment status. ANZ and OnePath propose to limit that data to the relevant details at the time of the policyholder's application for insurance. In their submissions, ANZ and OnePath state that the amendment has been proposed to ensure that the data to be exported is that data which was provided to ANZ at the time the application for insurance was submitted. They submitted that this will avoid production of duplicate data, to the extent that copies of this data have been subsequently received from different sources or have been transferred to other databases. That explanation is not entirely clear; in particular, there is no information about the likelihood of other different data being available from different sources. Nevertheless, the causes of action pleaded by the applicants generally concern the point of sale of the policies. The most relevant information would seem to be the information available to the respondents at the point of sale, which is likely to be the information that accompanied the application for insurance. For that reason, and based on the evidence currently before the Court, I accept that the change proposed by ANZ and OnePath is reasonable.
17 The third issue concerns data about the premiums paid on the policies. ANZ and OnePath propose to amend the category to refer to premiums paid or charged to the customer, including details of any refunds. In their submissions, ANZ and OnePath state that the amendment has been proposed to reflect the fact that credit facilities which were used to finance the payment of premiums will record a drawdown of available credit, which is a different concept to a record of the payment of a premium to an insurer. Thus, the change is intended to reflect the different means by which the premium was funded. I consider that the change proposed by ANZ and OnePath is reasonable.
18 I will therefore make orders for discovery as proposed by the applicants with the two acceptable changes referred to above. The applicants sought discovery by 25 February 2022, but ANZ and OnePath have indicated that they can provide discovery by 18 January 2022. I will make orders accordingly.
19 Finally, the applicants seek their costs associated with their application for discovery from the first to third respondents the subject of these reasons. In cases such as the present, there are frequent interlocutory disputes concerning pleadings and discovery. Where each party acts reasonably in relation to such interlocutory disputes, the Court will usually order that the costs of such disputes are costs in the cause or the costs are reserved, as such disputes are an ordinary aspect of case preparation. However, if the Court forms the view that one of the parties has acted unreasonably in respect of the interlocutory dispute, costs may be awarded in favour of the other party. This is such a case. As explained above, I consider that in the period after the hearing on 12 November 2021 ANZ and OnePath failed to consult in a reasonable manner in relation to discovery category 3; the basis on which they proposed to give discovery was unclear; and ultimately they abandoned their position and agreed to give discovery largely in the form sought by the applicants. I acknowledge that, in the overall context of this litigation and the costs being incurred by each party, the costs associated with the present application for discovery from ANZ and OnePath might be described as trivial. Nevertheless, the principles upon which costs are ordered in such applications are not trivial and serve to mark the Court's disapproval of the approach taken to this aspect of discovery by ANZ and OnePath.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan.