[2021] TASSC 61

Procedure - Civil proceedings in State and Territory courts - Court supervision - Dormant proceedings - Step in proceeding: what constitutes - Step taken within six year period - Email between solicitors requesting further discovery does not constitute a step in advancing the proceedings - Reminder of continuing obligation to discovery has no legal effect - Appeal upheld.

Supreme Court Rules 2000 (Tas), r 56, 382, 383, 386, 388.

Argo Pty Ltd v Attorney-General (No 3) [2004] TASSC 51, 13 Tas R 69, Coad v Dimmick [2013] TASSC 48, 22 Tas R 351 - distinguished.

Crane v Western Australia [2017] WASCA 31 at 24-27 - referred to.

Ives and Barker v Williams [1894] UKLawRpCh 64; (1894) 2 Ch 478, Trade Practices Commission v Santos Ltd and another [1993] 120 ALR 120, TNT Management Pty Ltd v Trade Practices Commission (1983) 47 ALR 693 - applied.

Procedure - Civil proceedings in State and Territory courts - Court supervision - Dormant proceedings - Step in proceeding: what constitutes - Step taken within six year period -Email requesting an inspection of equipment relevant to the alleged negligence not a step capable of advancing the proceedings - Amounts to communication only, no Court order made - Cross-appeal dismissed.

Supreme Court Rules 2000 (Tas), r 56, 437.

Citicorp Australia Ltd v Metropolitan Public Abattoir Board [1992] 1 Qd R 592 - referred to.

Ives and Barker v Williams [1894] UKLawRpCh 64; (1894) 2 Ch 478 - applied.

Appellant/Cross-Respondent: Wallace Wilkinson & Webster

Respondent/Cross-Appellant: McLean McKenzie & Topfer

Judgment Number: [2022] TASSC 49

1. The appeal and cross-appeal in this case relate to decisions made by Associate Justice Holt in respect of an action brought by Mr Strang (the plaintiff) against two defendants, one of which is the Hydro Electric Corporation (the second defendant). On 1 July 2021, the second defendant applied to have the action stayed until the plaintiff obtained an order permitting him to proceed under r 56(1) of the Supreme Court Rules. That rule prevents a party from taking a further step in a proceeding without an order permitting that to occur "if a step, other than an application on which no order has been made, has not been taken in a proceeding for six years since the last step was taken". The issue before the associate judge, and now the issue which concerns me, is whether, either or both of two acts, one by the plaintiff and one by the second defendant, conducted during the six year period, amounted to a "step" within the meaning of that rule.
2. At the hearing before the associate judge, the plaintiff contended that another act, an interlocutory application filed on 26 May 2015 by the second defendant seeking an extension of time to bring proceedings against a prospective third party and associated relief, amounted to a relevant step. His Honour determined that it did not because the application had not been finalised, and hence it was an application "on which no order has been made" and accordingly excluded from consideration as a step for the purposes of r 56(1). There is no appeal from his Honour's decision about this.
3. It is uncontroversial that apart from these acts, there is nothing else that has been done by either party that would amount to a relevant step.
4. The asserted steps which remain in issue both arise from an email exchange which took place between the plaintiff's solicitors and the second defendant's solicitors on 22 January 2020. In particular:
   • The plaintiff sought to arrange an inspection of equipment relevant to the alleged negligence. The associate judge concluded that this was not a step for the purposes of the said rule. The respondent's cross-appeal challenges this determination.
   • In the responding email, the appellant's solicitor requested "updated discovery". His Honour concluded that this was a step in the action, on the basis that it amounted to a notice requesting discovery under r 383(1). This conclusion is challenged by the appellant's appeal.

1. The relevant part of the email said this: "Can you please have Mr Strang provide updated discovery including further medical reports and the terms of settlement of his workers compensation claim?". It is clear from the record that this was a second request for discovery. It would appear from the documents in the appeal book that the pleadings between the plaintiff and the second defendant closed after the second defendant filed an amended defence on 25 September 2013. The associate judge was told that the plaintiff filed a list of documents verified by affidavit on 14 August 2014. I infer that this was in response to an appropriate request under r 381. The express purpose of the request relevant to this argument was to seek "updated discovery" which included particular classes of documents.
2. The associate judge concluded that this email amounted to a request by notice to make discovery pursuant to r 383(1). His Honour rejected an argument that the email lacked the required formality of such a notice and further concluded that it had the effect of activating the obligation of the defendant to make discovery in accordance with r 383(1)(a). His Honour observed, correctly in my view, that r 383(1) mandates discovery in the same way as an order for discovery, made on application. The purpose of the rule is to avoid the need for an application in the ordinary case. The request therefore amounted to a step because it had the effect of "carrying the action forward": Argo Pty Ltd v Attorney-General (No 3) [2004] TASSC 51, 13 Tas R 69 per Underwood J; Coad v Dimmick [2013] TASSC 48, 22 Tas R 351.
3. On the appeal, the second defendant repeated the arguments made, but rejected, at first instance that whatever else I might find in relation to the proper operation of the rule, the email does not in any event amount to a notice under r 383(1) because of a lack of formality and further, that it should be inferred that it was not intended to operate as such a notice by the author. In view of my conclusion in relation to the proper operation of the rule, it is not necessary for me to determine these questions but in any event, I would reject the arguments. I agree with the associate judge that the rule does not require any particular formality, provided it satisfies the description of a request by notice for the other party to make discovery by production for inspection of all discoverable documents in respect of which privilege is not claimed. In my view, the email would amount to such a request. The argument concerning the intention of the author of the email relied on evidence provided to the associate judge from that lawyer that it was not his intention that the notice should operate as a notice under r 383. His subjective intention about this question is plainly irrelevant and, in any event, the argument incorrectly describes the asserted state of mind. What was really being said by that lawyer was that it was his opinion that the notice did not amount to such a request. Whether it amounts to a request is to be determined objectively on the face of the document and if it does, it will have effect in accordance with r 383(1), if that provision is applicable.
4. In any event, it seems to me that the determination of the appeal comes down to a discrete but important point in respect of the proper operation of the rule. The point is whether r 383(1) contemplates and enlivens only one request for discovery capable of creating an obligation to make discovery under that rule. If so, then any subsequent request will not have effect as a request under the rule, and will not give rise to a further obligation to make discovery, independent of the effect of the original request. It was not argued by the plaintiff nor suggested by the associate judge, that a request for provision of documents which had no effect under r 383 could otherwise amount to a step in the action. This must be so. At the very most, such a request would amount to the type of communication between solicitors held not to constitute a step in a proceeding in cases such as Ives and Barker v Willans [1894] UKLawRpCh 64; (1894) 2 Ch 478_. S_ee also discussion in Crane v Western Australia [2017] WASCA 31 at 24-27. The plaintiff's argument is that the rule permits multiple requests, each creating a discrete obligation to make discovery and constituting a separate step in the action.
5. Division 1A of the Rules provides an integrated scheme dealing with discovery and inspection of documents. Rule 383(1) imposes an obligation on a party to make discovery upon request by notice by any other party, at any time after the pleadings between them are deemed to be closed. The discovery obligation activated by this request is to produce for inspection all discoverable documents in respect of which privilege is not claimed. "Discoverable documents" are defined by r 382. If the notice so requires, then the party required to make discovery must also make and serve a list of all discoverable documents. Discovery must be made within 14 days after receipt of the notice or such further time as agreed or allowed by the court or a judge. By s 383(6) the party served with the notice may apply for orders which in effect limit or dispense with the need for discovery. The obligation contemplated by r 383(1)(b) does not require the list of documents to be verified by affidavit, but under sub-par (8) the party requiring discovery may serve a notice requiring such an affidavit. There are separate rules dealing with the time frame for serving and compliance with that notice.
6. The wording of r 383(1)(b) makes it clear that the request, if made, is to be part of the same notice that activates the obligation to make discovery under r 383(1)(a). In other words, r 383(1) does not contemplate separate notices for discovery by inspection and making and serving a list of discoverable documents. Both matters are to be addressed in the same notice. However, it seems clear that r 383(8) requires a separate notice.
7. Rules 386 and 388 deal with orders that may be made on application in respect of discovery. Rule 386 provides for provision of an order for a list of discoverable documents and/or an affidavit verifying same. The service of a notice under r 383 (1) is not a pre-requisite to such an order, but it clearly could be used to enforce the obligation arising from a notice. Rule 388 is concerned with discovery of a particular discoverable document or class of such documents. It caters for circumstances in which a party can establish grounds for a belief that a document or class of documents may be or may have been in the possession of a party, and would include a situation in which those documents have not been produced or referred to in a list pursuant to a notice under r 383(1).
8. It is clear from this examination that the mandatory requirement to make discovery, activated by notice, is intended to be the fundamental process for obtaining discovery under the rules. Importantly for the determination of this case, r 382 provides that "the discovery obligation is a continuing obligation". In my view, it is clear that "the discovery obligation" referred to in r 382 is the obligation to "make discovery" activated by notice in r 383 and refined and further developed by the other provisions of Div 1A.
9. All Australian jurisdictions have now introduced rules which specify that discovery is a continuing obligation. The Tasmanian rules do not provide any explanation or definition of that term, but the purpose and operation of a similar provision in the Federal Court Rules was explained by Heerey J in Trade Practices Commission v Santos Ltd and another [1993] 120 ALR 120:

"I think it is plain beyond argument that this amendment to the Rules, which was introduced in 1989, must have been made in the light of the decision of the Full Court in TNT Management Pty Ltd v Trade Practices Commission (1983) 47 ALR 693. In that case the Full Court held, in the words of McGregor J at 699

'There is no obligation on the respondent to update discovery.'

Similarly, Sheppard J said at 709 after referring to Mitchell v Darley Main Colliery Company (1884) 1 Cab and El 215 and Myers v Elman (1940) AC 282

'These cases are authority for the proposition that a person who has made discovery pursuant to an obligation so to do is obliged to make further discovery of documents in his possession or power of which he becomes aware after the original discovery is made. The cases are concerned not with documents coming into his possession or power after discovery has been made but with documents which were always in his possession or power and which were omitted from the original discovery through accident, oversight or deliberate non-disclosure.'

In my opinion, I do not think r.7A can be read, as Santos argues, simply as imposing an obligation on a party to discover documents which were in its possession, custody or power at the time at which discovery was originally made, and which it is subsequently realised should have been discovered. Such a construction would do no more than re-state what was clearly understood to be the law prior to the amendment, as appears from the passage of Sheppard J's judgment to which I have just referred.

In the context of TNT Management, the use of the expression 'continuing obligation' shows in my opinion a clear intention to extend what had previously been the obligation imposed on parties making discovery. The obligation was thenceforth to discover documents which subsequently came into the possession, custody or power of the party."

1. The learned author of Cairns, Australian Civil Procedure (11 ed, para 10.260) also expresses the view that the introduction of continuing obligation provisions in the rules of each Australian jurisdiction responded to the decision in TNT Management Pty Ltd v Trade Practices Commission. That case was a decision of the Full Federal Court. In a discussion which is pertinent to the issue before me, Sheppard J referred to James v Plummer (1888) 23 LJ in C107 (James) in which Gratham J, in chambers, refused to order the plaintiff to make a further and better affidavit, in respect of documents which had come into his possession after making his affidavit of discovery. His Honour said:

"On appeal it was urged that the plaintiff must search for, find and give discovery of documents up to date. But the Court said that to require a further affidavit up to date would be 'to cast a burden of intolerable weight upon litigants and add enormously to the cost of litigation".

1. This apparent justification for the rule of practice which precluded further discovery after the initial affidavit of discovery, was the subject of comment by Heerey J in Trade Practices Commission v Santos:

"Santos pointed out that continuing obligation to make discovery would be very onerous, particularly in cases like the present one where it has already discovered some 65,000 documents as a result of the activities of 60 to 70 people working full-time. I accept that the obligations of discovery in the present case, both under the original order and under the continuing obligation which, in my opinion, r.7A imposes, are indeed onerous. But that is a choice which our system of litigation has taken, based on a view that the trouble and expense involved in discovery is a price which parties are required to pay to maximise the prospects of the ultimate result of the litigation being a correct and just one."

1. The historical context illuminated by these comments is that discovery, before the rule amendments, was regarded as a once only obligation, and that further discovery was limited to documents that should have been, but for some reason were not, included in that act of discovery. Continuing discovery was rejected as a matter of policy, in particular because of the onerous nature of that obligation. The introduction of the principle of discovery as a "continuing obligation" by express provision in the rules to that effect not only manifests a change in policy, but also alters the fundamental nature of the discovery obligation. The alteration means that the discovery obligation is now not fixed in time, but continues throughout the litigation. I am satisfied that the intended scheme set out in Div 1A is that the discovery obligation, once activated by notice under r 383(1), requires the party receiving the notice to make discovery within the time limited by the rule and to thereafter make supplementary discovery on a continuing basis as discoverable documents come into its possession. I reject the proposition that the continuing obligation provision requires or even permits further notices under r 383(1) before it can have effect. The continuing nature of the obligation arises immediately from the notice once given, and is not dependant on a further or supplementary notice.

Accordingly, I am satisfied that the associate judge erred when he said this:

"The notice was not an activity without effect. Once in the hands of the recipient party, the obligation to provide discovery of non-privileged documents arose. As I have said, the issue of a request, by force of the rules, has the identical effect of a successful application for discovery, which would always be regarded as a step in the proceeding for the purposes of r 56."

1. In my view, the notice given in the email of 22 January 2020 was superfluous and amounted to nothing more than a communication between solicitors. At the most, it was an informal reminder to the plaintiff of its continuing obligation to make discovery of fresh non-privileged documents as they came into its possession, custody or power. It had no legal effect additional to that arising from the original discovery obligation. It did not, therefore have the effect of carrying the action forward in the manner discussed in Argo and Coad v Dimmock. It follows that the learned associate judge was in error when he determined that the email in question amounted to a step in the proceedings for the purposes of r 56.

1. The essence of the plaintiff's argument is that the request to inspect the relevant machinery should be regarded as a step because it was an activity that had "the capacity to carry the action forward". Coad v Dimmock per Porter J at [32]-[34]. The argument relies on the provisions of r 437 of the Supreme Court Rules which provides as follows:

(1) On the application of any party to a proceeding, the Court or a judge may make any order as may be just for the detention, preservation or inspection of any property whether or not in the possession, custody or power of a party that is the subject of the proceedings or as to which any question may arise in the proceedings."

1. The plaintiff's counsel submits that because the request in the email referred to a matter which is capable of being the subject of an order under that rule, that any activity designed to achieve an inspection is and should be regarded as a relevant step.
2. The following passage from the judgment of Lindely LJ in Ives and Barker v Willans has been endorsed by Australian courts in all jurisdictions and at all levels as an example of legal activity relating to a case that falls short of a step in the action.

"The authorities shew that a step in the proceedings means something in the nature of an application to the Court, and not mere talk between solicitors or solicitors' clerks, nor the writing of letters, but the taking of some step, such as taking out a summons or something of that kind, which is, in the technical sense, a step in the proceedings."

1. The plaintiff's counsel sought to distinguish this case on the basis that it was concerned with a request for something already required by the rules, in particular the delivery of a statement of claim. I must confess that the point of distinction eludes me, but in any event the relevant passage is intended to distinguish conduct which is not sufficiently related to the formal conduct of the action and will not necessarily carry the action forward from the perspective of the Court. It may be entirely relevant to a party's preparation for conduct of the case in court, but this has always been distinguished from steps which carry the action forward, for the purposes of rules such as the one currently under consideration.
2. This distinction was further explained by the Queensland Court of Appeal in Citicorp Australia Ltd v Metropolitan Public Abattoir Board [1992] 1 Qd R 592. At issue was whether the process of inspecting documents produced by the other party on discovery constituted a "proceeding", which can be regarded as an identical to a step under the Tasmanian rules. The primary judge had determined that it did because "the rules provide for such a step which is in substance directed towards the progress of the litigation". On the appeal, McPherson SPJ, with whom Ryan and Dowsett JJ agreed, said this:

"Notwithstanding the careful analysis of the authorities undertaken by his Honour, I find myself in respectful disagreement with his conclusion in this matter. It may I think be accepted that to constitute a 'proceeding' the act or activity must have the characteristic of carrying the cause or action forward. It may, as Stable J. described it in Kaats v. Caelers [1966] Qd.R. 482, 489, be 'some step taken toward the judgment or relief sought in the action'; or 'taken with a view to continuing the litigation between the parties to it': Spincer v. Watts [1889] UKLawRpKQB 103; (1889) 23 QBD 350, 353, per Lindley L.J. The word 'is one that suggests something in the nature of a formal step in the prosecution of an action ...': see Mundy v. Butterly Co. (1932) 102 L.J.Ch. 23, 26. It need not be a step taken or act done in a court or its registry. Holding a compulsory conference in conformity with O. 39 r. 30A(4)(e) of the Rules constitutes a proceeding within O. 90 r. 9: see Russell v. Mihaljevic & Anor (Full Court, 24 June 1982, unreported); likewise, the production to the other party of a signed certificate of readiness pursuant to O. 39 r. 30A(5) has been held to be a proceeding: ibid., per Kelly J.; aliter if the certificate has not been signed by either party: see Wright v. Ansett Transport Industries Limited [1990] 1 Qd.R. 297, 299. All these, and many other authorities besides, were referred to by his Honour below or in the course of submissions before us.

I am, however, unable to accept that acts done in the recesses of a solicitor's office partake of the character of a proceeding simply because they may, from the standpoint of the party for whom that solicitor is acting, be supposed to carry the action forward. That is particularly so where the act in question has, so far as the other party or the court is aware, no readily discernible impact on the progress of the action. Time and effort expended on preparing an affidavit of documents achieves nothing if the affidavit is never delivered. Taking instructions from the client or proofs from witnesses are necessary activities if the action is to be brought to trial. None of them can however fairly be described as a 'proceeding' in the cause as that expression is used in O. 90 r. 9."

1. His Honour went on to conclude that the process of inspecting documents fell "outside ordinary conceptions of a proceeding". He noted, in particular, that the only reference in the rules to production of documents by one party for the inspection of another was the power of the Court to compel that production. His Honour went on to make the point:

"It makes no attempt to compel that other party to inspect, in the sense of look at, read or examine, the documents so produced."

1. It seems to me that those comments are particularly pertinent to the issue in this case. There is a strong analogy between production of documents for inspection, compelled if necessary by order, and what was being requested by the plaintiff in this case. The only reference to inspection of property in the rules is that contained in r 437, which is limited to providing a party with the opportunity to ask the court to compel inspection in an appropriate case. It says nothing about whether such inspection will occur and, if so, its nature or purpose. It is clearly a matter related to the preparation by the plaintiff of its case in respect of the proceedings and, in this sense, is closely related to activities such as interviewing potential witnesses and making other enquiries. The communication itself is in the nature of "the writing of letters" referred to in Ives and Barker v Willans.
2. In any event, the request for the inspection was far removed from a court order dealing with that matter. Without deciding the point, it may well be accepted, having regard to the judicial reasoning already discussed, that obtaining an order for inspection under r 437 would amount to a step in the proceeding. However, assuming this to be the case, an application for such an order would not, until the order was made, amount to a step for the purposes of r 56, having regard to the specific exclusion contained in that rule. It cannot be accepted as a reasonable proposition that the informal communication of a request for inspection by agreement amounts to a step for the purposes of that rule, when a formal application for an order in that regard does not. I reiterate that there is no suggestion in this case that the request had been acceded to nor that any such inspection had taken place. The plaintiff relies on the communication of the request itself to constitute the relevant step. It clearly does not.
3. This reasoning is consistent with that adopted by the learned associate judge in respect of this point. His Honour, in fact, set out and relied upon the passage from Ives and Barker v Willans referred to by me. I agree with his Honour's conclusion about this. The ground set out in the cross-appeal has not been made out.

1. It follows that the cross-appeal must be dismissed. However, the appeal will be upheld. I will hear from counsel as to the appropriate disposition of the proceedings consequent upon that determination.