Taylor v Batten

Federal Court of Australia|1990-08-29|Before: O'Loughlin J

The applicant's case against the University includes claims based on allegations of misleading and deceptive conduct and breach of fiduciary duty. The applicant's have also joined the Commonwealth and the Minister of Industry, Science & Technology as Respondents alleging that it has causes of action against them in consequence of an alleged breach of natural justice and an alleged promissory estoppel. I will refer those respondents as "the Commonwealth". According to the applicant's pleadings it has, for many years been a joint applicant with the University to the Commonwealth and to instrumentalities of the Commonwealth for research grants with respect to a project or projects that may be described as airborne research. The gravamen of the applicant's claim centres upon a particular joint application in respect of an airborne research project that was lodged in the names of the applicant and the University with the Major National Research Facilities Program in 1994. The applicant claims that, unknown to it, in June 1995, the University lodged, and the Commonwealth accepted a second competing application in respect of the same project. That second application was successful. It excluded the applicant from participation in the grant of about $8.5m that was ultimately made in respect of the project exclusively to the University. The applicant filed its List of Documents verified on oath by Peter Anthony Goon, one of its Directors, on 6 June 1996. In addition, the solicitor for the applicant had certified, as required by O 15 r 6(8), that "according to his instructions, the list and the statements in the list are correct". The applicant stated that it had in its possession custody or power, the documents numerated in Schedule 1 to the list. Part I of Schedule 1 contains seven entries. The last four entries identify specific items of correspondence and are unobjectionable. I list hereunder the first three entries:-

"The documents contained in the files listed in the schedule annexed hereto and entitled "Schedule A" which files are more particularly described in that Schedule." Seven hundred and fifteen files are listed. Presumably each file contains one or more documents, but the list does not give any further details.

F248Liaison and Seminars F312Engineering Data" The letter "F" and the numbers following it appear under a heading which is identified only by the letters "LSN". There is no legend in the document to explain the meaning of that heading nor is the last mentioned heading "BO explained. X" Schedule C also contains a series of headings none of which are explained. They include the letters "LSN" once again together with a heading "SHT - NO" (which probably stands for "sheet number") and headings "ISS" and "SHT" neither of which are explained. An example of some of the entries in Schedule C is the series D17 to D36 inclusive. Each of those twenty entries has the same document number 804 10 21.1001. Each of the twenty entries has the same document title "Assembly: IDAC". Under the heading "SHT - NO" there are sequential numbers from 1 to 20. Either the figure 2 or the figure 1 appears under the heading "ISS". The symbol "A2" appears under the heading "SHT" in 19 of the cases. In the remaining case the symbol is "A0". Save for D19 the "date" of each entry is 30 April 1991. The relevant date for D19 is 9 April 1991. I find those entries meaningless, an observation which, regrettably, holds good for the greater number of the entries in Schedule C.

The obligation on a party to litigation to give discovery is contained in O 15 r 2(2) of the Federal Court Rules. The prima facie obligation is to file and serve:- "a list in accordance with r 6 of documents relating to any matter in question ... " Order 15 r 6 states that the list of documents "shall enumerate the documents which are or have been in the possession custody or power of the party." The enumeration is to be in a convenient sequence and as short as possible but it shall describe each document or, in the case of a group of documents of the same nature, shall describe the group sufficiently to enable the document or group to be identified. Despite these primary propositions there remains an overriding discretion in the Court. Order 15 r 3(2) specifically empowers the Court to "make such orders ... as are necessary to prevent unnecessary discovery." It is a well established rule that discoverable documents must be described and identified in such a way that will enable the other party to determine whether it wishes to examine them or not: Taylor v Batten (1878) 4 QBD 85. Although the description of a document should be brief, it must nevertheless be sufficiently detailed so that the other party may know from its description whether or not it should be inspected, a requirement that also extends to documents that are the subject of a claim of privilege; Kadlunga Proprietors & Ors v Electricity Trust of South Australia (1985) 39 SASR 410 at 414 per White J: The Minister for Community Services and Health v Carter and Gribbles Pathology Pty Ltd (unreported, 29 August 1990 per Duggan J with whom King CJ and Mohr J agreed). Issues such as a claim for privilege also warrant an adequate description of the document so that a court may adjudicate if production of the document for inspection is disputed. As Duggan J pointed out in The Minister for Community Services and Health (supra): "In order to satisfy these requirements the description of a document may have to include details such as the date, a description of the document itself and some other information relating to the content or provenance of the document to enable it to be identified subsequently."(p4) Discovery can, of course, be made by reference to bundles and, in some cases, it is only proper that this method be used; see for example, Walker v Poole (1882) 21 Ch D 835 where the defendants, solicitors, were ordered to pay the costs because of their failure to utilise the system of identifying documents by bundles. In that case Kay J said:- "The ordinary mode of setting out such letters has been settled after an immense amount of litigation, and the proper method is to refer to them as contained in a bundle, each document in the bundle being identified by a letter or some other method of identification; that is all that is necessary."(p836) The same view was expressed by Cotton LJ in Hill v Hart-Davis (1884) 26 Ch D 470 at 472 where His Lordship said:-

"[T]hey are set out at unnecessary and improper length. They ought to have been set out in bundles, and scheduled and numbered in such a way that the defendant might have asked for those which he wanted to see, specifying them by their numbers." There is a heavy task placed on a litigant and his or her solicitors in the discovery process. The decision in Compagnie Financiere Du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 still remains the authority which lays out the parameters for discovery. Brett LJ, with whom Baggallay LJ agreed, expressed the principle in these terms:- "It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary."(p63)

Even so, the width of that observation does not mean that there are no constraints upon a litigant. A subjective assessment must be made so that only those documents that relate to a matter in question are discovered. Discovery of unreasonable length, of irrelevant documents, of unnecessary prolixity, can be the subject of an order that the affidavit be taken off the file (see Walker v Poole (supra)) and such an order could be accompanied by heavy cost consequences. The approach to discovery must be directed towards a consideration of the pleadings. As Menzies J explained in Mulley v Manifold (1959) 103 CLR 341 at 345:-

"I now turn to the pleadings to determine what are the matters at issue between the parties, because discovery is a procedure directed towards obtaining a proper examination and determination of these issues- not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary." The examples that I have given and which have been extracted from Schedule A and Schedule C are, in my opinion, self evidently, examples of the inadequacy of discovery. In the first place, the reference to documents in a file is in most cases inadequate because the title of the file does not even suggest that its contents relate in some way to a matter in question. In the second place the descriptions of the documents in Schedule C, relying quite often on technical language would not permit the Court to make any assessment of relevance. I credit the applicant with making a genuine attempt to contain the very expensive exercise of discovery and inspection. However, I believe that its attempts have been misguided. Rather than containing costs it would, in a sense, duplicated costs. If it has not already done so, it will ultimately be necessary for the applicant to make its individual assessment of the contents of each file that is referred to in Schedule A and each document that is listed in Schedule C for the purposes of determining, on an advice on evidence, whether it will or may be used in the presentation of the applicant's case. In the course of that exercise, the applicant could also make a subjective assessment of the documents which would be discoverable by it in the proceedings. I venture to suggest that such an exercise would reduce, substantially, the extent of the present parameters of the discovery material and would thereby reduce, substantially, the costs of the University in an examination of documents. To reduce the costs of a litigant is a salutary exercise and is to be encouraged, for at this interlocutory stage one does not know which of the litigants will ultimately bear such costs. In other words, it would be as much in the interests of the applicant as it is in the interests of the University to ensure that all costs of the discovery process are contained. A proper reassessment of the contents of the files and the descriptions of the documents utilising, where appropriate, references to bundles, would substantially reduce the costs of the discovery process in my opinion. However, there is another approach to the problem. This litigation already bears the hallmarks of a long and expensive trial. Estimates that it might take up to four months have been given. The applicant has submitted that, because of denials in the University's defence of the existence of joint ventures between the parties, it will be necessary to lead oral and documentary evidence covering many years of business activities between the parties. Accepting the concerns as justifiable, it seems to me that they should encourage the parties and the Court to give special consideration to the subject of discovery. Whilst it might be true to say that every piece of paper that has been generated over the years on the subject of the business relationship between the applicant and the University might be discoverable, it does not mean that the parties, or either of them, would contemplate tendering all such material in the trial. As I have come to the opinion that the applicant's discovery has not complied with the Rules, it is open to me to use the discretionary powers that are available under O 15. During the course of argument I suggested to counsel for the applicant that an appropriate order might be in terms that:- "The applicant make discovery on oath by listing in separate categories those documents:- (a) That it will tender as exhibits in the trial (b) That it might tender as exhibits in the trial (c) That will or might assist the case of the respondents or any one or more of them."

Counsel for the applicant responded by informing the Court that his client would be amenable to such an order so long as identical orders were made in respect of the Commonwealth and University. That would pose difficulties. Both sets of respondents have given discovery and neither discovery has been challenged. Furthermore, the Commonwealth was not represented on the hearing of the Notice of Motion. I will make the orders set out above against the applicant who must pay the University's costs. Although I will not make the same orders against the respondents they are matters that are worthy of further consideration under case management principles. I certify that this and the preceding pages are a true copy of the reasons for Judgment of the Honourable Justice O'Loughlin Associate:

Counsel for the University : Mr M Rice Solicitors for the University : Fisher Jeffries

Counsel for Australian Flight Test Services : Mr D Greenwell Solicitors for Australian Flight Test Services : Mouldens

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Judgment (9 paragraphs)

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