BETWEEN : WESTPOINT CORPORATION PTY LTD (ACN 009 395 751)

Practice and procedure - Application to strike out claim pursuant to springing order concerning discovery - Issue as to adequacy of discovery - Leave granted to file further affidavits of discovery - Turns on own facts

Application to file further affidavits of discovery allowed

Pulitano v Ginbey [1999] WASC 5

The Nordglimt [1988] QB 183

Westpoint Corporation Pty Ltd & Ors v Marsh & Ors [2005] WASC 29

1 HASLUCK J: I have before me two applications. First, I have an application dated 18 March 2005 whereby the first and second plaintiffs seek orders that certain paragraphs of the substituted statement of claim dated 5 March 2004 be struck out and, more importantly, that the first and second plaintiffs have leave to file affidavits of discovery with an amended list of documents in place of earlier affidavits of discovery.

2 The proposed orders are set out in the application dated 18 March 2005. As to the discovery issue, par 2 says this:

"The first plaintiff have leave to file an affidavit of discovery with an amended list of documents in terms of the first plaintiff's affidavit of discovery annexed to this application to substitute the first plaintiff's affidavit of discovery filed on 19 November 2004 ('first plaintiff's original affidavit of discovery')."

3 I pause to note that the same is said in par 3 in respect of the second plaintiff's application for leave to file an affidavit of discovery with an amended list of documents.

4 Put shortly, the plaintiffs seek leave to file and serve so-called "substituted" affidavits of discovery and related lists. I will call this the "plaintiffs' discovery application".

5 The grounds for the plaintiffs' discovery application are described in these terms:

"1. Paragraph 6 in the List of Documents annexed to the First and Second Plaintiffs' Original Affidavit of Discovery contained a number of qualifications and at the request of the First Defendant, the First and Second Plaintiffs now seek to delete some of the qualified paragraphs.

2. The First and Second Plaintiffs wish to add to a paragraph 7 to the annexed List of Documents, at the request of the First Defendant, to clarify why certain paragraphs of the Substituted Statement of Claim have not been mentioned within the First and Second Schedule of the List of Documents annexed to the First and Second Plaintiffs' Original Affidavit of Discovery.

3. The First and Second Plaintiffs wish to fix slips in the First and Second Plaintiffs' original Affidavit of Discovery.

4. The First and Second Plaintiffs will rely upon the Affidavit of June Delphine Kenny sworn on 17 March 2005 in support of this application."

6 The plaintiffs contend that what is proposed will remove certain of the objections formerly raised by the defendants. It is said also that certain of the matters in respect of the alleged deficiencies can be characterised as slips. I will return to these matters shortly.

7 I have before me also an application dated 24 December 2004 whereby the first defendant seeks orders striking out certain paragraphs of the substituted statement of claim on the basis that the first and second plaintiffs have not given any or any adequate discovery in relation to the paragraphs in question. For ease of reference, I will call this the "first defendant's striking out application".

8 The two applications arise in this way. The plaintiffs complain of an alleged defamation in respect of words spoken by the defendants in the year 2001. I understand that the plaintiffs commenced legal proceedings in 2003. The nature of the plaintiffs' complaints is now reflected in a substituted statement of claim dated 5 March 2004.

9 The statement of claim is a lengthy document and I will not traverse it in full. In essence, the claim refers to various occasions on which the defendants are said to have acted in a manner which defamed the plaintiffs and caused loss. It seems that the plaintiffs will seek to establish that there was loss of a commercial kind. This means that many documents bearing upon the commercial situation of the plaintiffs will be relevant to the matters in issue and must therefore be discovered.

10 The plaintiffs purported to provide discovery but this led to an application by the defendants for orders that the plaintiffs provide discovery in a particular form; that is, that documents be listed by reference to specific allegations in the statement of claim. On 5 November 2004 Registrar C Boyle ordered that as a consequence of the plaintiffs having failed to comply with certain directions concerning discovery, the statement of claim was to be struck out and judgment entered for the defendants against the first and second plaintiffs unless the plaintiffs provided discovery by affidavit on or before 19 November 2004.

11 The orders in question reflected an initiative by the Registrar to compel the plaintiffs to attend to some alleged shortcomings in regard to discovery with the ultimate sanction of striking out should there be a lack of compliance.

12 I pause here to echo a point made in the course of debate with counsel. The Registrar's determination to impose an effective sanction by way of a springing order was entirely understandable, having regard to the circumstances before him. The fact is, however, that the Registrar, in allowing for striking out if the plaintiffs provided no discovery or inadequate discovery, was not in a position to determine finally whether a striking out should in fact take place. Whether certain paragraphs of the claim (or the claim as a whole) should be struck out might well be influenced by the seriousness or degree of the alleged inadequacy of discovery. These matters lay in the future. It follows that the decision to strike out depends not upon the presence of the springing order but on the degree of compliance with the order. That is a matter for me to determine.

13 I pause to note that an appeal against the ruling of Registrar Boyle was made to Master Sanderson. The learned Master dismissed the appeal. His reasoning is reflected in Westpoint Corporation Pty Ltd & Ors v Marsh & Ors [2005] WASC 29. The full text of the orders made by Registrar Boyle is set out in that judgment.

14 The Sanderson judgment contains at par 6 a useful overview of the situation which is now before me. The summary is presented in these terms:

"Before dealing with each of the particular grounds of appeal it is appropriate to set out a brief chronology of events as they transpired prior to 5 November 2004. This is a claim for slander. The slander was allegedly uttered by the first defendant in or about May or June 2001 and on other dates. The writ was issued on 20 May 2003. As was required by the Rules, it was generally endorsed. A statement of claim was filed on 1 July 2003. The first status conference was held on 4 July 2003. At that conference the first defendant drew to the attention of both the Registrar and the plaintiffs' solicitors the magnitude of the discovery task involved, given the nature of the plaintiffs' claims. Without going into detail it is said that the slander allegedly uttered by the first defendant impacted adversely on the business of the first plaintiff resulting in losses of many millions of dollars. It must have been apparent to the plaintiffs at the outset that to prove this loss they would have to actually establish the adverse effect on the first plaintiff's business. Effectively what that would require was an audit of the first plaintiff's business, in other words discovery of just about every financial record the plaintiff had available to it. One might have expected the plaintiffs' solicitors to embark upon the process of discovery as soon as the writ was issued, if not before it was issued. Be that as it may, as at 4 July 2003 the plaintiffs must have been aware that they faced a difficult discovery exercise."

15 It was against the background described by Master Sanderson that the matter came before Registrar Boyle. The orders he made on 5 November 2004 show that he took a rigorous view of the requirements to be met by the plaintiffs with the ultimate sanction of a striking out if there were a lack of compliance. Time limits were imposed, including a requirement that affidavits of discovery be filed by 19 November 2004.

16 In purported compliance with the orders made by Registrar Boyle affidavits of discovery sworn by the second plaintiff, Norman Philip Carey, were filed and served on behalf of the plaintiffs on 19 November 2004. Prima facie, the orders made by the Registrar had been complied with.

17 However, as it happened, the defendants were dissatisfied with the affidavits that had been filed and served. Accordingly, as I have indicated, by an application dated 24 December 2004 they applied for orders striking out certain paragraphs of the statement of claim pursuant to the order previously made by Registrar Boyle on the grounds that the discovery provided was inadequate. The Boyle orders undoubtedly allowed for an application to strike out of this kind.

18 Faced with an application to strike out, the plaintiffs made the discovery application dated 18 March 2005 mentioned earlier. In essence, the plaintiffs seek to correct an alleged inadequacy in the affidavits previously filed by substituting or filing revised affidavits in the manner indicated by certain so-called amended lists of documents annexed to the affidavits the subject of the discovery application.

19 The plaintiffs say that the affidavits of discovery previously filed were sufficient; they complied with the Registrar's orders save only for attending to certain deficiencies mentioned in the grounds of the application and for correcting slips in the list forming part of the subject affidavits.

20 The plaintiffs' application, which speaks of "substitution", has given rise to an issue of law reflected in the respective submissions of the parties before me. The submissions, in written form, raise the question of whether the Court has power to make an order providing for the substitution of a list attached to an earlier affidavit with an amended list of documents.

21 I will return to this aspect of the matter shortly. A related, and more central issue is this: if the Court does have power to allow correction, either by way of substitution in the manner proposed, or in some other manner such as the granting of leave to file replacement affidavits, the plaintiffs must nonetheless satisfy the Court that it should exercise the power. Should the Court allow correction in circumstances where the plaintiffs have (by counsel) admitted that in various respects they are in default?

22 The plaintiffs contend that the corrections in question are in respect of some inadvertent omissions and comparatively minor slips. They are matters of correction which, if made, will not give rise to any real prejudice to the defendants. The plaintiffs illustrate this by referring to certain passages in which documents included in one of the affidavits of discovery were not copied across to the other affidavit and so forth. It is said that in these circumstances there is no real prejudice to the defendants, because the documents are known to exist and were identified in one of the affidavits.

23 On the other hand, the defendants say that if there be a power of the kind contended for, it should not be exercised in the manner proposed by the plaintiffs, given a long history of delay and insufficient discovery, and having regard also to the observations made by Master Sanderson that I touched on earlier.

24 I will not traverse all of the matters raised by counsel bearing upon the question of power to make an order of the kind proposed. I have to say at the outset that I am not persuaded that the slip rule in Rules of the Supreme Court O 21 r 10 can be utilised in the manner proposed by counsel for the plaintiffs.

25 The written submissions contain reference to other rules, including O 21 r 7 of the Supreme Court. This contains a power to correct any defect or error in proceedings. The Court may at any stage of the proceedings on the application of any party to the proceedings order any document in the proceedings to be amended on such terms as to costs or otherwise as may be just and in such manner as it may direct. However, I note from Seaman's Civil Procedure at par 21.7.2 that although affidavits may be documents within the meaning of O 21 r 9 their evidentiary nature is such that leave should not be given to amend them. The relevant passage suggests that the proper course is for the party affected by the error to file fresh affidavits. See also The Nordglimt [1988] QB 183 at 187.

26 I do not think it is appropriate for there to be a substitution of the kind proposed because it seems to me that in this case a list of documents must be allied to and considered in conjunction with the affidavit itself. For the reasons given in Nordglimt (supra), it seems to me that it would not be appropriate simply to make provision for the substitution of a list.

27 In the end, I am of the view that pursuant to the provisions of the rules concerning affidavits and the obligation to provide ongoing discovery there is power to require in circumstances such as are presently before me to grant leave to file a further affidavit. This view is reflected in and supported by the reasoning of Master Sanderson in Pulitano v Ginbey [1999] WASC 5.

28 In summary, then, I am not persuaded that there is power to make an order for substitution in the manner contended for by the plaintiffs in the course of argument before me. However, I do consider that there is power to make an order for leave to be granted for the filing of fresh affidavits aimed at correcting the deficiencies and slips specified in the subject application.

29 Even if I be wrong in that conclusion, I consider, additionally, that there is power to be found also in another provision of the rules relied upon by counsel for the plaintiffs in the course of debate, namely O 2 r 1. This contains a power concerning the correction of irregularities or non-compliance.

30 Having found that there is power to grant leave for the filing of a further affidavit, I must proceed to the question of whether that power should be exercised in favour of the plaintiffs. In other words, it is open to me to arrive at the conclusion that there was a nominal compliance with the order requiring that affidavits of discovery be filed by 19 November 2004. But that leaves open a further issue as to the adequacy of the compliance. Accordingly, I come now to matters bearing upon that issue.

31 I set out the grounds of the application in earlier discussion. I am obliged to note also that both parties have filed written submissions bearing upon the central issues. There are affidavits directed to the matters in question including the affidavit of June Delphine Kenny sworn 18 March 2005 and the affidavit of Mr Fairweather sworn 6 April 2005.

32 The plaintiffs submissions draw together the matters which are said to weigh in favour of some opportunity for correction by way of a fresh affidavit being allowed. I touched on those matters in general terms a moment ago. More particularly, one finds reference to the matters of concern at par 6 of the plaintiffs' written submissions in respect of the first plaintiff's affidavit of discovery. It is said that there are a number of slips in relation to documents numbered 14, 37, 44, 53 and 66. It is said that there are a number of omissions in relation to references to certain paragraphs and they are then described. There are a number of other references which the first plaintiff seeks to add to the amended list of documents.

33 It is said at par 10 of the outline of submissions that the second plaintiff's affidavit of discovery contained a number of slips in relation to documents numbered 25, 51, 47, 221, 273, 285, 379, 389, 402, 539 and 570. It is said that there are a number of omissions and the particulars in that regard are set out in the written outline. It is said at par 11 that there are a number of other references which the second plaintiff seeks to add to the amended list of documents.

34 The plaintiffs go on to submit that there is no prejudice to the defendants in granting the first and second plaintiffs the orders set out in their application which cannot be adequately addressed in a costs order. It is said that the proposed orders will not cause prejudice but it would create an injustice to deny the first and second plaintiffs an opportunity to correct slips and errors in their affidavits.

35 It is said, in effect, that if the Court allows the orders requested by the first and second plaintiffs the actual documents being discovered by the first and second plaintiffs when considered in combination, will not have altered from the affidavits of discovery originally filed. It is said that it is appropriate to substitute the affidavits rather than file amended or fresh affidavits because the substituted affidavits are only necessary to amend slips and omissions which do not go to the documents actually discovered by the first and second plaintiffs.

36 As to that latter proposition, I ruled a moment ago that it is not appropriate in my view to proceed in that manner and nor is there a power to do so. However, as I seek to draw all this together, I am of the view that an opportunity should be allowed to the plaintiffs to correct the matters mentioned earlier which can be broadly characterised as slips and errors. I am not convinced that there will be any specific prejudice to the defendant if leave to file a further affidavit is provided, subject to further time limits being imposed and orders as to costs. I will come back to these matters in a moment.

37 Put shortly, my ruling is that rather than substitution the plaintiffs are to be allowed an opportunity within a prescribed time to correct the errors and omissions. To that end, they will be granted leave to file fresh affidavits of discovery addressing the relevant matters.

38 In arriving at this conclusion I have taken account of the evidentiary materials before me describing the nature of the amendments and adjustments that are to be made. It is apparent from the foreshadowed affidavits including the foreshadowed amended lists, if I can describe them in that way, that a considerable number of the objections raised by the defendants will thereby be disposed of. However, there are various other matters that remain in issue.

39 This brings me to the second of the two applications before me, namely the application by the defendants to strike out the statement of claim, or portions of it, by utilising the liberty to apply in that regard which was allowed to them by the order made by Registrar Boyle.

40 It follows from the ruling I have made as to the discovery application, and from the observations I made a moment ago, that a considerable number of the objections raised by the defendants will fall away with the result that the matters in issue concerning discovery will be narrowed. This is recognised by counsel on both sides.

41 Nonetheless, Mr Fairweather, as counsel for the defendants, took me to various objections which will continue to be pressed. I think it is important as a matter of record that I briefly identify the objections in question.

42 The objections which will continue to be pressed in respect of the first plaintiff's affidavit of discovery relate to pars 1(b), 1(c), 15(e), 31(d), 31(e), 51 and 52 of the statement of claim. The plaintiffs' purported discovery in respect of those paragraphs of the claim is said to be contentious. A question remains as to how the controversy concerning those matters should be dealt with.

43 As to the second plaintiff's affidavit of discovery, as appears from par 5 of the defendants' application to strike out, it is said that there continues to be inadequate discovery (even if amended affidavits are filed in the foreshadowed form) in respect of par 15(e) of the statement of claim, 15(c), 40(a), par 2(e) and par 40(c).

44 As I have indicated, this leaves the question as to how the matters remaining in issue should be dealt with.

45 I pause to say that a forceful argument was put to me by counsel for the defendants in regard to some of the remaining matters. It seems that the plaintiffs continue to assert in respect of some of the disputed matters that the characterisation of what are thought to be relevant documents can be qualified. However, counsel submits, it is not clear what the exact nature of the qualification is, and thus the purported discovery is inadequate.

46 I pause here to say that it is an unfamiliar concept in the general practice concerning discovery to use language which suggests that a qualified form of discovery is being given. Thus, without purporting to make any final ruling upon that matter, I do see considerable force in the argument put before me by counsel for the defendants.

47 However, I must return to an important, underlying reality. It follows from the ruling I have made in respect of the plaintiffs' discovery application that further affidavits of discovery will soon be filed. It is acknowledged on both sides that many of the objections made to date will fall away. It seems to me that in the light of the full debate that has taken place before me it may transpire that when fresh affidavits are filed, the plaintiffs will couch the affidavit and the expression of the description of documents in a form which removes some or all of the remaining objections of the defendants, especially as to the "qualified discovery" issue.

48 It therefore seems to me that rather than purporting to rule upon the matters in issue now, in a form which might give rise to a decision to strike out certain portions of the claim pursuant to the springing order previously made, I should make provision for the matter to proceed in a staged manner; namely, that the fresh affidavits be filed so that the remaining matters in issue (if any) can then be reconsidered.

49 This will allow for a determination to be made as to whether there are further contentious issues remaining. If there are any such matters I see it as appropriate and just that the defendants be allowed an opportunity to renew their application to strike out. The order made by the Registrar remains in force, so that if the further discovery is thought to be inadequate then an opportunity to strike out is allowed to the defendants. I mention this because counsel, in light of an intimation from me as to how I intended to proceed upon the hearing of the application, were not afforded an opportunity to develop their submissions fully in regard to what is still thought to be contentious aspects of the discovery provided. If the defendants' application to strike out be adjourned, for the reasons I have given, being essentially the fact that further affidavits are to be provided, then there will nonetheless be an opportunity for the defendants' application to be renewed at some later stage, if necessary.

50 Put shortly, then, I will not rule upon the defendants' application to strike out at this moment. Having regard to the matters I have mentioned, the appropriate course is for the defendants' strike out application to stand adjourned, with liberty to the defendants to renew that application if they are inclined to do so once the further affidavits have been filed.

51 This brings me to the question of costs. The plaintiffs recognise in their application that there has been a degree of fault upon their part. Thus their proposed order is that the first and second plaintiffs do pay the defendants' costs incurred and thrown away by reason of the substituted affidavit of discovery. I am minded to make an order in those terms. It seems to me an order in those terms brings with it the incidental costs involved in the application. That is a matter to be reviewed by the taxing master.

52 I pause here to say that there has been some reference to an indemnity costs order I am not persuaded that indemnity costs should be provided in circumstances where I have characterised the deficiencies complained of as being of the kind I have described. They consist principally of slips and omissions and a failure to copy across documents and other matters of that kind.

53 As to the defendants' application, because that matter is to be adjourned, one would normally be inclined to allow for the costs of the application to be reserved until the outcome of the application is known. However, in the present case, I consider that an order for costs against the plaintiffs should be made now in respect of all costs incurred in respect of that application to date. It has been necessary for the defendants to bring their application to strike out against a background of an admitted default on the part of the plaintiffs. It follows that I will make an order on the adjourned summons that the first and second plaintiffs do pay the defendants' costs incurred to date in any event in respect of that application. Again, I am not prepared to make an order for indemnity costs. If further costs arise in respect of the defendants' application to strike out such costs have to be dealt with in the light of the circumstances then existing.

54 This leaves, finally, the question of the time limit for the filing of the fresh affidavits. Reference has been made to the plaintiff's movements and to the possibility that fresh affidavits of discovery can be provided within seven days. In par 4 of the plaintiffs' application dated 18 March 2005 reference is made to 14 days. In all the circumstances I consider that an order should be made in terms of par 4. Accordingly, I will make an order that the first and second plaintiffs do have 14 days from the date of this order to file the further affidavits of discovery.

55 In summary then, going to the first plaintiff's application dated 18 March 2005:

(1) Paragraphs 15(d)(iv) and 15(d)(vi) of the substituted statement of claim dated 5 March 2004 shall be struck out;

(2) the first plaintiff shall have leave to file a further affidavit of discovery;

(3) the second plaintiff have leave to file a further affidavit of discovery;

(4) the first and second plaintiffs shall have 14 days from the date of this order to file and serve the further affidavits of discovery;

(5) the first and second plaintiffs shall pay the defendant's costs incurred and thrown away by reason of this application.

56 A further order is that the filing and serving of the further affidavits of discovery by the first and second plaintiffs shall be taken as compliance with the time limit of 19 November 2004 referred to in Registrar Boyle's orders and the time limit will be extended accordingly. The order in these terms is concerned only with the time limit and leaves open the question as to whether the plaintiffs have provided adequate discovery by way of the affidavits served originally and soon to be served.

57 As to the defendants' application to strike out dated 24 December 2004, my orders are as follows:

(2) the defendants have liberty to renew the application by having the same listed for hearing after the filing and serving of further affidavits of discovery by the plaintiffs pursuant to the orders made as above;

(3) the first and second plaintiffs do pay the defendants' costs of the defendants' application to date including all costs of and incidental to today's hearing;

(4) the costs awarded to the defendants include all costs reserved to date in respect of that application.