Allen v The Haines Group Pty Ltd

[2019] FCCA 2253

FEDERAL CIRCUIT COURT OF AUSTRALIA

ALLEN v THE HAINES GROUP PTY LTD & ANOR [2019] FCCA 2253

Catchwords:
CONSUMER LAW – Application for specific discovery, interrogatories and cross examination of witnesses who verified discovery – consideration of purpose of the Act and the Rules – general principles of discovery and interrogatories not allowed – application dismissed.

Legislation:

Federal Circuit Court Rules 2001 (Cth), ss.13.03A, 13.03B, 14.01

Federal Circuit Court Act 1999 (Cth), s.45

Cases cited:

Abrahams v Qantas Airways Limited (No.2) (2007) 210 FLR 314
Kautto v La Trobe Capital [2011] WASC 157
Kettlewell v Barstown (1872) LR 7 CH.App 686
Vinden v Wrong Fuel Rescue Pty Ltd & Anor [2019] FCCA 1091

Applicant: MARTIN ALLEN

First Respondent: THE HAINES GROUP PTY LTD
(ACN 155 792 848)

Second Respondent: GOOD TIMES MARINE PTY LTD
(ACN 124 734 612)

File Number: SYG 1320 of 2018

Judgment of: Judge Humphreys

Hearing date: 2 August 2019

Date of Last Submission: 2 August 2019

Delivered at: Parramatta

Delivered on: 16 August 2019

REPRESENTATION

Counsel for the Applicant: Mr Parish

Solicitors for the Applicant: MDW LAW

Counsel for the Respondents: Mr Given

Solicitors for the Respondents: Macpherson Kelley

ORDERS

1. The application for an order pursuant to 13.03B (2)(a) of the Rules for further verified disclosure of a number of categories of documents set out within the application in a case, the administrative of interrogatories and leave to cross examine the deponents of the affidavits made in relation to discovery is denied.

2. Costs will be reserved in relation to this application.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1320 of 2018

MARTIN ALLEN

Applicant

And

THE HAINES GROUP PTY LTD (ACN 155 792 848)

First Respondent

GOOD TIMES MARINE PTY LTD (ACN 124 734 612)

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant purchased in 2015, a Haines Signature 650F model boat, manufactured by the first respondent. It is alleged that the boat is the subject of a significant number of faults and the boat is not of acceptable quality and/ or unfit for purpose. The applicant seeks quantifiable loss or damage in the amounts of:

   a)Full purchase price in the amount of $115,000.00.

   b)The amount of $6884.08 for repairs conducted on the boat.

   c)The amount of $1095.00 for the transport costs as a result of the repair work conducted by the first respondent.

   d)The amount of $6441.78 for the associated and consequential costs borne by the applicant in maintaining, operating and storing the boat, inter alia, of which the applicant is currently, by virtue of the conduct of the first and second respondents, unable to enjoy.

2. The matter has been the subject of a number of orders by Nicholls J, including orders for discovery against the respondents.

Application in a Case

1. By application dated 12 July 2019, the applicant seeks a number of orders including the following:

   a)That a regime be put in place for further discovery by the respondents of certain categories, along with interrogatories to test whether there has been full and verified disclosure by the respondents under rule 14.01 of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”).

   b)If compliance is forthcoming as to the disclosure sought, judgment be entered against the respondents in accordance with r 13.03B(2)(d) of the rules for defaults under sub rules 13.03A(2)(iii), 4, 5, and 6 of the Rules.

   c)In the alternative, a charge of contempt be bought against the respondents along with costs orders.

2. The matter was listed for a hearing in relation to the application in a case on Friday 2 August before myself. Previously, the matter had been in the docket of Nicholls J, however, it has been transferred to my docket and will now remain with me to conclusion.

The Applicant’s Submissions

1. An order was made by Nicholls J on 11 October 2018 for discovery pursuant to s 45(1) of the Federal Circuit Court Act 1999 (Cth) (“the Act”). An order for general disclosure was made by consent, pursuant to rule 14.02(2) by Nicholls J.

2. On 30 November 2018, the respondents provided a verified list of documents (first tranche) accompanied by an affidavit sworn by Daniel Wignall, deposing that he had been informed by Richard Gavin, Chief Financial Officer of the first respondent, Haines, and Derek Rodway, Director of Good Times Marine, the second respondent that they both had made reasonable enquiries as to the existence and location of documents specified in the Order of Nicholls J.

3. On 10 December 2018, the applicant’s solicitors sent an email noting that various categories of documents that they might expect would be caught by the general discovery order, appeared to be missing including:

   a)Internal correspondence of the parties;

   b)Correspondence of other aggrieved purchasers;

   c)Correspondence between Haines and the manufacturer of the boat’s windscreens (Alfab); and

   d)Design specifications of the boat including windscreens and hard tops.

4. On 19 December 2018, the applicant’s solicitors sent a letter in the same terms as the email dated 10 December 2018 requiring “confirmation as to whether your clients have in their possession, custody or control, any of the above documents and to the extent to which they do, please provide an explanation as to why those documents have not been disclosed to date pursuant to the general discovery order of 11 October 2018.”

5. On 29 January 2019, a further list of documents was provided by Haines (second tranche) in which;

   a)There was no accompanying affidavit; and

   b)There was no substantive response to the letter of 19 December 2018.

6. It is noted that the second list of documents include 2 warranty claims only.

7. On 6 February 2019, the applicant’s solicitors wrote to the respondent’s solicitors, noting Haines must accept that similar complaints and issues relating to the design and manufacture of the windscreen and hard top are discoverable and there had still been no substantive response to the letter of 19 December 2018 as to other categories of documents, including design documents, correspondence between Alfab and other complaints.

8. On 13 February 2019, the respondent’s solicitors stated that they have disclosed every relevant document in their possession, custody, control or correspondence.

9. On 4 April 2019, the applicant’s solicitors noted further documents one would expect would be in the possession of the respondents and also noted the difficulty in briefing an expert without full disclosure of documents.

10. On 17 April 2019, the respondent’s solicitors emailed the applicant’s solicitor asking for further time to make enquiries with Alfab and Designer Stainless Steel.

11. On 26 April 2019, the respondent’s solicitors wrote to the applicant’s solicitors in response to the letter of 4 April 2019, noting that the boat was designed by eye and by moulds, such that no documents that pertain to the design and the canopy installed on the boat are in possession or control of either of the respondents.

12. On 1 May 2019, the solicitors for the applicant issued subpoenas to Alfab and Design Stainless Steel. On 8 May 2019, the respondents served a second list verified by Mr Wignall that includes the second tranche and a further tranche of warranty documents (third tranche).

13. On 28 May 2019, Alfab and Designer Stainless Steel produced, under subpoena, certain documents including the Alfab emails and design documents.

14. The applicant asserts that the respondent has filed improper disclosure in the first tranche, failed to verify and provide documents under the second tranche, failed to produce or refer to the Alfab emails, failed to provide the Alfab and the Designer Stainless Steel drawings and had failed to produce patent registration documents which have now been obtained by the applicant’s solicitors under subpoena.

15. It is submitted by the applicant that the conduct of the respondent has been contemptuous and intentional because:

    a)There have been at least 3 breaches of the discovery order and there is a strong implication that further documents are either being withheld or have been destroyed.

    b)The rectification of the previous breaches were only rectified after persistent urging of the applicant’s solicitors.

    c)The documents that were withheld were adverse to Haines’ case.

16. It is submitted that the Court should give a declaration for interrogatories in respect of the compliance with the discovery orders is appropriate pursuant to s 45(1) of the Act and that leave should be given to the applicant to administer interrogatories in respect to full and verified disclosure by the respondents under r 14.01 of the Rules. Further, that leave should be granted to cross examine each of the deponents of the affidavits of verification of discovery.

The Respondent’s Submissions

1. The respondents suggest that the initial disclosure was a reasonable attempt by the respondents to provide the documents listed by the applicant. As a result of correspondence from the applicant’s solicitors, further searches were made and additional documents were then provided. It is submitted that the fact that documents have been obtained from third parties, being Alfab and Designer Stainless Steel, does not show that the respondent has failed to provide discovery documents that were in their possession.

2. It is asserted that this application, in so far as it relates to further disclosure, should be dismissed because;

   The application should have proceeded under rule 14.06 as it relates to a particular disclosure and no order for particular disclosure has been made.

3. It is submitted that in the affidavit of Daniel Wignall sworn 30 November 2018, asserts that he made reasonable enquiries as to the existence of the location of documents specified in the order of Nicholls J on 11 October 2018. Mr Wignall also deposed that he had been informed by Mr Derrick Rodway, a director of the respondent, that he had made reasonable enquiries as to the existence of documents as set out in schedule 4, the control of the second documents and that to the best of his knowledge he does not have any further documents in possession covered by the discovery orders.

4. In the affidavit of 27 June 2019, Ms Parsons, an employee of the first respondent, in the capacity of office manager, swears that she had undertaken searches in the file management system operated by the first respondent and had undertaken subsequent searches in January and April 2019. She particularly states that she could not find certain emails and that it was not unusual for emails older than 5 years to still be in the possession of the first respondent.

5. It is submitted that the respondent’s affidavit material is clear that no further documents are in their possession, custody and control and that a Court should not order parties to do what they have no power to do (as to dual custody of documents see Kettlewell v Barstown (1872) LR 7 CH.App 686 at 693).

6. It is submitted that the applicant’s continual assertion that disclosure is deficient as it does not include a number of documents they believe exists, is mere speculation and is insufficient to support the making of the order of the kind contemplated (see Kautto v La Trobe Capital [2011] WASC 157).

7. It is submitted that leave should not be granted to administer interrogatories in relation to the disclosure because the respondents have already filed affidavits in relation there.

Consideration

1. It is appropriate to consider the overriding legislation in this case being the Federal Circuit Court Act 1999 (Cth). Section 45(1) is as follows:

   Interrogatories and discovery are not allowed in relation to proceedings in the Federal Circuit Court of Australia unless the Federal Circuit Court of Australia or a Judge declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery.

   Section 45(2) states:

   In deciding whether to make a declaration under subsection (1), the Federal Circuit Court of Australia or a Judge must have regard to:

   a)whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and

   b)Such other matters (if any) as the Federal Circuit Court of Australia or the Judge considers relevant.

2. Kendall J in Vinden v Wrong Fuel Rescue Pty Ltd & Anor [2019] FCCA 1091, stated at paragraph 10 as follows:

   Overall, there is a reluctance in this Court to grant orders for discovery and interrogatories. Indeed, in Vanden Driesden v Edith Cowan University (2012) 226 IR 452, the Court referred to the power as one that is “rarely used”.

3. At paragraph 14 of Vinden, Kendall J makes reference to the fact that the Court must consider the objects of the Act and to his mind in particular;

   (c) The resolution of the proceedings should be achieved justly, efficiently and economically…

   (e) The Court should seek to avoid undue delay, expense and technicality.

4. Lucev FM in Abrahams v Qantas Airways Limited (No.2) (2007) 210 FLR 314 at [25] (“Abrahams “) made reference to a non-exhaustive list of considerations that may be relevant as to whether or not discovery should be orders. These include

   a)   the relevance of any documents sought to be discovered

   b)   the volume of documents sought to be discovered

   c)    whether there is a court book containing relevant documents, and the extent to which relevant documents are included in the court book;

   d)   whether discovery would narrow the issues;

   e)   whether both parties seek discovery;

   f)     whether there is consent to discovery;

   g)   whether discovery is “of benefit” in the litigation; and

   h)   the effect of discovery on litigants, especially, vulnerable litigants.

5. Discovery was ordered by Nicholls J pursuant to s 45(1) of the Act on 11 October 2018. An order for general disclosure was made by consent pursuant to r 14.02(2) of the Rules. What has occurred since then has been an acrimonious interchange between the solicitors for the applicant and the solicitors for the respondent as to whether or not full and proper discovery has been made. In my view, the fact that discovery was ordered, initially was an exception rather than the general procedure followed in this Court. As a result of correspondence between the parties, further searches have been made and further documents have been produced which are now the subject of verification by way of affidavits.

6. It is asserted by the applicant, that there may be more documents in existence, based on the fact that further documents have been provided to the applicant as a result of subpoenas issued to third parties. I would not consider this to be surprising. It may well be the case that there may be documents in possession of third parties that are no longer or never were in the possession of the respondents.

7. I have considerable concerns that the applicant, by this application in a case, is failing to focus on the real issue in this case, which is not whether or not complete and proper discovery has been made, rather whether or not the claims made in the statement of claim that the boat is unfit for purpose or of an acceptable quality, can be bought on for trial at an early opportunity.

8. Bearing in mind that interrogatories are an exception rather than the rule, and discovery is similar, I consider that an application to cross examine the deponents of the affidavits verifying the discovery should also be an exception rather than the rule.

9. I have had regard to the non-exhaustive list of considerations set out in Abrahams noting the following:

   a)A considerable volume of documents have already been discovered.

   b)That it appears that the discovery made already, has not in fact narrowed the issues and if anything is giving rise to “collateral litigation”.

10. I note that consent was made initially to the general disclosure, but that consent is not given now as to the further application for discovery, for the cross examination of the deponents of the affidavits verifying discovery or interrogatories. I am also mindful of the additional costs that are being imposed on both the parties as a result of this application in a case and that to allow either interrogatories or a cross examination of the deponents, in my view would not be in keeping with the objects of the Act and particular the resolution of the proceedings in a just, efficient and economical manner.

Conclusion

1. I therefore deny the application for an order pursuant to 13.03B (2)(a) of the Rules for further verified disclosure of a number of categories of documents set out within the application in a case, the administration of interrogatories and leave to cross examine the deponents of the affidavits made in relation to discovery.

2. Costs will be reserved in relation to this application.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Humphreys

Associate: 

Date:  16 August 2019