Allstate Life Insurance Co v ANZ Banking Group Ltd (No 23)
[1996] FCA 21
•1 FEBRUARY 1996
NOT FOR DISTRIBUTION
CATCHWORDS
PRACTICE AND PROCEDURE - application for further and better discovery - whether discovery would be oppressive - potential relevance of documents sought - no question of principle.
ALLSTATE LIFE INSURANCE CO & ORS v ANZ BANKING GROUP LTD & ORS (No 23)
Lindgren J
Sydney
1 February 1996
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION )
No NG 381 of 1994
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
RespondentsNo NG 523 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
RespondentsNo NG 622 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
RespondentsNo NG 635 of 1991
BETWEEN:
ALLSTATE LIFE INSURANCE CO and the parties listed in Annexure A to the third further amended statement of claim.
Applicants
AND:
AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 and the parties listed in Annexure B to the third further amended statement of claim.
Respondents
CORAM:Lindgren J
PLACE:Sydney
DATE:1 February 1996
REASONS FOR JUDGMENT (No 23)
There is before the Court a motion by the applicants seeking against the 1st to 11th respondents (the "Banks") further and better discovery. The motion is brought by notice of motion filed on 25 January 1996. The documents in respect of which discovery is sought are described as follows in para 2 of the notice of motion:
"... documents described in paragraph 3 on page 1, (d) on page 2, (a)(ii) on page 2 and (c) on page 3 of the letter from Deacons Graham & James to each of the first to eleventh respondents dated 30 November 1995."
Clearly it is necessary to go to the letter dated 30 November 1995 from Deacons Graham & James in order to understand the significance of the four categories referred to. I can take the letter to Mallesons Stephen Jacques, the solicitors for the fifth and sixth respondents, as representative. The four categories of documents described in that letter are as follows:
Category 1
"[documents relating to] any release and reinstatement transaction [of the kind] described in [the] statement of claim ... with other significant commercial customers at any time during the years 1987-1989."
Category 2:
"Any files or documents evidencing or relating to any transaction by which your clients released their securities for any indebtedness (exceeding $5 million) of a significant commercial customer without satisfaction of that liability at any time during the years 1987-1989."
Category 3:
"(a)All written policies, procedures, manuals, directions or other documents issued or published by your clients during the years 1987-1989 evidencing or relating to -
(i)........ ........ ........ ........ .....;
(ii)your clients' requirements relating to the discharge of ... commercial loans or facilities [of $5 million or more made or issued to corporations] during that period;"
Category 4:
"Any note, memorandum, report or other document in any personnel or other file of any officers of your clients who approved of or were otherwise engaged in or in respect of the release and reinstatement transaction, which refers or relates to such transaction."
Objection is taken to the orders sought on grounds of relevance and oppressiveness.
The positions of the various Banks are the same except in one respect. Apparently some of the Banks have already discovered the documents referred to in category 4 while others have not yet done so. However, these also agree that such discovery should be given. In these circumstances I think it appropriate that an order be made in relation to category 4 documents. But I note that there may be a difference between the Banks in relation to costs because, as I have said, some have, and others have not, given discovery.
I turn now to category 1. In my view, there is difficulty, and indeed uncertainty to the point of oppressiveness, in the description of the documents in category 1. For this reason no order should be made in respect of that category.
It is put for the applicants that the case to be made would, hopefully from their viewpoint, be that the Banks never, or only very rarely, entered into a transaction of the kind to which category 1 is intended to refer.
But the language, "any such transactions" and "other significant customers", highlights the very great difficulty in knowing precisely what it is that the Banks would be required to discover. It is true as is put for the applicants that there is no affidavit evidence before the Court as to the oppressiveness that category 1 would work, but at least I can take notice of the fact that the Banks' operations are wide-ranging and that many transactions and documents would need to be considered. In any event, the oppressiveness derives not from that fact in isolation, but from the effect in that context of the uncertainty inherent in the description in category 1.
I can see the potential relevance of the kind of document apparently intended to be caught by category 1 to issues in the case but it does seem to me that the category is perhaps impossible of satisfactory definition and certainly is not presently defined in a way which is acceptable.
In relation to category 2, the same result follows. For a start, there is the language "significant commercial customer". As well, there is a wide range of documents referred to in category number 2. Because of the uncertainty of description and the wide range of search which would have to be carried out, I think that discovery should not be ordered in relation to category 2 on the ground of oppressiveness.
Category 3, is, in my opinion, of a different order. In the first place, the definition of the documents is more precise. The reference is to documents of particular kinds issued or published by the Banks during (apparently) calendar years 1987, 1988 and 1989, evidencing or relating to the Banks' requirements in relation to the discharge of commercial loans or facilities of $5 million or more made or provided to corporations during that three year period. No doubt, as is said by senior counsel for the applicants, what is hoped to be shown is, again, that there were such requirements and that they were departed from in this case.
No doubt it is hoped to be suggested that the departure is explicable by fraud on the part of the Banks or in the form of knowing participation in misleading or deceptive conduct by Linter Textiles. I am of the view that category 3 represents a proper category of document of which discovery should be given and there will be an order accordingly.
In the result, there will be an order as sought in relation to categories 3 and 4 and a refusal of the relief sought in relation to categories 1 and 2.
On the question of costs, the applicants had some success and some insuccess. In my view, prima facie, the parties' costs should be their costs of the proceedings.
There being no submission to the contrary, there will be no special order as to costs but the parties' costs of the applicants' motion will be part of the costs of the
proceedings of the respective parties to that motion.
I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.
Associate:
Dated: 5 February 1996
Heard: 1 February 1996
Place: Sydney
Decision: 1 February 1996
Appearances: Mr A R Emmett QC with Mr D R Stack of counsel instructed by Deacons Graham & James appeared for the applicants (applicants on the motion).
Mr P Anastassiou of counsel instructed by Mallesons Stephen Jaques appeared for the 5th and 6th respondents (as some of the respondents to the motion).
Mr M Pembroke SC with Mr J Halley of counsel instructed by Allen Allen & Hemsley appeared for the 1st, 7th, 8th, 9th and 11th respondents (as some of the respondents to the motion).
Mr M J Slattery QC of counsel instructed by Clayton Utz appeared for the 4th respondent (as a respondent to the motion).
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