Amaca Pty Ltd v Werfel - [2019] SASC 29

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge)
AMACA PTY LTD v WERFEL & ANOR
[2019] SASC 29
Judgment of The Honourable Justice Nicholson
6 March 2019
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - BY LEAVE OF COURT - INTERLOCUTORY ORDERS AND JUDGMENTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - APPLICATION AND ORDER FOR FURTHER AND BETTER DISCOVERY
The appellant was formerly James Hardie & Coy Pty Ltd under which name it was a major distributor of asbestos building products in South Australia in the 1970s and early 1980s. The respondent has contracted malignant mesothelioma. By consent the matter has been listed for an expedited trial to commence on 3 April 2019.
A list of documents disclosed by the appellant was filed on 14 January 2019. It comprises more than 300 pages and more than 3,000 entries. The disclosure is vast. By interlocutory application filed on 6 February 2019, the respondent sought orders for further and better disclosure. On 12 February 2019, a Judge of the South Australian Employment Tribunal, being the Judge assigned to hear the trial, made ex tempore orders in the terms applied for.
On 20 February 2019, the appellant filed in this Court a notice of appeal against the orders made and including an application for permission to appeal, the orders below being interlocutory in nature. Given the proximity of the trial, the nature and extent of the further and better disclosure ordered, and the fact that it was ordered to be provided electronically by 4 March 2019, the argument on appeal was expedited.
Held:
1.       Permission to appeal allowed.
2.       Appeal allowed in part.
3.       The Judge’s orders 1(a), (c), (d) and (e) are set aside.
4.       The Judge’s order 1(b) is set aside and replaced with an order in these terms:
"The defendant is to provide further and better disclosure of the Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation dated September 2004 (the Jackson Report) by 11 March 2019."
5.       The Judge’s orders 2, 3, 4 and 5 are set aside.
6.       The respondent’s interlocutory application filed in the SAET on 6 February 2019 is otherwise dismissed.
7.       The interim stay with respect to the Judge’s order 4 made at the hearing on 1 March 2019 is vacated.
Supreme Court Civil Rules 2006 (SA) r 280; District Court Civil Rules 2006 (SA) r 4, r 136, r 145; Special Commissions of Inquiry Act 1983 (NSW) s 23; Dust Diseases Act 2005 (SA) s 11A, referred to.
Landmark Operations Ltd v J Tiver Nominees Pty Ltd [2009] SASC 185, discussed.

AMACA PTY LTD v WERFEL & ANOR
[2019] SASC 29
Appeal to a single Judge
NICHOLSON J.
Introduction

The appellant was formerly James Hardie & Coy Pty Ltd under which name it was a major distributor of asbestos cement building products in South Australia in the 1970s and early 1980s. The respondent has contracted malignant mesothelioma. He has brought proceedings in negligence against the appellant. The respondent’s statement of claim was filed on or about 30 August 2017 but it was not served on the appellant until August 2018. A second statement of claim was filed on or about 18 December 2018. The appellant’s defence was filed on or about 9 October 2018. By consent the matter has been listed for an expedited trial to commence on 3 April 2019.
A list of documents disclosed by the appellant was filed on 14 January 2019. It comprises more than 300 pages and more than 3,000 entries. The disclosure is vast. The nature of the entries, of course, varies but many comprise an identified but large class of documents. By interlocutory application filed on 6 February 2019, the respondent sought orders for further and better disclosure. That application was opposed and was argued on 12 February 2019 before a judge of the South Australian Employment Tribunal, being the Judge assigned to hear the trial. Her Honour made ex tempore orders on that day and provided short written reasons on 13 February 2019.
On 20 February 2019, the appellant filed in this Court a notice of appeal against the orders made. Given the proximity of the trial, the nature and extent of the further and better disclosure ordered, and the fact that it was ordered to be provided electronically by 4 March 2019, the argument on appeal was expedited and was heard before me at the end of my chamber list on Friday 1 March 2019. The third party (State of South Australia) expressed no interest in the appeal and was excused from attending.
In addition to written and oral submissions, I had before me the materials (including affidavits by the appellant’s solicitor and the respondent’s solicitor) that were before the Judge and a further affidavit by each of the appellant’s and the respondent’s solicitors. Some of the material in the affidavits before the Judge and before me was objected to. I have not had regard to evidentiary material with respect to which an objection was upheld. Some of the assertions objected to before me were received by me by way of submission.
At the conclusion of the argument, I reserved my decision and ordered that the appellant’s compliance with order 4 (see below) be stayed until further order. Given the imminence of the trial, it was important that the appeal be resolved very quickly. As a consequence, these reasons may not be as elegant as otherwise might have been the case.
The orders made by the Judge, all of which are complained of, are in these terms.
1.That the defendant provide further and better disclosure of documents, including in relation to the following categories of documents:
(a)     Claims and proposed claims against the defendant relating to injuries alleged to have been sustained due to exposure to asbestos building or products containing asbestos in the years 1992 to 2005.
(b)     The Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation (“the Jackson Report”) dated September 2004.
(c)     Exhibits and evidence from the Special Commission of Inquiry into the Medical Research and Compensation Foundation (“the Jackson Inquiry”), and specifically actuarial reports, projections, reports, correspondence and advice as to the defendant’s future asbestos liabilities.
(d)     Any and all documents that evidence the defendant’s knowledge of the risk of injury (and the magnitude thereof) to those exposed to pre-existing (or in situ) asbestos cement building materials up until 2005.
(e)     Any and all documents relating to the marketing/promotion/advertisement of the defendant’s asbestos cement building materials including product brochures/booklets/pamphlets, marketing plans, advertising plans, public relations plans and strategies, marketing and advertising budgets and advertisements, promotions and pronouncements in print, on radio and television up until the date the defendant ceased trading in 1997.
2.The defendant is to provide discovery[1] on oath.
3.Defendant to provide discovery to the plaintiff electronically.
4.Discovery to be completed by 4 March 2019.
5.Costs.
[1]    The present Court rules regime provides for disclosure of documents. The use of the term discovery is of no material consequence being simply the terminology in use in rules earlier in force.
The appellant relies on the following grounds of appeal.
1.The learned judge erred in making the order that the appellant provide further and better disclosure:
1.1     By misapplying Rule 145 of the District Court Civil Rules 2006 (SA) (Rules) and by misconstruing Rule 136 of the Rules;
1.2     By finding there was a basis for concluding that there was a doubt that the appellant had complied with its disclosure obligations;
1.3     By making an order which would require the appellant to breach New South Wales legislation.
2.The learned trial judge erred by failing to afford the appellant procedure fairness:
2.1     By failing to address the arguments advanced by the appellant in relation to the relevant issues;
2.2     In respect to the admission and treatment of parts of the evidence;
2.3     In fixing the date for providing the further and better disclosure.
3.The trial judge erred by failing to provide sufficient reasons for the decision.
The decision appealed from is an interlocutory judgment. As such, the appeal lies to a single Judge of the Supreme Court.[2] I have treated the appeal as one requiring permission, by analogy with rule 288(1)(a)(ii) of the Supreme Court Civil Rules 2006 (SA). Ordinarily, permission will be granted to appeal against an interlocutory order where the Court is satisfied that the decision sought to be impugned is either wrong or attended with sufficient doubt to warrant its reconsideration on appeal and has the effect of working a substantial injustice on the appellant.[3] An appeal against a discretionary interlocutory order will be subject to the usual constraints as explained in House v The King.[4] An appellate court will only be entitled to revisit the discretion exercised where the primary Judge has acted on a wrong principle, has allowed extraneous or irrelevant matters to guide or affect him or her, has mistaken the facts or has failed to take into account some material consideration or where the decision appealed from is unreasonable or plainly unjust.
[2] See section 11A of the Dust Diseases Act 2005 (SA).
[3] Duke Group v Arthur Young (1991) 4 ACSR 355; Landmark Operations Ltd v J Tiver Nominees Pty Ltd [2009] SASC 185.
[4] [1936] HCA 40, (1936) 55 CLR 499.
Further background
The respondent claims damages (including exemplary damages) against the appellant having alleged that his illness was caused by his inhalation of asbestos dust from asbestos cement building products manufactured by the appellant and in the following circumstances.[5]
(i)when he was employed as a fencer and required to handle, cut, drill and generally work with in situ corrugated asbestos cement sheets during the period between 1994 and about 1997;
(ii)when he performed home renovations at a Pooraka address during which he disturbed in situ asbestos cement sheets in or about 2000/2001; and
(iii)when he performed home renovations at a Parafield Gardens address where he again disturbed in situ asbestos cement sheets in or about 2004/2005.
[5] The allegations of exposure are pleaded in more general terms in the statement of claim. The following are particulars provided by the plaintiff in later correspondence.
The appellant ceased manufacturing asbestos cement building products in 1985 such that the products to which the respondent is said to have been exposed had been in situ long before his exposure occurred. As such, the respondent falls within a class of potential victims that has been referred to as “the third wave” of complainants. In the case of these complainants, the products had been sold and installed on building sites well before the fact of any exposure.
The respondent in his Outline of Argument, summarised the allegations of the appellant’s negligence, material to the present dispute, in the following terms.
(a)Failing to warn end users of the building materials manufactured or supplied by James Hardie such as the plaintiff of the risks associated with the use of the building materials knowing that such building materials were likely to be cut with implements, drilled, worked and handled manually and demolished thereby releasing asbestos dust fibre into the atmosphere.
(b)Manufacturing the building materials and supplying the building materials in circumstances where there was a real risk that persons such as the plaintiff would inhale asbestos dust and fibre as a consequence of handling, drilling and demolishing the building materials.
(c)Inducing customers to purchase the building materials by promotion, demonstration and instruction knowing that the building materials would require handling, cutting, drilling, sanding and working with and may be demolished thereby release dust into the atmosphere.
(d)Failing to substitute non asbestos materials for the asbestos materials in the building materials manufactured and supplied by James Hardie.
(e)Whilst possessing sufficient financial and personnel resources to do so and with knowledge of the risk to health from inhaling asbestos dust and fibre, failing to devise, organise, administer and implement out of its Australian headquarters located at Sydney, New South Wales a national scheme for warning end users of the building materials and those who may cut, drill, sand, demolish or otherwise interfere with the building materials of the risks to health from inhaling asbestos dust and fibre. Such a national scheme ought to have included the dissemination of warnings and/or information in newspapers, radio, television, magazines and hardware stores about the health risks of inhaling asbestos dust from cutting, drilling, sanding, demolishing or otherwise interfering with the building materials.
(f)Failing to heed internal company warnings as to the likelihood of the incidence of asbestos diseases decades after exposure to persons exposed to small quantities of asbestos contained in the building materials. [Emphasis added]
(Emphasis in original)
The legal basis for the application below
The respondent’s application for further and better disclosure was brought pursuant to rule 145 of the District Court Civil Rules 2006 (SA) which is in these terms.
145—Non-compliance with obligations of disclosure and production of documents
(1)If there is reason to doubt whether a party has fully complied with the party's obligations to disclose and produce documents under this Part, the Court may make orders the Court considers appropriate to ensure that the obligations have been fully complied with and, if necessary, to enforce those obligations.
(2)The Court may (for example)—
(a) require the party, or another person who may be in a position to provide relevant information, to appear before the Court for examination; or
(b) require the party to answer written questions relevant to ascertaining whether the party has made full disclosure.
The power to make an order or orders as envisaged by rule 145 must be understood against the background of each party’s obligation to disclose documents provided for by subrule 136(1) which is in these terms.
136—Obligation to disclose documents
(1)Each party must disclose the documents that are, or have been, in the party's possession and—
(a) are directly relevant to any issue raised in the pleadings or affidavits files in lieu of pleadings; or
(b) are to be disclosed by order of the Court.
Rule 136 requires disclosure of documents that are or have been in a party’s “possession”. However, in rule 4 possession is defined as follows:
A person is taken to be in possession of a document or object if –
(a)the document or object is in the person’s custody or control; or
(b)it lies within the person’s power to obtain immediate possession of the document or object or to control its disposition (whether or not the power is one that would be recognised in law or equity).
It is generally accepted that the proper approach to an application under rule 145 is as set out by White J in Ceneavenue Pty Ltd & Ors v Martin & Ors.[6]
[6] [2008] SASC 332 at [8]-[13].
The application for further and better disclosure indicated that Gillmar invoked r 139 of the Supreme Court Civil Rules 2006 (the 2006 Rules).[7] However, on the hearing of the application Mr Burnett for Gillmar indicated that it relied instead on r 145 of the 2006 Rules. Rule 145(1) provides:
[7]    Rules 139 and 145 of the Supreme Court Civil Rules 2006 are, respectively, in materially the same terms as rules 139 and 145 of the District Court Civil Rules 2006 (this footnote supplied).
If there is reason to doubt whether a party has fully complied with the party’s obligations to disclose and produce documents under this Part, the Court may make orders the Court considers appropriate to ensure that the obligations have been fully complied with and, if necessary, to enforce those obligations.
That means that in order to obtain an order for further and better disclosure, Gillmar must establish that there is reason to doubt that the plaintiffs have complied with the relevant disclosure obligation found in r 136, ie, that each party disclose any documents which are or which have been in that party’s possession and which are directly relevant to any issue raised in the pleadings.
The word “possession” is defined in r 4. A person is taken to be in possession of a document or object if either:
(a)     the document or object is in the person’s custody or control; or
(b)     it lies within the person’s power to obtain immediate possession of the document or object or to control its disposition (whether or not the power is one that would be recognised at law or in equity)
In Belcar Pty Ltd v Premier Automotive Group Australia Pty Ltd[8] Judge Burley considered that this definition extended the scope of documents which may be regarded as being in a party’s possession. I agree with that conclusion. A litigant is now required to disclose directly relevant documents which are in a practical sense within its power, even if it does not have a legally enforceable right to possession.[9] So for example, documents which are in the de facto control of a party will be regarded as being in its possession.
I consider that the expression “reason to doubt whether a party has fully complied with the party’s obligations to disclose and produce documents” in r 145 implies a presumption that there has been compliance with a party’s disclosure obligations. Hence, it will be incumbent upon an applicant for further and better disclosure to point to matters which indicate that the Court should not give effect to that presumption. It is not necessary for the Court to be convinced that the plaintiffs’ disclosure is inadequate, or to be satisfied on the balance of probabilities that it is inadequate. It is sufficient if the Court is satisfied that there is a reasonable basis for doubting that the disclosure made is adequate. This will require a degree of satisfaction going beyond the mere possibility that the plaintiffs’ disclosure is inadequate.
An applicant may establish the doubt by demonstrating, amongst other things, that the party making the disclosure has proceeded under some form of misconception, whether as to the nature of the issues arising on the pleadings, or as to the documents which may be directly relevant to those issues, or as to the reach of the rules concerning possession. It may also satisfy the evidential onus by pointing to the documents which one would expect to have come into existence in the circumstances of the case by reason of ordinary commercial practice or experience, by reference to the pleadings themselves or by reference to other documents already disclosed.
As to the reach of the expression “directly relevant”, I refer to the Full Court decision in Channel Seven Adelaide Pty Ltd v Lane & Hurley;[10] to the reasons of the Chief Justice in Quenchy Crusta Sales Pty Ltd v Logi-Tech Pty Ltd;[11] to the judgment of the Chief Justice in Rehn v Australian Football League;[12] and finally to the judgment of Bleby J in Harris Scarfe Ltd v Ernst & Young (No 4).[13] The issue of direct relevance is to be determined by reference to the pleadings. A document will be directly relevant if it tends to prove or disprove a matter which is in issue. It will not be directly relevant if it merely tends to prove or disprove something that may be relevant to a matter in issue, or if there is merely a chance that the document will prove or disprove a matter in issue.
(Emphasis supplied)
[8] [2007] SASC 240 at [20]-[21]; (2007) 249 LSJS 403 at 407-08.
[9]    Cf Taylor v Santos Ltd (1998) 71 SASR 434 at 437-38.
[10] [2004] SASC 177 at [22] - [25]; (2004) 234 LSJS 225 at 230-31.
[11] [2002] SASC 374 at [9] – [11]; (2002) 223 LSJS 266 at 267.
[12] [2003] SASC 159 at [24]; (2003) 227 LSJS 378 at 381.
[13] [2005] SASC 443 at [13] – [15]; (2005) 93 SASR 300 at 303-04.
The Judge’s reasons

The Judge in her reasons[14] set out the background to the dispute and made reference to the requirements of rules 136 and 145 together with other matters which have already been referred to in these reasons. Her Honour then proceeded to identify the “relevant issues” arising on the pleadings in the following terms, as to which counsel for the appellant, when asked during the hearing, raised no objection.
•The nature and extent of Mr Werfel’s exposure to asbestos from the defendant’s asbestos materials;
•Whether the defendant owed persons in a class of which Mr Werfel was a member (fencers/home handymen/”do it yourself renovators”) a duty of care;
•Was it foreseeable to the defendant prior to and up to 2005 that persons in this class might suffer personal injury from exposure to defendant’s materials which had been in situ for many years? Directly relevant to this issue is the defendant’s knowledge about the nature and likely magnitude of the risk of such persons contracting mesothelioma in the future and likely number of deaths therefrom;
•Did any duty of care owed by the defendant reasonably require it to engage in a national campaign of public awareness or communication about the dangers of disturbing in situ asbestos materials so as to liberate dust? Directly relevant to this issue is the defendant’s ability to do so up to 2005 including its resources, expertise/experience in marketing, public relations and advertising;
•Did the defendant breach any duty of care owed to Mr Werfel? Relevant to this issue is the defendant’s knowledge about the known risks of injury from inhalation of asbestos dust, and the circumstances of exposure to its products in which those risks arise, its knowledge about the unknown, uncertain or unquantifiable risks of injury from inhalation of asbestos, the availability and practicability of preventative measures and the resources available to the defendant at the relevant time. Also directly relevant is the defendant’s knowledge up to 2005 of the likely extent of future claims and the likely costs of meeting such future claims. All of these matters would need to be considered by a Court in the balancing exercise referred to as the Shirt calculus;
•Did the defendant’s breach of duty cause or materially contribute to Mr Werfel’s mesothelioma? Relevant to this issue is the likely effectiveness of any public relations or communications campaign that the defendant had available to it in the period up to 2004 in order that Mr Werfel would have received the relevant warning and refrained from carrying out work which liberated asbestos dust from the defendant’s materials.
[14] Werfel v AMACA [2019] SAET 22.
Her Honour then identified the affidavit evidence that was before her and proceeded to describe the “gist” of the appellant’s opposition to the application for further and better disclosure as being[15]
… that it would involve a lot of work for a small legal firm and such an order would put me in breach of the NSW legislation.
[15] Werfel v AMACA [2019] SAET 22 at [17].
The Judge then expressed a number of conclusions.
(i)There was a reasonable basis for doubting that the disclosure made was adequate. Her Honour based this conclusion on a finding that the latest document in the appellant’s disclosure was a letter, dated 8 March 1991, which referred to a foreshadowed claim against an entity, not being the appellant or its predecessor company, concerning in situ asbestosis exposure. This letter predated the respondent’s first exposure in or about 1994. Her Honour expressed the view that the existence of this letter provided a reasonable basis “for doubting that no more recent documents of the kind sought are in or have been in the [appellant’s] possession in respect to the first of the five categories of further disclosure sought”.[16]
(ii)A report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation (September 2004) (“the Jackson Report”), a copy of which is already in the possession of the respondent and a copy of which was provided to the Judge during the argument, identified a number of risks of exposure to do-it-yourself renovators. These, according to her Honour, were “matters which are undoubtedly directly relevant to [the respondent’s] claim”.[17] According to her Honour, the Report was also useful in identifying the third category of documents with respect to which further disclosure was sought by the respondent (the evidence and exhibits relied on for the Jackson Report). The Judge noted that a document from that third category had been tendered before her (although not identified in the reasons) which her Honour characterised as directly relevant to the issues in the present matter. Given that it had not been disclosed, “it provides reasonable basis for doubting that the disclosure made is adequate”.
[16] Werfel v AMACA [2019] SAET 22 at [20].
[17] Werfel v AMACA [2019] SAET 22 at [21].
At this point the Judge expressed herself to be satisfied that both the second and third categories of documents were directly relevant to the issues in the matter and that there was a reasonable basis for doubting that the disclosure made to this point had been adequate with respect to the Jackson Report and the exhibits and evidence relating to that report.
The Judge expressed further conclusions.
(i)Her Honour did not accept that the appellant’s expressed difficulty in being able to comply with the requirement to provide disclosure was a sufficient reason not to make the order.[18] Her Honour said this.
The [appellant] has opposed the application without providing any evidence of actually seeking attempting to obtain the documents sought.
(ii)Her Honour did not accept the appellant’s submission that the New South Wales legislation relied upon by the appellant[19] restrained her from making the order sought with respect to the Jackson Report (or, by implication, the evidence and exhibits relied on).
(iii)Her Honour then noted that with respect to the fourth and fifth categories of documents complained about by the respondent, counsel for the appellant had confirmed to the Court that its discovery was complete. Nevertheless, her Honour went on to declare:[20]
In order to allay in [sic] any doubts in that regard I will include it in the order, those categories are direct [sic] relevant to the issues and given the other matters raised in this matter warrant the disclosure being provided on oath.
[18] Werfel v AMACA [2019] SAET 22 at [23].
[19] Section 23 of the Special Commissions of Inquiry Act 1983 (NSW).
[20] Werfel v AMACA [2019] SAET 22 at [25].
The Judge ultimately concluded that, on the basis of the evidence and arguments before her, she was satisfied that the orders sought in the application for further and better discovery should be made. Her Honour was also satisfied that disclosure should be on oath “because of the failures identified in the defendant’s existing list of documents”.[21] The Judge then proceeded to make the orders in the form sought in the interlocutory application and as set out earlier in these reasons.
[21] Werfel v AMACA [2019] SAET 22 at [26].
Consideration of the parties’ primary contentions on appeal
The arguments of the parties ranged far and wide. To a degree, some of the appellant’s contentions might be seen as stepping outside the strict confines of the appeal grounds. Nevertheless, the appellant’s contentions were fully canvassed in its affidavit evidence and written and oral submissions relied on before the Judge and in its affidavit evidence and written submissions before me. For example, the issue of whether or not the orders, or some of the orders sought by the respondent, if made, would require such time and expense to comply with as, in all the circumstances, to be oppressive and unreasonable, was at all times a very significant issue before the Judge and before this Court on appeal, although it is not expressly referred to in the grounds of appeal.
I am satisfied that the appellant’s contentions were matters properly raised by the appeal and that there is no unfairness in requiring the respondent to meet them. The parties’ primary contentions can be distilled and resolved as follows.
It is convenient to deal with paragraphs (d) and (e) of order 1 first. There was simply no evidence before the Judge that the appellant’s obligation to disclose, as required by rule 136, had not been observed with respect to those two categories. As best I understand the respondent’s contention in this respect, it is to the effect that once her Honour became satisfied that there had not been a proper disclosure with respect to the categories in paragraphs (a) and/or (b) and/or (c) (discussed further below) that, in effect, meant that there had not been proper compliance generally with the respondent’s obligation to disclose pursuant to rule 136 and, as such, justified an order for further and better disclosure generally.
Some support for this approach was sought to be obtained from the remarks of White J in Ceneavenue set out earlier in these reasons. I do not read his Honour’s reasons in that way. In my view, the identification of a document that should have been disclosed but has not been disclosed or of a class of documents that should have been disclosed or more fully disclosed but has not been may well be a pre-requisite to, and justify an order for, further and better discovery with respect to that document or that class. However, it would not necessarily follow that such a finding opens the door to an order for further and better discovery generally or in terms wider than otherwise would capture the established default. In Ceneavenue itself, White J went on to consider various categories with respect to which further and better discovery was sought and refused the application with respect to categories where no default had been established.
Insofar as paragraphs (d) and (e) are concerned, senior counsel for the appellant from the bar table advised the Judge that the appellant’s discovery with respect to these two categories was complete. No evidence was adduced or submission made to the contrary. In these circumstances, there was no reason for the Judge to go behind the presumption deriving from the terms of rule 136 that the appellant, at least with respect to these two categories, had complied with its obligations. Indeed, the Judge implicitly acknowledged this when the only reason she gave for making the order with respect to paragraphs (d) and (e) was:
With respect to the fourth and fifth category of documents counsel for the [appellant] says its discovery is complete with respect to those matters. In order to allay any doubts in that regard I will include it in the order. …
(Emphasis supplied)
In so finding, the Judge, with respect, failed to apply the correct test and made an order for further and better discovery that was not open to her in accordance with the requirements of rules 136 and 145. For these reasons, I would allow the appeal with respect to paragraphs (d) and (e) of order 1.
I return now to consider paragraphs (a), (b) and (c) of order 1.
An initial difficulty derives from the form of the chapeau to order 1, particularly as it concerns paragraph (a). On its ordinary reading, this requires disclosure of documents being documents in relation to the identified categories of documents. This is an extremely wide identifier particularly as it relates to the class identified in paragraph (a). The respondent contends that paragraph (a) of order 1 only requires disclosure of claims documents and proposed claims documents. This is plainly not correct as the order requires documents in relation to documents in that category. Further, the chapeau to order 1 uses the phrase “including in relation to” with reference to the various categories of documents identified in the following paragraphs. The use of the word “including” is also objectionable. It is simply not possible for the appellant, when seeking to observe the order, to be able to identify the extent or nature of the disclosure required.
In addition, paragraph (a) is itself materially ambiguous. The timeframe “in the years 1992-2005” which is intended to qualify the ambit of the proposed disclosure might refer to: claims and proposed claims against the defendant notified within that period of 13 years or so; injuries alleged to have been sustained during that period (which would expand the potential period for notification of claims and proposed claims to include all such notified claims and proposed claims up until the date of the disclosure – some 27 years or so); or exposure to asbestos during the period 1992 to 2005 which again would expand the period for notification of claims and proposed claims in like manner. The literal and natural meaning of paragraph (a) is the latter, that is, the phrase “in the years 1992-2005” qualifies the matter immediately preceding it being exposure to asbestos. For these reasons also an order in the form of paragraph (a) is unfair and objectionable and should not have been made.
During the hearing before the Judge there was some discussion as to whether or not any order to be made in the form of paragraph (a) should be read down so as to only capture claims and proposed claims (otherwise satisfying the terms of paragraph (a)) notified to the appellant during the years 1992-2005 (that is the first of the three possible meanings identified above) and as not encompassing “documents including in relation to such claims”.
Counsel for the respondent during the argument clarified that insofar as the three alternative meanings were concerned it was only the first meaning (claims and proposed claims coming to the attention of the appellant during the period of 1992-2005) that was intended. However, later during the argument the following exchange occurred.
HER HONOUR:  Can 1(a) be modified so your 1(a) in your interlocutory application be modified to make it clearer?
COUNSEL FOR RESPONDENT:   Well, I could – yes, I …
COUNSEL FOR APPELLANT:     That’s not the application before you.
COUNSEL FOR RESPONDENT:   Well, your Honour, these things are done.
COUNSEL FOR APPELLANT:     This is in reply they’re going to modify what they want?
COUNSEL FOR RESPONDENT:   This is in response.
HER HONOUR:  I just asked him to help me out.
COUNSEL FOR APPELLANT:     If it can be modified, they can withdraw it. They can properly withdraw it.
HER HONOUR:  No. Well we can leave it as it is.
COUNSEL FOR RESPONDENT:   We’re happy to leave it. Like any other process of discovery when it’s properly undertaken, the defendant’s bona fide, knowing the reliance that everybody including the court places on their activity, makes a proper judgment, properly informed as to the law, as to what is relevant and what isn’t. That’s what needs to be done. So the fact that the class may include other documents that are not relevant to facts in issue in these proceedings, that’s no different from any other discovery situation where a defendant has got a whole lot of documents and they have to work out which respond to the facts in issue in the particular litigation.
In my view, the order should never have been made in the form of the chapeau to order 1 and with the ambiguous language in paragraph (a). Nevertheless, during the appeal it became clear that all the respondent was seeking pursuant to paragraph (a) were bare claims and notices of claim coming to the attention in one way or another of the appellant during the 13 year period between 1992 and 2005. I will consider other issues raised by the appellant with respect to paragraph (a) in the context of the respondent’s concession as to its meaning.
The appellant maintains that each of paragraph (a) and paragraph (c) by virtue of its wording imposes an improper or unreasonable obligation on the appellant and one that is not in accordance with the obligation to disclose provided for by rule 136. The appellant maintains that it is under an obligation to disclose all claims and proposed claims (paragraph (a)) and all exhibits and evidence from the Jackson inquiry (paragraph (c)), irrespective of whether any of the items falling within the descriptions are directly relevant to the issues between the parties raised on the pleadings.
In other words, the form of the order, as made by the Judge, has foreclosed the question of direct relevance ordinarily to be addressed by the disclosing party, in that the Judge has made the finding (express or implied) that the whole class of documents identified in each case and every document within it is directly relevant to an issue between the parties raised by the pleadings.
The respondent contends that this is a misreading or misunderstanding of the position and that all the appellant has been ordered to disclose is those documents within the respective classes that are directly relevant. As such, it will be a matter for the appellant as to which and how many it discloses by way of compliance with paragraphs (a) and (c) of order 1.
The Judge’s reasons in this respect are ambiguous. Her Honour said this.[22]
It was uncontroversial the letter dated 8 March 1991 was the latest document in the [appellant’s] disclosure of that kind. Clearly as [the respondent] claims his exposure to asbestos did not commence until 1994 documents of that kind from the period 1992 to 2005 are directly relevant to the issues before me.
The fact that the letter dated 8 March 1991 is the latest such letter provides a reasonable basis for doubting that no more recent documents of the kind sought are in or have been in the [appellant’s] possession in respect to the first of the five categories of disclosure sought.
. . . .
I am satisfied that both the second and third category of documents are directly relevant to the issues in this matter … .
[22] Werfel v AMACA [2019] SAET 22 at [19]-[20] and [22].
Notwithstanding the ambiguity in the Judge’s reasons, I agree with the submission of the respondent that on a proper or sensible reading of paragraph (a) and paragraph (c) of order 1, the appellant is only obliged to disclose documents within that category that are directly relevant. Paradoxically, this serves to increase the burden of the task. Were the question of direct relevance to have been foreclosed, the appellant would only have been required to locate and identify claim documents. However, were direct relevance to remain to be determined by the appellant, it would have to locate, identify, read and consider (for direct relevance) each such document.
The next contention by the appellant was to the effect that with respect to the categories of documents in paragraphs (a) and (c) and the document identified in paragraph (b) of order 1, the respondent had not demonstrated on the evidence that there was reason to doubt that the appellant had properly complied with the relevant disclosure obligation found in rule 136 as that notion has been explained by White J in Ceneavenue. In order to make this finding the Judge relied on the following matters.
Her Honour relied on the letter of 8 March 1991 that had been disclosed by the appellant and referred to earlier in these reasons. As I understand the argument, this document and documents of this nature might be relied upon by the respondent to demonstrate that the appellant was aware of the possibility of future claims being brought against it even after it had stopped distributing products in 1985 with the potential for such claims arising out of exposures to the appellant’s products that were already in situ and which may have been in situ for many years prior to a complainant’s exposure. In the event that the appellant had been aware of the possibility of such claims being made during the period prior to and until the last exposure date for the respondent, that is, some time in 2005, such awareness would be relevant in the sense of being probative of a fact in issue, namely whether or not the injuries said to have been caused to the respondent were reasonably foreseeable to the appellant.

A difficulty with this argument is that the fact the appellant had such a document in its possession, custody or control as at the time it were to make its further and better disclosure (2019) cannot, of itself, be directly relevant. Other matters would need to be established including that appropriate officers of the company were aware of the contents of the document and that they were so aware at a relevant time. As I understand the position it is the knowledge of the appellant at the relevant time that is of significance not the bare fact of any claim having been made or notice of proposed claim given. The mere existence of another claim, even if of a nature similar to the respondent’s claim, cannot of itself be directly relevant to an issue between these parties.[23]
[23] Quenchy Crusta Sales Pty Ltd v Logi-Tech Pty Ltd & Anor [2002] SASC 374.
As far as the letter of 8 March 1991 is concerned, the appellant appears to have reached a conclusion that it was directly relevant and thus has disclosed it. It does not necessarily follow that any other document of a like nature, should it exist within the appellant’s possession, custody or control, would also necessarily be directly relevant although the possibility of such cannot of course be discounted.
There is a further difficulty with the Judge’s reasoning on this topic. Her Honour was in error in finding that this letter was the latest document of that kind in the appellant’s disclosure, let alone in declaring this to be uncontroversial. It was, it would appear, the only document of its kind in the appellant’s disclosure that was drawn to the Judge’s attention. However, the disclosure is mammoth and an examination of the list that was before her Honour and of the affidavit evidence that was before her Honour reveals that it was not possible to make a finding of that nature.
Having said that, it cannot be concluded that all claims and proposed claims received or with respect to which the appellant was on notice during the period 1992 to 2005 have been disclosed. The appellant is on record as advising the court, in support of its oppression argument, that compliance with paragraph (a) of order 1 would require it to locate and review something like 3,698 files concerning claims made against it during that period.
The only conclusion available on the evidence is that there may be documents within the class referred to in paragraph (a) that are directly relevant in the sense of having a sufficient similarity of allegations and coming to the attention of the appellant within the relevant time period as would put the appellant on notice of the possibility of a claim or claims, in the nature of that being brought by the respondent, in time for the appellant to have taken appropriate steps to avoid the breaches of duty alleged. However, in my view the probative value of any such documents are likely to be marginal in this respect. This is a matter to be weighed when consideration is given to the oppression argument dealt with below.
Another reason given by the Judge for doubting that the appellant’s disclosure had been adequate was the fact that the Jackson Report had not been disclosed. The Jackson Report was delivered in September 2004, very much towards the end of the period of exposure as alleged by the respondent, namely 1994 to 2004/2005. Her Honour formed the view that the Jackson Report itself was a directly relevant document because it identified the risk of exposure to asbestos by do-it-yourself renovators and the future risk of in situ exposures to asbestos by what she referred to as “downstream” users. Her Honour found these matters to be “undoubtedly directly relevant” to the respondent’s claim.[24] Her Honour also found the report to be useful in assisting to identify the category of documents described in paragraph (c) of order 1, that is, the exhibits and evidence relied on in the Jackson inquiry.
[24] Werfel v AMACA [2019] SAET 22 at [21].
Her Honour was provided with one such exhibit, an expert report or extracts from an expert report (“the Trowbridge Report”) that made various references to matters such as: the known risk that individuals would be exposed to asbestos products in situ throughout the indefinite future; the likely increasing number of claims arising therefrom; and the likely increasing costs of such claims. Again, her Honour found documents of that nature tendered to the inquiry to be directly relevant to the issues arising from the respondent’s claim. Her Honour also found that the failure of the appellant to disclose the Trowbridge Report provided a reasonable basis for doubting that the disclosure made was adequate.[25]
[25] Werfel v AMACA [2019] SAET 22 at [21].
Again, I take the view that the Trowbridge Report itself is not a directly relevant document. It contains findings and expressions of opinion by the Commissioner based on evidence and submissions received by the Commissioner for that purpose. These are not matters that would be admissible or probative of any issue arising between the present parties. I appreciate that a document does not need to be admissible in evidence in order for it to be of direct relevance for the purposes of disclosure. Nevertheless, and once again, the Jackson Report (paragraph (b) of order 1) and the exhibits and transcript of evidence on which it was based (paragraph (c) of order 1) can only be of assistance to the respondent to the extent that the information contained therein can be said to have come to the attention of the appellant in an appropriate way and at an appropriate time. There are no doubt many steps that would need to be established in order to demonstrate this.
Similar considerations apply with respect to the exhibits and the transcript. A list of the 342 exhibits is exhibited to an affidavit of one of the solicitors involved in the conduct of the respondent’s matter that was before the Judge. The 342 exhibits are not 342 single items. Many of the exhibits would appear to be very substantial collections of documents in themselves. For example, many of them are witness statements with multi-volume supporting documentation. Counsel for the appellant described the 342 exhibits as comprising many tens of thousands of pages.
More importantly, there is little, if anything, on the face of the bare descriptions of the exhibits that suggests that any of the exhibits would be of direct relevance to the issues raised in the present matter. Indeed, the vast majority would appear to have no relevance. Nevertheless, it has been acknowledged by the appellant (again, as part of its submissions dealing with the oppression assertion) that the solicitors for the appellant have not had an opportunity to review the exhibits relied upon for the Jackson Report.
In my view and, with respect, contrary to that of the Judge, whilst the Jackson Report might be of marginal direct relevance, it has not been established on the evidence before the Judge or that was before this Court that the exhibits and transcript for the Jackson Report, as a class, are of direct relevance to the issues raised on the pleadings in this matter. Nor has it been established that any individual exhibit other than perhaps the Trowbridge Report is of direct relevance, with the Trowbridge Report being, at best, marginal in this respect.
Independently of my conclusions to this point, including on the issue of direct relevance, concerning paragraphs (a) and (c), I would allow the appeal with respect to paragraphs (a) and (c) of order 1 in any event for the reason that her Honour, with respect, failed to have regard to the evidence relied on by the appellant demonstrating the oppressive nature of those orders as made and that they were highly likely to be impossible to comply with within the timeframe as ordered.
One only has to look at the form of the orders imposed, even in the restricted form of paragraph (a) as conceded by the respondent, to have real disquiet about whether the orders made on 12 February 2019 could be complied with by 4 March 2019 and in electronic form. However, in my view the difficulties were made clear by the appellant in its affidavit evidence and submissions that were before the Judge.
Caroline Mary Knight swore an affidavit on 11 February 2019 which was read on the application before the Judge. Ms Knight is the appellant’s solicitor and has the day to day care and conduct of the matter. She has been a solicitor conducting litigation for more than 24 years and has acted for the appellant in dust diseases claims in South Australia since at least 2005. She deposed to matters of her own knowledge and on information and belief based on information obtained from colleagues familiar with claims against the appellant and the appellant’s processes involved in defending those claims. Among the matters she deposed to, with respect to the then proposed paragraph (a) of order 1, were the following:[26]
(a)On any view of the correct interpretation of what is sought, it would require me collecting and compiling records made in respect of all claims made against Amaca for at least 13 years;
(b)This is not limited to South Australia. It would apply Australia-wide. Amaca has had claims litigated against it in New South Wales, Victoria, Queensland, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory. There have also been some claims involving New Zealand;
(c)Many of the documents which would be required to be produced by the orders sought will be in storage or may have been destroyed. I know this because Holman Webb’s practice is to archive closed files at off-site storage facilities. Unless those files are marked so as to require them to be retained for a specific purpose, they are destroyed after 8 years. This was also the practice of my previous firms, Phillips Fox, DLA Phillips Fox, Fox Tucker and DW Fox Tucker Lawyers.
(d)To retrieve those files of documents from all around Australia would require making contact with the lawyers in the different states and territories and arranging for documents to be removed from storage and delivered to my office in Adelaide. This, of course, is not limited to those lawyers currently conducting this work. It would extend to law firms carrying out the work back in 1992 – 27 years ago. As stated above, some of these law firms no longer exist, and the lawyers are no longer involved. I cannot anticipate that I will receive full and immediate cooperation;
(e)Based on experience of retrieving documents from storage, and given the distances involved, I believe this could take several weeks and cost many thousands of dollars. There are also logistical difficulties with keeping the volume of paper in my office in Adelaide, which I will deal with below;
(f)Once a file arrives it will require a lawyer on a properly-supervised paralegal going through the file to ascertain which documents are relevant; which documents are irrelevant; and which documents are subject to legal professional privilege. Based on experience, I know some matters will have given rise to a large number of documents. Even the most simple cases would produce several thousand pages of paper. I can only do my best to estimate how long which process may take, file by file. I believe that the minimum allowed per file would be approximately one hour, and that many files would take much longer.
I recognise that, in the event that the search was only to involve statements of claim or notices of proposed claim, some of the steps and the time involved as identified in paragraph (f) above would need to be modified downwards.
[26] Paragraph 12(a)-(f).
Ms Knight also deposed to logistical difficulties in the following terms:[27]
(a)The office of Holman Webb in Adelaide is a small office, comprising two legal staff, one causal law clerk and one administrative assistant. Each of those persons is currently fully engaged in a work load meeting legal commitments to Amaca and other clients. There is presently no-one who could cease work on current legal work to provide this Disclosure. In other words, new employees would need to be brought in on a temporary, but indeterminate, basis;
(b)The actual offices of Holman Webb in Adelaide are physically small. Currently, there is no spare space in which this exercise could be undertaken. Some adjustments could be made, but even with that adjustment it would be unlikely that more than 20 archive boxes could be bought into the office at any time;
(c)I am presently unable to estimate precisely how long this process would take. Bearing in mind the Disclosure is sought to be given on oath, it must be a careful procedure. In those circumstances I can only estimate that, depending the number of permanent or temporary employees bought in for this sole task, it would take many months.
(d)Finally, there is the issue of costs. The costs would be likely to be several hundreds of thousands of dollars.
[27] Paragraph 16(a)-(d).
The Judge failed to identify and deal with these considerations in her reasons. In my view, they are powerful considerations and should have been expressly dealt with. It would appear that her Honour implicitly rejected them as either being of no relevance or of no sufficient weight. With respect, her Honour erred in drawing the following conclusion.[28]
I do not accept that the difficulty in complying with the requirement to provide disclosure is a sufficient reason to not make the order. The [appellant] has opposed the application without providing any evidence of actually seeking or attempting to obtain the documents sought.
[28] Werfel v AMACA [2019] SAET 22 at [23].
With respect, evidence of merely seeking or attempting to obtain the documents sought would, of itself, have been of little assistance. Had the appellant made such attempts and had it received information in response that supported a finding that the task was too big and likely to be impossible or that the task was not too big and not likely to be impossible, such might have been a relevant consideration. However, given the timeframes involved it is understandable that the most useful evidence that could be made available was that concerning what, in the solicitor’s opinion, would be involved in attempting to comply with the proposed order. Further, given that the order had not yet been made and, as at the time of swearing the affidavit, might well not be made, it is unsurprising that steps were not taken to comply prior to the hearing before the Judge.
Ms Knight swore another affidavit, on 21 February 2019, which was read in support of the appeal. Some assertions in that affidavit were objected to and received either by way of submission or were not pressed by the appellant.
Received as a submission was the following paragraph 7.
It remains my view that compliance with the Orders made by her Honour on 12 February 2019 will not be possible by 4 March 2019, the date by which her Honour required compliance. Indeed, I am concerned that if the orders were to stand, the appellant would not be in a position to comply with orders 1 and 2 by the date fixed for the trial of this action being 4 April 2019.
In paragraph 9 of this affidavit (not objected to), Ms Knight deposed to the following.
I have been advised by the appellant that it received approximately 3,698 claims which are subject to Order 1. The appellant advised me that those claims are not all stored electronically by the appellant but are in hard copy files which are in off-site storage. Further, I have been advised that due to the practice adopted at the time the appellant’s stored hard copy claim files are unlikely to be complete. I have contacted solicitors who conducted claims the subject of Order 1 for the appellant. Some of those solicitors who conducted those claims have ceased practising or their firms are no longer in existence. Some of the solicitors who have responded to me have advised me the files may be, or are, in storage and located throughout Australia. Some firms have advised they have hundreds of archive boxes in storage which may contain relevant documents. They have advised it would take time to retrieve them, collate them and transport them to Adelaide. Those hard copy files must be reviewed for claims of privilege and any documents standing outside the scope of those Orders. Those solicitors have also advised me there is a cost associated with retrieving, reviewing and transporting any files they have.
As far as paragraph (c) of order 1 is concerned, Ms Knight at paragraphs 22 and 23 of her affidavit read before the Judge, deposed as follows.
There are practical problems as well. At the time of the Inquiry Amaca was owned and controlled by the Medical Research and Compensation Foundation (the MRCF) and that organisation conducted the Inquiry. The MRCF collected and compiled the evidence and exhibits through its solicitors, Clayton Utz. I have been instructed that Amaca did not receive or retain separate copies of the evidence and exhibits in the Jackson Inquiry. I have attempted to make contact with Clayton Utz to see whether or not that firm retains the documents. I asked to speak with Nancy Milne and Jocelyn Kellam – who I understand and believe to have been the principal lawyers at Clayton Utz with the conduct of the Inquiry on behalf of the MRCF. I was told there is no one in the [telephone] system by those names which means they are no longer working at Clayton Utz.
In the time available to me I have been unable to ascertain whether the MRCF retains those documents, or by whom or where they are retained.
There is a real question whether, in these circumstances, the exhibits and evidence relied on with respect to the Jackson Report can be said to be in the possession, custody or control of the appellant. However, this issue was not fully argued before me and is not a matter I am in a position to resolve on this application.
The limited likelihood of there being documents of direct relevance falling within the categories described in paragraph (a) and paragraph (c), the likely limited nature of the probative value of any such documents, the time likely to be required in order to comply with the orders, the expense and logistical difficulties associated with any compliance with the orders, and the time limit imposed by the Judge of 4 March 2019, in combination, persuade me that the orders made by the Judge with respect to paragraphs (a) and (b) were unreasonable and plainly unjust. As such, and independently of any process errors by the Judge in arriving at her conclusions concerning direct relevance, in my view an outcome error in the sense recognised by the High Court in House v The King has resulted and paragraphs (a) and (c) of order 1 should be set aside for this reason.
As earlier indicated, I would also allow the appeal and dismiss the application with respect to paragraphs (d) and (e) of order 1 for reasons earlier given. I would allow, albeit with some hesitation, paragraph (b) of order 1 to stand. In this respect, I take the view that any impediments that may be imposed by section 23 of the Special Commissions of Inquiry Act 1983 (NSW) would not operate at the disclosure or production stage but only, if at all, at the deployment stage.
I turn now to consider briefly what are now consequential matters – orders 2 to 5.
In my view, there is now no justification for order 2, that is, that the discovery be made on oath and I would set that order aside. As far as giving disclosure electronically is concerned, the appellant prior to and at the appeal hearing agreed to provide the disclosure already made in electronic form. As a consequence and with the consent of the parties I made an order at the hearing in the following terms:
[T]he appellant (defendant) is to provide an electronic copy of the documents contained in the disclosure list filed Monday 14 January 2019 to the respondent’s (plaintiff) solicitors by 10.00am on Monday 4 March 2019.

However, at all times, the appellant has been opposed to making electronic disclosure with respect to any of the documents ordered by way of further and better disclosure by the Judge on the simple basis, as I apprehend it, that the appellant did not expect to be able to obtain an electronic version of the vast number of documents involved extending as far back as 27 years or so most of which would only be in hard copy form in archive boxes. In any event, given that, as a result of this appeal, the appellant will not be subject to an order for further and better disclosure other than with respect to the Jackson Report, it is unnecessary for any further order with respect to electronic disclosure. I take the view that it is not necessary to disclose the Jackson Report in electronic form. As such, I would formally set aside the Judge’s order 3.
As far as order 4 is concerned, I will amend the date for the further and better disclosure of the Jackson Report so that it is to be completed not by 4 March 2019, as ordered by the Judge, but by Monday 11 March 2019.
I set aside order 5 (“costs”) and will hear the parties on the questions of the costs of the argument before the Judge and the costs of the appeal.
Conclusion
I make the following orders:
1.Permission to appeal allowed.
2.Appeal allowed in part.
3.The Judge’s orders 1(a), (c), (d) and (e) are set aside.
4.The Judge’s order 1(b) is set aside and replaced with an order in these terms:
The defendant is to provide further and better disclosure of the Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation dated September 2004 (the Jackson Report) by 11 March 2019.
5.The Judge’s orders 2, 3, 4 and 5 are set aside.
6.The respondent’s interlocutory application filed in the SAET on 6 February 2019 is otherwise dismissed.
7.The interim stay with respect to the Judge’s order 4 made at the hearing on 1 March 2019 is vacated.