Australia and New Zealand Banking Group Limited v ANZCover Insurance Pty Ltd (No 3)

[2005] VSC 329

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 2073 of 2003
F5600

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
(ACN 005 357 522)

Plaintiff

v

ANZCOVER INSURANCE PTY LTD
(ACN 082 275 125) and ORS

Defendants

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 August 2005
DATE OF JUDGMENT:	19 August 2005
CASE MAY BE CITED AS:	ANZ Banking Group Ltd v ANZCover Insurance Pty Ltd (No. 3)
MEDIUM NEUTRAL CITATION:	[2005] VSC 329

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PRACTICE and PROCEDURE – discovery– whether  compliance with direction as to affidavits supporting claim for privilege – Commercial List - co-operation between practitioners

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr AC Archibald QC and Ms C Kenny	Clayton Utz
For the Defendants	Ms Wendy Harris	Ebsworth & Ebsworth

HIS HONOUR:

1. The parties to this litigation have again taken up their position in trenches which are separated by a distance just beyond voice range.  The proceeding is fixed for trial commencing on 6 February 2006.

1. In late July 2005, the plaintiffs submitted to the defendants a proposal to substantially amend its statement of claim.  Before me this was consented to,  but the existing interlocutory timetable had to be adjusted to accommodate the new pleading, new particulars and consequential pleadings as well as witness statements which depend upon the amendment.  When the matter was called on for hearing each side submitted a revised timetable.  I was told that, although they had been sitting in court for some time while I dealt with another matter, there had been no attempt to discuss these dates.  As a consequence, a good deal of court time recorded on nearly 50 pages of transcript was occupied resolving these details which, in other cases, are commonly able to be agreed.  This proceeding is being conducted in the Commercial List.  The failure of the practitioners to attempt to resolve the timetable issues is a contravention of paragraph 3.10 of the Commercial List Practice Note.  I take this opportunity to remind the practitioners concerned, if reminder be necessary, of the expectation of the Court that, in litigation of this kind, their role is to assist the Court to resolve matters in a just and efficient way.  This requires a degree of co-operation so as to avoid needless expense and delay.[1]

   [1]See Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190 at 194, per Ipp J.

1. Two further disputed matters were the subject of argument and in respect of which I reserved my decision.  These were the following:

(1)The claim of the defendants to privilege in respect of two letters from HIH Management Ltd and Karp & Karp dated 29 November 2000 and 14 February 2001, respectively, which were produced by HIH upon subpoena.  I shall refer to these letters as the Karp & Karp letters.

(2)The allegation of the plaintiff that the defendants have not complied with paragraphs 1 and 2 of the orders made on 30 June 2005 with respect to their claims for privilege.

1. As to the Karp & Karp letters, the defendants’ affidavit material is deficient and it was accepted that I give them further opportunity, in addition to that which I afforded to them on 30 June, to place before the Court the facts upon which they rely to resist the order for access to these documents.

1. The second point requires some consideration of the background.  During the period from mid-2004 to mid-2005 the parties have been in dispute about the defendants’ claim for legal professional privilege with respect to discovered documents.  To a large extent this dispute centred around the assertion of the plaintiff that the  defendants had pleaded into issue their state of mind as to the prospects of the success of ANZ Grindlays with respect to the NHB claim so that the privilege otherwise attaching to communications on that topic had been waived.  The matter was finally resolved by 30 June 2005 when the defendants accepted that the privilege had been waived with respect to a category of documents, namely those documents which are: 

“relevant to the issue of whether they were able to or did form a view on policy coverage prior to settlement of the NHB claim on 16 January 2002.”

The privilege attaching to documents falling outside the accepted category is not subject to the waiver.

1. On 30 June 2005  I made the following orders:

“1. (a)That by consent the 1^st to 13^th defendants provide discovery of all documents relevant to the issue whether they were able to or did form a view on policy coverage prior to settlement of the NHB claim on 16 January, 2002.

(b)That on or before 15 July 2005 the 1^st to 13^th defendants by their solicitors file and serve an affidavit which exhibits a list of privileged documents which they assert fall outside the category of documents referred to in sub-paragraph (a).

2. (a)That on or about 15 July 2005 the 1st to 13^th defendants by their solicitors file and serve an affidavit exhibiting a list of privileged documents produced under subpoenas by Allens Arthur Robinson and HIH Management Pty Limited which they assert fall outside the category of documents referred to in sub-paragraph 1(a).  Such affidavit is to specify the grounds on which the claim for privilege is made and the facts upon which the grounds are based.

(b)The Plaintiff be granted access to the documents produced under subpoenas by Allens Arthur Robinson and HIH Management Pty Limited other than those documents listed in the exhibit referred to in sub-paragraph 2(a).”

1. Documents falling within paragraph 1 of the order were listed and released for inspection in the tranche 10 discovery which was given on or about 18 July 2005.  Paragraph 2 of the order does not seem to be relevant to the point presently under consideration.

1. The argument on behalf of the defendants with respect to compliance with the 30 June order largely depended upon a comparison between certain of the discovered documents in the tranche 10 discovery and unmasked copies of the same documents which have come to light from other circumstances.  This comparison, it was argued, showed that the lawyers who have examined the tranche 10 documents have misconceived their obligations to determine that these documents, or part of them, fall outside the accepted category and are therefore subject to unwaived privilege. 

1. A further, but related, complaint is that certain of the documents for which privilege is now claimed are not themselves included in the tranche 10 list.  This, it was said, showed a lack of diligence in the discovery process by those acting for the defendants. 

1. Lack of diligence is also said to be demonstrated by the fact that when the imaged tranche 10 documents were provided to the plaintiff on CD Rom, they included documents which were masked but which were not mentioned in the tranche 10 list or the tranche 10 privileged documents list.

1. In the normal course of things, many of these complaints would be resolved by discussions between the solicitors, if it was thought that the nature and number of the discrepancies warranted this.  This, however, are not the way things are done in this litigation.  No discussions have taken place.  What was proposed on behalf of the defendants was that the solicitors for the parties should deal with the matter in correspondence.  This seems to be a very time consuming approach and, given the detail of the letters already exchanged, a very expensive one for the clients.  Expense, however, does not appear to be a matter of concern for the litigants in the present case nor, it seems, for the practitioners who, after all, are the beneficiaries of this intransigence. 

1. The alternative, which appears to be the preferred course, is to leave the matter to the Court.  I was invited to trawl through the 20 or so examples of careless or misconceived discovery which are exhibited to Mr Boyd’s affidavit of 3 August 2005 and the discovery lists exhibited to Mr Burns’s affidavit of 16 July 2005.  I was invited to detect in these the matters relied upon by counsel for the plaintiff and to conclude that they showed that the defendants’ tranche 10 discovery obligations had not been observed. 

1. I do not so conclude.  I find no systemic error in the discovery lists or the exhibited documents.  Insofar as documents produced for inspection have been omitted from one or other list, this may be remedied if the parties wish.  If not, the production of the document itself will serve to bring it to the attention of the plaintiff.

1. Insofar as the solicitors for the defendants have failed to support their claims for privilege in the manner prescribed in paragraph 2 of the order of 30 June, the claims, if challenged, may be rejected.  It is for the party asserting an unwaived privilege to satisfy the Court of the facts upon which the assertion is based.

1. I have not been asked to determine any claims to privilege for any tranche 10 documents.  I do not, therefore, undertake that task.

1. It is sufficient for present purposes that I accept the affidavit of Mr Burns of 16 July 2005 as setting out the facts upon which the claims of privilege are based.  If those advising the defendants are not content with this affidavit, it is for them to seek to supplement it or to defend any challenge to those claims upon the material as it now stands. 

1. With respect to the two matters upon which I have reserved my decision, I propose the following orders:

1.The defendants file and serve any affidavit setting out the facts upon which they rely as giving rise to a claim for legal professional privilege with respect to the Karp & Karp letters.

2.The objections of the defendants to inspection of the Karp & Karp letters by the plaintiff be adjourned.

3.I refuse the plaintiff’s application to extend the time fixed in paragraphs 1 and 2 of the order of 30 June 2005 for the defendants to comply with those paragraphs.

1. Having regard to my criticisms of the way these matters have been dealt with, I will hear counsel for each party as to whether any costs order should be made upon these reserved matters and as to the dates to be inserted in the order to be made.

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