Australian Railroad Group Pty Ltd & Ors v Rowan & Anor

[2004] WASC 165

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   AUSTRALIAN RAILROAD GROUP PTY LTD & ORS -v- ROWAN & ANOR [2004] WASC 165

CORAM:   LE MIERE J

HEARD:   19 MAY 2004

DELIVERED          :   29 JULY 2004

FILE NO/S:   CIV 2059 of 2002

BETWEEN:   AUSTRALIAN RAILROAD GROUP PTY LTD (ACN 080 579 308)

First Plaintiff

AUSTRALIA WESTERN RAILROAD PTY LTD (ACN 094 792 275)
Second Plaintiff

WESTNET RAIL PTY LTD (ACN 094 721 301)
Third Plaintiff

AND

WILFRED THEO ROWAN
First Defendant

WILDOR NOMINEES PTY LTD (ACN 067 095 434)
Second Defendant

COMMISSIONER OF MAIN ROADS
Third party

Catchwords:

Negligence - Evidence - Discovery - Application to compel further and better discovery - Rail Safety Act 1998 - Failure to discover documents relating to safety and compliance obligations - Inherent power of the Court to order further discovery - Power under O 26 r 6 - Discoverable documents must relate to issue in the proceeding - Relevant documents

Legislation:

Rail Safety Act 1998, s 7, s 8

Rules of the Supreme Court 1971 (WA), O 26 r 6

Result:

Application allowed in part

Category:    B

Representation:

Counsel:

First Plaintiff                :     Mr K J Martin QC

Second Plaintiff            :     Mr K J Martin QC

Third Plaintiff               :     Mr K J Martin QC

First Defendant             :     Mr R E Keen

Second Defendant         :     Mr R E Keen

Third party                   :     No appearance

Solicitors:

First Plaintiff                :     Phillips Fox

Second Plaintiff            :     Phillips Fox

Third Plaintiff               :     Phillips Fox

First Defendant             :     Talbot & Olivier

Second Defendant         :     Talbot & Olivier

Third party                   :     State Solicitor

Case(s) referred to in judgment(s):

Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627

Swanston v Lishman (1881) 45 LT 360

The Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company (1882) 11 QBD 55

Case(s) also cited:

Australian & New Zealand Savings Bank v FCT (1991) 91 ATC 4107

Commissioner for Railways v Dowle (1958) 99 CLR 353

Commonwealth v Northern Land Council (1993) 176 CLR 604

Fraser v The Victorian Railways Commissioners (1909) 8 CLR 54

Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540

Kolizos v Australian National Railways Commission (1981) 25 SASR 146

Moore v Woodman [1970] VR 577

Mulley & Marney v Manifold (1959) 103 CLR 341

Onetech Pty Ltd v Shaw [1999] WASCA 289

Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121

Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178

Tame v State of New South Wales; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317

South Australian Railways Commissioner v Thomas (1951) 84 CLR 84

1. LE MIERE J:  The first and second defendants have applied for an order that the second and third plaintiffs give further and better discovery of certain specified documents.

The Action

1. This action arises out of a collision between a prime mover and a train at railway level crossing 375 near Esperance on 6 March 2002.

2. The plaintiffs plead that the first plaintiff is the parent company of the second and third plaintiff.  The first plaintiff is the owner of the rolling stock operating on the railway line between Esperance and Kalgoorlie.  The second plaintiff is the operator of the rolling stock.  The third plaintiff is responsible for providing access to, and maintenance of, infrastructure, including infrastructure at and in the vicinity of railway level crossing 375.  More particularly the third plaintiff is responsible for track repairs and maintenance of the railway, and for the operation, repair and maintenance of railway signalling equipment at railway level crossing 375.

3. The prime mover was owned by the second defendant and driven by the first defendant.

4. The plaintiffs plead that prior to the train entering railway level crossing 375 the yellow warning lights and the red warning lights both activated.  The plaintiffs plead that the collision occurred as a result of the first defendant's negligence.

5. The defendants deny that the first defendant was negligent and plead that any loss or damage suffered by the plaintiffs was occasioned by the negligence of the third plaintiff.  The defendants counterclaim for loss and damage suffered as a result of the collision.  The defendants have given particulars of their allegation that the third plaintiff was negligent.  The particulars that are most relevant to this application are that the third plaintiff was negligent for and as follows:

   "(1)Failing to devise, install and maintain a safe system such as would ensure that road traffic could not traverse railway level crossing 375 at any time when a train was traversing the track in the vicinity of that crossing;

   …

   (6)Failing correctly to align the red flashing lights at railway level crossing 375 in such a way that they were clearly visible at all times to the first defendant as he approached the level crossing;

   (7)Failing to design, install and maintain a warning system that would be clearly visible to all licensed drivers approaching the level crossing, including those whose visual acuity is adversely affected by their age;

   (8)Installing and maintaining a railway level crossing controlled only by signal lights within a major highway approved for use by road trains at speeds of up to 100 kph;

   (9)Failing to heed reports of, investigations into and complaints of dangerous incidents at railway level crossing 375 and similar level crossings within its control in the five years prior to 6 March 2002, and accidents and near‑accidents at all such level crossings in the same period."

6. In their defence to counterclaim the plaintiffs deny that the third plaintiff was negligent and say that the level crossing was devised and installed by Westrail and that the level crossing was adequate to warn drivers of the presence of trains on the rail track in the vicinity of the level crossing.

History of the Further and Better Discovery Application

1. The plaintiffs gave formal discovery verified by an affidavit sworn on 29 April 2003.  On 4 August 2003 the defendants' solicitors wrote to the plaintiffs' solicitors requesting further discovery.  The defendants' solicitors drew the plaintiffs' solicitors' attention to the plaintiffs' safety and compliance obligations under the Rail Safety Act 1998 ("the Act") and stated that the plaintiffs had failed to discover any documents relating to the plaintiffs' conduct with respect to those obligations. The defendants' solicitors stated that to the extent that such documents may disclose the measures taken, or not taken, by the plaintiffs to guard against risks relevant to the litigation, such documents could put the defendants on a reasonable train of inquiry and to that extent should have been discovered. The defendants requested discovery of all documents relevant to the plaintiffs' accreditation under, or compliance with, their obligations under the Act prior to the collision, and which related to the defendants' allegations of negligence against the third plaintiff.

2. On 29 October 2003 the plaintiffs' solicitors replied. They stated that the only documents relating to the plaintiffs' obligations under the Act they considered to be relevant were the certificates of accreditation of the second and third plaintiffs. Those documents were included in a draft supplementary discovery list which was served with the plaintiffs' letter.

3. The defendants' solicitors wrote to the plaintiffs' solicitors on 10 December 2003.  The defendants' solicitors said that the discovery given by the plaintiffs on 29 October 2003 constituted an inadequate response to the defendants' request.  The defendants' solicitors requested further discovery but proposed, to address concerns which had been raised by the plaintiffs' solicitors about the width of the request, that the plaintiffs' further discovery be limited, in the first instance, to narrower classes of documents.  The classes of documents that were sought are those that were subsequently sought by the defendants in their chamber summons to compel further and better discovery.  Those documents are:

   1.The second and third plaintiffs' applications for accreditation under the Act as railway owners and operators;

   2.The second and third plaintiffs' safety management plans submitted with the applications referred to in par 1 in accordance with s 10 of the Act.

   3.The annual safety reports dealing with the second and third plaintiffs' operations under their accreditations under the Act and any significant developments relating to those operations submitted within 28 days of each anniversary of their accreditations under s 36 of the Act.

4. In their letter of 10 December 2003 the defendants' solicitors stated that their approach would enable the defendants to understand the processes of internal review and investigation into relevant safety matters undertaken by the plaintiffs for the purpose of obtaining and retaining accreditation under the Act and, thus, would enable any further necessary requests for discovery by the defendants arising from the initial discovery to be kept as narrow and targeted as possible.

5. The plaintiffs refused the defendants' request for further discovery.  On 2 February 2004 the defendants issued a chamber summons seeking orders that the second and third plaintiffs give further and better discovery of the documents specified above.  The chamber summons was listed for hearing on 29 April 2004.

6. On 27 April 2004 the plaintiffs' solicitors wrote to the defendants' solicitors.  The plaintiffs' solicitors stated that their position remained that the documents requested in the defendants' discovery application are irrelevant by reference to the scope of the pleadings but that the plaintiffs were prepared to disclose on an informal basis the following documents:

   1.Railway safety management plan for second plaintiff dated November 2001;

   2.Railway safety management plan for third plaintiff dated 7 November 2001;

   3.Second plaintiff's safety management annual safety report November 2001;

   4.Third plaintiff's safety management annual safety report for year 2001.

7. The plaintiffs' solicitors stated that the documents were provided without prejudice to the plaintiffs' right to assert that they are entirely irrelevant to issues in the action.  They further stated that they considered that a perusal of the content of the documents would reaffirm their general irrelevance to the scope of the present issues in this litigation.  In that hope they were disappointed.

8. The defendants' chamber summons came on for hearing before Johnson J on 29 April 2004.  The defendants applied for an adjournment.  The plaintiffs opposed the adjournment.  After hearing argument, Johnson J adjourned the application and made consequential orders for the filing of further affidavits and otherwise adjourned the hearing of the application to a special appointment.

9. The defendants filed a further affidavit sworn by William Bailey, an engineer retained by the defendants' solicitors to prepare an expert report relating to the collision.  Mr Bailey deposed that, based upon his extensive review of materials made available to him, there is evidence upon which he may reasonably conclude that, adopting the as yet unsubstantiated assumption that the advance warning signals operated correctly, any one or more of the following risk factors may have caused or contributed materially to the collision:

   (a)The misalignment of the red signal lamps, greatly reducing their effectiveness and the visibility of the lamps to approaching drivers;

   (b)The sun's position at the time of the incident, adversely affecting the effectiveness of the small amber signal lights, placed as they were against a reflective yellow signboard;

   (c)The adoption of an advance yellow warning system following a major accident at the crossing in 1995, being a test system not recognised in Australian Standard AS1742.7 Manual of Uniform Traffic Control Devices - Part VII:  Railway Crossings (and to this day not recognised under such standards), and carrying with it the risk of a reduction in a road user's perception of the red signals following, should the yellow signals not be seen;

   (d)The use of flashing, as opposed to static, warning lights, carrying with it a greater risk of non‑observation of the signals;

   (e)Mr Rowan, the first defendant and driver of the road train, having a diminished capacity to perceive the flashing light signals because of a combination of factors:

   (i)the reduced effectiveness consequential upon the ambient sunlight;

   (ii)his age (64 years at the time) and therefore his reduced sensitivity to contrasting colours;

   (iii)the correction of his sight by spectacles.

   None of these factors is indicative of negligence on the part of Mr Rowan;

   (f)The failure to adopt light emitting diode (LED) lamps in the warning signals, despite their availability at the time of the accident and research confirming their superiority over traditional incandescent lamps which were used at this crossing as a means of alerting road users approaching a level crossing;

   (g)The failure to adopt other means, which had been adopted at similar level crossings, located elsewhere, to reduce the inherent danger associated with the location of this level crossing, controlled as it was solely by signal lights, within a major highway approved for use by road trains at speeds of up to 100 KPH, namely:

   (i)use of boom barriers;

   (ii)reductions in road speed limits to 80 KPH.

   ("Risk factors").

10. Mr Bailey deposed that he had been asked for his opinion about whether it would have been reasonable for the third plaintiff to adopt alternative means to address those risk factors, having regard to reasonable practices at the time of the accident.  In order to do so, he said it would be relevant to consider the state of industry knowledge in relation to those kinds of risk factors.  However, Mr Bailey deposed, it would also be relevant to understand what the third plaintiff knew or ought to have known in relation to the impact of those risk factors, in a practical sense, on the safety of this particular crossing, or like crossings under its management and control.  Mr Bailey deposed that information relevant to such knowledge may bear upon the reasonableness or otherwise of the first plaintiff's adoption and continued use of the protection system which operated at the time in the context of then reasonable practices.  Mr Bailey said that the information which he will need in order to assess this issue properly is solely within the knowledge of the third plaintiff, and that until he has access to such information, he will not be in a position to say whether or not, in the light of the particular circumstances of this level crossing, and the then state of technology and standards of best safety practices, the third plaintiff's protection system was, in his opinion, reasonable or unreasonable.

11. Mr Bailey had been provided with copies of the four documents disclosed on an informal basis by the plaintiffs.  Mr Bailey deposed that the documents are helpful to him in finalising his opinion and are relevant thereto because they demonstrate the internal framework which the third plaintiff adopted to address risk within its railway system, including risks of the kind he has identified with respect to the particular level crossing.  Furthermore they enable him to pinpoint the further documents (if they exist) which are likely to contain information setting out the particular safety matters relevant to protection at the level crossing.  Mr Bailey then listed 12 documents, or classes of documents, which, if discovered, will be of assistance to him in finalising his opinion, and are relevant thereto, and will enable him to properly research the risk factors so to ensure that he has sufficient information to provide an opinion that is both full and accurate.

12. Notwithstanding that Mr Bailey has now identified further documents which he considers to be relevant to his investigation, the defendants have not amended their chamber summons.  They press for an order for discovery of the documents specified in their chamber summons. 

Order for discovery of particular documents

1. The Court has inherent power to order further discovery. The Court also has power under O 26 r 6 to make an order requiring a party to make an affidavit stating whether any specified document or class of document is, or has at any time been in his possession, custody or power, and, if not then in his possession, custody or power, when he parted with it and what has become of it.

2. In my view, the affidavits relied upon by the defendants sufficiently comply with O 26 r 6(3) so as to enliven the power of the Court to make an order under O 26 r 6. In any event, the Court has inherent power to make the orders sought.

3. A party is entitled only to discovery of documents that relate to the issues in the proceeding.  The pleadings are the principal source of matters in issue in the proceeding.  An allegation in the pleadings is in issue until it is admitted, withdrawn, struck out or otherwise disposed of, for example, by a preliminary decision of the Court.  If there is an inference that a matter is in dispute between the parties, it is a matter in issue for the purposes of discovery.  The inference of dispute can be drawn from the pleadings, the conduct of the parties and any admissions.  A document is relevant if it would lead to a course of inquiry which would advance a party's own case or damage an opponent's case:  The Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company (1882) 11 QBD 55, Brett LJ, at 63. A document may be relevant and discoverable even if it is not admissible as evidence in Court.

4. I will consider each of the documents, or classes of documents, requested by the defendants in their chamber summons.

1. Second and Third Plaintiffs' Applications For Accreditation Under the Act

1. The plaintiffs resist discovery of these documents on two bases.  First, they do not relate to any matter in question in this action.  Secondly, they are not, and have not been, in the possession, custody or power of the plaintiffs.

2. Section 7 of the Act provides, in effect, that before a railway owner or operator can legally undertake any railway activity it must hold an appropriate rail safety accreditation issued under the Act. Section 8 of the Act sets out the matters that the accrediting authority must be satisfied of before granting accreditation. They include:

   (a)that the applicant has the competency and capacity to meet the requirements of the Australian Rail Safety Standard, and any other safety standard prescribed, or approved, as relevant to the operation of the Act, and generally to ensure the safe construction and maintenance, or construction or maintenance, or operation as the case may be, of rail infrastructure, or rolling stock, or, if relevant, a proper operation of train control, signalling and communication systems;

   (b)that the applicant has an appropriate safety management plan;

   (c)that appropriate standards will be met in relation to the availability and adequacy of rail infrastructure, or rolling stock, as the case may be, and that appropriate safe working and operating systems will apply under the accreditation.

3. In my view, one of the issues in this action relates to the safe construction and maintenance of railway level crossing 375 and the proper operation of train control, signalling and communication systems.  Those matters are put in issue by the defendants' allegation of negligence against the plaintiffs and the particulars of negligence I have referred to.

4. It is to be inferred that those matters are addressed in the plaintiffs' applications for accreditation.  The drawing of that inference is supported by the National Guidelines for Rail Safety Accreditation applications adduced in evidence by the defendants in support of their application.  The guidelines state that the rail safety accreditation process in Australia is based upon the principle that applicants should clearly understand the risks associated with the operation of their railway operational systems, infrastructure or rolling stock in order that they can provide a level of safety acceptable to the community or any people affected.  The guidelines further state that this means that it is mandatory for applicants to have in place (or be capable of demonstrating that it will be in place prior to the commencement of operations) an appropriate railway safety management system, including standards, to ensure that the railway takes appropriate action to limit the risk of injury to persons, or damage to property, to levels acceptable to the community.  The guidelines go on to say that accreditation authorities, in assessing whether to approve any application for accreditation involving operation systems, infrastructure or rolling stock, must be satisfied that due consideration has been given to implementing appropriate railway safety management systems in a way that ensures that all intolerable risks have been eliminated and all remaining risks have been reduced to be as low as reasonably practicable.  The guidelines state that applicants should take care to, amongst other things, identify the complete range of foreseeable risks, assess each risk and establish its significance and provide a means of preventing or controlling the risk, if appropriate.  The guidelines further say that applicants are required to develop a railway safety management system for their railway activities in a manner consistent with Australian Standard AS4292.

1. In my view, the plaintiffs' applications for accreditation under the Act relate to a matter in question in this action in the sense described by Brett LJ in Peruvian Guano Co.

2. The second issue concerning these documents is whether they are, or have been, in the possession, custody or power of the plaintiffs. The second and third plaintiffs' applications for accreditation under the Act as railway owners and operators were referred to by the plaintiffs' solicitors in a letter of 27 April 2004 to the defendants' solicitors. The plaintiffs' solicitors said:

   "The relevant application(s) were made by Westrail on their behalf.  These documents are in the custody of Westrail and are not in our clients' custody, possession or power."

3. Documents in the possession or power of agents on the party's behalf are in that party's possession for the purposes of the rule:  Civil Procedure Western Australia [26.1.9A] citing Swanston v Lishman (1881) 45 LT 360 at 361. The inference to be drawn from the plaintiffs' solicitors' letter is that Westrail is in possession of the applications as agent of the plaintiffs. Furthermore, a document is in the power of a party when he has a presently enforceable legal right to obtain inspection of it from whoever actually holds it without obtaining the consent of anyone else: Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 at 635. Furthermore, the plaintiffs are required to discover not only documents currently in their possession, custody or power, but also documents which have been in their possession, custody or power. I infer from the plaintiffs' solicitors' letter referred to that the applications were, at least when approved and executed by the plaintiffs, in their possession, custody or power.

4. On the hearing of this application, senior counsel for the plaintiffs sought leave to lead further evidence in relation to this matter.  I informed counsel that if I otherwise determined that the documents were discoverable, I would give the plaintiffs leave to lead further evidence as to whether the documents are, or have been, in the possession, custody or power of the plaintiffs.

1. The Second and Third Plaintiffs' Safety Management Plans Submitted with the Accreditation Applications

1. The second plaintiff has given informal discovery of its railway safety management plan with an effective date of 9 November 2001. The plan bears a note that it was superseded on 12 November 2002. Thus, the plan is the plan that was in effect at the time of the railway crossing accident, but not the plan submitted with the plaintiffs' application for accreditation under the Act. The third plaintiff has given informal discovery of its railway safety management plan that is described as "Revision 1.04" and dated 7 November 2001. Again, it appears that that plan is the plan that was in effect at the time of the accident, but not the plan submitted with the application for accreditation under the Act. The nature of, and likely, contents of the plaintiffs' railway safety management plans submitted with their applications for accreditation may be inferred from the contents of the railway safety management plans that have been informally discovered.

2. In his affidavit of 14 May 2004 Mr Bailey identifies documents which, if discovered, will be of assistance to him in finalising his opinion, and which he says are relevant thereto, and which will enable him to properly research the risk factors he has referred to and ensure that he has sufficient information to provide an opinion both full and accurate.  Those documents include the risk management registers and treatment plans prepared and documented by the third plaintiff, as referred to in par 3.1 of the third plaintiff's 2001 plan.  They include details of any proposed or implemented treatment plans in respect of the railway crossing in question and the risk factors at other similar crossings referred to at par 3.2 of the third plaintiff's 2001 plan.  They include documentation relating to the adoption or adaptation of any existing railway operation's practice, as referred to in par 6.1 of the third plaintiff's 2001 plan, in respect of the railway level crossing 375, or any of the risk factors referred to by Mr Bailey in relation to other similar crossings.  Mr Bailey also refers to other documents that are referred to in the third plaintiff's 2001 plan.

3. Senior counsel for the plaintiffs submitted that a document does not relate to any matter in question because it refers to another document that relates to a matter in question.  Senior counsel says that the document itself must relate to a matter in question for it to be discoverable.  I accept that submission.  The defendants did not demonstrate to my satisfaction that there is anything in either of the plans informally discovered which would either advance the defendants' case or damage the plaintiff's case, and hence are discoverable.

4. However, I am persuaded by the affidavit of Mr Bailey that the railway safety management plans of the plaintiffs may lead the defendants to a train of inquiry, which may either advance the defendants' case or damage that of the plaintiffs.  Accordingly, I find that the second and third plaintiffs' safety management plans submitted with their applications for accreditation relate to a matter in question in the relevant sense.

5. The Court should only order discovery of particular documents, or classes of documents, if their discovery is necessary for the fair disposal of the proceedings.  If the plaintiffs had given discovery of their safety management plans of 2001, I would not have ordered them to give discovery of their safety management plan submitted with their applications for accreditation.  In my view, discovery of the safety management plans in effect at the time of the collision would have been sufficient.  However, the plaintiffs have expressly stated that the 2001 plans are not formally discovered and the plaintiffs maintain that they are entirely irrelevant to issues in this action.  In those circumstances, I will order that the second and third plaintiffs give discovery of their safety management plans submitted with their applications for accreditation.  There is no express evidence before me that the plaintiffs are presently in possession of those plans.  However, it is to be inferred that the plans have been in the possession, custody or power of the plaintiffs and hence are discoverable.

1. The Annual Safety Reports Dealing with the Second and Third Plaintiffs' Operations Under their Accreditations

1. The plaintiffs have given informal discovery of the second and third plaintiffs' annual safety reports for 2001.  They are the reports for the year preceding the collision.

2. As I have said, Mr Bailey has identified in his affidavit further documents which will be of assistance to him in finalising his opinion and in forming the basis for that view.  The only annual safety report referred to by Mr Bailey is the annual safety report of the third plaintiff for the year 2002.  Mr Bailey appears to state that the relevance and significance of that report is that it is likely to contain information relevant to the accident in question which occurred during that year.  Senior counsel for the plaintiffs submitted that there is no evidence, and it is not to be assumed, that any information relevant to the accident in question that is contained within the 2002 annual safety report has not already been discovered.  That is, the information may have been discovered without discovering the whole of the report.  That may be so, but it is not an answer to the defendant's application for discovery.  The defendants are entitled to discovery of any relevant documents.  A party must discover a document containing relevant information notwithstanding that it has discovered another document containing the same information. 

3. As I have said, Mr Bailey says the annual safety report of the second and third plaintiffs for the year 2002 is likely to contain information relevant to the accident in question which occurred during that year.  I draw the inference that the report does contain information relevant to the accident.  It is unlikely that an annual safety report would not contain some reference to a collision between a train and a prime mover at a railway level crossing. 

4. The defendants seek discovery of all of the annual safety reports dealing with the second and third plaintiffs' operations since they received accreditation under the Act. In my view, the defendants have not demonstrated that the annual safety reports, other than those in respect of the year during which the collision occurred, are relevant. Accordingly, I will order discovery of only the annual safety reports for the year 2002.

Conclusion

1. I will order the second and third plaintiffs to discover their safety management plans submitted with their applications for accreditation under the Rail Safety Act 1998 as railway owners and operators and their annual safety reports for the year 2002.

2. In relation to the defendants' application that the second and third plaintiffs' give further and better discovery of their applications for accreditation under the Rail Safety Act 1998 as railway owners and operators, I give leave to the plaintiffs to lead further evidence concerning whether the documents are, or have been, in the possession, custody or power of the plaintiffs.

3. I will hear the parties as to the orders that should be made to give effect to this decision.