Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
GROUP PROCEEDINGS LIST
S ECI 2020 04789
BETWEEN:
| BEECHAM MOTORS PTY LTD (ACN 010 580 551) | Plaintiff |
| v | |
| GENERAL MOTORS HOLDEN AUSTRALIA NSC PTY LTD (ACN 603 486 933) | Defendant |
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JUDGE: | Irving AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 July 2023 |
DATE OF RULING: | 1 August 2023 |
CASE MAY BE CITED AS: | Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2023] VSC 443 |
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PRACTICE AND PROCEDURE – Discovery – Application for particular discovery – Whether documents sought relevant to an issue in the proceeding – Application granted in part – Supreme Court Act 1986 (Vic), Part 4A – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 29.08.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Parkinson KC with Mr H Hill-Smith | HWL Ebsworth Lawyers |
| For the Defendant | Mr A McRobert | Norton Rose Fulbright Australia |
TABLE OF CONTENTS
Introduction................................................................................................................................... 1
The parties’ material on the discovery application.................................................................. 2
The categories sought in the amended summons and the defendant’s proposed reworded categories.............................................................................................................................. 2
The breach and damages as pleaded by the plaintiff.............................................................. 4
General Motors Holden’s defence.............................................................................................. 5
The plaintiff’s further amended reply of 28 April 2023........................................................... 5
The defendant’s further witness statements and expert report............................................. 6
The agreed amendments to the defendant’s defence to plead the counterfactuals............ 9
The statutory provisions.............................................................................................................. 9
The defendant’s submissions.................................................................................................... 13
The plaintiff’s submissions in reply......................................................................................... 16
Consideration.............................................................................................................................. 16
Conclusion.................................................................................................................................... 18
HIS HONOUR:
Introduction
This is a representative proceeding brought pursuant to Part 4A of the Supreme Court Act 1986 (Vic). This ruling concerns the plaintiff’s application for orders that the defendant make particular discovery of various categories of documents relevant to the defendant’s counterfactual case. That aspect of the defendant’s case had not been formally pleaded at the time of the hearing of the plaintiff’s application, but its terms were the subject of agreement between the parties. The proceeding is listed for trial commencing on 21 August 2023.
The plaintiff was an authorised dealer of Holden cars under a five year dealership agreement with the defendant that commenced in 2018 and ended in 2022. In February 2020, the defendant announced that General Motors Company was ceasing the manufacture of Holden vehicles which led to the defendant ceasing to supply the plaintiff and other dealers with Holden vehicles several months later. The plaintiff alleges the defendant’s non-supply of Holden vehicles for the duration of the dealership agreement constituted a breach of the dealership agreement.
The breach alleged by the plaintiff includes the defendant’s failure to provide a broad range of vehicles and the failure to supply a sufficient quantity of vehicles to meet the dealers’ reasonably anticipated demand for vehicles. The plaintiff claims damages for losses suffered as a result of the alleged breach.
The plaintiff’s damages case pleads the counterfactual that the defendant, if it had not breached the agreement, would have been able to supply vehicles to meet reasonably anticipated demand until the end of the term of its dealership agreement. The plaintiff sets out its alleged anticipated demand levels in a schedule to the plaintiff’s third further amended statement of claim. As noted above, the plaintiff and defendant have reached agreement for the defendant to file an amended defence by consent pleading a counterfactual different to that pleaded by the plaintiff.
This ruling concerns an application by the plaintiff for orders that the defendant make discovery of categories of documents said by the plaintiff to be necessary to allow it to properly test the defendant’s proposed counterfactual. Since filing its original summons, the plaintiff’s application has been refined to reflect agreement between the parties in relation to some categories of documents. By the time of the hearing of the application three categories remained in dispute, two were agreed and the remainder abandoned by the plaintiff. In relation to two of the disputed categories the defendant provided proposed alternative wording for the Court’s consideration.
For the reasons that follow, I have decided the defendant should make particular discovery. I have disallowed one category sought by the plaintiff on the basis that it is a subset of an existing category. Where the parties were in agreement as to the wording of a category, I will make orders in the terms agreed. In relation to the other categories, the wording will be as set out in these reasons.
The parties’ material on the discovery application
In support of its amended summons the plaintiff relied on:
(a) the affidavit of Evan Anthony Stents sworn 6 June 2023;
(b) the affidavit of Evan Anthony Stents sworn 13 July 2023; and
(c) written submissions dated 13 July 2023.
In opposition to the plaintiff’s amended summons the defendant relied on:
(a) the second affidavit of Thomas Charles Morrell Kelly sworn 10 July 2023;
(b) the fourth affidavit of Thomas Charles Morrell Kelly sworn 17 July 2023; and
(c) written submissions dated 18 July 2023.
The categories sought in the amended summons and the defendant’s proposed reworded categories
The plaintiff’s amended summons sought discovery of the following categories of documents:
a Documents sent, received or created by Mr Kristian Aquilina and/or Mr David Buttner between 1 September 2019 and 16 February 2020 referring to or evidencing alternative strategies and options for the Holden brand, including but not limited to:
i scenarios where the supply of Holden vehicles continued beyond 2020 including the models that might be supplied in those scenarios; and/or
ii the different options for the timing of the announcement to the public that the Holden brand was being retired.
aa The documents relating to or evidencing the investment plan presented by Holden in or about late 2019 or early 2020 to the General Motors Company for the reinvigoration of the Holden brand.
b Documents referring to or evidencing any consideration of whether the sale or closure of GM’s Rayong plaint would have occurred in 2020 in the event that the supply by GM Holden of Holden vehicles continued beyond 2020.
bb The financial statements and management accounts for the Defendant for FY2018, FY2019 and FY2020.
bc The 1,331 documents identified at paragraph 5(f) of the affidavit of Mr Thomas Kelly dated 10 July 2023.
e Documents referring to or evidencing any consideration of any alternative supply arrangements for Holden Trailblazer or Colorado vehicles beyond March 2020 in the event of the sale or closure of GM’s Rayong plant.[1]
[1]Categories c. and d. are not listed as they were abandoned by the plaintiff prior to the hearing.
By the time of the hearing of the plaintiff’s amended summons, the parties had agreed that it would be appropriate that the Court order discovery in relation to categories b and e. The plaintiff abandoned category bc at the hearing. This meant that categories a, aa and bb were the remaining categories in dispute.
In relation to the disputed categories a and bb, the defendant submitted the Court could order discovery of the following reworded categories:
a Document sent, received or created by the directors of the defendant between 1 September 2019 and 16 February 2020 referring to or evidencing consideration of:
i the vehicle models that might be supplied by it to Holden dealers in any scenario in which the supply of Holden vehicles continued beyond 2020 but GM’s Rayong plant was sold or closed by General Motors in 2020; or
ii the timing of any announcement to the public that the Holden brand would be retired upon the expiry of the Holden dealer agreements on 31 December 2022, but the supply of Holden vehicles would continue until then.
bb The management accounts for the Defendant for FY2018, FY2019 and FY2020 to the extent they disclose the revenue per model of vehicle.
Given the defendant’s counterfactual case was not pleaded at the time of the hearing of the plaintiff’s application, it is helpful to set out the background to the discovery dispute by reference to the existing pleadings and some witness statements filed by the defendant.
The breach and damages as pleaded by the plaintiff
The plaintiff pleads that the defendant breached certain provisions of the dealer agreements by, among other things, failing to provide a broad range of motor vehicle products or indeed any motor vehicle product and failing to endeavour to supply dealers with a sufficient quantity of vehicles to meet reasonable anticipated demand.
The plaintiff has pleaded that as a result of the defendant’s breaches the plaintiff and each group member has suffered loss and damage. The plaintiff pleaded that but for the breach the defendant would have continued to supply the plaintiff and group members with new vehicles. At schedule 2 to the plaintiff’s third further amended statement of claim, the plaintiff has set out in relation to each dealer the reasonably anticipated demand for each of five models of motor vehicles for three periods: 4 March 2020 to 21 December 2020; 2021; and 2022. Relevantly, the five models of motor vehicles are Trax, Equinox, Acadia, Trailblazer and Colorado. In relation to the plaintiff and each dealer, schedule 2 suggests that the Trailblazer and Colorado models made up 60 to 70 per cent of anticipated demand.
Counsel for the plaintiff submitted that those two models represented the majority of sales for dealers and were also the most profitable for them. Counsel submitted that if for any reason in the counterfactual situation for the breach claim there were no Trailblazer and no Colorado vehicles, the impact on the quantum of loss to both the plaintiff and the other group members would be significant.
Counsel for the plaintiff submitted that the defendant’s capacity to supply vehicles and which models of vehicles it could supply was likely to become a common question in the proceeding.
General Motors Holden’s defence
The defendant has filed its defence to the third further amended statement of claim. The defendant denies the damages claimed by the defendant and alleges that around May 2020, following the announcement of the retirement of the Holden brand, it made offers of compensation to all dealers including the plaintiff and group members with the result that the plaintiff has not suffered any loss caused by any breach by the defendant.
The defendant has filed two witness statements by Charles Edward Gripton III, Manager – Scheduling and Order Fulfilment for General Motors. Mr Gripton’s witness statements address manufacturing and supply constraints affecting General Motors in 2020 to 2022. In short, Mr Gripton’s statements are to the effect that the COVID-19 pandemic caused major manufacturing and supply chain disruptions for General Motors and other car manufacturers which extended far beyond the initial closure of General Motors plants and resulting lost production. These included labour shortages, shortages of parts and the global shortage of semiconductors.
Relevantly, Mr Gripton also says that General Motors sold its assembly plant at Rayong in Thailand to Great Wall Motors in February 2020 with the last General Motors production at that plant occurring in June 2020.
The plaintiff’s further amended reply of 28 April 2023
The plaintiff filed a further amended reply to the defendant’s defence on 28 April 2023. As part of that reply, the plaintiff denied the supply of new vehicles to it would have been constrained due to COVID-19 related supply disruptions from 2020 to 2022. Further, the plaintiff said that if supply was so constrained, the plaintiff would have taken deposits and forward orders from customers during the term of the dealership agreement and, if the defendant had not supplied the vehicles ordered by 31 December 2022, the defendant would have delivered those new vehicles to the plaintiff in 2023, in accordance with a term of the dealership agreement.
The defendant’s further witness statements and expert report
In response to the plaintiff’s further amended reply, the trial judge granted the defendant leave to file responsive witness statements.
The defendant filed a witness statement of Mr Manish Gulati, Chief Financial Officer – Strategic Markets of General Motors International. Mr Gulati’s statement says, in summary, that at the same time General Motors announced the retirement of the Holden brand, General Motors also announced the sale of the Rayong plant in Thailand. The Rayong plant assembled right hand drive vehicles for the Australian market. Mr Gulati said that once General Motors made the decision to close its sales and vehicle assembly operations in Thailand, there was a clear commercial imperative to implement and complete the wind down as quickly as possible. This was because General Motor’s Thailand business was making losses and those losses would continue until it was closed. Mr Gulati’s statement says that as a result of steps taken by General Motors there were no material remaining stocks of unsold General Motors vehicles left in Thailand by 31 December 2020.
Mr Gulati states that until June 2020 when production ceased at the Rayong plant, that plant produced Holden Colorado and Trailblazer vehicles for export to the Australian market. Mr Gulati indicates that he was asked to consider a hypothetical scenario in which the decision made by General Motors on 14 February 2020 with respect to General Motor’s operations in Australia was altered so that General Motors would exit the new vehicles market in Australia at the expiry of the Australian Holden dealer agreements on 31 December 2022 instead of in 2020. Mr Gulati states he was asked to explain the steps and decision that would have been required to have been made within General Motors and by the defendant in that scenario.
In relation to this hypothetical, Mr Gulati’s statement was that:
(a) The commercial and legal risks of attempting to keep secret the February 2020 decision to retire the Holden brand until June 2022 (when the defendant would have had to give the dealers notice of non-renewal under the terms of the dealer agreements) would have been unacceptable. According to Mr Gulati’s statement, this meant the decision by General Motors would have been publicly announced on 17 February 2020, being the same day as the actual announcement.
(b) There would have been no ongoing supply of Trailblazer or Colorado vehicles from the Rayong plant to the Australian dealers. This was because a substantial portion of the Rayong plant’s production was for the Thailand market which General Motors had decided to close because of substantial and sustained losses. Irrespective of General Motor’s decision to retire the Holden brand, it would not have been commercially rational for General Motors to make any decision other than to sell or close the Rayong plant. This meant the volume of Trailblazer and Colorado vehicles available for sale in Australia after March 2020 would have been the same as was in fact the case.
(c) All decisions made and all steps taken by the defendant and General Motors from mid-February 2020 would have been directed to ensuring that Holden sales operations were completely finalised by 31 December 2022.
(d) Consumer demand would have significantly decreased from February 2020 to 31 December 2022.
(e) The defendant would have refused to accept orders which may have prejudiced its ability to wind down completely its sales and dealer network by 31 December 2022.
The defendant also filed a witness statement of Clayton Ralph Whitaker, executive director of General Motors China, within General Motors Manufacturing. Mr Whitaker was based in Bangkok, Thailand and responsible for the Rayong plant between January 2018 and 2020. Mr Whitaker’s statement says that the Rayong plant was used by General Motors to produce Colorado and Trailblazer model vehicles until June 2020. He states that in 2019 the plant produced around 47,000 vehicles, of which around 25,500 were for the Australian and New Zealand market, with the balance for other markets, predominantly Thailand. Mr Whitaker said this level of production was less than 50% of the production capability of the Rayong plant and that the Rayong plant was unprofitable throughout his time in Thailand. Mr Whitaker said the underutilisation of the plant was a significant cause of the Rayong plant’s lack of profitability.
Mr Whitaker’s statement says that given the disassembly of the General Motors production facility at Rayong and the termination of experienced staff, it would not have been possible for General Motors to continue to have contracted Great Wall Motors (the buyer of the Rayong plant) to continue to assemble Colorado and Trailblazer vehicles at Rayong after the plant was sold.
On 19 June 2023, the defendant filed an expert report prepared by Mr Owain Stone of KordaMentha going to the issue of quantum of loss. Mr Stone was asked to prepare his report by assuming:
(a) The dealer agreements would not have been renewed for a further term after 31 December 2022;
(b) The closure of the Holden business and retirement of the Holden brand, effective 31 December 2022, would have been announced to dealers and the public in or before June 2022; and
(c) Commencing no later than that announcement, GM Holden would have tapered its supply of vehicles to its dealers, including [the plaintiff], and would have offered them liquidation allowances …with the intent that all remaining new Holden vehicles would be sold to end-customers by 31 December 2022.
Mr Stone identified three scenarios to estimate the number of Holden vehicles sold from financial year 2020 to 2022, using actual sales figures for financial year 2020. Those scenarios join issue with the plaintiff’s assessment of anticipated demand and the capacity of the defendant to supply vehicle models and volumes.
The agreed amendments to the defendant’s defence to plead the counterfactuals
The defendant has proposed and the plaintiff has consented to the defendant amending its defence to plead that any supply of new Holden branded vehicles in the period from in or about March 2020 to 31 December 2022 would have been affected by the following matters:
(i)the sale of the GM assembly plant in Rayong, Thailand, which was announced in February 2020;
Particulars
On or about 14 February 2020, GMC decided to close its sales and vehicle assembly operations in Thailand. The decision regarding Thailand operations included proceeding with a sale of GM’s loss-making Rayong vehicle assembly plant to Great Wall Motors. That sale was fully implemented by November 2020, the final General Motors vehicles having been produced at that plant in June 2020. As a result of the sale of the Rayong plant, there would have been no ongoing supply of Trailblazer or Colorado vehicles from the Rayong plant and the supply of those vehicles to Australia would have ceased in or about June 2020.
(ii)manufacturing and supply chain disruptions during the time of the COVID-19 pandemic and constraints on production at GM’s assembly plants at:
(A) Spring Hill, Ramos and BUP2; and
(B) had it not been sold, Rayong,
in each of 2020, 2021 and 2022;
(iii)if 31 December 2022 were the last date by which a vehicle could be sold by dealers in Australia, GM would have ceased producing vehicles for sale in Australia around June 2022; and/or
(iv)the announcement of the retirement of the Holden brand in February 2020 (which would have been announced in February 2020 even if the supply of new Holden branded motor vehicles was to continue into 2022).
The statutory provisions
The plaintiff’s application is brought pursuant to ss 55(1) and 55(2)(a)(i) of the Civil Procedure Act 2020 (Vic) (CPA) which provide:
55 Court orders for discovery
(1) A court may make any order or give any directions in relation to discovery that it considers necessary or appropriate.
(2) Without limiting subsection (1), a court may make any order or give any directions—
(a) requiring a party to make discovery to another party of—
(i) any documents within a class or classes specified in the order; or
(ii) one or more samples of documents within a class or classes, selected in any manner which the court specifies in the order;
…
The ongoing obligation on parties to disclose the existence of documents critical to the resolution of the dispute is imposed by s 26 of the CPA.
Rule 29.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) provides:
29.08 Order for particular discovery
(1) This Rule applies to any proceeding in the Court.
(2) Where, at any stage of a proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any question in the proceeding may be or may have been in the possession of a party, the Court may order that party to make and serve on any other party an affidavit stating—
(a) whether that document or any, and if so what, document or documents of that class is or has been in that party’s possession; and
(b) if it has been but is no longer in that party’s possession, when the party parted with it and that party’s belief as to what has become of it.
(3) An order may be made against a party under paragraph (2) notwithstanding that the party has already made or required to make an affidavit of documents.
The principles relevant to an application for particular discovery are well settled and were not in dispute between the parties.[2] It is unnecessary to rehearse them again here.
[2]See for example, Cargill Australia Ltd v Viterra Malt Pty Ltd (No 9) [2018] VSC 433, [38]–[41].
The plaintiff’s submissions
The plaintiff’s counsel submitted that the defendant intends to run a counterfactual to the effect that for the last two and a half years of the term of the dealer agreement, the defendant would only have supplied the Equinox, Acadia and Trax model vehicles. Counsel submitted the likely consequence of this, if correct, would be to halve the quantum of anticipated sales by dealers. Additionally, counsel submitted, the second aspect of the defendant’s proposed counterfactual is that there were supply constraints due to the COVID-19 pandemic affecting the other plants that could, in theory, have assembled Colorado and Trailblazer vehicles if the Rayong plant was shut down. Counsel submitted that the third aspect of the defendant’s counterfactual responded to the plaintiff’s pleading that if supply were constrained, the defendant would still have taken orders for delivery in 2023. The fourth aspect asserts that supply of vehicles from March 2020 to 31 December 2022 would have been affected by the announcement of the Holden brand’s retirement in February 2020.
Counsel submitted that the validity of any counterfactual must be measured against its commercial viability. In other words, the Court is unlikely to accept an economically unviable scenario as a legitimate counterfactual.
The plaintiff’s proposed category a sought emails from the managing directors of the Holden brand between 1 September 2019 and 16 February 2020 referring to or evidencing alternative strategies and options for the Holden brand, including but not limited to:
(a) scenarios where the supply of Holden vehicles continued beyond 2020 including the models that might be supplied in those scenarios; and/or
(b) the different options for the timing of the announcement to the public that the Holden brand was being retired.
Counsel submitted that by this category the plaintiff sought documents about the alternative strategies and options for the economic viability of the supply of Holden brand vehicles that were considered by Holden executives, including whether consideration was given to the viability of continuing to supply only the three least desirable and least profitable vehicle models, ie. not the Colorado or Trailblazer. Counsel said it was clear from a press release by the General Motor’s President made on 16 February 2020 to the effect that the company considered a range of options to continue Holden operations, that documents responsive to this category exist.
The plaintiff’s counsel submitted that the plaintiff has subpoenaed Mr Buttner, a former managing director of the defendant, to give evidence at trial and filed an outline of topics of evidence it intends to raise with him. The proposed topics include:
(a) the defendant’s plans in or about 2019 for the Holden brand in circumstances where General Motors was reviewing its future;
(b) the defendant’s communications regarding proper winding down and the cessation of vehicle supply; and
(c) the damages counterfactual (which the plaintiff intends to amend to include the defendant’s new counterfactuals).
The plaintiff’s counsel submitted that the defendant should provide general discovery in relation to these topics which should include the documents sought in category a of the plaintiff’s amended summons.
In response to the defendant’s submission that they have identified 45,000 documents potentially responsive to category a, the plaintiff’s counsel submitted that notwithstanding that volume of documents, the defendant had led no evidence that it was unable to review those documents before the trial. The plaintiff also submitted that the timing issue has arisen because the defendant had only recently revealed its counterfactual case.
The plaintiff’s counsel submitted that category aa is likely to be a subset of the category a documents. The plaintiff seeks the documents to see whether Holden executives ever considered and discussed with General Motors an economically viable proposal where the defendant was going to supply just three models into the future.
In relation to category bb, the plaintiff’s counsel conceded that the defendant had already discovered the financial statements for the financial years of 2018, 2019 and 2020. Counsel explained that the information in the financial statements was of insufficient granularity for the plaintiff to identify the revenue per model but the plaintiff expected this information to be either explicitly available, or discernible through analysis of the data, in the management accounts. Counsel explained this information would allow the plaintiff to test the viability of any counterfactual in which the defendant would be supplying only three vehicle models.
The defendant’s submissions
The defendant’s counsel largely agreed with the plaintiff’s counsel’s characterisation of the issues raised by the defendant’s further evidence filed in late May 2023. However, the defendant’s counsel submitted that the plaintiff’s proposed categories of discovery were not tied to the issues the plaintiff identified. In particular the defendant submitted:
(a) the plaintiff’s statement of claim makes no allegation that the defendant would have decided not to retire the Holden brand;
(b) there is no allegation in a counterfactual or otherwise that a decision would have been made not to retire the Holden brand;
(c) in 2021, Justice Nichols[3] struck out a sub-paragraph of the plaintiff’s statement of claim alleging that ‘General Motors Company, or one of its subsidiaries decided in 2017 to retire the Holden brand’ on the basis that:
[3]Beecham Motors Pty Ltd v General Motors Holden NSC Australia Pty Ltd [2021] VSC 855, [60]–[63].
(i) it did not allege a material fact in the proceeding;
(ii) the making of that decision was anterior to the conduct the subject of the pleaded cause of action;
(iii) the pleading could cause wastage of time and costs because it may found applications for discovery;
(iv) the making of the decision may well be an issue of some factual complexity as far as the defendant is concerned; and
(v) the plaintiff in fact alleges the defendant announced the retirement of the Holden brand and did in fact retire the Holden brand.
The defendant’s counsel submitted the plaintiff’s solicitor had identified the issues raised by the defendant’s further evidence in a letter to its solicitor dated 31 May 2023. In particular the defendant referred to the following passage from the letter which reflected the plaintiff’s articulation of the issues in its written submissions on this application:
The witness statement of Mr Manish Gulati dated 26 May 2023 (Gulati Statement) and the supplementary witness statement of Mr Charles Gripton III dated 25 May 2023 (Supplementary Gripton Statement) have raised for the first time a number of allegation regarding the damages counter-factual in this proceeding. These include whether:
(a)the General Motors’ Thai factory in Rayong would have been sold in 2020 in the counter-factual (Gulati Statement [31]);
(b)supply of the Trailblazer and Colorado models would have ceased in around March 2020 in the counter-factual (Gulati Statement [34] and Supplementary Gripton Statement [25]-[34]);
(c)the retirement of the Holden brand would have been announced in 2020 even if vehicle supply was to continue into 2022 (Gulati Statement [32]-[35]).
The defendant’s counsel submitted the plaintiff was entitled to discovery going to any of the identified issues but said the plaintiff’s proposed category a was not drawn by reference to any of those issues. According to the defendant, categories a and aa sought to open an inquiry into the decision to retire the Holden brand, which the trial judge has already stated is a decision anterior to the conduct the subject of the proceeding. The defendant submitted that so much was obvious from the plaintiff’s identification of an issue for trial in its written submissions as ‘whether the decision to retire the Holden brand would have been made in February 2020, in June 2022, or would not have been made at all’.
The defendant said that whether the Holden brand would have been retired was not part of the plaintiff’s pleaded case, it was not the subject of any application by the plaintiff to amend its claim and, if it were, the defendant would resist the application. The defendant submitted that to order discovery in relation to an unpleaded issue raised shortly before trial and requiring the defendant to review 45,000 documents would be disproportionate to the issues in dispute.
Counsel agreed with the plaintiff’s counsel’s submission that the Court’s decision about whether discovery should be made of the category a documents would likely dictate the outcome in relation to category aa. Counsel submitted that the plaintiff’s written submissions sought the category aa documents on the basis that they would be relevant to the most likely alternative strategy that would have been adopted by the defendant and General Motors in the event that the Holden brand had not been retired. Again, counsel said this demonstrated that category aa was sought to open an issue the plaintiff has not pleaded.
The defendant submitted that the plaintiff had only clearly articulated its rationale for seeking the management accounts during the course of the hearing. The defendant proposed a rewording of the plaintiff’s proposed category bb to provide for discovery of the relevant management accounts in the event they disclosed the revenue per model.
The plaintiff’s submissions in reply
The plaintiff’s counsel submitted that:
(a) the plaintiff’s counterfactual case necessarily assumed the Holden brand was not retired as that is the only premise upon which supply can occur;
(b) the case existing before the defendant raised its counterfactuals raised issues around questions of demand, ie. what was the reasonably anticipated demand; and
(c) the defendant’s counterfactuals now seek to also raise issues around supply of various vehicle models.
Counsel reiterated that the plaintiff sought the documents in its category ai to test what supply of what types of vehicles in what volumes was deemed viable and not viable by the defendant. Counsel expressed concern that if this category were limited by inclusion of the plaintiff’s ‘but GM’s Rayong plant was sold or closed by General Motors in 2020’ it was likely no documents would be produced because this scenario was not considered.
Counsel submitted that the defendant’s proposed limitation on category bb was unnecessary because even if the accounts did not explicitly identify revenue by vehicle model, the plaintiff would still likely be able to glean that information from close examination of the accounts.
Consideration
I accept the plaintiff’s submission that the defendant’s recently filed evidence raises the question of what the defendant deemed viable in terms of supply of vehicle model types and volumes and that it is appropriate to order the defendant provide discovery addressed to that issue. I also accept that the defendant’s proposed counterfactual directly raises the issue of the timing of the announcement of the Holden brand’s retirement. From the evidence before the Court I am satisfied that there are grounds for belief that documents exist evidencing the various supply scenarios considered by the defendant and the timing of the announcement.
I also accept, however, the defendant’s submission that as currently worded, the plaintiff’s proposed categories a and aa appear directed towards an issue that is not currently pleaded; the decision to retire the Holden brand. It appears to me the decision to retire the Holden brand goes beyond the issues identified by the plaintiff and that to order discovery directed to that issue would not be appropriate. I do not agree with the plaintiff’s submission that the plaintiff’s counterfactual necessarily assumes the Holden brand was not retired. That is not the plaintiff’s pleaded case, and if it were necessary to the plaintiff’s counterfactual, one would have expected it to be pleaded.
The situation in relation to the sale of the Rayong plant is different because the defendant intends to rely on that sale in its counterfactual case as a factor affecting supply of vehicles and vehicle models. Having raised that issue it is appropriate the defendant provide discovery about how the decision to sell the Rayong plant affected the vehicle model supply scenarios the defendant considered for the period after 2020.
Discovery relevant to the question of what the defendant deemed viable in terms of supply of vehicle model types and volumes can be achieved with a slight rewording of the defendant’s proposed category a, so that it reads:
aDocuments sent, received or created by the directors of the defendant between 1 September 2019 and 16 February 2020 referring to or evidencing consideration of:
ithe vehicle models that might be supplied by it to Holden dealers in any scenario in which the supply of Holden vehicles continued beyond 2020, including any scenario where GM’s Rayong plant was sold or closed by General Motors in 2020;
iithe timing of any potential announcement to the public that the Holden brand would be retired upon the expiry of the Holden dealer agreements on 31 December 2022, but the supply of Holden vehicles would continue until then.
I accept the parties’ submissions that the plaintiff’s category aa is a subset of the plaintiff’s proposed category a. I also agree with the defendant that this category is directed to discovery of documents relevant to the decision to retire the Holden brand. Accordingly, it would be inappropriate for the Court to make an order for category aa discovery.
I agree that discovery of the management accounts for financial years 2018, 2019 and 2020 is appropriate because it is likely to allow the plaintiff to test assumptions about vehicle model supply volumes and revenues going to the viability of the defendant’s counterfactual. I do not propose to limit the category in the way suggested by the defendant, which is too narrow. In my view the appropriate balance can be achieved by preserving the defendant’s right to raise, if so advised, any confidentiality or privilege claims in relation to aspects of these accounts not relevant to the issues in dispute.
Conclusion
For the reasons given above it is appropriate the defendant provide discovery of the following categories of documents:
(a) Documents sent, received or created by the directors of the defendant between 1 September 2019 and 16 February 2020 referring to or evidencing consideration of:
(vi) the vehicle models that might be supplied by it to Holden dealers in any scenario in which the supply of Holden vehicles continued beyond 2020, including any scenario where GM’s Rayong plant was sold or closed by General Motors in 2020;
(vii) the timing of any potential announcement to the public that the Holden brand would be retired upon the expiry of the Holden dealer agreements on 31 December 2022, but the supply of Holden vehicles would continue until then.
(b) Documents referring to or evidencing any consideration of whether the sale or closure of GM’s Rayong plant would have occurred in 2020 in the event that the supply by GM Holden of Holden vehicles continued beyond 2020.
(c) The defendant’s management accounts for FY2018, FY2019 and FY2020.
(d) Documents referring to or evidencing any consideration of any alternative supply arrangements for Holden Trailblazer or Colorado vehicles beyond March 2020 in the event of the sale or closure of GM’s Rayong plant.
I request the parties to confer and provide a minute of orders reflecting this ruling and any agreement in relation to the costs of the plaintiff’s application. If the parties are unable to agree on the issue of costs, the matter will be relisted for short oral submissions.
Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd [2023] VSC 443
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