BGC (Australia) Pty Ltd v Professional Public Relations Pty Ltd - [2006] WASC 175

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BGC (AUSTRALIA) PTY LTD -v- PROFESSIONAL PUBLIC RELATIONS PTY LTD & ANOR [2006] WASC 175

CORAM: MASTER SANDERSON

HEARD: 9 JUNE 2006

DELIVERED : 16 AUGUST 2006

FILE NO/S: CIV 1263 of 2006

BETWEEN: BGC (AUSTRALIA) PTY LTD
Plaintiff
AND
PROFESSIONAL PUBLIC RELATIONS PTY LTD
First Defendant
PETER HARRIS
Second Defendant

Catchwords:

Practice and procedure Application for preaction discovery Turns on own facts

Legislation:

Fair Trading Act 1987 (WA), s 10, s 68
Rules of the Supreme Court 1971 (WA), O 26A, O 26A r 3, O 26A r 3(4)(b)

Trade Practices Act 1974 (Cth), s 52, s 75B

Result:

Discovery ordered

Category: B

Representation:

Counsel:

Plaintiff:     Mr M C Hotchkin
First Defendant             :     Mr S G Leslie
Second Defendant         :     Mr S G Leslie

Solicitors:

Plaintiff:     Hotchkin Hanly
First Defendant             :     Wilson & Atkinson
Second Defendant         :     Wilson & Atkinson

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

McCarthy v Dolpag Pty Ltd [2000] WASCA 106

Case(s) also cited:

Central Exchange Ltd v Anaconda Nickel Ltd [2001] WASC 128
Crofter Handwoven Harris Tweed Co Ltd v Veitch [1942] AC 435
Davis v Sagar Pty Ltd, unreported; SCt of WA; Library No 980443; 10 August 1998
Exley v Wyong Shire Council, unreported; SCt of NSW; 9 December 1976
Global Intertrade Pty Ltd v Adelaide Festival Centre Trust, unreported; Fed Crt of A; 17 December 1998
Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215
HallGibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84
Hooper v Kirella Pty Ltd [1999] FCA 1584
Makita (Aust) Pty Ltd v Black & Decker (Australasia) Pty Ltd (1990) 18 IPR 270; (1990) ATPR 41030
Malouf v Malouf [1999] FCA 710
Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500
St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147
Stewart v Miller [1979] 2 NSWLR 128
Tipperary Developments Pty Ltd v The State of Western Australia [1999] WASC 62; (1999) 21 WAR 250
Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 32 ALR 570

MASTER SANDERSON: This is the return of an originating summons seeking orders under O 26A r 3 which allows discovery to be ordered to identify a potential party to an action. To understand the nature of the application it is necessary to consider the facts in some detail.
The evidence in support of the application is to be found in an affidavit of Leonard Walter Buckeridge ("Mr Buckeridge") sworn 21 March 2006. Mr Buckeridge is a Director of the plaintiff. The plaintiff carries on business in the building and construction industry and is also a supplier of building products and materials.
In 2005, the plaintiff entered into an agreement to sublease certain land currently leased by Westralia Airports Corporation Pty Ltd ("WAC") from the Commonwealth of Australia. The land is near the Perth International Airport. The plaintiff intends to construct a brick manufacturing plant on the land. It is a condition precedent to the sublease that the plaintiff obtains approval from the Minister for Transport and Regional Services of a Major Development Plan ("MDP"). A draft MDP was advertised on 29 August 2005. Mr Buckeridge says that he has been advised by WAC that obtaining Ministerial approval for an MDP involves a process that includes public consultation and seeking public comments after advertising the draft MDP. The MDP is also reviewed by both the Department of Transport and Regional Services and the Department of Environment and Heritage. Mr Buckeridge has been advised that the Minister takes into account the view of the Minister for the Environment regarding likely environmental impacts of any project.
At the time the sublease was executed Mr Buckeridge was advised that it was likely that approval for the MDP would take no more than six months.
The site of the proposed brickworks on the WAC land is within the Federal seat of Hasluck. Hasluck is held by the Liberal Party with a small majority and is what is known as a "marginal seat". Mr Buckeridge is aware that a number of parties oppose the construction of brickworks on the WAC land. One of the groups opposed to the project is known as Confederation of Affiliated Residents and Ratepayers of WA Association, WA Incorporated ("CARRA"). Mr Buckeridge is also aware that Boral Limited ("Boral") and its wholly owned subsidiary Midland Brick Company Pty Ltd ("Midland Brick") are opposed to the project. Boral is a competitor of the plaintiff in the production of building materials. Midland Brick is part of a duopoly of current brick manufacturers in Western Australia. The plaintiff through its building operations is the single biggest customer of Midland Brick. Difficulties in obtaining supply of bricks is one of the main reasons which has led the plaintiff to attempt to set up its own brickworks. Mr Buckeridge says that he believes that if the plaintiff ceased buying bricks from Midland Brick this would have a significant impact on that company's profits and that in turn would effect Boral.
On 17 October 2005, Mr Rod Pearce, the Chief Executive Officer and Managing Director of Boral wrote to both the Minister for the Environment and Heritage, Senator Ian Campbell and the Minister for Transport and Regional Services, Mr Warren Truss expressing concern about the construction of a brickworks on the WAC land by the plaintiff. A copy of that letter appears as part of annexure "LWB1" to Mr Buckeridge's affidavit. The letter urges the Ministers to refuse approval for the construction of the plaintiff's brickworks on the WAC land. A number of reasons are given for Boral's objection to the construction of the plaintiff's brick plant. One of these reasons is pollution likely to be occasioned by emissions from the plant. There are other reasons of a commercial nature advanced in opposition to the construction of the brickworks. But for present purposes it is important to note that reference is made to the environmental implications of the construction of the plant.
The plaintiff responded to the submissions of Boral and a copy of that response appears as annexure "LWB2" to Mr Buckeridge's affidavit. In addition to lobbying the Ministers directly Boral also retained the services of Crosby Textor, a firm of consultants that specialises in lobbying members of Parliament to advance a case. Crosby Textor have discharged their remit and appear to have lobbied extensively against construction of the brickworks. In response the plaintiff engaged its own lobbyists in Canberra to protect its position. The battle has been joined, and presumably, still rages.
Early in 2006, Mr Buckeridge became aware of a DVD entitled "A Brickwork In The Wrong Place" ("DVD"). The DVD states that it is authorised by CARRA. A copy of the DVD was provided as annexure "LWB5" to Mr Buckeridge's affadivit. It would appear that this DVD has been shown to various State and Federal politicians although whether it has been shown to these politicians by Crosby Textor is not clear. In his affidavit Mr Buckeridge says (at par 21):
"The DVD contains allegations or inferences that:
(a)The Plaintiff is immoral;
(b)The brickworks will produce emissions deadly to residents;
(c)Aircraft will fly through a plume of deadly emissions;
(d)The building and the stack and dangerous to aircraft and to residents (including the use of the phrase 'remember 9 – 11?');
(e)The Plaintiff's proposal endangers the health of children at nearby schools;
(f)The brickworks will product quantities of Chromium 6, a carcinogen, and so will pose a further health risk to local residents;
(g)Emissions from the brickworks will increase death rates;
(h)The brickworks will damage environmentally sensitive and significant areas;
(i)The development will involve the loss of or damage to culturally significant areas and sites;
(j)The views expressed in the DVD are supported by or are consistent with those held by Guildford Grammar School, in that it had consented to its name being associated with the production and distribution of the DVD."
Having watched the DVD I am satisfied that apart from par 21(a) what Mr Buckeridge says is in the DVD is in fact there. If it is not actually alleged that the plaintiff is immoral that is certainly the inference to be drawn from the emotive way in which the material is provided. Essentially the DVD focuses on the environmental implications of the construction of the brickworks and clearly is intended to persuade the viewer that the proposed construction should not go ahead.
Once Mr Buckeridge had seen the DVD he set about ascertaining who was responsible for its production. He telephoned CARRA. He spoke to a Mr Rob Greenwood ("Mr Greenwood) and asked who had authorised and produced the DVD. Mr Greenwood declined to answer. On 7 March 2006, Mr Buckeridge met with Ms Lesa Hinchliffe ("Ms Hinchliffe"). Ms Hinchliffe is the female presenter featured on the DVD. Ms Hinchliffe told Mr Buckeridge that she was engaged by Mr Greenwood and was presented by him with a script for use in the DVD. Ms Hinchliffe was nervous about the contents of the script she was asked to deliver and she obtained an indemnity from CARRA to protect her position. She also required a disclaimer to be put at the end of the DVD saying that the views expressed therein were not necessarily those of the presenter. Ms Hinchliffe advised Mr Buckeridge that Mr Greenwood told her to send her account to Professional Public Relations Pty Ltd, the first defendant, addressed to a person named Ms Rachel Stoffers ("Ms Stoffers"). Ms Hinchliffe received payment of her account from the first defendant.
Thereafter Mr Buckeridge attended upon the Hay Street offices of the first defendant. He met with the second defendant. The second defendant is the Managing Director of the first defendant. The second defendant told Mr Buckeridge that Mr Greenwood was not one of the first defendant's clients. Mr Buckeridge asked who had instructed his organisation to produce the DVD. The second defendant declined to answer. He also declined to tell Mr Buckeridge whether or not the first defendant had paid Ms Hinchliffe. The second defendant also said that Ms Stoffers, the Account Manager, was on maternity leave. The second defendant did admit that his office held a copy of the DVD. As Mr Buckeridge was departing the offices of the first defendant he noticed that the logo of Midland Brick was mounted on the wall of the foyer. A subsequent visit to the first defendant's website showed Midland Brick listed as a client. Mr Buckeridge's suspicions were aroused. He asked the second defendant whether Midland Brick had funded the DVD or any part of the first defendant's involvement in the matter. The second defendant refused to answer. The second defendant did undertake to speak with his client to see whether or not they were agreeable to being identified.
True to his word the second defendant did subsequently phone Mr Buckeridge. The second defendant said that he had discussed Mr Buckeridge's request for information with the co‑owner of the first defendant and with its legal advisor. The second defendant advised that no further information would be forthcoming. Mr Buckeridge consulted his solicitors. On 10 March 2006 the solicitors wrote to the second defendant seeking identification of the party who had funded the DVD. A copy of that letter appears as annexure "LWB10" to Mr Buckeridge's affidavit. No response was forthcoming. This application was then made.
Mr Buckeridge alleges that the DVD contains false, misleading and defamatory allegations of and concerning the plaintiff. At this stage of the proceedings it is not necessary to make any detailed assessment of the plaintiff's claim in any action it may bring against a potential party. It is sufficient if I note that having watched the DVD the plaintiff's claim that it has been defamed and the DVD contains misleading and deceptive information is arguable.
Order 26A r 3 allows discovery to identify a potential party. Relevantly the rule reads as follows:
"(1)This Rule applies if a person who appears to have a cause of action against a person ('the potential party') wants ‑
(a)to commence proceedings against the potential party; or
(b)to take proceedings against the potential party in the course of an action to which the person is a party,
but the person, after reasonable enquiries, has not been able to ascertain a description of the potential party sufficient for the purposes of doing so.
(2)If there are reasonable grounds for believing that another person ('the non-party') had, has, or is likely to have had or to have, possession of information, documents or any object that may assist in ascertaining the description of the potential party, the person may apply for an order under this Rule."
These subrules set out a number of criteria that must be satisfied before an order for discovery can be made. First the rule applies only if a person appears to have a cause of action against another person and the person wants to commence proceedings against the potential party. As counsel for the defendants properly concedes it is not necessary for a plaintiff to establish that it has a prima facie case. It must only establish that it "appears to have a cause of action". In this case it is obvious that the plaintiff appears to have a cause of action against parties involved in the production of the DVD. (I emphasise again that I am making no findings in this regard – even prima facie findings). There is also no doubt that the plaintiff wants to commence proceedings. It is clearly outraged at what it regards as the blackening of its reputation. So these two criteria have in my view been satisfied. The defendants take issue on both of these criteria. First they say that no cause of action could lie against the party or parties responsible for funding production of the DVD. They say that no cause of action arises under s 52 of the Trade Practices Act 1974 (Cth) or s 10 of the Fair Trading Act 1987 (WA) merely from funding production of a false or misleading DVD. Rather the plaintiff must establish that the party funding the DVD was involved in the contravention of s 52 (or s 10) as contemplated by s 75B of the Trade Practices Act (or s 68 of the Fair Trading Act). They say that there is no evidence before the Court to suggest that the party or parties funding the production of the DVD were so involved.
With respect that seems to me to put the test too high. Accepting that to be liable under s 75B of the Trade Practices Act, a party must be knowingly concerned in the breach of s 52, it is difficult to imagine that a party providing funding for production of a DVD of this nature would not know what was being produced. They would be remarkably naive if they did not. So in my view it is arguable a cause of action lies under the Trade Practices Act.
So far as the action and defamation is concerned the defendant says that the matters referred to in par 21 of Mr Buckeridge's affidavit are not capable of being defamatory of the plaintiff. Rather it is said that these allegations are made of brickworks generally. This is not the venue for a discussion on the arcane world of implications and their place in defamation proceedings. Nor could I conclude that no cause of action could arise from funding the production of a DVD because the cause of action depends on publication. Once again I am satisfied that the plaintiff's position is arguable.
The defendants also argued that the plaintiff had not established that it wanted to commence proceedings against the potential party. Frankly a reading of Mr Buckeridge's affidavit could not leave anyone in any doubt as to the plaintiff's intentions. On behalf of the defendants it was said that the fact that the plaintiff has not commenced proceedings against Ms Hinchliffe, CARRA, Mr Greenwood and others despite them being implicated in the production of the DVD is an indication that it does not want to commence proceedings against the potential party. With respect that does not follow. The plaintiff may have all sorts of reasons for not proceeding against others despite the fact that they may be implicated in any cause of action. It is for the plaintiff to determine who it will sue. In my view this criteria has not been satisfied.
Next it is necessary to consider whether reasonable inquiries have been made by the plaintiff in an effort to establish the description of the potential party. In my view what has been done by the plaintiff is sufficient. There is not much more they could do. Clearly the defendants are the parties who know who funded the production of the DVD. The second defendant will not divulge the information. The first defendant is controlled inter alia by the second defendant. Where is the plaintiff to go? That criteria is then satisfied.
In all the circumstances then I am satisfied that the plaintiff has made out its case under O 26A r 3 and that discovery ought be ordered. The question is the extent of the discovery. Given the intrusive nature of a discovery order, any order made ought be no wider than is strictly necessary: see McCarthy v Dolpag Pty Ltd [2000] WASCA 106. Annexed to the originating summons is a schedule which sets out four categories of documents of which discovery is sought. In my view the schedule is more extensive than is necessary to allow the plaintiff to establish who funded production of the DVD. What I would be prepared to order is discovery of category 2. That is in the following terms:
"Any books of record or account in which funds were provided to the Defendant either:
(a)on trust, to be dispersed in payment of expenses incurred in the production of the DVD, showing from whom any payments were received to be held on trust and to whom such payments were made; or
(b)as payment of the Defendants' fees and reimbursement of the Defendants' expenses.
The documents include electronic journal entries and hard copies of bank statements and cheque butts."
As is generally the case in applications of this sort it may be that once discovery of these documents is given a further order will be necessary so as to allow the documents discovered to be put in context. I will therefore give liberty to apply. I will hear the parties as to the time within which discovery and inspection is to be provided.
There is one further matter which I should make reference. Under O 26A r 3(4)(b) it is open to the Court to make an order that a person attend personally to be examined in relation to the description of a potential party. Although it is not mentioned in the originating process, during the course of his submissions counsel for the plaintiff suggested that this may be a case where an order could be made requiring the second defendant to attend for examination. Given the limited nature of the inquiry which has led to this application, the advantage of making an order directed against the second defendant that he attend for examination is obvious. So far as I am aware no such order has been made in the almost 10 years that O 26A has been operating. On balance I have concluded that it would be a better option to require discovery in the conventional way. That will provide the plaintiff with a more complete picture of how and by whom the DVD was funded.
I will hear the parties as to the form of order and as to costs.