Buchanan v TAL Life Limited

Case [2015] FCA 42

FEDERAL COURT OF AUSTRALIA

Buchanan v TAL Life Limited [2015] FCA 42

Citation: Buchanan v TAL Life Limited [2015] FCA 42
Parties: PETER ERIC BUCHANAN v TAL LIFE LIMITED
File number: NSD 907 of 2013
Judge: EDMONDS J
Date of judgment: 6 February 2015
Catchwords:

PRACTICE AND PROCEDURE – Rule 30.01 Federal Court Rules 2011 – application for particular questions arising in proceeding to be heard separately from any other questions – guiding principles – application of principles to particular circumstances – where hearing of separate questions has capacity to bring proceedings to finality

EVIDENCE – ss 118 and 119 Evidence Act 1995 (Cth) – whether redacted portions of discovered documents privileged under either provision – whether adducing evidence of redacted portions would result in disclosure of confidential communications or contents of confidential documents brought into existence for either of the respective dominant purposes referred to in these provisions

Legislation: Australian Securities and Investments Commission Act 2001 (Cth) ss 12CA, 12GF
Evidence Act 1995 (Cth) ss 118, 119
Federal Court of Australia Act 1976 (Cth) Pt VB
Insurance Contracts Act 1984 (Cth) s 29
Federal Court Rules 2011 r 30.01
Cases cited: Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 followed
University of Sydney v ResMed Limited (No 5) [2012] FCA 232 followed
Date of hearing: 20 November 2014
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 55
Counsel for the Applicant: Mr J Gracie with Ms E Glover
Solicitor for the Applicant: Warren McKeon Dickson Lawyers
Counsel for the Respondent: Mr SJ Walsh
Solicitor for the Respondent: TurksLegal

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 907 of 2013
BETWEEN:

PETER ERIC BUCHANAN
Applicant
AND:

TAL LIFE LIMITED
Respondent

JUDGE:

EDMONDS J

DATE OF ORDER:

6 FEBRUARY 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.On or before 13 February 2015, or by such later date as may be agreed between the parties:

(a)The parties bring in draft short minutes of order setting out the questions to be heard and separately determined prior to any other question in the proceeding, as will determine the liability (if any) and the quantum of that liability (if any) of the respondent under Parts 2 and 3 of the Amended Statement of Claim filed 13 June 2013;

(b)in default of agreement between the parties as to the form or terms of the questions referred to in (a) above, each of the applicant and the respondent bring in draft short minutes of order setting out such questions.

2.On or before 13 February 2015, or by such later date as may be agreed between the parties, the parties bring in draft short minutes of order requiring the respondent to provide verified discovery and inspection of documents consistent with the “Draft Discovery Plan” that is Annexure “G” to Ex 2 on or before 28 February 2015 or by such later date as may be agreed between the parties.

3.On or before 13 February…

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AGLC
Buchanan v TAL Life Limited [2015] FCA 42
Case
[2015] FCA 42
Decision Date

CaseChat Overview and Summary

Buchanan v TAL Life Limited is a case where Dr. Peter Eric Buchanan, a medical specialist, sought to bring separate proceedings against TAL Life Limited, an insurance company, concerning various issues arising out of insurance policies. Dr. Buchanan claimed that he was totally disabled for professional practice due to severe head trauma he suffered in 2011, while TAL Life Limited argued that Dr. Buchanan failed to disclose relevant information when applying for the insurance policies and therefore, the company had the right to avoid the policies. The case involved complex issues of disclosure, privilege claims, and the admissibility of certain documents. The Federal Court of Australia was tasked with determining whether certain questions arising in the proceeding should be heard separately from any other questions, and if so, what the implications for the overall litigation would be.

The primary legal issues the court had to decide were whether certain questions arising in the proceeding should be heard separately and, if so, which questions those were, and whether the redacted portions of discovered documents were privileged under the Evidence Act 1995. The court had to consider whether the separate determination of these questions would contribute to the saving of time and cost, contribute to the settlement of the litigation, or whether it would result in significant contested factual issues, overlap in evidence, or prolong the litigation. Additionally, the court had to examine whether the redacted portions of the discovered documents were privileged under ss 118 and 119 of the Evidence Act 1995, which pertain to confidential communications and the contents of confidential documents.

The court examined the guiding principles for the exercise of its discretion under Rule 30.01 of the Federal Court Rules 2011. It considered factors that supported or opposed the making of an order for separate determination, including the potential to narrow issues for trial, contribute to the settlement of litigation, and avoid unnecessary prolongation of the proceedings. The court also evaluated whether the separate determination of certain questions had the potential to bring the proceedings to finality. After thorough deliberation, the court decided that certain questions should be heard separately, and it provided detailed orders to ensure that the process was conducted efficiently and fairly.

In conclusion, the court granted several orders to manage the proceedings effectively. These included requiring the parties to bring in draft short minutes of order setting out the questions to be heard and separately determined, mandating the respondent to provide verified discovery and inspection of documents, and directing the respondent to produce certain discovered documents unredacted. The court also allowed the respondent to issue a subpoena to Medicare Australia and ordered the respondent to pay the applicant’s costs of the interlocutory application. The court's decision aimed to streamline the litigation process and ensure that the issues were resolved in an orderly and efficient manner.

Orders

Orders of the court

1. On or before 13 February 2015, or by such later date as may be agreed between the parties:

(a) The parties bring in draft short minutes of order setting out the questions to be heard and separately determined prior to any other question in the proceeding, as will determine the liability (if any) and the quantum of that liability (if any) of the respondent under Parts 2 and 3 of the Amended Statement of Claim filed 13 June 2013;

(b) in default of agreement between the parties as to the form or terms of the questions referred to in (a) above, each of the applicant and the respondent bring in draft short minutes of order setting out such questions.

2. On or before 13 February 2015, or by such later date as may be agreed between the parties, the parties bring in draft short minutes of order requiring the respondent to provide verified discovery and inspection of documents consistent with the “Draft Discovery Plan” that is Annexure “G” to Ex 2 on or before 28 February 2015 or by such later date as may be agreed between the parties.

3. On or before 13 February 2015, or by such later date as may be agreed between the parties, the respondent produce for inspection by the applicant the following discovered documents unredacted:

First Discovery

(1) Document 357.

(2) Document 372.

(3) Document 373.

(4) Document 382.

Third Supplementary Discovery

(5) Document 11.

(6) Document 12.

4. The Respondent have leave to issue a subpoena to Medicare Australia in the form of that annexed and marked “TL-1” to the affidavit of Thomas Lui affirmed 3 December 2014.

5. The respondent pay the applicant’s costs of the interlocutory application, as agreed or taxed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The hearing of the interlocutory application also ventilated other issues that had arisen between the parties – issues of discovery and claims for privilege of portions of discovered documents, in both cases by the respondent, and these issues are also dealt with in these reasons and are the subject of orders of the Court.BACKGROUND The following background facts are taken from the pleadings. Some of the applicant’s pleadings are not admitted by the respondent but are nevertheless included in the background; others are denied, and in such cases this is noted. The applicant, Dr Peter Eric Buchanan, is a medical specialist holding Bachelor of Medicine/Bachelor of Surgery (Hons, QLD) (“MBBS”), Bachelor of Science (Pure Mathematics and Biochemistry) (“BSc”), a Fellow of the Royal Australasian College of Radiologists (“FRACR”) and Member of The Royal Australian College of General Practitioners (“RACGP”). From 1995 to 2011, the applicant practised his profession on the central coast of New South Wales, relevantly at Erina. The practice was known as Erina Diagnostic Imaging Pty Limited (“EDI”). The applicant also practised his profession remotely at Tweed Heads, Coffs Harbour, Port Macquarie, Sydney and Melbourne. On 18 May 2011, the applicant suffered severe head trauma causing internal diffuse cranial damage, occasioning leakage of brain fluid and meningitis, and vertigo and gross behavioural deficits and disinhibition (“the Event”). The applicant was and is totally disabled for professional practice by reason of the injuries. The applicant was the policy owner and life insured under the following policies (together “Policies”) with the respondent:(1)Accelerated Protection Policy, Policy No 1374860 (“IP & BEX Policy”), which amongst other things provided for payment of Income Protection and Business Expenses Benefits in accordance with the relevant policy terms and conditions. It was entered as a Tower Series 29 product; and(2)Accelerated Protection Policy, Policy No 1376872 which provided for payment of Term Life, Trauma and Total and Permanent Disablement (“TPD”) benefits in accordance with the relevant policy terms and conditions (“Life & TPD Policy”). It was entered as a Tower Series 30 product rolled back to Series 29. The applicant claims that on 5 August 2011 the respondent formed the opinion that the applicant was totally disabled as a result of the Event, but the respondent denies this. By letter dated 22 December 2011, the respondent informed the applicant that it was entitled, and had elected, to avoid the Policies pursuant to s 29(3) of the Insurance Contracts Act 1984 (Cth) (“the Act”) on the grounds that the applicant had failed to disclose relevant matters, notably the applicant’s self-prescription of certain medication, and had made misrepresentations in relation to his application for the Policies, notably the applicant’s failure to disclose his usage of such medication, as set out in s 29(1) of the Act.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Counsel went on to say that: “The more problematic one is really the patent application …”. As to this, counsel said at T 22, 26:Now, that’s an issue as well because all of these patent applications were held by family trust as I understand it, and so what that then involves is an inquiry as to what Mr Buchanan and his wife would have done with payments coming into and out of the trust, profits of the business. Well, they would have been but for the injury, etcetera, etcetera, so it starts to get complicated, but what – the reason why credit issues arise when it comes to the patent issue as well is because Dr Buchanan is going to have to be cross-examined about what he was doing with his management of the family trust before the injury. After the injury his wife is going to have to be cross-examined about what – about her management of the family trust before and after in order to determine whether or not as a matter of fact this is what he would have done.So, in my submissions, it inevitably if one hives off the patent claim your Honour is going to have to hear from Mr and Mrs – Dr and Mrs Buchanan both – or Dr Buchanan for the non-disclosure case and the patent claim, and certainly for Mrs Buchanan on – potentially on the question of disablement and etcetera, and also on the patent claim, so that’s a factor pointing against the separate determination of the patent claim. Your Honour, that’s really the fundamental basis upon which I put the opposition to the separate determination on that issue. CONSIDERATION First and foremost, the questions which the applicant is seeking to have heard separately relate to issues arising under the Policies. The applicant is not seeking to “hive off”, to use the words of the respondent’s counsel, the claim for alleged breach of a duty of good faith on the part of the respondent and its officers, nor some patent claim. Indeed, there is no patent claim, the only other claim being a claim for alleged engagement in unconscionable conduct contrary to s 12CA of the ASIC Act (Pt 6 of the ASOC). The reference to “the patent claim” is undoubtedly a reference to the relief for damages sought for the alleged breach of a duty of good faith in respect of the matters pleaded under both Pt 4 of the ASOC (paras 4.26 to 4.29) and Pt 5 of the ASOC (para 5.4). The principles which govern the exercise of the Court’s discretion under r 30.01 are reasonably well settled; it is their application in any given case where difficulties can arise. A summary of those principles was given by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 at [8] (dealing with the predecessor to Rule 30.01):(a)the term “question” in O 29 r 1 includes any question or issue of fact or law in a proceeding. The distinction in the rule between an “issue” and a “question” is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an “issue”, and less decisive matters of dispute being “questions” (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647);(b)a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties’ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647);(c)however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; 161 ALR 399; [1999] HCA 9 at [45]);(d)where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242-3; [1969] 1 All ER 629 at 663-4 per Lord Pearson; Bass v Perpetual Trustee at [53]);(e)care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not “ripe” for separate and preliminary determination. An issue may not be “ripe” for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606);(f)factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may: (i)contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or(ii)contribute to the settlement of the litigation (CBS Productions Pty Ltd v O’Neill per Kirby P at 607);(g)factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may:(i)give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934;(ii)result in significant overlap between the evidence adduced on the hearing of the separate question and at trial – possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) [[1995] FCA 727)]. This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or(iii)prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth).