Concrete Constructions v Commonwealth of Australia

[1996] FCA 437

JUDGMENT No. -*.rrurnJ -,.-, 4-37 46.

IN THE FEDERAL COURT OF AUSTRALIA	)
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NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 710 of 1995

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GENERAL DIVISION 1

BETWEEN: CONCRETE CONSTRUCTIONS

Applicant

AND : COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:	SHEPPARD J
PLACE :	SYDNEY 05 JUN 1996

FEDERAL COURT OF

DATE : 22 MAY 1996 AUSTRALIA PRINCIPAL

REASONS FOR JUDGMENT (EX TEMPORE)

HIS HONOUR: To be dealt with are two notices of motion, one taken out by the applicant, the other by the respondent. The notice of motion taken out by the applicant seeks orders that the respondent forthwith give discovery to the applicant of any documents that are or have been in its possession, custody or power relating to the matters in the schedule and that the respondent make available for inspection by the applicant by 10 May 1996 the documents discovered pursuant to that order. The date, 10 May 1996, has been amended, at least informally, by the applicant. I take account of the fact that its motion was not filed until 13 May. But as I understand it the date it would substitute is either 23 May, which is tomorrow, or a date within a week or so of that date.

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The notice of motion taken out by the respondent seeks orders that the time for the respondent to provide a list of documents referred to in certain directions made on 26 April

1996 be extended to 28 June 1996 and that the time for the

respondent to give inspection of the documents on what is called "the preliminary discovery list" be extended to 12 July

1996. There are other orders sought but they are not relevant

to these applications.

It is convenient to deal first of all with the respondent's notice of motion because it really is determinative of the outcome of the two notices of motion. In this respect, I should mention that today a letter has been written by the respondent to the applicant which has been tendered by the respondent as amounting to an open offer to vary the orders sought by the respondent in its notice of motion. That offer is to allow the applicant's solicitors access to 36 folders of documents already reviewed by the respondent, on and from 5 June 1996, and to provide a list of what are described as "merged discovery documents", that is, documents produced on discovery, whether conventional discovery or preliminary discovery, by 12 July 1996 and to allow access to those documents, insofar as they have not already been produced as part of the 36 folders, from 26 July

1996.

There are also some documents which have been produced by

consultants and are to be produced by the solicitors for the

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respondent in relation to the work which is in question in this case. These documents have not yet been inspected. The offer also contemplates the respondent completing discovery of the consultants' documents by 26 July 1996, but sounds a cautionary note on the basis that that may not be practical.

But it says that, at least by that date, advice will be provided of the best estimate when the consultants' documents can be produced.

Each of the notices of motion has been supported by an affidavit. The respondent's notice of motion has been supported by the affidavit of Gregory George Kathner, sworn on 20 May. He is the Deputy Director of the Civil Litigation Team in the Sydney office of the Australian Government Solicitor. I do not propose to refer to the detail of the affidavit. I have, of course, read it and taken into account what is said and also considered the annexures to it. It is in my view a genuine attempt to assess realistically what time is necessary for the respondent to complete the task of discovery which is involved at least to the stage that the parties had in mind at this point in their preparation of the case.

I do mention in passing that para. 12 of the affidavit discloses that during March 1996 four solicitors were employed full time on the discovery process along with one full-time paralegal clerk being devoted to the matter. There is then some account of the hours that have been spent by this team up

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to 17 May, that is to say, last Friday. There has been some criticism of this by counsel for the applicant. Mr Kathner was not cross-examined and I should accept his evidence at face value.

Nevertheless, it is pointed out to me that the hours which are stated do not suggest that the conventional hours of, say, 35 or 40 per week are being spent in this task. Something less than that is involved because the hours on an arithmetical calculation are of the order of 25 or 26 hours per week rather than, say, 3 5 . However, I can imagine, because of the intensity of the task, that it may not be possible to apply oneself for seven or eight hours a day to it and do it justice. There is no evidence about that in the affidavit but it seems to me that that may be a reasonable inference to draw.

There have been other criticisms of what Mr Kathner has said and a criticism of the apparent lateness with which the respondent approached the task which should have been fully on foot, so it seems to me, earlier than it was. But there is no doubt that at least since March the respondent has made a proper appreciation of what is involved. What is involved is a great deal. The respondent has been applying itself assiduously to the problem since then.

The affidavit filed in support of the applicant's motion

is that of Gavin Witcombe sworn 21 May. He is a solicitor

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employed by and assisting the solicitor for the applicant. He sets out the history of the matter. One thing that emerges from this history is that the applicant and its solicitors had been led to believe that the task which the respondent has been engaged in could be completed very much earlier than is apparently the case. It is obvious to me that estimates were given on behalf of the respondent which were perhaps unwise in the sense that they did not take proper account of the very large task which lay before its advisers.

I am sure that realisation now has brought a degree of reality to the task that was perhaps absent before March of this year. As I put to counsel for the applicant, it is no good in cases of this kind expecting the impossible. It is not much use my making an order with which, on the face of Mr Kathner's evidence, it would be impossible to comply. The only effect of that would be to put the respondent perhaps in contempt of this court. Evidence of the kind Mr Kathner has given would persuade any court that there ought not to be any punishment for contempt in this area. There is now and there has not been at least since March any neglect of the respondent's obligation either to the Court or to the applicant. I can well understand, as I said in the course of the argument, that the applicant and its solicitor are frustrated and impatient now to see documents which they regard as highly important and relevant to the ongoing preparation of the case. But one has to deal in realities and that is what I propose to endeavour to do.

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There is a lot more I could say about the evidence both in M r Kathnerfs evidence and in the affidavits and in the documents themselves, but I do not regard it as useful to do that. I have to make a decision which must be to a degree arbitrary. The notice of motion taken out by the respondent and the letter present alternatives. The alternative for which the letter provides has at least the advantage that documents will become available for inspection by 5 June next; that is 14 days from today.

It seems to me that that is the preferable alternative and the one I propose to adopt. But it will mean a consequent delay in the provision of further documents for the reasons given in Mr Kathnerf6 affidavit. However, I think that the times limited in paragraphs 5 and 6 of the offer which are respectively 12 July and 26 July should come down by a week so that those dates should be 5 July and 19 July respectively. I would hope that within that period, if not all, then at least a substantial number of the consultants' documents will have also been processed and I shall expect next time the matter is in the list a full report as to how matters are progressing.

Of course if counsel for the applicant decides, having heard what I have just said, that he would prefer the other alternative which is really in the notice of motion, naturally I am prepared to resort to it with an appropriate reduction of about a week in the timetable for which it eventually provides.

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I propose to make directions in accordance with what I have said and I direct counsel for the respondent to bring in short minutes no later than this afternoon or if appropriate tomorrow to give effect to my conclusions.

There are some other things I wish to say before I finish these remarks. This case is obviously a large case in any terms. It has been in my list for some time now. There have been a number of directions hearings and there has been the contested application for preliminary discovery in which I made orders on 26 April last. So I have some idea, I think, of the extent of it.

It is obviously a case which, conservatively speaking, will last several weeks and, as I said in the run of the submissions, I think it may be several months. The documentation will be enormous. That is plain from the af fidavit of Mr Kathner and, of course, that is only one side of the record because there are the documents to be discovered by the applicant. Discovery is one of the most expensive processes the Court sees. It is a process that concerns all of its judges because of the extent of it and the cost of it and the time-consuming nature of the task.

There have been attempts made in the Court over the years to endeavour to shorten it or even to dispense with it in certain cases but these have not proved satisfactory. It is recognised, not only in the courts of Australia, but in the

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courts both of the United Kingdom and the United States that the exercise has these problems about it and that technology has enabled it to become the gigantic and all-consuming exercise which it presently is. Eventually something is going to have to be done about that but for the moment it goes on as it is.

It is not unknown in this court for the exercise to cost the parties at least on a solicitor and client or rather indemnity basis some millions of dollars and I do not think that this case will be any exception to that experience because the exercise is ongoing. Although a large part of it may be completed by 19 July, there will be more to go because there always is.

I have informed counsel this afternoon that it is unlikely that this Court will have a date for this case before the first half of 1998. I think the best that I can suggest at the moment, bearing in mind the state of the Court's current judicial resources and the demands on its time, is a date in March 1998 and that may be optimistic.

That may change, of course, if the judicial strength, particularly in Sydney, is reinforced by the appointment of two or three additional judges. I say additional simply to draw attention to the fact that we are in need of one judge at the moment to replace one who left the Court recently. It does not seem to me likely in the current state of the

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financial considerations that apply to the Court that the sort of reinforcement I speak of will be forthcoming. So this case, with all its preparation and all its cost, and its diversion of executives and others from resources or ongoing activities that might be more productive, will continue in that way, and cost the parties money in the sort of range I

have mentioned .

It is a question, of course, for the parties what they propose to do about it. It is their right to litigate the case in accordance with the rules of the Court and its established procedures. But there is well known now I think in the community an alternative procedure which is known as mediation or alternative dispute resolution. This case, it seems to me, would be likely to lend itself to such a process so long as it is entered into in good faith and before an appropriate mediator. Undoubtedly, if it were able to be mediated the parties would save an enormous amount of time and money in costs which may not be recouped by a successful outcome in the case. It is a course which I do recommend be considered by them and their advisers very seriously. But, of course, it is a course which can only be undertaken with the . , agreement of both parties and it is no good it being undertaken unless it is undertaken with a degree of good faith on both sides.

I direct that a copy of the transcript of today with

these remarks is to be taken out and sent to the Chairman and

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Chief Executive of the applicant and to the person or officer in charge of the Department having responsibility for this matter on behalf of the respondent. That is to be done within seven days of the transcript becoming available. I hope it will become available no later than some time next week.

I certify that this and the nine (9) preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Sheppard.