Economos & Co Pty Ltd v Bowlers Club of NSW Ltd

[2000] NSWSC 1065

CITATION:	Economos v Bowlers Club [2000] NSWSC 1065
FILE NUMBER(S):	SC 20952/97
HEARING DATE(S):	30/08/2000
JUDGMENT DATE:	24 November 2000
PARTIES :	Economos & Co Pty Limited & Ors v Bowlers Club of NSW Limited & Ors
JUDGMENT OF:	James J at 1

LOWER COURT JURISDICTION :	Supreme Court (Master)
LOWER COURT FILE NUMBER(S) :	20952/97
LOWER COURT JUDICIAL OFFICER :	Master Harrison

COUNSEL :	S J Archer - Westpac Financial Services J S Drummond - Jones Lang Lassale B Hull - Bowlers Club of NSW
SOLICITORS:	Corrs Chambers Westgarth - WFS Middletons Moore & Bevins - JLL Malcolm Johns & Company - Bowlers Club of NSW
CATCHWORDS:	Discovery - further discovery - Supreme Court Rules Part 23.
CASES CITED:	National Australia Bank v Idoport
DECISION:	Appeal dismissed

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

JAMES J

Friday 24 November 2000

20592/97 - Economos & Co Pty Limited & Ors v Bowlers Club of New South Wales Limited & Ors

JUDGMENT

1   HIS HONOUR: This is an appeal from a decision of Master Harrison made on 29 May 2000, dismissing an application by the appellant Jones Lang Lasalle (NSW) Pty Limited (“JLL”) for further discovery of documents by the respondents, the Bowlers Club of New South Wales Limited (“the Bowlers Club”) and Westpac Financial Services Limited (“WFS”). JLL formerly had a different name, JLW (NSW) Pty Limited (“JLW”) and its business was originally carried on by a partnership and not a company but these changes in the appellant’s name and in the structure of the entity carrying on its business are of no significance.

2   For a proper understanding of the appeal, it is necessary to give an outline of the background to the principal proceedings in which the application for further discovery was brought. No affidavit providing such an outline was filed by any party. The outline I am about to give has been derived by me from the pleadings in the principal proceedings, the Master’s judgment, the written submissions on the appeal from the Master’s judgment and what I was told by counsel from the bar table during the hearing of the appeal. The outline does not purport to be comprehensive and may in some respects be inaccurate or at least controversial. However, it seems to me that the outline is likely to be sufficiently comprehensive and sufficiently accurate for the purposes of the present appeal.

3   On 7 September 1994 a fire broke out in a city building at 95-99 York Street, Sydney (“the building”). The Bowlers Club had been the owner of the building since 1968. In about July 1985 the Bowlers Club entered into a head lease of the building to Permanent Nominees (Aust) Limited (“PNA”). PNA held its interest as head lessee as trustee of two trusts, the Westpac Property Trust (sometimes referred to as “the WPT”) and the Westpac Real Property Growth Trust (sometimes referred to as “the WRPGT”). It would seem that from August 1990 onwards PNA held its interest as head lessee solely as trustee of the Westpac Real Property Growth Trust. The manager of both the Westpac Property Trust and the Westpac Real Property Growth Trust was WFS. In 1985, at about the time at which it acquired its interest as head lessee, PNA entered into a management agency agreement with JLL, (sometimes referred to as “the MAA”) whereby JLL agreed to manage the building for PNA.

4   PNA as head lessee entered into a large number of sub-leases of different parts of the building. In 1992 PNA sub-leased part of level 2 of the building to the Bowlers Club. This part of the building was used by the Bowlers Club for social and business functions. On or about 2 August 1994 PNA surrendered its interest as head lessee to the Bowlers Club, with the consequence that the parties who had been sub-lessees of PNA became head lessees of the Bowlers Club. There had been an earlier proposal in 1992 that PNA should surrender its interest as head lessee to the Bowlers Club but that proposal had not proceeded.

5   Upon the surrender by PNA of its interest as head lessee the management agency agreement between PNA and JLL was terminated. Discussions took place between the Bowlers Club and JLL with a view to JLL becoming the manager of the building for the Bowlers Club but these discussions had not produced any concluded agreement by 7 September 1994.

6   As I have already indicated, on 7 September 1994 a fire broke out in the building. The fire started on level 2 of the building and level 2 was destroyed. Smoke from the fire spread to other parts of the building, causing extensive damage.

7   A number of possible causes of the spread of the fire through the building have been identified. These causes include:-

(i) The lack of an effective connection between the Thermal Detector Panel (“TDP”) and the Early Warning Intercommunication System (EWIS”) in the building.

(ii) The failure of dampers, which were supposed, in the event of fire, to close and thereby prevent the spread of smoke from any fire into other parts of the building.

(iii) The failure to install water sprinklers.

8   The court proceedings which have been brought in consequence of the fire are complicated and involve a large number of parties. More than one action has been brought but it is necessary to refer only to the present proceedings, which have been called the “Economos proceedings”, after the name of the first plaintiff in the proceedings. Another set of proceedings has been referred to as “the Bowlers Club proceedings”.

9   There are twelve plaintiffs in the Economos proceedings, the first of these being Economos & Co Pty Limited. Most of the plaintiffs were sub-lessees of PNA, who, upon the surrender by PNA of its interest as head lessee, became head lessees of the Bowlers Club. It is alleged that the other plaintiffs occupied parts of the building, with the consent of PNA and then with the consent of the Bowlers Club. The plaintiffs in the Economos proceedings claim that they suffered losses as the result of the fire. There are a number of defendants in the Economos proceedings, including the Bowlers Club, PNA and JLL.

10   A large number of cross-claims have been brought in the Economos proceedings, including a cross-claim by JLL, a cross-claim by PNA, a cross-claim by the Bowlers Club and a cross-claim by WFS.

11   A multiplicity of claims and cross-claims are made in the pleadings in the Economos proceedings and it is impossible to summarise all of these claims and cross-claims succinctly. Some analysis of the claims and cross-claims is attempted in pars3.6 to 3.11 of the appellant’s written submissions on the appeal, which were in the following terms:-

“3.6 By their amended statement of claim the Economos plaintiffs allege that JLL owed to the plaintiffs (as occupiers of level 12 of the building) a non-delegable duty to:
(i) ensure the provision of adequate Fire Protection Systems in the building;
(ii) to protect the plaintiffs from risks caused by defects in the design manufacture supply and installation of the Fire Protection System;
(iii) ensure the appointment of appropriate persons to carry out installation maintenance and inspection of the Fire Protection System;
(iv) provide adequate supervision of persons appointed to carry out the installation, maintenance and inspection of the Fire Protection System;
(v) to identify non-compliance with legal standards or requirements in respect to Fire Protection System; and
(vi) to undertake and report on the rectification of any or non-compliance with legal standards or requirements in respect to Fire Protection System.
The plaintiffs in the Economos proceedings rely upon paragraphs 20(a) to 20(g) of the amended statement of claim filed by the Club in the Bowlers Club proceedings. Paragraphs 25(b) (c)(iii), (f), (g) and (h) assert a failure on the part of JLL to advise the Club of any defects in the Fire Protection System.
3.7 By its amended second cross-claim filed in the Economos proceedings, PNA alleges (pursuant to contract and/or a duty of care) that JLL owed to PNA a duty to:
(i) ensure that the premises were reasonably safe;
(ii) take reasonable care to ensure:
(a) provision of adequate Fire Protection Systems;
(b) to protect against risks posed by defects in design, manufacture supply and installation of the Fire Protection System;
(c) to identify non-compliance with legal standards or requirements in respect to Fire Protection System; and
(d) to undertake and report on the rectification of any or non-compliance with legal standards or requirements in respect to Fire Protection System.
3.8 By its amended second cross-claim, PNA alleges as against WFS serious breaches by WFS of the terms of the Trust Deeds for both the WPT and WRPGT (see clauses 30-33).
3.9 WFS by its sixth cross-claim filed in the Economos proceedings alleges that JLL owed to WFS a duty to perform its obligations under the MAA. In paragraph 10 WFS alleges that JLL breached the requisite duty in failing to ensure that:
(i) the building had adequate and properly maintained fire protection and suppression systems.
(ii) appropriate consultants or contractors had been retained to properly install and maintain the Fire Protection System;
(iii) the contractors retained to maintain the Fire Protection System had adequately performed their tasks and duties; and
(iv) to identify non-compliance with legal standards or requirements in respect to Fire Protection System; and
(v) to undertake and report on the rectification of any or non-compliance with legal standards or requirements in respect to Fire Protection System.
3.10 JLL by its second further amended cross-claim asserts as against PNA an obligation pursuant to clause 2(f) of the Headlease a duty owed by it to the Club to maintain the plant and equipment in the building (see paragraph 121) and a breach of that duty by itself, through its servant or agent WFS by:
(i) permitting the Club to use level 2 for purposes other than office accommodation;
(ii) failing to require the Club to install sprinklers on level 2;
(iii) failing to install a multi-trip cable to the EWIS;
(iv) failing to permit JLL to engage a third party expert to assess the Fire Protection System in the building (see paragraph 124).
3.11 By its second further amended first cross-claim JLL pleads as against WFS a breach by it of its requisite duty of care to PNA as required by the terms of the WPT and WRPGT Trust Deeds (see paragraph 144)”.

12   The conclusion was drawn in par3.12 of the appellant’s written submissions that:-

“3.12 The pleadings referred to above clearly demonstrate that a significant component of the issues in dispute between WFS, PNA and JLL are allegations that both PNA and WFS relied upon JLL to perform its obligations under either the MAA or in accordance with an alleged duty of care owed by JLL to PNA and/or WFS. in short, those assertions raise, if not explicitly then implicitly, a reliance upon the performance by JLL of the various obligations as alleged. That reliance is one asserted by both PNA and its agent WFS to form part of the causes of action pleaded against JLL”.

13   The parties to the Economos proceedings (or at least some of them) agreed that each of them should discover documents falling within “a list of categories for discovery” in a document which has been referred to as “the protocol”. The list of categories for discovery in the protocol was as follows:-

“1. All documents going to the original construction of the Bowlers Club building (“the Building”), including building contracts, architects plans, specifications, sub-contractor documentation and the like.
2. Ownership of the Building, including surrender of lease and sub-leases between Permanent Nominees (Aust) Limited (“PNA”) and Bowlers Club of New South Wales Limited (“Bowlers Club”).
3. Retainer of Westpac Financial Services Limited in relation to management services in respect of the Building during its ownership by PNA.
4. Retainer of JLW (NSW) Pty Limited (“JLW”) as managing agent of the Building.
5. Retainer of sub-contractors by JLW on behalf of PNA and/or Bowlers Club, documents to be classified separately in relation to:
(a) Newsound Electronics Pty Limited (“Newsound”);
(b) FFE Buildings Services Limited (“FFE”),
(c) First Five Minutes Pty Limited (“First Five Minutes”); and
(d) Honeywell Limited (“Honeywell”).
6. Management/administration of the Building by JLW, documents to be classified separately in relation to:
(a) General matters;
(b) Newsound;
(c) FFE;
(d) First Five Minutes; and
(e) Honeywell.
7. Sub-leasing of tenancies in the Building;
(a) by JLW; and
(b) by parties other than JLW.
8. Sub-tenants’ (including McBride Hinton) files, with these files to be divided into documents going to:
(a) leasing and/or occupation of the Building; and
(b) quantum of loss arising from fire related matters.
(c) Insurance policies, being all policies pleaded in the proceedings.
9. Coronial inquiry materials, categorised by reference to:
(a) transcripts;
(b) reports;
(c) submissions;
(d) lay statements; and
(c) other.
10. Fire related documents other than Coronial Inquiry materials including but not limited to reports by Fire Service, Police Service and other statutory and semi-governmental organisations (including Sydney City Council) not tendered at the Coronial Inquiry.
11. Rebuilding documents dealing with rebuilding of the Building and categorised as follows:
(a) loss adjustors’ reports, loss surveyors’ reports, correspondence and other documents;
(b) architects’ reports, correspondence relating to demolition, restoration and rebuilding of the Bowlers Club premises;
(c) builders’ quotations for the restoration, rectification and rebuilding works;
(d) quantity surveyors’ and other reports in relation to the work necessary to be undertaken;
(e) quantity surveyors’ and other reports in relation to the work actually to be undertaken;
(f) all documents going to the restoration, rectification, refurbishing and rebuilding works including but not limited to Building Applications submitted to Sydney City Council;
(g) all insurance documents and policies including documents relating to the completion of the building, rectification and restoration works;
(h) minutes of meetings of the Board of Directors of the Bowlers Club referring to the fire and rebuilding matters;
12. Operational files of:
(a) Newsound;
(b) FFE;
(c) First Five Minutes; and
(d) Honeywell
in respect of the Building”.

14   Orders were made for discovery and verified lists of documents were filed. It is necessary to refer only to the lists of documents filed by the respondents, that is the list of documents filed by the Bowlers Club and the list of documents filed by WFS.

15   The list of documents filed by the Bowlers Club which was annexed to an affidavit filed on behalf of JLL in support of its application to the Master was in fact a list of documents entitled in the Bowlers Club proceedings and not the Economos proceedings but I will proceed on the basis that a list of documents in the same terms was filed in the Economos proceedings.

16   The list of documents filed by the Bowlers Club contained statements that searches had been made of records held by the Bowlers Club, the Bowlers Club’s current solicitors, the Bowlers Club’s insurer, the Bowlers Club’s former solicitors and the Bowlers Club’s former property adviser. It was stated that documents in two boxes described in pars3 and 4 of the second schedule to the list of documents were last known to have been in the possession of the Bowlers Club’s then solicitors (Messrs Cutler Hughes and Harris) on 13 August 1998 but could not presently be located. The final statement in the Bowlers Club’s list of documents was in the following terms:-

“Except that (the Bowlers Club) does not know and cannot say what if any of its records perished as a result of fire, smoke or water damage on 7 September 1994, to the best of (the Bowlers Club’s) knowledge, information and belief, neither (the Bowlers Club) nor its solicitor nor any other person on their behalf has now or ever had in their possession, custody or power any documents relating to any matter in the Schedule entitled List of Categories for Discovery filed in Court on 21 October, 1998 relevant to any question in the proceedings other than the documents enumerated in Schedules 1 and 2”.

17   The list of documents filed by the Bowlers Club was verified by an affidavit sworn by its chief executive officer Mr Rocky Massaria. The list of documents also contained a certificate by the Bowlers Club’s solicitor in the usual terms.

18   The list of documents filed by WFS was verified by the counsel and group secretary of WFS Fiona Low and contained a certificate by WFS’s solicitor, Louise Massey.

19   The list contained a statement that to the best of WFS’s knowledge, information and belief, neither it nor its legal advisers nor any other person on its behalf had, or had ever had, in its possession custody or power any document relating to any matter in question between the parties other than the documents enumerated in the list of documents.

20   The solicitors for JLL challenged the adequacy of the discovery made by the Bowlers Club and by WFS and eventually a notice of motion was filed by JLL. By its notice of motion as amended JLL sought orders that the Bowlers Club provide further and better discovery, including discovery of all documents falling within any of the classes of documents enumerated in annexure A to the amended notice of motion and that WFS discover all documents falling within any of the classes of documents enumerated in annexure B to the amended notice of motion. Pars 9 and 10 of annexure B were in the following terms:-

“9. All documents passing between WFS and PNA in relation relating to, or including the management and/or surrender of lease and/or sale by or on behalf of PNA of any interest held by PNA in the Building for the period from 1 January 1990 to 31 December 1994.
10. All documents, including all notes, memoranda, correspondence, draft reports, asset management plans, agreements or draft agreements either :
(i) prepared by WFS in its capacity as manager of the Trusts, or
(ii) received from PNA ;
which deal with or touch upon the following aspects of the Building:
(a) income and expenditure ;
(b) capital expenditure ;
(c) valuation ;
(d) return on investment ;
(e) the compliance or otherwise of the essential services ;
(f) use or permitted use of tenanted areas ;
(g) appointment, valuation and termination of service contractors including but not limited to Honeywell Ltd, Newsound Electronics Pty Ltd, FFE Buildings Services Pty Ltd and First Five Minutes Pty Ltd ;
(h) appointment and/or evaluation of JLL as managing agent; or
(i) evaluation of the Building in regards to the structural integrity and services for the purposes of the sale or disposal of its interest
for the period from 1 January 1990 to 31 December 1994 .”

21   The application by JLL was supported by an affidavit sworn 15 March 2000 by Susan Bennett, a solicitor employed by the solicitors for JLL. There were annexed or exhibited to Ms Bennett’s affidavit the lists of documents filed by the Bowlers Club and WFS and correspondence in which the solicitors for JLL had complained to the solicitors for the Bowlers Club and the solicitors for WFS about the allegedly inadequate discovery which had been made by the Bowlers Club and WFS.

22   An affidavit by Mr Massaria sworn 24 March 2000 was filed on behalf of the Bowlers Club. In his affidavit Mr Massaria said that he had caused numerous searches to be carried out on behalf of the Bowlers Club and had been informed and believed that there were no further documents in the possession or control of the Bowlers Club (including the documents referred to in JLL’s notice of motion), apart from the documents already discovered by the Bowlers Club.

23   An affidavit by Louise Massey sworn 11 April 2000 was filed on behalf of WFS. In her affidavit Ms Massey said that, after WFS had been served with JLL’s application, she had instructed an employed solicitor to re-inspect all of the documents provided by WFS to its solicitors. As a result of this search a further ten documents had been found, which had been inadvertently excluded from the list of documents filed by WFS. Particulars of these further documents were supplied and Ms Massey said that a supplementary list of documents would be filed. Ms Massey said that, apart from these ten further documents, all documents which should have been discovered by WFS had been discovered. She gave particulars of enquiries she had made of Messrs Freehill Hollingdale and Page who had prepared some of the sub-leases of parts of the building.

24   On 16 May 2000 Ms Bennett made a further affidavit. In her affidavit Ms Bennett complained, with respect to the Bowlers Club, that:-

(i) Minutes of a number of the monthly meetings of the Board of Directors of the Bowlers Club had not been discovered.

(ii) Documents relating to the use by the Bowlers Club of level 2 of the building had not been discovered. In this connection, it was stated that a number of documents had been produced on subpoena by third parties; that the Bowlers Club should also have had these documents; but that the Bowlers Club had failed to discover them.

(iii) Documents relating to the acquisition of the leasehold interest from PNA had not been discovered.

25   With respect to WFS, Ms Bennett complained inter alia that documents and reports, which under the terms of the trust deeds WFS as manager would have been required to send to PNA as trustee, had not been discovered.

26   An affidavit by Craig Higginbotham, solicitor, sworn 23 May 2000, was filed on behalf of the Bowlers Club. In his affidavit Mr Higginbotham said that he was a partner of Cutler Hughes and Harris, that Cutler Hughes and Harris had been instructed in about April 1998 to act for the Bowlers Club on the cross-claim brought against it by JLL and that Cutler Hughes and Harris had received documents from Messrs Truman Hoyle, who had been acting for the Bowlers Club.

27   Mr Higginbotham went on in his affidavit to say that Mr Massaria had informed Cutler Hughes and Harris that a number of boxes of documents had been provided by the Bowlers Club to Truman Hoyle. However, these boxes of documents could not be found within the documents provided by Truman Hoyle to Cutler Hughes and Harris or among the documents which had been retained by Truman Hoyle. In his affidavit Mr Higginbotham gave particulars of searches which had been made to locate the missing documents at the premises of Cutler Hughes and Harris, the Bowlers Club and Truman Hoyle. A box of documents which contained minutes of meetings of the board of directors of the Bowlers Club had been found but otherwise the searches had been unsuccessful.

28   Mr Higginbotham was cross-examined on his affidavit in the hearing before the Master.

29   In her reserved judgment of 29 May 2000 Master Harrison dismissed the application for further discovery, as against both respondents to the application.

30   In her judgment Master Harrison gave what she described as “a short and somewhat potted history of these complex proceedings”.

31   Paragraph 11 of the Master’s judgment was in the following terms:-

“WFS referred to Jones v Monte Video Gas Co [1880] QB 556; White v Spafford [1901] 2 KB 241 at 245-246 and Mulley v Manifold (1959) 103 CLR 341 at 343 as the appropriate test for further discovery. These cases establish the principle that a party from whom further discovery is sought has prima facie discharged his or her obligation when he or she has stated upon oath that all documents in his or her possession or power which are relevant to the matters in dispute have been listed. Although prima facie the original affidavit has disclosed everything, an opponent can furnish affidavit in the belief that some specific documents have not been disclosed. The opponent has to be in a position he or she believes there is or are in the other party’s possession some specific documents which he or she can name and specify. In that case, if those documents have not been disclosed, he or she is entitled to a further affidavit from his or her opponent as to those specific documents. Officers of WFS and Bowlers have both verified the list of documents and solicitors acting for those parties have deposed that there are no further documents to be discovered”.

32   Much of what the Master said in par11 of her judgment was taken by her almost verbatim from parts of the judgment of Collins LJ in White v Spafford.

33   In her judgment the Master referred to the cross-examination of Mr Higginbotham and made a finding that Mr Higginbotham had made reasonable enquiries to try to locate the two boxes of documents referred to in Schedule 2 to the Bowlers Club’s list of documents, which had last been in the possession of the Bowlers Club’s solicitors in about August 1998.

34   As regards the application against WFS, the Master said in part of par12 of her judgment:-

“In relation to further documents sought from WFS, although some documents that may have been expected to be produced by WFS have been produced from other sources, these documents may no longer be in its possession. It is not alleged that WFS relied on the advice of JLL so the documents relating to this issue are not required to be discovered. I am not satisfied that it has specific documents in its possession that have not been listed in its list of documents. In any event, the documents sought in paragraphs 9 and 10 of the schedule are oppressive and amount to a fishing expedition. I dismiss the motion”.

35   The present appeal has been brought from the Master’s decision. The grounds of appeal include that the Master erred in not holding that JLL had adduced evidence tending to prove that there were a number of classes of documents which were relevant, which were in existence and which were in the possession of one or other of the respondents, but which had not yet been discovered; that the Master had erred in holding that on the pleadings it was not an issue whether WFS had relied on advice from JLL and hence documents relating to such an issue were not required to be discovered; and in holding that, insofar as JLL sought discovery of documents falling within the classes of documents described in pars9 and 10 of annexure B to the amended notice of motion, its application was oppressive and amounted to a fishing expedition.

36   After the institution of the appeal two further affidavits were filed on behalf of the Bowlers Club.

37   In his further affidavit of 11 August 2000 Mr Massaria said that he had made enquiries of all present and a number of past office holders of the Bowlers Club and had been informed that no further documents relevant to any issue in the proceedings were held by any of these persons. Mr Massaria swore that the Bowlers Club did not hold any relevant documents, other than those already discovered.

38   In his further affidavit Mr Higginbotham said that he had caused searches to be undertaken at the offices of Cutler Hughes and Harris. His affidavit continued:-

“7. I am informed by Mr Hugh Docherty an employee of Cutler Hughes & Harris and verily believe that the searches have revealed that the only documents other than those documents already discovered which have been located are a number of documents which were located in a box numbered CH6226 in storage off site from Cutler Hughes & Harris’ premises.
8. I am informed by Hugh Docherty and verily believe that these documents were originally stored in an empty office within Cutler Hughes & Harris with approximately 400 boxes containing material relevant to unrelated proceedings on behalf of a client of Cutler Hughes & Harris not related to the Bowlers Club.
9. I am informed and verily believe that when the documents were sent to storage they were listed under the name of the unrelated client and were only discovered by Mr Hugh Docherty after a complete review of the list of all documents stored off site from Cutler Hughes & Harris’ premises. Annexed and marked “A” is a true copy of an extract of the index to documents stored off site from Cutler Hughes & Harris’ premises.
10. Annexed and marked “B” is a true copy of an index of the documents referred to in box entitled “CH6226”.

39   It would appear that the box which was found was the box referred to in paragraph 4 in Schedule 2 to the Bowlers Club’s list of documents.

40   Mr Higginbotham also gave evidence in his further affidavit about the system of recording in registers incoming and outgoing courier and hand deliveries used by Cutler Hughes and Harris and said that he had himself reviewed a number of registers and had not gained any information which would assist in locating any further documents.

41 The present appeal is brought pursuant to Pt60 r10 of the Supreme Court Rules. An appeal lies as of right and it is not necessary to obtain leave to appeal.

42   An appeal from a Master to a single judge of the Court is governed by the same principles as an appeal from a single judge to the Court of Appeal. Do Carmo v Ford Excavations Pty Limited (1981) 1 NSWLR 409.

43   The present appeal is against an interlocutory discretionary decision of the Master on a matter of practice and procedure. As the appeal is against a discretionary decision by the judicial officer of first instance, the appellant is required to show that in some way the Master made an error in exercising her discretion. See House v The King (1936) 55 CLR 499 at 504-505.

44 Although there has been some controversy about the circumstances in which further evidence should be received on an appeal after a contested hearing before a Master (see Pt60 r15 of the Supreme Court Rules and the commentary in Ritchie’s Supreme Court Procedure NSW at par(60.15.1)), no objection was taken at the hearing of the present appeal to the further affidavits by Mr Massaria and Mr Higginbotham.

45 Having regard to some of the submissions which were made by counsel for the appellant, it is necessary to refer to some of the provisions of Pt23 of the Supreme Court Rules relating to the discovery and inspection of documents.

46 A completely new Pt23, applicable to proceedings commenced on or after 1 October 1996, was inserted in the Supreme Court Rules in 1996. The new Pt23 applies to the present proceedings, which were commenced in 1997.

47   The authors of Ritchie comment at par(23.0.2) that the new Pt23 of the Supreme Court Rules limits the entitlement to discovery in three significant respects. The first of these respects is not relevant to the present appeal. Ritchie continues:-

“The second respect in which discovery has been narrowed is that, whilst parties may seek an order for discovery under r 3, the Court is required to order discovery only in relation to classes of documents and, only then, to the extent that it considers discovery is justified in the circumstances of the particular case. The third respect in which the discovery concept has, arguably, been narrowed is that discovery is only permissible to the extent that documents are ‘relevant’ to a fact in issue. The concept of ‘relevance’ in this context is defined in r 1(d) in the same terms as s 55 of the Evidence Act 1995. It includes only those documents whose contents could rationally affect ‘the assessment of the probability of the existence of a fact in issue’: National Australia Bank Limited v Idoport Pty Ltd [2000] NSWCA 8. This criterion is more restrictive than the criterion of relevance that prevailed under the previous rules - where a document was considered discoverable if it either tended to advance a party’s case or would lead to a chain of inquiry that might have that effect: Mulley v Manifold (1959) 103 CLR 341 at 345…”.

48   In National Australia Bank Limited v Idoport Pty Ltd the Court of Appeal referred to a statement by Brett LJ in Compagnie Financiers du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 63:

“It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words ‘either directly or indirectly’ because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences”.

49   In National Australia Bank v Idoport the Court of Appeal held that an effect of the new Pt23 of the Supreme Court Rules was to “exclude” the second sentence in this passage from Brett LJ’s judgment, so that the fact that a document, if discovered, might lead an opposing party to a train of inquiry which might have the consequence of advancing the opposing party’s case or damaging the discovering party’s case is no longer sufficient to make a document relevant and hence discoverable.

50 The new Pt23 of the Supreme Court Rules, while it provides for the making of an order for discovery (r 3), does not make any express provision for making an order for further discovery. Ritchie comments at par(23.3.20):-

“Although the present rule puts the onus on the discovering party to provide full discovery, it says nothing about whether the other party may challenge the sufficiency of the discovery or the contents of any verifying affidavit. Notwithstanding this omission, it is likely that the court will permit an application for further discovery to be made, provided that the party making the application specifies the document, or class of documents, in respect of which further discovery is sought. The party making such an application ought to specify the document, or class of documents in respect of which particular discovery is sought. The party must also make out a reasonable ground for believing that the documents were, or had been, in the opponent’s possession…”.

51   On this appeal lengthy written submissions were filed on behalf of the appellant, JLL and on the hearing of the appeal counsel spoke to those submissions.

52   It was submitted on behalf of JLL that the Master had made a number of errors such as would invalidate her discretionary decision not to order further discovery.

53   A submission particularly pressed was that the Master had adopted too restrictive a criterion of relevance, for example in not applying a principle that a document is relevant if it might lead to a chain of inquiry which might advance a party’s case and in determining that the application for discovery of documents within the classes of documents specified in pars9 and 10 of annexure B to the amended notice of motion was a “fishing expedition”. Reference was made by counsel for the appellant to a number of cases, mainly judgments of judges of the Federal Court, in which, it was submitted, a more liberal approach to relevance and to the prohibition against a fishing expedition had been adopted.

54 However, because of the provisions of the new Pt23 of the Supreme Court Rules and the decision of the New South Wales Court of Appeal in National Australia Bank v Idoport, these decisions of the Federal Court, where different rules of court apply, are inapplicable to proceedings in the Supreme Court. In proceedings in the Supreme Court of this State a more restrictive criterion of relevance is to be applied, than the criterion which is applied in the Federal Court or which used to be applied in this State prior to the introduction of the new Pt23. For example, in this Court it is now insufficient, in order for a document to be discoverable, that, the document, if discovered, might lead to a chain of inquiry which might advance the case of the opposing party. Discovery should not be ordered, if an application for discovery amounts to a fishing expedition.

55   I do not accept that the Master erred by adopting too restrictive a criterion of relevance. Having regard to the extreme width of pars9 and 10 of annexure B to the amended notice of motion, the Master did not err in describing an application for discovery of all documents falling within pars9 or 10 of annexure B as being oppressive and as amounting to a fishing expedition.

56   It was submitted that the Master had been guilty of error and confusion in saying in her judgment:-

“In relation to further documents sought from WFS, although some documents that may have been expected to be produced by WFS have been produced from other sources, these documents may no longer be in its possession”.

57   I do not consider that this passage in her judgment evinces error or confusion on the Master’s part. The Master was saying that some documents had been produced by third parties on subpoena, which had such a connection with WFS that one might have expected WFS to have “produced” them, that is to have discovered them as being in its possession, but that an explanation for the non- “production” of such documents by WFS might be that the documents were no longer in the possession of WFS.

58   It was submitted that the Master had erred in holding that, as it was not expressly alleged that WFS had relied on advice given by JLL, the documents sought in annexure B to the amended notice of motion were irrelevant. It was contended that the allegations in the pleadings “raise, if not explicitly, then implicitly, a reliance upon the performance of JLL” of the obligations alleged to rest on JLL under the management agency agreement and otherwise.

59   However, what the Master said in her judgment was that there was no allegation in the pleadings that WFS had relied on the advice of JLL, so that any documents relating to such an issue were not required to be discovered. It would appear to be conceded that there was no allegation in the pleadings that WFS had relied on the advice of JLL. An allegation that another party such as WFS had relied upon the performance by JLL of its obligations, assuming that it was made, at least implicitly, in the pleadings, is not the same as an allegation that WFS had relied on advice given by JLL. In any event, on my reading of the Master’s judgment, the Master considered that it was a sufficient ground for not ordering further discovery against WFS, that “I am not satisfied that it has specific documents in its possession that have not been listed in its list of documents”.

60   An additional reason given by the Master for not ordering further discovery against WFS, with respect to the documents described in pars9 and 10 of annexure B to the amended notice of motion, was that that part of the application for further discovery against WFS was oppressive and amounted to a fishing expedition and, as I have already held, the Master was entitled to make those findings.

61   A further submission made on behalf of JLL was that the Master had erred in not holding that JLL had adduced evidence tending to prove that there were a number of classes of documents, which were relevant and which were in the possession of one or other of the respondents but which had not been discovered. Counsel pointed to references in documents which had been discovered or which had been produced by third parties on subpoena as indicating the existence of documents which would be in the possession of one or other of the respondents but which had not been discovered. It was contended that the Master had erred in holding that Mr Higginbotham had made reasonable inquiries to locate further documents.

62   In my opinion, the Master, on the basis of the affidavits and certificates in the lists of documents and the affidavits by Mr Massaria and Mr Higginbotham, the affidavit by Ms Massey and the oral evidence of Mr Higginbotham, did not err in making the findings that she did and, indeed, ought to have made the findings that she did.

63   It was not suggested on the hearing of the appeal that there was any error in the statement by the Master in par11 of her judgment of the principles to be applied in determining an application for further discovery.

64   As I am not satisfied that the Master made any error in making her discretionary decision refusing further discovery, the appeal against the Master’s decision should be dismissed.

65   If I was to decide the application for further discovery myself, I would come to the same conclusion as the Master did, that the application should be dismissed as against both respondents.

66 In determining the application for further discovery it is necessary to apply the authorities referred to in par11 of the Master’s judgment, the provisions of the new Pt23 of the Supreme Court Rules, the principles discussed in Ritchie’s commentary on Pt23 and the decision of the Court of Appeal in National Australia Bank v Idoport. To the extent to which decisions or dicta in the Federal Court or other courts are inconsistent with Pt23 of the Supreme Court Rules and the decision of the Court of Appeal in National Australia Bank v Idoport, they are to be disregarded.

67   Applying the relevant principles, I do not consider that the appellant has established an entitlement to further discovery against either respondent. As against the inferences which counsel for the appellant submitted should be drawn, that as yet undiscovered documents exist in the possession of the respondents, there must be opposed the lists of documents filed by the respondents each with an affidavit verifying and a certificate by a solicitor, the two affidavits by Mr Massaria, the two affidavits by Mr Higginbotham, the oral evidence of Mr Higginbotham and the affidavit by Ms Massey. The appellant has not established that there are further documents in the possession of either respondent or even that there are reasonable grounds for believing that there are further documents in the possession of either respondent.

68   Paragraphs 9 and 10 in annexure B to the appellant’s amended notice of motion and, indeed, some other parts of the annexures to the amended notice of motion are, in my opinion, properly described as fishing expeditions, in that the appellant seeks the production of all documents falling within widely defined classes, so that it can trawl though any documents produced in the hope of discovering something which may advance its case or weaken the case of an adversary.

69 Of course, if any document which should have been discovered is subsequently located by either respondent, that respondent will be obliged to notify the appellant (see Pt23 r3(8) of the Supreme Court Rules).

70   I dismiss the appeal from the Master’s decision and I order the appellant to pay the respondents’ costs of the appeal.

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Last Modified: 11/28/2000