Green v Fairfax Media Publications Pty Ltd [No 3]

[2021] WASC 7

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   GREEN -v- FAIRFAX MEDIA PUBLICATIONS PTY LTD [No 3] [2021] WASC 7

CORAM:   LE MIERE J

HEARD:   15 & 16 DECEMBER 2020

DELIVERED          :   15 JANUARY 2021

FILE NO/S:   CIV 1011 of 2019

BETWEEN:   JEMMA MARIE GREEN

Plaintiff

AND

FAIRFAX MEDIA PUBLICATIONS PTY LTD

First Defendant

AARON ODYSSEUS PATRICK

Second Defendant

Catchwords:

Practice and procedure - Application to permanently stay proceeding - Whether abuse of process - Plaintiff's failure to comply with discovery obligations - Whether plaintiff deliberately failed to give proper discovery - Whether plaintiff has caused unjustifiable oppression to defendants - Whether plaintiff has brought administration of justice into disrepute - Whether plaintiff's failings justify stay of proceedings

Practice and procedure - Amendment of defence - Documents discovered prior to and during trial

Practice and procedure - Further discovery - Plaintiff's failure to comply with discovery obligations

Practice and procedure - Leave to recall witnesses for further cross‑examination

Practice and procedure - Costs - Costs of application for further discovery - Costs of cross‑examination and further cross‑examination - costs of application for permanent stay of proceeding - Application for indemnity costs - Application for special costs order - Application for lump sum costs order - Application for stay of proceeding pending payment of costs

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 26 r 1

Result:

Application for stay dismissed
Orders for leave to amend defence for further discovery and for leave to recall witnesses for further cross‑examination

Category:    B

Representation:

Counsel:

Plaintiff	:	Mr M L Bennett
First Defendant	:	Mr A T S Dawson SC & Dr D Roche
Second Defendant	:	Mr A T S Dawson SC & Dr D Roche

Solicitors:

Plaintiff	:	Bennett + Co
First Defendant	:	Banki Haddock Fiora Lawyers
Second Defendant	:	Banki Haddock Fiora Lawyers

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

Clifton (Liquidator) v Kerry J Investment Pty Ltd (t/as Clenergy No 2) [2020] FCAFC 112

Clifton (Liquidator) v Kerry J Investment Pty Ltd (t/as Clenergy) (2020) 379 ALR 593

Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (Permanent Stay) [2019] FCA 802

Hunter v Chief Constable of West Midlands Police [1982] AC 529

Johnson v Gore Wood & Co [2002] 2 AC 1

Mango Boulevard P/L v Spencer [2008] QCA 274

Masha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd (No 2) [2006] VSC 56

National Australia Bank Ltd v Petit‑Breuilh (No 2) [1999] VSC 395

Rozenblit v Vainer (2018) 262 CLR 478

Strickland v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; (2018) 361 ALR 23

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507

UBS AG v Tyne (2018) 265 CLR 77

Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190

Walton v Gardiner (1993) 177 CLR 378

Wheatley v Bower [2001] WASCA 293

LE MIERE J:

Summary

1. In this action, the plaintiff claims damages and other relief against the defendants for publishing two defamatory articles.

2. Prior to the commencement of the trial on 26 October 2020, the plaintiff had given discovery pursuant to orders for general discovery and for discovery of specified classes of documents.  On 6 November, which was the ninth day of the trial, on the application of the defendants, I ordered the plaintiff to give further discovery of three classes of documents.  On 9 November, pursuant to that order, the plaintiff filed a list of documents verified by affidavit.  The list contained 288 documents.  The trial continued that day and on the following day, on the application of the defendants, I adjourned the trial to a date to be fixed.

3. The defendants have applied to the court to permanently stay the action on the ground that the plaintiff has failed to comply with her discovery obligations and her non-compliance is an abuse of the process of the court justifying a permanent stay of the proceeding.  Alternatively, the defendants apply for orders amending their defence for further discovery by the plaintiff, that the defendants have leave to recall and cross‑examine the plaintiff and her witness, Mr Bulich, at the resumption of the trial and for orders that the plaintiff pay costs incurred by the defendants prior to the resumption of the trial as a condition of the trial resuming.

4. For the reasons which follow, I will make orders to the following effect:

   1.The defendants' application that the proceedings be permanently stayed on the ground of abuse of process be dismissed.

   2.The defendants have leave to amend their substituted defence in accordance with the amendments listed in schedule B annexed to their amended application of 14 December 2020 except for:

   (a)paragraph 68A(b)(ii) insofar as it refers to Vector Pty Ltd;

   (b)paragraph 68A(i) insofar as it refers to Vector Pty Ltd;

   (c)paragraph 68D; and

   (d)paragraph 68E(b).

   3.(a)      if she has not already done so, the plaintiff should consult with an independent IT expert to determine whether Power Ledger emails subsequent to 1 June 2017 and prior to 5 September 2017 can be retrieved and if so the cost and practicality of doing so.  If the IT expert advises, or has advised, that the emails may be retrieved the plaintiff should retrieve and discover such emails that fall within any of the categories of documents ordered to be discovered by the plaintiff.  If the plaintiff is, or has been, advised that it is not possible to retrieve the emails or that it is possible to retrieve the emails but she considers that the practicality and cost of doing so is disproportionate to the significance of any document which is likely to be located during the search, she should say so in her further affidavit of discovery and set out the basis of that contention.

   (b)By [date] plaintiff should give discovery on affidavit of all documents in the possession, custody or power of the plaintiff within the categories listed in schedule A annexed to the defendants' amended application of 14 December 2020 but not including:

   (i)documents in category 2 brought into existence after 31 December 2018;

   (ii)documents in category 2 that are available to the public on a website or application;

   (iii)documents in category 3A brought into existence after 31 December 2018;

   (iv)documents in category 4;

   (v)documents in categories 12 ‑ 13;

   (vi)documents in category 14 which are attachments to emails which attachments the plaintiff did not receive;

   (vii)documents in category 14 which are, or are only accessible by, a link in a document received by the plaintiff; and

   (viii)documents previously discovered by the plaintiff.

   (c)Where the plaintiff's searches for electronic documents are undertaken by keyword searches the plaintiff shall state the keywords used to make the search.

   (d)By [date] the plaintiff shall provide to the defendants a copy of the documents so discovered subject to redactions for client legal privilege.

   4.The plaintiff shall pay the defendants' costs of the defendants' applications for further and better discovery filed by the defendants on 8 October 2020 and 5 November 2020.

   5The trial of the action be listed to continue for [ ] days commencing on [ ].

   6At the resumption of the trial the defendants have leave to recall the plaintiff and Mr Bulich for further cross-examination.

5. I will hear from the parties in relation to the dates referred to and in relation to the costs of this application.

The claim and the defence

1. The plaintiff, Dr Jemma Green, is a co-founder and chairman of Power Ledger Pty Ltd which is a block chain technology company.

2. The defendants published articles entitled 'Block chain firm in gun over spruikers' (the Spruikers Article) and 'How to make and lose $2 billion' (the $2 Billion Article).  On 7 January 2019 the plaintiff filed and served the writ of summons.  On 7 February 2019 the plaintiff filed and served a statement of claim.  The plaintiff pleads that the Spruikers Article conveys the imputation that the plaintiff causes unethical market manipulation by Power Ledger using undisclosed paid spruikers to promote it and its POWR token.  The plaintiff pleads that the $2 Billion Article conveys the imputations that by her creation, promotion and operation of Power Ledger the plaintiff defrauds, or alternatively misleads, the public and investors.

3. The defendants accept that the Spruikers Article conveys an imputation substantially to the effect pleaded by the plaintiff, deny that the $2 Billion Article conveys the 'fraud' imputation pleaded by the plaintiff but admit that the $2 Billion Article conveys an imputation substantially to the effect of the alternative imputation pleaded by the plaintiff that by her creation, promotion and operation of Power Ledger the plaintiff misleads the public and investors.  The defendants plead that the imputations conveyed by the Spruikers Article and the alternative imputation conveyed by the $2 Billion Article are true.  The defendants plead the statutory defence of honest opinion in relation to the Spruikers Article.

Some procedural history

1. By their defence of 11 April 2019, the defendants denied that the Spruikers Article conveys the pleaded imputations, denied that the $2 Billion Article conveys the 'fraud' imputation but admitted that the $2 Billion Article conveys the alternative imputation that by her creation, promotion and operation of Power Ledger the plaintiff misleads the public and investors.  The defendants pleaded that each of the articles were published on an occasion of qualified privilege and the Spruikers Article was an expression of opinion relating to a matter of public interest and based on proper material.  The defendants also pleaded matters upon which they rely in mitigation of damages.  On 17 May 2019 the defendants filed and served an amended defence which introduced further particulars.

2. On 7 June 2019 the plaintiff filed and served a reply.

3. By consent, the court made orders on 17 June 2019 that the parties give discovery on affidavit.  On 29 July 2019 the plaintiff filed and served a list of documents verified by affidavit (First Discovery Affidavit).

4. On 22 August 2019 the plaintiff filed and served an amended statement of claim which included further allegations relevant to her claim for aggravated damages.

5. On 26 August 2019 the court made orders, by consent, that the parties file and serve any supplementary affidavit of discovery.  Pursuant to that order, on 13 September 2019 the plaintiff filed a supplementary affidavit of discovery.

6. On 31 January 2020, at the request of the defendants, the court issued a subpoena addressed to Power Ledger.

7. On 21 March the defendants amended their defence (re-amended defence) to plead that the imputation pleaded by the plaintiff to be conveyed by the Spruikers Article and the alternative imputation pleaded by the plaintiff to be conveyed by the $2 Billion Article are true.  The defendants also pleaded a defence of contextual truth in relation to the Spruikers Article.

8. On 3 April the plaintiff served an informal discovery list.

9. On 17 April, at the request of the defendants, the court issued a second subpoena addressed to Power Ledger (Second Power Ledger Subpoena).

10. On 1 May the plaintiff filed and served an application to strike out, in part, the defendants' re-amended defence.  The application was heard on 3 June.  On 3 July the court made orders striking out parts of the re‑amended defence, including the defence of contextual truth.

11. On 29 July the defendants filed a further re-amended defence giving effect to the court's decision striking out part of the defendants' re‑amended defence.

12. On 5 August the court made orders, by consent, that the parties provide any further discovery by 28 August 2020.

13. On 14 August the defendants filed a further further re-amended defence which included mark‑ups to show the amendments by the further re‑amended defence.

14. On 25 August the plaintiff filed an amended reply.  The amended reply pleaded the plaintiff's response to the allegations in the defendants' pleas of justification in their further further re-amended defence.

15. On 2 September the plaintiff filed a second supplementary list of documents verified by affidavit (Second Supplementary Discovery Affidavit).

16. On 25 September the plaintiff filed a further re-amended statement of claim. The further re-amended statement of claim included further allegations relevant to the plaintiff's claim for aggravated damages.

17. Also on 25 September the defendants filed a substituted defence. The substituted defence introduced, among other things, further particulars.

18. Between 12 December 2019 and 5 October 2020 the defendants made enquiries of the plaintiff concerning the plaintiff's discovery and deficiencies in the plaintiff's discovery and the plaintiff responded to those enquiries.

19. On 5 October 2020 the plaintiff filed her third supplementary list of documents verified by affidavit (Third Supplementary Discovery Affidavit).

20. On 9 October, on the application of the defendants and after a contested hearing, I made orders that the plaintiff give further discovery of the following documents:

    1.All business plans or strategic plans for Power Ledger created during 2017 and 2018, including executive summaries of any such documents (the Business Plans).

    2.All revenue models for Power Ledger created during 2017 and 2018 referring to the POWR token or peer-to-peer trading in Australian electricity markets (the Revenue Models).

    3.All documents evidencing the calculations referred to at [350.1] and [350.2] of the amended supplementary witness outline of the plaintiff filed 10 September 2020 (the Calculations).

    4.All board papers, board packs, reports, meeting agendas and meeting minutes prepared for Power Ledger's board of directors (or any committee or subcommittee thereof) created during 2017 and 2018 referring to peer-to-peer trading in Australian electricity markets (the Board Papers).

21. On 19 October the plaintiff filed and served a list of documents verified by affidavit pursuant to the orders of 9 October 2020 (Fourth Affidavit of Discovery).

22. On 23 October the defendants filed and served a notice to produce (First Notice to Produce).  The plaintiff produced the document requested on 25 October.

23. On 26 October the defendants filed and served another notice to produce (Second Notice to Produce).  The plaintiff produce documents pursuant to the notice to produce on 27 October.

24. On 1 November the defendants served a further notice to produce (Third Notice to Produce).  The plaintiff provided documents in response to the Third Notice to Produce on 4 November.

The trial commences

1. The trial commenced on 26 October 2020.  Counsel for the defendants appeared by video link from Sydney.  Counsel for the plaintiff and the defendants made opening submissions on 26 October and 27 October.  The plaintiff, Dr Green, gave evidence‑in‑chief on 27 and 28 October.  Regrettably, the trial then had to be adjourned to enable the defendants' counsel to move to a location from which a better video link could be obtained.

2. The cross‑examination of Dr Green commenced on Monday 2 November and continued until Thursday 5 November.  On 5 November and 6 November Mr Bulich, who was called to give evidence by the plaintiff, gave evidence‑in‑chief and was cross‑examined.

3. The plaintiff closed her case on Friday 6 November.

6 November discovery order

1. On the evening of Thursday 5 November the defendants gave notice of an application for orders that the plaintiff give discovery of all documents recording communications posted, sent or received by the plaintiff between June 2017 and January 2019 referring to:

   (a)the Origin project;

   (b)the Bounty Campaign; and

   (c)Elon Musk or Tesla.

2. On Friday 6 November, after the completion of the evidence of Mr Bulich, I heard the defendants' application and later that day ordered:

   1.By 12 noon on 9 November 2020 the plaintiff give discovery of all documents in the possession, custody or power of the plaintiff, recording communications posted, sent or received by the plaintiff between 1 September 2017 and 1 January 2019 referring to:

   (a)the technical trial of the Power Ledger Platform undertaken by Origin Energy Ltd which commenced in or about September 2017;

   (b)the Bounty Campaign described in exhibit 462; and

   (c)Elon Musk or Tesla;

   but excluding audio or video recordings and excluding documents available to the public on a website or application (Specified Documents).

   2.The plaintiff file and serve an affidavit verifying her list of documents discovered, with such affidavit to describe the reasonable searches made to locate the Specified Documents.

   3.The Specified Documents, or copies, redacted for any client legal privilege be provided to the defendants' solicitors on 9 November 2020.

3. On 9 November, pursuant to the orders of 6 November, the plaintiff filed and served a fifth supplementary affidavit of discovery (Fifth Supplementary Discovery Affidavit) and delivered copies of the documents to the defendants.

The trial is adjourned

1. The trial resumed on 10 November.  The defendants adduced expert evidence from Mr Price and Professor Buckley which completed the defendants' oral evidence.

2. The defendants then moved that the trial be adjourned to enable the defendants to consider what, if any, orders they would move for as a result of the documents provided by the plaintiff pursuant to the Fifth Supplementary Discovery Affidavit.  Senior counsel for the defendants, Mr Dawson SC, said that the defendants wished to consider whether to move for orders that the plaintiff would be recalled for further cross‑examination, that there be a retrial or that the proceeding be stayed on the ground of abuse of process by the plaintiff failing to comply with her discovery obligations.

3. I adjourned the trial to enable the defendants to consider their position and make such application as they saw fit.

The stay application

1. By an application filed on 4 December 2020 the defendants applied for an order that the proceeding be permanently stayed on the ground of abuse of process.

2. In their written and oral submissions, the defendants put their argument in various ways.  In their written submissions, the defendants submitted that the plaintiff failed to discharge her discovery obligations and that failure was part of a deliberate and concerted effort to deprive the defendants of the evidence necessary to defend the truth of the imputations pleaded by the plaintiff.  The defendants submitted that there are three factors exacerbating the deficiencies in the plaintiff's discovery.  First, the plaintiff has failed to take steps to correct the problems with discovery.  Secondly, Power Ledger has also failed to produce documents.  Thirdly, the plaintiff has failed to identify the true nature of her case.

3. In oral submissions, Mr Dawson submitted that the plaintiff has deliberately failed to give proper discovery in that she has consciously refused to engage with her discovery obligations.

4. Mr Dawson submitted that the plaintiff did not make the searches which should have been made and did not provide documents that the plaintiff knew existed.  Mr Dawson submitted that the defendants brought the shortcomings in the plaintiff's discovery to her attention, she failed to take heed of those complaints and, except where the court has ordered her to discover a category of documents, she has consciously failed to engage and comply with her discovery obligations.  Mr Dawson says that that failure has prejudiced and oppressed the defendants. In particular, the defendants' cross‑examination of the plaintiff and Mr Bulich miscarried because it was done on a false basis without the benefit of relevant documents which contradict evidence given by the plaintiff.

The power to stay proceedings for abuse of process

1. This court has power to stay proceedings to prevent an abuse of the process of the Court.  The categories of abuse of process are not closed.  Cases such as UBS AG v Tyne[1] and more recently Strickland v Commonwealth Director of Public Prosecutions,[2] albeit in a different context, demonstrate the broad scope of the circumstances that may constitute such abuse. 

   [1] UBS AG v Tyne (2018) 265 CLR 77.

   [2] Strickland v Commonwealth Director of Public Prosecutions (2018) 266 CLR 325; (2018) 361 ALR 23.

2. The breach of a party's discovery obligations may, in appropriate circumstances, constitute an abuse of process justifying a stay of the proceedings.[3]

   [3] See Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (Permanent Stay) [2019] FCA 802; Clifton (Liquidator) v Kerry J Investment Pty Ltd (t/as Clenergy) (2020) 379 ALR 593; Mango Boulevard P/L v Spencer [2008] QCA 274.

3. The circumstances in which the use of the court's processes will amount to an abuse are not capable of exhaustive statement.  However, the High Court has relevantly identified two conditions, either of which enlivens the power: where the use of the court's procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute.[4]  In this case, the defendants submit that both of those conditions are met notwithstanding that the trial of the action is well advanced and the factual merits of the plaintiff's claims have not been determined.

   [4] UBS AG V Tyne (2018) 265 CLR 77 [1] (Kiefel CJ, Bell & Keane JJ) citing Hunter v Chief Constable of West Midlands Police[1982] AC 529, 536 (Lord Diplock); Walton v Gardiner (1993) 177 CLR 378, 393 (Mason CJ, Deane & Dawson JJ); Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, 519 [25] (French CJ, Bell, Gageler & Keane JJ).

4. In determining whether either condition is satisfied, a consideration of all the relevant circumstances is required, which necessitates 'a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case'.[5]

   [5] See Johnson v Gore Wood & Co [2002] 2 AC 1, 31 (Lord Bingham of Cornhill).

5. Further, in determining whether the continuance of a proceeding is an abuse of process, relevant civil procedure provisions such as O 26 r 1 and O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA) (RSC) must also be considered. The court must take into account the interests of the public as well as the parties' interests.

6. In considering whether a proceeding should be stayed because the use of the court's procedures occasions unjustifiable oppression to a party, it is necessary to consider all reasonable alternatives to such an order and whether there is no other fair and practical way of ensuring justice other than a stay.[6]

   [6] Rozenblit v Vainer (2018) 262 CLR 478 [34] (Kiefel CJ & Bell J), [47], [48] (Keane J), [66], [100], [111] (Gordon & Edelman JJ).

Evidentiary basis of defendants' argument

1. Mr Dawson submitted that the plaintiff's deliberate failure to give proper discovery ‑ that is, a conscious refusal to engage with her discovery obligations ‑ 'is borne out by the evidence … and the mere fact of the number of applications which have been required to achieve a measure of compliance to the plaintiff's discovery obligations'.

2. The deficiencies in the plaintiff's discovery relate to the defendants' pleas of justification.  The defendants did not plead justification until their re-amended defence of 21 March 2020.  Since then, the plaintiff has sworn four affidavits of discovery.  The first, her second supplementary affidavit of discovery, was consequential upon the defendants amending to plead justification.  The second, her third supplementary affidavit of discovery, was made voluntarily by the plaintiff pursuant to her continuing obligation of discovery.  Mr Dawson's reference to 'the number of applications' is a reference to two applications ‑ the applications which led to the discovery orders of 9 October and 6 November 2020, and the plaintiff's fourth and fifth supplementary discovery affidavits.  The 'mere fact of the number of applications' for discovery ‑ the two applications to which I have referred ‑ does not go very far to establishing that the plaintiff consciously refused to engage with her discovery obligations.

3. The defendants made something of the fact that the plaintiff resisted the applications of 8 October and 5 November 2020 which led to the discovery orders of 9 October and 6 November 2020.  The application of 8 October was brought on without conferral.  The principal basis of the plaintiff's opposition was the relevance of the documents sought.  I do not infer from the plaintiff's opposition to the application a conscious refusal to engage with her discovery obligations.  The application of 6 November was brought in the course of the trial. I do not infer from the plaintiff's opposition to the application a conscious refusal to engage with her discovery obligations.

4. The principal evidence relied upon by the defendants is the plaintiff's failure to produce the documents discovered by the plaintiff pursuant to the orders of the court of 6 November 2020 before ordered by the court to give discovery of documents within the specified classes of document.  The inferences to be drawn from that failure requires an analysis of the documents produced.  I will refer to those documents shortly.  However, it is pertinent to first refer to the nature of the documents produced and the conduct of the plaintiff in failing to discover them earlier.

The plaintiff's conduct

1. In her affidavit sworn on 11 December 2020, the plaintiff has denied that she deliberately attempted to withhold documents from the defendants relevant to their truth defence.  The plaintiff swears that her solicitors have explained to her the importance of the obligation to give discovery, and she has attempted at all times to comply with her discovery obligations.

2. The deficiencies in the plaintiff's discovery relate substantially, if not wholly, to documents relating to the defendants pleas of justification which were not discovered by the defendant in her second supplementary affidavit of discovery sworn 2 September 2020 after the defendants had amended their defence to plead justification.

3. The defendants submit that the documents discovered by the plaintiff on or subsequent to 19 October 2020 demonstrate the failure of the plaintiff to have properly carried out her discovery obligations.  The defendants identify those documents in the affidavit of David Kim, a solicitor assisting in the conduct of the proceeding on behalf of the defendants, affirmed on 4 December 2020.

4. Mr Kim divides those documents into eight categories.  The number of documents discovered by the plaintiff on or subsequent to 19 October 2020 in relation to each category and subcategory is:

   (a)Documents relating to Power Ledger's Bounty Campaign - 12

   (i)the involvement of bots and professional bounty hunters ‑ 10

   (ii)the plaintiff's involvement in Power Ledger's Bounty Campaign ‑ 2

   (b)The Elon Musk rumour ‑ 31

   (i)the plaintiffs conduct with respect to the Elon Musk rumour ‑ 4

   (ii)non‑disclosure agreement with Tesla ‑ 27

   (c)The need to secure the cooperation of an authorised retailer ‑ 2

   (d)The need for legislation and/or rule changes ‑ 7

   (e)The Origin trial - 15

   (i)authorisation to share information ‑ 1

   (ii)the plaintiff's involvement in the Origin trial ‑ 14

   (f)Funding of the Renew Nexus project ‑ 37

   (g)Misleading statements in relation to the POWR token ‑ 7

   (h)The plaintiff's involvement generally at Power Ledger ‑ 52.

5. I have considered the plaintiff's failure to discover those documents before 19 October 2020 and, where appropriate, the plaintiff's explanation for that failure.  However, before addressing those particular categories I note the plaintiff's explanation for failing to discover a number of emails across those categories.

6. The plaintiff says that the searches by herself and Power Ledger staff were undertaken over several days and across various devices.

7. The plaintiff swears that, as well as searching for emails herself, she delegated the task of locating documents to Power Ledger staff.  The searches were conducted using Outlook and Webmail.  As a result of COVID‑19, some of the searches were conducted from home and others from the offices of Power Ledger.  Searches using Webmail were often used when searches were undertaken from home on a personal home computer.  The plaintiff explains that there are search functionality differences between searches using Outlook and Webmail.  A Webmail browser search returns a thread represented as a single line and does not flag which emails are responsive to the search terms.  Without being aware of this a person could find the first email that contains the search term in a thread and erroneously believe that it is the only relevant one.  Multiple threads are clustered as a single line in the searches summary even when there may be several threads inside a single search summary.  Further, if you flag an email in Outlook as having been sent, and then later search that topic in Webmail, it can at times show the entire thread as having been flagged when it is only the one email and the thread which has been flagged and sent.  The outcome of all those things is that these functionality features may result in a person conducting a search using keywords failing to uncover relevant emails.

8. The plaintiff says that Power Ledger no longer retains records of any emails prior to 5 September 2017. On 5 September 2017 Power Ledger's email system moved from PrivateEmail to Gmail.  PrivateEmail emails were supposed to be migrated but unfortunately this did not occur.

The defendants' analysis of documents belatedly discovered by plaintiff

1. The defendants submit that, prior to 19 October 2020, the plaintiff failed to discover documents that were discoverable, that the documents are relevant to issues in the proceeding, that they contradict evidence given by the plaintiff and hence the defendants cross‑examination of the plaintiff and Mr Bulich without the benefit of the documents caused those cross‑examinations to 'miscarry', which has prejudiced the defendants so as to amount to oppression of the defendants.

2. In his oral submissions, Mr Dawson referred to some documents which the plaintiff failed to discover before 19 October 2020 but principally relied upon the explication of David Kim in his affidavit affirmed on 4 December 2020.  In part 3 of his affidavit Mr Kim analyses the documents discovered after 19 October 2020 under the categories I have set out above.

Documents relating to Power Ledger's Bounty Campaign

(i) the involvement of bots and professional bounty hunters

1. The first document, document 5S ‑ 016, is a screenshot of text messages between Mr Bulich and the plaintiff on 27 December 2018 discussing the article on the medium.com website entitled 'More Bounty in Your Bounty' (the More Bounty Article).  This is one of 17 documents discovered by the plaintiff in her fifth supplementary discovery affidavit of 9 November 2020 which Ms Lavan, a solicitor assisting in the conduct of the matter on behalf of the plaintiff, admits is relevant to the issues in dispute with respect to the Bounty Campaign.  Mr Kim says that the document is inconsistent with evidence given by the plaintiff in the course of her cross‑examination.  Counsel for the plaintiff, Mr Bennett, submitted that the document is not inconsistent with the plaintiff's evidence.

2. It is not obvious to me that the document contradicts the plaintiff's evidence, or that it proves some part of the defendants' case, or contradicts some part of the plaintiff's case.  However, those are not matters about which I can make any informed judgment without further cross‑examination of the plaintiff and further submissions on behalf of the defendants which place the evidence in the context of the whole of the relevant evidence.

3. Document 4S+436 was produced by the plaintiff on 27 October 2020 in response to the second notice to produce.  Documents 5S‑017, 5S‑023 and 5S‑035 were discovered by the plaintiff by her fifth supplementary discovery affidavit.  Ms Lavan admits they are relevant to the issues in dispute with respect to the Bounty Campaign.  Mr Kim says that they are inconsistent with evidence given by the plaintiff in cross‑examination.  Mr Bennett says they are not.  As with document 5S-016, it is not obvious to me that any of the documents contradict the plaintiff's evidence or prove some part of the defendants' case or contradict some part of the plaintiff's case but I can make no informed judgment on those matters without further cross‑examination of the plaintiff and submissions by the defendants which place the evidence in the context of the whole of the relevant evidence.

4. Documents 4S+127, 4S+415, 4S+432, 4S+437 and 4S+440 were produced by the plaintiff on 27 October 2020 in response to the second notice to produce.  They are various versions of the More Bounty Article.  The defendants submit they are relevant to whether Bounty Campaign Participants included Bot Accounts and Professional Bounty Hunters.  The plaintiff submits that they have remote, if any, forensic relevance.

5. It is not obvious to me that the various versions of the More Bounty Article constitute an admission by the plaintiff that Bounty Campaign Participants included Bot Accounts and Professional Bounty Hunters.

(ii) the plaintiff's involvement in Power Ledger's Bounty Campaign

1. In their particulars of justification, the defendants say that at all material times the plaintiff knew about and permitted the matters stated in [5] ‑ [31] of their particulars.  In her reply, the plaintiff denies that particular.  In the course of cross-examination when she was asked if Mr Yarrow was paid for promotions as part of a bounty campaign, the plaintiff said:  'I don't know. I was not involved in the bounty campaign'.  Later, when it was put to her that she was involved in the bounty campaign, the plaintiff said:  'I obviously knew about the bounty campaign but I was not involved in running the bounty campaign'.

2. The defendants submit that documents 5S‑001 and 5S‑002 which the plaintiff discovered in her fifth supplementary discovery affidavit are inconsistent with her pleading and the evidence referred to.

3. The documents are Telegram messages.  It is again not obvious to me that the documents contradict the plaintiff's evidence or that they prove some part of the defendants' case or contradict some part of the plaintiff's case.  However, those are not matters about which I can make any informed judgment without further cross‑examination of the plaintiff and further submissions on behalf of the defendants which place the evidence in the context of the whole of the relevant evidence.

The Elon Musk rumour

(i) the plaintiffs conduct with respect to the Elon Musk rumour

1. In their defence, the defendants allege that by making certain Twitter posts and Telegram messages and by failing to respond to certain queries the plaintiff encouraged a rumour that Elon Musk was interested in Power Ledger and had met with the plaintiff to discuss that interest.  The defendants further allege that the plaintiff failed to take reasonable steps to correct the falsity of the rumour knowing that the rumour was circulating among people interested in Power Ledger and her conduct occurred during the ICO Proper and was misleading.  The plaintiff denies those allegations in her reply.

2. In cross‑examination Mr Dawson put to the plaintiff that the idea of the plaintiff and Mr Musk doing something together got picked up in the media and referred the plaintiff to an article in The Huffington Post.  In answer to the question whether she became aware of the article at the time it was published the plaintiff said:

   I can't remember. I don't think I spoke to the journalist at all. I may have become aware of it, at the time … I definitely became aware of it after the AFR article was published.  But I can't remember if I had seen it prior.

3. The plaintiff also said in relation to statements in the article about Elon Musk and Power Ledger that she did not know what the journalist was referring to.

4. The plaintiff failed to discover three documents relating to the Elon Musk rumour until her fifth supplementary discovery affidavit.  One of those documents is significant.  Document 5S ‑ 046 is a chain of emails between the plaintiff and Siobhan Kenna, a Huffington Post journalist, regarding the article on The Huffington Post website entitled 'Power Ledger:  The Aussie Company That's Using Blockchain to Digitise Energy'.  The email chain is evidence that the plaintiff participated in an interview with Ms Kenna before the article was published and saw the article before the publication of the $2 Billion Article.

5. Mr Bennett concedes that the plaintiff should have, and failed to, discover the chain of emails between her and Ms Kenna.  Mr Bennett submitted as explanation the plaintiff's evidence that she did not remember speaking to the journalist and still does not.  I understand that explanation to be in effect that the plaintiff did not conduct a key word or other search that would have disclosed emails between herself and Ms Kenna because she had no recollection of having spoken to Ms Kenna in connection with the article.  I accept that explanation.  The failure to disclose the email chain does not evidence a deliberate failure to give proper discovery or a conscious refusal to engage with her discovery obligations.

6. In her fifth supplementary discovery affidavit the plaintiff discovered two other documents which relate to Elon Musk.  They are emails from the plaintiff to Dave Martin, the CEO of Power Ledger, containing drafts of the letter which the plaintiff sent to Elon Musk, the final version of which was earlier discovered by the plaintiff.  Without cross‑examination of the plaintiff or other evidence I am not satisfied that the drafts have any evidentiary significance.

(ii) non‑disclosure agreement with Tesla

1. In their particulars of justification, the defendants allege that the plaintiff did not meet Elon Musk on 30 September 2017 or subsequently to discuss Power Ledger.  The plaintiff admits that allegation and further pleads that Power Ledger began discussions with Tesla in about September 2017 and subsequently signed a nondisclosure agreement which thereafter prevented the plaintiff and Power Ledger from making any public statements concerning Power Ledger's dealings, discussions or involvement with Tesla without its consent.

2. The defendants say that 27 documents discovered by the plaintiff in her fifth supplementary discovery affidavit relate to the dealings, discussions or involvement between Power Ledger and Tesla which may have been the subject of a nondisclosure agreement.

3. Mr Bennett submitted that each and every one of the documents is wholly irrelevant to the matters in issue but were discovered pursuant to the order because they contain the word Tesla.

4. Mr Dawson maintained that the documents are relevant to the nondisclosure agreement which the plaintiff referred to.  Mr Dawson said for example that the emails which refer to the purchase of a Tesla motor vehicle are relevant because the nondisclosure agreement relates to the purchase of a Tesla motor vehicle.  Mr Bennett submitted that that is wrong, and the nondisclosure agreement refers to Project Kone in South Australia.

5. It is not obvious that the documents relate to the nondisclosure agreement or are relevant to any matter in issue, and without cross‑examination of the plaintiff or further evidence I am unable to form an informed opinion on whether all or any of these documents is relevant or discoverable.

The need to secure the cooperation of an authorised retailer

1. The defendants submit that documents 5S‑252 and 5S‑230 relate to the allegations at particular 19(a)(I) of [32A] of the substituted defence that the plaintiff publicly made misleading statements and/or caused Power Ledger to make misleading statements by making favourable statements about the likelihood of Power Ledger succeeding as a business and by omitting to disclose in her and/or its public statements the significance of certain vulnerabilities in Power Ledger's business plan, namely the fact that without the cooperation of licensed or registered electricity retailers (Authorised Retailers) Power Ledger was unlikely to succeed as a business.  The defendants also allege that the documents are inconsistent with the plaintiff's amended reply.

2. The documents broadly relate to Power Ledger's business and strategic plans and what the defendants refer to as 'vulnerabilities'.  It is not obvious that they are inconsistent with the plaintiff's pleading.  I am unable to assess the importance or significance of these documents without cross‑examination of the plaintiff or further evidence.

The need for legislated of and/or rule changes

1. It is part of the defendants' case that the plaintiff failed, or failed to cause Power Ledger, to disclose certain vulnerabilities in Power Ledger's business plan including that without legislative changes the peer to peer electricity trading possible on a microgrid or embedded network could not be replicated on interconnected distribution networks by reason of the compulsory charges and liabilities that are imposed on Authorised Retailers that use the Grid.

2. The defendants say that each of documents 4S-017, 5S-047, 5S‑052, 5S-085, 5S-227, 5S-230 and 5S-195 are relevant to that issue and documents 5S-047, 5S-085, 5S-227 and 5S-230 are inconsistent with evidence given by the plaintiff.

3. Document 4S‑017 appears to be a draft of a business plan.  Document 5S-047 is an email attaching a copy of document 4S‑017.  Document 5S‑052 is an email from the plaintiff attaching a version of a business plan.  Document 5S‑085 is an email attaching what is said to be a proposal from the plaintiff.  Document 5S‑227 is an email from the plaintiff referring to Origin.  Document 5S‑230 is an email from the plaintiff referring to a strategy plan document.  Document 5S‑195 is an email to the plaintiff and others which appears to be referring to power companies participating in peer to peer electricity.

4. On the face of it, these documents should have been discovered.  The plaintiff says that documents 4S-017 and 5S-052, and other documents discovered pursuant to orders to discover business and strategy plans, are draft versions of the same document, do not differ materially from the final version of the document which was discovered and hence are not relevant to any matter in issue.

5. In the absence of cross‑examination of the plaintiff or further evidence I am unable to form an informed opinion whether and if so to what extent the documents assist the defendants and hence the prejudice occasioned to the defendants by the plaintiff's failure to discover them before 19 October 2020.

The Origin trial

(i) authorisation to share information

1. Document 5S‑280 is an email from the plaintiff to Vinod Tiwari.  The defendants say that it is relevant to whether Power Ledger could not share certain information concerning the trial with Origin Energy without its authorisation.  In her reply, the plaintiff pleads that Power Ledger could not share certain information concerning the trial with Origin Energy without its authorisation.

2. On the face of it, the document appears to relate to getting approval from Origin before making statements.  In the absence of cross‑examination of the plaintiff or other evidence I am unable to form an informed opinion as to its significance or importance.

(ii) the plaintiff's involvement in the Origin trial

1. In the course of cross‑examination, the plaintiff said:  'I was not involved in the Origin trial, so I'm not across all of the details, but it was a desktop trial, yes'.  In answer to further questions the plaintiff gave further answers about the extent of her involvement in or in relation to the Origin trial.  The defendants say that documents 5S‑192, 5S‑194, 5S‑197, 5S‑202, 5S‑203, 5S‑204, 5S‑212, 5S‑222, 5S‑223, 5S‑227, 5S‑246, 5S‑254, 5S‑255, and 5S‑263 are relevant to that question.  Only 5S‑203 and 5S‑204 are in evidence on this application.

2. The plaintiff disputes that her obligation to give general discovery required her to discover these documents.  The plaintiff submitted that the plaintiff was under no obligation to disclose all documents which demonstrated that she was less involved in the business during the periods she was on maternity leave or involved in the City of Perth.

3. I am not satisfied that the plaintiff's failure to discover the documents evidences a deliberate failure to give proper discovery or a conscious refusal to engage with her discovery obligations.  In the absence of cross‑examination of the plaintiff or further evidence I am unable to form an informed opinion as to the significance of the documents and whether or to what extent they assist the defendants in relation to the matter in issue, which is the defendants plea that the plaintiff publicly made misleading statements, or caused Power Ledger to make misleading statements, by making favourable statements about the likelihood of Power Ledger succeeding as a business and by omitting to disclose in her or its public statements unfavourable information regarding Origin Energy's trial of the Power Ledger platform.

Funding of the Renew Nexus project

1. The defendants plead that, prior to the publication of the matters complained of, Power Ledger uploaded onto its website a statement that in November 2017 the Australian government (through the Smart Cities and Suburbs Programme) awarded Power Ledger $2.57 million for a cutting-edge project in Fremantle (the Renew Nexus Project).  In her reply, the plaintiff did not admit that allegation and said that Power Ledger publicly stated that the Australian government announced that it would provide $2.57 million in funding for a cutting-edge project in the city of Fremantle with $5.68 million being funded through project partners including Power Ledger.

2. The defendants say that the 37 documents made available on 4 November 2020 are various versions of the modal window on the Power Ledger website used to display information about Renew Nexus.  The modal window was a pop-up window in front of the original window which opened the modal until the modal has been closed.  The defendants say that the documents indicate that, from at least 1 December 2018 until 20 December 2018, the modal window stated as stated in the defendants' defence and on or about 20 December was amended to state as stated in the plaintiff's reply.  The defendants submit that the 37 documents are inconsistent with the plaintiff's pleading.

3. In her affidavit sworn 11 December 2020 the plaintiff explained her failure to discover the documents relating to the modal window before 4 November 2020.  On 1 November 2020 the plaintiff was served with the defendants third notice to produce which required her to produce 'any webpage or any part of a web page (including any modal window) on the website describing the Renew Nexus Project (Renew Nexus Page) as the page appeared in December 2018 and January 2019, emails created from December 2018 to the present referring to any amendment or proposed amendment to the Renew Nexus Page and any drafts created from December 2018 to the present of any amendments or proposed amendments to the Renew Nexus Page.  The plaintiff says that, before she was served with the Third Notice to Produce she was not aware that Power Ledger had historically published information on its website concerning the Renew Nexus Project by a modal window accessible from a page which contained a map of the world. Before that time she did not know what a modal window was.

4. On receiving the Third Notice to Produce the plaintiff made inquiries of Power Ledger's front end developers and a contractor.  The plaintiff was informed that Power Ledger had changed its publishing tools and no longer used modal windows and did not retain old versions of its website or details of edits to the content of the website but that there was a mechanism to review historical versions of the modal window on Power Ledger's website on a publicly available website called the Wayback Machine. The plaintiff obtained old versions of its website by accessing the Wayback Machine website.

5. I find that the plaintiff's failure to discover the various versions of the modal window prior to 4 November 2020 was not the result of or evidence of a deliberate failure to give proper discovery or a conscious refusal by the plaintiff to engage with her discovery obligations.

6. I infer that the defendants' lawyers were aware before 1 November 2020 of the modal window, and the December 2018 changes in the modal window.  I draw that inference from the defendants' description of the document required to be produced by the Third Notice to Produce and from the Banki Haddock Fiora tax invoices which show that on 4 October 2020 Ms Olsen, a solicitor assisting in the conduct of the matter on behalf of the defendants, 'review[ed] Wayback Machine archives for Power Ledger on Medium website'.

7. The plaintiff's failure to discover the various versions of the modal window prior to 4 November 2020 inconvenienced the defendants' legal representatives and in particular Mr Dawson in that the documents produced by the plaintiff became available to the defendants during rather than before commencing the cross‑examination of the plaintiff.  However, that has not prejudiced the defendants so as to amount to oppression of the defendants.  The defendants had become aware of documents relating to the modal window prior to Mr Dawson commencing cross‑examination of the plaintiff on Monday 2 November and possibly as early as 4 October 2020.  Mr Dawson had the documents produced by the plaintiff during the cross‑examination and in cross‑examination the plaintiff confirmed that, prior to the date of publication of the matters complained of, the modal window contained a statement to the effect pleaded by the defendants.

Misleading statements in all relation to the POWR token

1. The defendants say that documents 5S‑219, 4S‑005, 4S‑007, 4S‑009, 5S‑211, 5S‑180 and 5S‑224 relate to the defendants' case that Power Ledger did not know and/or had not developed a plan for how the Token Model would function in practice.

2. I find that the documents are discoverable.  The plaintiff did not discover the documents before the court made orders as to the discovery of specific categories of documents.  The issue concerning whether the plaintiff had developed a plan for how the token model would function in practice is a complex issue.  I find that the plaintiff's failure to discover the documents referred to was not in bad faith and does not establish or evidence a deliberate failure to give proper discovery or a conscious refusal to engage with her discovery obligations.  In the absence of cross‑examination of the plaintiff or other evidence I am not able to form an informed opinion as to the significance of the documents and the assistance they might provide to the defendants in putting their case and hence the prejudice to the defendants occasioned by the plaintiff not having discovered the documents earlier.

The plaintiff's involvement generally at Power Ledger

1. The defendants' particulars of justification include that at all material times the plaintiff was intimately involved in Power Ledger's day‑to‑day affairs, was responsible for deciding Power Ledger's direction and oversaw all aspects of Power Ledger's business.  In her reply the plaintiff pleads that as a director acting on a number of the Board of Directors (sic) the plaintiff was responsible for formulating the strategic direction of Power Ledger and:

   (1)between May 2016 and July 2019 David Martin was the managing director of Power Ledger during which time he oversaw all aspects of the power Ledger business;

   (2)between May 2016 and September 2018 the plaintiff worked part-time at Power Ledger due to taking leave for the birth of her children and as a result had less involvement in the day to day affairs and strategic aspects of Power Ledger's business.  During these periods the plaintiff was one of the spokespersons for Power Ledger and was involved in the corporate development aspects of the Power Ledger business; and

   (3)between October 2017 and February 2019 whilst the plaintiff held office as the Deputy Lord Mayor and Acting Lord Mayor of the City, her active day-to-day involvement with Power Ledger further decreased.

2. In cross‑examination the plaintiff was asked a number of questions about and gave a number of answers which referred to her involvement in the running of Power Ledger's business between May 2016 and December 2018.  The defendants say that 52 documents which the plaintiff discovered in her fifth supplementary discovery affidavit and which are referred to at [107] of Mr Kim's affidavit are inconsistent with evidence given by the plaintiff in cross‑examination.

3. My initial impression is that it would be oppressive to require the plaintiff to discover every document which evidenced or referred to her receiving or sending a communication of any nature (including copies of emails sent to others), doing something or being present on any occasion relating to Power Ledger, between May 2016 and December 2018.  The discovery of such documents is not necessary for fairly disposing of the proceeding.

4. Only four of the 52 documents were received in evidence on the hearing of this application.  I am unable to form any informed opinion whether the documents are relevant to any matter in issue or should have been discovered pursuant to the plaintiff's obligation to give general discovery.  In the absence of further cross‑examination of the plaintiff or other evidence I am unable to form an informed opinion about the extent of any prejudice caused to the defendants by the failure of the plaintiff to discover the documents earlier.

The plaintiff did not deliberately fail to give proper discovery

1. Mr Dawson described the nature of the plaintiff's deliberate failure to give proper discovery as 'closing and leaving closed the cupboard doors containing the relevant documents'.

2. The documents discovered by the plaintiff after 19 October are electronically stored information (ESI) including emails, computer files and social media pages. I am not persuaded by Mr Dawson's metaphor to equate traditional paper-based discovery with the discovery of ESI. ESI is not stored in manila folders, filing cabinets or cupboards; it is stored electronically in various forms and in a range of virtual locations.  ESI is stored on an electronic medium, usually a computer or server which is accessed through some form of computer program.  ESI by its nature is voluminous.  It is also dynamic; the information can change with time or through various operations.  A major difference is the ever-increasing volume of electronic information.  Further, unlike most paper-based discovery, archived emails and other ESI typically lack a coherent or any filing system.  Material posted or accessed on websites presents numerous search challenges.

3. The sheer volume of electronic documents means that it is reasonable for a party to make use of keyword searches to identify relevant documents to be reviewed.  A too narrow list of terms may lead to relevant documents being omitted.  However a too wide list of terms may lead to too many hits and thus documents to be manually reviewed.  I am not prepared to infer from the imperfect searches by the plaintiff for electronic information that she consciously refused to engage with her discovery obligations.

4. In this case, the relevant material consisted not only of emails and computer files stored on the plaintiff or Power Ledger's computers but also posts and pages stored on the servers of social media platforms such as Telegram, Twitter and Medium.  Searching and retrieving material from such sources poses challenges not akin to opening cupboards and searching manila folders or filing cabinets.

5. The plaintiff was unable to search for and retrieve historical online material until she learned that such searches could be made using the Wayback Machine website. I doubt whether the failure to search for and retrieve material in that way is a failure to carry out a reasonable search.  In any event, I find that the plaintiff's failure to search for and retrieve material in that way was not, in the circumstances of this case, a deliberate failure to give proper discovery or a conscious refusal by the plaintiff to engage with her discovery obligations.

6. I find that the plaintiff failed to discover discoverable documents.  A number of factors contributed to that failure.  First, the plaintiff and her solicitors took a too narrow view of some of the matters in question in this action.  That led to the failure of the plaintiff to discover some business plans, strategic plans and revenue models for Power Ledger.  I found that the plaintiff and her legal representatives were wrong in the view they took of the matters in question in this action.  I find that the plaintiff and her solicitors held that view in good faith and the plaintiff's failure to discover those documents until ordered to do so does not evidence a conscious refusal to engage with her discovery obligations.

7. Second, it appears that some of the plaintiff's searches and those done by staff of Power Ledger failed to reveal some documents because they used the Webmail search facility and were unaware of relevant functionality features of the system.

8. Third, the selection by the plaintiff and staff of Power Ledger assisting her of keywords for searches failed to reveal some discoverable documents that would have been revealed by the selection of more or different keywords.

9. Fourth, in some instances the plaintiff or staff of Power Ledger assisting her have failed to bring up or record documents they should have brought up or recorded in the course of their searches in circumstances where they were making searches on laptops at home and have failed to be as thorough or careful as they should have been.

10. Fifth, some electronic information was historical information which had changed by the time the plaintiff conducted her searches and she did not know that the historical information existed or could be retrieved by use of the Wayback Machine website.

11. I am not satisfied that the plaintiff deliberately failed to give proper discovery or consciously refused to engage with her discovery obligations.

The plaintiff has not occasioned unjustifiable oppression to the defendants

1. The defendants have been prejudiced by the plaintiff's failure to discover documents she ought to have discovered earlier in a number of ways but I find that that prejudice does not amount to unjustifiable oppression.

2. First, the defendants were put to the cost of making the applications for discovery of 8 October and 5 November 2020.  The plaintiff should pay the defendants' costs of those applications.  That is the usual and appropriate way for compensating a party put to the expense of an interlocutory application they should not have been put to.

3. Second, the cross‑examination of the plaintiff and Mr Bulich by counsel for the defendants was prejudiced by senior counsel not having available to him documents which should have been but were not discovered by the plaintiff earlier.  Mr Dawson submitted that the cross‑examination 'miscarried' because it was done on a false basis.  I assume Mr Dawson means that the cross‑examination did not attain the outcome that may have resulted if he had had the relevant documents available to him.  It is impossible to assess how the cross‑examination may have been affected by the late discovered documents if they had been available prior to the cross‑examinations.

1. The appropriate way to deal with this matter is to allow counsel for the defendants to further cross‑examine the plaintiff and Mr Bulich with the documents available to counsel.  Mr Dawson submits that in that event the plaintiff will have the advantage of knowing what documents she may be cross‑examined on and how they might be deployed by counsel in cross‑examination.  That proposition must be considered not in the abstract but in light of the relevant issues and documents.  I have given consideration to that matter and conclude that no substantial prejudice will be caused to the defendants on that account.  Indeed, counsel will have the advantage of the plaintiff's evidence given on oath without reference to the documents.  In his analysis of the documents discovered by the plaintiff after 19 October 2020, Mr Kim says that a large proportion of the documents contradict evidence given by the plaintiff. If that is so it will provide fertile ground for cross‑examination.

2. The defendants also submit that the plaintiff has failed to identify the true nature of her case.  I do not accept that submission.  Mr Dawson complained that the plaintiff's evidence in cross‑examination about her lack of involvement in day-to-day activities of the company during 2017 and 2018 took the defendants by surprise.  It should not have done.  The plaintiff's case is adequately set out in her pleadings, her counsel's opening address and her evidence‑in‑chief.

3. The defendants will be put to additional cost by reason of the cross‑examination of the plaintiff and Mr Bulich being bifurcated and possibly duplicated in some respects.  That will have cost consequences for the plaintiff.  The appropriate course is to compensate the defendants by awarding them the wasted costs thrown away by the bifurcated and possibly duplicated cross‑examination.

4. The prejudice caused to the defendants by the failure of the plaintiff to discover earlier the documents she discovered after 19 October 2020 may be addressed by allowing the defendants to further cross‑examine the plaintiff and Mr Bulich on the resumption of the trial and by appropriate costs orders.

The plaintiff has not brought the administration of justice into disrepute

1. I am not satisfied that the administration of justice has been brought into disrepute by the failings in the plaintiff's discovery, or will be brought into disrepute by the resumption and completion of the trial.

2. A major goal of the system of justice is the fair and just determination of the issues bona fide in contention between the parties.  The trial is well advanced.  The issues between the parties may be resolved fairly and justly by the resumed trial.  The prejudice caused to the defendants by the plaintiff's discovery failings may be appropriately dealt with.  In those circumstances it does not bring the administration of justice into disrepute to resume the trial and determine the issues between the parties.

The proceedings should not be stayed

1. The defendants acknowledge in their written submissions that the power of a court to stay proceedings permanently on the ground of abuse of process must be exercised with caution and only in the most extreme cases.  The cases referred to by Mr Dawson such as the Federal Treasury case[7] illustrate that principle.

   [7] Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (Permanent Stay) [2019] FCA 802.

2. The court would only permanently stay a proceeding at or near the end of a trial in very exceptional circumstances where it is satisfied that the plaintiff's abuse of process is such that she has thereby forfeited the right to have her claim determined.  The existence of the power to stay a proceeding for abuse of process is in the public interest, but in deciding whether or not to exercise the power, the court must examine the circumstances scrupulously in order to ensure that to stay the claim is a proportionate means of achieving the aim of controlling the process of the court and deciding the case justly.

3. This is not an appropriate case in which to stay the proceeding instead of giving judgment on the facts as established on the whole of the evidence, including further cross‑examination.

4. The failings of the plaintiff's discovery are serious, but they do not justify the extreme step of permanently staying the proceeding.  The more appropriate course is to give the defendants leave to recall the plaintiff and Mr Bulich for further cross‑examination in the light of the further documents discovered.  The plaintiff faces an order for costs in respect of work wasted and thrown away by her failure to give proper discovery.  The trial may be resumed and completed, with appropriate orders, without occasioning injustice to the defendants.  It would not be proportionate or just to permanently stay the proceeding without determining the plaintiff's claims on their merits.

Basis on which trial should resume

1. In the alternative to the action being permanently stayed, the defendants seek orders that the hearing of the trial be resumed on the following terms.

Costs

3.1The plaintiff pay the defendants' following costs:

3.1.1the defendants' costs of, and incidental to, the defendants' applications for further and better discovery filed by the defendants on 8 October 2020 and 5 November 2020 (including any reserved costs);

3.1.2the defendants' costs of, and incidental to, cross‑examining and preparing for the cross‑examination of the plaintiff and Mr Bulich (such costs to include the costs of four and a half days of the trial commencing 26 October 2020) (including any reserved costs); and

3.1.3the defendants' costs of, and incidental to, the present application (including any reserved costs).

3.2The costs in 3.1 are to be assessed on an indemnity basis, or, alternatively, without regard to any of the limits set and any of the hourly or daily rates set under applicable costs scale determinations, or, alternatively, fixed as a lump sum.

3.3The proceedings be stayed pending the payment of the costs in 3.1.

Further discovery

3.4.The plaintiff

3.4.1 consult with Mr Christopher Hatfield of FTI consulting (or other independent IT expert):

(a)to determine whether Power Ledger emails prior to 5 September 2017 can be restored or retrieved;

(b)to obtain advice about appropriate searches of electronic material to be conducted in compliance with order 3.5 and the court's previous discovery orders of 9 October 2020 and 9 November 2020;

3.4.2to the extent she has not already done so:

(a)take such steps as Mr Hatfield (or other expert) advises to achieve the restoration or retrieval of the emails referred to in order 3.4.1 (a) above;

(b)conduct such searches as Mr Hatfield (or other expert) advises to comply with order 3.5.

The plaintiffs discovery affidavit referred to in order 3.5 is to include a summary of the advice received from Mr Hatfield (or other expert) and the steps and searches taken by the plaintiff in accordance with that advice.

3.5By [date], the plaintiff give discovery on affidavit of all documents caught by the categories listed in Schedule A to this application (but not including any documents already discovered in these proceedings) and any documents caught by the court's orders of 9 October 2020 and 9 November 2020 identified as a result of the further searches recommended by Mr Hatfield (or other expert).

3.6By [date], the documents discovered pursuant to order 3.5 be served on the defendants' legal representatives, subject only to any redactions for client legal privilege.

Amendments to defence

3.7The defendants be granted leave to file an amended substituted defence incorporating the amendments listed in Schedule B annexed to this application.

Plaintiff and Bulich be recalled for further cross-examination

3.8At any resumption of the trial, the defendants have leave to recall the plaintiff and Mr Bulich for further cross-examination.

Further directions for resumption of trial

3.9The matter be listed on [date] for further directions, and, if appropriate, allocation of further hearing dates for the resumption of the trial.

1. I will deal with the defendants' applications to amend their defence, for further discovery and for leave to recall the plaintiff and Mr Bulich for further cross-examination and then the defendants' applications for costs orders.

Amendment of the defence

1. The defendants seek leave to amend their defence in accordance with the proposed amendments set out in schedule B to their amended application of 14 December 2020.

2. The defendants seek to amend the particulars to [32A] of their defence and to amend the table in schedule 3.  The proposed amendments to [32A] are to add multiple new particulars and in some instances add to existing particulars.  The proposed amendments are extensive ‑ they occupy more than four A4 pages.

3. The plaintiff does not oppose most of the proposed amendments but opposes the amendments to insert new particulars 68A(a)(ii), 68A(b)(ii) insofar as it refers to Vector Ltd, 68A(i) insofar as it refers to Vector Ltd, 68D and 68E(b).

4. At [32A] of their defence, the defendants plead that the imputation that the plaintiff, by her creation, promotion and operation of Power Ledger, misleads the public and investors is true.  The particulars are organised in this way.  Particular 1 repeats particulars 1 ‑ 4 of [30A] which are concerned with the plaintiff's involvement in and responsibility for acts and omissions of Power Ledger.  Particular 2 is that the plaintiff has misled the public and investors in that she has:

   …

   (c)made misleading statements about, and/or caused Power Ledger to make misleading statements about the likelihood of Power Ledger succeeding as a business to the public and investors, including by omission, as described in paragraphs 19 to 68 below; and

   …

5. The proposed amendments to the particulars which the plaintiff opposes are new particulars of the defendants' allegation that the plaintiff made misleading statements about, and/or caused Power Ledger to make misleading statements about, the likelihood of Power Ledger succeeding as a business to the public and investors, including by omission.

6. Proposed particular 68A(a)(ii) is:

   The plaintiff publicly made the following statements, and/or caused Power Ledger to make the following statements:  During the token sale, Power Ledger also announced 2 new major deals that have undoubtedly added to the momentum of Australia's highest trending company.  The first, with Origin Energy in Australia, that will run until the end of 2017 and the customers using the Power Ledger platform to either buy or sell excess energy', which statement was set out in article prepared by Power Ledger entitled 'Power Ledger named Western Australia's Highest Trending Company in Techboard WA Awards' and made available on the Power Ledger Website on or about 6 December 2017.

7. I will allow that amendment.  It introduces a new allegation but it is related to the defendants' existing case that the plaintiff made, or caused to be made, misrepresentations about the Origin trial.

8. Proposed particular 68A(b)(ii) is:

   The plaintiff sent an email to David Antonii on 29 November 2018 at 4:17 pm which attached a slide deck that, on page 15, identifies Origin Energy and Vector Ltd as Power Ledger projects for trading across the regulated electricity network (Information Pack).

9. The plaintiff objects to this proposed particular insofar as it refers to Vector Ltd.  I will allow the amendment but not insofar as it relates to Vector.  That opens up an entirely new case ‑ that the plaintiff made or caused to be made misrepresentations about Power Ledger's dealings with Vector.  Further, Vector is a New Zealand company.  The defendants' case has been confined to Power Ledger's business in relation to the Australian electricity market and misleading conduct by the plaintiff in relation to Power Ledger's business in that market.

10. Proposed particular 68A(i) is:

    The plaintiff sent an email to Sarah Turner, a member of the public, which attached an FAQ document that identified Origin Energy and Vector Ltd as Power Ledger's projects for trading across the regulated electricity network (FAQ document).

11. The plaintiff objects to that particular insofar as it refers to Vector Ltd.  I will allow that amendment but not insofar as it relates to Vector for the same reason as the proposed amendment to particular 68A(b)(ii).

12. Proposed particular 68D is:

    The statement identified in paragraph 68A(a)(iii) was misleading in that it was contrary to the fact that, at the time the statement was made, Power Ledger's sale of the Power Ledger Platform with American Powernet was a trial to use the Power Ledger Platform to enable American Powernet to trade solar power generated from the roof of its headquarters building and carport in Wyomissing, Pennsylvania with two of its office park neighbours.

13. I will not allow that amendment.  In oral submissions, Mr Dawson acknowledged that the defendants had material permitting them to make that amendment if they had wished to do so earlier.

14. Proposed particular 68E(b) is:

    The emails identified in paragraph 68A(b)(i) above were misleading in that the Capability Statement, the Information Pack and the FAQ Document were contrary to the fact that, at the time those emails were sent, Vector Ltd decided, in or prior to May 2018, not to proceed with an implementation of the Power Ledger Platform on account of issued Vector Ltd had with Power Ledger's technology.

15. I will not allow that amendment for the same reason that I have not allowed the other amendments relating to Vector.

Further discovery

1. The defendants seek further discovery of a large number of categories of documents covering a wide range of matters.  In the usual course, the defendants would have to demonstrate that the documents sought relate to a matter in question and that it is on the cards that the plaintiff has the documents in her possession, custody or power.  However the defendants submit in effect that the plaintiff should be required to give further discovery as the price for the trial continuing notwithstanding the previous deficiencies in the plaintiff's discovery.

2. Mr Bennett submitted that the plaintiff has provided a full discovery and indeed her fifth supplementary discovery affidavit goes further than required.  She sought to correct previous deficiencies arising from searches with Webmail by using an Outlook search guided by an IT expert, FTI Consulting.  Mr Bennett submitted that the plaintiff produced some drafts of documents of no forensic significance because they are drafts of the business plan that has already been put to her in cross‑examination, but she did so to demonstrate her willingness to complete the task of discovery and to satisfy the defendants that she has committed to the task of discovery.

3. The court has the jurisdiction and power to make an order for discovery under its inherent jurisdiction. The court should exercise that power if it is necessary to secure justice between the parties and avoid abuses of the court's processes by ensuring a fair and satisfactory trial.

4. As a matter of discretion, I will order the plaintiff to give further discovery to ensure that the trial is conducted fairly and can be seen to have been conducted fairly.

5. The documents of which the defendants now seek discovery are set out in Schedule A to the defendants' amended application of 14 December 2020.  The list consists of 14 categories of documents, many of which contain multiple subcategories.

6. On behalf of the plaintiff, Mr Bennett submitted that many of the categories of documents in Schedule A are irrelevant to any issue in the proceeding and unnecessary for the fair determination of the proceeding.

7. Mr Bennett referred to category 1 which refers to all documents sent or received by the plaintiff referring to:

   (a)the bounty campaign described in exhibit 462;

   (b)the preparation of documents, versions of documents, reports and articles specified at sub sub‑items (i) ‑ (x); and

   (e)The Huffington Post article published 5 October 2017 entitled 'The Aussie Company That's Using Blockchain to Digitise Energy'.

8. A, if not the, principal forensic utility of the documents to the defendants appears to be to show or ascertain the involvement of the plaintiff in the preparation of the documents and the matters to which they relate.  In the circumstances of this application the court will err on the side of generosity in ordering further discovery. I will order discovery in relation to those documents

9. Category 2 is 'all documents (including all communications sent or received by the plaintiff and/or John Bulich and/or David Martin and/or Amie Rigas and/or Vinod  Tiwari referring to, or considering' the matters set out in subparagraphs (a) ‑ (g) and (i) ‑ (m).

10. Mr Bennett submits that if the plaintiff is required to give discovery of those categories of documents, the documents should be limited in time.  I agree.  Three of the subcategories are limited to documents brought into existence prior to 1 January 2019.  All of the category 2 documents should be limited to documents brought into existence prior to 1 January 2019.

11. Mr Bennett further submits that the category 2 documents extend to any document that refers to or considers the specified matters.  This will include documents on social media databases such as Telegraph, Facebook, LinkedIn and Twitter which would involve an enormous search. It is not reasonably necessary for fairly determining this matter that the plaintiff give discovery of such documents which are on databases available to the defendants and other members of the public.  Indeed, it is apparent from Banki Haddock Fiora tax invoices attached to Ms Norman's affidavit affirmed on 4 December 2020 that the defendants' solicitors have searched websites including Wayback Machine archives for Power Ledger on the Medium website.  I will not require the plaintiff to give discovery of documents available to the public on a website or application.

12. Category 3A is all documents comprising final versions of Power Ledger business plans and strategy plans. I will order discovery of those documents brought into existence prior to 1 January 2019.

13. The defendants do not press category 3 as sought in their original application.

14. Category 4 is all documents recording communications between Power Ledger and the persons listed in paragraphs (a) ‑ (c).  Mr Bennett submits that these documents relate to the correction to the modal window and are not relevant to any matter in issue because:

    'We know that the modal window at 19 December said one thing incorrectly and inconsistently with the Telegraph page, the Facebook page and other media release, the Power Ledger website but that it was corrected on 20 December.  The article was written and published on the 27th. Mr Patrick had obviously gone to it before the 19th, seen that, taken information from the modal window and not checked again, but that doesn't matter.  We're not dealing with a qualified privilege defence of reasonableness… What does it matter that he looked at something that was corrected before publication and what is it said to say?'

15. I agree.  Discovery of that category of documents is not necessary for fairly disposing of the proceeding.

16. The defendants do not press categories 5 ‑ 10 as sought in the original application.

17. Category 11 is all documents (including, but not limited to, documents comprising communications passing between Power Ledger and Techboard) relating to the article prepared by Power Ledger entitled 'Power Ledger named Western Australia's Highest Trending Company in Techboard WA Awards' and made available on the Power Ledger Website on or about 6 December 2017.'  This relates to the new issue raised by the proposed amendment to [68A(a)(ii)] of the defence.  I have allowed that amendment.  I will require the plaintiff to give discovery of the category 11 documents.

1. Category 12 is all documents (including but not limited to documents comprising communications passing between Power Ledger and Vector Ltd referring to Vector Ltd's challenges or difficulties with Power Ledger's technology and Vector Ltd's decision not to proceed with an implementation of the Power Ledger Platform.  These documents relate to the proposed amendments in relation to misrepresentations concerning Vector which I have not allowed.  I will not require discovery of those documents

2. Category 13 is 'all documents (including but not limited to documents comprising communications passing between Power Ledger and American PowerNet) evidencing the nature of Power Ledger's trial with American PowerNet.'  I have not allowed the proposed amendment relating to American PowerNet.  I will not require discovery of the category 13 documents.

3. Category 14 is specified documents referred to in documents discovered in the fifth supplementary discovery affidavits.  There are 31 specified documents.  Some of them are attachments to emails.  The plaintiff should discover those attachments which are, or were, in her possession, custody or power.  The plaintiff is only obliged to discover documents if they are in the plaintiff's possession, custody or power.  The plaintiff is not necessarily in the possession, custody or power of a document which is referred to in an email received by the plaintiff.  Mr Bennett gave the following example:

   Where Dr Green receives the end of a thread of emails, a copy of an email, and embedded in the thread in an earlier email is reference to an attachment, she is not under an obligation where the only document she has received contains no attachment.

4. I will not require the plaintiff to discover attachments to emails referred to in emails received by her where she did not receive the attachment on the ground that such documents are not in her possession, custody or power, or alternatively, the discovery is not necessary for fairly disposing of the proceeding.

5. Some of the category 14 specified documents are documents linked in a document received by the plaintiff.  A link is a reference to a document or data that the user can follow by clicking the link.  I am not satisfied that the plaintiff is in possession, custody or power of a document or data merely because a document received by her contains a link to that document or data.  Alternatively, the discovery of documents or data 'linked' in documents received by the plaintiff is not necessary for fairly disposing of the proceeding.

Engagement of IT expert

1. The defendants submit that the plaintiff should consult with an independent IT expert:

   (a)to determine whether Power Ledger emails prior to 5 September 2017 can be restored or retrieved; and

   (b)to obtain advice about appropriate searches of electronic material to be conducted in compliance with the order to be made for further discovery and the Court's previous discovery orders of 9 October 2020 and 6 November 2020.

2. The defendants further submit that to the extent she has not already done so the plaintiff should:

   (a)take such steps as the IT expert advises to achieve the restoration or retrieval of the emails prior to 5 September 2017; and

   (b)conduct such searches as the IT expert advises to comply with the orders for discovery.

3. The defendants submit that the plaintiff's discovery affidavit should include a summary of the advice received from the IT expert and the steps and searches taken by the plaintiff in accordance with that advice.

4. To comply with a court order to give discovery, a party must make a reasonable search for the documents ordered to be discovered.  The extent of the search which must be made will depend on the circumstances of the case.  Depending on the circumstances, it may be reasonable to search for documents coming into existence before or after a particular date.  A reasonable search for electronic documents will generally be limited to reasonably accessible data.  The relevant English practice direction[8]  provides that the factors that may be relevant in deciding the reasonableness of a search for electronic documents include the following:

   [8] Civil Procedure Rules pt 31, Practice Direction 31B[21].

   (3)the ease and expense of retrieval of any particular document. This includes:

   (a)the accessibility of electronic documents including email communications on computer systems, servers, back-up systems and other electronic devices or media that may contain such documents taking into account of alterations or developments in hardware or software systems used by the disclosing party and/or available to enable access to such documents;

   (b)the location of relevant electronic documents, computer systems and servers;

   (c)the likelihood of locating relevant data;

   (d)the cost of recovering any electronic documents;

   (e)the cost of disclosing and providing inspection of any relevant electronic documents; and

   (f)the likelihood that electronic documents will be materially altered in the course of recovery, disclosure or inspection;

   (4)the availability of documents or contents of documents from other sources; and

   (5)the significance of any document which is likely to be located during the search.

5. The authors of the fifth edition of 'Disclosure' opine:

   It will be rarely appropriate to require a party to obtain deleted emails or other documents or to have to go to the expense of engaging an IT specialist to recover such material as part of an order for standard disclosure.  On the other hand, there may be circumstances where it is necessary and appropriate to do so where a key document is involved and there is an issue as to whether or not a party received it.[9] 

   [9] Matthews P and Malek QC HM, Disclosure (5th ed, 2017) [7.19].

6. When a court makes an order for specific discovery the order may require that the party must carry out a search to the extent stated in the order.

7. Mr Bennett submitted that documents brought into existence prior to 5 September 2017 are not likely to be relevant to any matter in issue.  That may be so but such documents should be searched if they are reasonably accessible taking into account the practicality and cost of retrieving the documents.

8. If such documents are reasonably accessible they should be searched for a reasonable period prior to the Power Ledger ICO.  It would be reasonable to search such documents coming into existence after 1 June 2017.  In their discovery application of 8 October 2020 the defendants sought discovery of the specified categories of documents after 1 June 2017 on the basis that Power Ledger was involved in matters relevant to the matters in question in this action from June 2017.  The likelihood of any documents brought into existence prior to that time being relevant to a matter in issue and significant is such that the forensic utility of conducting a search for such documents is disproportionate to the cost of doing so.

9. The plaintiff has sworn that she consulted an IT expert before providing her fifth affidavit of discovery.  It is not clear from the plaintiff's affidavit whether or not she consulted the IT expert in relation to whether it is possible to retrieve the emails prior to 5 September 2017 and if so the practicality and expense of doing so.  To the extent that she has not already done so, the plaintiff should consult an IT expert to determine whether Power Ledger's emails subsequent to 1 June 2017 and prior to 5 September 2017 can be restored or retrieved and if so the practicality and cost of doing so.  If the plaintiff is advised that it is possible to retrieve the emails, the plaintiff should search those documents if the practicality and cost of doing so is proportionate to the significance of any document which is likely to be located during the search.  If the plaintiff is, or has been, advised that it is not possible to retrieve the emails or that it is possible to retrieve the emails but she considers that the practicality and cost of doing so is disproportionate to the significance of any document which is likely to be located during the search, she should say so in her further affidavit of discovery and set out the basis of that contention.

10. I do not consider that the plaintiff should consult an IT expert in relation to any other aspect of the further discovery.  It is reasonable to search for discoverable emails by means of keyword searches.  There is no evidence that an IT expert has any relevant expertise in relation to identifying the keywords or combination of keywords to be used.

Leave to recall plaintiff and Mr Bulich for cross‑examination

1. The plaintiff does not oppose the defendants being granted leave to recall the plaintiff and Mr Bulich for further cross-examination.  It is appropriate that such leave be granted.

Costs

1. The defendants submit that the plaintiff should pay the defendants' costs:

   (a)of the defendants' applications for further and better discovery filed by the defendants on 8 October 2020 and 5 November 2020;

   (b)of cross-examining and preparing for the cross-examination of the plaintiff and Mr Bulich and the costs of four and a half days of the trial commencing 26 October 2020; and

   (c)of the present application.

2. The defendants submit that those costs should be assessed on an indemnity basis, or, alternatively, without regard to any of the limits set and any of the hourly or daily rates set under applicable costs scale determinations, or, further alternatively, fixed as a lump sum.  The defendants further submit that the proceedings should be stayed pending the payment of those costs.

Costs of defendants' discovery applications of 8 October and 5 November 2020

1. I previously reserved the costs of these applications. The defendants were successful. It is appropriate to apply the general rule that costs follow the event notwithstanding that the defendants did not comply with the conferral requirements of RSC O 59 r 9 in relation to either application. The 8 October 2020 application was made approximately two weeks before the trial. The 5 November 2020 application was made during the trial.

2. The defendants seek indemnity costs orders in relation to each application.  The court has a discretion to order costs on an indemnity basis where the facts and circumstances warrant the making of such an order.  However, the court will usually only order indemnity costs against a party for relevant misconduct or unreasonable conduct.

3. A failure to comply with obligations to make discovery has been recognised as a class of case in which an order for indemnity costs may be appropriate.[10]  To justify an indemnity costs order there must be conduct deserving of criticism and resulting in greater expense to the innocent party.

   [10] See eg National Australia Bank Ltd v Petit‑Breuilh (No 2) [1999] VSC 395 [15]; Masha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd (No 2) [2006] VSC 56 [17] ‑ [21]; Clifton (Liquidator) v Kerry J Investment Pty Ltd (t/as Clenergy No 2) [2020] FCAFC 112 [31].

4. The defendants submitted in effect that the plaintiff's failure to give proper discovery before 19 October 2020 is relevant misconduct justifying an order for indemnity costs.  I have found that the plaintiff failed to give proper discovery before 19 October 2020.

5. However, I am not persuaded that this is an appropriate case for me to exercise my discretion to make an indemnity costs order in relation to the defendants' applications for further discovery.  In my view, the conduct of the plaintiff is not sufficiently delinquent or unreasonable so as to justify departure from the ordinary rule as to the basis of assessment of costs.  Although I have found that the plaintiff did not properly comply with her ongoing discovery obligations after the defendants had amended their defence to plead justification, I have found that the plaintiff did not deliberately fail to give proper discovery in that she did not consciously refuse to engage with her discovery obligations.  Having regard to the circumstances of the plaintiff's failure to give proper discovery which I have outlined earlier in these reasons, I do not exercise my discretion to order costs on an indemnity basis on the ground of the plaintiff's failure to give proper discovery.

6. The plaintiff opposed the defendants' discovery application of 8 October 2020 but I am not satisfied that her opposition was such as to amount to misconduct or was unreasonable so as to warrant an indemnity costs order.

7. The defendants emphasise that in the written submissions filed on her behalf the plaintiff submitted that there were no grounds for the court to be fairly certain of the existence of the documents of which the defendant sought discovery.  However, the primary basis on which the plaintiff resisted the application was that the documents were not relevant to the issues to be determined at trial.  The plaintiff further argued that there were no grounds for the court to be fairly certain that documents meeting the description of the documents sought existed beyond those already discovered.  I found that the plaintiff took too narrow a view of the matters in issue and it was likely that relevant documents, beyond those already discovered, existed.  However, I am not satisfied that the plaintiff's conduct in opposing the application amounted to misconduct or was so unreasonable as to justify an order for indemnity costs.

8. Furthermore, the defendants filed their application on 8 October 2020 without conferral required by RSC O 59 r 9. In the circumstances where the trial was to commence in approximately two weeks I considered it was appropriate to hear the application and make the orders sought. Furthermore, I have decided that the plaintiff should pay the defendants' costs of that application notwithstanding their failure to confer in accordance with the Rules. However, the fact that the application was made without adequate conferral is a further and independent reason for refusing to make an indemnity costs order.

9. Similarly, although the plaintiff opposed the defendants' discovery application of 5 November 2020, I am not satisfied that her opposition was such as to amount to misconduct, or was unreasonable so as to warrant an indemnity costs order.  Again, whilst it is appropriate to order the plaintiff to pay the defendants' costs notwithstanding their failure to confer in accordance with the Rules, it is not appropriate to order the costs be assessed on an indemnity basis.

10. Furthermore, an award of indemnity costs is discretionary and generally an indemnity costs order will not be made unless it is demonstrated that some part of the costs will not be recovered without the order.[11]  Where costs are payable on an indemnity basis by a party, that party is liable to pay all the costs that the other party has incurred except insofar as the costs are of an unreasonable amount or have been unreasonably incurred.[12]  For the reasons set out below in relation to the defendants' application for special costs orders in relation to their discovery applications, I am not satisfied that some part of the defendants' costs reasonably incurred and in a reasonable amount will not be recovered without an indemnity costs order.

    [11] Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190, 192 (Ipp J).

    [12] Wheatley v Bower [2001] WASCA 293 [106].

11. In all the circumstances, I am not satisfied that it is appropriate to make an indemnity costs order in relation to the defendants' discovery applications of 8 October and 5 November 2020.

12. In the alternative to an order for an indemnity costs, the defendants seek an order that the costs of their discovery applications be assessed without regard to any of the limits set and any of the hourly or daily rates set under applicable costs scales or determinations.

13. Section 280(2) of the Legal Profession Act 2008 (WA) empowers the court to order an amount exceeding the scale if it considers that scale costs are inadequate because of the unusual difficulty, complexity or importance of the matter. The defendants rely upon reports of Maria Luisa Coulson, a barrister and solicitor who provides legal services exclusively in relation to legal costs, in support of their claim that the scale of costs are inadequate.

14. The appropriate scale is the scale of costs in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018. The appropriate scale item in relation to the 8 October 2020 application is item 10 which allows amounts of $20,460 for senior counsel and $12,540 for junior counsel.  The appropriate scale item in relation to the 5 November 2020 application is either to apply item 10 by analogy or to treat the application as part of the trial which allows daily fees of $6,820 for senior counsel and $4,180 for junior counsel.

15. Ms Coulson 'assesses' the defendants' costs of their discovery applications at $34,301.03 applying scale rates or a 'rates assessment' of $37,758.95.  Ms Coulson does not separately assess the costs of each application.  It is not clear to me how Ms Coulson arrived at those assessments.  In her report she says in effect that she did not undertake a full assessment of the costs of the discovery applications which would require a detailed review of the whole of the defendants' solicitors' file but she identified the actual costs which have been incurred by reference to the description of the work undertaken as stated in the invoices and the counsel fee notes.  I have reviewed the invoices and fee notes but without my attention having been drawn to the relevant items, I am unable to identify the amounts identified by Ms Coulson.  The only work done by the defendants' solicitors in relation to the discovery applications that was apparent to me from the Banki Haddock Fiora tax invoices were amounts of $490 and $752.50 for research in relation to the 8 October 2020 application and in relation to the 5 November 2020 application amounts of $110 and $55 for telephone calls and emails about the outcome of the application.  I am unable to ascertain from the fee notes of Mr Dawson or Dr Roche what work was done by them in relation to the discovery applications.

16. The defendants filed their discovery application of 8 October 2020 the day before a court hearing.  The application was supported by an affidavit sworn by the defendants' solicitor and brief written submissions.  The matter came on for hearing on 9 October 2020 at 8.45 am.  The greater part of the hearing was concerned with other procedural matters, in particular the plaintiff's successful application to set aside a subpoena caused to be issued by the defendants.  The hearing of the defendants' discovery application occupied approximately 40 minutes of which senior counsel for the defendants addressed the court for approximately 30 minutes.

17. The defendants' discovery application of 5 November 2020 was filed during the course of the trial. It was supported by a memorandum stating that the parties had not conferred as required by RSC O 59 r 9 because the plaintiff had made admissions in the course of cross‑examination with respect to the adequacy of her discovery and because of the limited time remaining in the trial. The application was served on the plaintiff on the evening of 5 November. The application was heard on the afternoon of 6 November and occupied a little over two hours.

18. I am not satisfied by Ms Coulson's reports and the attached invoices and fee notes that the scale costs are inadequate in relation to the costs reasonably incurred by the defendants in relation to their discovery applications of 5 October and 8 November 2020, or that scale costs are inadequate because of the unusual difficulty, complexity or importance of the matter.

19. In all the circumstances, I am not satisfied that it is appropriate to make a special costs order in relation to the defendants' discovery applications of 8 October and 5 November 2020.

1. In the further alternative, the defendants seek that their costs of the discovery applications be assessed as a lump sum.  The court has power to make such an order but I am not satisfied that it is appropriate to do so in this case.  Ms Coulson did not undertake a 'full assessment of the [costs of the discovery applications] [which] would require a detailed review of the whole of [the defendants' solicitors file] applying the Scale (or lifted hourly rates) to the evidence on the file'.  As I have said I am not able to identify from the invoices and fee notes attached to Ms Coulson's report the costs reasonably incurred by the defendants in relation to their discovery applications.

Costs of further cross‑examination

1. The defendants submit that the plaintiff should pay the defendants' costs of cross-examining and preparing for the cross-examination of the plaintiff and Mr Bulich and the defendants' costs of four and a half days of the trial commencing 26 October 2020.  The defendants submit, in effect, that the costs of the cross‑examination of the plaintiff and Mr Bulich and their further cross‑examination on the resumption of the trial are costs wasted because of the plaintiff's failure to give proper discovery.

2. In this context, costs wasted are the costs of work done by the defendants which has been wasted as a result of the plaintiff's failure to give proper discovery.  Not all of the work done to date by the defendants in relation to the cross‑examination of the plaintiff and Mr Bulich has necessarily been wasted.  Work useful for the ongoing conduct of the proceedings is not work which has been wasted.  Costs of the cross-examination to date may be costs incurred which must be incurred a second time for the purpose of the trial on its resumption.  Such work may be wasted because it is reasonably necessary for the defendants to repeat much of the cross‑examination with the advantage of the discovered documents.  On the other hand, it may not be reasonably necessary for the defendants to repeat parts of the cross‑examination to date, in which case the work in relation to those parts of the cross‑examination will not have been wasted.

3. I am not satisfied that all of the costs incurred in the cross‑examination of the plaintiff and Mr Bulich to date have been wasted.  It is not possible to ascertain how much of the work done in the cross‑examination has been wasted or what costs must be incurred a second time until the further cross‑examination is completed.  Only after the further cross‑examination will it be possible to ascertain what additional costs have been incurred by the defendants as a result of the plaintiff's failure to give proper discovery earlier.

4. There will be costs consequences for the plaintiff resulting from her discovery failures but the additional costs reasonably incurred by the defendants and the appropriate order in relation to the defendants' costs incurred in cross‑examination of the plaintiff and Mr Bulich can only properly be determined after the further cross‑examination.

Costs of the present application

1. The costs of the present application are in the discretion of the court.  The court's discretion is ordinarily exercised in favour of the successful party pursuant to the general rule that costs follow the event.

2. The defendants have been unsuccessful in their primary application that the proceeding should be permanently stayed.  The alternative orders sought by the defendants were agreed to in part and opposed in part by the plaintiff.  In relation to the contested matters the defendants have achieved some success but failed in relation to the greater part of the contested matters.

3. However, the discretion to order costs is unfettered and must be exercised judicially according to what justice demands in a given case.  There are circumstances in which the successful party may be deprived of some or all of her costs or even ordered to pay the unsuccessful party's costs.  A court may deny costs to a successful party who has done something which has caused unnecessary expense or has otherwise placed upon the unsuccessful party an unjustified cost burden.

4. In an appropriate case the court may order that the costs of an interlocutory or discrete hearing should be in the cause.

5. Before determining the costs of this application, I will hear from the parties after they have had an opportunity to consider these reasons.

Stay of proceedings pending payment of costs

1. The defendants submit that the proceedings be stayed pending the payment of the costs ordered to be paid to them by the plaintiff.

2. The only costs which I have determined should now be paid by the plaintiff are the costs of the defendants' discovery applications.  I have not yet determined the costs of the present application.

3. RSC O 66 r 10(1) provides that the court may deal with costs at any stage of the proceedings and any order of the court for the payment of costs may require the costs to be paid forthwith notwithstanding that the proceedings are not concluded. Consolidated Practice Direction 4.7.1 [3] provides that as a general rule, where an order for costs is to be made against a party in interlocutory proceedings, the costs will be fixed and ordered to be paid forthwith or by a particular date.

4. In this case there is insufficient material before me to enable me to fix the costs of the defendants' discovery applications. I will order that the plaintiff pay the defendants' costs of the discovery applications.  The effect of such an order is that the costs can be agreed, or, if not agreed, assessed immediately and become payable as soon as the taxing officer signs the allocator.

5. A stay of proceedings should not be ordered simply to give effect to an interlocutory costs order that is taxable immediately.  A stay order should not be made unless it is the only fair way of protecting the interests of the party seeking the order.[13]

   [13] Rozenblit v Vainer [2018] 262 CLR 478.

6. It is not appropriate to make an order staying the proceedings until the payment of the costs. It may take some time before the amount of the defendants' costs of their discovery applications, or the costs of this application, are determined. It is not in accordance with RSC O 1 r 4A and r 4B that the resolution of the proceedings should be delayed until those costs have been ascertained and paid. There is no injustice to the defendants. The defendants may proceed to assess the costs, if they cannot be agreed, and take appropriate action to enforce payment if the costs are not paid after they have been ascertained.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CR
Associate to the Honourable Justice Le Miere

15 JANUARY 2021