Health and Life Care Ltd (Receivers and Managers Appointed) v Price Waterhouse No. SCGRG 93/289 Judgment No. 4361 Number of Pages 4 Discovery and Inspection of Documents

[1993] SASC 4361

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA ANDERSON J

CWDS
Discovery and inspection of documents - plaintiff seeks limited discovery before pleadings closed - Supreme Court Rule 54.04(b) has the effect of ameliorating the previous general rule depending upon the circumstances of the case. Supreme Court Rule 54.04(b). Latec Finance Pty Ltd v Jury (1960) NSWR
321; Gollin Holdings Ltd and Anr v Adcock and Ors (1981) 1 NSWLR 691 and Speyside Estate and Trust Co Ltd v Wraymond Freeman (Blenders) Ltd (1950) 1 Ch 96, discussed.

HRNG ADELAIDE, 20 December 1993 #DATE 23:12:1993
Counsel for appellant:     Dr R J Baxter with Mr J D Warde
Solicitors for appellant:    Johnson Winter and Slattery
Counsel for respondent:     Mr A J Besanko with
   Mr M J Barrett
Solicitors for respondent: Kelly and Co

ORDER
Application granted.

JUDGE1 ANDERSON J The plaintiff seeks an order for limited early discovery from the defendant. It is early because the statement of claim is not in its final form and a defence has not been filed. The plaintiff issued its application on 2 December, 1993 and seeks disclosure and production of those documents broadly described as working papers and reports in the possession, custody or power of the defendant relating to work done by representatives of the defendant for the plaintiff from about 13 March, 1987 to 18 June, 1987. It is not presently necessary to further detail the schedule to which the plaintiff's application refers. 2. An amended more explicit statement of claim was filed on 8 November, 1993. It incorporates certain amendments by consent. A further document entitled a second amended more explicit statement of claim is annexed to an affidavit filed on behalf of the defendant but has not yet been filed and is almost certain to be further amended as to the calculations of loss therein. 3. The nub of the plaintiff's claim against the defendant is contained in paragraph 10 of the first mentioned pleading. It alleges that the plaintiff retained the defendant to act for it and render certain advice on or before 13 March, 1993. It is further alleged that the defendant was negligent and so in breach of its retainer. The allegations are particularised in some detail in the statement of claim. The essence of the plaintiff's claim against the defendant has not changed since the proceedings were issued and is unlikely to. There are two earlier statements of claim on file in substantially similar terms in that regard. 4. Dr Baxter appeared with Mr Warde, for the plaintiff and Mr Besanko with Mr Barrett, for the defendant in opposition. 5. The application is brought pursuant to Supreme Court Rule 58.04 which is, insofar as is relevant:
    "The Court may on application for discovery made at any
    stage of the proceedings:
    (a) ...
    (b) order that-
    (i) discovery be limited to certain documents or classes of
    documents related to the matters specified in the order;
    (ii) discovery be made by phases in relation to any class or
    classes of documents in such manner as may be specified in
    the order." 6. The plaintiff seeks documents of the limited class which I have described. Dr Baxter proceeded on the basis that to obtain the order the plaintiff had to establish that there were "exceptional circumstances" (as stated at paragraph 58.04.1 of "Civil Procedure", Volume 1) so to enable discovery and production to be made at such an early stage in the proceedings. He submitted that such "exceptional circumstances" were here made out because of the nature of the case. The plea was in and not going to change. To wait until the usual time for this discovery would build in a lengthy delay to when the case would be ready for trial because in order to succeed the plaintiff must rely upon expert accounting evidence to establish the matters alleged against the defendant in the statement of claim. To do this an expert report will be needed and better to get started on it now as it will require to be considered by the defendant's expert and perhaps others. Why then wait until discovery is normally given when this discrete matter is obviously central to the dispute between the parties even before a defence is in and will remain so. In the context of this case it was submitted that this circumstance was sufficient to meet the test which Dr Baxter accepted as applicable. 7. Mr Besanko opposed the application upon three bases:
    (1) By reliance upon the general rule which Dr Baxter
    acknowledged.
    (2) As the statement of claim is not yet finalized.
    (3) By reference to the weight to be attached to the
plaintiff's reason for this request. 8. In support of his submission as to (1) Mr Besanko referred to the text of Simpson, Bailey and Harris "Discovery and Interrogatories" at pp29-31 to put the general rule in context. (The second edition of this work is in similar terms). In support of the general rule he referred to the well known authority in this area of Latec Finance Pty Ltd v Jury (1960) NSWR 321. In that case the application was by a defendant who sought the indulgence before pleading. Else Mitchell J said at p323: "This general rule, which applies equally in other jurisdictions and to applications by plaintiffs as well as defendants, appears to me to be based in part upon the notion that it is impossible to determine what documents are material until the issues have been defined by pleadings, and partly upon the desirability of avoiding fishing expeditions." There is no suggestion that this is a fishing expedition. Mr Besanko also referred to Speyside Estate and Trust Co Ltd v Wraymond Freeman (Blenders) Ltd (1950) 1 Ch 96 in which the general rule was restated. As that was a case where a statement of claim had not been delivered it is presently of no further assistance. 9. The third case referred to by Mr Besanko was Gollin Holdings Ltd and Anr v Adcock and Ors (1981) 1 NSWLR 691 for a restatement of the general principle. Even though there were there no pleadings the nature of the issues joined was apparent from narrative statements ordered to be filed Rogers J. He ordered that discovery be made stating "the rule of practice will always yield to the demands of justice in the particular instance..." (at p696). Thus the discretion is wide, something recognised in Simpson (supra), 2nd Edn at p39, when compared with the harsher English test prescribed by "very special circumstances" and "most exceptional circumstances". 10. Mr Besanko drew my attention to defects in paragraph 17 of the statement of claim (being shortcomings which were acknowledged by Dr Baxter) which is a plea as to the plaintiff's alleged loss and damage. He submitted that because this paragraph was defective then there existed the real likelihood that other parts of the document would need to be changed to establish the necessary linkage between alleged negligence/breach of duty and loss and damage. That submission may be correct. Presently, it is too early to say. In that circumstance, he submitted, the plaintiff should not have the indulgence which this application seeks. 11. Thirdly, he attacked the plaintiff's reason of due expedition of the proceedings in light of the general rule and the alleged defects with the statement of claim. 12. There is no question but that the discretion here available is wide and must be exercised so as to do justice to the cause. 13. Supreme Court Rule 58.04(b) was inserted by Amendment No 37 which came into effect on 5 July, 1993 as part of several amendments designed to facilitate the caseflow management objectives which are embodied within the Supreme Court Rules generally and Rule 2 in particular. That the previous general Rule may not apply to the Rule in its present form is to my mind recognised by the learned author of "Civil Procedure" when, at the commencement of his commentary upon Rule 58.04 he says, at 58.04.1: "Presumably the previous law is unchanged that exceptional circumstances must be established for a party to be given discovery at that early stage of an action: RHM Foods Ltd v Bovril Ltd (1982) 1 All ER 673; Latec Finance Ltd v Jury (1960) NSWR 321." In passing, I note that the first cited case was an instance of where discovery was sought without any pleadings having been issued and the application was refused by the Court of Appeal because no statement of claim had issued, there was a suggestion of fishing and no costs were to be saved (also, as to the latter, see Speyside (supra)). 14. Having regard to the altered philosophy of the present Supreme Court Rules as to case management I am not at all convinced that the previous strict test to be applied to the indulgence now sought by the plaintiff remains apposite just because the pleadings have not closed and there may be some (to my mind, and in relation to the issues relevant to this application) inconsequential amendments to the statement of claim. Should there exist the opportunity to encourage the progress of the litigation thus saving time, and therefore costs, in conformity with the philosophy of the Rules so long as no disadvantage by so doing, is visited upon the other party then the opportunity should be taken. Limited discovery has no real place in the Rules if it can only be ordered as contended for by the defendant. It is designed to allow the life of an action to be shortened in appropriate circumstances. Here, even though there is as yet no defence, it is most unlikely that there will be no challenge to that part of the plaintiff's claim to which this application relates, it being at the heart of the plaintiff's cause. Should the plaintiff's expert be able to have access to the limited and clearly identified papers which are sought there is an excellent opportunity to save time to trial. That is the object of this Rule in this circumstance and the plaintiff does not need to go further to obtain the indulgence sought. The defendant will sustain no adverse consequence, apart from having to comply, by the making of the order. The application is therefore granted. 15. I shall hear counsel as to the appropriate directions to facilitate the order and as to costs.