I Cook Foods Pty Ltd v State of Victoria
[2025] VSC 116
•19 March 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S ECI 2020 03070
| I COOK FOODS PTY LTD (ACN 094 392 060) | Plaintiff |
| v | |
| STATE OF VICTORIA (Department of Health and Human Services) | Defendant |
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JUDGE: | Goulden AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 28 November 2024 |
DATE OF RULING: | 19 March 2025 |
CASE MAY BE CITED AS: | I Cook Foods Pty Ltd v State of Victoria |
MEDIUM NEUTRAL CITATION: | [2025] VSC 116 |
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CIVIL PROCEDURE – Application by plaintiff for release of defendant from implied undertaking – Objective of application to ease discovery burden on the plaintiff – Discovery of documents discovered in separate proceeding ordered to be discovered as a class pursuant to s 55(2)(a) of the Civil Procedure Act 2010 (Vic) – No utility in determining application for release from implied undertaking once discovery order made.
CIVIL PROCEDURE – Supreme Court (General Civil Procedure) Rules 2015, r 47.02 – Application by plaintiff to change mode of trial – Party seeking to alter the mode of trial bears the onus of establishing a special reason for change – Plaintiff failed to articulate special reason – Application dismissed.
CIVIL PROCEDURE – Supreme Court (General Civil Procedure) Rules 2015, r 47.04 – Application by plaintiff to split trial between questions of liability and relief – Plaintiff brings misfeasance in public office claim where damage is the gist of the action – Split trial request under r 47.04 – Split only to be enacted with extreme caution and in clear case – Insufficient demarcation to split – Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R T Wodak | Stirling Law |
| For the Defendant | Mr C Caleo KC and Mr M McLay | MinterEllison |
HER HONOUR:
By its summons filed 7 August 2024, and amended on 28 November 2024, the plaintiff seeks orders that:
(a) the defendant be released from its implied undertaking in respect of certain documents discovered by the plaintiff to the defendant in proceeding S ECI 2020 02728 (‘Government proceeding’);
(b) the question of liability be tried by judge and jury, with damages to be assessed by a judge or associate judge pursuant to Order 51 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’);
(c) alternatively to (b), that the proceeding be tried before judge and jury;
(d) if the Court declines to make the orders sought in (b) or (c), there be an initial trial by judge alone, limited to the question of liability.
In support of the application, the plaintiff has filed two affidavits of John Joseph Nathan Stirling, sworn 7 August 2024 and 1 November 2024. The defendant relies upon two affidavits of Philip Stefanovski, sworn 18 October 2024 and 15 November 2024.
The implied undertaking release application
The plaintiff seeks that the defendant be released from its implied undertaking in the Government proceeding in relation to documents discovered or otherwise produced by the plaintiff in that proceeding (as identified in the amended summons) (‘Documents’). No issue is taken as to whether the application should have been made in the Government proceeding.
The plaintiff has made some discovery in this proceeding but that discovery does not include any of the Documents. When this application came to be made, the plaintiff no longer had possession of all of the Documents in respect of which it seeks the release.[1] It could not readily verify those documents that were missing.[2] The plaintiff, which no longer operates its business, also has limited resources available to it to undertake a search and review exercise in order to make further disclosure in this proceeding, even one limited to verification of what is missing from among the Documents in its possession. The plaintiff will rely heavily on its lawyers to undertake the work necessary to complete its discovery task,[3] which is expected to be time consuming and expensive.
[1]Affidavit of John Joseph Nathan Stirling sworn 7 August 2024, [12], [14] (‘First Stirling Affidavit’).
[2]First Stirling Affidavit [12].
[3]First Stirling Affidavit [13].
Given its difficulties, both practical and financial, the plaintiff seeks that the defendant be released from its implied undertaking in the Government proceeding so that the defendant can use the Documents in this proceeding. The plaintiff submits that, if it is released, the defendant will then be ‘in possession’ of the Documents in this proceeding for the purposes of r 29.01 of the Rules, with the consequence that the Documents need not be separately discovered pursuant to r 29.01.1(4). The plaintiff frankly acknowledges that not all of the Documents will be relevant to the issues in dispute in this proceeding.[4]
[4]First Stirling Affidavit [17].
By the time the plaintiff’s release application came on for hearing, the factual landscape had changed because the defendant had caused the Documents to be provided to the plaintiff (via its former solicitors).[5] At the time of the hearing, therefore, the plaintiff had possession of the Documents. The defendant contends that the plaintiff should now make discovery of relevant documents from among the Documents, and that its release application is redundant. Whilst a verification exercise is no longer required because the plaintiff has a full set of the Documents, to make discovery in the manner contemplated by the defendant, the plaintiff would still need to undertake a review exercise to determine relevance. The plaintiff submits this would take ‘some months’[6] to complete and is subject to the same resource constraints.
[5]Affidavit of Philip Andrew Stefanovski sworn 18 October 2024, [16] (‘Stefanovski Affidavit’).
[6]First Stirling Affidavit [15(b)].
Release from the implied undertaking
The plaintiff’s application for an order that the defendant be released from its implied undertaking is unusual for the reason that such applications are typically made by the party that is seeking to be released. Here, the plaintiff applies to release the defendant from its undertaking; the defendant does not seek to be released.
The rationale for the implied undertaking is explained by the High Court in Hearne v Street.[7] It is an obligation of substantive law that cannot be disclaimed by any party subject to it. Rather, it is in the power of the Court to release or modify it, which ‘dispensing power is not freely exercised and will only be exercised where special circumstances appear.’[8] Neither party could identify any decision in which a court has exercised that power upon application by a party seeking to release a different party to the proceeding from its undertaking, as here. The submissions reveal a contest between the parties on, amongst other things:
(a) whether or not a release of the implied undertaking can be given to a party that does not seek it; and
(b) whether and how the special circumstances test applies where, as here, the party with the benefit of the undertaking consents to its release.
[7](2008) 235 CLR 125 (‘Hearne’).
[8]Hearne 158–160 [107].
The real problem to be solved in this proceeding is how to ensure that some or all of the Documents are discovered in this proceeding. Prior to coming into possession of the Documents, the plaintiff made the release application with the objective of solving that problem in a way it considered most efficient. As I raised with the parties at the outset of the hearing, due to the change in circumstances, it may not be necessary to determine the substance of the plaintiff’s release application if the Court is minded to make an order under s 55 of the Civil Procedure Act 2010 (Vic) (‘CPA’). Specifically, the Court could order that the plaintiff make discovery of the Documents as a class of documents[9] and without conducting a review of each document for relevance. Such an order would in any event require consideration if I were to determine the plaintiff’s release application against it.
[9]CPA s 55(2)(a)(i).
The plaintiff, accepting the Court has power to make orders under s 55 of the CPA of the type contemplated, does not abandon its release application, which it regards as meritorious. However, the plaintiff’s counsel acknowledged that although the method proposed is different, if the Court were to make the discovery order under s 55 of the CPA, the plaintiff could avoid the time consuming and resource intensive document review exercise it otherwise faces, and it would accept that as an appropriate outcome.
The plaintiff seeks to avoid the extensive cost and time required to be expended in conducting a review of the Documents for the purposes of determining relevance by reference to r 29.01.1(3) because of its challenged financial circumstances and lack of resources. The plaintiff submits that the defendant and its solicitors have already had access to, and can be assumed to have a detailed working knowledge of, the contents of the Documents as a result of the plaintiff’s reliance on them in the Government proceeding, which ran to trial. It submits the defendant is well placed to identify what are the critical documents in this proceeding. The plaintiff says it could then defer its own review to a time of its choosing (such as when it comes to prepare its witness statements or outlines) and when resources permit. Those factors are relevant to the Court’s consideration of the appropriateness of an order under s 55 of the CPA.
The defendant similarly accepts that the Court has power to make orders under s 55 of the CPA, and to do so on its own motion. However, it opposes that course for the same reasons it submitted that the case management efficiencies which might result if the release application was granted, do not provide ‘special circumstances’[10] justifying the release. The defendant contends that it would be more efficient and cost effective for the plaintiff to be required to review and discover only those documents relevant to the issues in dispute in the proceeding. In opposing the release application, the defendant submitted, and the same argument applies to the decision whether to make an order under s 55,[11] that because of the complexity of the causation issues, it is particularly important that the parties undertake their discovery obligations with the necessary focus upon the issues in this proceeding and that the parties discover documents that fall within the terms of r 29.01.1(3). It asserted also that the plaintiff would need to review the documents for the purposes of preparing its witness statements or outlines, and that an order under s 55 of the CPA would have the effect of delaying engagement with the documents as well as depriving the defendant of the benefit of the plaintiff’s view of the significance of documents to the proceeding.
[10]Hearne 158–160 [107].
[11]Transcript of Proceedings, I Cook Foods Pty Ltd v State of Victoria (Supreme Court of Victoria, S ECI 2020 03070, Goulden AsJ, 28 November 2024) T54.16–T54.25 (‘Transcript’).
The interests of justice and fulfilment of the overarching purpose favour the making of a discovery order in accordance with s 55 of the CPA in all the circumstances of this proceeding. I am satisfied that based on the evidence given by Mr Stirling that the plaintiff, and his law firm, are subject to resource constraints, and so the task of re-reviewing the approximately 1600 Documents will be a protracted and expensive one. The defendant (represented by the same solicitors as in the Government proceeding) has been in receipt of the Documents for some time, albeit in the other proceeding and so in respect of different issues. However, the defendant can be expected to have a sufficiently advanced working knowledge of the Documents to readily appreciate which of them are relevant to the plaintiff’s case in this proceeding. I consider the benefit the defendant contends it would obtain from having the benefit of the plaintiff’s view of the significance of the documents if discovered pursuant to the terms of r 29.01.1(3) to be overstated. The making of an order under s 55 of the CPA will permit a more efficient, cost effective and timely discovery of the Documents and so facilitates achievement of the overarching purpose.
Given I will make an order under s 55 of the CPA which provides that the plaintiff make discovery of the Documents without conducting a further review of them, there is little utility in devoting time and resources to further contemplate the novel issues that arise from the plaintiff’s release application.
The trial by judge and jury application
Under r 47.02(1) of the Rules, a trial in a proceeding based on tort will proceed as a jury trial if the conditions of that rule are satisfied; that is, where so elected by the plaintiff in the writ or by the defendant by notice in writing to the Prothonotary as specified in the rule, and provided also that the requisite fees are paid.
When this proceeding was commenced on 27 July 2020, the writ stated the trial would be by ‘a judge of the Court sitting alone’. As the defendant correctly submits, the plaintiff could have issued a writ that was silent as to the mode of trial, in which case it is assumed that the plaintiff desires a trial without a jury.[12] Rather than remain silent, the plaintiff specifically selected trial by judge alone upon commencement. Mr Stirling deposes, based on information he has received from Mr Cook, the director of the plaintiff, that Mr Cook did not consider requesting a trial by judge and jury when he commenced the proceeding, as the proceeding was commenced against the Buckett parties[13] only, being a private citizen and a private company, and not the State.
[12]Rules r 5.08(2).
[13]The plaintiff’s claims against the Buckett parties, being the Gourmet Guardian Pty Ltd and Gavin Buckett, were resolved in mid-2023, with the writ being amended on 6 October 2023 to remove them as defendants.
The defendant, the State, was joined to the proceeding on 4 April 2023. The plaintiff’s amended writ filed on 4 April 2023 again stated that the mode of trial would be by ‘a judge of the Court sitting alone’. Following the resolution of the claims against the Buckett parties, the Court gave leave for the filing of a further amended writ and statement of claim.[14] The further amended writ, filed on 6 October 2023, stated to like effect. Mr Stirling deposes that he has been informed by Mr Cook that he did not consider requesting a trial by judge and jury at this time.[15]
[14]Orders of Matthews J made on 5 October 2023.
[15]First Stirling Affidavit [54].
Upon being served with the amended writ in April 2023, by which the plaintiff nominated a trial by judge alone, the defendant had the right to give notice that it desired a jury trial, in accordance with r 47.02(1). It did not do so. Accordingly, by operation of the Rules, as at about April 2023, both parties had made a choice for the mode of trial to be by judge alone.
Notwithstanding the operation of the Rules, the Court has an overriding discretion to determine the mode of the trial regardless of the wishes of the parties, and at any stage of the proceeding.[16] In Deka v Johns (‘Deka’), when dealing with an application under r 47.02(2) by a defendant to change the mode of trial from judge alone to a trial by jury, J Forrest J held:
[16]Deka v Johns [2009] VSC 296 (‘Deka’).
The onus in persuading a Court to dispense with the mode of trial determined by the operation of the rules rests upon the party making that application. A Court will not lightly make such an order given the right of the other party to seek a particular mode of trial (be it by judge alone or by jury). There must be a special reason to persuade a Court to dispense with the mode of trial sought by a party who has properly invoked the rules of the Court.[17]
In applying Deka to the case of Roland van Marburg v Aldred & Anor (‘Roland’),[18] Keogh J said:
The first defendant bears the onus of establishing a sufficient reason to deprive the plaintiff of the mode of trial chosen by him. The reason must be sufficient to outweigh the factors which otherwise weigh in favour of the plaintiff maintaining the benefit of the mode of trial he chose.[19]
[17]Deka [6(e)].
[18][2016] VSC 565, [63] (‘Roland’).
[19]Roland [63].
These authorities establish that the party seeking to alter the mode of trial bears the onus of establishing a sufficient reason for the change. Here, the defendant properly invoked its right to trial by judge alone by not seeking to alter the plaintiff’s selection when served with the amended writ in April 2023. The proceeding has continued on that footing since that time. The defendant opposes the plaintiff’s application to change the mode of trial. In order to deprive the defendant of its selected mode of trial, the Court must be satisfied that the plaintiff’s reasons are sufficient to outweigh the factors which otherwise weigh in favour of the maintenance of the defendant’s election.
Mr Stirling deposes to receiving instructions to apply to change the mode of trial on 3 July 2024. The defendant submits that the delay in bringing this application is significant, and that many steps have been taken in the proceeding since the joinder of the defendant. Even considering Mr Stirling’s evidence about what the plaintiff’s sole director, Mr Cook, has told him about what prompted him to seek the change, namely the plaintiff’s failure to recover damages in the Government proceeding before McDonald J, that judgment was given on 13 November 2023, over 7 months prior to Mr Cook giving instructions to make this application.
Mr Stirling deposes that the reason Mr Cook has instructed him to bring this application, that is, his special reason, is his belief that ‘a jury is better-placed than a judge to decide facts concerning the State’s alleged conduct in respect of [the plaintiff].’[20] Mr Stirling deposes that Mr Cook’s belief is based upon his experiences and those of his company, the plaintiff, in respect of the events and the actions of the defendant’s officers leading to the closure of the plaintiff’s business in February 2019. It was subsequently found by this Court that the plaintiff had been the subject of ‘a wrong done by a public officer.’[21] Mr Stirling deposes to being informed by Mr Cook that as a result of the wrong done to the plaintiff, which resulted in the closure of his business and a significant adverse financial impact on I Cook Foods, Mr Cook and his family, Mr Cook has ‘lost faith in the State and its instrumentalities’,[22] and that he holds ‘serious concerns regarding corruption in Victoria’.[23] Mr Stirling further deposes as to Mr Cook’s belief that:
he (and he believes the thousands of people that have expressed support for him) would be far better able to accept as just the outcome of the present proceeding if the facts regarding the State’s alleged conduct are determined by a jury of his peers.[24]
[20]First Stirling Affidavit [52].
[21]I Cook Foods Pty Ltd v State of Victoria [2023] VSC 654, [240].
[22]First Stirling Affidavit [45].
[23]First Stirling Affidavit [48].
[24]First Stirling Affidavit [51].
As Deka establishes, the onus of persuading the Court to dispense with the mode of trial that has been regularly invoked under the Rules rests on the party making that application. I accept the defendant’s submission that it does not bear an onus in resisting such application to demonstrate that it should be entitled to preserve its choice only if there is some particular prejudice it will suffer or for some other reason. The benefit to be maintained, that is referred to by Keogh J in Roland, is the benefit of the choice the defendant made to invoke the rules relating to the mode of trial at the time prescribed. The plaintiff must show a special reason, that is, one that is sufficient to justify now depriving the defendant of its choice.
The defendant does not seek to argue that a jury cannot hear this case, or that it would have taken different steps in the 17 months that elapsed since it was joined and when this application was heard. It simply contends that the plaintiff must demonstrate a special reason and that it has failed to do so. The defendant contends that the special reason that is advanced, as best as it can discern it, is that the director of the plaintiff holds the belief that judges of this Court are corrupt, or at least they may be thought to be corrupt.
I do not consider that any special reason is coherently advanced in the plaintiff’s evidence. I make that finding for the reasons which follow.
(a) The evidence, given on information and belief, of Mr Cook’s ‘concerns regarding corruption in Victoria’[25] is vague, and is not linked to any identified concern about corruption in the Court. It follows the seemingly irrelevant (to the asserted special reason) observation as to the period in which the Labor government has held power in this State. It does nothing to explain Mr Cook’s apparent belief that a jury is better placed than a judge to decide the facts in this case.
(b) The evidence, given on information and belief, to the effect that Mr Cook has lost faith in the State and its instrumentalities identifies, non-exhaustively, two of the reasons for that loss of faith based on conduct of the defendant. It is not stated that Mr Cook has lost faith in the independence of the judiciary. The former does nothing to explain Mr Cook’s apparent belief that a jury is better placed than a judge to decide the facts in this case.
(c) The evidence, given on information and belief, to the effect that Mr Cook (and, in his belief, thousands of unidentified ‘others’ who have expressed their support for him) would be ‘far better able to accept as just’[26] the outcome of the present proceeding if the facts are determined by a jury, uses the language associated with the important principle of the law that justice must be seen to be done, without raising any issue of apprehended bias in this Court. The allusion, without more, does not identify a special reason to change the mode of trial.
[25]First Stirling Affidavit [48]–[49].
[26]First Stirling Affidavit [51].
It follows that I am not satisfied that the plaintiff has shown a special reason to justify the exercise of the Court’s discretion to change the mode of trial at this stage of the proceeding. I will dismiss the application.
The split trial application
The plaintiff seeks orders under r 47.04 of the Rules, and the Court’s inherent powers, for the trial of this proceeding to be split between the questions of liability and relief.
Conventionally in civil litigation, all issues of fact and law in a dispute are determined in one trial at the one time.[27] Rule 47.04 of the Rules confers a specific power, which is in addition to the Court’s inherent jurisdiction, to make orders concerning the manner of conduct of a trial, including that the trial be split into two or more parts. There are numerous authorities, in this and in other jurisdictions with like powers, identifying the considerations which guide the exercise of this discretion. Its exercise is also conditioned by ss 8 and 9 of the CPA. The Court may make orders to control the manner of trial that it considers most conducive to the just, efficient, timely and cost effective resolution of the real issues in dispute.
[27]Inpex Operations Australia Pty Ltd v AIG Insurance Ltd(No 2) [2023] WASC 61, [57].
The authorities considering the power to split warn that the discretion should be exercised ‘with great caution and only in a clear case’,[28] that is, when the ‘utility, economy, and fairness to the parties [of the split is] beyond question.’[29] That caution is particularly apt in a case concerning misfeasance in public office in which, like some other torts, damage is the gist of the action and the questions of liability, causation and remedy are intertwined.
[28]Paz Stone Pty Ltd v Vincenzo Crocitti & Ors [2017] VSC 492, [6], citing Murphy v Victoria
(2014) 45 VR 119, [28].
[29]Tepko Pty Ltd v Water Board (2001) 206 CLR 1, 55 [170] (Kirby and Callinan JJ).
The plaintiff concedes that it will be necessary for it to establish that it suffered some loss at the initial trial, and accordingly, some lay witnesses, including Mr Cook, would need to be called to give evidence twice – that is, at the initial trial, and again at the second trial if required. The plaintiff submits that there will otherwise be a clear delineation between the evidence to be led as to liability, and the evidence relevant to the quantification of damages at a second trial. The plaintiff further submits that splitting the trial gives effect to the overarching purpose under the CPA because it will mean that if a trial on damages is not required, then neither party will be put to the expense of reviewing documents related solely to that question, nor will they be put to the cost of briefing experts to provide reports on the issue of quantum. It also submits that if a second trial is not required, there will be a resulting saving in Court time and resources. The plaintiff points to the split that was ordered by McDonald J in the Government proceeding between the questions of liability and quantum as evidence of the suitability of this proceeding to be conducted in a like manner because it involves the same tort, the same parties and ‘arose out of the same broad factual circumstances.’[30]
[30]First Stirling Affidavit [60].
In his first affidavit, Mr Stirling expresses his view, as an experienced practitioner, that a split trial ‘is likely to be much more efficient and inexpensive compared to the alterative course…’.[31] He does not make any attempt to quantify that efficiency gain or costs reduction, saying only that the efficiency is gained through deferring the review of documents and preparation of expert evidence relating solely to the question of loss, which is also more complex, until such time as it is necessary to do so.
[31]First Stirling Affidavit [61].
The defendant submits that in this case, unlike in the Government proceeding before McDonald J where the split was consented to, the issues of causation and loss, including the specific identification of loss caused by the conduct complained of in the proceeding (as opposed to other potential causes) will be critical and difficult, and will need to be the subject of evidence at the first trial, and then again at a trial on relief. The defendant submits, therefore, that there is a lack of demarcation in this case which gives rise to all of the potential perils accepted in the authorities as reasons for declining to order a split. I agree.
Given loss is relevant to both the question of liability and relief in this proceeding, there is insufficient demarcation of the issues to justify a split. That lack of demarcation is liable to cause the very confusion, inefficiencies and risks that are sought to be avoided by a single trial. In particular, undesirable risks and inefficiencies may arise from witnesses being called twice, such as what objections will be taken at each stage, and what will be the impact of adverse credit findings, if any, made in the first trial.[32] The risks of fragmentation (via the bringing of appeals between trials) and prolongation also loom large in this case. Nothing has been suggested by the plaintiff by way of case management that might mitigate these risks, or ameliorate their adverse consequences if realised.
[32]POS Media Online Ltd v Queensland Investment Corporation [2000] FCA 1451, [6]; Fleming’s Nurseries Pty Ltd v Hannaford [2008] FCA 591, [28]; Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130, 141–142.
I am also not persuaded that there will be efficiencies likely to be gained from the split to which I can attribute any real weight. The plaintiff’s evidence is directed solely towards identifying efficiency in terms of the costs and time that will be avoided if a separate trial on relief is not required at all. In that event, the efficiency gain is self-evident. However, the Court is not exclusively concerned with assessing the time and costs saved by avoiding any trial on the question of relief, because it is equally self-evident that separate trials, in the event the defendant is found liable, will not necessarily lead to the overall action being resolved sooner or at a lesser cost. In undertaking the balancing exercise required in considering whether to order the split, the Court is concerned to know that if a second trial is required following the conclusion of the first, that it will not be more expensive and more time consuming in the aggregate than a single trial of all issues. If it is likely to be more time consuming and expensive, then there would need to be some other efficiency gained or unfairness avoided, which justifies that result. There is no evidence that there is such efficiency if both trials are required, nor is there any evidence that any inefficiency is otherwise justified.
For the foregoing reasons, I will not make orders sought by the plaintiff to split the trial.
Disposition
I will order that the plaintiff make discovery of the Documents in this proceeding as a class of documents under s 55(2)(a)(i) of the CPA.
The plaintiff’s amended summons will be otherwise dismissed.
Although I have not determined the plaintiff’s release application, the orders that I have made give effect to the plaintiff’s objectives which motivated that application. However, the balance of the plaintiff’s applications have been unsuccessful, and costs ought follow the event. I will accordingly order that the plaintiff pay the defendant’s costs of and incidental to its amended summons.
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