Karen White t/as Jewel Cave Cafe v Bromic Pty Ltd
[2019] WADC 34
•20 MARCH 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: KAREN WHITE t/as JEWEL CAVE CAFE -v- BROMIC PTY LTD [2019] WADC 34
CORAM: LEMONIS DCJ
HEARD: 18 FEBRUARY 2019
DELIVERED : 20 MARCH 2019
FILE NO/S: CIVO 46 of 2018
BETWEEN: KAREN WHITE t/as JEWEL CAVE CAFE
Applicant
AND
BROMIC PTY LTD
Respondent
Catchwords:
Application for pre-action discovery - Appeal from decision of the deputy registrar refusing application - Appeal by way of hearing de novo
Legislation:
District Court Rules 2005 (WA), r 15
Rules of the Supreme Court 1971 (WA), O 26A r 4
Result:
Appeal allowed
Representation:
Counsel:
| Applicant | : | Mr G J Pynt |
| Respondent | : | Ms E Luck |
Solicitors:
| Applicant | : | Hall & Wilcox Lawyers |
| Respondent | : | HWL Ebsworth Lawyers |
Case(s) referred to in decision(s):
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47
GH v AB [2019] WASCA 47
Horwood v Davenport [2014] WASC 436
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14(S)
The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [2009] WASCA 146
Waller v Waller [2009] WASCA 61
LEMONIS DCJ:
This is an appeal from a decision of Deputy Registrar Harman made 5 September 2018 dismissing the applicant's application against the respondent for pre‑action discovery pursuant to O 26A r 4 of the Rules of the Supreme Court 1971 (WA) (RSC). The appeal is brought pursuant to r 15 of the District Court Rules 2005 (WA) (DCR). The appeal is by way of a hearing de novo. As I propose to allow the appeal, I make clear at the outset that the material before me was substantially different to, and more expansive than, the material which was before the learned deputy registrar.
Background
The applicant, Ms White, was the owner of a café in Augusta called the Jewel Cave Café (Café). There was a fire at the Café. The fire caused substantial damage to the Café, its contents and a nearby Visitors Centre. Ms White suffered losses as a consequence. Ms White contends the fire was caused by a refrigerator designed and manufactured by the respondent, Bromic Pty Ltd (Bromic). Ms White applies for the discovery of documents by Bromic to assist her in deciding whether to commence proceedings against it. The documents sought comprise Bromic's investigations as to the cause of the fire and Bromic's claim form lodged with its insurer consequent upon the fire.
Principles applicable to appeal
Rule 15(6) of the DCR provides that an appeal from a registrar to a judge 'is to be by way of a new hearing of the matter that was before the registrar'. This requires the appellant body to exercise its powers whether or not there was error at first instance.[1]
[1] Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47 [14].
Order 26A r 4 of the RSC
Order 26A r 4 of the RSC provides to the court a discretion to order what is commonly known as pre‑action discovery where the prerequisites set out at O 26A r 4(1), r 4(2) and r 4(3) are met.
In order to enliven that discretion, the applicant for the order must establish by evidence that:
1.The applicant may have a cause of action against the potential party;
2.The applicant wants to commence proceedings against the potential party or to take proceedings against the potential party in the course of an action to which the applicant is a party;
3.The applicant, after reasonable enquiries, has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings;
4.There are reasonable grounds for believing that the potential party had or has, or is likely to have had or have, possession of documents that may assist in making the decision (the decision being whether to commence or take proceedings).[2]
[2] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [2009] WASCA 146 [12] (McLure JA) (with whom Miller JA agreed).
The order contains a mix of objective and subjective elements.[3]
[3] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [14].
Whether an applicant may have a cause of action is an objective question.[4] In GH v AB[5], Mitchell JA stated that an applicant:
must demonstrate more than mere assertion, conjecture or suspicion, but does not have to positively establish the existence of a cause of action. What the applicant must produce is evidence showing that he, she or it may have a cause of action.
[4] Waller v Waller [2009] WASCA 61[75].
[5] GH v AB [2019] WASCA 47 [34].
The court must form an opinion as to whether there is sufficient evidence before it that the applicant may have a cause of action against the potential party.[6] The ambit of the evidence reasonably required to establish that the applicant 'may have a cause of action' will be assessed in the context of the character and ambit of the relief sought.[7]
[6] Waller v Waller [75].
[7] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14 [3].
It is a natural corollary to the prerequisite that an applicant has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings, that at the time of making the application the applicant has not made such a decision.[8]
[8] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [17]; Horwood v Davenport [2014] WASC 436 [8(f)].
At first glance, the separate requirements that an applicant wants to commence proceedings, yet has not made a decision to commence proceedings, may appear contradictory. However, each is a separate and distinct subjective matter. A person may want to carry out a particular act (here, commence proceedings), yet, the decision to do so remains dependent upon other factors. As McLure JA (with whom Miller JA agreed) explained in TheNew South Wales Solicitors Mutual Indemnity Fund:
It is also necessary to consider the scope and relationship between the requirement that the applicant wants to commence or take proceedings against the potential party and the requirement that the applicant does not have sufficient information to enable a decision to be made as to whether to commence or take proceedings. The first of the two requirements (which has no equivalent in the Federal Court rule) places a limitation on the extent to which an applicant can fish for information. As the applicant must show that it wants to commence or take proceedings against the potential party, it follows that if the missing information supports its claim, proceedings would be commenced or taken. The conditions enlivening the discretion are not met if the applicant requires the information in order to determine whether or not it wants to take proceedings.[9]
[9] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [16].
The reasonableness of the inquiries and the sufficiency of the information available are objective standards.[10] In The New South Wales Solicitors Mutual Indemnity Fund[11] McLure JA stated that sufficient information means:
… no more than that which is reasonably necessary to enable the person to decide whether to commence or take proceedings. … Ordinarily, what is reasonably necessary is unlikely to extend beyond documents constituting or contemporaneously recording the material facts or information necessary to determine the material facts. It should not extend, for example, to the potential parties' subjective evaluation of its potential liability.
[10] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [14].
[11] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [15].
The factors relevant to the exercise of the discretion once it is enlivened were set out by Mitchell J (with whom Martin CJ and Buss JA agreed) in Kelbush.[12] Important amongst those factors is the principle of proportionality. As Martin CJ observed in His Honour's reasons:
The cost and delay involved in the provision of the discovery sought must be proportionate to the forensic benefit likely to be derived and to the value and importance or complexity of the subject matter of the proceedings.[13]
Material relied upon
[12] Kelbush [120] – [124].
[13] Kelbush [6]. See also Mitchell J [121] – [124].
Ms White has filed affidavits of Ms Stacey Marino, a solicitor employed by the plaintiff's solicitors, sworn 19 March 2018, 5 April 2018, 20 July 2018 and 3 September 2018, Ms White's undated affidavit filed 3 December 2018 and an affidavit of Mr George Gryllis sworn 3 December 2018. Mr Gryllis is employed by Allianz Australia Insurance Ltd (Allianz), which is the property and liability insurer for Ms White.
Bromic has filed an affidavit of its solicitor, Mr Thomas, sworn 3 August 2018.
Ms White seeks orders for pre-action discovery in the terms set out in her amended appeal notice dated 14 September 2018 by reference to the categories set out at pars 8 and 11. During argument on the appeal, counsel for Ms White did not press the categories set out at pars 9 and 10 of the amended appeal notice.
The categories sought at pars 8 and 11 are:
8.All investigation reports, including but not limited to, any fire investigation report or reports prepared by Jim Manser of Jim Manser Fire and Marine Investigators in relation to the fire that occurred on about 27 October 2015 at 1 Jewel Cave Road, Augusta in the State of Western Australia.
…
11.The claim form lodged by the defendant regarding that fire that occurred on about 27 October 2015.
Bromic's position
Bromic's contentions against the grant of pre-action discovery are summarised at pars 24 – 29 of its submissions:
1.Ms White already has sufficient information on which to decide whether to commence proceedings.
2.Ms White has already decided to commence proceedings.
3.There is no evidence to satisfy the court that there are reasonable grounds for believing Bromic has or had the majority of documents sought in its possession.
4.The discovery sought goes far beyond what is reasonably necessary to determine whether to commence proceedings and appears to be aimed at discerning the merits of Ms White's case and likely defences available to Bromic.
5.For these reasons, the discretion is not enlivened, or if enlivened should not be exercised in Ms White's favour.
The possible cause of action
In assessing whether Ms White may have a cause of action, it must be kept in mind that Ms White need not establish the existence of a cause of action. She only needs to demonstrate she may have a cause of action beyond 'mere assertion, conjecture or suspicion'.
The facts relating to Ms White's alleged cause of action are set out in Ms White's affidavit. They are as follows. From 15 December 2010 until July 2017, Ms White operated the Café at 1 Jewel Cave Road, Augusta (the property). She occupied the property pursuant to a lease from its owner, the Augusta Margaret River Tourism Association Inc (AMRTA). The AMRTA also owned the Jewel Cave Visitors Centre located on the property.[14] Metro Beverage Company (MBC) supplies beverages such as water and cool drinks. Its representative persuaded Ms White to allow MBC to install a refrigerator at the Café to display MBC products.[15] On 1 October 2015 MBC delivered what Ms White believed was a brand new refrigerator manufactured by Bromic.[16] Ms White did not have a written agreement with MBC for the supply of the refrigerator.[17] Ms White closed the Café at 5.00 pm on 26 October 2015.[18] On about 27 October 2015 there was a fire inside the Café which resulted in damage to the Café building, to Ms White's goods and to the Visitors Centre.[19] Ms White submitted an insurance claim in respect of the fire with her insurer, Allianz.[20]
[14] Paragraphs 4 - 5 of Ms White's affidavit.
[15] Paragraphs 8 – 11 of Ms White's affidavit.
[16] Paragraphs 13 – 15 of Ms White's affidavit.
[17] Paragraph 16 of Ms White's affidavit.
[18] Paragraph 22 of Ms White's affidavit.
[19] Paragraphs 25 – 29 of Ms White's affidavit.
[20] Paragraphs 30 – 32 of Ms White's affidavit.
When Ms White attended the Café on 27 October 2015 after she was notified of the fire she noticed that the wooden floor underneath the Bromic refrigerator was the only part of the Café floor that was burnt.[21] Ms White also noticed that the ceiling above the refrigerator was intensely burned.[22] She formed the view that the fire had started with the Bromic refrigerator.[23] Bromic appointed Mr Michael Illari to assess the matter.[24] Mr Illari inspected the fire scene on 30 October 2015.[25] During this inspection Ms White heard Mr Illari speaking on the telephone outside of the Café saying words to the effect that the refrigerator was Bromic's and it looked like it had caused the fire.[26] Mr Illari then returned to the Café and said to Ms White that 'the Bromic refrigerator had caused the fire'.[27] Mr Illari also said to Ms White the hot spot was at the base of the fridge near the motor and fan area.[28]
[21] Paragraph 35 of Ms White's affidavit.
[22] Paragraph 41 of Ms White's affidavit.
[23] Paragraph 42 of Ms White's affidavit.
[24] Paragraph 48 of Ms White's affidavit.
[25] Paragraph 49 of Ms White's affidavit.
[26] Paragraph 57 of Ms White's affidavit.
[27] Paragraph 58 of Ms White's affidavit.
[28] Paragraph 59 of Ms White's affidavit.
At a later time, two men who explained to Ms White that they were instructed by Bromic attended the Café and told Ms White the cause of the fire definitely appeared to be the fan in the refrigerator and they showed Ms White the motor and fan. The two men then also explained to Ms White how they came to the conclusion that the fan started the fire.[29] The two men then took the motor of the refrigerator with them.[30] (I address below additional evidence as to what occurred to the motor.)
[29] Paragraphs 65 – 67 of Ms White's affidavit.
[30] Paragraphs 69 of Ms White's affidavit.
Allianz appointed Mr Paul Marsh to investigate the cause of the fire. He prepared a report. In the report, he concluded that from 'the scene examination the fire originated in the motor/compressor compartment located at the bottom rear of the MBC supplied fridge.'[31]
[31] Paragraphs 75 and 76 and page 23 of Ms White's affidavit.
Ms White received the sum of $64,871.71 from Allianz in response to her insurance claim.[32] She has further uninsured losses of approximately $130,000.[33] The AMRTA has made a claim against Ms White for the sum of $580,557.[34]
[32] Paragraph 32 of Ms White's affidavit.
[33] Paragraph 33 of Ms White's affidavit.
[34] Paragraph 34 of Ms White's affidavit.
In the evidence before me, Ms White has no contractual arrangement with Bromic.
The possible cause of action against Bromic is that its negligence in the design or manufacture of the refrigerator caused the fire. I was not taken in argument to the legal principles underpinning such a claim. They are, for present purposes, sufficiently set out in Flemings Law, The Law of Torts (10th ed, 2011) [23.30], [23.40].[35] To the extent that a claim is based upon fault in failing to take precautions against a risk of harm, the general principles contained in section 5B of the Civil Liability Act 2002 (WA) would need to be considered.
[35] See the analysis in Flemings Law, The Law of Torts (10th ed, 2011) [23.30], [23.40].
In short, the possible grounds of negligence in respect of the design and manufacture include that the fridge components which caught fire may not conform to a reasonable standard of safety, or that the design and manufacture failed to protect against the risks of the components catching fire.
For the purposes of this application, I am satisfied from Ms White's affidavit there was a fire to the Café which caused her substantial loss. I am also satisfied it is probable the fire originated in components contained within a refrigerator which Bromic designed and manufactured. Bromic has not put forward any explanation for the cause of the fire in the fridge components. The fridge had only been installed at the Café 26 days before the fire. There is no suggestion on the evidence that Ms White took any steps to alter the fridge. A possible explanation for the fire is defect in the design and/or manufacture of the components which caught fire. Other possible explanations are that the fridge was damaged after it left Bromic, or fault by MBC in its installation. However, defect in design and/or manufacture remains one of what appear to be a very limited number of possible explanations. It is therefore not mere assertion, conjecture or suspicion. In these circumstances, I am satisfied Ms White may have a cause of action against Bromic.
The motor and the fan
Before considering the second and third requirements as set out at par 5 above, it is important I first address what has become of the motor and fan to the refrigerator. I consider this is an important factor in my ultimate disposition of the appeal. If Ms White has possession of, or access to, the motor and fan, then she could engage her own experts to inspect them and the significance to her of the documents the subject of this application would be substantially lessened. Ms White effectively concedes this.[36]
[36] Paragraph 80 of Ms White's affidavit.
The evidence filed for Ms White as to the whereabouts of the fridge motor is as follows:
1.In Ms Marino's affidavit sworn 19 March 2018 she says at par 4 that she is informed by Ms White and believes that following the fire Mr Manser at the request of Chubb Insurance (said to be Bromic's insurers) attended the premises to investigate the cause of the fire and removed the fridge from the premises.
2.In Ms Marino's affidavit sworn 20 July 2018, at par 3, she said she has been informed by Ms White and believes that the motor of the refrigerator was taken by Mr Elera (presumably Mr Illari) on behalf of Bromic.
3.In Ms White's affidavit filed 3 December 2018 at pars 65 – 69, she says that the two men who told her they were instructed by Bromic attended the Café and took the motor of the refrigerator.
4.Mr Marsh in his report annexed at KYW4 to Ms White's affidavit stated that the fire investigator for MBC, Mr Jim Manser, took the remains of the fan and motor and Mr Marsh assumed Mr Manser would conduct further tests.
On the evidence before me, at times there was reference to the motor only, as distinct from the motor and the fan. However, on the evidence as a whole, the motor and fan were contained within the same compartment.[37]
[37] See the photographs in the Marsh report at page 20 of Ms White's affidavit.
Bromic has not filed any evidence as to what has become of the motor and the fan. In the letter from Ms White's solicitors to Chubb Insurance (Bromic's insurer) of 6 December 2017 annexed as part of SJM2 to Ms Marino's affidavit sworn 19 March 2018, Ms White's solicitors asked Chubb Insurance to advise whether Bromic had 'retained the fridge in question and where it can be inspected if required.' On the material before me there was no response to that letter. At the hearing of the appeal, I raised with counsel for Bromic what the current status was of the motor and the fan, however instructions in response to my query were not available to her.
The evidence filed for Ms White is contradictory. There is no explanation in her affidavit as to why her evidence as to what happened to the motor differs from Ms Marino's earlier affidavits. However, one consistent aspect of the affidavits filed for Ms White (which is not contradicted by Bromic) is that Ms White does not have possession of the motor and the fan. Accordingly, I find that Ms White does not have possession of the motor and the fan.
Considering the evidence as a whole, I find that there is a reasonable possibility Bromic had possession of or access to the motor and fan at some stage after it was taken from the Café. I do not consider I am able to make any finding as to whether the motor and fan have been preserved and, if preserved, who now has possession of them.
Further, there is no readily apparent right which Ms White has to call for an inspection of the motor and the fan. During the appeal, the parties could not point to any such right. Order 52 r 2(1) of the RSC provides for an order for preservation or inspection of any property but this must be on the application of any party to a cause or matter. It would therefore not appear to apply here.
I proceed to determine the appeal having regard to the following:
1.My finding that Ms White does not have possession of the motor and fan.
2.There is a reasonable possibility Bromic had possession of or access to the motor and fan at some stage after it was removed from the Café.
3.I am not able to make any finding as to whether the motor and fan have been preserved and, if preserved, who now has possession of them.
4.Even if preserved, Ms White does not appear to have any right to call for the motor and a fan to be produced for inspection.
Ms White wants to commence proceedings
Ms White states that she wants to commence proceedings against Bromic at par 78 of her affidavit filed 3 December 2018. Bromic does not contest this. I therefore find Ms White has established the second of the criteria set out at [5] above.
Has Ms White made reasonable enquiries and does she have sufficient information to enable a decision to be made to commence proceedings?
Other than a general discussion regarding the possibility of pleading inferences, whether or not Ms White may be able to avail herself of evidentiary inferences such as those outlined at [23.50] of Fleming was not argued before me and I make no comment on their possible application. In any event, the possible application of such inferences does not exclude the possibility of the fire having been caused by factors extraneous to Bromic.
In my view, Ms White's evidence outlined at [19] – [22] above demonstrates she has sufficient information to determine whether or not the Bromic refrigerator caused the fire. However, that is only part of the assessment which needs to be undertaken. Ms White's possible cause of action will require her to prove negligence on Bromic's part in respect of, at least, the design or manufacture of the motor or the fan.
Ms White's submissions point out at par 28 that there are two pertinent factors which affect a decision whether or not to commence proceedings against Bromic. First, whether or not the fire might have started because of either the way in which MBC installed the refrigerator, or something that had happened to it after it left Bromic's custody. Second, why or how the refrigerator started the fire, as this might reveal whether it was caused by a design or manufacturing defect. Ms White does not have sufficient information on the subject matters outlined at par 28 of her submissions.
The Marsh report annexed to Ms White's affidavit states at page 11:
As the fridge was only weeks old at the time of the fire and it is evident that the fire originated in this area and most likely originated within the Bromic fridge there appears to be a relatively good chance of recovery from the manufacturer.
This is a conclusion which presumes negligence on the part of Bromic. To have any validity, such a conclusion would require an assessment of the cause of the fire within the refrigerator parts. It would also require an assessment of the applicable legal principles, in respect of which Mr Marsh has no professed expertise. Therefore, I do not consider this statement in Mr Marsh's report constitutes sufficient information to enable a decision to be made as to whether to commence or take proceedings against Bromic. Furthermore, Mr Marsh states in the last paragraph of his report that as he cannot have the subject components examined 'I cannot state what the ignition source was or what the combustible first ignited was, however I can state that the fire originated within the Motor/compressor compartment…'.
As explained above, Ms White is not able to facilitate an inspection of the motor and fan by experts she appoints. Bromic's solicitors' letter attached at KR-2 to Mr Thomas' affidavit accepts this is a relevant factor. The letter states:
Ms White's ability to undertake her own expert examination of the fridge is clearly a relevant factor.[38]
[38] Paragraph 6 of the letter on page 26 of the affidavit.
Ms White had discussions with the Bromic representatives at the Café regarding the cause of the fire. While these discussions revealed that the source of the fire within the refrigerator appeared to be the fan, the Bromic representatives did not descend to how or why the fan caught fire. Ms White obtained information from the Department of Fire & Emergency Services pursuant to a Freedom of Information application. The information she received refers to an apparent electrical fault, however it does not descend to any detail as to what caused the electrical fault.[39]
[39] Page 2 of Incident Comments forming part of Attachment SJM1 to Ms Marino's affidavit sworn 19 March 2018.
Having regard to these matters, in my view Ms White has made reasonable enquiries and has not been able to obtain sufficient information to decide whether or not to commence proceedings.
Has Ms White already made a decision to commence proceedings?
In assessing this issue there are three relevant affidavits - Ms Marino's affidavit sworn 19 March 2018, Ms White's affidavit filed 3 December 2018 and Mr Gryllis' affidavit sworn 3 December 2018.
In interpreting an affidavit, I must read it as a whole. I should not interpret the affidavit by looking at any particular sentence in isolation to the balance of the affidavit.
Bromic submits Ms White has already made a decision to commence proceedings. Bromic points to par 6(a) of Ms Marino's affidavit, where Ms Marino states Ms White had instructed her solicitors to commence proceedings against Bromic. However, that sentence cannot be looked at in isolation to the rest of the affidavit, in particular the rest of par 6. Paragraph 6 is an attempt to summarise what is set out in Ms White's solicitors' letter to Chubb Insurance of 6 December 2017 appearing as part of annexure SJM2 to the affidavit. The letter stated:
Our clients [being Ms White and Allianz] wish to commence proceedings against your insured for damages to its property, in addition to damage to goods and business interruption. However, our clients, after reasonable enquiries, have not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings.
This makes clear that a decision had not been made to commence proceedings. This is also consistent with par 6(b) of the affidavit which says that Ms White had 'not been able to make a decision as to whether or not to commence proceedings against Bromic.' Paragraphs 9 and 11 of Ms Marino's affidavit are to similar effect.
I therefore find Ms Marino's affidavit is not to the effect that Ms White has already made a decision to commence proceedings. This finding is consistent with Ms White's affidavit at par 78, which is the most recent exposition of Ms White's position. It states:
I want to commence proceedings against Bromic in relation to my losses, however, I have been unable to make a decision about that because I do not think I have sufficient evidence about how or why the fire started in the Bromic refrigerator.
Bromic also points to Mr Gryllis' affidavit in support of its submission that a decision has already been made to commence proceedings. Like Ms Marino's affidavit, Mr Gryllis' affidavit needs to read as a whole. Paragraph 6 of the affidavit says that Allianz intends to pursue a subrogated claim and commence proceedings against Bromic. However, par 7 of the affidavit says that Allianz has not commenced proceedings against Bromic as there is presently insufficient evidence as to how and why the fire commenced in the Bromic refrigerator. Read together, pars 6 and 7 convey that Allianz has not made a decision to commence proceedings.
I therefore reject Bromic's submission that Ms White has already made a decision to commence proceedings.
Are there are reasonable grounds for believing Bromic had, has or is likely to have had or to have, possession of documents that may assist in making the decision?
Consideration of this criteria obviously must be assessed having regard to the documents sought by Ms White. They are:
1.All investigation reports, including but not limited to, any fire investigation report or reports prepared by Mr Jim Manser of Jim Manser Fire and Marine Investigators in relation to the fire that occurred on about 27 October 2015 at 1 Jewel Cave Road, Augusta in the State of Western Australia.
2.The claim form lodged by the defendant regarding that fire that occurred on about 27 October 2015.
I have set out above those parts of Ms White's affidavit which demonstrate she may have a cause of action. They include that the fire caused significant damage and that on two occasions different persons appointed by Bromic attended the Café to investigate the fire. They inspected the refrigerator; Mr Illari took photographs of the refrigerator.[40] Plainly, the purpose of the inspections was to investigate the possible cause of the fire and report back to Bromic. It is very likely that such reports would be in writing. Additionally, having regard to the significance of the fire and the acknowledgement from Bromic's appointed representatives that it originated within the refrigerator, in my view it can be inferred Bromic would have investigated the cause of the fire and it is very likely the outcome of such investigation would have been reduced to writing. Accordingly, in my view, there are reasonable grounds for believing Bromic has in its possession investigation reports in relation to the fire.
[40] Paragraphs 56 – 60, 65 – 68 of Ms White's affidavit.
In respect of the reference to Mr Manser's report contained within the first category, there appears to be much controversy between the parties as to whom Mr Manser represented and who was provided with access to his report. Ms White says at par 76 of her affidavit Mr Manser attended the Café on the instructions of Bromic's insurer Chubb Insurance. Mr Marsh's report attached to Ms White's affidavit says MBC had arranged for Mr Manser to attend. The issue of Mr Manser's report is also dealt with in the correspondence attached to Mr Thomas' affidavit. The correspondence concludes with the letter from Bromic's solicitors to Ms White's solicitors annexed at KRT-10 to the affidavit, in which Bromic's solicitors state their instructions are that Bromic does not have and never has had possession, custody or power of any fire investigation report prepared by Mr Manser in relation to the fire in question.[41]
[41] Page 55, par 6(d) of the affidavit.
In my view, I do not need to resolve this controversy for the purposes of determining this appeal. The words in the proposed category referable to Mr Manser are not limiting words. They can be removed. If the person swearing the required affidavit of discovery on Bromic's behalf is satisfied Bromic does not have and never has had possession, custody or power of any fire investigation report prepared by Mr Manser, then it will not be included in the affidavit of discovery.
In relation to the claim form at category 2, the evidence establishes Bromic is insured by Chubb Insurance and it has been involved in respect of this matter.[42] Therefore, in my view there are reasonable grounds to believe that Bromic lodged a claim form with its insurer in relation to the fire.
[42] Paragraph 5 of Mr Thomas's affidavit; e-mail from Chubb to Bromic's solicitors, Annexure KRT-1, page 5 of Mr Thomas's affidavit.
Having found that there are reasonable grounds for believing Bromic has possession of the documents sought, I then must assess whether those documents may assist in Ms White making the decision whether or not to commence proceedings. In essence, what is sought by the documents is information as to how the fire started within the refrigerator. In my view, the character of the documents sought make it likely they will contain information as to the possible cause of the fire within the refrigerator. The possible cause of the fire is a key aspect of Ms White's decision making and therefore in my view the documents may assist in her making a decision whether or not to commence proceedings.
Objection to scope of discovery sought
Bromic says the documents sought go far beyond what is reasonably necessary to determine whether to commence proceedings and are aimed at discerning the merits of Ms White's case and the likely defences available to Bromic. However, a decision whether or not to commence proceedings will by its very nature entail an assessment of the merits of a possible cause of action. Where the discovery sought may become impermissible is if its purpose is to strengthen or enhance a decision to commence proceedings.[43] I do not consider the discovery sought by Ms Whyte is for such a purpose. Rather, it is directed to obtaining information as to whether the fire started because of factors not attributable to Bromic, and, how and why the refrigerator caught fire. In the circumstances of this case, such information is intrinsic to a decision whether or not to commence proceedings and is thus reasonably necessary to enable the decision to be made.
[43] The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Limited [No 2] [61].
Summary so far
In summary, I am satisfied that on this appeal Ms White has established by evidence the criteria set out at par 5 above. I must now consider the exercise of the discretion to grant the pre-action discovery sought.
Exercise of discretion
Bromic opposes the exercise of the discretion. It says the documents sought are disproportionate to Ms White's stated needs and the objective of O 26A r 4. In my view, this submission is addressed by Ms White not pressing her application in respect of the documents set out at pars 9 and 10 of the Amended Appeal Notice. The balance of the documents sought are confined. I have addressed above the remainder of Bromic's contentions which were directed to both whether the discretion was enlivened, and to its exercise.
However, I still must separately satisfy myself that the discretion should be exercised in favour of Ms White. Addressing the factors outlined in Kelbush:[44]
1.I am satisfied that Ms White may have a cause of action against Bromic, however, at this stage, it is not possible for me to assess the likelihood that the cause of action will be found to exist.
2.Ms White's claim against Bromic is between an amount of approximately $195,000 (noting Allianz's claim to subrogation in respect of the payments made to date) and a further $580,557 presumably by way of a claim for indemnity in respect of the claim made against Ms White by AMRTA. The claim is significant, not only in an objective sense, but also in respect of its importance to Ms White.
3.There is no evidence before me to the effect that to produce the investigation reports and the claim form is time consuming, costly or otherwise onerous.
4.For the reasons explained above, I consider there are not any other adequate means by which Ms White can obtain the information which she seeks.
5.There is no suggestion that the documents sought contain commercially sensitive information of Bromic, or other sensitive information. I appreciate the documents are likely to be confidential, but there is no submission put that the confidentiality is of a particularly sensitive nature.
6.Absent Ms White having access to the motor/compressor for the fridge, the information contained within the documents is likely to be of significance in Ms White's decision whether or not to commence proceedings.
7.There is no suggestion Ms White is not able to compensate Bromic for its costs of complying with the order. Further, in light of the reduced scope of the documents sought, I would not expect these costs to be significant.
8.There is no evidence of bad faith on Ms White's part.
[44] Kelbush [120].
In relation to proportionality, given the reduced scope of the documents sought and the potential significance of Ms White's cause of action, I do not consider the cost and delay involved in the provision of the discovery sought is disproportionate to the forensic benefit likely to be derived, or to the value and importance or complexity of the subject matter of the proceedings.
I appreciate the factors set out in Kelbush are not exhaustive. An additional factor I take into account is the possibility that discovery of the documents sought may assist in narrowing, at an early stage, the issues raised on any proceedings which Ms White commences. This may assist in reducing costs and also enhance the prospect of an early mediation.
Taking account of all of these matters, I am of the view I should exercise my discretion in favour of granting the application for the reduced scope of discovery now sought. I therefore allow the appeal.
Subject to hearing from the parties as to my proposed formulation of the order for discovery, I propose to make the following orders:
1.The appeal be allowed.
2.Order 1 of the order made by the deputy registrar on 5 September 2018 be set aside.
3.Within 21 days from the date of this order, the respondent file and serve on the applicant an affidavit stating whether the following documents are or were in the respondent's possession, custody or power:
(a) all investigation reports in relation to the fire that occurred on about 27 October 2015 at 1 Jewel Cave Road, Augusta in the State of Western Australia;
(b)the claim form lodged by the respondent with its insurer regarding the fire.
4.Subject to any claims of legal professional privilege by the respondent, within seven days after the provision of the affidavit of discovery, the respondent make available for inspection and photocopying by the applicant the documents discovered.
Costs
In relation to costs, my preliminary views are as follows. The usual course is that in the absence of any reason to the contrary, the applicant pays for the respondent's costs of the application and the respondent's reasonable costs of complying with any order for discovery made.[45]
[45] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14(S) [2].
In respect of the costs of the application before the deputy registrar, my preliminary view is the costs order in favour of Bromic should not be disturbed. This appeal has been conducted on substantially different material to that before the deputy registrar. Furthermore, the usual order would be Ms White pay the costs of the hearing before the deputy registrar even if she had been successful.
In respect of the costs of this appeal, in Kelbush (S)[46] Martin CJ (with whom the other members of the court agreed) held that the principle that an applicant for an order of pre-trial discovery should ordinarily pay the respondent's costs, had no application beyond the proceedings at first instance. However, Kelbush was an appeal where it was necessary to demonstrate error by the decision maker.[47] This appeal is a hearing de novo. Furthermore, this appeal was conducted on substantially different material to that before the deputy registrar.
[46] Kelbush (S) [5].
[47] Kelbush [24] – [26].
Accordingly, my preliminary view is that Ms White should pay Bromic's costs of the appeal. Consistently with the principles set out at [3] and [4] of the decision of Martin CJ in Kelbush (S),[48] I would make an order empowering Ms White to make an application in the course of any subsequent proceedings for orders with respect to the costs that she is ordered to pay Bromic and also with respect to her own costs of the appeal before me.[49]
[48] Kelbush (S) [3] - [4].
[49] Kelbush (S) [4].
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
ED
Associate to Judge Lemonis19 MARCH 2019
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