Lane v Channel 7 Adelaide Pty Ltd No. Scciv-03-1394

LANE & ANOR v CHANNEL 7 ADELAIDE PTY LTD
[2003] SASC 391
Appeal from a Master

PRIOR J: The defendant to proceedings seeking damages for defamation said to arise out of a television broadcast appeals against orders of a master dismissing the defendants’ applications for further and better discovery from the plaintiffs and non-party discovery from three companies in the Westpac group of companies.
The plaintiffs were legal representatives of a former magistrate, a defendant in proceedings in the District Court. They claim that they were defamed in the broadcast by statements alleging that they had presented information to the District Court which was false and misleading and that they had conspired with, or knowingly assisted the magistrate to deprive those making claims in the District Court from receiving fair compensation.
In answer to the defamation claim, the defendant has pleaded justification, fair comment and qualified privilege. Within the defence, the defendant has pleaded details of the assets of the magistrate and the knowledge of the plaintiffs of those assets. In the application for discovery it was submitted that documents relating to fees charged by the plaintiffs, the assets of the magistrate or the knowledge of the plaintiffs of those assets are directly relevant to issues arising in the defamation proceedings.
In this appeal it is complained that the master erred in refusing the application for further and better discovery. The master found there were no grounds for believing that any of the documents or classes of documents sought in the application might be, or might have been in the possession, custody or power of either of the plaintiffs.
It is also complained that the master erred in holding there was no value in the plaintiffs being directed to file a supplementary list of documents, setting out when the documents sought were last in their possession, custody or power and how they came to leave their possession, custody or power.
The master properly recognised that lists of documents having been filed on behalf of each of the plaintiffs, there was a presumption that the plaintiffs had discharged their obligation under Supreme Court Rule 58A. If there was to be any further order, it was for the defendant to discharge the onus cast on it under r 58.04(e). Before any order for discovery is made on the application there had to be grounds for a belief that any document discoverable under r 58A.03 was, or had been in the possession, custody or power of the opposing party[1].
[1]Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335
The defendant complains that the master has taken an inappropriately stringent view of the requirement that the defendant make out grounds for a belief that some document or class of documents relating to any matter in question in the proceedings may be, or may have been in the possession, custody or power of the plaintiffs.
An order for further and better discovery cannot be made unless the applicant shows that the documents are directly relevant to an issue arising on the pleadings[2]. The affidavit in support of the order for further discovery identified six categories of documents, which it was said should be discovered.
[2]Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [16]
The first were documents relating to the former magistrate’s superannuation policies and bank accounts with Westpac. The plaintiffs’ response to the affidavit in support was not to deny the existence or relevance of such documents but assert that they came into existence for the sole or dominant purpose of litigation and were therefore privileged in their hands. On the material before him, the master said he was not satisfied that there were grounds to consider that either the plaintiffs had those documents in their possession. The defendant says that that is contrary to the second plaintiff’s assertions that she had conducted full investigations of all of the magistrate’s superannuation policies and transfer of monies into his bank accounts. It is submitted that the master simply should have considered the claim made by the plaintiffs as to legal professional privilege and rejected it. The defendant says that the claim for privilege did not attach to the documents sought to be produced. In the alternative, if there was a privilege attaching to the documents, that privilege had been waived.
I agree with the master. The privilege is the former magistrate’s, not that of the plaintiffs[3]. No waiver is made out. It is noted that since the hearing before the master a list of documents has been filed by a non party, which includes the Westpac documents. The respondents are able to refrain from any order to produce these documents absent being heard on a production argument with respect to the non party list. That apart, I am not persuaded that these documents are “directly relevant to any issue arising in the pleadings”. The defendant has not demonstrated that this material tended to prove an issue in the pleadings[4]. The application for further discovery could well be described as fishing and thus outside the reach of SCR 58A.03[5]. The intended use of the documents is not clearly identified. It should have been[6]. Further, I think the master was correct in his view that the affidavits before him did not support the contention that this material was currently in the possession of the plaintiffs. I agree that it is pointless to require the filing of a supplementary list.
[3]Procter v Smiles (1886) 55 LJ 527; Great Atlantic Ins v Home Insurance [1981] 2 All ER 485 at 493
[4] Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [11]
[5]Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [12]
[6] Rehn v Australian Football League [2003] SASC 159 at [20]
The documents identified as legal fee accounts and trust account statements are documents no longer in the possession of the second plaintiff and never in that of the first. As with the Westpac documents, there is no value in directing a supplementary list in respect of those documents nor is direct relevance made out.
The defendant sought discovery of any insurance policies and related correspondence held by the former magistrate. Reference was made in an affidavit to the second plaintiff referring to the absence of a policy on the contents of a country property, the insurance of which was void. The affidavit in reply from the plaintiffs’ solicitor asserted that there were no such policies in the possession of his clients and that they never did have them.
The plaintiffs emphasise that the master was asked for the discovery order to go to any policies of insurance and not related correspondence. In any event, any merit in the present protest that the answering affidavit did not expressly deal with related correspondence or documentation cannot justify an order for discovery by way of a second schedule given the list now filed by the legal practice that the second plaintiff was associated with. The master acted correctly in refusing the discovery on the express denials of the plaintiffs’ solicitor[7].
[7]Southern Equities Corporation Limited in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [17]
I think the master was right to refuse to make any order in relation to the discovery sought of “correspondence with Nuriootpa police regarding … break‑ins”. The affidavit in support of the discovery complained that the request resulted in no notes or other documentation being disclosed but only contact telephone numbers for the Nuriootpa Police Station. The appellant concedes that the affidavit in response makes it plain that the plaintiffs do not currently have any documents relating to the break-ins in their possession, custody or control. However, it is submitted that a natural inference from the material set out in the affidavit in support of the application is that the second plaintiff did, at some stage, have some material in her possession, custody or control and that should call for an order that a second schedule discovery be now made. The plaintiffs’ counsel gave an unequivocal assertion to me to answer that complaint. Accepting that, I refuse to make any order sought with respect to this topic.
The second plaintiff’s list of documents includes some which relate to the retention of Mr van Kruyssen to make a valuation of the contents of the country property. The defendant’s affidavit in support claims that the discovery lacks correspondence of approaches to Mr van Kruyssen to carry out the valuation, or of approaches to any other valuers, or of any instructions or briefing to him in relation to assets - nor has Mr van Kruyssen’s account for the valuation been discovered.
The master found that the second plaintiff’s list of documents was a sufficient response. The defendant complains that it is not sufficient for the plaintiffs’ solicitor to assert that all relevant documents within this category have been discovered. The response is said to be uninformative. It is said not to be a denial that any of the documents sought, beyond those already discovered, have been discovered but a denial that no relevant documents remain to be discovered. The defendant submits that while a court will not readily go behind an assertion of fact made by a practitioner, where an assertion is a conclusion of law the court should do so. Reliance was placed upon the court’s power to order discovery of documents if the interests of justice require it though the documents not be directly relevant.
The submission is that the structure of the rules requires the court to be provided with facts in relation to the existence or otherwise of documents or categories of documents sought and not the opinion of a legal practitioner as to the outcome of the application of a legal test. Thus, it was submitted that it is not an adequate answer to a request for further discovery to have a legal practitioner assert that all relevant documents have been discovered.
No application was made for extended discovery when the matter was before the master. I do not think it is appropriate to give it now on this appeal, particularly as there is a list of documents filed by Mr van Kruyssen and a further application before the master on 1 December. I am not persuaded that it is appropriate to make any order nor insist upon any asserted power to challenge the assertion made by the plaintiffs’ solicitor as to the absence of directly relevant documents. I cannot see that the interests of justice would justify the invocation of r 58A.04 against the list of documents already filed and the forthcoming application.
The master found there was nothing before him to justify an order in relation to documents relating to a memorandum of understanding entered into by the parties to the civil action. The master’s view was that there was nothing in the affidavit in support of the application with respect to the memorandum which would cause one to believe that there were documents of any particular kind relating to the memorandum which are or ever have been in the possession, custody or control of the plaintiffs other than those already discovered. Besides that, as with other matters, the plaintiffs’ solicitor swore that all relevant documents had been discovered.
The defendant presses the application for discovery, insisting that in the absence of an unequivocal statement by or on behalf of the plaintiffs that the documents sought are not and have not been in the possession, custody or control of the plaintiffs the order should go. I am not persuaded that it is appropriate to challenge the assertion by the plaintiffs’ solicitor that the only documents in this category have been discovered. The unequivocal statement called for by the defendant in the course of this appeal is made, accepted and acted upon to dismiss this part of the application on appeal.
As for the applications for non party discovery against Westpac companies, one application sought orders from Westpac Financial Services Limited in relation to superannuation services provided to the former magistrate for the period from 1 January 1999 to the present, as well as copies of statements of any superannuation policies, notes or correspondence between Westpac and persons acting as the former magistrate’s solicitors.
The master refused to make an order in relation to this application on the ground that the documents sought were not directly relevant to an issue in the pleadings. The master rejected the assertion that the documents sought to be discovered were directly relevant. True it was that in the pleadings the defendant gave details of the assets of the former magistrate and pleaded knowledge of the plaintiffs. The defendant also pleaded that despite the former magistrate having assets of substantial value in the form of real property, superannuation and artefacts, little money remained to satisfy the award of damages made in favour of the plaintiffs in the District Court proceedings because virtually all of the former magistrate’s assets have been used up to pay for his legal fees in connection with his defence of criminal charges.
I agree with the master. Direct relevance was not made out. Even if some of the documents were directly relevant, the material within the category identified in the application for discovery were not. On that basis, the master had to refuse the order[8]. As for the material sought to be discovered against the two other Westpac companies, Westpac General Insurance Limited and Westpac Banking Corporation, I accept the submissions put on behalf of the respondents in their oral submissions and outline. The documents sought against the insurance company were described as documents in relation to insurance services provided to the former magistrate. In the case of the application addressed to Westpac Banking Corporation, the defendant sought discovery of financial services provided to the former magistrate from 1 January 1999 to the present, as well as the statements of accounts held by him and copies of any credit card statements, as well as documents in safe deposit boxes and copies of notes or correspondence between Westpac and persons acting for the former magistrate.
[8] Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [36]
I agree with the submission put by the respondents on appeal, that the documents said to be held by Westpac would only be relevant, if at all, in an indirect manner. The documents could, at best, be said to be tending to prove something that may be relevant to an issue[9].
[9] Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [11]
Of particular significance is the attempt to seek discovery of material years before the relevant event. That approach renders the master’s refusal all the more inevitable[10]. I am not persuaded that the interests of justice call for the orders sought.
[10] Quenchy Crusta Sales v Logitech (2002) 223 LSJS 271 at [36]
The appeal is dismissed.
Footnotes
1.Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335
2.Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [16]
3.Procter v Smiles (1886) 55 LJ 527; Great Atlantic Ins v Home Insurance [1981] 2 All ER 485 at 493
4.Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [11]
5.Southern Equities Corporation Limited (in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [12]
6.Rehn v Australian Football League [2003] SASC 159 at [20]
7.Southern Equities Corporation Limited in liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 at [17]
8.Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [36]
9.Quenchy Crusta Sales v Logitech (2002) 223 LSJS 266 at [11]
10.Quenchy Crusta Sales v Logitech (2002) 223 LSJS 271 at [36]

[2003] SASC 391

28 November 2003