Lane v Channel Seven Adelaide Pty Ltd - [2007] SASC 188

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
LANE & ANOR v CHANNEL SEVEN ADELAIDE PTY LTD
[2007] SASC 188
Reasons of Judge Burley a Master of the Supreme Court
30 May 2007
PROCEDURE - DISCOVERY AND INTERROGATORIES
Application for further and better discovery and leave to interrogate - defamation proceedings - computer software and documents produced by the use of same - whether directly relevant - alternatively whether interests of justice to order discovery.
Provenance of document allegedly obtained unlawfully by defendant - plaintiffs wished to interrogate as to circumstances under which and from whom defendant obtained insurance schedule.
Supreme Court Rules 1987 rr 58A.03, 58A.04(1), referred to.
Channel Seven Adelaide Pty Ltd v Lane & Hurley (2004) 234 LSJS 235; Rehn v Australian Football League & Ors (2003) 225 LSJS 378; Quenchy Crusta Sales Pty Ltd v Logi-tech Pty Ltd (2002) 223 LSJSD 266 at [11]; Finsbury Print Pty Ltd &Anor v CPI Graphics Ltd & Ors (No 2) [2006] SASC 352; WA Pines Limited v Bannerman (1980) 41 FLR 175, considered.

LANE & ANOR v CHANNEL SEVEN ADELAIDE PTY LTD
[2007] SASC 188

JUDGE BURLEY: By notice for specific directions dated 1 March 2007 (FDN 109) the plaintiffs seek the following orders:
2That leave be granted to the plaintiffs to interrogate the defendant in the form of exhibit “NJI1” to the affidavit of Nicholas James Iles sworn on 1 March 2007 and filed herein.
3That the defendant be directed to answer the questions in the said exhibit within 28 days of the filing of this application with the exception of the question at paragraph 5.5 of the exhibit which interrogatory shall be answered on the first day of trial of this action.
4That the defendant provide further and better discovery, alternatively extended discovery in the interests of justice, of documents constituting the information held with respect of the investigations of the defendant for the programs identified in paragraphs, 7, 9A, 9E, 9F, 0J, 9O, 9P, 9T of the Third Further Amended Statement of Claim and the defendant’s ongoing investigation into the matters raised in those broadcasts, where such documents are part of, or utilised by, the hi-tech criminal intelligence computer software identified in paragraph 9N of the Third Further Amended Statement of Claim.
At the hearing of the application on 23 April 2007 Mr Trim QC and Mr Heuzenroeder appeared for the plaintiffs and Mr S Doyle appeared for the defendant. The plaintiffs relied upon the affidavit of the plaintiffs’ solicitor, Mr Iles, sworn on 1 March 2007.
In these proceedings the plaintiffs seek damages for alleged defamation. The proceedings were commenced in August 2002. Damages are sought in relation to five broadcasts made by the defendant in its “Today Tonight” programmes, the first of which took place in June 2002 and the fifth of which took place in May 2005.
According to the plaintiffs the broadcasts relate to the role which the defendant alleges was taken by lawyers acting for a Mr Peter Liddy in relation to the disposition of Mr Liddy’s assets.
In 2002 Mr Liddy was convicted of various sexual offences against minors. The plaintiffs represented Mr Liddy, the defendant, in civil proceedings in the District Court instituted by persons who were allegedly the victims of Mr Liddy’s sexual offending.
In their statement of claim the plaintiffs say that they were respectively counsel and solicitor for Mr Liddy. During the course of the proceedings Mr Liddy applied to vary or discharge an interlocutory injunction, the effect of which had been to preclude Mr Liddy from removing from the jurisdiction, disposing of, securing in any way or otherwise dealing with in any manner, his assets. The details of the broadcast on 10 June are set out in an annexure to the statement of claim. Without in any way attempting to be exhaustive in relation to the plaintiffs’ allegations as to the effect of the broadcast, in essence they complain that the broadcast meant that the plaintiffs procured and presented to the District Court and to the lawyers acting for Mr Liddy’s alleged victims a valuation of his assets that they knew was false and misleading or manifestly inadequate.
Application for Discovery
I shall deal first with paragraph 4 of the plaintiffs’ application. In order to understand the application, it is necessary also to refer to the fourth broadcast on 25 April 2005. During the course of that broadcast, it is alleged that the programme’s presenter referred to investigations over a three-year period in relation to Mr Liddy’s “hidden assets”. The presenter is alleged to have said that “this programme has always held the view that Peter Liddy’s victims had been deceived over the true extent and value of his historic collections”. During the course of the programme, reference was made to “the intensive work of three investigators” and “the use of hi-tech criminal intelligence computer software”.
The plaintiff’s application for further and better discovery is centred upon the computer software referred to in the fourth alleged broadcast and any documentation arising from its use. The plaintiffs seek discovery of the computer software identified in paragraph 9N of the third further amended statement of claim (“the statement of claim”). It is not in dispute that such software is a “document” for the purposes of the discovery application. Paragraph 4 of the notice for specific directions also refers to other paragraphs of the statement of claim. As I understand it, the plaintiffs seek discovery of any documentation arising from the use of the computer software in respect of the programmes identified in paragraphs 7, 9A, 9E, 9F, 9J, 9O, 9P and 9T of the statement of claim.
It is to be noted that, in paragraph 4 of the notice for specific directions, the plaintiffs apply for an order for further and better discovery in respect of which the directly relevant test applies – Rule 58A.03. Alternatively, the plaintiffs seek further discovery pursuant to rule 58A.04(1) in the event that the Court finds that the documentation sought is not directly relevant but should be discovered because “it is in the interests of justice to do so”.
Mention was made during the course of submissions that, with one exception, the defendant no longer has custody or possession of the documentation raised in respect of the use of the software. That, in itself, is not an impediment to discovery because, if the software and documentation arising from its use are found either to be directly relevant or that it is in the interests of justice to require discovery of same, the defendant is required to state the circumstances in which it ceased to have custody or possession of the documentation including, for example, the identity of any person or company who obtained possession or custody of the documentation from the defendant or whether the documentation was destroyed by the defendant.
The defendant, in opposing the application for discovery, submitted that the documentation was not directly relevant to the issues in dispute in the proceedings and that it was not in the interests of justice that discovery of such documentation be ordered.
In paragraph 9 of his written submissions Mr Doyle correctly identified the basis upon which the plaintiffs asserted that the documents were directly relevant. Reference was made to paragraph 11.13.2 of the statement of claim. The plaintiffs relied upon that paragraph, the relevant parts of which are as follows:
[The various broadcasts] constituted a course of conduct by the defendant which the defendant engaged in in order to create a sensational theme:
11.13.1 ….
11.13.2 While asserting, without a proper basis, that the defendant was concerned with the truth of the matters published, and in particular the plaintiffs’ repeat the matters in paragraph 9N herein.
11.13.2 [scil 3] regardless to the damage that would inevitably be caused to the reputations of the plaintiffs;
Both parties accepted that the question of whether or not a document is directly relevant must be determined by reference to the pleadings: Channel 7 Adelaide Pty Ltd v Lane & Hurley (2004) 234 LSJS 235 at [25] where Duggan J, with whom the other members of the Court agreed, referred to the decision of the Chief Justice in Rehn v Australian Football League & Ors (2003) 225 LSJS 378 at [24]. Because Mr Doyle criticised parts of the statement of claim (as to its sufficiency), I add that the Court takes into account the statement of claim as it is, hot how it might be.
As I understand the plaintiffs’ argument, the documentation sought is discoverable as being directly relevant because it is asserted in paragraph 11.13.2 of the statement of claim that the defendant has made the assertion “without a proper basis”. The plaintiffs’ case is that they did not procure and present to the District Court and to the lawyers acting for the alleged victims a valuation of Mr Liddy’s assets that they knew to be either false and misleading or manifestly inadequate. The plaintiffs’ submission was that no amount of investigation using sophisticated computer software or otherwise could implicate them or either of them in such conduct. Consequently the relevant computer software and the documentation arising from the use thereof was admissible in relation to their contention, in paragraph 11.13 of the statement of claim, that the defendant had engaged in a course of conduct designed to create a sensational theme, part of which included “asserting, without a proper basis, that [it] was concerned with the truth of the matters published”.
Mr Doyle submitted that the software and the documentation could only prove something that may be relevant to an issue as opposed to proof of the issue itself. If the probative force of a document is so limited, it cannot be said to be directly relevant. This is clear from the decision of the Chief Justice in Quenchy Crusta Sales Pty Ltd v Logi-tech Pty Ltd (2002) 223 LSJS 266 at [11] where his Honour said:
The point is that a document will not be directly relevant if, rather than tending to prove an issue on the pleadings, it merely tends to prove something that may be relevant to an issue.
This case and Rehn v Australian Football League are both quoted with approval by the Full Court in Channel 7 Adelaide Pty Ltd v Lane & Hurley (supra).
In Rehn the Chief Justice also said (at [24]):
Another point relevant to the meaning of r 58A.03 is that the Rule assumes that a party is able to decide, from the pleadings, what documents must be discovered. This also suggests a narrow meaning for ‘directly relevant’. It would be counter-productive if a party was expected to discover documents because they might be relevant, depending on how the other party’s case was put at trial. R 58A.03 assumes that a party can determine that party’s obligation to make discovery by reference to the pleadings.
In my opinion, paragraph 11.13 of the statement of claim clearly raises the issue of the defendant allegedly engaging in conduct in order to create a sensational theme. The software and documentation sought either supports the defendant’s case that they have been right all along or it does not. If it does support the defendant’s position, it is clearly discoverable as being directly relevant to the issue of whether or not it unjustifiably sensationalised the theme. Even if the material sought by the plaintiffs can only be said to be supportive of the defendant’s case, it is still discoverable. In other words, the defendant does not have a discretion as to whether or not it will discover the material is solely beneficial to its own case.
If the material does not support the defendant’s position, it is clearly relevant to the matters pleaded by the plaintiffs in paragraph 11.13 of the statement of claim.
For these reasons, I conclude that the documentation sought in paragraph 4 of the application is discoverable as being directly relevant to the issues in dispute between the parties.
In case I am wrong in that view, I should briefly mention the question of whether or not the documentation should be the subject of a discovery order now on the basis that it is in the interests of justice to do so. In my opinion, it would be in the interests of justice to order that the documentation be discovered because, it seems clear, on the pleadings as they presently stand, that the matters referred to in the 4^th broadcast and the matters raised in paragraph 11.13 of the statement of claim will inevitably become the subject of debate during the course of the trial. There is every possibility that one or more witnesses may refer to such documentation in circumstances where the plaintiffs might justifiably call for production of the documentation. This would inevitably lead to a delay in the trial, particularly if all but one of the documents sought are now no longer in the custody or possession of the defendant.
In support of their alternative contention that the documents should be discovered because it is in the interests of justice to do so, the plaintiffs relied upon the decision of Judge Lunn in Finsbury Print Pty Ltd & Anor v CPI Graphics Ltd & Ors (No 2), an unreported decision [2006] SASC 352 where his Honour said at [23]:
While it is unknown at this stage what the documents contain, it seems likely that there will be a substantial enquiry at the trial into the comparative performances [of various equipment]. It is likely to be a complex and protracted investigation. It would not be in the interests of justice for the trial to be delayed if in the light of the other evidence adduced the trial Judge considered it proper that the plaintiffs’ witnesses in cross-examination should be required to produce the documentation in question.
His Honour made an order for discovery on the basis that it was in the interests of justice to do so. In my opinion, that approach is applicable to the circumstances of this case.
For the above reasons, there will be an order in terms of paragraph 4 of the notice for specific directions dated 1 March 2007 (FDN 109). I will hear the parties as to the time for compliance with that order.
The application for leave to interrogate.
This aspect of the application relates to an insurance schedule referred to at paragraph 11 et seq of Mr Iles’ affidavit. He has referred to paragraph 11.14 of the statement of claim, the relevant parts of which are as follows:
11.14 Further, for the purposes of creating a sensational story damaging to, inter alia, the plaintiffs’ reputations, and being retrocessed to its legal obligations, the defendant has misused documents in the course of conduct referred to in paragraph 11.13 herein.
PARTICULARS
11.14.1 …..
11.14.2 Knowing that such document was confidential, and prior to it being obtained in non party discovery in the within proceedings, the defendant obtained a schedule of insured items of Mr Liddy, which schedule was attached to Mr Liddy’s contents insurance;
11.14.3 The said insurance schedule was obtained either by participating in a breach of equitable obligation of confidence by Westpac General Insurance Limited, and further or alternatively, by participating in a breach of the Privacy Act 1988 (CTH) by Westpac General Insurance Limited;
11.14.4 Parts of the said insurance schedule were published unlawfully by the defendant in the 4^th broadcast, and were utilised by the defendant in prosecuting their defence to the within action, prior to it being discovered;
At paragraph 14 of his affidavit Mr Iles states:
I am instructed by the plaintiffs and verily believe, that they consider that the defendant obtained the insurance schedule from Westpac General Insurance Limited, based on the matters now set out in paragraph 15 to 45 inclusive hereof.
The effect of those paragraphs are:
·That for a variety of reasons Mr Liddy has neither the incentive nor the ability to provide the insurance schedule to the defendant.
·That Mr Liddy’s attorney had an obligation of confidentiality and in any event would not be likely to assist the defendant.
·That the defendant could have obtained the schedule, from Westpac General Insurance Limited.
·That no other possible source for obtaining the schedule has been identified by the plaintiffs or their advisers.
From paragraph 23 onwards, Mr Iles’ affidavit deals with the evidence that the defendant had possession of the insurance schedule as at 13 September 2004 (that is, before a copy of it was obtainable by the ordinary discovery process).
In my opinion, neither the content of Mr Iles’ affidavit, nor the submissions, either written or oral, put by the plaintiffs in support of the application for leave to interrogate, support the making of such an order. The facts, such as they are, disclose a situation which was not dissimilar to that which confronted the Full Court of the Federal Court in WA Pines Limited v Bannerman (1980) 41 FLR 175. In that case, Brennan J (as he then was) referred (at 181) to the case where:
sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery. This is not such a case. This is a case where a bare allegation is made by paragraph 6 of the statement of claim and, the paragraph being denied, the applicant seeks to interrogate the Chairman and ransack his documents in the hope of making a case. That is mere fishing. As Smithers J said in Melbourne Home of Ford Pty Ltd v Trade Practices Commission & Bannerman: “in the absence of such evidence the proceeding is essentially speculative in nature. In such circumstances for the Court to assist the applicants by making available to them the processes of interrogatories and discovery would be to assist then in an essentially fishing exercise and from this the Court on established principles should refrain”.
In my opinion, this aspect of the plaintiffs’ application must fail because it is speculative in the sense referred to by Brennan J and Smithers J in the cases respectively referred to above.
This aspect of the plaintiffs’ application will be dismissed. I will hear the parties as to the costs of the application.