Lifeplan Australia Friendly Society Ltd v Foresters Friendly Society Ltd - [2012] SASC 173

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
LIFEPLAN AUSTRALIA FRIENDLY SOCIETY LTD & ANOR v FORESTERS FRIENDLY SOCIETY LTD
[2012] SASC 173
Reasons of Judge Lunn a Master of the Supreme Court
25 September 2012
PROCEDURE
Rule 32 – pre-action disclosure – order by consent – alleged inadequate disclosure made – application under r 32(3) to cross-examine deponent to affidavits of disclosure – held cross-examination under sub-r (3) only to be ordered in furtherance of obtaining disclosure permitted by sub-r (1) and not merely because order not fully complied with – plaintiffs had not shown that documents not disclosed might provide information to satisfy sub-paragraphs (1)(a), (b), and (c) – application refused.

LIFEPLAN AUSTRALIA FRIENDLY SOCIETY LTD & ANOR v FORESTERS FRIENDLY SOCIETY LTD
[2012] SASC 173
JUDGE LUNN:
Reasons on plaintiffs’ application to cross-examine on the defendant’s affidavits of documents

The plaintiffs have brought this action under r 32 for pre-action disclosure of documents against the defendant. On 10 August 2012 I made an order by consent (“the Order”) that the defendant disclose documents in various categories. Kerry Hughes, the Chief Executive of the defendant, has filed three affidavits (FDN5, FDN11 and FDN13) in purported compliance with the Order. There has been considerable correspondence from the plaintiffs’ solicitors to the defendant’s solicitors complaining that the defendant’s disclosure under the Order has been inadequate and incomplete.
By paragraph 4 of an application taken out on 26 July 2012 the plaintiffs sought an order under r 32(3) that Kerry Hughes be cross-examined on his affidavits[1]. The defendant opposes this application.
[1] Because the disclosure order was made by consent, FDN5 and FDN7 were filed before the consent order was made.
As far as I am aware no order has ever been made for cross-examination under r 32(3) and there is no authority on when such cross-examination will be ordered. Counsel for the plaintiffs and the defendant respectively advocated very different approaches on whether such an order should be made. The plaintiffs contended, in effect, that, if they showed that there had been significant non‑compliance with the Order, and/or the defendant had not had proper regard to its obligations to make disclosure under the Order, the Court should order the cross-examination as sought. The defendant’s counsel contended that the plaintiffs had to show more, and, in particular, that such cross‑examination was necessary to fulfil the purposes of r 32(1). For the reasons which follow I accept these contentions of the defendant. This is sufficient to dispose of the present application. It is not necessary for me to canvass the extensive arguments of the plaintiffs’ counsel about the many respects in which the plaintiffs allege that the defendant’s disclosure did not fully comply with the Order.
The relevant parts of r 32 provide:
32—Investigation
(1)If the Court is satisfied, on application by a person (the plaintiff) that the plaintiff may have a good cause of action and requires further information—
(a)to determine whether a cause of action exists; or
(b)to formulate the claim properly; or
(c)to determine against whom the claim lies,
the Court may exercise the investigative powers conferred by this rule in anticipation of an action.
(2)The Court may, if satisfied that a person may be in possession of evidentiary material relevant to the possible cause of action, make an order imposing one or more of the following requirements—
(a)to disclose to the Court or to the plaintiff whether the person is or has been in possession of relevant evidentiary material and, if so, to disclose full particulars of relevant evidentiary material that is, or has been, in the person's possession;
(b)if the person is in possession of relevant evidentiary material—to produce it to the Court or to the plaintiff;
(c)to verify the person's response to the order by affidavit.
(3)After considering a person's response (or failure to respond) to an order under subrule (2), the Court may require the person to appear before the Court for cross-examination.
It should be noted that sub-r 32(1) only deals with the plaintiffs’ need for further information on the topics in sub-paragraphs (1)(a), (b) and (c). While sub‑r (2) refers to “evidentiary material”, which term is defined in r 4, that evidentiary material is only to be given to the plaintiffs under r 32 for the purposes of them obtaining information[2]. Sub-r 32(1) does not give a plaintiff any additional right to fish for what evidence might be available in the defendant’s documents which would assist it in proving any cause of action it might otherwise have. While an order under sub-r 32(2) is likely to disclose some of the evidence available to prove the plaintiff’s claim against some particular person, that evidence is only to be disclosed insofar as it is necessary to provide the information for the purposes of sub-paragraphs (1)(a), (b) and (c). In other words, the powers under r 32 cannot be used merely to enable a plaintiff to assess its chances of successfully proving its causes of action in any subsequent action. Insofar as any purpose of the documents of a defendant is to assist a plaintiff in proving its claim, their disclosure will have to await the disclosure processes in any subsequent substantive action except insofar as they are otherwise disclosable under sub-paragraphs (1)(a), (b) and (c).
[2] I alluded to this point in my reasons in Café at Hyde Park Pty Ltd v Teddy Holdings Pty Ltd, which is quoted below.
Sub-r (1) refers to the Court exercising “the investigative powers conferred by this rule”. It is debatable whether sub-r (2) by its sub-paragraphs (a) and (b) confers one or two investigative powers, but the preamble to sub-r (2) refers to “order” in the singular. In any event I consider that the “powers” in sub-r (1) encompasses sub-r (3). This means that the power in sub-r (3) is only to be exercised for the purposes of the plaintiff obtaining further necessary information on the topics in sub-r (1)(a), (b) or (c). It is merely a means to this end and no more.
Reference was made in argument to the similar, but not identical, provisions in r 145 which provides:
145—Non-compliance with obligations of disclosure and production of documents
(1)If there is reason to doubt whether a party has fully complied with the party's obligations to disclose and produce documents under this Part, the Court may make orders the Court considers appropriate to ensure that the obligations have been fully complied with and, if necessary, to enforce those obligations.
(2)The Court may (for example)—
(a)require the party, or another person who may be in a position to provide relevant information, to appear before the Court for examination; or
(b)require the party to answer written questions relevant to ascertaining whether the party has made full disclosure.
R 145 deals with the powers of the Court where a party has not complied with its obligations under Chapter 7 Part 3 of the Rules to make disclosure and production of documents in an ordinary action. Sub-r 145(2)(a) confers an apparently similar power of cross-examination to that given by sub-r 32(3). However, the Court will only order cross-examination under sub-r 145(2)(a) where the preconditions in r 145(1) have been satisfied[3]. Sub-r (1) contains a requirement that there is a “doubt whether a party has fully complied with the party’s obligations”. There is no equivalent requirement in sub-r 32(3) about the defendant having fully complied with the order for disclosure. The only express condition to an order under sub-r 32(3) is that the Court must consider the defendant’s response or failure to respond. That is so obvious that it hardly needs to be said. It does imply that there must be some suggestion of non‑compliance with the order before cross-examination can be ordered, but it does not go as far as does r 145(1) in referring to not fully complying with the obligation to disclose.
[3] Ceneavenue Pty Ltd & Ors v Martin & Ors, White J, [2008] SASC 332.
The plaintiffs’ counsel correctly submitted that the defendant was obliged to comply properly with the terms of the Order. However, on the interpretation which I have placed on sub-rr 32(1) and (3), sub-r (3) is not directed to enforcing compliance with the Order, but rather is a supplementary power to enable the information to which the plaintiffs are entitled under sub-r (1) to be obtained by them. Any compliance with orders is to be enforced under rr 12 and 13 and the Court’s contempt powers, but the plaintiffs have not by FDN7 sought to invoke those powers[4].
[4] If they had sought to invoke the contempt powers, I would not have jurisdiction by virtue of rr 15(5) and 16(2).
The discretionary power conferred on the Court by the term “may” in sub‑r (3), is to be given a similar meaning to the power conferred by the same term in sub‑r (1) (ie. in proper cases to give the plaintiff the further information it needs on the topics in (1)(a), (b) and (c)). In respect to “may” in sub-r (1) I said the following in Café at Hyde Park Pty Ltd & Anor v Teddy Holdings Pty Ltd & Anor [2011] SASC 185, 31 October 2011, at [9]-[11]:
One of the threshold requirements imposed by 6R 32(1) for an order for pretrial disclosure is that “the plaintiff … requires further information”. …
This phrase in sub-r (1) implies that the plaintiff has some relevant information, but not enough to fulfil all of sub-rr (1)(a), (b) or (c). As the requirement for further information is a precondition to the exercise of the power, the onus is on the plaintiff to show by proper evidence all of the relevant information which it does have and why and how it needs more information to fulfill sub-rs (1)(a), (b) and (c).
I accept the defendants’ contention that it is necessary for the plaintiffs to marshal the information which it has from other sources and then to show that information is not sufficient for them to determine whether a cause of action exists, or for them to formulate their claim properly. If the plaintiffs already have the necessary information from other sources, there is no justification for an order being made under 6R 32. Here the plaintiffs have not shown that they require any further information on items 8 and 9. I do not intend to trawl through the numerous documents exhibited to the plaintiffs’ affidavits in an attempt to determine the point, when the plaintiffs have not marshalled and collated that information in a form which enables the Court to see readily that more information is required for an order to be justified under 6R 32.
The defendants’ counsel also submitted that the plaintiffs should disclose the sources from which they obtained the information which they already have on the topic. … Its source rather goes to whether the plaintiffs would be able to prove at any trial of the substantive issues what it asserts as a result of the information. R32(1) is only concerned with the content of information, and not with its evidentiary weight. …
The plaintiffs here have not made any attempt on FDN7 to show that the information which may be in the documents which they allege the defendant has not disclosed is information on the topics in sub-paragraphs (1)(a), (b) and (c) and is information which they do not already have from other sources. Merely to point to over 100 aspects which they say the disclosure is insufficient, as they have done, is not enough without showing how those documents relate to their present need for information on the topics in sub-paragraphs (1)(a), (b) and (c).
In the course of dealing with this application I noted that paragraph 5 of the Order states:
5. In the event that the Plaintiffs commence proceedings (whether in this Honourable Court or another) against the Defendant in relation to the causes of action ... the Defendant will consent to any application by the Plaintiffs for an order that the Compensation paid by the Plaintiffs be the Plaintiffs’ costs of in the cause in those proceedings.
It is not permissible for the plaintiffs to use r 32 to obtain evidentiary material for use in other than subsequent proceedings in this Court[5]. If the plaintiffs intend to make any further application under 6R 32(3), I would require an undertaking from them before making any order that they would bring any future proceedings against the defendant in this Court.
[5] Newport Quays Pty Ltd & Ors v The Urban Renewal Authority & Ors, Lunn M, 25 May 2012, [2012] SASC 84.
I have today made the following orders:
1.Paragraph 4 of FDN7 is dismissed.
2. The costs of paragraph 4 of FDN7, as agreed or adjudicated, are to be paid by the plaintiffs to the defendant.
3.Paragraph 4 of FDN7 is certified fit for counsel.
4.Liberty to apply.