Mandie v Memart Nominees Pty Ltd (No 4)
[2018] VSC 49
•7 February 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2014 06635
IN THE MATTER of the DAVID MANDIE FAMILY TRUST
| EDWARD NICHOLAS MANDIE and others | Plaintiffs |
| v | |
| MEMART NOMINEES PTY LTD (ACN 005 024 617) (as trustee for the DAVID MANDIE FAMILY TRUST) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 7 February 2018 |
CASE MAY BE CITED AS: | Mandie v Memart Nominees Pty Ltd (No 4) |
MEDIUM NEUTRAL CITATION: | [2018] VSC 49 |
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PRACTICE AND PROCEDURE — Discovery of documents — Plaintiffs’ application made late — Plaintiffs’ substantial delay not adequately explained — Where Court required to find most efficient, effective and economical management of application — Liesfield v SPI Electricity Pty Ltd (Ruling No 1) (2013) 43 VR 493.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A P Young QC Mr R W Short | Cornwall Stodart |
| For the Defendant | Mr P D Herzfeld | Allens |
HER HONOUR:
Introduction
The plaintiffs commenced this proceeding in December 2014. On 11 August 2017, the proceeding was listed for trial commencing 8 March 2018. With the trial date fixed, the pre-trial orders for the preparation of the evidence were compressed so that by the end of 2017 all of the evidence preparation would be completed. Orders made included orders that by 13 October 2017, the plaintiffs file and serve their affidavits for trial, as well as a list of documents on which they intend to rely not exhibited or annexed to an affidavit, a mediation and any final directions on 8 December 2017.
The day before the final directions hearing, the plaintiffs sought permission of the Court to issue a summons returnable on 8 December 2017 seeking orders that the defendant (‘Memart’) make discovery of seven categories of documents. The directions hearing on 8 December 2017 was the last directions day for the year. The Court was unable to accommodate the hearing of the summons that day or in the balance of December. With the proceeding listed for trial on 8 March 2018, the most expeditious manner in determining the summons was for the application to be dealt with by way of written submissions.
Accordingly, orders were made for the parties to file written submissions. The plaintiffs filed written submissions on 22 December 2017. Memart filed its responding submissions on 31 January 2018. Although not ordered, on 2 February 2018, the plaintiffs forwarded further written submissions said to be in reply to Memart’s submissions.
By email dated 7 February 2018, the Court informed the parties that:
In view of the lateness of the application, the need for a decision to be made as a matter of urgency with the impending trial date and the preparation for the trial on 8 March 2018, her Honour's view is that the defendant's proposals, as set out in paragraphs 23 to 26 of its written submission, is the just and efficient course to follow.
If required by the parties, her Honour will provide written reasons in due course.
By email dated 7 February 2018, the plaintiffs’ solicitors informed the Court that the plaintiffs required written reasons.
Factual background
The plaintiffs’ first reference to discovery by Memart is contained in a letter dated 26 September 2014 from the plaintiffs’ then solicitors.[1] The plaintiffs contend that this letter is agreement by Memart ‘to provide to the plaintiffs records of all legal advice obtained by the defendant falling within the categories requested by the plaintiffs’.
[1]Affidavit of Evelyn Lik Lin Ooi sworn 22 December 2017, exhibit ‘ELO-5’.
Memart rejects the plaintiffs’ characterisation of this letter as an agreement. In rejecting this, it refers to a letter dated 6 October 2014 from its solicitors responding to the plaintiffs’ letter.[2] By this letter, Memart’s solicitors informed the plaintiffs’ solicitors that Memart did not agree to provide the plaintiffs with all legal advice falling within the categories requested by the plaintiffs, but agreed to provide only the more limited categories specified in the letter dated 26 September 2014 and only after the plaintiffs agreed to keep the documents confidential. The plaintiffs did not agree to the confidentiality of the documents until almost three years later on 21 August 2017 by email from the plaintiffs’ solicitors. By letter dated 28 November 2017, Memart’s solicitors produced the legal advice and the other documents referred to in Memart’s defence.
[2]Affidavit of Evelyn Lik Lin Ooi sworn 22 December 2017, exhibit ‘ELO-6’.
In the period April to June 2015, the parties exchanged correspondence and submissions concerning categories of discovery and reached some agreement as to the categories that, in substance but not exactly, replicate the categories as set out in the plaintiffs’ summons filed 7 December 2018.
In 2015, the plaintiffs pursued an application to amend their claim. At the hearing of the plaintiffs’ application for leave to amend, the Court stated that the discovery issues should be heard after the leave to amend application was determined.[3] After judgment was delivered in the amendment application, the plaintiffs did not pursue the discovery issues.
[3]Mandie v Memart Nominees Pty Ltd [2015] VSC 446 (28 August 2015) [41].
The plaintiffs appealed the judgment of the amendment application and the decision of the Court of Appeal was delivered on 5 February 2016.[4] After the decision of the Court of Appeal, the plaintiffs did not pursue the discovery issues.
[4]Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 (5 February 2016).
On 18 April 2016, the plaintiffs issued an application that I recuse myself from the proceeding. Judgment on the recusal application was delivered on 23 May 2016.[5] The plaintiffs appealed the recusal decision. On 4 July 2016, the Court of Appeal dismissed the appeal.[6]
[5]Mandie v Memart Nominees Pty Ltd (No 3) [2016] VSC 267 (23 May 2016).
[6]Mandie v Memart Nominees Pty Ltd [2017] VSCA 177 (4 July 2017).
Following the dismissal of the plaintiffs’ appeal in the recusal application, the proceeding was listed for directions on 11 August 2017. At that directions hearing, the plaintiffs did not mention or pursue any discovery issues, did not seek any orders for discovery or state they were unable to comply with the orders made that day prior to discovery by Memart.
Plaintiff’s submissions
The plaintiffs refer to r 29.08(2) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) and s 26, s 54, s 55(1) and (2) and s 59 of the Civil Procedure Act 2010 (‘the CP Act’).
They submit that in respect of each of the categories of documents of which discovery is sought, the pre-conditions for the making of an order under r 29.08(2) of the Rules are satisfied; that s 55 of the CP Act empowers the Court to make the orders sought by them and that s 26 of the CP Act imposes on Memart a continuing overarching obligation to disclose the existence of all documents critical to the resolution of the dispute that are, or have been, in Memart’s possession.
The plaintiffs submit that Memart’s objections to their application are baseless given that in October 2014 Memart agreed to provide documents of the type described in category 5; that in May 2015 Memart agreed to make discovery of documents in categories 1, 2, 3, 4 and 5 and that on 27 November 2017 the plaintiffs sought discovery of the 7 categories.
The plaintiffs reject Memart’s assertions that there has been unexplained delay by the plaintiffs in bringing their application for discovery. The plaintiffs submit that the discovery issues between the parties were placed in abeyance by the Court while the plaintiffs’ application to amend their statement of claim was heard and determined and remained in abeyance while the applications for leave to appeal to the Court of Appeal were heard and determined and thereafter the parties prepared for and participated in the mediation in October 2017. Following the mediation, the plaintiffs asked the defendant to make discovery and the defendants refused to do so in late November 2017, which then prompted their application on 8 December 2017.
Memart’s submissions
Memart submits that with the trial scheduled to commence on 8 March 2018, the plaintiffs’ summons seeking discovery is made too late and is made against a history of extensive and unexplained delay on the part of the plaintiffs, namely, in completing their evidence and in bringing the application at such a late stage in the proceeding.
The plaintiffs have known of the trial date since 11 August 2017. The plaintiffs did not comply with the orders to file and serve their affidavits by 13 October 2017. They ultimately filed and served their affidavits six weeks late on 1 December 2017. They did not explain this delay and they did not seek an extension of time for the filing of their affidavits.
The plaintiffs’ late filing of their affidavits and their late discovery application has ‘thrown out’ the timetable for the trial. It has meant that Memart has had to take time out from its preparation for trial to consider the discovery application and has had much less time to prepare for the trial, thereby causing prejudice to Memart.
Memart accepts that the categories of discovery sought by the plaintiffs are relevant to the issues in dispute. It says that the just determination of the proceeding must take into account not only the plaintiffs’ desire to explore through discovery all relevant documents but also other matters specified in s 9(2) of the CP Act, including the degree of promptness with which the plaintiffs have conducted the proceeding, the degree to which the plaintiffs have been timely in undertaking interlocutory steps and consideration of the prejudice to Memart resulting from any lack of promptness by the plaintiffs.
Memart contends that it has discharged its obligations imposed by s 26 of the CP Act by its list of critical documents and by its identification of documents in the defence. Memart has already produced the legal advice together with the other documents referred to in Memart’s defence. On 12 January 2018, Memart produced the documents referred to in Memart’s list of critical documents.
On 9 February 2018, Memart will file and serve its evidence for trial, which will include the list of documents that it seeks to rely on at trial. Memart expects that a substantial number of documents responsive to the discovery categories sought by the plaintiffs will be included on that list.
Memart has also made clear to the plaintiffs’ solicitors that, if following review of Memart’s material, the plaintiffs make reasonable requests for production of further documents, Memart will consider those requests and, if proper, Memart will produce them subject to the undertakings as to confidentiality.
Memart proposes that the just and efficient way forward is for Memart to complete its evidence and any further requests for production of documents to take place thereafter, confined to proper requests for the production of documents at or shortly before trial. This will minimise the prejudice to Memart while at the same time leave open the ability of the plaintiffs to explore matters through the production of documents in a focused manner.
Consideration
The plaintiffs’ discovery application must be considered together with the course of the proceeding over more than three years. The plaintiffs’ issues with discovery by Memart were known as early as September 2014. Those issues were before the Court on the hearing of the plaintiffs’ amendment application. The discovery issues were to be heard after the determination of the amendment application. Judgment on the amendment application was delivered on 28 August 2015. After judgment, the plaintiffs did not seek any orders for discovery until the application that is now before the Court.
While the plaintiffs seek to explain their delay by reference to their application seeking recusal and participating in mediation, these matters do not adequately explain their delay or justify the lateness of their discovery application. The plaintiffs do not explain their failure to pursue their discovery issues during the period that the recusal application was being considered, particularly when such an application would ordinarily be heard by an associate judge. The plaintiffs could also have requested Memart to consent to orders for discovery, in respect of a number of the categories of the discovery where agreement had been reached, but did not do so.
Even allowing for the plaintiffs’ reliance on the sequence of events in the proceeding, their failure to raise their discovery issues at the directions hearing on 11 August 2017 is inexplicable. The plaintiffs knew their discovery issues from 2015 had not been resolved and they knew that agreement as to the confidentiality of the documents had not been reached yet they failed to mention any discovery issues at that directions hearing. The directions hearing on 11 August was a significant directions hearing with pre-trial orders being made for the trial commencing on 8 March 2018. The fact that the parties sought mediation is not an adequate explanation for any outstanding discovery application not being mentioned or pursued by the plaintiffs.
In Liesfield v SPI Electricity Pty Ltd (Ruling No 1), J Forrest J referred to the scope of s 55(1) of the CP Act and Order 29 of the Rules and stated:
These provisions make clear that the court’s powers in relation to discovery are broad. In sum, both the Act and Rules mandate that any order concerning discovery should be directed to finding the most efficient, effective and economical management of the discovery exercise, bearing in mind the nature and complexity of the trial.[7]
[7](2013) 43 VR 493, 500 [25].
In Volunteer Fire Brigades Victoria v CFA (Discovery Ruling), J Forrest J stated:
The overriding consideration of the [CP Act] is to ensure that the parties receive a fair trial ie. ‘a just resolution’ to use the words of the [CP Act]. However, a fair trial is not a perfect trial. It is, rather, the best trial that a court can provide to the parties within reason and in proportion to the issues in dispute and the court’s resources. Accordingly, demands for discovery of documents which are peripheral to the central issues cannot be entertained. The Court is obliged to focus on central issues as best it can be determined at this point in the litigation.
…
… The key is ensuring the discovery exercise is proportionate not only to the relevance of the issues, but also to the likely cost to be incurred bearing in mind that it is the trial that is the focus of the proceeding and not the discovery fight.[8]
[8][2016] VSC 573 (29 September 2016) [34], [36] (citations removed).
The circumstances in this proceeding in December 2017 are very different from early 2015 and 11 August 2017. The plaintiffs’ delay in making the discovery application and their delay in filing their affidavits some six weeks later than ordered has caused substantial prejudice and delay to Memart in preparation for the trial.
It is common ground that the categories of discovery sought by the plaintiffs are relevant to the issues in dispute. The proposals put forward by Memart for the management of the discovery issues provides the most efficient, effective and economical management for the discovery issues, bearing in mind the imminent trial date. It will ensure that the focus will remain on the trial, thereby minimising, in part, the prejudice to Memart and will also leave open the ability of the plaintiffs to explore the discovery issues through the production of documents in a more focused manner.
Conclusion
The plaintiffs’ summons filed 7 December 2017 is dismissed.
SCHEDULE OF THE PARTIES
| EDWARD NICHOLAS MANDIE | First Plaintiff |
| - and - | |
| JANE ELISABETH MANDIE | Second Plaintiff |
| - and - | |
| ISABELLA MANDIE | Third Plaintiff |
| - and - | |
| AMANDA MANDIE | Fourth Plaintiff |
| - and - | |
| NICHOLAS ELLIOTT MANDIE | Fifth Plaintiff |
| - and - | |
| DANIELLA MANDIE (a person under a disability being a minor by her litigation guardian AMANDA MANDIES) | Sixth Plaintiff |
| - and - | |
| MEMART NOMINEES PTY LTD (ACN 005 024 617) (as trustee for the DAVID MANDIE FAMILY TRUST) | Defendant |
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