Nardelli v University of South Australia No. Scciv-00-1289

NARDELLI AND ANOR V UNIVERSITY OF SOUTH AUSTRALIA
[2002] SASC 291

JUDGE BURLEY. By paragraph 4 of the plaintiffs’ application filed on 30 May 2002 (Document 53), the plaintiff seeks the following order:
“4An order pursuant to RR58A.10 and 58.04A that the plaintiff be at liberty to cross-examine Michael James Gallagher on his affidavit of discovery sworn 15 April 2002 and the list of documents filed and served on behalf of Land SA Pty Ltd dated 6 February 2002 and 12 April 2002.”
Paragraphs 1 to 3 of the application have already been dealt with by the Court and an order was made on 4 July 2002 dismissing the application by Document 53. I take that order for dismissal to relate only to paragraphs 1, 2 and 3 of the application because it is apparent from the reasons delivered by Judge Bowen Pain that he only dealt with those paragraphs on that occasion.
Paragraph 4 of the application relates to discovery which has been given by a non-party, Land SA Pty Ltd, pursuant to SCR 60.
Before turning to the facts, I think it appropriate to refer to some of the rules of Court and the principles set out in the cases.
The plaintiffs relied upon SCR 58.04A which provides that cross-examination may be ordered in respect of an affidavit of discovery. However, it is clear from the terms of sub-rule (1) that the rule only applies to affidavits filed pursuant to Rule 58.04(e), ie an affidavit filed pursuant to an order for further and better discovery. SCR 58.04A has no application to an affidavit of discovery provided pursuant to the provisions of SCR 60.
SCR 60.02 sets out the powers of the Court on an application for discovery pursuant to Rule 60. The Court has power to order a non-party to disclose whether certain documents are in the custody, possession or power of that person, to produce such documentation to the applicant, to make an affidavit “stating whether any specified documents are or at any time have been in his possession, custody or power” and to do anything else, “on production of documents”, which could be ordered under Rules 58 and 59 as if that person was a party to the action.
SCR 83.12, also relied upon by the plaintiffs, empowers the Court to order a deponent to an affidavit to attend for cross-examination. Normally that rule is used for affidavits filed in support of applications, interlocutory or otherwise, made prior to trial. It could also be used in respect of affidavits which are to be tendered at trial where one or more of the parties requires the attendance of the deponent for the purposes of cross-examination.
Prior to the introduction of SCR 58.04A, cross-examination in respect of an affidavit of discovery was not normally allowed. The affidavit of discovery, or, as in this jurisdiction, the list of documents, was regarded as conclusive and they could not be challenged by the introduction of contentious affidavit material: Mulley v Manifold (1959) 103 CLR 341; Fruehauf Finance Corporation Pty Ltd v Zurich Australian Insurance Limited and Ors (1990) 20 NSWLR 359. In the latter case Giles J referred (at 364) to a decision of the Full Court of the Federal Court in Young v Quin (1985) 59 ALR 225 where an application had been made to cross-examine a non-party that claimed public interest immunity in an affidavit. Bowen CJ referred to the fact that an affidavit of discovery was generally regarded as conclusive. He said (at 227):
“In such cases the affidavit is regarded as being required in order to pledge the oath of some person in a position to speak to the matters in the affidavit. It is not tendered as evidence in the lis. It was submitted that an affidavit making a claim of public interest immunity (taking the place of the certificate of a Minister which was formerly conclusive) was in the same way required in order to pledge the oath of someone able to speak to the facts; it was not tendered as evidence in the lis, but for the purpose of enabling the court to rule on the claim for immunity. There is a good deal of force in this submission.”
His Honour went on to conclude (at 228) that “a claim of public interest immunity in relation to oral evidence should be dealt with very much in the same confined way as a claim for immunity in relation to documents”. Sheppard J held a similar view. Beaumont J was prepared to permit cross-examination in an appropriate case, at least where the claimant was not a party to the proceedings.
In this matter, what underlies the application is the plaintiffs’ concern that the discovery given by Land SA Pty Ltd, a non-party, in the affidavits that have been filed in relation to such discovery, are insufficient. It seems to me that the applicant may not have borne this sufficiently in mind when pursuing this application. If there is a discretion to make an order for cross-examination, and if it is to be exercised in favour of the applicant, the cross-examination must necessarily be limited to the question of the sufficiency of the lists of documents and the affidavits supporting those lists that have been filed by Land SA Pty Ltd pursuant to the order for non-party discovery. This is so even where, as in this case, the nature of the Rule 60 discovery is in part discovery for the purposes of determining whether or not Land SA Pty Ltd ought to be joined as a defendant in these proceedings.
It is to be noted that the current rules relating to discovery require documents which are directly relevant to the issues between the parties to be discovered. By way of contrast, the old form of discovery applies under Rule 60 and thus documents which are both directly and indirectly relevant must be discovered. This is somewhat anomalous because, if a proposed plaintiff comes within the provisions of Rule 60 for the purposes of making an application for pre-action discovery, the applicant for such discovery may obtain a much broader form of discovery than is available as between parties where proceedings have been commenced.
Land SA Pty Ltd has filed a number of lists of documents. Some were filed prior to the hearing of the application for discovery pursuant to Rule 60 made by the plaintiffs against Land SA Pty Ltd. They purport to be made pursuant to SCR 58A, but that rule relates to discovery between the existing parties to an action. Consequently, the reference to that rule in the list is incorrect. The discovery has obviously been made pursuant to the provisions of Rule 60.
On 5 March 2002 the plaintiffs’ solicitors wrote to the solicitors for Land SA Pty Ltd asserting that the discovery given was inadequate. It was stated in the letter:
“We note for example that the discovery of documents provided by you does not include the following:-
1Any written notes or other documentation providing a financial analysis of the project.
2Reports or notes of discussions with planning consultants as to whether or not the Land SA proposal would be valid.
3Plans prepared by Land SA or its consultants or agents.
4Land SA’s file itself as well as file covers/file index records.
5The file cover for the Lynch & Meyer conveyancing file and any other records that show what date it was opened.
6Soil and engineering reports.
7Internal reports of any kind including emails or intramails.
8Files of and any communications with consultants.
9Diaries of all relevant officers including Mr Gallagher and Mr Pickard.”
This was followed by an affidavit of Mr Gallagher sworn on 15 April 2002 where he referred to lists of documents filed by Land SA Pty Ltd on 6 February 2002 and 12 April 2002. He said at paragraph 4 of the affidavit:
“I have conducted all proper searches and enquiries as to relevant documents in Land SA’s possession, custody or power which are relevant to the Plaintiff’s amended application for non party and pre-action discovery dated 26 March 2002 ... Those searches and enquiries have revealed that the only relevant documents in Land SA’s possession, custody, or power are those set out in the respective Lists of Documents [filed on 6 February and 12 April 2002].”
The plaintiffs were still not satisfied and pursued further orders. On 22 March 2002 the solicitors for Land SA Pty Ltd wrote to the plaintiffs’ solicitors in part as follows:
“We have been instructed to foreshadow our client’s position in respect of your letter of 5 March 2002 with the following observations:
1It is common place for our client to make decisions relating to the purchase of large volume development land without anything in the nature of a feasibility study. There are 25 subdivisions in the metropolitan area of Adelaide which involve our client or related companies and in the last 12 months our client has undertaken around a dozen development projects in the nature of that contemplated for the land in this case. Our client’s vast experience in relation to such projects enables it to make a decision on the acquisition of development land with a minimum of planning and financial analysis.
2There was no financial analysis as such done by our client in respect of the project involved in this matter. Our client was able to arrive at what it considered to be the value of the land on the basis of a simple calculation. Upon the basis of that simple calculation, and our client’s previous experience as detailed above, it was clear to our client that the site was conducive to a profitable development.
If you wish to confirm the above practices, please contact Mr Bruce Harper at Land Management Corporation, Mr Don Crouch at Knight Frank, Mr Terry Goodwin at Brock Partners, or Mr Brett McMurtrie at McGees, being the agents regularly dealt with by our client.”
The plaintiffs’ solicitors responded as follows:
“In respect to paragraphs 1 and 2 of your letter - we make the following comments, namely:
1In paragraph 2 you refer to ‘a simple calculation’. The ‘simple calculation’ is required to be produced as that is a relevant document.
2In our opinion, there appear to be a number of other documents which have not been discovered. As an example we note that from an inspection of the City of Salisbury file there is a facsimile from the City of Salisbury to Land SA of 1st November 2000 which has not been discovered by your client.
3We also understand that soil testing was taking place on your client’s behalf at the University’s grounds prior to termination of our client’s contract. Those soil reports are discoverable.
4In addition other documents which we consider relevant, and should be discovered include the following:
Engineering reports.
Internal e-mails and memorandums, including those that evidence the decision to purchase the land.
Any surveyor’s file and all relevant plans.
Land SA’s file and file cover sheet.
Lynch Meyer conveyancing file and cover sheet. This should also include any covering letters, delivery dockets, or with compliments slips, sent with the documents to Minter Ellison.
Any documentation in the form of a file indexing system in the possession of either Lynch Meyer and/or Land SA which will establish when the relevant files were open.
All correspondence, e-mails, file notes etc in relation to any dealings with the City of Salisbury or any other party. (Including the defendant or its solicitors).
Any correspondence between Land SA and Jennifer Rankine or any other persons, particularly correspondence on or about 15 February 2000.
5We know that a credit check was conducted by the defendant regarding your client. Documents evidencing your client’s approval or consent to any credit checks and the date or dates of such credit consent are relevant and covered by the Applications.”
Under cover of letter of 31 May 2002 Land SA’s solicitors provided a supplementary list of documents disclosing further documents with an explanation as to why those documents had not been discovered previously. It was said in the letter:
“In relation to items 1 to 5 of your letter of 7 May 2001 we note the following:
1We are instructed that Deane Treloar Architects do not have a file as such, but only drawings and plans and they have been discovered as such. We are instructed that the only consultants engaged by our client in relation to the project were Deane Treloar Architects, Alexander Symonds Surveyors and TMK Engineers. Their files were not previously discovered as our client did not realise that they were discoverable, as being in its power, and that was overlooked by us.
2 As to the letter from City of Salisbury to Land SA of about 1 November 2000 we confirm our instructions that our client no longer has a copy of this letter in their files. Our client does not know what has happened to the letter.
3Our time entry sheets and file notes are privileged, but we enclose an extract from our time entry records which shows that initial instructions were first taken on 9 November 2000. Privileged material has been deleted from the time records enclosed.
4The Transport SA document is automatically generated when a Section 7 Statement is requested. We have been unable to locate on our files, our rounds form requesting the Section 7 Statement, but given that the Section 7 Statement is dated 9 November 2000, it would have been requested around that date. In order to confirm that no disbursements were paid before 10 November 2000, also enclosed is an extract from our disbursement entry records. Again, privileged material has been deleted.
5We do not consider that correspondence enclosing draft agreements or the final agreement is relevant. Such documents are not directly relevant to the foreshadowed possible claim against our client, nor to the matters the subject of your client’s claim against the University. Accordingly, we have not included reference to such documents in the further supplementary Lists of Documents. For the sake of completeness however, I have enclosed copies of covering emails, which represent the only correspondence on our files in relation to the exchanging of drafts of the agreement. We note that our office had little to do with Minter Ellison in negotiating the contract.
6We have also discovered a City of Salisbury Council Search, dated 13 November 2000, which was previously overlooked by us in our client’s previous discovery. A copy of that document is enclosed.”
Further correspondence took place between the solicitors on 12 June 2002 (Mellor Olsson to Lynch Meyer) and 13 June 2002 (Lynch Meyer to Mellor Olsson). This correspondence raised, among other things, the fact that a copy of a plan prepared by Symonds Ryan and Cornish, surveyors retained by the plaintiffs, came to be in the possession of Alexander Symonds, another firm of surveyors who had been retained by Land SA Pty Ltd. An explanation was given that the plan was provided to Land SA Pty Ltd by a church group known as The Seventh Day Adventists. It later became apparent that the church group had been wrongly identified. Apparently, it was the Mormon Church which had provided the plan.
Land SA Pty Ltd filed the further affidavit of Mr Gallagher sworn on 4 July 2002. Exhibited to that affidavit is a second further supplementary list of documents which discloses possession of additional documents.
In support of the application for an order for cross-examination, the plaintiffs rely upon the affidavit of Mr Nardelli sworn on 3 July 2002. In that affidavit he makes a number of complaints about the discovery given by Land SA Pty Ltd and asserts that the discovery given has been selective and therefore insufficient. The affidavit also contains argumentative material but to the extent that it does, submissions were put in a similar vein by Mr Rochow, counsel for the plaintiffs.
I have also had regard to the affidavits of Mr Ryan (sworn on 4 July 2002) and Mr Innis (sworn on 23 July 2002) relating to the plan prepared by Symonds Ryan and Cornish which found its way into the possession of surveyors employed by Land SA Pty Ltd. In particular, I note that Mr Ryan had telephoned Mr Gallagher about the plan and asked who supplied the copy plan to Mr Gallagher. According to Mr Ryan he was told that the matter was before the Court and Mr Gallagher refused to comment further. This is at odds with the latest statement of Mr Gallagher in his affidavit sworn on 5 August 2002 when he said at paragraph 5 that he did not recall how he came into possession of the plan.
I have not, in setting out the facts relating to this application, attempted to include the detail into which the affidavits go. It is not necessary to do so. Having reviewed the relevant evidence, it is clear that during the course of providing discovery, items were omitted from the disclosure by Land SA Pty Ltd where they should not have been had Land SA Pty Ltd been properly advised of its obligations in relation to such discovery.
There is some justification for the plaintiffs’ concern that Land SA Pty Ltd may not have given complete discovery. In saying that I do not suggest that the discovery given has been selective or that there has been a deliberate attempt on the part of Land SA Pty Ltd to conceal relevant documentation.
I have already indicated that I do not consider that the provisions of SCR 58.04A apply to this application. The plaintiffs therefore may only rely upon the provisions of SCR 83.12. If that rule confers upon the Court a discretion to make an order for cross-examination of a deponent in relation to discovery, it is necessary to examine the purpose behind the plaintiffs’ application. As I have said previously, the only legitimate purpose to be pursued on such an application is the determination of whether or not Land SA Pty Ltd has given sufficient discovery in accordance with the provisions of Rule 60.
In his written submissions, handed up to me during the course of the hearing, Mr Rochow set out, in paragraph 2.2, the categories in respect of which it was alleged that there are deficiencies in the discovery which were to be the subject of cross-examination. They are as follows:
“2.2.1Explanation as to how Land SA was able to assume the benefit of the contractual negotiations of the plaintiffs as soon as it did after Cabinet approval and the purported termination of the contract by the defendant;
2.2.2Explanation as to how Land SA came into possession of a confidential copyright plan prepared on behalf of the plaintiffs without their knowledge or consent;
2.2.3Explanation as to how the deponent, as early as November 2000, had a sufficiently clear recollection at the time of the illegal copying of the plan referred to by Ryan as to how the plan came into his possession so as to refuse to comment because ‘the matter was before the court’ and yet now say ‘... I cannot recall how it came into possession of the plan’, which, at best is based upon a recollection that ‘may be wrong’;
2.2.4Having failed to adequately explain provenance of the plan in his possession, how he could further fail to respond to direct evidence of his conduct while his recollection must have been fresh;
2.2.5Documents that are ‘no longer in Land SA’s file’ and what ‘items of correspondence’ he did not ‘necessarily keep on file’.”
The reference in paragraph 2.2.5 is to a statement by Mr Gallagher in his last affidavit that he did not necessarily keep all documents on file.
Paragraph 2.3 of the written submissions asserted that the categories just referred to are relevant to causes of action that might be pursued against Land SA Pty Ltd and that they were also relevant to matters pleaded in various paragraphs of the statement of claim.
I do not accept that the subject matter of the proposed cross-examination set out in paragraphs 2.2.1 to 2.2.5 are confined to the question of the sufficiency of the discovery given to date by Land SA Pty Ltd. In particular, paragraphs 2.2.1 to 2.2.3 extend into issues arising on the lis either between the plaintiffs and the defendant or between any contemplated proceedings between the plaintiffs and Land SA Pty Ltd. That is not, in my view, something which may be pursued on an application such as this.

The matters raised in paragraphs 2.2.4 and 2.2.5 may be more readily seen to relate to the issue of the sufficiency of discovery. Those matters in themselves do not, in my view, require the exercise of any discretion to order cross-examination, if it is conferred by Rule 83.12, in favour of the plaintiffs.
For the above reasons, I consider that the application of the plaintiffs ought to be refused.

[2002] SASC 291

4 September 2002