Naughton v GRC Group Pty Ltd (in Liquidation) - [2020] WASC 176

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   NAUGHTON -v- GRC GROUP PTY LTD (IN LIQUIDATION) [2020] WASC 176
CORAM:   REGISTRAR WHITBREAD
HEARD:   8 MAY 2020
DELIVERED          :   26 MAY 2020
FILE NO/S:   CIV 1967 of 2019
BETWEEN:   PAUL NAUGHTON
First Plaintiff
BERNADETTE NAUGHTON
Second Plaintiff
AND
GRC GROUP PTY LTD (IN LIQUIDATION)
First Defendant
TIMOTHY RUPERT BARR GOYDER
Second Defendant
QBE INSURANCE (AUSTRALIA) LIMITED
Third Defendant
PHILLIP WARREN SCOTT
First Third Party
QBE INSURANCE (AUSTRALIA) LIMITED
Second Third Party
GRC GROUP PTY LTD (IN LIQUIDATION) (ACN 120 668 000)
Third Third Party

Catchwords:

Practice and procedure – Interlocutory application – Application for leave to cross-examine on production application – Privilege claim by party in possession of loss adjuster documents – Inspection application

Legislation:

Nil

Result:

Application for leave to cross-examine granted

Category: B

Representation:

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	Ms R O'Brien
Third Defendant	:	Mr J C Yeldon
First Third Party	:	No appearance
Second Third Party	:	Mr J C Yeldon
Third Third Party	:	No appearance

Solicitors:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	Cullen MacLeod Lawyers
Third Defendant	:	Hall & Wilcox (Perth)
First Third Party	:	No appearance
Second Third Party	:	Hall & Wilcox (Perth)
Third Third Party	:	No appearance

Case(s) referred to in decision(s):

Australian Competition and Consumer Commission v Australian Safeway Stores (1998) 81 FCR 526
Australian Securities and Investments Commissions v Macks [2018] SASC 132
Brunswick Hill Apartments v CGU Insurance Ltd [2010] VSC 532
Duro Felguera Australia Pty Ltd v Samsung C&T Corporation [2015] WASC 484
Esso Australia Resources Ltd v The Commissioner of Taxation [1999] 201 CLR 49
Grant v Downs (1976) 135 CLR 674
Matthews v SPI Electricity Pty Ltd [2013] VSC 422
Mitsubishi Electric Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332
National Crime Authority v S (1991) 29 FCR 203
Protean (Holdings) Ltd v American Home Assurance Co (unreported, Supreme Court of Victoria, 5 September 1985)
RCI Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2009] FCA 910
Samenic Ltd v APM Group Pty Ltd [2011] VSC 194
Yunghannes v Elfic Pty Ltd [2009] 25 VR 613

REGISTRAR WHITBREAD:

On 29 November 2019, the Second Defendant filed an application for specific discovery from the Third Defendant and Second Third Party (QBE), supported by an Affidavit sworn by Laura Thurston‑Moon on 29 November 2019 (the Thurston-Moon Affidavit). The application seeks the following orders:
1.Pursuant to Order 26 rule 12 of the Rules of the Supreme Court the third defendant and second third party provide specific discovery of:
(a)the correspondence between passing between the third defendant/second third party and any loss adjuster referred to at F3 of the third defendant and second third party's list of discoverable documents dated 1 October 2019;
(b)the loss adjuster reports referred to at F4 and F5 of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] WASC 176
Decision Date: 26 MAY 2020

CaseChat Overview and Summary

The case of Naughton v GRC Group Pty Ltd (in Liquidation) involved an application for leave to cross-examine in relation to a production application. The plaintiff, Naughton, sought to cross-examine the second defendant on the production of loss adjuster documents, which the second defendant claimed were privileged. The case was heard in the Supreme Court of Western Australia. The primary issue was whether the plaintiff should be granted leave to cross-examine the second defendant on the production of loss adjuster documents, considering the privilege claim.

The court considered the principles outlined in Duro Felguera Australia Pty Ltd v Samsung C&T Corporation [2015] WASC 484, which emphasised that the court has a discretion to permit cross-examination in interlocutory applications, but it would be exercised sparingly. The court also referred to Matthews v SPI Electricity Pty Ltd [2013] VSC 422, which set out the relevant authorities and considerations for determining an application to cross-examine on an interlocutory application. The court examined the nature of the interlocutory application, the importance of the credit of the witness, the need to establish material facts, and the relevance of factual disputes to determine whether cross-examination was necessary.

In reaching its decision, the court held that the interests of justice required the plaintiff to be granted leave to cross-examine the second defendant. The court found that the credit of the witness was important to resolving the interlocutory application, and there was a relevant factual dispute that required cross-examination for its resolution. The court also noted that the application was made bona fide to test an issue of material fact on the interlocutory application and that the pressure of the court's business permitted cross-examination. Therefore, the court granted the plaintiff's application for leave to cross-examine the second defendant.

The court made an order that the plaintiff be granted leave to cross-examine the second defendant on the production of loss adjuster documents. The court also directed that the cross-examination be conducted in accordance with the court's directions and that the second defendant provide the plaintiff with access to the loss adjuster documents. The court emphasised that the granting of leave to cross-examine was an interlocutory decision and did not prejudice any final determination of the case.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The Court will permit cross-examination where the interests of justice require it. In Duro Felguera Australia Pty Ltd v Samsung C&T Corporation [2015] WASC 484 at [39], Le Miere J stated:The court has a discretion to permit cross-examination in interlocutory applications but that discretion will be exercised sparingly. The court will permit cross-examination where the interest of justice require it. The question is therefore whether a fair resolution of the Production Application requires that, in the interests of justice, the Cross-examination Application be granted in circumstances where the Second Defendant contends that the asserted facts should be tested, in cross-examination, in order to properly resolve the interlocutory dispute. Prior to the hearing of the Cross-examination Application, I referred the parties to Matthews v SPI Electricity Pty Ltd [2013] VSC 422, (Matthews), which authority clearly sets out the relevant authorities and considerations relevant to determining an application to cross-examine on an interlocutory application. At [28] and [29], Derham AsJ states:28.An examination of the authorities shows that the variety of circumstances in which it may be appropriate to allow cross‑examination varies according to the nature of the application and the facts of the case. The overriding principle is that of procedural fairness. There are, however, a number of factors that have been found relevant to granting leave to cross‑examine, as follows: (a)where the credit of the witness is important to resolving the interlocutory application; (b)the interlocutory application requires the establishment of material facts; (c)there is a relevant factual dispute which requires cross‑examination for its resolution; (d)the interlocutory application is unusual and it is difficult to know what issues will eventually be relevant. 29.There are, of course, factors that will exclude or limit cross‑examination, including: (a)that the application is not made bona fide to test an issue of material fact on the interlocutory application, but rather to engage in a rehearsal of issues relevant to the trial; (b)the extent to which the pressure of the business of the Court permits cross-examination.(c)the factors referred above from the decision of Warren J in Yunghanns. The factors referred to in Yunghannes v Elfic Pty Ltd [2009] 25 VR 613, (Yunghannes), when incorporated into the above list, mean that [29] of Matthews should be read as stating that factors that will exclude, or limit, cross-examination include:(a)that the application is not made bona fide to test an issue of material fact on the interlocutory application, but rather to engage in a rehearsal of issues relevant to the trial; (b)the extent to which the pressure of the business of the Court permits cross-examination;(c)where, insofar as there are inconsistencies in the evidence, or allegations of recent invention, such matters can be dealt with in submissions;(d)the fact that it is undesirable (except in compelling circumstances) to permit a party to have the opportunity at an interlocutory stage to cross-examine an opposing party upon an issue of fact which goes to the core of the proceeding; and(e)that the Court would not be assisted by the cross-examination.