Panoz Motorsport Australia Pty Ltd v Olsen - [2005] SASC 109

Supreme Court of South Australia
(Civil)
PANOZ MOTORSPORT AUSTRALIA PTY LTD v OLSEN & ORS
Reasons for Rulings of The Honourable Justice Debelle (ex tempore)
16 March 2005
PROCEDURE
Notice to Admit - adequacy of answers - relevant principles - rulings on challenged answers - ruling as to costs of the application.
Supreme Court Rules 1987 r 54.02, referred to.
Hydron Pty Ltd v Harous [2005] SASC 74, discussed.

PANOZ MOTORSPORT AUSTRALIA PTY LTD v OLSEN & ORS
[2005] SASC 109
Civil:

DEBELLE J. This is an application by the plaintiff to strike out a large number of the answers made by the defendant to the plaintiff’s first Notice to Admit Facts and Documents.
In large part the ground on which the defendants have denied answering paragraphs in the plaintiff’s first Notice to Admit is that the question asked in each paragraph is irrelevant. Rule 54.02 permits a party to refuse to answer on the ground of irrelevance. A judicial officer considering whether such an answer should be struck out or upheld must, I think, act with a degree of caution. That judicial officer does not have the benefit of an opening or, indeed, of any evidence which might assist on ruling whether evidence of a particular fact or evidence of a particular document is or is not relevant. Moreover, it is not uncommon in the course of litigation for a ruling as to relevance to be reviewed in the light of further evidence. Plainly, the judicial officer considering the propriety of answers to a Notice to Admit does not have the benefit of the course of evidence.
At the same time, claims of irrelevance should not be lightly made nor should they be lightly upheld lest the purpose of the Rules in promoting the procedure of a Notice to Admit is defeated. In Hydron Pty Ltd v Harous (2005) SASC 74 at [10] Besanko J said,
“Irrelevancy is ground upon which a party may refuse to admit the truth of a fact and it is not for the court at this stage to go behind the claim of irrelevancy save and perhaps in an extreme case.”
With respect, I do not agree with the use of the epithet “extreme”. I think that is to put the position a little too highly. There may well be cases where it is clear by reference to the pleadings or to facts which are admitted or to documents which are admitted that the claim for irrelevance cannot, on any view, be sustained. I do not wish to engage in a futile exercise in pedantry but I would suggest a better epithet might be “clear”. The court will interfere where it is clear by reference to pleadings or documents or facts which have been admitted that the claim for irrelevance cannot be upheld. However, beyond that, the judicial officer should not go lest he trespass upon the province of the trial judge.
Mr Stitt QC, who appears for the plaintiff, referred to sub-rule (3) of Rule 54.02, which authorises the Court to make an order pursuant to sub-rule (2) (b) of Rule 54.02 “if it is satisfied that the truth of any fact … is not bona fide disputed by the party answering the Notice to Admit”. That sub-rule must, however, be qualified by the terms of sub-rule (1) which permit an objection to be made on the ground of irrelevance. With those general observations, I proceed to deal with each of the disputed responses. I do so by reference to the paragraph number in the Notice to Admit.
In respect of paras 7, 8, 9 and 11, it is contended that these facts should be admitted largely because there are later Cabinet documents which use the words which form the substance of those paragraphs. That may be so. However, the issues in this action essentially turn on the terms of a Memorandum of Understanding and a deed called the “Race Staging Deed” and amendments to that deed made between the parties. I do not think this is such a clear case that I should rule on the question of relevance which plainly is an issue with which the trial judge might have to deal. I, therefore, do not accede to the plaintiff’s application in respect of paras 7, 8, 9 and 11.
As to para 12, the issue of attendances and representations made as to attendances is relied on by the plaintiff which asserts that there were misrepresentations as to attendances at a motor race. I strike out the answer but grant leave to file a fresh answer.
Paragraphs 18, 19, 20, 21, 22, 24, 26, 27 and 28 may be considered together. They involve a like issue, namely, the question of representations as to attendances at the race meeting in 1999. As I have already mentioned, the plaintiff pleads misrepresentation as to those attendances that were made and acted upon by the plaintiff. The plaintiff pleads that the figures were not later corrected. Pleas to that effect are made in para 42 and in para 44 of the Statement of Claim. The defendants have not pleaded to para 42. It is a relevant fact whether the figures were later corrected or whether the plaintiff’s attention was drawn to the fact that they were incorrect. I, therefore, strike out the answers to the paragraphs I have named but grant leave to file a fresh answer.
In relation to a number of paragraphs in the Notice to Admit, there is a common issue, that is to say, whether the plaintiff is entitled to require the defendants to respond to questions as to documents prepared for the purpose of advising the defendants, or some of them, in relation to matters leading up to the execution of the Memorandum of Understanding or of the Race Staging Deed. The defendants have pleaded that those documents are irrelevant, stating that the material and relevant documents are either the Memorandum of Understanding or the Race Staging Deed. Thus, the defendants say, any memorandum or correspondence concerning negotiations or other step leading to the execution of those two documents is not admissible, particularly as there is no issue as to the meaning of those documents. In my view, the ordinary principles of contract law justify that submission and, for those reasons, I do not strike out the objections to documents 30, 31, 32, 33 and 34.
Applying a similar line of reasoning, I uphold the defendants’ objection on the grounds of irrelevancy in relation to discussions between the parties prior to the preparation of the Memorandum of Understanding I, therefore, uphold the objection of the defendants in relation to paras 35, 36, 37, 39, 40, 41, 42, 43, 44, 46.1, 46.2, 46.3, 47.1, 47.2, 49.1, 49.2 and 49.3.
The answer to paras 51 and 52 of the Notice to Admit are struck out with leave to file a fresh answer. Both questions concern attendances at a race meeting which for the reasons already given is a relevant issue.
Paragraphs 58, 59, 61 and 62 all involve a common issue. The questions are asked in respect of documents that predate the Memorandum of Understanding. They include Cabinet documents authorising the execution of the Memorandum of Understanding and minutes to the Premier relating to the execution of the Memorandum of Understanding. The authority of those who executed the memorandum on behalf of the defendants is not in question. Applying the ordinary principles of contract law, there is no basis on which these paragraphs are relevant. I will not strike out the answer. The defendants have answered paras 67 and 68 of the Notice to Admit on the ground of irrelevancy and, for similar reasons, I uphold the objection.
Paragraph 79 asks questions in relation to handwritten notes made by Mr Spurr on or about 11 May 2000. The defendants have admitted the authenticity of the document. They refuse to admit its admissibility on the ground that it is irrelevant. The ground of irrelevancy is also taken in relation to the question in para 79 which is whether the notes were made by Mr Spurr on or about 11 May. In the course of his arguments in support of the submission, Mr Trim tended to shift his ground in that he contended that the document is one which it is not possible for the defendants to admit because, as these notes were made by Mr Spurr, evidence was required from Mr Spurr to explain the notes. In my view, that is a valid objection and I uphold it. It is implicit in this ruling that I am dismissing the objection on the ground of irrelevance but am permitting an amendment of the ground and allowing that ground.
Paragraphs 85.1 and 85.2 ask whether a conversation occurred between Mr Spurr and Mr Rainsford while returning to Australia from Canada, where they had been spectators at a race meeting at Mosport. The question is asked whether the topic of the plaintiff negotiating with the Western Australian Government in relation to the holding of a Le Mans race in Perth was raised. In my view, this issue has been addressed in the Race Staging Deed and, in particular, in clause 16 of that deed. The ground of irrelevance will, therefore, be upheld.
Paragraph 94 refers to a document the authenticity and admissibility of which have been admitted. There is no basis for the defendants’ objection of irrelevance. The answer is struck out.
The question in para 97 is not a proper question. The plaintiff has volunteered to amend the question and the defendants for their part have indicated they will answer an amended question. The appropriate course is, therefore, for the plaintiffs to amend their question in the terms I suggest and there is leave to do so. I will deal with the question of time at the end of these reasons.
Paragraphs 117, 118 and 122 of the Notice to Admit raise a like issue. In these paragraphs it is suggested that the first defendant on two occasions said words which praised, in enthusiastic tone, the staging of the Le Mans race in Adelaide on 31 December 2000. To each of those paragraphs the defendant objects on the ground of irrelevance. I am not prepared, at this stage, to overrule that ground. I have regard to Mr Trim’s argument that whatever might have been stated by the Premier cannot substitute for any negotiations thereafter. Furthermore, the Premier, who is the first defendant, may have been later informed of other facts which might have caused him to form another view. I do not, therefore, think it proper at this stage to overrule the objection.
Paragraphs 123.12, 123.13, 123.15 and 123.17 all raise a like issue, namely, whether the question asked by the plaintiff correctly states the effect of the terms in which the defendants have pleaded their Defence. The defendants deny the fact as asserted in the Notice to Admit on the ground that the facts, as asserted, are not true, and they refer to the relevant paragraph in the Defence. I, therefore accept the answer of the defendants in relation to paras 123.12, 123.13, 123.14, 123.15, and 123.17. The justification for that conclusion is grounded on a comparison of the terms of the question and the terms of the Defence as pleaded in the relevant paragraphs. The discrepancy is sufficient, in my view, to justify upholding the objection. The questions as asked by the plaintiff in those particular paragraphs are a very loose and, at times, a wholly incorrect statement of the effect of the relevant paragraphs of the Defence.
Paragraph 133 asks if the document therein referred to was executed by the plaintiff and the acting Premier. The document is the subject of a Notice to Admit Documents. The document has been admitted both as to authenticity and admissibility. An examination of the document shows that it has been executed. The question is entirely superfluous and I, therefore, uphold the objection on the ground of irrelevance.
The next paragraph is 135. I have struck out the defendant’s answer and the defendant does not seek leave to file an amended answer.
The next paragraph is 139.1 A number of sub-paragraphs of para 139 raise the same issue as is raised in relation to para 123 of the Notice to Admit, that is to say, whether the questions correctly state the effect of the relevant paragraphs of the Defence. In relation to the contested paragraphs, which are 139.1, 139.4, 139.6, 139.7, 139.10, 139.11 and 139.12, the same answer is given, that is to say, that the assertion is denied on the grounds of fact it is not true and there is reference to the paragraphs in the Defence. The assertion does not correctly represent the respective paragraphs in the Defence. A comparison of the two makes that quite clear. This is not based on a pedantic reading of the Defence or of the questions. In some cases, the substance of the assertion significantly departs from the substance of the paragraph of the Defence. The objections are upheld.
Paragraph 148 asks whether the contents of a Cabinet cover sheet and a Cabinet discussion paper were discussed with the first defendant on or about 20 January 2001. Paragraph 149 asks whether the same document was discussed by Mr Spurr and the Minister for Tourism on or about 20 January. The question was based on a handwritten endorsement on the document. The defendant objects, in each case, on the ground of irrelevance. It submits that the relevant documents are the Cabinet resolutions and the Cabinet documents themselves. There is no plea which makes the endorsement or discussion with the first defendant relevant in any respect. I agree with both those submissions and uphold the objection.
The next paragraph is 152. In relation to document 64, a memorandum entitled “Cost Comparison of the Le Mans and V8 Series Motor Sports Events”, it asks if that was seen by the Treasurer. The defendants deny the assertion on the ground of irrelevance. The Treasurer had no role in relation to the negotiations between the plaintiff and the defendants. I uphold the objection.
Paragraph 161 relates to document 68 the authenticity and admissibility of which has been admitted. The issue concerns a handwritten note on the document. This can be answered in these terms:
“Admitted save and except that the documents when signed by the Minister did not bear the handwritten notation.”
I strike out the present answer and give leave to file the above answer.
Similarly, in relation to 171 and 172, I struck out the answer but in those two instances have given the defendant leave to file an amended answer.
Paragraph 173 asks whether a Cabinet submission which bears the endorsement “Returned to Minister” was in fact returned to the Minister. The defendant objects on the ground of irrelevance, submitting that the significance of the endorsement “Returned to Minister” does not depend on a physical return of the document to the Minister. I uphold the submission. Plainly, the significance does not depend on the physical presence of the document.
I have struck out the answer to para 181 and there is no application to file an amended answer.
Paragraph 190 asks whether a document entitled “Le Mans Race Announcement” was prepared by the South Australian Tourism Commission on or about February 2001. This question has been answered, but with a denial, which reads “Denied on the ground that, save to say that the document was prepared on the date after 8 February 2001, the date on which the document was prepared is not known”. In my view the answer is adequate. The plaintiff must accept the defendants’ answer that they do not know when the document was prepared.
Paragraph 201 relates to two draft documents 87 and 88 in the bundle of documents accompanying the Notice to Admit. I do not think the question which is asked is a proper one. Furthermore, I uphold the denial of the assertion on the ground that these are two drafts of the same document which only serve to reinforce the conclusion that this is not a proper question. Furthermore, there is no plea relating to these drafts which makes them in any respect relevant.
Paragraph 201 should also be considered with para 214 which asks a question concerning a draft which is document 75 in the bundle of documents. Like considerations apply to each. In relation to the figure of $1.4 million which appears in clause 4.2.4 in the draft deed, it must be noted that the same clause in document 88 has a different figure. These are drafts. The question is not relevant, particularly in the absence of any relevant plea. The objection on the ground of irrelevancy taken in respect of para 214 is upheld.
Paragraphs 203, 206, 207, 208, 209, 210 and 213 relate to events well after 15 February 2001. The plaintiff does not plead in its Statement of Claim to the events identified in those paragraphs. Expressed another way, none of the causes of action rely on events occurring after 14 February 2001 save and except a plea in paras 91, 92 and 93 which have no relevance for the purposes of ruling on these particular paragraphs in the Notice to Admit. In the absence of such a plea, the denial on the ground of irrelevance should be upheld. If the plaintiff seeks to rely on these facts or if it wishes to plead such facts as part of its claim, it must amend its Statement of Claim and promptly.
I turn to the Notice to Admit insofar as it relates to documents. In large part the grounds which have been expressed for either upholding or dismissing the answers of the defendants apply mutatis mutandis to the Notice to Admit so far as it relates to documents. I therefore propose simply to rule briefly on each document in order.
I uphold the objection of inadmissibility to document 1 on the ground of irrelevance having regard to the fact that the Memorandum of Understanding and the Race Staging Deed were executed. This is plainly a preliminary document made before the ultimate agreement.
Document 2 is a media bulletin in relation to a race event called “Sensational Adelaide 500” with the usual overstatement in which Government or its agencies often engage. It is relevant in that it states an attendance figure. Attendance figures are in issue in this action. The document is, therefore, relevant. I strike out the objection on the ground of irrelevance. The same ruling applies in relation to documents 3 and 4.
I uphold the objection to document 7 on the ground of irrelevance for the reasons expressed when dealing with the relevant paragraph in the Notice to Admit Facts. For like reasons I uphold the objection in relation to documents 8, 10, 11, 13, 14, 16, 17, 22 and 23.
Document 31 is the handwritten notes of Mr Spurr, May 11 2000. I dealt with this in the Notice to Admit Facts and upheld the objection, although as I recall on slightly different grounds. I uphold the objection as to the admissibility of the document.
Document 41 raises different kinds of issues. There is insufficient material before me to disallow the objection of irrelevance on 41.
In relation to document 46, I have already ruled upon statements made by the first defendant following the staging on 31 December 2001 of the races. I uphold the objection for lack of relevance on the same grounds.
Document 56 refers to a media release from an organisation called “Clipsal 500 Adelaide” regarding spectator attendance both at the 1999 Sensational Adelaide 5000 motor races and at the 2000 Clipsal 500 motor races. Mr Trim QC objects to the relevance of this document on the ground it is a document prepared in 2000 and includes figures for the year 2000. He says the document is, therefore, not relevant. However, the document does restate figures in relation to the event called 1999 Sensational Adelaide 5000 and, as I have stated earlier in these reasons, the attendance at that event is in issue and the correction of figures stated by the defendants to the plaintiff is in issue. The document is, therefore, relevant and I strike out the objection.
Document 63. I have already ruled on the question of fact asked in relation to this document. For like reasons I uphold the objection.

Document 77 is a memorandum to the Treasurer regarding the staging of the 2001 Le Mans race and additional costs which might be associated with that race. The authenticity of the documents is admitted. Its admissibility is objected to on the ground of irrelevance. The costs of staging the race are an issue in this action. Therefore, the objection on the ground of irrelevance must be struck out. The document is, therefore, admissible. Although I have earlier ruled that the questions asked in relation to that document are irrelevant, that involves different issues from the admissibility of the document as a document.
The authenticity of document 78 which is a five page document headed “Le Mans Race Announcement” is admitted. Its admissibility is in issue on a number of grounds. I require the defendant to identify the author. I immediately acknowledge that a Notice to Admit is not a set of interrogatories. On the other hand, for the reasons expressed by Lander J and myself in other matters, the intent of Rule 54 is that parties should get to the real issues and identify the relevant facts. It is not an exercise in who can best outwit the other in terms of tactics or strategy. It is not, in other words, a game of chess but, in fact, an exercise in which legal advisers should cooperate in identifying what are the real issues. In that way the cost of litigation is reduced and the best interests of the parties are served. However, this is a document, the content of which can only be explained by the author or by the recipient of the note, preferably the author for obvious reasons. That person should be called. I refrain from making a final order pending the resolution of the issues I have identified in these reasons. The same considerations apply to documents 80 and 81.
The defendants apply for the costs of its two applications in relation to its two Notices to Admit and in relation to the plaintiff’s application in respect of the defendant’s answer to the plaintiff’s Notice to Admit.
Neither party has been wholly successful in relation to any of these applications. However, in relation to its three applications, the defendant essentially succeeded, that is to say, the plaintiff failed to uphold very few of its objections.
In relation to the plaintiff’s application the defendant has succeeded in a good deal more than half of its objections. I would be the first to subscribe to the principle that orders as to costs should not be based on any careful or over precise calculation of who succeeded and on what issues. It is well settled that, as a general rule, that is not the appropriate basis upon which to make orders as to costs, either when dealing with the costs of an action or the costs of an interlocutory application. However, I think it fair, when dealing with Notices to Admit to have some regard to the success or failure of a party on the applications.
I have considered whether it is better to order costs of these applications be costs in the cause. I do not consider that is the appropriate approach as it has the risk it will unfairly penalise a party who has been essentially successful.
I think that it is appropriate in this case to have some regard to the fact that the defendant has, in large part, been successful, in all three applications and to allow it some portion of its costs. In respect of the three applications by the defendant I allow the defendant three-quarters of its costs. In respect of the application by the plaintiff I allow the defendant one-half of its costs. There will be orders to that effect.
I do not believe it is appropriate to prepare a fiat dealing with each of the rulings in respect of each of the paragraphs in the Notice to Admit. The rulings may be found in these reasons. I will make the appropriate orders as well as the orders for costs.