Perpetual Trustees Australia Limited v OneSteel Trading Pty Ltd
[2008] VSC 21
•13 February 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 9979 of 2005
| PERPETUAL TRUSTEES AUSTRALIA LIMITED (ACN 000 431 827) AND ORS (According to the Schedule) | Plaintiffs |
| V | |
| ONESTEEL TRADING PTY LTD (ACN 007 519 646) AND ANOR (According to the Schedule) | Defendants |
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JUDGE: | HABERSBERGER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 26 OCTOBER AND 16 NOVEMBER 2007 | |
DATE OF JUDGMENT: | 13 FEBRUARY 2008 | |
CASE MAY BE CITED AS: | PERPETUAL TRUSTEES AUSTRALIA LIMITED v ONESTEEL TRADING PTY LTD [NO. 2] | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 21 | |
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Practice and Procedure – Discovery before close of pleadings – Statement of claim struck out with leave to replead – Application by plaintiffs for early or particular discovery before delivery of amended statement of claim – Supreme Court Rules Ch 1 rr.29.07, 29.08.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr TJ Walker with Mr BF Quinn | Freehills |
| For the Defendants | Mr GP Harris | Gadens Lawyers |
HIS HONOUR:
This is an application by the ten plaintiffs in this proceeding for an order pursuant to r.29.08, alternatively r.29.07, of the Supreme Court (General Civil Procedure) Rules 2005 (“the Rules”) that the two defendants make discovery of certain categories of documents before the plaintiffs are required to deliver an amended statement of claim.
The application was made in the following circumstances. A generally endorsed writ was issued on 16 December 2005, but was not served on the defendants until 12 December 2006. A statement of claim was filed and served on 15 February 2007. On 28 September 2007 I handed down reasons for judgment[1] upholding the defendants’ application that the statement of claim be struck out. I considered, however, that the plaintiffs should have leave to replead their claim. Further, I refused the defendants’ alternative application that the proceeding should be summarily determined.
[1][2007] VSC 370.
In order to understand the background to the application it is helpful to repeat some of what I said in my earlier judgment about the statement of claim. It pleaded that one or more of the ten plaintiffs was the owner of the land and improvements comprising each of the 16 shopping centres described in a schedule in the statement of claim,[2] and that, between 1994 and 2002, certain development or redevelopment works were undertaken at each of the shopping centres, during which fire protection and fire sprinkler and hydrant systems and services were installed at each of the shopping centres. The plaintiffs alleged that the fire protection system installed at each of the shopping centres included pipework and hydraulic services constructed from light gauge galvanised steel piping known by the brand or trade name “Firelite”, which was designed, manufactured, marketed, distributed and/or sold or supplied for sale in Australia by the first defendant, OneSteel Trading Pty Ltd (“OneSteel Trading”), and/or the second defendant, OneSteel Limited. It was pleaded that consultants, described as “construction contractors, engineers and other contractors”, were involved in designing, providing advice about, and installing the fire protection systems at the shopping centres.
[2]It should be noted, however, that according to the schedule, Permanent Trustee Australia Ltd, which is not one of the ten plaintiffs, was said to be the sole owner of two shopping centres and the joint owner of another two shopping centres with the fifth plaintiff, Commonwealth Bank Officers Superannuation Corporation Pty Ltd.
The plaintiffs alleged that the Firelite used in the fire protection systems installed at the shopping centres did not comply with a 1994 fire hydrant standard (AS 2419.1) in that the wall thickness of Firelite was less than the minimum wall thickness prescribed by the hydrant standard, namely 3.04 mm and 3.4 mm for 100 mm and 150 mm piping respectively, and that it suffered from defects in that it was “highly susceptible” to various forms of accelerated corrosion, particularly around electrical resistance welds, and thus was “highly susceptible” to developing leaks. It was pleaded that the Firelite used in the fire protection systems installed at the shopping centres had developed these various forms of corrosion, particularly around electrical resistance welds, and had developed leaks, with the result that the Firelite was unable to perform its intended function of providing pipework and hydraulic services required to permit the fire protection systems to operate effectively and reliably and that they did not do so and did not provide an effective or reliable means of protection against the risk of injury to persons and damage to property in the event of fire.
The plaintiffs also alleged that relative to any medium wall pipe which was available in the Australian market for use in fire protection systems at the time of installation in each of the shopping centres, the Firelite suffered from the defects referred to above and that, as a consequence, the service life of Firelite was substantially shorter than the service life of competing medium gauge piping, which was 25 to 30 years. It was then pleaded that, by reason of the defects, it had been or was now necessary for each of the plaintiffs to replace the Firelite used in the fire protection installed in their respective shopping centres with a medium wall pipe at a substantial cost to the plaintiffs.
The plaintiffs’ causes of action were for damages in negligence and for misleading conduct in contravention of the Trade Practices Act 1974 (“the TPA”). The negligence claim alleged that, at the time the defendants designed, manufactured, marketed, distributed and sold or supplied for sale the Firelite installed as part of the fire protection system at each of the shopping centres, they knew or ought reasonably to have known of certain matters, including the above defects, and that the service life of Firelite would be substantially shorter than the service life of the competing piping and that it would be necessary to replace the Firelite after installation at substantial cost. It was further alleged that each of the plaintiffs was vulnerable to the risk of suffering substantial loss and damage, including replacing the Firelite, as a consequence of the above defects in that there were no reasonable steps available for them to take in order to ascertain the existence of the defects before installation of the Firelite or to protect themselves from suffering such loss and damage. The plaintiffs alleged that each of the defendants owed each of the plaintiffs a duty of care to take reasonable care in designing, manufacturing, marketing, distributing and selling or supplying for sale the Firelite to ensure that the plaintiffs did not suffer loss and damage as a consequence of Firelite being used in the fire protection system installed at each of the shopping centres, and that each of the defendants had breached the duty of care in respect of each of the above aspects, as a consequence of which the fire protection system installed at each of the shopping centres included Firelite and each of the plaintiffs had suffered or would suffer loss and damage.
The TPA claim alleged that before the fire protection system using Firelite was installed at each of the shopping centres, the defendants published and distributed to construction contractors, engineers and other contractors, involved in designing, providing advice about, and installing the fire protection systems at the shopping centres, marketing material regarding Firelite. Three brochures, the Firelite general brochure, the Firelite ILG brochure and the Firelite HDG brochure, were identified in the particulars. Certain express representations were said to be contained in the Firelite marketing material, including an express representation that Firelite complied with AS 4118. It was also alleged that the Firelite HDG brochure contained an express representation by the defendants that Firelite HDG complied with the 1994 fire hydrant standard, AS 2419.1. Certain implied representations were said to be found in the Firelite marketing material, including representations that Firelite did not suffer from any material defects or deficiencies that were not disclosed in the Firelite marketing material, and that there were no disadvantages in using Firelite rather than the competing piping in commercial fire protection systems. The representations were alleged to be false.
The plaintiffs alleged that in publishing and distributing the Firelite marketing material and in thereby making the false representations, each of the defendants contravened various sections of the TPA, and that, by reason of one or more of the false representations, Firelite was installed in the fire protection system at each of the shopping centres, as a result of which each of the plaintiffs had suffered and would suffer loss and damage.
I considered that the pleading of the statement of claim was deficient for a number of reasons, in particular because of the way in which the plaintiffs had rolled up into the one generalised allegation that between 1994 and 2002 Firelite had been installed in the fire protection systems at each of the 16 shopping centres owned by one or more of the plaintiffs, that the Firelite was defective and that, as a result, each of the plaintiffs had suffered or would suffer loss and damage. I ruled, however, that it would be premature, having already decided that the statement of claim should be struck out and repleaded, to summarily determine the strongly debated issue of whether the plaintiffs were owed a duty of care by the defendants to take reasonable care in designing, manufacturing, marketing, distributing and selling or supplying for sale the Firelite to ensure that the plaintiffs did not suffer economic loss and damage as a consequence of the Firelite being used in the fire protection systems installed at each of the shopping centres.
The matter was stood over to enable the parties to consider my reasons and to formulate appropriate orders for the future conduct of the proceeding. On 26 October 2007, the matter came back before me. Having heard and dealt with an argument about the costs of the defendants’ applications, I then turned to the plaintiffs’ application for limited discovery by the defendants before delivery of the amended statement of claim.
The application for discovery was made by a summons dated 24 October 2007. The categories of documents of which discovery was sought was set out in a schedule to the summons as follows:
1.Documents in the possession, custody or power of the Defendants or either of them relevant to or evidencing the fact that between 1994 and 2002 the Defendants or either of them knew that the light gauge galvanized steel piping sold under the brand or trade name “Firelite”:
(a)may not comply with the standard prescribed in AS2419.1:1994 Fire Hydrant Installations-System Design, Installation and Commissioning;
(b)may be susceptible to corrosion-induced pitting and perforation of pipework walls throughout the main body of pipework which was particularly severe around electrical resistance welds;
(c)may be susceptible to accelerated preferential corrosion at the hardened heat-affected zone of electrical resistance welds;
(d)may be susceptible to accelerated galvanic corrosion at the hardened heat-affected zone of electrical resistance welds once the galvanized coating of pipework walls was breached;
(e)may be susceptible to accelerated pitting corrosion when used in service with soft potable water;
(f)may be susceptible to developing leaks.
2.Documents in the possession, custody or power of the Defendants or either of them relevant to or evidencing the fact that between 1994 and 2002 the Defendants or either of them knew that:
(a)Firelite may be unable to perform its intended function of providing pipework and hydraulic services required to permit commercial fire protection systems to operate effectively and reliably;
(b)commercial fire protection systems in which Firelite was used may not operate effectively or reliably;
(c)commercial fire protection systems in which Firelite was used may not provide an effective means of protection against the risk of injury to persons and damage to property in the event of fire.
3.Documents in the possession, custody or power of the Defendants or either of them relevant to or evidencing the fact that between 1994 and 2002 the Defendants or either of them knew that relative to any medium wall pipe which was available in the Australian market for use in fire protection and fire sprinkler and hydrant systems and services (“competing piping”), Firelite:
(a)was susceptible to corrosion-induced pitting and perforation of pipework walls particularly around electrical resistance welds;
(b)was susceptible to preferential corrosion at the hardened heat-affected zone of electrical resistance welds;
(c)was susceptible to accelerated galvanic corrosion at the hardened heat-affected zone of electrical resistance welds once the galvanized coating of pipework walls was breached;
(d)was susceptible to accelerated pitting corrosion when used in service with soft potable water;
(e)was susceptible to developing leaks.
4.Documents in possession, custody or power of the Defendants or either of them relevant to or evidencing the fact that between 1994 and 2002 the Defendants or either of them knew that the service life of Firelite would be shorter than the service life of competing piping.
5.Documents in the possession, custody or power of the Defendants or either of them relevant to or evidencing the removal or withdrawal of Firelite from the market in about 2002 and the reasons for that removal or withdrawal.
The hearing was not concluded on 26 October 2007 because the defendants sought an adjournment to enable them to put evidence before the Court concerning, amongst other things, the oppressive nature of the task confronting them should the plaintiffs’ application be granted.
The hearing resumed on 16 November 2007. The plaintiffs then indicated that discovery of differently worded categories of documents was now being sought. After amendment during the course of the argument, the proposed new categories were described as follows:
Documents in the possession, custody or power of the defendants or either of them relevant to or evidencing:
(a)complaints and/or claims, made to OneSteel by customers, distributors, installers, commercial building owners or managers or end-users of pipe distributed and/or marketed between 1994 and 2002 under the brand name “Firelite”, that Firelite pipe was leaking or corroding, including, but not limited to, complaints and/or claims concerning:
(i)the State Library of Victoria;
(ii)the Market City development in Sydney;
(iii)Crown Casino in Melbourne;
(iv)Vision Systems building in Blackburn, Victoria; and
(v)the shopping centres the subject of this proceeding or any other commercial property development;
(b)any reports concerning the leaking or corrosion of Firelite pipe;
(c)the removal or withdrawal of Firelite from the market in or about 2002 or, alternatively, the phasing out of the range of products distributed and marketed under the name “Firelite” and the introduction of a new range of products distributed and marketed under the name “Fireplus”, to the extent that these documents refer to the reasons for the phasing out of Firelite and the introduction of Fireplus.
It was proposed, by the plaintiffs, that the order would make it clear that the term “OneSteel” should be taken to mean both defendants and “any business name under which the product known as ‘Firelite’ was manufactured, distributed and marketed including Steel & Tube, Metaland, Piping Systems, Sheet & Coil and Northguard” and that the term “Firelite” should be taken “as a reference to both hydrant piping and sprinkler piping, more particularly described in the letter dated 14 November 2007 from the plaintiffs’ solicitors to the defendants’ solicitors.”
Rule 29.07(1) empowers the Court, in a proceeding commenced by writ, to order the defendants to make discovery of documents to the plaintiffs “notwithstanding that the pleadings between any parties are not closed”. Rule 29.07(3) provides that such an order may be “limited to such documents or classes of documents, or to such questions in the proceeding, as the Court thinks fit”.
Rule 29.08(2), which is concerned with particular discovery, provides that:
Where, at any stage of a proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any question in the proceeding may be or may have been in the possession of a party, the Court may order that party to make and serve on any other party an affidavit stating—
(a)whether that document or any, and if so what, document or documents of that class is or has been in that party's possession; and
(b)if it has been but is no longer in that party's possession, when the party parted with it and that party's belief as to what has become of it.
An order for limited discovery before the delivery of a statement of claim was made in two defamation cases, Oswin v Radio 2UE Sydney Pty Ltd[3] and Radio Ten Pty Ltd v Brisbane TV Ltd.[4] In the second of these cases, McPherson J rejected the argument that as the plaintiff was sufficiently able to formulate his claim, the action should proceed “in the ordinary way … without obtaining the advantage of … premature discovery.” He said that it was a case:
where both convenience and the interests of all parties as well as that of the court dictate that the plaintiff should be permitted an inspection of the video cassette before pleading.
His Honour added that:
much time and more costs will be saved if the matter proceeds on the basis that the plaintiff knows precisely what it is that was said about its affairs and can therefore plead appropriately …[5]
[3][1968] 1 NSWR 461.
[4][1984] 1 Qd R 113.
[5][1984] 1 Qd R 113 at 123.
The potential saving in costs and inconvenience if the defendants were ordered to make discovery prior to the repleading of the statement of the claim was at the forefront of the submissions advanced by Mr Walker of counsel, who appeared with Mr Quinn of counsel on behalf of the plaintiffs. Mr Walker conceded, though, that the extent of discovery sought in this proceeding was much broader than the single recording in question in each of the above defamation cases.
In Lyons v Kern Konstructions (Townsville) Pty Ltd,[6] Fitzgerald J stated the principle in the following way:
Discovery may even be granted before delivery of a statement of claim or other pleading if exceptional circumstances exist and the discovery is necessary to the formulation of the pleading: see Gale v Denman Pictures Ltd (1930) 1 KB 588, Smith v New Dempsey's Gold Mining Co (1903) 29 VLR 100; Herman v Douglas (1922) 22 SR (NSW) 317; Brydon v Archibald (1938) QWN 5; Reid v FrostDevelopments Pty Ltd (1964-5) NSWR 1683; Latec Finance Pty Ltd v Jury (1960) NSWR 321 and Oswin v Radio 2UE Sydney Pty Ltd (1968) 1 NSWR 461.
[6](1983) 47 ALR 114 at 129.
Other aspects of the discretion were referred to by Lindgren J in Trade Practices Commission v CC (New South Wales) Pty Ltd.[7] First, his Honour referred to the well recognised rule that discovery (and interrogatories) will not be ordered if the purpose is to carry out a “fishing expedition”. He continued:
What does the reference to a "fishing expedition" mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware (similarly, the administering of interrogatories will often, if not always, reveal information of which the other party was not previously aware). What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists: see, for example, Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575; Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd [(1952) 72 WN(NSW) 250]; WA Pines Pty Ltd v Bannerman [(1980) 41 FLR 175]; Barbarian Motor Cycle Club Inc v Koithan (1984) 35 SASR 481 at 486; Nestle Australia Ltd v Commissioner of Taxation (1986) 10 FCR 78 at 82-83; Mobex Pty Ltd v Comptroller-General of Customs (unreported, Federal Court, Foster J, 18 May 1994), at p 18. In WA Pines Pty Ltd v Bannerman at 181, Brennan J said that what is required is that "sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery". On the facts of particular cases, the application of the distinction between "fishing" and "non-fishing" may well be difficult.[8]
[7](1995) 58 FCR 426.
[8](1995) 58 FCR 426 at 438.
Secondly, Lindgren J stated that:
A well-accepted situation [in] which the court often exercises its discretion by ordering discovery before particulars are supplied is that in which the party which seeks particulars and resists discovery is alone in possession of the relevant documents: Millar v Harper (1888) 38 Ch D 110 at 112; Egg & Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd [1963] VR 378; L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 90-91; Halsbury's Laws of England (4th ed, 1975), Vol 13, par 28; BC Cairns, Australian Civil Procedure (3rd ed, 1992), p 348.[9]
[9](1995) 58 FCR 426 at 439.
In Computershare Ltd v Perpetual Registrars Ltd,[10] Warren J, as her Honour then was, held that r.29.07 was “a novel rule” which “essentially codified the position at common law”.[11] Her Honour quoted with approval[12] from the judgment of Cross J in Boyle v Downs,[13] in which he had concluded that discovery should be ordered when such an order was “reasonably necessary for the disposing fairly of the case; and where a plaintiff has evidentiary difficulties, consideration of those difficulties will probably be the most important, but not the only, considerations relevant to determining whether the order is so necessary.” Her Honour rejected the submission that she should read into the rule a requirement that the applicant make out “exceptional circumstances” because that set “too high an obstacle for the applicant” and might “well frustrate the very purpose for which the rule was inserted”. In her Honour’s view, the matter was left “entirely at the discretion of the Court” and “in determining whether or not to exercise the discretion under order 29.07 it will be necessary for a court to assess the circumstances in each case”.[14]
[10](2000) 1 VR 626.
[11](2000) 1 VR 626 at 638 [28].
[12](2000) 1 VR 626 at 635 [21].
[13][1979] 1 NSWLR 192 at 205.
[14](2000) 1 VR 626 at 638 [28].
The Computershare case was concerned with an alleged breach of confidential information. Warren J based the exercise of her discretion in favour of an order that the defendants provide discovery, pursuant to r.29.07, before the delivery of defences on three grounds. First, that the plaintiff had shown a pre-existing relationship between it and the first and second defendants; secondly, that its unrebutted evidence showed enough to establish that it had a case, proof of which was likely to be supported by discovery; and, thirdly, that the defendants had on foot a summons to strike out the statement of claim and the plaintiff was entitled to information exclusively within the defendants’ knowledge “to enable it to further plead and particularise its case”.[15]
[15](2000) 1 VR 626 at 638 [28].
Each of these elements was said to be present in this proceeding. First, it was submitted that there was a pre-existing relationship between the plaintiffs as consumers of products designed, manufactured, marketed, distributed and/or sold or supplied for sale by the defendants. Secondly, Mr Walker submitted that this application was not a “fishing expedition” because the plaintiffs were not seeking to ascertain from the discovery whether or not a cause of action existed. Rather, early discovery was sought for the purpose of meeting the requirement that the statement of claim be better pleaded, in particular, to enable them to replead the allegations of the defendants’ knowledge of the risks associated with the defects of the Firelite products. Thirdly, Mr Walker argued that it was inevitable, given the history of this matter, that any amended statement of claim would be subjected to a further strike out application.
It seems to me, however, that there are significant differences between the present dispute and that dealt with by Warren J in Computershare. As Mr Harris of counsel for the defendants submitted, there is a very real question yet to be determined and that is whether, in the circumstances of this case, the defendants owed the plaintiffs a duty of care not to cause them economic loss. Thus, he submitted that it was not clearly established that there was a pre-existing relationship between the parties which entitled one to obtain information from the other. Nor was it simply a case of a plaintiff with an undoubtedly good case suffering from “evidentiary difficulties”. Further, Mr Harris submitted that the plaintiffs had, so far, not identified the negligent act or omission by the defendants which caused the plaintiffs to suffer loss and damage. Without that identification, the application for early discovery was simply a “fishing expedition”.
Mr Harris submitted that it was a well recognised principle that the process of discovery involved a compromise or balancing of the competing interests of the parties to the litigation. He referred to the following statement by Lord Keith in Home Office v Harman.[16]
Discovery constitutes a very serious invasion of the privacy and confidentiality of a litigant's affairs. It forms part of English legal procedure because the public interest in securing that justice is done between parties is considered to outweigh the private and public interest in the maintenance of confidentiality. But the process should not be allowed to place upon the litigant any harsher or more oppressive burden than is strictly required for the purpose of securing that justice is done.
See also Mobil Oil Australia Ltd v Guina Developments Pty Ltd.[17]
[16][1983] 1 AC 280 at 308.
[17][1996] 2 VR 34 at 37 per Hayne JA, with whom Winneke P and Phillips JA agreed.
In my opinion, before the defendants are required to give discovery the plaintiffs should establish that they have an arguable claim by delivering their amended statement of claim. The defendants can then, if so advised, seek a summary determination of the issue of whether a duty of care is owed by a designer or manufacturer to a consumer for a defect in a product causing pure economic loss. If that application fails, or if no such challenge is made to the new pleading, then the defendants can deliver their defences and by admitting or denying the various allegations can define the scope of the dispute. This will allow the parties to determine which documents are relevant to the issues in dispute and are therefore discoverable.
I also accept the submission, on behalf of the defendants, that it would be unduly oppressive for them to be required to make discovery before the delivery of the amended statement of claim. The affidavit evidence filed by the defendants disclosed that in 1996 BHP Billiton Limited (“BHP”) became a 100% owner of Tubemakers of Australia Limited (“Tubemakers”), as OneSteel Trading was previously known, and that, before that time, Tubemakers maintained an independent record keeping system from the rest of the BHP Group. From 1996 until October 2000, when the OneSteel Group of companies were split off from the BHP Group, Tubemakers’ record keeping was partially integrated with the BHP Group information system but remained largely independent. Further, significant organisational changes occurred following the split off of the OneSteel Group. Although all OneSteel business units were integrated into OneSteel information systems, it was suggested that difficulty could be encountered in locating documents from as long ago as 1994.
In these circumstances, it was submitted by the defendants that the plaintiffs had failed to identify with any precision just what was meant by the term “Firelite” in the proposed order for early or particular discovery. The affidavit material filed on behalf of the defendants had disclosed that there were well over a dozen different sizes of Firelite pipes, available in two surface finishes and two end finishes as well as a range of fitting components. The only identification of Firelite piping in the statement of claim that was struck out had been to 100mm and 150mm diameter piping. During the hearing on 26 October 2007, the plaintiffs’ counsel had asserted that the application for discovery was limited to “in line galvanised and hot dip galvanised Firelite 100mm and 150mm diameter” piping as “identified in the materials”. It was said in the affidavit of Karen Nadiene Thomas, a partner of the South Australian firm Fisher Jeffries, the solicitors for the defendants, sworn on 8 November 2007, that her perusal of the correspondence between the solicitors for the parties disclosed that the plaintiffs had complained to the defendants of leaks in six of the 16 shopping centres, and that the first complaint was made with regard to the Ingle Farm Shopping Centre[18] in about January 2000 with the further complaints in November 2003, June and July 2004 and June 2005. Ms Thomas also said that the correspondence showed that the first complaint related to in line galvanised (“ILG”) sprinkler pipe with a nominal diameter of 50mm and that all five other complaints related to hot dipped galvanised (“HDG”) hydrant pipe with a nominal diameter of 150mm. In a letter dated 8 November 2007 from the plaintiffs’ solicitors to the defendants’ solicitors it was stated as follows:
[18]According to the schedule, this shopping centre is solely owned by Permanent Trustee Australia Ltd, but as mentioned in footnote 2 above, that company is not one of the ten plaintiffs in this proceeding.
We are further instructed in relation to your letter that the pipe specifications for the respective centres are as follows:
1. all the pipe the subject of complaint was roll-grooved;
2. “black” pipe is not the subject of any claim;
3.as regards the particular pipe, we are instructed that the complaint is directed at hydrant pipe with a nominal diameter and thickness as follows:
nominal diameter thickness
80mm 2.11mm
100mm 2.11mm150mm 2.77mm
and in relation to sprinkler pipe with a nominal diameter of 25, 32 and 50mm.”
These statements are to be contrasted with the “more particular description”, in the letter of 14 November 2007, of Firelite piping installed at 14 of the 16 shopping centres in question. That description referred not just to “roll-grooved” hydrant pipes and sprinkler pipes but also to some “welded tees or pulled ends” sprinkler pipes. It also referred to hydrant pipes with a nominal diameter of 50mm and 250mm as well as 80mm, 100mm and 150mm, and to sprinkler pipes with a nominal diameter of 80mm, 100mm and 150mm, as well as 32mm and 50mm, but none with a nominal diameter of 25mm. It appears to me, therefore, that there is considerable confusion about just what Firelite piping is in issue. Clarification of this issue is best done, in my opinion, by the plaintiffs delivering a properly pleaded amended statement of claim before insisting upon discovery of possibly irrelevant documents. This would also remove the defendants’ concern that having to comply with the proposed order would almost certainly mean that they would have to perform the lengthy, difficult and costly task of searching for discoverable documents more than once.
The defendants raised further issues about the claimed relevance of the documents listed in the proposed order for early or particular discovery. In her second affidavit, sworn on 15 November 2007, Ms Thomas said that she had been informed by Ivan Cutler, the former Product Support Manager of OneSteel Market Mills, who was now retired, that the complaints made about Firelite pipe at Vision Systems and at Crown Casino were made in 2003 and 2004 respectively, after the alleged last installation of Firelite pipe, in the shopping centres the subject of dispute in this proceeding, at some unspecified time in 2002. Further, Ms Thomas said that she had been informed by Mr Cutler that the complaint concerning the State Library of Victoria was about leaks in 50mm nominal bore ILG sprinkler pipe used as part of a dry sprinkler system, which was different to the fire protection systems the subject of dispute in this proceeding, and that the complaint concerning the Market City development was about leaks in discrete sections of 100mm nominal bore HDG hydrant pipe installed in a fire protection system which was not used exclusively for that purpose as it was also “used to regularly wash down Paddy’s market which was held under the Market City building several times a week.”
Finally, in her affidavit sworn on 8 November 2007, Ms Thomas said that she had been informed by Mr Cutler that the change in the marketing of Firelite had resulted from a review conducted by him in about 1998. According to Mr Cutler, his June 1999 recommendation to reduce the number of sizes of piping in the Firelite range and to change the wall thickness was accepted by senior management in late 1999. Thus, the decision to change was made before the first complaint about any of the 16 shopping centres. The initial change date of March 2000 was then revised to allow for a longer phasing out period. The new range of products was marketed as “Fireplus”. According to Mr Cutler, “the same welding, galvanising and quality control processes applied to both ranges of pipe.” It was submitted by the defendants that this evidence showed that the change in the marketing of Firelite “in or about 2002” had nothing to do with any complaints about the Firelite leaking or corroding, but the plaintiffs are, of course, entitled to test that proposition.
In my opinion, these further issues merely highlight the difficulty of being satisfied that it is fair that the defendants should be required to discover all of the documents sought in the proposed order before the issues in dispute have been defined by the exchange of pleadings.
In all the circumstances, I am not persuaded that it is appropriate to make an order under either r.29.07 or r.29.08 for early or particular discovery at this stage of this proceeding, when the plaintiffs have yet to deliver their amended statement of claim. The plaintiffs’ application will therefore be dismissed.
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