Perry Properties P/L v Westpac Banking Corp

[1992] FCA 916

Re: PERRY PROPERTIES PTY LIMITED
And: WESTPAC BANKING CORPORATION
No. N G411 of 1991
FED No. 916
Number of pages - 9
Discovery and Interrogatories

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Discovery and Interrogatories - Order 15 rule 8 Federal Court Rules - whether an order for "particular discovery" ought to be made - whether any grounds exist for believing that further documents exist in relation to an area already subject to an order for discovery - whether a view expressed by an expert witness that documents which should be in existence but have not been discovered forms the basis for the exercise of the Court's discretion - whether absence of such documents should be explained.

Federal Court Rules - O 15 r 8

HEARING

SYDNEY

#DATE 10:8:1992

Counsel for the Respondent: Mr P. Dowdy

Instructed By: Henry Davis York

Counsel for the Applicant: Mr B. Coles QC Mr M. Podleska

Instructed By: Salvatore Sapuppo

ORDER

THE COURT ORDERS THAT:

1. The notice of motion be dismissed;

2. The applicant pay the respondent's costs, except such proportion of those costs as relate to the determination of the admissibility of the evidence of Geoffrey Alan Lock;

3. The costs of the first occasion are to be costs in the cause.
Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

FOSTER J. During the course of the hearing of this matter, as a result of discussion taking place, the ambit of the application has been somewhat reduced from its original form. The applicant now only seeks an order under O 15 r 8 of the Federal Court Rules and it seeks orders only in respect of certain aspects of the application as originally framed. The application relates to disputes that have arisen in relation to discovery furnished by the respondent to the applicant. The discovery has obviously been of an extensive kind. It relates to banking records and documents of the respondent relating to its transactions with the applicant over a not inconsiderable period of time. Those transactions were transactions of loan.

1. I have been informed as to aspects of the problems which are the subject of this litigation. They involve broadly the alteration and withdrawal of loan facilities allegedly in breach of representations that that would not occur and a consequent claim for damage to the applicant. The matters that I have to decide however fall into a fairly narrow compass. Quite clearly there has been extensive discovery of documents. The question that I am asked to consider, within the confines of O 15 r 8, is whether an order should be made, as the heading to that rule indicates, "for particular discovery".

2. It is convenient to set out the rule in full at this stage. It provides as follows:
   

"Where, at any stage of the 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 matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party:

(a) to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has been become of it; and

(b) to serve the affidavit on any other party."

1. On the basis of evidence placed before the Court the applicant submits that I should hold that grounds for the relevant belief exist and that I should consequently order the filing of the affidavit contemplated by the rule. It is clear that a rule of this kind is in the Federal Court Rules, as it is in the rules of other courts, to provide an exception to the general principle that a court will not go behind the affidavit of discovery made on behalf of a party to litigation. It is intended that such affidavits be prepared with exacting care and sworn by the party on the basis that he is making full disclosure of all relevant documentary material.

2. So far as the present case is concerned it has been necessary for the respondent to file supplementary affidavits of discovery, the latest of such affidavits having been filed on Friday. It is clear that the necessity to do so has arisen from what has been, unfortunately, a fairly acrimonious debate between the representatives of the parties as to whether discovery has been adequate. A very determined effort was apparently made to ascertain whether any further documents could be found. That did result in the provision of a further 40 documents, as I have said, very recently.

3. The respondent, for its part, through its counsel says that it has made every endeavour to honour its obligations. It has spent an inordinate amount of time going through documentary material and that it is satisfied that no further documents exist which could be properly the subject of discovery.

4. The areas of documentation in respect of which it is submitted on behalf of the applicant that it is entitled to the further affidavit provided for by the rule divide into two. First, I mention those which are the subject of paragraphs 35 and 37 in annexure B to the affidavit of Mr Geoffrey Alan Lock. Mr Lock made an examination of documents which had been discovered by the respondent. He made such an examination as an expert assistant on behalf of the applicant. I have held already that he has sufficient expertise to give opinions based upon his observations. His opinions are expressed in schedule B to his affidavit. It is those opinions that are relied upon on behalf of the applicant to found its application for the further affidavit.

5. Paragraph 35 describes a document in these terms: "Report prepared by Manager, Central Recovery Unit (14/1/91 Memo of Respondent)". The comment is made, "Not discovered. This report is critical as it was requested by Senior Manager, Credit (relieving) prior to implementing liquidation proceedings which did not eventuate."

6. It is apparent from argument before me that the thrust of the comment by the witness is to the effect that the memo of 14 January 1991 would have sufficiently operated as a request for the preparation of such a report. In the event that no such report appeared in the discovery documents then it should be assumed that it existed, but has not been discovered. I, of course, have to evaluate this comment in light of its own terms and also in light of the memo referred to. That memo is discovery document 520; it has been placed before me. I am not persuaded that by its terms it would necessarily have required the preparation of a report of the kind contemplated. The matter in my view is adequately covered by the current affidavit of discovery. I am not persuaded, in light of the sworn statement that all relevant discovery has been made, that this report in fact came into existence and has for some reason not been found and discovered.

7. Paragraph 37 refers to matters in somewhat the same area. It refers to "all directions from central recovery unit and their files for the applicant". The comment, as I understand it, simply relates to the fact that no privilege has been claimed for these documents. It appears, however, that there is an implied comment relied upon by the applicant that in the opinion of the expert there should be in existence documents which can properly be described as such directions and also documents which would amount to being files kept or brought into existence by the central recovery unit in respect of the applicant.

8. I have had my attention directed to the fact that documents emanating from the central recovery unit, obviously a unit in the bank dealing with the recovery of loan moneys, have in fact been the subject of discovery. These constitute the documents emanating from that unit in relation to the applicant. In these circumstances I am not persuaded that there is any ground for belief that further documents exist in relation to this area which should be the subject of further discovery or mention in a further affidavit.

9. The other area which is dealt with by Mr Lock in his affidavit, and which is still sought to be the subject of relief by the applicant, relates to documents described as "history sheets". The thrust of Mr Lock's evidence in relation to these documents is that they are documents which in the ordinary course of banking practice, would be brought into existence and retained. The references to them in the following paragraphs of annexure B, paragraph 16 states as follows:
   

"True history sheets from 27/2/91 to 19/3/91."

The comment reads:

"Most history sheets for this period are missing."

1. This paragraph needs to be read, in my view, with other paragraphs relating to the same area. Paragraph 45 reads as follows:
   

"True history sheets dated 20/3/91 to 4/4/91."

1. It will be observed that this is the period following directly on the period referred to in paragraph 16. The comment made by the witness is in fairly cryptic form. It reads as follows:
   

"Various activities occurred in relation to the preparation of the $4.7M bills offer, eg Tony Perry/Peter Surtees phone call 18/3/91, Bank directions to offer finance, etc. which must be documented. Those history sheets/working papers were not found in discovery. Due to the various events in this period the actual history sheets were replaced with one summary history sheet 19/3/91, i.e. the whole documentation regarding the findings by Peter Surtees was not there. Nothing on the file to explain the sudden change of policy towards the Applicant in March, 1991."

1. I have been informed that it is part of the applicant's case that there was at that point of time an apparent change of policy in relation to the loan to be made to him. I have also been informed that the respondent disputes anything that could properly be described as a sudden change about that time. The final paragraph relating to this particular area is paragraph 25. It states:
   

"Missing history sheets 1/6/91 to 4/7/91."

The comment is made:

"During these periods various meetings, discussions, etc, must have been held within the Respondent because on 4/7/91 a history sheet was produced which recommended that the $4.7M finance facility be rescinded. This decision would have been made over an extended period - not on 4/7/91. These various meetings, discussions, etc. must have been documented."

1. There is no further evidence placed before me by the applicant in relation to this area. The applicant relies upon the expertise of Mr Lock. The respondent relies on the fact that discovery procedures have been extensively pursued to the end that the affidavit of discovery asserts that there is no further material available to be discovered. I have to ask myself whether the material which I have set out which relates, it must be said, in a very terse way, the observations made by the witness and comments relating to those observations, provides, first of all, relevant grounds for belief within the meaning of the sub-rule that some document or class of document may be or may have been in the possession of the respondent.

2. Additionally, before any further order can be made the Court must be satisfied that it should exercise its discretion to make such an order. It is clear that the decisions as to whether appropriate grounds for belief exist must fall outside the area which could properly be described as speculation.

3. The material placed before me really amounts to this: a witness with some expertise in the area, having looked at the material that has been provided against the background of allegations in the case, has expressed the view that other documents should have come into existence, and that being so, should be available to be discovered or the absence of which should at least be explained. I have not found this an easy decision to make.

4. I have ultimately come to the view, however, that the material placed before me is not sufficient to provide the grounds for relief required by the rule. Nor, indeed, having regard to the extensive discovery that has already taken place would I, in the absence of some clear indication of the likely existence of documents of the type referred to, exercise my discretion in favour of ordering yet a further affidavit to be made. In the circumstances I have come to the view that I should dismiss this notice of motion. Costs will have to follow the event.

5. Accordingly, I dismiss the notice of motion and order the applicant to pay the respondent's costs, except such proportion of those costs as relate to the determination of the admissibility of the evidence of Geoffrey Alan Lock. The costs of the first occasion are to be costs in the cause.