(re Zunic) BHP Billiton Limited v Commonwealth of Australia

[2008] NSWDDT 16

Dust Diseases Tribunal

of New South Wales

CITATION:	(re Zunic) BHP Billiton Limited v Commonwealth of Australia & Ors [2008] NSWDDT 16
PARTIES:	BHP Billiton Limited Commonwealth of Australia Newbrook Insulation Company Pty Limited (In Liquidation) Newton Brooks Insulation Company Pty Limited (In Liquidation) Newbrook (Whyalla) Pty Limited (In Liquidation)
MATTER NUMBER(S):	90/2001/CC3
JUDGMENT OF:	Kearns J
CATCHWORDS:	DUST DISEASES TRIBUNAL :- Ruling; discovery; application by BHP for the Commonwealth to provide discovery of certain categories of documents; application resisted by the Commonwealth; Part 23 Rule 5 of Supreme Court Rules requiring special reasons; whether discovery should be refused for discretionary considerations including lapse of time; resort to other processes to obtain documents; order being sought close to a hearing date that was to be vacated; lack of protest for a long time as to the adequacy of production; extensive delay and massive costs; documents being in Commonwealth Archives and allegedly equally available to BHP and Commonwealth; BHP having copies of the documents.
LEGISLATION CITED:	Supreme Court Rules Archives Act 1983
DATES OF HEARING:	23 May 2008
DATE OF JUDGMENT:	28 May 2008
LEGAL REPRESENTATIVES:	Mr T G R Parker SC, with Mr D Villa, instructed by Piper Alderman, appeared for the cross claimant. Mr P Deakin SC, with Mr M McDonogh, instructed by Minter Ellison, appeared for the first cross defendant.

JUDGMENT:

RULING

KEARNS J

Outline

1. Mr Zunic brought proceedings in this Tribunal against BHP Billiton Limited (BHP) and other defendants. Those proceedings were settled and judgment entered, requiring BHP to pay a sum of money to Mr Zunic. BHP now seeks contribution towards that judgment sum from the Commonwealth of Australia (Commonwealth) and has brought a cross-claim accordingly.

2. The Commonwealth has its own cross-claim against BHP.

3. There are other cross-claims and parties, but they are not relevant to the issues to be determined.

4. The proceedings between BHP and the Commonwealth were fixed for hearing over three days commencing on 10 June 2008. At the commencement of the hearing of the applications before me, it became apparent that those dates could not be maintained and that the hearing would need to be vacated and, by and large, the submissions proceeded on that understanding.

5. Before me were two applications. The Commonwealth had an application seeking an order that BHP comply with a discovery order made on 18 December 2007. At the outset, Mr Parker SC, who appeared for BHP, acknowledged that BHP needed to discover further documents and, accordingly, the Commonwealth’s application did not proceed and was stood over pending the result of the further discovery. The other application was an application for the Commonwealth to provide discovery of certain categories of documents. This application was resisted by the Commonwealth.

6. Discovery arises in the following context. Mr Zunic was employed by BHP at its shipyard and engineering works at Whyalla between about 1962 and about 1978. He was employed as a painter and docker to work within the shipyard on board vessels under construction or undergoing re-fit. During that work, he was exposed to asbestos dust and fibre. Between 1958 and 1972, the Commonwealth contracted with BHP for the construction of ships and BHP undertook the construction of ships between 1960 and 1974. BHP’s case against the Commonwealth is that the Commonwealth reserved to itself the powers of approval, design and specification of ships and approval of materials for use in the construction of ships and approval of work practices for the installation of materials in ships and that BHP was required to build ships in accordance with specifications approved by the Commonwealth and to use asbestos in the construction of ships. It is also BHP’s case that the Commonwealth reserved for itself the powers of inspection of ships and work practices and power to order removal, amendment and replacement of materials or work practices. It is BHP’s case that the inspectors observed the construction materials, techniques and work practices used by BHP, including the supply and installation of asbestos. It proceeds from these allegations to allege breach of duty of care by the Commonwealth to Mr Zunic and various particulars of breach are specified.

7. The starting point for the Commonwealth’s opposition was Part 23, Rule 5 of the Supreme Court Rules (SCR). Mr Deakin QC, who appeared for the Commonwealth, submitted that the rule could not apply because it could only apply in cases where “special reasons” could be demonstrated. I accept the compelling response of Mr Parker SC to this submission, namely that it does not bear scrutiny. The Commonwealth, itself, presumably considers that “special reasons” apply to this case as it has obtained its own order for discovery against BHP. Not only has it done so, but it stands before the Tribunal insisting that BHP continue its discovery process. It is at least implicit in the Commonwealth’s application that it acknowledges that “special reasons” apply to this case. It can hardly stand before this Tribunal and then say that on BHP’s application there are no “special reasons”.

8. I accept also the submission of Mr Parker SC that there are special reasons in this case. The rule providing, in effect, that discovery is not to apply to personal injury or contribution matters, is a reflection of the reality that most such matters are straightforward cases not requiring discovery. The exception in the rule that discovery may apply for special reasons recognises that there are personal injuries cases that do not fall within the ordinary run-of-the-mill personal injury cases. It is not necessary to detail all circumstances in which the exception might apply, but a clear case is one where the facts sought to be proved occurred many years ago. The events in this case date back at least into the 1960s and, accordingly, this is an appropriate case for considering that special reasons do apply. The Commonwealth’s submission also fails to recognise and appreciate the established practice in this Tribunal. It is commonplace for discovery to be ordered in cases in the Tribunal. One of the reasons for this is that the facts sought to be proved happened so long ago.

9. In my view, there are special reasons making it appropriate to order discovery if the other requirements for the making of an order are established.

10. Mr Deakin QC does not, with one exception, submit that any of the documents, in the categories of documents, sought by BHP is irrelevant. The only category of documents in respect of which he made a relevance submission was Category 1.1 in BHP’s Notice of Motion of 8 May 2008. The documents sought in that category were tender documents in respect of ships built and which were worked on by Mr Zunic. Mr Deakin QC’s submission was that these documents were of peripheral relevance, if any. Relatively late in these proceedings, the Commonwealth obtained leave to rely on a cross-claim in which it sought a contractual indemnity from BHP. The indemnity is, at least partly, to be found, it says, in implied terms in the contract. It follows, if the Commonwealth is right, that the entirety of the terms of the contract between the Commonwealth and BHP is not to be found in the written contractual document between them. It may be possible to imply the terms the Commonwealth seeks simply by reference to the written contractual document, but no argument was put to this effect and it is unlikely that a determination could be made on that at an interlocutory level. BHP, in answer to the claim of implied terms, must be entitled to explore the conduct between the parties before or perhaps even after the making of the contract. Likewise, documents brought into being before and maybe even after the making of the contract could have a bearing on whether or not the terms sought to be implied by the Commonwealth should be implied. Also, the Commonwealth makes an allegation that in various instances, the specifications for the vessels were modified by BHP. This is disputed and it obviously means that conduct and documents outside the contractual documents themselves need to be explored. In my view, the documents sought in Category 1.1 of BHP’s Notice of Motion of 8 May 2008 are relevant.

11. That left to be determined whether, in the circumstances of this case for some discretionary reason or otherwise, the relief sought should be refused. In that regard, Mr Deakin QC put forward a number of reasons why leave should be refused.

12. The first reason is that proceedings commenced in 2003 and, by reason of the lapse of time, an order should be refused. I do not find this is a compelling submission. There is no statute of limitations that would deny BHP the order it seeks, nor is there any defence of laches that would deprive it of the order it seeks, nor has its conduct been such that it could be accused of approbation and reprobation. It was not until I read the correspondence referred to in the affidavits that I appreciated how casual BHP’s approach to Commonwealth discovery appears to have been. There are substantial time gaps throughout 2006 and 2007 with apparently very little happening. One might be critical of the enthusiasm with which it was pursuing its rights and it should never have sought that the matter be listed for hearing with the discovery issues unresolved, but I do not consider it ever abandoned its rights. Even if its conduct had until recently indicated to this point that it would not seek discovery, I would not see a change of mind as a matter denying it the order it seeks. Furthermore, this submission must be seen in the context of the reality that when it was made, it was common ground that the hearing dates would be vacated and that the matter would not be re-listed until matters of discovery had been finalised.

14. Mr Deakin QC then pointed to five occasions where BHP had sought documents as follows, by:

- Court order on 17 October 2005, it sought contractual documents;

- Court order on 21 November 2005, it sought insurance documents;

- Court order on 6 September 2007, it sought documents on the Commonwealth’s state of knowledge on the dangers of asbestos;

- notice to produce on 2 November 2007, it sought documents in relation to proceedings involving Cockatoo Dockyard. Those documents were assembled, but they were not called on. I draw nothing from that because there is no evidence to suggest that when they were assembled they needed to be called on;

- notice to produce on 14 December 2007, it sought documents brought into existence by Commonwealth engineers and inspectors and about 20-odd folders were produced.. There is no evidence as to whether these folders contained one document or whether they were several inches thick.

Mr Deakin QC draws from these five occasions that BHP has resorted to its entitlement to obtain documents and that it is entitled to enforce those obligations. BHP’s notice of motion seeks discovery of categories of documents. It also seeks compliance with a notice to produce. Mr Parker SC has made it plain that he cannot have both remedies and his primary submission is that he is entitled to the discovery remedy. Documents BHP seeks include documents that are not included in the earlier orders and notices to produce and they are clearly relevant documents. I do not think the Commonwealth’s submission on this point should deprive BHP of its discovery remedy.

15. Mr Deakin QC’s next point was that the case had reached a stage in the proceedings where a hearing date had been allocated and no objection had been made, when it was allocated, as to the adequacy of documents produced. That submission might have some force if it were the case that the hearing dates were to be maintained. At the time of the submissions, the hearing dates were to be vacated to accommodate at least the need for BHP to discover documents. There is no reason on the basis of this submission why the Commonwealth, likewise, should not discover. The fact that no objection was made when the dates were allocated, I do not think has a bearing on whether the Commonwealth should discover. It may have a bearing on other issues.

16. Mr Deakin QC’s next point was that BHP had done nothing since 2005 to indicate that the inadequacy of production was an ongoing issue. He referred to the last document being a letter from the Commonwealth solicitors to BHP solicitors dated 18 November 2005 (AKP13). There was some activity after 18 November 2005, but not much. When I went through the correspondence, I found:

- 21 November 2005 - short minutes of order providing for discovery of insurance documents (AKP14). This has now been resolved, but it was an incomplete discovery matter at that time;

- 2 June 2006 - letter from PA to ME enclosing draft short minutes of order requiring discovery of certain categories of documents (AKP16);

- 2 June 2006 - letter from ME to PA rejecting the draft short minutes of order as to discovery as premature, but contemplating agreement as to specified discovery at the conclusion of the pleadings (AKP17);

- 23 March 2007 - letter PA to ME advising that it would be seeking a discovery order from the Tribunal as to certain categories of documents (AKP20);

- 2 November 2007 - notice to produce by BHP on the Commonwealth to produce documents in the Cockatoo Dockyard litigation (AKP26);

- 14 December 2007 - notice to produce by BHP on the Commonwealth to produce documents concerning Commonwealth inspectors’ functions (AKP27);

- there was then more of a flurry of activity this year.

(References to PA and ME are references to BHP’s solicitors and the Commonwealth solicitors respectively. References to AKP with numbers are reference to tab numbers in the documents referred to in the affidavit of Anthony Kevin Phelps.)

This history might demonstrate a haphazard and casual approach by BHP to the production of documents by the Commonwealth, but it does show an ongoing dissatisfaction.

17. Mr Deakin QC’s next point was that discovery would involve massive costs, delays and duplication and that the Commonwealth would have to go back through documents it had already produced. Mr Deakin QC points to the manpower already expended and the volume of documentary material. He points to six persons being occupied over three days in July 2005 (AKP8). He points also to 28,000 pages being only a portion of the documents obtained by BHP (MFT18). He also points to manpower days in October 2005 (MFT17). He submits that, in effect, the exercise has to be done afresh, because although documents have been looked at by the Commonwealth, they have not been looked at in a discovery context. He submits the process needs to be done again. If the Commonwealth has already produced a large amount of documents, it must have some idea of the relevance of those documents. Presumably, it was not producing documents simply because it had them and not caring whether they had any relevance. One would imagine that the task of discovering documents already produced has already passed time consuming tests of obtaining them and then of determining whether the documents have relevance. The remaining task in respect of those documents is more mechanical. That task is itemising the documents either individually or, more likely, by categories. There is no evidence that this task would be one involving massive costs or delays. The further task in discovery, then, is to discover documents that so far have not been disclosed. This is very much something that BHP is after and there is no evidence as to the cost or time that would be involved in this.

18. When discovery is resisted on the basis that the exercise would be too time consuming or the costs disproportionate, it is common to tender evidence as to the time that would be taken and the likely costs involved. The only evidence on this is contained in the matters already referred to being the matter in AKP8, MFT 18 and MFT17. I am not satisfied that the time and cost of undertaking the discovery exercise are such as to warrant refusing an order.

19. Mr Deakin QC also submitted that all the documents that BHP seeks are in the Commonwealth archives and they are just as available to BHP as they are to the Commonwealth. It was stated that the Commonwealth’s own solicitors have exactly the same access to the documents and difficulty obtaining access to the documents as BHP has. I am not convinced that this is so. I asked whether this difficulty was to be found in the evidence or found in legislation. The only legislation I was taken to was s.30 of the Archives Act 1983. That imposes an obligation on the Commonwealth to make records available in certain circumstances. If the Commonwealth imposes strictures and procedures on all persons, including its own solicitors, who seek access, that is its business. It cannot avoid the consequences of a discovery order, if an order is appropriate, by limiting access or putting procedures in place that make access difficult for its own solicitors. Even if the Commonwealth solicitors are under the same strictures as BHP in seeking access to documents, I do not think it is an answer to BHP’s claim. I would have thought that for assistance in accessing or understanding the indexing, or other archival system of categorising, assistance from the archivist or staff of the archives would be more readily on tap for the Commonwealth than it would be for BHP. I may well be wrong on that, but in any event, discovery requires the person giving discovery to make enquiries of its appropriate present and past employees and officers to enquire as to whether there are other documents that may have existed, but no longer exist, or whether there may be other documents elsewhere. That is a process that is not available to BHP without discovery.

20. One of the problems with Mr Deakin QC’s submission is highlighted by an answer given by Mr Phelps in cross-examination. It was put to him that, following approach to the Archives office, he was able to inspect any documents he requested. He refuted that and said that, to take an example, that he had never received a tender document despite requests. It was suggested that the series number he had might have misdescribed the document. After argument, that suggestion was left without an answer, but it is plainly only one possible explanation. Mr Phelps described that documents in the Archives have series numbers which give a general description as to types of documents. Then he and others attempt to work out which of the series may have relevant documents. They work out the relevant series by looking at the general description against series numbers and then take a blind stab. BHP should not have to seek out relevant documents in this way. It is a bit like the Commonwealth being given the benefit of being able to delegate to BHP the functions it would have to undertake if it were subject to an order for discovery.

21. Mr Deakin QC proceeded to make submissions as to the contents of the list of documents in BHP’s notice of motion. The content of the list was as follows:

1.1 tender documents relating to ships built pursuant to the ASB subsidy scheme and which are defined by the pleadings to have been worked upon by Mr Zunic (relevant ship/s);

1.2 correspondence between the ASB, “each ‘client’” and BHP relating to ship design, the tender process for construction of each ship and the production of specifications for use in the tender by the ASB;

1.3 correspondence and other documents relating to the design and specifications, including variations, of each relevant ship;

1.4 correspondence between the ASB and BHP regarding requested and/or approved amendments to specifications for the relevant ships;

1.5 correspondence, reports, notes of inspection of work performed pursuant to the construction contracts covering the relevant ships;

1.6 correspondence between the ASB and BHP relating to inspection of the ships and exercise of the power of inspection by the ASB, including requests for permission to inspect work from parties other than the ASB;

1.7 documents relating to the ASB’s contractual power to inspect and/or demand the demolition, replacement or amendment of any work on each of the subject ships;

1.8 reports between the Commonwealth and its employees relating to the construction of the Commonwealth Ships at the Whyalla shipyards;

1.9 documents relating to Commonwealth inspectors’ work, duties or activities at the Whyalla shipyards and any reporting to the ASB or any other Commonwealth entity;

1.10 documents between BHP and the Commonwealth relating to the negotiation of specifications for the vessels 35, 38, 39, 42, 43, 44, 45, 50, 52, 53, 55 and 56.

22. As to categories 1.1, 1.3, 1.4, 1.5, 1.7, he submitted that the reference to ships defined by the pleadings was meaningless because the pleadings did not define the ships. Several pleadings identify 22 ships, so I am not sure what was meant by Mr Deakin QC’s submission and when it was pointed out that pleadings identified ships, that submission seemed to fall away.

23. As to categories 1.2, 1.4, 1.5, 1.6, 1.10, Mr Deakin QC submitted that there is a huge volume of correspondence. These were all categories where BHP had the documents. There was no evidence as to whether BHP had retained the documents or copies of the documents but, in any event, the fact that one party has copies of documents is not a basis for denying that party an order for discovery.

24. As to categories, 1.7, 1.8 and 1.9, Mr Deakin QC submitted that the contracts speak for themselves and that these documents are covered by the notice to produce of 14 December 2007 and that BHP can make its complaints about any failure to comply with the notice to produce. As Mr Parker SC made plain, he does not seek discovery and an order enforcing compliance with the notice to produce. He seeks them in the alternative.

25. I consider that BHP has made out its case for discovery by the Commonwealth and I propose to make an order in accordance with prayer 1 in its notice of motion of 8 May 2008. I refrain from making any order at this stage. The matter is to come before me for directions on 2 June 2008. I expect then that the parties will bring in short minutes of order in conformity with these reasons. I expect also that the parties will agree on a suitable timetable and suitable directions for the further conduct of this matter. Such timetable and directions should encompass all matters that need to be attended to up to the point of hearing.

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Mr T G R Parker SC, with Mr D Villa, instructed by Piper Alderman, appeared for the cross claimant.

Mr P Deakin QC, with Mr M McDonogh, instructed by Minter Ellison, appeared for the first cross defendant.