Richardson Pacific Ltd v Fielding, A.m

[1990] FCA 410

Re: RICHARDSON PACIFIC LIMITED
And: ANTHONY MICHAEL FIELDING; DAVID BRUCE McCLAER and ROLADUCT PTY LIMITED
No. VG 205 of 1989
FED No. 410
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

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

CATCHWORDS

Practice and Procedure - discovery - complaint of alleged inadequacy - importance of Order 15 rule 15 - grounds for a belief that a document may have been in possession of a party within rule 8 - onus - particular discovery ordered re some documents, but not necessary within rule 15 re others.

Inspection - place of inspection where vast numbers of documents were in a different state.

HEARING

SYDNEY

#DATE 24:7:1990

Counsel for the Applicant: Mr D M Yates

Solicitors for the Applicant: Messrs Freehill, Hollingdale and Page

Counsel for the Respondents: Mr J M Ireland

Solicitors for the Respondents: Messrs Abbott Tout Russell Kennedy

JUDGE1

In this matter there are several applications before the court, which in many respects are centrally related to problems of discovery. Submissions have been put to me concerning Order 15 (and in particular rules 8 and 15 of that order) which concerns the subject of discovery. Rule 8 should, I think, be read with rule 15. Perhaps this needs some emphasis; if more regard were paid to the terms of rule 15 it may be that, in the various arguments that do from time to time occur about discovery, the issues would be pointed up rather more quickly and attention directed to what might be called the substantial merits of the particular discovery question. The court has a discretion, which should have regard to what is really necessary in the interests of a just resolution of the dispute between the parties. Discovery, of course, requires diligent compliance by those responsible, both the clients and those acting for them, but it also requires an eye to the practical needs of the particular case. Rule 15 is there to ensure that discovery, so far as the court can ensure this, does not become enmeshed in technicalities. On this aspect of the matter, I refer to a recent decision of a full court of this court in Cameron v. Rural Press Limited (unreported, 20 July 1990, Burchett, Gummow and Hill JJ.).

1. The discretion under the old law, in respect of the making of orders for particular discovery to rectify failures in the discovery process by some party, required to be based on something approaching a certainty that the relevant documents existed. Rule 8 was, beyond question, designed to ameliorate this situation and permit the discretion to be exercised where much less than that was able to be shown by the applicant for further discovery. But, in my opinion, the court should not lightly be satisfied that there are grounds within the meaning of the rule. Nevertheless, there will arise from time to time - and the insertion of the rule indicates it was intended that these cases should be able to be appropriately dealt with - cases where avenues have been overlooked by a discovering party which should have been explored.

2. In the present case, it is admitted that certain inquiries about the existence of documents, which I think should have been made, particularly of the respondents' accountant, were not made, and that certain records, particularly cheque butts, were not examined. The circumstances in which those failures occurred are very unusual. It appears that the acquisition of machinery and equipment for a factory may have begun in inquiries at least, which took place while the individual respondents were still employed by the applicant which now sues (inter alia) for breach of the duty of fidelity owed by them as employees. Use of the machinery was obtained very promptly after the individual respondents left the applicant's employ. But it is said that that use was pursuant to no written agreement, and continued over a period of about 18 months without payment. It is, nevertheless, said that the machinery - but not all of the equipment - belongs to a third party, and that there is an obligation to make payment. No documents at all relating to the actual machines installed in the factory have been discovered - no specification, invoice or delivery docket.

3. A director of the respondent company was present at the commissioning of the machines. One would have expected him to have had some document at some stage, and indeed it was conceded he may have had brochures or a sketch. The likelihood, on the evidence at present adduced, is that some documents relating to some items of machinery, and also some items of equipment, would have borne dates which could make those documents relevant for the purposes of discovery. They would, if they bear dates which I think it is likely some of them do bear, be relevant to the question when the business was set up, and how and in what circumstances it was set up. Perhaps a clue to the omission of any such document from the discovery is provided by the sworn evidence of Mr McClaer, who said in an affidavit:
   

"The respondents also regard the names and addresses of all suppliers of equipment and materials to it" - I pause there to remark that "it" of course refers to the third respondent, the company Roladuct Pty Limited - "including invoices, orders, receipts, debit and credit notes as

irrelevant to any issue in these proceedings."

I think this statement of the perceived position is not accurate as to the true position.

1. I propose to order the filing and service of an affidavit under rule 8, paragraphs (a) and (b), in respect of the class of documents being all documents relating to the planning, specification, acquisition, delivery, installation, commissioning or use of machines or equipment which were available for use by the respondents or any of them prior to 30 June 1989. I shall make a similar order regarding the personal financial records of the individual respondents in respect of payments made relating to the corporate respondent or its acquisition prior to 31 March, 1989.

2. A number of other areas of alleged failure were raised by the applicant. It is sufficient to say that I was not satisfied, to the extent that any failure to discover was shown in these respects, that any order is necessary within Order 15 rule 15. The significance of that rule has already been referred to in these reasons.

3. There was a separate dispute regarding the inspection of documents discovered by the applicants. It was agreed, after some argument, that counsel would endeavour to define arrangements regarding certain documents claimed to be confidential. I therefore deal only, at this stage, with the dispute concerning location. That dispute was as to whether the respondents must inspect some of the documents in Melbourne, or whether the applicant would be required to remove those documents to Sydney so that they could be made available there for inspection by the respondents. The question arises in circumstances where the number of documents involved could fairly be described, on the evidence, as vast; and possibly something of the order of a third to half of them are located in Melbourne. I think it is reasonable for the applicant to make the documents available in the two locations - one lot in Sydney, and one lot in Melbourne. This is a Federal Court and the practical necessity of hearing the matter in one particular place does not make another place out of bounds so far as this court is concerned. If Sydney and Melbourne were further apart than they are, there might be practical reasons for taking a different view. But I do not think any serious problem arises here for the respondents which a different solution would not equally inflict on the applicant.

4. The next question is the question of the filing of the applicant's affidavits, there having been made some time ago an order that the evidence be given by affidavit in the first instance; and an order having been made, at the same time, fixing a period for the filing of the applicant's affidavits. The circumstances have changed since then. It is not, I think, necessary to analyse in detail the respective contributions by the parties to the change of circumstances, or the extent to which the parties might be regarded as being at fault. I note only that it was the applicant which failed to ensure that the solicitor representing it had sufficient and proper instructions at the time when the order which is now sought to be varied was made. In the events which have happened, I think that the proper thing to do is to order that the time for filing the applicant's affidavits should be extended to 18 September at 4pm.

5. I find a decision as to the appropriate costs order in this case peculiarly difficult. It seems to me that there are many considerations pointing in different directions. I have come to the conclusion that the fairest order is to say that one half of the costs of these applications that I have dealt with today be costs in the action. Each side, it seems to me, has had some success, and each has pursued some issues in respect of which it would be possible to level criticism.

6. (His honour also gave certain directions regarding the filing of affidavits and draft interrogatories.)