Saruman Holdings Pty Ltd as trustee for the Galopoulos Family Trust v Pindan Capital Ocean Village Pty Ltd - [2020] WASC 219

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   SARUMAN HOLDINGS PTY LTD AS TRUSTEE FOR THE GALOPOULOS FAMILY TRUST -v- PINDAN CAPITAL OCEAN VILLAGE PTY LTD [2020] WASC 219
CORAM:   MASTER SANDERSON
HEARD:   12 MAY 2020
DELIVERED          :   15 JUNE 2020
PUBLISHED           :   15 JUNE 2020
FILE NO/S:   CIV 1653 of 2019
BETWEEN:   SARUMAN HOLDINGS PTY LTD AS TRUSTEE FOR THE GALOPOULOS FAMILY TRUST
Plaintiff
AND
PINDAN CAPITAL OCEAN VILLAGE PTY LTD
Defendant

Catchwords:

Practice and procedure - Pre-action discovery - Appropriate orders - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Orders made

Category: B

Representation:

Counsel:

Plaintiff	:	A Metaxas
Defendant	:	D K Barker

Solicitors:

Plaintiff	:	Metaxas Legal
Defendant	:	Chalmers Legal Studio Pty Ltd

Case(s) referred to in decision(s):

Nil

MASTER SANDERSON:

On 16 July 2019 I made the following orders:
1.Pursuant to O 26A r 4 of the Rules of the Supreme Court 1971 (WA) the defendant give discovery of the documents listed in the schedule of documents within 28 days of the date of this order.
2.The plaintiff pay the defendant's reasonable costs of complying with the order made in terms of paragraph 1.
3.The plaintiff pay the defendant's costs of the application.
For reasons which are not apparent from the file this order was never extracted. On 30 April 2020 the defendant filed a minute of proposed orders in the following terms:
1.The defendant give discovery of the documents listed in the schedule to the application filed 11 April 2019 within 21 days of the date of this order.
2.The plaintiff pay the defendant's costs on an indemnity basis in complying with order 1.
3.The plaintiff pay the defendant's costs of the application on an indemnity basis.
On 14 August 2019 the defendant filed an affidavit of Nicholas John Allingame sworn 14 August 2019. This affidavit was filed in purported compliance with the orders for discovery I made on 16 July 2019. Mr Allingame's affidavit is not in the form of a normal discovery affidavit. In the body of the affidavit he lists the categories of documents which were sought in the originating summons. He then attaches to his affidavit copies of those documents. It was the defendant's position what was actually provided by Mr Allingame's affidavit was the discovery ordered. By attaching copies of the documents to the affidavit the defendant had assisted the plaintiff by eliminating the need for inspection of documents.
On 7 May 2020 the plaintiff lodged a minute of proposed orders. That minute was in the following terms:
1.Pursuant to O 26A r 4 of the Rules of the Supreme Court 1971 (WA) the defendant give discovery of the documents listed in the schedule of documents within 28 days of the date of this order.
2.The plaintiff pay the defendant's reasonable costs of the application.
3.Subject to order 4 the plaintiff pay the defendant's reasonable costs of compliance with order 1 of these orders.
4.The plaintiff may make an application in the course of any subsequent proceedings for orders with respect to not only the costs, the subject of order 3, but also with respect to its own costs of the application.
5.The defendant pay the plaintiff's costs of this hearing.
The parties were at odds over three issues. First, whether the affidavit of Mr Allingame was sufficient or whether a conventional affidavit of discovery ought be filed. Second, what was the appropriate order in relation to the defendant providing discovery – should the order be the plaintiff pay the defendant's 'reasonable costs' or should the order be the plaintiff pay the defendant's costs 'on an indemnity basis'. Finally, what should be the order for costs of the application.
In relation to the first question, what the defendant ought to do is give discovery in the conventional fashion. That is what O 26A of the Rules of the Supreme Court 1971 (WA) anticipates and that is what should be done. An affidavit in the conventional form requires the deponent to state that all reasonable enquiries have been made and also to give the whereabouts of documents no longer in his possession, custody or control. In this case, because the documents requested in the schedule to the originating summons were quite specific, it may well be the case there was no real difference between the documents listed in an affidavit of discovery and the documents attached to Mr Allingame's affidavit. But that is not the point. The defendant was ordered to give discovery and the plaintiff is entitled to expect discovery in the conventional form will be given. For that reason, I will make an order in terms of par 1 of the plaintiff's minute.
There was some debate between counsel as to whether there was any distinction to be draw between 'reasonable costs' and 'costs on an indemnity basis'. The intention of the costs order is to hold harmless a party who is required to give pre‑action discovery. It is only reasonable to expect a party who is required to give discovery will engage a solicitor to prepare the discovery affidavit. The solicitor will have to undertake some enquiries and explain to the client precisely what is required. Given there is no certainty any proceedings will be issued, the party giving discovery should have their costs covered.
That being the case, it is perhaps immaterial just how the order is framed. Perhaps the difficulty arises because of the connotations associated with the phrase 'indemnity costs'. It tends to suggest a party is at fault. It is probably the case that this exercise in semantics would only ever worry litigation lawyers. But it does seem to me that the order should be the plaintiff pay the defendant's 'reasonable costs' of giving discovery.
Finally, there is the costs of the application itself. As any costs order is discretionary it is not possible to set hard and fast rules. On the one hand, if an order for discovery has been made the plaintiff has been successful and costs should follow the event. On the other hand, any defendant who is dealing with an application for pre‑action discovery is having their right of privacy attacked. A party has every right to maintain their privacy unless and until a court determines pre‑action discovery is warranted. On that basis, penalising a defendant by awarding the costs of the application to the plaintiff has about it an element of unfairness.
When confronted with these issues it is generally my policy to order that if proceedings are issued within three months of the date of making of the order then the costs of the application for pre‑action discovery be costs in the cause of the main proceedings. If proceedings are not issued then the costs of the application should be paid by the plaintiff. Although such an order is far from perfect, it is flexible. It seems to me to be an appropriate order to make in this case.
The plaintiff has also, by its proposed order 4, anticipated that the costs paid to the defendant in giving discovery might be recoverable in subsequent proceedings. Although it is not an order I generally make I can see no reason why it is inappropriate. Accordingly, I will make that order.
The costs of the brief hearing at which these matters were debated should be paid by the defendant. I have reached that conclusion on the basis the affidavit of Mr Allingame did not comply with the direction the defendant give discovery and that failure occasioned the need for a further hearing.
Accordingly, I make the following orders:
1.Pursuant to O 26A r 4 of the Rules of the Supreme Court 1971 (WA) the defendant give discovery of the documents listed in the schedule of documents within 28 days of the date of this order.
2.The plaintiff pay the defendant's reasonable costs of giving discovery.
3.If the plaintiff, within 3 months of the publication of these reasons, commences proceedings, the costs of the application, including reserved costs, be costs in the cause of the new proceedings. If no proceedings are issued, the defendant's costs of the application, including reserved costs be paid by the plaintiff.
4.The plaintiff may make an application in the course of any subsequent proceedings for orders with respect to not only the costs the subject of order 3, but also with respect to its own costs of the application.
5.The defendant pay the plaintiff's costs of the hearing on 12 May 2020.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson
15 JUNE 2020