Scott v Grodd
[2024] FedCFamC2G 334
•11 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Scott v Grodd [2024] FedCFamC2G 334
File number(s): MLG 2305 of 2023 Judgment of: JUDGE CHAMPION Date of judgment: 11 April 2024 Catchwords: PRACTICE AND PROCEDURE – Application for discovery – Declaration that discovery of particular classes of documents is in the interests of the administration of justice Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth) ss. 176, 190
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr. 10.01, 14.02
Cases cited: Abrahams v Qantas Airways (No.2) [2007] 210 FLR 314; [2007] FMCA639 25 Division: Division 2 General Federal Law Number of paragraphs: 33 Date of last submission/s: 11 April 2024 Date of hearing: 11 April 2024 Place: Melbourne Counsel for the Applicant: Mr A Blair (direct brief) Solicitor for the Respondents: Suburban Law ORDERS
MLG 2305 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JUSTIN SCOTT
Applicant
AND: WOLFGANG ULRICH WALTER GRODD
First Respondent
SLEEPING BEAUTIERS PTY LTD
Second Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
11 APRIL 2024
THE COURT ORDERS THAT:
1.Pursuant to s. 176(2) of the Federal Circuit and Family Court of Australia Act 2021 it is declared that it is appropriate in the administration of justice to allow discovery in the proceeding.
2.The parties make discovery of the following categories of documents on or before 7 May 2024:
(a)documents that record any work done to the 1965 Mercedes Benz SL 230 vehicle (MB Vehicle) by either or both Respondents including such part or parts said to have been installed on the MB Vehicle by the Respondents;
(b)documents that record the cost of goods and services provided by third parties to either or both Respondents for the purpose of performing work on the MB Vehicle; and
(c)copies of financial records that show payments to or received by either or both Respondents from the Applicant.
3.Each party file an affidavit of documents pursuant to r. 14.03 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules) on or before 7 May 2024.
4.Each party make available for inspection by the other party the documents disclosed in the affidavit in accordance with Part 14 of the Rules.
5.Orders 3 and 4 of the Orders of this Court made 25 January 2024 are vacated.
6.The Respondent make the MB Vehicle available to the Applicant (or such third party as may be reasonably nominated by him) in Brisbane at such time and on such conditions that may be reasonably agreed between the parties on or before 15 June 2024.
7.The matter be referred to mediation before a Judicial Registrar of the Court on the first available date after 24 June 2024.
8.Costs in the proceeding.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
Revised from TranscriptJUDGE CHAMPION:
THE APPLICATION
Mr Scott, the Applicant, has made an interim application seeking:
(a)orders for discovery;
(b)orders that a 1965 Mercedes-Benz vehicle (MB Vehicle), which is currently in Brisbane and is part of the subject matter of the substantive dispute, be transported to a location in Victoria to enable it to be inspected by Mr Scott's chosen expert, and then returned to Brisbane by him on an undertaking that he do so.
The issues for decision are as follows:
(a)the scope of any discovery ordered;
(b)the timing of any discovery, and whether discovery ought to be deferred until after mediation; and
(c)whether I ought to order that the MB Vehicle be transported to Victoria to enable its inspection by an expert of Mr Scott's choosing.
MATERIALS BEFORE THE COURT
Mr Scott's interim application is dated 27 March 2024. He relied on his affidavit made on 28 March 2024, together with its annexures which I marked Exhibit A1.
He also relied upon a second affidavit made on 10 April 2024 which, subject to some deletions, I admitted into evidence and marked Exhibit A2.
Each party filed an outline of submissions. The Applicant's outline was dated 5 April 2024 and the Respondents’ responsive outline was dated 9 April 2024. The Respondents did not file any evidentiary material on the interim application.
THE UNDERLYING DISPUTE
Without wishing to set out the nature of the underlying dispute in any comprehensive way, which is not necessary on this application, suffice to say that Mr Scott and Mr Wolfgang Grodd, the First Respondent, were longstanding friends.
Mr Grodd is the former director of Sleeping Beauties Pty Ltd, which had a business in the restoration of vintage motor vehicles.
Mr Scott alleges that in reliance on certain misrepresentations made by Mr Grodd he purchased the MB Vehicle and had it shipped to Australia. There are disputes between the parties as to the basis on which Sleeping Beauties Pty Ltd would remove rust and undertake rectification work as to mechanical defects as to the MB Vehicle under the terms of a bailment agreement. Mr Scott alleges that without prior notice to him, and without his prior consent, substantial works were performed outside the scope of the bailment agreement.
Mr Scott relies upon statutory causes of action under the Australian Consumer Law and actions in the nature of breach of the bailment agreement. He seeks orders for damages and the delivery up of the vehicle.
The Respondents, by their defence, deny that they have engaged in misleading or deceptive conduct or are otherwise indebted to Mr Scott. They argue that the claims are statute barred. They bring a counterclaim for their repair work done.
THE INTERIM APPLICATION
Declaration
Discovery is not allowed in a general federal law proceeding unless the Court or the judge “declares that it is appropriate in the interests of the administration of justice to allow the … discovery”: Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act), s. 176(2). Section 176(3)(a) and (b) provide that the judge “must have regard to whether the discovery would likely to contribute to the fair and expeditious conduct of the proceedings” and “such other matters, if any, as the Court or judge considers relevant.”
Although my discretion is not fettered, matters which commonly guide the exercise of discretion include:
(a)the relevance of the documents to be discovered,
(b)the volume of the documents to be discovered,
(c)whether discovery may narrow issues in dispute,
(d)whether both parties seek discovery, and
(e)whether discovery is of benefit to the litigation.
(See Abrahams v Qantas Airways (No.2) [2007] 210 FLR 314; [2007] FMCA639 25)
The Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) permit an order for disclosure generally [r. 14.02(a)], or in relation to particular classes of documents [r. 14.02(b)].
The documents sought
In his interim application Mr Scott sought orders for discovery for particular classes of documents in categories (a) to (g):
(a)documents on which the party relies (including each document referred to in the party's pleadings or the particulars of the pleadings and any document which may be produced by the party at the trial during examination-in-chief, cross-examination or re-examination);
(b)documents that adversely affect the party's own case;
(c)documents that adversely affect another party's case;
(d)documents that support another party's case;
(e)documents that record any work done to the 1965 Mercedes Benz SL 230 vehicle by either or both Respondents including such part or parts said to have been installed on the MB Vehicle by the Respondents;
(f)documents that record the cost of goods and services provided by third parties to either or both Respondents for the purpose of performing work on the MB Vehicle; and
(g)copies of financial records that show payments to or received by either or both Respondents from the Applicant.
In a refinement of his application orally this morning, he did not press the categories of documents (a) to (d).
CONSIDERATION
The parties are in dispute as to approximately $200,000. That is a substantial sum, but at the same time, I am conscious of the overarching purpose of the case management procedures in this Court to achieve the resolution of the dispute at a cost that is proportionate to the importance and complexity of the matters in dispute: FCFCOA Act, s. 190(2)(e).
The subject matter of the dispute is such that it appears inevitable to me that its just resolution will require evidence as to the scope and quality of restoration works performed on the MB Vehicle, and the amounts charged and paid for that work. Contemporaneous documents, if available, will be important to the just resolution of the dispute.
For that reason, I am persuaded that, in the interests of justice, it is appropriate that documents in class (e) that record work done, class (f), which record the cost of goods and services provided by third parties to the Respondents, and class (g), the financial records as to the work done, ought to be discovered and disclosed in the interests of the administration of justice.
Having regard to the matters articulated in the decision in Abrahams, they are directly relevant, are unlikely to be so voluminous that the cost of discovering them outweighs the benefit to the interests of justice, and their discovery may serve to narrow the issues in dispute.
As to class (g), the Respondents opposed the application because they submitted that the Applicant already had relevant records of payments in his possession, and, therefore, any order for discovery may be in effect an arid order. I am of the view that, given the early stage of the proceeding, it is appropriate that there be discovery of the documents in possession of both parties, even though that may entail the discovery back to Mr Scott of documents he already has in his possession. Although the rules in this Court do not, in terms of my research, refer to the notion of “reasonable searches” for documents in the same terms as the Federal Court Rules refer to the concept of “reasonable searches”, I would expect in each party's affidavit as to the discovery of documents, that they undertake reasonable searches for documents in the relevant classes which might be in their possession.
I say no more about documents in classes (a) to (d), as that application was not pressed. I do note, for completeness, that the Respondents submitted that the Applicant's claim for relief is almost certainly statute barred, but that the authorities were against them as to having the proceeding summarily disposed of before trial on this basis. Assuming this to be correct, without expressing any considered view, it appears to me that if the limitation issues can only be determined at trial, this is not a case in which the court may postpone discovery until after a preliminary issue has been determined.
Timing of discovery
In my assessment, the subject matter of this case means that mediation will have much better prospects of success if relevant documents are disclosed now before any mediation. Discovery now is necessary to ensure that competing positions are better defined before any mediation.
I intend to make an order for discovery now rather than deferring discovery until after any mediation.
INSPECTION OF THE VEHICLE
On 25 January 2024, I made orders permitting inspection of the vehicle in Brisbane, where it is currently located and is in the current possession of the Respondents.
Although there was some debate as to the basis on which the Respondents currently maintain possession of the MB Vehicle, at least in paragraph 29 of the defence, there is a reference to a repairer's lien as the basis of the continued possession of the vehicle. The Respondents asserted that if any legal action which Mr Scott may have had for the return of the vehicle to him is statute barred, their possessory title may be the superior title.
I express no view as to that at this interlocutory stage, but, for the moment, I am not presently minded to move the vehicle from where it currently is located for the purposes of inspection. I note that, in his affidavit, Mr Scott deposed that he has been unable to obtain the services of any suitably qualified Brisbane based expert to inspect the MB Vehicle. He has identified a Melbourne-based expert, Mr Klaever, as a suitable person to inspect the vehicle, but Mr Klaever is not currently prepared to travel to Queensland.
As a result, he seeks an order that the vehicle be transported to Melbourne for inspection. The order he proposes is that he will, in the first instance, bear the cost, but otherwise the cost be in the cause. He also proffered an undertaking to the court that he would cause the vehicle to be returned to its present location after the inspection. In oral submissions this morning, counsel for Mr Scott also said that the issue as to the repairer's lien could be neatly dealt with by the payment of an amount into court.
At this stage of the proceedings, when the exact basis for the Respondents’ assertion of a possessory title remains a matter of dispute, I am not persuaded that I can be confident that a payment into Court will deal with matters which arise on the counterclaim, or otherwise, as to who is the rightful possessor and owner of this vehicle. Those are matters best left for trial.
I note that there was no countervailing evidence, and only an averment by way of submissions, that the Respondents do not accept that there are no willing, able and suitably qualified experts in Brisbane who can be engaged by the Applicant to inspect the vehicle. It was common ground that I have power, pursuant to the rules – see r. 10.01(3)(k) of the Rules – to make orders for the inspection of personal property. In candour, counsel for the Applicant said he could not refer the Court to any authority where a Court had made an order in the nature of an inspection order for property where the Court had found it necessary or appropriate in its discretion to make an order comparable to transporting a vehicle from one location to another, and, indeed, interstate, for the purposes of inspection.
I am concerned, even given the proffered undertaking, that there are additional costs at issue if the vehicle is transported from Brisbane to another location and/or that there are risks of damage to the vehicle (or allegations of damage) between the parties that may only exacerbate the dispute. It is not a practical way to proceed for the vehicle to be transported to Melbourne.
Mr Scott will need to make arrangements to have the vehicle inspected by an expert of his choice and nomination where it is currently located. Any expert will need to travel to the vehicle, not vice-versa. There will need to be some amendment to the order that I crafted on 25 January 2024, having regard to the dates I then set.
NEXT STEPS
On 25 January 2024, I referred the matter to an early mediation. I remain of the view that an early mediation is the appropriate way to proceed, however, since that date, a mediation has been set down on 14 May 2024.
Given the dispute that has arisen as to discovery and the inspection of the vehicle before 15 March 2024 has not proved feasible, that date will need to be postponed. I propose that I will make an order setting down a mediation on the first available date after 24 June 2024, which I trust will enable alternative arrangements to be made for the inspection process to take place before mediation.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Champion. Associate:
Dated: 11 April 2024
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