Simpson v Thorn Australia Pty Ltd trading as Radio Rentals (No 3)

[2019] FCA 1179

FEDERAL COURT OF AUSTRALIA

Simpson v Thorn Australia Pty Ltd trading as Radio Rentals (No 3) [2019] FCA 1179

File number:	NSD 448 of 2017
Judge:	GLEESON J
Date of judgment:	2 August 2019
Catchwords:	PRACTICE AND PROCEDURE – application for discovery against insurer – non-standard discovery –application granted in part
Legislation:	Federal Court Rules 2011 rr 20.14, 20.15
Cases cited:	Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603
Date of hearing:	21 June 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	11
Counsel for the Applicant:	Rachel Francois
Solicitor for the Applicant:	Maurice Blackburn
Counsel for the First Respondent/Second Cross-Respondent:	James Hutton
Solicitor for the First Respondent/Second Cross-Respondent:	Norton Rose Fulbright Australia
Counsel for the Second Respondent:	Wayne Muddle SC
Solicitor for the Second Respondent:	Gillis Delaney
Counsel for the Third Respondent:	Jeremy Giles SC
Solicitor for the Third Respondent:	Lander & Rogers Lawyers

ORDERS

NSD 448 of 2017

BETWEEN:

CASEY CHERYL SIMPSON

Applicant

AND:

THORN AUSTRALIA PTY LTD T/AS RADIO RENTALS (ACN 008 454 439)

First Respondent

JAMES LESLIE MARSHALL

Second Respondent

AIG AUSTRALIA LIMITED (ACN 004 727 753)

Third Respondent

AND BETWEEN:

JAMES LESLIE MARSHALL

Cross-Claimant

AND:

AIG AUSTRALIA LIMITED (ACN 004 727 753)

First Cross-Respondent

AND BETWEEN:

JAMES LESLIE MARSHALL

Cross-Appellant

AND:

THORN GROUP LIMITED (ACN 072 507 147)

Second Cross-Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	2 AUGUST 2019

THE COURT ORDERS THAT:

1.By 14 August 2019, the third respondent:

(a)Give discovery of the following category of documents (in which terms have the same meanings as in the further amended statement of claim):

(i)all documents created since 28 March 2011 evidencing or recording any claims made against Thorn, its directors or officers including the second respondent, notified to the third respondent under the Professional Indemnity Policy or the D&O Policy including but not limited to:

(A)all claim forms lodged by or on behalf of Thorn or its directors or officers, including the second respondent;

(B)all claim notifications received by the third respondent from or in respect of Thorn or its directors or officers including the second respondent; and

(C)notes of any discussions with any officer or employee of or any agent or brokers on behalf of Thorn, its directors or officers, describing a claim or circumstances that may give rise to a claim under the Professional Indemnity Policy or the D&O Policy.

(b)File and serve its verified list of documents.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GLEESON J:

1. The applicant seeks discovery of the following categories of documents from the third respondent (AIG):

   (1)Any document comprising the “Submission” as defined at clause 4.23 of Thorn’s Professional Indemnity Policy provided by AIG.

   (2)All claim forms lodged by or on behalf of Thorn or its directors or officers, including Mr Marshall, concerning the issues raised in this proceeding.

   (3)All claim notifications received by AIG from or in respect of Thorn or its directors or officers including Mr Marshall concerning the issues raised in this proceeding.

   (4)All correspondence including email communications with or from Thorn, its directors or officers including Mr Marshall, or any agent or broker on its or their behalf regarding notification of claims made against Thorn or its directors or officers, including Mr Marshall concerning the issues raised in this proceeding.

   (5)Notes of any discussions with any officer or employee of or any agent or broker on behalf of Thorn, its directors or officers, in respect of any AIG policy of insurance or any claim which had been made or notified under any such policy concerning the issues raised in this proceeding.

   (6)All documents evidencing or recording acceptance or denial of indemnity by AIG in relation to any policy of insurance issued to Thorn by AIG in the period from 28 March 2011 to 8 May 2019 concerning the issues raised in this proceeding.

   (7)All documents evidencing or recording any steps taken by AIG as described in the “Insurer’s Response” section of any policy of insurance issued to Thorn by AIG in the period from 28 March 2011 to 8 May 2019 concerning the issues raised in this proceeding.

   (8)All documents relied upon by AIG for the purposes of pleading paragraphs 73, 74, 75, 76, 77 and 78 of its defence to the further amended statement of claim as filed on 12 June 2019 (FASOC) but excluding any documents subject to a claim of legal professional privilege or litigation privilege.

2. AIG agreed to give discovery in accordance with the first category and the applicant agreed to defer the application for discovery of category 8 until after she has received AIG’s evidence.

3. In addition, AIG agreed to give discovery of the following categories of documents:

   (1)All documents created during the “Discovery Period” evidencing or recording any claims made against Thorn, its directors or officers including Mr Marshall, notified to AIG under the “Professional Indemnity Policy” or the “D&O Policy” including but not limited to:

   (a)All claim forms lodged by or on behalf of Thorn or its directors or officers, including Mr Marshall;

   (b)All claim notifications received by AIG from or in respect of Thorn or its directors or officers including Mr Marshall;

   (c)Notes of any discussions with any officer or employee of or any agent or brokers on behalf of Thorn, its directors or officers, describing a claim or circumstances that may give rise to a claim under the Professional Indemnity Policy or the D&O Policy.

4. Senior counsel for AIG, Mr Giles SC, noted that the terms “Professional Indemnity Policy” and “D&O Policy” have extended meanings by virtue of the terms of the FASOC.

5. The “Discovery Period” is defined as 28 March 2011 to 29 March 2017.

6. Rule 20.15 of the Federal Court Rules 2011 sets out requirements on a party seeking an order for discovery other than standard discovery including, relevantly, discovery by categories of documents. Counsel for the applicant, Ms Francois, did not submit that AIG should be required to give discovery other than in accordance with the criteria set out in rr 20.14(1) and (2): cf. r 20.15(1). There is no reason why the discovery sought should extend beyond categories of documents that are likely to be directly relevant to the issues raised by the pleadings.

7. Ms Francois argued that the documents in the applicant’s proposed categories (2) to (7) are relevant to the following issues:

   (1)It is not clear what has been claimed and notified to AIG;

   (2)The proper construction of the relevant insurance policies, on the basis that conduct both prior to and subsequent to the making of the policies is relevant to that matter;

   (3)The documents may contain admissions. 

8. I am satisfied that the category of documents agreed to be discovered by AIG, extended as I have indicated above, is sufficient to address points (1) and (3) above.

9. As to point (2), I accept Mr Giles SC’s submission that this is incorrect, except to the extent that such conduct might evidence some matter that can enter into the construction of the policy in accordance with the objective theory of contract: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 at 625 [58] per Allsop P (as his Honour then was); 681-683 [322]-[327] per Campbell JA. Ms Francois put the applicant’s case only on the basis that the conduct of the parties itself may be relevant to the construction of the policies.

10. In particular, I am not satisfied that documents falling within the applicant’s proposed categories (6) and (7) are likely to be relevant to the construction of the relevant insurance policies.

    CONCLUSION

11. For the reasons set out above, I will order discovery of claims notification documents as agreed by AIG but extending the category to include documents created since the end of the Discovery Period. Otherwise, I will not order the discovery sought by the applicant from AIG.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

Associate:

Dated:       2 August 2019