Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 8]
[2022] WASC 46
•14 FEBRUARY 2022
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 8] [2022] WASC 46
CORAM: KENNETH MARTIN J
HEARD: ON THE PAPERS
DELIVERED : 14 FEBRUARY 2022
FILE NO/S: CIV 1915 of 2019
BETWEEN: SINO IRON PTY LTD
First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
CITIC LIMITED
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant
STATE OF WESTERN AUSTRALIA
Third Defendant
Catchwords:
Practice and procedure - Application for further and better discovery - Proposed augmentation to agreed category of discoverable in wake of recent amendments to statement of claim - Trial imminent - Utility of request in context
Legislation:
Nil
Result:
Application for further and better discovery, dismissed
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
| Third Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Herbert Smith Freehills |
| Second Plaintiff | : | Herbert Smith Freehills |
| Third Plaintiff | : | Herbert Smith Freehills |
| First Defendant | : | Kane Jones |
| Second Defendant | : | In person |
| Third Defendant | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Lanco Resources Australia Pty Ltd v Griffin Energy Group Pty Ltd (subject to a deed of company arrangement) [2016] WASC 322
Perpetual Trustees Co Ltd v Burniston [2012] WASC 26
Roe v The State of Western Australia [2013] WASC 130
Singh v Friedman [2013] WASC 78
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 4] [2021] WASC 451
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 7] [2022] WASC 25
KENNETH MARTIN J:
Introduction
I am dealing with an application for further and better discovery made by the first defendant, Mineralogy, under part of its chamber summons filed 18 January 2022 (folio 339). My previous interlocutory reasons in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 7] [2022] WASC 25, delivered 1 February 2022 (folio 348), canvassed the circumstances in which the present application arose: see [20] - [23] of those reasons.
The current application is firmly opposed by the plaintiffs.
In accord with case management directions issued under my orders of 19 January 2022 (folio 348), the current application is being determined on the papers. The application of Mineralogy is advanced in circumstances where the 10 week civil trial in this matter is now scheduled to commence on 21 February 2022 (by reason of my timetable extension orders of 4 February 2022).
Current application
Mineralogy's application begins with the history of what was a formerly agreed category of discovery (of many) as between the parties - settled between the plaintiffs, the first defendant and the second defendant: see my orders of 20 May 2020 (folio 110).
Part of that agreed category of documentary discovery, seen under category 4, section W (project approvals) of Schedule 1 of the 20 May 2020 orders, saw the parties agree that the plaintiffs would provide some 16 categories of documents.
On the present application, the first defendant moves, at this later stage and with the commencement of the civil trial imminent, for a formerly agreed section W of category 4 to be expanded - in the terms of what they define as an 'Amended Category' of further discovery, as I will expose below.
Second defendant's application for further and better discovery
The second defendant, Mr Clive Palmer, has also filed an application for further and better discovery by his separate chamber summons of 17 January 2022 (folio 335).
Mr Palmer's further discovery application also seeks that the plaintiffs provide him with extra documents in terms of the so-called 'Amended Category' of further discovery. But the 'Amended Category' in Mr Palmer's application is only a lesser subset of Mineralogy's 'Amended Category' as is being sought on the present application: see Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 7] [34] - [37].
Outlined below, and underlined, are the proposed further discovery augmentations that Mineralogy and Mr Palmer are presently seeking to add, so as to expand the agreed categories of discovery (save that Mr Palmer's application does not seek the extra par (xix) documents that Mineralogy has added as well, as seen below).
4 ...
W
...
All Documents during the MCPs Period including drafts recording or relating to, the consideration by the CITIC Parties of, and the preparation and submission of (as the case may be), and any interaction with the State (in any capacity) in relation to, (in any capacity):-
xii. the MCPs;
xiii. the PoW;
xiv. The alleged Further Necessary Tenure Request, as it relates to the alleged MCP Subset of Requested Areas, and Re-Purposing Request FRASOC, [24] - [27], [104] [123], [130], [147] and [147A];
xv. MS1066 [SOC, [35]];
xvi. Attachment 5 to MS635 [SOC, [31](a)];
xvii. the alleged 2017 MCP Tenure Request [CFRASOC, [147B]];
xviii. the alleged November 2021 Tenure Request [CFRASOC, [150A]].
xix. the operational necessity, or lack thereof, of the additional tenure that was sought by way of the alleged Further Necessary Tenure Request but is omitted from the alleged MCP Subset of Requested Areas [CFRASIC, [147], [147A], 5FAD, [1AL]].(the Amended Category)
The law
There was no dispute between the parties over the applicable legal principles concerning an application for further and better discovery. The first defendant's submissions of 31 January 2022 (folio 357) refer me to the observations of Edelman J, made whilst a member of this Court's general division in Perpetual Trustees Co Ltd v Burniston [2012] WASC 26 at [27]. Those submissions refer to the well settled touchstones of first, ostensible relevance, and second, that there be shown, by the applicant, 'reasonable grounds for being fairly certain' as threshold criteria used towards a pursuit of undisclosed further documents on discovery - as applied by his Honour in that decision.
The plaintiffs' outline of submissions of 1 February 2022 (folio 360) also refers me to two decisions of this Court in Roe v The State of Western Australia [2013] WASC 130 at [10] - [13] per Martin CJ and to Allanson J's earlier reasons for decision in Singh v Friedman [2013] WASC 78 at [3]. I have elsewhere discussed both those decisions in the context of my own observations concerning the discovery threshold of direct relevance and further and better discovery in commercial litigation actions in the Court's CMC List - where categories of discovery are deployed for the purposes of the exercise: see Lanco Resources Australia Pty Ltd v Griffin Energy Group Pty Ltd (subject to a deed of company arrangement) [2016] WASC 322 at [14], [21] and [22].
Case management principles, particularly concerning the overall proportionality of the interlocutory task, are another consideration to be weighed in the overall evaluation of such an application. Proportionality evaluations will be influenced by the proximity of an application to the commencement of a looming civil trial - as regards assessing the resourcing implications of another interlocutory task added to the parties' preparatory burdens.
Materials relied upon for the purposes of the present application
In accord with earlier timetabling directions, to enable this contested issue to be dealt with on the papers, I now hold the following written submissions from the parties, namely:
(a) Outline of written submissions of the first defendant (Mineralogy) as applicant, electronically filed on 31 January 2022 (folio 357), advocating for further and better discovery orders. For the purposes of facilitating greater expedition and efficiency I will append those brief written submissions as Schedule A to these reasons; and
(b)Outline of written submissions of the CITIC plaintiffs, electronically filed on 1 February 2022 (folio 360), opposing any further discovery orders. Likewise, for the purposes of facilitating expedition and efficiency given the circumstances of a large and imminently looming civil trial, commencing on 21 February 2022, I will also append that outline as Schedule B to these reasons.
These rival written submissions need to be weighed and evaluated. Their appended as observed brevity means that I do not need to attempt a synthesis of their contents.
Evidence
Mineralogy reads and relies upon an affidavit of its lawyer, Daniel Jacobson, sworn 18 January 2022, which comprises two volumes of material (folio 341). I refer particularly to pars 7 through 15 and to the passing larger communications which are attachments DJ-01 through DJ-08 to volume 1 of Mr Jacobson's affidavit.
As evidence relied upon by the CITIC plaintiffs, in resisting the present applications, the plaintiffs rely upon two affidavits made by their solicitor partner of record, Mr David William John, sworn 19 January 2022 (folio 346) and later, Mr John's further affidavit sworn 1 February 2022 (folio 361).
Most of those materials are attachments containing passing communications as between the first defendant's lawyers, or its legal representatives or in-house counsel over these disputed further discovery issues with the plaintiffs' lawyers of record.
Proposed Mineralogy augmentations (xiv), (xvii) and (xviii)
The circumstances in which the 'MCP Subset of Requested Areas' (as defined) emerged with par 147A of the amended statement of claim ('ASOC') (with the fresh map that is Annexure 11A to the ASOC - now the CFRASOC) were explained in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 4] [2021] WASC 451 (delivered 10 December 2021). These reasons discuss that as defined term and its ascertainment by reference to Annexure 11A to the then amended statement of claim (ASOC): see [37] and [38] of those reasons.
As I then observed at [46] and [47] of those reasons:
46.The ASOC amendments under par 147A and which introduced at then, the 'Subset' concept for requested areas at 26 October 2021, were pleading amendments made by consent at the time.
47.It was from that point that this lesser tenure 'Subset' concept towards the relief as sought at trial by the plaintiffs (at ASOC prayer for relief par Bb) came to be introduced into the action as a potential issue. No opposition was articulated at the time ...
My earlier reasons also explain how it came to pass that leave was obtained for the CITIC plaintiffs to amend then, in terms of par 147B, after Mineralogy's responsively filed defence pleading had, in effect, formally denied that there had ever been a 'request' made to it to grant such (lesser) extra tenure to the CITIC plaintiffs - per the terms of the MCP Subset of Requested Areas (as defined). That no request stance then occasioned a further amendment by par 147B of a further amended statement of claim (FASOC) that effectively relied upon the content of 11 exchanged documents (as identified by the particulars of the plaintiffs) - as constituting, in effect, a constructive request made to Mineralogy - for it to consider and grant such lesser areas of tenure (defined at FASOC par 147B as 'the 2017 MCP Tenure Request').
The plaintiffs' resistance position
It emerged from out of both of Mr John's affidavits that the primary responsive position put against providing the requested further and better is advanced on a three-fold basis.
This can be seen explicitly in the Herbert Smith Freehills communication to Mineralogy of 4 January 2022, at page 47 of Mr John's first affidavit, within attachment DJW7, where Mr John then responds to Mineralogy in terms:
Having investigated the issue, we can advise that all of the documents falling within the proposed amendments to category 4W are either:
(a)covered by a pre-existing discovery category to which the CITIC parties have previously responded;
(b)already in Mineralogy's possession (for example, the letter dated 29 November 2021 pursuant to which the November 2021 tenure request was made); or
(c)documents which are subject to legal professional privilege, namely (by reference to Part 1B of the standard discovery affidavit of listed documents) they are documents which are either:
·originals, copies and drafts of correspondence and file notes of conversations between the Plaintiffs and their legal advisers and amongst their legal advisers for the dominant purposes of obtaining or giving legal advice for the purposes of these proceedings; or
·statements, notes, drafts, reports, memoranda and other documents prepared by or for the Plaintiffs and their legal advisers for the dominant purposes of obtaining or giving legal advice or for the purposes of these proceedings.
In such circumstances our clients would object to the production of the documents referred to in (c) above, even if discovery were ordered.
The 4 January 2022 communication of Mr John added the further observation:
That such documents would be wholly privileged is entirely unsurprising, given the circumstances in which our clients came to narrow their claims for relief at trial in the Amended Statement of Claim, and subsequently make the amendments relating to the 2017 MCP Tenure Request and the November 2021 tenure request, referred to above ...
Mr John's second affidavit, at par 8, essentially reiterates the very same three resistance considerations as were communicated under the 4 January 2022 Herbert Smith Freehills communication above.
To that extent then the plaintiffs have responded to Mineralogy by, in effect, verification on oath made by Mr John as the solicitor partner of record for the plaintiffs' lawyers - as to there only being documents which are a subject of a claim of legal professional privilege (aside from the documents already in Mineralogy's possession, as explained).
My overview as case manager of the ongoing interlocutory circumstances in and around CIV 1915 of 2019 - namely, leads me to a like view that it is probable that as regards an October 2021 emergence of a concept of an 'MCP Subset of Requested Areas', that the CITIC plaintiffs' lawyers are indeed likely at then to have been heavily involved in all pleading developments by which the CITIC plaintiffs came to introduce the notion of the ASOC's par 147A MCP Subset of Requested Areas at 21 October 2021, given the timing and the intrinsic character of what was then introduced and pleaded.
In other words, the documentary privilege explanation as provided, and as now verified by Mr John on oath concerning likely lawyer advice input at that time, is not at all implausible - assessed now for a purpose of evaluating the utility of a further and better discovery application advanced by Mineralogy, proximate to the commencement of a major commercial nine-week trial.
To the extent that the written submissions of Mineralogy suggest there is still utility for it from in an order made for further discovery, even if the plaintiffs' legal professional privilege claims are wholly substantiated (par 14 of Mineralogy's written submissions attached as Schedule A), then Mr John's second affidavit, in effect, does now provide what is a verified position on behalf of the CITIC plaintiffs concerning any documents referable to the (as defined) Amended Category (other than those documents already in the possession of Mineralogy). Mineralogy is, of course, at liberty at trial to make whatever forensic submission it sees fit about that position - to the extent it takes a view that it assists Mineralogy's case forensically at the trial.
Discussion (the Amended Category)
Mineralogy's as drafted extra classes of documents, now sought as for further and better discovery advanced by augmenting an earlier as agreed 2020 category of 'W' discovery - for which inspection has been now provided - reads somewhat obscurely to the naked eye, especially the uniquely pursued par xix, as seen.
But broadly speaking, there presents two main areas of extra disclosure augmentation as the subject of Mineralogy's application.
First are the augmentations seen proposed as to former category xiv, xvii and (xviii) - by reference to the MCP Subset of Requested Areas. Such documents are, of course, requested under a preceding chapeau - which relevantly probes for documents recording or relating to a 'consideration by the CITIC parties' of the ensuing document subject matters as the subjects of xii through xix (as proposed).
In other words, by reference to category W, par xiv (as it would be expanded by Mineralogy) the further and better discovery documents as sought relate to a possible subjective consideration of the MCP Subset of Requested Areas (a defined term in the Consolidated Further Reamended Statement of Claim ('CFRASOC')) by the CITIC plaintiffs, presumably from an operational perspective, ie, as to why this extra tenure area is reasonably needed for their continued operations at Cape Preston.
On the present application the tendentious references to 'alleged', seen used before the extra subject matter class of documents as referred, can be ignored. However, 'the MCP Subset of Requested Areas' concept is to be understood against the earlier in time and geographically wider notion, referred to from the outset of this action as a 'Further Necessary Tenure Request' (also a defined term in the CFRASOC).
The MCP Subset of Requested Areas concept was introduced into the litigation by par 147A of the plaintiffs' ASOC at 26 October 2021 (folio 259). Necessarily, the MCP Subset of Requested Areas is addressing a lesser geographical tenure subject matter - as the word 'subset' must dictate - towards a lesser area of tenure sought. But the 2021 lesser subset area concept falls entirely within the earlier requested greater area as first mentioned as the subject of SOC par 147 as the 'Further Necessary Tenure Request'. Discovery and inspection has been given towards the considerations underling why that greater tenure request was made.
Discovery and inspection given by the CITIC plaintiffs in respect of documents concerning any subjective consideration by the CITIC parties of the original request for that Further Necessary Tenure Area, is now complete. That appears to be undisputed. What is at issue now, is the proposed reopening of that task on an augmented basis to the 2021 lesser tenure request category to take account of the October 2021 request for the subset or lesser tenure area request as it came to be made then.
Requests under the proposed augmented further categories xvii and xviii manifest as being of the same essential augmentation character as the augmented category request as seen under xiv.
It always needs to be borne in mind that these augmentations address subject matters which are defined terms under the plaintiffs' CFRASOC.
Secondly, Mineralogy's category W augmentation seen under xix is of a slightly different conceptual character. This sub-category request as seen is unhappily phrased from a clarity perspective. It seems to be directed at Mineralogy pursuing any CITIC plaintiff subjective consideration documents (by those plaintiffs towards tenure areas no longer sought at the trial, as a result of the amendment events and at post 21 October 2021, by reference to the CITIC plaintiffs' tailored lesser 2021 request for the MCP Subset of Requested Areas (explained in the ASOC by reference to a map that is Annexure 11A of the plaintiffs' statement of claim) (see also the later map being Annexure 11B).
Consequently, the further and better discovery request under proposed augmentation xix looks to be pursuing documents in way of the CITIC parties' subjective consideration towards 2021 revised requested truncations to the earlier and greater scope of the Further Necessary Tenure Request (as a subject of the plea under par 147 of the founding statement of claim and as explained by reference to the map that is Annexure 11 to the original pleading).
The resistance against par (xix)
Another of the CITIC plaintiffs' resistance submissions further raised against the xix augmentation to discovery is that any revised and now omitted tenure areas no longer requested to be pursued at the looming trial - constitute a wholly irrelevant exercise of no utility to the approaching trial. In other words, what is relevant for the trial, are the extra tenure areas being sought ‑ not what was once sought, but is no longer sought. There is force in that submission - particularly at this time with so much still to be done before the commencement of the trial.
The submissions of Mineralogy seek to read much into a forensic decision of the CITIC plaintiffs to narrow at October 2021 the scope of their original par 147 Further Necessary Tenure Request (as defined), for the purposes of the trial - to a lesser tenure area request as defined by par 147A of the 21 October 2021 ASOC MCP Subset of Requested Areas. But I am not in the end persuaded that the par (xix) augmentation pursuit is relevant or utile at this time. Even if it were, then still, it is overall only a microscopic component of a massive dispute spanning a myriad of other disputed issues and I assess such a pursuit is well out of proportion to the required determinations around those many other issues.
So even if par (xix) were arguably relevant, still I am not persuaded as case manager and as putative trial judge - that it is of sufficient proportional utility at this time. To that end I have in mind a veritable deluge of so many other disputed issues presenting for my resolution at the trial and, indeed, the imminence of the trial itself and a significant number of other preparatory tasks pending and still to be performed by Mineralogy before its commencement.
On my assessment, request Wxix presents as being in the character of another quasi credibility subjective motivation enquiry pursued by Mineralogy. Its pursuit at this time requires an undue application of resources, assessed in overall context as a consideration of proportionality of resourcing at this time.
Mineralogy can, of course, make whatever submissions it likes at trial about a 2021 revised (lesser) extra tenure request. But it is, in my view, measured against the earlier scope of the request for extra tenure, a disproportional overkill of resource deployment at this time to order discovery around tenure areas no longer being sought.
Conclusions: Amended Category documents
As to the pars (xiv), (xvii), (xviii) and (xix) proposed augmentations, the force of the verified direct response via Mr John on behalf of the CITIC plaintiffs to the extra document request is determinative. Documents not already in the possession of the defendants, disclosed under the existing regime of category W discovery, or as a result of direct receipt by communications directly passing between the parties' lawyers to each other in the period leading up to the articulation of the concept of the MCP Subset of Requested Areas in October 2021 (and then as a subject of the uncontroversial ASOC amendments made by the plaintiffs to their statement of claim at 21 October 2021) - are more than likely to be a subject of legal professional privilege. I do not accept that Mineralogy has shown a likelihood as to the existence of operational consideration documents by the CITIC plaintiffs that would have been brought into existence other than for the dominant purpose of legal advice and use in this litigation.
Bearing in mind that CIV 1915 of 2019 has been pending in the Federal Court and then in this Court now for over three years prior to October 2021 and then, the interlocutory circumstances under which the October 2021 notion of the MCP Subset of Requested Areas came then to manifest in ASOC at par 147A under those introduced amendments, the likely involvement of the CITIC plaintiffs' lawyer in these events is very probable. CITIC lawyer driven input from a legal advice in pending litigation, as I have earlier observed, presents as quite understandable as the action in October 2021 and approached a set trial commencement date (then) at 31 January 2022.
A narrowing of parties' cases in a lead-up to the trial commencement date is not uncommon, in my experience, in large scale complex litigation - as pre-trial preparations intensify - frustrating as that may be to some. It is, nevertheless, an exceptional fact of a professional life in litigators.
I assess there to be only marginal, if any, utility in a late pursuit of category W documents at this time, given now the CITIC plaintiffs' verification on oath by a partner and officer of this court, to the effect the only documents the defendants do not already hold on the augmentation issues are a subject of legal professional privilege against inspection by reason of the dominant purpose of legal advice and litigation context in which they came to be conceived.
Orders
Consequently, the further and better discovery application of Mineralogy under its chamber summons of 18 January 2022 must be dismissed. Mineralogy, as applicant, should also bear the CITIC plaintiffs' taxed costs associated with the resisting of the unsuccessful application.
SCHEDULE A
SCHEDULE B
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DM
Associate to the Honourable Justice Martin
14 FEBRUARY 2022
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