Syndicate Mortgage Solutions Pty Ltd v Khaled El-Sayed & ors

[2008] NSWSC 1396

CITATION:	Syndicate Mortgage Solutions Pty Ltd v Khaled El-Sayed & ors [2008] NSWSC 1396
HEARING DATE(S):	4 December 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	4 December 2008
DECISION:	Order for further and better discovery refused.
CATCHWORDS:	PROCEDURE – discovery and interrogatories – discovery and inspection of documents – further and better discovery – discovery by categories
LEGISLATION CITED:	(NSW) Uniform Civil Procedure Rules, r 21.2
CATEGORY:	Procedural and other rulings
PARTIES:	Syndicate Mortgage Solutions Pty Ltd (plaintiff/first cross-defendant) Khaled El-Sayed (first defendant/first cross-claimant) Khayrieh El-Sayed (second defendant/second cross-claimant) National Australia Bank Limited (third defendant) Perpetual Trustees Victoria Limited (fourth defendant) Haysam Mouhajar (second cross-defendant) Raymond Mawad (third cross-defendant) Registrar General of NSW (fourth cross-defendant)
FILE NUMBER(S):	SC 2585/08
COUNSEL:	Mr D D Knoll (plaintiff/first cross-defendant) Mr R T McKeand SC (first & second defendants/cross-claimants) Ms K E Jones (sol) (third cross-defendant)
SOLICITORS:	Leon M Ratner & Associates (plaintiff/first cross-defendant) City Legal Solicitors (first & second defendants/cross-claimants) Colin Biggers & Paisley (third cross-defendant) Legal Services, Dept of Lands (fourth cross-defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Thursday, 4 December 2008

2585/08 Syndicate Mortgage Solutions Pty Ltd ACN 053 995 243 v Khaled El-Sayed & ors

JUDGMENT (ex tempore)

1 HIS HONOUR: (NSW) Uniform Civil Procedure Rules, r 21.2 (1), provides for discovery of a class or classes of document specified in an order for discovery. Subrule (2) provides that a class of document must not be specified in more general terms than the Court considers justified in the circumstances. Subrule (3) provides that a class of document may be specified by relevance to one or more facts in issue, or by the description of the nature of the documents and the period within which they were brought into existence, or in such other manner as the Court considers appropriate in the circumstances. Subrule (4) provides that an order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue.

2 In this way, subrule (4) preserves, as the touchstone for discovery, the relevance of a document to a fact in issue in the proceedings. A document is regarded as relevant to a fact in issue if it could, or contains material that could, rationally affect the assessment of the probability of the existence of that fact, otherwise than by relating solely to the credibility of a witness, and regardless of whether the document would be admissible in evidence.

3 It should be clearly understood that the purpose of providing for discovery limited to classes of documents was not to widen the scope of discovery to enable it to be used as a subpoena for all manner of documents which might in some way touch upon the case, but to narrow the obligation from that which would have been imposed by an order for general discovery. It still remains essential that any document in respect of which an order is to be made be relevant, in the sense to which I have referred, to a fact in issue. Generally speaking, categories of discovery should be framed so as to specify classes by relevance to facts in issue, rather than by description of classes of documents not on their face tied to any particular fact in issue in the proceedings, because the latter approach will often fail to demonstrate the requisite connection to a fact in issue in the proceedings.

4 I accept that the question of whether or not the defendants knew and understood the documents that they were executing is a fact in issue in the proceedings, raised by their non est factum defence. I accept also that applications for finance made by them on other occasions are relevant to that fact in issue.

5 Save that the period of their creation is more extensive, the documents called for by paragraph 8 of the proposed new categories of discovery fall within the existing paragraph 8, albeit with greater specification. In the absence of any evidence that there has been incomplete discovery, I see no reason to vary or supplement the existing order in this respect. The fact that specific entities have been referred to on this application will no doubt cause the defendants to review the adequacy of their discovery, being on notice that there is a suggestion that they may have overlooked some matters, and informed by what now appears in paragraphs 8.1 to 8.47 of the proposed revised categories. But, I do not see any occasion to make a further order in respect of previous, or proposed new, category 8.

6 So far as proposed new category 16 is concerned, while the documents which that category encompasses are relevant in the sense to which I have referred, it is at this stage impossible to see how they would not be privileged. Privilege is not necessarily an answer to an order for discovery; rather, it is an objection to production for inspection of the documents of which discovery is required. However, where discovery is proceeding by way of categories, in the absence of some explanation as to how a list of the relevant class of documents, without access and inspection to them, would in any way advance the case, I am not prepared to make an order for discovery in respect of that class.

7 So far as categories 17 and 18 in the proposed new list is concerned, in their present form they are admittedly far too broad. They simply refer to a subject matter mentioned in the defendant’s affidavit, and it does not appear from that how all of the documents in the classes described are relevant to a fact in issue in the proceedings. The circumstance that a matter is referred to in evidence does not necessarily mean that every document that refers to that matter is relevant to a fact in issue in the proceedings. Some might be, but as presently framed those categories are much too broad. They would capture many documents not relevant to a fact in issue and, accordingly, an order may not be made by reason of r 21.2(4).

8 Paragraph 19 is in the following terms:

Copies of all documents produced (whether pursuant to subpoena or otherwise) by AKN Associates which either (i) the Defendants have relied upon in pleading the amended first cross-claim or (ii) the Defendants may rely upon in these proceedings, to the extent not included in the documents discovered under the preceding paragraphs.

9 This appears to be an attempt not so much to discover documents by reference to their relevance to any fact in issue in the proceedings, but to discover the defendants’ case and evidence. Insofar as it seeks documents that the defendants "may rely upon in these proceedings", it requires the defendants to make a speculative judgment or, at least, a forecast. I do not consider paragraph 19 is in an appropriate manner in which to frame a category of discovery.

10 It follows that I refuse to make any further order for discovery as against the defendants at this stage. That is not to say that more appropriate and refined claims would not meet with favour at a subsequent stage, if advanced with due expedition.

11 I extend time for the plaintiff to file and serve its defence to the amended cross-claim to 11 December 2008.

12 I extend time for the plaintiff to give verified discovery of the documents in categories 1, 2, 3 and 5 in the document dated 10 October 2008, entitled “First and Second Defendants’ Categories of Documents”, which I initial, date this day and place with the papers, to 11 December 2008.

13 I direct that the first cross-defendant serve any affidavit evidence on or before 12 December 2008.

14 I adjourn the proceedings to 6 February 2009 at 11:00am for further directions.

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