Taxicare Club Limited v Arcuri and Associates Pty Ltd
[2014] VSC 231
•16 May 2014
| THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2012 7169
| TAXICARE CLUB LIMITED (ACN 006 637 789) | Plaintiff |
| v | |
| ARCURI AND ASSOCIATES PTY LTD (ACN 006 299 298) | First Defendant |
| - and - | |
| QBE INSURANCE (AUSTRALIA) LIMITED (ACN 003 191 035) | Second Defendant |
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JUDGE: | LANSDOWNE As J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 February 2014 with further submissions filed on 14 March 2014 | |
DATE OF JUDGMENT: | 16 May 2014 | |
CASE MAY BE CITED AS: | Taxicare Club Limited v Arcuri and Associates Pty Ltd and anor | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 231 | |
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PRACTICE AND PROCEDURE – pleading summonses – summonses seeks strike out or further and better particulars of particular paragraphs only – oral applications to strike out whole statement of claim - statement of claim flawed as a whole because not self-contained and uses poorly defined terms – particular paragraphs also defective – whole statement of claim struck out – discovery – request in summons too broad – refined request also too broad – strike out summonses late - partial discovery ordered prior to repleading
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C. Twidale | BizLaw |
| For the First Defendant | Mr T. J. Scotter | DLA Piper Australia |
| For the Second Defendant | Mr J. P. Slattery | Wotton + Kearney |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 2
Pleading summonses......................................................................................................................... 3
Statement of claim and defences................................................................................................. 3
First and second defendant’s summonses for strike out or further and better particulars 5
Paragraph 11: “request”............................................................................................................. 6
Breach: allegations of breach of confidence................................................................................. 6
Broader difficulties with the statement of claim.......................................................................... 9
Allegations of agency................................................................................................................ 11
Causation................................................................................................................................. 12
Loss and damage....................................................................................................................... 13
Determination of pleading issues............................................................................................ 13
Discovery........................................................................................................................................... 14
Determination of application for discovery............................................................................ 15
Category (a).............................................................................................................................. 17
Category (b).............................................................................................................................. 17
Category (c).............................................................................................................................. 18
Category (d).............................................................................................................................. 19
Category (e).............................................................................................................................. 21
Category (f)............................................................................................................................... 21
Category (g).............................................................................................................................. 21
Category (h).............................................................................................................................. 21
Category (i)............................................................................................................................... 22
Discovery before repleading?................................................................................................... 22
What discovery?.......................................................................................................................... 23
Plaintiff or first defendant to determine the list of vehicles?............................................... 23
Conclusion and orders.................................................................................................................... 24
HER HONOUR:
Introduction
Three summonses came before me for hearing on 26 February 2014. The plaintiff by summons filed 11 December 2013 seeks particular discovery from the first defendant. The first defendant by summons filed 13 December 2013 seeks strike out of certain paragraphs of the statement of claim dated 21 December 2012, or in the alternative further and better particulars.
The second defendant by summons also filed 13 December 2013 seeks further and better particulars of certain paragraphs of that statement of claim, or in the alternative strike out.
The second defendant also sought by that summons security for its costs, but that application was not pressed at the hearing and was withdrawn and dismissed. A matter relevant to that dismissal was that although the second defendant’s summons was filed on 13 December 2013, it was only served on the plaintiff on 21 February 2014. All other applications proceeded and were opposed.
The plaintiff and first defendant had further discussions in the course of the day in an endeavour to resolve the discovery issues. They also sought and were given by consent the opportunity to file further submissions in relation to discovery by 14 March 2014. Both did so.
I declined a request made by the plaintiff made after the hearing, which was opposed by the defendants, to give the plaintiff a further opportunity to put submissions in response to the stance taken by both defendants at the hearing in relation to strike out. Although each defendant had sought by its summons only strike out of certain paragraphs of the statement of claim, at the hearing both defendants submitted that the preferable approach would be to strike out the whole of the statement of claim.
I refused the plaintiff’s application because, although strike out of the whole of the statement of claim was not expressly sought by the defendants’ summonses, it was in my view sufficiently ventilated at the hearing to enable the plaintiff to respond at that time, and the plaintiff did so.
I heard argument on the discovery application first (being first in time) at the hearing but in these reasons I will deal first with the challenges to the statement of claim.
Pleading summonses
Statement of claim and defences
The plaintiff filed its statement of claim on 21 December 2012. Defences were subsequently filed by each defendant, by the first defendant on 15 February 2013 and by the second defendant on 4 March 2013. Each subsequently filed amended defences in April of that year. Each defendant has also sought before the issue of their summonses further and better particulars, the second defendant on two occasions. Those further and better particulars of the statement of claim were sought and provided in the period between March and December 2013.
Thus it is apparent that there has been significant activity undertaken by all parties, with corresponding cost and lapse of time prior, to the oral application made by each defendant in the course of the hearing for strike out of the whole of the statement of claim, each defendant having sought only further and better particulars of particular paragraphs or strike out of those paragraphs by summons.
The thrust of the plaintiff’s case as it is pleaded is that all three parties entered into an agreement (called the “Broker Agreement” in the statement of claim) in 2004 whereby the first and second defendants agreed to offer an insurance product or products to members of the plaintiff on a doubly exclusive basis, that is only to current members of the plaintiff and only via the plaintiff.
The members of the plaintiff are described in paragraph 4 of the statement of claim as “taxi owners and taxi operators”. The first defendant is agreed to be an insurance broker and the second defendant a provider of insurance products.
The plaintiff alleges that the first and second defendants breached the agreement by offering the insurance product or products in question to taxi owners who were not members of the plaintiff but were members of other taxi clubs. The plaintiff also alleges breach of the agreement by the first and second defendants offering the products directly to taxi owners rather than going through the plaintiff.
The plaintiff’s case is pleaded in contract, and, in the alternative, as misleading and deceptive representations made by the first and second defendants and relied upon by the plaintiff.
The plaintiff also alleges a further representation made by the first and second defendants as to the need for a further payment, which was then paid. The plaintiff alleges this representation was misleading and deceptive or in the alternative that the payment unjustly enriched the defendants.
Two further specific causes of action are pleaded. The first is an agreement said to have been arrived at between the plaintiff and the second defendant in October 2012,[1] that all further cancellations and variations to existing policies of members of the plaintiff in relation to the insurance products in question would be processed and paid by the second defendant to the plaintiff upon request by the plaintiff through its new broker. The plaintiff alleges this agreement was breached.
[1]Statement of Claim [10].
The plaintiff also makes a case against the first defendant only in relation to certain statements said to have been false and misleading made by the first defendant in letters distributed to the members of the plaintiff in 2012, and in letters to Lumley Insurance in 2012.
The first defendant’s case as it appears from its amended defence in relation to the principal claim of breach of the Broker Agreement or the alternative casting of that cause of action as reliance on misleading and deceptive conduct is as follows. The first defendant says that the plaintiff approached the first defendant; the first defendant negotiated a suitable product with the second defendant and agreed with the plaintiff to make that product available to members of the plaintiff. Referral was to come through the plaintiff but the first defendant would act in the capacity of broker for the individual taxi owners concerned and the scheme was not exclusive to members of the plaintiff. Accordingly, the first defendant denies the terms of the agreement as pleaded by the plaintiff and denies any breach of such agreement. In relation to the specific allegations that false and misleading statements were made by the first defendant in letters provided to members of the plaintiff and to Lumley Insurance in 2012, the first defendant agrees that certain letters and emails were sent but denies that they contained incorrect and misleading information and that any loss was thereby occasioned.
The second defendant’s case is that it did not enter into any agreement at all either in 2004 or in 2012 with the plaintiff and did not engage in any misleading conduct. In relation to the claim based on a representation that further payment was required, both defendants plead that this payment was the negotiated settlement of a legitimate claim for outstanding premium due to the second defendant.
First and second defendant’s summonses for strike out or further and better particulars
The first defendant sought in its summons filed 13 December 2013 strike out of certain paragraphs alleging breach of the Broker Agreement (and the corresponding paragraphs relating to that claim framed as misleading and deceptive conduct) and the paragraphs alleging loss. In the alternative to strike out the first defendant sought further and better particulars of those paragraphs.
The second defendant’s primary application by its summons was for further and better particulars of paragraphs relating to breach of the alleged 2012 agreement between it and the plaintiff; alleged misuse of confidential information; agency; and loss. The alternative application in the summons was for strike out. Interestingly the paragraphs are not coextensive in those alternative applications.
The first defendant’s written submissions also noted a number of claimed general defects in the statement of claim and in his oral submissions counsel for the first defendant submitted (and counsel for the second defendant adopted in reply) that the whole of the statement of claim should be struck out.
The claimed deficiencies, the plaintiff’s response to them, and my determinations are as follows.
Paragraph 11: “request”
Paragraph 11 of the statement of claim pleads that:
In breach of the October 2012 Agreement, QBE failed upon request from TCC through its new broker Insurance House Group Pty Ltd to process and pay cancellations and variations.
The second defendant seeks the usual particulars of the claimed “request”. The plaintiff concedes that particulars are required. I agree.
Breach: allegations of breach of confidence
The second defendant seeks further and better particulars or strike out in respect to the allegations of breach of confidence in paragraphs 7(d) and (e) and 17(d) and (e) of the statement of claim. These paragraphs allege, initially in contract and in the alternative in breach of representation, that the first defendant:
Disclosed confidential TCC Scheme details to parties other than TCC.
Used confidential TCC Scheme details and TCC’s confidential business details and information to engage in direct and indirect competition with TCC.
Objection is also taken to these paragraphs by the first defendant who adopts the submissions put by the second defendant in this regard.
The defendants submit that the further and better particulars supplied to date do not adequately meet the requirement of specificity where breach of confidence is pleaded. The second defendant relies on authorities to the effect that the actual information that is said to have been confidential must be identified in the pleading and submits that neither the statement of claim nor the further and better particulars supplied to date meet this test. The second defendant also says that the use to which this confidential information was allegedly improperly put has not been sufficiently identified, either in the pleading or in the further and better particulars.[2]
[2]Second defendant’s Outline of Submissions at [15]-[21].
The plaintiff says in its written submissions that further particulars relating to the extent of breaches by the first and second defendants of the agreements or representations (and particulars of loss thereby occasioned) can only be supplied after further discovery, because this information is solely within the control of the first defendant.[3] The plaintiff’s further general answers to the objections taken by the defendants is to say, first, that objection has only recently been taken to the statement of claim, despite other steps taken in the litigation to date, and that the defendants have shown by their actions in the litigation that they sufficiently understand the statement of claim, and that the statement of claim is sufficiently pleaded and sufficiently clear for the Court.
[3]Plaintiff’s Outline of Submissions at [19].
I do not consider the plaintiff’s submissions meet the objections raised.
First, the plaintiff submits that it cannot particularise the “extent” of the defendants’ breaches without further discovery- this is not to say that the information said to be confidential cannot be identified. That must be within the knowledge of the plaintiff.
In relation to the general submission that the defendants really know what information was intended to be confidential and how it was used in breach of that obligation, even if this was the case (and I make no finding in relation to that contention) the authorities are quite clear that the information in question must be set out in the pleading, and material facts must be pleaded to establish that it was confidential, that there was an obligation on the defendants to keep it so, and that the defendants have misused it.[4] This is not least for the very good reason that the plaintiff’s case must be apparent to the Court, including a judge coming to it for the first time, whether or not the parties already familiar with the facts can understand it. If the statement of claim is not sufficiently clear, it must be made so, whether or not the objection is taken after some time has elapsed. I accept the defendants’ submissions that the statement of claim as a whole must be repleaded for the following reasons.
[4]Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 per Gummow J at 443; Liberty Financial Pty Ltd& Anor v Scott & Anor (No 3) (2004) 11 VR 621 and (No 4) (2005) 11 VR 629
Dealing first with the claim of misuse of confidential information, the statement of claim does not at all identify the content or nature of the “TCC Scheme details” or “TCC’s business details” alleged to be confidential. Thus the information in question is not identified. In response to enquiry, the plaintiff has answered in Further and Better Particulars dated 2 December 2013 that:
The Confidential details, included, but was (sic) not limited to, the
i) TCC Scheme details;
ii) QBE policy details of the TCC Scheme;
iii) TCC scheme fee, rates and charges;
iv) TCC Scheme claims history;
v) TCC Scheme members’ and TCC members’
(I) contact details
(II) Claims history
(III) Policy detail
It is plain that this does not significantly advance the identification of the information said to be confidential. The first item is merely a repeat of what appears in the statement of claim, the other items are category descriptions, not detail of the information within that category, and the whole is said to be non-exhaustive. The same criticism applies to the particulars supplied in response to query as to whom it is alleged this information was supplied, save that that answer is exhaustive. That answer reads that “Parties other than TCC means Taxi Clubs, Taxi license owners and Taxi operators not members of TCC”. In summary, I accept the criticisms made of these answers by the second defendant in its outline.[5]
[5]At [15]-[16].
The first defendant further submits that it is not clear from the statement of claim how, in the alternative formulation of the plaintiff’s case as breach of representation, the allegations of misuse of confidential information by the first defendant in paragraph 17(d) and (e) arise from the representations pleaded in paragraph 14.[6] I also agree with this submission. Specifically, while it is alleged in the contract case that it was a term of the Broker Agreement that certain information was confidential, there is no representation that certain information would be kept confidential that is pleaded.
[6]Outline of Submissions for the First Defendant at [17].
Broader difficulties with the statement of claim
Examination of the statement of claim in relation to the allegations of misuse of confidential information expose broader problems with the whole drafting of the document that cannot be corrected merely by further particulars. These are identified by the first defendant in its outline as:
(a) the use of poorly defined terms including “TCC’s Members” and “the TCC Scheme”;
(b) (that the statement of claim) seeks to refer to an affidavit filed in another proceeding for particularisation in a way that is unhelpful to the Court.[7]
[7]At [6]
I consider these criticisms to be entirely correct, and would go further.
The phrase “TCC’s members” is used to mean the “customers” of the plaintiff (TCC) in paragraph 1 of the statement of claim. It is of no utility as shorthand, however, unless who comprises that class is somewhere set out. Counsel for the plaintiff directed me to paragraph 4 which states in the third paragraph to the particulars that “TCC’s members are taxi owners and taxi operators”. This does give meaning to the phrase, but the reader should not have to search for it in another paragraph.
The phrase “the TCC Scheme” first appears in paragraph 4(a) of the statement of claim as meaning the “new insurance product” that it is alleged the parties agreed to deliver only to TCC members. In other words, the Scheme is the product. Elsewhere, however, as in paragraphs 7(d) and (e) and the further and better particulars supplied in relation to that paragraph, the phrase “TCC Scheme” appears intended to mean not just the product, but something more, which would be a more natural meaning to give to the word “scheme”. This discontinuity is also apparent even within paragraph 4 itself- the final paragraph of the particulars states in part “Generally, the TCC Scheme entitled TCC to provide this insurance product to TCC members…” This statement also implies the Scheme was more than the product.
Further, nowhere in the statement of claim is the actual insurance product identified (what sort of insurance?) and on occasion the word is used in the singular (for example, paragraphs 4 and 5) and on other occasions in the plural (for example, paragraph 6(a)). The defendants and the Court should not have to speculate as to what is meant. Other terms are also capitalised, such as “Taxi Clubs” in paragraph 7, implying that they are defined terms, when in fact they are not defined in the statement of claim. It may be that the particulars to that paragraph are intended by the reference to “entities not affiliated with TCC” to particularise “Taxi Clubs” but even that detail is said to be non-exhaustive.
The second general deficiency identified by the first defendant is also a very significant hindrance to the ease of use of the statement of claim. In multiple paragraphs particulars are sought to be given by reference to another document, an affidavit sworn by the managing director of the plaintiff in a different proceeding. This is objectionable in a number of respects. First, a pleading should be self-contained for both clarity and ease of use. If this statement of claim were to continue, then, in addition to the four sets of further and better particulars already supplied in answer to request or order, the reader would be required to source from another proceeding a fifth document, being the affidavit. Secondly, seeking to give particulars by reference to an affidavit risks confusion between assertion of fact, and evidence of that fact. This distinction is important in allowing the parties and the Court to identify that all necessary elements of a cause of action have been pleaded.
These broader difficulties cannot be cured by further particulars, and further particulars would only exacerbate them. What is required in my view is strike out of the whole of the statement of claim with liberty to re-plead.
Allegations of agency
The second defendant (and first defendant by adoption of that submission) also take issue with the adequacy of the particulars supplied to date in respect of the plea that the first defendant, the broker, was the agent or “authorised representative” of the second defendant insurer, which is pleaded in support of imputing liability for acts of the first defendant to the second.
Again, the plaintiff has made no specific answer to these criticisms. I will assume that the plaintiff’s response is as set out above- that the objection is late, and the case it makes is sufficiently plain.
I consider the defendants’ objections to be sound. After two sets of further and better particulars requested by the second defendant some further detail as to the basis on which it is said that the broker (first defendant) was the agent of the insurer (second defendant) has been provided, but still in very general terms. The first set of further and better particulars continues to use the passive tense to describe the alleged appointment of the first defendant as broker- “AAPL was appointed as the authorised broker with respect to the TCC Scheme (as defined)”[8]-without stating who appointed it. In the second set of particulars, QBE is stated to be the appointor.[9] However, this second set of particulars may have introduced a new allegation- that “through its dealings of the TCC Scheme QBE held AAPL out to TCC as its legally authorised representative in relation to the TCC Scheme”. As the second defendant notes, this assertion is made without any particulars of the “dealings” in question, nor, I add, of the acts said to constitute the holding out. If this is a new allegation, then in any event it should be in the statement of claim, and there properly particularised.
[8]Further and Better Particulars dated 21 May 2013 at [6.1.4]
[9]Further and Better Particulars dated 2 December 2013 at [6]
I also note (this point was not specifically taken by the defendants) that the statement of claim uses two, or possibly three, terms to describe the relationship between the first and second defendants, which is said to be sufficient to attribute to the second defendant the liability of the first. In paragraphs 9(b) and 18(c), for example, the first defendant is alleged to be the “authorised agent” of the second defendant; in paragraph 18 (a) “an agent”; in paragraph 26 and the further and better particulars “QBE’s authorised representative and agent”; and in paragraph 27 the “authorised representative”. If the use of different terms is intended to convey different categories of relationship in law this should be made plain. If it is not, then consistent use of one term or phrase would make that clear.
Causation
The first defendant submits that there are no material facts pleaded to link the claimed breaches to the claimed loss in either formulation of the plaintiff’s case, either in contract or as breach of representation. [10] The plaintiff appears to submit in its written submissions that it is sufficient to plead that “by reason of the breach” the plaintiff has suffered loss and damage.[11] This is how the statement of claim is currently drafted. The necessary causation is alleged only by the words in paragraph 12 “as a result of (the breaches)…TCC has and will continue to suffer loss and damage”. An equivalent formulation is used in paragraph 21 in relation to the case framed as breach of representation.
[10]Outline of Submissions for the First Defendant at [7]-[10] and [15].
[11]At [24] and [25].
I do not consider this sufficient and accept the first defendant’s submission. The current plea is bare allegation or conclusion, when what is required to give content to it is the pleading of facts to establish the causal link.
It is important to note that this also is not a defect that can be cured by further and better particulars as it is a deficiency in material facts.
Loss and damage
Both defendants take issue with the particulars given to date in relation to loss. Those particulars, given by document dated 14 October 2013, give precise figures for certain categories of liquidated loss together with details by spreadsheet as to how the figure is calculated. The document does not, however, contain any particulars at all as to what may be the more substantial component of the plaintiff’s claim, being its claim for loss of profit and loss of business reputation. The plaintiff concedes that further particulars are required, but says that provision of these is dependent on further discovery by the defendants. I will return to this timing issue shortly.
The defendants also take issue with the manner of pleading loss. The first defendant submits that the statement of claim does not link particular heads of loss to particular claimed breaches of the Broker Agreement. This is so, but I accept the submission of the plaintiff that it is not essential in the pleading, at least at this stage. The relationship should, however, be made plain by trial.
The second defendant submits that the pleading of loss is deficient in that it does not identify which categories of loss are claimed against which defendant. I do consider this to be a defect that requires remedy, both for clarity and to enable the defendants to know the case they are required to meet. For example, if it is the case, as the second defendant asserts, that categories of loss 1.1-1.4 as particularised in the Further and Better Particulars of Damages dated 14 October 2013 arise from operation of the broker account they may be claimed or claimable only as against the first defendant. The plaintiff’s case in this regard should be made plain.
Determination of pleading issues
For the reasons given, I accept the submission put by the first defendant and then later adopted by the second defendant in reply that the deficiencies in the statement of claim exposed in the course of the hearing in fact require the whole of the statement of claim to be repleaded. In hindsight it is regrettable that this application is made after such lapse of time and activity, given that other steps taken and costs thereby incurred may now be thrown away. That is, however, a matter for argument in relation to costs. It may be, that as the second defendant has submitted, it was reasonable for the defendants to initially seek further and better particulars rather than seek strike out. I will hear the parties further in relation to costs if required.
Even if it is the case that steps taken by the defendants show that they in truth understand the claim put against them (and, as to that, as previously stated I reach no conclusion), in my view the statement of claim on its face is not sufficiently clear to the Court. It is essential that it be so, for the efficient conduct of eventual hearing and any further interlocutory steps requiring adjudication. Further, sufficient elucidation is not provided by the further and better particulars or the other document referred to in the pleading and in fact the necessity to refer to that material bolsters the case, rather than undermining it, for entire repleading. The only cure for the deficiencies in the statement of claim is re-pleading as a whole.
Discovery
By summons filed 12 December 2013, the plaintiff seeks further particular discovery by the first defendant. Counsel for the plaintiff and first defendant had discussions on the day of hearing in an endeavour to reach agreement as to further discovery, and continued those discussions for a period thereafter. They were unable to reach agreement. In further submissions filed 14 March 2014, the first defendant maintains its primary position that the discovery sought is impermissibly wide and, if the statement of claim is to be repleaded, further discovery should await that repleading in any event. In the alternative, the first defendant proposes some limited further discovery.
The plaintiff in its further submissions of 14 March 2014 narrows its request for further discovery, but still seeks more than that proposed by the first defendant. The parties are also in dispute in their further submissions and proposals as to which of them should be responsible for preparing the list of members of the TCC at the relevant dates, for the purpose of identifying the further documents to be discovered.
In its summons the plaintiff sought nine categories of documents, categories (a)-(i). The more limited proposal submitted 14 March 2014 seeks four categories of documents, (a)-(d), which appear to be more limited recasts of earlier categories (a)-(d), and possibly also (e), (h) and aspects of (i). It seems that categories (f) and (g) in the summons are no longer pursued in this proposal. In the plaintiff’s written submissions on the summons, category (f) was said to relate to the allegation that the first defendant did not properly maintain the broker account. I note that there was discussion about further discovery in relation to the broker account between the parties in the period December 2013 to February 2014 prior to the hearing.[12] Category (g) in the summons was said in the plaintiff’s written submissions on the summons to relate to the demand for $234,421 in 2012, which the defendants say was a negotiated settlement in respect of outstanding premium.
[12]Exhibits 27-30 to the affidavit of Lachlan Ingram sworn 12 February 2014
The plaintiff in its submissions of 14 March 2014 expressly repeats its earlier submissions. Thus it is unclear whether or not the plaintiff now seeks only the more limited categories contained in the 14 March 2014 proposal. I will assume that it does, but given that this is not entirely clear will also give brief reasons in relation to the categories in the summons, with the exception of the documents sought by categories (f) and (g) in the summons. I consider that I will need to hear further from the parties if the plaintiff still seeks those documents. I will assume that the plaintiff’s first submissions remain relevant to the categories as recast in the plaintiff’s 14 March 2014 proposal.
Determination of application for discovery
The plaintiff’s oral submission at hearing was that it sought to know what insurance was effected under the TCC scheme by the first defendant placing insurance with the second defendant either without the knowledge of the plaintiff, or in respect of vehicles that were not owned (or operated- this was not clear to me) by current members of the TCC. The first defendant admits in its defence that it placed insurance in its capacity as the insurance broker for members of other taxi clubs. The plaintiff says it seeks to know the vehicles concerned.
In my view the discovery sought in the plaintiff’s summons does not capture this intention. It is both too broad and too imprecise. As to breadth, none of the nine categories of documents sought contain any express temporal limitations, and the period of the agreement-2004 to 2012-may not be adequate limitation. I do note that the first defendant’s alternative proposal made in the further submissions does not, however, cavil with the time period 2004-2012 but this is in the context of a far more precise category of documents.
Further, nowhere in the description of what is sought by the summons is there a reference to identification or limitation by vehicle. Rather, what is sought is variously described as “all documents” “all correspondence, documents and material”, “all letters, correspondence, documents and communication”, “correspondence, documents and emails”, “documents and records” and so on, limited only as relating to the identity of the person or entity (as being a non TCC member), or relating to the TCC Scheme (and here I reiterate my comments as to the failure to properly define that phrase). There is no reference at all to vehicles. In some categories, for example (a) and (b), the type of insurance concerned is not identified at all save than by reference to the TCC Scheme, which as noted earlier is not sensibly defined and the insurance product not identified. Where a limitation is given, as in (e), it is “Taxi related insurance” which is far too general to be helpful. I agree with the objections on the basis of breadth and relevance taken by the first defendant to categories (a)-(c) of the summons as set out in the Outline dated 26 February 2014.[13] Further, category (c), which seeks correspondence between the first defendant and TCC members does not exclude communications via the plaintiff. For these reasons I would not have ordered the discovery sought by paragraphs (a)-(c) of the summons.
[13]At [22]-[24].
Category (a)
These defects are cured to some extent by the more precise and narrower proposal advanced by the plaintiff after the hearing and supplied to the Court with its submissions dated 14 March 2014. The type of insurance in question is identified as a third party property policy over a taxi vehicle, and the type of documents sought is limited at least in paragraph (a) of the more refined request to “invoice documents”. The proposal for some discovery advanced by the first defendant on 14 March 2014 also provides for this discovery, subject to dispute about who is responsible for drawing the list of non TCC members. I will return to this category shortly.
Category (b)
Category (b) in the summons sought all communication between the first and second defendants relating to the TCC Scheme. The plaintiff said in its written February submissions before hearing that this category is related to “Whether AAPL was entitled to offer membership in the TCC Scheme to non-TCC members”[14]. That is indeed an issue in the proceeding, but clearly on its face the request went broader.
[14]Plaintiff’s Outline of Submissions at [11].
A limitation has been imposed in the plaintiff’s 14 March 2014 proposal by reference to communication regarding “Operation of terms of the TCC Scheme” or “Insurance of Non-TCC Members in the TCC Scheme”. A further basis for this category is also advanced in the plaintiff’s further written submissions. It is there submitted by the plaintiff that conduct after the Broker Agreement was entered into is relevant in determining whether or not the contract was entered into and its terms.[15] That contention is said to be the basis for all the categories of documents sought in the recast proposal, including recast category (b), together with, in respect of some categories, relevance to loss. The contention was not fully argued before me and accordingly I do not consider it appropriate to determine it in these reasons. I am not persuaded, however, that even if arguably correct as a general principle it is sufficient basis for the discovery sought either in the summons or in the recast proposal in relation to category (b). What is sought in both is what the first and second defendants said to each other, in the recast proposal only in relation to the terms of the TCC Scheme. I am not currently persuaded that subjective expressions of those parties’ understanding of the contract or arrangement are relevant in the objective determination of whether or not there was a contract, or its terms. I will not order the discovery sought by paragraph (b) in the recast proposal of the plaintiff.
[15]At [7].
Category (c)
Category (c) in the recast proposal seeks the same communications between the first defendant and members of the plaintiff as earlier sought, but does exclude communications via the plaintiff. In its February written submissions the plaintiff says that this category relates to two issues: whether the first defendant was entitled to offer membership in the TCC Scheme to TCC members without involving TCC; and if not, what loss and damage has TCC suffered? That submission is repeated in the plaintiff’s submissions in respect of the recast and more limited proposal of 14 March 2014, but now supported on the basis that the discovery relates to post contract conduct that is relevant to determining the terms of the contract. The first defendant in its February submissions queried the relevance of any of these documents, and says that if they are sought to ascertain whether or not the plaintiff has a case in misleading and deceptive conduct that is impermissible. In its further March submissions the plaintiff expressly says that the documents go to “whether (and if so, the extent) AAPL made misleading and deceptive statements to TCC’s members”.[16]
[16]At [8].
In relation to this last contention I accept the submission of the first defendant that this is an attempt to determine if there is a case of misleading and deceptive conduct, not to obtain discoverable documents in respect of such a case already pleaded. Further, I do not consider that the documents sought in the recast category (c) are relevant to the issue first identified by the plaintiff that is “whether” the first defendant was entitled to offer membership without the involvement of the plaintiff. As noted earlier, that issue turns on the terms of the contract, if any, between the plaintiff and first defendant, not on what the first defendant then did, which would ordinarily be relevant to breach only. Even if some post contract conduct by the first defendant might be relevant to determining whether or not involvement of the plaintiff in the insurance of its members pursuant to the contract was a term of the contract (and I do not here determine that), it is not explained how communications to members of the plaintiff could be relevant conduct in this regard.
I do accept that some communications between the first defendant and members of the plaintiff may be relevant to loss incurred by the plaintiff if the agreement was indeed that the first defendant would not directly offer insurance to the plaintiff’s members. The recast category (c) is in my view, however, not sufficiently limited to capture such documents. It seeks all communications, not just those that could identify or quantify any loss suffered by the plaintiff. It seems to fall within the earlier approach to discovery, which included documents that were indirectly relevant or may lead to a train of enquiry[17], rather than the more targeted approach r29.01.1 of the Supreme Court (General Civil Procedure) Rules 2005 and the Civil Procedure Act 2010 now require. The Court may order broader discovery, but I am not here persuaded it is justified, at least on the current pleading. I refuse discovery as sought by the recast paragraph (c).
[17]Compagnie Financière du Pacifique v Peruvian Guano Co (1882) 11 QBD 55
Category (d)
Category (d) in the summons sought all communications between the first defendant and non TCC members regarding insurance in the TCC Scheme. The plaintiff says in its February submissions that these documents are discoverable because they relate to the issue of whether or not TCC Scheme was exclusive to TCC members. In its March proposal the category of documents is limited to:
i) Invitation by the First Defendant to Non-TCC Members; or
ii) Requests by Non-TCC Member to the First Defendant;
for third party property insurance over Non-TCC Member’s taxi vehicles in the TCC Scheme.
In its March submissions the plaintiff advances, as noted earlier, the contention that this form of post contract conduct is relevant to determining the terms of the contract i.e. whether or not exclusivity to TCC members was a term. I accept that that is an issue in the proceeding, but I repeat the comments I made earlier in relation to category (c). Whether or not the agreement was exclusive to TCC Members would ordinarily be determined by reference to the contract, if any, as entered into by the plaintiff and the first defendant, not, at least in the first instance, by what the first defendant did thereafter. As noted, this would ordinarily relate to breach only. In any event, the first defendant admits that it placed insurance for members of other named taxi clubs. The discovery sought by this category in the summons is not, however, limited in any way by this plea- for example as to type of document or limited to those named clubs. The recast paragraph (d) in the 14 March 2014 proposal is limited by type of document, but not by the named clubs.
The list of named clubs in paragraph [7.3] of the first defendant’s amended defence is on its face exhaustive. The plaintiff has not asserted in the reply that there were more clubs. Accordingly, there does not appear any reason on the pleadings why the request could not have been limited to these clubs.
The type of document is limited in the plaintiff’s 14 March 2014 proposal to invitations or requests relating to specified insurance in the TCC Scheme. I accept that documents showing insurance actually obtained by the first defendant from non TCC members may be relevant to loss that the plaintiff may have suffered due to breach of an exclusivity term. Loss is said in the plaintiff’s March submissions to be an additional basis for this category of discovery. I am not, however, persuaded that correspondence requesting or offering such insurance is sufficiently relevant. If an offer made by, or request made to, the first defendant was in fact accepted, then any loss that subsequently may have ensued to the plaintiff would be captured by the invoices for such insurance.
The first defendant in its alternative proposal of 14 March 2014 (by which some discovery would be ordered prior to repleading), proposes that invoices in respect of insurance over taxi vehicles not members of the plaintiff that was placed by it with QBE be provided, subject to appropriate confidentiality. The first defendant’s proposal is limited to invoices, and does not include documents seeking or offering insurance i.e. it is limited to actual loss suffered. The first defendant does not take the point I have noted, that the discovery be limited to the clubs it has identified.
If any discovery is to be ordered prior to repleading, I consider that the first defendant’s proposal is as far as such discovery should currently go in relation to category (d).
Category (e)
I accept the first defendant’s submission that category (e) in the summons appears to be a sub-category of category (a) and repeat the comments I have made about category (a) in the summons, and in the plaintiff’s 14 March 2014 proposal.
Category (f)
Category (f) in the summons is said by the plaintiff to relate to operation of the broker account. It does not appear in the plaintiff’s 14 March 2014 proposal. I will assume subject to further argument that it is no longer pursued.
Category (g)
Category (g) in the summons sought documents relating to the 2011 audit. These are relevant, but the first defendant says they have already been discovered. The category does not appear in the plaintiff’s 14 March 2014 proposal and I will assume subject to further argument that it is no longer pursued.
Category (h)
Category (h) in the summons sought discovery of “database records maintained by Arcuri relating to TCC, non TCC Taxi Licence owners, clubs, the TCC scheme and TCC members”. I accept the submissions of the first defendant that the request is flawed by the lack of clarity in the terms “non TCC Taxi licence owners”, “clubs” and the “TCC Scheme” and is in any event impermissibly broad. The category does not appear in the plaintiff’s recast proposal, but if still sought I would refuse it.
Category (i)
Category (i) in the summons sought discovery of all of the first defendant’s “account records” relating to the “TCC trading account, bank records and statements”. This was said by the plaintiff in its February submissions to relate to three issues: did the first defendant properly maintain the broker account; whether the TCC Scheme was exclusive to TCC members; and what loss the plaintiff has suffered. The category does not appear in the plaintiff’s recast 14 March proposal. If it is pursued, I would refuse it. While some financial information is clearly relevant at least to proper conduct of the broker account and loss, the request is too broad to be acceptable. I am not persuaded the category relates to whether or not the Scheme was exclusive.
Discovery before repleading?
The first defendant’s primary submission is that the discovery summons should be dismissed, and further discovery reconsidered after the pleadings are in order. Where a pleading summons is brought early in a proceeding, this would be the usual approach. The pleading summonses, that will now result in the whole of the statement of claim being struck out with liberty to replead, have in this case, however, been brought well after the deficiencies in the statement of claim should have been apparent. There may have been good reason for the proceeding to continue for the period it did before the applications were made, and I will hear further from the parties in that regard if required in relation to costs. Given the course that the proceeding has taken, however, I consider the alternative approach advanced by the first defendant to be the fair and practical way to proceed- that is, to order some discovery prior to repleading to keep the proceeding moving. This approach will also meet, at least to the extent of the documents I will order be discovered, the plaintiff’s contention that discovery in relation to loss is required before it can give useful particulars of loss of profit and loss of business opportunity and goodwill.
What discovery?
The parties in their respective 14 March 2014 proposals agree that invoices relating to insurance placed by the first defendant with QBE for taxi vehicles not members of the TCC be discovered for each of the years 2004-2012 (the plaintiff further limits the documents to those relating to third party property insurance, but this may in fact be no further limitation if that in truth is the insurance “product” referred to in the statement of claim). I will order this discovery. It relates to paragraph (a) in the plaintiff’s 14 March 2014 recast proposal. For the reasons given above, I will not order the discovery sought in paragraphs (b)-(d) of that recast proposal, or any of the other discovery sought by the summons in categories other than (f) and (g), if still pursued. In relation to categories (f) and (g) I will hear the parties further if required.
Where the parties disagree in relation to paragraph (a) is how it is to be determined which person or entity, or which vehicle, was or was not a member of the TCC in the relevant year.
Plaintiff or first defendant to determine the list of vehicles?
The plaintiff proposes that the first defendant determine this, on the basis of its own records and knowledge. The first defendant proposes that it be determined by the plaintiff.
The plaintiff says that the first defendant has shown, by the undertaking it gave to the Court at the time pre-action discovery was ordered in 2012, that it knows who was a member of the TCC, and so can determine whether or not insurance it placed with QBE was, or was not, in relation to a TCC member. The undertaking in question is in these terms:
1. The Defendant (‘AAPL’) undertakes to the Court and to the Plaintiff:
(a) Subject to (b), not to write to or telephone persons shown in the Defendant’s records as current members of the Plaintiff; and
(b) to send all correspondence to persons shown in the Defendant’s records as current members of the Plaintiff, care of the Plaintiff.[18]
[18]In “Other matters” to the order of Kyrou J of 18 October 2012 in S CI 2012 5652, exhibited as LCI-04 to the affidavit of Lachlan Ingram sworn 12 February 2014.
The plaintiff has also referred me to other documents said to show that the first defendant knows who are members of TCC and who are not.[19]
[19]Plaintiff’s Further Submissions at [3].
I accept that it appears from the undertaking that the first defendant had, at the time it was given, records that showed who, at that time, were members of the plaintiff. This is not to say the records were correct; nor is it to say that the first defendant knew correctly who were members of the plaintiff in each of the years 2004 to 2012. Yet this is the discriminant that most comprehensively suits the purpose of the discovery that the plaintiff seeks, and the first defendant, in its alternative submission, offers to give. Further, nothing is advanced as to why the plaintiff would not be in a position to know its own members for those years, and certainly why it would not be in a better position than the first defendant. I also consider it appropriate that the plaintiff, as the party seeking this further discovery, and as the plaintiff in the proceeding, bear the administrative burden, if there is one, and the cost, if that is of significance, of ascertaining this discriminant.
Conclusion and orders
I will strike out the whole of the statement of claim and give leave to the plaintiff to re-plead. I will also order discovery limited to the documents and information identified by the first defendant in its further written submissions dated 14 March 2014 at paragraph 7.2 and 7.3. This discovery may be required before the amended statement of claim is required to be filed and served if the plaintiff so seeks. I will give the plaintiff the opportunity to be heard further on the mechanism proposed by the first defendant at paragraph 7.1 of those submissions if there is some technical reason, not yet advanced, why that mechanism is not appropriate, but only on the basis that I will make it the responsibility of the plaintiff to identify its own members. I will also give the parties the opportunity to be heard further, if required, on a confidentiality regime.
I will hear the parties further on costs if required and will otherwise dismiss their respective summonses.
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