Whithear v Australian Capital Territory (No 2)

[2019] ACTSC 220

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Whithear v Australian Capital Territory (No 2)

Citation:

[2019] ACTSC 220

Hearing Date:

16 July 2019

DecisionDate:

19 August 2019

Before:

Crowe AJ

Decision:

See [19]

Catchwords:

COSTS – Where application for preliminary discovery previously determined – where the applicant was partially successful

Legislation Cited:

Civil Law (Wrongs) Act 2002 (ACT) s 68

Court Procedures Rules 2006 (ACT) r 651

Cases Cited:

Ashton & Ors v The Australian Capital Territory [2019] ACTSC 93

McFarlane (As Trustee for S McFarlane Superannuation Fund) v IOOF Holdings Limited (No 2) [2018] FCA 932
Minerva (Aust) Ltd v Suburban Land Agency [2018] ACTSC 103

Whithear v Australian Capital Territory [2019] ACTSC 195

Parties:

Mark Whithear (Applicant)

Australian Capital Territory (Respondent)

Representation:

Counsel

A Muller (Applicant)

V Thomas (Respondent)

Solicitors

Maliganis Edwards Johnson (Applicant)

ACT Government Solicitors (Respondent)

File Number:

SC 259 of 2019

Crowe AJ

1. On 30 July 2019 I delivered my decision on the Originating Application which had sought an order for production of documents under s 68 of the Civil Law (Wrongs) Act 2002 (ACT) (the Act), or alternatively, for preliminary discovery under r 651 of the Court Procedures Rules 2006 (ACT) (the Rules). These reasons should be understood in the context of my reasons for that decision: see Whithear v Australian Capital Territory [2019] ACTSC 195.

1. At the time of handing down my decision I stayed the proposed costs orders (Orders 2 and 3) to allow the parties to make written submissions on the issue.

The Applicant’s Submissions

1. The applicant points to the Court’s general discretion as to costs, and submits that the outcome here could be distinguished from that in Ashton & Ors v The Australian Capital Territory [2019] ACTSC 93 (Ashton) on the basis that the applicant had a relatively greater degree of success in the categories sought. The applicant relies on McWilliam AsJ’s comment at [80] in Ashton that neither party had been entirely successful and that the applicant had obtained what amounted to an indulgence.

1. It is argued that the orders I stayed may lead to a harsh outcome for the applicant in the event that the documents produced by the defendant dissuade him from commencing proceedings for damages. The applicant contends that if the discoverable documents had been produced at the outset by the respondent this would have negated the need for the Originating Application.

1. The applicant submits that the appropriate order is that costs be reserved. This is to avoid a situation where the applicant may be left with a substantial costs liability.

The Respondent’s Submissions

1. The respondent addressed the costs of the application and the costs of complying with the order for production separately.

1. In respect of the application, the respondent argues that a substantial part of the hearing involved addressing the applicability of s 68 of the Act, as to which the applicant was wholly unsuccessful. The respondent then takes issue with the suggestion that the applicant secured disclosure of virtually all of the categories of documents he had been seeking in correspondence. The respondent highlights that of the eight categories initially sought in the Originating Application, the applicant succeeded in four, and in two the category was significantly narrowed.

1. The respondent says, by reference to the exceptional nature of an order for preliminary discovery, it is reasonable to consider this form of relief as an indulgence. Even a wholly successful application does not give an automatic entitlement to costs. In that context the decisions in Ashton at [80] and McFarlane (As Trustee for S McFarlane Superannuation Fund) v IOOF Holdings Limited (No 2) [2018] FCA 932 (McFarlane) at [7] are relied upon.

1. It is also submitted that having regard to the circumstances of the applicant’s requests for documents and the evidentiary basis of the Originating Application, the respondent’s opposition to the orders as sought was reasonable.

1. Finally, the respondent submits that it would be inappropriate to reserve the costs of the Originating Application given the discrete nature of the Originating Application. Once the costs orders have been finalised the current proceedings will have been fully determined.

1. As to the costs of compliance, the respondent argues that the orders as proposed are supported by recent authorities of this court on the basis that:

(1)     such discovery before action is properly seen as an indulgence, and

(2)     because the produced documents may well have been produced in the course of any future proceedings against the respondent it is appropriate that there be a means whereby the applicant can seek to recoup the costs of pre-trial discovery in those proceedings.

1. The authorities referred to by the respondent are: Minerva (Aust) Pty Ltd v Suburban Land Agency [2018] ACTSC 103 and Ashton at [81]. The respondent also relies upon McFarlane at [33].

1. The respondent submits that the appropriate orders are those foreshadowed in Orders 2 and 3 of the primary judgment.

Consideration

1. There is much force in the submission of the respondent as to the applicant’s relative lack of success having regard to the categories of documents sought in the correspondence and those which were ultimately the subject of the orders made on 30 July 2019. It is also important to note that the applicant’s letters to the respondent’s solicitors focussed very much on the asserted entitlement under s 68 of the Act. Consequently, in my view, the outcome here is directly comparable to that in Ashton.

1. Moreover, I do not believe it was unreasonable for the respondent to oppose the orders, as initially sought. The categories of documents listed in the Originating Application were far too wide.

1. It would be unfortunate if the applicant was left having to bear the respondent’s costs of investigating his potential claim. However, I believe it would be unfair for a respondent to an application for preliminary discovery to have to bear its own costs of providing discovery in circumstances where no action was commenced and where it may be innocent of any wrongdoing. As the authorities show, preliminary discovery is something of an indulgence for an applicant. It is also something of an imposition upon a respondent: see McFarlane at [7]. In the circumstances of this case, it is clear that the greatest potential imposition is one where the respondent has to bear its own costs of meeting the application and the costs associated with complying with the discovery order.

1. Finally, due to the limited nature of these proceedings, the costs orders need to be finalised. In such circumstances, I do not see the reservation of costs as being appropriate.

Conclusion

1. The submissions of the applicant do not persuade me that I should depart from the orders which I proposed in the primary judgment. Indeed the submissions of the respondent provide good reasons why those orders should stand.

1. The order of the Court is therefore as follows:

(1)     The stay of Orders 2 and 3 made on 30 July 2019 is lifted.

I certify that the preceding nineteen [19] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe.

Associate:

Date: 19 August 2019