Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 5]
[2016] WASC 58
•26 FEBRUARY 2016
WRIGHT PROSPECTING PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 5] [2016] WASC 58
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 58 | |
| Case No: | CIV:3041/2010 | 15 FEBRUARY 2016 | |
| Coram: | LE MIERE J | 26/02/16 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Directions given | ||
| B | |||
| PDF Version |
| Parties: | WRIGHT PROSPECTING PTY LTD HANCOCK PROSPECTING PTY LTD HOPE DOWNS IRON ORE PTY LTD HAMERSLEY WA PTY LTD DFD RHODES PTY LTD MATTHEW JOHN KEADY as Executor of the Estate of DONOVAN FRANCES DUNCAN RHODES DOROTHEA MARGARET CAMPBELL as Executor of the Estate of DONOVAN FRANCIS DUNCAN RHODES |
Catchwords: | Directions Third party Participation in trial Bound by proceedings Directions Third party Discovery Resisting discovery order |
Legislation: | District Court Rules 1973 (NSW) Rules of the Supreme Court 1971 (WA) Supreme Court Act 1935 (WA) |
Case References: | Insurance Exchange of Australasia v Dooley [2000] NSWCA 159; (2000) 50 NSWLR 222 Smith v Leveraged Equities Ltd [2011] WASC 282 The Millwall [1905] P 155 Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2013] WASC 248 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Consolidated with CIV 2617 of 2012 by Orders dated 9 September 2014
- Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
HOPE DOWNS IRON ORE PTY LTD
Second Defendant
HAMERSLEY WA PTY LTD
Third Party
- First Plaintiff
MATTHEW JOHN KEADY as Executor of the Estate of DONOVAN FRANCES DUNCAN RHODES
First named Second Plaintiff
DOROTHEA MARGARET CAMPBELL as Executor of the Estate of DONOVAN FRANCIS DUNCAN RHODES
Second named Second Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
WRIGHT PROSPECTING PTY LTD
Second Defendant
HOPE DOWNS IRON ORE PTY LTD
Third Defendant
HAMERSLEY WA PTY LTD
Third Party
Catchwords:
Directions - Third party - Participation in trial - Bound by proceedings
Directions - Third party - Discovery - Resisting discovery order
Legislation:
District Court Rules 1973 (NSW)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)
Result:
Directions given
Category: B
Representation:
CIV 3041 of 2010
Consolidated with CIV 2617 of 2012 by Orders dated 9 September 2014
Counsel:
Plaintiff : Mr J Rowland QC
First Defendant : Mr C Bova & Mr T O'Brien
Second Defendant : Mr C Bova & Mr T O'Brien
Third Party : Mr J Garas
Solicitors:
Plaintiff : Clayton Utz
First Defendant : Jackson McDonald
Second Defendant : Jackson McDonald
Third Party : Allens
CIV 2737 of 2013
Counsel:
First Plaintiff : Mr N D C Dillon
First named Second Plaintiff : Mr N D C Dillon
Second named Second Plaintiff : Mr N D C Dillon
First Defendant : Mr C Bova & Mr T O'Brien
Second Defendant : Mr J Rowland QC
Third Defendant : Mr C Bova & Mr T O'Brien
Third Party : Mr J Garas
Solicitors:
First Plaintiff : G E Taylor & Associates
First named Second Plaintiff : G E Taylor & Associates
Second named Second Plaintiff : G E Taylor & Associates
First Defendant : Jackson McDonald
Second Defendant : Clayton Utz
Third Defendant : Jackson McDonald
Third Party : Allens
Case(s) referred to in judgment(s):
Insurance Exchange of Australasia v Dooley [2000] NSWCA 159; (2000) 50 NSWLR 222
Smith v Leveraged Equities Ltd [2011] WASC 282
The Millwall [1905] P 155
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2013] WASC 248
1 LE MIERE J: The parties have applied for directions in CIV 3041 of 2010 consolidated with CIV 2617 of 2012 (the consolidated proceedings) and CIV 2737 of 2013 (the Rhodes proceedings) which have been ordered to be heard together. There are two controversial matters. The first is whether it should be ordered that the third party, Hamersley, take part in the trial of the proceedings between the plaintiffs and the defendants (original proceedings) and be bound by the outcome. The second is whether Hamersley WA Pty Ltd (Hamersley) should be ordered to give discovery to Hancock Prospecting Pty Ltd (HPPL) and Hope Downs Iron Ore Pty Ltd (HDIO), the first and second defendants in the consolidated proceedings and the first and third defendants in the Rhodes proceedings, and if so the scope of the order for discovery.
Third party bound by outcome of trial
2 On 24 May 2013 and 19 June 2015 I made orders in the consolidated proceedings and the Rhodes proceedings respectively that the third party, Hamersley, be entitled to attend and take such part at the trial of the main action as the judge directs. HPPL and HDIO assert, and Hamersley denies, that the effect of that order is that judgment in the original actions is binding upon the third party. The orders were made with the agreement of all the parties and without any argument about whether the third party is to be bound by the outcome of the original proceedings. In those circumstances it is in the interests of efficient case management that I determine afresh the questions of what part Hamersley should play in the trial of the original proceedings and whether it should be bound by the outcome of those proceedings.
3 Order 19 rule 1 of the Rules of the Supreme Court 1971 (WA) (RSCWA) provide for a defendant to commence third party proceedings by the service of a third party notice on the person against whom it is issued. The rules are based upon s 24(3)(b) of the Supreme Court Act 1935 (WA). Order 19 rule 1(3) provides that where a third party notice is served, the person against whom it is issued shall as from the time of service be a party to the action with the same rights in respect of his defence against any claim made against him in the notice and otherwise as if he had been duly served in the ordinary way by the defendant by whom the notice is issued.
4 The learned authors of Civil Procedure Western Australia made the following statements about whether a third party is bound by the outcome of the trial of the original proceedings:
Bearing in mind the object of third party procedure …, the usual order is that the third party may appear at the trial between the plaintiff and the defendant: Barclays Bank v Tom [1923] 1 KB 221 at 224. If there is no such order, the judgment in the original action is not binding upon the third party: The Millwall [1905] P 155 at 165 [19.4.8].
5 In Insurance Exchange of Australasia v Dooley [2000] NSWCA 159; (2000) 50 NSWLR 222 Handley JA, with whom Giles JA agreed, did not follow The Millwall [1905] P 155 and stated that part of the reasoning in The Millwall is unsatisfactory. Handley JA said in relation to District Court Rules 1973 (NSW) Pt 21, r 4(1) which is in similar terms to RSC O 19 r 1(3), that the effect of the rule is that a third party is made a party to the action and will be bound by a judgment which is adverse to the third party's interests.
6 It is unnecessary to determine whether a third party is bound by the outcome of the original action by reason of RSCWA O 19 r 1(3), or to determine the effect of the orders I made on 24 May 2013 and 19 June 2015, because I have reached a clear view that Hamersley should be bound by the outcome of the original proceedings and I should make orders to make that clear.
7 The purpose of the rules relating to third party proceedings is succinctly stated in Civil Procedure Western Australia:
Their purpose, … is firstly to bind the third party to the decision between the plaintiff and the defendant. Otherwise the defendant would be at the great disadvantage of having fought the case against the plaintiff and lost, of having to fight the case again against the third party on different materials with the risk of the same question being answered differently. Secondly, the procedure saves the expense of separate actions. Finally, it enables the question between the defendant and the third party to be decided promptly so that the defendant is able to enforce his or her judgment against the third party while the plaintiff is enforcing his or her judgment against the defendant [19.0.1].
8 In par 22 of the substituted statement of claim of HPPL and HDIO in the third party proceedings, HPPL and HDIO claim that if either HPPL or HDIO is liable to WPPL in the original proceedings in the respect stated then Hamersley is responsible for that liability or a proportion of it. In its defence to that substituted statement of claim in the third party proceedings Hamersley does not admit that either HPPL or HDIO is liable to WPPL. At par 22 of its defence to the substituted statement of claim Hamersley pleads that it admits that, if either HDIO or HPPL is liable to WPPL on the basis of the claims currently pleaded and particularised in the substituted statement of claim, in respect of liabilities referred to, then by reason of certain matters HPPL is entitled to a contribution from Hamersley in the manner and to the extent there stated. If the result of the rules of court, or directions given under them, is that Hamersley is not bound by the decision as between WPPL and HPPL and HDIO, HPPL and HDIO would have to prove their liability to WPPL all over again as against Hamersley. That would defeat one of the purposes, if not the principal purpose, of the third party procedure which is to make a judgment as between plaintiff and defendant binding on the third party. The object of third party proceedings is not only to prevent the same question being litigated twice, but to obviate the injustice which would arise by the same question being differently decided in the original proceedings and in the third party proceedings. The issues and pleadings are relevantly the same in the Rhodes proceedings as they are in the consolidated proceedings and the same considerations apply.
9 There should be an order in the consolidated proceedings and the Rhodes proceedings that Hamersley may appear at the trial between the plaintiffs and the defendants and will be bound by the outcome of those proceedings.
Discovery
10 HPPL and HDIO seek an order that Hamersley give discovery:
[O]f any documents evidencing or recording communications in the period 2005 to 2010 with the plaintiffs in [the consolidated proceedings or the Rhodes proceeding] or with any person on their behalf in respect of any claims that any of them might have in relation to any of the tenements the subject of those proceedings. Such discovery is limited to and does not extend beyond reasonable searches being conducted by the Third Party of such electronic repositories as it considers to be obvious locations for such documents.
11 Hamersley resists the order sought on a number of grounds. First, Hamersley says that the proposed discovery is not relevant to any of the matters in issue in the third party proceedings. Secondly, the discovery order is too broad. Thirdly, the proposed discovery order has no utility. Fourthly, the proposed order is oppressive.
Discovery by a third party
12 Order 26 rule 1(1) provides that any party may give notice to any other party requiring him to give discovery of all documents relating to any matter in question in the cause or matter. Order 26 rule 7 provides that a party whose request under r 1 for discovery has not been satisfied may apply for an order under that rule and the court may order any or all of the parties to give discovery. Discovery may be ordered to be given by any party in favour of another party. A third party is a party to the action. Order 26 defines the obligation of discovery by reference to the documents that relate to matters in question in the cause or matter. It does not confine the obligation to matters in question between the parties seeking discovery and the party from whom it is sought: Smith v Leveraged Equities Ltd [2011] WASC 282 [33] (Allanson J).
Scope of proposed order for discovery
13 The documents sought are relevant to the HPPL and HDIO laches defences in the consolidated proceeding and in the Rhodes proceeding. Furthermore, the documents sought are also necessarily relevant to the issues in the third party proceedings because liability in the third party proceedings is dependent upon the finding of liability in the original proceedings.
Utility of orders sought
14 Hamersley says that there would be no real forensic utility to HPPL and HDIO in obtaining the documents sought in the proposed discovery order for the following reasons. On 9 February 2016 Hamersley provided HPPL and HDIO with copies of documents that it had located through certain searches. The documents evidence statements made by the plaintiffs in the Rhodes proceeding in July and August 2005 regarding potential claims in relation to East Angeles and Hope Downs. Hamersley also provided an affidavit by a director of WPPL filed in CIV 1279 of 2001, proceedings relating to Rhodes Ridge, which affidavit was provided to Hamersley by HPPL and HDIO in May 2007. That affidavit, by the sworn evidence of a WPPL director, demonstrates that WPPL knew, from around July 2005 that East Angeles formed part of the Hope Downs project. Those documents should enable HPPL and HDIO to achieve its forensic purpose of demonstrating that WPPL and the Rhodes parties knew, as early as July and August 2005 of the Hope Downs Joint Venture, including that East Angeles formed part of it. The Hope Downs project was established in July 2005 and the period of the proposed discovery is 2005 to 2010. Therefore, there would be no real forensic utility to HPPL and HDIO in obtaining further similar documents, if they exist, that may have been created subsequent to the documents referred to.
The documents referred to by Hamersley
15 I considered the defence of laches in the application by HPPL and HDIO for summary judgment in CIV 2617 of 2012, which was subsequently consolidated with CIV 3041 of 2010 to form the consolidated proceedings. In its summary judgment application HPPL claimed that WPPL's claim was bound to fail because of its delay in commencing the proceedings. In my judgment dismissing the summary judgment application I said that the defence of laches may take two forms. The first is where the plaintiff, by delaying the institution or prosecution of his case, has acquiesced in the defendant's conduct - delay with acquiescence. The second is where the plaintiff's delay in instituting or prosecuting his case has caused the defendant to alter his position in reasonable reliance on the plaintiff's acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb - delay with prejudice: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2013] WASC 248 [59]. WPPL admits that two of its directors, Michael Wright and Robert Brandli, each had actual knowledge of the existence of the Hope Downs Joint Venture from about 1 July 2005 and that the venture included the East Angeles tenements. In dismissing the application for summary judgment based on the delay with acquiescence ground I said:
Mere delay does not constitute laches. Sometime more than mere delay is required. All of the circumstances must lead to an inference that WPPL was content not to make a claim. That determination should take place after all of the evidence is presented at trial [73].
- In relation to the delay with prejudice ground, one of the areas of prejudice pointed to by HPPL and HDIO is that they will suffer the forensic disadvantage of not being able to fairly defend the claim because of the delay in commencing the proceedings which primarily flows from the unavailability of witnesses by reason of death or incapacity. In rejecting that as a sufficient basis for granting summary judgment I said:
WPPL acknowledges that some of those potential witnesses now deceased might have been able to give evidence if proceedings had been commenced earlier. However, WPPL submits that it would be premature to reach any concluded view about the significance of the death of any particular witness. I accept that submission. The prejudice to the defendants arising from the death or incapacity of witnesses as a result of the delay in the commencement of the proceedings should be evaluated in light of all of the evidence presented at trial [75].
17 The observations I have made in relation to the consolidated proceedings apply equally to the Rhodes proceedings. The relevant matters go beyond the knowledge of the Rhodes parties of the Hamersley announcement in July 2005 and that the East Angeles reserves were part of the project. The relevant matters include the wider knowledge and conduct of the Rhodes parties, their dealings with and their conduct towards Hamersley.
18 Hamersley have made little or no relevant searches. The documents which have been produced by Hamersley are referred to by Ms Jasper, a corporate counsel in Rio Tinto's Iron Ore Division, in her affidavit sworn 12 February 2016. Ms Jasper annexes to her affidavit the six documents produced by Hamersley. Three of the documents relate to a meeting that took place between representatives of Rio Tinto and the Rhodes parties on 8 August 2005. Ms Jasper had come across two of those documents while working on an unrelated matter and located the third by making enquiries of the current Rio Tinto employee who is identified as a participant in that meeting. Of the other three documents, Ms Jasper located two of them by making a search on the Supreme Court website and the third, the affidavit of Mr Brandli, was located by a search of Rio Tinto's solicitors, Allens. The affidavit had been sent to Rio Tinto from HPPL in May 2007. Ms Jasper asked an Allens' solicitor to conduct the search following a review of one of the judgments she found on the Supreme Court website which referred to the affidavit. Hamersley have made no searches for any related documents. Such documents are likely to exist. For example, Hamersley have produced notes from a meeting with representatives of DFD Rhodes Pty Ltd on 8 August 2005. After the meeting one of the Rhodes representatives, Christopher Rhodes, sent an email to one of the Hamersley representatives attaching a document requested by the Hamersley representatives which had been referred to by Rhodes representatives at the meeting. The email concludes:
Should the document or its contents raise any questions please feel free to contact us at any time for further discussion.
- It seems likely that there may have been other communications with Hamersley representatives following the meeting and the email from Mr Christopher Rhodes.
Oppression
19 In its written submission Hamersley submitted that Ms Jasper's evidence demonstrates that the proposed discovery would be akin to looking for a needle in a haystack and that it is difficult for Hamersley to identify all the relevant custodians or repositories, as the scope of potential persons is wide and also very unclear. That submission was made when the order proposed by HPPL and HDIO was not limited, as it now is, to reasonable searches of such electronic repositories as Hamersley considers to be obvious locations for such documents. In my opinion that qualification removes the force of the Hamersley 'needle in a haystack' objection.
20 I initially considered that the form of the order proposed by HPPL and HDIO might be uncertain insofar as it refers to 'such electronic repositories as [Hamersley] considers to be obvious locations for such documents'. However, in the course of the hearing Hamersley tendered a minute of the order which it proposed if the court determined that some discovery order should be made. The order proposed by Hamersley is that it give discovery of:
[A]ny documents evidencing or recording communications in the period 2005 to 2010 with the plaintiffs [in the consolidated proceeding or the Rhodes proceeding] or with any person on their behalf in respect of any claims that any of them might have in relation to Hope Downs or East Angeles. Such discovery is limited to and does not extend beyond reasonable enquiries being conducted by [Hamersley] of such of its unarchived, Perth office electronic repositories, as it considers to be obvious locations for such documents.
- Thus, Hamersley recognises that it is able to conduct reasonable enquiries of electronic repositories as it considers to be obvious locations for such documents, albeit Hamersley submits that the order should be confined to unarchived Perth office electronic repositories.
21 In my opinion the evidence does not sufficiently establish that the order proposed by HPPL and HDIO would place an undue or oppressive burden on Hamersley. In her affidavit Ms Jasper addresses the burden of complying with the discovery order originally proposed by HPPL and HDIO but not the more limited order now proposed by HPPL and HDIO.
22 The order proposed by HPPL and HDIO is limited in two important respects. First, it is limited to such electronic repositories as Hamersley considers to be obvious locations for the relevant documents. That overcomes the 'looking for a needle in a haystack' problem initially advanced by Hamersley. Secondly, the discovery is to be limited to reasonable searches being conducted by Hamersley. In the first instance, it will be for Hamersley to carry out such searches as it considers reasonable in all the circumstances and to disclose the searches it has made.
Orders to be made
23 Orders should be made in the form proposed by HPPL and HDIO. That is that Hamersley give discovery of:
[A]ny documents evidencing or recording communications in the period 2005 to 2010 with the plaintiffs in CIV 2737 of 2013 or the plaintiff in CIV 3041 of 2010 or CIV 2617 of 2012 or with any person on their behalf in respect of any claims that any of them might have in relation to any of the tenements the subject of those proceedings. Such discovery is limited to and does not extend beyond reasonable searches being conducted by the Third Party of such electronic repositories as it considers to be obvious locations for such documents.
- Hamersley should have until 2 May 2016 to comply with the order. That is the time proposed by Hamersley in its proposed discovery order, albeit Hamersley proposed a more limited discovery. Hamersley should serve its discovery on each of the parties to the consolidated proceeding and the Rhodes proceeding.
24 Hamersley submitted that HPPL and HDIO should be ordered to pay the costs of Hamersley giving discovery if any discovery order is made. The basis for that submission is that the proposed order for discovery is, or is akin to, an order for non-party discovery. The order for discovery is not an order for non-party discovery. It is discovery by a party to the action. The court has power to order that HPPL and HDIO pay Hamersley's costs of giving discovery but I am not persuaded that it is appropriate to make such an order in this case.
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