Younger v Westpac Banking Corporation

[2016] NSWSC 1186

Supreme Court

New South Wales

Medium Neutral Citation:	Younger v Westpac Banking Corporation [2016] NSWSC 1186
Hearing dates:	12 August 2016
Date of orders:	05 September 2016
Decision date:	05 September 2016
Jurisdiction:	Common Law
Before:	Garling J
Decision:	(1)   Order that the discovery categories in Annexure B to the orders of the Court made on 4 March 2016 be varied as set out in the annexure to the Notice of Motion filed 20 April 2016, save that under the heading “Qualification”, the words “or any other claim made by any person in respect of the Retention Incentive” be deleted. (2)   Defendants to pay the plaintiff’s costs of the Notice of Motion filed 20 April 2016.
Catchwords:	PROCEDURE – civil – Notice of Motion seeking variation of discovery orders – where discovery orders made by consent – whether discovery orders are oppressive – whether it is in the interests of justice to vary the discovery orders
Legislation Cited:	Civil Procedure Act 2005
Cases Cited:	Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 Liu v The Age Company Ltd [2016] NSWCA 115
Texts Cited:	Not Applicable
Category:	Procedural and other rulings
Parties:	Neil Younger (P) Westpac Banking Corporation (D1) Asgard Wealth Solutions Ltd (D2)
Representation:	Counsel: D R Pritchard SC (P) E Holmes (D1, D2)   Solicitors: Gillis Delaney Lawyers (P) Allens, Solicitors (D1, D2)
File Number(s):	2014/335469
Publication restriction:	Not Applicable

Judgment

1. This is a representative proceeding which, regrettably, has now been on foot without a final hearing for too long. The essential claim made by the plaintiff in the representative proceeding is that, as an employee of St George Bank Limited, he was not paid a “Retention Incentive” sum to which he was entitled. He claims that Westpac is now liable to pay that sum.

2. The final hearing of the plaintiff’s claim, and the identified common issues, was fixed for 11 April 2016 for a period of five days. That hearing date has been vacated essentially because of a failure by the defendants to comply with their existing discovery obligations.

3. On 4 March 2016, in preparation for the final hearing, the Court made orders by consent for discovery to take place in accordance with agreed categories and in time for the final hearing. There were two categories which were not agreed and which were determined following argument.

4. On 20 April 2016, the defendants filed a Notice of Motion to revisit the question of discovery by seeking the following principal order:

“An order that the discovery categories in Annexure B to the orders made on 4 March 2016 be varied as set out in the annexure to this Notice of Motion.”

5. I directed that the parties deal with this matter on the papers. On 12 August 2016, I informed the parties, at a directions hearing, of my decision. These are the reasons for that decision.

Amendments Sought

Temporal Limitation

6. The defendants seek to limit several of the agreed categories to the time period of 1 May 2008 to 30 April 2013. Those categories are: C1, C2, E1 and E2. That time period, according to the affidavit of Mr Arthur, the solicitor for the defendants, is the period between the approval of the Retention Incentive by the relevant board decision, and the date upon which the last group member signed their Deed of Release.

7. The plaintiff does not oppose such an amendment. It is a sensible one, and it ought to be granted.

Refinements of Wording

8. In categories C2(a), C2(b), C3(e1) and (e2), the defendants sought to refine those categories by changing words of general import such as “relating to” to words of more specific import such as “containing” or “directly evidencing”.

9. The plaintiff consented to these variations. That consent avoids the need for the Court to explore the benefit, if any, to the interests of justice of these refinements.

10. The Court will permit the amendments to the categories under this heading as sought by the defendants, and as agreed to by the plaintiff.

General Qualification

11. The defendants sought a general qualification for all the categories of discovery in these words:

“Qualification These categories do not apply to documents which were created to record, describe, report or advise on the legal claims made in the Federal Court proceedings, the Local Court proceedings or any other claim made by any person in respect of the Retention Incentive.”

12. The annexure to the Notice of Motion defined the term “Federal Court proceedings” as including seven specifically nominated proceedings and appeals from those proceedings. In each case, the Court file number was specified.

13. The term “Local Court proceedings” was also defined as including two identified files of the Local Court.

14. The affidavit of Mr Arthur addressed the reasons for this qualification. Mr Arthur asserted that the qualification is sought on the basis that the discovery of documents in accordance with the orders of 4 March 2016 would be oppressive:

“… particularly in circumstances where the documents captured by those categories were likely to be the subject of a claim of privilege.”

15. Mr Arthur deposed to the fact that, in the course of the Federal Court and Local Court proceedings, Allens, the firm of which he is a partner, received instructions from at least seven members of Westpac’s in-house legal team. Apparently, and unsurprisingly, in accordance with Westpac’s ordinary practice, those in-house lawyers would provide periodic reports on aspects of the proceedings in the Federal Court and the Local Court to managers and relevant senior officers at Westpac. Mr Arthur also noted that he had received instructions directly from four senior managers at Westpac, and had corresponded with them about the Federal Court and Local Court proceedings.

16. Mr Arthur also noted that a further 23 lawyers from Allens had undertaken substantive work on the Federal Court and Local Court proceedings.

17. Quite how a relatively straightforward claim from former employees for the payment of relatively modest sums by way of a retention incentive or bonus arising out of their employment could have occupied the time of 30 lawyers over seven years is not explained. However, the plaintiff did not seek to challenge Mr Arthur’s explanation, or to cross-examine him about any of the facts to which he had deposed. The Court should accept them.

18. Mr Arthur suggested in his affidavit that, if the qualification sought in the Notice of Motion was not applied to the agreed categories, it would be necessary for two Westpac employees to work fulltime for at least three months to complete the search for documents falling within those categories. Mr Arthur said that even that estimate was likely to be conservative, and that the period was more likely closer to six months.

19. In addition, Mr Arthur noted that to search the email boxes of the 23 lawyers from Allens who had participated in the Federal Court and the Local Court proceedings would first require restoration of the email boxes, thereby bringing to light about 250,000 emails, which would then need to be electronically processed into a searchable format, and the search then undertaken. Mr Arthur estimated that the process of restoration, processing and searching would cost in excess of $70,000. As well, Mr Arthur noted that once those searches were undertaken, each document would need to be reviewed for relevance and, no doubt, legal professional privilege, at considerable additional cost.

20. As noted earlier, none of these factual matters or conclusions were challenged by the plaintiffs. I accept them.

21. The defendants submitted that, in light of these unchallenged facts and conclusions, to permit the discovery to go ahead without the qualification sought would be oppressive.

22. The plaintiff submitted that in light of the fact that the categories without this qualification had been agreed to between the parties, and that Court orders were made upon the basis of that agreement in circumstances where no application for leave to appeal has been brought against the Court’s orders, there was no basis for seeking a variation of those orders.

23. The plaintiff called in aid of his submissions the remarks of McLelland J in Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46-47. The plaintiff submitted that, according to the ordinary rule of practice, an application to set aside, vary or discharge an interlocutory order of a substantive nature must be founded upon a material change of circumstances since the determination of the original application. The plaintiff submitted that a further order dealing with discovery would only be appropriate if new facts came to light that were not known at the time of the disposition of the earlier claims for discovery.

24. In addition, the plaintiff referred the Court to the decision of the Court of Appeal in Liu v The Age Company Ltd [2016] NSWCA 115 at [168] and [199] per McColl JA as being authority for the proposition that although a court may have the power to set aside or vary an interlocutory order, such power was not unconstrained because of the potential injustice which the constant revisiting of interlocutory orders may create. In particular, the plaintiff cited this statement at [199]:

“In summary, accordingly, the overriding principle governing the approach of the Court to interlocutory applications is that the Court should do whatever the interests of justice require in the particular circumstances of the case. ... However, in determining what the interests of justice require, the Court will have regard, among other matters, to the nature of the first interlocutory application, the nature of the change in position and whether any matter relied upon to change the basis upon which the challenged earlier order was made, was open to be advanced at the earlier hearing.”

25. Drawing attention to these authorities, the plaintiff submitted that there had been no change in circumstances or position since the earlier agreed orders, and that the matters which were now advanced could have been advanced earlier by the defendants had they so chosen. As well, the plaintiff submitted that, even if the Court were to reconsider the earlier agreed categories, the mere fact that documents may be the subject of legal professional privilege was not in itself a reason for excusing their discovery. The plaintiff submitted that the nature of the defendants’ pleadings put in issue its state of mind and that, accordingly, it had waived any question of legal professional privilege over documents relating to the Federal Court and Local Court proceedings.

26. Finally, the plaintiff submitted that the Court ought to keep in mind that discovery was critical to the plaintiff’s case and that in any balance exercise the interests of justice would favour rejecting the qualification sought by the defendants.

Discernment

27. As presently worded, the qualification sought is very broad because it includes the phrase “or any other claim made by any person in respect of the Retention Incentive”. Counsel for the defendants was unable to clarify what was intended by those words. Counsel was unable to obtain instructions as to whether any other claim had in fact been made, and if so, what court, if any, it had been made in.

28. The word “claim” is broad and general in nature. It covers everything from proceedings commenced in a court, to correspondence (whether by email or standard mail) of a complaint about an underpayment related to the Retention Incentive by an employee which goes on to make claim for reimbursement. The qualification now sought by the defendants cannot plausibly include a phrase of such breadth and generality as “any other claim made … in respect of the Retention Incentive”.

29. For that reason, I was not persuaded to allow the qualification in the form in which it was proposed. It is, however, necessary to consider the question of whether amore limited qualification, eliminating the words identified above, ought to be permitted.

30. I am unpersuaded that the principles enunciated by McLelland J in Brimaud apply in the circumstances here. There are three reasons for this. First, unlike in these proceedings where the orders sought to be varied were made by consent, the orders sought to be varied in Brimaud were made after a full and contested interlocutory hearing on the basis of evidence adduced before the Court.

31. Secondly, the subject matter of the respective interlocutory orders in Brimaud and this case is entirely different. In Brimaud, an interlocutory order was made for the appointment of a provisional liquidator of a company over the opposition of the relevant company. Setting aside an order for the appointment of a provisional liquidator, in the particular circumstances identified by McLelland J, would have been “conducive to great injustice and enormous waste of judicial time and resources”. No such circumstance exists here, where the subject matter of the interlocutory order is a continuing obligation of the defendants to provide discovery.

32. Thirdly, the decision in Brimaud preceded the Civil Procedure Act 2005, in particular the statutory provisions in Part 6 of that Act. The overriding purpose, set out in s 56, of facilitating the just, quick and cheap resolution of the real issues in the proceedings, and the objects of case management set out in s 57, raise matters for consideration by a Court which are different from those which concerned McLelland J in Brimaud. I am unpersuaded that the principles enunciated in Brimaud apply in this context.

33. The principal question, as McColl JA identified in Liu, is what the interests of justice require in this case, and what orders would best facilitate the overriding purpose set out in s 56 of the Civil Procedure Act.

34. Although the initial discovery orders were made by consent, I see no reason, subject to any matters of actual prejudice, including additional costs, why a court should not be at liberty to review such orders from time to time. That is not to say that once orders are made following an interlocutory hearing, it is open to a party, regularly and without sufficient cause, to revisit those orders.

35. Here, as the unchallenged affidavit of Mr Arthur shows, the effect of the agreed discovery would be both oppressive, and unduly costly and burdensome to the defendants.

36. In those circumstances, sufficient cause has been shown for the Court to revisit the orders made by consent. Particularly is this so when such consideration can be done by a judge familiar with the proceedings by reason of ongoing case management, and in circumstances where the parties’ contentions can be put in writing and the matter determined without oral submissions.

37. Having regard to the material in Mr Arthur’s affidavit, it is manifestly in the interests of justice for the qualification, in the limited form I have outlined, to be imposed.

38. In reaching this conclusion, I have considered not only the prejudice that would be occasioned to the defendants if the qualification is not imposed, but also to the fact that many, if not all, of the documents encompassed by the qualification would, if relevant, be subject to a properly made claim for legal professional privilege.

39. It is for these reasons that I ordered discovery to be given in the manner contemplated by the defendants’ Motion in all respects, except that the qualification be adjusted in the way in which I have indicated.

Costs

40. The original orders for discovery were made by consent consequent upon largely agreed categories and, where those categories were not agreed, by determination. There is simply no reason advanced by the defendants as to why they did not turn their minds to the breadth of the proposed discovery at that time, and raised it either by not agreeing to the breadth of the categories sought or, alternatively, leaving it for the Court to determine.

41. The defendants did neither of these things. The evidence set forth in Mr Arthur’s affidavit, on its face, seems to have been available in March 2016, had reasonable or adequate enquiries been made of Westpac, and had thought been given to the matter.

42. In those circumstances, although the defendants have had significant success with respect to their Motion to limit the categories of discovery, that Motion, it seems to me, has come about because of a failure on the part of the defendants to attend to their obligations at the time the orders for discovery were made.

43. In those circumstances, it is appropriate that the defendants be ordered to pay the plaintiff’s costs of the Motion.

Orders

44. I make the following orders:

1. Order that the discovery categories in Annexure B to the orders of the Court made on 4 March 2016 be varied as set out in the annexure to the Notice of Motion filed 20 April 2016, save that under the heading “Qualification”, the words “or any other claim made by any person in respect of the Retention Incentive” be deleted.

2. Defendants to pay the plaintiff’s costs of the Notice of Motion filed 20 April 2016.

**********

Decision last updated: 20 September 2016