Medquest Pty Ltd as trustee for the Clotest Trust v Ballard Medical Products [2008] FCA 1884

FEDERAL COURT OF AUSTRALIA

Medquest Pty Ltd as trustee for the Clotest Trust v Ballard Medical Products [2008] FCA 1884

MEDQUEST PTY LTD AS TRUSTEE FOR THE CLOTEST TRUST (ACN 063 843 407) v BALLARD MEDICAL PRODUCTS

WAD 350 of 2005

SIOPIS J

26 NOVEMBER 2008

PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WAD 350 of 2005

BETWEEN: MEDQUEST PTY LTD AS TRUSTEE FOR THE CLOTEST TRUST (ACN 063 843 407)

Applicant

AND: BALLARD MEDICAL PRODUCTS

Respondent

JUDGE: SIOPIS J

DATE OF ORDER: 26 NOVEMBER 2008

WHERE MADE: PERTH

THE COURT ORDERS THAT:

1. The proceeding is adjourned to a directions conference at 9.30 am on 4 December 2008. 2. The respondent by its proper officer, is to give discovery verified by affidavit of all documents listed in paragraphs 1(i) to (xix) of the Order made on 8 August 2008 by 4.00 pm on 16 December 2008. 3. The respondent pay the applicant's costs of 30 October 2008 and of today to be fixed in the total sum of $1,500.00 forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WAD 350 of 2005

BETWEEN: MEDQUEST PTY LTD AS TRUSTEE FOR THE CLOTEST TRUST (ACN 063 843 407)

Applicant

AND: BALLARD MEDICAL PRODUCTS

Respondent

JUDGE: SIOPIS J

DATE: 26 NOVEMBER 2008

PLACE: PERTH

REASONS FOR JUDGMENT 1 This is an application by the applicant for a springing order in relation to the failure of the respondent to provide an affidavit of discovery which complies with the orders made on 30 October 2008. 2 I need to set out some background in order to put the matter in context. 3 On 8 August 2008, there was an application before me for particular discovery of specific documents to be given by the respondent. It was a contested application. Both parties were represented by counsel and I heard argument in relation to each of the complaints that were made in respect of the inadequacy of the discovery which had been given by the respondent by an affidavit sworn on 6 May 2008. 4 On that day, I made orders for the giving of discovery by the respondent of documents falling into 19 different categories. In response to the submissions made today by the respondent, I might say that the basis upon which an application for particular discovery was brought was to challenge the conclusiveness of the respondent's discovery affidavit. The Federal Court Rules (the Rules) permit a party, on sufficient basis being shown, to challenge and overturn the conclusiveness of a discovery affidavit. 5 The matter came before me again on 30 October 2008. At the hearing on that day, the applicant complained that the respondent had not complied with the orders of 8 August 2008. I expressed my disapproval at the apparent inactivity in relation to providing an affidavit of discovery in compliance with the orders of 8 August 2008. I made orders that the respondent give discovery of the documents within the categories referred to in the orders of 8 August 2008, by 14 November 2008. 6 I also made an order that each of Mr Shaun Temby, Mr Stephen Clune and Mr Ross Mansbach make an affidavit deposing that he had taken steps to provide the particular discovery and otherwise comply with the orders that were made on 8 August 2008. Each of those persons has filed an affidavit in response to that order. The affidavits show that all that occurred for the purpose of complying with the 8 August orders was that Mr Clune instructed Ms Fiona Elizabeth Cross, then an employee of Deacons and Mr Jason Then, a current employee of Deacons, to review the orders made on 8 August 2008, to review all documents provided to Deacons by the respondent, and to categorise the documents on the basis of whether they fell within the categories of documents to be discovered. What is particularly revealing about the evidence is that there was no attempt made by the respondent's solicitors to contact the respondent's officers in the United States of America, with a view to seeking their input as to whether there were any further documents, which fell within the 19 categories of documents referred to in the orders of 8 August 2008. 7 On 14 November 2008, the respondent filed an affidavit of discovery in response to the orders made on 30 October 2008. This affidavit is sworn by Mr Stephen Anthony Campbell, of an address in New South Wales. Mr Campbell describes himself as the General Manager Asia Pacific of the Health Care Division of Kimberley‑Clark Corporation. He deposes that he had been authorised to make the affidavit on the respondent's behalf. 8 The affidavit only discloses 18 documents in Sch 1 to the affidavit of discovery. It is clear that there has been no discovery made of any documents falling within many of the 19 categories of documents, which were identified in the 8 August orders. For example, Order 1(i) required that the respondent discover the entirety of the document, page 7 of which is the respondent's discovered document number 164. This document was not listed in Sch 1. Another example is that the orders required that the discovery be made of all minutes of meetings of boards of Tri‑Med and Kimberley‑Clark Corporation, which were specifically identified in those orders. These documents have not been listed in Sch 1 either. 9 Paragraph 3 of the list verified by Mr Campbell's affidavit says that the respondent has had, but does not now have in its possession, custody or power the documents listed in Sch 2 to the affidavit of discovery. 10 Paragraph 4 of the list verified by Mr Campbell's affidavit states that the documents referred to in Sch 2 were last in the possession, custody or power of the respondent on or about the dates set out in Sch 2 and to the best of the respondent's information and belief they are now in the possession of the persons described in Sch 2. 11 Schedule 2 of the discovery affidavit is in the following terms: 1. The originals of the copy documents referred to in part 1 of schedule 1, insofar as those documents originated from the Respondent, being documents which were sent to the persons to which they were addressed on or about the dates which they respectively bear. 2. Documents which have been lost or destroyed in the ordinary course of the Respondent's business. 12 It is apparent that there are no documents within the 19 categories referred to in the 8 August orders specifically listed in Sch 2. Nor does Sch 2 disclose the identity of any persons referred to in para 4 of Mr Campbell's affidavit, nor does it disclose the dates referred to in that paragraph of Mr Campbell's affidavit. This is a serious deficiency in the affidavit. 13 The obligation of a party giving discovery in respect of documents that were once, but are not now in the possession, custody or power of the party, is to make inquiries of the persons who are most likely to have the requisite knowledge as to what has happened to those documents and are able to provide the information which is necessary for the deponent to depose to the matters set out in para 4 of the prescribed form. The extent of the investigation to be undertaken will depend on the circumstances. 14 It is also necessary for the person swearing the affidavit to describe in the body of the affidavit the investigation he or she has caused to be undertaken and the facts which demonstrate that the investigation undertaken was reasonable in the circumstances. Where, as para 4 of the prescribed form anticipates, the deponent deposes on the basis of information and belief, it is incumbent on the deponent in respect of each document listed, to identify in the body of the affidavit the person who has provided the information which is the source of the deponent's belief. 15 Plainly, Mr Campbell's affidavit is defective in this regard. It follows that there has been a failure by the respondent to comply with the orders of the Court of 8 August and 30 October 2008. 16 Mr Clune, on behalf of the respondent, has contended that no springing order should be made, because the respondent's discovery affidavit which was sworn on 6 May 2008, was, in relation to Sch 2, in the same form as Mr Campbell's affidavit, and the applicant made no complaint as to the form of that affidavit. Accordingly, said Mr Clune, the applicant should not be entitled to complain now. 17 In my view, the fact that no complaint was made does not preclude the applicant from complaining now, particularly in light of the fact that the complaint now made, is made in the context of the applicant having obtained orders on 8 August 2008 for particular discovery of specific documents. 18 There are difficulties associated with making a springing order in respect of the giving of discovery. This is because it can give rise to uncertainty as to whether the springing order has become effective. Even in cases where the affidavit of discovery has been filed and served in time, there can be arguments about whether the springing order has taken effect because of the defective nature of the affidavit. Ironically, because of the serious extent to which Mr Campbell's affidavit is defective, the potential for a dispute of this nature to arise in this case, is considerable. Accordingly, I will not make a springing order on this occasion. I will require the respondent to provide discovery of the documents in the categories of documents described in the orders of 8 August 2008, by swearing an affidavit which complies with the Rules. 19 Mr Clune has submitted that the costs of today should be in the cause because the applicant only yesterday gave notice that it would ask for a springing order. In my view, the prospect that a springing order would be asked for was always going to be on the cards by reason of the woefully inadequate nature of the discovery affidavit, plus the fact that so little was disclosed as having been done by the respondent by way of compliance with the orders of 8 August 2008. In any event, I do not see this as a reason which would inhibit me from awarding costs of the application to be paid by the respondent. In view of the history of this matter, which I have recounted above, it is appropriate that the respondent pay the costs which are to be paid forthwith. I will order that the respondent pay the applicant's costs of 30 October 2008 and of today to be fixed at a total sum of $1,500.00 forthwith. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.