MARONIS HOLDINGS LTD & ANOR v. NIPPON CREDIT AUSTRALIA LTD & ORS [2000] NSWSC 520

New South Wales Supreme Court

CITATION : MARONIS HOLDINGS LTD & ANOR v. NIPPON CREDIT AUSTRALIA LTD & ORS [2000] NSWSC 520 CURRENT JURISDICTION: EQUITY FILE NUMBER(S) : SC 1946/94 HEARING DATE(S) : 09/06/00 JUDGMENT DATE : 9 June 2000

Maronis Holdings Limited - First Plaintiff PARTIES : Girvan Corporation (New Zealand) Ltd (In Liq.) - Second Plaintiff Nippon Credit Australia Ltd - First Defendant JUDGMENT OF : Bryson J at 1

COUNSEL : G. Kennett for Plaintiffs P. Kerr (s) for First Defendant SOLICITORS : Henry Davis York for Plaintiffs Allen Allen & Hemsley for First Defendant CATCHWORDS : PRACTICE and PROCEDURE - application for further discovery LEGISLATION CITED : Oaths Act s 26 Supreme Court Rules Pt 23 (repealed) Beecham Group Ltd v. Bristol Myers Co [1979] VR 273 Boyle v. Downs [1979] 1 NSWLR 192 CASES CITED : British Association of Glass Bottle Manufacturers Ltd v. Nettlefold [1912] AC 709 Mulley v. Manifold (1959) 103 CLR 341 Pendlebury v. O'Neill (1911) 11 SR(NSW) 188 Percy v. General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 DECISION : Further discovery refused.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRYSON J.

Friday 9 June 2000 1946/94 MARONIS HOLDINGS LIMITED & ANOR v. NIPPON CREDIT AUSTRALIA LIMITED & ORS

JUDGMENT 1 HIS HONOUR: The plaintiffs' Notice of Motion dated 23 February 2000 seeks an order requiring Nippon Credit to make a discovery affidavit dealing specifically with documents and classes of documents described in the Schedule to the Notice of Motion. Discovery is regulated by former Pt 23 of the Supreme Court Rules as the proceedings were commenced before 1 October 1996. Nippon Credit has furnished a verified list of documents verified on 9 October 1996 and supplementary lists verified on 19 August 1998 and 22 February 1999. There was earlier litigation between the parties in 1990 in New South Wales and in 1990 and 1991 in New Zealand, and the parties may well have had occasion to consider, in a general way, what documents were relevant to their controversy before the need to give discovery arose in this case. 2 The claim now made for further and better discovery arose with the affidavit of Mr S.J. Lesser, sworn on 28 September 1999 and filed on behalf of the plaintiffs. Mr Lesser was an officer of Nippon Credit from November 1988 until February 1990, which included the time of the most significant events in this litigation. In paras 6 and 7 of his affidavit, when identifying the affidavits and relevant documents to which he had referred, he produced a bundle SLJ1 of Nippon Credit's discovery documents and went on to refer to a schedule of documents, Annexure C to his affidavit, of which he said "I believe the documents listed in this Schedule exist or did exist at Nippon, although the plaintiffs' solicitors have not been able to show them to me." The Schedule to the Notice of Motion is based generally but not exactly on Mr Lesser's Annexure C. In correspondence commencing on 17 September 1999 the plaintiffs' solicitors contended that there was outstanding discovery and further relevant documents which have not been discovered. After some exchanges of correspondence the solicitors for Nippon Credit stated its position on these contentions fully in a letter of 28 February 2000. 3 The test of relevance is the wide test stated in Mulley v. Manifold (1959) 103 CLR 341 at 345 under which documents are discoverable if they might fairly lead to a train of inquiry which might lead to the production of admissible evidence. Further and better discovery is subject to the limit under the former Pt 23 r 14 that the court must be satisfied that the order is necessary at the time when the order is made. Rule 14 appears to declare the test in accordance within the view expressed, on an earlier state of Pt 23, that the Court should consider whether discovery was "necessary in the interests of a fair trial"; see Percy v. General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 at 292; and see too Boyle v. Downs [1979] 1 NSWLR 192 at 205. It is for my consideration whether some explanations which have been given on behalf of Nippon Credit in correspondence should necessarily, in the interests of a fair trial, be verified or further stated. 4 The court will not readily embark on ordering further and better discovery or taking courses which are based on not accepting a discovery affidavit, but will do so in a clear case. In British Association of Glass Bottle Manufacturers v. Nettlefold [1912] AC 709 at 714 Viscount Haldane LC approved a statement in the Court of Appeal in that case that "… if there appeared from the contents of the affidavit of documents to be other documents that were obviously omitted, a further affidavit might be ordered" and said "If, therefore, on the face of it, or from admissions in other documents, the Court has reasonable ground for being fairly certain that there were other relevant documents which ought to have been disclosed, it could order further discovery". Authorities on this subject were collected by Menhennitt J in Beecham Group Ltd v. Bristol-Myers Co. [1979] VR 273. A usual pathway is to point to references in the party's documents which show that further documents exist, as in Pendlebury v. O'Neill (1911) 11 SRNSW 188. 5 One effect of the approach which the courts take to applications for further discovery is that exercises in the nature of cross-examination or interrogatories on a discovery affidavit will not be undertaken. Further the court has a discretion with respect to ordering further discovery, and can have regard to keeping the requirements imposed on parties within reasonable limits, consistent with the object of discovery as ancillary to preparation for a fair trial. 6 Nippon Credit's evidence shows and the nature of its business suggests that it has a very large volume of business records. There is a serious risk that any requirement to renew the process of discovery, or a significant part of it would be oppressive. In this regard I keep in view the extensive attention which has already been given to discovery processes. 7 In some instances references in Mr Lesser's schedule are based on cross-references from documents which have been produced, but in other instances his statement to the effect that he believed that documents exist or did exist is not a clear or cogent demonstration of their probable existence as, working in the organisation, he had the opportunity to have knowledge of company documents, at least to some extent, yet he expresses himself in terms of an unsupported belief. In these cases the evidence does not reach the standard of specificity of proof that there are further discoverable documents which the courts usually require. See Mulley v. Manifold at 343. 8 In the present case Nippon Credit's solicitors in their letter of 28 February 2000 stated item by item Nippon Credit's positions on the items in the Schedule. 9 In the circumstances of there having been three earlier verified lists, the question of discovery having been under consideration for some years, the approach of the hearing on 10 July and the nature of the matters raised I am of the view that the explanations given in correspondence on behalf of Nippon Credit are all that the Court should require. 10 With respect to Schedule Item 4, the Consultation presented to Nippon Credit's chairman in relation to an earlier application for loan on different terms appears from its general nature clearly to be a discoverable document. Nippon Credit has in my view dealt adequately with the subject by (repeatedly) stating that original applications for approval were destroyed when a new application for approval was made. I do not think that I should require Nippon Credit to take this matter any further. Item 5 is related to Item 4 and it does not clearly appear that there was such a document; the claim entered into the realm of cross-examination. 11 Item 6 refers to documents which on the description given were discoverable. Nippon Credit has sufficiently dealt with this claim by its assertions in correspondence identifying the documents with documents which have been produced. 12 Items 7 and 8 are claims in the nature of cross-examination on the earlier discovery. I do not allow them. Item 9 is of the same kind. 13 Item 10 relates to a diagram which is clearly producible on discovery. In my view Nippon Credit has dealt sufficiently with this claim by its assertion in correspondence that it does not know the whereabouts of the diagram. The circumstances of the nature of the document and the lapse of time have to be kept in view. 14 From their general nature and description it sufficiently appears that the documents in Items 11 and 12 would be discoverable. There has been no showing that Item 11 is or has relevantly been in Nippon Credit's control. In correspondence the explanation given was, "Mr Walker has informed us that he no longer has his diary for 1989." I am of the view that this question should not be taken further for discovery purposes. Item 12 is in the nature of cross-examination on the earlier discovery list. Item 12 as framed makes a claim which should not be granted as a fishing expedition, that is, it is made for the purpose of fishing out whether there is a case, and there is no concrete demonstration of a probability that there are such documents additional to those already produced, or that further documents are relevant. 15 Item 13 relates to Nippon Credit's internal guidelines or manual. There is no evidence establishing prima facie the existence of such a document. In my view the claim has been adequately dealt with in correspondence. 16 Item 14 relating to company searches claims discovery of documents which are plainly discoverable. Nippon Credit's solicitors replied "Documents 1 to 4 with our client's discovery are company searches." Observations to the effect that this statement does not claim to be exhaustive - it was spoken of as "cute" - are in substance a claim in the nature of interrogatories on earlier discovery affidavits. 17 In my view the court should not now order further verified discovery. 18 Plaintiffs' counsel mentioned a contention that the verifying affidavits sworn overseas were not made in accordance with s 26 of the Oaths Act, but the claims in the Notice of Motion do not raise any matter relating to this contention. 19 Order: