Eden Construction v State of NSW [2004] NSWSC 178

New South Wales Supreme Court

CITATION : Eden Construction v State of NSW [2004] NSWSC 178 HEARING DATE(S) : 12/03/04 JUDGMENT DATE : 19 March 2004

JURISDICTION: Equity Division Technology and Construction List JUDGMENT OF : Barrett J DECISION : Notice to produce set aside

CATCHWORDS : PRACTICE AND PROCEDURE - notice to produce served by plaintiff - next step in proceedings is determination of application for security for costs - whether plaintiff, having fully pleaded its claims, has legitimate need of documents sought Bailey v Beagle Management Pty Ltd (2001) 182 ALR 264 Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 Caruso Australia Pty Ltd v Portec (Australia) Pty Ltd (1984) 1 FCR 311 CASES CITED : Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd (No 2) [1977] 1 NZLR 516 K P Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 Process Engineering Pty Ltd v Derby Meat Processing Co Ltd [1977] WAR 145 Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609 Wenlock v Moloney [1965] 1 WLR 1238 PARTIES : Eden Construction Pty Limited - Plaintiff State of New South Wales - Defendant FILE NUMBER(S) : SC 55025/03 COUNSEL : Mr P R Arden SC/Mr B R Young - Plaintiff Mr R W Hunt - Defendant SOLICITORS : Johninfo Lawyers - Plaintiff Bartier Perry - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST

BARRETT J

FRIDAY, 19 MARCH 2004

55025/03 – EDEN CONSTRUCTION PTY LTD v STATE OF NEW SOUTH WALES JUDGMENT 1 The defendant's notice of motion filed on 13 February 2004 seeks orders that two notices to produce served by the plaintiff on the defendant be set aside. By the time the notice of motion came on for hearing on 12 March 2004, the parties had reached an accommodation regarding the scope of the notice to produce the subject of the first order sought and identification of the documents to be produced in relation to it. That aspect may therefore be regarded as resolved, subject to any question of costs. In relation to the second order sought, the plaintiff, being the party by which the relevant notice to produce was served, has produced an amended description of the documents to be produced. I approach the notice of motion on the basis that, again subject to any question of costs, it should be regarded as referring to this amended description of documents. The defendant's objections to the second notice to produce nevertheless remain. 2 The defendant has filed a notice of motion seeking security for costs. This predated the notice of motion in relation to the notices to produce, having been filed on 21 November 2003. The notice to produce with which I am concerned was served at a time when the next step in the proceedings was determination of the application for security for costs which, if wholly successful, may well bring a stay of proceedings into operation, given the evidence of the plaintiff's principal as to its financial resources. Although the plaintiff sought to say that the notice to produce relates to the proceedings as a whole (and not just to the security for costs application), I consider the appropriate course, in view of the matter I have just mentioned, to be to assess the notice to produce as it relates to the security for costs application. The central issue is therefore as to the pertinence of the documents sought to that application itself. 3 The plaintiff's substantive claims advanced in its amended summons filed on 24 August 2003 are to the effect that the defendant – or, more particularly, a department or section of the civil service concerned with letting and administration of contracts for construction and like work for State and local government projects – wrongfully made to certain persons misrepresentations as to the abilities of the plaintiff in its sphere of work and, by that means and by removing or omitting the plaintiff's name from a list of acceptable contractors, caused damage to the plaintiff. The documents sought by the plaintiff through the notice to produce (assumed to be varied by the narrowing to which I have referred) fall into two basic categories. First, there are documents prepared for or as a consequence of each of several meetings identified by date and persons attending. There are then documents related, in defined ways, to particular decisions or tenders concerning particular works. 4 A central issue in the determination of any security for costs application is as to the strength and bona fides of the plaintiff's case (see Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] QB 609 at 626; Process Engineering Pty Ltd v Derby Meat Processing Co Ltd [1977] WAR 145 at 147; Caruso Australia Pty Ltd v Portec (Australia) Pty Ltd (1984) 1 FCR 311 at 312-313; Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd (No 2) [1977] 1 NZLR 516 at 520). Danckwerts LJ, in Wenlock v Moloney [1965] 1 WLR 1238 referred to the nature of the assessment (at 1244): "… this summary jurisdiction of the court was never intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that power." 5 In Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 514, French J said: "It is consistent with authority and the existence of a broadly based discretion that the bona fides and merits of the claim be taken into account where there is material which from such an assessment can be made. Where there is a claim prima facie regular and disclosing a cause of action, I see no reason why the court would, in the absence of evidence, proceed on the basis that the claim was other than bona fide with a reasonable prospect of success." 6 This passage was cited with approval by Beazley J in K P Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189. Her Honour referred to six additional matters that are typically taken into account on a security for costs application. They are: