New South Wales Supreme Court CITATION : Auburn Council v Austin Australia [2007] NSWSC 85 HEARING DATE(S) : 15 December 2006 JUDGMENT DATE : 15 December 2006 JUDGMENT OF : McDougall J at [1] EX TEMPORE JUDGMENT DATE : 15 December 2006 DECISION : See para [38] of judgment CATCHWORDS : PRACTICE AND PROCEDURE - interrogatories - where order made by consent that defendant answer specified interrogatories - where defendant thereafter objects to answer on ground that certain interrogatories vexatious - whether that objection remains open once order to answer has been made - Uniform Civil Procedure Rules 2005 NSW, rules 22.1-.3 LEGISLATION CITED : Supreme Court Rules Uniform Civil Procedure Rules CASES CITED : Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622 PARTIES : Auburn Council (Plaintiff) Austin Australia Pty Ltd (Defendant) FILE NUMBER(S) : SC 50138/06 COUNSEL : I D Faulkner SC/M Condon (Plaintiff) A A Henskens (Defendant) SOLICITORS : Matthews Folbigg Pty Ltd (Plaintiff) Colin Biggers & Paisley (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST McDOUGALL J 15 December 2006 Ex tempore (revised 6 February 2007) 50138/06 AUBURN COUNCIL v AUSTIN AUSTRALIA PTY LTD JUDGMENT 1 HIS HONOUR: By notice of motion filed in Court on 24 November 2006 the plaintiff sought, amongst other relief, an order "that [it] be granted leave to administer interrogatories pursuant to the notice to answer interrogatories which is attached to this notice of motion and marked "A"." 2 The notice of motion was to be heard on 8 December 2006. Shortly before then the parties engaged in negotiations with a view to proposing consent orders. Ultimately I made orders in Chambers by consent in the following terms: "1. Leave is granted to the Plaintiff to administer interrogatories to the Defendant in the form of the Notice to Answer Interrogatories which is annexure 'A' to the Plaintiff's Notice of Motion dated 22 November 2006. 2. The Defendant is to serve its answers to the interrogatories by noon on Thursday, 14 December 2006. 3. Time for the Defendant to complete service of its evidence is extended to noon on Thursday, 14 December 2006, and up to that time the Defendant is to serve its Affidavits and/or Statements of Evidence progressively as it is completed. 4. Stand over the Plaintiff's Motion to Friday, 15 December 2006. 5. Liberty to apply on one (1) day's notice. I reserve the costs of the notice of motion filed on 22 November 2006." 3 The defendant provided verified answers to the interrogatories on 14 December 2006. On a number of occasions, it objected to answering interrogatories: in some cases, because "the interrogatory ... does not seek an answer to a question, but rather requests the defendant to produce documents"; and in other cases, because the interrogatory was asserted to be "oppressive, frivolous, vexatious and does not relate to any matter in issue between the parties." That extensive statement of reasons in some cases was amplified by other reasons: for example, " … and that it seeks the defendant to express an opinion as to a statement made by another person and an opinion as to that other person's state of mind." 4 Further, in one case the answer given proceeded upon a particular interpretation of the interrogatory, namely, that the answers need only relate to matters that had occurred as at 30 July 2004. To enable this to be understood I shall set out interrogatory 3 A and its answer: "3A. Please look at the letter dated 30 July 2004 (annexure "D") from CBP to MF and answer the following questions: (a) What were the various options referred to in the second paragraph? (b) In relation to each such option, when did the investigation referred to in that paragraph begin? (c) In relation to each such option under investigation at or prior to 30 July 2004: (i) what was the result if any of the investigation and when did such result emerge from the investigation? (ii) if any such result is recorded in writing, please identify the writing and produce it for inspection. 3B. (a) Options (a) – (c) set out in paragraph 27 of the Affidavit of Mr Hutchison sworn 14 December 2006. (b) 8 March 2004. (c) (i) As to Options (a), and (c) in paragraph 27 of Keiran William Hutchison's Affidavit sworn 14 December 2006, the result of the investigation was that they were still in progress as at 30 July 2004. As to Option (b) in paragraph 27 of Keiran William Hutchison's Affidavit sworn 14 December 2006, the liquidators of Austin sought assistance generally from creditors. As at 30 July 2004, no creditor had offered to fund the provision of security. (ii) As to the documents recording the steps, see the answer to (a) above. As to the production of such documents for inspection, the Defendant objects to the interrogatory on the basis that it does not seek an answer to a question, but rather requests the Defendant to produce documents." 5 By notice of motion filed in Court today, the plaintiff seeks an order that the defendant answer a number of specified interrogatories "without evasion". In the case of all but interrogatory 3, the issue between the parties is in substance whether the orders made on 7 December 2006 decided, expressly or by necessary inference, whether the relevant interrogatories were not objectionable, or whether it was still open to the defendant to do as it has done on a number of occasions and decline to answer an interrogatory in effect on grounds going to the propriety of the question. 6 The scheme of Part 22 of the Uniform Civil Procedure Rules relating to interrogatories is plain. Rule 22.1 provides that the Court may order any party to answer specified interrogatories at any stage of the proceedings. There are specific matters to be considered including (UCPR Rule 22.1(4)) that the Court be satisfied that the order is necessary at the time it is made. 7 Rule 22.2 deals with objections. In substance, it states that a party may not object to being ordered to answer interrogatories except on the grounds that it does not relate to any matter in issue, is vexatious or oppressive, or the answer could disclose privileged information. 8 Rule 22.3 provides that a party who has been ordered to answer interrogatories must do so within the time specified (UCPR Rule 22.3(i)). By subpara (ii)(b) of that rule, the substance of each interrogatory is to be answered "without evasion". 9 In relation to the first category of dispute - what can be called for convenience the threshold question - the plaintiff's submission is simple. It submits that the time for objecting on the grounds specified in rule 22.2 (which are the only specified grounds for objection to specific interrogatories) passed no later than the time the order was made. Thus, the plaintiff submits, it is not open to the defendant to take the threshold objection that it has in relation to the great bulk of the interrogatories. 10 The defendant contests this interpretation of the Rules. It submits that it was not ordered to answer interrogatories. Instead, it submits, the plaintiff was given leave to administer interrogatories which, it says, is not precisely the process contemplated by rule 22.1 (and it was to serve its answers) which, it submits, is not precisely the process contemplated by rule 22.3. 11 Thus, the defendant submits, the mechanism laid out in Part 22 of the Rules has not been engaged and the threshold point must be determined in its favour. 12 In substance, and this formed an express part of the defendant's submissions, the defendant's point is that the order was sought under the now repealed Supreme Court Rules Part 24. Those rules provided for a party being granted leave to answer interrogatories, and for the party interrogated to object to answers in its statement (verified or otherwise) in response. The defendant submitted that that is what the parties agreed to do in this case. 13 It would be strange if the Court, simply by reason of the wording of the order, should be taken to have engaged a procedure pursuant to an expired, or more accurately repealed, rule, and not the precise procedure laid down by the current rule. 14 There was tendered a bundle of correspondence, comprising in effect the negotiations that led to the consent orders that were made on 7 December 2006. That correspondence was tendered and admitted without objection, notwithstanding that it was clearly written in an attempt to resolve the then extant dispute between the parties. 15 In a letter of 5 December 2006, the defendant's solicitor stated that its client was prepared to settle the notice of motion filed in Court on 24 November 2006 on the basis that it would answer all the plaintiff's interrogatories the subject of the earlier notice of motion "on a specified basis". The response was that "[a]s long as there is compliance with the orders", the plaintiff would consent to dismissal of the notice of motion on the specified basis. 16 The draft orders that were ultimately provided to me were then signed, and thereafter orders were made by consent. 17 There is nothing in the correspondence to suggest that the defendant was proposing to do anything other than answer the interrogatories. It is, I think, plain that the defendant had had a reasonable opportunity of considering the interrogatories and its position in relation to them. That it was able to do so is confirmed in the letter of 5 December 2006, to which I have already referred, by the statement that it would answer the interrogatories by reference to paragraphs in its affidavit evidence. There is nothing in that statement to suggest that it would decline to answer interrogatories on the bases now specified, including that they might be frivolous, vexatious or oppressive. 18 In my view, notwithstanding the way in which the notice of motion and the orders were framed, it is plain that the Court was exercising its power under Pt 22 of the Rules. Any other conclusion would involve either that the Court was exercising powers pursuant to a repealed part of the former Rules or that it was exercising some inherent power moulded on those former Rules. I do not think that either of those alternatives is a proper way to view what was done. I reach that result purely as a matter of construction of the notice of motion and the orders made. However, it is confirmed - in my view plainly - by the correspondence to which I have referred. 19 It follows that I think that the plaintiff's point, that the time for objection to specific interrogatories passed no later than the time when the order was made, is good. Thus, I think, the threshold point must be answered in favour of the plaintiff. Had the defendant wished to take the position, as to particular interrogatories, that it has taken and that has given rise to the first aspect of the current dispute, it should have done so before the Court made orders. 20 The defendant submits that if I came to that conclusion (contrary to its primary position) then, as a matter of discretion, I should not order it to make specific answers, basically on the ground that it has already done so in its answers that have given rise to the controversy. Amongst other things, it submits, directing it to answer would require it to go through two lever arch folders of affidavit material and extract the relevant answers. I do not accept that submission. There are two reasons. Firstly, in so far as it seeks to advance by the back door the prohibited argument as to matters said to be frivolous, vexatious and oppressive, I do not think that the Court should give a party a second opportunity, not permitted by the Rules, to take a point that it should have considered and taken at an earlier time. Secondly, as I have indicated, it was the defendant that proposed to answer the interrogatories by reference to paragraphs in its affidavit material. It must have known, when it made that proposal, that it would take some time and involve some work. If it wished to take some easier course, it should have indicated what the course was. It did not do so. 21 It follows that, with the exception of the specific answers to which I shall turn, the relevant interrogatories have not been answered "without evasion" and that the plaintiff is entitled to an order that they be so answered. 22 The question as to the specific interrogatory (3A – see para [4] above) is in substance whether the words "at or prior to 30 July 2004" qualified the preceding words "each such option under investigation" or the "result" or results specified in the following subparagraphs (i) and (ii). 23 In my view it is plain, as a matter of construction of the interrogatory in question, that the words: "at or prior to 30 July 2004" do qualify the preceding words to which I have referred. The question could perhaps have been phrased more felicitously but, nonetheless, I think it is clear enough. If the dates were intended to qualify "the time at which any results emerged", one would have expected to find it in the precise subparagraphs in which the information sought was specified. 24 It was common ground that if I came to that conclusion then the answer given was insufficient. 25 The matters to which I have referred deal with all the disputed interrogatories specified in prayer 2 of the notice of motion filed in Court today. I will order that the defendant answer the interrogatories "without evasion" but I will hear the parties both as to the date when such answers should be made and as to any other orders to be made, including an order for costs. (Discussion as to costs.) 26 HIS HONOUR: The parties have agreed as to the time by which the outstanding interrogatories should be answered and I will in due course make an order to give effect to that agreement. 27 That leaves the question of costs. The plaintiff seeks the costs not only of the notice of motion filed in Court today but also of the notice of motion filed in Court on 24 November 2006. Further, it seeks an order not only against the defendant but also against Hillcrest Litigation Services Limited, a company that is said to be providing litigation funding to the defendant. 28 I will deal briefly with Hillcrest. There is no evidence of it or its position. In the circumstances, in particular where it has not been given any opportunity to be heard, I do not think that I should make an order for costs against it. However, by refusing to make that order now, I should not be taken to be suggesting that the plaintiff would be in some way barred (let alone estopped) from seeking such an order, on appropriate notice and evidence, if so advised. 29 As to the question of costs as against the defendant, the defendant accepts that, having regard to what I have said, it should pay the costs of the notice of motion filed in Court today. However, it submits, it should not have to pay the costs of the earlier notice of motion. 30 The correspondence to which I have referred above included a proposal by the defendant's solicitor that each party would pay its own costs. However, that proposal was not accepted. A response was that the motion could be dismissed with each party to its pay its own costs: "provided that there is compliance with the orders". 31 It is plain from what I have said that the defendant did not comply with order 2 made on 6 December 2006. Thus, the condition pursuant to which the plaintiff said it would consent to dismissal of the motion with no order as to costs has not been satisfied, and it is in substance as though the parties had agreed on the substance of the earlier notice of motion but had left the question of costs for later agreement or in default determination by the Court. 32 I should note that the orders made on 6 December 2006 also included order 3 (an order for the completion of service of the defendant's evidence). It was common ground that that order has not been complied with, in that although the texts of affidavits have been "served" by email at some stage during the course of yesterday, the exhibits to those affidavits (which one might think would comprise at least some of the evidentiary material on the which the defendant would rely, and which are clearly comprehended within the phrase "its evidence") did not arrive until some time this morning. Although that delay is not, in terms of time, significant, it is nonetheless another bar to satisfaction of the condition proposed by the plaintiff in relation to costs. 33 In my view, the combination of the orders made by consent and the orders that I have made after a contest today is that the defendant should be taken to have been liable to answer the interrogatories, so that one might assume that an order in those terms would have been made on 8 December 2006 had not the compromise been reached. 34 I have been informed that that was to have been a contested hearing expected to occupy approximately two hours. No doubt, both parties have engaged in preparation for a hearing which was headed off only at the last moment when the orders were made. It may be noted that the documents in terms of which I made those orders arrived in my chambers at some time in the afternoon on 6 December. 35 Perhaps, but for the compromise, the defendant would have argued the questions that it thought were reserved pursuant to Rule 22.2. Perhaps it would have succeeded. I do not know; but its agreement may be taken as some indication of a view on that point. 36 In the result, I think, the position is that the plaintiff has obtained not only the relief sought by its notice of motion filed in Court today but also the relief sought by its notice of motion filed in Court on 22 November 2006. Thus, but for any agreement as to costs, the position is prima facie that the plaintiff is entitled to its costs. 37 In circumstances where the proposed or conditional agreement as to costs was intercepted by the defendant's non compliance with the orders that were made by consent, I think that the plaintiff is entitled to be treated like any other successful litigant and to have its costs. In other words, I think, I am entitled to look at the outcome of the notice of motion of 24 November 2006 and to conclude that, partly by consent and partly by orders made today, the plaintiff has succeeded (compare the reasoning of McHugh J in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622). 38 For those reasons, I make the following orders: (1) I make an order in terms of prayer 2 of the notice of motion filed in Court today substituting for the date Tuesday 19 December 2006 the date Wednesday 20 December 2006. (2) I order the defendant to pay the plaintiff's costs of that notice of motion. (3) I order the defendant to pay the plaintiff's costs of the plaintiff's notice of motion filed in Court on 24 November 2006. (4) I order that the exhibits on both applications be handed out. (5) In addition to the orders I made earlier today, I make orders in accordance with paragraphs 1, 2 and 3 of the short minutes of order initialled by me and dated today's date. ******** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.