New South Wales Supreme Court CITATION : Ng v Velik [2009] NSWSC 1256 HEARING DATE(S) : 6 November 2009 JUDGMENT DATE : 20 November 2009 JUDGMENT OF : Harrison J DECISION : 1. Application refused. 2. Order the defendant to pay the plaintiff's costs of the application. CATCHWORDS : DISCOVERY – plaintiff suing former solicitor alleging negligence and breach of fiduciary duty – whether solicitor acted without instructions from the plaintiff – where 11,000 pages of solicitor's files provided to the plaintiff before commencement of proceedings - application by defendant for order to limit scope of defendant's obligation to comply with UCPR 21.3 as documents already in plaintiff's possession – whether cost and inconvenience to defendant outweighs plaintiff's insistence that defendant conform to his obligation to give discovery with particular identification of each document in the normal course – order refused LEGISLATION CITED : Uniform Civil Procedure Rules 2005 CATEGORY : Procedural and other rulings CASES CITED : Auspine Ltd v H S Lawrence & Sons Pty Ltd [2000] FCA 1405 Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Ltd (No. 8) [2001] NSWIRComm 208 PARTIES : Ping Jin Ng (Plaintiff) Stephen Wayne Velik (Defendant) FILE NUMBER(S) : SC 20093/2009 COUNSEL : G Doherty (Plaintiff) SOLICITORS : Chalmers Legal Studio (Plaintiff) S V Law (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HARRISON J 20 November 2009 20093/2009 Ping Jin Ng v Stephen Wayne Velik JUDGMENT 1 HIS HONOUR: The defendant seeks orders to limit or qualify the manner in which, and the extent to which, he ought to be required to give discovery to the plaintiff. That application arises in the circumstances described below. Background 2 The statement of claim in this matter is an unfortunate document. However, at least the following matters emerge, or can be assumed to flow, from it. The defendant is the plaintiff's former solicitor. The defendant provided legal services to the plaintiff with respect to a loan from the plaintiff, or from an entity controlled by him, to Felice Pulzato and Gesilla Pulzato. The loan was secured by a mortgage over their property in Box Hill North in Victoria. The Pulzatos were refinancing an existing mortgage over the property, which secured a loan from Wayne Stuart Jonas and Rosalind Wilson Jonas. The defendant prepared the new loan documentation and mortgage for the plaintiff and appears to have attended on settlement of the transaction when $243,649.50 was paid to discharge the Jonas' mortgage. 3 The Pulzatos subsequently alleged that they had not signed the mortgage given to the plaintiff, but apparently maintained that their signatures had been forged by a third party. In due course, on 18 October 2005, a solicitor for the Pulzatos wrote to the defendant to tell him of the allegation that the mortgage had been forged and that his clients had been defrauded. The plaintiff alleges that the defendant did not refer these allegations to him but proceeded instead on his own to take steps in the plaintiff's name to enforce the mortgage notwithstanding the allegations. In due course the Pulzatos challenged the defendant's ability to continue to act for the plaintiff having regard to the allegations of forgery and the defendant's particular involvement in the preparation of the mortgage under challenge. The plaintiff alleges that the defendant continued to act without his knowledge or consent and without his instructions and that he caused costs to be incurred by the Pulzatos in an unsuccessful application by the defendant in the Victorian Supreme Court. The plaintiff became liable for these costs. The defendant allegedly also billed the plaintiff for legal services he neither requested nor authorised. The plaintiff disputes his liability to pay any of these costs and seeks to recover damages in respect of them from the defendant. 4 These proceedings were commenced by statement of claim filed on 9 March 2009. The defendant had previously passed the file that he maintained, when allegedly acting for the plaintiff, to the plaintiff's solicitors in August 2008. There is no dispute that the file is voluminous, consisting of some 35 A4 size ring binders that contain something in the order of 11,000 pages. The defendant contends in these circumstances that he should not be required formally to discover any documents forming part of, or presumably falling within, classes of documents that the parties have agreed upon, which documents make up part of the files maintained by the defendant for the plaintiff in relation to the mortgage advance and the proceedings in the Victorian Supreme Court, because they have already been provided. The defendant relies upon the single ground for wishing to adopt this course, set out in par 1(c) of his letter to the plaintiff's solicitors dated 17 August 2009, which he described as a desire "to avoid unnecessary discovery of documents already provided [by him] to the plaintiff's solicitors with [his] said file for the plaintiff, in turn, reducing both parties [sic] discovery related costs". Consideration 5 Orders for discovery were made by consent on 14 September 2009 in the following relevant terms: "The Court directs that: 1. The parties to attempt to agree upon, and to give discovery within, agreed classes in accordance with Part 21 UCPR by 21 September 2009. 2. The parties to provide inspection of discovered documents in accordance with UCPR Part 21 from 21 September 2009. 3. Liberty to apply to the Judicial Registrar in respect of categories that cannot be agreed." 6 The parties in due course agreed upon the classes of documents for discovery. They included separate classes for the mortgage documentation and the proceedings in the Victorian Supreme Court. However, in response to the defendant's letter of 17 August 2009, the solicitor for the plaintiff also relevantly provided the following reply: "We refer to your letter of 17 August 2009 and advise that as Uniform Procedure Rule 21.3 requires discovery of documents in your possession, along with discovery of documents that are not now, but were within 6 months prior to the commencement of the proceedings, in your possession, then reference to documents in your power in the classes of documents for which we seek discovery from you, is to be ignored, as being beyond our power to compel discovery. In respect to paragraph 1(c) of your letter of 17 August 2009, we advise that for the purpose of discovery a class of documents cannot be diminished so as to avoid unnecessary discovery by excluding documents contained in files delivered prior to the commencement of these proceedings. The purpose of discovery is for a list to be prepared of all documents in a class of documents, which list under Procedure Rule 21.4 is to be supported by an affidavit by you, and if you are represented by a solicitor, accompanied by a solicitor's certificate of advice. We note that for the purpose of discovery, you declined to do this by deposing on oath that all files delivered to this practice, except for file notes for which a list was sought, comprised all documents held by you relating to the matters in issue." 7 Although the terms of this letter are not as clear as they could be, they appear to conform to the approach adopted by the plaintiff in response to this application, which was to insist that discovery be given by the defendant without any variation or departure from what the rules require. 8 Resolution of the present dispute is informed by a consideration of the purpose of the requirement for particular identification of all documents that are to be discovered. It is said that the requirement serves two purposes. First, particular identification by numbering and description permits convenient production of documents. This is particularly the case where, as here, there are many documents involved. Secondly, the party obtaining discovery, in this case the plaintiff, is entitled to have the benefit of any admission that may be involved in a proper description of the documents. In this last respect UCPR 17.5 should be noted: " 17.5 Admission of documents discovered (1) In this rule: admitting party means the party on whom a list of documents is served under rule 21.3. requesting party means the party by whom a list of documents is served under rule 21.3. (2) If a requesting party allows inspection of any documents referred to in a list of documents under rule 21.5, the admitting party is taken to have made the following admissions in favour of the requesting party, unless the court orders otherwise: (a) in respect of each document described in the list as an original document, that the document is an original document and was printed, written, signed or executed as it purports to have been, (b) in respect of each document described in the list as a copy of an original document, that the document is a true copy. (3) Subrule (2) does not apply to a document referred to in the list of documents if the admitting party: (a) has, by his or her pleading, denied the authenticity of the document, or (b) has served on the requesting party, within 14 days after the time limited under rule 21.5 for inspection of a document, a notice to the effect that the admitting party disputes the authenticity of the document. (4) The admitting party and the requesting party are taken to be in the same position as they would have been in had the admitting party, on the date of service of the list of documents, served on the requesting party a notice requiring production at the trial of such of the documents specified in the list as are in the possession of the requesting party." 9 The plaintiff promotes these matters as justification for his insistence upon discovery being provided by the defendant strictly in accordance with the rules. Moreover, the plaintiff contends that the defendant has not identified any specific difficulty related to full compliance, other than a general complaint that as a sole practitioner appearing for himself the unlimited discovery process will be potentially, if not actually, time consuming and expensive and for those reasons also unduly onerous and oppressive. 10 In contrast, the defendant asserts that the potential for even such general disruption to him is sufficient in the circumstances of the present case to warrant the making of at least one of the orders that he seeks. The defendant referred me to Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Ltd (No. 8) [2001] NSWIRComm 208 at par [21] in these terms: "[21] . . . [Counsel] referred to what O'Loughlin J said in Auspine at par 108 in relation to cross-examination on an affidavit of discovery: 'The principle that an affidavit of discovery should, in most cases, be regarded as conclusive, has become less rigid in its application in recent times, but it has not been abolished. There are times when a court will feel justified in having the subject of discovery pursued in greater detail. The defects in Olympic Airways afford a good example of an appropriate case for further investigations. The cases on legal professional privilege are another example. But the facts in this case have not excited my interest. The respondents have shown a predilection to pursue a state of perfection. Presumably the length of their pocket permits such a course of action; but it is a course of action that is taking up valuable court time when, in my assessment of the matter, the parties could be more gainfully employed in preparing their cases for trial'." 11 I was also referred to Auspine Ltd v H S Lawrence & Sons Pty Ltd [2000] FCA 1405 at par [25] as follows: "[25] The respondents regarded these efforts as inadequate. They submitted that the applicant should have made inquiries of its officers, servants and agents, including former officers, servants and agents who were at the material time employees or agents and who were likely to have knowledge regarding the documents that are the subject of the December orders. The respondents complained that there is no evidence that the applicant made these inquiries. Counsel for the applicant responded to this submission, labelling it speculative and submitting that there was no evidence to support it. I agree. I consider that the attitude adopted by the respondents is unwarranted. To require the applicant to engage in further inquiries would be wasteful. The Court has a responsibility to ensure that cases are prepared and presented with expedition and, if possible, with minimal costs. The pursuit of excellence, which seems to be the objective of the respondents or its solicitors, is a luxury that can not always be afforded ." [Emphasis added] 12 I have had regard to these sentiments. However, I do not consider that the plaintiff in this case has "shown a predilection to pursue a state of perfection" or is engaged in an unwarranted "pursuit of excellence". As implied earlier, the statement of claim suffers from serious infelicities to which it is presently unnecessary in detail to refer. It does however at least raise the spectre of a controversial and potentially significant dispute about the defendant's files materialising in the course of the proceedings, if it has not already done so. The amended defence is also a challenging document but appears equally to suggest, if only by inference, that those files are very likely, if not certain, to assume some considerable prominence in this litigation. There should as far as possible be no room in this case for doubt about their provenance or what they contain. It is unnecessary and potentially unhelpful at this time to elaborate. 13 The need at an early stage to require the defendant to clarify and verify his position, at least in so far as the documents that became part of files allegedly created and maintained by him on the plaintiff's instructions are able to do so, achieves some prominence in the circumstances. A corresponding obligation will also necessarily apply to the plaintiff. The need to ensure the efficient management at the trial of the large number of documents created by the defendant also favours adherence to the usual practice. Decision 14 It is not in my opinion either inappropriate or unreasonable to require the defendant to give discovery in accordance with the rules in the ordinary way. Accordingly I decline to make either order 2 or 3 sought by the defendant in his notice of motion filed on 21 September 2009. I understand there is agreement with respect to order 1 as sought by the defendant although some adjustment to the timetable for which it provides may now be necessary. I order that the defendant pay the plaintiff's costs of the notice of motion. 15 I direct the parties to bring in short minutes of order to reflect my decision. ********** 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. 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