Supreme Court New South Wales Medium Neutral Citation: Hancock v Rinehart [2015] NSWSC 1311 Hearing dates: 31 August 2015 Date of orders: 31 August 2015 Decision date: 31 August 2015 Jurisdiction: Equity Before: Brereton J Decision: Notice of motion to set aside notice to produce dismissed with costs. Catchwords: PROCEDURE – subpoenae and notices to produce – application to set aside notice to produce – where documents sought pertain to issues no longer pressed by plaintiffs –applicability of principles from Anshun v Port of Melbourne Authority Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 to interlocutory applications –court's discretion – where there has been a narrowing of issues in dispute – where situations created by plaintiff's change of position of the earlier unsuccessful application – held, upholding second application inimical to administration of justice. Legislation Cited: (NSW) Civil Procedure Act 2005, s 98(4) Cases Cited: Anshun v Port of Melbourne Authority Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 Brimaud v Honeysett Instant Print Pty Ltd (1998) 217 ALR 44 D A Christie Pty Ltd v Baker [1996] 2 VR 582 Hancock v Rinehart [2015] NSWSC 896 Henderson v Henderson [1843] 3 Hare 100; 67 ER 317 Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139 Stevenson v Garnett [1898] 1 QB 677 Wentworth v Rogers (unreported NSWSC, Sperling J, 28 April 1995) Woodhouse v Consignia Plc [2002] EWCA Civ 275; [2002] 2 All ER 737 Category: Procedural and other rulings Parties: John Langley Hancock (first Plaintiff) Bianca Hope Rinehart (second Plaintiff) Gina Hope Rinehart (first Defendant) Ginia Hope Frances Rinehart (second Defendant) Hope Rinehart Welker (third Defendant) Hancock Prospecting Pty Ltd (fourth Defendant) Hope Downs Iron Ore Pty Ltd (fifth Defendant) Representation: Counsel: C Withers (plaintiffs) B McClintock SC (first defendant) Solicitors: Yeldham Price O'Brien Lusk (plaintiffs) Corrs Chambers Westgarth (first defendant) File Number(s): 2011/285907 Judgment (ex tempore) 1. HIS HONOUR: Consequent upon an order made in the substantive proceedings on 9 October 2013 that the first defendant pay the plaintiff's costs of the proceedings to that date on an indemnity basis, the plaintiffs on 2 December 2014 filed a notice of motion seeking an order pursuant to (NSW) Civil Procedure Act 2005, s 98(4)(c), that the first defendant pay the plaintiffs the amount of $2,444,492.76 or such other amount as the Court deems fit. That application was made on the footing of a lump sum order, so as to avoid the costs, expenses and delay that would be associated with engaging the costs assessment process. The application was supported by an affidavit of Timothy Randolph Price of 2 December 2014, in which he deposed to reasons why a lump sum order was appropriate and as to the calculation of that order, including a bill of costs which itemised the amount claimed. 2. On 5 December 2014, the first defendant caused to be issued and served a notice to produce to Court requiring production, inter alia, of the tax invoices for the professional costs and disbursements claimed in the various items in that bill of costs. On 23 December 2014, the plaintiff filed a motion seeking an order that that notice to produce be set aside. That application was heard by White J on 24 June 2015, when his Honour, for reasons then published, refused the application to set aside the notice to produce, ordered that the motion be dismissed, and stood the notice to produce over to the Registrar's list on 8 July 2015, no doubt with a view to its being complied with on that occasion [see Hancock v Rinehart [2015] NSWSC 896]. His Honour reasoned, inter alia, that the production of the invoices was necessary for the just determination of the question as to whether the work in respect of which costs and disbursements were claimed in the bill fell within the terms of the original costs order. 3. It would seem that the notice to produce may have been adjourned from 8 July to 10 July, because on 9 July 2015, the plaintiffs' solicitors wrote to the first defendant's solicitors advising that upon further consideration of White J's reasons for judgment and the hearing before his Honour, they no longer claimed in respect of a number of matters which were specified in that letter. In the light of that, they said that the plaintiffs would be producing documents on the assumption that the first defendant would no longer press for production so far as concerns the items in the bill which were no longer to be pressed. 4. That assumption, as it transpired, was not well-founded. After further correspondence between the parties, on 25 August 2015 the plaintiff served a further amended bill of costs from which the items said no longer to be pressed were deleted. This represented a reduction in the total claim of about $500,000. The plaintiffs did not produce in answer to the notice documents that they said were relevant only to the items in the bill that they no longer pressed. The first defendant, on 17 August 2015, filed a motion seeking an order for production of those documents. Ultimately, the plaintiffs on 25 August 2015 filed a motion seeking an order that certain paragraphs of the notice to produce be set aside "insofar as they concern the items identified in schedule 1 to this notice of motion", and in relation to any costs agreement or retainer with Butcher Paul Calder or KD Johns and Company; the effect of this was to capture all the items in the bill that were no longer pressed. It is that application which crystallised the relief presently sought from the Court. 5. The first defendant submits that the documents in question are still of relevance, notwithstanding that the plaintiff no longer presses the items to which they relate, inter alia because the plaintiffs' claim for a lump sum costs order rests on an affidavit of their solicitor which effectively verifies the original bill in a sum of about $2.4 million, but from which sum $500,000 has now been excised, which suggests a basis for cross-examination as to the reliability of the solicitor's approach and estimate. For present purposes, however, I am content to proceed on the basis, without accepting, that the documents in question would have relevance only to the items no longer pressed by the plaintiffs. 6. For a long time it has been recognised that the principles of the kind that are expressed in Henderson v Henderson [1843] 3 Hare 100 at 115; 67 ER 317 (at 319), and in this country in Anshun v Port of Melbourne Authority Pty Ltd [1981] HCA 45; (1981) 147 CLR 589, are not irrelevant to interlocutory applications. Indeed, one of the foundation cases in that territory – Stevenson v Garnett [1898] 1 QB 677 – concerned an interlocutory order. In that case, it was held that when proceedings brought in the High Court of Justice depended on a question that was identical with that which had been decided by a County Court judge, albeit on an interlocutory application, the subsequent proceedings ought to be stayed as frivolous and vexatious and an abuse of process of the Court. 7. In Brimaud v Honeysett Instant Print Pty Ltd (1998) 217 ALR 44, McLelland J (as the later Chief Judge in Equity then was), emphasised that it would be productive of great injustice and waste of time and resources if there were no limit on the power of a party to have any interlocutory application or order re-litigated at will, and held that the ordinary rule of practice was that an application to set aside, vary or discharge an interlocutory order must be founded on a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the Court on the hearing of the original application. His Honour said: The private injustice and public undesirability of permitting the re-litigation of matters already litigated once is recognised in a number of principles in law, notably the rules relating to res judicata and issue estoppel, the more flexible rules under the rubric of vexation and abuse of process illustrated in such cases as Stevenson v Garnett [1891] 1 QB 677 and Hunter v Chief Constable West Midlands Police [1982] AC 529, and the restrictive provisions governing the adducing of further evidence on the hearing of an appeal even by way of further hearings (see, for example, s 75(A)(8) of the Supreme Court Act 1970 (NSW)). Interlocutory orders of their nature create no res judicata or estoppel and the Court retains jurisdiction to set aside, vary or discharge an interlocutory application up to the time of the final disposition of the proceedings. However, the general rationale of the principles last referred to applies even in the case of interlocutory orders. It would be conducive of great injustice and an enormous waste of judicial time and resources if there were no limit on the power of a party to have any interlocutory application or order re-litigated at will. 1. Nonetheless, his Honour recognised that the overriding principle governing the approach of the Court to interlocutory applications is that the Court will do whatever the interests of justice require in the particular circumstances of the case. His Honour suggested that in giving effect to that general principle, in recognition of the public and private interests mentioned, rules of practice have developed in connection with interlocutory orders, and that not all kinds of interlocutory orders attracted the same considerations. His Honour then went on to consider those particularly applicable to the question before his Honour, which concerned an interlocutory injunction of a substantive nature made after a contested hearing, in contemplation that it would operate until final disposition. 2. In England, the principles in Henderson v Henderson continue to be applied to interlocutory decisions, although with less rigour than in the case of final judgments. In Woodhouse v Consignia Plc [2002] EWCA Civ 275; [2002] 2 All ER 737, the Court of Appeal said that although the policy that underpinned the finality of litigation rule had relevance as regards to successive pre-trial applications for the same relief, it should be applied less strictly than in relation to a final decision of the Court, at least where the earlier pre-trial application had been dismissed. It was wrong, their Lordships said, to regard as decisive the fact that the fresh application was a "second bite of the cherry". 3. In Victoria, in D A Christie Pty Ltd v Baker [1996] 2 VR 582, the majority (Brooking and Hayne JJA; Charles JA dissenting) held that a second application for an extension of time in which to bring proceedings for personal injury, where the limitation period had expired and where the second application was made in circumstances where the new material relied upon had been available at the time of the first application and there was no sufficient explanation as to why it was not then put forward, should be stayed as an abuse of process, notwithstanding that the dismissal of the first application was not a final determination and did not create an estoppel precluding the making of a second application. 4. However, that decision was, by majority, not followed in the New South Wales Court of Appeal in Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139, where the facts were practically identical – an application for leave to commence an action out of time for damages for personal injuries received in a motor vehicle accident having been dismissed, another such application was made supported by evidence which was not, but could have been, presented in the earlier proceedings. 5. In the Court of Appeal, Mason P referred to D A Christie Pty Limited, which his Honour regarded as indistinguishable in essential respects. At [10], his Honour observed that a long line of authority attested to the practice of courts hearing interlocutory applications on matters of substance declining to allow "a second contested run at the target" where the only change of circumstances was an applicant coming forward with new evidence. Reference was made to Brimaud v Honeysett Instant Print and to Wentworth v Rogers (unreported NSWSC, Sperling J, 28 April 1995). His Honour regarded those cases, and in particular Brimaud, as indicating an ordinary rule of practice. 6. Heydon JA and Foster AJA, who constituted the remainder of the Court, were of a different view, preferring the reasoning of Charles JA in D A Christie. However, Heydon JA said (at [72]): Nothing in the above reasoning rejecting the Nominal Defendant's submission is intended to encourage litigants to avoid putting their best cases forward in any interlocutory application. The deliberate non-tender of evidence for use in a second interlocutory application should the first fail, or for use in an interlocutory appeal from the interlocutory application, might of itself be fatal to success; and even the non-deliberate failure to tender evidence is extremely risky. The Nominal Defendant's proposition that no second interlocutory application can be entertained unless there is a change of circumstances or unless evidence is relied on which could not reasonably have been obtained earlier is too extreme, but a litigant bringing a second application where circumstances have not changed on evidence available earlier is facing serious and self-created risks of an adverse exercise of judicial discretion. The real evils to which Hayne JA referred in D A Christie Pty Ltd v Baker [1996] VicRp 89; [1996] 2 VR 582 at 602-3 – the risk of conflicting decisions, the unnecessary vexing of respondents, judge-shopping and the diminution of certainty in the conduct by respondents of their affairs – and others – damaging public confidence in the integrity of judicial decisions, expending time and money on litigation unnecessarily – are evils which each court in its individual discretion will rightly strain to avoid. 1. His Honour then went on to point out that those risks must be balanced against all the circumstances of the case relevant to whether it is fair and just, whether leave should be granted, and in particular, whether a trial which is just and fair for all parties can be held. That, of course, was said in the context of that particular case and the particular type of application, being an extension of a limitation period. However, it provides the most authoritative guidance for the approach I should take. 2. The significant consideration which the plaintiffs' present application has to commend it is that it involves overall an apparent endeavour to narrow, rather than to broaden, the scope of the ultimate dispute. At first sight, that fact, and in particular that it would apparently result in avoiding only the production of documents no longer relevant, is attractive. 3. But the consequences are, it seems to me, most inimical to the administration of justice, even on an interlocutory basis. Although I am by no means an enthusiast for the so-called "floodgates" principle, to hold in this case that the plaintiffs can, by narrowing the issues after losing an application to set aside a notice to produce, achieve at least partially the same result as was sought by the earlier application, would in effect establish that a party who unsuccessfully applies to set aside a subpoena or a notice to produce or resists discovery, so as to be required to produce documents or give discovery across the range of issues then being litigated, could reserve to itself the position thereafter, in order to avoid producing the formerly disputed documents, narrowing the issues in the case. To adopt such a course would be entirely inconsistent with maintaining an expectation that parties are required to bring forward their whole case the first time. It seems to me that, having decided to litigate the application to set aside the notice on the basis upon which it was litigated, and having lost that application, the plaintiffs ought not now be permitted to have a "second bite at the cherry", even by ostensibly reducing the issues in dispute. 4. For those reasons, the Court orders that the plaintiffs' notice of motion filed 25 August 2015 be dismissed with costs. ********** Amendments 09 September 2015 - Typographic error para 10 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. Decision last updated: 09 September 2015