Supreme Court New South Wales Medium Neutral Citation: In the matter of Felan's Fisheries Pty Limited [2017] NSWSC 1262 Hearing dates: 7 September 2017 Decision date: 20 September 2017 Jurisdiction: Equity - Corporations List Before: Black J Decision: The Court rules on the proposed discovery categories in the manner indicated. Catchwords: CIVIL PROCEDURE — Discovery — Practice Note SC Eq 11 – whether orders for discovery in the categories proposed reasonably necessary for the fair resolution of the real issues in the proceedings Legislation Cited: - Corporations Act 2001 (Cth), ss 181, 1324 Cases Cited: - Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 - James v Royal Bank of Scotland Group plc [2013] NSWSC 402 - Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458 - Re Mempoll Pty Ltd, Anakin Pty Ltd and Gold Kings (Australia) Pty Ltd [2012] NSWSC 1057 - Re Metal Storm Ltd (subject to a Deed of Company Arrangement) [2016] NSWSC 306 Category: Procedural and other rulings Parties: Felan's Fisheries Pty Limited (Plaintiff) Sydney Fish Market Pty Limited (First Defendant) SFM Tenants and Merchants Pty Limited (Second Defendant) Bruce James Standen (Third Defendant) Grahame Richard Turk (Fourth Defendant) John Samuel Symonds (Fifth Defendant) William John Gallagher (Sixth Defendant) Sandra Margaret Hook (Seventh Defendant) Terry Con Poulos (Eighth Defendant) Harry Kouros (Ninth Defendant) Gregory George Imisides (Tenth Defendant) Nicholas Peter Manettas (Eleventh Defendant) George Apostolakis (Twelfth Defendant) John Jeffreson (Thirteenth Defendant) Ross Geoffrey Fiden (Fourteenth Defendant) Representation: Counsel: R P V Carey (Plaintiff) J C Hewitt (First Defendant) N J Kidd (Third to Ninth and Twelfth to Fourteenth Defendants) Solicitors: Fraser Clancy Lawyers (Plaintiff) K & L Gates (First Defendant) HWL Ebsworth (Third to Ninth and Twelfth to Fourteenth Defendants) File Number(s): 2015/369226 Judgment 1. By Notice of Motion filed on 7 August 2017 the Plaintiff, Felan's Fisheries Pty Ltd ("Felan's") sought an order that the Defendants give discovery of documents within categories set out in an affidavit of Mr Mark Fraser sworn 7 August 2017. 2. By my judgment delivered on 28 August 2017, I declined to make discovery orders in the form then sought by Felan's, where its application for those orders did not comply with the requirements for disclosure under Practice Note Supreme Court Equity 11, and I also observed that it was apparent on the face of the discovery categories proposed by Felan's that many of those categories could not and should not be ordered. I nonetheless noted that: "Nothing in this judgment has the consequence that Felan's cannot bring a further application for disclosure that makes an appropriate attempt to narrow the categories by reference to the matters that are actually in issue in the proceedings, and supports that application with a proper identification of the matters contemplated by Practice Notice Supreme Court Equity 11, namely, the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings; implicitly, the logical relationship between the disclosure that is sought and the issues as to which it sought; and the likely cost of such disclosure. Equally, nothing in this judgment would prevent the parties reaching agreement, having regard to this judgment, and having regard to the proposal which had been put by the First Defendant as to discovery which they consider is appropriate, and Felan's then supporting that discovery by an affidavit of the kind contemplated by Practice Note Supreme Court Equity 11." 1. By Notice of Motion filed 4 September 2017, which was heard before me on 6 September 2017, Felan's sought discovery of some 44 categories of documents set out in an annexure to that Notice of Motion. That application was supported by an affidavit of Felan's solicitor, Mr Fraser, dated 4 September 2017 which addressed the reason why the categories of discovery were sought and provided an assessment of the costs of discovery in respect of those categories. Mr Fraser set out the matters in issue in the proceedings, as Felan's understood them (Fraser 4.9.17 [6]–[9]), including that: "Felan's asserts that: (a) Fishbank [Development Corporation Pty Ltd ("Fishbank")] asked to make a presentation to [the board of the Fifth Defendant ("SFM")] in relation to the Fishbank Proposal in September 2013 and again in March 2014 (paragraph 59 of the Further Amended Statement of Claim); (b) from about the end of 2013 [SFM's Chairman Mr] Turk, [SFM's General Manager Mr] Skepper and the management of SFM had come to the view that SFM should not consider or support the Fishbank Proposal (paragraph 60A of the Further Amended Statement of Claim); (c) on about 24 July 2014, the then directors of SFM resolved not to consider the Fishbank Proposal (paragraph 60A of the Further Amended Statement of Claim); and (d) having resolved not to consider or support the Fishbank Proposal, the Director Defendants engaged in conduct (including purporting to pass the [resolutions or purported resolutions at a meeting or purported meeting of the Third–Ninth and Twelfth–Fourteenth Defendants on 21 April 2015 identified in paragraph 75 of the Further Amended Statement of Claim ("April 2015 Resolutions")], purporting to cause SFM to terminate Felan's Lease and Licence without offering Felan's a new lease or licence, causing SFM to exclude Felan's from Felan's Premises, continuing to cause SFM to refuse to offer Felan's a new lease or new licence between July 2015 and the present time, and passing the October 2016 Resolutions) for the purpose of: (i) bringing Felan's tenancy at the Sydney Fish Market Site to an end (paragraphs 107(a), 112M(a), 100J(a), 124H(a), and 124Y(a)); (ii) causing the divestiture of Felan's … Shares [in the Second Defendant, SFM Tenants and Merchants Pty Ltd ("Buyers")] in accordance with the Divestiture Provisions in Buyer's Constitution (paragraphs 107(b), 112M(b), 100J(b), 124H(b), and 124Y(b)); (iii) eliminating or reducing support amongst the members of Buyers for the Fishbank Proposal (paragraphs 107(c), 112M(c), 100J(c), 124H(c), and 124Y(c)); and (iv) punishing Felan's for its perceived association, through Deans, Dean's Property and others, with Fishbank and support for the Fishbank Proposal (paragraphs 107(d), 112M(d), 100J(d), 124H(d), and 124Y(d)); and (v) destroying Felan's business (paragraphs 107(e), 112M(e), 100J(e), 124H(e), and 124Y(e)). Each of the defendants denies the matters referred to above. In further answer to the above allegations (and numerous other paragraphs of the Further Amended Statement of Claim) SFM (at paragraph 59 of its Defence to the Further Amended Statement of Claim) and the Director Defendants (at paragraph 59 of their Defence to the Further Amended Statement of Claim) allege (amongst other things) the following: (a) on 28 February 2014, the NSW Government advised SFM that it had received an unsolicited proposal from Fishbank; (b) on 13 March 2014, senior managers of SFM met with senior representatives of Fishbank where the Fishbank proposal was discussed and SFM asked for, and Fishbank agreed to provide, a written commercial proposal; (c) no written commercial proposal was provided by Fishbank; (d) at a meeting of SFM's board on 3 April 2014, its directors resolved to defer consideration of Fishbank's request to make a presentation to SFM's board, pending consideration of Fishbank's unsolicited proposal by the NSW Government; (e) SFM received the Brookfield Proposal; (f) on 1 May 2014 [NSW Fisherman's Holding Company Pty Ltd ("Catchers")] resolved to support the Brookfield Proposal; (g) at a meeting of SFM's board on 19 June 2014, its directors resolved to appoint Savills to undertake a detailed analysis of the Fishbank proposal and the Brookfield Proposal; (h) on 2 July 2014, the NSW Government informed SFM that it had decided that the Fishbank Proposal did not meet its proposal assessment criteria so as to justify proceeding further; (i) in its report dated 21 July 2014, Savills concluded that the Brookfield Proposal was in the best interests of SFM and recommended that SFM support the Brookfield Proposal; (j) on 23 July 2014 SFM's board resolved not to proceed with a presentation from Fishbank and to "work with UrbanGrowth, Brookfield and others in the development of a long-term plan for the Bays Precinct"; (k) following announcements made by the NSW Government in October 2015, SFM ceased working with Brookfield and determined to participate in "an open and transparent competitive procurement process" in relation to the redevelopment of the Bays Precinct, including the Sydney Fish Market Site; and (l) since then SFM has remained committed to that procurement process, in which process both Fishbank and Brookfield are free to participate. There is a deemed joinder of issue as between Felan's and each of SFM and the Director Defendants in relation to each of the above matters and each of Mr Skepper and the Director Defendants seeks to give evidence in respect of those matters." 1. SFM relies on the affidavit dated 6 September 2017 of its solicitor, Mr Webster, and the Third–Ninth and Twelfth–Fourteenth Defendants ("Directors") rely on the affidavit dated 6 September 2017 of their solicitor, Mr Harding, which referred to a letter dated 6 September 2017 from the Directors' solicitors to Felan's solicitors. Felan's in turn relied on Mr Fraser's further affidavit dated 7 September 2017 in response to those affidavits. Some limited common ground developed between the parties in the course of the exchange of affidavit evidence, to which I will refer below, but many of the categories sought by Felan's remain in dispute. 2. Mr Carey, who appears for Felan's, draws attention to the observation of Brereton J in Re Metal Storm Ltd (subject to a Deed of Company Arrangement) [2016] NSWSC 306 at [14] that: "There has been a tendency, since the introduction of the predecessor of UCPR r 21.2 (and its predecessor in the Supreme Court Rules), for classes of documents for discovery to be framed, not by reference to facts in issue, but by description of the type and (sometimes) the dates of the documents. While it is sometimes apparent that documents so described are relevant to a fact in issue, often it is not. Moreover, framing classes of documents for discovery in that way tends to distract Party B from focusing on the question of relevance to a fact in issue, and direct it towards whether or not the document fits within the description. It tends to confuse the process of discovery with that of a subpoena for production. As I have pointed out on more than one occasion, for this reason it is usually preferable to draft classes of documents for discovery by reference to facts in issue rather than by description of the nature of the documents and the period within which they were brought into existence, because doing so makes the relevance of the class clear beyond doubt, and because it makes clear that Party B is required to make the necessary judgment as to relevance of any particular document. When drafted by reference to facts in issue the relevance of the class is immediately apparent. This is the principal way in which [the cross-claimant] has propounded its case for discovery. Discovery in the form sought is not only specifically authorised (by UCPR r 21.2(3)(a)), but is the preferable means of framing such an order. Save as to the requirement that a class of documents not be specified in more general terms than justified in the circumstances, there is no limit to the width of a class. An order framed in terms of "the issues raised by para[graph] 18 of the cross-claim" is permissible and appropriate, at least if para[graph] 18 represents real issues in dispute in the proceedings." 1. I also have regard to the wider observations of Brereton J in Re Metal Storm Ltd (subject to a Deed of Company Arrangement) above at [16]–[17] to the effect that, so far as paragraph 5 of Practice Note Supreme Court Equity 11 provides that discovery will be ordered only where necessary, it reflects a longstanding requirement, formerly contained in the rules), that discovery would be ordered only where it was necessary; that this requirement was consistently interpreted to mean "reasonably required for the fair disposition of the matter"; and that approach has also been applied to the similar phrase in the Practice Note: Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458 at [13]; Re Mempoll Pty Ltd, Anakin Pty Ltd and Gold Kings (Australia) Pty Ltd [2012] NSWSC 1057 at [18]; James v Royal Bank of Scotland Group plc [2013] NSWSC 402 at [16]; Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326 at [19]. In Re Metal Storm Ltd (subject to a Deed of Company Arrangement) above, Brereton J also observed that: "[I]t is a common use of discovery to obtain evidence of Party B's knowledge or conduct, that is far from its sole use or purpose. The purposes of discovery include not only obtaining relevant evidence, but also reducing surprise and promoting fairness by putting parties in an equal position at trial, so that the parties are "playing with all the cards face up on the table". Discovery has the consequence that Party B cannot adduce documentary evidence at trial which takes Party A by surprise. Thus, simply ascertaining what documents relevant to a fact in issue are in the possession of Party B and may be deployed at trial by that party, or may aid Party A's case or harm Party B's case, is a relevant and proper purpose of discovery. It is a means of a party ascertaining what the other party has in its hand, and thereby avoiding surprise." It should be noted, of course, that that observation is directed to the position in respect of facts in issue in the proceedings and does not support an order for discovery extending beyond the matter in issue. 1. It seems to me that these observations do not assist Felan's in this application where, as will emerge below, categories 1–5 of Felan's proposed discovery categories do not seek draft classes of documents by reference to facts in issue, but instead refer to very complex pleadings without identifying the facts in issue raised by those pleadings. Many of the other categories as to which Felan's seeks discovery extend beyond the facts in issue in the proceedings, as pleaded, and instead seek production of documents as to matters that are not presently in issue in the proceedings. 2. I should also note, and I have borne in mind in this judgment, that the proceedings brought by Felan's are listed for hearing over several weeks commencing in November 2017. I have had regard to the potentially serious consequences for Felan's of being permitted only limited discovery in respect of the proceedings which it has brought. However, it seems to me that, if a party is not prepared to formulate appropriate discovery orders, and insists on leaving the Court with a choice between ordering inappropriately wide discovery or only limited discovery on its application, then the appropriate course is for the Court to order only limited discovery. If that outcome is adverse to that party, then it is a product of its own failure to formulate appropriate categories, something which many litigants in this Court, including in complex commercial litigation, do without controversy or particular difficulty. It remains open to Felan's, now having the benefit of two judgments that identify the difficulties with its present approach to discovery, to reevaluate that approach and formulate discovery categories in a manner that appropriately reflects the matters that are genuinely in issue in the proceedings. I will observe below that it has taken steps toward doing so in a third proposal for discovery which it submitted by leave, after the conclusion of this hearing. Felan's proposed categories 1–5 1. Felan's proposed categories 1–4 seek discovery of documents relevant to the existence or otherwise of the facts pleaded in paragraphs 59, 60A–60B, 64–69, 72A, 74–80, 101–112 and 112A–124AD of Felan's Further Amended Statement of Claim, SFM's Defence and the Directors' Defence. Felan's proposed category 5 sought discovery of all documents relevant to the existence or otherwise of the facts pleaded in paragraphs 1–19 of Felan's Reply to SFM's Defence and the Directors' Defence. 2. Mr Fraser refers to the affidavit evidence of Mr Robert Deans sworn 29 August 2016 in Felan's case and to the evidence led by the Directors in support of categories 1–5 of Felan's discovery. Mr Fraser's evidence (Fraser 4.9.17 [16]–[17]) is that: "[Felan's] says the fact that the April 2015 Resolutions were passed for an improper purpose or improper purposes is to be inferred from the conduct referred to in [Mr Dean's affidavit], and on that basis, and accordingly, documents which disclose the purpose/s of the defendants in engaging in that conduct are relevant to the determination of issue of whether the defendant directors in passing the April 2015 Resolutions were acting bona fide and in the best interests of SFM and for a proper purpose. However, without the discovery of documents falling within Categories 1–5, Felan's is simply not in a position to test the assertions made by SFM and the Director Defendants in the pleadings and affidavits as to the purpose of the Director Defendants in engaging in the conduct referred to in paragraph 6(d) above." 1. Mr Webster's evidence, in response, is that Felan's categories 1–5 require discovery of all documents relevant to the existence or otherwise of the facts pleaded in 112 paragraphs of Felan's Further Amended Statement of Claim and the corresponding 112 paragraphs of SFM's Defence to the Further Amended Statement of Claim; that many of these paragraphs in the Further Amended Statement of Claim contain multiple subparagraphs; and many of these paragraphs also rely on or repeat other paragraphs of the Further Amended Statement of Claim. For example, Mr Webster refers to paragraph 112M of the Further Amended Statement of Claim, as to which discovery is sought, which in turn incorporates the facts and matters referred to in paragraphs 72–112, 120A–120C and 124A–124Q of the Further Amended Statement of Claim. Mr Webster notes that another 62 paragraphs of the Further Amended Statement of Claim would fall within the discovery categories sought on that basis, and that Felan's proposed category 4 would require SFM to give discovery of "all documents relevant to the existence or otherwise of the facts pleaded" in at least 125 separate paragraphs of the Further Amended Statement of Claim. 2. In oral submissions, Mr Carey rightly accepted that the scope of the discovery sought by those categories involved discovery concerning a substantial part of the pleaded case, although he would not go so far as to accept that it amounted to general discovery. In supporting these discovery categories, Mr Carey refers to paragraphs 58A–60B of Felan's Further Amended Statement of Claim, which plead that Mr Deans, including through Fishbank, developed a proposal for the redevelopment of land including the Sydney Fish Market site ("Fishbank Proposal"); discussed that proposal with directors of SFM and others between 2003 and 2013; in February 2013, Fishbank entered into an agreement with a third party which agreed to support the Fishbank Proposal and between September 2013 and March 2014, Fishbank requested SFM to allow it to present the Fishbank Proposal to SFM's board; by the end of 2013, representatives of SFM had come to the view that SFM should not proceed to consider or support the Fishbank Proposal; and, in July 2014, SFM's then directors resolved not to consider the Fishbank Proposal. Aspects of those allegations, each of which are matters of fact, are not admitted by SFM. 3. Mr Carey also points to SFM's Defence to those allegations which includes, in paragraph 59, a chronology of events relating to the Sydney Fish Market site, including that, in February 2014, the New South Wales Government advised SFM that it had received an unsolicited proposal from Fishbank for redevelopment of Blackwattle Bay; Fishbank's proposal was discussed with senior managers of SFM at a meeting in March 2014; Fishbank then did not put a written proposal to SFM; by letter dated 31 March 2014, Fishbank requested an opportunity to present a proposal to the board of SFM for the redevelopment of Blackwattle Bay including the Sydney Fish Market site; the board of SFM resolved to defer consideration of Fishbank's request, at its meeting in April 2014, until after Fishbank's proposal to the NSW Government had been considered by the NSW Government and advised Fishbank of that matter in mid-April 2014; SFM then received a proposal ("Brookfield Proposal") for redevelopment of the Sydney Fish Market site from Brookfield Multiplex Limited ("BM") and, on 1 May 2014, Catchers resolved to support the Brookfield Proposal; in June 2014, SFM's board resolved to appoint Savills Project Management ("Savills") to undertake a detailed analysis of the Fishbank Proposal and the Brookfield Proposal; in July 2014, the NSW Government informed SFM that it had decided that the Fishbank Proposal did not meet the proposal assessment criteria so as to justify proceeding further and, in mid-July 2014, the NSW Government announced its intention to hold a summit to consider ways to revitalise the Bays Precinct in which the Sydney Fish Market was located and assigned the development of the Bays Precinct to Urban Growth NSW; in late July 2014, Savills recommended that SFM support the Brookfield Proposal and, after several further steps, SFM ceased to work with Brookfield; and, in October 2015, it was announced that SFM and Urban Growth were committed to working together for the redevelopment of the Sydney Fish Market site in an open and transparent competitive procurement process for the Bays Precinct in which persons with a relevant interest in SFM or either of its shareholders may be excluded by Urban Growth and, since then, SFM and Urban Growth have remained committed to that process. Those matters are also allegations of fact, other than for the last allegation as to SFM's current attitude to the process for redevelopment of the Bays Precinct, which is directed to its current intention. 4. It seems to me that the matters pleaded in paragraph 59 of SFM's and the Directors' Defence are, with the possible exception of their current attitude, simply pleadings of material facts. I accept that Felan's would be entitled to discovery as to whether those events took place, to the extent there is any real dispute as to those particular matters. It does not follow that, for example, the fact that it is alleged that a report was obtained, or that a proposal was put by a particular party, raises wider issues as to the merits or otherwise of that report or that proposal. 5. Mr Carey also draws attention to Felan's various claims against directors of SFM at paragraphs 101ff of the Further Amended Statement of Claim in relation to notices to quit issued by SFM in 2015. Mr Carey emphasises Felan's pleading in paragraph 101(a) of the Further Amended Statement of Claim that the conduct of the Directors in passing certain resolutions without causing SFM to offer Felan's a new lease of its premises in the Sydney Fish Market was "inconsistent with and not directed to achieving the Tenancy Objective [as defined]"; its pleading in paragraph 102 that other conduct of the Directors was inconsistent with and not directed to achieving the Tenancy Objective; and its pleading in paragraph 103 that the Directors of SFM failed to discharge their duties in good faith and in the best interests of SFM and thereby contravened s 181(1)(a) of the Corporations Act 2001 (Cth). Mr Carey also draws attention to the pleading in paragraph 110 of Felan's Further Amended Statement of Claim that, in taking certain steps pleaded in paragraphs 71–88 of the Further Amended Statement of Claim, including refusing to recognise removal of two directors and the appointment of two other persons as Buyers' nominee directors of SFM between March and May 2015 and the steps pleaded in paragraphs 106–109 of the Further Amended Statement of Claim, the Directors failed to discharge their duties for a proper purpose and thereby contravened s 181(1)(b) of the Corporations Act. 6. Mr Carey also refers to paragraph 107 of Felan's Further Amended Statement of Claim which pleads that the relevant directors engaged in the conduct referred to in paragraphs 74–88 of the Further Amended Statement of Claim, having resolved not to consider the Fishbank Proposal and in the belief that Felan's was an associate of Fishbank or would support, promote and advocate for the Fishbank Proposal and for the purposes of bringing Felan's tenancy at the Sydney Fish Market site to an end; causing the divesture of Felan's shares in Buyers in accordance with provisions in Buyers' constitution; eliminating or reducing support among the members of Buyers for the Fishbank Proposal; punishing Felan's for its perceived association with Fishbank and support for the Fishbank Proposal; and destroying Felan's Business (as defined). Mr Carey also refers to paragraph 107 of the Directors' Defence, which refers to matters of which SFM's board was informed at its meeting on 21 April 2015 and to the April 2015 Resolutions passed at that meeting in accordance with a pleaded recommendation by SFM's legal advisers. That pleading seems to me to be directed to matters of fact as to what the board was told at that meeting. As Mr Carey points out, that pleading is repeated in several other paragraphs of the Defence. Mr Carey also refers to the Directors' affidavit evidence where they explain their reasons for taking particular steps or refer to the legal advice they had received. 7. Mr Carey also refers to Felan's Reply to SFM's Defence and the Directors' Defence, which, in paragraphs 2–19, pleads a range of facts to develop an affirmative case that the advice given by SFM's legal advisers did not provide a proper or reasonable basis for the April 2015 Resolutions, at least from May 2015, after those resolutions were passed. 8. Mr Carey also submits that Felan's proposed categories 1–5 "simply require" the Defendants to review their documents to determine what documents are relevant to the facts pleaded at those particular paragraphs. While Mr Carey acknowledged that there was cross-referencing in the pleadings, he submitted that matters reduced to several periods of time and correspondence between several persons within SFM and external parties. It seems to me that that submission understates the difficulty involved in tracking numerous cross-references across the relevant paragraphs, if discovery is ordered in the form sought in those categories, although it also points to the fact that it might readily have been possible for Felan's to identify the matters in issue, as pleaded, and to seek discovery on that basis. Regrettably, Felan's did not adopt that course in either its first application for discovery or this application. 9. Mr Hewitt, who appears for SFM, submits that Felan's has failed for the second time to comply with Practice Note Supreme Court Equity 11 in making a good faith attempt to identify the real issues in dispute in the proceedings and to articulate why the discovery that it seeks is necessary to resolve those issues (T18). I do not consider it necessary to go so far as to reach that finding, where Felan's application for discovery in the specified categories may be determined on the narrower grounds to which I refer below. Mr Hewitt identified the matters which SFM contended were relevant to whether the Directors had acted for a proper purpose in passing the particular resolutions that are challenged, so as to support the injunctive relief sought by Felan's under s 1324 of the Corporations Act. Mr Hewitt emphasised that there was no suggested breach of contract by SFM in terminating Felan's month to month lease of premises at the Sydney Fish Market at the expiration of its term and Felan's attack on that decision involved an allegation of improper purpose as against the Directors and submitted that discovery was properly directed to whether the Directors had an improper purpose in relation to the decisions that are attacked (T19). Mr Hewitt also submitted that paragraph 59 of SFM's Defence, on which Felan's relied to expand the scope of discovery, did no more than to identify several facts that SFM contends put the Directors' decisions in context. Mr Hewitt also submitted that there were no issues raised by the pleadings, beyond whether those facts were or were not the case, to be "tested" by the discovery sought by Felan's (T20). Mr Hewitt submitted (T22) that Felan's proposed categories 1–5 were more onerous than general discovery, because of the extent of cross-referencing in the relevant paragraphs, and that there was no basis for an order for general discovery rather than discovery by reference to the more limited issues that were genuinely in dispute in the proceedings. 10. Mr Kidd, who appears for the Directors, similarly submitted that it would be impossible or extremely difficult for them to give discovery within Felan's proposed categories 1–5, and pointed to Mr Webster's evidence that those categories extended to about 112 paragraphs of the Further Amended Statement of Claim, which in turn cross-referred to an additional 62 paragraphs of the Amended Statement of Claim. Mr Kidd similarly submitted that an order for general discovery would not be consistent with the policy underpinning the Practice Note, to limit discovery to the classes of documents shown to be necessary for the determination of the proceedings, and submitted that an order for general discovery would impose a substantial burden on the Defendants less than two months prior to the commencement of the hearing. Mr Kidd also submitted that the proper approach was to determine whether a category of discovery was relevant to a fact in issue, by reference to the matters raised in the comprehensive pleadings filed by all parties. 11. I am satisfied that I should not make orders in the form of Felan's proposed categories 1–5. First, it seems to me that those categories do not reflect an appropriate attempt by Felan's to seek to identify the matters that are genuinely in dispute in the proceedings, even apart from the extraordinarily expansive interpretation that Felan's gives to those categories in the specific categories to which I refer below. Second, it seems to me that those proposed categories are not capable of sensible implementation by a party asked to give discovery or its legal advisers, because of the complexities and extensive cross-referencing in Felan's Further Amended Statement of Claim and, to a lesser extent, SFM's and the Directors' Defences. In order to give discovery within those categories, the Defendants or their legal representatives would, in effect, have to develop a list of the matters in issue in the proceedings, by working through those paragraphs and the multiple cross-references in them. That is a task that could and should be undertaken by Felan's, in seeking discovery in a common and appropriate way, by identifying the matters that are genuinely in issue in the proceedings by reference to the pleadings. As I note below, Felan's has now gone at least some way to attempting that task in a third discovery proposal submitted, by leave, after the conclusion of this hearing. Felan's proposed categories 6–7 1. Felan's proposed categories 6–7 sought discovery of all documents relevant to the existence or otherwise of the matters pleaded at paragraphs 3 and 15 of Felan's Further Amended Statement of Claim, SFM's Defence and the Directors' Defence and SFM's register of members. It is common ground between the parties that it is not now necessary to order discovery in accordance with these categories, since SFM and the Directors each indicated that they accept that Buyers and Catchers owned all the issued shares in SFM at all material times. Felan's proposed categories 8–10 1. Felan's proposed category 8 seeks discovery of letters and emails, including attachments, exchanged between SFM and/or its representatives on the one hand and BM and/or its representatives in relation to the NSW Premier and Cabinet's unsolicited proposal process in the period from 1 September 2013 to 3 April 2014. I have referred above to the facts pleaded by the Defendants in respect of SFM's entry into and the termination of an arrangement with BM and its present approach to the future development of the Bays Precinct. Mr Fraser refers to events from August 2013 until July 2014 in support of these categories, including by reference to the evidence led by Mr Skepper in SFM's case, and his evidence is that: "[Felan's] seeks discovery of the documents in Category 8 to show whether SFM knew that unless SFM advised NSW Premier & Cabinet that it supported Fishbank's unsolicited proposal that NSW Premier & Cabinet would reject Fishbank's unsolicited proposal. If SFM did know that NSW Premier & Cabinet would do so, then in resolving to defer receiving a presentation of the Fishbank proposal until after NSW Premier & Cabinet had determined Fishbank's unsolicited proposal, SFM was not acting in good faith and was seeking to reduce or eliminate the support of Buyers' shareholders for the Fishbank proposal." 1. Mr Webster responds that there is no allegation that SFM was not acting in good faith or was seeking to reduce or eliminate the support of shareholders in Buyers for the Fishbank Proposal in the time period or in respect of the subject matter for which discovery is sought and that discovery in this category is not necessary for the resolution of the real issues in dispute in the proceedings. 2. It seems to me that Mr Fraser's formulation of this suggested issue takes the form of a hypothesis to be tested by discovery, and that hypothesis is not pleaded in Felan's case, and could not have been pleaded without a proper evidentiary basis for it. I am not satisfied that discovery as to an unpleaded hypothesis is reasonably required for the fair resolution of the proceedings and I will not order discovery in this category. Mr Fraser also expresses the view that documents within this category fall within what is required to be discovered under Felan's proposed category 1. That view seems to me to be incorrect, even if discovery had been ordered within Felan's proposed category 1, where there is no pleaded allegation of these matters. 3. Mr Webster's evidence is that SFM is prepared to give discovery of the document sought in Felan's proposed category 9, provided access to it is restricted to Felan's solicitors on the record and counsel for Felan's. Mr Fraser's affidavit in reply indicates that Felan's will accept a limitation on access to its "legal advisers", which may or may not be intended to be a wider class of persons than those with conduct of these proceedings. I will order discovery in this category with the limitation on access proposed by SFM. 4. Felan's proposed category 10 seeks discovery of letters and emails exchanged between SFM and Mr Skepper and Savills and a named person between specified dates in June and July 2014 in relation to the assessment by Savills of each of the Fishbank Proposal and the Brookfield Proposal, including but not limited to specified subcategories. Mr Fraser also refers to Mr Skepper's affidavit evidence as to the engagement of Savills to assess the Felan's Proposal and the Brookfield Proposal. Mr Fraser asserts, incorrectly, that: "Savills' independence is an issue that arises squarely on both SFM's and the Directors' Defences. It is positively asserted by SFM and the Directors. It is an integral part of their case." 1. Mr Webster responds that this category seeks to test the independence of Savills; that there is no allegation by Felan's in the Further Amended Statement of Claim that Savills was not independent of SFM; and that discovery in this category is not reasonably required for the fair resolution of the real issues in dispute in the proceedings. 2. In oral submissions, Mr Carey submitted that the independence of Savills is in issue in the proceedings because, if the Defendants did not allege that Savills was appointed to undertake an independent valuation, it is difficult to see how the relevant paragraph would disclose a proper defence to the allegations in paragraphs 59–60V of Felan's Further Amended Statement of Claim. I am not persuaded by that submission. The Defence pleads material facts, namely the steps taken to obtain and the fact of Savills' assessment of the proposals and does not seek further to characterise the role of Savills. The Defendants do not assert Savills' independence and the Plaintiffs do not impugn it by their pleadings, and it is not, in my view, a matter that is presently in issue in the proceedings. Whether the Defendants' Defence in that regard will be of any advantage to them is a matter to be determined at the final hearing, and I will not read additional matters into the Defendants' pleaded Defences because, in the Plaintiff's view, they would be less effective without them. Mr Carey also refers to a document produced on discovery relating to a board request that an "independent" assessment of the proposals by Felan's and BM be undertaken. I accept that document may suggest that the Savills' review was, or was intended to be, independent, but that matter does not put that proposition in issue, where SFM and the Directors do not seek to advance it and Felan's does not seek to contend to the contrary. 3. This category appears to be directed to an investigation of the unpleaded issue as to the independence of Savills, or possibly — although Felan's did not suggest this — to a substantive evaluation of the merit of the Fishbank Proposal or the Brookfield Proposal. Where neither issue is raised by the pleadings and neither is in issue in the proceedings, I am not satisfied that discovery in this category is reasonably required for the fair resolution of the real issues in the proceedings and will not order discovery within that category. Felan's proposed categories 11–12 1. Felan's proposed category 11 relates to minutes of the meeting of the directors of Buyers held on 24 February 2015 and copies of all board papers and other documents attached to those minutes or provided to the directors of Buyers in advance of that meeting. Felan's proposed category 12 relates to letters and emails exchanged between SFM and several other persons on the one hand and Buyers and several other persons on the other over a four month period in relation to six topics. 2. In support of these categories, Mr Fraser refers to events concerning an attempt to replace three nominee directors on the SFM board whom he characterises as aligned with the Brookfield Proposal with three nominee directors whom he characterises as aligned with Fishbank and to the fact that SFM did not accept the validity of the appointment of Messrs Imisides and Manettas in place of Messrs Poulos and Kouros as Buyers' nominee directors on SFM's board. Mr Fraser also refers to Felan's allegation that a "purported" meeting of the SFM board on 21 April 2015 at which the April 2015 Resolutions were purportedly passed was not a valid meeting as a quorum was not present as required by cl 59 of SFM's constitution, because Messrs Imisides and Manettas did not attend that meeting, and also submits that the validity of meetings of Buyers shareholders on 25 February 2015 and 4 March 2015 are issues in the proceedings and refers to the detailed pleadings addressing these issues. Mr Fraser also expresses the view that these matters are relevant to the Directors' purpose in purporting to pass the April 2015 Resolutions. Mr Fraser's evidence is that: "[Felan's] seeks discovery of the documents at Categories 11 and 12 which [Felan's] considers are relevant to the issue of whether the resolution passed at the 25 February 2015 meeting of the Buyers' directors was passed bona fides and in the best interests of Buyers and for a proper purpose, which in turn is relevant to the determination of the issues in the proceedings referred to in paragraph 47 [of Mr Fraser's affidavit]. However, just as importantly the content of documents at Category 12 are also relevant to issue of whether the April Resolutions were passed for a proper purpose." 1. Mr Webster responds that Felan's Further Amended Statement of Claim does not allege that the resolution passed at the 25 February 2015 meeting of Buyers' was not passed bona fides and in the best interests of Buyers or was not passed for a proper purpose and that discovery in these categories is not necessary for the resolution of the real issues in dispute in the proceedings. 2. I would accept that Felan's would be entitled to discovery of the minutes of the board meeting on 24 February 2015, board papers and other associated documents to the extent that they related to matters in issue in the proceedings. However, the formulation of its proposed category 11, together with other similar categories, appears to be intended to require that the Defendants discover board papers and other documents even if they do not relate to the matters in issue in the proceedings. Felan's proposed category 12 is not restricted by any limitation to the matters in issue in the proceedings. I am not satisfied that discovery of this width is reasonably required for the fair resolution of the real issues in the proceedings and I will not order discovery in these categories. Felan's proposed categories 13–18 1. Felan's proposed categories 13–18 seek discovery of documents and communications relating to an exclusivity agreement entered into between a company associated with Mr Poulos, Australian Fishing Industries Pty Ltd, and BM. Mr Fraser's evidence is that: "[Felan's] seeks discovery of the documents at Categories 13 to 16 which will disclose whether [Mr] Poulos had a material personal interest in the affairs of each of Buyers and SFM as a result of the agreement between [BM] and [Mr] Poulos, and if so, if and when [Mr] Poulos gave notice to the directors of Buyers and SFM respectively of that material personal interest, and will also disclose the content of such notice/s." 1. Mr Fraser supports categories 17 and 18 as directed to the content of any exclusive agreement between Mr Poulos and BM and as to SFM's knowledge of and any actions it took in response to such an agreement. There are no pleaded facts, or issues, as to the extent of or legal significance of any such interest of Mr Poulos or his associated company or SFM's knowledge of or response to it. I do not accept Mr Fraser's claim that these matters are "relevant to the issue of whether the directors of SFM were acting in good faith and in the best interests of SFM and or for a proper purpose when they passed the April 2015 Resolutions" where these matters are not pleaded. Mr Fraser also expresses the view that documents within Felan's proposed categories 12–18 fall within what is required to be discovered under Felan's proposed category 2. That view seems to me to be incorrect, even if discovery had been ordered within that category, where there is no pleaded allegation as to these matters. 2. Mr Webster responds, in his affidavit, that these matters are not pleaded in Felan's Further Amended Statement of Claim; there is no allegation that Mr Poulos had a material personal interest in the affairs of Buyers or SFM as a result of any agreement with BM; and that discovery in Felan's proposed categories 13–18 is not necessary for the resolution of the real issues in dispute in the proceedings. Mr Kidd also submitted that the discovery sought in these categories was not supported by any reference to any issue as to any agreement between Mr Poulos, his company and BM in the pleadings, or by any allegation of conflict of interest or failure to disclose against Mr Poulos. 3. Neither the material facts of any dealings between BM, Mr Poulos or his associated company nor any issue in respect of them are pleaded and I will not order disclosure in these categories. I would also not order disclosure in the form sought in Felan's proposed categories 14 and 16 so far as they are structured, as with other similar paragraphs in Felan's proposed discovery categories, so as to seek to require disclose of attachments to minutes of directors' meetings whether or not they relate to matters in issue in the proceedings. Felan's proposed category 18 relates to letters and emails exchanged between several persons over a twenty-month period relating to arrangements between the company associated with Mr Poulos and SFM. I am not satisfied that discovery of this width is reasonably required for the fair resolution of the real issues in the proceedings and I will not order discovery in that category for the same reasons. Felan's proposed categories 19–20 1. Felan's proposed category 19 relates to documents containing information about the Fishbank Proposal presented or provided by Mr Skepper or any other representatives of SFM to the directors of Catchers at a meeting on 1 May 2014. Felan's proposed category 20 seeks discovery of correspondence and emails between SFM and others on the one hand and Catchers and others on the other over an extended period in relation to the Fishbank Proposal, Fishbank or Mr Deans, or Felan's. 2. Mr Fraser refers to dealings between Mr Deans and Catchers as to the Fishbank Proposal and to evidence led in the Defendants' case as to those matters in support of these categories. Mr Fraser expresses the view that, perhaps not surprisingly, Messrs Skepper and Turk of SFM were communicating with one or more of the Catchers' directors in relation to the Fishbank Proposal and the Brookfield Proposal and his evidence is that: "Felan's seeks discovery of the documents in Categories 19 and 20 which may disclose the extent of the involvement of SFM in the decision of the Catchers Board made at their meeting on 1 May 2014 and in the issue of the 5 May 2014 letter by Catchers to SFM. The documents in Category 14 [sic] are also relevant to the purpose for which SFM directors passed the April 2015 Resolutions." Mr Fraser also expresses the opinion that documents within Felan's proposed categories 19 and 20 fall within what is required to be discovered under Felan's proposed category 1. That view seems to me to be incorrect, even if discovery had been ordered within that category. 1. Mr Webster's evidence in response is that there is no allegation in the proceedings that SFM was or was not, or should or should not have been, involved in the decision the Catchers' board made at its meeting on 1 May 2014 and that discovery of Felan's categories 19 and 20 is not necessary for resolution of the real issues in dispute in the proceedings. Mr Webster also points out that Felan's proposed category 20 would require discovery of all communications between any of a group of five people or entities (some of which comprise many members) and any of a group of five other entities or groups of people (some of which also contain many members) over a period totalling 12 months "in relation to or concerning in whole or in part" any of the Fishbank Proposal, Fishbank and/or Mr Robert Deans or Felan's. Mr Webster indicates that, in SFM's submission, discovery in that category is not necessary for resolution of any real issue in dispute in the proceedings. 2. Felan's proposed category 19 appears to be relatively narrowly drafted and to relate to matters in issue in the proceedings and I would allow discovery in that category. Felan's proposed category 20 extends to any letter or email referring to any of the specified persons, relating to the general topics specified, irrespective of whether it had any relationship to the particular matters in issue in the proceedings. I am again not satisfied that discovery in so wide a category is reasonably required for the fair resolution of the real issues in the proceedings and I will not order discovery of that width. Felan's proposed category 21 1. This proposed category seeks discovery of: "All letters and emails including attachments thereto (however described) exchanged between SFM or its solicitors on the one hand and on the other hand each of – (a) Klaudios Pty Ltd or its legal representatives, (b) M & G Oyster Supplies Pty Ltd or its legal representatives, (c) Nick's On Line Pty Limited or its legal representatives, (d) Redaze Pty Ltd or its legal representatives, (e) Transtasman Fisheries Pty Ltd or its legal representatives, respectively in the period between 22 April 2015 and 31 May 2015 in relation to notices issued to each of them by SFM and or SFM's solicitors on or about 22 April 2015." 1. In support of this category, Mr Fraser refers to Mr Skepper's evidence of correspondence between several shareholders in Buyers and SFM's solicitors in relation to notices of breach and notices to quit and expresses the view that this is relevant to the issue whether, in passing the April 2015 Resolutions, the Directors were acting in good faith and in the best interests of SFM and for a proper purpose. Mr Fraser also expresses the view that documents within this category fall within Felan's proposed category 1. That view also seems to me to be incorrect, even if discovery had been ordered within that category. 2. Mr Webster responds that the correspondence sought by this category postdates the 22 April 2015 Resolutions, and that it is "logically difficult" for Felan's to sustain an argument that that correspondence sought bears in any way upon the purpose of SFM's directors in passing the earlier April 2015 Resolutions. That proposition should be left for trial and is not an answer to discovery. SFM also offers to provide Felan's with all of the correspondence referred to in the relevant paragraphs of Mr Skepper's affidavit informally and submits that will dispose of the need for discovery in this category. Mr Fraser responds to these matters in his affidavit in reply and indicates that Felan's presses for formal discovery in this category. I will order discovery in that category where the documents have been deployed in part in SFM's case. Felan's proposed categories 22–28 1. Felan's proposed category 22 refers to: "Letters and emails including all attachments (however described) exchanged between SFM or Skepper or SFM's legal representatives on the one hand and on the other hand Dahua [Group Fish Market Project Pty Ltd and its subsidiaries and other related entities ("Dahua")] or its representatives or Felan's or its representatives (in each case including legal representatives) in the period between 22 April 2015 and 1 December 2015." 1. Mr Fraser's evidence is that (Fraser 4.9.17 [80]): "[Mr] Skepper says that "some" of the correspondence concerning the Felan's tenancy and exchanged between King & Wood Mallesons and K & L Gates in the period from 13 May 2015 to 16 June 2015 is included in Exhibit BAS at Tab 79". 1. Mr Fraser's evidence is also that this category will show "[w]hat information and documents SFM or its representatives sought from Dahua or its representatives or Felan's and its representatives" and "[w]hat information and documents Dahua or its representative or Felan's or its representatives supplied to SFM or its representatives" in order: "to enable SFM to consider the factors which SFM says it would usually consider in determining whether to grant a new lease or consent to an assignment to a new tenant, including as to the identity of the tenant, and are relevant to show the true purpose of SFM and its directors in refusing to grant a new lease of the Felan's premises to Felan's." 1. Mr Webster's evidence in response is that SFM is prepared to provide Felan's with all of the correspondence exchanged between Dahua's solicitors and SFM's solicitors in the period 13 May 2015 to 1 December 2015 informally and that will dispose of the need for discovery in relation to this category. Mr Fraser's evidence in reply is that Felan's presses for formal discovery in this category. I will order discovery in that category where the documents have been deployed in part in SFM's case. 2. Felan's proposed category 23 seeks discovery of: 1. "Letters and emails including all attachments (however described) exchanged between Skepper on the one hand and on the other hand any one or more of the directors of SFM in the period from 22 April 2015 to 31 July 2015 in relation to the concerns which Skepper had in offering a new lease to Felan's or Dahua." 1. Mr Fraser's evidence is that the documents in this proposed category are relevant to the true purpose of SFM and its directors in not granting or causing to be granted a new lease of the Felan's premises to Felan's. Mr Webster's evidence in response is that SFM submits that discovery should not be ordered in this category because Mr Skepper's evidence is that he had discussions, not written communications, with the SFM directors between April 2015 and June or July 2015, and his evidence is that the communications were oral and not written. That evidence is not conclusive of that fact so far as the question of discovery is concerned. Mr Webster also submits that, to the extent that Felan's relies upon paragraph 122 of Mr Skepper's affidavit to support an order for discovery, the discovery it seeks is for a period which is much broader than the evidence would support. I will order discovery in this category, where the question of a new lease to Felan's is plainly in issue and the category should cause no practical difficulty if, as SFM contends, the relevant communications were oral in any event. 2. Felan's proposed category 24 relates to dealings between SFM or Mr Skepper or SFM's legal representatives on the one hand and the owner of a third party business in relation to the grant of a lease by SFM to the owner of that business in September 2014. Felan's proposed category 25 relates to minutes of a board meeting concerning that matter and again extends to attachments whether or not relevant to the matters in issue in the proceedings. Felan's proposed category 26 relates to documents concerning the assignment of sub-leases or licences of a third party and proposed category 27 relates to the minutes of the SFM board meeting at which that assignment was discussed, again without limitation to matters in issue in the proceedings. Felan's proposed category 28 is broadly similar to proposed category 26, but appears to relate to a prospective assignment by another third party to a prospective purchaser of its business. 3. Mr Fraser's evidence is that the documents in its proposed categories 24–28 will show what factors SFM took into account in making its decisions to grant leases and or to consent to the assignment of leases to new lessees and assignees in respect of various third party transactions. Mr Webster responds that: "Felan's Categories 24 to 28 seek discovery of documents in relation to grants of leases or assignments of leases to tenants which have nothing to do with these proceedings or with any allegation pleaded by Felan's in its Further Amended Statement of Claim. [Mr] Skepper gives evidence of the matters he actually considered in deciding whether a new lease should be granted to Felan's. SFM submits that matters considered in relation to different tenants, in respect of different premises, which ran different businesses and which were entirely unconnected to Felan's are not a real issue in dispute in the proceedings. SFM submits that discovery in accordance with Felan's Categories 24 to 28 is not necessary for resolution of the real issues in dispute in the proceedings." 1. I will not order discovery in those categories, where neither the material facts relating to any such lease or assignment or any issue concerning them is pleaded in the proceedings. Felan's proposed category 29 1. This category seeks production of "[l]etters and emails including all attachments (however described) exchanged between [Mr] Skepper and [Mr] Turk in the period from 22 April 2015 to 21 May 2015." In its original form, this category is not limited by reference to the matters in issue in the proceedings, and would catch correspondence and emails relating to irrelevant business matters and any personal or social matters. Mr Fraser's evidence is that the documents in this category are: "relevant to the issue of the true purpose of SFM and the directors of SFM in issuing and causing to be issued the notices to quit to Felan's, and the refusal of SFM to offer a new lease of the Felan's premises to Felan's." 1. Mr Webster responds that this category requires discovery of all letters and emails exchanged between Messrs Skepper and Turks in the specified period; makes no attempt to confine discovery to the real issues in dispute in the proceedings; is not supported by Mr Skepper's evidence that he had discussions with Mr Turk in the period, rather than that he engaged in written communications with Mr Turk in the period; and is not necessary for resolution of the real issues in dispute in the proceedings. Mr Fraser proposed, for the first time in his affidavit evidence in reply, a limitation to this proposed category to restrict it to communications relating to Felan's, the six shareholders, their tenancies and their relationships with Fishbank and/or the Fishbank Proposal. 2. I will not order discovery in that category, where it still extends well beyond the matters in issue to seek, for example, any correspondence referring to Felan's, Fishbank or the Fishbank Proposal, rather than correspondence linked with the matters in issue in the proceedings. It does not seem to me that discovery of that width is reasonably necessary for the fair resolution of the real issues in the proceedings. Felan's proposed categories 30–32 1. Felan's proposed category 30 seeks production of: "Letters and emails including all attachments (however described) exchanged between any of the following persons and any one or more of any other of those persons: (a) Skepper, (b) Turk, (c) Standen, (d) Hook, (e) Poulos, (f) Kouros, (g) Symonds, and (h) Gallagher, in the period from 1 January 2015 to 1 December 2015 in relation to any one or more of – (i) Felan's, (j) Fishbank, (k) Dahua, (l) Bidvest, (m) The Fishbank Proposal." 1. Mr Fraser's evidence is that discovery in this category: "may disclose the belief of the directors of SFM about Felan's association with Fishbank which is relevant to show the whether the SFM directors in passing the April 2015 Resolutions and in refusing to offer a new lease of the Felan's premises to Felan's were acting in good faith and in the best interests of SFM and for a proper purpose." Mr Fraser also expresses the view that the documents within this category fall within what is required to be discovered under Felan's proposed categories 1 and 4, as to which I have not ordered discovery. 1. Mr Fraser also refers to Felan's allegations, in paragraphs 72A, 106–107 and 112L of the Further Amended Statement of Claim that several SFM directors believed that from at least 15 April 2015 there was an agreement in existence between Fishbank and Felan's (or a related entity of Felan's) in relation to the Fishbank Proposal, which is denied by the Defendants; that, when the April 2015 Resolutions were passed, several directors of SFM purported to pass those resolutions in the belief that Felan's was an associate of Fishbank or would support, promote and advocate for the Fishbank Proposal, which is not admitted by the Defendants; that the Directors passed resolutions for purposes which included eliminating or reducing support amongst the Buyers shareholders for the Fishbank Proposal, which is denied by the Defendants; and that several directors of SFM did not cause SFM to offer to Felan's a new lease or licence in the belief that Felan's was an associate of Fishbank and or would support, promote and advocate for the Fishbank Proposal, which is not admitted by the Defendants. Mr Fraser also refers to paragraph 107 of the Defences which pleads that the April 2015 Resolutions were passed in accordance with legal advice and for the purpose of ensuring that SFM's headlease of the Sydney Fish Market site was not terminated and to the Directors' evidence as to these matters. 2. Mr Webster's evidence in response, by way of submission, is that this category does not limit discovery of documents to those necessary for resolution of the real issues in dispute in the proceedings; he rightly accepts that letters and emails in relation to the April 2015 Resolutions or the decision not to offer a new lease to Felan's may relate to the real issues in dispute in the proceedings; but submits that this category, in the terms sought, is drafted too broadly and should not be ordered as it captures documents which are not necessary for resolution of the real issues in dispute in the proceedings. 3. This proposed category seeks discovery of letters and emails between any one or more of 8 persons, within many potential combinations, over a period of a year in relation to any one or more of the four specified corporate entities or the Fishbank Proposal. It is again not limited to the specific issues raised in the proceedings and would extend to correspondence between any of those persons relating to any aspect of any dealing or any subject involving any of those four corporate entities or the Fishbank Proposal. I am also not satisfied that discovery on a category of that width is reasonably necessary for the fair resolution of the real issues in the proceedings and I will not order discovery in that form. 4. Felan's proposed category 31 seeks production of: "The letters and emails or memoranda containing the legal advice from K&L Gates to SFM or any one or more of the defendant directors in relation to – (a) The subject matter of the advice given by K&L Gates to SFM on each of 4 March, 2015, 16 March 2015, 15 April 2015 and 15 April 2015, (b) The appointment or potential appointment of 2 new Buyers' nominee directors to the SFM Board in or about early 2015 in place of Poulos and Kouros (Fishbank aligned directors), (c) What action SFM or its directors could be take [sic] to frustrate the progress of the Fishbank proposal and or to nullify the consequence of the Fishbank aligned directors being appointed to the SFM Board could be delayed or obstructed, (each such advice being a relevant legal advice)." 1. Felan's proposed categories 32 seeks production of: "All documents comprising, containing, recording or attaching (a) the instructions given to K&L Gates by or on behalf of SFM for each relevant legal advice, (b) draft versions of each relevant legal advice, (c) correspondence between K&L Gates and SFM (and or its representatives and or its servants or agents) in relation to each relevant legal advice, whether that correspondence occurred before or after that relevant legal advice was given to SFM, (d) letters and emails from K & L Gates under cover of which K & L Gates provided SFM with copies of letters and emails exchanged between K & L Gates on the one hand and on the other hand the solicitors acting for the Buyers' shareholders to whom SFM issued notices of breach and notices to quit on 22 April 2015, and (e) the invoice/s which was issued by K&L Gates for giving each relevant legal advice to SFM." 1. Mr Fraser's evidence is that several of the legal advices are included in the exhibits to the Defendants' affidavits and he notes Felan's submission that legal professional privilege in these legal advices and any other legal advices relating to the same subject matter have been waived. Mr Fraser expresses the view that documents in Felan's proposed categories 31 and 32 are relevant to the true purpose of the Directors in passing the April 2015 Resolutions and in not taking steps to cause SFM to offer a new lease to Felan's. 2. Mr Webster's acknowledges, in his evidence in response, that several of the Directors have led evidence of the legal advice on which they relied. His evidence, by way of submission, is that the relevant advice is letters from SFM's solicitors dated 4 March 2015 and two letters of advice dated 15 April 2015 which have been exhibited to the affidavits of Mr Skepper or the Directors. Mr Webster submits that a reference in footnote no. 6 of the letter of advice of 15 April 2015 to "our advice provided to you on 16 March 2015" is not a waiver of legal professional privilege with respect to the advice provided on 16 March 2015. That matter should be left for determination at trial and that letter should be discovered, subject to any proper claim for privilege. Mr Webster also submits that there is no allegation or evidence that any of the documents which are the subject of Felan's proposed category 32 were provided to or considered by the Directors when passing the April 2015 Resolutions or deciding not to cause SFM to offer a new lease to Felan's and that discovery in proposed categories 31 and 32 is not necessary for resolution of the real issues in dispute in the proceedings. 3. I will order discovery in category 31, where legal advice is relevant to the matters in issue and has been deployed by SFM and the Directors at least in part, but only of documents dated or brought into existence prior to the date of commencement of these proceedings, and subject to any proper claim for legal professional privilege by SFM or the Directors. I will also order discovery within proposed categories 32(a)–(d), so far as they relate to the legal advices discovered in paragraph 31, but only so far as such documents were dated or brought into existence prior to the commencement of these proceedings. I will not extend that disclosure to invoices issued by the solicitors for giving each relevant legal advice, which does not seem to me to have any relevance to the matters in issue in the proceedings. Felan's proposed categories 33–34 1. Felan's proposed category 33 seeks disclosure of letters and emails including all attachments (however described) exchanged between any of specified persons including Mr Skepper and some of the Directors in the period from 19 April 2016 to 17 May 2016 in relation to any one or more of Felan's, Fishbank, Dahua, Bidvest Australia Limited ("Bidvest"), and the Fishbank Proposal (as defined). Felan's proposed category 34 is in similar form in respect of the period after 17 May 2016. 2. Mr Fraser refers (in respect of discovery category 33) to paragraphs 120I and 120J of the Further Amended Statement of Claim where Felan's pleads that relevant Directors from 19 April 2016 to 17 May 2016 did not cause SFM to offer to Felan's a new lease or licence in that period in the belief that Felan's was an associate of Fishbank or would support, promote and advocate for the Fishbank Proposal for purposes which included eliminating or reducing support amongst the Buyers shareholders for the Fishbank Proposal, which are respectively not admitted and denied by the Defendants. Paragraphs 124G–124H plead corresponding allegations as to the period after 17 May 2016 and paragraphs 124X–124Y plead that the relevant Directors authorised the issue of further notices to quit in October 2016 and did not take steps to cause SFM to offer Felan's a new lease and licence after notices to quit were issued to Felan's in October 2016 for the same purposes. 3. Mr Fraser's evidence is that the documents in proposed categories 33–34 "may disclose the belief of the directors of SFM about Felan's association with Fishbank which is relevant to show the true purpose of SFM's directors in not causing SFM to offer a new lease of the Felan's premises to Felan's" in the periods from 19 April 2016 to 17 May 2016 and after 17 May 2016. Mr Fraser also expresses the view that documents within those categories would fall within what is required to be discovered under Felan's proposed category 4. Mr Webster's evidence in reply, by way of submission, is that: "Felan's Categories 33 and 34 make no attempt to confine the documents to be discovered to those necessary for resolution of the real issues in dispute. For example, letters and emails in relation to the SFM directors' decision not to offer Felan's a new lease may be a real issue in dispute in the proceedings. However, SFM submits that Felan's Categories 33 and 34, in the terms sought, should not be ordered as they require discovery of documents which are not necessary for the resolution of the real issue in dispute in the proceedings." 1. Felan's proposed category 33 again seeks discovery of letters and emails between 8 persons, in many possible combinations, concerning Felan's and three other companies and the Fishbank Proposal (as defined) over the period from 19 April 2016 to 17 May 2016, unconfined by any link to the particular matters in issue in the proceedings. Felan's proposed category 34 takes a similar form in respect of the period after 17 May 2016, apparently to date and extending through the period in which these proceedings have been under way. I am not satisfied that discovery in categories of that width is reasonably necessary for the fair resolution of the real issues in the proceedings and I will not order discovery in those categories. Felan's proposed category 35 1. Felan's proposed category 35 seeks discovery of letters and emails including all attachments (however described) exchanged between Mr Skepper on the one hand and on the other hand any of Messrs Poulos, Kouros, Cowdroy and Jeffreson in the period from in or about 1 July 2014 and 31 December 2014 in relation to the Fishbank Proposal (as defined) and or the Brookfield Proposal (as defined). 2. Mr Fraser refers to a resolution passed by the Buyers' board on 7 August 2014 to support in principle the redevelopment of the Sydney Fish Market and to Mr Skepper's evidence as to that matter and SFM's suggested termination of an exclusivity arrangement with BM. Mr Fraser's evidence is that Felan's seeks discovery in this category "to show what the Buyers board or one or more of its directors communicated to [Mr] Skepper in writing about its or their reasons for passing the 7 August 2014 resolution". Mr Webster's evidence in response, by way of submission, is that: "Felan's Category 35 requires discovery of documents in relation to issues much broader than those described in paragraph 116 of the Fraser Affidavit. Further, there is no allegation in Felan's Further Amended Statement of Claim about the reasons of the board of Buyers for passing any resolution on 7 August 2014, or that the directors of Buyers communicated with [Mr] Skepper in relation to any such resolution or the board's reasons for passing it. In SFM's submission, discovery of Felan's Category 35 is not necessary for resolution of the real issues in dispute in the proceeding." 1. This proposed category is again not limited by any further restriction to the matters in issue in the proceedings and would extend to correspondence between the named persons which had no connection with those matters. I am not satisfied that discovery of that width is reasonably necessary for the fair determination of the real issues in the proceedings and I will not order discovery in this form. Felan's proposed categories 36–37 1. Felan's seeks discovery in these categories of: "The documents which constitute the agreement made between SFM and [BM] to terminate the exclusivity agreement which they entered into in or about December 2014, or if there are no such documents, the document which record that agreement. Letters and emails including all attachments (however described) exchanged between SFM or its representatives (including legal representatives) on the one hand and [BM] or its representatives (including legal representatives) in relation to the termination of the exclusivity agreement entered into in or about December 2014 between SFM and [BM]." 1. Mr Fraser's evidence is that Felan's seeks discovery in these categories: "to show whether the Exclusivity Agreement was in fact terminated in February 2015 and to show the purpose of SFM in relation to that termination, which is also relevant to the true purpose for which the SFM directors passed the April 2015 Resolutions." 1. Mr Webster's evidence in response, again by way of submission, is that there is no issue in the proceedings as to when SFM terminated the Exclusivity Agreement with BM; no allegation is made in Felan's Further Amended Statement of Claim that termination of the Exclusivity Agreement is connected or relevant to the purpose for which the Directors passed the April 2015 Resolutions; Mr Skepper's evidence is that SFM and BM mutually agreed to terminate the Exclusivity Agreement; Felan's is not entitled to discovery of documents to test whether each or any issue deposed to by one of the Defendants' witnesses "in fact" occurred; and discovery in these categories 36 and 37 is not necessary for resolution of the real issues in dispute in the proceedings. 2. It seems to me that SFM pleads, as a matter of fact, the termination of the arrangement with BM and I will order discovery in proposed category 36, which is relevant to whether that arrangement was terminated. No issue is pleaded beyond the fact of that termination and I am not satisfied that discovery in proposed category 37 is reasonably necessary for the fair determination of the real issues in the proceedings. Felan's proposed categories 38–41 1. Felan's seeks discovery in these categories of: "All documents which disclose who occupied the Felan's premises in the period after 16 July 2006 and the terms of that occupation. The documents which constitute the offer of a new lease of the Felan's premises made by SFM to Felan's or Bidvest in or about August 2014 (new lease offer). Letters and emails including all attachments (however described) sent by Felan's or Bidvest in or around August 2014 and by which Felan's or Bidvest declined the alleged new lease offer. The complete and unredacted minutes of the meeting/s of the SFM Board at which it authorised SFM to make the new lease offer." 1. Mr Fraser refers to a question whether Felan's, or possibly Bidvest, occupied Felan's premises in the period following the expiry of the initial term on 16 July 2006 and seeks discovery in proposed category 38 on the basis that it is relevant to the issue of who was the occupier of the Felan's premises in the period after 16 July 2006. It appears that question has been raised in Felan's Further Amended Statement of Claim and its particulars, and one of the Defendants' witnesses also refers to it. The pleadings also raise a dispute as to whether SFM offered Felan's a new lease of Felan's premises in or around August 2014, but that offer was declined. Mr Fraser's evidence is that the documents in categories 39 and 40 are relevant to show whether an offer of a new lease of the Felan's premises was made to Felan's (or to Bidvest) and whether such an offer was declined by Felan's. I am satisfied that discovery should be ordered in these categories. 2. Mr Fraser also identifies an unpleaded contention that, for the alleged offer of a new lease to Felan's to be an offer for the purposes of cl 3.1(c)(viii) of a Shareholders Agreement, it would need to be authorised by a resolution of the SFM board passed by a majority of directors which included both of the Buyers' nominee directors on the SFM board, pursuant to cl 50 of SFM's constitution. Mr Fraser's evidence is that the documents in category 41 are relevant to the issue of whether SFM made that offer. Mr Webster responds, by way of submission, that the real issues in dispute in the proceedings are to be ascertained by reference to the pleadings; no allegation is made by Felan's in its Further Amended Statement of Claim or Reply to the effect deposed to in Mr Fraser's affidavit; and discovery in this category is not necessary for resolution of the real issues in dispute in the proceedings. Mr Webster responds in his affidavit, by way of submission, that, if SFM's primary submission that the documents are not discoverable is not accepted, then discovery of the minutes of the relevant board meeting should be limited to those portions of the minutes that relate to the offer of a new lease to Felan's, with access restricted to Felan's solicitors on record and counsel for Felan's. I accept that the minutes may properly be redacted for relevance, but is not clear to me that this matter has any apparent commercial confidentiality such as to warrant a restriction on access. 3. These categories relate to confined categories of documents, apparently relevant to matters of fact alleged in the proceedings, and I will order discovery in these categories, omitting the words "complete and unredacted" in category 41 so that minutes may be redacted to obscure matters that are not in issue in the proceedings. Felan's proposed categories 42–43 1. Felan's seeks discovery in these categories of: "Letters and emails or documents recording communications received by SFM from the public and which contain complaints about rubbish and odours at the Sydney Fish Market site and which are referred to in paragraph 128 of the affidavit of Bryan Allan Skepper dated 29 May 2017 and served in these proceedings. All reports obtained by SFM in the period from 1 January 2013 to 31 October 2015 in relation to workplace health and safety, waste storage and disposal and or environmental management at the Sydney Fish Market site, including but not limited [sic] reports outlining problems and or available solutions and or the costs of implementing those available solutions." 1. Mr Fraser refers to Mr Skepper's and the Directors' evidence as to concerns as to waste management at SFM and to the use of Felan's premises, after its occupancy was terminated, to address that issue. Mr Fraser's evidence is that "[Felan's] seeks discovery of the documents in Categories 42 and 43 which will show the extent to which workplace, health and safety and waste and environmental management were long held and genuine concerns of Skepper and SFM's directors, and the extent to which alternatives to address the alleged concerns had been professionally considered. While it is not pleaded in the Defences, [Felan's] expects that the defendants will assert that the above evidence is relevant to the exercise of the court's discretion to grant the injunction sought by [Felan's]." 1. Mr Webster responds, by way of submission, that an order requiring it to discover all reports obtained in a 36 month period in relation to workplace health and safety, waste storage and disposal or environmental management is not necessary for resolution of the real issues in dispute in the proceedings and that, if any order is to be made, it should be limited to Felan's proposed category 42. 2. It seems to me that, although category 42 might properly have been the subject of a notice to produce rather than a discovery application, an order for discovery in that category should be made as a matter of convenience. Proposed category 43 plainly extends well beyond the matters in issue and I will not order discovery in that category. Felan's proposed category 44 1. Mr Fraser's evidence is that the exhibits to the Defendants' affidavits contain copies of only some of the minutes of meetings and board papers in the period from 1 January 2013 to 31 December 2015, and those that are exhibited are heavily redacted and or do not include all annexures referred to in those minutes or in the board papers. Mr Fraser's evidence is that this proposed category seeks discovery of complete and unredacted copies of all minutes and board papers in the relevant period to show certain matters, several of which relate to unpleaded matters to which I have referred above. I would not order discovery in this category on that basis. 2. However, it seems to me that Felan's should have the opportunity to confirm that relevant matters have not been omitted from redacted minutes and board papers on which SFM relies. For that reason, I will order disclosure in substantially the alternative form identified in Mr Webster's affidavit, of: "Copies of minutes and board papers for each of the SFM board meetings referred to in affidavit of Bryan Skepper sworn 29 May 2017, with access restricted, until further order of the court, to Felan's solicitors on the record and Counsel for Felan's." Mr Fraser's affidavit in reply indicates that Felan's will accept a limitation on access to its "legal advisers", which may or may not be intended to be a wider class of persons than those with conduct of these proceedings. I will order discovery in this category with the limitation on access proposed by SFM. Costs of discovery 1. There is a dispute between the parties as to the extent of costs that would be incurred in giving discovery within the relevant categories. Mr Carey pointed out, in submissions, that Mr Fraser's calculation of the costs incurred in giving searches within proposed categories 6–44 was the additional cost involved, beyond his estimate of giving discovery in proposed categories 1–5. As a matter of impression, it seems to me that the Defendants are likely to be correct in their submission that Mr Fraser's estimate of costs would substantially understate the costs involved, both for SFM and for the Directors, where their solicitors would need to make inquiries of the relevant Defendants individually. However, that matter is of lesser significance where I have only been persuaded that discovery should be ordered in several narrower categories. Orders and Felan's further formulation of its discovery categories 1. The parties should bring in agreed short minutes of order to give effect to this judgment, including as to costs, within 7 days. Felan's has had had some, but limited, success in the application which could have been determined in a much shorter period had Felan's approached discovery with adequate attention to the matters in issue in the hearing and the requirements of Supreme Court Equity Practice Note 11. My preliminary view is that Felan's should pay two-thirds of the Defendants' costs of the application, but the parties may make any further submissions as to costs, not exceeding 5 pages in one and a half spacing, if they wish to contend for a different result, also within 7 days. 2. At the conclusion of the hearing of Felan's Notice of Motion, and notwithstanding that this was the second occasion on which Felan's had sought discovery without, in my view, properly limiting it to matters that are in issue in the proceedings, I gave leave to Felan's to formulate, and provide to the parties and my Associate, a list of categories formulated in a more straightforward way, by reference to the pleaded issues. Those categories were provided, as an alternative to proposed categories 1–5 that I have addressed above, by Felan's on 11 September 2017 and my preliminary view is that they may adopt a more appropriate approach to discovery. The parties should include orders for discovery in those categories in the short minutes of order to be submitted in accordance with paragraph 90 above, to the extent that those categories be agreed, and address any disputed categories in submissions lodged with my Associate at the same time as those orders, indicating whether an oral hearing is requested. ********** 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: 21 September 2017