Supreme Court New South Wales Medium Neutral Citation: Searle v Commonwealth of Australia [2018] NSWSC 105 Hearing dates: 9 February 2018 Date of orders: 13 February 2018 Decision date: 13 February 2018 Jurisdiction: Common Law Before: Garling J Decision: 1. Order that the Notice of Motion filed by the Commonwealth on 9 February 2018 seeking leave to amend its Defence, be dismissed. 2. Order the defendant to pay plaintiff's costs of that Motion. 3. With respect to Notice of Motion of the Commonwealth dealing with the Notice to Produce served by the plaintiff dated 31 January 2018, decline to require production of the documents in accordance with that Notice. 4. Direct that an Amended Notice to Produce be served on or before 5pm 13 February 2018 which deletes paragraph 4 of the existing Notice of Motion, and limits the documents or things to be produced to the plaintiff and a sample of 10 sailors whose names are to be agreed between the parties. 5. The costs of this Notice of Motion are to be costs in the cause. 6. Stand the Notice of Motion over for production before trial judge at 10am on 5 March 2018. Catchwords: CIVIL PROCEDURE – leave to amend defence to add a pleading of failure to mitigate – prejudice to plaintiffs – interests of justice – Civil Procedure Act 2005 s 58 – leave refused CIVIL PROCEDURE – case management – notice to produce documents – where accuracy of records is uncertain – limitation placed on notice to produce Legislation Cited: Civil Procedure Act 2005 Cases Cited: Aon Risk Services Pty Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Texts Cited: Not Applicable Category: Procedural and other rulings Parties: Clayton William Searle (P) Commonwealth of Australia (D) Representation: Counsel: N Kidd SC (P) G Sirtes SC / J A Steele (D) Solicitors: Levitt Robinson (P) Norton Rose Fulbright (D) File Number(s): 2016/45027 Publication restriction: Not Applicable Judgment 1. In this matter, on Friday, 9 February 2018, I heard argument and reserved judgment on two matters. The first matter is whether the Commonwealth ought be permitted to amend its Defence, and the second matter related to the terms of a Notice to Produce served by the plaintiff on the defendant. This judgment is given orally, and with necessarily truncated reasons, by reason of the proximity of the commencement of the hearing of this matter. 2. By way of background, the proceedings were commenced in 2016 and first came before the Court on 20 May 2016. Thereafter, as with other representative proceedings, the matter has been case managed judicially with a series of hearings intended to ensure that all preliminary matters are dealt with in a timely way so as to enable the proceedings to be heard expeditiously. 3. At a judicial management hearing on 11 November 2016, the date for the hearing of the plaintiff's claim and associated common issues was fixed to commence on 19 February 2018, with an estimate of four weeks. Considerable preparations have been undertaken. The parties have attended a mediation and the two issues, the subject of this judgment, were first put before the Court for its determination on 9 February 2018. 4. I will deal with the question of amendment first. 5. The Commonwealth seeks leave to amend its Defence to add a pleading that the plaintiff failed to mitigate his loss in two respects: first, by failing to remain in the Navy for a sufficient period to enable him to complete all remaining training necessary to achieve a Certificate III qualification and, secondly, by failing, after his discharge from the Navy, to undertake and complete such remaining training, thereby to obtain the Certificate III qualification. 6. The evidentiary basis for the pleading has been known to the Commonwealth for a considerable period of time. 7. First, the Commonwealth has always had access to the personal records, including the training status, of the plaintiff referable to his period of service in the Navy. Secondly, in his affidavit sworn on 5 July 2017, the plaintiff described his decision and reasons for leaving the Navy and also his post‑discharge employment. This material appears to be the evidentiary basis upon which the Commonwealth will seek to argue, perhaps after cross‑examination, that there has been a failure by the plaintiff to act reasonably in mitigating his loss and damage. 8. As well as that evidentiary basis, it is clear that, at some time probably during the last quarter of 2017, although it is not entirely clear when, the Commonwealth instructed an expert to quantify the plaintiff's economic loss on the basis of a number of different scenarios and with various factual assumptions. One such scenario, I was informed, dealt with an assumption that the plaintiff had remained in the Navy and completed his Certificate III qualification. That is one of the two foundations of the proposed pleading. In giving such instructions to an expert, it must have been clear to the Commonwealth that it was necessary to amend its Defence to enable it to raise such evidentiary matters. 9. In seeking leave to amend its Defence, the Commonwealth has not provided any explanation, by evidence or otherwise, for the lateness of this application, which is being made about two weeks before the hearing is due to start. 10. As the plurality said in Aon Risk Services Pty Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [103], generally speaking in circumstances as exist here, where a discretion is sought to be exercised, an explanation will be called for. I regard the absence of an explanation as being a weighty matter. 11. In addition, allowing the proposed amendment would cause prejudice to the plaintiff. That prejudice emerges in a number of ways. First, the plaintiff would need to reply to the expert report served. It would take considerable time to examine the assumptions in the Commonwealth's report, formulate appropriate assumptions having regard to the amended pleading, and then instruct an expert to respond to the Commonwealth's report. The plaintiff's lawyers would be called upon to undertake that task at a time when they should be concentrating on the preparation for the upcoming hearing. Such an exercise would be a serious distraction from, and interruption to, the plaintiff's orderly preparation for trial. 12. In undertaking a response to the expert's report, the plaintiff would be put to considerable expense and there would inevitably be a delay in the proceedings. That delay would come about either because the proceedings would need to be adjourned in circumstances where it would be preferable to await the service of the report prior to the plaintiff being required to embark upon his case and the Commonwealth being required to cross-examine him on the unreasonableness of his conduct or else, even if the case were to commence, there would be inevitable delay until such report was obtained - and it could not be said that it would be likely that the hearing would be completed in the allocated time. 13. Section 58 of the Civil Procedure Act 2005 requires the Court to seek to act in accordance with the dictates of justice. This includes facilitating the just, quick and cheap resolution of the real issues in the proceedings. As well, the Court must have regard to the matters set out in s 58(2) of the Civil Procedure Act. 14. I have carefully considered each of the required matters. Ultimately, I must weigh up of the advantage and benefit to the Commonwealth in allowing the proposed amendment, and the disadvantages and prejudice to the plaintiff if such course was permitted. In addition, I am entitled to, and should have, regard to the interests of other litigants in the Court who would be affected by any delay in a hearing which has been fixed for over 12 months and what effect such order would have on the proper administration of justice. 15. I have come to the view that the application for amendment should be rejected. Putting it shortly, the amendment is very late, no explanation is offered, the plaintiff would suffer significant prejudice, including an inevitable delay in the commencement or else completion of the hearing of the proceedings and, as well, significant disruption in its preparation for the proceedings. I can see no clear way in which that prejudice to the plaintiff can be remedied. An order for costs would be insufficient. As well, any delay in the proceedings, as I have earlier remarked, would adversely affect other litigants. 16. I have concluded that it would be unjust and contrary to the dictates of justice to permit the proposed amendment. The Motion seeking such amendment ought to be dismissed. 17. The second matter which falls for consideration is the contents of the Notice to Produce dated 31 January 2018, and served by the plaintiff on the defendant with respect to production of records dealing with the content of a document served in December 2017. 18. One part of the Commonwealth's case consists of the evidence of Mr Treadwell. Mr Treadwell, putting it generally, was one of two individuals responsible for receiving signals and other correspondence about the career progress of individual sailors, including those in the cohort which can be described as the MT 2010 cohort. 19. Mr Treadwell has prepared a spreadsheet which charts the progress of each of the sailors in the MT 2010 cohort in terms of when they entered the Navy, their progress through various steps necessary to complete both Certificate III and Certificate IV qualifications, whether they remain in the Navy or have been discharged and, in respect of that progress, locations where, and the dates by which, the training has been completed. 20. The purpose of that document, as senior counsel for the Commonwealth informs the Court, is to respond to a perceived allegation made against it that the Navy was never in a position to provide either Certificate III or Certificate IV training to the sailors who form part of the group represented by the plaintiff in these proceedings. 21. The Notice to Produce appears intended to effect production of the source documents from which that particular spreadsheet has been compiled. Senior counsel for the plaintiff has informed the Court that the purpose of the Notice to Produce is to test the veracity and accuracy of the material in the spreadsheet. Senior Counsel submits that in the form in which it is presented, the spreadsheet is a potentially powerful document but one which is in effect unexaminable as to its accuracy. 22. The document was described by the Commonwealth as a "living document". By that it is meant that the document, firstly, is kept in the ordinary course of the business of the Navy and that as material comes in to Mr Treadwell's section the spreadsheet it is updated and the material is then filed or archived. A copy of the spreadsheet is kept and any earlier material that is either superseded or not required, is removed from the document as it is updated. 23. According to Mr Houghton's affidavit, the exercise necessary to be undertaken to produce the documents called for in the Notice to Produce would be a very significant one which would take an individual such as Mr Treadwell at least four weeks or more to search for and identify those documents. There are 283 individual group members and searching for all of those documents, going back in some cases to 2010 or 2011, where those documents are not in a central repository, would be a very considerable exercise. I am well satisfied that this is so. It will certainly be necessary for the training records and files of each individual sailor to be searched to identify that material. 24. On the one hand I am confronted with a document which the Commonwealth says, as a matter of ordinary business practice, one would expect to be reliable and accurate. But it must be accepted with any document such as this spreadsheet, that the accuracy of it depends upon the accuracy of the source material. Because after all, the person who compiles this document does not themselves know the accuracy of the source material. 25. There are two possible ways in which this spreadsheet may be found to be inaccurate. One would be an erroneous transposition of material from the underlying documents into the spreadsheet, and the second would be that the underlying documents themselves are inaccurate. 26. Senior counsel for the Commonwealth puts, and I accept, that given that this spreadsheet is a living document, and it is being maintained as part of the ordinary records of the Navy to assist it in its tasks, it is highly unlikely that there would be any significant errors. Senior counsel inferred that if there were significant errors, one would expect them to have come to light in the course of the preparation of the document. 27. Senior counsel for the Commonwealth also puts that the plaintiff could readily check the details of this document by inquiring of the individual sailors regarding its accuracy. Again, that is undoubtedly true. But checking with the individual sailors would not establish the inaccuracy of the process which underlay the document, nor would it assist in determining whether or not the plaintiff would have available to him a submission that the Court ought not place weight on the document because of a significant inaccuracy. 28. In making the following remarks, I do so without criticism of any party. This is a complex proceeding, and evidence has been served right up until the end of 2017. 29. It seems to me that both the Commonwealth and the plaintiff have significant merit in their argument. I certainly do not propose to put the Commonwealth to the time and expense of undertaking a search for, identification of and the production of, all of the source documents underlying this spreadsheet. That would be excessive. 30. On the other hand, it seems unfair to deny to the plaintiff the right to test the accuracy of the document. It would be unjust, it seems to me, if the Commonwealth were entitled to rely upon an unexaminable document as having significant weight. 31. In all of the circumstances, I have come to the view that there should be a limitation placed on the Notice to Produce so that it is restricted to some named individual sailors. It seems to me that to proceed in that way is the most obvious and easiest way to restrict the searches required of the Commonwealth to produce documents, but yet allow the plaintiff to check the accuracy of the document and the process underlying its preparation. 32. To make this rather convoluted statement plain, I propose to allow the Notice to Produce in a modified form so as to restrict the records which need to be searched to those of the 10 individual sailors agreed to by the parties. 33. I do not accept that the terms of paragraphs 5 and 6 of the Notice to Produce are in any way oppressive or vague, nor do I accept that the burden cast upon the Commonwealth to produce those documents has been established to be excessive. 34. It will also be necessary for the Commonwealth to be given a reasonable period to produce those documents. Having regard to the proximity of the commencement of the proceedings, and the likely time at which Mr Treadwell is to be called, I think a period of a little over two weeks is the maximum that can be allowed, and so I will stand the notice of motion over for production before the trial Judge at 10am on 5 March 2018. 35. I make the following orders: 1. Order that the Notice of Motion filed by the Commonwealth on 9 February 2018 seeking leave to amend its Defence be dismissed. 2. Order the defendant to pay the plaintiff's costs of that Motion. 3. With respect to the Notice of Motion of the Commonwealth dealing with the Notice to Produce served by the plaintiff dated 31 January 2018, decline to require production of the documents in accordance with that notice. 4. Direct that an Amended Notice to Produce be served on or before 5pm 13 February 2018 which deletes paragraph 4 of the existing Notice of Motion, and limits the documents or things to be produced to the plaintiff and the sailors, or former sailors, whose evidence consists of the plaintiff's evidence in reply to the Commonwealth's evidence. 5. Order with respect to this Notice of Motion, as each party has had a degree of success that the costs of this Notice of Motion are to be costs in the cause. ********** 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: 15 February 2018