Discovery

[2-2200] Discovery generally

Discovery is a process which originated in the Court of Chancery and involved both disclosure of documents and the answering of interrogatories: see generally McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 at 643–646.

Now, discovery (and inspection) of documents, interrogatories, preliminary discovery and discovery by non-parties are dealt with separately by the UCPR, although the former chancery remedy (separate proceedings for discovery) is expressly preserved in the Supreme Court: r 1.4.

[2-2210] Discovery and inspection during proceedings

For “Preliminary discovery generally” see below at [2-2280].

Discovery and inspection of documents during proceedings are governed by Pt 21 of the UCPR which is applicable in all courts other than the Dust Diseases Tribunal and the Small Claims Division of the Local Court: r 1.5, Sch 1. The process is available in the General Division of the Local Court.

In contrast to the previous practice (in proceedings commenced prior to 1 October 1996 in the Supreme Court, or 1 November 1996 in the District Court), a party can no longer require another party to give discovery merely by service of a notice and, in the absence of agreement, discovery can only be required pursuant to an order of the court.

In general, discovery (also known as disclosure) is ordered after the close of pleadings, so that the issues have been defined, but before the parties have exchanged evidence. However, in the Equity Division (including the Commercial List but excluding the Commercial Arbitration List), Practice Note SC Eq 11 now provides:

Disclosure

4

The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure.

5

There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.

6

Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out:

  • the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings;

  • the classes of documents in respect of which disclosure is sought;

  • and the likely cost of such disclosure.

Costs

7

The Court may impose a limit on the amount of recoverable costs in respect of disclosure.

The practice note guides but does not govern the discovery process. While it lists conditions that must be satisfied before the court will order disclosure, it does not list conditions which are sufficient to obtain disclosure. The court still retains a discretion to require or limit discovery under UCPR r 21. That discretion must be exercised having regard to ss 56 and 57 of the CPA.

The intention of the practice note is to reduce the burden of discovery by ordering it only after the issues have been defined by pleadings (where relevant) and refined by the affidavit evidence. It is also intended to prevent the parties constructing their evidence in light of the discovered documents.

Disclosure will be “necessary” for the purposes of paragraph 5 of the practice note when it is reasonably required for the fair disposition of the proceedings.

While the bar should not be set too high, “exceptional circumstances” in paragraph 4 of the practice note means not normal or usual, something out of the ordinary but not necessarily unique or unprecedented. While each case must be considered on its own facts and the categories of exceptional circumstances are not closed, one case in which the circumstances may be exceptional for the purposes of the practice note is where the relevant facts are solely in the knowledge of the party from whom discovery is sought.

For a convenient summary of the principles governing the application of the practice note (and on which the preceding paragraphs are based) see Bauen Constructions Pty Ltd v New South Wales Land and Housing Corporation [2014] NSWSC 684; Graphite Energy Pty Ltd v Lloyd Energy Systems Pty Ltd [2014] NSWSC 1326.

[2-2220] Discovery limited

When making an order for discovery, there is no power to make an order for general discovery (that is, all documents which may relate directly or indirectly to the matters in issue), but the court’s order must specify the class or classes of documents of which discovery is to be given: r 21.2(1)(a). The UCPR envisage that discovery be limited to documents relating to particular issues or subject matters, or limited to a particular period. Any such class of documents must not be specified in more general terms than the court considers to be justified in the circumstances: r 21.2(2).

A class of documents may be specified by relevance to one or more facts in issue, by description of the nature of the documents, the period within which they were brought into existence, or in such other manner as the court considers appropriate in the circumstances: r 21.2(3).

Where there is a large number of documents within a class, the court may order that discovery be given of one or more samples (selected in such manner as the court may specify): r 21.2(1)(b).

“Document” includes any part or copy of a document or part thereof (Dictionary to UCPR) and means any record of information including anything on which there is writing, or on which there are marks, figures, symbols or perforations that have a meaning for persons qualified to interpret them or anything from which sounds, images or writings can be reproduced with or without the aid of anything else: Interpretation Act 1987, s 21(1). It includes a tape recording (Australian National Airlines Commission v The Commonwealth (1975) 132 CLR 582 at 594); a video cassette recording (Radio Ten Pty Ltd v Brisbane TV Ltd [1984] 1 Qd R 113); and a computer database containing information which can be converted into a readable form: Derby & Co Ltd v Weldon (No 9) [1991] 2 All ER 901.

[2-2230] Relevant documents

Rule 21.1(2) of the UCPR defines a document as being “relevant to a fact in issue” if:

it could, or contains material that could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence.

There is a suggestion in some of the older cases that only documents which may advance a party’s own case or damage that of the other party are discoverable, but not those which are merely detrimental to a party’s own case, but r 21.1(2) makes it clear that such documents must be discovered. Any order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue: r 21.2(4). Thus documents which are not directly relevant but may merely lead to a line of inquiry are excluded.

[2-2240] Procedure

The party subject to the order must serve on the other party a list of documents in its “possession” (other than excluded documents, the meaning of which see r 21.1(1)) which complies with r 21.3(2). The time allowed for serving such a list is normally 28 days, but this time may be varied by the order: r 21.3(3). Note that “possession” is defined in s 3 of the CPA to include “custody and power”. The list of documents must be verified in accordance with r 21.4.

[2-2250] Personal injury cases

In proceedings on a common law claim for damages for personal injury or death, the court may not make an order unless special reasons are shown: r 21.8. Such “special reasons” may include such considerations as a young or badly injured plaintiff in a case where there were no eyewitnesses: Boyle v Downs [1979] 1 NSWLR 192 (a case on interrogatories, but similar considerations apply: r 22.1(3)), or where documents in the possession of the other party are necessary to enable an expert to prepare a report: Binks v North Sydney Council [2001] NSWSC 27. The applicant must show by affidavit or otherwise that “special reasons” exist: Goulthorpe v State of New South Wales [2000] NSWSC 329.

[2-2260] Privileged documents

Not only are documents which might expose a party to a civil penalty privileged from production (Evidence Act 1995 s 128(1)(b)); but it would appear that a party sued for a civil penalty (or for forfeiture) cannot be ordered to give discovery at all, although the party seeking the penalty (or forfeiture) can be the subject of such an order: Naismith v McGovern (1953) 90 CLR 336, and see also CPA s 87.

The list of documents must identify any document which is claimed to be a privileged document and specify the circumstances under which such privilege is alleged to arise: r 21.3(2)(d). As to the importance of compliance with this rule see Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333 at [35]–[45].

Whether a document is privileged depends on the definitions of the “privileged document” and “privileged information” in the Dictionary to the UCPR, the effect of which is to apply the relevant provisions of the Evidence Act 1995 to the pre-trial inspection of documents, see also r 1.9. As to inadvertent failure to claim privilege and a detailed consideration of related privilege issues, see [4-1562] and see Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303.

Sub-rules 1.9(4A)–(4B) clarify that when an objection is made to the production of a document on the ground of privilege, access to the document must not be granted unless and until the objection is overruled, and that the production of a document to the court under a claim for privilege does not constitute a waiver of privilege.

[2-2270] Inspection

Within 21 days after service of the list of documents or such other time as the court may specify, the other party must make the documents in its possession or control, other than privileged documents, available for inspection and copying: r 21.5.

The UCPR also make provision for further discovery in respect of documents of which the discovering party subsequently becomes aware (r 21.6), and for prohibiting the use of any copy of, or information from, a discovered document for any purpose other than the subject proceedings without leave of the court: r 21.7.

Without an order for discovery, a party to proceedings may serve on any other party a notice to produce for inspection any document or thing referred to in any originating process, pleading, affidavit or witness statement filed or served by the other party or any other specific document or thing that is clearly identified in the notice and is “relevant to a fact in issue”: r 21.10, as to which, see [2-2230]. The obligations of the party served with such a notice are set out in r 21.11. Once again, these rules do not apply to common law proceedings for damages for personal injuries and death unless the court, for special reasons, orders otherwise: r 21.12.

The court may order the party seeking production to pay the producing parties’ costs and expenses of compliance: r 21.13(1). If such an order is made the court must fix the amount or direct that it be fixed in accordance with the court’s usual procedure in relation to costs: r 21.13(2). As to a mandatory attempt to agree on these costs, see r 42.33.

[2-2280] Preliminary discovery generally

This process, which is available in the General Division of the Local Court (though not in the Small Claims Division of the Local Court), is wider than that formerly available in the Supreme and District Courts. Discovery is now available from a prospective defendant, not only as to the identity of the defendant, but also as to the person’s whereabouts and as to whether a cause of action exists: rr 5.2–5.3. Provision is also made for discovery of documents against third parties: see [2-2310]. A challenge to the validity of r 5.2 on Constitutional grounds was rejected in The Age Company Ltd v Liu (2013) 82 NSWLR 268.

[2-2290] Preliminary discovery to ascertain identity or whereabouts of prospective defendants

If an applicant satisfies the court that, having made reasonable enquiries, he or she is unable to ascertain sufficiently the identity or whereabouts of a proposed defendant (or cross-defendants as the case may be), and that someone may have information, or may have or have had possession of a document or thing that tends to assist in ascertaining such identity or whereabouts, the court may order that such person attend the court for examination or give discovery of such documents: r 5.2. See Roads and Traffic Authority of NSW v Care Park Pty Ltd [2012] NSWCA 35 and The Age Company Ltd v Liu, above.

An order for examination may include an order to produce any relevant documents or thing and/or an order that the examination be before a registrar: r 5.2(3). Such an order may be limited or conditional: Roads and Traffic Authority of NSW v Care Park Pty Ltd, above.

If the application relates to proceedings in which the applicant is a party it is to be made by motion in the proceedings, or otherwise by summons: r 5.2(8). It must be supported by an affidavit stating the facts on which the applicant relies and specifying the kinds of information, documents or things in respect of which the order is sought: r 5.2(7)(a). The application, together with a copy of the affidavit, must be served personally on the other person: r 5.2(7)(b).

In Stewart v Miller [1979] 2 NSWLR 128 at 140, it was held that under the former Supreme Court Rules, it was generally necessary for an applicant for preliminary discovery to show a prima facie case against the person whose name he wished to ascertain; but that there might be cases where the evidence, although falling short of establishing all the ingredients of a prima facie case, pointed sufficiently to the existence of a case for relief so as to justify the making of an order so that proceedings for such relief could be brought. The former Supreme Court rule was amended in 1974 to eliminate the requirement that the applicant establish a prima facie case against the intended defendant, but the issue is relevant to the exercise of discretion. The existence of such a case remains relevant to the exercise of the discretion under r 5.2: The Age Company Ltd v Liu at [89].

Applications for preliminary discovery are interlocutory applications in which it is inappropriate for contested issues of fact between the parties to be litigated or decided upon. Such applications should be conducted with due regard to the objectives in s 56 of the CPA and to the obligation on litigants and their advisors to conduct litigation in accordance with the overriding objective in that section: The Age Company Ltd v Liu, Bathurst CJ at [102]–[105].

[2-2300] Preliminary discovery to assess prospects

Rule 5.3 of the UCPR enables an applicant who believes he or she may have a cause of action against another person to require that other person to give discovery and produce for inspection relevant documents to assist in assessing whether or not to commence proceedings against that other person. See, RinRim Pty Limited v Deutsche Australia Ltd [2013] NSWSC 1762 at [34]–[49]. The documents of which discovery may be ordered are not limited to those relating to the entitlement to make a claim, but extend to documents going only to the quantum of a potential claim: O’Connor v O’Connor [2018] NSWCA 214 at [90].

To obtain such an order, it must appear to the court, pursuant to r 5.3(1), that:

(a) 

the applicant may be entitled to make a claim for relief (as defined in CPA s 3) against another person but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against such person, and

(b) 

such person may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and

(c) 

inspection of such a document would assist the applicant to make the decision concerned.

Unless the court otherwise orders, the application must be supported by an affidavit stating the facts on which the applicant relies and specifying the kinds of documents in respect of which the order is sought. The application, together with the affidavit, must be served personally on the person to whom it is addressed: r 5.3(3). In the case of a corporation, that person may be any officer or former officer of the corporation: r 5.3(2).

For a discussion of relevant principles generally, see O’Connor v O’Connor and in relation to defamation, see Hatfield v TCN Channel Nine Pty Ltd (2010) 77 NSWLR 506 (CA).

Cases decided under FCR O 15A r 6, although not in identical terms, would appear to be relevant to applications under this rule, however, in O’Connor v O’Connor the court noted at [79] that the test to be applied under UCPR 5.3 is the “appears to the court” test, which is wider than the test to be applied under the corresponding Federal Court “there is reasonable cause to believe” rule.

Note in particular that an applicant does not need to establish a prima facie case amongst the prospective defendant. The determination of an application for preliminary discovery under UCPR 5.3 does not involve a determination of the merits of the claim, but rather whether it “appears to the court” that a cause of action “may” exist: O’Connor v O’Connor at [77].

[2-2310] Discovery of documents from non-parties

Rule 5.4 of the UCPR provides for discovery against persons who are not parties to the proceedings. The rule is new and is based on FCR O 15A r 8. It is not strictly “preliminary” as it relates to proceedings already commenced, but is included in Pt 5 of the UCPR with the provisions relating to preliminary discovery.

Rule 5.4(1) provides that where it appears to the court that a person who is not a party to proceedings may have or have had possession of a document that relates to any question in the proceedings, the court may order such person to give discovery to the applicant of all documents that are, or have been, in the person’s possession and which relate to that question. As to the meaning of “document” and “possession”, see [2-2220] and [2-2240].

The application and the supporting affidavit stating the facts on which the applicant relies and specifying the kinds of documents in respect of which the order is sought must be served personally on the person to whom it is addressed: r 5.4(2).

The purpose of the rule is to enable a party to ascertain whether a person, who is not a party to the proceedings, is or has been in possession of a document which might usefully be the subject of a subpoena in the proceedings, and the content of such document. It may be noted that whereas rr 5.2 and 5.3 refer to “documents and things”, r 5.4 only refers to “documents”.

[2-2320] General provisions

The effect of an order for discovery under Pt 5 is the same as that of an order under Div 1 of Pt 21 relating to general discovery: r 5.5, as to which see above. The person ordered to give discovery must furnish a list of documents in his or her possession (other than excluded documents) and make the documents in their control (other than privileged documents) available for inspection and copying: rr 21.3, 21.5.

An order under Pt 5 may be made subject to the applicant giving security for the costs of the person the subject of the order (r 5.6); orders for costs and expenses may be made (r 5.8); and non-parties’ rights to privilege are preserved: r 5.7.

[2-2330] Sample orders

Legislation

  • CPA ss 3, 87

  • Evidence Act 1995, s 128(1)(b)

  • Interpretation Act 1987 s 21(1)

Rules

  • Federal Court Rules O 15A

  • UCPR rr 1.4, 1.5, 1.9, 5.1–5.8, 21.1–21.8, 21.10–21.13, 42.33, Sch 1, Dictionary

Further references

  • Justice D Hammerschlag, “Practice Note SC Eq 11 – Disclosure in the Equity Division: how is it working two years on”, paper presented at the 8th Information Governance & eDiscovery Summit, 17 June 2014, Sydney

  • Practice Note No SC Eq 11