Discovery - the Federal approach
Discovery - the Federal approach
By Benjamin Fitzmaurice[1], Barrister-at-La
Discovery does not necessarily mean backing up the truck at your opposing solicitor's office and dumping volumes of material. The making of discovery should be performed after careful consideration of the available material. A good practitioner will make common sense and practical judgments as to the relevance, or lack thereof, of any document. This is not a revolutionary approach but one that can be lost where there is a failure to see the forest but for the trees.
The focus of this paper is upon the practice of discovery in the Federal Court of Australia with a particular emphasis on the tests of relevance between Order 15 rule 2(3) and (8). This paper does not discuss issues of privilege in discovery as this is a substantial topic which should be discussed separately.
What is a document?
The discovery of documents in a proceeding involves the listing[2] and making available for inspection, subject to claims for privilege or otherwise, any record of information including:
- anything on which there is writing; or
- anything on which there are marks, figures, symbols or perforations having 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; or
- a map, plan, drawing or photograph[3].
Test for relevance
The documents required to be disclosed are those which have been or are in the possession, custody or power[4] of a party to the litigation. Such documents are those:
- on which the party relies; and
- that adversely affect the party's own case; and
- that adversely affect another party's case; and
- that support another party's case[5].
The term ‘power' generally means an enforceable right to inspect or to obtain possession or control of a document. In an attempt to thwart discovery, a company or individual may claim that a third party to the litigation, of which it has a relationship, has possession, custody and power over relevant material and therefore refuse to list the document or documents in its discovery. In the likelihood that the litigant has the ability to request the said document and be given access to it, the Court has power to direct the litigant to take such steps to obtain access to the document and to make discovery of the relevant document or documents held by a third party to the litigation[6].
In order to ascertain whether a document will fall within one of the categories referred to above, a practitioner must have complete command of the issues in the proceeding. Without a complete understanding of the issues in the pleadings a practitioner cannot properly make decisions of whether a document is discoverable and therefore will not fulfil his/her duty to the Court[7]. Whilst an understanding of the pleadings is essential in the discovery process, emphasis should also be placed on the importance of getting the case right at a preliminary stage. The failure to plead all of the relevant matters in a proceeding may adversely affect the ability of a party to obtain all relevant documents to the dispute. A practitioner cannot place enough importance on good pleadings.
Order 15 rule 2
General discovery is governed by Order 15 rule 2 of the Federal Court Rules ("the Federal Court Rules")[8]. This rule should be read in conjunction with Practice Note 14 which was drafted to eliminate or reduce the burden of discovery. The implementation of Order 15 rule 2(3) in 1999 superseded the ‘train of inquiry' test[9] set down in Compagnie Financere et Commercial du Pacifique v Peruvian Guano Co[10]. The train of inquiry test meant that a document was discoverable if it was a document which enabled the opposite party "either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences".
Despite the concern that the 1999 amendment to Order 15 rule 2 may have restricted the width of discovery, it should be borne in mind that if a document is relevant to an issue in the pleading then it is more probable than not that such a document will fall within the current scope of discovery in Order 15 rule 2(3). Further, it should also be borne in mind that upon a reading of the Federal Court Rules and Practice Note 14, the Court will only order discovery that is relevant to the advancement of the case. For instance, Order 15 rule 3(2) states that the Court may make orders for discovery as are necessary to prevent the unnecessary production of documents. This rule evinces a policy that discovery under Order 15 should only be ordered to the extent that is necessary for the attainment of the ends of justice[11]. However, it is natural to expect that the policy will be implemented by reference to whether the issue is fixed by the pleadings[12].
The policy of necessity is also noted with respect to Order 15 rule 6A which takes away the technical requirement of having to discover all relevant documents where such documents are additional copies of a document already discovered.
Order 15 rule 8
Order 15 rule 8 allows a party, at any stage in the proceeding, to make application to the Court for discovery of documents or documents falling within particular categories[13]. The Court may order a party:
- to file an affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it; and
- to serve the affidavit on any other party.
This rule provides a procedure whereby particular discovery may be sought where a party is dissatisfied with the extent of discovery made by an opposing party[14]. The rule was introduced to overcome the principle of lists of discovered documents being conclusive on their face. As such, the rule enlarges the power of the Court to order discovery where it appears there are other relevant documents which have not been discovered. This may arise where a discovered document refers to another document which has not been discovered or from admissions in the pleadings. It may also arise from the application of common sense that there must be other documents which may be or have been in the other parties' possession, custody or power.
This rule also has one particular distinction to that or Order 15 rule 2. It is with respect to the test of relevance. In Spyer v Cuddles ‘N' Mum (Franchise) Pty Ltd (No 3)[15] Lindgren J referred to the history of Order 15 rule 2(3) and observed that the broader test of ‘relating to any matter in question in the proceeding", which derives from the Peruvian Guano case[16], continues to be used in the context of applications under Order 15 rule 8 for particular discovery[17]. Therefore, there is a dichotomy between the test of relevance in Order 15 rule 2(3) and that in rule (8). The test of relevance in Order 15 rule 8 is a more inclusive test and will concern documents which may put a party on a ‘train of inquiry'.
In Spyer, Lindgren J stated:
"The expression "relating to any matter in question in the proceeding" of O15 r8 of the Rules uses "the Peruvian Guano test" of discoverability
It follows from the retention of the expression "relating to any matter in question in the proceeding" in O15 r8, that there is a disconformity between the narrower and less demanding test of discoverability pursuant to notice of O15 subr2(3), and the Peruvian Guano test which provides the basis for the making of an order under O15 r8. In other words, where discovery is given in response to the simple form of notice for discovery found in Form 21, (referred to in O15 r1), it can no longer be said that the basis for the making of an order under O15 r8 is that there has been a failure to give full discovery as required by such a notice."[18]
Classes or categories of documents for discovery
In large commercial cases where discovery could involve a large number of documents, i.e. in excess of 10,000, litigants and the Court have attempted to draft categories of documents to be discovered in an attempt to limit the burden. This approach should eschewed.
Often the drafting of categories of documents to be discovered promotes disagreement between parties. The categories are often drawn widely to capture the maximum amount of documents possible. Such categories if out of proportion to the issues in the proceeding will be objected to and the interlocutory battle lines are drawn. The downside of this approach is that:
- the parties are put to expense in drawing the categories;
- arguments about width and relevance in interlocutory matters increase the costs; and
- the Court has its time resources occupied in tedious interlocutory disputes.
Such disputes can delay a matter unnecessarily. The delay may also be compounded in the situation where the determination as to the categories of documents to be discovered is reserved. In the time taken in unnecessary interlocutory applications and argument, the parties could have discovered documents relevant to the proceeding, within the terms of Order 15 rule 2(3), and already ascertained whether any further application is necessary for particular discovery under Order 15 rule 8.
Conclusion
The competent discovery of all relevant documents in a proceeding involves the application of the Federal Court Rules but more importantly common sense. The discovery process highlights the necessity of clear and well thought out pleadings to ensure all of the issues are raised at an early stage to ensure discovery is completed in a timely and fulsome manner. Poor pleadings will let a party down at the discovery stage as all of the issues may not be framed and the party will be put to further, possibly unnecessary expense, in amending pleadings and making application for further discovery.
Further, a practitioner should be aware of the different tests of discovery between that of Order 15 rules 2(3) and 8 to ensure that all of the documents which should be discovered in a proceeding are made available for the benefit of the parties.
© Copyright Benjamin Fitzmaurice 2007
Every effort is taken to ensure that the information contained in this article is accurate at the time of publication. The content of this article is not legal advice and should not be relied upon as legal advice. The content is designed as a guide only. If you require legal advice please contact a legal practitioner accordingly.
[1] Benjamin is a Barrister practising at the Tasmanian and Victorian Bar. Benjamin can be contacted at Malthouse Chambers, Hobart or fitzmaurice@mel
[2] See Order 15 rule 6 of the Federal Rules - a list of documents shall be in accordance with Form 22 having regard to the matters set out in subrules 2 to 8.
[3] "Document" is defined in Order 1 rule 4 of the Federal Rules and makes reference to the Dictionary in the Schedule to the Evidence Act 1995 (Cth).
[4] The terms ‘possessi
[5] See Order 15 rule 2(3) of the Federal Court Rules.
[6] Sabre Corp Pty Ltd v Russ Kalvin's Hair Care Co (1993) 46 FCR 428.
[7] Note the requirements of Order 15 rule 6(8) where the practitioner shall certify to the Court that, according to his/her instructions, the list and the statements in the list of documents are correct. This does not mean that a practitioner can blindly follow the client's instructions without having satisfied himself/herself as to the fact that discovery has been performed properly and all the relevant searches have been made. The scope of the obligation is to discover all relevant document after a ‘reasonab
[8] It should also be noted that section 23 of the Federal Court of Australia Act 1976 (Cth) provides the Court with the general power to make discovery orders as it thinks appropriate.
[9] See Lubrizol Corporation Inc & Ors v Imperial Chemical Industries plc (2000) 50 IPR 526 at 528 [9]; Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 2) [2006] FCA 1001 at [145].
[10] (1882) 11 QBD 55 at 63. Known as the ‘Peruvian Guano test'. This test is applicable in Victoria - Joseph Guss v Law Institute of Victoria Ltd [2006] VSCA 88 at [14] and Tasmania - J Boag & Son Brewing Ltd v Cascade Brewery Co Pty Ltd and Anor (No 2) unreported, Supreme Court of Tasmania, 4 July 1997 per Zeeman J at 5.
[11] F Hoffman-La Roche AG v Chiron Corp (2000) 171 ALR 295 at 296; Golden Hill Vineyard Pty Ltd v Bayer Australia Ltd [2006] FCA 112 at [4].
[12] Ibid
[13] Murex Diagnostics Australia Pty Ltd v Chiron Corp (No 2) (1995) 62 FCR 424.
[14] Diddams v Commonwealth Bank of Australia [1998] FCA 497; McIlwain v Ramsey Food Packaging Pty Ltd [2005] FCA 1233 at [31].
[15] (2002) FCA 1563
[16] Supra ftn 8.
[17] Noted with approval by Collier J in Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 2) [2006] FCA 1001 at [146].
[18] Supra ftn 13 at [6] and [7]