Omar Property Pty Ltd & Others v Amcor Flexibles (Port Melbourne) Pty Ltd [2019] VSC 446 (3 July 2019); discovery, content of pleadings and redactions

July 22, 2019 |

In Omar Property Pty Ltd & Others v Amcor Flexibles (Port Melbourne) Pty Ltd [2019] VSC 446 the Supreme Court, per Mukhtar AsJ considered the principles of ambit of discovery and the use of redactions in a hard fought discovery application.

FACTS

The five-day trial dated was vacated because of three intervening discovery fights [1].

This decision related to the first fight.

The proceeding is a dispute over a commercial lease of industrial premises. The question is whether the defendant has validly exercised an option to renew its lease or is entitled to renew the lease. The plaintiff says the defendant was not entitled to a renewal because it was in breach of the lease, and the breach was not remedied. By counterclaim, the defendant says its acts and omissions were not a contravention of the lease, and it is ought not be deprived of a renewal. The commercial interests appear to be of a high calibre.

DECISION

The plaintiffs claim the defendant’s discovery has been insufficient in that:

  • some of the discovered documents were produced with redactions without justification or proper explanation, to the extent that not much of the contents remained for exposure.
  • more documents ought to be discovered to enable their expert evidence to be completed, and to test or meet elements of the defence and the counterclaim [3].

The plaintiffs issued a summons seeking orders requiring discovery of twelve categories of documents which has been reduced to five categories of documents in dispute, with sub-categories [4].

The court defined the issues as being:

  • the question of relevance. The defendant maintains the documents sought are irrelevant according to the pleadings.
  • the question whether the documents that have been discovered and produced with extensive redactions should be re-produced without redactions [5]

The court stated that in addition to the test in Peruvian Guano case  (Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company) which permitted discovery of documents directly or indirectly within the purview of the pleadings and may go to a fact in issue the Civil Procedure Act  provides that the overarching purpose is facilitating ‘the just, efficient, timely and cost-effective resolution of the real issues in dispute’ [6].

The court  stated:

  • discovery is limited to documents directly relevant to the issues in dispute and to the extent proportionate to the apparent needs and procedural justice of the case.
  • pre-trial discovery of facts and documents remains a very important tool of justice, especially in commercial litigation where much is usually documented in the ways of modern trade and commerce
  • in borderline cases, Courts tend in the interests of justice to make judgments that prefer, or err on the side of, disclosure [7].

Regarding the issue of redactions the court stated that the starting point is that strictly speaking a party is required to produce the entire discovered document even though parts of if may be irrelevant because production of irrelevant parts does not ordinarily prejudice the discovering party in ways regarded as unjust [40].

A party is entitled to redact irrelevant parts of a document if it has a legitimate claim on the basis of confidentiality or the like.  The court referred, at [41], to the principles set out in Guns v Marr, per Kaye J, as being:

(a) where there is a dispute as to the right to mask or redact part of a discovered document, the Court may, in an appropriate case, inspect the document in its unmasked form, in order to assess the claim that the masked or redacted parts of the document are irrelevant to the issues in the case, and are parts which, by their nature, attract a valid basis for exclusion from the inspection processes

(b) in assessing the claim of a party to be entitled to mask part of a discovered document, it is important to ensure that the redaction of irrelevant parts of the document does not create gaps affecting the intelligibility or meaning of the remaining portions of the document which are produced on inspection;

(c) where there is a dispute as to the right of a party to redact part of a discovered document, the oath of the party applying the redaction is not conclusive and it is for the Court to determine, on the material before it, whether that party had a right to do so;

(d) the onus lies on the party resisting production of the whole of the document to establish an appropriate basis for doing so; and,

(e) in determining the entitlement of a party to mask or redact a part of a discovered document the test is what is necessary to ensure the attainment of justice between the parties [40].

Regarding the claim for protection of confidential documents the court cited  the Court of Appeal in Cargill Australia Ltd v Viterra Malt Pty Ltd , at [42], which stated:

On the one hand, a party to litigation has an interest in having access to documents held by its opponent that are relevant to the issues in the litigation. … On the other hand, where the parties are commercial competitors (or ‘trade rivals’) and one of the parties discovers sensitive business information which, if used by the other party for purposes other than the litigation, would prejudice the first party’s commercial interests, the first party has an interest in minimising the risk of such use. The ultimate question is what is necessary for the attainment of justice in a particular case.

The court raised, at [42], the weakness of relying on Home Office v Harman obligations not to use documents provided in a civil proceeding for a purpose other than in connection with the civil proceeding and quoted Hayne JA in Mobil Oil Australia v Guina Developments Pty Ltd  where he stated:

Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. … Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case?

The Court noted that just because a relevant document contains confidential information does mean it is not discoverable, or that is therefore protected from production [45].

ISSUE

The decision sets out no new principles.  The court set out the step by step analysis that takes place in discovery fights; and analysis of the pleadings against the claim for discovery.  I have not descended to an analysis of the exercise undertaken by the court however it is relevant to note that while the four corners of the pleadings is the starting point the overall legal principles regarding the matter in issue, in this case lease law, were considered when determining the scope of discovery.  What is particularly useful about the decision is how the court deals with redactions when there is controversy as to their appropriateness.

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