Challis & Anor v Ford Motor Company of Australia Pty Ltd & Anor [2021] QDC 177

DISTRICT COURT OF QUEENSLAND CITATION: Challis & another v Ford Motor Company of Australia Pty Ltd & another [2021] QDC 177 PARTIES: CHRISTINE CHALLIS (First Plaintiff) AND BRUCE CHALLIS (Second Plaintiff) v FORD MOTOR COMPANY OF AUSTRALIA PTY LTD ACN 004116 223 (First Defendant) AND MACKAY CITY AUTO GROUP PTY LTD ACN 125 986 503 (Second Defendant) FILE NO: 813/20 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Brisbane District Court DELIVERED ON: 13 August 2021 DELIVERED AT: Brisbane HEARING DATE: 4 August 2021 JUDGE: Porter QC DCJ ORDER: 1. An affidavit be filed and served by or on behalf of the plaintiffs which answer the following questions to the best of the deponent’s knowledge and belief after making reasonable inquiries: (a) In or around early 2019, was the Vehicle salvaged or otherwise destroyed? If the answer is “yes”, state: (i) when the decision to salvage or otherwise destroy the Vehicle was made; (ii) the person/s involved in making the decision to salvage or otherwise destroy the Vehicle; -- 1 of 21 -- 2 (iii) whether any written deliberations or records exist concerning the decision to salvage or otherwise destroy the Vehicle; and (iv) the person/s responsible for approving the decision to salvage or otherwise destroy the Vehicle. (b) If the answer to question 3 is “yes”, state: (i) the entity/entities which performed the salvage or destruction of the Vehicle; (ii) when and how instructions were given to the entity/entities described in subparagraph (i) to salvage or destroy the Vehicle; (iii) in relation to the instructions described in subparagraph (ii): A. if oral, who gave and received the instructions; and B. if written, how and to whom were the instructions given. 2. An affidavit be filed and served by or on behalf of the plaintiffs which answer the following questions to the best of the deponent’s knowledge and belief after making reasonable inquiries in respect of the instructions given by Youi to GKA Investigations in the email from Leon Haycock to Rhonda Doughty sent at 3.56pm on 12 April 2018 (being exhibit DB-54 to the affidavit of Dora Anna Banyasz affirmed on 3 August 2021): (a) the person/s involved in making the decision to give those instructions; (b) whether there are any written records evidencing or recording any deliberation in respect of the decision to give those instructions; and (c) the person/s responsible for approving the decision to issue those instructions. 3. The Court will hear from the parties as to the identity of the person to be ordered to provide the affidavits and as to the timing for their provision and as to costs. CATCHWORDS: COURTS – PRACTICE AND PROCEDURE – CONTEMPT OF COURT – where parts of the vehicle subject of the proceedings were destroyed at the direction of the plaintiffs’ insurer after a claim was notified but before proceedings were commenced – where the vehicle subject of the proceedings was destroyed after proceedings were commenced at the direction -- 2 of 21 -- 3 of the plaintiffs’ insurer after the commencement of proceedings – whether there is a sufficient prima facie case that the destruction of that evidence makes maintenance of the proceedings an abuse of process – whether consideration of the intention of a person who destroys evidence is material to determining if such destruction gives rise to an abuse of process – power of Court to order production of affidavit setting out circumstances of the destruction CASES: Capital Webworks Pty Ltd v Adultshop.com.limited [2005] FCAFC 232 Clark v State of New South Wales (2006) 66 NSWLR 640 Cocker v Tempest (1841) 151 ER 864 Blue Badge Insurance Australia Pty Ltd v Farnan [2017] NSWSC 688 Fuji Xerox Australia Pty Ltd v Lee & Anor [2003] QSC 303 Melco Engineering Pty Ltd v Eriez Magnetics Pty Ltd [2007] QSC 198 von Risefer v Permanent Trustee Co Pty Ltd [2005] 1 Qd R 681 LEGISLATION: District Court of Queensland Act 1967 (Qld), ss. 68, 69 Uniform Civil Procedure Rules 1999 (Qld), Rules 149, 150(4), 166, 367 COUNSEL: A. Fitzsimons for the Plaintiffs E. Robinson for the First Defendant H. Nankivell (solicitor) for the Second Defendant SOLICITORS: Ligeti Partners Lawyers for the Plaintiffs Allens for the First Defendant Carter Newell Lawyers for the Second Defendant Summary [1] The plaintiffs alleged their Ford Territory was damaged by fire caused by a defective solenoid in September 2017. They seek damages of $52,000 from the first defendant (Ford), as manufacturer, and the second defendant (Mackay Auto), as seller. [2] Ford wants to examine the vehicle and the certain parts which had been removed from it. However, some of the parts and the remainder of the vehicle were destroyed without notice to Ford on the instructions of the plaintiffs’ insurer (Youi), which is conducting these proceedings for the plaintiffs. -- 3 of 21 -- 4 [3] Ford has applied for orders, broadly, compelling the production of affidavits explaining the circumstances in which Youi directed the destruction of the parts and the vehicle. Ford submits, inter alia, that the Court has power to make such an order where there are grounds to suspect that there has been an abuse of process. The plaintiffs’ counsel conceded that the Court has power to make such an order but submitted that it ought not do so because the fact of the destruction of the parts and the vehicle is not in dispute on the pleadings. [4] For the reasons which follow, I intend to make the orders sought by Ford, subject to identification of the correct person to be made the subject of the orders. The pleadings [5] The plaintiffs allege that they acquired a Ford Territory from Mackay Auto on 16 August 2017. They allege that on about 26 September 2017, the vehicle ignited, causing damage to the vehicle and the plaintiffs’ property. They allege the fire was the result of a safety defect in the vehicle for which the defendants are responsible. [6] They claim damages of $52,700 for the loss of the vehicle. [7] They separately claim some $500,000 for damage to their property in proceedings 4687/2019, which are to be heard together with this proceeding. [8] Mackay Auto admits the fire and positively alleges that the fire was caused by a faulty starter motor solenoid which could not have been identified by Mackay Auto. Mackay Auto, for its part, seeks indemnity from Ford for any liability to the plaintiffs. [9] Ford does not admit that the fire occurred as alleged. Ford also denies any such fire was caused by a faulty starter motor and says that if a fire occurred in the vehicle (rather than from some external source), it was caused by post-sale modifications to the wiring of the vehicle by Mackay Auto or the plaintiffs. [10] Ford’s defence goes on to allege, under the heading “The plaintiffs’ destruction of physical evidence”, that:1 (a) Youi notified Ford of the incident on about 12 December 2017 and the plaintiffs’ solicitors notified the claim on 28 March 2018; (b) Ford requested inspection of the vehicle on a number of occasions from 5 April 2018 and never withdrew that request, and the plaintiffs agreed; (c) The plaintiffs and Youi knew that the site, the vehicle and any parts removed from the vehicle would be relevant to any claim brought; (d) The site of the fire was rebuilt between September 2017 and 19 June 2018 without notice to Ford; 1 See the Amended Defence of the First Defendant to the Second Defendant’s Third Party Statement of Claim, filed 16 March 2020. -- 4 of 21 -- 5 (e) There were parts removed from the vehicle without notice to Ford on 28 September 2017 and December 2017 by Youi’s investigator, Mr Nystrom; (f) The parts were delivered to a metallurgist, Mr Cox, and subsequently to Youi’s agent, GKA Investigations; (g) In about April 2018, GKA Investigations disposed of the parts without Ford ever being offered an opportunity to inspect them; and (h) In about February 2019, Youi caused the vehicle to be destroyed. [11] Youi is conducting the proceedings on behalf of the plaintiffs pursuant to its rights of subrogation. It has been the guiding mind of the post-fire events and I will refer to Youi, rather than the plaintiffs, unless there is a specific reason to refer to the plaintiffs in person. The plaintiffs’ solicitors, Ligeti Partners, are instructed by Youi. [12] Youi’s reply to the destruction allegations fails to comply with Rule 166 Uniform Civil Procedure Rules 1999 (Qld) (UCPR): (a) First, the reply fails to plead at all to 13 of the 19 paragraphs of the destruction allegations. The reply alleges in paragraph 1 that the plaintiffs take issue with the allegations in the defence and relies on the allegations in the statement of claim. While this catch-all response might be effective in some circumstances,2 it fails to address the destruction allegations in form or in substance. These allegations are at this stage deemed admitted; and (b) Second, where the reply does plead to a paragraph of the destruction allegations, it fails to plead in accordance with Rule 166 to each of the distinct allegations in the particular paragraph. Discrete allegations in a defence not pleaded to are also deemed admitted. A significant example is the failure of paragraph 2(f) of the reply to plead to the allegation in paragraph 27 of the defence that the plaintiffs or Youi deliberately caused the vehicle to be salvaged. [13] Putting that to one side, the gravamen of the reply is not that the destruction allegations are admitted or not disputed, but that: (a) Some of the parts were not delivered to GKA Investigations; (b) Ford had had a sufficient opportunity to inspect the site, the vehicle and the parts because it had known about the potential claim from September 2017, and the parts were disposed of after 12 April 2018 and the vehicle in February 2019; and (c) The reason the vehicle was salvaged was to mitigate the plaintiffs’ loss. [14] Notably, the reply: 2 Melco Engineering Pty Ltd v Eriez Magnetics Pty Ltd [2007] QSC 198 at [17] to [18]. -- 5 of 21 -- 6 (a) Does not distinctly admit who directed “salvage” of the vehicle; (b) Does not say who directed destruction of the parts; (c) Does not plead where the parts not sent to GKA Investigations were to be located; and (d) Does not allege Ford was ever given notice of the intention to rebuild the site or destroy the vehicle or any of the parts. [15] Much of what is alleged by Ford and deemed admitted seems uncontentious in any event on the documentary record. [16] It might be argued that the destruction allegations are irrelevant from a pleading perspective. Certainly, it might be difficult to characterise them as material facts relevant to making out the defence to the cause of action pleaded in the statement of claim. However, they might be defended as proper allegations on the basis that they are allegations, which if not stated specifically, might take the plaintiffs by surprise: Rule 149(1)(c) and 150(4)(c) UCPR. It might also be argued that the allegations are required to be pleaded by Rule 150(4)(a), which requires, relevantly, a defence to specifically plead a matter that makes a claim not maintainable. The contention by Ford, which is relied upon to sustain its application, is that the claim should be struck out or dismissed as an abuse of process. It might be thought that such a contention literally falls within the scope of Rule 150(4)(a) UCPR as a matter which makes the claim not maintainable, though arguments to the contrary can be easily imagined. [17] In any event, the plaintiffs’ counsel did not contend that the destruction allegations should be struck out. Further, whether the defence is in a proper form is a moot question on this application. Ford contends that it is entitled to orders compelling the explanation of the circumstances of the destruction of the evidence, because Youi’s conduct might amount to an abuse of process which justified summary dismissal of the claim. Whether some of the allegations of fact said to support that conclusion are properly included in the defence or not, according to the pleading rules, makes no difference to the existence of the right to seek dismissal for that purpose. [18] There is one final matter to deal with before leaving the pleadings. The only responsive point of substance made in the plaintiffs’ outline is that, because the plaintiffs have admitted the removal of the parts and the disposal of the vehicle, those factual issues are no longer in dispute, so there is no basis for further orders about those matters. [19] It is not quite correct that the disposal of the parts is admitted, at least not directly, though it does appear to be the subject of a deemed admission of paragraph 25 of the amended defence. Putting that to one side, however, the issue which Ford agitates is not so much whether the parts and the vehicle have been destroyed, but rather the context in which Youi apparently caused that to occur. As will be seen, that is a relevant matter in assessing whether or not the proceeding should be struck out or dismissed as an abuse of process. Even if those matters do not arise on the -- 6 of 21 -- 7 pleadings, it would not mean they were irrelevant on an application for such relief by Ford. Some additional facts [20] Given the admissions and the documentary record, this application may be determined assuming the correctness of the allegations set out in paragraph [10] above, subject to the clarification in paragraph [13](a) that some of the parts remain with Mr Cox. The evidence now suggests that that is correct. It is necessary to make some futher findings. [21] It is to be recalled that Youi has been in control of the vehicle and the parts since September 2017 and contacted Ford about the incident in December 2017. [22] A convenient starting point for closer analysis of the evidence is 5 April 2018. On that day, Mr Sullivan, Senior Legal Counsel of Ford, responded to a letter dated 5 March 2018 from Ms Thompson of Ligeti Partners, which I infer foreshadowed a claim against Ford (the re-line states “Claim by Christine Challis”) by sending an email as follows:3 I have received your letter of 28 March 2018. Please confirm urgently that both the site where the fire occurred and the vehicle itself are available for inspection by an expert we intend to engage. [23] On 10 April 2018, he sent a further email stating:4 I refer to my email of 5 April 2018 below and note that I have not received a response. Please confirm as a matter of urgency that the evidence has been preserved and is available for inspection by Ford Australia being both the site where the fire occurred and the vehicle itself. [24] Ms Thompson responded immediately on the same day, writing: I am currently seeking instructions with respect to whether the incident site has been preserved. In relation to the vehicle, it is still intact and available to be examined by your expert, however we require an undertaking that any testing carried out will be non- destructive. We will then organise for your expert to attend with a Youi assessor for the purposes of the inspection of the vehicle. [25] It appears that as of 10 April 2018, GKA Investigations held at least the main cable from the battery of the vehicle to the starter motor and auxiliary wiring.5 [26] Ironically, on 10 April, the same day that Ms Thompson was writing to Ford, GKA Investigations sent an email to Mr Haycock of Youi containing an invoice for work done and warning, “Please note that with regards to the exhibit we are holding (starter motor cables) storage fees apply every six months unless we receive written advice from you that we can dispose of it.” On 12 April 2018, Mr Haycock 3 Affidavit of Dora Anna Banyasz filed 26 July 2021 at pages 168 to169 (Affidavit of Dora Anna Banyasz). 4 Affidavit of Dora Anna Banyasz at page 168. 5 Affidavit of Gabrielle Elise Fergus affirmed 3 August 2021 at GEF-3. -- 7 of 21 -- 8 responded, informing GKA Investigations, “Please dispose of item in storage (cables)”.6 [27] (GKA Investigations confirmed that they had done as instructed when asked for the cables by Ms Fergus of Ligeti Partners on 6 October 2020).7 [28] On 19 June 2018, Ms Thompson followed up with Mr Sullivan, writing:8 …Is your client still intending to carry out an assessment to the Ford vehicle? I confirm the incident site was not preserved as it needed to be rebuilt. [29] Mr Sullivan responded, confirming that Ford did intend to inspect the vehicle. On Friday 22 June 2018, Ms Peeler of Ford sent Ms Thompson an email stating, relevantly:9 …I can confirm…Ford’s intention to inspect the vehicle in question. Can you please let me know the current location of the vehicle so that we can arrange some possible dates for travel… We note that some parts and wiring were removed from the vehicle during the investigation process and sent to forensic metallurgist Simon Cox for inspection…Ford will also require these parts to be made available for the inspection please… [30] On 27 June 2018, Ms Thompson replied:10 Dear Catherine, I am currently liaising with my client with respect to the inspection date. Please be advised that any inspection will be on the basis an undertaking is given that the testing will be non- destructive, and carried out with a Youi Assessor in attendance. Below is a link containing photographs taken by GKA investigations. [link] Murray Nystrom and Simon Cox were not engaged by my client but by APIA, and therefore recommend you contact them direct to obtain further information or items. [31] There was an exchange about the efficacy of the link, then apparently no further contact from Ford for a month. Ms Thompson emailed Ms Peeler again:11 Hi Christine, I am awaiting the updated dropbox details. In the interim, my client is prepared to allow your assessor to inspect my client’s vehicle without a Youi assessor provided an undertaking is given that the inspection and testing will be non-destructive. I have received correspondence from Mackay City Group wherein they advised their assessor has determined the cause of the fire to be a faulty motor solenoid to the vehicle. My client continues to hold Ford liable for the loss and damage. 6 Affidavit of Dora Anna Banyasz affirmed 3 August 2021 at page 117. 7 Affidavit of Gabrielle Elise Fergus affirmed 3 August 2021 at GEF-3. 8 Affidavit of Dora Anna Banyasz at page 167. 9 Affidavit of Dora Anna Banyasz at pages 166 to 167. 10 Affidavit of Dora Anna Banyasz at page 166. 11 Affidavit of Dora Anna Banyasz at page 165. -- 8 of 21 -- 9 My client will allow a further 14 days for your client to obtain a report. My instructions are to commence proceedings against Ford without further notice thereafter. [32] It does not appear that Ford pursued the matter of inspection before the proceedings were issued by Youi in the Magistrates Court in November 2018. However, it is uncontentious that Youi did not say anything to Ford about the destruction of any of the parts held by GKA Investigations at any time after that destruction occurred on 12 April 2018. It is also uncontentious that Ford never communicated that it abandoned its wish to inspect the vehicle. [33] Ford filed its defence on 21 January 2019, which put in issue the cause of the fire. [34] It appears that the vehicle (minus the removed parts) had up to that time been stored at an auction house as agent for Youi. On 19 February 2019, Ligeti Partners provided legal advice to Youi relating to the salvage of the vehicle. That advice is said to be covered by both litigation and advice privilege in the plaintiffs’ list of documents. The vehicle was “salvaged” (effectively destroyed) on or about 19 February 2019 by the auction house, seemingly after that advice was provided. [35] On 9 May 2019, Ford’s solicitors, Allens, sent an email to Ligeti Partners asking about the location of the vehicle so that it could be inspected.12 On 13 May 2019, Ligeti Partners responded:13 We refer to your email dated 9 May 2019. Our client’s vehicle has been salvaged and is no longer available for inspection. In this regard, on 29 July 2018, Ms Celine Thompson of our office emailed Catherine Peeler of your client and notified her that our client is prepared to allow your client’s assessor to inspect our client’s vehicle without an assessor from our client present. Ms Thompson went on to state that a further 14 days would be allowed for your client to obtain a report. We enclose a copy of the correspondence between Ms Thompson and Catherine Peeler for your reference. Our client did not receive a response from your client and legal proceedings were ultimately issued in November 2018. As our client did not receive further notification from your client with respect to an inspection opportunity, our client salvaged the vehicle. [36] Allens responded on 19 June 2019. The letter set out, more or less, the above chronology and, not surprisingly, asserted that the vehicle should not have been destroyed while the proceedings remained on foot. Allens then foreshadowed the array of possible consequences where evidence is destroyed. The first paragraph of that letter stated:14 First, your client’s destruction of the Vehicle may, depending on the circumstances, constitute a criminal offence under the Criminal Code 1899 (Qld), or otherwise be a contempt of court. If Ligeti Partners counselled the destruction of the evidence, then that may also amount to professional misconduct. [37] While the paragraph included the condition “depending on the circumstances”, the letter contemplated that Youi might have committed an offence, and suggested that 12 Affidavit of Dora Anna Banyasz at page 173. 13 Affidavit of Dora Anna Banyasz at page 175. 14 Affidavit of Dora Anna Banyasz at page 179. -- 9 of 21 -- 10 Ligeti Partners might have counselled the destruction of the evidence. That was intemperate and discourteous. Courtesy and restraint in correspondence is a professional duty. The efficient conduct of disputes requires all solicitors to honour the spirit of that duty. [38] Ligeti Partner’s response, sent on 27 June 2019, contended that Ford had been given a sufficient opportunity to inspect the vehicle and that the failure of Ford to inspect justified destruction of the vehicle, given the costs of storing a vehicle destroyed by fire.15 [39] There followed these paragraphs:16 Other Matters Our position is that your client has not been prejudiced in any event by reason of the above. It was given an opportunity to arrange an inspection of the vehicle and failed to do so. Further, your client has been provided with three separate reports with respect to the cause of the fire. We are also now able to provide comprehensive images (200+) of the vehicle after the fire, including close up images of the area of fire origin. These can no doubt be provided to an expert and will therefore allow your client to obtain any additional expert opinion it deems necessary and/or appropriate to assist with its defence of the claim. We likewise dispute the salvaging of the vehicle limits our client’s ability to convince the Court of causation or otherwise prove our case. We point out that often in product liability claims, particularly those involving catastrophic fires, the physical evidence is destroyed and/or unavailable in any event. Our client need only convince the Court that on the balance of probabilities, the vehicle was the source of the fire. It need not prove the specific nature of any manufacturing fault or failure which caused the fire (we refer you to the authority of Batchelder & Anor v Holden Limited [2009] VSC 29). In all the circumstances, we advise our client will not discontinue the proceeding against your client and maintains your client is liable for the claimed damages. [40] It can be seen that Ligeti Partners contends that in the circumstances of this case, the proceedings can proceed fairly, despite the destruction of the cables and the vehicle. [41] The subsequent correspondence takes matters no further, except that Allens discovered the destruction of the cables and complained about that in similar terms. [42] On 20 December 2019, the plaintiffs commenced a further proceeding in their names seeking damages of (after amendment) $546,468.87 (the APIA proceedings). Those proceedings are being conducted by the plaintiffs’ home and contents insurers (APIA), also pursuant to rights of subrogation. APIA pleads that the fire in the vehicle caused the fire in the house and that it was caused by an electrical fault in the vehicle as particularised in expert reports from, effectively, (as I understand it) Mr Cox and Mr Nystrom. Ford defends on essentially the same grounds, including pleading, again, the allegations about the destruction of 15 Affidavit of Dora Anna Banyasz at pages 182 to 183. 16 Affidavit of Dora Anna Banyasz at pages 183 to 184. -- 10 of 21 -- 11 evidence. Judge Reid has ordered that APIA proceedings be heard together with these proceedings. [43] Fortunately, I do not have to resolve how conduct by Youi might impact on the proceedings by APIA where the plaintiffs are common, but the separate proceedings are being conducted by different insurers. The applications [44] There has been extensive correspondence between Allens and Ligeti Partners as to the circumstances leading to the removal and destruction of the parts by GKA Investigations and the destruction of the vehicle. There has also been correspondence about interrogatories in relation to modifications which might have been made to the vehicle by the plaintiffs with APIA and Youi. The detail is unnecessary to recite at this stage. Ultimately, Ford brought applications in both proceedings seeking relief directed at obtaining evidence about those matters. [45] In both proceedings, the plaintiffs have agreed orders for the issue of the interrogatories sought by Ford. [46] Further the application in each proceeding by Ford that the plaintiffs file and serve affidavits addressing, broadly, what was removed from the vehicle, and when, by Mr Nystrom in September 2017 and December 2017 is to be adjourned by consent while Ford investigates further information which has been provided. [47] The balance of the applications in the APIA proceedings has been adjourned. [48] The contest remains in respect of Ford’s application for orders requiring the plaintiffs to file and serve affidavits which, in broad terms, address the circumstances leading to the destruction by GKA Investigations of the parts and the vehicle. The issues for this judgment [49] Ford seeks the following contentious orders: (a) First, that the plaintiffs file and serve affidavits which answer the following questions (the vehicle affidavit):17 3. In or around early 2019, was the Vehicle salvaged or otherwise destroyed? If the answer is “yes”, state: (a) when the decision to salvage or otherwise destroy the Vehicle was made; (b) the person/s involved in making the decision to salvage or otherwise destroy the Vehicle; (c) whether any written deliberations or records exist concerning the decision to salvage or otherwise destroy the Vehicle; and (d) the person/s responsible for approving the decision to salvage or otherwise destroy the Vehicle. 17 See the Schedule to the Application filed on Behalf of the First Defendant on 23 July 2021. -- 11 of 21 -- 12 4. If the answer to question 3 is “yes”, state: (a) the entity/entities which performed the salvage or destruction of the Vehicle; (b) when and how instructions were given to the entity/entities described in subparagraph (a) to salvage or destroy the Vehicle; (c) in relation to the instructions described in subparagraph (b): (i) if oral, who gave and received the instructions; and (ii) if written, how and to whom were the instructions given. (b) Second, in relation to the destruction of the parts by GKA Investigations, as follows (the parts affidavit):18 4. By 4.00pm on 20 August 2021, the plaintiffs file and serve affidavits which address the following matters in respect of the instructions given by Youi to GKA Investigations in the email from Leon Haycock to Rhonda Doughty sent at 3.56pm on 12 April 2018 (being exhibit DB-54 to the affidavit of Dora Anna Banyasz affirmed on 3 August 2021): (a) the person/s involved in making the decision to give those instructions; (b) whether there are any written records evidencing or recording any deliberation in respect of the decision to give those instructions; and (c) the person/s responsible for approving the decision to issue those instructions. (c) Third, in relation to the instructions referred to in the email in paragraph [24] above (the instructions affidavit):19 5. By 4.00pm on 20 August 2021, the plaintiffs file and serve affidavits which identify the person or persons from whom Celine Thompson of Ligeti Lawyers sought instructions as referred to in her email to Michael Sullivan sent on 10 April 2018 at 9.04am. [50] By the orders sought, Ford seeks to compel Youi to explain the whole of the circumstances surrounding the decisions to destroy the parts and the vehicle, and the manner in which those decisions were carried out. Two issues arise: (a) Does this Court have power to order affidavits to be filed? (b) If so, should that power be exercised to order some or all of those affidavits in the circumstances of this case? [51] Ford contends that the answer to both questions is “yes”. As to the first, Ford contends that there are three sources of that power. [52] First, it is submitted that the Court has power under Rule 367 UCPR which provides relevantly:20 18 See paragraph 4 of the First Defendant’s Draft Order. 19 See paragraph 5 of the First Defendant’s Draft Order. 20 Paragraph 43 of the Outline of Argument of Ford Motor Company of Australia Pty Ltd (Ford’s Outline of Argument). -- 12 of 21 -- 13 “Directions (1) The court may make any order or direction about the conduct of a proceeding it considers appropriate, even though the order or directions may be inconsistent with another provision of these rules. (2) In deciding whether to make an order or direction, the interests of justice are paramount.” [53] Second, the implied power of the District Court gives it power to control its own processes. In von Risefer v Permanent Trustee Co Pty Ltd [2005] 1 Qd R 681 at [14] Keane JA (with whom McPherson JA and Philippides JA as her Honour then was agreed) quoted with approval the following remarks of Baron Alderson in Cocker v Tempest (1841) 151 ER 864 at 865 (emphasis added):21 “The power of each Court over its own process is unlimited; it is a power incident to all Courts, inferior as well as superior; were it not so, the Court would be obliged to sit still and see its own process abused for the purpose of injustice.” [54] Third, s. 69(1) of the District Court of Queensland Act 1967 (Qld) gives this Court (in respect of matters within its jurisdiction) all of the powers and authorities conferred on the Supreme Court. The Supreme Court, as a superior court of record, has power to order a person to furnish evidence.22 It follows that s. 69(1) confers the same power on the District Court to the same extent.23 [55] As to whether the Court should exercise that power, it is convenient to quote Mr Robinson’s outline on behalf of Ford:24 46. In the present case, what has emerged (only in a piecemeal fashion and not as a result of Youi volunteering the information) is that: (a) on 12 April 2018 (when proceedings were clearly at least contemplated) Youi gave express instructions to GKA Investigations to dispose of parts of the Vehicle which GKA Investigations had inspected but Ford had not; and (b) in March 2019, after it had commenced proceedings against Ford and the Dealer, Youi gave instructions to salvage the Vehicle, in circumstances where Ford had previously repeatedly stated that it required its experts to inspect the Vehicle. This appears to have been a considered decision by Youi made after receiving legal advice. 47. It is submitted that these are matters which warrant explanation in order that the Court may be satisfied that its processes are not being abused. The deliberate destruction of evidence known to be relevant to a court proceeding is, it is submitted, at least as serious as non-compliance with a court order (which not uncommonly attracts an order requiring a party to furnish evidence explaining the non-compliance). 48. Indeed, the intentional destruction of evidence relevant to a proceeding which is on foot would, ordinarily at least, constitute an abuse of process. So, for example, in Clark v New South Wales (2006) 66 NSWLR 640 (upheld on appeal) Johnson J held at [104]: 21 Paragraph 44 of Ford’s Outline of Argument. 22 For example, Blue Badge Insurance Australia Pty Ltd v Farnan [2017] NSWSC 688 at [32]. 23 Paragraph 45 of Ford’s Outline of Argument. 24 Paragraphs 46 to 50 of Ford’s Outline of Argument. -- 13 of 21 -- 14 “Where, however, a party to proceedings intentionally destroys material which is significant to the determination of the proceedings, and such destruction occurs after the proceedings have been commenced, then a clear foundation would appear to exist for the court to call in aid its power to stay or dismiss the proceedings.” 49. His Honour found that “[i]t is not necessary for the defendant to establish that the acts of the plaintiff were delinquent, blameworthy or contumelious for the purposes of establishing abuse of process”.25 50. In the present case it is submitted that there is at least reason for the Court to consider that its processes might be being abused. It is an appropriate case to order the plaintiffs to furnish evidence explaining matters concerning the decisions which were made to destroy evidence. [56] The plaintiffs’ response was not extensive, in writing or orally. The argument appeared to be as follows: (a) There was no basis to conclude any abuse of process because Ford had ample opportunity to inspect the parts and the vehicle before its destruction; and (b) There is no dispute on the pleadings that the parts and the vehicle were destroyed, so there is no issue in dispute that the evidence in the affidavits would address. The Court has power to make the orders [57] As I understood his position, Mr Fitzsimons (who appeared for the plaintiffs) did not dispute that this Court has power to order a party to provide affidavits relevant to the conduct of the proceeding. In that circumstance, I am willing to proceed in this application on the basis of Ford’s submission that this Court has such a power. [58] The limit on that power, which I have identified, is that the evidence must be relevant to the conduct of the proceeding. It is not confined just to evidence on issues in dispute on the pleadings, nor just to issues which go to the merits of the material facts pleaded. It can also go to interlocutory issues, to issues of abuse of process, to issues of professional conduct by legal practitioners, and so forth. However, the evidence must be relevant to the conduct of the proceeding because, at its heart, the jurisdiction of the Court arises from its power to hear and determine actions conferred by s. 68 District Court of Queensland Act 1967 (Qld) and other civil jurisdiction conferring provisions. [59] Where a party contends another party is abusing the process of the Court by its conduct of proceedings, it is plain in my view that the Court may order a party to file evidence on that matter where a sufficient case has been made out to justify that course. Mr Robinson relied on Capital Webworks Pty Ltd v Adultshop.com.limited [2005] FCAFC 232. In that case, the respondent had brought an application to strike out the proceedings on the basis that they were an abuse of process because they were being maintained for the benefit of a third party. In that application, the trial judge had ordered a party to file an “affidavit disclosing fully the persons 25 Blue Badge Insurance Australia Pty Ltd v Farnan [2017] NSWSC 688 at [144]. -- 14 of 21 -- 15 beneficially entitled to the cause of action which it brings”. Moore J (with whom Finn J agreed and with whom Lee J agreed on the principle) held that: [32] It cannot be doubted that a Judge of this Court can take steps to avoid the abuse of the Court's processes which might include ordering a party to provide evidence on that issue at least when the Judge reasonably suspects that the processes are being abused. There is nothing novel about a Judge requiring a party to furnish evidence. It can, for example, be done in aid of enforcing a Mareva injunction: see, for example, the observations of Deane J in Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 622-623. However, in the present case it is not entirely clear why it was necessary for the affidavit to be ordered. On the evidence adduced to this point, it can be inferred that a third party (which may or may not be at arms length to the appellant) has lent money to the appellant to provide security ordered by Nicholson J. The evidence does not suggest anything more. Even if the lender is at arms length and anticipates repayment of the loan from the proceeds of the litigation if the appellant is successful, such a situation falls well short of one which would constitute an abuse of process. If, in addition, the lender was entitled to some or all of the proceeds of the litigation, that, of itself, is unlikely to render the principal application an abuse of process. There is nothing to suggest that there has been any "trafficking" in the litigation or that the appellant does not control the litigation. It must be remembered that the position of the respondents, in relation to any costs the appellant might ultimately be ordered to pay, has been protected to this point by the provision of security for costs. [33] It is also not entirely clear what information would likely be elicited in an affidavit filed in compliance with the order. It is more likely, on the material before us, that the lender has an interest in the proceedings in the sense that the lender would have a right under the loan agreement to repayment of the loan (and any additional amounts agreed) from any damages awarded to the appellant rather than a beneficial interest in the proceedings themselves. But the respondents have not challenged the form of the order. [60] A distinction exists between the circumstances of that case and this case. There, the person seeking the orders had brought an interlocutory application to which the affidavit evidence would be relevant. There is no such application on foot in this case. However, I do not think that matters from the perspective of whether the Court has the power to make the order. It is clear from the evidence filed by Ford, and the submissions made, that Ford contends that there is arguably, at least, an abuse of process arising from the destruction of some of the parts and the vehicle. Further, I consider that contention to be reasonably arguable. It is a matter of form, not substance, that no strike out application is on foot. Ford could just have easily filed an application to strike out, then sought the orders. Whatever might be the position where the lack of an application indicates a lack of bona fides or an unjustified and speculative process (and that can occur whether there is an application on foot or not, as the result in Capital demonstrates), that is not the case here. [61] Another point to note from Moore J’s judgment is that the scope of the order sought by an applicant in the position of Ford must be scrutinised to determine if the evidence will meaningfully assist. -- 15 of 21 -- 16 Should the orders be made? [62] Here, the evidence sought is said by Ford to be relevant to the proceedings because it is relevant to demonstrating whether the proceedings are an abuse of process as a result of the destruction of the parts and the vehicle. [63] The destruction of evidence can justify the striking out of pleadings or dismissal of proceedings as an abuse of process. The principles applicable, where a party destroys real evidence before proceedings commence, were considered by Chesterman J in Fuji Xerox Australia Pty Ltd v Lee & Anor [2003] QSC 303. That case is conveniently explained by Johnson J in Clark v State of New South Wales (2006) 66 NSWLR 640 and I gratefully adopt his Honour’s summary: [96] In Fuji Xerox Australia Pty Ltd, the defendant applied for orders that the plaintiff’s claim be struck out or dismissed as an abuse of process or stayed permanently. The grounds advanced in support of the application alleged that the plaintiff had destroyed critical evidence before the commencement of proceedings. It was alleged that the conduct amounted to an attempt to pervert the course of justice and/or contempt of court. The defendant submitted that there could not be a fair trial of the action without the evidence which the plaintiff had destroyed. The claim related to a rental agreement of a photocopier. Following the termination of the agreement, the plaintiff took possession of the photocopier. It was leased to another entity and then returned to the plaintiff. The photocopier was destroyed along with several other machines of an identical type prior to the commencement of proceedings. The fact that the machine had been destroyed did not become known until after the proceedings were on foot. Chesterman J said (at [8]): “[8] I accept the defendant’s submission that if it be shown that the photocopier was destroyed in order to deprive him of critical evidence and prevent him advancing a good arguable the case the court would intervene to ensure that the attempt to distort the course of justice did not succeed. The particular order to achieve that end would depend on the circumstances.” [97] After referring to British American Tobacco Australia Services Ltd v Cowell (at 586 [173], 587 [175]), Chesterman J (at [9] and [10]), referred to the principles in R v Rogerson: “[9] According to Brennan J and Toohey J in R v Rogerson (1992) 174 CLR 268 at 280: ‘… The course of justice is perverted … by impairing … the capacity of a court … to do justice. The ways in which a court … may be impaired in … its capacity to do justice are various. Those ways comprehend … erosion of the integrity of the court … hindering of access to it, deflecting applications that would be made to it, denying it knowledge of the relevant law or of the true circumstances of the case, and impeding the free exercise of its jurisdiction and powers …’ [10] This would seem to be a case of denying the court knowledge of the true circumstances relevant to the determination the court is called upon to make.” [98] Chesterman J referred to Arrow Nominees Inc and the facts of the case before him and said (at [14]–[16]): -- 16 of 21 -- 17 “[14] It is not the case that a trial will only be fair if all possible evidence relevant to the issues in dispute is available to the parties. It is common experience that witnesses die or cannot be found, or that documents are lost or that objects or scenes which may help to determine a disputed course of events change or are obliterated. The parties must do the best they can with what is available. A trial in which a witness, even a critical witness cannot be called can still be fair. [15] The remedy sought by the defendant’s application is drastic. It is to preclude the plaintiff from pursuing what is an arguable right to recover a substantial sum of money. I apprehend that a court would only accede to such an application where it is clear that there cannot be a fair trial and that that consequence is a result of the deliberate action of a party to the litigation. [16] In this regard, the intention of the person who destroys evidence or puts it beyond the reach of his opponent is critical. Actions which are themselves lawful may amount to a contempt of court if done with the intention to interfere with the course of justice. This was pointed out by the High Court in Lane v Registrar of Supreme Court of New South Wales (1981) 148 CLR 245 at 258, at which the Court (Gibbs CJ, Mason J, Murphy J, Wilson J and Brennan J) said: ‘… Thus it may be lawful for one man to advise another to take a holiday in Brazil, but the giving of the advice may constitute a contempt of court if the advice is given for the purpose of keeping the witness out of the way to avoid service of a subpoena. It may be lawful to dismiss a servant … but if this is done for the purpose of punishing him for having given evidence it is a contempt of court.’ ” [99] Chesterman J dismissed the defendant’s application having concluded (at [41] and [42]): “[41] It will be remembered that the photocopier was destroyed before the action was commenced. I have already drawn attention to the terms of the correspondence from the defendant’s solicitors which did not request that the photocopier be retained for the purposes of an inspection. [42] There being evidence that the photocopier was not destroyed in order to defeat the defendant’s case and there being some evidence that an inspection would not produce anything of relevance it is not an appropriate case to enter judgment for the defendant.” [64] Those passages identify that, where evidence is destroyed, the intention of the party causing that to occur may be relevant. If the intention was to deprive the other party of critical evidence, the Court will intervene, though how it does so will depend on the circumstances. [65] Further, his Honour recognises that it is relevant to consider the extent to which the destruction impacted on the ability of the other party to present its case. This latter principle is reflected in numerous other decisions in this area. Johnson J states the principle in Clark as follows: [102] In other cases, the issue has been left to the drawing of inferences adverse to the party who has destroyed the material prior to trial, applying the principles in Allen v Tobias and Katsilis. Whether an adverse inference will be drawn, and the strength -- 17 of 21 -- 18 of the inference, will depend upon the particular circumstances of the case. In a clear case of conscious destruction of material which was likely to be used in evidence, a strong inference adverse to the destroying party may be drawn with the ultimate inference being of the type referred to in Marsden v Amalgamated Television Services Pty Ltd. [103] However, the remedies available in such circumstances are not confined to the drawing of appropriate inferences. If the conduct of the destroying party may be characterised as an abuse of process, then the power of the court to stay or dismiss proceedings may be utilised in an appropriate case. This power is to be exercised sparingly. [104] Ordinarily, a party is entitled to initiate and continue proceedings with the court determining those proceedings on their merits. Where, however, a party to proceedings intentionally destroys material which is significant to the determination of the proceedings, and such destruction occurs after the proceedings have been commenced, then a clear foundation would appear to exist for the court to call in aid its power to stay or dismiss the proceedings. The court will have in mind the interests of the individual parties to the civil proceedings, but also the protection of the administration of justice and the integrity of the courts and the system of justice generally. Resolution of an application for a stay or dismissal of the proceedings will consider the question whether a fair trial may take place in the absence of the destroyed material even where an appropriate inference may be drawn adverse to the destroying party. [66] Most recently, the High Court restated that principle that the remedy for a demonstrated abuse of process is concerned with prejudice to a trial rather than punishing for the conduct involved.26 [67] It is important also to keep in mind that the destruction of evidence might not amount to an abuse of process which can be shown to frustrate the prospect of a fair trial, but might still have significant forensic consequences:27 [77] In Allen v Tobias (1958) 98 CLR 367, Dixon CJ, McTiernan J and Williams J considered the consequence which should follow where an agreement was destroyed by the defendant to proceedings before those proceedings had been commenced. Their Honours said (at 375): “… Notwithstanding the difficulty which his Honour felt in arriving at a conclusion, there are two grounds why the Court should proceed upon the assumption that the document was so executed. In the first place to presume the fact against the defendant seems but a proper application to the circumstances of the principle omnia praesumuntur contra spoliatorem. It is a far cry from the municipal warfare of the present case to a case in Prize but no statement of the principle could be more apposite than that of Sir Arthur Channell delivering the opinion of the Privy Council in The Ophelia ([1916] 2 AC 206 at 229–230): ‘If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been 26 Victoria international Container Terminal Limited v Lunt 388 ALR 376 at [18]–[22] 27 See Clark v State of New South Wales (2006) 66 NSWLR 640 at [77] to [78]. -- 18 of 21 -- 19 expected in his case.’ A second reason for acting on the assumption that the agreement was executed by the defendant and his brothers is that the burden of proof is cast upon the defendant.” [78] In Katsilis v Broken Hill Pty Co Ltd (1977) 52 ALJR 189; 18 ALR 181, Barwick CJ elaborated upon the drawing of inferences in circumstances where an item of potential evidence (a pick) was destroyed in advance of civil proceedings. Although Barwick CJ dissented in the outcome in Katsilis, the principles referred to by the Chief Justice remain applicable. Barwick CJ said (at 197; 197–198): “Ordinarily, though a case is normally better tried on the evidence which is produced than on that which is not, it can properly be said that the failure of a party to give or produce evidence which, in the circumstances of the case, that party in its own interest would be expected to give or produce, warrants the conclusion that, if given or produced, the evidence would not support that party’s case. Indeed, in some circumstances it might be inferred that it would support the opponent’s case; but, if so, it must depend very much on the circumstances. But, in any case, the inference would depend upon some element of conscious repression or withholding of the evidence. The warrant for the inference must depend upon the deliberation with which the evidence is withheld and the appreciation or likely appreciation of the party of its significance in the case. In my opinion, these propositions are in accord with the decided cases which I have taken occasion to examine. A passage towards the end of their Lordships’ advice in The Ophelia [1916] 2 AC 206 at 229, may call for comment in this connection.” The Chief Justice set out the passage from The “Ophelia” [1916] 2 AC 206 at 229– 230 referred to in Allen v Tobias and continued (at 197; 198): “I would make two comments on this passage. First, the use of the word ‘presumption’ might seem to put the matter too high. Of course, in the supposed circumstances the inference that the document, if produced, would not assist the spoliator is, in the circumstances, quite strong. But it merely becomes part of the body of evidence to be considered. Secondly, if the destruction is innocent no such inference can be drawn — that is to say, innocent because the significance of the document is not known or because the destruction was not deliberate but, for example, accidental. But bereft of the opportunity to produce the document to support him, the party who has thus innocently destroyed it is at the disadvantage of its absence. I take no more than this from the quoted passage from their Lordships’ advice. It thus seems to me that before any adverse inference is drawn, it must be possible to conclude that the failure to give evidence or to produce a piece of real evidence is deliberate and that it is likely that the party against whose interest the inference is to be drawn has or has reason to have an appreciation of the relevant nature of the evidence. Thus, it seems to me that, having regard to what I have said already, there is no reason in this case for drawing any inference from the unavailability of the actual pick in use: …” [68] Much more could be said about this subject, but this is a sufficient statement of principles for the purposes of this application. [69] In deciding whether to make the orders sought by Ford, attention must be given to exactly what Ford already knows and what is seeks to find out by its orders. -- 19 of 21 -- 20 [70] The evidence before the Court prima facie demonstrates that: (a) Youi directed the destruction of both the parts and the vehicle; (b) Mr Haycock of Youi directed destruction of the parts; (c) Youi took advice about salvage of the vehicle from Ligeti Partners; (d) Youi contends it was entitled to destroy the evidence because of Ford’s lack of activity in seeking to inspect, and in those circumstances, it avoided the cost of storage by disposing of the items; (e) Youi contends there is extensive evidence of examinations of the vehicle and the parts available to Ford; and (f) Youi never informed Ford of its intention to destroy the parts. [71] By its application, Ford seeks, in effect, to find out who at Youi actually made the decision to destroy, and any record made of that decision or a subsequent instruction. In practical terms, such evidence would seem to assist Ford the most if it facilitated proof of a subjective intention to frustrate Ford’s defence. Otherwise, Ford seems to have the evidence it needs relating to Youi’s conduct to mount its case on abuse of process, or alternatively, to make submissions on the evidence at trial. [72] The evidence already demonstrates that Youi destroyed the evidence, knowing it was bringing proceedings (or had brought proceedings), and Ford can advance arguments on whether there can in consequence be a fair trial because it already has such other evidence about the parts and the vehicle as exists. [73] I think it unlikely that this is a case of deliberate destruction of evidence with an intention of frustrating Ford’s defence. Youi’s claim is too modest to seem to justify such behaviour. And it is a strange course to take where there appears to be documentation of the state of the relevant parts of the vehicle. [74] In my view, Court’s should be reluctant to order a responding party to file affidavit material touching on the issues in dispute with another party. The ordinary position is that parties are free to choose what, if any, evidence to put before the Court. However, in this particular situation, any application by Ford to dismiss the proceedings as an abuse of process will face real difficulties should Ford seek to persuade a Court to infer an intention to frustrate the defence of the proceedings without additional information about how, when and by whom the decisions to destroy were made. [75] I would have considerable reluctance in directly ordering a person to state what their subjective intention actually was in causing or directing destruction, especially a such evidence might attract the privilege of self-incrimination. But the orders sought by Ford fall short of directly requiring that to be done. [76] In these specific circumstances, I consider I ought to make orders requiring the vehicle affidavit and parts affidavit to be provided, though I consider some adjustment to the form of the direction by the Court is required such that the -- 20 of 21 -- 21 deponent has to answer questions to the best of their knowledge and belief after making reasonable inquries. [77] I will not order the instructions affidavit be provided. While no submission was made that that affidavit would intrude on legal professional privilege (and it probably would not), I do consider that affidavit to seek information of secondary relevance to the abuse of process contended for by Ford and to unnecessarily probe the relationship between solicitor and client. [78] On balance, therefore I should make the orders sought by Ford for the provision of the vehicle affidavit and parts affidavit as defined in paragraph 49(a) and (b) above. I am concerned, however, whether the object of the orders ought to be the plaintiffs, or more correctly, the proper officer of Youi. I will hear the parties on that matter. -- 21 of 21 --