Agipcoal Australia Pty Ltd v Idemitsu Queensland Pty Ltd & Ors [1991] QSC 183

J;V> REVlSEo coPrEs .,s,c::iJ-i=o'7 J ..... I :-.:,.0 1 IN THE SUPREME COURT OF QUEENSLAND { ·"""""- Sc.. 9/t 8'.3 Court Reporting Bureau i . Oate:jq If:, I c,- / f ~.,-;,-.:,.,u,.,,,,.;:,.;..~~- f 10 20 30 40 50 60 ,......,_,._"""'•- ... -~ COMMERCIAL CAUSES JURISDICTION BEFORE MASTER WHITE No. 1139 of 1990 BRISBANE, 17 JUNE 1991 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN: AGIPCOAL AUSTRALIA PTY. LTD. -and- IDEMITSU QUEENSLAND PTY. LTD. -and- BLIGH COAL LIMITED -and- LUCKY-GOLDSTAR INTERNATIONAL (AUSTRALIA) PTY. LTD. -and- PACIFIC COAL PTY. LTD. -and- IDEMITSU KOSAN CO. LTD. Plaintiff First Defendant Second Defendant ThirdDefendant FourthDefendant Fifth Defendant BY ORIGINAL ACTION AND BETWEEN: Govt. Printer, Qld. IDEMITSU QUEENSLAND PTY. LTD. First and BLIGH COAL LIMITED Plaintiffs by Counterclaim -and- LUCKY-GOLDSTAR (INTERNATIONAL) SecondAUSTRALIA PTY. LTD. Plaintiff by Counterclaim -and- ENTE NAZIONALE IDROCARBURI 1 FirstDefendant by Counterclaim 10 20 30 40 50 60 -- 1 of 8 -- 10 AGIPCOAL S.p.A. -and- Second Defendant by Counterclaim AGIPCOAL AUSTRALIA PTY. LTD. Third Defendant by Counterclaim BY COUNTERCLAIM JUDGMENT MASTER: This is an application by the plaintiffs by counterclaim for orders that the first and second defendants by counterclaim make further general affidavits of discovery 20 pursuant to 0.35 r.11 and particular discovery in relation to certain classes of documents set out in the schedule to the summons. It is unnecessary to consider the action in depth for the giving of these reasons. The action and counterclaim arise out 30 of a joint venture formed between the plaintiff and the first, second, third and fourth defendants and two other companies, not parties, for the purposes of investigating the feasibility of developing and exploiting deposits of coal at Ensham in Queensland. The participants in the joint venture were granted 40 an authority to prospect for three years from February 1984, which authority was renewed. The joint venturers were obliged to give a commitment to the Queensland Government to proceed 50 and develop and mine the coal deposits. It is alleged that .the authority to prospect would otherwise be liable to forfeiture. The plaintiffs by counterclaim allege that the defendants by counterclaim declined to give that commitment. The defendants by counterclaim in their action plead that the increase in interest by the parties on the counterclaiming side of the record obtained an interest in Bligh Coal Limited, Govt. Printer, Old. 2 10 30 40 50 60 -- 2 of 8 -- 10 20 30 40 50 60 venture. T~e defendants by counterclaim allege that the reaso that the defendants by counterclaim declined to give that commitment was that they intended to prefer their interests in other coal projects in Guasare in Venezuela, Newlands in Queensland and the United Project in New South Wales. Subsequently, the plaintiffs by counterclaim obtained an exploration permit to the exclusion of the defendants by counterclaim, hence the action of the defendants by counterclaim. It is the allegation of preference in para.15(f) of the defence and counterclaim which is at the heart of the application for discovery although there are matters of general relevance. The first defendant by counterclaim, Ente Nazionale Idrocarburi, ("E.N.I.") together with the third defendant by counterclaim, Agipcoal S.p.A., ("Agip Italy") are pleaded to own and control the third defendant by counterclaim, Agipcoal Australia Pty. Ltd. Agip Australia has given discovery in this action as have the two respondents. E.N.I. is said to be the focus of a world-wide group of subsidiary companies involved in energy production. One Giuseppi Daino, deputy legal counsel for E.N.I. has sworn its affidavit of discovery. Apart from the court documents and correspondence between the parties' solicitors (not particularised) three documents only have been discovered. The submission is, in accordance with the pleadings, that E.N.I. had favoured other projects over the Ensham project. It is pleaded that E.N.I. controlled and directed Agip Australia and yet no documents have been discovered going to this. Govt. Printer, Qld. 3 10 20 30 40 50 60 -- 3 of 8 -- 10 20 30 Mr. Sofronoff, senior counsel for the plaintiffs by counterclaim, took me inter alia through many of the documents discovered by Agip Australia. They are relevant to show that E.N.~. and to a lesser extent, Agip Italy, was involved on a day to day, or, decision to decision basis, with the Ensham project. Many of the documents bear the notation that they be copied to Mr. Daine. Some are documents directed to, or emanating from Mr. Lussu, E.N.I.'s Director of International Activities prior to the commencement of the action. It is submitted by Mr. O'Donnell for the respondents that Mr. Daine, being legal counsel, clearly received those documents as legal advisor to E.N.I. and the documents were thus privileged from production. A reference to para. 3 of the affidavit of discovery seems to suggest that these documents are not so described there. It is as follows: "3. The company objects to produce the documents in Part 2 of the said Schedule 1 on the grounds that they are privileged being confidential communications between the company and its solicitors relating solely to the conduct of thecase on its behalf and their instructions to Counsel, draft papers, and documents relating 40 solely to its case." In any event, they are not in any way particularised in Part 2 of Schedule 1, so that the other parties might be in a position to change the claim for privilege. Certain passages from the documents discovered by Agip so Australia have been removed. One of those documents obtained elsewhere shows that the eliminated passage related to another coal project. There are very few documents which Agip Italy has discovered which go to the projects said to have been preferred in para.15 (f) of the defence and 60 Govt. Printer, Old. 4 10 30 40 50 60 -- 4 of 8 -- 10 20 30 40 counterclaim. Mr. Rosengren, solicitor for the respondents, has identified a few of those documents which are said to relate to other projects. The applicants have submitted that since the discovery has been so defective, in addition to another affidavit of discovery, the respondents ought also to go on oath as to the existence of the classes of documents set out in the summons. Mr. O'Donnell submits that the applicants have failed to make out the elements which would give rise to such an order pursuant to 0.35, r.18, because reference is to classes rather than to specific documents. I have formed the view that the respondent discovering parties have, by failure to refer to documents which have been discussed by me above~ misconceived either the extent of the duty to discover, or the ambit of the case. As was observed in Beacham Group Ltd. v. Bristol Myers Pty. Ltd.(1979) V. R. 273, documents which might lead to a train of inquiry are discoverable. Since the decision in British Association of Glass Bottle Manufacturers Ltd. v. Nettlefold (1912) A.C. 709, approved in Mulley v. Manifold 103 C.L.R. 341 by the High Court, it is possible to look more widely than was previously the position to ascertain the existence of other documents. This action is a.commercial cause. The respondents are, in effect, the plaintiff in the action. They have been 10 20 30 40 50 . 50 60 given trial dates later this year in preference to other matters. It is, in my opinion, important for the parties to recognise their responsibility in the matter of discovery and to make every attempt to be co-operative and not obstructive in their attitude to it. Govt. Printer, Old. 5 60 -- 5 of 8 -- 10 It has been raised with me by Mr. O'Donnell that the ambit of the discovery which I am to order in relation to th preferment of the other coal projects might well be oppressive. I have acceded to his. request that I limit in some way the order which I·, will make as to further general discovery and I 10 will set that out in the order. Because neither Mr. Sofronoff nor Mr. Newton, his junior counsel, have been here to hear this further submission, I will give liberty to the applicants to make further submissions with respect to this proposal to vary the order which I indicated I would make on Friday evening. 20 I have concluded, somewhat reluctantly, that I cannot order the discovery sought pursuant to 0.35 r.18, those documents being classes rather than specific documents. In an action such as this, the limitations of 0.35 r.18 are apparent and the amendments made to the English rules have much to 30 30 40 50 60 recommend them. Accordingly, it is ordered that the respondent first and second defendants by counterclaim make, file. and serve a further and better affidavit of discovery on or before 4 p.m. on 8 July 1991, and that the discovery relating to the question of preference raised in para.15(f) of the defence and counterclaim be limited in the following way: The discovery of the first and second defendants by counterclaim in relation to the issue pleaded in para.15(f) of the defence and counterclaim be confined to; (a) documents which were created by or otherwise come into the possession or power of the first and/or second defendants by counterclaim between July 1988 and August 1990; and Govt. Printer, Qld. 6 40 50 60 -- 6 of 8 -- 10 20 30 40 50 60 ( b) which came to the attention of a person within thl defendants capable of making a decision to prefer one o~ the projects over another; and (c) which involve either comparison of one of the four projects against another o a consideration of the progressing of one of the fou projects in relation to another. It is further ordered that the respondents give inspection of the discovered documents by copying such documents on the usual terms to be delivered with the said affidavits. With respect to costs, it is ordered that the applicant pay the respondents' costs of and incidental to the adjourne application before Senior Master Horton Q.C. on 31 May 1991 t be taxed. It is further ordered that the respondents pay the applicants' costs of and incidental to the summons to be taxed. I give liberty to apply. I add to these reasons what has ocurred subsequently. Mr. Sofronoff appeared on Monday afternoon to oppose the limitatio proposed by Mr. O'Donnell upon the order for further and bette discovery. In the absence of agreement between the parties and any admissible evidence advanced by the respondents as to the oppressive nature of the ambit of the further discovery apart from submissions that it must be so I concluded that the further discovery could not be confined in the manner sought. I therefore deleted (a), (b) and (c) above save that the documents were restricted to those which came into existence after July 1988 it being the date on the pleadings when the plaintiffs by counterciaim plead that the defendants by Govt. Printer, Old. 7 10 20 30 40 50 60 -- 7 of 8 -- 10 20 30 40 50 60 counterclaim initiated their course of conduct which i complained of. I have done this pursuant to O. 35 r .11 ( 2). That limitation was opposed by Mr. Sofronoff. The orders relating to discovery are as follows: The respondent first and second defendants by counterclai make file and secure a further and better affidavit of discovery on or before 4 p.m. on 8 July 1991 and that discovery relating to the question of preference raised in para.15(f) of the defence and counterc1aim be limited tJ documents which were created by or otherwise came into thJ possession or power of the first and/or second defendant]) by counterclaim from July 1988. The other orders as to inspection and costs remain. Added t the orders for costs is an order that the respondents pay two- thirds of the applicants' costs of and incidental to th appearance on 17 June 1991. Govt. Printer, Qld. 8 10 30 40 50 60 -- 8 of 8 --