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With thanks to Charles Harrison for drawing attention to this decision.
Valentini (a pseudonym) v Trustees of the Marist Brothers (Costs) [2022] VSC 550 (on Austlii).
The plaintiff in this matter and four other matters (all of which settled soon before hearing) sought orders for costs on an indemnity basis on two grounds. Firstly, that the defendant by reason of its failure to use reasonable endeavours to comply with its overarching obligations imposed by the Act be required to pay the plaintiff’s costs of the proceeding on an indemnity basis. Secondly that the defendant by reason of its failure to comply with its obligations in respect of discovery as required pursuant, inter alia, to s 55 of the Act and Order 29 of the Supreme Court (General Civil Procedure) Rules 2015, be required pursuant to s 56 of the Act, to pay the plaintiff’s costs of the proceeding on an indemnity basis.
The Court found that the alleged breaches were not made out so there was no cause to consider whether special costs orders should be made, as explained below.
The pleading issue.
In relation to the first issue the Court said at [104] – [111]:
104 The pleading provided no particulars for either actual or constructive knowledge of Coffey’s conviction or of the risk posed by Coffey. The Statement of Claim did not set out when, how or who held actual knowledge, nor did it set out any factual matters that would be relied on to infer constructive knowledge. The defendant objected to the relevant paragraphs and made the denials under cover of that objection.[61] True it is in the absence of particulars a claim, or part of it, is liable to be struck out. It is wrong to say, as the plaintiff submitted, that at no time did the defendant take any step to strike out the deficient pleading. Wrong because instead the defendant sought particulars which the plaintiff agreed to provide. Although particulars were provided by letter, a particularised pleading to which a defendant would need to respond in a way that has a proper basis, was not provided until the 27 April 2022.
105 It may well be that for good reason the plaintiff was not in a position to provide particulars when the Statement of Claim was served and the best that might have been done at that time was to refer to particulars to be provided after discovery. When particulars are not provided, an order for particulars is generally not made before provision of a defence.[62] In those circumstances, Williams describes that the ‘convenient course’ is for a defence to be filed denying the allegations lacking particulars and apply for particulars afterward.[63]
106 This is exactly what occurred in these cases. The denials therefore are made based upon the incomplete state of the plaintiffs’ pleadings. The Statement of Claim remained substantively unchanged until 27 April 2022. As the obligation in s 18 is one that is owed at the time the response is made, I do not accept the submission that maintaining the denials until the proposed Amended Defence on the eve of trial was a breach of s 18.
107 It seems to me that the proper basis for the denials of knowledge when the defence was filed, was based upon the state of the pleading that the defendant was asked to answer. The defendant was not required to amend its defence or withdraw those denials until such time as a particularised amended pleading was provided. That could have been done as early as August 2021 upon the discovery that was made by the defendant and the receipt of the report of Dr Kenny by subpoena inspection in late 2020.
108 In those circumstances, when the pleading was particularised, the defendant made an appropriate non-admission. I accept that in BLT in particular there was no maintenance of a denial on the particularised pleading. On either defence, the plaintiff was to be put to his proof on questions of knowledge.
109 There are two remaining denials said not to have a proper basis. The submissions did not expand why these denials never had a proper basis other than to say they were abandoned on the eve of trial. The oral submissions focused on the questions of knowledge as discussed above. The first other matter is a denial that the physical and sexual abuse and injuries to the plaintiff were caused by breaches of duty of care by Coffey.[64] The Statement of Claim and corresponding defence are pleaded:
[34] As a consequence of the trespass and breaches of duty of care by the defendant and Coffey, the plaintiff has suffered loss and damage.
As to paragraph 34, the defendant:
(a) insofar as the allegation in paragraph 34 are material to any claim against the defendant, it denies the allegations;
(b) the defendant otherwise does not plead to the allegations in paragraph 34 insofar as the allegations contained therein are made against a third party.
If the pleading in this form is responsive to the corresponding paragraph, it is clear in my view that the defence only pleads a denial of breach of duty owed by it and does not plead to any breach by Coffey.
110 Finally, a denial of vicarious liability for Coffey’s breaches of duty of care was said not to have a proper basis.[65] The plea of vicarious liability is at [35] of the Statement of Claim. The responding plea denies vicarious liability with a specific denial of vicarious liability for any criminal conduct committed by Coffey. Responding to a plea of vicarious liability requires consideration of the detail of the acts of abuse and the circumstances in which they occurred.[66] That is necessarily informed, in this case, by the collation of discoverable documents, the process of interrogation and other pre-trial processes, including the request for further particulars. Particulars were sought as to the pleaded abuse and as to the ‘placing of authority power trust and intimacy’ which were relevant to the question of vicarious liability. I also observe that a third party notice was issued against Archbishop Comensoli as the nominated third party,[67] pleading amongst other things that the operation of the school was such that any vicarious liability lay with the Archdiocese. Ultimately the third party proceeding resolved shortly prior to trial. I do not draw an inference that the defence never had a proper basis from the timing of the admission of vicarious liability on the eve of trial.
111 I am not satisfied that the defendant’s defence dated 29 July 2020 breached its obligations under s 16 or s 18 of the Act.
The discovery issue
On the second issue the Court said at [112] – [127]:
112 There are two aspects to the breaches alleged. First the misleading nature of the discovery that was initially made, and second the inadequacy of that discovery in producing documents within its custody, possession, control or power.
113 The plaintiffs submit that the defendant’s initial affidavit of discovery was misleading or likely to mislead. It did so by referring to documents not discovered because they were said to be not relevant. The plaintiffs submitted that subjectively they relied on the representation although the affidavits relied on did not depose to placing any such reliance on the phrase. Fundamentally, the submission is that I should (and the plaintiff’s advisors did) read the deponent’s assertion that the documents are not relevant as being an assertion that documents of that type had been reviewed and their content determined not to be relevant. In my view, this is an unlikely interpretation in the circumstances.
114 From the disclosure of the documents regarding the complaint by IHC5, an inference would be easily drawn that pleadings and documents such as medico-legal reports from the 1998 claim exist and might bear on what IHC told the school principal in or around 1974. The fact that the affidavit refers to the existence of other such documents, many of which would be likely to be held in archives by firms of solicitors and not readily accessible, does not suggest that all such documents have been reviewed as to their content. To interpret it in this way would assume a most extensive search, including a search of documents held in the archives of third parties. Objectively this is unlikely. There was no suggestion that such an extensive search was required to meet the obligation to conduct a reasonable search. The subsequent letter seeking further and better discovery made no comment as to the existence of defences or subsequent pleadings, there was no demand that a search be made of such documents or challenge to the asserted lack of relevance of such documents created as a result of those complaints.
115 There is no explanation for why the discovered statement of IHC5 did not inform the particulars provided by the plaintiff by letter in August 2021 or why amendments pleading as a particular of knowledge the information contained in that document did not occur until 27 April 2022. The importance of the documents, particularly the 2017 statement of IHC5, seems to have been overlooked by the plaintiffs’ advisors until the eve of trial when CCI documents brought to light other documents including those in which IHC5 had repeated the same representation.
116 The fact that the representation of IHC5 was disclosed in June 2021 by the discovery of the initial contact report makes the repetition of that representation in other documents on other occasions less likely to be critical documents in their own right. The complaint report by IHC9 disclosed in the CCI documents was not contained in the discovered statement of IHC9.
117 Nor does it follow that because the later affidavit of documents identified further documents, the earlier affidavit was not correct and therefore misleading. If that were so, then any subsequent affidavit of documents would demonstrate the misleading nature of the first. Affidavits disclose documents identified by reasonable searches and subsequent affidavits disclose the product of later and often more diligent searches or documents responsive to amendments to pleadings. I do not accept that the first affidavit was misleading because it said the defendant had no other relevant documents because at a later time other relevant documents were disclosed. I consider this consistent with a party’s ongoing obligation to make discovery.
118 The obligation under rule 29 of the Rules is to discover documents in the ‘possession, custody or power’ of a party. This is supplemented by the obligation to disclose the existence of certain documents in the ‘possession, custody or control’ contained in s 26 of the Act.
119 In response to the amended pleading of prior complaints by IHC5 and IHC9, the solicitor for the defendant reviewed the archived files held by the defendant including those pertaining to IHC5 and IHC9 and conducted an interview with the relevant principal of St Joseph’s College in Geelong. Ms Kemp’s affidavit confirmed that none of the documents produced by CCI were held in the defendant’s own records.[68] Accordingly, its discovery had not overlooked relevant documents in its custody. The question of whether they are in the possession or power of a party turns on whether the defendant has a right to possession, or has documents in its power or control.
120 ‘Power’ in this context has been formulated by Lord Diplock to mean:
A presently enforceable legal right to obtain from whoever actually holds the document inspection of it without the need to obtain the consent of anyone else.[69]
Conversely a document is not within power if the right to inspection requires the consent of the party holding the document. Nor is a party compelled to take steps to obtain a present enforceable legal right. As such medical records of a patient held by various practitioners are not within the power of the patient.[70] Taxation documents, originally documents of the taxpayer, in the hands of the Australian Taxation Office, may result in a taxpayer having an enforceable legal right and discovery may be ordered if on request permission was likely to be given.[71]
121 I accept that the documents held by an insured and those held by its insurer will not always be identical. There will be many reasons why this might be so. The plaintiff submits that the distinction between defendant and insurer is artificial and therefore the obligation on the defendant is to discover documents held by the insurer. In my view, this submission take too broad a view of a defendant’s discovery obligation. The relationship between an insured and its insurer is a contractual one. The insurer is not a party to the litigation. Its obligations are measured by its power to control the proceeding. What is required to discharge those obligations is not necessarily identical with that of its insured as a party. The submission that the defendant is in breach by not having discovered or disclosed the documents held by its insurer glosses over the question as to what documents might be within the power of the insured to inspect.
122 A practical example of this is demonstrated by CCI’s production in this case in answer to the plaintiff’s subpoena. Production included documents relating to Coffey’s time with the Salesian order. It was not explained how such documents could be in the defendant’s possession, power or control, nor how it might have been aware of their existence. Many of the documents identified as coming to light only through answering the CCI subpoena are not Marist documents at all. Of the eight documents identified[72] above only one related to the Marist brothers, the remainder relate to Coffey’s time in the Salesians and were relied on to criticise the production by the Salesians to a subpoena addressed to it.
123 The Court has power, buttressed by s 55 of the Act, to require a party to take steps to obtain particular documents not presently in its possession, power or control. In Hanks v Johnston (No 2),[73] John Dixon J ordered a plaintiff to use software to access backups of deleted text messages from the Apple iCloud in a defamation action. The defendant who was seeking the discovery was to provide the necessary software.[74]
124 While it might be appropriate in certain circumstances to order a party to take particular steps to obtain from its insurer documents that are not and never have been in its custody, the simpler and usual course is for either party to subpoena such documents. This is what occurred. The plaintiffs have not demonstrated that the need to issue the subpoena to CCI was caused by some deficiency in the defendant’s discovery. Despite the matters recorded by Judicial Registrar Baker in the orders regarding the objections hearing, the plaintiffs relied on the CCI and defendant’s objection to the subpoena as demonstrative of a failure of the defendant to comply with its discovery obligation. I do not accept the submission for the reasons outlined above. The objections were withdrawn upon the identification of a legitimate forensic purpose.
125 The importance of discovery to the proper administration of justice in resolving disputes cannot be overstated. The adequacy of discovery is a common area of interlocutory dispute, and properly so within the broader context of other overarching obligations including the obligation to ensure costs are reasonable and proportionate. The judgment called for by the totality of the overarching obligations requires practitioners to give adequate consideration to the timely completion of all desired interlocutory steps before the listed trial date.
126 In this case, as can be seen by the agreed extensions to the pre-trial timetable, the parties were co-operative in identifying the steps they wished to take in preparation for mediation and those they wished to postpone until after mediation. Presumably, this agreed timetable was informed by judgments as to overarching obligations regarding costs, delay, narrowing of the issues in dispute and using endeavours to resolve the dispute. There may well be good reason why the CCI subpoena was only issued five weeks before trial, but in my view the timing of that step was the root cause of the documentary difficulties that plagued the commencement of the trial. If the outcome of mediation is to be a ‘bright line’ in terms of the efficient timing of steps for trial preparation, then it is imperative that the mediation is held with sufficient time for the steps that are to occur after mediation and prior to trial.
127 No breach in respect of discovery obligations has been made out.
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