Perspectivas de análisis de la Calidad de Vida Urbana

5.9 Discovery is an important part of the litigation process as it provides access to information required to resolve or determine the issues in dispute.⁵ However, in some cases, the costs associated with discovery can present a distinct barrier to justice.

Therefore, any restrictions on parties’ access to discovery—to avoid the costs, but also foregoing the information that discovery provides—need to be responsive to the interests of the administration of justice in each case. This point was made in the ALRC’s report on the civil justice system in Australia, Managing Justice: A Review of the Civil Justice System (2000) (ALRC Report 89) (Managing Justice):

The process needs supervision and control but, in setting such controls courts should note that discovery is an essential part of the process. The information obtainable through discovery is required to facilitate settlement as well as to present at trial.⁶

5.10 In its report, Civil Justice Review, the Victorian Law Reform Commission (VLRC) also formed the view that ‘discovery plays a vital role in the administration of justice’.⁷ Moreover, notwithstanding many submissions that the discovery process should be viewed as a privilege and maintained for appropriate cases by leave of the Court,⁸ the VLRC concluded that discovery in Victorian courts should continue to be available to the parties as of right.⁹ Consequently, the Supreme Court (Chapter 1 Amendments No 18) Rules 2010 (Vic), which implemented some of the VLRC’s recommendations, made no changes to limit the availability of discovery—so that parties may continue to serve notice on another party requiring discovery of documents, without leave of the Court.¹⁰

5.11 By way of contrast, in line with the commentary in Managing Justice about the need for court supervision and control over the use of discovery,¹¹ the Federal Court amended the Federal Court Rules in 2002 to introduce the requirement for leave of the Court to serve a notice for discovery.¹²

5.12 Doubts have emerged, however, as to whether the leave requirement is working as an effective control on the availability of discovery. In a March 2008 conference paper, the Hon Justice Ray Finkelstein observed that:

Although leave is nominally required and general discovery is frowned upon, the reality is that the leave requirement is a formality rather than a substantive limitation on a party’s ability to obtain discovery. That is to say, there is no general practice of

5 See Ch 2.

6 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), [6.73].

7 Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008), 466.

8 Ibid, 458.

9 Ibid, 426.

10 Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 29.02.

11 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), [6.73], [7.190].

12 Federal Court Amendment Rules (No 3) 2002 (Cth).

requiring a party to justify a request for leave to obtain discovery by showing need or cause.¹³

5.13 Justice Finkelstein took into account comments from practitioners in the Law Council’s Final Report in Relation to Possible Innovations in Case Management, which called for judges to take a much stronger role control discovery.¹⁴ He noted that

‘[t]he concern, particularly with respect to large and complex cases, is that the Court has abdicated responsibility, resulting in excessive costs for very little return’.¹⁵

5.14 Similar concerns were raised with the ALRC during this Inquiry. In some cases, parties might seek discovery as a matter of course, or just to ‘shake the tree trunk’, rather than out of necessity or with any real prospects of discovering significantly relevant documents.¹⁶ At the same time, the extent to which the Court will scrutinise the need for discovery orders sought by a party in a proceeding may vary between different judges and different court registries—leading to inconsistent practice and uncertainty for practitioners and litigants.

5.15 Some judges hearing matters in the Federal Court’s ‘Fast Track List’ have promoted an activist approach to judicial scrutiny of requests for discovery. The Fast Track List aims to reduce the costs and time of commercial litigation conducted in that list. By limiting discovery, introducing scheduled pre-trial conferences and resolving most interlocutory disputes on the papers, the Fast Track List is an attempt to respond to commercial disputes in a more timely and cost-effective manner.¹⁷ The attitude which a Fast Track List judge should adopt when considering discovery applications was described by the Hon Justice Michelle Gordon at a conference in November 2009:

The general presumption is not just that discovery will be limited, but that there will be no discovery unless a party can identify with specificity particular documents or materials (not simply categories) that they require, the reasons that they require those documents, and why no alternative, cheaper means of obtaining the information is available (such as inspection, a summary created pursuant to s 50 of the Evidence Act 1995 (Cth), a letter or admission from the other side, or an affidavit from a witness with the relevant knowledge).¹⁸

Submissions and consultations

5.16 In the Consultation Paper, the ALRC asked whether the requirement to obtain leave of the Court to serve a notice for discovery effectively regulates the use of

13 R Finkelstein, Discovery Reform: Options and Implementation (2008), prepared for the Federal Court of Australia, [4].

14 Law Council of Australia, Final Report in Relation to Possible Innovations to Case Management (2006).

15 R Finkelstein, Discovery Reform: Options and Implementation (2008), prepared for the Federal Court of Australia, [6].

16 T Howe, Consultation, Canberra, 21 July 2010.

17 See Ch 6 for discussion of the court procedures applying to matters in the Fast Track List.

18 M Gordon, ‘The Fast Track Experience in Victoria: Changing and Evolving the Way in Which We Administer Justice’ (Paper presented at International Commercial Litigation and Dispute Resolution Conference, Sydney, 2010).

5. Access to Discovery and General Discovery 103 discovery in Federal Court proceedings, and whether the law is sufficiently clear on when the Court should grant leave for discovery of documents.¹⁹

5.17 A number of submissions expressed the view that, while current law was sufficiently clear on when the Court should grant leave for discovery, the Court did not necessarily apply this law in a formal and consistent manner.²⁰ Some suggested that judges rarely gave serious consideration to the specific factors set out in the relevant lines of authority.²¹ Others noted that parties often prepare consent orders for discovery to be filed at a directions hearing and that such orders are usually made by the Court without argument or scrutiny.²²

5.18 In contrast, the Commissioner of Taxation for the Commonwealth of Australia (Tax Commissioner) submitted that:

In the Commissioner’s experience, the requirement for leave of the Court does effectively regulate the use of discovery. The Court actively engages with the parties in determining what, if any, discovery orders are appropriate and carefully examines the categories of documents to be discovered.²³

5.19 The Tax Commissioner noted, however, that his observations in respect of discovery in tax appeal proceedings were linked with the case management protocols spelled out in the applicable practice note.²⁴

5.20 One submission suggested that greater and more consistent judicial consideration of existing leave requirements for discovery may eventuate following the introduction of the overarching purpose provision, s 37M of the Federal Court of Australia Act 1976 (Cth).²⁵ This requires the Court to apply civil procedure provisions in a manner that best promotes the overarching purpose of civil practice and procedure—namely, the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible.²⁶ This provision ‘may make the discussion

19 Australian Law Reform Commission, Discovery in Federal Courts, Consultation Paper 2 (2010), Questions 2–2, 2–3.

20 Law Council of Australia, Submission DR 25, 31 January 2011; Australian Corporate Lawyers Association, Submission DR 24, 31 January 2011; Contributors from the Large Law Firm Group, Submission DR 21, 25 January 2011; Department of Immigration and Citizenship, Submission DR 13, 20 January 2011; Australian Lawyers Alliance, Submission DR 11, 19 January 2011; M Legg, Submission DR 07, 17 January 2011; The Commercial Bar Association of Victoria, Submission DR 04, 13 January 2011.

21 Contributors from the Large Law Firm Group, Submission DR 21, 25 January 2011; Department of Immigration and Citizenship, Submission DR 13, 20 January 2011; Australian Lawyers Alliance, Submission DR 11, 19 January 2011; M Legg, Submission DR 07, 17 January 2011; The Commercial Bar Association of Victoria, Submission DR 04, 13 January 2011. Legg referred to: Australian Broadcasting Commission v Parish (1981) 41 FLR 292, [295]; Index Group of Companies Pty Ltd v Nolan [2002] FCA 608, [6]–[7]; Parkin v O’Sullivan [2006] FCA 1413, [9]–[20]; United Salvage Pty Limited v Louis Dreyfus Amateurs SNC (2006) FCA 116, [3].

22 Australian Lawyers Alliance, Submission DR 11, 19 January 2011; M Legg, Submission DR 07, 17 January 2011.

23 Australian Taxation Office, Submission DR 14, 20 January 2011.

24 Ibid.

25 M Legg, Submission DR 07, 17 January 2011. Section 37M is set out in Ch 2.

26 Federal Court of Australia Act 1976 (Cth) s 37M.

about discovery at direction hearings more fulsome or more searching but that provision has only been in place for a relatively short time’.²⁷

ALRC’s views

5.21 The different experiences of litigants outlined in submissions echoes the views put forward during consultations in this Inquiry. The ALRC was advised that there is a degree of inconsistency across the Federal Court as to how thoroughly judges scrutinise the need for discovery in proceedings, and require parties seeking discovery to justify such requests.

5.22 The close judicial scrutiny of discovery applications in the Federal Court’s Tax List, as experienced by the Tax Commissioner, is consistent with the approach taken in the Court’s Fast Track List—as described by Justice Gordon above.²⁸ This reflects the fact that similar case management protocols are prescribed in both Practice Note Tax 1—Tax List and Practice Note CM 8—Fast Track. However, every judge across the Federal Court might not be as stringent in testing a party’s need for discovery in each case.

5.23 In the ALRC’s view, the existing requirement in O 15 r 1 of the Federal Court Rules, to obtain leave of the Court to serve a notice for discovery, is an important control over the use of discovery in Federal Court proceedings. This rule reflects the gatekeeper role of the Court to ensure that discovery obligations are not imposed on litigants unnecessarily. The rule promotes the principle of consistency in the types of cases for which discovery mechanisms are reserved. There is ample guidance in current Practice Note CM 5 and relevant case law for judges considering whether discovery is necessary or appropriate in proceedings. This guidance also promotes the principle of consistency—in the way judges determine applications for leave to serve a notice of discovery.

5.24 The Court will continue to play this gatekeeper role under the proposed new Rules, which provide that a party may give discovery only after the Court has so ordered.²⁹ The proposed rules would also impose a costs sanction if parties give discovery without being ordered to do so by the Court.³⁰ However, the effectiveness of court rules will be undermined if some judges grant leave or make discovery orders as a matter of course—without specific consideration of whether discovery is necessary.

Such inconsistency in the way judges determine applications for discovery orders would lead to inconsistencies between the types of cases where discovery mechanisms are used, which in turn would create uncertainty for litigants as to whether discovery is appropriate in their case.

27 M Legg, Submission DR 07, 17 January 2011.

28 M Gordon, ‘The Fast Track Experience in Victoria: Changing and Evolving the Way in Which We Administer Justice’ (Paper presented at International Commercial Litigation and Dispute Resolution Conference, Sydney, 2010).

29 Federal Court Rules (Cth) [Draft 2010] r 20.12(1).

30 Ibid r 20.12(2).

5. Access to Discovery and General Discovery 105 5.25 The potential for reform to facilitate greater consideration by the Court and the parties, on a more consistent basis, as to whether discovery is necessary in proceedings is discussed below.