[2006] WASC 175
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION : BGC (AUSTRALIA) PTY LTD -v- PROFESSIONAL
PUBLIC RELATIONS PTY LTD & ANOR
[2006] WASC 175
CORAM : MASTER SANDERSON
HEARD : 9 JUNE 2006
DELIVERED : 16 AUGUST 2006
FILE NO/S : CIV 1263 of 2006
BETWEEN : BGC (AUSTRALIA) PTY LTD
Plaintiff
AND
PROFESSIONAL PUBLIC RELATIONS PTY LTD
First Defendant
PETER HARRIS
Second Defendant
Catchwords:
Practice and procedure - Application for pre-action discovery - Turns on own
facts
Legislation:
Fair Trading Act 1987 (WA), s 10, s 68
Rules of the Supreme Court 1971 (WA), O 26A, O 26A r 3, O 26A r 3(4)(b)
Trade Practices Act 1974 (Cth), s 52, s 75B
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[2006] WASC 175
Result:
Discovery ordered
Category: B
Representation:
Counsel:
Plaintiff : Mr M C Hotchkin
First Defendant : Mr S G Leslie
Second Defendant : Mr S G Leslie
Solicitors:
Plaintiff : Hotchkin Hanly
First Defendant : Wilson & Atkinson
Second Defendant : Wilson & Atkinson
Case(s) referred to in judgment(s):
McCarthy v Dolpag Pty Ltd [2000] WASCA 106
Case(s) also cited:
Central Exchange Ltd v Anaconda Nickel Ltd [2001] WASC 128
Crofter Handwoven Harris Tweed Co Ltd v Veitch [1942] AC 435
Davis v Sagar Pty Ltd, unreported; SCt of WA; Library No 980443; 10 August
1998
Exley v Wyong Shire Council, unreported; SCt of NSW; 9 December 1976
Global Intertrade Pty Ltd v Adelaide Festival Centre Trust, unreported;
Fed Crt of A; 17 December 1998
Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215
Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84
Hooper v Kirella Pty Ltd [1999] FCA 1584
Makita (Aust) Pty Ltd v Black & Decker (Australasia) Pty Ltd (1990) 18 IPR
270; (1990) ATPR 41-030
Malouf v Malouf [1999] FCA 710
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[2006] WASC 175
Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500
St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147
Stewart v Miller [1979] 2 NSWLR 128
Tipperary Developments Pty Ltd v The State of Western Australia [1999]
WASC 62; (1999) 21 WAR 250
Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 32 ALR
570
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[2006] WASC 175
MASTER SANDERSON
1 MASTER SANDERSON: This is the return of an originating summons
seeking orders under O 26A r 3 which allows discovery to be ordered to
identify a potential party to an action. To understand the nature of the
application it is necessary to consider the facts in some detail.
2 The evidence in support of the application is to be found in an
affidavit of Leonard Walter Buckeridge ("Mr Buckeridge") sworn
21 March 2006. Mr Buckeridge is a Director of the plaintiff. The
plaintiff carries on business in the building and construction industry and
is also a supplier of building products and materials.
3 In 2005, the plaintiff entered into an agreement to sublease certain
land currently leased by Westralia Airports Corporation Pty Ltd ("WAC")
from the Commonwealth of Australia. The land is near the Perth
International Airport. The plaintiff intends to construct a brick
manufacturing plant on the land. It is a condition precedent to the
sublease that the plaintiff obtains approval from the Minister for Transport
and Regional Services of a Major Development Plan ("MDP"). A draft
MDP was advertised on 29 August 2005. Mr Buckeridge says that he has
been advised by WAC that obtaining Ministerial approval for an MDP
involves a process that includes public consultation and seeking public
comments after advertising the draft MDP. The MDP is also reviewed by
both the Department of Transport and Regional Services and the
Department of Environment and Heritage. Mr Buckeridge has been
advised that the Minister takes into account the view of the Minister for
the Environment regarding likely environmental impacts of any project.
4 At the time the sublease was executed Mr Buckeridge was advised
that it was likely that approval for the MDP would take no more than six
months.
5 The site of the proposed brickworks on the WAC land is within the
Federal seat of Hasluck. Hasluck is held by the Liberal Party with a small
majority and is what is known as a "marginal seat". Mr Buckeridge is
aware that a number of parties oppose the construction of brickworks on
the WAC land. One of the groups opposed to the project is known as
Confederation of Affiliated Residents and Ratepayers of WA Association,
WA Incorporated ("CARRA"). Mr Buckeridge is also aware that Boral
Limited ("Boral") and its wholly owned subsidiary Midland Brick
Company Pty Ltd ("Midland Brick") are opposed to the project. Boral is a
competitor of the plaintiff in the production of building materials.
Midland Brick is part of a duopoly of current brick manufacturers in
Western Australia. The plaintiff through its building operations is the
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MASTER SANDERSON
single biggest customer of Midland Brick. Difficulties in obtaining
supply of bricks is one of the main reasons which has led the plaintiff to
attempt to set up its own brickworks. Mr Buckeridge says that he believes
that if the plaintiff ceased buying bricks from Midland Brick this would
have a significant impact on that company's profits and that in turn would
effect Boral.
6 On 17 October 2005, Mr Rod Pearce, the Chief Executive Officer
and Managing Director of Boral wrote to both the Minister for the
Environment and Heritage, Senator Ian Campbell and the Minister for
Transport and Regional Services, Mr Warren Truss expressing concern
about the construction of a brickworks on the WAC land by the plaintiff.
A copy of that letter appears as part of annexure "LWB1" to
Mr Buckeridge's affidavit. The letter urges the Ministers to refuse
approval for the construction of the plaintiff's brickworks on the WAC
land. A number of reasons are given for Boral's objection to the
construction of the plaintiff's brick plant. One of these reasons is
pollution likely to be occasioned by emissions from the plant. There are
other reasons of a commercial nature advanced in opposition to the
construction of the brickworks. But for present purposes it is important to
note that reference is made to the environmental implications of the
construction of the plant.
7 The plaintiff responded to the submissions of Boral and a copy of
that response appears as annexure "LWB2" to Mr Buckeridge's affidavit.
In addition to lobbying the Ministers directly Boral also retained the
services of Crosby Textor, a firm of consultants that specialises in
lobbying members of Parliament to advance a case. Crosby Textor have
discharged their remit and appear to have lobbied extensively against
construction of the brickworks. In response the plaintiff engaged its own
lobbyists in Canberra to protect its position. The battle has been joined,
and presumably, still rages.
8 Early in 2006, Mr Buckeridge became aware of a DVD entitled "A
Brickwork In The Wrong Place" ("DVD"). The DVD states that it is
authorised by CARRA. A copy of the DVD was provided as annexure
"LWB5" to Mr Buckeridge's affadivit. It would appear that this DVD has
been shown to various State and Federal politicians although whether it
has been shown to these politicians by Crosby Textor is not clear. In his
affidavit Mr Buckeridge says (at par 21):
"The DVD contains allegations or inferences that:
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(a) The Plaintiff is immoral;
(b) The brickworks will produce emissions deadly to
residents;
(c) Aircraft will fly through a plume of deadly emissions;
(d) The building and the stack and dangerous to aircraft and
to residents (including the use of the phrase
'remember 9 11?');
(e) The Plaintiff's proposal endangers the health of children
at nearby schools;
(f) The brickworks will product quantities of Chromium 6, a
carcinogen, and so will pose a further health risk to local
residents;
(g) Emissions from the brickworks will increase death rates;
(h) The brickworks will damage environmentally sensitive
and significant areas;
(i) The development will involve the loss of or damage to
culturally significant areas and sites;
(j) The views expressed in the DVD are supported by or are
consistent with those held by Guildford Grammar School,
in that it had consented to its name being associated with
the production and distribution of the DVD."
9 Having watched the DVD I am satisfied that apart from par 21(a)
what Mr Buckeridge says is in the DVD is in fact there. If it is not
actually alleged that the plaintiff is immoral that is certainly the inference
to be drawn from the emotive way in which the material is provided.
Essentially the DVD focuses on the environmental implications of the
construction of the brickworks and clearly is intended to persuade the
viewer that the proposed construction should not go ahead.
10 Once Mr Buckeridge had seen the DVD he set about ascertaining
who was responsible for its production. He telephoned CARRA. He
spoke to a Mr Rob Greenwood ("Mr Greenwood) and asked who had
authorised and produced the DVD. Mr Greenwood declined to answer.
On 7 March 2006, Mr Buckeridge met with Ms Lesa Hinchliffe
("Ms Hinchliffe"). Ms Hinchliffe is the female presenter featured on the
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[2006] WASC 175
MASTER SANDERSON
DVD. Ms Hinchliffe told Mr Buckeridge that she was engaged by
Mr Greenwood and was presented by him with a script for use in the
DVD. Ms Hinchliffe was nervous about the contents of the script she was
asked to deliver and she obtained an indemnity from CARRA to protect
her position. She also required a disclaimer to be put at the end of the
DVD saying that the views expressed therein were not necessarily those
of the presenter. Ms Hinchliffe advised Mr Buckeridge that
Mr Greenwood told her to send her account to Professional Public
Relations Pty Ltd, the first defendant, addressed to a person named
Ms Rachel Stoffers ("Ms Stoffers"). Ms Hinchliffe received payment of
her account from the first defendant.
11 Thereafter Mr Buckeridge attended upon the Hay Street offices of
the first defendant. He met with the second defendant. The second
defendant is the Managing Director of the first defendant. The second
defendant told Mr Buckeridge that Mr Greenwood was not one of the first
defendant's clients. Mr Buckeridge asked who had instructed his
organisation to produce the DVD. The second defendant declined to
answer. He also declined to tell Mr Buckeridge whether or not the first
defendant had paid Ms Hinchliffe. The second defendant also said that
Ms Stoffers, the Account Manager, was on maternity leave. The second
defendant did admit that his office held a copy of the DVD. As
Mr Buckeridge was departing the offices of the first defendant he noticed
that the logo of Midland Brick was mounted on the wall of the foyer. A
subsequent visit to the first defendant's website showed Midland Brick
listed as a client. Mr Buckeridge's suspicions were aroused. He asked the
second defendant whether Midland Brick had funded the DVD or any part
of the first defendant's involvement in the matter. The second defendant
refused to answer. The second defendant did undertake to speak with his
client to see whether or not they were agreeable to being identified.
12 True to his word the second defendant did subsequently phone
Mr Buckeridge. The second defendant said that he had discussed
Mr Buckeridge's request for information with the co-owner of the first
defendant and with its legal advisor. The second defendant advised that
no further information would be forthcoming. Mr Buckeridge consulted
his solicitors. On 10 March 2006 the solicitors wrote to the second
defendant seeking identification of the party who had funded the DVD. A
copy of that letter appears as annexure "LWB10" to Mr Buckeridge's
affidavit. No response was forthcoming. This application was then made.
13 Mr Buckeridge alleges that the DVD contains false, misleading and
defamatory allegations of and concerning the plaintiff. At this stage of the
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MASTER SANDERSON
proceedings it is not necessary to make any detailed assessment of the
plaintiff's claim in any action it may bring against a potential party. It is
sufficient if I note that having watched the DVD the plaintiff's claim that
it has been defamed and the DVD contains misleading and deceptive
information is arguable.
14 Order 26A r 3 allows discovery to identify a potential party.
Relevantly the rule reads as follows:
"(1) This Rule applies if a person who appears to have a cause
of action against a person ('the potential party') wants -
(a) to commence proceedings against the potential
party; or
(b) to take proceedings against the potential party in
the course of an action to which the person is a
party,
but the person, after reasonable enquiries, has not been
able to ascertain a description of the potential party
sufficient for the purposes of doing so.
(2) If there are reasonable grounds for believing that another
person ('the non-party') had, has, or is likely to have had
or to have, possession of information, documents or any
object that may assist in ascertaining the description of
the potential party, the person may apply for an order
under this Rule."
15 These subrules set out a number of criteria that must be satisfied
before an order for discovery can be made. First the rule applies only if a
person appears to have a cause of action against another person and the
person wants to commence proceedings against the potential party. As
counsel for the defendants properly concedes it is not necessary for a
plaintiff to establish that it has a prima facie case. It must only establish
that it "appears to have a cause of action". In this case it is obvious that
the plaintiff appears to have a cause of action against parties involved in
the production of the DVD. (I emphasise again that I am making no
findings in this regard even prima facie findings). There is also no
doubt that the plaintiff wants to commence proceedings. It is clearly
outraged at what it regards as the blackening of its reputation. So these
two criteria have in my view been satisfied. The defendants take issue on
both of these criteria. First they say that no cause of action could lie
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against the party or parties responsible for funding production of the
DVD. They say that no cause of action arises under s 52 of the Trade
Practices Act 1974 (Cth) or s 10 of the Fair Trading Act 1987 (WA)
merely from funding production of a false or misleading DVD. Rather the
plaintiff must establish that the party funding the DVD was involved in
the contravention of s 52 (or s 10) as contemplated by s 75B of the Trade
Practices Act (or s 68 of the Fair Trading Act). They say that there is no
evidence before the Court to suggest that the party or parties funding the
production of the DVD were so involved.
16 With respect that seems to me to put the test too high. Accepting
that to be liable under s 75B of the Trade Practices Act, a party must be
knowingly concerned in the breach of s 52, it is difficult to imagine that a
party providing funding for production of a DVD of this nature would not
know what was being produced. They would be remarkably naive if they
did not. So in my view it is arguable a cause of action lies under the
Trade Practices Act.
17 So far as the action and defamation is concerned the defendant says
that the matters referred to in par 21 of Mr Buckeridge's affidavit are not
capable of being defamatory of the plaintiff. Rather it is said that these
allegations are made of brickworks generally. This is not the venue for a
discussion on the arcane world of implications and their place in
defamation proceedings. Nor could I conclude that no cause of action
could arise from funding the production of a DVD because the cause of
action depends on publication. Once again I am satisfied that the
plaintiff's position is arguable.
18 The defendants also argued that the plaintiff had not established that
it wanted to commence proceedings against the potential party. Frankly a
reading of Mr Buckeridge's affidavit could not leave anyone in any doubt
as to the plaintiff's intentions. On behalf of the defendants it was said that
the fact that the plaintiff has not commenced proceedings against
Ms Hinchliffe, CARRA, Mr Greenwood and others despite them being
implicated in the production of the DVD is an indication that it does not
want to commence proceedings against the potential party. With respect
that does not follow. The plaintiff may have all sorts of reasons for not
proceeding against others despite the fact that they may be implicated in
any cause of action. It is for the plaintiff to determine who it will sue. In
my view this criteria has not been satisfied.
19 Next it is necessary to consider whether reasonable inquiries have
been made by the plaintiff in an effort to establish the description of the
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potential party. In my view what has been done by the plaintiff is
sufficient. There is not much more they could do. Clearly the defendants
are the parties who know who funded the production of the DVD. The
second defendant will not divulge the information. The first defendant is
controlled inter alia by the second defendant. Where is the plaintiff to
go? That criteria is then satisfied.
20 In all the circumstances then I am satisfied that the plaintiff has made
out its case under O 26A r 3 and that discovery ought be ordered. The
question is the extent of the discovery. Given the intrusive nature of a
discovery order, any order made ought be no wider than is strictly
necessary: see McCarthy v Dolpag Pty Ltd [2000] WASCA 106.
Annexed to the originating summons is a schedule which sets out four
categories of documents of which discovery is sought. In my view the
schedule is more extensive than is necessary to allow the plaintiff to
establish who funded production of the DVD. What I would be prepared
to order is discovery of category 2. That is in the following terms:
"Any books of record or account in which funds were provided
to the Defendant either:
(a) on trust, to be dispersed in payment of expenses incurred
in the production of the DVD, showing from whom any
payments were received to be held on trust and to whom
such payments were made; or
(b) as payment of the Defendants' fees and reimbursement of
the Defendants' expenses.
The documents include electronic journal entries and hard
copies of bank statements and cheque butts."
21 As is generally the case in applications of this sort it may be that
once discovery of these documents is given a further order will be
necessary so as to allow the documents discovered to be put in context. I
will therefore give liberty to apply. I will hear the parties as to the time
within which discovery and inspection is to be provided.
22 There is one further matter which I should make reference. Under
O 26A r 3(4)(b) it is open to the Court to make an order that a person
attend personally to be examined in relation to the description of a
potential party. Although it is not mentioned in the originating process,
during the course of his submissions counsel for the plaintiff suggested
that this may be a case where an order could be made requiring the second
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defendant to attend for examination. Given the limited nature of the
inquiry which has led to this application, the advantage of making an
order directed against the second defendant that he attend for examination
is obvious. So far as I am aware no such order has been made in the
almost 10 years that O 26A has been operating. On balance I have
concluded that it would be a better option to require discovery in the
conventional way. That will provide the plaintiff with a more complete
picture of how and by whom the DVD was funded.
23 I will hear the parties as to the form of order and as to costs.
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