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5 IN OUR PRELIMINARY PAPER we said:
The first purpose of the discovery rules is to avoid ambush. In New Zealand that matter is taken care of by the provisions of Rule 305 prohibiting reliance at trial on an undisclosed document. The second purpose may be stated in different ways, but essentially it is to ensure that a document that might affect the outcome of proceedings and that is or has been in the possession or control of one party should be available to the other party or parties. ...
There is a spectrum of possibilities for rules governing discovery. At one extreme there is no discovery (as in civil law jurisdictions) or minimal discovery (as in the arbitration codes discussed) and at the other, an entitlement as of right to general discovery of Peruvian Guano width. Current New Zealand law very nearly approaches this latter extreme, falling short only to the extent of the oppression exception. The question for the reformer is whether this should be changed and if so in what way?
In most contemporary civil litigation, the parties seek either to gain an economic advantage or to avoid an economic disadvantage. The law should not impose or permit procedures that result in expense or delay disproportionate to what is at stake. A compromise has to be struck between perfection and cost. This is the rationale for summary judgment and other fast-track procedures. It is the approach favoured by litigants themselves when allowed to make the relevant decision. ...[13]
6 The object of any reform to the law of general discovery must be to try to ensure access to all the documents that might affect the outcome of proceedings by means of processes that are not more costly than is demanded by what is at stake in the litigation. The aim is to be sparing and thrifty rather than wasteful. The basic matters calling for consideration seem to be these:
• the width of the Peruvian Guano test;
• the availability of general discovery as of right;
• the extent of the obligation to list documents;
• the need for a more precise definition of the issues in the proceeding; and
• the need for provision for ad hoc variations.
Although it assists analysis to identify these five elements, they are in fact intertwined. The solution preferred in relation to any one is dependent on the solution adopted for each of the others.
7 When considering, as we do in this report, the law as to general discovery, it is necessary to keep in mind that the court has an additional power to order particular discovery, that is to say discovery of some specific document or class of documents.[14] Currently an applicant for an order for particular discovery must establish necessity.[15]
8 The Peruvian Guano formula requires discovery of:
• the documents on which a party relies;
• documents adversely affecting the case of that party or supporting the case of another party;
• documents that do no more than provide background to the case; and
• documents that may lead to a train of inquiry enabling a party to advance that party’s case or damage the case of that party’s opponent.
Jurisdictions that have abandoned the Peruvian Guano formula have done so by confining the obligation on general discovery to the first two of these classes.[16] The reason for the change in Queensland (which was the model for that in other Australian jurisdictions and in England and Wales) has been described by the Chairman of the Litigation Reform Commission that proposed the reform in these terms:
Direct relevance is now the test for disclosure of documents under the rules adopted in all courts in Queensland in the middle of last year. The main reason for the adoption of that test was the high and often disproportionate cost of discovery pursuant to the Peruvian Guano test. But it will also make for a fairer contest, eliminating the opportunity to oppress or conceal by overdiscovery.[17]
9 We recommend the adoption of this change, the wording to be employed being that of Rule 31.6 of the English Civil Procedure Rules 1998. There will be, however, cases in which discovery of background material and train of inquiry information will be appropriate (cases, for example, in which an allegation as to some such mental element as intention is an issue). In those cases it will be necessary to supplement Rule 300 with a provision entitling the court, at any stage after an order for general discovery has been complied with, to order particular discovery if the court is satisfied that:
• compliance with such an order will not unreasonably delay the expeditious disposal of proceedings; and
• the cost of compliance is not disproportionate to what is at stake in the proceedings.
The new rule should make it clear that its purpose is to provide discovery in addition to that which would be furnished on general discovery and that it is not intended as a remedy for non-compliance with general discovery obligations.
10 In jurisdictions with an active regime of case management more sophisticated than is available in New Zealand, there can be observed a move away from an entitlement to general discovery as of right. An example is the Australian Federal Court Practice Note to be found in appendix B.[18] However, it seems to the Commission that, in New Zealand conditions, it is better for general discovery to be available as of right than for entitlement to general discovery to be a matter of contention, and for reform to concentrate on the narrower issues of what is to be discovered and how.
11 Submitters pressed on us, and we accept, the view that the major cost of discovery is the need to compile a written list of documents. This dispiriting task involves culling the discoverable from the irrelevant and assigning a description to documents in the former category. It was said that it would be sufficient and cheaper:
• to produce documents for inspection or provide copies of documents without the need to list them at all; or
• to number documents sequentially without describing them and to certify that documents numbered 1–x comprise all discoverable documents; or
• where documents comprise a file, to number without describing either documents or pages, listing the file by its description followed by some such words as “comprising x documents [pages] numbered for the purposes of discovery from 1–x”.
On this last point Rule 298(4) already permits a group description of documents “of the same nature” but it has been held to be confined to situations where it is possible to provide an accurate global description of the individual documents in a group for example:
Correspondence between the defendant and its solicitors between [earliest date] and [latest date] prepared by solicitors/counsel for the party and addressed and forwarded to [eg managing director] of client, all such documents being headed with or referring to this proceeding and requesting or giving legal advice in relation to it and assisting in the conduct of litigation.[19]
12 The difficulty with all these proposals is the possibility that they create for time consuming arguments at trial as to whether a particular document has or has not been discovered. The likelihood of such arguments will increase if, as we suggest later in this report, Rule 305, excluding reliance at trial on undiscovered documents, is strengthened. Some submitters suggested that the cost of discovery is greatly increased by over-discovery, resulting from either a reluctance by list-making solicitors properly to turn their minds to culling the discoverable from the non-discoverable, or their delegating the task to staff members not qualified to do the job. If this is correct (and we believe it may very well be) such proposals as those set out in the previous paragraph are unlikely to improve matters.
13 We are not prepared to recommend any blanket change along the lines of the proposals recorded in paragraph 11, but we will refer again to these matters when we come to discuss ad hoc variations.
14 It would seem sensible to put an end to the pedantry of listing:
• copies of pleadings and other documents filed in court in the proceedings; and
• additional unmarked copies of listed documents.
15 In our preliminary paper we emphasise the significance of the words “in question” in Rule 293.[20] The obligation is to list documents “relating to any matter in question in the proceedings”. It is because the pleadings define the extent of the list-maker’s obligation that discovery may not be required without the assistance of the court before the pleadings are complete. The view was expressed to us in submissions, and we agree, that fuzzy and imprecise pleadings unnecessarily widen the scope of discovery and so add wastefully to its cost. It should be a ground for resisting an order enforcing a discovery obligation that the pleadings of the party seeking enforcement fail adequately to define the issues. Moreover, although it does not change what the law would be if there were no such rule, we believe that (following the Queensland provision to be found in appendix B in paragraph B2) it would be a useful reminder to include in the rules a provision that an allegation remains in question until it is admitted, withdrawn, struck out or otherwise disposed of.
AD HOC VARIATIONS
16 We have already mentioned in paragraph 9 our view that an appropriate trade off for narrowing the general discovery obligation is to supplement Rule 300 with a provision for particular discovery in appropriate cases. We are of the view that there will also be converse situations in which the burden of compliance with general discovery obligations, even when limited as we propose, will be excessively burdensome. Rule 295 empowers the court to make such orders “as are necessary to prevent unnecessary discovery”. We recommend that Rule 295 be recast to empower the court to relieve the list-maker of some part of the general discovery obligation or to limit such obligation if the court is satisfied that, if it does not do so the expeditious disposal of the proceedings will be unreasonably impeded or disproportionate cost will be imposed on the list-maker. It will be noted that this proposal is the counterpart of that advanced in paragraph 9.
17 In both the particular discovery rule that we propose in paragraph 9, and the new Rule 295, the court’s discretion should extend beyond determining the ambit of discovery to prescribing the manner of compliance. It may be, for example, that in appropriate cases, the court will direct the adoption of one of the methods of avoiding itemised listing that we discussed in paragraph 11.
18 The shape then of the general discovery rules that we are proposing is that, although general discovery will continue to be available as of right, the extent of the obligation will be narrowed:
• by limiting the obligation to matters directly in issue and by withholding the entitlement to general discovery until the state of the pleadings sufficiently defines the issues;
• by making it easier in appropriate cases to obtain a Rule 295 order limiting the width of the discovery obligation or prescribing the manner in which in the particular circumstances it is to be performed; and
• (a minor point) by the exclusion of any obligation to list such documents as pleadings and unmarked copies.
But, Rule 300 will be supplemented by a rule not subject to the Rule 312 necessity test making it easier, in appropriate cases, to obtain particular discovery. The court will have jurisdiction to tailor the manner in which the obligation to provide such particular discovery is to be performed to the circumstances of the case.
19 It seems to us that the approach we advance in this part will, in run-of-the-mill cases without the need for anything in the nature of an interlocutory hearing, confine the general discovery obligation to documents likely to be of real importance to the ultimate disposal of the case. It will provide a sufficiently flexible mechanism to enable the court, in appropriate cases, either to limit even further the general discovery obligation or to supplement it with particular discovery, and in each case in doing so to prescribe a mode of compliance that fits the situation.
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URL: http://www.nzlii.org/nz/other/nzlc/report/R78/R78-2.html