On 26 March 2012, changes commenced in relation to the procedure
for discovery of documents in the Equity Division of the Supreme
Court of New South Wales. The changes, geared towards minimising
the excessive costs which parties routinely incur through the
discovery process, are likely to have a significant impact on the
way litigation is conducted in this division.
The new requirements are set out in Practice Note SC Eq 11, a
new practice note issued by the NSW Supreme Court.
Who is affected?
These changes apply to all new and existing proceedings in the
Equity Division of the Supreme Court (except the Commercial
Arbitration List). This covers the Commercial and Technology and
Construction Lists, which deal with the majority of significant
construction litigation.
What are the changes?
The practice note brings significant changes to obtaining
discovery orders (now known as orders for
"disclosure"):
Timing of discovery – disclosure orders will not be
made before parties have served their evidence (unless there are
"exceptional circumstances necessitating
disclosure").
Scope of documents that may be sought – a disclosure
order will not be made unless it is necessary for the resolution of
the real issues in dispute in the proceedings.
Any application for a disclosure order, consensual or otherwise,
must be supported by an affidavit explaining:
the reasons why disclosure is necessary;
the classes of documents sought; and
the likely cost of such disclosure.
The Court has the power to impose a limit on the costs
recoverable in relation to such a disclosure order.
What about Subpoenas and Notices to Produce?
Parties may now need to seek leave of the court before issuing a
subpoena if they wish to do so before serving their evidence.
Further, subpoenas and notices to produce issued before parties
have served their evidence may be set aside as an abuse of process,
particularly where documents sought would have previously fallen
within the scope of discovery.
What will this mean in practice?
Discovery orders will now be significantly harder to obtain. No
longer will broad discovery orders be obtained as a matter of
course, with a formal application and supporting affidavit
explaining the necessity of the order now required.
The requirement for evidence to be served before discovery means
that the opposing party's case and the real issues in
dispute will be known with greater precision prior to seeking
discovery. Coupled with the documents having to meet the high
threshold of necessity to these real issues in dispute, the scope
of documents able to be sought will be significantly narrower and
less oppressive. This is likely to result in greater efficiency,
lower legal costs and earlier hearing dates as parties will have to
attend to preparing evidence much earlier.
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