It is common that, in proceedings involving an insured person or entity, the action is being conducted by an insurer pursuant to its right of subrogation. The insured person is usually a nominal party to the proceedings, even though they may not actually conduct the proceedings or instruct the solicitors with the carriage of their case. In those circumstances, the insurer usually instructs legal representatives to conduct the case, who technically act for both the insured and the insurer.
Part 21 of the Uniform Civil Procedure Rules (UCPR) requires parties to disclose documents within specified categories that are in the party’s possession. Section 3 of the Civil Procedure Act 2005 (NSW) (CPA) states that “possession” is defined to include custody or power. In other words, parties are required to disclose documents in the specified categories that are within their possession or under their power or control. There are similar rules in the various States and Territories that, largely, do not differ in substance.
Leader Westernport Printing Pty Ltd t/as Waverly Offset Publishing Group v IPD Instant & Duplicating Pty Ltd [1988] VicSC 242 (Leader) expands upon the meaning of “possession or control” in circumstances where there is a subrogated insurer acting in the name of an insured.
In Leader, the plaintiff’s solicitors also acted for the plaintiff’s insurer (Insurer), who conducted the proceedings pursuant to its right of subrogation. The plaintiff disclosed a number of documents by its affidavit of documents, but claimed privilege in respect of certain loss adjuster’s reports held by the plaintiff’s solicitor (Reports). The defendant challenged that privilege and sought discovery of the Reports. The plaintiff argued that the Reports were never in its power or possession but that they were held by the plaintiff’s solicitors in their capacity as solicitors for the Insurer.
Justice Bobbo held that a solicitor acting in a dual capacity, who receives possession of documents, cannot simply assert the power in which they hold those documents. Even though it is the insurer who controls the proceedings, the proceedings are still in the plaintiff’s name and it is the plaintiff that must prove its loss. It is artificial to suggest that the documents are not in the possession or power of the plaintiff’s solicitors, especially in circumstances where the subject documents are intended to be used to assist the plaintiff’s solicitors in the conduct of the claim.
When making disclosure in proceedings, nominal parties cannot draw artificial distinctions about whether documents are in their power or control, and care must be taken to ensure that the obligations of disclosure are met.
