IN THE COUNTY COURT OF VICTORIA
AT Melbourne
COMMERCIAL DIVISION	Revised
Not Restricted
Suitable for Publication	
General List

Case No.  CI-21-00790

PIRELLI TYRES AUSTRALIA PTY LTD (ACN 001 784 014)

and

TROFEO PTY LTD (ACN 109 136 656) 	Plaintiff and first defendant by counterclaim	
	First defendant and plaintiff by counterclaim	
and 		
		
JIM MANOLIOS	Second defendant	
		
and		
		
PIRELLI C.S.P.A.  	Second defendant by counterclaim	
		
---

JUDGE:	HER HONOUR JUDGE A RYAN	
WHERE HELD:	Melbourne	
DATE OF HEARING:	28 January 2022	
DATE OF RULING:	1 February 2022	
CASE MAY BE CITED AS:	Pirelli Tyres Australia Pty Ltd v Trofeo Pty Ltd & Anor	
MEDIUM NEUTRAL CITATION:	[2022] VCC 43		

REASONS FOR RULING
---

Subject:	PRACTICE AND PROCEDURE – Application for further discovery and adjournment of trial

Catchwords: 	Further discovery sought pursuant to Rule 29.11 of the County Court Civil Procedure Rules 2018 – whether trial date should be vacated if discovery ordered – application of case management principles

Legislation Cited:	County Court Civil Procedure Rules 2018; Civil Procedure Act 2010 

Cases Cited:	Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Traffic Technique Pty Ltd v Burgmann [2020] VSCA 319
---

APPEARANCES:
	Counsel	Solicitors	
For the plaintiff and defendants by counterclaim	Mr A Galbraith	Results Legal	
			
For the defendants and plaintiff by counterclaim	Mr J Ribbands	Kalus Kenny Intelex 	

HER HONOUR:

1	By summons filed 20 January 2022, the first defendant and plaintiff by counterclaim (Trofeo) seeks orders that the plaintiff and first defendant by counterclaim (Pirelli Australia) and the second defendant by counterclaim (Pirelli Italy) provide further discovery of documents pursuant to Rule 29.11 of the County Court Civil Procedure Rules 2018. 
2	The summons identified five categories of documents which were sought. During oral submissions made on 28 January 2022, the categories were narrowed.   The documents which remained the subject of dispute were restricted to sub-paragraphs (b), (d), and (e)(ii) of paragraph 1 of the summons.   The application for further discovery was opposed by Pirelli Australia and Pirelli Italy.   
3	In addition to the further discovery sought, the defendants seek an order that the trial listed on 8 February 2022 be adjourned to 21 September 2022 or the next available trial date after 11 October 2022 with an estimate of four sitting days.
4	In support of the summons, the defendants rely on the affidavits of Isabella Royce dated 24 December 2021 (First Royce Affidavit) and 12 January 2022 (Second Royce Affidavit).   In opposition to the application, Pirelli Australia and Pirelli Italy rely on the affidavit of Melissa Jarvin dated 25 January 2022.   As is apparent from the exhibits to the affidavits, there has been extensive correspondence back and forth between the parties regarding categories of discovery.   A chronology of the requests for discovery was attached to the defendants’ outline of submission dated 27 January 2022 as Annexure A.
5	By its claim, Pirelli Australia is seeking payment of invoices which remain outstanding and unpaid by Trofeo. The invoices relate to tyres sold and delivered.   The amount said to be owing is $1,130,066.20 together with interest and costs. The second defendant (Manolios) is sued in his capacity as guarantor.   
6	Trofeo makes a counterclaim for damages resulting from a breach of an alleged exclusive distribution agreement with Pirelli Italy.   An alternative claim is made for misleading and deceptive conduct by Pirelli Italy and/or Pirelli Australia. No particulars of loss have been provided.
7	The plaintiff helpfully set out the well-known propositions regarding case management principles in paragraphs 11 and following of its outline of submissions dated 27 January 2022.   Reference is made to the oft cited case of Aon Risk Services Australia Ltd v Australian National University (Aon).  In addition to these principles, it said that the Court should also have regard to the relevant provisions of the Civil Procedure Act 2010 (CPA) when addressing case management issues, including applications for leave to amend.  
8	Dealing first with the remaining categories of documents in issue, paragraph 1(b) of the summons seeks “communications (including emails) between Mr Simon Pool of Pirelli Australia and Pirelli Italy, its agents and/or representatives, pertaining to the relationship with Trofeo” regarding various sub-categories which are then set out.  The Pirelli entities state that they have already discovered all the relevant communications under this category, being emails which were sent on 25 August and 7 September 2021 as referred to at pages 13 and 14 of Exhibit IKR-2 to the Second Royce Affidavit.   They claim that the documents provided are the only relevant internal emails between Pirelli Italy and Pirelli Australia pertaining to the contractual relationship between those entities and Trofeo between 1 January 2006 and 12 November 2021.   The Pirelli entities also note that all documents, including emails relying on the particulars contained in the counterclaim, are in the possession of Trofeo and Manolios.
9	More generally, the Pirelli entities note that there is no contractual relationship between Pirelli Italy and Pirelli Australia.   Consequently, no such documents exist.   Pirelli Italy is merely a holding company and does not sell, supply or ship Pirelli tyres to Pirelli Australia or other entities. 
10	In his oral submissions, counsel for the defendants sought documents pertaining to the relationship with Trofeo not only passing between Pirelli Australia and Pirelli Italy but also the latter’s agents or representatives.  This appeared to be a somewhat wider category than simply documents passing between Pirelli Australia and Pirelli Italy.  The point that the defendants seek to make is that it has been denied that Pirelli Italy entered into an exclusive dealership arrangement with Trofeo. They wish to in effect challenge the assertion that Pirelli Italy was not involved. Such documents will go to this issue and, if in the event some other Pirelli entity was involved, then this is something which the defendants are entitled to explore. Given that the involvement of Pirelli Italy is denied, then documents which go to that issue appear to be relevant. If there are documents passing between Pirelli Italy’s representatives or agents in addition to documents passing directly between Pirelli Italy and Pirelli Australia (which have been discovered), then in my view they should be produced. It remains to be seen whether in fact such documents exist.
11	The next category of documents sought is contained in sub-paragraph (d), which relates to documents “recording or related to Pirelli Australia being requested to and/or providing projections on future sales for both the Australian and New Zealand markets.”   Counsel for the defendants accepted that they have been provided with details of tyres which were sold.   This category was objected to on the basis that these documents were not discoverable because they are irrelevant.   The claim put against Pirelli Italy is for breach of contract and misleading and deceptive conduct.   Whilst Pirelli Italy denies existence of the alleged exclusive distribution agreement, it says only sales which have occurred could breach the alleged agreement and occasion loss.   The plaintiff says there is no claim pleaded in the counterclaim occasioned by projected future sales which have not or may not occur.   This stance was conveyed to the defendants in October 2021.   Further documents relating to and evidencing the motorsports tyre sales made to third parties including Trofeo by Pirelli Australia during the relevant period have been discovered.   
12	I am not persuaded that this is an appropriate category of documents.   The description is very broad. No time span is given, for example, nor is it identified from whom Pirelli Australia may have been requested to and/or providing projections on future sales.  The counterclaim claims an exclusive dealership agreement was entered into between Trofeo and Pirelli Italy, but the term of that alleged agreement is not pleaded.  Although lost profits on future sales are claimed in paragraph 6(c), this must be seen in the context of an ongoing arrangement, the term of which is not stated.  The defendants accepted that they had been given documents relating to the products which have been sold. On the present state of the pleadings, I am not satisfied that the documents sought in sub-paragraph (d), being projections, are relevant to the issues in the dispute.  Therefore, I decline to order discovery of the documents described in category (d).   
13	The remaining categories in respect of the documents described is in paragraph 1(e)(ii).   This was refined in oral submissions as “invoices, purchase orders, yearly stock purchase summaries, and any other document causing or recording the purchase and/or shipment of tyres by, any Pirelli entity from which Pirelli Australia received the supply of tyres and related products for motorsports within Australia or New Zealand”. The inquiry seeks to ascertain the extent to which Pirelli Australia has received tyres and products, and not just those that have been sold.  It appears to be suggested that there may have been other tyres and products which have been received by Pirelli Australia from other Pirelli entities, excluding Pirelli Italy.   If products from other Pirelli entities were received, then this might give rise to the possibility of a further Pirelli entity potentially being joined to the proceeding if Pirelli Italy was not the supplier.  
14	In answer to this category, the Pirelli entities say that if this were limited to the shipment of tyres from Pirelli Italy to any other entity from which Pirelli Australia received the supply of tyres and related products for motorsports within Australia or New Zealand between 1 January 2018 and the date of the summons (which would appear to be the only potentially arguable framing of the category), the documents do not exist, and Pirelli Italy did not at any relevant time and does not sell or supply Pirelli tyres to Pirelli Australia or other entities as noted above.
15	I accept the criticism made that the wording of this category is very broad.  That became apparent when counsel for the defendants sought to narrow it during the scope of arguments.   
16	In my view, the defendants are entitled to try and ascertain from which entity tyres were received by Pirelli Australia as part of an exercise in trying to establish the scope of the damages in their counterclaim and, in particular, the account of profits sought.   If Pirelli Italy has not provided the tyres, then they must have been sourced from somewhere and been provided to Pirelli Australia by some other entity.
17	I will order that there be discovery under category (e)(ii) but reframed as
“invoices, purchase orders, yearly stock summaries and any other document causing or recording the purchase and/or shipment of tyres by Pirelli Italy or any other Pirelli entity from which Pirelli Australia received the supply of Pirelli tyres and related products for motor sports within Australia and New Zealand between 1 January 2018 and 22 January 2022.”
18	Considering the submissions made, I am persuaded that the defendants are entitled to pursue this aspect of discovery further and are entitled to seek the documents which have been identified as narrowed above. It may well be that the aspect of further discovery can be resolved readily, particularly where the plaintiff says the documents sought do not exist. But realistically, this discovery issue is unlikely to be resolved and completed before the trial date on 8 February 2022.
19	The plaintiff objects to the trial date being vacated.   Understandably, the plaintiff is desirous of having the trial proceed, particularly where its claim appears to be a relatively straightforward debt claim for the goods sold and delivered.   Counsel for the defendants accepted that the claim for damages arising out of the counterclaim would be used predominantly as a set-off to the principal claim.
20	In respect of vacating the trial date, in addition to Aon, the principles relating to applications for adjournment were recently referred to by the Court of Appeal in Traffic Technique Pty Ltd v Burgmann.  The Court confirmed that the principles relating to case management as identified in Aon are matters which should be taken into account.   In this instance, the plaintiffs rely on factors such as prejudice if the hearing of the claim is delayed, the fact that substantial costs would be thrown away, and that the adjournment affects case management principles, including a waste of the Court’s resources.   Additionally, there is an obligation under the CPA to facilitate the overarching purpose. All of these are valid submissions and matters that I have considered when considering the exercise of my discretion to vacate a trial date.
21	On the other side, the defendants contend that they wish to obtain these documents as a means of establishing the quantum of damages for their counterclaim and the account of profits claim.   Although it is denied that Pirelli Italy had any involvement and it was not responsible for providing tyres to Pirelli Australia, if in the event there were some other Pirelli entity involved, then the defendants wish to explore that aspect and then consider whether the joinder of another party might then be needed.   Although it is unfortunate that these matters were not addressed and dealt with at an earlier stage, there has been extensive and ongoing correspondence between the parties in respect of these issues.   The aspect of the discovery sought has not been raised the first time on the eve of the trial by the defendants. This application is the culmination of an ongoing dispute.
22	The matter was listed for hearing pursuant to the timetabling orders made on 12 May 2021.   Whilst it is always desirable to maintain a trial date if possible, it is not unusual in this list for trial dates which have been allocated to be adjourned given the quite often tight timetable that is set at the initial directions hearing listing the matter for trial.
23	The Court must determine what best serves the interests of justice. The application is finely balanced in my view. Although there are some disadvantages to the plaintiff, in particular the fact that there may be some costs thrown away, I consider the interests of justice dictate that the trial be vacated and the defendants have an opportunity to obtain discovery of the further documents which have been ordered.   As I have already indicated, it may well be that this is a pyrrhic exercise as there may be no further documents in the categories of documents requested, but this is a matter that will need to be established one way or another.   
24	In terms of the costs of the application, the defendants submitted that they should not have to pay the costs of the application or costs thrown away on the basis that they have been seeking these documents for some time.  It was in effect the intransigence of the plaintiff which had led to the application being made.   Conversely, the plaintiff not unsurprisingly blames the defendants and say there has been delay on their side.  They had given all the relevant information and there was nothing new.   Both parties were of the view that if I was not prepared to order costs in their favour, then the appropriate order would be that costs, including any costs thrown away, be costs in the cause.  In the circumstances, I am inclined to the view that this is the appropriate order.
25	Accordingly, I will order that:
(1)	The trial listed for 8 February 2022 is vacated and the proceeding is refixed for trial on 12 October 2022 as a Cause before a Judge sitting alone (estimate 4 sitting days).
(2)	By 4.00pm on 28 February 2022, Pirelli Australia and Pirelli Italy provide further discovery of the documents identified in:
(i)	sub-paragraph 1(b) of the defendants’ summons dated 20 January 2022; and
(ii) 	sub-paragraph 1(e)(ii) of the defendants’ summons dated 20 January 2022 which is reformulated to read as follows:
“invoices, purchase orders, yearly stock summaries and any other document causing or recording the purchase and/or shipment of tyres by Pirelli Italy or any other Pirelli entity from which Pirelli Australia received the supply of Pirelli tyres and related products for motor sports within Australia and New Zealand between 1 January 2018 and 22 January 2022”.
(3)	     The matter is listed for further administrative mention on 14 March 2022. 
(4) Reserve liberty to apply to the Commercial Registry (commercialregistry@countycourt.vic.gov.au) for further directions upon giving reasonable notice to all other parties.
(5)	The costs of the defendants’ summons filed 20 January 2022 together with any costs thrown away by reason of the application to vacate the trial date, be costs in the cause.

- - -
Certificate
I certify that these 9 pages are a true copy of the Reasons for Ruling of Her Honour Judge A Ryan delivered on 1 February 2022.
Dated:  1 February 2022
Associate to Her Honour Judge A Ryan