ACN 105 921 962 Pty Ltd v Dominic Wiggett aka Ashley Neave Wiggett

[2011] NSWSC 1470

Supreme Court

New South Wales

Medium Neutral Citation:	ACN 105 921 962 Pty Ltd & Anor v Dominic Wiggett aka Ashley Neave Wiggett & Anor [2011] NSWSC 1470
Hearing dates:	Tuesday, 15 November 2011
Decision date:	15 November 2011
Jurisdiction:	Equity Division
Before:	Brereton J
Decision:	Notice of motion dismissed with costs.
Catchwords:	PRACTICE AND PROCEDURE - Notices to produce - notice in the nature of discovery - notice fails to specify a document or thing - notices cannot be used to obtain further and better discovery - notice set aside. PRACTICE AND PROCEDURE - Strike out application - plaintiffs apply for strike out of defence on basis of alleged defaults by defendants in giving discovery - usually necessary for applicant to show that has been and remains in substantial degree of default - mere suspicion discovery inadequate does not establish default - affidavit of documents generally conclusive - no evidence defendants remain in default - motion to strike out dismissed.
Legislation Cited:	(Cth) Corporations Act 2001 (NSW) Uniform Civil Procedure Rules 2005, r 20.2, r 34.1
Cases Cited:	Australian Consolidated Press Ltd v Bond (1982) 61 FLR 91 Tony Azzi Automobiles Pty Ltd v Volvo Car Australia Pty Ltd [2006] NSWSC 283
Category:	Procedural and other rulings
Parties:	ACN 195 921 962 Pty Ltd (first plaintiff) Envirotechnic Pty Ltd (second plaintiff) Shannongrove Pty Ltd (third plaintiff) Dominic Wiggett aka Ashley Neave Wiggett (first plaintiff) A-Tek Specialist Industrial Cleaning Services Pty Ltd (second defendant)
Representation:	Counsel: Mr A M Gruzman (plaintiffs) Mr O J Andersen (solicitor, defendants) Solicitors: Bamford Lawyers (plaintiffs) Watson Mangioni Lawyers Pty Limited (defendants)
File Number(s):	2009/290680 & 2010/39897

Judgment (ex tempore)

1. HIS HONOUR: In the substantive proceedings, which were commenced in the District Court in 2007, the plaintiffs complain that the defendants, being a former officer of the plaintiffs and a corporation established by him, have, in breach of his duties as such officer, including under the (Cth) Corporations Act 2001 and his general law fiduciary obligations, diverted for the benefit of the defendants certain work involving the use of a high strength woven-geo-textile bag used to dispose of organic material and known as a 'Geotech bag'.

1. There has been a very lengthy history of attempts on the part of the plaintiffs to obtain discovery from the defendants. Initially, after orders for discovery were made on 7 June 2010, the plaintiffs served their proposed categories of documents on 21 June 2010. After various extensions of time, the defendants served their first verified list of documents on 10 December 2010, disclosing no documents at all. On 4 April 2011, they served a second list of documents, disclosing some 90 documents. Thereafter, the plaintiffs issued subpoenas to third parties to obtain further documents, and the subsequent history is recorded in my judgment of 30 August 2011, when I adjourned the proceedings to 7 September for further directions "on which occasion it may be anticipated that the defence will be struck out if the order for discovery has not been complied with". That was a reference to the order for discovery made that day, that by Monday 5 September 2011 the defendants give discovery to the plaintiffs of the documents within the classes described in the schedule, by serving on the plaintiff a verified list of documents complying with (NSW) Uniform Civil Procedure Rules 2005, r 21.3. The schedule contained two paragraphs, as follow:

(1) all financial statements including management accounts prepared by ATB Services Pty Limited on behalf of any of the defendants during the period 1 January 2006 to 30 May 2011,

(2) all the defendants' bank accounts and communications with their bankers in connection with the operation of the waste treatment business which the defendants are alleged to have diverted or converted.

1. On 7 September 2011, by consent, orders were made in accordance with short minutes and the proceedings were adjourned to 14 September. On 14 September, the proceedings were adjourned to 28 September. On 28 September, leave was granted to the plaintiffs to file a motion in respect of discovery, such motion to be returnable on 10 October. The plaintiffs on 5 October filed the motion the subject of today's hearing, in which they claim an order striking out the defence pursuant to various rules of court, but essentially on the basis of default in giving discovery. When that motion was returnable on 10 October, the defendants were given leave to file in Court a responsive affidavit, and the motion was adjourned to today for hearing.

1. On the hearing of the motion, the plaintiffs called on a notice to produce addressed to the defendants, seeking production of the following:

1. All documentation (including software data files) that in the period 1 January 2006 to 30 April 2011 records, evidences, comprises or relates to, the disposal of waste by the Defendants to a licensed, other waste facility or other site, including, but not limited to, invoices, records of payment, weighbridge dockets, permits and agreements and licences.

1. The defendants thereupon moved to have that notice to produce set aside, to which application I acceded. I did so, first, because that notice to produce does not, in conformity with UCPR, r 34.1, require production of "any specified document or thing", but is in the nature of discovery requiring the defendant to make a judgment as to the relevance of documents within the wide class it describes. Such a course is not permitted by r 34.1 [see Australian Consolidated Press Ltd v Bond (1982) 61 FLR 91].

1. In truth, as the submissions for the plaintiffs made clear, the purpose of the notice to produce was to seek additional documents, not within the classes of which discovery was so far required, in order to explore queries and issues posed by some of the documents that have been discovered. A notice to produce documents cannot be used as a means of obtaining further and better discovery, especially where orders have previously been made under the UCPR, r 21.2, defining and limiting the classes of documents in respect of which discover is required [see Tony Azzi Automobiles Pty Ltd v Volvo Car Australia Pty Ltd [2006] NSWSC 283 (at [10]-[15]). It may well be that, in the substantive proceedings, the plaintiff would be able to make a case for wider discovery than has been ordered to date. The appropriate course for doing so is a notice of motion for further discovery, and not a notice to produce which has the effect of defeating the very purpose for which discovery is limited by categories.

1. On their notice of motion, the plaintiffs invoked the "prolonged and extraordinary difficulties" they have encountered in gaining proper discovery from the defendants. Those complaints are understandable and would be relevant if the plaintiffs could point to any present defect or default in the discovery given. But if prior defects and defaults, have now been remedied, then a history of past defaults, however serious, though relevant as a discretionary consideration if there were current defaults, does not ordinarily if ever justify the drastic consequence of striking out a defence. On an application for dismissal of proceedings, or striking out a defence, on the ground of default in giving discovery, it is at least ordinarily necessary for the applicant to show, to a substantial degree of certainty, that there has been, and remains, a serious default by the respondent in giving discovery.

1. An affidavit of a director of the plaintiffs, Susan Gilmartin, endeavoured to suggest a number of such defects. The first was in respect of invoices to Taurus Trade Finance Pty Ltd. On subpoena from Taurus Trade Finance Pty Ltd, the plaintiffs obtained a ledger showing that Abergeldie Young Process Engineering Pty Ltd was a trade creditor of the defendant to the extent of $517,000, whereas it was said the defendants had produced no invoices to Abergeldie in respect of the period covered by the ledger. In response, the defendants, through Mr Wiggett, deposed that while the defendants indeed conducted works for Abergeldie, only seven invoices related to the use of a Geotech bag, all of which, with one exception, had been discovered in the second list of documents, the seventh having inadvertently been overlooked but was now produced.

1. It was common ground that invoices unrelated to the use of a Geotech bag did not relate to any matter initially in proceedings. The framing of categories of documents does not broaden the scope of relevance for the purpose of discovery. The mere suspicion that other invoices might relate to relevant work, in the face of the defendants' denial, does not establish a defect or deficiency in discovery. Generally speaking, as is well established, the affidavit of documents is conclusive as to questions of relevance. It is open to an opposing party to adduce evidence to impugn it, or to cross-examine to do so, but as things stand, on this application in connection with discovery, there is no reason to go behind the assertion that all those invoices relating to Abergeldie that relate to a Geotech bag have been discovered.

1. Next, Ms Gilmartin referred to documents produced by Global Synthetics Pty Ltd on subpoena showing purchases by the second defendant, and observed that the defendants had produced no documents from Global Synthetics Pty Ltd. Mr Wiggett's response is that while the defendants purchased materials from Global Synthetics Pty Ltd, they were used in the works conducted for Abergeldie and were not separately invoiced, being included in the total amounts invoiced to Abergeldie which, where relevant, had been discovered.

1. Next, Ms Gilmartin referred to a ledger produced under subpoena by Taronga Conservation Society, said to disclose Geotech bag work conducted by the defendants. In response, Mr Wiggett said that while the defendants conducted works for Taronga, they involved cleaning out by a pool used by Tapir and did not involve disposal of organic materials through the use of the Geotech bag, and that while there was a delivery of a Geotech bag to Taronga by the second defendant, the defendants did not provide any services to Taronga in relation to the Geotech bag, in that it did not remove or dewater any waste material from Taronga Zoo.

1. Finally, Ms Gilmartin said that in examining records discovered by the defendants certain entries had been redacted, and by comparing them with like documents obtained from another source, it could be identified that the redacted entries included payments received from the Prospect Water Treatment Plant, Australian Water Services and Degemont. Mr Wiggett responded that while Degemont, formerly known as Australian Water Services, was a customer of the defendants and operated the Prospect Water Treatment Plant, the services provided by the defendants for that entity included high-pressure blast and vacuum loading, and the defendants had never used any Geotech bag for works for Degemont under its various names or sites.

1. The plaintiffs also relied on an affidavit of Mr Christopher Garry Bryett sworn 5 October 2011, which also covered the redacted transactions referred to by Ms Gilmartin. He referred to an additional redacted transaction, which Mr Wiggett explained as being the balance in his personal bank account before the relevant period, and two invoices produced by Taurus Trade Finance Pty Ltd, said not to have been discovered by the defendants, to which Mr Wiggett responded that, with the exception of three invoices, none of the Taurus Trade Finance Pty Ltd invoices related to the use of a Geotech bag or Geotech works, and that the three had been inadvertently omitted from the defendants' discovery, and were now produced.

1. Finally, Mr Bryett observed that the defendants had discovered 14 delivery documents produced by Taurus Trade Finance Pty Ltd under subpoena covering a period from 20 November 2010 to 30 November 2010, but no other delivery documents. Mr Wiggett pointed out that in fact 81 such delivery documents and associated material had been discovered in the defendants' second list.

1. In short, therefore, the evidence on this application does not establish that there remains, or persists, any such default in discovery in compliance with existing orders of the Court as could warrant the drastic remedy of striking out the defence.

1. I order that the notice of motion be dismissed with costs. I adjourn the proceedings to Tuesday 22 November 2011 at 9 AM before the Registrar for further directions.

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Decision last updated: 18 January 2012