Australian Mineral Investors Pty Ltd v Barndon

[2007] WASC 302

AUSTRALIAN MINERAL INVESTORS PTY LTD -v- BARNDON [2007] WASC 302

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2007] WASC 302
Case No:	CIV:1626/2006	Heard:	6 DECEMBER 2007
Coram:	BEECH J	Delivered:	10/12/07
No of pages:	11	Judgment Part:	1 of 1
Result:	Application granted in part
Category:	B
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Parties:	AUSTRALIAN MINERAL INVESTORS PTY LTD (ACN 083 007 881) OMEGA MANAGEMENT SERVICES PTY LTD (ACN 060 723 453) ARNOLD NELSON BARNDON MARIE CARMEL BARNDON GENEVIEVE MARGETIC WARREN KALAJZICH NOMINEES PTY LTD (ACN 008 822 875)
Catchwords:	Practice and procedure Application for further and better discovery Turns on own facts
Legislation:	Rules of the Supreme Court 1971 (WA), O 26 r 6
Case References:	Beecham Group Ltd v Bristol-Myers Co [1979] VR 273 Chandler v Water Corporation [2004] WASC 95 CSBP Ltd v Gerling Australia Insurance Co Pty Ltd [2007] WASC 9 Mulley v Manifold (1959) 103 CLR 341 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : AUSTRALIAN MINERAL INVESTORS PTY LTD
-v- BARNDON [2007] WASC 302 CORAM : BEECH J HEARD : 6 DECEMBER 2007 DELIVERED : 11 DECEMBER 2007 FILE NO/S : CIV 1626 of 2006 BETWEEN : AUSTRALIAN MINERAL INVESTORS PTY LTD (ACN 083 007 881)

First Plaintiff

OMEGA MANAGEMENT SERVICES PTY LTD (ACN 060 723 453)
Second Plaintiff

AND

ARNOLD NELSON BARNDON
MARIE CARMEL BARNDON
First Defendants

GENEVIEVE MARGETIC
Second Defendant

WARREN KALAJZICH NOMINEES PTY LTD (ACN 008 822 875)
Third Defendant

(Page 2)

Catchwords:

Practice and procedure - Application for further and better discovery - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 26 r 6

Result:

Application granted in part

Category: B

Representation:

Counsel:

First Plaintiff : Mr M G Pendlebury
Second Plaintiff : Mr M G Pendlebury
First Defendants : Ms C H Thompson
Second Defendant : Mr C J Sweeney
Third Defendant : No appearance

Solicitors:

First Plaintiff : Lewis Blyth & Hooper
Second Plaintiff : Lewis Blyth & Hooper
First Defendants : Nielsen & Co
Second Defendant : McCallum Donovan Sweeney
Third Defendant : No appearance

(Page 3)

Case(s) referred to in judgment(s):

Beecham Group Ltd v Bristol-Myers Co [1979] VR 273
Chandler v Water Corporation [2004] WASC 95
CSBP Ltd v Gerling Australia Insurance Co Pty Ltd [2007] WASC 9
Mulley v Manifold (1959) 103 CLR 341
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60

(Page 4)

BEECH J:

Introduction

1 This is an application by the plaintiffs for discovery by the first defendants and by the second defendant of particular classes of documents.

2 The plaintiffs say that the proper discovery has not been given. On this application they rely on O 26 r 6 of the Rules of the Supreme Court 1971 (WA) and, perhaps, on the inherent jurisdiction of the court (although that was not specifically referred to by counsel for the plaintiffs).

3 The plaintiffs rely on an affidavit of Mr Houthuysen sworn 30 October 2007 to enliven the court's jurisdiction under O 26 r 6.

4 It is clear from the language of O 26 r 6(3) itself, and from the authorities, that an affidavit complying with r 6(3) is required in order that the court's discretion is enlivened.

5 The principles applicable to an application under O 26 r 6 were summarised by Master Newnes in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 [3] - [6] as follows:

[3] In determining whether to make an order for further discovery, the Court must have reasonable grounds for being fairly certain that there are other relevant documents which ought to have been discovered: Beecham Group Pty Ltd v Bristol Myers Co [1979] VR 273. The Court must be able to infer from the nature of the document in question that it is relevant; it will not speculate as to its relevance. Relevance may either appear from the nature of the document or its contents, and if the latter then there must be a prima facie case as to the contents before an order for further discovery will be made: Astra-National Productions Ltd v Neo-Art Productions Ltd [1928] WN 218 at 219. Where an application is made in respect of a document referred to in a document already discovered (the relevance of the latter being conceded by its discovery) it is generally reasonable to assume, in the absence of a contrary indication in the document discovered, that the document referred to is relevant: see Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co [1882] 11 QBD 55; Kent Coal Concessions Ltd v Duguid [1910] 1 KB 904 at 915 and the discussion in PDM Australia Pty Ltd v Kellogg Overseas Corporation & Ors, unreported; SCt of WA; Library No 6646; 26 March 1987 at [5-14].

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[4] In determining whether a document relates to a matter in question, and, therefore, whether it ought to have been discovered, the test is that set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (supra) as follows:

'It seems to me that every document relates to matters in question in the action which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in words "either directly or indirectly" because it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance its own case or to damage the case of its adversary, if it is a document which may fairly lead to a chain of inquiry, which may have either of those two consequences.

[5] The matters in issue are to be determined by reference to the pleadings: Mulley v Manifold (1959) 103 CLR 341 per Menzies J at 345. But regard must also be had to the conduct and admissions of the parties and the nature of the action: Schlam v WA Trustee Executor & Agency Co Ltd [ 1964] WAR 178 at 186.

[6] It is also important to bear in mind that there is not a strict entitlement to an order for discovery, including an order for further discovery: Kent Coal Concessions Ltd v Duguid (supra) at 910. Moreover, amendments to the Rules in more recent times, including the introduction of O 1 r 4B and O 26 r 7, emphasise the need to have regard to the timely and cost effective disposal of the action in the exercise of the discretion to order discovery.

6 Further, documents going solely to the credit of the party giving discovery do not relate to a matter in issue: Beecham Group Ltd v Bristol-Myers Co [1979] VR 273, 278; CSBP Ltd v Gerling Australia Insurance Co Pty Ltd [2007] WASC 9 [46].

7 In an application based on the court's inherent jurisdiction in seeking to displace the generally conclusive nature of the affidavit of discovery, the applicant is confined to information from the opponent's affidavit and list, the documents the opponent discloses and the opponent's admissions. The applicant may not rely upon a contentious affidavit. Limited to those materials, the court may make an order if, among other things, it has reasonable grounds for being fairly certain that there are other documents which ought to have been disclosed, or if it appears that a party has excluded documents under a misconception of the case: Mulley v

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Manifold (1959) 103 CLR 341, 343; Chandler v Water Corporation [2004] WASC 95 [17].

8 The plaintiffs seek orders of discovery of various classes of documents by each of the first defendants and the second defendant. No application is made in respect of the third defendant.

9 Some of the paragraphs of the categories set out in the chamber summons are dated 30 October 2007 are not now pursued by the plaintiffs.

10 It is convenient to deal with the application by reference to the various classes of documents sought by the plaintiffs. Before doing that, I will outline the pleadings and the issues emerging from them.

The pleadings

11 In overview, the case may be summarised as follows. The first defendants (Mr & Mrs Barndon) own land known as Lot 15 Brand Highway, Rudds Gully (the Land). The second defendant is the daughter of the first defendants. She held a power of attorney for the first-named first defendant, Mr Barndon. Mr Barndon held a power of attorney for the second-named first defendant, Mrs Barndon.

12 In late December 2005/January 2006 the second defendant and the plaintiffs executed a contract (the Contract) for sale by the first defendants of the Land to the plaintiffs. The Contract was executed by the second defendant, purportedly (at least) on behalf of the first defendants.

13 However, the first defendants deny that Mrs Barndon is bound by the Contract. The first defendants have refused to perform the Contract.

14 The plaintiffs plead their case in various ways.

15 In par 4 of the statement of claim (SC 4) it is pleaded that the first defendants, through the third defendant, alternatively the third defendant, represented to the plaintiffs that the second defendant had the first defendants' authority to enter into a contract in respect of a sale of the Land on behalf of the first defendants and to execute contractual documentation in that respect. Particulars are given of that allegation. They relate to documents sent by the third defendant to the plaintiffs or one of them or to conversations between the third defendant and the plaintiffs' agent.

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16 In SC 4A the plaintiffs plead that the first defendants, through the second defendant, represented or held out to the plaintiffs that the second defendant had the first defendants' authority to enter into the Contract and execute contractual documentation. Particulars are provided, including, in par (1) of the particulars, allegations about discussions between Mr Barndon and the second defendant, and his consent to or knowledge of conduct on the part of the second defendant.

17 In SC 5 it is pleaded that the second defendant, on behalf of or purportedly on behalf of the first defendants, and the plaintiffs entered into the Contract. No particulars of the plea of the second defendant's authority have been requested or provided.

18 In oral submissions the plaintiffs say that their case (or part of their case) is that the second defendant had express oral authority from her father to execute the Contract on behalf of the first defendants. The first and second defendants say that it was not apparent to them that this was part of the plaintiffs' case. That is, I think, understandable. However, the plea that the second defendant entered into the Contract 'on behalf of' the first defendants is a broad plea of authority. Express oral authority is within the scope of that plea. Particulars can be requested or anyway provided by the plaintiffs.

19 The plaintiffs plead that the execution of the contract by the plaintiffs was induced by the representations referred to in SC 4 and SC 4A, and that the first defendants are thereby bound by the terms of the contract.

20 SC 10A - 10L plead representations by the third defendant, authorised by the first defendant, that the second defendant held a power of attorney empowering the sale on behalf of the first defendants. There are then claims of estoppel and damages for misleading or deceptive conduct.

21 There is also a claim against the second defendant for a breach of warranty of authority.

22 The plaintiffs also draw attention to their plea in par 2C that, at all materials times, the plaintiffs intended, as each of the defendants knew, to acquire the Land for the purpose of subdivision at a profit. Detailed particulars in support of the plea of knowledge have been provided; see the particulars dated 14 August 2007 and the further and better particulars dated 9 October 2007.

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23 Finally, the plaintiffs point to the plea, not admitted by the relevant defendants, that the third defendant was authorised by the first defendants to market the Land to prospective purchasers and to convey any written offers for sale of the Land that the first defendants or persons authorised by the first defendants to make offers on their behalf, may wish to put to prospective purchasers.

The application

24 The plaintiffs seek further and better discovery of three categories of documents from the first and second defendants:

(a) documents relating to communications with the Shire of Greenough (the Shire);

(b) documents relating to the advertising and marketing of the Land; and

(c) the first and second defendants' telephone records from 1 October 2005 to 1 February 2006.

I will deal with these categories in turn.

The Shire documents

25 As to the Shire documents, the plaintiffs rely on pars 17 - 20 of Mr Houthuysen's affidavit of 30 October 2007.

26 However, as the first defendants point out, subsequent to that affidavit, the first defendants have, as their solicitors foreshadowed prior to this application being filed, sworn and filed a supplementary affidavit of discovery, sworn by Mr Barndon on 12 November 2007. On the face of that affidavit and its supplementary list, it provides discovery of documents relating to the Shire, including the letter referred to at par 18 of Mr Houthuysen's affidavit.

27 That being so, the affidavit of Mr Houthuysen of 30 October 2007 does not, in my opinion, provide an adequate foundation for the exercise of power under O 26 r 6.

28 The plaintiffs pointed to the material at pages 48 and 50 of Mr Houthuysen's affidavit. That material falls well short of satisfying me that there are reasonable grounds for being fairly certain that there are other relevant documents in this category in the possession of the first defendants. The minutes at page 48 record a discussion, not the existence of any document. Page 50 records a recommendation by a Shire officer

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within minutes of a Committee meeting that Council send letters to land owners. There are no minutes produced of any Council meeting at which Council resolved to adopt such recommendation.

29 The plaintiffs then point to documents in this category which are said to be in the possession of the third defendant. Documents in the possession of the third defendant are, it is said, within the power of the first defendants and should, therefore, be discovered by the first defendants.

30 In this regard, the plaintiffs handed up, without objection, correspondence from the third defendant's solicitors enclosing a draft affidavit of discovery and supplementary list. The letter states that sworn copies of the affidavit will be provided once it is finalised.

31 For present purposes it may be assumed, favourably to the plaintiffs, that documents within the possession of the third defendant are within the power of the first defendants on the ground that such documents were created in the course of the third defendant's work as agent for the first defendants. The question, however, is whether an order for further and better discovery ought now to be made against the first defendant, in respect of documents said to be in the possession of the third defendant, in circumstances where the third defendant is evidently about to give discovery of the documents relied upon by the plaintiffs. The power to order discovery is properly exercised having regard to the timing and cost effective disposal of the action (Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [6]). I am not satisfied that there is any sufficient benefit to the plaintiffs, or to the conduct of the litigation generally, in requiring the first defendants to give discovery of documents held by the third defendant, which documents are about to be the subject of discovery by the third defendant.

32 For those reasons I decline to make any order for further and better discovery in respect of the Shire documents against the first defendants. For corresponding reasons, and for the additional reason that documents held by the third defendant are, anyway, not within the power of the second defendant, I decline to make any such order against the second defendant.

Advertising and marketing documents

33 The plaintiffs accepted (rightly in my opinion) that the evidence before the court is not sufficient to warrant a conclusion that there are reasonable grounds to be fairly certain that documents within this

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category are within the possession of the first or second defendants. In relation to this category, the plaintiffs relied upon documents in the possession of the third defendant, as being within the power of the first defendants and thus ought to be discovered by them.

34 As explained in relation to the Shire documents, I do not consider it an appropriate exercise of the discretion to order further and better discovery to order discovery by the first defendants of documents possessed by the third defendant in circumstances when the third defendant is about to give discovery of such documents.

Telephone records

35 Finally, the plaintiffs seek discovery of telephone records on the part of the first and second defendants.

36 The issue is one of relevance. The defendants do not deny that such documents exist and are within their power, but say that they are irrelevant to the issues in the action.

37 By their nature, the telephone records may assist in establishing the timing, extent and duration of telephone conversations between the various defendants (at least in respect of telephone calls involving a mobile phone). The question is whether evidence of that nature is relevant to the issues between the parties.

38 The plaintiffs' written submissions say that the records may be of assistance in relation to the issue of whether the third defendant held out the second defendant as having authority. I do not accept that the telephone records are capable of assisting in relation to that issue. Whether the third defendant held the second defendant out is a matter governed by communications by the third defendant to the plaintiffs; not by communications between the third defendant and other defendants.

39 In oral submissions, the plaintiffs submitted that the telephone records were relevant, in the Peruvian Guano sense, to the question, arising from SC 5, whether the second defendant was orally authorised by Mr Barndon to execute the Contract on behalf of the first defendants.

40 In response, the first and second defendants made two submissions. First, it was said that the plea of oral authority was not sufficiently clear on the face of the pleading. As explained earlier in these reasons, while I accept that the plea could certainly have been clearer, express oral authority seems to me to be within the scope of the plea in SC 5.

(Page 11)

41 Secondly, the first and second defendants submitted that, by their nature, the telephone records were incapable of assisting in relation to the question of whether the second defendant was orally authorised by Mr Barndon to execute the Contract. Taking into account the low threshold for relevance as explained in Peruvian Guano, I do not accept that submission. Plainly, the telephone records will say nothing, in any direct sense, as to the content of whatever telephone calls occurred between the defendants, including between father and daughter. However, the relevance of the telephone records is not to be tested in isolation from other evidentiary material. The pattern of duration and frequency of phone calls in the period in which negotiations respecting the Contract were occurring, compared to the frequency and duration of telephone contact in other periods, in combination with other evidence, may be capable of supporting the plaintiffs' case or damaging the first and second defendants' case.

42 Thus I conclude that the telephone records are sufficiently relevant as to be discoverable. However, as would be apparent, the relevance of those documents is, to my mind, indirect and far from central. If the discovery and production of these documents involved substantial burdens for the defendants I would not have been inclined to exercise the discretion to order further and better discovery of them. However, it was accepted by the defendants that discovery of telephone records by the defendants does not impose any undue burden, in that it involves no more than the making of a request by the relevant party to his or her telephone service provider.

Conclusion

43 For those reasons I would order that the first and second defendants give further and better discovery in respect of their telephone records for the period requested and would otherwise dismiss the application.

44 I will hear from the parties as to the orders to give effect to these reasons and as to costs.