Chaffey Services Pty Ltd as trustee for Cataby Services Trust, T/A Cataby Services v Doble [No 3]
[2022] WASC 304
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: CHAFFEY SERVICES PTY LTD AS TRUSTEE FOR CATABY SERVICES TRUST, T/A CATABY SERVICES -v- DOBLE [No 3] [2022] WASC 304
CORAM: TOTTLE J
HEARD: 8 SEPTEMBER 2022
DELIVERED : 8 SEPTEMBER 2022
PUBLISHED : 12 SEPTEMBER 2022
FILE NO/S: CIV 1854 of 2020
BETWEEN: CHAFFEY SERVICES PTY LTD AS TRUSTEE FOR CATABY SERVICES TRUST, T/A CATABY SERVICES
Plaintiff
AND
MICHAEL PAUL DOBLE
First Defendant
KIRAHNLEY PTY LTD T/A KTR SERVICES
Second Defendant
Catchwords:
Practice and procedure - Discovery - Defendants' application for further and better discovery - Where statement of claim alleges the first defendant's use of confidential information is confined to monthly turnover figures - Whether further and better discovery of financial records extending beyond records of turnover should be given - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | J Schoombee |
| First Defendant | : | D H Solomon |
| Second Defendant | : | D H Solomon |
Solicitors:
| Plaintiff | : | Bennett |
| First Defendant | : | Solomon Brothers |
| Second Defendant | : | Solomon Brothers |
Case(s) referred to in decision(s):
Nil
TOTTLE J:
(This judgment was delivered extemporaneously on 8 September 2022 and has been edited from the transcript.)
Introduction
The background to this action and the nature of the plaintiff's claims are outlined in the reasons delivered by me on 10 August 2022 and are to be taken as incorporated in these reasons.
These reasons concern an application by the defendants for further and better discovery made by a minute of orders filed on 2 September 2022. The application was expressed in the following terms:[1]
By 29 September 2022, the plaintiff provide to the defendants further and better discovery verified by affidavit and inspection, in electronic or native format, of all documents, including but not limited to, monthly, quarterly or other periodic management accounts, financial statements, cash flow statements, ledgers and accounting software records that contain or record or were used by or on behalf of the plaintiff to calculate the plaintiff’s monthly and annual turnover, payments, and net cash flow figures during the period from July 2017 to January 2020 in the custody, possession or control of the plaintiff.
[1] Defendants' minute of proposed orders filed 2 September 2022 [1].
The issue on the pleadings
The plaintiff pleads:[2]
10On various dates between October 2019 and 31 March 2020, and relevantly, whilst still employed by the plaintiff, and thereafter as pleaded in paragraphs 10.19 to 10.21 and 10.28 below, unbeknown to the plaintiff Mr Doble:
…
10.8on a date unknown to the plaintiff, prior to 20 November 2019, accessed and thereafter provided to the NAB (in support of the Loan Application) a copy of the plaintiff's confidential financial information in support of the second defendant's application;
PARTICULARS
(i)Email from the first defendant to Ms Gardiner dated 20 November 2019 attaching a document entitled CGS turn over which contained the monthly and annual turnover figures of the plaintiff from July 2017 to October 2019.
[2] Second further re-amended statement of claim filed 26 August 2022 [10].
10.15on a date unknown to the plaintiff, between 7 January and 13 February 2020, used the plaintiff's confidential financial information to complete a 'Monthly Cash Flow Forecast Template' document and thereafter provided a copy of the same to the NAB on behalf of the second defendant;
PARTICULARS
(i)Monthly Cash flow Forecast Template dated 7 January 2020 which contained the plaintiff's monthly turnover figures.
(ii)Email from the first defendant to Ms Sweetman dated 13 February 2020.
The defendants plead that the first defendant completed an application for finance based on his own knowledge and experience, that 'the Monthly Cash Flow Forecast Template' document did not contain any of the plaintiff's confidential information and that all the figures contained in it were the first defendant's own estimates derived from his knowledge and experience accumulated over a period of 20 years.[3]
[3] First defendant's and second defendant's fourth further re-amended defence filed 12 May 2022 [17.5], [17.12].
The plaintiff joins issue with the defendants' pleas.[4]
[4] Further re-amended reply filed 6 April 2022 [1].
Plaintiff's response to the application
Following conferral between the parties, the plaintiff agreed to produce ledger accounts generated by its accounting software recording turnover on a monthly basis.
Analysis
The issue raised by this application can be analysed as follows:
(a)There is an issue between the parties as to whether the information contained in the CGS turnover spreadsheet and the Monthly Cash Flow Forecast Template does, in fact, contain confidential information of the plaintiff.
(b)The documents discovered to date do not enable a simple comparison by the defendants between the figures contained in the CGS turnover spreadsheet and the Monthly Cash Flow Forecast Template and the plaintiff’s actual figures.
(c)The defendants contend the documents sought by them are necessary to enable that comparison to take place.
(d)The defendants contend the documents to be discovered should extend beyond documents recording turnover and extend to cash flow forecasts and other management accounts for two reasons: first, because the plea in par 10.15 of the statement of claim is not confined to an allegation that the only confidential information used by the first defendant was the plaintiff's turnover figures, and secondly, because documents falling within the wider category are relevant to the issue of what potentially confidential information the first defendant had access to and used. This, the defendants contend, will remain in issue under par 17.5 and par 17.12 of the defence and par 1 of the reply, even if par 10.15 of the statement of claim is understood as being limited to an allegation of misuse of information as to turnover. If aspects of the Monthly Cash Flow Forecast Template (which go beyond turnover) are inconsistent with the plaintiff’s records, that will lead to inferences that the first defendant did not have access to, or use, the plaintiff’s confidential information in preparing the Monthly Cash Flow Forecast Template.
Disposition
I have reached the firm view that the defendants' application be dismissed for three reasons.
First, on a plain reading of the statement of claim, the plaintiff's allegation of the use of confidential financial information and the preparation of the Monthly Cash Flow Forecast Template is confined to the use of the plaintiff's monthly turnover figures. For the purpose of the comparison exercise which the defendants say must be undertaken (and which the plaintiff accept will be undertaken at trial) it is the turnover figures and nothing else that need to be considered. The additional discovery the plaintiff has agreed to provide will enable the comparison referred to to be undertaken.
In my respectful view, there is no need, in the context of this case and this application, to consider the ambit of the concept of turnover by references to the cases cited by counsel for the defendants. In this case, there is no doubt that by using the expression 'turnover' the plaintiff means the figure calculated by reference to the invoices rendered and monies received in respect of those invoices.
Secondly, there is no issue about what confidential information of the plaintiff the defendants had access to. The issue is what confidential information the first defendant used and, as I have said, that issue is confined to an allegation that the first defendant used the plaintiff's turnover information.
Thirdly, I do not accept the defendants' submission that the application for discovery can be justified on the basis that it will enable a comparison to be made between the defendants' projected expenses and the plaintiff's actual expenses and that differences between the two will give rise to an inference the first defendant had not used any of the plaintiff's confidential information. Given the confined nature of the plaintiff's case, I am not satisfied that the possibility of drawing an inference of the nature identified by the defendants is a sufficient justification for the further and extensive discovery sought, especially given the confidential nature of the documents sought by the defendants and the inherently intrusive nature of the discovery process.
Conclusion
For the reasons given, the defendants' application for further and better discovery will be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OK
Associate to the Honourable Justice Tottle
12 SEPTEMBER 2022
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