CITYRICH Investments Pty Ltd T/As Millennium Equity Construction Engineers v Greg Rowe Pty Ltd T/As Greg Rowe and Associates
[2005] WASC 96
•17 MAY 2005
CITYRICH INVESTMENTS PTY LTD T/AS MILLENNIUM EQUITY CONSTRUCTION ENGINEERS -v- GREG ROWE PTY LTD T/AS GREG ROWE AND ASSOCIATES [2005] WASC 96
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 96 | |
| 17/05/2005 | |||
| Case No: | CIV:1068/2005 | 4 MAY 2005 | |
| Coram: | MASTER SANDERSON | 4/05/05 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Discovery in limited terms ordered | ||
| B | |||
| PDF Version |
| Parties: | CITYRICH INVESTMENTS PTY LTD T/AS MILLENNIUM EQUITY CONSTRUCTION ENGINEERS (ACN 007 534 720) GREG ROWE PTY LTD T/AS GREG ROWE AND ASSOCIATES (ACN 093 308 715) |
Catchwords: | Practice and procedure Application for pre-action discovery Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 26A r 4, O 59 r 9 |
Case References: | Hill v National Australia Bank Ltd, unreported; SCt of WA (Sanderson M); Library No 980676; 17 November 1998 McCarthy & Ors v Dolpag Pty Ltd [2000] WASCA 106 St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
GREG ROWE PTY LTD T/AS GREG ROWE AND ASSOCIATES (ACN 093 308 715)
Defendant
Catchwords:
Practice and procedure - Application for pre-action discovery - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 26A r 4, O 59 r 9
(Page 2)
Result:
Discovery in limited terms ordered
Category: B
Representation:
Counsel:
Plaintiff : Mr C Touyz
Defendant : Mr G A Rabe
Solicitors:
Plaintiff : Hammond King Touyz
Defendant : Mullins Handcock
Case(s) referred to in judgment(s):
Hill v National Australia Bank Ltd, unreported; SCt of WA (Sanderson M); Library No 980676; 17 November 1998
McCarthy & Ors v Dolpag Pty Ltd [2000] WASCA 106
Case(s) also cited:
St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360
(Page 3)
1 MASTER SANDERSON: This is a plaintiff's application for pre-action discovery. The application is brought under O 26A r 4 of the Rules of the Supreme Court1971 (WA). At the conclusion of the hearing, I indicated that I would order limited discovery. I provided brief oral reasons for doing so. Counsel for the defendant, foreshadowing an appeal, asked for written reasons. These are those reasons.
2 Order 26A r 4 is in the following terms:
"4.Discovery from a potential party
(1) This Rule applies if a person who may have a cause of action against a person whose description has been ascertained ('the potential party') wants —
(a) to commence proceedings against the potential party; or
(b) to take proceedings against the potential party in the course of an action to which the person is a party,
but the person, after reasonable enquiries, has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings.
(2) If there are reasonable grounds for believing that the potential party had, has, or is likely to have had or to have, possession of documents that may assist in making the decision, the person may apply for an order under this Rule.
(3) The application shall be supported by an affidavit and a copy of both shall be served on the potential party.
(4) On the application the Court may order the potential party to give discovery of all documents that are or have been in the potential party's possession and that may assist the applicant in making the decision."
3 Rule 4(1) and (2) sets out a number of requirements that a plaintiff making an application under the rule must satisfy. These requirements can be summarised as follows:
(Page 4)
- (1) The plaintiff must establish that he "may" have a cause of action. This implies that the plaintiff has made no final decision as to whether proceedings should be issued. Rather, he is still considering his position. If a firm decision has been taken to issue proceedings, then recourse cannot be had to the rule: see Hill v National Australia Bank Ltd, unreported; SCt of WA (Sanderson M); Library No 980676; 17 November 1998.)
(2) The description of the person who is a potential party has been ascertained.
(3) The plaintiff "wants" to commence proceedings against a potential party either by way of fresh action or in the course of an action already on foot. There is an undoubted tension inherent in r 4(1) between the concept of a person "who may have a cause of action" and a person who "wants" to commence proceedings. However, this tension is resolved by the further wording of the subrule.
(4) The plaintiff must have made reasonable inquiries.
(5) After those reasonable inquiries, the plaintiff must not have been able to obtain sufficient information to enable a decision to be made whether to commence proceedings. Once again, the subrule embodies a concept of uncertainty. It reflects the use of the word "may" in relation to whether or not a cause of action exists.
(6) The plaintiff must establish that there are reasonable grounds for believing that a potential party has possession of documents which may assist in making a decision. Once again, the concept of no decision having been made as at the date of the application is embodied in the rules.
4 The policy behind this rule is not difficult to ascertain. It is not infrequently the case that a party will feel that a particular individual or organisation has infringed his rights. The aggrieved party is likely to "want" to vindicate his rights. But on the material available to him, he is uncertain whether any claim can be made out. It is then, after he has made all reasonable inquiries and is still unable to reach a conclusion as to whether or not a cause of action exists, that an application can be made under r 4.
5 The facts in this case are relatively straightforward. They are set out in two affidavits. The first is an affidavit of Theodore George Ongarazos
(Page 5)
- sworn 19 January 2005 and in an affidavit of Colin Touyz sworn 8 March 2005. The position can be summarised in this way. The plaintiff is a builder. On 11 November 2004, the plaintiff was invited to submit a tender for the refurbishment and extension to the existing science centre at John Septimus Roe Anglican Community School - Mirrabooka Campus ("the Project"). The invitation to tender was issue by the defendant. A copy of the letter containing the invitation appears as annexure TG01 to the affidavit of Mr Ongarazos. The invitation set a deadline for the submission of tenders. It was in the following terms:
"Your tender submission should be presented to the office of Greg Rowe and Associates by 1 00pm Thursday, 2 December 2004." (Emboldening and underlining as contained in the defendant's letter.)
7 Mr Ongarazos says that about 3 pm on 2 December 2004 he received a phone call from a person who introduced himself as Mr Fred Witting, a representative of Derwent Construction ("Derwent"). Mr Ongarazos was aware that Derwent was one of the four firms invited to tender for the project. Mr Ongarazos states that Mr Witting advised him that Derwent had been invited to tender, but had not been able to submit a tender on time. He goes to say also Mr Witting said that the defendant had asked him to submit a price even though the deadline had expired, that he had been advised by the defendant that his tender for the project would not be considered, but the fact of the tender might be important when considering whether Derwent ought be asked to tender for any future works undertaken by the Anglican school. Mr Witting further said that the price submitted would be $100,000 higher than the plaintiff's price. Mr Ongarazos said that Mr Witting's request seemed reasonable, as there was no prospect of Derwent being awarded the tender, and so he advised Mr Witting of the price the plaintiff had submitted.
8 On 8 December 2004, Mr Ongarazos spoke to a Mr Alan Francis, a representative of the defendant. During this conversation, Mr Francis advised Mr Ongarazos that only three parties had submitted a tender. Of these three tenders, one was $100,000 higher than the plaintiff's tender and the other was $300,000 higher. Mr Francis advised Mr Ongarazos that the defendant had recommended that the plaintiff's tender be accepted, but as yet no decision had been made.
(Page 6)
9 During the course of his discussion with Mr Francis, Mr Ongarazos realised that the Derwent tender was up for consideration. Mr Ongarazos asked Mr Francis if the Derwent tender was a conforming tender and whether it had been submitted to the defendant prior to the expiration of the deadline. Mr Francis confirmed the tender had been received prior to that deadline. On 15 January 2005, the plaintiff was advised that its tender had been unsuccessful. The successful tenderer was Derwent.
10 The plaintiff was left in a difficult position. On the one hand, Mr Ongarazos had been told by Mr Witting that Derwent did not submit a conforming tender. On the other hand, Mr Francis said that Derwent's tender was a conforming tender. Clearly, Mr Witting and Mr Francis could not both be right.
11 The plaintiff set about attempting to ascertain precisely what had occurred. Without going into detail, it is enough if I say that the plaintiff's solicitors wrote to John Septimus Roe Anglican Community School and to defendant. Neither was co-operative. Neither would disclose to the plaintiff any documents which might have clarified the position. Both indicated in their correspondence that they would not be prepared to take the matter any further. The plaintiff then brought this application.
12 It is apparent on these facts that the plaintiff is entitled to an order under O 26A r 4. There can be no doubt that it may have a cause of action against the defendant. It may also have a cause of action against John Septimus Roe Anglican Community School. Counsel for the defendant submitted that it was the school which should properly have been the subject of this application. After all, the defendant is a disclosed agent of the school, and if there has been a breach of the process contract, then liability for the breach must rest with the school. It may well be that the plaintiff does have a cause of action against the school. But it is arguable that it has a cause of action against the defendant for misleading and deceptive conduct. It may have been open to the plaintiff to bring the discovery action against the school. Be that as it may, there does not seem to me to be any impediment against the plaintiff bringing this action against the defendant. After all, it may have a cause of action against the defendant.
13 Clearly, the plaintiff wants to vindicate its rights and commence proceedings against the defendant. It has made reasonable inquiries and it has not been able to obtain sufficient information to enable a decision to be made as to whether to commence proceedings. There are clearly
(Page 7)
- reasonable grounds for believing that the defendant has in its possession documents which may assist in making the decision.
14 As all the requirements of the rule were satisfied, it was appropriate that an order should be made.
15 However, the order as sought in the chamber summons was, in my view, too wide. The authorities make it plain that, given the invasive nature of an order made under this rule, the terms of the order should be no wider than is strictly necessary to allow the plaintiff to determine whether or not take action: see McCarthy & Ors v Dolpag Pty Ltd [2000] WASCA 106 at [13]. Accordingly, I made orders limiting the discovery to be provided by the defendant to those documents which would disclose the date and time upon which the Derwent tender was received. I reserved to the parties liberty to apply should difficulties arise in implementation of the order.
16 There remained, then, the question of costs. Counsel for the plaintiff made a forthright submission. He pointed out that the parties had conferred, as was required by O 59 r 9 and that the defendant had refused to disclose the documents sought. Counsel submitted that the application had been successful and that costs should follow the event. Despite the strength of counsel's submission, I determined that costs should be reserved. The correspondence passing between the parties shows that the extent of the discovery sought by the plaintiff from the defendant was wider than what was eventually obtained. But that was not the main reason I reserved costs. A party in the position of the defendant who is acting as an agent for a disclosed principal has an understandable reluctance to disclose sensitive documents without the authority of that principal. Doubtless it will comply with an order of the Court; but it is an altogether different thing to comply with an order of the Court as against simply handing over confidential documents when requested to do so. Given the nature of applications such as this, it is not, in my view, unreasonable for a party in the position of the defendant to resist the application. That does not mean that they should not eventually be required to pay the costs of the application. If no proceedings are commenced by the plaintiff against the defendant in relation to the tender, then the question of costs can be considered in the light of the documents discovered and the information obtained on inspection. It may be that the circumstances will warrant a costs order against the defendant. On the other hand, if proceedings are commenced, it may be appropriate to consider these reserved costs at the conclusion of the trial when all the evidence is in and the significance of the pre-action discovery order is
(Page 8)
- apparent. In my view, to order costs at this stage of the proceedings is, in the circumstances of this case, inappropriate.
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