Computershare Ltd v Trenerry Crescent Properties Pty Ltd
[2002] VSC 212
•4 June 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 2029 of 2001
| COMPUTERSHARE LIMITED (ACN 005 485 825) | Plaintiff |
| v. | |
| TRENERRY CRESCENT PROPERTIES PTY LTD (ACN 005 598 489) | Defendant |
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JUDGE: | Pagone J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 and 16 May 2002 | |
DATE OF JUDGMENT: | 4 June 2002 | |
CASE MAY BE CITED AS: | Computershare Limited v Trenerry Crescent Properties Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 212 | |
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Discovery – Documents relevant to consideration of project – Causation of loss and damage.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr I R Jones | Minter Ellison |
| For the Defendant | Mr J Davis | Norton Gledhill |
HIS HONOUR:
This proceeding is an appeal under Rule 77.05(4) against the whole of the judgment of Master Kings delivered on 5 March 2002. The judgment of the Master disposed of an application by the defendant by summons filed on 18 December 2001 for particular discovery pursuant to Rule 29.08. The documents sought by the defendant are set out in sub-paragraphs 1(a) to (k) of the summons. The decision of the Master turned in large part upon her view about the issues raised by the pleadings. Another significant factor was the quality of the drafting of the description of the documents which the defendant sought by way of discovery. A third factor of significance in the Master's decision was her view of the terms and effect of an order made by Warren J on 28 September 2001 in this proceeding. The Master did not have the advantage of the detailed analysis of the issues which the defendant put in written submissions for the hearing before me. But for those submissions, and the oral arguments at the hearing, I would have thought the Master's decision beyond challenge.
To understand the significance of the documents sought by the defendant it is necessary for there to be some explanation of the issues raised by the pleadings. The proceeding arises from a contract between the plaintiff and the defendant made on 21 September 2000 for the sale of certain land. The contract provided for the payment of a deposit of $1.2 million which, it seems, was paid on the date of execution of the contract. Special condition 14 of the contract made the contract conditional upon the defendant, as vendor, obtaining within a period of time prior to sale, a certificate of environmental audit, a statement indicating that the land was suitable for residential purposes in accordance with sub-section 57AA(5)(b) of the Environment Protection Act 1970, or a statement in accordance with sub-section 57AA(5)(b) of that Act that the environmental conditions of the land were suitable for the proposed sensitive use. The principal case for the plaintiff is that the defendant failed to satisfy the terms of this condition and that, accordingly, it was entitled both to terminate the contract and to require the return of the deposit with interest. A notice to that effect is pleaded as having been delivered to the defendant on 30 March 2001. It seems that there was no other cause of action alleged by the plaintiff when the statement of claim was filed in this proceeding.
An amended statement of claim dated 2 July 2001 raised two further causes of action as alternatives to the main contract claim. The first of the alternatives is to rectify the contract to accord with what is alleged to have been the common and continuing intention of the parties that the contract be conditional upon the defendant carrying out the works necessary to clean up the land sold to the extent of it being immediately suitable for residential use, and not merely high density residential use. The plaintiff’s amended pleading goes on to assert its entitlement to terminate the contract (as rectified) by the notice dated 30 March 2001.
The final claim is based upon allegations of misleading and deceptive conduct constituted by certain representations. It is this claim which lies at the heart of the present dispute between the parties about discovery. The plaintiff alleges that in reliance upon the representations, it (a) entered into the contract, (b) paid the deposit, and (c) expended monies in relation to the purchase and proposed development of the land. Mr. Jones of counsel, who appeared for the plaintiff, said in argument that the loss and damage claimed by the plaintiff was entering into the contract[1]. However, paragraph 30 of the amended statement of claim is not so limited. It alleges more broadly that the plaintiff "has suffered, or is likely to suffer, loss and damage" and, by way of particulars, states that the particulars of the plaintiff's loss and damage will be provided prior to trial. The defendant points to the breadth of the claim of loss and damage and, in any event, points to the obligation upon the plaintiff that it establish that the loss and damage was suffered "by reason of" the alleged conduct of the defendant. Mr. Davis of counsel, who appeared for the defendant, maintains therefore, that it is relevant to the proceeding to inquire as to the matters which caused the plaintiff to act in the way it did by purporting to terminate the contract on 30 March 2001.
[1]See Demagogue Pty Ltd v Ramensky & Anor (1992) 110 ALR 608, esp. per Gummow J at 621
The defendant wishes to challenge the causal link between its alleged wrongful conduct (namely the representations relied upon by the plaintiff) and the damage to the plaintiff flowing from the exercise by it of the (presumed) right to terminate the contract by reason of the alleged wrongful representations. In that way the defendant maintains that it is entitled to discovery about matters which bear upon the plaintiff’s decision to terminate the contract, such as the plaintiff's view about the project's lack of viability. This point was put in oral argument to me and, in particular, in paragraph 11 of the written submissions in this way:
"The matters referred to in paragraphs 9 and 10 above [of the written submissions] provide a foundation for the defendant to seek discovery of documents relevant to the viability of the project proposed by the plaintiff. It is apparent the plaintiff got 'cold feet'. If it can be established that the plaintiff's decision to purport to terminate the contract on 30 March 2001 was based upon considerations relating to the viability of the project, those documents will provide a basis for the defendant to argue that any misleading or deceptive conduct which might be established by the plaintiff did not cause the plaintiff any loss or damage, insofar as that loss or damage is equivalent to the deposit forfeited by the plaintiff as a consequence of the defendant's acceptance of the plaintiff's repudiation of the contract. This may be a case of the type identified by Justice Hayne in Henville v Walker [2001] HCA 52: 'there may be cases where some of the loss suffered by a person following – and I use the word 'following' in a neutral sense – the conduct of another in contravention of the Act may not be loss suffered by that person by the contravening conduct. Had the appellant chosen, for wholly extraneous reasons, to change the design of the units, part way through their construction, in such a way as to waste some costs of construction already incurred, it might be said that the extra costs incurred were not caused by the respondents' contraventions' – Henville at paragraph 166."
The plaintiff contends that the viability of the project does not arise as an issue of causation on the pleadings. It is undoubtedly true that the viability of the project is not expressly mentioned in the pleadings of either party. However, the defendant seeks to challenge the causal link between any misrepresentation that may be found against it and the loss resulting in any forfeiture of the deposit based upon that cause of action. The defendant is entitled to discovery of documents which relate to matters that bear upon the plaintiff's decision to give notice of termination of the contract on 30 March 2001 and this, in my view, includes documents which relate to the viability of the project. Such documents may reveal a decision to terminate the contract for reasons extraneous to the alleged representations which are said to amount to misleading and deceptive conduct.
The terms of the summons for discovery are not expressed as seeking discovery of documents related to the viability of the project proposed by the plaintiff on the land which was the subject of the contract. In essence the summons seeks documents, the existence of which are either referred to or suggested by other documents which the plaintiff has discovered. Many of the documents or categories of documents sought by the defendant were also said to fall within the order for discovery made by Warren J on 28 September 2001. On that day her Honour ordered discovery in the following terms:
"The Plaintiff file and serve a further list of documents namely records of communications between the Plaintiff and its architects and other persons engaged by it in relation to the proposed project at Trenerry Crescent by 4.00 p.m. on 5 October 2001."
Her Honour also dismissed an application by the defendant that the plaintiff discover:
"documents relevant to the development plan by the plaintiff at Trenerry Crescent."
Her Honour said, in ruling on this issue:
"As for the second category of documents, that is documents relevant to the development planned by the plaintiff at Trenerry Crescent, I consider that there is no basis whatsoever for these documents or the category of documents pursued is far too wide, and the pursuit of further discovery is not made out."
A good deal of the argument before me, and that apparently before the Master, was whether any category of documents sought fell within the category in respect of which discovery had been refused. The plaintiff's obligation to provide discovery under her Honour's orders depends upon whether documents fall within the class ordered by her Honour to be discovered and not whether they may also fall within the class of documents sought in an application which was refused. There may be some documents which overlap and, if they do, the obligation and duty to discover exists fully, and that obligation is not cut down by the fact that the document might also come within another, or wider, description which was rejected. The duty to discover is not narrow. In Mulley v Manifold[2] Menzies J said:
"Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary."[3]
The obligation to discover falls upon the parties themselves, but it is the legal advisers to the parties who first have the task of identifying which documents their clients should discover.
[2](1959) 103 CLR 341
[3]Ibid at 345
Much criticism was directed to the drafting of the terms by which the documents sought were described. Some of that criticism was well made and was correctly accepted by the Master. Some of the criticism about the drafting, however, lost force when the terms were looked at in the context of the background information available to the parties. In Pyneboard Pty Ltd v TPC[4] it was said, in the context of the drafting of a statutory notice that documents be produced,:
"Artificial dissection, in the cause of determined obfuscation, can introduce an argumentative element of uncertainty into words which, when read reasonably in context, are adequate to convey a plain and clear meaning. Provided a notice makes it reasonably clear, in the circumstances in which it is given and on a fair reading of its terms, what information or documents are required, the requirements of s.155(1) as to clarity will be satisfied. In this regard, the mere fact that parsing and analysis in the artificial atmosphere of the courtroom can lead to the identification of a number of latent ambiguities will not invalidate what, as a matter of common sense, is reasonably clear."[5]
Nonetheless, such ambiguities as exist in the summons should not be perpetuated by incorporation into a court order. Moreover, here the fundamental issue in respect of which discovery should be given is not that found in any of the form of words found in any part of the summons for discovery, but in the broader issue of the causal connection between the alleged representations pleaded by the defendant as constituting false and misleading conduct (on the one hand) and the loss and damage which the plaintiff claims was caused by the termination of the contract on 30 March 2001 (on the other hand). Accordingly, and as I foreshadowed during the course of the hearing before me, I propose to make an order for discovery in such terms rather than in the terms sought by the summons.
[4](1982) 57 FLR 368
[5]Ibid at 375
The view that I have taken about the orders for discovery which I should make removes the need for me to consider an argument put on behalf of the plaintiff to the effect that certain parts of the summons which had been conceded before the Master as not pursued were effectively the subject of a consent order for dismissal which could not now be propounded without special leave of the court under section 17A of the Supreme Court Act 1986. I doubt the correctness of the submission put to me, but in any event, if leave were needed I am disposed to give it. The position of the parties at the hearing before me was the same as that before the Master, and Mr. Jones was able to deal with, and did deal with, each of the paragraphs of the defendant’s summons. The position might be otherwise if some prejudice to the plaintiff could be shown. I should say, however, that any party having made a concession in like circumstances, should, as a matter of prudence, inform the other party if the concession is no longer going to be made.
Accordingly, I order that the plaintiff discover those documents relating to its consideration of the viability of the project proposed for the land which was the subject of the contract referred to in paragraph 4 of the amended statement of claim in this proceeding.
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