Cyclis Group Pty Ltd as Trustee for the Garside Health Property Trust v Kabway Pty Ltd [No 2]
[2021] WADC 57
•18 JUNE 2021
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: CYCLIS GROUP PTY LTD as Trustee for THE GARSIDE HEALTH PROPERTY TRUST -v- KABWAY PTY LTD [No 2] [2021] WADC 57
CORAM: DEPUTY REGISTRAR HEWITT
HEARD: 3 JUNE 2021
DELIVERED : 18 JUNE 2021
FILE NO/S: CIV 1809 of 2017
BETWEEN: CYCLIS GROUP PTY LTD as Trustee for THE GARSIDE HEALTH PROPERTY TRUST
Plaintiff
AND
KABWAY PTY LTD
First Defendant
AND
KEVIN JOE HUGHES
Second Defendant
AND
KABWAY PTY LTD in its capacity as Trustee of the HUGHES FAMILY TRUST
Third Defendant
AND
BAKWAY PTY LTD in its capacity as Trustee of the HUGHES FAMILY TRUST
Fourth Defendant
AND
KEVIN HUGHES in his capacity as Trustee of the HUGHES FAMILY TRUST
Fifth Defendant
Catchwords:
Practice and procedure - Application for leave to administer interrogatories - Whether appropriate in the circumstances - Turns on its own facts
Legislation:
Corporations Act 2001 (Cth), s 9, s 1305
Rules of the Supreme Court 1971 (WA), O 30 r 4(3), r 5
Result:
Application dismissed
Representation:
Counsel:
| Plaintiff | : | Mr M J McPhee |
| First Defendant | : | Mr J C Yeldon |
| Second Defendant | : | Mr J C Yeldon |
| Third Defendant | : | Mr J C Yeldon |
| Fourth Defendant | : | Mr J C Yeldon |
| Fifth Defendant | : | Mr J C Yeldon |
Solicitors:
| Plaintiff | : | M J McPhee Barrister and Solicitors |
| First Defendant | : | Pacer Legal |
| Second Defendant | : | Pacer Legal |
| Third Defendant | : | Pacer Legal |
| Fourth Defendant | : | Pacer Legal |
| Fifth Defendant | : | Pacer Legal |
Case(s) referred to in decision(s):
Nil
DEPUTY REGISTRAR HEWITT:
This action was commenced by writ of summons filed on 26 May 2017 naming Kabway Pty Ltd as a first defendant and Kevin Joe Hughes as a second defendant. The application I am called upon to determine is that filed by the plaintiff for leave to administer interrogatories for answer by the defendants including those added after the action commenced. The form of the interrogatories sought to be administered has not been filed but I was provided with a copy at the hearing and it is that upon which my decision is based.
The action pursued by the plaintiff is in relation to a lease which was assigned to the first defendant and in respect of which there are significant arrears. An issue has arisen as to whether the first defendant entered the lease in its own right or whether it entered the lease as the trustee of a trust called the Hughes Family Trust. The plaintiff in its written submissions has described the issues as follows:
The relevant issue here
6.The issue to be proved by the Plaintiff in this case is that the First Defendant, Kabway Pty Ltd, when it contracted with the Plaintiff for the subject lease, did so as agent for an undisclosed principal, namely itself as trustee of the Hughes Family Trust (Fourth Amended Statement of Claim para 4 et seq). The allegation is denied (Amended Substitute Defence to Fourth Statement of Claim paras 3 and 4). When the matter was first pleaded by the Plaintiff (relying on evidence of an unsuccessful effort by the trust to buy the property) the response from the Defence side was to change the identity of the trustee three times to different companies and finally Mr Hughes himself; which had the result of additional Defendants being joined on the same issue, to ensure the trustee for the time being is bound by a judgment against the trust.
The Discovery from the trust
7.Discovery from the trust was obtained and the documents, the subject of the interrogatories, were disclosed. They are statements of account of the trust going back to the date of the subject transaction, describing the lease, in the balance sheet, as an asset of the trust; also Bank Statements of the trust, in terms on the document itself, showing payments being made by the trust for expenses of the property. There are no documents discovered (such as annual accounts) from Kabway or any of the other Defendants showing an interest in the property in their own right. There is no pleading to suggest and no documents discovered by the Defence showing some later transaction to show the lease was transferred to the trust by Kabway after the transaction with the Plaintiff.
8.Submitted this is Prima Facie evidence of the Plaintiff's case that the lease was taken for the trust by Kabway as trustee of the trust, its undisclosed principal. The purpose of the interrogatories is to prove the provenance of the documents (not their particular contents, that will speak for themselves) as part of its case without having to call someone, like the accountant who prepared the accounts, who can be expected to be in the opponent's camp, or run the risk of a submission of no case against the trust to answer by the Defence in the absence of other evidence, in the Plaintiff's case, of the fact that the lease was taken for the trust.
Form of the Interrogatories
9.In this case there are five defendants in relation to the same issue. There were rolling changes to the identity of the trustee. A different trustee may have been in charge at the time different annual accounts were prepared. They are all related companies to Mr Hughes himself. The request refers to a director of the individual company to answer the questions relating to documents that came into existence at the time the company of which they were a director, was the trustee. Mr Hughes is likely to be the common director and there can be no oppression by this request which is aimed at reducing confusion, remembering it was the Defendants who created this maze of companies in order to move the trust away from the action and any judgment therein.
The interrogatories are in two parts and those in sch 1 are as to the authenticity of documents. All of the documents are discovered documents in the defendant's discovery and are identified by their numbers in that discovery. Order 30 r 5 of the Rules of the Supreme Court 1971 (WA) provides as follows:
5.Notice to admit authenticity of documents; notice requiring production of documents at trial
(1)A party to any proceedings may serve on any other party a notice requiring him to admit for the purpose of those proceedings only, the authenticity of the documents specified in the notice, and the notice must specify a reasonable time and place for inspection.
(2)If, in relation to any document specified in the notice, the party on whom a notice under subrule (1) is served does not within 7 days after the time limited for inspection serve on the party giving the notice, a notice disputing the authenticity of the document, its authenticity shall, unless the Court otherwise orders, be deemed to be admitted by the party on whom the notice under subrule (1) is served.
(3)Except where rule 4(3) applies, a party to any proceedings may serve on any other party a notice requiring him to produce at the trial or hearing the documents specified in the notice.
Order 30 r 4(3) provides:
Where a party serves on any other party a list of documents in pursuance of Order 26 the party serving the list shall be deemed to have been served on the date of service of the list, with a notice requiring production by him at the trial of the cause or matter, of such of the documents specified in the list as are in his possession, custody or power.
In my view the administration of interrogatories of the kind set out in sch 1 of the minute of proposed interrogatories is improper. The defendants should not be required to answer such questions on oath. The proper procedure is set out in the Rules of the Supreme Court as I have outlined above. If the procedure I have described is followed then the authenticity of the document is established and the defendant is required to produce the document at trial. There is therefore in my opinion no place for the questions which are contained in sch 1 of the proposed interrogatories. At this point I should pause to mention that in my opinion there is no question of an undisclosed principal in this case. The only issue which is relevant is whether or not the first defendant in entering the lease did so in its own right or whether in doing so it was acting as a trustee of the Hughes Family Trust. I mention in passing that the third, fourth and fifth defendants are parties to this action on the basis that they have been or are successive trustees appointed to the Hughes Family Trust. The issue however is not who is the present trustee but whether the first defendant was acting as a trustee when it entered these lease arrangements.
The second schedule of interrogatories which incidentally amounts to something close to 100 separate questions requiring answers by four of the five defendants overlap to some extent the questions in the first schedule. Providing the correct procedure is adopted by the plaintiff and there is no notice of a dispute, the authenticity of each document is deemed to be admitted. I have not had the opportunity to examine any of these documents but would have thought that a document deemed to be authentic would speak for itself and in the instance of financial statements or appointments of trustee or things of such kind and a document deemed to be authentic could be received as evidence of the facts contained within it. Many of the questions in my opinion are improper such as question 4 relating to a financial report which is phrased 'Does the document record a true and fair view of the company's affairs for the period referred to in the document?'. A question repeated throughout many of the various individual groups of questions within sch 2. Likewise again repeated many times is that in question 10 'Is the document, being a business record, a genuine business record?'. In questions such as 11 referring to a copy of a National Australia Bank account 'Were all the payments out referred to in the statement actually made from the trust account?'. The description of the account is Kabway Pty Ltd ATF (as Trustee for) the Hughes Family Trust and the document is a statement generated by the bank itself the matter appears to be beyond dispute. In my view the authenticity of these documents can be readily established and the documents speak for themselves.
In the latter regard I refer to s 1305 of the Corporations Act 2001 (Cth) (Act) which provides:
1305Admissibility of books in evidence
(1)A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book.
(2)A document purporting to be a book kept by a body corporate is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (1).
As to the meaning of the word 'books' that is defined by s 9 of the Act to include:
(a)a register; and
(b)any other record of information; and
(c)financial reports or financial records, however compiled, recorded or stored; and
(d)a document;
…
I take the view that the combination of the various legislative materials and the Rules of the Supreme Court provide this plaintiff with all it needs in order to progress its case and it is unnecessary for the interrogatories contained in the second schedule of the proposed interrogatory to be administered. Added to that I observe that this action has been going for over four years and although there is some explanation for delay in terms of the defendant failing to admit facts, it is still very late in the proceeding and after a myriad of amendments have taken place. In my view the length of the interrogatories is oppressive, their usefulness is marginal or non-existent and it is not appropriate to require these five defendants to respond to these interrogatories. As a consequence the application for leave to administer the interrogatories is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AO
Associate
18 JUNE 2021
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