Dale v Dennis - [2005] WADC 142

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: DALE & ORS -v- DENNIS [2005] WADC 142

CORAM: COMMISSIONER ARCHER

HEARD: 28 JUNE 2005

DELIVERED : 3 AUGUST 2005

FILE NO/S: CIV 1661 of 2000

BETWEEN: STEPHEN JOHN DALE
First Plaintiff
PAUL ZEMUNIK
Second Plaintiff
SJ DALE ENTERPRISES PTY LTD
Third Plaintiff
AND
JOHN DENNIS
Defendant

Catchwords:

Practice and procedure - Further and better particulars - Scott schedules - Security for costs - Further and better discovery - Turns on own facts

Legislation:

Nil

Result:

On the plaintiffs' summons, orders made for further and better particulars, for Scott Schedules, and for further and better discovery

On the defendant's summons, order made for further and better discovery

Representation:

Counsel:

First Plaintiff                  :     Mr G M Abbott
Second Plaintiff             :     Mr G M Abbott
Third Plaintiff                :     Mr G M Abbott
Defendant:     Mr S J Blyth

Solicitors:

First Plaintiff                  :     Askew & Co
Second Plaintiff             :     Askew & Co
Third Plaintiff                :     Askew & Co
Defendant:     Lewis Blyth & Hooper

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

Beecham Group Ltd v Bristol-Myers Co [1979] VR 273
Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11QBD 55
Sarac v Croation House Hrvatski Dom (Inc), unreported; FCt of SCt of WA; Library No 950675; 12 December 1995

Case(s) also cited:

Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in Liq) (1979) 4 ACLR 492
Lonhro Limited v Shell Petroleum Co Ltd (No 2) [1980] 1 WLR 627
Midalco Pty Ltd v Simpson, unreported; FCt of SCt of WA; Library No 6747; 5 June 1987
Willey v Synan (1935) 54 CLR 175

COMMISSIONER ARCHER: Before me are two summonses for directions. The first summons was filed on behalf of the plaintiffs. It seeks three orders. Firstly, that the defendant provide a Scott Schedule in respect of its counterclaim. Secondly, that the defendant provide security for costs. Thirdly, that the defendant provide further and better discovery.
The other summons was filed by the defendant. It seeks further and better discovery.

Plaintiffs' application for a Scott Schedule

During the course of submissions in respect of the Scott Schedule sought, it became apparent that the parties were not particularly far apart. Accordingly, at the conclusion of the hearing, I reserved my decision and gave the parties the opportunity to prepare a minute of consent orders in terms suggested by me. Such a minute has not been filed.
As noted above, the plaintiff seeks an order that the defendant provide a Scott Schedule in respect of its counterclaim. The defendant's counterclaim can be divided into four categories of claim, namely:
(1)that during the period 13 February 2002 to 16 May 2002 (which period is defined in paragraph 50 of the counterclaim as "the retention period") the first and second plaintiffs wrongfully retained possession of the Pontiac, VIN 14 and certain goods defined in paragraph 49(b) and schedule 1 to the counterclaim (First Retention Claim);
(2)that the first and second plaintiffs have retained or converted to their own use certain items of the "defendant's goods" as further particularised in schedule 2 to the counterclaim (Second Retention Claim);
(3)that the second plaintiff breached the duty of care that he owed to the defendant to exercise skill and care in the race preparation of the engines for VIN 59 and VIN 61 (First Breach of Duty Claim);
(4)a further claim against the second plaintiff that he breached the duty of care to prepare the engine for VIN 14 (Second Breach of Duty Claim).
In relation to the First Retention Claim, the defendant claims to have suffered loss and damage particularised in par 53 of the counterclaim as follows:
"(a) As result of the first and second plaintiffs refusal to deliver up possession of the Pontiac, VIN 14 and the defendant's goods during the retention period their value has deteriorated and/or depreciated.
(b) Further, particulars will be provided prior to trial."
In the course of argument it became clear that the defendant proposed to prove that loss by calling an expert witness to give a "global" value of all of those goods as at the beginning of the retention period, and as at the end of the retention period.
Whether that would be sufficient to discharge the defendant's burden of proving the quantification of that loss is an open question. However, I make no comment as to that. What is important for the purposes of the plaintiffs' application is that, if that is the manner in which the defendant chooses to attempt to discharge his burden, the only particulars required would be what the defendant alleges those global values are. Accordingly, I order that the defendant provide particulars of the global value of the goods referred to in the First Retention Claim as at the beginning of the retention period and as at the end of the retention period within 21 days.
Obviously, if the defendant changes his approach and instead decides to adduce evidence of the value of each individual item at the beginning and end of the retention period, the plaintiffs would be entitled to proper particulars of that. Accordingly, should the defendant change his intended manner of proof, I would direct that he supply a Scott Schedule in respect of each of the goods allegedly retained with the following columns:
(1)the goods allegedly retained;
(2)the value of the goods as at 13 February 2002 (ie the pleaded start of the period of retention);
(3)the value of the goods as at 16 May 2002 (ie the pleaded end of the period of retention);
(4)the amount of the claimed diminution of value (ie column 2 minus column 3);
(5)the plaintiffs' assessment of the diminution in value;
(6)the defendant's witness who will give evidence about the values;
(7)the plaintiffs' witness who will give evidence about the values; and
(8)Judge's comments.
I note that counsel for the defendant conceded that, if the manner of proof did change, it would be appropriate to provide a Scott Schedule in this form.
Obviously the defendant should make a firm decision promptly as to how he intends to prove this loss. If the defendant does change his mind in relation to the manner of proof and, as a result by this order is required to file a Scott Schedule, it may be that the plaintiffs will require additional time to deal with the change in circumstances. That may, of course, have costs implications for the defendant.
In relation to the Second Retention Claim, par 55 of the counterclaim indicates that the loss is particularised in the attached Second Schedule. The Second Schedule sets out each item, where it was purchased and what its estimated replacement cost would be, with the exception of items 22 and 23 for which the estimated replacement cost is "to be advised". Ultimately, Mr Blyth agreed that it would be useful to add to those columns the additional columns of:
(1)relevant date of valuation;
(2)defendant's witness;
(3)plaintiffs' valuation;
(4)plaintiffs' witness;
(5)plaintiffs' comments;
(6)Judge's comments.
Mr Blyth also agreed that the estimated replacement cost of items 22 and 23 needed to be supplied.
Accordingly, I order the defendant to provide a Scott Schedule in respect of the Second Retention Claim of the counterclaim within 21 days in the form of schedule 2 to the defence and counterclaim, by completing column 4 in respect of items 22 and 23 and adding the additional columns set out above.
In respect to the Breach of Duty Claims, the defendant is claiming the costs of repairs to various engines.
The plaintiffs are entitled to know the basis upon which the repair costs rest. In order to understand that, they would need to know the repairs done, the hours of labour charged, the costs of the labour per hour, the parts put in, and the costs of the parts. Requiring the defendant to provide those particulars would not be oppressive or unreasonable. Accordingly, I order that the defendant provide a Scott Schedule in respect of the "breach of duty" claims of the counterclaim within 28 days with the following columns:
(a)item number;
(b)date of work done;
(c) full particulars of work done;
(d)amount claimed;
(e)hourly rate charged;
(f)time spent;
(g)full particulars of parts replaced;
(h)costs of parts replaced;
(i)date and amount of payment made by defendant;
(j)witnesses of the defendant;
(k)comments by plaintiffs on work done;
(l)comments by plaintiffs on amount claimed;
(m)plaintiffs' witnesses;
(n)Judge's comments

Plaintiffs' application for security for costs

The plaintiffs seeks an order that the defendant provide security for costs "for trial in the sum of $110,000". During the course of the argument, it became apparent that the plaintiffs were only seeking security in the amount of $35,000, and the application was amended to reflect that.
·    the grounds for the plaintiffs' application were:
·    that the defendant had been "coy" about disclosing his assets;
·    that the defendant was a person who moved around a lot, and
·    that there was no evidence that the defendant had any real property.
It is certainly true that the defendant's affidavit of 20 May which sets out his assets, is unusually expressed. For instance, in par 2, Mr Dennis states "Without exhaustively disclosing all my assets, my personal assets include …". However, I accept the submission made by counsel for the defendant, Mr Blyth, that the defendant need only disclose enough assets to satisfy the court that there are adequate funds available to satisfy any costs order.
The next issue in relation to the affidavit is that Mr Dennis states in par 2(d) "I am the sole trustee and a beneficiary of the Dennis Family Trust which has investments of not less than $500,000 in the form of shares and property and which trust income is distributed to me on a monthly basis." The plaintiffs pointed out that the bank statement annexed to Mr Dennis' affidavit was described as the account of Icana Holdings Pty Ltd as trustee for the Dennis Family Trust. It covered the period from 25 July 2002 to 23 August 2002. However, Icana Holdings was deregistered on 18 February 2002. Further, it was common ground that the defendant had refused to provide information as to the terms of the trust. In submission, the plaintiffs' counsel, Mr Abbott, explained that the plaintiffs wished to know whether the trust was a discretionary trust, and whether it had other beneficiaries. Mr Blyth advised that the defendant had refused to provide that information as it was thought to be irrelevant. He said that was because the trust was a discretionary trust and therefore it was not being claimed that the assets were necessarily available to the defendant. He agreed, therefore, that the assets of the trust should not be taken into account in determining the application for security for costs, other than the fact that the defendant, at the moment, is receiving some form of monthly income from it.
Counsel for the plaintiffs also drew my attention to various documents which showed that the defendant had lived at a number of different addresses in Western Australia during the life of this action. He also pointed out that the defendant had no real property.
It was submitted on behalf of the defendant that there was already over $70,000 of the defendant's money being held as security in this action. However, that money was deposited by the defendant in exchange for the return of physical property over which the plaintiffs' claimed a lien. Accordingly, the money was simply a substitution for the property. It could provide no security for the costs of defending the counterclaim if the plaintiffs were also successful in their claim. I accept that the fact that money is there, and that the defendant was able to pay it, can be taken into account. However, in my view, it is of little weight in determining whether security for costs should be ordered.
In Mr Dennis's affidavit of 20 May 2005, he deposes that his personal assets include four motor vehicles, each of which is unencumbered, with a total current value of approximately $170,000. While Mr Dale in his affidavit of 3 June 2005 sought to challenge the values of two of those vehicles, it is clear that the matters to which Mr Dale refers related to a period before the vehicles had been improved. Accordingly, on the evidence before me, the defendant has considerable assets, and well in excess of the amount that could potentially be the subject of the costs order in respect of the counterclaim.
It was common ground that the defendant's counterclaim did not arise out of the plaintiffs' claim. Accordingly, the defendant can be ordered to give security for costs in respect of his counterclaim (O 25 r 4 of the Rules of the Supreme Court 1971). I accept that I have a broad discretion under O 25 to order security for costs. While none of the grounds referred to in O 25 r 2 apply in this case, r 2 does not limit the generality of r 1, and I accept that I still retain a discretion to make the order.
I note that r 3 requires me to take into consideration:
(a)the prima facie merits of the claim;
(b)what property within the jurisdiction may be available to satisfy any order for costs against the defendant on his counterclaim;
(c)whether the normal processes of the court would be available within the jurisdiction for enforcement of any order for costs made against the defendant.
The plaintiffs did not seek to persuade me that the order should be made because the counterclaim was unlikely to succeed. Instead, the plaintiffs' argument focused on the "coyness" of the defendant, his frequent changes of address and the lack of evidence of any real property. However, I am not persuaded that those maters should cause me to exercise my discretion to order security for costs. The defendant has significant assets in the jurisdiction. One of the primary issues to be considered in exercising this discretion is whether the defendant would be able to meet an order for costs in the event that his counterclaim was unsuccessful and a costs order made against him in respect of the counterclaim (Sarac v Croation House Hrvatski Dom (Inc), unreported; FCt of SCt of WA; Library No 950675; 12 December 1995. The available evidence suggests that the defendant would be able to meet any such costs order. Accordingly, I decline to order security for costs against the defendant.

Plaintiffs' application for further and better discovery

In an affidavit sworn 15 November 2000, the defendant deposed to a list of discoverable documents which included various bank statements from BankWest. However, in an affidavit sworn 11 March 2004, Mr Dennis appeared to suggest that he did not presently have in his possession original bank statements of BankWest (in relation to accounts of the John Dennis Family Trust and Icana Holdings Pty Ltd) and Commonwealth Bank (in relation to accounts of the Dennis Family Trust and John Dennis) from 1 January 1999–2004. However, attached to Mr Dennis's affidavit of 20 May 2005 is a Bankwest bank statement, described as relating to the account of Icana Holdings Pty Ltd as trustee for the Dennis Family Trust. The statement covers the period from 25 July 2002 to 23 August 2002. It is apparent therefore that the defendant has at least one bank statement relevant to this matter which could not have been covered by the affidavit of discovery, as that affidavit was sworn well prior to the period covered by the bank statement. Accordingly, I am able to be certain that there is at least one document in existence which ought to have been discovered.
In addition, I am "fairly certain" that there are also cheque butts and bank statements relating to amounts allegedly paid by the defendant for the costs claimed in the counterclaim which have not yet been discovered. In view of those findings, I have a discretion to order further and better discovery (Beecham Group Ltd v Bristol-Myers Co [1979] VR 273).
In par 3 of their chamber summons, the plaintiffs seek all cheque butts and bank statements for all amounts allegedly paid by the defendant for the costs claimed in the counterclaim. Any such documents would clearly be relevant. Furthermore, the documents sought are identified specifically, and will inevitably be of a limited number. Such an order would not impose any oppressive burden upon the defendant, nor is it uncertain in its scope. Accordingly, I order that the defendant provided further and better discovery of all of the cheque butts and bank statements for all amounts allegedly paid by the defendant for the costs claimed in the counterclaim within 21 days.

Defendant's application for further and better discovery

The defendant seeks further and better discovery of 10 items set out in the schedule to his chamber summons. During the course of argument, Mr Blyth quite properly withdrew his applications in respect of items 6, 7, 8 and 10.
The first four items refer to documents that relate to the employment relationship between the second plaintiff and the first and/or third plaintiff, the amount of time worked by the second plaintiff, his rate of pay, and also his charge out rate for services provided by him when self‑employed.
Counsel for the defendant submitted that those documents are relevant, as the defendant disputes the plaintiffs' claimed rate per hour of labour. While Mr Dennis's affidavit of 22 April 2005 also challenged the actual hours claimed, that was not the basis upon which the argument was put to the court.
The plaintiffs' claim is for the value of services allegedly provided to the defendant, not for the recovery of costs incurred. Accordingly, the plaintiffs' submitted that what they actually paid employees is not relevant, nor is what they charged in respect of any other service. Mr Abbott conceded that, if the plaintiffs can't prove that the amount sought is reasonable, they will fail on that claim.
However, in determining whether a rate is reasonable, it may be relevant to know what rate was charged by the plaintiffs in respect of other services provided. It is no answer to say that the absence of that information may cause the plaintiffs to fail in their claim, and that therefore the defendant is not entitled to that evidence. That is because the defendant may be able to positively use the evidence to challenge the reasonableness of the rate charged.
The plaintiffs further submitted that the rate charged for other services is not relevant to evaluating a reasonable rate for work on high performance race cars. If that is so, the plaintiffs would be entitled to prove that. Unless or until they do, however, it cannot be assumed that the evidence could not be relevant. The defendant points to the fact, for example, that the plaintiffs are claiming the high performance rate for washing the cars. In addition, the pleadings show the plaintiffs are also claiming that rate for unpacking support trucks, cleanup for spare parts, and delivery of spare parts.
I am satisfied that documents that relate to the charge out rate of the plaintiffs ought properly to have been discovered. Documents relating to what the second plaintiff was paid as an employee, on the other hand, need not have been. Nor did any employment records need to be discovered. Evidence relating to those matters is not relevant to determining a reasonable rate, and it is not "reasonable to suppose that they would contain information which may … either directly or indirectly enable …[the defendant] to advance his own case or to damage the case of his adversary (Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11QBD 55 at 63). Further, the category of documents sought in items 1 and 2 was extremely broad.

Given that the plaintiffs' submission that the documents covered by item 3 and 4 were not relevant, I am "practically certain" that such documents would have been discovered if the plaintiffs had acted on the basis that they were relevant. Further, as a matter of commonsense, such documents must exist. Nor was it suggested that they did not.
Accordingly, I decline to order further and better discovery in relation to items 1 and 2 of the Schedule. However, I order that the plaintiffs provide further and better discovery of items 3 and 4 within 21 days.
In relation to item 5, the defendant seeks "banking records including, but not limited to, bank statements and cheque stubs evidencing all out of pocket expenses and disbursement costs claimed by the plaintiffs in the action and particularly those in schedule 9 of the Scott Schedule."
It was not an issue that any such documents would be relevant to the facts in issue in this case. What was in dispute was whether I could be "fairly certain" that such documents existed yet had not been previously discovered.
Previously, the plaintiffs discovered various bank statements. However, there has been no discovery of any cheque account. Counsel for the defendant drew the courts attention to annexure L to the affidavit of John Dennis, sworn on 22 April 2005. That annexure is an invoice which was discovered by the plaintiffs. On that invoice is written "paid cheque". As Mr Abbott properly conceded, that does give rise to the inference that the plaintiffs have a cheque account that is relevant to this action. In addition, Mr Blyth pointed out that there are a number of invoices annexed as annexure M to the same affidavit that do not appear to have been paid by the bank records discovered by the plaintiffs so far. It is of course possible, as Mr Abbott pointed out, that those invoices were paid by cash. However, that is perhaps unlikely. It is unnecessary for me to decide whether those invoices alone would be sufficient to enable me to be "fairly certain" that there are further documents that need to be discovered. That is because, in my view, the invoice upon which is written "paid cheque" is sufficient to enable me to be fairly certain.
In addition to being obviously relevant, the documents sought are specific in their nature and inevitably limited in their number. Furthermore, providing further and better discovery of such documents could not impose a significant burden upon the plaintiffs, nor would such a requirement be uncertain in its scope. Accordingly, I order that the plaintiffs provide further and better discovery of item 5 within 21 days.
In relation to item nine, the defendant seeks further and better discovery of "any power of attorney or other written authority issued or otherwise granted by the second plaintiff to the first and/or third plaintiff authorising such latter parties to conduct this action, in whole or in part and for any period of time, on behalf of the second plaintiff." Mr Blyth properly conceded that the relevance of such a document was not apparent, and could only be gleaned, if at all, from the document itself. However, given that the plaintiffs have filed what they say are lists of all relevant documents, there is an implied assertion that any such document is not relevant (and the plaintiffs must have seen any such document if one exists). In the absence of any other evidence, it is not possible for the court to be "fairly certain" that there are further documents which ought to be disclosed (Beecham Group Ltd v Bristol Myers Co [1979] VR 273 at 279). Accordingly, I decline to order further and better discovery of item 9.