Donaldson v Suffolk Investments Pty Ltd
[2015] WASC 236
•1 JULY 2015
DONALDSON -v- SUFFOLK INVESTMENTS PTY LTD [2015] WASC 236
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 236 | |
| Case No: | CIV:1461/2015 | ON THE PAPERS | |
| Coram: | BEECH J | 1/07/15 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Rulings on objections made | ||
| B | |||
| PDF Version |
| Parties: | JOHN RAWSON DONALDSON SUFFOLK INVESTMENTS PTY LTD |
Catchwords: | Practice and procedure Pre-action discovery Objections to affidavit |
Legislation: | Rules of the Supreme Court 1971 (WA), O 26A r 4 |
Case References: | Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33 Donaldson v Nolan [No 2] [2015] WASC 158 Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 New South Wales Solicitors Mutual Indemnity Fund v Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 Waller v Waller [2009] WASCA 61 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
SUFFOLK INVESTMENTS PTY LTD
Respondent
Catchwords:
Practice and procedure - Pre-action discovery - Objections to affidavit
Legislation:
Rules of the Supreme Court 1971 (WA), O 26A r 4
Result:
Rulings on objections made
Category: B
Representation:
Counsel:
Applicant : No appearance
Respondent : No appearance
Solicitors:
Applicant : In person
Respondent : Tottle Partners
Case(s) referred to in judgment(s):
Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33
Donaldson v Nolan [No 2] [2015] WASC 158
Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147
New South Wales Solicitors Mutual Indemnity Fund v Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146
Waller v Waller [2009] WASCA 61
- BEECH J:
Introduction
1 In these proceedings the applicant, Mr Donaldson, seeks an order for discovery from a potential party under O 26A r 4 and O 26A r 6 of the Rules of the Supreme Court 1971 (WA).
2 In support of his application, Mr Donaldson relies upon his affidavit sworn 30 March 2015.
3 The respondent (Suffolk) objects to a substantial portion of Mr Donaldson's affidavit.
4 It appears, from email correspondence, that Mr Donaldson is content for the court to determine the objections, and determine the substantive application, at the one time. However, in circumstances where Mr Donaldson is self-represented, it is appropriate to determine the objections to his affidavit first, and then provide him with an opportunity to supplement his affidavit in support in light of the determination.
5 On 22 May 2015, I ordered that:
(1) By 29 May 2015 the defendant file and serve submissions in support of its objections to the plaintiff's affidavit of 30 March 2015.
(2) By 12 June 2015 the plaintiff file and serve his submissions in response to the defendant's objections.
(3) The defendant's objections be determined on the papers.
6 Suffolk filed submissions as ordered. By email to my Associate, Mr Donaldson indicated that he did not intend to file any further submissions.
7 These reasons deal with Suffolk's objections to Mr Donaldson's affidavit.
Recusal application
8 By email of 29 June 2015, Mr Donaldson requested that I recuse myself. This is at least the third such application. No new grounds or facts have been advanced. I decline to recuse myself for the reasons previously given in a published decision1 and the subsequent unpublished decision of 3 June 2015.
9 Suffolk's objections raise issues as to the relevance of much of Mr Donaldson's affidavit. In that light it is convenient to begin by outlining the nature of these proceedings, and the issues that arise in them.
Applications under O 26A r 4: General principles
10 Order 26A rule 4 provides as follows:
Discovery from 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.
11 The language of the rule reveals the following requirements for the making of an order for discovery under O 26A r 4:
(1) The applicant may have a cause of action against the potential party.
(2) The applicant wants to commence or take proceedings against the potential party.
(3) After reasonable enquiries, the applicant has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take proceedings.
(4) 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 whether to commence or take the proceedings.2
12 Thus, these proceedings are not a vehicle for any substantive claim by Mr Donaldson against Suffolk. Rather, these proceedings are an application for discovery to assist in a decision by Mr Donaldson whether to bring an action against Suffolk.
13 Order 26A rule 4 has a mixture of objective and subjective elements. For example, whether the applicant wants to commence proceedings, the enquiries that have been made by the applicant, and the information the applicant has obtained are all subjective matters. Whether reasonable enquiries have been made is objective. Whether there are reasonable grounds for believing that a party has or had documents that may assist in making the decision, or whether either of these things are likely, is an objective matter.3 So is whether the applicant may have a cause of action against the potential party.4 That requires more than mere allegation, suspicion or assertion.5
14 In determining an application under O 26A r 4, the court has a discretion.6 Among the matters that may be relevant to its exercise are the likelihood that the cause of action of the kind suggested would be found to exist; the nature and significance of the potential cause of action; the likely effect, on the person against whom discovery is sought, of the making of an order of the kind sought; whether there is any other adequate means available to the intending plaintiff of obtaining the information which it seeks; the nature and confidentiality of the documents proposed to be obtained; the possible significance of the information contained within those documents to the decision whether or not to commence the contemplated proceedings; whether the applicant is able to compensate the potential party for its costs of complying with the order; and whether there is any evidence of bad faith on the part of the applicant.7
Mr Donaldson's affidavit
15 A copy of Mr Donaldson's affidavit, without annexures, is a schedule to these reasons.
The resolution of Suffolk's objections
16 I make the following rulings, for the reasons that follow, in relation to Suffolk's objections.
17 I overrule Suffolk's objections to pars 3 and 4 of the affidavit. Relevance is a low threshold. It is sufficient that the evidence proposed to be tendered is capable of affecting the fact to be found or the question to be determined. In my view, the matters in pars 3 and 4 are capable of bearing upon the discretion as to whether any order should be made. Suffolk also objects to par 4 on grounds of hearsay. The paragraph is not hearsay because the evidence of what was said is not led to prove its truth; it is led to prove the fact that it was said.
18 I uphold Suffolk's objection to par 5 of the affidavit. In my view, that paragraph is objectionable on a number of grounds. It is expressed at an unacceptably high level of generality. It is conclusionary in nature and makes scandalous assertions without any identified factual basis.
19 The same applies to par 6 of the affidavit. I uphold the objection to that paragraph. It is impermissible for the deponent of an affidavit to assert that he or she believes a fact without identifying the basis and source of the belief.8 It is not permissible to make sweeping and generalised assertions by prefacing them as something that the deponent believes.
20 I overrule the objection to par 8 of the affidavit. I accept Suffolk's submission that it does not contain any admissible evidence of the truth of the facts asserted in it. That is because it is a belief stated without identifying the grounds of the belief. Further, it is impermissibly general and conclusionary in character. Nevertheless, I overrule the objection because I take the paragraph to indicate Mr Donaldson's belief in the facts he asserts and which he believes support the claim which he wants to bring against Suffolk. In other words, it is relevant to one of the subjective elements of a claim under O 26A r 4: that Mr Donaldson wants to commence proceedings against Suffolk.
21 I overrule the objection to par 7 and admit it on the same limited basis.
22 I overrule the objection to par 9 of the affidavit. While the nature and subject matter of the cause of action which Mr Donaldson believes he may have against Suffolk has not been fully articulated, on the face of it the matters asserted in par 9 are potentially relevant to it. Thus, again the paragraph is not evidence of the truth of its contents. It is admitted as to a subjective element of the claim under O 26A r 4.
23 I overrule the objection to par 10 of the affidavit. The first part of the sentence is relevant in the same way as par 9 is. The second part of the paragraph relates to discretion.
24 I uphold the objection to pars 11 and 12 of the affidavit. The fact that somebody advised Mr Donaldson that some fact was well known is not evidence of the fact. Further, the fact that a person, whether they be an experienced barrister or otherwise, advised him that he was entitled to full disclosure is not relevant in any way.
25 I overrule the objection to par 13 of the affidavit. That paragraph is or may be relevant to whether Mr Donaldson has satisfied the elements of an application under O 26A r 4, particularly the requirement of a possible cause of action.
26 I overrule the objection to par 14 of the affidavit. The objection is put on the grounds that Mr Donaldson has not set out the basis for his belief and has asserted a conclusion of law. In my view, that is not, for present purposes, to the point. Paragraph 14 is evidence that goes to whether Mr Donaldson has satisfied a subjective element of O 26A r 4. It does not bear upon whether he has satisfied the objective elements.
27 I overrule the objections to pars 15, 16 and 17 of the affidavit. Paragraph 15 deposes to facts relevant or potentially relevant to the cause of action which Mr Donaldson claims he may have. Paragraphs 16 and 17 relate to the enquiries that Mr Donaldson has made in attempting to obtain documents.
28 I overrule Suffolk's objection to par 18 of the affidavit. In my view, in this paragraph Mr Donaldson is, in substance, setting out the categories of documents which he says he requires in order to make a decision as to whether to commence or take proceedings against Suffolk. Suffolk submits that some of the paragraphs should be limited in time to avoid going further back than six years, given the general six year limitation period. I do not think the limitation period question should be determined summarily, or the answer assumed, for the purposes of this application. Further, Suffolk objects to par 18(1), 18(n) and 18(o) on the grounds that the categories of documents there set out are too wide and will not assist Mr Donaldson to make a decision. In my view, that is a submission to be made on the merits of the application, not a ground for objection to the admissibility of the affidavit.
29 I overrule the objection to par 19 of the affidavit. In my view, that paragraph sets out what Mr Donaldson seeks in this application.
30 I overrule the objection to par 20 of the affidavit. In my view, that is capable of bearing on the discretion whether to order discovery under O 26A r 4.
Conclusion
31 For the reasons I have given, I would uphold the objections to pars 5, 6, 11 and 12. I strike out those paragraphs of Mr Donaldson's affidavit.
32 Otherwise, I overrule Suffolk's objections to Mr Donaldson's affidavit.
33 I would also order that Mr Donaldson have 21 days within which to file any further affidavit he wishes; within 14 days thereafter Suffolk file and serve its submissions in opposition to the pre-action discovery application; and within 14 days thereafter Mr Donaldson file and serve any submissions in reply. Mr Donaldson's application for pre-action discovery can then be determined on the papers.
SCHEDULE
I, John Rawson Donaldson, of unit 5/74 Marine Parade, Cottesloe 6011, in the State of Western Australia, being shareholder in Suffolk Investments and part time construction worker, being duly sworn MAKE OATH AND SAY as follows:
1. I am a shareholder in Suffolk Investments PTY LTD ('the Respondent').
2. I swear this affidavit in support of my originating summons for potential litigation discovery from the Respondents.
3. I have asked Jeff Nolan and Hartleys from early 2013 to keep all Suffolk Investments PTY LTD records since 1 July 2005.
4. Mid 2013 after my fathers passed away (feb 2013) Glen Giles (Taylor Smart) laughed at me and stated Taylor Smart were 'well connected' in the Supreme Court and under no circumstances would I receive any disclosure from Suffolk Investments PTY LTD, Peter Nevin (Taylor Smart) and Jeff Nolan have maintained this view for 2 years. They all ,including Jemma Hector (Director) also have said on numerous occasions if I wanted money I had to sell my shareholding in Suffolk Investments at a 2009 valuation of which I can not verify valuations. They all will not allow me as a shareholder to independently let a licensed valuer view the book and accounts.
5. Between 2004 and 2009 the Directors of Suffolk Investments PTY LTD and the accountant 'Barry Cook' (Jeff Nolan's current associate) were putting me under duress with threats to sign documents I had no understanding at the time they were in fact ATO tax avoidance documents. Making me state in writing the Directors were not in a position to repay loans to the company and as such they were to be written off as bad loans. Also signing away property's to my brother as a Director at significantly under market valuation to avoid stamp duty and other fees. Once I received advice it was clearly deliberate tax avoidance intentionally misleading the ATO I refused to be a part of it and asked both the Directors to repay the ATO monies. (Judge Maxwell Supreme Court-NSW 'whatever way you look at it, it is tax fraud, Dallhold Investments-Alan Bond).
6. I believe the money may have been repaid at my insistence at a later date and the books' cooked' 2008 to cover it up.
7. The property at 12 Bedford St Nedlands has since been sold to my brother Tom Donaldson at a reduced valuation and I can not verify payment or any details.
8. I verily believe money and property was removed out of 'the company' between 2005 to2009 and perhaps to the present by the Directors John Wayne Donaldson, Tom Donaldson and then accountant Barry Cook while my father was in a vulnerable, mentally and physically sick state. This is being covered up by the current Directors Jeff Nolan and Jemma Hector. My father often spoke of extensive property syndicates and extensive blue chip shareholdings the company is currently making no reference to.
9. It is not disputed my father as a Director of Suffolk Investments was a very sick man for his last 15 years with extensive medical reports (records) clearly stating 'chronic alcoholic-1998' 'brain disease 2006(more than likely much longer)', 'chronic liver disease 2002', 'frontal lobe damage 2007', 'numerous falls-heavy knocks to head-can't remember things-2002 to2013'. My father never stopped drinking excessively and experiencing medical problems up to his death.
10. Jeff Nolan and Jemma Hector were appointed as Directors while my father was very sick and Jeff Nolan and/or Taylor Smart will not provide details or company minutes on Jeff Nolan and Jemma Hectors appointments.
11. In January 2013 Anne Durack advised me it was well known to some that my father was used and manipulated in his vulnerable, sick mental and physical later years. Anne Durack also advised me I was entitled to full disclosure on Suffolk Investments PTY LTD and my income now my father was deceased.
12. In November 2014 Alan Camp advised me in writing I was entitled to full disclosure on Suffolk Investments PTY LTD and my income for the last 5years. Also in 2013 Rob Nash and Leo Tsanki also advised me I was entitled to full disclosure on Suffolk Investments PTY LTD and my income. They are all very respected Barristers.
13. Since 1993,1 have owned 40,000 ordinary and 8000 F class shares and have not received my income ever from 'the company' only ad-hoc dividends at the Directors discretion and they are now not paying any. I have been a original shareholder in Suffolk Investments PTY LTD since 1975 formally John Holdings).
14. 1 honestly believe I may have a legal cause of action against the Respondents pursuant to section 232 of the Corporations Act 2001.
15. Based on my readings on 24 Febuary 1992, John Wayne Donaldson (Director) owned the the Bedford St property and it was not morgageed. On 28th febuary 1992 JWD obtained a mortgage over the Bedford St property through 'the company'. On 2005, Thomas Donaldson as a Director and John Wayne Donaldson (acting for 'the company') each purchased half of the Bedford St property.
16. The current and previous Directors of' the company' will not let me verify the transactions of Bedford St from 'the company' and/or seek market valuations.
17. The current Directors will not let me view any of 'the company's accounts to verify its income, assets, loans, debts, transactions, tax returns, correct valuations, income owed to shareholders, etc etc. The annual reports I have received in the past are all unsigned and can not be verified.
18. 1 am unable to trust previous documents due to my fathers long term brain disease, frontal lobe damage, chronic alcoholisim etc etc to determine whether or not I have a cause of action against 'the company without reviewing and obtaining legal advice regarding the Respondents:
(a) signed tax returns for each of the financial years since 1 July 2005 'the company':
(b) minutes of all Directors meetings and appointments since 1 July 2005 for 'the company':
(c) minutes of all annual general meetings since 1 July 2005 for 'the company':
(d) payments of Directors fees since 1 July 2005 for 'the company':
(e) payments of dividends to any shareholders since 1 July 2005 for 'the company':
(f) loans to any of the respondents officers, shareholders and details of repayments (including JLB) or entities related to them since 1 July 2005 for 'the company':
(g) all sharemarket Chess Sponsored Holding Statements for Suffolk Investments PTY LTD on a year by year basis from 1 July 2005 for 'the company':
(h) all listed share portfolio dividend statements and roll overs since 1 July 2005 for 'the company':
(j) all bank statements for Suffolk Investments PTY LTD and its entities since 1 July 2005 for 'the company':
(k) all superannuation audited accounts on a year by year basis including year by year Chess Sponsored Holding Statements held by Suffolk Investments PTY LTD since 1 July 2005:
(1) all accounting and legal fees paid and owed by Suffolk Investments PTY LTD since 1 July 2005 for 'the company':
(m) pay the applicants income (minus dividends paid) from the 8.5% the applicant owns in Suffolk Investments PTY LTD, exclusive of 'the company's Directors legal fees from 1st July 2007:
(n) all Suffolk Investments cheque butts since 1 July 2005:
(o) all property, superannuation and or other trusts associated 'the company and its entities from 1 July 2005:
AND
19. Pursuant to Order 26 A Rules 4 and 6 of the rules of the Supreme Court, within 7 days of the Applicants request, the Respondents:
(a) allow the Applicant to inspect any or all of the documents in the list:
(b) provide copies of any or all of the documents in the list to the Applicant.
(c) the respondents pay the Applicants income from his ownership in Suffolk PTY LTD since 1 July 2007.
(d) the respondents pay the Applicants independent accounting valuation of Suffolk Investments from Suffolk Investments PTY LTD, accounts.
(e) the Respondents approve a subpoena to Hartley's for all Suffolk Investment PTY LTD and entities, Chess Sponsored Holding Statements on a year by year basis, all dividend statements, and dividend roll overs from 1 July 2005, for 'the company':
20. The Respondents (Directors) and/or their lawyers Taylor Smart refuse to provide me with copies of the documents I seek and/or the income relief I seek despite the Corporations Act saying it is a offence of strict liability to not comply within 7 days.
1Donaldson v Nolan [No 2] [2015] WASC 158.
2New South Wales Solicitors Mutual Indemnity Fund v Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 [12] (McLure P, Miller JA agreeing).
3New South Wales Solicitors Mutual Indemnity Fund [14].
4Waller v Waller [2009] WASCA 61 [75] (Le Miere AJA, Martin CJ agreeing); New South Wales Solicitors Mutual Indemnity Fund [13].
5Waller [4] (Martin CJ), [75] (Le Miere AJA, Martin CJ agreeing).
6Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 [47] (Le Miere J); Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33 [83] (Steytler J, Malcolm CJ & Wallwork J agreeing).
7Central Exchange Ltd v Anaconda Nickel Ltd [83].
8 See O 37 r 6(2), O 37 r (3A).
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