Donaldson v Suffolk Investments Pty Ltd [No 2]
[2015] WASC 262
•21 JULY 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: DONALDSON -v- SUFFOLK INVESTMENTS PTY LTD [No 2] [2015] WASC 262
CORAM: BEECH J
HEARD: ON THE PAPERS
DELIVERED : 21 JULY 2015
FILE NO/S: CIV 1461 of 2015
BETWEEN: JOHN RAWSON DONALDSON
Applicant
AND
SUFFOLK INVESTMENTS PTY LTD
Respondent
Catchwords:
Practice and procedure - Pre-action discovery - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 26A r 4
Result:
Application dismissed
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; (2004) 26 WAR 33
Donaldson v Suffolk Investments Pty Ltd [2015] WASC 236
New South Wales Solicitors Mutual Indemnity Fund v Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146
Stone v Braun [2015] WASCA 103
Waller v Waller [2009] WASCA 61
BEECH J:
Introduction
In these proceedings the applicant, Mr Donaldson seeks an order for discovery from the respondent (Suffolk) under O 26A r 4 and O 26A r 6 of the Rules of the Supreme Court 1971 (WA). For the reasons that follow, I would dismiss the application.
Background
In support of his application, Mr Donaldson relies entirely upon his affidavit sworn 30 March 2015. Suffolk objected to a substantial portion of Mr Donaldson's affidavit.
By his emails to the court dated 10 June 2015 and 29 June 2015, Mr Donaldson stated that he did not intend to file any further material, and requested the court's decision on the merits of his pre‑action discovery application. However, in circumstances where Mr Donaldson was self‑represented, I considered it appropriate to determine the objections to his affidavit first, and then to provide him with an opportunity to supplement his affidavit in support of the application in light of the rulings I made and the reasons for those rulings.[1] By reasons delivered 1 July 2015 I made rulings determining Suffolk's objections.[2] On that date I made orders that:
(1)Paragraphs 5, 6, 11 and 12 of the applicant's affidavit sworn 30 March 2015 be struck out.
(2)The respondent's objections to the applicant's affidavit sworn 30 March 2015 be otherwise overruled.
(3)The applicant have 21 days within which to file any further affidavit in support of his pre‑action discovery application.
(4)Within 14 days thereafter, the respondent file and serve its submissions in opposition to the pre‑action discovery application.
(5)Within 14 days thereafter, the applicant file and serve any submissions in reply.
(6)The applicant's pre‑action discovery application be determined on the papers.
[1] Compare Stone v Braun [2015] WASCA 103 [67].
[2] Donaldson v Suffolk Investments Pty Ltd [2015] WASC 236.
Subsequent to the delivery of my reasons of 1 July 2015, by email of 16 July 2015, Mr Donaldson advised that he did not intend to lodge any further documents in support of his application for pre‑action discovery. Consequently, I proceed to determine the application on the basis of Mr Donaldson's affidavit of 30 March 2015, in the light of my rulings and reasons of 1 July 2015.
The terms of Mr Donaldson's affidavit are set out in the schedule to my earlier reasons.
Applications under O 26A r 4: General principles
Order 26A r 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.
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; and
(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.[3]
[3] New South Wales Solicitors Mutual Indemnity Fund v Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 [12] (McLure JA, Miller JA agreeing).
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.
One of the requirements for the making of an order for discovery under O 26A r 4 is that the court is satisfied that the applicant may have a cause of action against the potential party. That is an objective matter for the court to determine.[4] It is not sufficient that the applicant believes he may have a cause of action. The court must make its own evaluation of the circumstances to determine whether it is satisfied that the applicant may have a cause of action.[5]
[4] Waller v Waller [2009] WASCA 61 [75] (Le Miere AJA, Martin CJ agreeing); New South Wales Solicitors Mutual Indemnity Fund v Hancock [13].
[5] Waller v Waller [75].
The threshold that an applicant under O 26A r 4 'may have a cause of action' is not a high threshold; it is not necessary that an applicant demonstrate a prima facie case.[6] Nevertheless, as the decision in Waller v Waller demonstrates, the need to show that an applicant may have a cause of action is a threshold. Something more than mere assertion, conjecture or suspicion is required.[7]
[6] Waller v Waller [4] (Martin CJ), [75] (Le Miere AJA).
[7] Waller v Waller [4], [75].
If the requirements of O 26A r 4 are established the court has a discretion whether to make an order.[8]
[8] Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2004) 26 WAR 33 [83] (Steytler J, Malcolm CJ & Wallwork J agreeing).
The disposition of the application
When regard is had to my reasons of 1 July 2015 it is, in my view, clear that the evidence relied on by Mr Donaldson falls well short of demonstrating that he may have a cause of action against Suffolk.
As well as upholding the objections to pars 5, 6, 11 and 12, in my earlier reasons I found that pars 7, 8, 9, 10, 14 and 15 were admissible only in relation to the subjective elements of Mr Donaldson's belief, and that they did not contain any admissible evidence of the truth of their contents or of the objective elements required by O 26A r 4.[9] The substantial bulk of the contents of Mr Donaldson's affidavit that potentially bears upon whether he may have a cause of action is not admissible as to the truth of what is said. It is thus not admissible on the objective question of whether he may have a cause of action against Suffolk.
[9] Donaldson v Suffolk Investments [18] ‑ [27].
In the earlier reasons I found that pars 3, 4 and 20 are relevant to the question of discretion; pars 16 and 17 relate to the attempts Mr Donaldson has made to obtain documents; and pars 18 and 19 relate to the identification of the documents Mr Donaldson seeks in this application. The only part of Mr Donaldson's affidavit that is capable of bearing on whether he may have a cause of action against Suffolk is par 13. That paragraph is evidence that he owns shares in Suffolk and that he has not received any dividends, or at least has not for quite some time. That falls well short of being sufficient to establish that he may have a cause of action against the company.
Mr Donaldson's submissions assert that he has a right to production of documents, and Suffolk is under a duty to produce documents, under various provisions of the Corporations Act 2001 (Cth). These proceedings for pre‑action discovery under O 26A are not a vehicle for the assertion or enforcement of any alleged right to documents arising under the Corporations Act. The questions in these proceedings are whether the requirements of O 26A are satisfied and, if so, whether the discretion should be exercised to order discovery. I am not satisfied that the requirements of O 26A have been satisfied. Consequently the discretionary power under O 26A is not enlivened, and the application must be dismissed.
Conclusion
For these reasons, I dismiss Mr Donaldson's application.
Costs should follow the event. I order that the applicant pay the respondent's costs of the application, to be taxed if not agreed.
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