Eccles v Koolan Iron Ore Pty Ltd - [2011] WASC 235

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ECCLES -v- KOOLAN IRON ORE PTY LTD [2011] WASC 235

CORAM: MASTER SANDERSON

HEARD: 25 AUGUST 2011

DELIVERED : 7 SEPTEMBER 2011

FILE NO/S: CIV 2868 of 2009

BETWEEN: REBECCA AMY ECCLES
LEE MARCUS STERGIOU
Plaintiffs
AND
KOOLAN IRON ORE PTY LTD
First Defendant
MT GIBSON IRON LTD
Second Defendant

Catchwords:

Discovery - Application by plaintiff for further and better discovery from defendants - Application for discovery from nonparty - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 26 r 6

Result:

Applications granted in part

Category: B

Representation:

Counsel:

Plaintiffs:     Mr M J McPhee
First Defendant             :     Mr D P C Robinson
Second Defendant         :     Mr D P C Robinson
Non-party:     Ms M G Di Martino

Solicitors:

Plaintiffs:     M J McPhee
First Defendant             :     Williams & Hughes
Second Defendant         :     Williams & Hughes
Non-party:     Karp Steedman Ross-Adjie

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

Nil

MASTER SANDERSON: This is the return of two applications. First, there is the plaintiffs' application seeking the first and second defendants give further and better discovery. This application is brought under O 26 r 6 of the Rules of the Supreme Court1971 (WA). Second, there is the plaintiffs' application against a non‑party, the Koolan Island Social Club Inc (the Social Club) for discovery of certain categories of documents. This application is brought under O 26A r 5. Before dealing with these applications, I should say something about the facts of the case. These facts are drawn from the re‑amended statement of claim and the further re‑amended defence.
The plaintiffs are health and lifestyle co‑ordinators. They provided services to the defendants which allowed the defendants' employees the opportunity for exercise and recreation. When the defendants engaged the plaintiffs a written contract was prepared but was never signed. Nonetheless, there is no dispute the plaintiffs provided services to the defendants and were paid for those services. There is an issue as to what, if any, written documents constituted the contract between the plaintiffs and defendants and what ultimately were the terms of the contract.
In particular, there was a term in the unsigned contract which required the parties to negotiate at the end of the term of the agreement with a view to the plaintiffs' position being renewed. The plaintiffs say that was not done and the defendants were in breach of the contract. There is a dispute as to whether either party repudiated the contract and the consequences which flow from that conduct. Of course, if the plaintiffs are able to establish there was a contract with the defendants and the defendants were in breach of that contract, then damages would be an issue. But the quantum of any damages is not relevant to these applications. What is central to the case is establishing what the contractual position between the parties was.
There is also an issue as to whether the plaintiffs were denied the commercial opportunity to renew the contract. In this context it is common ground that prior to the termination of the relationship between the plaintiffs and the defendants, the defendants engaged in discussions with an alternative lifestyle consultant (ESS). These negotiations included soliciting from the third party an undertaking if they were awarded the contract they would make a contribution of $2,000 per month to the Social Club. The fact of the discussions has emerged from documents already discovered.
The review of the pleadings makes it plain this is essentially a case which will be determined once the court decides just what was the contractual position between the parties. Once that is determined, the court has to decide whether any contractual provision relating to renewal of the contract was breached. It is this latter point which seems to be driving the plaintiffs' interest in discovery. Having found out from documents produced by the defendants that a payment to the Social Club by the new consultants was to be made, it clearly suspects there was more and is determined to find out what these additional documents might be. On one level, pursuing the issue is not unreasonable. But in the end, the line of inquiry must bump up against the reality of what documents actually exist. All that any discovery orders can do is ensure to the greatest extent possible all documents related to matters in issue between the parties have been disclosed.
In relation to the defendants, the plaintiffs seek relevantly the following order:
1.The defendants and each of them, within 10 days of the date of the order, make and file an affidavit by responsible officer, who, after making full and appropriate inquiries of the records of the company, states whether the defendants or either of them have or have had at any time in their possession, custody or power, any of the documents or class of documents specified in the schedule to the said summons other than those documents discovered in the first part of the first schedule ('additional documents') of the affidavit of David Garth Burg sworn on 20 July 2011; and if any such documents or any of them have or have been but are not now in the possession, custody or power of the defendants or either of them, stating when the defendants or either of them parted with such additional documents and what has become of the same.
...
The schedule to the chamber summons refers to seven categories of documents and is in the following terms.
Schedule
1.A list of members of the Koolan Island Iron Ore Social Club (Inc) ('the Social Club') with all available contact details.
2.A copy of the Constitution of the Social Club.
3.All records of payments made by ESS to the Social Club of workers of Koolan Island.
4.Such records to include deposit slips, invoices, payment advices, receipts, GST returns, agreements, or other documents relating to the making of such payment by ESS to the Social Club.
5.Any documents in the nature of an agreement, or referring to an agreement, made between members of the Social Club and ESS for the making of such payments.
6.Any documents relating to the confirmation that such payments were made.
7.Any documents relating to the disposition of such payments, by the Social Club, once paid.
It is difficult to see how documents in categories 1 and 2 relate to any matter at issue between the parties. As I understand the plaintiffs' submissions, it is suggested by obtaining a list of members of the Social Club, the plaintiffs may be able to work out if any of these members were in a position to influence the decision not to renew the plaintiffs' contract. With respect, that is a very vague connection. It is difficult to see how the constitution of the Social Club could be relevant in any way whatsoever.
Categories 3 and 4 also appear to be too wide. Any payment made by the new consultants to the defendants and passed on to the Social Club is of course relevant. Documents covering that issue have been discovered. There is nothing to suggest further documents exist. There is no basis for ordering further discovery.
The existence of documents referred to in pars 5, 6 and 7 is entirely speculative. There is nothing which emerges from the present documents or the pleaded case to suggest such documents are in existence. There is no warrant for requiring a further affidavit dealing with these categories.
In summary then, I am not satisfied there are any grounds for making the orders sought by the plaintiffs.
Having said that, during the course of his submissions, counsel for the plaintiffs did elude to the fact there have been a number of affidavits of discovery filed on behalf of the defendants. Given the obligation for continuous discovery that may be understandable. However, in my view it would be best if all documents which are to be discovered are referred to in one discovery affidavit. For that purpose a further affidavit of discovery ought be filed by the defendants which will be in effect a consolidated affidavit. I will make the necessary orders to facilitate this arrangement.
Turning then to discovery from the non‑party (ie, the Social Club) the Social Club is prepared to provide discovery but not to the extent sought by the plaintiffs. In their chamber summons filed 20 June 2011, the plaintiffs seek discovery of the following items.
Schedule
3.All records of payments made by ESS to Koolan Island Iron Ore Social Club (Inc).
4.Such records to include deposit slips, invoices, payment advices, receipts, GST returns, agreements, or other documents relating to the making of such payment by ESS to the said Social Club.
5.Any documents in the nature of an agreement written or oral, referring to an agreement, made between members of the said Social Club and ESS for the making of such payments.
6.Any documents relating to the confirmation such payments were made,.
7.Any documents relating to the disposition of such payments, by the Social Club, once paid.
To that list, the plaintiffs propose adding the following:
A list of all members of the Koolan Island Iron Ore Social Club ('the said Association') with all available contact details.
The Social Club objects to providing the list of members referred to in the amendment and documents referred to in par 7 of the schedule. Otherwise it will provide the discovery as requested.
In my view, there is no warrant for going beyond what the Social Club has offered to discover. I am not satisfied the list of members is relevant nor am I satisfied the disposition of any funds the Social Club received from the new consultants relate to any matter in issue between the parties. The authorities indicate discovery from a non‑party should go no further than is necessary. If it were the case the discovery provided led to a further chain of inquiries then further orders might be made. At the moment however it would seem to me what is proposed by the Social Club is sufficient.
The Social Club in its minute also proposed costs of the application and the costs of giving discovery be paid by the plaintiffs. I will hear argument from the parties before making final orders.