Equuscorp Pty Ltd v Glengallan Investments Pty Ltd

[1999] QCA 338

IN THE COURT OF APPEAL	99.338
SUPREME COURT OF QUEENSLAND

Appeal No. 4711 of 1999

Brisbane

[Equuscorp P/L & Anor v. Glengallan Investments P/L & Ors]

BETWEEN:

EQUUSCORP PTY LIMITED ACN 006 012 344

(FORMERLY EQUUS FINANCIAL SERVICES LIMITED)

(First Plaintiff) First Appellant

AND:

RURAL FINANCE PTY LTD ACN 008 584 638 (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

(Second Plaintiff) Second Appellant

AND:

GLENGALLAN INVESTMENTS PTY LTD ACN 009 836 364
HGT INVESTMENTS PTY LTD ACN 009 951 080

THORNTON, PRENDERGAST, ANDERSON AND CODD

(Defendants)	Respondents
McPherson JA Pincus JA Byrne J

Judgment delivered 24 August 1999

Judgment of the Court

APPEAL DISMISSED WITH COSTS

CATCHWORDS:	PROCEDURE - DISCOVERY AND INTERROGATORIES - appellants’ interrogatories of 1700 questions were struck out as oppressive - whether each of the interrogatories should be separately considered - whether their nature and volume is justifed by one party’s lack of knowledge of the factual issues.
Hughes v Western Cricket Association (Inc) (1986) ATPR ¶40-726
Counsel:	Mr S.S.W. Couper QC for the appellants Mr D.R. Cooper SC, with him Mr C.L. Francis for the respondents
Solicitors:	Gadens Lawyers for the appellants Lees Marshall Warnick for the respondents
Hearing Date:	3 August 1999

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4711 of 1999

Brisbane

Before McPherson JA
Pincus JA
Byrne J

[Equuscorp P/L & Anor v. Glengallan Investments P/L & Ors]

BETWEEN:

EQUUSCORP PTY LIMITED ACN 006 012 344

(FORMERLY EQUUS FINANCIAL SERVICES LIMITED)

(First Plaintiff) First Appellant

AND:

RURAL FINANCE PTY LTD ACN 008 584 638 (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION)

(Second Plaintiff) Second Appellant

AND:

GLENGALLAN INVESTMENTS PTY LTD ACN 009 836 364
HGT INVESTMENTS PTY LTD ACN 009 951 080

THORNTON, PRENDERGAST, ANDERSON AND CODD

(Defendants) Respondents

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 24 August 1999

1. This appeal is brought from orders striking out sets of interrogatories as being, in a word,

   oppressive. The interrogatories pose more than 1700 questions. Although the sets contain

   considerable duplication, they are not identical, ranging from 34 to 49 pages; and every set has

   many annexures, all differing.

2 The interrogatories were delivered on behalf of the appellants, plaintiffs in six actions. The
cases are managed as a group on the Supreme Court’s supervised case list. They will be tried

together, with the evidence in one evidence in all. In each case, the first appellant (“Equuscorp”)

claims moneys allegedly due under a written loan agreement made about 30 June 1989 between

the second appellant (“Rural”) as lender and the defendant as borrower. The borrowing was to

facilitate investment in a limited partnership business of farming red claw crayfish. Equuscorp claims

as the assignee of Rural’s rights. In aggregate, the principal sought to be recovered exceeds

$2,600,000. Substantial claims are made for interest.

1. The defences raise similar contentions. The respondents, the six defendants, set up that an

   oral agreement was concluded between Rural and a Mr Thornton pursuant to which the obligation

   to repay the loan was to be confined to just three payments, leaving the balance to be recovered

   from any profits of the partnership venture. It is also said that there was no effective assignment of

   Rural’s rights. These are not the only defences. An estoppel is pleaded against the claims; it is

   alleged to derive from discussions at a meeting and by telephone. Alternatively, the respondents also

   contend that no loan was made, asserting that the purported payment of principal consisted of no

   more than book entries. This prompted a Reply contending that the book entries were accepted by

   Mr Thornton. And other issues arise on the pleadings. The litigation obviously has its complexities,

   although it seems that the resolution of most of the factual issues will be decisively influenced by

   findings concerning the recollection of witnesses of conversations that took place in mid-1989.

2. The primary judge, while accepting that some of these voluminous interrogatories seemed

   proper, considered that every set contained so many “fishing” questions, or was otherwise

   “vexatious”, as to involve an oppressive burden. Taking this broad view, instead of separately

   considering each of the interrogatories to ascertain whether the respondents should be required to

   answer, the judge struck the entire sets out, mentioning Hughes v Western Cricket Association
   (Inc) (1986) ATPR ¶40-726 at p.47,932 as authority for that course.

3. The interrogatories are sought to be justified by difficulties the appellants anticipate in

   addressing the factual issues at the trial. Equuscorp did not take the assignments until January 1991;

   it lacks knowledge of the circumstances attending both the execution of the loan agreements and

   such oral arrangements as the respondents allege. The participants in the conversations and

   transactions which are said to stand in the way of the enforcement of the loan agreements according

   to their terms are respondents and others who, it seems, are not disposed to assist the appellants.

   Rural’s receivers have no personal knowledge of the material events either. These considerations

   suggest that interrogatories may well have a part to play in pre-trial preparation. It does not follow,

   however, that the respondents ought to be obliged to incur the very substantial trouble and expense

   of responding to all these interrogatories, taking such particular objections as the Rules permit[1],

   especially as so many of the questions appear not to be reasonably necessary for the fair and

   efficient conduct of the litigation.

   [1]             These cases are so old that the pre-1994 Rules of Court concerning interrogatories applied to them when, in May this year, the sets were struck out.

4. A few are plainly unnecessary: those which, within the one set, are merely repetitive -

   presumably through wordprocessor error. More importantly, many are too wide. Examples of this

   tendency can be found in inquiries about a “Guarantee”. This document, according to the

   respondents, was created in August 1990 to record what Rural and the borrowers had intended

   when concluding the 1989 arrangements. An interrogatory asks whether there was any communication between Mr Thornton (or any other person on behalf of the defendant) and a Mr

   Hasell “with respect to ... the provision to the defendant of the ... ‘Guarantee’”; and if the answer

   be affirmative, the respondent is to state the substance and effect of every such communication, as

   well as the means by which it was undertaken, the parties to it, and the date. Although a response

   that answered the substance of the interrogatory without evasion might furnish pertinent, even

   valuable, information, it is easy enough to conceive of conversations which answer the description

   that will have nothing much to do with the issues: for example, as to uncontroversial arrangements

   to sign the document. Similar questions are then directed to “a document of similar effect to the ...

   ‘Guarantee’”. If those enquiries are not fishing in nature, or else directed to irrelevant points, at least

   they impose an unfair burden, for conversations may have been had concerning something like the

   “Guarantee” that have no connection with the issues.

5. Another interrogatory asks about the orally concluded arrangement that is said to have

   stipulated a different repayment regime than that for which the written loan agreement provides.

   Here again, lots of questions are asked about every communication between Mr Thornton (and

   anyone else on behalf of the respondents) concerning the arrangement and all its terms, or proposed

   terms; even, therefore, immaterial terms. Yet another line of inquiry pursued relates to conversation

   said to have resulted in the oral arrangement, among them whether the conversation related to terms,

   “or potential terms”, other than those pleaded. Inquiries of this width cannot be required for the just

   determination of the litigation.

6. Unfortunately, questions about things which have only a tenuous relationship with the issues,

   or which are essentially fishing, are not unusual. Take an interrogatory about dealings with the

   Australian Taxation Office. It asks whether Mr Thornton, or anyone else on the defendant’s behalf,

   communicated with an officer of the ATO between June 1989 and September 1997 “ with respect to the nature or extent of the defendant’s liability to make the repayments recorded or set out” in

   the Loan Agreement. If the answer is yes, the date, means, and substance of every such

   communication are to be stated. Now, a sufficiently relevant communication has some potential to

   bear upon entries in income tax returns claiming a deduction in respect of the borrowings; and this

   could have significance as an admission that the moneys alleged to have been lent were received.

   But to require the respondents to collect, or recollect, for a more than 8 year period, every

   communication with the ATO relating to the “nature or extent” of a “liability” to make the

   repayments mentioned in the Agreement is to impose an unjustifiable burden.

7. Examples could be multiplied, but there is no point in dwelling on the detail. This is an appeal

   against the exercise of a discretion in a matter of practice. In view of the exceptional number of

   interrogatories, and that many are too wide, insufficiently relevant or fishing, the judge was entitled

   to conclude that the very considerable burden they imposed was out of all proportion to the likely

   utility of individual responses: in other words, that the sets were, as the judge said, oppressive. No

   consideration to warrant interfering with the exercise of discretion is established.

8. Of course, the fate of this appeal does not mean that suitably framed, appropriately limited,

   interrogatories should not be delivered; but that is a matter for the judge who manages the cases to

   consider.

9. The appeal should be dismissed with costs.