Espanol Holdings Pty Ltd v Banning - [2000] WASC 45

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ESPANOL HOLDINGS PTY LTD & ANOR -v- BANNING & ORS [2000] WASC 45

CORAM: MASTER BREDMEYER

HEARD: 10 & 11 FEBRUARY 2000

DELIVERED : 25 FEBRUARY 2000

FILE NO/S: CIV 1172 of 1999

BETWEEN: ESPANOL HOLDINGS PTY LTD
First Plaintiff
MARIA MICHELLE ORTIN
Second Plaintiff
AND
MARTIN PAUL BANNING
First Defendant
DOUGLAS FRANK BREWER
Second Defendant
ESCON LANE PTY LTD
Third Defendant
JOHN ANDREW MILLER
Fourth Defendant
COUNTRYWIDE HOME LOANS PTY LTD
Fifth Defendant
GEORGE JASPER
Sixth Defendant
DON CAMPBELL-SMITH
Seventh Defendant

Catchwords:

Discovery of particular documents

Legislation:

Nil

Result:

Applications allowed in part

Representation:

Counsel:

First Plaintiff                :     Mr J C Giles
Second Plaintiff            :     Mr J C Giles
First Defendant             :     Mr K J O'Toole
Second Defendant         :     In person
Third Defendant           :     Mr C R Coulson
Fourth Defendant          :     Mr C R Coulson
Fifth Defendant            :     No appearance
Sixth Defendant            :     No appearance
Seventh Defendant        :     Mr G H Murphy & Ms D M Templeman

Solicitors:

First Plaintiff                :     Solomon Bros
Second Plaintiff            :     Solomon Bros
First Defendant             :     K J O'Toole & Associates
Second Defendant         :     In person
Third Defendant           :     Coulsons
Fourth Defendant          :     Coulsons
Fifth Defendant            :     No appearance
Sixth Defendant            :     No appearance
Seventh Defendant        :     Minter Ellison

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

Nil

Case(s) also cited:

Alba Nominees Pty Ltd v Cecil Bros Pty Ltd, unreported; SCt of WA; Library No 970698; 12 December 1997
Astra-National Productions Ltd v Neo-art Productions Ltd [1928] WN 218
Beecham Group Ltd v Bristol-Myers Co [1979] VR 273
Biala v Mallina Holdings Pty Ltd [1990] WAR 174
British Association of Glass Bottle Manufacturers Ltd v Nettlefold [1912] AC 709
Commissioner of Taxation v Ryan [2000] HCA 4
Flower & Hart (A Firm) v White Industries (Qld) Pty Ltd [1999] FCA 773
Hoad v Nationwide News Pty Ltd (1998) 19 WAR 468
Jones v Monte Video Gas Co (1880) 5 QBD 556
Kent Coal Concessions Ltd v Duguid [1910] 1 KB 904
Mann v Carnell [1999] HCA 66
Molnycke A B v Proctor and Gamble Ltd (No 3) [1990] RPC 498
Moody v Cox and Hutt [1917] 2 Ch 71
Mulley v Manifold (1959) 103 CLR 341
Pulitano v Ginbey [1999] WASC 5
Schlam v WA Trustees [1964] WAR 178
Science Research Council v Nasse [1980] AC 1028
Spector v Ageda [1973] Ch 30
Temwood Holdings Pty Ltd v Oliver [1999] WASC 251
Tipperary Developments Pty Ltd v State of Western Australia [1999] WASC 62
York v Rowe & Ors, unreported; SCt of WA; Library No 8681; 18 January 1991

MASTER BREDMEYER: I have before me three applications for discovery of specific documents. The first is by the plaintiff against the first, second and seventh defendants. The second is by the first defendant against the plaintiff and the third is by the seventh defendant against the plaintiff.
I will consider first the plaintiff's application against the first defendant. The documents sought are set out in par 3.1 - 3.7 of the plaintiff's amended chamber summons of 15 December 1999.
"3.1any documents relating to dealings, other than those the subject of this action, between the first defendant and the seventh defendants;
3.2any documents relating to dealings, other than those subject of this action, between the first defendant and the third and fourth defendants;"
This request is said to go to the pleading that the first defendant breached fiduciary duties to the plaintiff in preferring the vendors' interests to those of the plaintiffs. These documents, it is said, might show a long business relationship between Banning and the vendors and Banning and the seventh defendant, so that they would show a motive why Banning might want to prefer the interests of the vendors to those of the plaintiffs. They would also show a motive why the seventh defendant might want to prefer the interests of the vendors or of Banning to those of the plaintiffs. Motive is not relevant to breach of fiduciary duties. These documents are not relevant to these issues and this request is refused.
"3.3any documents relating to payments made by the third or fourth defendants to the first defendant or second defendant (either in his personal capacity or trading as National Australian Realty) or by the first defendant to the third or fourth defendants, including documents that show payments have been or were intended to be, made by the third or fourth defendants or on their behalf or at their direction to the first defendant or second defendant (either in his personal capacity or trading as National Australian Realty);"
I consider it relevant to know what payments or commissions were made by the vendors to Banning or Brewer or National Australia Realty. I therefore allow this request.
"3.4any credit card records of the first defendant for the period November to December 1997 (inclusive);"
These records are relevant to par 17 of the statement of claim but Banning has produced his credit card records for the period, so this request is refused. The plaintiffs think that Banning may have another credit card. That may be the subject of an interrogatory.
"3.5any mobile phone accounts or records relating to calls made by the First Defendant for the period October 1997 to July 1998 inclusive; or"
These telephone accounts have now been produced and no order from me is required.
"3.6any documents relating to the sales of the Kardinya Property and Beaufort Street Property (as defined in the re‑amended statement of claim) by the third defendant,"
This relates to the on‑sale of the Kardinya and Beaufort Street properties by the third defendant, which I understood took place shortly after the purchase of the properties. These sales are relevant as to the value of the properties which is in issue. I therefore propose to allow this request.
"3.7any documents relating to the first defendant's employment or other business relationship with the second defendant."
These documents are clearly relevant. The plaintiffs have pleaded an agency between the first and the second defendants. It is denied or not admitted by those defendants. Banning's affidavit of 4 February 2000 says, in effect, there are no documents on this. I half accept that, but I think he may have misconceived the case. I am fairly certain that there would be some documents about the splitting of commissions and the expenses of National Australia Realty (Brewer's business). I will order the first defendant to discover "any documents relating to the first defendant's employment or other business relationship with the second defendant and financial documents for the financial year 1997/98".
I turn now to the plaintiffs' application against the second defendant, which is:
"Within 7 days from the date of this order the second defendant do make and file an affidavit stating whether any documents relating to an employment or other business relationship between the first and second defendant are, or have at any time been, in his possession, custody or power and if not now in his possession, custody or power when he parted with them and what has become of them and that he do within the same period serve a copy thereof on the plaintiff."
These documents relate to a relevant issue, namely the relationship between the first and second defendants, and I will allow this application.
I now turn to the plaintiffs' application for specific discovery against the seventh defendant. The documents sought are set out in the plaintiffs' chamber summons of 15 December 1999, already mentioned.
"1.1any documents relating to dealings, other than those the subject of this action, between the first defendant and the seventh defendant;"
I reject this request. It is not relevant for reasons given in relation to similar documents sought from the first defendant.
This request as amended by correspondence reads:
"1.2Any documents relating to payments made by or to the third and fourth defendants by or to the first defendant, including documents that show payments have been or were intended to be made by the third or fourth defendants or on their behalf or at their direction to the first defendant in relation to the Second Transaction (as defined in the re‑amended statement of claim)."
I consider this is relevant and will allow this request.
"1.3any documents relating to the sale by the third defendant of the Kardinya Property and Beaufort Street Property (both as defined in the re‑amended statement of claim),"
This request refers to on‑sales of the Kardinya and Beaufort Street properties. As previously advised, I consider these documents are relevant as to the values of those properties at about the time they were sold by the plaintiffs. I will allow this request.
I turn now to the first defendant's application for discovery of particular documents against the plaintiff. The documents sought are listed in the Schedule to the first defendant's chamber summons of 21 December 1999.
"1.All documents relating to the purchase, operation and sale of:
(a)Lucky's Cake and Lunch Bar
Shop 21 Coolbellup Shopping Centre
Coolbellup Avenue
Coolbellup
(b)Newcastle Sandwich Supply
466 Newcastle Street
Perth
(c)Sunflower Take-away and Café
Shop 20 Coolbellup Shopping Centre
Coolbellup Avenue
Coolbellup
(d)Hilton Lunch Bar
38 Stockdale Road
Hilton Park
(e)Richardson Drycleaners
O'Connor
(f)Melville Plaza Coffee Lounge
Melville Plaza
(g)Lunch Bar
Osborne Park"
The first defendant says that these documents are relevant because they will show the level of business experience and competence of Mrs Ortin and hence whether she was in a relationship of disability to Mr Banning, so that she was under his undue influence and subject to his unconscionable conduct. I consider the documents are not directly relevant to this issue. They may be indirectly relevant or remotely relevant but I consider it reasonable to apply O 26 r 7(3)(b)(ii) and O 1 r 4B. I consider that these documents are not necessary for the just determination of the litigation and are not directly relevant to the issues in this case and I refuse this request.
"2.All documents relating to the purchases and offers to purchase and sale of real estate (the 'Real Estate Dealings') by the plaintiffs since 1989 including but not limited to:
(a)12 Beaconsfield Avenue, Midvale
(b)57 Piercy Way, Beaconsfield
(c)lots 13, 16, 17 and 18 Coolbellup Shopping Centre, Coolbellup Avenue, Coolbellup
including documents evidencing communication between the plaintiff and
(i)their settlement agents
(ii)their finance brokers
(iii)their legal advisors
(iv)their financial advisors
in respect to each of the real estate dealings."
On (b), I consider the reference to 57 Piercy Way, Beaconsfield is a typing error and I have amended that to 57 Piercy Way, Kardinya.
An issue in this case is whether the plaintiffs incorrectly believed that the second transaction offer and acceptance was binding on them. The contract was subject to finance to be obtained by 21 January 1998 and that finance was sought but not obtained by that date. These documents relate to real estate deals done by the plaintiffs in 1995 and 1997. Some of the contracts are made subject to finance and the discovery of the related documents sought may show whether any of these contracts fell over because of inability to obtain loan finance. That is relevant to that issue in this case. I will allow this request.
"3.Documents evidencing the leasing of the plaintiffs' properties, the appointment of managing agents, rent receipts and trust statements in respect to real estate owned by the plaintiffs since 1989."
I consider Mrs Ortin's experience of leasing is not directly or indirectly relevant to the issues in the case which relate to buying properties, not leasing. I decline to grant this request.
"4.All documents evidencing dealings between the plaintiffs and Blue Line Realty in respect to negotiations by the plaintiffs to the purchase of
(a)Karrinyup Newsagency
(b)The Plantation Restaurant South Perth
(c)Earlybird Seafood
(d)Riverton Auto Lodge
(e)Canning River Auto Lodge"
I decline this request. It is based on evidence contained in a statutory declaration which is not admissible in this Court. Moreover, there is no evidence that she purchased, or offered to purchase, any of those businesses and I consider the request not directly or indirectly relevant to the issues.
"5.All documents evidencing the obtaining of advice by the plaintiffs since 1989 from
(a)David Bycroft, Accountant
Suite 3
9 Archibald St
Willagee
(b)Gamel Ward Pty Ltd
Suite 1, 6 Richardson Street
West Perth
(c)George Panossian
(d)H S Panossian & Associates
9/12 Prindiville Drive
Wangara
(e)Keith Willey, Real Estate Agent
(f)Blue Line Realty
(g)Dominic Casella
(h)Sam Martella, Solicitor
8/109 James Street
Perth
(i)Frichot & Frichot, Solicitors
Norfolk Chambers
6 Norfolk Chambers
Fremantle"
I consider advise from solicitors etcetera is relevant to the first defendant's plea in par 71 and par 102 of his defence that she "obtained advice and guidance from solicitors, accountants, real estate, business agents, finance brokers and banks in relation to her business affairs". To make an order for specific discovery, I need to be fairly certain that there are discoverable documents. Mr Banning's affidavit of 21 December deals with this topic at par 16 ‑ 21 and annexures and to some extent the matters are also covered in Mrs Templeman's affidavit of 22 December 1999.
(a) David Bycroft, Accountant. He assisted the plaintiffs in getting loan finance. He may or may not have advised her. However, I accept Mrs Ortin's evidence that he has no further documents from him to disclose and hence this request is refused.
(b) Gamel Ward Pty Ltd. This company is a finance broker, see Banning's affidavit p 27, p 80 and p 84. Those pages show that the plaintiffs got one loan of $300,000 for the purchase of 835 Beaufort Street through this broker. It was a subject to finance contract. I propose to allow this request.
(c) George Panossian. He was a Perth real estate agent who helped Mrs Ortin sign a management agreement for the leasing out of her units in Newman in April 1998. Not relevant to the issues in this case.
(d) H S Panossian & Associates. This firm (principal Joe Panossian) was the plaintiff's accountant at the time. He paid the deposit for her on the purchase of the Beaufort Street property which was purchased a few months before it was sold to the third defendant and had some involvement in the purchase of the Newman units. I would allow this request but for Mrs Ortin's evidence that the firm has no more documents from him to disclose. I therefore refuse this request.
(e) Keith Willey, Real Estate Agent. There is no evidence that he gave any advice to her and I refuse this request.
(f) Blue Line Realty. The statutory declaration of Mr Fitzpatrick is not admissible in this Court. He was trying to sell Mrs Ortin properties. There is no evidence that she offered to buy any of them. I am not willing to infer that he advised her on real estate matters. I refuse this request.
(g) Dominic Casella. No evidence that he gave her any advice. I refuse this request.
(h) Sam Martella, Solicitor. The evidence on his involvement is hearsay upon hearsay and not admissible and I refuse this request.
(i) Frichot & Frichot, Solicitors. The documents show that this firm acted for the plaintiffs in 1997 on the purchase of Lots 13 and 16 Coolbellup Shopping Centre and on the sale of 57 Piercy Way, Kardinya. I would allow this request for the period 1997 to May 1998 but for Mrs Ortin's evidence, which I accept, this firm has no more documents to disclose. I therefore refuse this request.
"6.The plaintiffs' telephone accounts (including accounts for the plaintiffs' mobile telephone accounts) showing telephone calls to telephone numbers 0418 923 877 and to 9227 9044 for the period 1 August 1997 to 30 June 1998 inclusive."
This is relevant to an issue as to whether Mrs Ortin frequently telephoned Mr Banning. I propose to allow this request.
"7.All documents concerning the stay by the second plaintiff at the Trade Winds Hotel, East Fremantle, on or about 3 May 1998."
I allow this request. It has been conceded.
I turn now to the seventh defendant's chamber summons for specific discovery against the plaintiff, dated 8 December 1999. The documents sought are set out in a minute of proposed orders of February 2000. The seventh defendant is a settlement agent engaged by the plaintiffs. The principal allegation against the seventh defendant is that he failed to advise the plaintiffs that the second contract of sale had terminated on 21 January 1998 when finance was not obtained. The plaintiffs further plead that they incorrectly believed that the contract was binding on them. These pleas are denied in the defence and this throws up an issue as to whether the plaintiffs - relevantly Mrs Ortin - believed that the contract was binding on her. Although not pleaded as a specific defence, it is relevant to know what her experience was of "subject to finance" contracts of sale.
"1.Annual returns of Espanol Holdings Pty Ltd from 1984 to 1986 (inclusive).
2.All taxation returns of:
(a)Espanol Holdings Pty Ltd;
(b)the J & M Ortin Family Trust;
from 1984 to 1992
3.All taxation returns of Maria Michelle Ortin from 1984 to 1993."
These documents are said to be relevant because they might show the level of income of Mrs Ortin and of her company in those years and, if they showed a high income, that might show a high level of experience in business. I regard these documents as not directly or indirectly relevant to the issues in this case and I refuse this request.
"4.All financial statements and accounts for:
(a)Espanol Holdings Pty Ltd;
(b)the J & M Ortin Family Trust;
for the period 1 January 1984 to 31 December 1999."
I am not fairly certain that these documents ought to be disclosed because I do not consider them relevant to the issues. There is evidence from David Bycroft, an accountant, that the company has not traded since 1992 either in its own right or as trustee for the Ortin Family Trust. There is evidence from Mrs Ortin that she did not lodge tax returns for the years ending 30 June 1993, 1994 and 1995 and that she lodged nil returns for the years 1996 and 1997. Even if she had lodged returns I do not consider that the level of her income is relevant to her experience of contracts of sale. This request will be refused.
"5.All bank statements of :
(a)Espanol Holdings Pty Ltd;
(b)the J & M Ortin Family Trust;
(c)Maria Michelle Ortin;
for the period 1 January 1984 to 31 December 1999."
For reasons given above in relation to item 4, I do not consider these documents relevant and I refuse this request.
"6.Offers and acceptances for purchase and sale and financial statements relating to the following businesses:
(a)Lucky's Café and Lunch Bar;
(b)Newcastle Sandwich Supply;
(c)the Hilton Lunch Bar;
(d)Richardson Dry Cleaners;
(e)Melville Coffee Lounge;
(f)the lunch bar in Osborne Park conducted by Maria Michelle Ortin;
(g)the Sunflower Takeaway and Café."
For reasons given in relation to the first defendant's request for documents relating to the same businesses, I refuse this request.
"7.Contracts for the sale and purchase of real estate for the following transactions:
(i)proposed purchase of lot 12 Beaconsfield Avenue, Midvale pursuant to contract dated 3 October 1995;
(ii)proposed sale of 57 Piercy Way pursuant to contract dated 3 October 1995;
(iii)proposed purchase of Parmelia Medical Centre pursuant to contract dated 3 October 1995; and
(iv)proposed sale of 61 Gilbertson Road, Kardinya pursuant to contract dated 3 October 1995;
(v)purchase of lot 13, Coolbellup Shopping Centre pursuant to contract dated 10 October 1997;
(vi)dealings with Blue Line Realty between 1995 and 1997 in regard to expressions of interest in purchasing Kardinya Newsagency; The Plantation Restaurant, South Perth; Early Bird Seafood, Riverton; and Canning Bridge Auto Lodge."

There is a duplication between this item and item 15. The initial wording of 7 is expanded in 15. The relevant documents are not simply the contracts for the sale and purchase of real estate but any other documents relating to the "subject to finance" clauses and any decision not to proceed with a purchase. I will amend the opening words of 7 to read "Contracts for the sale and purchase of real estate including documents relating to the 'subject to finance' clauses and any decision not to proceed with a purchase, for the following transactions: …". I propose to allow (i) as relevant. It was a subject to finance contract. I propose to allow (ii) as amended as relevant. I amend the date there from 3 October 1995 to 10 October 1997. The reason is that the 1995 offer was a cash offer and therefore not relevant, whereas the October 1997 offer was a subject to finance offer. I propose to allow (iii), which again was a subject to finance contract. I decline to allow (iv) as that was a cash offer. I will allow (v), which was a subject to finance contract.
I decline to allow (vi). Mrs Ortin contacted an agent about these businesses but did not proceed to offer to purchase any of them. I consider the request not directly or indirectly relevant.
"8.Contracts for the sale and purchase of real estate for any proposed or potential transactions for the sale or purchase of real estate to which the plaintiffs or either of them were parties, and any correspondence or documents sent or received in relation to such proposed transactions."
I refuse this request. Based on Mrs Ortin's affidavit I am not fairly certain that there are any other real estate transactions other than the ones she has declared and which I have covered in item 7 above.
"9.The files of documents held by the following agents or advisers instructed by or assisting the plaintiffs or either of them in the relevant transactions or in relation to the relevant properties:
(a)William Gamel/Gamel Ward Pty Ltd.
(b)David James Bycroft.
(c)HS Panossian & Associates.
(d)Hayter First National Real Estate.
(e)Frichot & Frichot.
(f)George Panossian Real Estate.
(h)Personalised Settlements
(i)Distinctive Property Settlements
(k)Ray White Port Hedland"
(a) William Gamel/Gamel Ward Pty Ltd. I propose to allow this request. The documents show that Mrs Ortin got a loan through this finance broker of $300,000 to purchase 835 Beaufort Street. That purchase was finalised in August 1997. The contract of sale was subject to finance.
(b) David James Bycroft. He assisted the plaintiffs in getting loan finance. He may or may not have advised the plaintiffs. However, I accept Mrs Ortin's evidence that he has no further documents to disclose and hence this request is refused.
(c) H S Panossian & Associates. Mr Joe Panossian, the principal of this firm, was the plaintiffs' accountant at this time. He paid the deposit for the purchase of 835 Beaufort Street, which was purchased a few months before it was sold to the third defendant and he had some involvement in the purchase of the Newman units. I would normally allow this request but for Mrs Ortin's evidence that this firm has no more documents to disclose. I am not therefore fairly certain that the firm has further documents that are ought to disclose and I decline this request.
(d) Hayter First National Real Estate. This firm is based in Port Hedland and was the managing agent for the plaintiffs in the leasing out of two units in Newman. I do not consider this relevant to the issues in this case and I decline this request.
(e) Frichot & Frichot. This firm acted for the plaintiffs in 1997 on the purchase of Lots 13 and 16 Coolbellup Shopping Centre and on the sale of 57 Piercy Way, Kardinya. However, I accept Mrs Ortin's evidence that this firm has no more documents to disclose and I therefore decline this request.
(f) George Panossian Real Estate. He appears to have been a go‑between between the plaintiff and Hayter First National Real Estate in signing an agency agreement with the latter for the leasing out of the units in Newman. I do not consider that he has any relevant documents and I decline this request.
(h) Personalised Settlements. I will allow this request. According to documents at 96 to 98 of Mrs Templeman's affidavit, this firm acted for the first plaintiff on the purchase of 835 Beaufort Street, which was settled in August 1997 as I have said, a few months before the property was sold. The contract of sale for the purchase of that property was subject to finance so these documents may be relevant.
(i) Distinctive Property Settlements. In the contract of sale for the purchase of 835 Beaufort Street, Inglewood by the first plaintiff, which is found at p 99 and p 100 of Mrs Templeman's affidavit, Distinctive Property Settlements was appointed the agent to act for the purchaser. As I have said, it was a subject to finance contract, however, although this agent did some work towards settlement, the actual settlement of the purchase was done by Personalised Settlements. I will allow this request.
(k) Ray White Port Hedland. I do not regard the leasing out of the 13 units in Newman through this firm in August 1998 as relevant to the issues in this case and I decline this request.
"11.Missing part pages of the second plaintiff's 1998 diary, document 566 in part 1 of the first schedule of the plaintiffs' list of documents, for the dates 23 December 1998, 24 December 1998, 27 December 1998"
I accept Mrs Ortin's explanation inferentially that parts of her diary were torn out to write telephone messages and are now irretrievably lost. I therefore decline this request.
"15.Any documents relating to the proposed purchaser by Espanol Holdings Pty Ltd of lot 12 Beaconsfield Avenue, Midvale, including any documents relating conditions 5 and 7 of the contract for the purchase and any decision not to proceed to completion."
This is a duplication of item 7(i) and I therefore decline this request.
"16.All correspondence between Laurence Robert Shortland and the plaintiffs or their agents or representatives concerning the property at 835 Beaufort Street."
Mr Shortland signed a lease of the Beaufort Street property. I do not regard Mrs Ortin's ability to negotiate the lease as relevant to the issues in this case. I decline this request.
I will make orders accordingly.