Graziano v Graziano

[2006] SADC 120

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

GRAZIANO v GRAZIANO

[2006] SADC 120

Judgment of His Honour Judge Boylan

29 September 2006

PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - ORDERS FOR FURTHER AND BETTER DISCOVERY

Appeal against order of District Court Master - Master ordered defendant file and serve a further list of documents with particular regard to financial documents, including primary source documents of a partnership and a group of companies - whether Master erred in so doing.

Held:  Appeal allowed

GRAZIANO v GRAZIANO
[2006] SADC 120

1. Bruno and Antonio Graziano are brothers.  They are also business partners and they share interests in a number of companies.  They are at war. 

2. At the end of 1998, Bruno Graziano became totally incapacitated for the work which he had been doing in the partnership business.  He claimed on a disability insurance policy.  The insurance company met the claim and paid $500,000 into a bank account.  The money is still there.  Antonio will not sign a release for the payment of the money to his brother. 

3. In his statement of claim, Bruno seeks a declaration that he is entitled to the insurance money.  In his defence, Antonio claims that the money belongs to the partnership.  He also claims that he agreed with his brother that the whole of the insurance money would be paid to Bruno upon Bruno’s transferring his interest in the partnership and the various companies to Antonio.   In his amended defence, Antonio asks for orders that the terms of the agreement be enforced.  Bruno denies that there ever was any agreement. 

4. There is now an argument about discovery. 

5. A Master of the court made various orders, including this one:

   “I order that the defendant file and serve a further list of documents, verified on oath, in the categories identified in these reasons and in particular all financial, tax and banking information, including primary source documents, of the partnership and of the group companies HBS International Pty Ltd, HPS Pty Ltd Transport Pty Ltd and Quintile Pty Ltd including agreements between the partnership and group companies and their bankers.”

   Antonio has appealed against those parts of that order which require him to discover company documents and primary source documents of the partnership.  He says that the order is too wide. 

6. This appeal is by way of re-hearing.  I am entitled to exercise my own discretion.  I have come to the conclusion that the order requiring Antonio to discover the company documents and primary source documents of the partnership is too wide. 

7. Bruno Graziano’s argument is that, without those documents, he will be unable properly to prepare his case for trial.  He will be unable to ascertain if, at relevant times, Antonio has acted in a way inconsistent with the asserted agreement.  That is,  he argues that the documents might be relevant. 

8. There is a serious obstacle to that argument.  Rule 58A.03 requires that parties discover only the documents which are directly relevant to any issue arising on the pleadings.  The issues arising on the amended pleadings in this action, are:

   (1)    Whether Bruno is entitled to the insurance money, and

   (2)    Whether Bruno and Antonio made the agreement which Antonio asserts.

   Primary source documents – cart notes, for example – are not directly relevant to either of those issues.  Some documents of the companies may be directly relevant but only because they are also relevant documents of the partnership.  The plaintiff has conceded as much and does not object to discovering such documents.

9. I mentioned “amended pleadings”.  Since I heard submissions in this matter, Antonio Graziano has filed an amended defence and counterclaim (FDN 53).  If ever there may have been force in Bruno Graziano’s argument based on the counterclaim, it has disappeared with the amendment. 

10. I record that I admitted the affidavit in appeal books 3 and 4 but have not been assisted by it.

11. I have not been asked to exercise my discretion under Rule 58A.04 to order that Mr Antonio Graziano discovered documents only indirectly relevant.  Had I been asked, I would not have been minded to do so. 

12. I allow the appeal.  I set aside the order of the Master which I have quoted above.  In its place, I substitute an order that the defendant make further discovery of any documents not discovered in his possession, power, custody or control evidencing or otherwise directly relevant to the matters and transactions pleaded in paragraphs 33-35 of the Statement of Claim and paragraphs 2, 6.3, 7.3, 11.1, 11.3, 11.4, 13, 14, 15, 31, 33-35, 42, 44.1, 45.1-45.6 of the Amended Defence and Counterclaim.