Gwilliam v Fedec
[2021] WASC 62
•8 MARCH 2021
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: GWILLIAM -v- FEDEC [2021] WASC 62
CORAM: REGISTRAR WHITBY
HEARD: 10 FEBRUARY 2021
DELIVERED : 17 FEBRUARY 2021
PUBLISHED : 8 MARCH 2021
FILE NO/S: CIV 2795 of 2019
BETWEEN: DAVID EDWARD GWILLIAM
Plaintiff
AND
LOXLEY KERRI FEDEC
First Defendant
NEW IMAGE ENTERPRISES PTY LTD as trustee for THE R & L FEDEC FAMILY TRUST
Second Defendant
Catchwords:
Discovery - Application for further and better discovery - Documents no longer in possession, custody or power - Whether the defendants complied with the requirement to depose to documents no longer in their possession
Discovery - Application for further and better discovery - Redaction - Whether defendants are entitled to redact documents - Whether redaction achieves the objectives in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA)
Discovery - Application for further and better discovery - Relevance of documents - Whether documents relating to 'meat' are relevant to the issue of the number of animals on the farm
Discovery - Application for further and better discovery - Place of inspection
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4A, r 4B, O 26 r 1, r 6, sch 2, Form 17, pt 2A, pt 2B
Result:
Defendants provide discovery of documents no longer in their possession, custody or control and documents relating to sale of meat
Defendants provide inspection of unredacted documents at the offices of the solicitors for the plaintiff
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr D M Stone |
| First Defendant | : | Mr P G Brunner |
| Second Defendant | : | Mr P G Brunner |
Solicitors:
| Plaintiff | : | Albany Legal Pty Ltd |
| First Defendant | : | Bailiwick Legal |
| Second Defendant | : | Bailiwick Legal |
Case(s) referred to in decision(s):
Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3] [2009] WASC 67
Perpetual Trustees Company Ltd v Burniston [2012] WASC 26
REGISTRAR WHITBY:
This is the plaintiff's application by minute of proposed orders dated 2 December 2020 (the application) to compel the defendants to provide discovery on oath of the following classes of documents:
(a)documents relating to the sale of sheep, lambs or meat by the defendants (or either of the defendants) between 6 September 2016 and the date of final disposal of the sheep flock held by the second defendant (New Image) or the first defendant (Mrs Fedec) (the disposal date);
(b)documents relating to lamb births in the sheep flock held by New Image and/or Mrs Fedec between 6 September 2016 and the disposal date;
(c)documents relating to deaths and disposals of sheep and lambs between 6 September 2016 and the disposal date in the sheep flock held by New Image and/or Mrs Fedec;
(d)documents relating to the stock of sheep and lambs on hand in the sheep flock held by New Image and/or Mrs Fedec as at 6 September 2016;
(e)National Vendor Declaration and Waybill books containing entries dated from 6 September 2016 to the disposal date; and
(f)documents relating to the loan(s) referred to at [9.5A] of the amended defence.
The plaintiff relies upon the affidavit of David Edward Gwilliam sworn 1 December 2020 (Gwilliam affidavit) and submissions in support of the application dated 18 January 2021.
The defendants rely upon the affidavit of Loxley Kerri Fedec sworn on 22 December 2020 (Fedec affidavit) and submissions in response to the application dated 2 February 2021.
Background
David Gwilliam (the plaintiff) is the son of Mrs Loxley Fedec (the first defendant) and Mr Richard Fedec. Mr Fedec died on 7 February 2016.
New Image Enterprises Pty Ltd (New Image) as trustee for the R & L Fedec Family Trust (the second defendant) carried on the business of stud sheep breeders and farmers from 262 Surrey Down Road, Porongurup (the farm).
The directors of New Image were as follows:
(a) since incorporation to 7 February 2016, Mr Fedec and the first defendant;
(b) from 7 February 2016 to 6 September 2016, the first defendant;
(c) from 6 September 2016 to 1 March 2018, the plaintiff and the first defendant;
(d) from 1 March 2018 to 19 April 2018, the first defendant[1]; and
(e) from 19 April 2018 to present, the first defendant and Ms Karrina Smallman (the first defendant’s daughter and the plaintiff’s sister).
[1] While the plaintiff ceased being a director of New Image on 1 March 2018, the Australian Securities and Investment Commission record reflects his removal as director as at 19 April 2018.
The plaintiff says that he worked on the farm for the period 5 April 2014 to 15 February 2018 without monetary payment, save for the amount of $11,300, in return for a promise made by the first defendant and the second defendant on 16 September 2016 that they would transfer one half of the sheep flock, including lambs born after 16 September 2016, to the plaintiff.[2]
[2] Amended Statement of Claim dated 16 October 2020 [7]-[12].
The plaintiff claims, inter alia, that he is entitled to one half of the value of the second defendant’s sheep flock, including one half of the value of the progeny of those sheep, and any income from those sheep as at 15 February 2018.[3]
[3] Amended Statement of Claim dated 16 October 2020 [16.2], [16.3] and [16.5].
The plaintiff submits that the documents sought by way of particular discovery relate to the number of sheep in the flock as at 16 September 2016 and the death or disposal of sheep from that date to the date of final disposal, issues which are central to the value of the sheep flock as at 15 February 2018.
Further and better discovery – Applicable legal principles
Order 26 r 6 of the Rules of the Supreme Court 1971 (WA) (RSC) provides:
6. Order for information as to particular documents
(1) Subject to rule 7 the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the application or any class of document specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it.
(2) An order may be made against a party under this rule notwithstanding that he may already have made or been required to make a list of documents or affidavit under rule 1 or rule 7.
(3) An application under this rule must be supported by an affidavit stating the belief of the deponent that the party from whom discovery is sought under this rule has, or at some time had, in his possession, custody or power the document or class of document specified or described in the application and that it relates to one or more of the matters in question in the cause or matter.
The legal principles applicable to an application for further and better discovery pursuant to O 26 r 6 RSC are articulated by Edelman J in Perpetual Trustees Company Ltd v Burniston[4]:
[4] Perpetual Trustees Company Ltd v Burniston [2012] WASC 26
[29]… there are … three requirements to satisfy:
(1) the court has reasonable grounds for being fairly certain that the documents sought (or class of documents sought) are in existence;
(2) those documents sought are relevant; and
(3) those documents ought to have been disclosed.
[30] The reference in (2) to relevant documents is, of course, a reference to documents which may either (a) advance a party's case or damage his or her opponent's case or (b) lead to a train of inquiry that would either advance a party's case or damage his or her opponent's case: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, 63 (Brett LJ); Mulley & Marney v Manifold [1959] HCA 23; (1959) 103 CLR 341, 345 (Menzies J).
…
[32] The reference in (3) to documents … which ought to have been disclosed requires reasonable grounds to believe that those documents are in the possession, custody or power of the party against whom discovery is sought. In O 26 r 6 it is sufficient to show that there are reasonable grounds to believe that those documents were once in the possession, custody or power of the other party.
Discovery provided by New Image and Mrs Fedec
The defendants have filed the following affidavits of discovery:
(a)affidavit of Loxley Kerri Fedec sworn 29 March 2020 (First Discovery Affidavit); and
(b)affidavit of Loxley Kerri Fedec sworn 2 December 2020 (Second Discovery Affidavit).
Issues
In the Fedec Affidavit,[5] the second defendant deposes that:
(a)In reference to proposed Order 1(1), being documents relating to sales of sheep lambs or meat between 6 September 2016 and the date of final disposal of the flock – that all such documents relating to sheep and lambs have been disclosed at documents 229, 230, 234, 238 to 241, 243, 245, 247, 249, 250 to 254, 256 to 273, 275, 276, 279 and 280.
(b)In reference to proposed Order 1(2), being lamb births in the New Image sheep flock between 6 September 2016 and the disposal date – that all such documents have been disclosed at documents 188, 244, 248, 255 and 277.
(c)In reference to proposed Order 1(3), being sheep and lamb deaths between 6 September 2016 and the disposal date – that all such documents have been disclosed at documents 187 and 274.
(d)In reference to proposed Order 1(4), being the stock on hand of sheep and lambs held by Mrs Fedec and /or New Image (sic) at 6 September 2016 – that all such documents have been disclosed at documents 246.
(e)In reference to proposed Order 1(5), being waybill books – see paragraphs 23 to 26 [of the Second Discovery Affidavit].
(f)In reference to proposed Order 1(6), being the loans referred to at paragraph 9.5A of the Amended Defence – that all such documents have been disclosed at documents 242 and 280.
[5] Fedec Affidavit [28].
The plaintiff accepts that, by reason of these matters deposed to in the Fedec Affidavit, the defendants have confirmed that they do not have any further documents in their possession, custody or control, not already discovered, which are the subject of this application. While counsel for the plaintiff submits that the affidavit does not strictly comply with O 26 r 6 RSC, he accepts that it is sufficient to enable cross-examination of Mrs Fedec at trial.[6] Counsel for the plaintiff submits that it is incumbent upon the defendants to provide a further affidavit of discovery which complies with O 26 r 6 and cannot just rely upon the matters deposed to in [28] of the Fedec Affidavit.[7]
[6] ts 13 (10/02/2021).
[7] ts 13 (10/02/2021)
Given that the plaintiff is entitled to cross‑examine Mrs Fedec on the matters deposed to in [28] of the Fedec affidavit, I do not consider that there is any practical necessity for the defendants to depose to the same matters in an additional affidavit. That it not to say that the defendants should not have deposed to those matters in the First Discovery Affidavit – they ought to have done so. It is simply to say that, not having done so in the Fedec Affidavit, they are not required to do so again.
Given the matters deposed to in [28] of the Fedec Affidavit, the following issues remain to be determined upon the application:
(a)whether the defendants are required, pursuant to O 26 r 6 RSC, to depose to particular documents which are no longer in their possession, custody or control;
(b)whether the defendants are entitled to redact each of the waybill books, New Image's general ledger and National Australia Bank (NAB) account statements on the grounds of relevance;
(c)whether documents which relate to the sale of meat by the second defendant between 6 September 2016 and the disposal date should be discovered by the defendants; and
(d)where inspection of the defendants' discovered documents should take place.
Each of these issues is considered in turn below.
Documents no longer in the defendants' possession
Order 26 r 1 RSC provides:
Discovery without order
(1) Any party may give notice in writing to any other party in a cause or matter requiring him to give discovery of all documents which are or have been in his possession, custody or power relating to any matter in question therein.
…
(3) The statements in the Form No 17 (list of documents) filed by a party giving discovery of documents must -
(a) be verified by an affidavit of a person listed in rule 4(4);
Supreme Court Form 17 provides at pt 2A and pt 2B[8]:
List of documents - Part 2A
The documents relating to the matters in question in this action that were, but no longer are, in the possession, custody or power of the [party giving discovery] are as follows –
List of documents – Part 2B
For each document listed in Part 2A, the following states –
•the date on which it was last in the possession, custody or power of the [party giving discovery]; and
•what has become of it; and
•who currently has possession or custody of or power over it.
[8] See RSC Sch 2
The plaintiff submits that neither the First Discovery Affidavit, the Second Discovery Affidavit nor the Fedec Affidavit comply with the requirement to depose to documents which were once, but are no longer, in the defendants' possession and what has become of those documents.[9]
[9] Plaintiff’s submissions on application dated 18 January 2021 [5]
The plaintiff submits that there are clearly documents which fall within this category that ought to have been deposed to in pt 2A and pt B of Form 17 by the defendants.[10]
[10] ts 10 (10/02/2021)
By letter dated 18 November 2020 (the November Letter), the solicitors for the defendants advised the solicitors for the plaintiff:[11]
Your client's assumption that source documents must exist for each of the compilations is not correct.
Where source documents exist for the compilation documents referred to, these are identified below:
243 – 248, 255 and 277
275/278 – 245, 247, 249, 250, 251, 252, 253, 254, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 272, 276
We also refer you to Part 2A of the [Second Discovery Affidavit]. As noted in this … Affidavit, there are a variety of documents that were, but no longer are, in our clients' possession, custody or control as they have been (inadvertently) lost, discarded or destroyed. We are instructed that included in this category are documents such as: (emphasis added)
(a)yard sheets, being a document containing a list of animals by tag number which were printed from our clients' business software and used during the course of regular yard runs to record ‘deaths and disposals’ and other information. Such lists were discarded/destroyed once the information was input into the business software.
We are otherwise instructed that no further source documents exist. All source documents that exist have been discovered in [the First Discovery Affidavit and the Second Discovery Affidavit] or form part of the documents referred to in Part 2A of the [First Discovery Affidavit].
[11] Gwilliam Affidavit pages 170 - 171.
The November Letter clearly indicates that source documents, used in the compilation of discovered documents, did once exist but have been inadvertently lost, discarded or destroyed. The use of the words ‘such as’ in the November Letter connote that there are source documents, in addition to the yard sheets, which fall into this category.
In the First Discovery Affidavit, the documents listed in pt 2A are as follows:[12]
1.The originals of all correspondence having been written by the defendants or the defendants' solicitors, agents or representatives listed in Part 1A.
2.The originals of pleadings or other documents filed in the Court by the defendants' solicitors which were last in its possession on or about the date of such documents being filed.
3.Drafts of documents which were discarded or destroyed when no longer thought to be required.
4.Documents that have been inadvertently lost, discarded or destroyed by the defendants which can no longer be located or practically located. (emphasis added)
[12] First Discovery Affidavit 15.
It is not sufficient for the defendants to simply include a generic description of the documents as it has in pt 2A of Form 17. For example, the yard sheets referred to in the November Letter should be specifically listed therein. Similarly, all other source documents which have been lost, discarded or destroyed must be individually described and listed in pt 2A. Given that other discovered documents have been compiled from these lost source documents, it must be possible for the defendants to identify the nature of those source documents, making it possible for the defendants to describe those documents with particularity in pt 2A.
I find that the defendants are required, pursuant to O 26 r 6 RSC, to depose to particular documents which are no longer in their possession, custody or control by including a specific description of each of those class of documents in pt 2A of Form 17.
Redaction
In Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3],[13] Martin CJ, after considering the approaches to redaction of discovered documents by courts in various jurisdictions, said:
In summary, the practice should be that while it is open to a party providing inspection of documents to mask a document provided, in the event of contention, that party will carry the onus of satisfying the court that masking the document was appropriate. An affidavit of that party or its solicitor will not be regarded by the court as conclusive, and in cases of doubt, the court may itself inspect the document in its entirety in order to evaluate the objection. In making its determination, the court will not be confined to an assessment of the relevance of the portion of the document masked, but will take into account broader considerations of the kind enunciated in O 1 r 4A and r 4B of the Rules of the Supreme Court, and will adopt the course which is best designed to achieve those objectives and the attainment of justice between the parties.
[13] Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [No 3] [2009] WASC 67 [38].
As I was entitled to, I required the defendants to make the waybill books, the general ledger and the NAB account balance statements available to me for inspection. The defendants delivered those unredacted documents to the court on 12 February 2021.
The starting point is that, the plaintiff having exercised his right to object to the redaction of those documents, the defendants have the onus of satisfying the court that redaction was appropriate and is the best method to achieve the objectives identified in O 1 r 4A and r 4B RSC and attain justice between the parties.
The defendants rely upon the Fedec affidavit and the documents themselves in order to discharge that onus.
The Fedec affidavit relevantly deposes that:
24. Blank national vendor and waybill forms comprise 3 self‑carbonated sheets of differing colour, with 20 blank forms being bound together into a type of booklet form. The forms are filled out whenever stock is transported off the farm. I do retain the vendor's copy of the filled out forms in the booklet.
25. I have disclosed all filled out national vendor and waybill forms for the period 1 September 2016 onwards that are relevant to the proceedings …
26. Any other national vendor and waybill forms contained in the booklets are not relevant to the proceedings or are blank, that is have not yet been used …
…
30. My solicitors have informed the plaintiff, on my instruction, that [the general ledger (document 273) and the NAB account balance summary (document 280)] have been redacted to cover data that is not relevant to these proceedings and which is confidential to the defendants.
I find that the each of these documents ought be disclosed without redaction for the following reasons:
(a)the Fedec affidavit does nothing more than assert irrelevance and confidentiality. The basis on which the defendants conclude that the redacted material in each document is irrelevant to the matters in issue in the proceedings is not clear from the terms of the Fedec affidavit;
(b)the Fedec affidavit does depose that ‘[t]he forms are filled out whenever stock is transported off the farm’[14] which itself suggests that all of the bills in the waybook are relevant to the issue of the number of sheep flock on the farm as at 15 February 2018;
(c)while it may not be the case that every time an animal moves off the farm a waybill is created[15], every time a waybill is created it relates an animal leaving the farm;
(d)it is not clear from the general ledger and the NAB account balance statements themselves that those documents are irrelevant to matters in issue in the proceedings; and
(e)the plaintiff was a director of the second defendant on the dates contained in the general ledger and the NAB account balance summary. It is difficult to see how the defendants can assert confidentiality over documents which a director of the second defendant was entitled to inspect.
[14] Fedec affidavit [24]
[15] ts 27 (10/2/2021).
I find that the defendants have not discharged the onus of satisfying the court that redaction of any or all of the waybill books, the general ledger or the NAB account balance statements was appropriate and was the best method to achieve the objectives identified in O 1 r 4A and r 4B RSC and attain justice between the parties.
Therefore, the defendants are required to make the unredacted originals of the waybill books, the general ledger and the NAB account balance statements available to the plaintiff for inspection.
Relevance of documents relating to sale of 'meat'
Whether or not documents which relate to the sale of meat by New Image between 6 September 2016 and the disposal date should be discovered by the defendants depends upon whether these documents are relevant to a matter in issue.
The plaintiff pleads, at par 12 of the Amended Statement of Claim dated 16 October 2020, that:
From 6th September 2016 until 15th February 2018 in reliance on the acknowledgment and agreements referred to at paragraphs 10.4, 10.5 and 10.6, and the Second promises and in the expectation he would receive the sheep and lambs referred to therein, and or the proceeds of sale of those animals, the Plaintiff performed the work referred to at paragraphs 10.1 and 10.2 without monetary payment. (emphasis added)
The defendants submit that the pleadings contain no reference to 'meat', only to sheep and lamb. The statement of claim would have to be amended to include a reference to meat, the defendants say, in order for such documents to be relevant.
The plaintiff submits that documents which evidence sale of meat during the relevant period are relevant to the amount of proceeds of sale of sheep and lambs and therefore, must be discovered.
It is not in dispute that New Image sold meat under the trade name 'Chester Pass Dorpers'.[16] The 'meat' sold is part of a lamb or sheep which has been slaughtered.
[16] Gwilliam Affidavit page 157.
For the purposes of this application, it is important to distinguish between what issues are raised in the pleadings and what documents relate to those issues. The principles enunciated in Perpetual Trustees Company Limited v Burniston establish that the latter test is much broader and includes documents which may either (a) advance a party's case or damage his or her opponent's case; or (b) lead to a train of inquiry that would either advance a party's case or damage his or her opponent's case.
I accept that documents evidencing the sale of meat may lead to a train of enquiry that would advance the plaintiff’s case that there are sheep or lamb that have been slaughtered by defendants, the proceeds of which the plaintiff claims.
Documents relating to sale of 'meat' should be discovered by the defendants.
Place of inspection
Given that Mrs Fedec is resident in the Porongurups, approximately 45 km north of Albany and that the solicitors for the plaintiff has its offices in Albany, I consider the most convenient method of inspection of original documents is for the same to be delivered to the offices of the solicitors the plaintiff. Any reasonable costs of the defendants associated with providing inspection are to be paid by the plaintiff.
Orders
I propose making the following orders:
1.The defendants provide discovery of the documents which depose to the categories of documents listed in the application which are no longer in their possession, custody or control in accordance with O 26 r 6 RSC;
2.The defendants provide discovery of all documents relating to the sale of meat by the second defendant for the period between 6 September 2016 and the disposal date;
3.The defendants provide inspection of the unredacted originals of the waybill books, the general ledger and the NAB account balance statements to the plaintiff at the offices of the solicitors for the plaintiff in Albany.
The parties are required to confer in relation to final orders and as to costs of the application. If orders cannot be agreed within 7 days of these reasons, then each party is to file a minute of proposed orders.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TG
Court Officer
8 MARCH 2021
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