Hoare v Spork

[1999] QSC 173

IN THE SUPREME COURT
OF QUEENSLAND

Before Justice Wilson

[Hoare v Spork]
  No. 641 of 1994

BETWEEN:

JOHN JOSEPH HOARE
  Plaintiff

AND:

MALCOLM ROBIN SPORK

Defendant

REASONS FOR JUDGMENT - WILSON J

Delivered the 28th day of July 1999

1. These are five applications by the defendant pursuant to O 40 r 38D of the Supreme Court Rules 1900 seeking determinations in relation to objections to produce documents referred to in Writs of Non-Party Discovery.

2. The plaintiff’s action is for damages for professional negligence. In March 1990 the defendant performed a vasectomy upon the plaintiff. Subsequently the plaintiff fathered a child who was born in February 1994. He has sued the defendant alleging failure to warn him of the risks that the operation might not be effective as a sterilization measure. He claims damages including the costs of rearing the child. In Further and Better Particulars dated 22 October 1996 he said:

   “Assuming an average expenditure of $350.00 per week from the date of birth until the age of 18 years provides a sum of $216,671.00 when discounted on the 5% Tables. Assuming a further average expenditure of $250.00 per week for a further 4 years to allow for further educational costs provides a sum of $47,266.00 when discounted on the 5% Tables.”

3. Writs of Non-Party Discovery were served on five respondents:

   (i)Horizons International Pty Ltd (trustee of the J J Hoare Property Trust);

   (ii)Kit Walker Investments Pty Ltd (trustee of the Latrobe Practice Trust);

   (iii)      Oakdevon Pty Ltd;

   (iv)M Hart, J Hoare and S Grant (trustees of the Cleary and Hoare Practice Trust);

   (v)M Hart (trustee of the Cleary and Hoare Office Trust).

4. The documents which Horizons International Pty Ltd is required to produce are as follows:

   “All documents in the possession power or custody of the company (either in its own capacity or in its capacity as trustee for any trust) relating to all moneys (whether capital or income) paid, disbursed, distributed, given or lent to the Plaintiff, JOHN JOSEPH HOARE, including but not limited to any trust deeds, minutes of meetings of trustees, directors or shareholders, loan agreements or documents evidencing a similar arrangement, loan payments or repayments, tax returns, profit and loss accounts, balance sheets, beneficiaries’ or shareholders’ loan accounts relating to any such moneys for the period from 1 July 1991 to 30 June 1998.”

   Those which Oakdevon Pty Ltd is required to produce are expressed in similar terms. Those which Kit Walker Investments Pty Ltd is required to produce are expressed in similar terms except that there is an express reference to the Latrobe Practice Trust Deed. Those which M Hart, J Hoare and S Grant are required to produce are similar except for express reference to moneys paid, etc to the plaintiff or to Kit Walker Investments Pty Ltd as trustee for the Latrobe Practice Trust and express reference to the Cleary and Hoare Practice Trust Deed.  Those which M Hart is required to produce are similar to those which the trustees of the Cleary and Hoare Practice Trust are required to produce except there is reference to the Cleary and Hoare Office Trust Deed.

5. The first three respondents have objected to production of the documents on the grounds that they cannot be satisfied that the documents are “relevant to any of the issues raised in the Statement of Claim” and that they are unable to be satisfied that the documents are “directly relevant to matters and issues between [the plaintiff] and [the defendant]”.  The respondents to the last two writs have not made any direct response.

6. The plaintiff is a solicitor and member of the firm Cleary Hoare. He has organized his affairs to minimize taxation obligations. The applicant defendant contends that the source and security of his income is an issue relevant to the damages claimed, and that the documents sought are relevant to that issue. Mr Webb of counsel who appeared for the plaintiff and for the respondents to the five Writs of Non-Party Discovery argued that the Writs of Non-Party Discovery amount to a fishing expedition: in his submission the relevant inquiry is the cost of raising the child and what is relevant is the availability of funds, but not their source.

7. The plaintiff has disclosed his personal tax returns for the years ended 30 June 1991-

   30 June 1997. They show a taxable income of nil. Those for the years ended 30 June 1994, 30 June 1995 and 30 June 1996 show distributions from partnerships and trusts and non primary production losses as follows:-

Year Ended	J J Hoare Property Trust	Oakdevon Pty Ltd	J J Hoare Family Trust	Non Primary Production Losses
30.6.94	$27,310	$10,636	$851	($593,419)
30.6.95	$32,084	($557) Share of capital gain $20,135	($599,748)
30.6.96	$29,389	($514,629)

1. In answer to Interrogatory No. 12 sworn on 18 November 1997 the plaintiff said:-

   “... that either income is available or capital distribution of trust funds so as to provide the Plaintiff with moneys for the benefit of his family in excess of $4,000.00 per week.”

   In his statement of loss and damage filed on 17 April 1998 he said that in the past he had spent between $10,250 and $17,750 per annum on the child the subject of this action and that he would in the future have to spend between $14,956 and $25,468 per annum on that child. From the trust tax returns which have been discovered it appears that:-

   1.the Latrobe Practice Trust is a beneficiary of the Cleary and Hoare Practice Trust (see Latrobe Practice Trust tax return for the year ended 30 June 1996);

   2.the Cleary and Hoare Office Trust is a beneficiary of the Latrobe Practice Trust (see Latrobe Practice Trust tax return for the year ended 30 June 1996);

   3.the J J Hoare Family Trust is a beneficiary of the J J Hoare Property Trust (see J J Hoare Property Trust Balance Sheet for the year ended 30 June 1992);

   4.as at 30 June 1996, the plaintiff owed the Latrobe Practice Trust $543,272 (approximately $200,000 more than he had owed that Trust as at 30 June 1995).

2. The applications were filed and heard while the Supreme Court Rules 1900 were still in force. Since then the Uniform Civil Procedure Rules have replaced the Supreme Court Rules.  Order 40 rule 38A of the Supreme Court Rules provided:

   “Writ of non-party discovery

   38AA party to a cause may, by writ of non-party discovery, require a person who is not a party to the cause, to produce to the party a document that -

   (a)relates to the matter in question in the cause; and

   (b)is in the person’s possession or control; and

   (c)the person could be required to produce at the trial of the matter.”

3. Under the Uniform Civil Procedure Rules, r 242 the document must be “directly relevant to an allegation in issue in the pleadings.” This mirrors the changed test for discovery inter partes introduced in O 35 of the Supreme Court Rules in 1994: no longer was the test relevance but rather direct relevance. This has been widely regarded as overcoming the train of inquiry test in the Peruvian Guano case (1882) 11 QBD 55.

4. The applications are to be determined under the old rules. By s 135 of the Supreme Court of Queensland Act 1991 the new rules apply to the next step or application in a pending proceeding. The express reference to the next step indicates that the new rules do not apply to a step taken under the old rules but incomplete by reason of the decision not having been handed down at the time of their repeal. While a party’s right to the production of documents satisfying the tests in SCR O 40 r 38A is a right of a procedural kind and as such not protected by s 20(1)(c) of the Acts Interpretation Act1954 (see Yrttiaho v Public Curator (Queensland)(1971) 125 CLR 228 at 243 per Gibbs J), it may be that the defendant had a right to have the Court determine each application in accordance with the law applicable when it was heard: cf Esber v The Commonwealth (1992) 174 CLR 430. It is not necessary for me finally to determine this since I am of the view that the objections to production should be overruled whichever test is applied.

5. A procedure for requiring the production of documents in the possession or control of a non-party was first introduced into the Supreme Court Rules in 1965 as O 35 r 28.   In 1993 that was replaced with the provisions of O 40 rr 38A-38F. However, there was only a slight change to the description of the documents which could be ordered to be produced. (Order 35 r 28 referred to “any document in his possession or power relating to any matter in question in the cause and which he could be required to produce at the trial.” cf O 40 r 38A as set out above.)  In a number of decisions of this court the documents which would have to be produced under this procedure were likened to those which would have to be produced pursuant to a subpoena duces  tecum. In Rossi Pty Ltd v Ballymore Tower Pty Ltd [1984] 2 Qd R 167 at 174-75 Master Lee QC said:

   “‘It is timely to repeat the remarks of Hoare J. in Wm. Collin & Sons Pty. Ltd. v. T. & T. Mining Corporation Pty. Ltd. [1971] Qd R 427 at p. 435:

   ‘O. 35, r. 28 was introduced to the Queensland Rules in December 1965. It introduced an entirely new procedure whereby documents in the possession of a stranger may be inspected. The Rule necessarily involved an infringement of the rights of third parties and for this reason care should always be taken to ensure that, as far as possible, these rights are infringed to no greater extent than is necessary to ensure the due conduct of the litigation. The concern of the Court to ensure that third parties are not unduly  harassed is indicated by such cases as Lee v. Angus (1866) L.R. 2 Eq. 59. The necessity to particularize documents in a subpoena or other like process has been adverted to in a number of cases’

   to which His Honour then referred.

   And at p. 436 His Honour said:

   ‘The existence of particular documents may sometimes be inferred but generally speaking it seems to me that an order for inspection of documents should only be made under O. 35, r. 28 if the existence of particular documents is established by evidence identifying them.’

   The reference that the existence of particular documents may sometimes

   be inferred is no doubt a reference to His Honour’s previous decision

   in Lisle v. Rasmussen [1971] QWN 3 where at p. 5 His Honour said:

   ‘It seems to me that the rule is intended primarily to apply to particular documents and certainly is not intended to provide for a general discovery as would be available as between parties to the action. However, it seems to me that if it can be shown that a document, which probably relates to any matter in question in the cause, is probably in existence and in the possession of a third party, even though the precise terms of the document are not known, nevertheless, the court may make an order for inspection under the Rules.’”

6. The plaintiff is claiming damages for the cost of rearing the child and that those damages should be quantified by reference to the particular social and economic status which he apparently now enjoys. Assuming such damages are recoverable (see the discussion in Fleming, The Law of Torts, 9th ed, LBC Information Services, Sydney, 1998 at pp 184-85), it will be for the Court to assess the likelihood of that level of child support continuing into the future.  In other words, the source and likely continued availability of the funds used for his family’s living expenses, and in particular for the support of the child, are relevant to the assessment of the damages. 

7. In my view the documents are sufficiently described in the Writs of Non-Party Discovery and they are relevant to the issue of damages. Were the test under the Uniform Civil Procedure Rules the applicable one, I would be of the view that the documents were directly relevant to that  issue. 

8. Accordingly on each Summons I overrule the objection which has been taken and order the production of the documents referred to in the schedule to the relevant Writ of Non-Party Discovery within 14 days of today. 

9. On each Summons I order the respondent non-party to pay the applicant defendant’s costs.

   IN THE SUPREME COURT
   OF QUEENSLAND

   Before Justice Wilson

   [Hoare v Spork]
     No. 641 of 1994

   BETWEEN:

   JOHN JOSEPH HOARE
     Plaintiff

   AND:

   MALCOLM ROBIN SPORK

   Defendant

   REASONS FOR JUDGMENT - WILSON J

   Delivered the 28th day of July 1999

   CATCHWORDS:     PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - PRODUCTION AND INSPECTION - GENERALLY - DOCUMENTS IN POSSESSION OF PERSON NOT A PARTY - writs of non-party discovery - action for damages for professional negligence for cost of rearing a child conceived after a vasectomy - documents relating to source and security of plaintiff’s income - whether relevant to the assessment of damages.

   Rossi Pty Ltd v Ballymore Tower Pty Ltd [1984] 2 Qd R 167, considered

   Supreme Court Rules 1900 O 40 rr 38A - 38F
   Uniform Civil Procedure Rules r 242

   STATUTES - ACTS OF PARLIAMENT - OPERATION AND EFFECT OF STATUTES - RETROSPECTIVE OPERATION - IN RESPECT OF PROCEDURE AND PRACTICE - applications filed and heard under Supreme Court Rules 1990 - Uniform Civil Procedure Rules replaced the Supreme Court Rules before determination made - new test for non-party discovery - whether new rules apply - party’s right to production of documents is procedural - whether a defendant has a right to have the Court determine application in accordance with the law applicable when it was heard.

   Esber v The Commonwealth (1992) 174 CLR 430, considered
   Yrttiaho v Public Curator (Queensland) (1971) 125 CLR 228, considered

   Acts Interpretation Act 1954 s 20(1)(c)
   Supreme Court of Queensland Act 1991 s 135
   Supreme Court Rules 1900 O 40 r 38A
   Uniform Civil Procedure Rules r 242

   Counsel:  Mr J Webb for the plaintiff and non-party respondents

   Mr D Tait for the defendant

   Solicitors:  Cleary Hoare for the plaintiff and non-party respondents

   Flower & Hart for the defendant

   Hearing date:               14 April 1999