Isaco Pty Ltd v Toni Barbara Davey

[2003] NSWSC 1262

CITATION:	Isaco Pty Ltd & Ors v. Toni Barbara Davey [2003] NSWSC 1262
HEARING DATE(S):	19 December, 2003
JUDGMENT DATE:	19 December 2003
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
DECISION:	Defendant's application dismissed.
CATCHWORDS:	NOTICE TO PRODUCE - Plaintiffs serve Notice to Produce - Defendant's solicitors advise Plaintiffs' solicitors that Defendant has no further documents to produce and requests that Notice to Produce be withdrawn - Plaintiffs require formal answer to Notice in Court - Defendant moves to set aside Notice. - HELD: Plaintiffs entitled to a proper formal answer to Notice - Defendant not entitled to have it set aside.
LEGISLATION CITED:	Corporations Act 2001 (Cth) - s.459G, s.459H
PARTIES :	Isaco Pty Ltd - First Plaintiff Maskcode Pty Ltd - Second Plaintiff Pepamall Pty Ltd - Third Plaintiff Setrave Pty Ltd - Fourth Plaintiff Sterling Estates Corporation Pty Ltd - Fifth Plaintiff Sterling Estates Development Corporation Pty Ltd - Sixth Plaintiff Sterling Estates (SA) Pty Ltd - Seventh Plaintiff Sterling Guardian Pty Ltd - Eighth Plaintiff Yuft Pty Ltd - Ninth Plaintiff Toni Barbara Davey - Defendant
FILE NUMBER(S):	SC 5109/03
COUNSEL:	M. Cashion SC - Plaintiffs M.J. Cohen - Defendant
SOLICITORS:	Nash O'Neill Tomko - Plaintiffs Watson Mangione - Defendant

JUDGMENT – Ex tempore

1 This is an interlocutory application by the Defendant to set aside a Notice to Produce dated 28 October 2003 served by the Plaintiffs. 2 The dispute arises in the following way. The Defendant has served a notice of demand on the Plaintiffs claiming a debt due under a deed entered into between the Plaintiffs and the deceased husband of the Defendant. The Defendant is the executor of the estate of her deceased husband. 3 The Plaintiffs commenced proceedings to set aside the statutory demand. Affidavits were filed in accordance with the requirements of s.459G and s.459H of the Corporations Act 2001 (Cth) setting out the basis upon which the Plaintiffs say the debt the subject of the demand is genuinely disputed. 4 In short, the Plaintiffs say that the deceased, Mr Davey, who was an accountant and financial officer and a director of several of the Plaintiffs and who had various financial dealings with the Plaintiffs over a number of years, misled the Plaintiffs as to the state of the accounts as between himself and the Plaintiffs in the course of negotiations which led to the execution by the Plaintiffs of the deed of settlement. 5 The Plaintiffs say that by reason of that deception they are entitled to set aside the deed which would, if not set aside, effect a compromise of all claims between both parties. The Plaintiffs say that if the deed is set aside then there is, in fact, a balance of indebtedness owing by Mr Davey's estate to them and not the other way around. 6 The Notice to Produce seeks various financial records, principally bank statements and other documents relating to all payments made by certain persons on behalf of the Plaintiffs. The documents are clearly sought in order to establish a balance of indebtedness in favour of the Plaintiffs as against Mr Davey in furtherance of the allegations said to constitute the genuine dispute between the parties. 7 The Defendant resists the production of the documents and seeks to set aside the Notice to Produce essentially upon two grounds. Firstly, she says that the seeking of the documents is entirely unnecessary in order to substantiate the allegation of a genuine dispute which the Plaintiffs raise and, secondly, she says that in any event the scope of the Notice to Produce is too wide and complains that it would be oppressive on her in the circumstances in which she is placed. 8 I have sought to elicit from Counsel for the Defendant the scope of the Defendant's attack on the assertion by the Plaintiffs that the debt is genuinely disputed. I have, in particular, asked whether it will be said that insufficient documentary evidence has been adduced by the Plaintiffs in support of their allegation that the indebtedness prior to the execution of the deed was an indebtedness from Mr Davey in favour of the Plaintiffs, rather than the other way around. 9 Without disrespect to Counsel for the Defendant, who is clearly bound by the instructions which he is receiving, I have not been at all illuminated as to what it is that the Defendant wishes to say in that respect. It seems to me that the Defendant wishes to reserve her position to make such a submission. That is the best I can glean from what I have been told about the nature of the defence in that respect. 10 Much time has been expended by the Defendant in explaining to me why it is that the terms of the deed itself defeat the assertion by the Plaintiffs that the dispute is genuine. However, that submission does not seem to me to deal with the core of the dispute which is raised by the Plaintiffs, namely, that there is a basis upon which the whole of the deed may be set aside. 11 There seems to me to be a deal of game playing and shadow boxing on both sides of the record on this application. On the one hand, Counsel for the Defendant says that the Plaintiffs have all of the evidence which they need for the purposes of their application to set aside the statutory demand and therefore the documents sought on the Notice to Produce are unnecessary and constitute a fishing expedition. On the other hand, he reserves his right to make the submission in the Plaintiffs' application to set aside the statutory demand that the evidence is deficient in some respects. 12 In view of the assertions by the Defendant that the Plaintiffs have all the evidence they need in order to deal with the application to set aside the statutory demand, I invited the Defendant to inform me whether she wished the application to set aside the statutory demand to be dealt with by me now. The Defendant, through her Counsel, did not take up that invitation. I should say that that, amongst other things, has caused me to doubt the utility of the exercise in which we are now engaged. 13 It seems to me in those circumstances that I should allow the production of the documents sought, unless I am satisfied that producing the documents would be unduly oppressive to the Defendant in the circumstances in which she is placed. The only evidence which is adduced in that respect is evidence from the solicitor for the Defendant. The gist of that evidence is that contained in paragraph 33 of Mr Rose's affidavit. The Defendant says, according to Mr Rose, that her late husband has produced to the Plaintiffs' solicitors several bundles of documents which would come within the scope of the Notice to Produce. Mrs Davey says that, after having conducted a search, she is not aware of having in her possession, any further documents which would comply with the Notice to Produce. Mrs Davey says she does not have any knowledge, information or belief as to where any further documents would be located. 14 In those circumstances, it seems to me that, if that evidence is accepted, a very simple answer to the Notice to Produce is already available to the Defendant. She says that she is not aware of any further documents. She does not know where to search for any further documents and all documents of which she is aware which have come within the scope of the Notice to Produce have been produced already to the Plaintiffs' solicitors. 15 Why, in those circumstances, she is not content with that answer to the Notice to Produce and seeks to set it aside is not clear to me. It seems to me to be another illustration of the games which are apparently being played by the parties in these proceedings. 16 I decline in those circumstances to set aside the Notice to Produce. If it is found later on that due steps have not been taken to produce documents in accordance with that Notice, then obvious consequences will flow. The application is dismissed. 17 The Plaintiffs seek an order that the Defendant pay the costs of the Defendant's application to set aside the Notice to Produce. Mr Cohen resists that order. He says that the Defendant has made known through correspondence to the Plaintiffs' solicitors that the Defendant, in effect, has no further document to produce and does not know where any further documents might be located and therefore, the Notice to Produce should have been withdrawn. Because it was not withdrawn, Mr Cohen says it was necessary to set it aside. I do not agree. 18 The Plaintiffs, having been served a Notice to Produce, were entitled to a formal and binding response to that Notice to Produce. They need not content themselves with informal assurances that the Notice to Produce had already been complied with. If the Defendant had appeared in answer to the Notice and had stated to the Court that there were no documents to produce, and if it had been later found that the Defendant had not complied with her obligations under the Rules to search for and produce documents in accordance with the Notice, then consequences may well have flowed of which the Plaintiffs could take formal advantage. 19 It seems to me that the proper course for the Defendant, having made known its position, was to appear when the Notice to Produce was called and state the matters which are set out in paragraph 33 of Mr Rose's affidavit. However, rather than doing that, the Defendant took out this interlocutory process to set aside the Notice to Produce. That was not the proper course. It failed. The Defendant must pay the costs of that application.
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Last Modified: 02/19/2004