Jonco Holdings Pty Ltd v Ignoble Pty Ltd

[2001] QDC 74

DISTRICT COURT OF QUEENSLAND

CITATION:

Jonco Holdings Pty Ltd v Ignoble Pty Ltd & Ors [2001] QDC 074

PARTIES:

JONCO HOLDINGS PTY LTD (FORMERLY KNOWN AS SAM COCO PTY LTD)
(ACN 003 474 799)
Plaintiff
-v-
IGNOBLE PTY LTD
(ACN 064 772 096)
First Defendant
And
RAAVI YADAV AND PING YADAV
Second Defendants

FILE NO/S:

1788 of 1997

DIVISION:

Civil jurisdiction

PROCEEDING:

Chamber application

ORIGINATING COURT:

Brisbane

DELIVERED ON:

30 April 2001

DELIVERED AT:

Brisbane

HEARING DATE:

30 April 2001

JUDGE:

Judge Forde

ORDER:

1.   ORDER IN TERMS OF PARAGRAPHS 1 AND 2 OF THE APPLICATION FILED 20 APRIL 2001 BY THE PLAINTIFF FOR FURTHER AND BETTER    PARTICULARS.  IT IS ORDERED THAT THE DEFENDANTS PAY THE COSTS OF THE PLAINTIFF’S APPLICATION.

2.   APPLICATION BY DEFENDANTS FOR SECURITY FOR COSTS IS REFUSED AND IT IS ORDERED THAT THE COSTS OF THIS APPLICATION BE THE PLAINTIFF’S COSTS IN THE CAUSE.

3.   APPLICATION FOR FURTHER  DISCOVERY BY THE DEFENDANT PURSUANT TO THE ORDER OF HER HONOUR JUDGE WOLFE MADE ON 17 NOVEMBER 1998 IS REFUSED.  IT IS ORDERED THAT THE COSTS OF THIS APPLICATION BE THE PLAINTIFF’S COSTS IN THE CAUSE.

CATCHWORDS:

Security for costs – Corporations Law  - Uniform Civil Procedure Rules (UCPR) R 211 – Discovery.

COUNSEL:

Mr P Hackett for the Plaintiff
Mr C Toogood for the Defendants

SOLICITORS:

Colwell Wright for the Plaintiff
Chris Toogood Lawyers for the Defendants

1. There are three applications before the Court.  The first I shall deal with is the application by the plaintiff for orders that the defendants provide further and better particulars.  Mr Toogood for the defence has said that it would be difficult before discovery is made to provide those particulars.  He anticipated amendments to the defence.  I am dealing with the present pleadings not with some possible pleading which may arise in the future and which has not been put before me.

1. There seems, therefore, no basis for – nor was any argument put before me of any substance to oppose the orders of the application for further and better particulars, the amended defence and I order in terms of paragraphs 1 and 2 of the application filed on 20 April 2001.

1. The application by the defendants for security for costs is based upon the main proposition that the company was put into provisional liquidation and that that is some proof of its present inability to meet debts as they fall due.  Currently, Mr McPhee, the General Manager of the company swears that the plaintiff is solvent.  The onus is upon the applicant to prove otherwise.

1. A balance sheet before the Court of the trust CELA Pty Ltd and Exhibit 5, the letter from Westpac Bank, shows a net equity of which the first defendant is entitled to its share.  The net equity is 1.6 million.

1. There is no evidence of any other liabilities.  The letter from Westpac shows that the debt, which the property in Toowoomba secures, is 1.2 million.  The value of the property is 3.6 million.

1. It was suggested by Mr Toogood that the plaintiff was not trading but there is no evidence of that before me.  The request by him for assets and liabilities, although not answered, does not establish the proposition.  The prerequisite for security of costs requires that the Court be satisfied that the plaintiff will not be able to pay the defendants’ costs if ordered and discretionary matters include the question of whether the plaintiff is effectively in the position of the defendant as a result of the counter-claim.  That is the position here.

1. The plaintiff’s claim, in effect, is for moneys due and owing for goods sold and delivered. The defendants set off some funds for overcharging and then counterclaim in relation to other matters. The main issue in the case will be in relation to that counterclaim as well as, of course, the overcharging, however that may be the subject of a counterclaim and the plaintiff is effectively for those purposes in the position of the defendant.

1. The plaintiff company was released from provisional liquidation in September of 2000 having paid substantial sums to other parties, including the second defendants in relation to some costs.  In relation to its claim the plaintiff does have good prospects of succeeding on its claim, whereas it is the question of this counterclaim which will determine whether the defendants owe money or not in a net sense.

1. The defendants did not take advantage of their rights under the Corporations Law to challenge decisions by the administrator and provisional liquidator who rejected the claims as being debts owed by the company.  That is only one matter, of course, that could be considered.

1. It is not determinative of the issue but it is something which one can have regard to in exercising the discretion and determining the genuineness of proceedings and other matters.  For those reasons, the application for security for costs is refused.

1. Finally, on the question of discovery the defendants seek further discovery pursuant to the order of Her Honour Judge Wolfe made on 17 November 1998.  That order, which was made, did not specify in terms of what is sought here today.  The order, in fact, stated that the plaintiff make such further and better discovery as it shall be advised within 10 days.

1. As pointed out by Mr Toogood the material before Her Honour did refer to the matters which he has argued here today but specifically no order was actually made which could in any way bind the plaintiff to providing invoices delivered by  third parties to the plaintiff and in relation to which the plaintiff on-sold certain goods.

1. The practical problem which arises here is that invoices delivered by third parties to the plaintiff would include goods delivered not only to the first defendant but to other franchises.  There are a total of some eight franchises, so that those invoices would have to be divided up to determine which parts of which boxes of fruit or vegetables were delivered to the defendant.  It becomes an impossible task.

1. Often those types of matters are difficult but what is more to the point in this case is that in the affidavit of Mr Yadav, which is before me and which is sworn on 17 November 1998, in paragraph 4(c):

“Between 1 July 1994 and 30 March 1995 a total of $59,281.92 was overcharged by the company for fruit and vegetables.”

1. It is obvious, therefore, to me that it has been possible for the defendants to determine overcharging without regard to all of the invoices.  Until the counterclaim, or allegations in relation to overcharging are more definitive, it would be impossible for the plaintiff to provide further and better discovery of the matters which are raised in the counterclaim.

1. Mr Toogood says that there will be amendments made to that counterclaim or the overcharging allegations.  That may well  occur but the application before me is that the plaintiff provide further and better discovery pursuant to the order of her Honour Judge Wolfe.

1. Her Honour did not make specific orders in relation to discovery and for the practical reasons to which I refer it would be oppressive for the plaintiff to have to provide all invoices, most of which would be quite irrelevant to the claim and which there is obligation under the Rules for the defendant to be more definitive.

1. Under Rule 211 of the Uniform Civil Procedure Rules:

“A party to a proceeding has a duty to disclose a document which is directly relevant to an allegation in issue in the pleadings.”

1. There have been no allegations which allow a document to be earmarked by the plaintiff which would then  touch upon the allegation in issue.  This may be a hard task for the defence to state which particular fruit there in respect whereof there was overcharging but on the face of the material before me that task seems to have been done and Mr Yadav has sworn to that issue in the case.

1. In effect, the application today is an attempt to vary the order of Her Honour Judge Wolfe by providing a more specific order which was not made in the first instance. However, apart from that point, in dealing with the application before me as to whether further discovery ought to be made the present pleading does not allow such an order to be specific to allow a relevant issue in the case to be brought to the attention of the plaintiff and pursuant to Rule 211 to allow proper discovery without it being a mere fishing exercise on the part of the defence.

1. For those reasons, the application for further and better discovery pursuant to the order Her Honour Judge Wolfe made on 17 November 1988 is refused. 

1. In relation to the application for further and better particulars by the plaintiff, it is ordered that the defendant pay the costs of the plaintiff of the application.  In relation to the application by the first and second defendants, it is ordered that the cost of those applications be the plaintiff’s costs in the cause.