Knoeckel Enterprises Pty Ltd v Dell Enterprises Pty Ltd
[2003] QSC 45
•13 March 2003
SUPREME COURT OF QUEENSLAND
File No S1719 of 2002
BETWEEN:
KNOECKEL ENTERPRISES PTY LTD & ORS
Applicant
AND:
DELL ENTERPRISES PTY LTD & ORS
Respondent
MOYNIHAN J – REASONS FOR JUDGMENT
CITATION:
Knoeckel Enterprises Pty Ltd & Ors v Dell Enterprises Pty Ltd & Ors [2003] QSC 045
PARTIES:
Knoeckel Enterprises Pty Ltd & Ors
(plaintiff/applicant)
v
Dell Enterprises Pty Ltd & Ors
(defendant/respondent)
FILE NO/S:
SC8496 of 2001
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court, Brisbane
DELIVERED ON:
13 March 2003
DELIVERED AT:
Brisbane
HEARING DATE:
11 November 2002
JUDGE:
Moynihan J
ORDER:
Application dismissed
CATCHWORDS:
PROCEDURE – Discovery and interrogatories – Production and inspection of documents.
COUNSEL:
PW Hackett for the Applicant
PV Rooney for the Respondent
SOLICITORS:
Tucker and Cowen for the Applicants
P Willey and Associates for the Respondents
The plaintiffs seek the following orders that the defendants:-
1. Provide copies of documents disclosed by the defendants, referred to in a letter from the plaintiff’s solicitors to the defendants of 18 September 2002.
2. Provide further and better disclosure of the documents referred to in that letter.
The action is one in which the plaintiffs claim damages for breach of contract and for misleading and deceptive conduct pursuant to the provisions of the Trade Practices Act 1974 (Commonwealth). The action arises out of the sale of a business by the defendants to the plaintiff. It is founded on allegations of misrepresentations inducing the contract and breaches of it. One of the alleged breaches is of a restraint of trade provision by conducting a competing business after the completion of the contract at specified addresses.
The proceedings were instated on 20 September 2001. There were disputes about pleadings and particulars leading to applications to the court. The pleadings closed on 22 July 2002.
By letter 3 September 2002 written pursuant to Rule 444 of the Uniform Civil Procedure Rule the plaintiffs complained that they had not been given a list of documents or disclosure. On receipt of the letter the defendants’ solicitor sought instruction and was informed that the second defendant was overseas and most historical business documents were archived.
The solicitor requested that the second defendant’s wife provide him with such documents as she could locate which she did on 6 September. On 9 September the defendant’s solicitor sent a draft list of documents to the plaintiff’s solicitors under cover of a letter stating that the second defendant was overseas, was expected to return within the next week and that the solicitors preferred to wait until his return before finalising the list of documents.
Arrangements were nevertheless made between the solicitors for the plaintiff’s solicitor to inspect documents at the office of the defendant’s solicitors pending the defendant’s solicitor obtaining instructions and finalising the list. This was done on 16 September 2002, at that stage the defendant’s solicitors apparently did not have final instructions as to the list.
At the inspection, the plaintiff’s solicitors inspected documents referred to on the draft list and looked at other documents not referred to on it. It appeared that a number of these documents related to other entities associated with the first and to other activities other than the sales in the business conducted by the first defendant and purchased by the plaintiff’s. They were intermingled with defendants’ documents which were on the list. The plaintiffs’ solicitor made a note of the documents inspected in this way.
By a letter of 18 September the plaintiff’s solicitors sought copies of documents identified in terms of their number on the draft list and additional documents “provided for inspection” where the documents had been tagged. The letter went on to contend that the defendant’s disclosure was inadequate in a number of specified respects for reasons among others that it did not include documents which had been inspected on the 18th.
On 25 September the plaintiff’s solicitors wrote a second letter pursuant to Rule 444 of the UCPR. The letter referred to the draft list and the inspection and to the request for further and better disclosure and required a reply by 30 September.
On 30 September the defendant’s solicitors responded enclosing “by way of service” the defendant’s list of documents. This led to a response of 1 October complaining that the documents requested in the letters of “18 December” (presumably an error for September) and of 25 September had not been produced and that an application would be made without further notice; the application was filed on 1 October.
Uniform Civil Procedure Rule 214 provides for disclosure by delivery of a list of documents and the provision of copies of disclosed documents. Rule 216 provides for inspection of documents when it is not on request, convenient to deliver them. Rule 217 provides for disclosure by producing documents as an alternative to disclosure by list, inspection and delivery of copies pursuant to rules 214 to 216.
In my view disclosure in this action is governed by Rule 214(2)(f). The inspection of 16 September was an informal arrangement pending the return of the second defendant from overseas, instructions being obtained and a list of documents being finalised. I do not consider making documents available for the inspection on the 16th constituted a waiver of any privilege or an admission of direct relevance of documents inspected.
The requests of 18 and 25 September were made before the sworn list of 30 September. The defendants obligations were in respect of documents disclosed by that list. It follows that in my view the demand and subsequent application for the provision of copies of documents inspected on 16 September 2002 was premature. The defendants have indicated before me that they will provide copies of documents on the list of 30 September. This includes documents not on the draft list, inspected on 16 September and included on the list of the 30th.
As a consequence of the informal inspection of 16 September the plaintiff’s solicitors became aware of documents not on the final list which it asserts are directly relevant. In so far as a document inspected on 16 September 2002 belongs to another entity, even one with which the second defendant is associated, it seems to me that the first defendant is not obliged to disclose it. It is not as I understand it sufficient to constitute possession or control that the second defendant is without a director or shareholder of other entities to establish that the documents the plaintiff seeks are in his possession or control.
On the other hand a document in the possession or control of either of the defendants which is directly relevant to an allegation in issue in the proceedings is disclosable although it may have emanated from a third entity. I am not satisfied on the evidence before me that that is the case here.
If the defendants are not obliged to disclose documents in the possession or control of third parties it is of course open to the plaintiffs to pursue third party disclosure.
I mentioned that the plaintiffs claim the defendants have breached a restraint of trade provision in the contract. The defendants plead that they acted in accordance with a discretion conferred by a provision of the contract of sale. This allowed the second defendant to become concerned or interested in a business at a specific address if the defendants determined that the commercial viability of the business required it. That is the issue of direct relevance and it is not demonstrated that the disclosure is defective in respect of it, the request appears to go beyond the issue.
In my view the plaintiffs have not established their entitlement to the relief sought in this application and it should be dismissed.
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