Leonard Cohen & Co v Richardson & Anor - [2005] WADC 172

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: LEONARD COHEN & CO -v- RICHARDSON & ANOR [2005] WADC 172

CORAM: SLEIGHT DCJ

HEARD: 11 AUGUST 2005

DELIVERED : 7 SEPTEMBER 2005

FILE NO/S: CIV 970 of 2000

BETWEEN: LEONARD COHEN & CO
Plaintiff
AND
PHILLIP RICHARDSON
BILL PALIGOROV
Defendants

Catchwords:

Appeal against spring order for discovery - Discretion to grant judgment when order not selfexecuting

Legislation:

Supreme Court Rules O 26

Result:

Judgment for the plaintiff

Representation:

Counsel:

Plaintiff: Mr S V Forbes
Defendants: Mr D J Miller

Solicitors:

Plaintiff: Stewart Forbes
Defendants: Dennis & Co

Case(s) referred to in judgment(s):

Burkett v Miller, unreported; FCt SCt of WA; Library No 2131; 6 September 1977
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Magenta Nominees Pty Ltd v Bonini & Ors [1999] WASC 88

Case(s) also cited:

Nil

SLEIGHT DCJ: This decision is on an appeal by the defendants against a decision of Deputy Registrar Hewitt on 5 May 2005 making a springing order for discovery. The action has a long and unfortunate history.
The action was commenced by a writ of summons in the District Court in Perth on 14 April 2000. It is a claim commenced by the plaintiff, a legal firm, seeking recovery of fees allegedly due for professional services. The amount claimed is $161,253.91 plus interest.
There is a second action ("the second action") commenced by the plaintiff against the defendants (action No 2520 of 2003) in the District Court in Perth claiming the sum of $87,899.75 for counsel fees. A counterclaim was made by the defendants for $8,355,000 in the second action but the counterclaim has been struck out.
The action in this matter was initially commenced against the present defendants and a company Actus Australia Pty Ltd.
The matter was listed before his Honour Judge Jackson on 16 January 2003 for trial. On that day the court was informed that Actus Australia Pty Ltd was a defunct company and had been de‑registered. Accordingly the claim against the company was adjourned and subsequently the plaintiff discontinued the claim against the company.
The trial listed on 16 January 2003 was adjourned by his Honour Judge Jackson and various programming orders were made. One of those orders (par 5 of the orders) was that –
"All parties provide further discovery on oath of all documents which are or have been in their possession, custody or power relating to any matter in issue in the action by the 7^th March 2003".
It should be noted that at this time the defendants were unrepresented. They subsequently obtained representation through their current solicitors, Dennis & Company, a firm which normally operates in New South Wales.
By a letter dated 4 March 2003 from the plaintiff's then solicitors, Paiker & Overmeire, the defendants were requested to comply with the order of discovery made by his Honour Judge Jackson on 16 January 2003. The letter further stated as follows:
"Kindly ensure that you include in each discovery all documents relating to settlement of the Supreme Court action".
This was a reference to Supreme Court Action No CIV 1090 of 1991. The plaintiff had acted for the defendants in relation to this action but ceased to act on behalf of the defendants prior to settlement of the action.
The plaintiff's solicitors again wrote to the defendants by letter dated 13 March 2003 complaining that the defendants had not complied with the order of his Honour Judge Jackson in regard to discovery, and unless further discovery was received by 18 March 2003, the plaintiff would apply for a springing order.
On 18 March 2003 the plaintiff's solicitors filed an application by way of chamber summons seeking a springing order for discovery against the defendants. The chamber summons also included an alternative application to strike out the defence of the defendants and for judgment to be entered in favour of the plaintiff.
The defendants wrote to the plaintiff's solicitors by letter dated 19 March 2003 stating as follows:
"We have no further documents to discover other than those discovered already rendering it unnecessary for us to provide further discovery. Any application to compel us to discover any further documents will be made at your peril. We will ask for indemnity costs for travel to Perth, accommodation, subsistence etc in opposing your application as we have informed you that we have no further documents to discover. The indemnity costs will be sought from both you and your client for an obvious abuse of process."
The application came before the court on 4 April 2003. On that date no appearance was made by the defendants.
An order was made on 4 April 2003 striking out the defence and judgment was entered in favour of the plaintiff. An appeal was lodged against this decision. The appeal came before her Honour Judge Kennedy (as she then was) on 6 June 2003. On this occasion the defendants were represented by a barrister, Mr G M Abbott. An order was made setting aside the judgment that had been entered.
During the hearing of the appeal, her Honour enquired of the plaintiff's counsel as to what documents were being sought by way of discovery. Counsel for the plaintiff, Mr Forbes, replied as follows:
"Particularly the representation of these defendants by Leonard Cohen & Co was in regard to Supreme Court litigation which, after Leonard Cohen & Co ceased to be the defendants' solicitors, was continued and eventually, as far as we know, settled and we want those documents, none of which have been discovered. It is those documents relating to the litigation, and the defendants simply have to have them."
Her Honour stated as follows:
"We have on transcript the sort of things that the plaintiffs are actually looking for so they know what they are looking for, and they know what to do, and its not only documents that they have actually got in their back pocket, its documents that they have the power to obtain."
Her Honour's comments were recorded in a transcript which was provided to the defendants' counsel and the defendants' counsel undertook to forward a copy of the transcript to his instructors. Although Dennis & Company were not solicitors on the record at that time, they were identified by Mr Abbott as his instructors.
On 3 July 2003 Dennis & Company filed a notice of appointment of solicitors acting for the appellant. An affidavit of the appellant, Phillip Richardson, prepared by Dennis & Company was sworn on 3 July 2003. This affidavit deposed to the fact that the defendants "have in their possession, custody or power the documents relating to the matters in question in this action and numerated in part 1 of the first schedule hereto."
The first schedule included documents described as follows:
"Court documents and correspondence relating to Supreme Court matter CIV 1090 of 1991".
The defendant Richardson also included in the affidavit of discovery a list of documents which the defendant objected to produce on the grounds of "legal professional privilege and confidentiality". Included in the list of documents that the defendant objected to produce were documents described as "court documents and correspondence relating to Supreme Court matter CIV 1090 of 1991".
A similar affidavit was sworn by the defendant, Bill Paligorov, on 24 June 2003. I am told that the action then became dormant for some period of time as both parties' attention then focussed on the second action where the defendants had made a counterclaim.
On 2 February 2005 the plaintiff filed an application in this action that the defendants "give discovery of all documents in relation to the finalisation and settlement of the proceedings in CIV 1090 of 1991 in which the defendants were co‑plaintiffs". In support of this application the plaintiff filed an affidavit which was entitled "Affidavit of Stewart Vivyan Forbes in support of application for specific discovery sworn 20 January 2005".
That affidavit provided the history of the difficulty the plaintiff had experienced in obtaining discovery. Annexed to the affidavit was a letter from the plaintiff's solicitors to the defendants' solicitors dated 23 July 2003, stating as follows:
"We informed Mr Abbott that we did not require copies of all documents but we do require documents in relation to the finalisation of the Supreme Court proceedings.
Kindly note that unless we receive copies of those documents or you tender inspection in accordance with the rules of the Supreme Court of Western Australia, within 7 days then we will have no alternative but to make an application to court in relation to your failure."
In response to this letter Dennis & Company, acting on behalf of the defendants, wrote to the plaintiff's solicitors by letter dated 31 July 2003 and sent by facsimile stating, inter alia, as follows:
"Insofar as our Clients so called 'finalisation' documents are concerned these were made a subject of a Confidentiality Order of the Court and it will therefore be necessary to obtain the consent of the other persons involved to provide you with same otherwise our Clients will be not only be in breach of contractual arrangements but also more than likely will be in Contempt of Court."
The plaintiff's solicitors by letter dated 31 July 2003 wrote to the appellants' solicitors requesting a copy of the confidentiality order of the court. In response to this Dennis & Company wrote to the plaintiff's solicitors by letter dated 13 August 2003, stating that "Our Clients do not have a copy of the Order of the Court that you seek".
The affidavit of Mr Forbes states that on 4 March 2003 he searched the court file in relation to the Supreme Court proceedings about which discovery was being sought and there was no such confidentiality order on the court file. He double checked by conducting a second search on 18 May 2004 and again found that there was no such order.
On 2 February 2005 the plaintiff's application for specific discovery came before Deputy Registrar Harman. There was no appearance by the defendants. The Deputy Registrar made an order in the following terms:
"Paragraph 5 of the order of Judge Jackson made 16^th January 2003 be amended to read – within 14 days of date of service of this order on the defendants each of the defendants do give discovery of all documents in their possession, custody or power relating to any matter and question in the action and do make an affidavit verifying that list and do serve a copy of each on the plaintiff".
A copy of this order was sent to Dennis & Company at the address for service provided by Dennis & Company being 58B La Grange Street, Innaloo WA 6018.
In apparent response to this order the defendants served further affidavits of discovery sworn 17 March 2005. These affidavits were in almost identical terms as the previous affidavits, stating that they had in their possession power and control "court documents and correspondence relating to Supreme Court matter CIV 1090 1991" but also claiming in the affidavit privilege in relation to these documents.
The matter was again re‑listed before Deputy Registrar Harman and on 21 March 2005 he made a springing order for discovery in the following terms:
"It is declared that the affidavit of the second defendant sworn 17 March 2005 fails to comply with paragraph 5 of the order of Judge Jackson made 16 January 2003 as amended by paragraph 1 of the order of Deputy Registrar Harman made 2 February 2005 as it does not comply with order 26 rule 4 of the Rules of the Supreme Court of Western Australia and IT IS ORDERED THAT.
1.Unless within 14 days of the date of service of this order on the Defendants each of the Defendants do comply with paragraph 5 of the order of Judge Jackson made on 16 January 2003 as amended by paragraph 1 of the order of Deputy Registrar Harman made 2 February 2005 the Defendants' defence be struck out and judgment be entered for the plaintiff in terms of the plaintiff's amended statement of claim filed 5 February 2003 together with interest and costs, together with all costs reserved."
The defendants then served a further affidavit by each defendant both sworn on 7 April 2005 which included in the list of discoverable documents an itemisation of various documents not previously discovered. However, in relation to documents relating to Supreme Court Action No 1090 of 1991 the defendants described these again in generic terms as "court documents and correspondence relating to Supreme Court matter CIV 1090 of 1991".
Again the defendants claimed privilege in relation to the documents. However, the defendants went further in these affidavits by stating that "they did not know the whereabouts of the documents and the documents were last in possession of the plaintiff and/or Melvyn Levitan, a solicitor of this Court" (par 4 of the list of documents).
This claim that the defendants did not know the whereabouts of the documents had not been previously made in earlier affidavits of discovery served by the defendants.
The plaintiffs made an application by way of chamber summons dated 21 April 2005 seeking an order declaring that the further affidavits served failed to comply with the order of Deputy Registrar Harman, and seeking judgment. The application was supported by an affidavit of Stewart Vivyan Forbes sworn 21 April 2005 which confirmed that the springing order had been served on the defendants' solicitors by facsimile.
An affidavit of service of Mandy Susan McDowall sworn 9 June 2005 indicates that service of the application by chamber summons dated 21 April 2005 and the supporting affidavit of Stewart Vivyan Forbes was effected by forwarding the application to the defendants' address for service by pre‑paid mail on 22 April 2005.
The plaintiff's application came before Deputy Registrar Hewitt on 5 May 2005. Again, there was no appearance by the defendants or their representatives.
In an affidavit sworn on 27 May 2005 the defendants' solicitor, Mr Bruce Vernon Dennis stated as follows:
"I am unaware of the contents of the application by summons filed 21 April 2005. The first time that I became aware that such a application had been made was when I received a letter from Stewart Forbes dated 18 May 2005 enclosing by way of service a springing order for discovery which is annexed hereto marked 'A' ".
However, it should be noted that in an affidavit sworn by Liana Maree Marche sworn 10 June 2005 she stated that she appeared at a chamber's hearing in these proceedings before Deputy Registrar Hewitt on 3 May 2005 when programming orders were made in relation to an application lodged by the defendants for summary judgment. The defendants were represented on that occasion by Mr John Kay who appeared at the hearing on behalf of the defendants (apparently on instruction from Dennis & Company). Ms Marche deposes that during the course of the hearing Deputy Registrar Hewitt mentioned that the hearing of the plaintiff's application was listed on 5 May 2005.
On 5 May 2005 Deputy Registrar Hewitt made a springing order for judgment in the following terms:
"Unless the defendants do within 10 days of service of this order file and serve a further affidavit properly particularising the documents comprised in item 139 of the list of documents filed on 8 April 2005 and in particular, itemising those documents relating to the finalisation in settlement of proceedings in Supreme Court Action 1090 of 1991, their defence be struck out and judgment be entered on the plaintiff for the amount of its claim, interest and costs."
The defendants lodged an appeal against the decision of Deputy Registrar Hewitt which is the matter before me. This appeal was lodged by facsimile on 27 May 2005.
The defendants' solicitor Bruce Vernon Dennis has sworn a further affidavit dated 10 August 2005 stating inter alia as follows:
"4.I did not receive at my office at 23 O'Connell Street, Sydney any notification of this application. The first I knew of the application was by way of facsimile from Stuart Forbes on 18 May, 2005 enclosing a copy of the springing order made 5 May, 2005.
5.I had no notice that the matter was proceeding on 5 May, 2005 before Deputy Registrar Hewitt in Chambers. Accordingly, my clients had no opportunity to contest the springing orders."
Significantly, the affidavit of Mr Dennis made no denial that the application documents had been served on the defendants' address for service. I am informed from the Bar table by counsel appearing on behalf of the defendants on the hearing of the appeal that the address for service is not the address of a firm of solicitors.
In further support of the appeal, the defendants have also filed an affidavit of the defendant Phillip Richardson sworn 10 August 2005, and the defendant Bill Paligorov sworn 11 August 2005.
Both these affidavits state as follows:
"2.I do not have any documents in my possession relating to Supreme Court Action 1090 of 1991 under my physical control.
3.I believe these documents are in the possession of Mr Mel Levitan, solicitor, Perth".
Mr Mel Levitan apparently took over the conduct of the Supreme Court Action 1090 of 1991 from the plaintiff.
The consequences of this appeal are that if I dismiss the appeal then the order of the Deputy Registrar will remain in place and the plaintiff will be entitled to extract a judgment pursuant to the springing order immediately. The appellants seek to have the order of Deputy Registrar Hewitt set aside.
On the appeal the defendants were represented by Mr Darren Miller as counsel. Mr Darren Miller is from the firm of Marks & Sands, a firm located in Perth. Mr Miller indicated that Marks & Sands are not acting as permanent agents of Dennis & Company in relation to the matter, but are simply instructed from time to time on an ad hoc basis.
The plaintiff argues that the appeal should be dismissed. The plaintiff submits that the defendants are being, at best, obstructive and have consistently failed to fulfil their obligations of giving proper discovery.
The appeal is pursuant to O 6 r 11 of the District Court Rules 1996 (the District Court Rules 2005 do not apply under the transitional provision).
The appeal is a complete review of the matter de novo by way of an actual re‑hearing of the application which led to the making of the order (see Hazart Pty Ltd v Rademaker (1993) 11 WAR 26).
Order 26 r4(1) of the Supreme Court Rules (that apply to the District Court) states as follows:
"The list of documents made in compliance with rule 1 or with an order made under rule 7 must be in Form No 17, and must enumerate the documents in a convenient order and as shortly as possible, but describing each of them or, in the case of bundles of documents of the same nature, each bundle, sufficiently to enable it to be identified, and must be filed within 10 days after the service of their requisition, or within the time directed by the order."
The provision for enumeration and description of documents is to enable the court to see whether the rules as to discovery have been complied with, and to enable it to make an order for production which is clear and can be enforced.
A further reason why documents should be properly identified in the list is that a party has the responsibility of stating on oath what documents he or she has which relate to the matter in question, and upon an indictment for his or her perjury, all that should be necessary is to turn to the affidavit. (See Seaman, "Civil Procedure Western Australia" par 26.4.2).
It is trite law that there is an obligation on the part of the discovering party to make proper enquiries to identify and disclose all relevant documents that are not in his or her physical possession but are held by some other person on the discovering party's behalf [Seaman "Civil Procedure in Western Australia" 26.1.10A].
It is a matter of substance as to whether an affidavit filed in any proceedings is a complete discovery of documents, and if it is not, is it so deficient as to show that the party is not attempting to do what was required of him (see Burkett v Miller, unreported; FCt SCt of WA; Library No 2131; 6 September 1977 – Burt CJ).

In the matter of Magenta Nominees Pty Ltd v Bonini & Ors [1999] WASC 88, Wheeler J at p 11 concluded that the filing of a wholly inadequate affidavit of general discovery will prevent a springing order from being self‑executing, but the inadequacy of the affidavit may nevertheless enliven a discretion to give judgment under O 26 r 15 on the basis that an inadequate affidavit represents a failure to give discovery as contemplated by the Rules of the Supreme Court or by the relevant order.
Order 26 r 15(1) provides as follows:
"If any party who is required by any rules of this order or by any order made hereunder, to give discovery of documents or to produce any documents for the purpose of inspection or any other purpose fails to comply with any provisions of that rule or with that order, as the case may be, then without prejudice, in the case of a failure to comply with any such provision, to rule 7 and 9(1) the court may make such order as it thinks just including in particular, an order that the action be dismissed or as the case may be, an order that the defence be struck out and judgment entered accordingly."
In Magenta (supra) Wheeler J concluded the affidavit filed in response to a springing order although deficient could not be regarded as a nullity. Hence she concluded that a springing order was not self‑executing. However, she concluded that the history of the discovery demonstrated, at best, a cavalier attitude to the obligations of discovery by the plaintiff (p 19 of the decision). She concluded that the plaintiff's claim ought to be struck out and the defendant given judgment in view of the reckless disregard demonstrated by the plaintiffs in the conduct of a litigation and, at worst, a calculated attempt not only to avoid disclosure of documents, but also to avoid putting the defendants in a position in which they will be able to prepare adequately for trial.
In this matter it is possibly arguable that in view of the affidavits filed by the defendants on 7 April 2005 after the springing order made by Deputy Registrar Harman on 21 March 2005 that the springing order was not self‑executing.
In my opinion when the matter came before Deputy Registrar Hewitt on an application by the plaintiffs for judgment, the conduct of the defendants had been such that the Deputy Registrar would have been entitled to make an order for judgment relying upon O 26 r 15.
In reaching this conclusion I take into account the following:
1.It was made very clear by her Honour Judge Kennedy (as she then was) on 6 June 2003 that the obligation under the existing order for discovery related to documents concerning Supreme Court Action Matter CIV 1090 of 1991. This was also confirmed in correspondence from the plaintiff's solicitors.
2.I consider that the defendants' solicitors Dennis & Company falsely alleged that the documents sought were the subject of a Supreme Court confidentiality order, and that to disclose them might be in contempt of court. I conclude this was a deliberate attempt to avoid the defendants fulfilling their obligations of giving proper discovery.
3.The defendants have filed a number of affidavits in purported compliance with the orders of the court, but such affidavits do not comply with O 26 r 4 by listing all relevant documents relating to Supreme Court matter CIV 1090 of 1991.
4.The defendants have provided affidavits stating that the documents sought were in their possession, power and control, but then in an affidavit filed on 7 April 2005 stated "we do not know of the whereabouts of the documents" and claimed that they were last in the possession of the plaintiff and/or Melvyn Levitan.
Again, I believe the affidavits filed on 7 April 2005 were an attempt to further delay giving proper discovery.
Notwithstanding that in my opinion Deputy Registrar Hewitt would have been entitled to give judgment under O 26 r 15 he generously gave the defendants a further opportunity to give discovery. He also, by the wording of his order, clearly intended to make it explicit as to what documents were required to be discovered.
Since the decision of Deputy Registrar Hewitt I have received further affidavits from the defendants which in my opinion, again manifest a disregard for the obligations of giving proper discovery. The affidavits of the defendants dated 10 August 2005 and 11 August 2005 respectively stating the documents are not in their physical control do not address the issue of their obligation to make enquiries of persons with whom documents may be held on their behalf, and to give discovery of these documents.
In my opinion, the continuing disregard by the defendants of their obligation to give proper discovery justifies a judgment being entered against them under O 26 r 15. In my opinion, the history of this matter demonstrates that the defendants have deliberately attempted to frustrate the plaintiff's attempts to obtain proper discovery, and in doing so they have sought to avoid putting the plaintiffs in the position which they will be able to prepare adequately for trial.
In the circumstances I believe I should make an order under O 26 r 15 for judgment.
I will hear submission from counsel as to the appropriate wording of the orders.