Live Long and Prosper Investments Pty Ltd v Jeffrey Smith and Maria Wesley as trustee for JL Smith Family Trust
[2015] WADC 1
•6/01/15
LIVE LONG AND PROSPER INVESTMENTS PTY LTD -v- JEFFREY SMITH AND MARIA WESLEY AS TRUSTEE FOR JL SMITH FAMILY TRUST [2015] WADC 1
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WADC 1 | |
| 07/01/2015 | |||
| Case No: | CIV:1438/2013 | 3 DECEMBER 2014 | |
| Coram: | PRINCIPAL REGISTRAR MELVILLE | 6/01/15 | |
| PERTH | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Parties to be heard as to the form of an order for a compliant consolidated list of documents and verifying affidavit | ||
| PDF Version |
| Parties: | LIVE LONG AND PROSPER INVESTMENTS PTY LTD JEFFREY SMITH AND MARIA WESLEY AS TRUSTEE FOR JL SMITH FAMILY TRUST SIGMA BUSINESS SALES PTY LTD |
Catchwords: | Discovery Adequacy of affidavit Adequacy of list of documents Order for further and better discovery |
Legislation: | Oaths, Affidavits and Statutory Declarations Act 2005 Rules of the Supreme Court 1971 O 26 |
Case References: | Abreu v Thomas Peacock & Sons Pty Ltd [No 2] [2012] WADC 10 Compagnie Financiere Et Commereciale Du Pacifique v Peruvian Guano Co [1882] 11 Qbd 55 Perpetual Trustees Company Ltd v Burniston [2012] WASC 26 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
JEFFREY SMITH AND MARIA WESLEY AS TRUSTEE FOR JL SMITH FAMILY TRUST
First defendants
SIGMA BUSINESS SALES PTY LTD
Second defendant
Catchwords:
Discovery - Adequacy of affidavit - Adequacy of list of documents - Order for further and better discovery
Legislation:
Oaths, Affidavits and Statutory Declarations Act 2005
Rules of the Supreme Court 1971 O 26
Result:
Parties to be heard as to the form of an order for a compliant consolidated list of documents and verifying affidavit
Representation:
Counsel:
Plaintiff : Mr R Lilley
First defendants : Mr P Mugliston
Second defendant : No appearance
Solicitors:
Plaintiff : Murfett Legal
First defendants : Brook Legal & Settlement Services
Second defendant : Not applicable
Case(s) referred to in judgment(s):
Abreu v Thomas Peacock & Sons Pty Ltd [No 2] [2012] WADC 10
Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company [1882] 11 Qbd 55
Perpetual Trustees Company Ltd v Burniston [2012] WASC 26
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60
1 PRINCIPAL REGISTRAR MELVILLE: The plaintiff seeks damages for losses it alleges were suffered as a result of various misrepresentations including misrepresentations as to the number of hours worked by the staff of a business the plaintiff was buying from the first defendants for whom the second defendant is alleged to have acted as agent. The business concerned is known as Country Direct Produce.
2 It is said that in fact the staffing requirements of the business was understated and so misrepresented, that in fact the business required a significant labour input over and above that represented, including labour input from the first named first defendant, with the effect that the business was nowhere near as profitable as anticipated.
3 An issue has arisen between the plaintiff and the first defendants regarding the discovery of documents.
4 As a result the plaintiff seeks an order as follows:
5. Within 14 days of the date of this order:
5.1. The first defendants serve on the plaintiff and second defendant a further and better list of documents that complies with O 26A r 8 with the Rules of the Supreme Court 1971, and which includes the following documents:
(a) emails from the first defendant's personal email accounts [email protected] and [email protected], to the Country Direct Produce business email account of [email protected]. In particular the emails passing between the first defendants and Meredith Banks relating to information to be provided to the second defendant;
(b) any documents or emails passing between first defendants personal email accounts (as above) and the second defendant relating to the sale agreement between the first defendants and Dunham Family Traders Pty Ltd dated 2 November 2010; and
(c) business records that were uplifted from the Country Direct Produce premises prior to the plaintiff taking possession including, but not limited to, staff wage books, rosters, employee records, and emails or other correspondence from/to staff relating to wages/salaries and work hours.
6 Notwithstanding the form of the order sought, it is clear that the first defendant did not require compliance with O 26A r 8 of the Rules of the Supreme Court 1971 (RSC), which order deals with discovery from non-parties and potential parties. Nor, notwithstanding the statement found at paragraph 4 of the affidavit of Robert John Lilley sworn 25 September 2014 in support of the chamber summons, was the application in respect of a list of documents that was perceived to be deficient ' … in that it did not comply with O 26r 8A …'. That rule deals with the production of discovered documents for inspection. The real essence of the application is as outlined in the plaintiff's submissions, namely the form in which the discovery was given by the first defendants and per pars 8 and 10 a request for an order for further and better discovery of particular documents, described as 'emails to and from the email address of [email protected] including in relation to the information to be provided to the second defendant in relation to staff working hours' on the basis they were relevant by reference to the plaintiff's pleaded case:
… specifically in relation to the alleged misrepresentation as to the number of hours worked by staff prior to the plaintiff purchasing the business.
The form of the discovery
7 By O 26 r 1 of the RSC a party can be required by the other to provide a list of all the relevant documents it has or once had in its possession, custody or power and where that party once had those documents in its possession, custody or power but no longer has them, what become of them or where they may be found. That party is also required to identify the documents on that list to which objection to inspection is taken. This list of documents should be in Form 17 to the RSC, and by O 26 r 4, should enumerate the documents in a convenient order and as shortly as possible, but describe each of them, or in the case of bundles of documents of the same nature, each bundle, sufficiently to enable it to be identified. The list of documents is verified by an affidavit which by O 26 r 4(3) must be in Form 18.
8 Further, there is an obligation on the discovering party to continue to discover any documents that are relevant and which have not previously been discovered. In the case of documents that are discovered pursuant to this continuing obligation, this be done having regard to the provisions for O 26 r 2(6) by filing and serving a supplementary list enumerating the relevant documents together with a verifying affidavit.
9 In this case the two first defendants have sworn a series of affidavits with successive lists of documents. There is an affidavit of the first named first defendant dated 4 November 2013, sworn 4 November 2013. The affidavit is not in the prescribed form, contrary to O 37 r 2 does not mention the deponent's occupation and does not appear to comply with the provisions of s 9(2)(b) Oaths, Affidavits and Statutory Declarations Act 2005 insofar as it does not say where it was sworn. Nor is the list of documents in the prescribed form. It does, however, discover some 32 miscellaneous documents.
10 The next affidavit is dated 3 November 2013, sworn 4 November 2013. Again the same observations can be made in respect of this affidavit. In this affidavit some 147 documents are discovered, numbered consecutively from 1 - 147, listing an assortment of documents, although principally email correspondence. A perusal of this list reveals that not all of the emails are listed in chronological order.
11 The next affidavit of discovery is that of Maria Wesley dated 17 November 2014. Again, there is no reference to the occupation of the deponent. The same issues arise in respect of the form of the affidavit, O 37 r 2, and s 9 of the Oaths, Affidavits and Statutory Declarations Act 2005 (with the additional problem constituted by the fact there is no indication in the affidavit as to when the affidavit was sworn). In this case the form of the list of documents itself is substantially compliant with Form 17, but even then, the content of the list of documents is confusing. Part 1A of the list envisages that the documents in the possession, custody or power of the party will be enumerated and shortly described. However the three documents that are listed in Part 1A to the list are described as 'First Schedule Part 1A, First Schedule Part 2, First Schedule Part 3'. There is no first schedule to Form 17, nor any first schedule to the Form 17 annexed to the affidavit of Maria Wesley. The documents are numbered consecutively 1 – 5.
12 In my opinion, where discovery is given on an ongoing basis in compliance with the requirement to give continuing discovery, the subsequent list of documents should for ease of reference use as its starting number the next number after the last number given to the last described document in the previous list.
13 There are more lists of documents verified by affidavit. They are annexed to the affidavit of Alan Michael Brooks dated 20 November 2014 at pages 9 – 29 and are constituted by an affidavit of Jeffrey Smith sworn, according to the cover sheet, 14 February 2014 and Maria Wesley of the same date.
14 The purported list of documents attached to the affidavit of Jeffrey Smith that should be found in Part 1A says 'Please see list attached'. There is no list attached.
15 The list of documents attached to the affidavit of Maria Wesley lists, under a document headed 'First Schedule Part 1', some 97 documents. Under a document headed 'First Schedule Part 2' 16 documents, and under a document headed 'First Schedule Part 3', eight documents. It is challenging if not impossible to relate the documents headed 'First Schedule Part 1', 'Part 2' or 'Part 3' back to the list of documents referred to in the affidavit and the Form 17. Further, the Form 17, where it requires the discovering party to list those documents that once were, but are no longer, in their possession, custody or power, is completed with the words 'Nil all documentation provided to Plaintiff'.
16 It is my view that the various lists of documents and affidavits verifying the list are defective insofar as they do not comply with O 26 r 4, are not in the prescribed form, are not sworn correctly, and are described in a somewhat random and confused manner either by reference to the nature of the documents and/or the dates of the documents.
17 In my view the first defendants should be required to file a list of documents in compliance to O 26 r 4 and in these circumstances, by way of a consolidated list with the documents consecutively numbered, and properly grouped, verified by an affidavit in Form 18 that complies with O 37 r 2 and s 9 of the Oaths, Affidavits and Statutory Declarations Act. In this regard I will hear further from the parties on the precise form of the orders.
Request for further and better discovery of specific documents
18 An application for further and better discovery of particular documents is governed by O 26 r 6. Order 26 r 6(3) requires the application to be supported by an affidavit stating the belief of the deponent that the first defendants have, or at some time had, in their possession custody or power the documents or class of documents referred to in the chamber summons. In the event the applicant can successfully persuade the court that an order should be made, the order is made pursuant to the provisions of O 26 r 6(1) which would require the first defendants to state whether the specified or described document or class of documents is or at any time has been in their possession, custody or power and if not then in their possession, custody or power, when they parted with it and what had become of it. That is not the form of the order sought by the plaintiff in its summons but clearly is the type of order that the plaintiff seeks having regard to its outline of submissions.
19 In Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60, Master Newnes considered the manner in which O 26 r 6 ought to be interpreted. In [3] he said:
In determining whether to make an order for further discovery, the court must have reasonable grounds for being fairly certain that there are other relevant documents which ought to have been discovered: Beecham Group Pty Ltd v Bristol Myers Co [1979] Vic Rp 27; [1979] VR 273. The court must be able to infer from the nature of the document in question that it is relevant; it will not speculate as to its relevance. Relevance may either appear from the nature of the document or its contents, and if the latter then there must be a prima facie case as to the contents before an order for further discovery will be made; Astra-National Productions Ltd v Neo-Art Productions Ltd [1928] WN 218 at 219 … where an application is made in respect of the document referred to and a document already discovered (the relevance of the latter being conceded by its discovery) it is generally reasonable to assume, in the absence of a contrary indication in the document discovered, that the document referred to is relevant; see Compagnie Financiere Et Commereciale Du Pacifique v Peruvian Guano Co [1882] 11 Qbd 55; I regard the test of relevance to be whether it is reasonable to suppose the document contains information which may either directly or indirectly advance the requesting parties case or damage his adversary's case or which may fairly lead to a chain of enquiry which may have that consequence.
20 The existence of any relevant document would normally be determined by reference to the pleadings but regard can be had to the conduct and admissions of the parties and the nature of the action.
21 The decision in Youlden Enterprises Pty Ltd was applied by Edelman J in Perpetual Trustees Company Ltd v Burniston [2012] WASC 26 who summarised the position as requiring three criteria to be satisfied in order to obtain the order sought. Those are whether:
1. The court has reasonable grounds for being fairly certain that the documents sought (or class of documents sought) are in existence;
2. Those documents sought are relevant; and
3. Those documents ought to have been disclosed.
22 Given the issue raised on the pleadings regarding the hours worked by the staff of the first defendants, if there were any emails between the first defendants and the Country Direct Produce business email account that existed and addressed the question of those hours, or which might lead to a course of enquiry which may advance the plaintiffs' case or damage the first defendant's case on this issue, I would easily come to the view that the last two of the criteria summarised by Edelman J in Perpetual Trustees Company Ltd v Burniston were satisfied, namely the documents were relevant and had not been discovered. However, the plaintiff, who carries the burden of proving the facts, has failed to persuade me there are reasonable grounds for me to be fairly certain that these documents exist. In the end, the plaintiffs' oral submissions relating to the evidence that would constitute reasonable grounds for me to be fairly certain that documents exist distilled two propositions being:
1. The first defendants' several attempts to provide discovery demonstrates a lack of appreciation of the nature of the case they have to meet and a failure to turn their mind to what needs to be discovered;
2. The first defendants' subsequent discovery of documents by way of provision of copies of documents that did not previously appear on any list of documents provided by the first defendants.
23 In respect to those submissions, I am of the view that the first defendants' several and various attempts at discovery are as equally consistent with their obligations to give continuing discovery as it is with any inference that might be drawn that they failed to turn their mind to giving proper discovery. Further, and in any event, this does not in itself allow the inference to be drawn that these documents exist. Accordingly, I would not allow the order sought at 5.1(a) on the basis I am not 'fairly certain' those documents being relevant documents in the sense they may touch upon the issue as to the number of hours of work done by the first defendants' employees exist.
24 In respect of the order sought at par 5.1(b), assuming there were documents or emails passing between the first defendants' email accounts and second defendant relating to the sale or proposed sale of the business to Dunham Family Traders Pty Ltd on 2 November 2010, there is nothing in the evidence produced to me to persuade me that those documents or emails, if they exist, have any relevance, in the sense used in the Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company [1882] 11 Qbd 55 case, to the number of hours of work performed by the staff employed by the first defendants. Again I am not 'fairly certain' that such documents exist.
25 Further, I am not persuaded that the deponents of the affidavits in support of the plaintiff's application have actually deposed to a belief that the first defendants have or had these documents, or this class of documents, in their possession, custody or power. I would be prepared to accept that in order to satisfy the requirements of O 26 r 6(3), this belief can be deposed to other than by the slavish adoption and repetition of those words. However, nowhere in the affidavit of Robert John Lilley or David Marcovich can I see those words or words to that effect. This is a requirement that must be satisfied in order to enliven the court's discretion to make such an order: Abreu v Thomas Peacock & Sons Pty Ltd [No 2] [2012] WADC 10.
26 Mr Lilley's evidence at par 4.1 of his affidavit of 25 September 2014 that he believes missing from the first defendants' discovery list were emails
… regarding information to be provided to the second defendant for the purposes of marketing and selling the Country Direct Produce business
- falls short of deposing to a belief that the so-called marketing and selling of the Country Direct Produce business includes emails relating to the hours worked by the first defendants or their staff. I can readily accept that there may be documents in existence that deal with the hours worked by the first defendants or their staff, but that is different to being satisfied that there are 'emails' relating to hours worked by the staff. Much of the evidence contained in that affidavit, particularly that contained within pars 5 – 48 addressed the plaintiff's concerns about the adequacy of discovery generally, rather than discovery of these particular documents that the plaintiff seems to speculate exists.
27 In his affidavit of 18 November 2014, Mr Lilley at par 14 deposes to a belief that the first defendants' have not adequately turned their minds to what documents are in their possession, custody or power. Again, in my view, this falls short of deposing to a belief that the specified documents exist.
28 Insofar as the affidavit of Mr David Marcovich of 27 November 2014 is concerned, at par 8 he deposes to a belief that there is a need for the first defendants' to reconsider the thoroughness of their search for documents and satisfaction of their discovery obligations. Again, this falls short of deposing to a belief that there are emails from the first defendant's personal email accounts to the Country Direct Produce business email account relating to the hours worked by their staff or that there are documents or emails passing between the first defendant's personal email account and the second defendant, relating to a sale agreement dated 2 November 2010 between the first defendants and Dunham Family Traders Pty Ltd.
29 Accordingly, I dismiss the application insofar as it seeks orders pursuant to 5.1(b) of the chamber summons.
Costs
30 The question of indemnity costs sought by the plaintiff was not argued or address by me at the special appointment, it being considered that question was best addressed following my determination as to the plaintiff's entitlement to either one of those orders sought at 5.1(a) or (b).
31 I will hear further from the parties on the form of the order to be made and hear from the parties on the question of indemnity costs.
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