Moorooka Shopping Town (Nominees) P/L v Kilmartin & Mulherin

[1998] QSC 260

IN THE SUPREME COURT
OF QUEENSLAND

Brisbane  No.  9682 of 1996

Before the Hon. Mr Justice Shepherdson

[Moorooka Shopping Town (Nominees) P/L v Kilmartin & Mulherin]

BETWEEN:

MOOROOKA SHOPPING TOWN (NOMINEES) PTY LTD 

(ACN 009 908 105)  Plaintiff

AND:

TERENCE JAMES KILMARTIN

First Defendant

AND:

HENRY DESMOND MULHERIN

Second Defendant

JUDGMENT - SHEPHERDSON J.

Judgment delivered 18 November 1998

CATCHWORDS: CIVIL PROCEDURE - Discovery and interrogatories - Application to set aside writs of non-party discovery - whether writs were too wide - Order 40 r.38A does not authorise general discovery against a stranger to the litigation nor does it allow fishing expeditions.

Lebon v.  Lake Placed Resort Pty Ltd [1995] 1 Qd.R.24
Uthmann v.  Ipswich City Council [1998] 1 Qd.R.435
William Collin & Sons Pty Ltd v.  T & T Mining Corporation Pty Ltd [1971] Qd.R. 427

Order 40 r.38 A and C Supreme Court Rules (Queensland)

Counsel:Mr G.A. Thompson for the applicant non-parties

Mr Erskine for the respondent Mulherin

Solicitors:Grant White & Associates for the respondent Mulherin

Ebsworth & Ebsworth for the applicant non-parties

Hearing date:          11 November 1998

IN THE SUPREME COURT
OF QUEENSLAND

Brisbane  No.  9682 of 1996

Before the Hon. Mr Justice Shepherdson

[Moorooka Shopping Town (Nominees) P/L v Kilmartin & Mulherin]

BETWEEN:

MOOROOKA SHOPPING TOWN (NOMINEES) PTY LTD 

(ACN 009 908 105)  Plaintiff

AND:

TERENCE JAMES KILMARTIN

First Defendant

AND:

HENRY DESMOND MULHERIN

Second Defendant

JUDGMENT - SHEPHERDSON J.

Judgment delivered 18 November 1998

1. In this action the above named second defendant (“Mulherin”) has delivered a statement of claim against the above named first defendant (“Kilmartin”).  In para.5 of that statement of claim Mulherin alleged that notwithstanding the execution by Kilmartin and Moorooka Shopping Town Nominees Pty Ltd (“Moorooka”) of a Deed of Settlement dated 24 December 1996 pursuant to which Kilmartin agreed to pay to Moorooka the sum of $202,500 in partial satisfaction of Moorooka’s claim against Kilmartin and Mulherin, together with the further sum of $7,500 for costs, payment of which was required to be made forthwith upon the execution of the Deed, Kilmartin has not in fact paid to Moorooka the whole or any part of that sum.  Kilmartin delivered a defence to this Statement of Claim and para.4(c) of the defence reads:-

   “(c)Mr Kilmartin, on or about 24 December 1996 discharged his obligation under the Deed to pay the settlement sum

   Particulars

   (i)the sum of $142,500 was paid by Mr Kilmartin to the plaintiff by his directing in writing that that sum, which was then owed by Pacific Shopping Centres Australia Pty Ltd to him, be paid to the plaintiff;

   (ii)the sum of $67,500 was paid by Charfern Pty Ltd on behalf of Mr Kilmartin by cheque to Pacific Shopping Centres Australia Pty Ltd for the plaintiff.”

2. The plaintiff referred to in para.4(c) is Moorooka.

3. Grant White & Associates are the Solicitors acting for Mulherin.  These Solicitors caused writs of non-party discovery as follows to be issued on behalf of Mulherin:-

   1.To Philip Hunter, Ebsworth & Ebsworth Solicitors;

   2.To Moorooka Shopping Town (Nominees) Pty Ltd;

   3.To Maurice Alter;

   4.To Pacific Group of Companies.

4. The persons and corporations to whom those writs of non-party discovery have been issued have applied to have the writs set aside.  On the hearing on the 11th instant Mr Erskine, who appeared for Mulherin conceded that the writ of non-party discovery against the Pacific Group of Companies was not sustainable because that was the business name of a group of unrelated companies.

5. As the argument progressed Mr Erskine informed me that he did not propose to press for non- party discovery against Ebsworth & Ebsworth.

6. This left the non-party discovery against Moorooka and Alter.  The writs of non-party discovery  against each of these persons required production of documents mentioned or described in the schedule to each writ.  In Moorooka’s case the schedule contains 7 paragraphs and at the end of the day, the documents in para.7 of that schedule were the only ones sought to be produced.  Paragraph 7 in Moorooka reads:-

   “7 Files notes, diary notes, correspondence, memoranda and other documents disclosing the basis of the direction by Maurice Alter on behalf of Moorooka Shoppingtown (Nominees) Pty Ltd to the first defendant to pay the sum of $67,500 to Pacific Shopping Centres Australia Pty Limited including all documents which link payment of the obligations to the first defendant pursuant to his personal guarantee provided on behalf of Kilcor Management Pty Ltd.”

7. In the writ of discovery against Alter once again only para.7 of the schedule was relevant and it was in identical terms to the para.7 which I have just set out.

8. I should at this stage mention that in the original action the claim of Moorooka as plaintiff against each of Kilmartin and Mulherin as defendant, is based on guarantees by them.

9. Before turning to the submissions, I mention also that Exhibit GAW2 to the affidavit of Grant Alan White filed by leave on 11 November 1998 is a photocopy of a facsimile cover sheet from “The Pacific Group of Companies”.  The document shows it is to “Terry Kilmartin” and is “from: Bill Boerkamp”.  Boerkamp’s name appears above the printed words “company: Pacific Group of Companies”.  The handwritten message in this facsimile reads:

   “Moorooka Shopping Town (Nominees) Pty Ltd hereby instructs you to pay the net proceeds of $67,500 to Pacific Shopping Centres Australia Pty Ltd to the bank account details we faxed to you earlier today.”

10. An indecipherable signature then appears and underneath the signature appears in handwriting and printed “M.  Alter, Director”.

11. Mr Thompson has appeared for Moorooka and Alter and his basic submission is that para.7 of each writ in effect requires each of his clients to engage in a fishing expedition.  Therefore he submits that each writ of non-party discovery is too wide and breaches the principles on which non-party discovery can be validly ordered.  He relies particularly on the decisions of Mr Justice Lee of this Court in Uthmann v. Ipswich City Council [1998] 1 Qd.R. 435 and Lebon v. Lake Placid Resort Pty Ltd [1995] 1 Qd.R. 24.

12. The writs of non party discovery were issued under Order 40 r.38A.  In Lebon, Lee J in speaking of this rule said (at p.32):-

    “The new Rule, as with its predecessor, does not authorise general discovery against a stranger to the litigation.  Neither does the new rule allow a party to engage in a fishing expedition against a person not a party to an action in the hope that it may throw up something on which a cause of action can be founded against the other party or which might advance his case or damage that of the opponent.  The principles have been established by a long line of cases which still have application:”

13. His Honour then cited as authority for this statement a number of decisions one of which was William Collin & Sons Pty Ltd v. T & T Mining Corporation Pty Ltd [1971] Qd.R. 427, a decision of the Full Court of the Supreme Court of Queensland. I agree with Lee J’s above statement.

14. In Uthmann, his Honour reviewed authority and at pp.450-451 set out what he believed to be  10 general principles which have emerged from the authorities.  One of these was No.3 which reads:-

    “The issuer of a writ must demand production only of specific documents which would be the subject of a subpoena duces tecum at the trial, which he can show are probably in the possession or control of the third party and which probably relate to a matter in question in the cause.  If this is not done, the issuer of the writ may be at risk as to costs if an application is brought to the court by either party.”

15. So far as concerns the claim made by Mulherin against Kilmartin, Moorooka is a stranger to that action and the above principle No.3 applies.  There is no doubt that Alter is also a stranger to that action.

16. It became apparent during argument that the object of the non-party discovery is to enable Mulherin to find out whether or not the matter pleaded by Kilmartin in para.4(c) of his defence is factually correct or is a sham.

17. Mr Erskine does not require the writ of non-party discovery against each of Moorooka and Alter in respect of the matter in sub-para.4(c)(i) of Kilmartin’s defence.  He does press however, in respect  to the payment referred to in para.4(c)(ii) of Kilmartin’s defence.

18. I turn now to Exhibit GAW2 to Mr White’s affidavit - I have already set out the relevant parts of it.  According to Mr White’s affidavit, GAW2 “is a true copy of a facsimile Maurice Alter to Kilmartin undated”.  He says this document was discovered by or on behalf of Kilmartin and not by the plaintiff Moorooka.

19. Whether it is true to describe GAW2 as a copy of a facsimile from Alter to Kilmartin is to say the least doubtful.  The handwritten message may or may not be signed by Alter, but the facsimile is clearly from Boerkamp to Kilmartin.  Boerkamp appears to be an executive of Pacific Shopping Centres Australia Pty Ltd.  I was informed during argument that Moorooka is a member of a group of companies which apparently together make up Pacific Shopping Centres Pty Ltd.

20. Closer examination of Exhibit GAW2 suggests, and it does nothing more than that, that if payment was made by Kilmartin in accordance with the handwritten message within GAW2, then one would have expected there to have been at least a facsimile to Kilmartin earlier on the date on which GAW2 was faxed to Kilmartin.  If there was such a facsimile and it was received by Kilmartin, then one would have expected that facsimile to have contained details of the “bank account” referred to in the message  within GAW2.

21. I say nothing about payment to that account because in para.4(c)(ii) of his defence Kilmartin says the $67,500 was paid by Charfern Pty Ltd on behalf of Mr Kilmartin.

22. Even though it is abundantly clear that the exhibit GAW2 is a document which is relevant to the claim made by Mulherin against Kilmartin, nevertheless, in my view, para.7 of the writ of non- party discovery against each of Moorooka and Alter is too widely cast.  Paragraph 7 as drafted, in effect requires the person to whom the writ is addressed to engage in a fishing expedition.  It also requires Moorooka and Alter (who are not parties to the claim by Mulherin against Kilmartin) to make judgments as to what documents are relevant to that claim.  This latter aspect really highlights another fatal flaw in each para.7 with which I am concerned.

23. In my view for the reasons which I have given the applications to set aside each of the four writs of non-party discovery must succeed.  I therefore order that the following writs of non-party discovery each dated 23/10/1998 against Moorooka Shopping Town (Nominees) Pty Ltd, against Maurice Alter, against the manager Pacific Group of Companies and against Ebsworth & Ebsworth (a firm) be set aside.

24. In my view also this is not a case where the writs of non-party discovery against Moorooka and Alter should be varied pursuant to Order 40 r.38C.

25. I have heard argument on costs and in view of the result, I order the second defendant to pay the costs of Moorooka Shopping Town (Nominees) Pty Ltd, Maurice Alter, the manager Pacific Group of Companies and Ebsworth & Ebsworth (a firm) of and incidental to the summons filed on 6 November 1998 to be taxed.