Oakbase Global Ltd v Perth Textiles International Pty Ltd - [2016] WADC 134

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: OAKBASE GLOBAL LTD -v- PERTH TEXTILES INTERNATIONAL PTY LTD [2016] WADC 134

CORAM: PRINCIPAL REGISTRAR MELVILLE

HEARD: 11 MAY 2016

DELIVERED : 6 SEPTEMBER 2016

FILE NO/S: CIV 4030 of 2014

BETWEEN: OAKBASE GLOBAL LTD
First Plaintiff
PRINCE MARTIN
Second Plaintiff
AND
PERTH TEXTILES INTERNATIONAL PTY LTD
Defendant

Catchwords:

Application to strike out statement of claim - Turns on its own facts

Legislation:

Australian Consumer Law
Rules of the Supreme Court 1971

Result:

The statement of claim be struck out

Representation:

Counsel:

First Plaintiff                  :     Mr I Kakay
Second Plaintiff             :     Mr I Kakay
Defendant:     Mr C McIntosh

Solicitors:

First Plaintiff                  :     Perth Legal Answers
Second Plaintiff             :     Perth Legal Answers
Defendant:     Muries Lawyers

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

Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60
Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490
Kaze Constructions Pty Ltd v Housing Indemnity Australia Pty Ltd and McPeake [1990] FCA 68
Live Long and Prosper Investments Pty Ltd v Smith (as Trustee for JL Smith Family Trust) [2015] WADC 1
Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167
Perpetual Trustees Co Ltd v Burniston [2012] WASC 26
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60

PRINCIPAL REGISTRAR MELVILLE: In December 2014 Oakbase Global Ltd ('Oakbase') as first plaintiff and Prince Martin as second plaintiff issued a writ against the defendant indorsed with a claim for recovery of the sum of US$58,491 and damages, apparently related to an alleged breach of contract made on 22 January 2013. There is also a claim for damages for misrepresentation.
The matter progressed with the plaintiffs filing an amended statement of claim dated 23 July 2015. On 16 November 2015 the case was listed for trial commencing 14 January 2016.
In general and broad terms it appears that it is alleged that two contracts were entered into, one in July 2012 and a second in January 2013 which was subsequently varied, presumably by way of an oral agreement, by which the defendant was to supply and deliver quantities of used clothing to both Oakbase and Prince Martin at a port in Mozambique. The quantities are seemingly described as 40 foot containers and in respect of the first contract per an agreed packing list. The packing list is not otherwise identified or set out although there is attached to the amended statement of claim a list of different types of materials such as women's clothing, men's clothing, children's items and household items the quantity of which is measured in kilograms, and which is dated the 17 January 2013. It is not clear whether that packing list is the 'agreed packing list' relevant to the first contract or whether it is a packing list relevant to the second contract, or both. However, as the packing list is dated 17 January 2013, it does not appear on the face of it to be related to the first agreement and it seems to be relevant only to the second agreement.
It is difficult to discern with any sense of certainty, the basis of the claims being brought by Oakbase and Prince Martin. The statement of claim from pars 5 ‑ 19 seems address the first contract by pleading there was a contract, partly oral and partly written but without identifying what parts were oral and what parts were written, entered into in about July 2012 for one container. No delivery date is pleaded but the plaintiffs plead it was a term of the contract the defendant would send a bill of lading as soon as the container was loaded on a ship. By par 7 the plaintiffs allege the defendant knew that time was of the essence of the contract, but they do not allege that this was either an express or implied term of the contract. By par 14 the plaintiffs allege the defendant breached the contract by not sending the bill of lading on time as agreed. One is left to guess that 'on time' might mean as soon as the container was loaded on a ship, but nowhere is it pleaded when the container was loaded on a ship. Paragraph 16 alleges the container was still in a shipping yard notwithstanding representations the container had already been shipped. If that is correct, how can it be said the failure to earlier forward a bill of lading was contrary to the terms or conditions of the contract?
From pars 20 ‑ 23 the plaintiffs allege a contract, which I take to be the second contract, was entered into on or about 22 January 2013 for 10 ‑ 12 containers. It is alleged this contract was reduced to writing and contained express terms none of which referred to time being of the essence, or of any requirement to provide bills of lading.
At par 29 it is alleged this second contract was varied in about April 2013 in relation to the number of containers. At par 30 the plaintiffs alleged that following the variation they reiterated to the defendant that time was of the essence. This suggests that this was not a term of the contract at the time it was varied. On the other hand the pleading might be implying that it was a term of the contract and that the 'reiteration' was nothing more than repetition or a reminder of a previously agree term. If so it is not the pleading of a material fact, but of evidence and seemingly irrelevant evidence. However, at par 31 it is alleged that this was made clear to the defendant 'at all times' and given that at par 32 it is alleged that the defendants breached the contract by failing to deliver the goods on time it seems the implication of the pleading is that it was a term of the contract that time was of the essence, both at the time the contract was reached on the 22 January 2013 or at the time of the variation some months later.
The plaintiffs then go on to allege that the defendant failed to deliver the correct quantities of clothing (too few bags), the correct size of clothing and the correct quality of clothing and that the defendant made misrepresentations. Nowhere is it alleged in the statement of claim that a specified number of bags of clothing were agreed to be supplied. If the document annexed to the amended statement of claim is said to be the agreed packing list, the clothing is measured in weight (kilograms). To this extent the pleading appears to be inconsistent or irrelevant. Nowhere is it alleged that less weight than that stated in the attached document was supplied, notwithstanding it is clear that the plaintiffs complain that they received less than they paid for. If there was any contractual requirement to provide a certain quality of clothing or size of clothing, either expressed or implied, there is nothing in the statement of claim to that effect.
Insofar as the statement of claim seeks to claim damages for misrepresentation, the alleged misrepresentations as disclosed in the statement of claim appear to be in respect of representations as to the container the subject of the first contract being on a ship when it was not (par 16). If there are any other misrepresentations alleged that are relevant to this action I cannot discern them from the statement of claim. Thus it would appear that the identified misrepresentation occurred after the first contract was made and accordingly it relevance is not clear in a case for breach of contract. A misrepresentation might constitute misleading and deceptive conduct for the purposes of s 18 of the Australian Consumer Law per Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 and a post contractual representation might be actionable having regard to Kaze Constructions Pty Ltd v Housing Indemnity Australia Pty Ltd and McPeake [1990] FCA 68 [21]. Whether the plaintiff relies on this to ground a case based on s 18 of the Australian Consumer Law is unclear. The plaintiffs seek damages for misleading and deceptive conduct but do not appear to tie any particular course of action by the defendant to such a claim. Nor does the statement of claim, in my view, spell out whether it is Oakbase who seeks damages for this or whether it is Prince Martin, or both. Nor does the statement of claim make it clear which of the two plaintiffs suffered the loss. Although, on one view, it might be considered that the statement of claim alleges Oakbase and Prince Martin were both parties to the contract with the defendant, it does not, in that case, distinguish what particular loss was suffered by each of the plaintiffs. It does not seem likely that they both suffered the same loss, for example, if the demurrage costs and the loss of profits claimed in par 19 are as a result of the misrepresentation (but I observe the loss is stated to be by reason of breach of contract) it does not seem possible that both Oakbase on the one hand and Prince Martin on the other hand suffered the loss associated with the demurrage. Unfortunately after having heard submissions I am still unclear as to whether Prince Martin should in fact be a party to this action. I was informed that he had another action, I think against the directors of the defendant, for misrepresentation and misleading and deceptive conduct under the consumer legislation.
When the case came before the court in January 2016 the defendant was unrepresented. The trial dates were vacated and the case was ordered to be listed before a deputy registrar for directions as to further matters.
The transcript of the proceedings before the court on 18 January 2016 show that apart from the unrepresented position of the defendant, a number of other issues were discussed relating to discovery by the plaintiffs of a document allegedly to be found on a Samsung iPad, the desire of the defendant to amend the defence to plead a set‑off and counterclaim and the appropriateness of Prince Martin being joined in the action as second plaintiff , in respect of whom there did not seem to be pleaded any agreement that he had contracted with the defendant.
It also appears that the court raised with the two plaintiffs the need to amend the statement of claim. Some of the concerns expressed were in respect of what appeared to be:
(a)a number of contracts or agreements alleged in the statement of claim for which there were very few expressed or implied terms pleaded;
(b)whether allegations in relation to misrepresentation surrounding the contract were misrepresentations at common law in respect of the contract or whether the claim was brought pursuant to consumer legislation;
(c)the lack of any pleading as to the quality of the used stock and facts which gave rise to the claim for the loss particularised as demurrage and storage expenses;
(d)that from par 25 of the statement of claim and onwards there were references to various conversations which were not material to the facts that gave rise to a cause of action; and
(e)whether there were two separate contracts pleaded or whether the pleading was alleging a subsequent agreement which replaced or varied the first. The debate as to whether there was one agreement or a subsequent variation or whether there were two agreements continued, with it being made clear that no matter what was the position it needed to be clearly and unequivocally spelled out in the statement of claim.
Consequently the action was referred back to a registrar for further case management. As the parties were unable to reach any agreement as to how the matter should proceed the now represented defendant brought an application for leave to file a defence and set‑off out of time, leave to strike out the statement of claim and for an order that the first plaintiff deliver to Phillip Russo his computer tablet for examination.

The strike out application

It is useful firstly to deal with the application to strike out the statement of claim. In my view the statement of claim should be struck out with the plaintiffs being given the opportunity to re-plead the statement of claim. The re‑pleading of the statement of claim will necessarily give rise to the need to amend the defence.
The defendant seeks to strike out the second plaintiff's claim on the basis there is no allegation the second plaintiff in his personal capacity entered into any contractual agreement with the defendant and has no entitlement to any relief.
The defendant seeks to strike out the first plaintiff's claim on the basis that:
(a)the contractual claim for damages for delays and poor quality of goods is unsupported by any properly pleaded term of the contract with respect of time and quality of the goods;
(b)it is not clear whether the alleged claim for misrepresentation arises contractually or pursuant to the consumer legislation; and
(c)the balance of the statement of claim pleads evidence rather than material facts.
I have previously said that the purpose of pleadings is to appraise the other parties to the proceedings of the case they have to meet, to enable an assessment of whether the pleadings give rise to an arguable cause of action or defence as the case may be, to define the issues to be determined at trial and to enable the court to control the preparation of the case and the conduct of the trial. This means the plaintiff is required to plead the material facts that establish the foundation for the case being brought against a defendant. The defendant is then required to either admit or deny those facts. If this is done as contemplated by the rules of pleading the facts that are not in dispute and those that are in dispute are neatly identified and the parties and the court's time and money can be concentrated on the real issues.
The Court of Appeal in Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167 applied the following words of Isaacs and Rich JJ in Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 517:
Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.
More recently in addressing the adequacy of pleadings, the Chief Justice of the Supreme Court of Western Australia said in Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82, 83:
It is, I think, important when approaching an issue of that kind to bring to mind the contemporary purposes of pleadings. The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.
In the same case at page 84 he observed contemporary case management techniques have the effect of promoting full disclosure prior to trial and minimizing or eliminating the risk of surprise at trial and against that background. He said:
In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and appraising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
In determining whether the pleadings disclose an arguable cause of action the pleadings must be read in their entirety. It serves no useful purpose to consider one paragraph in isolation to the rest of the document as the meaning of that paragraph is often influenced or flavoured by the surrounding words sentences and paragraphs of the documents. Having made these observations, it must nevertheless be acknowledged and accepted that pleadings are not a mere formality and they must satisfy the functions which are stated above. If it is accepted that the purpose of the pleading is to enable the court and the other parties to see whether or not there is in fact a cause of action, and if the pleadings are set out in such a manner that demonstrate there is, even if inelegantly drafted, there can be no criticism on this ground. Similarly, if the pleadings are set out in such a manner that they do not demonstrate any cause of action, there can be no criticism that statement of claim should rightly be struck out with all the consequences that follow.
The Rules of the Supreme Court 1971 (RSC) O 20 sets out a number of rules designed to satisfy the requirements described in the cases above. For example, the rules caution against the pleading of evidence and require only the material facts of the cause of action to be pleaded. This facilitates a clear and concise understanding of the issues that have to be decided and ensures they are not obscured by irrelevancies. Similarly, where knowledge or a condition of the mind is relevant to the action, the rules require that particulars of the facts upon which the party relies to establish that knowledge or condition of the mind to be stated.
Against that background it is necessary to look at the amended statement of claim dated 23 July 2015.
At par 3 of the statement of claim it is pleaded that the second plaintiff was a director and shareholder of the first plaintiff and at all material times acted on behalf of Oakbase in his dealings with the defendant. In my view that paragraph suggests that at no material time did he act in his personal capacity. If the suggestion is the fact then it seems to me clear that the contract was between the first plaintiff and the defendant and that the claim insofar as it joins Prince Martin as the second plaintiff should be struck out on the basis it does not disclose a cause of action.
However, in the paragraphs that followed, continual reference is made to 'the plaintiffs'. For example, in par 5 it is alleged that the defendant agreed to sell to 'the plaintiffs' a 40 feet container of used clothing after the 'plaintiffs' had completed payment of the goods. In par 7 it is alleged that the defendant knew that the 'plaintiffs' were purchasing the goods' for the sale in the course of 'their' business. In par 8 it is alleged that in July 2012 'the plaintiffs' reached an agreement with the defendant. In par 9 it is alleged that the plaintiffs would pay the agreed price.
Having regard to those pleadings it would appear that it is alleged that the first and second plaintiff jointly and severally entered into the contracts with the defendant and that the reference to the facts alleged in par 3 is simply to demonstrate that the second plaintiff at all material times had the authority to join the first plaintiff to the contract. However, in my view the pleading is embarrassing in that it is susceptible to two constructions and makes it difficult to identify the issue, and makes it difficult for the defendant to properly appreciate the nature of the case being brought against it. The situation was not clarified by evidence filed by the Prince Martin in opposition to the defendant's applications nor the submissions made by his counsel.

In his affidavit the Prince Martin said at par 27:
With respect to the joinder of me as second plaintiff in personal capacity, my claim against the defendant is about misrepresentation made to me before I used the resources of my company to do business with the Defendant.
At pars 29 ‑ 30 he deposed to seeking advice about bringing and action for misrepresentation against the directors of the defendant and as he was contemplating doing this he 'will' give instructions to seek leave to be removed as second plaintiff in his personal capacity and that he did not intend to provide further pleadings for the misrepresentations made by the directors of the defendant. At par 41 he said, 'As I only wanted to recover my money and some of the damages I suffered as a result of the defendant's breach of contract, I did not pursue the claim of misrepresentation against the defendant …'. It seems to me this is inconsistent with what he says in par 27 of his affidavit.
Counsel for Prince Martin however seemed to agree the action was being brought by the plaintiff in his personal capacity and also by the Oakbase, that is, both the Oakbase and the Prince Martin jointly contracted with the defendant. However he then seemed to say that Prince Martin was joined as a plaintiff for no reason other than that he was 'the owner' of Oakbase (ts 215). If that is correct then the joinder is misconceived as a company is a separate legal entity with different legal right and obligations are not those of its directors and shareholders even though its directors may be its governing mind.
However, counsel for the plaintiffs then said (ts 226 ‑ 227) that at all material times Prince Martin was '… acting for an on behalf of the first plaintiff because he's the owner of the first plaintiff – the owner – and he transacted all the business. He was acting for the first plaintiff'. He then said Prince Martin had a separate claim for misrepresentation which he did not articulate in these proceedings. This comment suggests that any claim for damages for misrepresentation is Oakbase's alone, a proposition that is not clear from the statement of claim.
The material facts that give rise to a cause of action for a breach of contract sounding in damages for delay in delivery of goods are limited. Precedents that provide some general assistance of broad application are easily accessible through well‑known publications such as Bullen & Leake & Jacobs Precedents of Pleadings, 17th ed. For example, see Form 25‑E13.
It seems to me that in order to plead the basic material facts one needs to plead:
(a)the parties to the contract;
(b)the date the contract was formed;
(c)the consideration provided by each party to the contract;
(d)the substance of the relevant terms of the contract (which will be the terms that are alleged to be breached, including other terms to which reference needs to be made in order to understand the term said to have been breached, such as any relevant definitions);
(e)whether and which of the relevant terms were in writing or were oral;
(f)if the terms are to be implied, the facts from which it is said the term is implied; and
(g)what the defendant did or failed to do that he was required by the term of the contract to do or not to do as the case may be.
In the case of misrepresentation it appears to me necessary to plead:
(a)what was the alleged representation;
(b)when it was made;
(c)why it was not accurate;
(d)what reliance there was on it, or how it induced the making of the contract; and
(e)what losses flowed from the misrepresentation relied upon or that induced the formation of the contract.
In the event any misrepresentation is said to ground a cause of action based on s 18 of the Australian Consumer Law it should be so stated.
From par 25 onwards the pleadings contained considerable amount of evidence that is irrelevant to the pleading of the case. The evidence should be left for trial and adduced to prove the existence of the material facts alleged in the statement of claim fact. Without any attempt to be exhaustive the following is a representative sample of pleading of evidence and statements of opinion rather than of the material facts.
In par 25 there is reference to an email being sent by the defendant to the second plaintiff purporting to attach a draft bill of lading 'which was unusual'. It is not known what is meant by this being unusual. Is the 'unusual' nature of the document material to the plaintiff's case? If not it is irrelevant and introduces or purports to introduce a fact that may be contentious and result in the parties spending money and time addressing a non-issue.
Paragraph 26 alleges that the second plaintiff sent an email enquiring about the bill of lading when the first container had landed. I am unable to see how this is a material fact and at best it appears to be a pleading of evidence to support an allegation that the defendant did not deliver the bill of lading in accordance with its knowledge that time was of the essence.
Paragraph 28 refers to the second plaintiff complaining 'bitterly' to the defendant that he was losing money. Losing money might be relevant to pleading that as a result of the breach the plaintiffs suffered loss and damage but informing the defendant of it is irrelevant. That the complaint was 'bitterly' made is irrelevant, although if that was the only objection scarcely enough to justify a strike out application.
In par 31, it is not explained how it was 'made clear' by the plaintiffs' that time was of the essence. It is a statement of personal opinion rather than of fact.
The pleading in par 34 complains about the 'very poor quality of the goods and a short fall in quantity'. However, there is no term pleaded in the contract as to the quality of the goods, although the pleadings suggest that it was a term of the contract that the goods would be of a certain quality. It might be that the term was that the goods be of a merchantable quality or that there was an implied or express warranty that the goods would be fit for the purpose for which they were purchased. However the defendant should not be required to guess as to the term of the contract that the alleged poor quality of the goods is said to have breached. The pleading should not be suggestive of what the case is. The pleading should clearly and unequivocally state what the case is. If the allegation is that it was an implied term that the goods were not fit for the purpose for which they were to be supplied, why and how that term should be implied should be clearly stated and what was the purpose should be clearly stated.
In my view pars 37 ‑ 44 are irrelevant in that they involve communications between the parties that do not in their terms purport to be part of the terms and conditions of the contract or the acts that constitute the breach.
Paragraph 45 insofar it alleges a repudiation of the agreement by the defendant is beyond criticism. However, what follows is simply an explanation said to have been made by the defendant for the repudiation, namely that it did not make financial sense for the defendant to '… do another of the containers …'. That the defendant repudiated the contract and what, when, where and how it did it is enough to establish the cause of action. The reason why the defendant did it is irrelevant and potentially gives rise to a false issue.
In par 47 it is said the second plaintiff informed the defendant about the shortfall and the quantity of goods and that he complained about the quality of the goods. That the pleading refers to having received only 640 bales rather than 670 bales might be regarded as an allegation as to a breach of the terms of the contract, if the terms of the contract required 670 bales. However no such term is pleaded.
Further, the complaints about the quality of the goods are really a statement of the plaintiffs' opinion as to the quality of the goods, something that is irrelevant unless it was a term of the agreement that the goods would be of a quality that was in the opinion of the plaintiffs satisfactory.
Again at par 53, by way of example, it is alleged '… the second plaintiff informed the defendant that he had seen the goods but the seriousness was not present as the goods were not very good and informed the defendant that he was sick and tired of the business …'. Again, it is simply not known what is meant by the expression 'but the seriousness was not present' and the fact that the second plaintiff was 'sick and tired of the business' is irrelevant and evidence.

Conclusion

In my opinion the statement of claim fails to clearly identify the terms of the contract that are alleged to be breached and whether those terms were express, either in writing or orally, or how those terms were breached. Like Scott J, I am unclear as to who are the parties, what the terms of the respective agreements were, how the terms were breached and what losses followed from the breach. I make the same observations insofar as the claim is for damages for misrepresentation. Accordingly in my view the statement of claim fails to disclose a cause of action and does not apprise the defendant of the case it needs to meet. In other words the statement of claim in its current form does not meet the minimum requirements as set out in Barclay Mowlem. To use the words Rich JJ in Gould v Mount Oxide Mines Ltd (in liq) the case has not been presented with reasonable clearness. In my opinion the defendant should be given leave to bring the strike out application and the plaintiffs should be required to re-plead their case in the statement of claim in a manner that clearly discloses the following:
1.Whether the second plaintiff contracted jointly with the first plaintiff in their dealings with the defendant or whether at all material times he was a director of the plaintiff and involved in the negotiations and discussions in nothing more than his capacity as a director and/or as duly authorised agent of the first plaintiff. The fact he is a shareholder of the first defendant is irrelevant and creates confusion as it suggests he may be alleging that because he is a shareholder he has a personal claim against the defendant for breach of a contract between the defendant and the first plaintiff.
2.For the first contract, the consideration flowing from each party to the other should be set out, the substance of its terms and conditions, the acts that constitute the breaches of its terms and conditions and the damages that flow from those breaches should be set out and pleaded in a manner that the reader can see clearly separates it from the second contract.
3.Then the same should be done for the second contract.
4.Then the variation to the contract should be pleaded which should clearly set out what terms and conditions were varied, when they were varied and what the variation was.

Misrepresentation

Any claim for damages for misrepresentation should be separately set out with the material facts stated in a concise chronological order. The misrepresentation that the case is based upon should be identified by stating what it was, when it was made, where it was made, how it was made and whether it was oral or in writing, and who made it.
If the claim for misrepresentation arises under any statutory provision such as the Australian Consumer Law found in sch 2 to the Competition and Consumer Act 2010 the plaintiffs should state the statutory provisions relied upon and the name of the legislation and all the legislative requirements that need to be satisfied in order to give rise to the claim and go on to identify the conduct, the reliance thereon and the loss that resulted from that reliance.

Further discovery

The defendant seeks an order that the first plaintiff shall deliver to Phillip Russo its computer tablet for examination. In support of the application is an affidavit sworn by Mr Paul Ineson who is a director of the defendant. Under a subheading 'Discovery' he gives evidence that the only record of a 2014 signed agreement is on 'the plaintiffs' tablet as a photograph. He does not say what plaintiff owns the tablet although the orders sought are against Oakbase. He says he was given a very brief inspection of the tablet in 2016 but he did not have time to see whether the photograph was deleted or not and does not know whether it is deleted or not. He says that Mr Russo is an expert who can 'do recovery of the 2014 agreement (if necessary).
The issue arises because the defendant pleads at par 24 of the defence filed the 29 February, (four days after the plaintiffs' affidavit of discovery was sworn), a third agreement entered into in April 2014 between the defendant and Oakbase whereby all breaches of the 2013 contract were waived, the agreement being in writing on a white board signed by the parties and copied by photograph taken on Prince Martin's laptop. The defendant goes on to allege a breach of the 2014 contract by Oakbase resulting in losses that it then sets off against any claim Oakbase may otherwise have.
So the evidence suggests there is or was a document in electronic form evidencing a 2014 agreement. A perusal of the plaintiff's affidavit of discovery sworn the 23 February 2015 reveals that in the plaintiffs possession custody or power as at the 23 February 2015 was a signed copy of the agreement for the production and supply of used clothing by the defendant top the first plaintiff dated the 22 January 2013. No documents dated 2014 are discovered as being in the plaintiffs' possession custody or power or as once having been but as no longer being, in the plaintiffs' possession custody or power.
If the document exists or once existed it should be discovered. Discovery is an ongoing obligation and does not come to an end once an affidavit verifying a list of discoverable documents has been filed and served. Although at the time discovery was given by the plaintiffs the issue did not arise on the pleadings, if there is such an agreement reached in 2014 and there is a document that is relevant to that issue in existence or was once in existence it is discoverable. In my view, in this case, it would clearly be relevant irrespective of whether the agreement had been pleaded in the defence.
Price Martin in his affidavit of discovery says there are no other documents. The affidavit is conclusive unless there is evidence to suggest error, in which case an application for discovery of particular documents may be brought. As I have previously observed in Live Long and Prosper Investments Pty Ltd v Smith (as Trustee for JL Smith Family Trust) [2015] WADC 1, an application for further and better discovery of particular documents is governed by RSC 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 plaintiffs 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.
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. He said [3]:
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.
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.
The decision in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd was applied by Edelman J in Perpetual Trustees Co 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.
In this case there is affidavit evidence of the existence of the document. That evidence is not denied, Prince Martin stating in his responsive affidavit that he is happy to make his tablet available for inspection, subject to a personal undertaking to pay $200,000 in the event the information on the tablet becomes corrupted or incomplete. I also observe that the plaintiffs' solicitor does not appear to have filed the certificate required by RSC O 26 r 16A that the duty of discovery has been fully explained and this should be done immediately.
In those circumstances I am fairly certain the document exists or once existed and is or was found on a tablet owned or possessed or in the custody or power of Prince Martin. Accordingly the appropriate order is for Prince Martin to swear an affidavit verifying whether this document is or was at any time in his possession custody or power and if it was, but is not now, in his possession custody or power, when he parted with it and what has become of it, and that he file and serve a copy thereof on the defendant.
Alternatively the application might be seen as brought pursuant to RSC O 28 r 2 which empowers the court to order inspection of a physical object, not in the nature of a document, by a party or his or its expert. In my view the issue raised by the defendant is really nothing more than an issue relating to the discovery and inspection of a document. No satisfactory reason is advanced for requiring the computer to be delivered into the possession of the defendant's expert for examination as there is no evidence the document in question has been deleted or altered. The defendant's remedies fall under RSC O 26. Accordingly the application for this order is dismissed.