Robert Frederick Jane v Bob Jane Corporation Pty Ltd
[2013] VSC 85
•28 February 2013
£
| Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2012 04648
| ROBERT FREDERICK JANE | Plaintiff |
| v | |
| BOB JANE CORPORATION PTY LTD | |
| (ACN 005 870 431) | Second Defendant |
| PORT 471 PTY LTD | Third Defendant |
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JUDGE: | DERHAM AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 February 2013 | |
DATE OF JUDGMENT: | 28 February 2013 | |
CASE MAY BE CITED AS: | Robert Frederick Jane v Bob Jane Corporation Pty Ltd and ors | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 85 | |
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DISCOVERY – After disclosure of critical documents pursuant to s 26 of the Civil Procedure Act2010 (Vic) – Trial of preliminary questions ordered – application made under wrong rule - Particular discovery under rule 29.08 of the Supreme Court (General Civil Procedure) Rules2005 intended - Whether discovery necessary for trial of preliminary questions- orders refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr. G. McCormick | |
| For the Defendants | Mr. I. G. Waller SC with Mr. J. S. Mereine |
HIS HONOUR:
Background
What follows is a revision of reasons for judgment handed down ‘extempore’ at the conclusion of argument of the plaintiffs application for discovery pursuant to a summons issued on 21 December 2012.
The summons, as the Defendants point out, is misconceived in form and substance. It purports to be an application for discovery pursuant to Rule 29.01.1(3) of the Supreme Court (General Civil Procedure) Rules 2005 that “the Defendants make and serve an affidavit stating any and if so what documents of certain classes are or have been in the Defendants’ possession, and, if any document has been but no longer is in the Defendants’ possession, when it [sic] parted with it and its [sic] belief as to what has become of it, with respect to the questions specified in paragraph 1(a), (b), (d), (e) and (f) of the Order of [his Honour Justice Croft] made on 23 November 2012”.
In that order his Honour ordered the determination of preliminary questions. The trial of those preliminary questions was later set down for 18 March 2013 before his Honour. Because his Honour is engaged in a very large trial in relation to the Great Southern proceedings, he is unable to undertake that trial and enquiries are being undertaken to determine if another Judge of the Court can hear the trial of those questions. The questions relate to separate claims made by the Plaintiff in the Amended Statement of Claim.
The first claim is in respect of a sum that is to be due by the Second Defendant to the Plaintiff, in the sum of $520,244.86. As I understand the application today, no discovery is sought in relation to that question.
The second question concerns a claim by the Plaintiff against the Third Defendant, for the sum of $2,402,723.23, referred to in paragraph 11 of the Amended Statement of Claim. In relation to that, the Plaintiff does seek to have discovery.
The third question is a question relating to the application of the Limitation of Actions Act 1958 (Vic) to the actions for an account raised by the Plaintiff in the Amended Statement of Claim and it is not suggested that there is any discovery that is relevant to that question that ought to be made.
The fourth question concerns whether or not there are settled accounts as between the Plaintiff and the Second Defendant for certain periods between 2001 and 2008. The application for discovery does concern the discovery of documents in relation to the accounts as between the Plaintiff and the Second Defendant.
The fifth question is whether or not the Plaintiff is otherwise estopped from reopening the loan account balance, and it seems to me that the application for discovery does not concern that question.
The sixth, and last, question is, if there are settled accounts, and the limitation period has not expired, should the account be reopened or the Plaintiff given liberty to surcharge and falsify the accounts? It is submitted that further discovery is necessary for the purpose of this question.
At the same time as an application was made purportedly for discovery pursuant to r 29.01.1(3), the Plaintiff served a Notice for Discovery in terms that sought the discovery of documents in accordance with r 29.01.1(3) limited to documents with respect to the questions specified in paragraphs 1(a), (b), (d), (e), and (f) of the Orders made by the Honourable Justice Croft on 23 November 2012, which I have just referred to.
Notice of Discovery
Dealing first with that Notice for Discovery, the Defendants submit (and when I am referring to the Defendants, I am referring to the Second Defendant and Third Defendant, as the First Defendant has been removed from the proceeding) that the Notice was served, and this is common ground, after Croft J ordered that any application for discovery by the Plaintiff shall be filed and served by 21 December 2012. That order was made on 14 December 2012, and reads as follows: “Any application by the Plaintiff for discovery shall be filed and served by 21 December 2012 and shall be made returnable before an Associate Justice”.
Rule 29.16 of the Rules of Court provides, in substance, that if the Court has given directions about discovery or inspection, no party may, without further order, serve a notice for discovery except in accordance with those directions.
The Defendants have submitted that in those circumstances the notice was served in breach of the Rule and thereby constitutes an abuse of process. They seek an order that they are not required to comply with the notice.
Mr McCormick, who appeared for the Plaintiff, did not address specifically this aspect of the matter, but it seems to me to be correct that in the circumstance where his Honour has made an order of the kind I have referred to, that the service of a notice in terms that I have mentioned is not permitted pursuant to that Rule.
Accordingly, should it be necessary, I will make an order to the effect sought by the Defendants, that they are not required to comply with that notice.
The summons issued is in very familiar terms. Even though it does not purport to be made pursuant to r 29.08 of the Rules of Court, it in effect does seek to have an order made in accordance with that particular discovery rule. Similarly, it is confined to documents that relate to the questions referred to in his Honour’s order, in paragraphs 1(a), (b), (d), and (e), and (f).
Upon hearing the application, it emerged that the ambit of discovery sought by the Plaintiff was much narrower than that which the summons seeks. After lunch Mr McCormick produced documents that identified particular items in the loan account of Mr Robert Jane, the Plaintiff, held with the Second Defendant, which appeared to reveal discrepancies, in relation to which he sought discovery for the purposes of further elucidating what appear to be potential errors in that account.
The Defendants submitted in the first instance, that that application was misconceived, as I have said, in form and in substance; is an application made on the run, so to speak; and more particularly, seeks relief that is contrary to r 52.01(3)(b). That rule provides, in relation to the taking of accounts and making inquiries, that the Court shall not order that an account be taken if there appears that there is some preliminary question to be tried.
Senior Counsel for the Defendants, Mr Ian Waller, submitted that to give discovery to the Plaintiff of the kind sought in the summons, and even of the narrower kind sought by reference to discrepancies between different versions of the loan account, was to put the cart before the horse. That is to say, it is incumbent upon a party in the position of the Plaintiff in this case who seeks to claim –
(a)that if there are settled accounts, the account should be reopened; or
(b)that the Plaintiff be given liberty to surcharge or falsify,
and these claims are made at the point at which a preliminary question is raised as to that, it is not appropriate to give the kind of discovery that is sought by the Plaintiff as that would involve the provision of discovery of the kind that would be ordered if the settled accounts are opened and an order for the taking of accounts were made.
In other words, the discovery sought is a step that will be taken if and only if the Plaintiff is successful in contending that the account should be reopened, or that the Plaintiff be given liberty to surcharge and falsify.
I agree with that submission, and I did not understand Mr McCormick to dispute the order in which discovery should be made in relation to the taking of accounts. But Mr McCormick did seek to advance the proposition, that on the face of the documents that have been disclosed in the Court Book (compiled in accordance with Croft J’s orders for the parties to disclose to each other critical documents pursuant to s 26 of the Civil Procedure Act2010 (Vic)), that there were discrepancies on the face of the different versions of the loan account produced, which required explanation.
Mr Waller submitted that this was not a sufficient basis upon which to order discovery, and in any event, it was not the application that he came to meet. It is certainly the case that the application he came to meet was different in character to the application that was in fact made by Mr McCormick on the day.
The only basis upon which Mr McCormick advanced the proposition that discovery was necessary for the purposes of the determination of the preliminary questions, was that these discrepancies between the different versions of the loan accounts pointed to errors, and that the documents that underpinned those particular entries in the loan account might disclose how those errors arose.
Mr Waller submitted that if these discrepancies do reveal errors, then that can be made the subject of evidence from the Plaintiff and cross-examination of witnesses called on behalf of the Defendants in the trial of the preliminary questions, and of course by way of submission based upon both the statements of the loan account that show the discrepancies, and of the underlying ledgers that have been identified in the course of argument by Mr Waller, and which are contained in the Court Book.
Mr McCormick relied upon the affidavit of Mr Antony Christopher Hill, sworn on 21 December 2012, in making the application for discovery. In that affidavit, Mr Hill stated in paragraph 3 that the Plaintiff does not seek a general order for discovery, but one limited in accordance with r 29.01.1(3) and further limited to the questions specified in the Order of the Court made on 23 November 2012.
I should say in passing that, having regard to the number of items in the loan account, and the number of years that the loan account travels, an order of that kind would be extremely burdensome and beyond what, on the face of it, is required in this proceeding at this stage. His Honour Justice Croft has limited the disclosure that has been given to that which is necessary, at this stage, for the determination of the trial of the questions that are ordered to be decided.
Mr Hill went on, that the critical documents that the Defendants have disclosed reinforce the need for discovery, and not a single documents has been disclosed that is contrary to the Defendants’ case. In addition, he deposes that supporting documents have not been disclosed, so that no documents go to the entries in the summary of the loan account, which is Schedule 1 to the Defence, dated 2 November 2012. Mr Waller pointed to extensive disclosure of general ledgers that do underpin the loan account as depicted in Schedule 1 to the Defence.
Mr Hill also referred to documents in the Court Book, being the documents the parties have determined to be the critical documents, that point to the existence of other documents, and particularly referred to the intercompany loans matrix that appears on page 205 of the Court Book.
In relation to that, Mr McCormick submitted that the entry described as “R F Jane non-current” with the same account number as the non-current loan account of Mr Jane in the books of the Second Defendant, referred to what appears to be a document with the number “6110”.
He also pointed to an entry entitled “Bob Jane T/Mart (NZ) Ltd”, with a different loan account number, in relation to which there is a statement on the intercompany loans matrix for the period ending 30 June 2007, that “the amount agreed to [5211] as currently outstanding”.
Mr Waller pointed out that there is no issue in the proceeding that relates to a loan account with the number ending in “6210” relating to Bob Jane T/Mart (NZ) Ltd. This was not disputed by the Plaintiff.
So in relation to any reference to a document with the number 5211, I agree with the submission made on behalf of the Defendants that it cannot be relevant to the issues of this dispute. However, in relation to the document (if it is a document) numbered 6110, it appears that that may be relevant to the loan account the subject of this proceeding.
The entry in relation to which that document is identified, if it is a document, appears to be signed off by Mr Robert Jane. Nothing has been put beyond the fact that this intercompany loans matrix apparently refers to a document to suggest that that this is an error that needs investigation. Although, the Plaintiff’s counsel submitted, with some force, that this is a case where the documents necessary and relevant to the claims made by the Plaintiff, are primarily in the possession of the Second Defendant or the Third Defendant, nevertheless the provision by the Defendants of documents critical to the determination of the preliminary questions have revealed what appear on the face of them to be sufficient material to enable the Plaintiff to address those questions.
Mr Waller submitted that Mr Hill’s affidavit should not be accepted. It was submitted that he gives no evidence that he believes that there are some documents, or some class of documents, relating to the preliminary question to be tried, which may be, or may have been, in the Defendants’ possession, but which have not been disclosed. Beyond pointing to the intercompany loans matrix, that does appear to be the case.
In relation to other aspects of Mr Hill’s affidavit, Mr Waller submitted that the statements that he makes that the supporting documents have not been disclosed, are wrong. In support of that submission, he has pointed to the following documents as having been disclosed and included in the Court Book as critical documents:
(a)First, the summary of loan accounts on a month by month basis, from July 2002 until October 2008, which appear in the Court Book at pages 91 to 97;
(b)Secondly, the general ledger for the loan account with the number ending 6490, which appear in pages 98 to 134 of the Court Book, which run from 1 July 2001 to 30 June 2008 and disclose a balance due to the Plaintiff of $456,989, a figure which that documents also reveal was paid to Mr Jane; and
(c)Thirdly, a general ledger for the loan account number ending in 6491, and further, documents that disclose that this loan account, which was known as the “current loan account”, was merged or amalgamated with the “non-current loan account” ending with the numbers 6490, so as to show that all of those amounts have been taken into account.
The allegation by Mr Hill that there are no supporting documents for the general ledgers is therefore wrong. Further, the Plaintiff is not entitled to discovery of the supporting documents for purposes of the hearing of the preliminary questions.
Mr Hill asserted that, in relation to the general ledgers already disclosed, they all bear the date of 26 November 2012. It is apparent on the face of those documents, that this is the date of the printing of the documents, and I note that that is a date shortly after the Orders of Croft J made on 23 November 2012 for the disclosure of the critical documents.
In relation to the statement of Mr Hill that there are no year-to-date spreadsheets showing a month by month summary, it was submitted on behalf of the Defendants that the Plaintiff had previously given evidence that he was given a statement every month. That occurred in the course of his cross-examination on 28 September 2012.
It is also said on behalf of the Defendants that they have produced the month by month summaries, so far as they are in their possession, and these appear on pages 91 and 98 of the Court Book. More significantly, nothing has been put before me to show that the Defendants have any further monthly statements that have not been disclosed.
It was submitted on behalf of the Defendants that the discovery sought in relation to the issue to be tried in paragraph 1(f) of Croft J’s order, i.e. if there are settled accounts and the limitation period has not expired, should the accounts be reopened or the Plaintiff given liberty to surcharge and falsify, amounts to a “fishing” expedition and is impermissible.
It was submitted that the pleadings framed the parameters of relevance for the issues in the case and the ambit of the discovery that is required to be given. There is no dispute from the Plaintiff that this is correct as a matter of principle. The Plaintiff nevertheless submits, as I have said, that the discrepancies between various versions of the loan account point to errors, and that those errors ought to be the subject of discovery.
In my view, if errors can be revealed on the face of documents, then those errors can be explored at the trial of the issues, as Mr Waller said, through evidence in chief and cross-examination of the witnesses to be called by the Defendants, or by application of the knowledge with which Mr Jane must have, to some extent, of his dealings with the company in relation to the matters in question.
One of the main matters in question concerns the entry in the loan account, which is Schedule 1 to the Defence, relating the property in Port Melbourne and described in the loan account as “471 Port Melbourne”. Mr McCormick pointed to discrepancies in relation to this entry, which required, in his submission, that the documents underpinning those entries be discovered. Mr Waller pointed out that the earlier statements of the loan account that reveal discrepancies can be explained by reference to the fact that they are snapshots of the account at earlier periods of time, and that what is important is the loan account as it appears as at 30 June 2008. And, moreover, that reveals that the loan account was credited during the 2007–2008 year, with an amount substantially equivalent to the debit amount that occurred in the 2005–2006 year, so that in the end there is a crediting to the loan account of a substantial portion of the amount attributable to payments for property “471 Port Melbourne”. And, further, the entries show that in the end, a crediting of that amount to the loan account amounts to a repayment of the debt, having regard to other items identified in paragraph 11 of the Defence.
Conclusion
For these reasons, I am not persuaded that the Plaintiff is entitled to particular discovery pursuant to r 29.08, nor that it is appropriate to make an order for general discovery of the kind sought in the summons. Indeed in that respect, the submission made on behalf of the Defendants against the making of any general order, I accept. These are set out in paragraphs 12 to 15 of the written submissions that Mr Waller handed up.
For those reasons I will dismiss the summons, with costs.
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