Schofields Property Development Pty Ltd v Lindsay-Owen
[2014] NSWSC 220
•12 March 2014
Supreme Court
New South Wales
Medium Neutral Citation: Schofields Property Development Pty Ltd v Lindsay-Owen [2014] NSWSC 220 Hearing dates: 7 March 2014 Decision date: 12 March 2014 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Exceptional circumstances not established
Catchwords: PROCEDURE - interlocutory issues - disclosure of documents - Practice Note SC Eq 11 - parties have not yet served all evidence - whether documents necessary to enable expert to conclude report - applicant has exercised contractual entitlement to documents from one cross defendant - whether exceptional circumstances established in relation to other cross defendant Legislation Cited: Practice Note SC Eq 11 Cases Cited: Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393
Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue; Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913
Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458
RSA (Moorvale Station) Pty Ltd v VDM CCE Pty Ltd [2013] NSWSC 534
SkyMesh Pty Ltd v Ipstar Australia Pty Ltd [2012] NSWSC 696Category: Interlocutory applications Parties: Gregory Hamilton Willoughby Lindsay-Owen (First Applicant/First Defendant/First Cross Claimant)
Dairycorp Pty Ltd (Second Applicant/Second Defendant/Second Cross Claimant)
Schofields Property Development Pty Ltd (First Respondent/Plaintiff/First Cross Defendant)
Villawood Management Pty Ltd (Second Respondent/Second Cross Defendant)Representation: Counsel:
M Dicker SC (Applicants/Defendants/Cross Claimants)
L V Gyles SC with P M Knowles (Respondents/Plaintiff/Cross Defendants)
Solicitors:
HWL Ebsworth Lawyers (Applicants/Defendants/Cross Claimants)
Clayton Utz (Respondents/Plaintiff/Cross Defendants)
File Number(s): SC 2013/215845 Publication restriction: Nil
Judgment
Introduction
By notice of motion filed on 9 December 2013 the Cross Claimants, Mr Lindsay-Owen and Dairycorp Pty Ltd, seek an order that the Cross-Defendants, Schofields Property Development Pty Ltd and Villawood Management Pty Ltd, disclose certain documents.
As the parties have not yet served all their evidence, I must have regard to Practice Note SC Eq 11 which at [4] provides:
"The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure."
Decision
The Cross Claimants have not established exceptional circumstances. Their notice of motion of 9 December 2013 should be dismissed.
Background
The Cross Claimants own land at Blacktown. On 29 March 2010 the Cross Claimants entered into a Joint Venture Agreement with Schofields, a property developer, to develop the land. On the same day the Cross Claimants and Schofields entered into a Project Management Agreement with Villawood, a project manager.
Under the Joint Venture Agreement, Schofields was entitled to a particular interest in the land if, as happened, relevant planning approval was not obtained for the proposed development by 29 September 2012.
The Cross Claimants allege that, in failing to obtain the planning approval by 29 September 2012, Villawood acted in breach of the Project Management Agreement and that Schofields acted in breach of the Joint Venture Agreement and its alleged fiduciary duty to the Cross Claimants.
The Cross Claimants claim that they are entitled to damages from both Schofields and Villawood, and that Schofields is not entitled to the interest in the land for which it contends.
The documents sought
As refined during submissions, the documents sought were as follows:
"1. All Documents relating to attempts by [Villawood] under the Project Management Agreement to secure Planning Approval, including any agreements for the engagement and retention by it and/or by [Schofields] of any third party to provide advice in relation to, or to assist in the obtaining of, Planning Approval, and all documents relating to advice or assistance provided by such third parties, in the period between 29 March 2010 and 29 March 2013.
2. All documents relating to any steps taken by [Schofields] to obtain Planning Approval under the Joint Venture Agreement, including its supervision of [Villawood] and/or Mr Greg Poole and/or Grelyn Pty Ltd, in the period between 29 March 2010 and 29 March 2013.
3. All correspondence, including letters, emails, facsimiles, and notes between:
(a) [Villawood] and/or [Schofields]; and
(b) Mr Greg Poole and/or Grelyn Pty Ltd
relating to planning issues concerning the Joint Venture Agreement and the Project Management Agreement for the period 29 March 2010 and 29 March 2013."
So far as the third category of documents is concerned, the Cross Claimants allege that, without their knowledge or consent, Schofields and Villawood appointed Mr Poole, or his company Grelyn Pty Ltd, to provide project management services in respect of the project and to represent Schofields and Villawood in fulfilling their obligations under the Joint Venture Agreement and the Project Management Agreement. Schofields and Villawood deny they appointed Mr Poole for that purpose, or at all.
Stage reached in the proceedings
Schofields, as plaintiff, has served all its evidence in chief. The Cross Claimants have served their lay evidence.
The Cross Claimants propose to serve expert evidence from Ms Sue Francis. The documents sought in the notice of motion of 9 December 2013 are said to be necessary to enable Ms Francis to complete her report.
The Cross Claimants' solicitor, Mr Alexander Robinson, has deposed:
"The [Cross Claimants] have engaged Ms Sue Francis, an expert town planner, to provide her expert opinion on several matters for the purposes of these proceedings. Ms Francis has been asked to provide her expert opinion about the adequacy or otherwise, as a matter of good town planning and developer practice, of the steps taken by [Villawood] in the period between 29 March 2010 and 29 September 2012 in fulfilling its obligations in a diligent and timely manner."
During submissions, Mr Dicker SC, who appeared for the Cross Claimants, informed me that Ms Francis's report was to be directed primarily to the question of the steps taken by Villawood, as project manager, to achieve planning approval by 29 September 2012.
The information already available to the Cross Claimants
Clause 4.14 of the Project Management Agreement obliged Villawood to give both Schofields, and the Cross Claimants (as the "Joint Venture Parties"):
"Free and unrestricted access to, and the right to take copies of, documents relating to the Project which are held by [Villawood] including its books of account...".
On 3 July 2013 Mr Robinson and Mr Lindsay-Owen attended Villawood's office and were given access, in electronic form, to Villawood's documents.
Mr Robinson and Mr Lindsay-Owen were provided with a DVD containing over 5000 documents arranged in folders.
The Cross Claimants contend that two documents were not included in those made available on 3 July 2013.
One was a consultancy agreement between Villawood and Grelyn Pty Ltd. The Cross Claimants assert they only became aware of such a document because it was referred to by Villawood in its Commercial List Cross Claim Response filed on 11 October 2013. However, a draft of that document was included in the documents disclosed on 3 July 2013.
The other document was an email dated 13 September 2011 which was produced on subpoena by Blacktown Council in November 2013. Villawood accepts that that email was not included in the documents made available on 3 July 2013. However, the email is addressed to, amongst others, Mr Lindsay-Owen.
During submissions, I invited Mr Gyles SC, who appeared with Mr Knowles for Schofields and Villawood, to obtain instructions from Villawood as to whether, with the exception of the 13 September 2011 email, it had made available to the Cross Claimants on 3 July 2013, all of the documents now sought by the Cross Claimants from Villawood by the notice of motion of 9 December 2013.
After obtaining instructions, Mr Gyles confirmed that this was so.
In those circumstances, as Mr Dicker acknowledged, the basis for the Cross Claimants' claim for disclosure from Villawood fell away.
What remains for consideration is whether Schofields should make disclosure of the documents sought.
The documents required for Ms Francis's report
Ms Francis is asked to opine on the adequacy or otherwise of steps taken by Villawood in relation to the obtaining of planning approval by 29 September 2012.
Mr Robinson gave evidence of statements Ms Francis has made to him, in very general terms, as to the information which had been provided to her.
For example, Mr Robinson said that on 19 November 2013 Ms Francis said words to the effect:
"I'm missing a lot of information. I need to understand what [Villawood] was actually doing in relation to seeking development approval. The documents I have are useful in general terms but they don't give me the complete picture as to what was going on."
More recently, Ms Francis is quoted as having said words to the effect that she would "expect to see a lot more information" concerning Villawood's actions, its engagement of consultants, its "approaches to the key stakeholders, such as the council" and as to "management of the consultants and progress on a project like this".
Ms Francis is also quoted as having said that "the biggest gap is between April 2010 to mid-2011" (although, according to an analysis conducted Mr Vince Annetta, the solicitor for Schofields and Villawood, Ms Francis has only been provided with 41 of the 245 documents made available on 3 July 2013 in respect of that period).
Are there "exceptional circumstances necessitating disclosure"?
The Court has considered the requirements of the Practice Note on a number of occasions including in Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [65] - [66] per Bergin CJ in Eq; Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458 at [14] per McDougall J, SkyMesh Pty Ltd v Ipstar Australia Pty Ltd [2012] NSWSC 696 at [7] - [9] per Sackar J and by me in RSA (Moorvale Station) Pty Ltd v VDM CCE Pty Ltd [2013] NSWSC 534.
In Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue; Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913 at [17] Gzell J said:
"[T]o be exceptional the circumstance need not be unique or unprecedented or very rare. What is needed is an appraisal of all the circumstances and the context in which the expression must be satisfied. Are there circumstances necessitating disclosure before evidence in the sense that the party's case cannot be put without the disclosure? Are those circumstances exceptional?"
Each case must be examined in its own context.
This case is similar to that which I considered in RSA (Moorvale Station) Pty Ltd in that a basis upon which it is said that "exceptional circumstances" exist is to provide an expert witness with all relevant documents now, and before the expert's report is finalised. Mr Dicker submitted that it was desirable to take this course, rather than having Ms Francis prepare her expert report upon the basis of the materials already available from Villawood, and then, perhaps, be obliged to produce a revised or supplementary report if Schofields ultimately disclosed further documents.
I accept that the desirability of avoiding a revised or supplementary expert report (which might involve the production of concomitant responsive reports from that expert's opposite number) is a factor to be taken into account when considering whether there are "exceptional circumstances" to justify disclosure prior to the service of all evidence.
However, in this case, I do not see that factor as weighing heavily in the balance for a number of reasons.
First, Ms Francis has been asked to opine on the role of Villawood, as project manager, in relation to the obtaining of planning approval. Ms Fracis has not been asked to express any opinion about Schofields' conduct. Ms Francis will now have available all material that Villawood has in relation to that topic.
It is possible that Schofields also has some documents relevant to that topic. However, it seems unlikely Schofields has any critical documents over and above those that Villawood has already disclosed. Villawood, and not Schofields, was the project manager. And the documentary shortcomings identified by Ms Francis, albeit in very general terms, are directed to documents likely to be in the possession of Villawood, rather than Schofields.
Furthermore, were Schofields ordered to give disclosure as sought by the Cross Claimants, it will be put to the trouble and expense of giving disclosure twice; both before and after the delivery of evidence.
Having taken into account all of these matters, the conclusion to which I have come is that the Cross Claimants have not established "exceptional circumstances" within the meaning of the Practice Note.
Accordingly, the Cross Claimants' notice of motion of 9 December 2013 should be dismissed.
I will hear the parties as to costs of the motion. However, my tentative view is that the costs of the motion should be the Cross-Defendants' costs in the cause.
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Decision last updated: 17 March 2014
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