Stanley v Stanley - [2018] WADC 141

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   STANLEY -v- STANLEY [2018] WADC 141
CORAM:   DEPUTY REGISTRAR HEWITT
HEARD:   25 OCTOBER 2018
DELIVERED          :   15 NOVEMBER 2018
FILE NO/S:   CIV 921 of 2017
BETWEEN:   ROSS FRANCIS STANLEY
Plaintiff

AND

TERRY GRAHAM STANLEY
Defendant

Catchwords:

Practice and procedure - Application for further discovery - Turns on its own facts

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	Mr J P Wood
Defendant	:	Mr M W Edinger

Solicitors:

Plaintiff	:	Norton Rose Fulbright Australia
Defendant	:	Summers Legal

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

Perpetual Trustees Company Ltd v Burniston [2012] WASC 26

DEPUTY REGISTRAR HEWITT:

This matter concerns an application for further and better discovery brought by the plaintiff by way of a chamber summons dated 22 June 2018.
In order to deal with the application it is first necessary to outline in a brief way the cause of action which is being pursued by the plaintiff. The plaintiff and the defendant held interests in various companies engaged, apparently, in mineral expiration in central Africa.
The parties decided to terminate the arrangement which existed between them and to that end executed an agreement intended to sever the relationships between the parties which included terms for the transfer of shares and for certain other transactions expressed in the deed. The proposition upon which the plaintiff relies in his action concerns a contract between Lumwana Mining Company Limited (Barrick) and Oresearch Drilling Zambia Limited (OSDZ). OSDZ subcontracted the work it was to perform for Barrick to a company called Tectonic Drilling Solutions Limited and it was a term of the agreement between the plaintiff and the defendant that Tectonic would invoice OSDZ for the cost of the services it provided to Barrick, OSDZ would issue invoices in like amount to Barrick, and upon payment of those invoices by Barrick OSDZ would forward the monies to Tectonic. As I have mentioned those arrangements were part of the arrangements between the parties intended to sever their then current business relationship.
It is alleged that in breach of these arrangements OSDZ, whilst receiving payment from Barrick of a sum of $194,215.32 failed to remit those monies to Tectonic under the terms of the agreement and applied those monies elsewhere. While not pleaded, it is apparent from materials which have been filed in the application that the monies ultimately finished with a company named Oresearch Drilling Group FZLLC Limited, a company apparently registered in Dubai. Before embarking upon an analysis of the facts of the case I refer to the case of Perpetual Trustees Company Ltd v Burniston [2012] WASC 26 where his Honour Justice Edelman held at [29] that there are three requirements which must necessarily be satisfied to succeed in an application of the kind with which I must deal and those are:
(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.
Although hardly necessary, I also mention that in order to give proper discovery a party is required to identify all documents which are or have been in his, her or its possession, custody, power or control which are relevant to the matters in issue in the proceedings and in respect of documents which are no longer in possession to state what has become of those documents.
The range of documents which has been sought by this application is extensive and I reproduce the various categories of which further and better discovery is sought as follows:
1.All bank statements of OSDZ for the period 1 April 2016 to 31 December 2016 (the Discovery Period) including but not limited to all bank statements and other statements of account evidencing or recording the receipt by Oresearch Drilling Zambia Limited (OSDZ) from Lumwana Mining Company Limited (Barrick) of funds totalling US$499,336 in payment of OSDZ's invoices to Barrick in respect of drilling services provided by Tectonic Drilling Solutions Limited (Tectonic) to Barrick in the months of April, May and June 2016.
2.All bank statements of OSDZ for the Discovery Period including but not limited to all bank statements and other statements of account evidencing or recording the transfer by OSDZ to Tectonic of funds totalling US$499,336 in payment of the May to June Invoices.
3.All documents recording or evidencing what instructions and/or applications and/or directions and/or authorisations were given or made to enable the transfer of those funds from OSDZ to Tectonic, including all instructions and/or applications and/or directions and/or authorisations given or made to or by OSDZ to transfer the funds to Tectonic, by whom those instructions and/or applications and/or directions and/or authorisations were given or made and to whom they were given or made.
4.All documents recording or evidencing all communications between the Defendant and any other person including but not limited to Mr Lacey regarding the transfer of those funds from OSDZ to Tectonic.
5.Where not already included above, all bank statements of OSDZ for the Discovery Period including but not limited to all bank statements and other statements of account evidencing or recording the receipt by OSDZ from Barrick of the US$194,215.32 (the Funds) in payment of OSDZ's invoices to Barrick in respect of drilling services provided by Tectonic to Barrick in the months of July and August 2016.
6.All bank statements of OSDZ for the Discovery Period including but not limited to all bank statements and other statements of account evidencing or recording the transfer by OSDZ to Oresearch Drilling Group FZ LLC Limited (ODG FZ LLC) of all or part of the Funds.
7.All bank statements of ODG FZ LLC for the period from Discovery Period including but not limited to all bank statements and other statements of account evidencing or recording the receipt by ODG FZ LLC of all or part of the Funds.
8.All bank statements of ODG FZ LLC for the period from Discovery Period including but not limited to all bank statements and other statements of account evidencing or recording the transfer by ODG FZ LLC to any other person of all or part of the Funds.
9.All documents recording or evidencing what instructions and/or applications and/or directions and/or authorisations were given or made to enable the transfer of the Funds from OSDZ to ODG FZ LLC, including all instructions and/or applications and/or directions and/or authorisations given or made to or by OSDZ to transfer the Funds to ODG FZ LLC, by whom those instructions and/or applications and/or directions and/or authorisations were given or made and to whom they were given or made.
10.All documents recording or evidencing all communications between the Defendant and any other person including but not limited to Ian Lacey regarding the transfer of the Funds from OSDZ to ODG FZ LLC.
11.All management accounts, profit and loss accounts, balance sheets and other financial statements of OSDZ (whether audited or not) for the Discovery Period.
12.All documents (including communications between OSDZ and ODG FZ LLC) recording or evidencing the circumstances in which and the reasons why the Funds were transferred from OSDZ to ODG FZ LLC and from ODG FZ LLC to other persons and the Defendant’s knowledge of and/or involvement in the transfer of the Funds from OSDZ to ODG FZ LLC and from ODG FZ LLC to other persons.
13.All company constitutional documents of OSDZ including all certificates of incorporation, memoranda and articles of association, shareholder register, shareholders agreement, company extracts and equivalent documents.
14.All company constitutional documents of ODG FZ LLC including all certificates of incorporation, memoranda and articles of association, shareholder register, shareholders agreement, company extracts and equivalent documents.
15.All minutes of meetings of the board of directors of OSDZ and all written resolutions of its board of directors or shareholders, from the Discovery Period.
16.All minutes of meetings of the board of directors of ODG FZ LLC and all written resolutions of its board of directors or shareholders, from the Discovery Period.
Before embarking on a further analysis I turn to the pleadings which have been filed to discern what is in issue in this action. As to the proposition that OSDZ received invoices from Tectonic and issued invoices in like amount to Barrick and received payment of those amounts and did not remit the monies so received to Tectonic, there is not an issue. The defence admits that to be the case.
I first consider pars 1 and 2 of the specific documents which are sought pursuant to the chamber summons. Paragraphs 1 and 2 refer to monies received by OSDZ from Barrick totalling $499,336 in respect of drilling services provided by Tectonic. Paragraph 2 refers to the transfer of those monies to Tectonic. The point of that discovery completely escapes me. In the statement of claim in pars 14 to 17 it is pleaded that the various invoices were issued by Tectonic to OSDZ, following the receipt of those invoices from Tectonic OSDZ issued invoices to Barrick in the same amount, following which Barrick remitted the amount of $499,336.80 in payment of those invoices and subsequently OSDZ forwarded those funds to Tectonic in payment of its invoices. Why those propositions are in the statement of claim is difficult to ascertain since they do not support any claim and most certainly they do not support an application for discovery of all the financial records in relation to the transactions. Insofar as the plaintiff seeks further and better discovery as outlined in pars 1 and 2 of the orders sought by the chamber summons I dismiss that part of the application on the grounds that such documentation is irrelevant to the claim brought by the plaintiff for the reasons I have stated.
Paragraph 3 seeks all orders, directions, authorisations and so forth in relation to the matters in pars 1 and 2 and par 4 seeks documents evidencing any relevant communications regarding the transfers. Again, this documentation is completely irrelevant as is the pleading to the cause being pursued by the plaintiff. There shall be no order for further and better discovery in terms of pars 3 and 4 of the minute of proposed orders.
As to par 5 the plaintiff seeks all bank statements from OSDZ for the discovery period (defined in par 1 to be 1 April to 31 December 2016) including all bank statements and other statements of account recording the receipt of $194,215.32 in payment of OSDZ's invoices to Barrick in respect of the drilling services provided by Tectonic to Barrick. Again that is not an issue in these proceedings. The defendant has admitted that it received the funds in payment of the invoices from Barrick and there is no point or purpose in the bank statements being discovered because the receipt of the funds has been admitted.
The next group of documents of which further discovery is sought are bank statements of OSDZ for the discovery period evidencing or recording the transfer by OSDZ to Oresearch Drilling Group FZLLC Limited of all or part of the funds. It is common ground that the funds were not remitted to Tectonic and the defendant has already produced a bank statement from Oresearch Group FZLLC Limited indicating it received the relevant monies. In my view nothing further is required.
The next item sought are all bank statements of Oresearch Drilling Group FZLLC Limited for the discovery period. No evidence whatever has been produced to indicate what the relationship of the defendant to that company is nor anything of the structure of the company nor anything to indicate that the defendant occupies any position from which I should infer that such documents are in his possession, custody, power or control.
Similar comments apply to par 8 which in essence seeks discovery of documents indicating the way in which the company dealt with the monies remitted to it.
The next group of documents sought are those concerning instructions, directions etc given to implement the transfers referred to in par 7. Again it seems to me that what matters is that the money was not remitted to Tectonic which is an admitted fact, the precise mechanism by which that was achieved in terms of instructions, orders and the like are to my mind irrelevant. The fact is that it happened and if the propositions advanced by the plaintiff are upheld that transfer would constitute a breach of the contract between the plaintiff and the defendant.
Paragraph 10 seeks documentation regarding the transfer of funds from OSDZ to Oresearch Drilling Group FZLLC Limited. That that happened is not in issue, how it happened is not relevant for the reasons referred to in regard to the previous paragraph.
Paragraph 11 seeks all management accounts, profit and loss accounts, balance sheets and other financial statements of OSDZ for the discovery period. I simply cannot comprehend how that material is relevant to the case being pursued by the plaintiff in this matter.
The next paragraph concerns documentation including communications relating the transfer to Oresearch Drilling Group FZLLC Limited and that regard I simply repeat what I said earlier. That it happened is what is relevant, how it happened is not relevant.
The next item which is sought in par 13 are all certificates of incorporation memoranda of incorporation, articles of association, shareholder registers, shareholder agreement, company extracts and equivalent documents of OSDZ. That the company existed is not in dispute, how these documents are relevant and assist the plaintiff in the pursuit of his action or defence of the counterclaim escape me.
The next matter is par 14 which seeks like materials in regard to Oresearch Drilling Group FZLLC Limited. Again the relevance of these matters escape me and additionally for the reasons earlier expressed I can see no evidentiary basis to infer that these documents are in the possession, custody, control or power of the defendant.
Paragraph 15 the plaintiff seeks minutes of all meetings of the board of directors of OSDZ and all written resolutions of its board of directors and shareholders from the discovery period which I remind myself runs from 1 April 2016 to the end of that year. The requirement is breathtakingly broad and even if it were relevant, which it is not in light of the admissions, would capture all sorts of information which had absolutely nothing to do with this case.
Paragraph 16 seeks like information from Oresearch Drilling Group FZLLC Limited. Personally I am unable to perceive how it could possibly be relevant. Secondly, I am unable to see any basis upon which it can be inferred to any standard let alone the required standard that these documents are in the possession, power or control of the defendant. And even if they were, I am totally unable to see how that information could be relevant and indeed the breadth of the information sought to be obtained is so broad as to be oppressive.
For these reasons I do not consider that this application is soundly based and it will be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AC
COURT OFFICER
13 NOVEMBER 2018