Taylor v National Australia Bank Ltd

[2009] WASC 69

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   TAYLOR -v- NATIONAL AUSTRALIA BANK LTD [2009] WASC 69

CORAM:   MASTER SANDERSON

HEARD:   10 MARCH 2009

DELIVERED          :   25 MARCH 2009

FILE NO/S:   CIV 2677 of 2008

BETWEEN:   MALCOLM CHARLES TAYLOR

Applicant

AND

NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937)
First Respondent

JOHN GAETANO FIOCCO on behalf of FIOCCO HOPKINS RATTIGAN (A FIRM)
Second Respondent

WILLIAM JOHN WATSON
DIANA FRANCES WATSON
Third Respondents

Catchwords:

Practice and procedure - Application for pre­action discovery - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Applicant:     Mr M S Barrett-Lennard

First Respondent           :     Ms R A Collins

Second Respondent      :     Mr A T Macknay

Third Respondents        :     No appearance

Solicitors:

Applicant:     M S Barrett­Lennard & Co

First Respondent           :     Mallesons Stephen Jaques

Second Respondent      :     McCallum Donovan Sweeney

Third Respondents        :     No appearance

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

Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147

1. MASTER SANDERSON:  By originating process filed 5 December 2008, the applicant sought from the respondents pre‑action discovery.  In particular, the applicant sought production by the respondents of:

   1.the executed and stamp‑dutied contract for the sale of assets purportedly dated 23 December 1994 with annexures of Tip Top Quality Meats; and

   2.the settlement statement recording the transaction.

2. The application was opposed by the first and second respondents.  At the conclusion of the hearing, I indicated that I would refuse the application and publish my reasons at a later date.  These are those reasons.

3. Before dealing with the substantive application, I should make mention of the representation of the applicant.  At the hearing, counsel appeared and sought leave to represent the applicant.  Counsel's firm had not filed a notice of appointment of solicitor and, I was advised, did not intend to do so.  Strictly speaking then, there was no basis upon which counsel could be heard.  However, the issues raised by this application were reasonably complex.  The material filed in support of and in opposition to the application was lengthy.  I took the view that it was in the interests of all parties, not only in the applicant's interest, that the basis of the applicant's application be articulated by experienced counsel.  Counsel for the first and second respondents raised no objection to this course of action.

4. An applicant for pre‑action discovery must show that objectively he may have a cause of action against the potential party which is more than mere suspicion or conjecture:  see Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 [35] ‑ [36]. The conditions to be satisfied for an application for discovery are:

   1.the applicant wants to take proceedings against the potential party;

   2.the applicant has made reasonable enquiries;

   3.the applicant has not been able to obtain sufficient information to enable the decision to be made as to whether to commence or take the proceedings; and

   4.there are reasonable grounds for believing that the potential party had, has, or is likely to have had or to have, possession of documents that may assist in making the decision whether to take proceedings.

5. Applying these principles to the present case, the applicant has sworn that he believes that the cause of action which he may have against the respondents will be, among other things, an action in negligence, an action for breach of duty and possibly deceit:  see applicant's affidavit sworn 4 December 2008.  While the alleged facts relied upon by the applicant are somewhat difficult to ascertain it appears that they can be summarised as follows.  The applicant was at all material times a director and creditor of Computerised Holdings Pty Ltd (CHPL) which purchased from the third respondents an abattoir trading under the name of Tip Top Quality Meats (Tip Top).  This purchase took place on 13 March 1995.  The second respondent was engaged by CHPL to conduct due diligence for the purchase of Tip Top and to protect further CHPL's interest in the transaction.  The first respondent was instructed to act as settlement agent for CHPL.  The applicant does not believe he has ever seen the contract used at the time of settlement of the transaction.

6. The land purchased by CHPL was not transferred at settlement but rather on 21 July 1995.  On settlement, CHPL did not acquire the assets essential to the operation of the abattoir.  The requisite assets were 'mandatorily required to be produced by the vendor to the purchaser prior to or at settlement'.  By a deed dated 'about 1999' the applicant was granted by the liquidator of CHPL permission to initiate proceedings deemed appropriate in connection with CHPL. 

7. With respect to the applicant, the affidavit which he drafted and which supports the application is somewhat difficult to follow.  The above is what I understand to be the essential elements of the applicant's complaint.  Counsel bravely attempted to further articulate the complaints but really what emerged was nothing more than the rather difficult version of events set out in the affidavit.  However, taken in the overall, I think the applicant's argument as to why he wants the documents referred to in the application emerges with sufficient clarity.

8. There are further matters which are relevant to this affidavit.  In CIV 1942 of 1996 the applicant brought a claim against inter alia the first and second respondents in relation to CHPL's purchase of the Tip Top abattoir.  The respondents denied the applicant's claim.  The applicant's claim was settled, and the applicant released the first and second respondents.  The deed also contained a plea bar clause.

9. Based on the applicant's evidence, the possible causes of action against the first and second respondents would appear to relate to the alleged delay in registration of the transfer of land, the applicant's belief that assets were not transferred to CHPL, and the claim that a further contract was 'used' on 13 March 1995.

10. It is difficult to see how any of these matters raised by the applicant give rise to a cause of action.  To start with, the applicant was a director of CHPL and any claim must surely lie with CHPL.  Furthermore, the applicant faces the obstacle of the compromise agreement.  It is very difficult to see how that obstacle could be overcome.  But even if it could there is the question of limitation.  Even taking the most benign view of the matters complained of the applicant must have been aware prior to 1999 (the date upon which the liquidator agreed to allow proceedings to be initiated) of the causes of action.  There is no reason to think that there is anything further which has occurred which would compromise the limitation defence.

11. That is sufficient to dispose of this matter.  The respondents' position is so strong that no useful purpose could be served in making the order sought.  However, in deference to the applicant's argument, and out of concern to ensure that consideration is given to all matters raised by the applicant, I should deal briefly with other reasons why this application failed.

12. In the earlier proceedings discovery was provided.  The two documents now sought by the applicant would have been discoverable.  The fact that these two documents were not discovered suggests they do not exist.  In the earlier proceedings the applicant - that is the applicant in these proceedings - discovered a document entitled 'Copy Contract of Sale of Assets by FHR between Moreay, CHPL and Watson 21/12/94'.  It would seem that this document is said to be different from the document discovery of which is now sought - the contract of sale the applicant wants discovered is said to be dated 23 December 1994.  In opposition to this application, the second respondent relied on an affidavit of John Gaetano Mario Fiocco sworn 18 February 2009.  At pars 12 ‑ 17 of that affidavit, Mr Fiocco details the discovery given by the second respondent in the earlier proceedings.  There is nothing in that affidavit to suggest that any document exists which would fit the description found in the applicant's application.

13. Nor is it at all clear what purpose might be served by producing the settlement statement.  It is not clear just what settlement statement might be referred to.  In written submissions the second respondent speculated that the settlement statement may be the first respondent's settlement statement for the third respondents.  Either way it would seem that this document was not discovered in the earlier proceedings and there is no firm evidence as to its existence.  Counsel for the applicant speculated during his submissions that such a document had to exist.  But there is no evidence to that effect. 

14. Finally, there is the question of whether or not the applicant has made reasonable enquiries in relation to the document.  Given the nature of the documents, if they still exist they are likely to be in the possession of the applicant or his former co‑director Mr Young, the liquidators or the third respondents.  The applicant has deposed to enquiries made of the liquidators and the third respondents' daughter.  The request to the liquidators led to an invitation to inspect CHPL's records, which it seems are extensive.  There is no evidence that any such inspection took place.  The enquiry of the third respondents' daughter was cursory. 

15. In my view, the applicant has not established that he has made reasonable enquiries before bringing this application.

16. In all the circumstances then I am not satisfied there is any merit in the applicant's application.  For these reasons I dismiss the application and order that the applicant pay the first and second respondents costs.