Terracall v Terracall
[2019] VSC 247
•16 April 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S ECI 2018 01199
| MIKAILA HILL TERRACALL (in her capacity as Administrator of the Estate of the late PETER FLEMING TERRACALL) | Plaintiff |
| v | |
| ROBERT WILLIAMS TERRACALL AND OTHERS (according to the attached schedule) | Defendant |
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JUDGE: | CAMERON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 March 2019 |
DATE OF JUDGMENT: | 16 April 2019 |
CASE MAY BE CITED AS: | Terracall v Terracall |
MEDIUM NEUTRAL CITATION: | [2019] VSC 247 |
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DISCOVERY – Specific discovery – Discovery before the close of pleadings – Discovery of documents to assist in particularising plaintiff’s case – Whether a fishing expedition – Whether there exists a strong and unrebutted suspicion as to the existence of a good cause of action – Civil Procedure Act 2010 (Vic) ss 7, 8, 9, 55; Supreme Court (General Civil Procedure Rules) 2015 r 29.07 considered – WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175; 30 ALR 559; Trade Practices Commission v CC (NSW) Pty Ltd & Ors (No 4) (1995) 58 FCR 426; Computershare Ltd v Perpetual Registrars Ltd & ors (2001) VR 626; Liesfield v SPI Electricity Pty Ltd (Ruling No 1) [2013] VSC 634; Asahi Beverages Pty Ltd v RFGA Management Pty Ltd [2018] VSC 606 referred to.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | M.J. Latham | Destra Law |
| For the First and Fourth Defendants | A.M. Meagher | Duffy & Simon |
| For the Second and Third Defendants | C.R. Brown | McKean Park |
HER HONOUR:
What is this case about?
Before me is an application for discovery in proceedings which form part of a complex family dispute. The plaintiff seeks discovery so that she might fully plead her case, which has been commenced by generally endorsed writ. The defendants oppose this application on the basis that the discovery sought is in the nature of a fishing expedition.
Background
The plaintiff, Ms Mikaila Terracall (‘Mikaila’), is administrator and sole beneficiary of the estate of the late Peter Fleming Terracall (the ‘Deceased’), who died intestate on 10 September 2012. Mikaila is the only child of the Deceased. The first defendant, Mr Robert Terracall (‘Robert’) is the uncle of the plaintiff and brother of the Deceased. The second and third defendants, John and Mark Terracall, are the Deceased’s other brothers. The fourth defendant, Carret Nominees Pty Limited (‘Carret Nominees’), is a corporate trustee which acts as trustee of the R.B. Terracall Family Trust. Robert is a director of Carret Nominees.
On 7 September 2018 Mikaila filed a generally indorsed writ, in her capacity as administrator of the estate of Peter Terracall, against the defendants. The indorsement to that writ alleges that Robert intermeddled, without authorisation, with the Deceased’s estate by:
(a) dealing a boat named ‘Current Affair’ to Carret Nominees or to the R.B. Terracall Family Trust pursuant to an agreement between the defendants;
(b) taking jewellery and monies from the Deceased’s superannuation and bank accounts into his own possession; and
(c) dealing assets to each of his co-defendants to satisfy purported debts.
Mikaila claims damages, equitable compensation, orders under the Administration and Probate Act 1958, orders that the assets of the estate be held on constructive trust for her benefit, and orders for an account or inquiry to identify the assets owing to the estate.
At present, the principal basis for Mikaila’s claim is a letter dated 7 March 2013, from Robert to herself, purporting to enclose a sum of $175,000 by way of distribution from the Deceased’s estate (the ‘Letter’). Mikaila considers that the Letter is evidence of Robert’s intermeddling in the estate’s affairs, and, by implication, the taking of control over the distribution of the assets of the estate.
Mikaila has not yet filed a statement of claim, saying that she requires further documentation to plead her case with sufficient particularity. By orders dated 14 December 2018, McMillan J directed that Mikaila file a summons for the production of documents or otherwise file a statement of claim. The present application was filed four days later.
Related proceedings
As observed, these proceedings form one of a number of proceedings between various members of the Terracall family. Two concurrent sets of proceedings are particularly relevant to this application:
(a) S CI 2016 02187, in which Robert applies for provision to be made to him on moral obligation grounds in the distribution of the estate of Mary Terracall, his mother and Mikaila’s grandmother; and
(b) S CI 2016 04936, which concerns the proper accounting of the M.A. Terracall Family Trust.
Mikaila is not a party to either of those proceedings.
The application
By an amended application dated 15 March 2019, Mikaila seeks orders that the defendants:
(a) serve upon her all pleadings affidavits and exhibits filed in S CI 2016 02187 and S CI 2016 04936, on the basis that they would assist her in determining whether to agree that the present proceedings be heard alongside those proceedings;
(b) provide discovery of the following categories of documents, on the basis that they would assist her in properly particularising her statement of claim:
(i) all documents, including without limitation, written agreements, bank statements, financial and transaction records, concerning any sale or transfer of the Deceased’s boat ‘Current Affair’ between January 2011 to present and/or any monies received in exchange for any such transfer;
(ii) all documents, including without limitation, financial accounts and statements, bank statements, income tax returns, superannuation records and account statements, and trust deeds, concerning the assets of the Deceased and/or the estate between January 2009 to the present;
(iii) the financial accounts and records, trust deeds, and income tax returns, produced or received by any defendant, between 10 September 2011 to the present, concerning the R.B. Terracall Family Trust and Hawthorn Dell Unit Trust; and
(iv)all documents, including without limitation, correspondence and notes of conversations – whether handwritten, typewritten or produced by mechanical means – concerning an agreement between the first to third defendants referred to in an affidavit filed by Robert in S CI 2016 02187; and
(c) by leave of the Court, be released from the ‘Harman’ undertaking for the purposes of complying with those orders.
Mikaila also seeks orders that she file and serve a statement of claim within 21 days of receiving the requested discovery.
In oral submissions before me Mr Latham, on behalf of Mikaila, abandoned requests (a) and (b)(iv). Mr Latham also abandoned request (b)(iii) insofar as it requested records relating to the Hawthorn Dell Unit Trust. By necessity request (c) also falls away, as none of the remaining documents requested fall under the ‘Harman’ undertaking in other proceedings.
The first and fourth defendants oppose the remaining discovery requests on the basis that they constitute a fishing expedition in order to substantiate bare allegations contained in the indorsement to the writ.
The second and third defendants stated, for the record, that they neither oppose nor consent to Mikaila’s application.
Legal Principles
Mikaila’s application for discovery was put forward on two alternative bases:
(a) for specific discovery pursuant to s 55(2) of the Civil Procedure Act 2010; and
(b) for discovery before the close of pleadings pursuant to order 29.07 of the Supreme Court (General Civil Procedure Rules) 2015.
Discovery under the Civil Procedure Act
Section 55 of the Civil Procedure Act provides as follows:
55 Court orders for discovery
(1) A court may make any order or give any directions in relation to discovery that it considers necessary or appropriate.
(2) Without limiting subsection (1), a court may make any order or give any directions—
(a) requiring a party to make discovery to another party of—
(i) any documents within a class or classes specified in the order; or
(ii) one or more samples of documents within a class or classes, selected in any manner which the court specifies in the order;
(b) relieving a party from the obligation to provide discovery;
(c) limiting the obligation of discovery to—
(i) a class or classes of documents specified in the order; or
(ii) documents relating to one or more specified facts or issues in dispute; or
(iii) some or all of the issues set out in a statement of issues filed in the proceeding;
(d) that discovery occur in separate stages;
(e) requiring discovery of specified classes of documents prior to the close of pleadings;
(f) expanding a party's obligation to provide discovery;
(g) requiring a list of documents be indexed or arranged in a particular way;
(h) requiring discovery or inspection of documents to be provided by a specific time;
(i) as to which parties are to be provided with inspection of documents by another party;
(j) relieving a party of the obligation to provide an affidavit of documents;
(k) modifying or regulating discovery of documents in any other way the court thinks fit.
(3) A court may make any order or give any directions requiring a party discovering documents to—
(a) provide facilities for the inspection and copying of the documents, including copying and computerised facilities;
(b) make available a person who is able to—
(i) explain the way the documents are arranged; and
(ii) help locate and identify particular documents or classes of documents.
(4) A court may order or direct a party to pay to another party an amount specified or determined by, or in accordance with, the order or direction in relation to the costs of discovery in any manner considered appropriate by the court, including, but not limited to, payment in advance of an amount to the other party for some or all of the estimated costs of discovery.
(5) Without limiting any other power of a court to make costs orders, a court may order or direct that costs payable under an order or a direction under subsection (4) are recoverable as costs in the proceeding.
The Court’s powers to order and control discovery under s 55 are couched in very broad terms. Sub-section (2) provides a non-exhaustive list of potential discovery orders which may be made. Those powers are to be exercised in a manner which gives effect to the overarching purpose of the Civil Procedure Act, reflected in ss 7 and 8, ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’. The relevance of the overarching purpose to discovery orders was recognised by J Forrest J of this Court in Liesfield v SPI Electricity Pty Ltd (Ruling No 1).[1] There, his Honour observed that the Court’s powers under the Act (and, for that matter, the Rules) should be ‘directed to finding the most efficient, effective and economical management of the discovery exercise, bearing in mind the nature and complexity of the trial’.
[1][2013] VSC 634, [25], referred to with approval by Bell J in Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union (Ruling on Discovery) [2015] VSC 352, [13].
Section 9(2) of the Civil Procedure Act lists several matters to which this Court may have regard when making orders in accordance with the overarching purpose:
(a) the extent to which the parties have complied with any mandatory or voluntary pre-litigation processes;
(b) the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;
(c) the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;
(d) the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;
(e) the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;
(f) any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;
(g) the public importance of the issues in dispute and the desirability of a judicial determination of those issues;
(h) the extent to which the parties have had the benefit of legal advice and representation.
Discovery before the close of pleadings under the General Civil Procedure Rules
Order 29.07 of the General Civil Procedure Rules provides:
29.07 Order for discovery
(1) In a proceeding within Rule 29.01, notwithstanding that the pleadings between any parties are not closed, the Court may order that any of those parties make discovery of documents to any other of those parties.
(2) In a proceeding not within Rule 29.01, the Court may at any stage order any party to make discovery of documents.
(3) An order under paragraph (1) or (2) may be limited to such documents or classes of document, or to such questions in the proceeding, as the Court thinks fit.
I was helpfully taken to the decision of Warren J (as her Honour then was) in Computershare Ltd v Perpetual Registrars Ltd & ors.[2] In that case the plaintiff company sought discovery of documents prior to the close of pleadings from the defendant pursuant to order 29.07 of the Rules, as well as non-party discovery from the Australian Stock Exchange.
[2](2000) 1 VR 626.
Justice Warren referred with express approval to the decision of Lindgren J in Trade Practices Commission v CC (NSW) Pty Ltd & Ors (No 4).[3] There, the Commission had filed a statement of claim which alleged that several conversations took place but was unable to particularise the content of those conversations. The Commission sought discovery to assist it in doing so. Warren J referred with approval to the following statements of Lindgren J:
In a case such as this, where one party and not the other is likely to have documents relating to a matter in question, it seems to me to be prima facie “necessary” in the sense referred to that discovery be ordered. But this general position is subject to the well established exception that discovery should not be ordered to enable a mere ‘fishing expedition’.
…
What does the reference to a ‘fishing expedition’ mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware... What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists... In WA Pines Pty Ltd v Bannerman Brennan J said that what is required is that ‘sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery’. On the facts of particular cases, the application of the distinction between ‘fishing’ and ‘non-fishing’ may well be difficult.[4]
[3](1995) 58 FCR 426; 131 ALR 581.
[4](1995) 58 FCR 426; 131 ALR 581, 591-2, referred to with approval in Computershare Ltd v Perpetual Registrars Ltd & ors (2000) 1 VR 626, 635-6 [21].
With respect to ‘fishing expeditions’ Warren J distinguished the decision of Brennan J in WA Pines Pty Ltd v Bannerman,[5] where it was said with respect to the discovery exercise in that case:
Though the power to require discovery be acknowledged, how should it be exercised? It depends upon the nature of the case and the stage of the proceedings at which the discovery is sought. In the present case, discovery is sought before there is a tittle of evidence to suggest that the Chairman did not have the requisite cause to believe which para 6 of the statement of claim would put in issue. Some assistance was sought to be derived from cases where discovery had been given to a party before he was required to give particulars of his claim: cases such as Ross v Blake’s Motors [1951] 2 All ER 689, but in cases of that kind there is either an anterior relationship between the parties which entitles one to obtain information from the other, or sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery. This is not such a case. This is a case where a bare allegation is made by para 6 of the statement of claim and, the paragraph being denied, the applicant seeks to interrogate the Chairman and ransack his documents in the hope of making a case. That is mere fishing. As Smithers J said in Melbourne Home of Ford Pty Ltd v Trade Practices Commission… “In the absence of such evidence the proceeding is essentially speculative in nature. In such circumstances for the Court to assist the applicants by making available to them the processes of interrogatories and discovery would be to assist them in an essentially fishing exercise and from this the Court on established principles should refrain.” His Honour’s refusal of discovery was right and it ought not to be disturbed.[6]
[5](1980) 41 FLR 175; 30 ALR 559.
[6](1980) 41 FLR 175; 30 ALR 559, 567 (Brennan J), distinguished in Computershare Ltd v Perpetual Registrars Ltd & ors (2000) 1 VR 626, 637 [26].
Warren J considered that there was sufficient unchallenged and unrebutted evidence put forward by the plaintiff in Computershare to ground a suspicion that it had a good case.[7] Her Honour rejected a submission put forward by the defendant that the plaintiff was also required to demonstrate ‘exceptional circumstances’. Her Honour instead identified three grounds upon which the discretion to order discovery ought to be exercised, recognising that it is necessary for the court to assess the circumstances of each individual case:
[7](2000) 1 VR 626, 638 [27].
(a) first, a pre-existing relationship existed between the parties;
(b) second, a strong and unrebutted suspicion as to the existence of a good cause of action was made out; and
(c) third, a statement of claim had been filed that was the subject of attack by the defendant on the basis of a lack of particularity.[8]
[8](2000) 1 VR 626, 638 [28].
Mr Meagher, counsel for the first and fourth defendants, raised the recent decision of Derham AsJ in Asahi Beverages Pty Ltd v RFGA Management Pty Ltd.[9] In that case the plaintiff sought preliminary discovery from a prospective defendant pursuant to order 32.05 of the General Civil Procedure Rules. In summarising the relevant principles, Derham AsJ made the following observation with respect to the prerequisite specified in order 32.05(b) that ‘after making all reasonable enquiries the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding’:
if there is evidence that an applicant has in fact decided to commence proceedings, the application must fail. In determining whether an applicant has in fact already decided to commence a proceeding, irrespective of the outcome of the application, the Court should not give too much weight to posturing in correspondence prior to the making of the application, particularly correspondence alleging the existence of a strong case but nevertheless seeking preliminary discovery by letter prior to making a formal application to the Court[10]
[9][2018] VSC 606.
[10][2018] VSC 606, [34(h)].
Mr Latham submitted that that restriction ought only apply to applications for discovery against a potential defendant under order 35.05, and not to an application for discovery before the close of pleadings under order 29.07.
Analysis & conclusion
This application comes before the Court in advance of a number of proceedings being heard together in relation to the administration of the estate of the Deceased and his wife.
In my opinion, the application (as amended at the hearing) ought to be granted. I say this for the following reasons:
(i)Mikaela’s application does not, in my opinion, compel the Court to conclude that it is a ‘fishing expedition’. The Letter illustrates that Robert had, at the very least, some control over the realisation and distribution of the assets of the Deceased. No evidence was led as to the basis of such authority, although it must be observed that there was ample opportunity to do so;
(ii)There is clearly a pre-existing relationship between the parties and this matter forms just one component of related proceedings in relation to the Deceased’s estate. As I have observed, these proceedings have the potential to impact (at least) and unduly delay (at worst) the concurrent hearing of related proceedings which may resolve once and for all the realisation and distribution of the assets of the Deceased;
(iii)Given the contents of the Letter, I consider that there is a strong and unrebutted suspicion as to the existence of a good cause of action. As I have observed, no evidence was advanced by Robert as to his authority to deal with, dispose of or distribute the assets of the Deceased, despite opportunity to do so;
(iv)There is little doubt that, in its present state, the generally indorsed writ lacks the particularity that would, in the usual course, be expected of a statement of claim. Notwithstanding this, and based on my observations above, I do not consider that this present lack of particularity is fatal to Mikaila’s application. There is very broad discretion both under the Rules of this Court and the Civil Procedure Act to make orders in relation to discovery that are appropriate. Further, as has been observed, under s 55(2) of the Civil Procedure Act, the Court is compelled to exercise its powers consistently with the overarching purpose of that legislation, that is ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.
(v)In my opinion, the circumstances of this case are precisely those that were contemplated by the policy objectives that the Civil Procedure Act was designed to promote. Were it to be the case that the various proceedings concerning and related to the Deceased’s estate were to advance in the absence of a comprehensive overview of the fabric of the Deceased’s affairs and the actions of related individuals, in my opinion, the interests of justice would not be served and, in addition, valuable resources of both the State and the individual litigants concerned would be unnecessarily wasted.
Based on my observations above, the application, as amended orally at the hearing, is granted.
I will hear the parties on the form of orders and the question of costs.
SCHEDULE OF PARTIES
S CI 2018 01199
BETWEEN:
| MIKAILA HILL TERRACALL (in her capacity as Administrator of the Estate of the late PETER FLEMING TERRACALL) | Plaintiff |
| and | |
| ROBERT WILLIAMS TERRACALL | First Defendant |
| JOHN GRAEME TERRACALL | Second Defendant |
| MARK RUSSEL TERRACALL | Third Defendant |
| CARRET NOMINEES PTY LIMITED (ACN 005 123 982) (in its own capacity and as trustee of the R.B. TERRACALL FAMILY TRUST) | Fourth Defendant |
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