Thomas v Mackay Investments Pty Ltd

[2002] WASC 205

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   THOMAS -v- MACKAY INVESTMENTS PTY LTD [2002] WASC 205

CORAM:   MASTER SANDERSON

HEARD:   26 JULY 2002

DELIVERED          :   22 AUGUST 2002

FILE NO/S:   CIV 2361 of 1996

BETWEEN:   DENNIS THOMAS

Plaintiff

AND

MACKAY INVESTMENTS PTY LTD (ACN 008 702 190)
Defendant

Catchwords:

Practice and procedure - Application for leave to enter judgment after failure to comply with springing order - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     Mr M E Paterson

Defendant:     Mr R A C Cullen

Solicitors:

Plaintiff:     Michael Paterson & Associates

Defendant:     Dwyer Durack

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

Thomas v Mackay Investments Pty Ltd [2002] WASC 4

Case(s) also cited:

Ebrahimi v Westbourn Galleries Ltd [1973] AC 360

McCabe v British American Tobacco Australia Ltd [2002] VSC 73

Re Norvabron Pty Ltd (1987) 5 ACLC 184

Rockwell Machine Tool Co v E P Barus (Commissionaires) Ltd [1968] 2 All ER 98

1. MASTER SANDERSON:  On 3 December 1999 Master Bredmeyer made a discovery order against the defendant.  The orders were in the form of a springing order and required the defendant to file affidavits of discovery on or before 31 January 2000.  The defendant filed an affidavit of Ross Edward Ledger of 27 January 2000 and an affidavit of Mr Richard Anthony Clarke Cullen, the defendant's solicitor, sworn 31 January 2000.  These affidavits were filed in purported compliance with the learned Master's orders.  Solicitors for the plaintiff were not satisfied that the affidavits filed complied with the orders made and applied by summons on 10 May 2001 for orders to the effect that there had been no compliance with the Master's earlier order and that they were entitled to judgment.  The application was eventually heard by Master Bredmeyer on 11 September 2001 and the Master delivered judgment on 18 January 2002:  Thomas v Mackay Investments Pty Ltd [2002] WASC 4. The orders made by the learned Master are central to this application and I will reproduce them in full:

   "1.The defendant is to provide further and better discovery of the documents listed hereunder on or before 15 March 2002 failing which the defendant's defence should be struck out and judgment entered for the plaintiff.

   2.The deponents of the affidavits are to depose to documents in their custody, power or possession, and, if not then in their custody, power or possession, when they parted with them and what has become of them. 

   3.Affidavits from overseas deponents may be filed in fax form.

   4.The deponents of affidavits are to make inquiries as set out in judgment [2002] WASC 4.

   THE DOCUMENTS:

   1.The balance of the Sleeter informal discovery promised in Mr Cullen's letter of 30 January 1998.  Mr Cullen to depose to this. 

   2(a)The annexure referred to in Mr Sleeter's letter to Arthur Andersen of 3 January 1995.  Mr Sleeter to depose to this.

   2(b)Correspondence to and from Messrs David Mackay, Sleeter, Burch, Arthur Andersen and Richard E Lloyd Jr for the period 1 August 1994 and 13 June 1995, not already discovered in Mr Ledger's affidavit of discovery of 28 January 2000.  Mr Sleeter and/or Mr Ledger should depose to these matters.  These affidavits should, inter alia, refer specifically to inquiries made to locate incoming correspondence referred to in outgoing correspondence and to annexures mentioned in discovered correspondence and also inquiries of Arthur Andersen's Perth office and of Mr Jeff Herbert, now of PPB Ashton Read in respect of correspondence passing between Mr Sleeter and Mr Jeff Herbert, then of Arthur Andersen.

   2(c)The originals of flawed copies of letters DAT3, 10 and 11 to Mr Thomas' affidavit of 15 December 1998 which are also attached to my reasons of 3 December 1999.  Mr Sleeter to depose to this. 

   2(d)The annual accounts for the Mackay Ranch Trust and the Mackay Family Trust (possibly correctly named the Donald Mackay Family Trust) for the period 1 January 1978 to 1 April 1980.  Mr Sleeter to depose to this. 

   5.The defendant do pay the plaintiff's costs of the application in any event, including reserved costs on 12 July 1999 and 9 August 1999.

   6.The balance of the plaintiff's chamber summons of 10 May 2001 be adjourned sine die."

2. The plaintiff says that the defendant has failed to comply with the orders of the Master and it has renewed its application by a summons dated 17 May 2002.  That summons sought a number of orders, including an order that the defence be struck out and judgment be entered for the plaintiff.  The plaintiff also sought an order that the defendant be wound up by the Court under s 461(k) of the Corporations Act (the just and equitable ground).  I will have something to say about the nature of the relief sought by the plaintiff later in these reasons.

3. Dealing then with the orders made by the learned Master, par 4(1) relates to matters covered in [5] to [7] of Master Bredmeyer's reasons of 18 January 2002 (Thomas v Mackay Investments Pty Ltd (supra).  In particular, the Master said at [7]:

   "What was required was a statement either that no documents were received after that date or, if further documents were received after that date, discovery of those documents.  I consider my order has not been complied with but the non‑compliance was a mistake rather than an intentional thing."

4. In response to that paragraph, Mr Cullen swore an affidavit of 23 January 2002.  Paragraph 3 of that affidavit is in the following terms:

   "I have searched the Dwyer Durack correspondence file for that period and have been unable to find any further documents in addition to those sent to Michael Paterson under cover of my letter of 30 January 1998.  No further relevant documents were received in the period of a few months after that date from Mr Sleeter either and I have confirmed this with him recently."

5. In my view, this adequately covers what was required of Mr Cullen.  On behalf of the plaintiff it was said that Mr Cullen's affidavit did not go far enough.  It is submitted that what was required was for Mr Cullen to make enquiries of Mr Sleeter to ascertain whether there were any further documents which should be discovered.  With respect, that is not what was intended by the order.  The question addressed by the learned Master was whether any further documents had been received by Mr Cullen.  If they had, then they were to be discovered.  If they had not, then Mr Cullen was to swear to that effect.  That is what has been done and in my view there has been compliance with the order. 

6. The requirements of par 2(a) can be explained in this way.  On 3 January 1995 Mr Sleeter wrote to a Perth accountant, Mr Herbert.  In the body of the letter he refers to a document which, as the letter is worded, set out what Mr Sleeter viewed as the plaintiff's entitlement.  This document was an attachment to the letter.  Reading the learned Master's judgment it is clear that what was required of Mr Sleeter was that he undertake a search to see whether or not he could locate the attachment.  That he did.  On 29 January 2002 he wrote to the Perth office of accountants Arthur Anderson, the firm of which Mr Herbert was a partner at the time the letter was written.  He enquired whether or not the attachment was available.  Arthur Anderson, through a Mr Buckingham, confirmed orally and in writing to the defendant's solicitor that no information was available.  This is set out in an affidavit of Mr Cullen sworn 26 March 2002.

7. On behalf of the plaintiff it is said that the defendant did not go far enough in his enquiries with Mr Buckingham and Arthur Anderson.  In my view he did.  He attempted to ascertain the whereabouts of the attachment, only to find that the trail was cold.  He need do no more.  This aspect of the orders has been complied with.

8. In his decision of 18 January, Master Bredmeyer dealt at some length with the matters covered by par 2(b) of the documents:  see [15] to [36] of the reasons.  It is a fair summary of the Master's reasons to say that what was required of Mr Sleeter or Mr Ledger was a thorough search to ensure that there had not been a failure to discover any relevant documents and in any case, to indicate what efforts had been made to locate these documents.  These matters are covered in par 6 to par 11 of the affidavit of Tom Howard Sleeter, sworn 14 March 2002.  It must be said that there is a certain brevity of expression employed in these paragraphs and it may have been preferable if Mr Sleeter deposed in more detail to what searches he had undertaken.  However, in my view the evidence demonstrates that Mr Sleeter has complied with the order.  The order itself contemplated "Mr Sleeter and/or Mr Ledger" swearing the affidavit.  There is only an affidavit from Mr Sleeter.  In my view that is sufficient.

9. The plaintiff complains that some 200 to 250 pages of attachments and annexures to various letters remained undiscovered and their whereabouts unexplained.  Be that as it may, in my view the defendant has complied with the requirements of the order and that is sufficient.

10. The learned Master dealt with the matters raised in par 2(c) of the orders in [37] through to [47] of his reasons.  Once again, what the learned Master appears to have required of Mr Sleeter is that he either discover certain missing pages or if they could not be provided, then he should outline the search made in an attempt to provide them.  He has done that in par 12 of his affidavit of 14 March 2002.  Once again, brevity of expression has been employed.  However, it is a little difficult to see what more Mr Sleeter could say.  In my view nothing more need be done.

11. In his submissions, counsel for the plaintiff pointed out that the documents the subject of the order were photocopied and that as vital parts of these photocopies were missing, it was up to Mr Sleeter to explain how that was so.  It was also submitted that it was up to Mr Sleeter to find the original documents.  There is some substance in these submissions.  However, on balance I am satisfied that the evidence of Mr Sleeter discloses that there is nothing more that can be discovered.  Flawed though the discovered documents may be, they are the limit of the available material and Mr Sleeter has sworn to that fact.  That is sufficient.

12. Finally, there is par 2(d).  These matters are covered in [42] through to [45] of the learned Master's reasons.  It is apparent from [45] of the reasons that what the learned Master envisaged was that Mr Sleeter should make further enquiries to see whether any copies of the accounts could be obtained.  This is dealt with in par 8 and par 9 of Mr Sleeter's affidavit and by annexure "THS4".  In my view, Mr Sleeter has made all necessary enquiries.  That is sufficient.

13. Based upon the above I am not satisfied that there has been a failure on the part of the defendant to comply with the orders of Master Bredmeyer.  Rather, I take the view that there has been compliance and that the chamber summons ought now be discharged.  That then should bring to an end the saga of discovery and the action should proceed.

14. I could not let this matter pass without making some comments about the way that the discovery process has been pursued.  The plaintiff has sought and successfully obtained orders for further and better discovery in this action seven times since October 1998.  The last two of those orders were springing orders.  It is apparent that the defendant has been dilatory in providing discovery and, it might be argued, has not taken its obligations seriously.  Although I have concluded that the defendant complied with the last order of Master Bredmeyer, it must be said that compliance was only the bear minimum and provided in a haphazard fashion.  In all probability, this application could have been avoided if the defendant's solicitors had observed the spirit, not just the letter of the orders made by the learned Master.

15. So far as the plaintiff is concerned, one has to wonder whether or not the relentless pursuit of the defendant over the issue of discovery is worthwhile.  This action has now been running for six years and has been bogged down since 1999 in interminable interlocutory discovery applications.  It may be that the plaintiff's solicitors take the view that in among the documents held but not discovered by the defendant there is the "smoking gun".  But any realistic assessment of the documents presently discovered suggests that the plaintiff has already access to documents which will advance his case so far as it can be advanced with documents.  Furthermore, even assuming the plaintiff had succeeded in this application, he would have obtained an order striking out the defence.  There was no prospect of obtaining an order that the defendant be wound up.  Winding‑up is sought on the just and equitable ground.  Faced with a default judgment, the plaintiff would no doubt have moved to wind up the defendant only to be met with an argument which was, in effect, the defence which had been struck out.  In other words, success on this application would not have significantly advanced the plaintiff's position.  Of course, tactics in litigation are a matter for the solicitors and their clients.  It is not always possible on a reading of the file to be sure that what appears to be a somewhat pointless exercise would not yield to a party a significant forensic advantage.  But in this case it is difficult to see what that advantage might be when weighed against the time lost pursuing discovery issues.

16. I would dismiss the plaintiff's chamber summons.  I will hear the parties as to costs.