Thomas v Mackay Investments Pty Ltd - [2002] WASC 4

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: THOMAS -v- MACKAY INVESTMENTS PTY LTD [2002] WASC 4

CORAM: MASTER BREDMEYER

HEARD: 11 SEPTEMBER 2001

DELIVERED : 18 JANUARY 2002

FILE NO/S: CIV 2361 of 1996

BETWEEN: DENNIS THOMAS
Plaintiff
AND
MACKAY INVESTMENTS PTY LTD (ACN 008 702 190)
Defendant

Catchwords:

Discovery - Springing order - Whether compliance with discovery order adequate or not

Legislation:

Nil

Result:

Application allowed in part

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 [1999] WASC 244

Case(s) also cited:

Buyquick.Com Ltd v Foxgold Pty Ltd [2000] WASC 216

MASTER BREDMEYER: The plaintiff has applied by way of a chamber summons of 10 May 2001 for judgment and costs and a number of other minor orders. I made a discovery order herein on 3 December 1999 against the defendant. The orders were in the form of a springing order requiring the defendant to file affidavits of discovery on or before 31 January 2000 failing which the defendant's defence would be struck out and judgment entered for the plaintiff. The defendant endeavoured to comply with that order and filed an affidavit of Mr Ross Ledger sworn 28 January 2000 and an affidavit of Mr Richard Cullen sworn 31 January 2000. The plaintiff says that these affidavits are so inadequate that in truth the orders have not been complied with and the springing order has now sprung. The plaintiff contends that the defence should be struck out and judgment now be entered for the plaintiff.
This present application of 10 May 2001 was brought without proper consultation with the defendant's solicitor. There was no communication orally or by letter explaining in what ways the plaintiff considered the discovery given was inadequate. If there had been, it may well be that in the interval between May and September, when this application was heard, the defendant would have filed additional affidavits to meet the plaintiff's objections. I ruled at the outset of this hearing that I would overlook the plaintiff's lack of proper conferral under O 59 r 9 on the basis that I admit three late affidavits of the defendant supplementing its earlier discovery. Those affidavits are from Mr David Mackay sworn 5 September 2001, Mr Tom Sleeter sworn 7 September 2001 and Mr Ross Ledger sworn 7 September 2001.
The plaintiff has sworn three affidavits in support of the application. One of these is sworn on 1 May 2001 and is headed "Application of Dennis Allen Thomas in support of the plaintiff's application confirming striking out of the defence and Annexures 'A' to 'P'". Another affidavit also of 1 May 2001 is headed "Application of Dennis Allen Thomas in support of the plaintiff's application for winding up Mackay Investments". The third affidavit of Mr Thomas is dated 10 July 2001. Of those three affidavits the most important, for this application, is the one first‑mentioned. Unless otherwise stated, I will be referring to that affidavit.
I published reasons for decision for my discovery orders of 3 December 1999 in Thomas v Mackay Investments Pty Ltd [1999] WASC 244. I ordered discovery of specific documents under five headings and, in each case, I gave a brief paragraph in my reasons setting out what enquiries should be made and what affidavits should be filed in order to comply with my order. The orders were not extracted until 28 July 2000. I now propose to consider whether the defendant has complied wit the orders.

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

I wrote this in my reasons:
"That letter from Mr Cullen to then solicitors of the plaintiff states:
'We enclose copies of letters between Arthur Andersen and Mr Sleeter for your information. We think that your client would have seen some of these and they may already have been discovered.
We will forward the balance of the documents as soon as we receive them.'
Given that this letter was written by Mr Cullen who is based in Perth, in this case I will order an affidavit from him relating to the discovery of the documents referred to therein."

What was done to comply with this order? Mr Ledger's affidavit of 28 January 2000 is not relevant. Mr Cullen's affidavit of 31 January 2000 states in relation to this order:
"1.I swear this affidavit in compliance with the order of Master Bredmeyer dated 3 December 1999 whereby he ordered that I swear an affidavit to discover the balance of the Sleeter informal discovery which was meant to have been included in my letter of 30 January 1998.
2.I attach a copy of my letter to the plaintiff's solicitors (marked A) and unfortunately a copy of the enclosures to the letter was not kept and therefore at this stage I am unable to state specifically which documents were included with the letter.
3.Accordingly I have included all of the documents which were sent to our office at about that time either by Tom Sleeter or David Mackay in relation to the involvement of Arthur Andersen. All these documents are marked B."
Unfortunately, Mr Cullen misunderstood my order. It did not relate to documents enclosed with his letter of 30 January 1998. All of those documents the plaintiff's solicitor received. They are the same documents annexed to Mr Cullen's affidavit and marked B. My order and reasons related to the last sentence in that letter:
"We will forward the balance of the documents as soon as we receive them."
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 that the non‑compliance was a mistake rather than an intentional thing.

2(a) The attachment referred to in Mr Sleeter's letter to Arthur Andersen of 3 January 1995

I wrote in my reasons:
"In a letter dated 3 January 1995 from Mr Sleeter to the Perth accountant Mr Herbert he stated:
'Secondly, Dennis Thomas is no longer a director of Mackay Investments Pty Ltd as Mrs Mackay accepted his resignation last month. He remains as a director of the two subsidiary companies. You should be aware that he hired an attorney to assist him in negotiating the fee he is to receive for past services as a portfolio manager. We were a bit puzzled by this as he has never submitted his bill for the fees due, despite repeated requests. For some reason, it appears that he wants to move very slowly on this. Following is our best estimate of what he has coming.
Sincerely,
Tom H Sleeter
Principal
Attachment'
I will order Mr Sleeter to give discovery of the document attached to that letter."

In copying that letter, I failed to note the "cc" entry at the foot of it:
"ccMr William Burch
Dr David Mackay
Mrs Mamie Mackay
Client file "
Mr Sleeter should have searched his file to see if he could find that attachment and also written to the other recipients of the copy letters to see if any of them had it. Mr Sleeter is a financial adviser who lives in Illinois. Mr Sleeter did not file an affidavit by the due date of 30 January 2000. Mr Cullen did and the relevant part of his affidavit reads as follows:
"4.I have been unable to find this attachment but there are other similar calculations which have been discovered for example document number 332 to Ross Ledger's affidavit sworn 28 January 2000 being the calculation made by Tom Sleeter as to a balance owed by or to the plaintiff prior to the previous litigation commencing. There are other similar and later calculations by Sleeter which are also discovered in Ledger's most recent affidavit. See document numbers 227, 228 and 229."
My order related to a letter from Mr Sleeter of 3 January 1995 to the Perth accountant Mr Herbert which attached Mr Sleeter's estimate or calculations of what he thought was owing to Mr Thomas. That estimate would have been prepared on, or prior to, 3 January 1995.
Mr Cullen's reference to discovered document 332 in Mr Ledger's affidavit of discovery of 28 January 2000 is a reference to:
"332Letter Sleeter to plaintiff (plus enclosure) 6/10/94"
Mr Thomas has annexed to his affidavit what he says is the defendant's discovered document 332. He has marked it D1 to his affidavit. It is a letter from Mr Thomas to Mr Mackay of 6 April 1988. I think it is the wrong letter and not relevant. I have not seen the letter Sleeter to plaintiff of 6 October 1994.
Mr Cullen in his sworn statement, quoted above, also referred to similar and later calculations done by Mr Sleeter which have been discovered in Mr Ledger's affidavit, namely documents 227, 228 and 229. Document 227 is reproduced as annexure E to Mr Thomas' affidavit. It is Mr Sleeter's calculations of Mr Thomas' entitlements prepared for a meeting on 7 April 1995. It therefore could not have been annexed to Mr Sleeter's letter of 3 January 1995. Document 228 is reproduced as annexure F to Mr Thomas' affidavit. It is further calculations of Mr Thomas' entitlements. It was prepared by Mr Sleeter and is dated 15 March 1995. Again, it is not the calculations referred to in the letter of 3 January 1995. Discovered document 229 is reproduced as annexure G to Mr Thomas' affidavit. It is revised calculations of the amount owed to Dennis Thomas and is dated 25 February 1995. The calculations are partly typed and partly in handwriting. Mr Thomas says the typed part is his calculations and that the handwritten part is in Mr Ledger's handwriting. In any event, it is not the Sleeter calculations annexed to the letter of 3 January 1995.
Mr Sleeter has sworn a further affidavit of 7 September 2001 in which he addresses certain paragraphs in Mr Thomas' strike‑out affidavit of 1 May 2001, but he says nothing relevant on this matter. I conclude that the defendant has not complied with this part of my order. He should search his file again and write to Mr Burch and Dr Mackay to see if they have copies.

2(b) Correspondence to and from Mrs Mackay, Sleeter, Ledger, Burch, Arthur Andersen, and the Mackay's US accountants, in particular for the period between 1 August 1994 and 13 June 1995.

I wrote of this in my reasons of 3 December 1999:
This category is referring to documents passing to and from the persons listed which are relevant to the matters in dispute. Par 3 of Mr Sleeter's affidavit of 10 November 1999 does not cover all these people. I consider he should be required to file a further affidavit deposing that he has made enquiries of all those people, which of course includes himself, and disclosing any further documents thereby discovered or deposing that there are no further documents in that category. If there are documents for which privilege is claimed then they need to be discovered but the privilege can be then asserted."
As stated there I envisaged that Mr Sleeter would enquire of those people whether there were any further documents available from them for that stated period. Mr Sleeter did not depose to those matters. Mr Cullen in his affidavit of 31 January 2000 deals with that part of the order. He states:
"This aspect is dealt with in Ledger's affidavit of 28 January 2000."
It is not fully dealt with in that affidavit. I envisaged that Mr Sleeter would depose to the enquiries he had made of those people and their response. I wanted him to depose to those matters. In any event, it was Mr Sleeter who was asked to make the enquiries of those persons.
In answer to that order Mr Ledger has filed an affidavit of discovery of 28 January 2000. In that affidavit he lists 381 documents under various headings:
"(i)Correspondence to and from Sleeter
(ii)Correspondence from Sleeter to Ledger
(iii)Correspondence received by Sleeter
(iv)Correspondence between Sleeter and Mackay
(v)Further documents held by Ross Ledger
(vi)Copy letter from R Lloyd & Co Ltd to Mackay and supporting documents 29/1/88
(vii)Documents generated by Sleeter
(viii)Further documents some or all of which have been previously discovered
(ix)Plaintiff's analysis of purchases and sales"
In addition, Mr Sleeter in his affidavit of 7 September 2001 has deposed in answer to certain paragraphs in Mr Thomas' affidavit as follows:
1.Re Burch letters:
"In 1994 and 1995, Burch co-operated in locating documents pertaining to the Mackays. I went to his office in Morrison, Il twice to talk with him and pick up documents. Much of our discussion focused on Donald Mackay's trust and will and not on the investments in Australia. Burch initially provided some background on the Mackay involvement in Australia. A follow up phone call made at Rick Cullen's request in, I believe, early 2000, did not produce any additional documents. All relevant correspondence to and from Burch has been discovered to the best of my knowledge."
2.Re Arthur Andersen letters:
"To the best of my knowledge, information and belief, all the material from Arthur Andersen has already been discovered. None of the material in par 2.3.4 [of the plaintiff's affidavit] from Arthur Andersen remains in my files.
Generally these files had documents removed numerous times for various discoveries and other projects and they were also taken to Perth for the trial in 1996."
3.Re David Mackay letters:
"To the best of my knowledge all correspondence from David to me and from me to David has already been discovered. We tried not to duplicate material submitted in earlier discoveries. I have more complete records of outgoing copies as I could refer to computer disks as well as files."
4.Re Ross Ledger letters:
"I have searched the files again and cannot locate any of these documents. Mr Ledger has, I understand, discovered some from his files."
5.Re Mamie Mackay letters:
"Mamie did not write many letters of a business nature. I have discovered everything I could find."
The plaintiff considers the discovery given in response to this order is unsatisfactory. Mr Thomas has counted the numbers of letters to Burch mentioned in Mr Ledger's affidavit and they are as follows:
Sleeter to Burch - 33
Donald Mackay to Burch - 2
David Mackay to Burch 2
I would expect that that number of letters to Burch would generate a significant number of replies. Especially the 33 letters from Sleeter, the financial adviser, to Burch, the American attorney. Mr Thomas points out in his affidavit that the discovery affidavit of Ledger contains no correspondence from Burch to Sleeter. It is clear from Mr Sleeter's paragraph on the Burch letters that he obtained certain correspondence from Burch in 1994 and 1995 when he went to visit him. He also says that he made a follow up phone call made at Mr Cullen's request in early 2000 which did not produce any additional documents. I consider that call was probably made in response to my order. I am not satisfied that adequate enquiries have been made of Mr Burch for the missing correspondence in the relevant period 1 August 1994 to 13 June 1995. I am able to say that because Mr Thomas has inspected the documents discovered in Mr Ledger's affidavit and they include a letter from Sleeter to Burch, discovered document 17 - letter to Burch 21/11/94. In that letter he states to Burch:
"Could you please fax me a copy of the Donald Mackay trust documents?"
That suggests a response was received and would be available on Mr Sleeter's file.
Likewise, with discovered document 29 - letter to Burch 31/1/95, which includes the following:
"Thank you for the two faxes with the draft of the estate tax return."
I suspect - and I get this from Mr Sleeter's recent affidavit - that he relied heavily on his computer records which, as he states, had a more complete record of his correspondence outwards. I suspect his computer did not record inwards correspondence. I suspect that he has in fact not searched his file for the two faxes referred to in that letter.
Part of Mr Ledger's discovery includes letters from Mr Sleeter to Arthur Andersen, ie, to Mr Herbert of that firm. Mr Thomas in his affidavit at 2.3.4 has annexed four letters in that category which refer to inward faxes. They are:
10/12/94 - "Thank you for your fax of December 9".
30/1/95 - "Thank you for your fax dated today".
15/3/95 - "Thank you for your fax dated March 14".
5/5/95 - "I received your fax but only the top page and three inches of a schedule on the Mackay Trust came through. Would you please fax it again".
Contrary to the statements in those letters, those inward faxes have not been discovered. Some correspondence from Mr Ledger to Mr Sleeter has been discovered in Mr Ledger's affidavit, see documents 72 to 84, but they do not include the faxes referred to in those four letters quoted above. I have not looked at those discovered documents but the dates do not tally. In response to par 2.3.4 of Mr Thomas' affidavit which deals with this matter, Mr Sleeter has deposed:
"To the best of my knowledge, information and belief, all the material from Arthur Andersen has already been discovered. None of the material in 2.3.4 from Arthur Andersen remains in my files. Generally these files have had documents removed numerous times for various discoveries and other projects and they were also taken to Perth for the trial in 1996."
I do not accept that completely in view of the undiscovered four faxes mentioned above.
The Ledger affidavit of discovery lists correspondence between Mr Sleeter and Dr David Mackay. They are documents 85 to 125. I give an example.
"85 - Copy letter - 20/8/94".
This description does not indicate the author or recipient, but I take it that these are faxes from Mr Sleeter to Dr Mackay and the list probably generated from his computer records. Mr Thomas in his affidavit at 2.3.6 says that, despite the number of these letters and faxes to David Mackay, only three replies have been discovered, namely:
No 163 - letter from David Mackay to Ledger 9/5/95.
No 183 - fax from David Mackay to Ledger 8/4/95.
No 319 - fax from David Mackay to Sleeter 27/4/95.
I would expect more replies than that from 40 letters or faxes.
Mr Thomas at par 2.3.7 of his affidavit annexes three letters to Dr David Mackay which refer to incoming correspondence. They are:
K1 13/4/95 - Ledger to Mackay - "Thanks for your fax of 10 April 1995".
K2 25/8/94 - Sleeter to Mackay - "Thank you for sending material this PM".
K3 2/9/94 - Sleeter to Mackay - "Thank you for the sets of copies of the Australian materials".
In response to these allegations in pars 2.3.6 and 2.3.7 of Mr Thomas' affidavit relating to the David Mackay letters, Mr Sleeter in his affidavit states:
"To the best of my knowledge, all correspondence from David to me and from me to David has already been discovered. We tried not to duplicate material submitted in earlier discoveries. I had more complete records of outgoing copies as I could refer to computer discs as well as files."
I do not entirely accept that paragraph. It may be true, but I require a paragraph stating that Mr Sleeter has searched his files to ascertain the incoming correspondence.
Part of Mr Ledger's affidavit of discovery refers to correspondence to and from himself. Mr Thomas' research has discovered three letters which refer to letters from Mr Ledger to Mr Sleeter that have not been discovered. They are:
29/11/94 - Fax to Mackay - "I received a long fax from Ross Ledger this morning".
13/12/94 - Fax to Ledger - "Thank you for your faxes dated today".
10/1/95 - Fax to Ledger - "Thank you for your faxes which I received this morning".
Mr Sleeter in his recent affidavit has referred to par 2.3.8 - Ross Ledger's letters:
"I have searched the files again and cannot locate any of these documents. Mr Ledger has, I understand, discovered some from his files."
I accept this statement that Mr Sleeter has searched his files again and cannot locate those documents. He has, in an earlier paragraph, explained what might have happened to them, namely that they have been removed numerous times for various discoveries and were taken to Perth for the trial in 1996. However, I consider that Mr Ledger should search and file a further affidavit on these faxes.

Mr Ledger in his affidavit of discovery has disclosed letters from Mr Sleeter to Mrs Mamie Mackay. Mr Thomas says they number 15 and I agree with that. In return he said there was only one letter from her to Mr Ledger dated 20 March 1995 in the discovery list. That may well be true. There are a number of letters in the discovery list from Mrs Mackay to the plaintiff. The plaintiff's counsel argued that this discovery is inadequate, that there should be more letters from Mrs Mackay to Mr Sleeter. I do not accept that. Mrs Mackay was a very old lady, I think in her 90s when Mr Sleeter got involved in this dispute. I accept his statement in his affidavit:
"Mamie did not write many letters of a business nature. I have discovered everything I could find."
I will not require further discovery of documents to or from her.
Mr Ledger's affidavit of discovery lists three letters from Mr Sleeter to the US accountant, Richard E Lloyd Jr. They are documents 256, 257 and 258. They were written on 22 September, 28 September and 21 November 1994. Despite that, there is no inward correspondence from the accountant except one 1988 letter which has been discovered. Mr Sleeter does not deal with that expressly in his affidavit sworn 7 September. My order envisaged that he would search for correspondence to and from the accountant and depose specifically to the results of that search. He has not really done that.
Mr Thomas at 2.3.11 of his affidavit says:
"When I inspected the documents subsequently discovered by Mr Ledger in his affidavit dated 28 January 2000, there were many letters that referred to attachments and annexures. Some are annexed hereto marked M. The attachments were not included in the documents that were made available for inspection. I estimate that the total number of missing attachments was some 200‑250 pages."
Mr Sleeter responds in his affidavit as follows:
"I have discovered every annexure that was included with all the relevant documents over the years. I do not believe that if there are any missing annexures they amount to anything like 200 to 250 pages."
I do not know how many pages there are of missing annexures but I do not entirely accept Mr Sleeter's first sentence. I think that most of the attachments referred to in the discovered correspondence would be held in the same file. That is a normal way of keeping business records. So if a letter is discovered I would expect the attachment to be readily available. I would not have expected the letters to be discovered separately from the attachments.

2(c) The originals of the flawed copies of three letters

This order refers to three letters which are DAT 3, 10 and 11 to Mr Thomas' affidavit of 15 December 1998; I also enclosed copies of those letters with my reasons for decision of 3 December 1999.

Mr Cullen deposed to these documents in par 6 of his affidavit of 31 January 2000:
"The original of the flawed copies of letters DAT3, 10 and 11 to Mr Thomas' affidavit of 15 December 1998. No such originals have been found and despite a thorough search by both Tom Sleeter and David Mackay, other than as may be found in Mr Ledger's latest affidavit. Documents 10 and 11 seem to be good copies anyway."
The three documents are:
DAT3 - letter Donald Mackay to ? - date ?.
The addressee, the date and the first paragraph are missing. I thought that it was a letter to the plaintiff, but Mr Paterson thinks it was probably to Mr Hebbard.
DAT10 - letter from ? (probably Mr Donald Mackay) to the plaintiff dated 17 September 1987. Page 1 only. Page 2 and any later pages are missing.
DAT11 - letter from ? (I think from the plaintiff) to Donald Mackay dated 8 March 1986. Page 1 only. Page 2 and any later pages are missing.
Mr Cullen's reference to "other than as may be found in Ledger's latest affidavit", is not particularly helpful. That affidavit lists documents in the period 1 August 1994 to 13 June 1995 so is unlikely to be relevant to DAT10 and 11 which are dated in 1987 and 1986 respectively. The statements that documents 10 and 11 seem to be good copies anyway, is also not relevant. In each case, the document is the first page of a two‑page or longer letter. In each case the first page is legible, but the problem is with the missing second page.
I quote from my judgment on these documents:
"4.The originals of the flawed copies from the boxes which were provided for inspection earlier this year.
I understand that these documents have parts missing, eg the addressee, the date, or page 2. The plaintiff suspects that they are hastily done photocopies and not the originals and that Mr Sleeter may still have the originals. Mr Sleeter has deposed generally in his affidavit of 10 November 1999 to the accuracy of Mr Cullen's letters of 9 September and 10 November stating, in effect, that there are no other copies and that Mr Cullen is not prepared to go the expense of looking through all the documents again to check them. I consider that the flawed copies are those annexed to the plaintiff's affidavit of 15 December 1998 which are copies of documents which he inspected at Mr Cullen's office on 25 November 1998 and not in early 1999 as stated. The ones attached to the affidavit are, of course, copies and I have not seen the originals held by Mr Cullen from which the copies were made. However, it seems to me that only three of the flawed copies are of significance and I do not accept entirely Mr Sleeter's deposition on this. It may be that a closer search will find the missing papers.
I will order him to depose to the whereabouts of the originals, and if found, provide copies of the originals of three documents only which are DAT3, 10 and 11 to Mr Thomas' affidavit of 15 December 1998. For ease of reference I will attach copies of those documents to these reasons. DAT3 appears to have had the name and address of the addressee and the opening few lines deleted from it, possibly covered up from the photocopy. The name and address are not so important (it appears to be a letter to the plaintiff) but the missing opening lines may be important. DAT10 and 11 are letters and appear in each case to be missing the second page."
My reasons envisaged that Mr Sleeter would depose to the whereabouts of these documents. That was not done prior to January 2000. Mr Sleeter's latest affidavit of 7 September 2001 does not deal with these missing pages. He should have made a specific search for them and deposed as to the result of that search specifically. There has been a non‑compliance with this order.

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

In my earlier reasons I said:
"However it is possible that the annual accounts prepared 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 may still be in existence. Supporting documents may have been thrown out but the annual accounts themselves may have been kept. Copies may be held by Mrs Mackay, David Mackay or by the US accountants. There are Perth cheque butts showing money repatriated to these trusts. It is possible that, if the money advanced to commence Mackay Investments in Australia in January 1978 was loaned by any of these trusts, then money repatriated to United States should show up as a repayment of this loan in the accounts of those trusts. I will direct Mr Sleeter to make enquiries of Mrs Mackay, Mr Mackay and the US accountants as to the existence of the accounts of these trusts for that period and for Mr Sleeter to depose to them in an affidavit."

Mr Cullen deposed to these matters in par 7 of his affidavit of 31 January 2000:
"The annual accounts for the Mackay Ranch Trust and the Mackay Family Trust for the period 1 January 1978 to 1 April 1980 have not been found yet if they exist at all at this stage. The only further documents which relate to either of these trusts are referred to in Ledger's affidavit at document number 240."
Document 240 is a letter from the accountants R Lloyd & Co Ltd to Mackay and supporting documents dated 29 January 1988. It is well outside the period mentioned in the order.
Mr Sleeter in his affidavit of 7 September 2001 at par 8 has deposed to this matter - the Mackay Family Trust:
"I looked extensively for the annual accounts for the Mackay Ranch Trust and the Mackay Family Trust for the period 1 January 1978 to 1 April 1980 but never found them. I believe they have long since been destroyed. The US Internal Revenue Service requires records such as those kept for seven years only.
In addition, I recall sending materials in relation to the termination of the Mackay Family Trust from the Trust's former accountant to Mr Thomas in about 1994/1995 in a vain effort to convince him that the Trusts did not exist any longer."
The latter sentence is not relevant to my order. The plaintiff argues that there has been no proper compliance with this order. Mr Sleeter has not deposed, for examples, as to enquiries made of Dr David Mackay as to whether he is holding any copies of the annual accounts for those trusts for that two year period. I think that a fair point. I consider Mr Sleeter's statement implies that he has looked extensively through his own records for the annual accounts for those two trusts. My reasons stated that copies may be held by Mrs Mackay, David Mackay or by the US accountants. He need not now make inquiries of Mrs Mackay who has died, but he should have at least made enquiries of David Mackay and the US accountants. I envisaged that his affidavit would depose to those matters. It is almost as if Mr Sleeter attempted to comply with the orders without the benefit of my reasons in front of him telling him what was required. I will require compliance with this order.
There has been non‑compliance with my orders of 3 December 1999. That non‑compliance has not been total, or I think deliberate and certainly not contumelious. Mr Ledger has discovered a further 381 documents in purported compliance with my orders and that was done within the time limit specified. I do not therefore propose to dismiss the defence and to enter judgment for the plaintiff. I consider that would be unjust. I consider I should make further orders of discovery against the defendant and make appropriate costs orders.
I will order discovery of the following:
1The 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 Ledger should depose to these matters except where in these reasons I have suggested that Mr Sleeter should depose to them. These affidavits should, inter alia, refer specifically to inquiries made to locate incoming correspondence referred to in outgoing correspondence.
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.
I propose to allow adequate time for the defendant to produce these affidavits. I will hear the parties on that. I consider the orders made should again be in the form of a springing order. I will hear the parties on costs.
I do not propose to make any orders on the $750 deposit. That matter can be decided later.