Thomas v Mackay Investments Pty Ltd - [1999] WASC 244

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: THOMAS -v- MACKAY INVESTMENTS PTY LTD [1999] WASC 244

CORAM: MASTER BREDMEYER

HEARD: 15 NOVEMBER 1999

DELIVERED : 3 DECEMBER 1999

FILE NO/S: CIV 2361 of 1996

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

Catchwords:

Discovery - Further and better discovery

Legislation:

Nil

Result:

Application allowed in part

Representation:

Counsel:

Plaintiff: Mr M E Paterson
Defendant: Mr R A C Cullen

Solicitors:

Plaintiff: Michael Paterson & Associates
Defendant: Gadens Lawyers

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

Nil

Case(s) also cited:

Nil

MASTER BREDMEYER: This is an application by the plaintiff for striking out the defence and judgment for the plaintiff on the basis that the defendant has failed to comply with discovery orders.
I made the following orders on 9 August 1999:
1.The plaintiff do supply the defendant with a list of document categories that are still required for inspection within 14 days.
2.The defendant respond within 14 days.
3.Any affidavits may be in fax form.
4.The application be adjourned sine die.
5.There be liberty to apply.
Pursuant to order 1 the plaintiff's solicitor wrote a letter dated 19 August 1999 setting out the documents required. The defendant's solicitors responded to that by letter dated 9 September 1999. The plaintiff's solicitor complained about the inadequacy of that response in a letter dated 13 September 1999. The defendant's solicitor replied to that letter in a letter dated 10 November 1999 and filed an affidavit of Mr Sleeter of the same date stating in effect that there were no more documents in the categories sought to be discovered. The plaintiff's counsel does not accept that and has filed written submissions and addressed me on this matter.
I have read the correspondence referred to above plus the affidavit of Mr Sleeter and other papers referred to me in the course of argument. I do not propose reciting all the arguments addressed to me for and against further discovery. I propose to give but brief reasons for my decision on the various categories.
1.      All records relating to the Australian companies that are currently held by the Mackay's US accountants and attorneys, in particular, Mr Burch. The plaintiff is particularly interested in reports sent to Mr Donald Mackay by Mr Hebbard, his agent in Perth, in the years 1978 and 1979. In a letter dated 9 October 1979 Mr Hebbard stated that he was required to report to Mr Mackay monthly. Mr Sleeter, for the defendant, in his affidavit of 30 July 1999 has deposed that he made a search and has found no extra documents in this category. I accept that statement as conclusive subject to what I later say in category 5 below. The plaintiff would prefer an affidavit from the accountants themselves but that should not be granted. Discovery is to be given by the party in an affidavit. That party has to make enquiries of servants or agents and has to disclose documents which include documents which were once, but are not now, in its possession.
I am also satisfied that proper enquiries have been made of Mr Burch, an US attorney, and that no further discovery should be ordered in relation to his records.
2.      Missing correspondence and parts of correspondence:
(a)     the balance of the Sleeter informal discovery promised in Mr Cullen's letter of 30 January 1998.
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.
(b)     The missing annexures referred to in Mr Sleeter's letters to Arthur Andersen and others such as the calculation of the debt due to the plaintiff.
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.
(c) Correspondence to and from Mrs Mackay, Messrs D 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.
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.
3. The documents referred to by Mr Cullen in open court on 9 August 1999 as having been brought to Perth by Mr Sleeter and Mr Mackay on or about 12 March 1996 which have not been made available for inspection.
Mr Cullen has stated in his letter of 9 September that:
"All these documents were sent back again and have been discovered and presumably inspected by your client. These documents were referred to in discovery previously."
I accept that statement and will not order any further discovery.
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.
5. The full details of cash transfers from the defendant's accounts in Australia at Commonwealth Bank, Wembley and Mt Gravatt, Martin Corp and the Hebbard Trust Account to - the Mackay interests in the US which include the individual and joint accounts of Donald and Mamie Mackay, the Mackay Ranch Trust and the Mackay Family Trust for the period 1 January 1978 to 1 April 1980 in particular.
In support of this request Mr Paterson says these documents should be with Mackay's US accountants. He further states:
"As you know Mrs Mackay has stated in general that they have all the records from the beginning and also that her bank - The Farmers' State Bank of Chadwick & Mt Carroll - have in particular the records of the above transfers."
Mr Cullen has responded to this request in some detail in his letters of 9 September and 10 November and those replies are verified in Mr Sleeter's affidavit of 10 November.
I am not persuaded that there would be any bank statements in existence in Australia or US for that period. Bank statements and the like are not normally kept for up to 20 years and Mrs Mackay is a very old lady. Her memory could be faulty. Also Mr Sleeter has deposed as to his enquiries to find these documents. 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.
I will hear the parties on the form of the orders and on the question of costs.