Thompson v Allan
[2020] VCC 887
•24 June 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-20-02053
| Craig Lee Thompson | Applicant |
| v | |
| Heath Allan | Respondent |
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JUDGE: | Lewitan | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 June 2020 | |
DATE OF JUDGMENT: | 24 June 2020 | |
CASE MAY BE CITED AS: | Thompson v Allan | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 887 | |
REASONS FOR JUDGMENT
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Subject:Application for discovery from prospective defendant pursuant to Rule 32.03 of the County Court Civil Procedure Rules 2018
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Determined on the papers
HER HONOUR:
1 Craig Lee Thompson (the applicant) is the sole director and secretary of Rorschach Wine Company Pty Ltd (Rorschach).[1]
[1] Affidavit by Craig Lee Thompson made 7 May 2020 [2] (Thompson’s affidavit).
2 Heath Allan (the respondent) is:
3 a director of Heath Allan Consulting Pty Ltd (Heath Allan Consulting);[2]
[2] Thompson’s affidavit, [4(a)].
4 a beneficiary of the Heath Allan Consulting Trust whose trustee trades as Adept Solutions (Adept);[3] and
[3] Thompson’s affidavit, [4(b)].
5 an investment director and international investment director of Autumn Bay Assets Limited (Autumn).[4]
[4] Thompson’s affidavit, [4(c)].
6 In January 2017 the respondent offered the applicant an investment opportunity to be facilitated through the respondent’s business partner, Charles Su (Su).[5]
[5] Thompson’s affidavit, [6].
7 On 27 January 2017, the respondent provided the applicant with an agreement between Rorschach and Heath Allen Consulting trading as Adept Solutions for an investment of $250,000 for 90 to 120 days (the First Agreement).[6]
[6] Thompson’s affidavit, [7]; exhibit CLT 5 to Thompson’s affidavit.
8 On 28 January 2017, the applicant arranged for $250,000 to be transferred into Heath Allen Consulting’s bank account.[7] On 18 July 2017, the applicant was repaid the balance of his return on the first Agreement from Autumn, not Adept.[8]
[7] Thompson’s affidavit, [8]; exhibit CLT 6 to Thompson’s affidavit.
[8] Thompson’s affidavit, [11]; exhibit CLT 8 to Thompson’s affidavit.
9 In July 2017, Su requested that the applicant invest a further $50,000 and advised the applicant that it would be easier to use an offshore account.[9] On 6 July 2017, a second agreement was entered into between Rorschach and Autumn for an investment of $300,000 for 120 days (the Second Agreement).[10] On 31 October 2017, the applicant advised the respondent that the Second Agreement had concluded on 26 October 2017.[11] The applicant instructed the respondent to rollover the $300,000 into a new agreement (the Third Agreement).[12]
[9] Thompson’s affidavit, [10].
[10] Thompson’s affidavit, [10];
[11] Thompson’s affidavit,[12].
[12] Thompson’s affidavit, [12].
10 On 17 May 2018, the respondent sent the applicant an email advising that Su had been bankrupted, which the respondent stated was delaying payment of the applicant’s investment under the Third Agreement. [13] The email referred to a contract between Su and Celta Assets Inc (Celta) but indicated that funds to Su had come from the respondent’s account.[14] On 13 and 14 August 2018 the applicant sent emails to the respondent seeking details of the Third Agreement.[15] On 20 August 2018, the respondent confirmed that the $300,000 from the Second Agreement had been rolled over into the Third Agreement.[16] On 20 August 2018, Celta advised the applicant that ‘the funds are safe and this should rectify very soon’.[17] The applicant has not been provided with a copy of the Third Agreement and the funds have not been returned to the applicant.[18]
[13] Thompson’s affidavit, [14].
[14] Exhibit CLT-10 to Thompson’s affidavit.
[15] Thompson’s affidavit, [16].
[16] Thompson’s affidavit, [18]; exhibit CLT 14 to Thompson’s affidavit.
[17] Exhibit CLT-13 to Thompson’s affidavit.
[18] Thompson’s affidavit, [20].
11 On 11 March 2020, the solicitors for the applicant, Duxton Hill, emailed the respondent requesting a copy of documents which would assist the applicant to identify the entity or entities to whom the investment was rolled over.[19] On 23 March 2020, the solicitors for the applicant emailed the respondent to advise that, as the respondent had not responded to the request for discovery, an application would be issued.[20] The applicant has not received a response from the respondent.[21]
[19] Affidavit made by William Simon Heath on 8 May 2020 (William Heath’s affidavit), [4].
[20] William Heath’s affidavit, [5].
[21] William Heath’s affidavit, [5].
The application
12 By originating motion filed 8 May 2020 and summons filed 12 May 2020, the applicant seeks the following documents from the respondent by way of preliminary discovery:
(a) Documents including bank statements relating to any transfer of transfers of the $300,000.00 invested pursuant to the agreement between Autumn Bay Assets Ltd and Rorschach Wine Company Pty Ltd dated 6 July 2017;
(b) Documents including bank statements relating to the “payment” referred to in the Respondent’s email to the Applicant dated 17 May 2018;
(c) Documents relating to the “third contract” referred to in the respondent’s email to the Applicant dated 20 August 2018;
(d) Documents relating to the “contract” referred to in the respondent’s email to the Applicant dated 6 May 2019;
(e) Documents, including but not limited to correspondence and emails, relating to any investment by the Applicant or Rorschach Wine Co Pty Ltd with Celta Assets Inc; and
(f) Documents, including but not limited to correspondence and emails with Su Co International Ltd relating to any investment by the Applicant and/or Rorschach Wine Co Pty Ltd.
13 Rule 32.03 of the County Court Civil Procedure Rules 2018 (Vic) (the Rules) is headed “Discovery to identify a defendant” and provides:
(1) The Court may make an order under paragraph (2) where—
(a) an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person (in this Rule called the person concerned); and
(b) it appears that some person has or is likely to have knowledge of facts, or has or is likely to have or has had or is likely to have had in that person's possession any document or thing, tending to assist in such ascertainment.
(2) The Court may order that the person, and in the case of a corporation, the corporation by an appropriate officer, shall—
(a) attend before the Court to be orally examined in relation to the description of the person concerned;
(b) make discovery to the applicant of all documents which are or have been in the person or corporation's possession relating to the description of the person concerned.
(3) Where the Court makes an order under paragraph (2)(a), it may—
(a) order that the person or corporation against whom or which the order is made shall produce to the Court on the examination any document or thing in the person or corporation's possession relating to the description of the person concerned;
(b) direct that the examination be held before an associate judge or judicial registrar.
14 Rule 32.08 of the Rules provides that an application under Rule 32.03 shall be made by originating motion supported by an affidavit stating the facts on which the application is made and specifying or describing the documents or any class of documents in respect of which the order is sought. The applicant has filed two affidavits; Thompson’s affidavit and William Heath’s affidavit.
Relevant legal principles
15 The principles relevant to the application of the corresponding rule in the Uniform Civil Procedure Rules 2005 (NSW) were summarised in Roads and Traffic Authority of New South Wales v Care Park Pty Ltd.[22]
[22] [2012] NSWCA 35.
16 In that case, Young JA held that there are two jurisdictional requirements under r 5.2 of the Uniform Civil Procedure Rules 2005 (NSW):
17 ‘he or she has made reasonable inquiries’; and
18 ‘the defendant may have information to assist’.[23]
[23]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [28] (Young JA).
19 There is also a discretionary requirement that the applicant has a purpose[24] or desire[25] to commence proceedings.
Does the applicant have standing?(a)
[24]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [28] (Young JA).
[25]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [98] (Basten JA).
20 The applicant must have standing to bring an application under Rule 32.03 of the Rules.
21 Standing is defined as ‘a special interest in the subject matter of the litigation’.[26] The absence of ‘a material interest in the subject matter, in the sense of property or possessory rights’, is not a bar to standing.[27]
[26]Environment East Gippsland Inc v VicForests (2010) 30 VR 1, 24 (Osborn J).
[27]Environment East Gippsland Inc v VicForests (2010) 30 VR 1, 25 (Osborn J).
22 The respondent submits that ‘the applicant has not demonstrated in his Affidavit that he made any investment but rather that Rorschach made an investment and, therefore, the applicant has no personal standing in this application’.[28]
[28] Respondent’s Submissions dated 16 June 2020 [6].
23 The applicant submits that he ‘clearly has standing’ because ‘[h]e personally received the balance of the return of the First Agreement ($75,000)’. It is not clear whether the applicant himself or Rorschach is a party to the Third Agreement. The applicant has ‘not been provided with a copy of the Third Agreement’.[29] The First Agreement was between Heath Allan Consulting and Rorschach.[30] The balance of the return of the First Agreement was paid to the applicant himself.[31] The Second Agreement was between Autumn and Rorschach.[32] The applicant instructed the respondent in ‘the rollover of $300,000 AUD to a new contract’.[33] The material provided to the applicant does not disclose whether the applicant himself or Rorschach was to be a party to that new contract.
[29]Thompson’s affidavit, [20].
[30] Exhibit CLT 5 to Thompson’s affidavit.
[31] Exhibit CLT 8 to Thompson’s affidavit.
[32] Exhibit CLT 7 to Thompson’s affidavit.
[33] Exhibit CLT 9Thompson’s affidavit.
24 Having considered the whole of the evidence and the submissions made by the parties, I am satisfied that the applicant has standing to bring the application.
Has the applicant made reasonable inquiries?(b)
25 Rule 32.03(1)(a) of the Rules requires the applicant to have made ‘reasonable inquiries’ to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person.
26 What is reasonable is a question of fact in all the circumstances. Relevant factors include the cost, delay and uncertainty of alternative means of ascertaining the prospective defendant’s identity.[34]
[34] Roads & Traffic Authority (NSW) v Australian National Car Parks Pty Ltd [2007] NSWCA 114 [14] (Mason P, McColl JA and Bell J).
27 The applicant has contacted the respondent a number of times in order to ascertain the identity of the person against whom the proceeding is to be commenced.[35] The applicant also contacted Celta in order to ascertain the reason for the delay in repayment.[36]
[35] Thompson’s affidavit, [16], [19]-[20]; William Heath’s affidavit, [4]-[5].
[36] Thompson’s affidavit, [17].
28 The applicant submits that ‘[t]he applicant meets the requirements of Rule 32.03’.[37] The respondent does not dispute that the applicant has made reasonable inquiries.[38]
[37] Applicant’s Submissions in Reply dated 18 June 2020 [1].
[38] Respondent’s Submissions dated 16 June 2020.
29 Having considered the whole of the evidence, I am satisfied that the applicant has made reasonable inquiries.
Does the respondent have information to assist?(c)
30 Rule 32.03(1)(b) of the Rules provides that the Court may make an order for discovery if it appears that the respondent is likely to have knowledge of facts, or any document or thing tending to assist in the ascertainment of the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person.
31 The information, document or thing must have the requisite tendency to assist, although the applicant need not establish in advance that the information, document or thing would necessarily assist in revealing the identity or whereabouts of the prospective defendant.[39]
[39]Roads & Traffic Authority (NSW) v Australian National Car Parks Pty Ltd [2007] NSWCA 114 [16]-[17] (Mason P, McColl JA and Bell J).
32 On 31 October 2017, the applicant emailed the respondent ‘confirming that the Second Agreement had been concluded on 26 October 2017 and instructing him to “rollover” the $300,000 into a new agreement (“the Third Agreement”)’.[40] As he had not been provided with a copy of the Third agreement, the applicant contacted the respondent in December 2017 after the respondent had returned from overseas. The applicant states that the respondent was ‘vague with his responses’ but that ‘the $300,000 had been invested’ and that ‘everything was all right.’[41] On 18 June 2018 the respondent emailed the applicant referring to ‘a contract between Celta and Su’.[42] That email also refers to the respondent’s entitlement to ‘his portion of the funds which will be paid from the received funds.’[43] The respondent ‘confirmed that the $300,000 from the Second Agreement had been rolled into a Third Agreement’.[44] The applicant does not have ‘a copy of the Third Agreement or any details thereof’.[45]
[40] Thompson’s affidavit, [12].
[41] Thompson’s affidavit, [13].
[42] Thompson’s affidavit, [15].
[43] Exhibit CLT10 to Thompson’s affidavit.
[44] Thompson’s affidavit, [18].
[45] Thompson’s affidavit, [20].
33 The respondent submits that ‘[t]he applicant has failed to demonstrate that the respondent has any further information or may have a document or thing that tends to assist in ascertaining the identity or whereabouts or any other person other than those referred to in his evidence and, further, demonstrates that he has the same knowledge as the respondent’.[46]
[46] Respondent’s Submissions dated 16 June 2020 [5].
34 I do not accept the respondent’s submission. The applicant submits that he desires to issue proceedings to recover the $300,000 investment and that the applicant is unable to determine the relevant defendant because the ‘person concerned’ could be any of:
(a) Heath Allan;
(b) Heath Allan Consulting;
(c) Autumn;
(d) Charles Su;
(e) Celta Assets Inc. [47]
[47] Applicant’s Submissions in Reply dated 18 June 2020 [3].
35 I accept the applicant’s submission that it appears that the respondent has knowledge of facts or is in possession of documents which would enable the applicant to ascertain the identity of the party or parties to the Third Agreement. On 31 October 2017 the applicant emailed a letter to the respondent instructing him to “rollover” the $300,000 into a new agreement (the Third Agreement).[48] The respondent has failed to provide the applicant with details about or a copy of the Third Agreement.
Does the applicant have a purpose or desire to commence proceedings? (d)
[48] Thompson’s affidavit, [12].
36 Rule 32.03(1)(a) of the Rules requires that the applicant ‘is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person’.
37 The respondent relied on Roads and Traffic Authority of New South Wales v Care Park Pty Ltd to argue that this requires the applicant to prove that he ‘desires to bring proceedings against a person’.[49] However, there was disagreement on the principle in that case. Barrett JA, with whom Beazley JA agreed, held that an applicant must only show that ‘he or she has such a “desire”’ to bring proceedings against the person in question.[50] A ‘desire’ is ‘less fixed and certain than an intention or purpose’.[51] It is not enough for the applicant to ‘simply assert some subjective desire’.[52] The applicant must have a ‘genuinely held and objectively based desire’.[53] On the other hand, Young JA, with whom Basten JA agreed, held that an applicant must show that ‘he or she has, at the time of the application, the purpose of commencing proceedings against the person in question’.[54] The purpose must be ‘the substantial and dominant purpose’.[55]
[49] [2012] NSWCA 35; Respondent’s Submissions dated 16 June 2020 [2(a)].
[50]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [98] (Basten JA).
[51]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [113] (Basten JA).
[52]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [106] (Basten JA).
[53]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [106] (Basten JA).
[54]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [28] (Young JA).
[55]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [72] (Young JA).
38 The applicant submitted that the applicant ‘desires to issue proceedings to recover the $300,000 investment’.[56] This is evident in the affidavit in which the applicant states that the discovery is required ‘to enable me to be able to issue proceedings to recover my investment’.[57] The applicant’s solicitor stated that the applicant requires discovery of the documents referred to in the summons “for the purpose of commencing a proceeding to recover that investment”.[58] The respondent submitted that ‘[t]he applicant has provided no evidence that he has any desire to issue proceedings against any other person’.[59] The respondent further submitted that the applicant’s ‘motivation for bringing this proceeding has not been identified’.[60]
[56] Applicant’s Submissions in Reply dated 18 June 2020 [3(a)].
[57] Thompson’s affidavit, [21].
[58] William Heath’s affidavit, [3].
[59] Respondent’s Submissions dated 16 June 2020 [3].
[60] Respondent’s Submissions dated 16 June 2020 [3].
39 This case is distinguishable from Roads and Traffic Authority of New South Wales v Care Park Pty Ltd.[61] In that case, the operator of a car park was seeking to identify people who park in its car parks without paying, displaying their payment voucher or overstaying.[62] The question of purpose arose because ‘statistically, operators of car parks appear to sue only 100 out of 10,000 reported defaults’.[63] It was argued that ‘a person whose prime purpose is to issue paper demands, but only takes proceedings in about one per cent of cases, has not demonstrated that the information it requested is being sought for the purpose of commencing proceedings’.[64] In the instant case, the applicant is seeking to recover an investment of $300,000 from an unknown entity or entities.[65] There is no reason for the Court to conclude that the applicant’s desire to issue proceedings is not genuinely held and objectively based. Moreover, there is nothing to indicate that commencing proceedings is not the substantial and dominant purpose of the application. No alternative purpose was put forward by the respondent.
[61] [2012] NSWCA 35
[62]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [14] (Young JA).
[63]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [34] (Young JA).
[64]Roads and Traffic Authority of New South Wales v Care Park Pty Ltd [2012] NSWCA 35 [35] (Young JA).
[65] Thompson’s affidavit, [21].
40 I am satisfied that the applicant has the purpose or desire of commencing proceedings.
Conclusion
41 For these reasons I order preliminary discovery of the documents sought by the applicant. I order that by 4pm on 17 July 2020 the respondent must make file and serve an affidavit of documents and make discovery (including full inspection) of the documents referred to in the applicant’s summons dated 8 May 2020. I order that the respondent pay the applicant’s costs of this application on a standard basis to be taxed in default of agreement.
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