Tracenia Nominees P/L v Centro Properties Ltd

[1993] FCA 996

I

r

996 1 % I

JUDGMENT NO. .sS,mnnmssasn.n * 81.) !

PRACTICE AND PROCEDURE - Discovery - alleged misrepresntation	, I
conveyed to third party - whether third party induced to act -	, !
requirement of an inducing cause - non-party discovery - non-	. .
party closely related to respondent - costs.	I .
Federal Court Rules 0.15 r.8, 0.15A r.8.
Gould v Vage l las (1985) 157 CLR 215
Kennedy v Dodson [l8951 1 Ch 334
George Ba l lan t ine and Son Ltd v F E R Dixon and Son Ltd [l9741
1 WLR 1125

Richardson P a c i f i c L imi ted v F ie ld ing (1990) 26 FCR 188

REGISTRY

Tracenia Nominess Ptv Ltd v Centro Pro~erties	Limited and Anor
(No. WAG 63 of 1993)
Judge :	Heerey J
Date:	10 December 1993  :.
Place:	Perth

- 6 J A N 1994

.-EDERAL COURT OF , - - I

AUSTRALIA PRINCIPAL

IN TEE FEDERAL COURT OF AUSTRALIA	1
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DMSION	1
B E T W E E N :

TRACENIA NOMINEES PTY LTD

A C N 009 006 740

Applicant

and

CENTRO PROPERTIES LIMITED

A C N 006 378 365

First Respondent

and

NEIL STEDMAN

Second Respondent

JUDGE :	Heerey J
m:	10 December 1993
PLACE :	Perth

MINUTES OF ORDERS

1.   There be an order in terms of the Applicant's motion dated 26 November 1993 for particular discovery.

2.   There be an order in terms of the Applicant's motion filed 6 December 1993 for non-party discovery.

3.   The respondents pay the costs of the two motions, including revenue costs.

1. In relation to the motion for non-party discovery, the costs of the non-party be reserved and liberty to apply is reserved in relation to these costs.

NOTE :  Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules

IN TEE FEDERAL CO-'JRT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY	)	NO. WAG 63 of 1993
GENERAL DIVISION	1
B E T W E E N :

TRACENIA NOMINEES PTY LTD

A C N 009 006 740

Applicant

and

CENTRO PROPERTIES LIMITED

A C N 006 378 365

First Respondent

and

NEIL STEDMAN

Second Respondent

JUDGE :	Heerey J
m:	10 December 1993
PLACE :	Perth

EX TEMPORE REASONS FOR JUDGMENT

The applicant seeks, under 0.15 r.8, particular discovery in relation to certain documents described in its notice of motion dated 26 November 1993.

The applicant held a lease of a shop at the Mandurah Forum

Shopping Centre for a term of five years from 28 February 1988 to 28 February 1993. The applicant conducted a newsagency business at the shop. No new lease was granted upon the expiry of the term. The applicant's complaint is that the refusal to grant a new lease by the landlord Uppsala Pty Limited was due to a misrepresentation by the second respondent, Neil Stedman, to the landlord that the applicant had, in the course of negotiations for the lease, made a promise to re-fit the shop but had not done so during the term of the lease. It is said that in fact the applicant had made no such promise.

The loss said to have been suffered by the applicant results from the communication of that statement by Mr Stedman to the first respondent's manager, Mr Colin Round, and/or to the landlord.

In their defence the respondents say that the applicant did give an undertaking to re-fit the premises and that Mr Stedman communicated the fact of that undertaking to Mr Round. The respondents, moreover, deny that the decision of the landlord not to grant a new lease was in any way connected with any statement as to the promise for fit-out. In par.11 of their defence the respondents say that Mr Round had the authority on behalf of the landlord to make decisions in relation to the centre, including which tenants were to be granted new leases, and that Mr Round would, in any event, have decided not to	grant the applicant a new lease irrespective of the fact of
the promise about re-fitting being communicated to him.
Par.ll(c) says:

"Colin Round would in any event have decided not to

grant the applicant a new lease of the premises on

the following grounds. (i) The applicant's
consistent late payment of rent, variable outgoings

and Merchant Association's levies over the term of

the second lease; (ii) The dishonouring of several
of the applicant's cheques tendered by the applicant

in payment of rent, variable outgoings and Merchant

Association's levies; (iii) The poor presentation

of the premises; (iv) The applicant's failure over

the period of its tenancy of the premises to carry
out any re-fit or refurbishment of the premises;

relative to other tenants at the centre; (vi) The (v) The applicant's poor trading performance

need to relocate the newsagency of the centre as a
result of a planned redevelopment of the centre."

Thus there will be an issue at the trial whether the representation about the applicant's alleged promise to re-fit had anything to do with the decision not to grant the new lease. The evidence on the present application includes a letter from the first respondent to the Newsagency Council of -

Western Australia advising that a new lease would not be granted to the applicant and giving a number of reasons for that decision. The first of those reasons is that on entering into the agreement in 1988, the applicant

"made a commitment to modernise the store fit-out.
Nothing was done in this 5 year period."

There are seven other reasons given, some of which correspond with the reasons referred to in the defence and some which relate to other matters such as, for example, the alleged

magazines.	refusal of the applicant to carry stocks of popular women's
In that setting, the applicant seeks further discovery of:

(a)	Colin Round's contract of employment and any other documents relating to his duties and powers whilst employed by the first respondent;
(b)	minutes of any Mandurah Forum Shopping Centre management meeting relating to the decision to renew or not renew any lease at the Mandurah Forum between the period February 1988 to February 1993;
(c)	any memoranda, letters or notes relating to any decision whether to renew or not renew any lease at the Mandurah Forum during the period February 1988 to February 1993;
(d)	any documents relating to payment of rent and variable outgoings at any tenancy at the Mandurah - Forum which has been granted a new lease or refused a new lease during the period February 1988 to February 1993, including all tenants ledger trial age balances during that period;
(d)	any documents relating to the presentation and fit out of any tenancy at the Mandurah Forum which has been granted a new lease or refused a new lease during the period February 1988 to February 1993;

(f) any notes, memoranda, correspondence or other

-	documents between the first respondent and Uppsala	Pty Ltd relating to the decision to grant a new
lease or not grant a new lease for any existing
tenancy at the Mandurah Forum during the period February 1988 to February 1993.

The argument dealt first, under par.l(a), with Mr Round's contract of employment. I was told by counsel for the respondents that the contract of employment contained no relevant information about M r Round's authority to grant leases, but that there had recently been found a document in the nature of a description of duties and this had been provided to the applicant's solicitors.

I think it is appropriate that I do order further discovery of

the contract of employment. I do not, of course, have any lack of confidence in what was said to me from the bar table but it does seem to me that since M r Round's scope of authority is an issue in the case, all documents relating to .

that question are relevant and discoverable. The fact that one document in itself on its face does not say anything about his authority to grant leases does not mean that it may not form a relevant part of an overall matrix. The absence of some explicit reference to a topic in a document may in itself be a matter of relevance.

The remainder of the documents referred to in the notice of motion are sought on the basis that they are said to be relevant to the question whether the non-performance of the	alleged promise to fit-out was, as the applicant says, at	least one factor in the decision not to grant a new lease.
This case is somewhat unusual in that the issue of inducement is not whether the applicant was induced by the respondents' alleged misleading and deceptive conduct but whether somebody else was induced to act, or not to act, in a way which caused loss to the applicant. For present purposes it is at least arguable that the court should apply, by analogy, the principle in Gould v Vagellas (1985) 157 CLR 215, to the effect that it is sufficient if the misleading and deceptive conduct was inducing cause and that the conduct does not have to be the sole or even the dominant inducing cause.
The applicant argues that if one looked at what happened to other leases in the Centre where there were comparable factors such as, for example, tardy payment of rent but, nevertheless, the grant of a new lease, that may tend to show that in the -
present case the non-performance of the alleged promise as to fit-out must have played some part. Counsel for the respondents contend that this is merely a fishing expedition and that the evidence sought goes solely to credit.
Reliance was placed on the case of Kennedy v Dodson [l8951 1 Ch 334, which was referred to and applied in George Ballantine and Son Limited v F E R Dixon and Son Limited L19741 1 WLR
1125.
the grant or refusal to grant other leases would go solely to I do not agree that evidence of the kind mentioned relating to
credit. It is not evidence which goes only to the question of whether a witness is to be believed on his or her oath like, for example, evidence of a criminal conviction. Evidence of the sort under consideration might raise difficult questions at trial as to the admissibility of evidence of similar facts. But now is clearly not the time to decide, in the abstract, questions of admissibility. It is sufficient to posit that such evidence may be admissible. Documents do not have to be admissible in themselves to be discoverable. It is sufficient if they lead or may lead to a line of inquiry which helps support the case of the party seeking discovery or damage the case of the opposing party.
If it were the case that with other tenants there were factors such as late payment of rent but nevertheless a grant of a new lease that might - and I stress might - be material on which -
the trial judge could find that as a matter of fact the existing practice at the relevant time was not necessarily to decline new leases when there had been tardy payment of rent and that again as a matter of fact, what affected the decision in the applicants' case was the non-performance of the alleged promise about re-fit.
I should also add that it seems a significant element of the
decision in Kennedy v Dodson was the oppressive nature of the
interrogatory there in question. It was described as
before me on behalf of the respondents to establish as a vexatious and oppressive. There has been no material put
matter of fact that the discovery of these documents would be vexatious and oppressive in the sense of requiring discovery of a very large number of documents imposing unreasonable burdens on the respondents.
The other notice of motion before me is brought under 0.15A r.8 seeking discovery from a non-party, namely the landlord Uppsala Pty Limited. This is a relatively new rule; it was discussed in Richardson Pacific Limited v Fielding (1990) 26
FCR 188. I think it is appropriate that I do make the order The material before me includes a number of letters from the first respondent which includes a statement that sought.

"The owners have advised that your lease on the

premises will not be renewed."

And on another occasion:

"We advise that the owners have examined your submission requesting that the decision not to renew your lease be reconsidered. We have been instructed to advise you that the owners have decided to stand by their decision not to renew your lease on the above premises."

Since the landlord is a company and presumably complies with the requirements of the Corporations Law, it is reasonable to infer that there would be some documentary record, whether in the form of minutes or reports to the Board or the like, which

would record a decision of this nature. I was told from the	bar table by counsel for the respondents that for all intents
and purposes the landlord has no separate existence from the first respondent. It has a common office with common directors and there are, counsel says, in fact no documents in the possession of the landlord which have not already been discovered. However if a case for discovery against a non- party is made out the applicant is entitled to have discovery in the form provided under the rules from that party, that is
to say on oath. As the parties are closely related it does seem that no great hardship will be incurred. This case really turns on the decision not to grant the new lease and what factors led to that decision. Documents directly relating to that question are so central to the claim that I think they should be discovered in accordance with the rule by the non-party in question.
I will make an order in terms of that notice of motion. There will be an order in terms of the motion for further discovery and an order in terms of the motion for discovery from a non- party.
As far as the motion for further discovery goes, the applicant should get its costs. The criterion is not, as the respondents' counsel argues, whether documents obtained on discovery are ultimately tendered in evidence at trial. If that were so there would be endless dispute in almost every case where a successful party had incurred costs in seeking
documents so discovered. There was really here a discrete discovery but not used some or, on occasions, any of the
issue, namely whether further discovery should be ordered, and that was opposed and a decision made. That is the only time that issue will be raised. The ordinary rule should apply and costs should follow the event. I will order that the respondents pay the costs of the two motions and in relation to the motion for non-party discovery I will reserve the costs of the non-party Uppsala Pty Limited and reserve liberty to
apply in relation to those costs since the company was not formally represented before the court.

I certify that this and the

preceding nine (9) pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Dated:  (Q & C E ~ L ? E L I C /??3

ADDearances

Counsel for the applicant:	MS M Cole
Solicitor for the applicant:	Summers Partners
Counsel for the respondent:	Mr S D Hicks
Solicitor for the respondent:	Clayton Utz
Date of hearing:	10 December 1993.