Waller v Waller - [2008] WASC 51

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WALLER -v- WALLER [2008] WASC 51

CORAM: SIMMONDS J

HEARD: 4 DECEMBER 2007

DELIVERED : 10 APRIL 2008

FILE NO/S: CIV 1682 of 2007

BETWEEN: CLIVE GREGORY WALLER
MARLENE McDONALD
MICHAEL JOHN WALLER
GAY CRIDDLE
KERRY CLUNE
Plaintiffs
AND
BARRY GRANVILLE WALLER
First Defendant
CHRISTINE MARGARET WALLER
Second Defendant
GERALDTON FOOD DISTRIBUTORS PTY LTD
Third Defendant

Catchwords:

Procedure - Pre-action discovery against potential parties - Elements required to be established - Whether the applicant may have a cause of action - Whether applicant has after reasonable enquiries been unable to obtain sufficient information - Whether the respondent has or has had or is likely to have or have had possession of documents that may assist - Whether the discretion to order discovery should be exercised and if so how - The costs of the application, of compliance with any orders and security for the costs of compliance - Rules of the Supreme Court 1971 (WA) O 26A r 4 and O 26A r 7

The rule in Barnes v Addy - Application to actions against persons participating in breaches of duty by an administrator - First and second limbs of the rule in Barnes

Administrator de son tort - Application to persons acting after grant of administration

Limitation of actions - Application of Limitation Act 1935 (WA) 2 47 to persons liable under the rule in Barnes - Application to persons liable as administrators de son tort

Laches - Delay and acquiescence - Delay permitting a situation to arise which it would be unjust to disturb

Abuse of process - Delay producing an abuse of process

Practice and procedure - Conferral prior to making an application - What constitutes conferral for the purposes of O 59 r 9

Legislation:

Administration Act 1903 (WA), s 14
An Act against Fraudulent Administration of Intestates' Goods of 1601, 43 Eliz I cap 8 s II (Imp)
Federal Court Rules, O 15A r 6, O 15A r 11
Limitation Act 1935 (WA), s 47
Limitation Act 1980 (Vic), s 21
Limitation of Actions Act 1969 (NSW), s 47
Property Law Act 1969 (WA), s 9
Rules of the Supreme Court (WA), O 26A r 4, O 26A r 5, O 26A r 7, O 59 r 9
Supreme Court Act 1981 (Imp), s 33(2)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiffs:     Mr M H Zilko SC & Mr P J Hannan
First Defendant             :     Mr D H Solomon
Second Defendant         :     Mr D H Solomon
Third Defendant           :     Mr D H Solomon

Solicitors:

Plaintiffs:     Curwood & Co Pty Ltd
First Defendant             :     Solomon Brothers
Second Defendant         :     Solomon Brothers
Third Defendant           :     Solomon Brothers

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

Barnes v Addy (1874) LR 9 Ch App 244
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864
Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33
Clay v Clay [2001] HCA 9; (2001) 202 CLR 410
Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694
Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373
Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216
Davis v Sagar Pty Ltd (Unreported, WASC, Library No 980443, 10 August 1998)
Dunning v Board of Governors of the United Liverpool Hospitals [1973] 2 All ER 454
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 236 ALR 209
Halfhide v Beaven [2003] NSWSC 1207
Harris v Newcastle-upon-Tyne Health Authority [1989] 2 All ER 273
Imperial Chemical Industries plc v Echo Tasmania Pty Ltd [2007] FCA 1731
In de Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389
In re Hayes' Will Trusts [1971] 1 WLR 758
Kalls Enterprises Pty Ltd (In Liq) v Baloglow [2007] NSWCA 191; (2007) 63 ACSR 557
Karak Rubber Co Ltd v Burden (No 2) [1972] 1 All ER 1210
Kim Riley in his capacity as Trustee of the Ker Trust v Jubilee Gold Mines NL [2000] WASC 114
Malouf v Malouf [1999] FCA 710
McCarthy v Dolpag [2000] WASCA 106
Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (In Liq) [1999] FCA 1820; (1999) 169 ALR 419
Newcastle City Council v Batistatos [2005] NSWCA 20; (2005) 43 MVR 381
Nolan v Nolan [2004] VSCA 109
On v On [2002] NTSC 18
Orr v Ford (1989) 167 CLR 316
Phipps v Boardman [1967] 2 AC 46
Pollard v Jackson (1994) 67 P & CR 327
Ray Mullins & Sons Pty Ltd v Skycorp Investments Pty Ltd [2005] WASC 142
Re Jarvis [1958] 2 All ER 336
Reader v Fried [2001] VSC 495
Rohanna Pty Ltd v Horwath Perth (a firm) [2003] WASC 172
Selangor United Rubber Estates Ltd v Cradock [No 3] [1968] 1 WLR 1555
Soar v Ashwell [1893] 2 QB 390
Swancross Corporation Pty Ltd v The Minister For Planning And Infrastructure For The State Of Western Australia [2004] WASC 259
Taylor v Davies [1920] AC 636
Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161

SIMMONDS J:

Introduction

This is the return of an application under Rules of the Supreme Court 1971 (WA) O 26A r 4 for pre-action discovery against potential parties to proceedings not yet commenced.
The present application raises issues in the application of Rules of the Supreme Court O 26A r 4 of the evidence required to enliven the discretion of the court to make an order under the rule, as well as how the discretion so enlivened should be exercised. Those issues are ones of some difficulty, as will appear from the lengthy discussion the resolution of those issues appeared to me to require. A principal source of such difficulty is the considerable length of time that has elapsed since the events in question.

Background

The following is taken from the five affidavits filed in support of the application, and the one affidavit filed in opposition to it, to the extent there is no contest as to the matters I state. Proceedings of the present kind may involve dealing with 'contestable matters of fact', although 'they should be limited for it is not contemplated that pre-action discovery proceeding should become a full-blown factual contest': Kendall C and Curthoys J, Civil Procedure in Western Australia (5 March 2008) [26A.0.2A]. However, in any event I consider that there are no 'contestable matters of fact' in the sense of matters of fact that are in contest before me that have a bearing on the present proceeding. There are, however, contests as I will indicate as to the significance of those facts for the purposes of the present application.
Further, I should note that I am not involved, in what are interlocutory proceedings, in making 'any findings of fact other than those that are proper in an interlocutory context': Imperial Chemical Industries plc v Echo Tasmania Pty Ltd [2007] FCA 1731 [13] (Graham J); see also [8].
The affidavits filed in support of the application were the following:
•Affidavit of Clive Gregory Waller sworn 10 August 2007 (the first named plaintiff's affidavit);
•Affidavit of Michael John Waller sworn 19 September 2007 (the third named plaintiff's affidavit);
•Affidavit of Gay Criddle sworn 21 September 2007 (the fourth named plaintiff's affidavit);
•Affidavit of Clayton Criddle sworn 24 September 2007 (Clayton Criddle's affidavit): Mr Criddle is the husband of the fourth named plaintiff; and
•Affidavit of Kerry Clune sworn 21 September 2007 (the fifth named plaintiff's affidavit).
The affidavit filed in opposition to the application is the affidavit of Barry Granville Waller sworn 9 November 2007 (the first defendant's affidavit).
The plaintiffs and the first defendant are the six children of Athol Granville Waller (the deceased), who died on 9 July 1959 without leaving a will. At the time of the death of the deceased, the first named plaintiff (Clive), whose date of birth appears to be 26 November 1952, was aged 6; the second named plaintiff (Marlene), whose date of birth appears to be 10 April 1941, was aged 18; the third named plaintiff (Michael), whose date of birth appears to be 31 January 1950, was aged 9; the fourth named plaintiff (Gay), whose date of birth appears to be 19 December 1942, was aged 16; the fifth named plaintiff (Kerry), whose date of birth appears to be 15 May 1947, was aged 12; and the first defendant (Barry), whose date of birth appears to be 26 April 1944, was aged 15.
The second defendant (Christine) is the wife of the first defendant.
At his death the deceased ran an abattoir and wholesale and retail butcher business in and around the Geraldton area through a corporate structure comprising three entities.
One entity was the third defendant. It owned a number of retail butcher shops in the Geraldton area, as well as large tracts of land on the outskirts of Geraldton. It is the only entity of the three still in existence.
Another entity was Waller & Son Pty Ltd (Waller & Son). It was a wholesale distributor of meat to retail butcher shops in the Geraldton area. Waller & Son was deregistered at a date unknown to the plaintiffs.
The third entity was Geraldton Abattoirs Pty Ltd (GA). It operated abattoirs from yards on the outskirts of Geraldton and, by the time of its de‑registration, on 1 November 1994, its name had been changed to Sunset Beach Management Services Pty Ltd (Sunset Beach).
Following the death of the deceased, the business of the third defendant, Waller & Son and GA continued under a manager now himself deceased, at least in the period before the first defendant assumed the role I will consider below.
On 14 October 1960 letters of administration of the estate of the deceased were granted to his widow, Mary Waller. Mary remarried, in January 1969, to become Mary Stevens. Mary is now in her 80s and suffers from a mental disability that would prevent her providing any assistance in the matters referred to in the present or other proceedings.
At the date of the grant of the letters of administration documents obtained from the probate office of the court for the estate of the deceased indicate it comprised land, shares, debentures, cash at bank, debts due to the deceased, a motor launch and yachts, a taxation refund, directors' fees received since death, war savings certificates and undrawn dividends and other amounts standing to the credit of the deceased with the third defendant. The net value of the estate after the liabilities of the deceased shown was approximately £50,000.
The land was in the Geraldton area, being the land the subject of Certificate of Title Vol 1134 Folio 157, which was the family home. A valuation of this land at £6,500 is referred to in the probate documents. On 2 April 1969 Mary executed a transfer document in respect of this land in favour of the first defendant: the consideration for this transfer was shown as $24,000. The transfer was registered on 30 May 1969. On 20 January 1970 the first defendant executed a transfer document in respect of the same land in favour of other persons for a consideration shown as $21,500; the transfer was registered on 16 April 1970.
In addition, the probate documents contain entries indicating that other lands had been sold by the deceased prior to his death to the third defendant, but the transfers of those lands had not by then occurred. Those lands represented the land the subject of Certificate of Title Volume 1134 Folio 158 and the land the subject of Certificate of Title Volume 906 Folio 4.
The land the subject of Certificate of Title Volume 1134 Folio 158 was a substantial area, of about 295 acres, about 5 to 6 km north of Geraldton, at least a portion of which was used for abattoirs. There is no indication in the material before me of the nature of the land the subject of Certificate of Title Volume 906 Folio 4.
On 14 June 1963 Mary executed a transfer of land document in favour of the third defendant covering both lands. The transfer of land document referred to the consideration for the transfer of the lands as £20,000 paid to the deceased during his lifetime. The transfer was registered on 17 September 1964.
There is evidence before me that subsequently, over the period beginning in about 1971 and ending in about 1980, the land the subject of Certificate of Title Volume 1134 Folio 158 was used for the purposes of a subdivisional development known as the 'Sunset Beach Development'. The subdivision involved about 240 blocks. The Sunset Beach Development was at least initiated by the third defendant and was developed by a company in which the first defendant had a management role, United Development Corporation Pty Ltd (United), which itself was in a group of companies of which the third defendant also appears to have formed a part. On 25 August 2005 a transfer under a transfer of land document dated 24 August 2005 of a portion of the land originally the subject of Certificate of Title 1134 Folio 158 from the third defendant to what appears to be an unrelated entity and showing a consideration of $10,450,000 was registered. I return below to the significance of that transfer, if any, for the purposes of the present application.
There is evidence that at the date of the death of the deceased, the third defendant also owned a large piece of land located 5 km from the centre of Geraldton the subject of several certificates of title and known as 'Utakarra'. At least a portion of this land was used for abattoirs. In 1968 that land was subdivided into a large number of residential blocks and 'the balance' sold prior to 1973.
There is also evidence that, at the date of death of the deceased, the third defendant owned a number of properties located in Geraldton related to a retail butcher's business. These were a depot and five retail shops. There is evidence that by 1973 all but one of these properties had been transferred.
This material, and the other evidence before me to which I have referred, show that by 1973 the business formerly conducted by the deceased had substantially changed.
The focus of much of the plaintiffs' case for the orders they seek is the shareholding of the estate of the deceased in the corporate entities through which the former business of the deceased had been conducted: GA, Waller & Son and the third defendant.
With respect to that shareholding, the probate documents show 100 £1 ordinary shares in each of GA and Waller & Son, and 11,204 £1 ordinary shares in the third defendant.
Further, those documents also contain entries indicating gifts by the deceased to each of his six children by his causing GA and Waller & Son respectively on 1 March 1959 to allot to each of them 170 shares in each of the two companies representing in total 1,020 shares in each company, that total taken from an entitlement of the deceased to 1,120 shares in each, and with the allotment monies paid out of dividends received on 30 April 1959 from the various companies. Those documents appear to show the value of the 1,020 shares in GA as £26,520 (£26 per share) and of the 1,020 shares in Waller & Son as £25,500 (£25 per share).
There is no evidence before me as to whether or not the 1,020 shares each were ever issued, and, if so, what became of them, although it would appear that the first named plaintiff at least had no knowledge of the gift of them, and the evidence as to the other plaintiffs is consistent with their ignorance of such a gift in their cases also.
However, there is evidence, in recitals in and a schedule to a deed dated 30 November 1973 (the 1973 deed), that at various dates beginning at the latest on 1 November 1971 and ending prior to 26 November 1973 each of the plaintiffs sold to the first and second defendants 'the shares then held by them and to which they would become entitled upon [the first named plaintiff] attaining the age of twenty one years' in GA, Waller & Son and the third defendant. The first named plaintiff attained that age on 26 November 1973.
As I will also indicate shortly there is evidence there were further shares than those registered in the names of the plaintiffs with the third defendant.
It further appears from the 1973 deed that at least the first named, second named, third named and fourth named plaintiffs were to be paid or had by 30 November 1973 been paid, in respect of the quantity of their shares in the third defendant referred to in the 1973 deed, amounts totalling $15,000 each, plus interest in the cases of the sales to the second and fourth named plaintiffs. The deed appears to indicate that the fifth named plaintiff had been paid for her shares, but it does not indicate in what amount or for what number of shares.
The fifth named plaintiff's affidavit states she had no recollection of signing the 1973 deed or of discussions with the first defendant concerning his and his wife's 'purchasing the family business in exchange for giving my brothers and sisters and myself $15,000'. She does depose that following a request of her mother for money made in 1975, and her mother telling her to ask the first defendant, she received a cheque from a company of the first defendant for $15,000.
The first named plaintiff's affidavit indicates he had no recollection of him signing or of the contents of the 1973 deed, or of any agreement with respect to any shares in the third defendant he held or to which he had an entitlement. However, he deposes that after turning twenty one, he asked his mother about his 'inheritance', and she told him he should go to see the first defendant. Subsequently, the first defendant had agreed to reduce the price of a house and land package being built for the first named plaintiff by a company partly owned by the first defendant by the amount of $15,000, representing the 'only benefit I received from the Estate of my father'.
The third named plaintiff's affidavit indicates he had no recollection of him signing or of the contents of the 1973 deed, or of any agreement with respect to any shares in 'the family business or companies'. The affidavit states that he did not receive any of the amounts shown as having been paid to him for any shares in the third defendant. However, he deposes that in 1972 he had spoken to his mother about the development at Sunset Beach. She had said words to the effect that, when the first defendant had finished developing the land, she had 'gifted all of you (namely all of the children) a block'. Subsequently the third named defendant and his wife received a block in the Sunset Beach Estate, representing the 'only benefit I have ever received from my mother, or my father's estate'.
The fourth named plaintiff's affidavit indicates she had no recollection of her signing the 1973 deed. She further deposes that, in reference to the statement in the 1973 deed as to an amount having been paid as a sum towards the $15,000 total, she was paid a sum in that amount to pay 'a tax bill'.
As I have previously indicated, there is no affidavit of the second named plaintiff. However, there is attached to the first defendant's affidavit a letter dated 31 October 1974 from the second named plaintiff to the first and second defendants in which she inquires when she can expect the payment of the first instalment of four which they had 'agreed to pay me in return for my shares which I transferred to you Barry'.
Further, there is a statement, in a letter dated 20 December 2006 from the solicitors for the plaintiffs to the solicitors for the defendants, that '[e]ach of my clients accept that they received cash or benefits approximating $15,000 each', although that does not appear to be an indication that in each case they acknowledged having received that amount in payment for shares.
There is no evidence in the 1973 deed or elsewhere as to what, if anything, the plaintiffs were to be paid in respect of the shares in GA and Waller & Son.
The 1973 deed is stated to be made between Mary, the first defendant and the plaintiffs, although it is also endorsed as bearing the signature of the second defendant. That signature, and the signatures of Mary and the fifth named plaintiff, appear to be unwitnessed, while the signatures of the first named, third named and fourth named plaintiffs appear each to have been witnessed by the second named plaintiff. To the extent those matters of execution go to the matter of the effectiveness of the document as a deed (see the requirements for witnessing by a person not a party to the deed in Property Law Act 1969 (WA) s 9) this would not affect the validity of the arrangement recorded by the document as a simple contract. As will shortly appear, I am satisfied it is clear the arrangement so recorded is effective as a simple contract, subject to a point I there make, at least as between the persons named as parties to the 1973 deed.

The 1973 deed recites that in accordance with the arrangements for the sales of the shares to the first and second defendants the first through fifth named plaintiffs had requested Mary to transfer all of the plaintiffs' interests in the shares to the first and second defendants. The 1973 deed also recites that the parties to it were 'desirous of winding up the estate of the [deceased]'.
The operative part of the 1973 deed has the following principal clauses:
1. The Administratrix shall transfer to the Covenantor [the First Defendant] and at the request of the Children [the First through Fifth Named Plaintiffs] to the Covenantor and the said Christine Margaret Waller in equal shares those shares in Geraldton Food Distributors Pty. Ltd Geraldton Abattoirs Pty Ltd and Waller & Son Pty Ltd (In Liquidation) set forth against their respective names in the Third Schedule hereto in complete satisfaction of the claims of the Covenantor and the Children for any interest in the estate of the said Athol Granville Waller deceased and the balance of the assets in existence as at the Thirtieth day of November One thousand nine hundred and seventy three shall be retained by the Administratrix for her own separate use.
2. In consideration of the Administratrix at the request of the Covenantor and the Children transferring to them or as they have herein directed their respective shares referred to in the Third Schedule hereto the Covenantor and the Children do and each of them doth HEREBY JOINTLY AND SEVERALLY release and forever indemnify the Administratrix from and against all actions claims demands and suits which they now have or might have against the Administratrix on account of the administration by her of the estate of the said Athol Granville Waller deceased.
There is also a clause providing that the first defendant will pay the whole of the costs of and incidental to instructions for preparation and stamping of the 1973 deed and all necessary transfers under it. In the first defendant's affidavit he deposes the 1973 deed was prepared 'on my instructions by Parker & Parker, solicitors, Perth'.
Although the contrary was at one point contended for by the plaintiffs, it seems to me there is little doubt this document is capable of being effective as a simple contract.
I leave to one side the question of whether or not it might be set aside in whole or in part on unconscionability grounds or other grounds. As I will indicate below, I do not consider I need to address that matter in any detail.
There appears to be consideration moving from each of the parties at the request, express or implied, of the others, even if, in the case of the fifth named plaintiff there is no indication of consideration moving to her. The consideration from Mary is the promise to transfer the shares as indicated. The consideration from each of the plaintiffs and the first defendant is the release and indemnity each gives. It is of course trite law that consideration sufficient for a simple contract need not move to the promisor: it is enough it moves from the promisee at the promisor's request (Carter JW and Harland DJ, Contract Law in Australia (4th ed, 2002) [308] and [321]).
The third schedule to the 1973 deed referred to in articles 1 and 2 of the 1973 deed sets out against the names of each of the first through fifth named plaintiffs and the first defendant 1,245 shares in the third defendant, and 11 shares in each of GA and Waller & Son.
The second schedule to the 1973 deed sets out as the 'List of Assets of Estate A G Waller known to exist as at the 30^th November, 1973' a savings account with a credit balance of $1284, shares in Geraldton Newspapers Ltd, Wesfarmers Superphosphates Ltd and Western Queen (1936) NL and 'stock units' in Ampol Exploration Ltd, as well as 11,203 $2 ordinary shares in the third defendant, 100 $2 ordinary shares in GA and 100 $2 ordinary shares in Waller & Son. The last three holdings would appear to correspond to the holdings in those companies as at the date of the death of the deceased to which I have earlier referred.
There is no evidence as to the other shareholdings in the third defendant, GA or Waller & Son as at the date of the death of the deceased, or as at the date of the 1973 deed or as at any other date. This is with the exception of the shareholdings in the third defendant as at about the time of the 1973 deed, and as at 30 June 1974.
With respect to that position at about the time of the 1973 deed, there are annexed to the first defendant's affidavit minutes of the meeting of the directors of the third defendant held on 29 November 1973 at which there is resolution approving 'a number of share transfers pursuant to deed of family arrangement and in respect to the Estate of the Late A.G. Waller'. Those transfers are of 1245 shares each to each of the plaintiffs and the first defendant, and 3733 shares to Mary.
It is not clear why, if the transfer is pursuant to the 1973 deed, the transfer is from the estate of the deceased to the plaintiffs rather than directly to the first and second defendants.
In any event, it would appear from these minutes, in particular from a resolution at the meeting to issue replacement share certificates for lost share certificates, that Mary had a holding in the third defendant in excess of the 11,203 shares those minutes showed as initially held by her as 'Administratrix of the Estate Late A G Waller', while the third named plaintiff also had a holding of shares in the third defendant prior to the transfer from the estate of the deceased.
Also with respect to the position at about that time there is a second set of minutes of a meeting of directors also annexed to the affidavit of the first defendant, this meeting held on 30 November 1973. These minutes show a resolution for the approval of transfers from the first named, second named and third named plaintiffs to the second defendant of 1,645 shares each; from the fifth named plaintiff to the first defendant of 1,645 shares; from the fourth named plaintiff to the second defendant of 83 shares and to the first defendant of 1,562 shares, that is, a total number of shares transferred by the fourth named plaintiff of 1,645 shares also; and from Mary to the second defendant of 5,234 shares.
It will be noted the share transfer totals indicate that each of the plaintiffs and Mary had a holding in the third defendant greater than the amounts transferred to them from the estate of the deceased. That excess in the case of Mary and the third named plaintiff corresponded to the amount shown as held by them in the resolution concerning the issue of replacement share certificates previously referred to.
The minutes of the meeting of 30 November 1973 record a resolution for the cancellation of share certificates issued to the first defendant totalling 7,046 shares. None of these were the shares the subject of the resolution approving the transfers to him from the fourth and fifth named plaintiffs; but 1,245 of them were the shares transferred from the estate of the deceased to the first defendant.
Those minutes also record that, because there were 'numerous certificates … issued to represent the total issued capital of 20,505 shares', there was a further resolution that all of the 'old certificates previously issued' were cancelled and two new certificates issued, for shares totalling 10,253 shares for the first defendant and 10,252 shares for the second defendant.
It will be noted from the minutes of the meetings of 29 and 30 November 1973 that as at the time immediately before the transfer of the shares of the estate of the deceased to the plaintiffs, the first defendant and Mary, the shareholdings in the third defendant appear to have been as follows:

Holder

Shares

First named plaintiff

400

Second named plaintiff

400

Third named plaintiff

400

Fourth named plaintiff

400

Fifth named plaintiff

400

First defendant

5,801

Estate of the deceased

11,203

Mary

1,501

Total

20,505

With respect to the issued shares of the third defendant after 30 November 1973, there is a series of balance sheets for the company for each of the financial years from 1974/1975 to 1985/1986 annexed to the first named plaintiff's affidavit. Those balance sheets show that there was no change in the number of issued shares (20,505) from 30 June 1976 to 30 June 1986. There is the statement in the balance sheet as at 30 June 1975 that as at 30 June 1974 and as at 30 June 1975 the number of shares was 40,010. However, I consider that this number is on the material before me likely an error, in view of the minutes just referred to, of the absence of any change in the issued capital for the dates from 30 June 1974 onwards; of the nominal value per share (£1 or $2) as was evident from the probate documents for the estate of the deceased and the second schedule to the 1973 deed; and of the number of issued shares shown in the balance sheet as at 30 June 1976, which shows as at 30 June 1975 and 30 June 1976 no change in the number of issued shares.
There were no earlier balance sheets for the third defendant the plaintiffs were able to obtain from the Australian Securities and Investments Commission. I note that, based on the earliest of those balance sheets that are so annexed, that as at 30 June 1975, it appears that by calculation as at 30 June 1974 the amount for net assets represented by 1,245 shares (which was as I have indicated the number of shares for each of the plaintiffs and the first defendant referred to in the minutes of the meeting of the board of directors of the third defendant of 29 November 1973 as transferred from the estate of the deceased to them) was $52,241.21. I return below to the implications, if any, for the purposes of the present application of a comparison of this figure with the price of $15,000 for that number of shares referred to in the 1973 deed as I have indicated.
For now, I also note that there is evidence of an agreement by way of offer and acceptance entered into on 23 July 1973 for the purchase by the second defendant of 'all those shares held in [the third defendant, GA and Waller & Son] … from [Mary]' (the 23 July 1973 transaction). The 'total consideration' for the sale by the 23 July 1973 transaction is stated to have been $80,000. However, there is no indication what number of shares in each company was so sold and purchased, nor of how the consideration was apportioned across those shareholdings. In any event, there was no reliance on the 23 July 1973 transaction by any of the parties for the purposes of the present application. However, additional information is sought about the 23 July 1973 transaction by several of the orders sought by the application, to which orders I will return.
There is also evidence of the involvement of Barry in the business of the third defendant.
On 7 December 1964, when he was 20 years old, the first defendant became a director of the third defendant. There is evidence that by 1968 he had the power to sign its cheques, and that the person who had overseen the management of the business of the three companies, the third defendant, GA and Waller & Son, prior to that point had 'no control now'.
There is also evidence that when the fourth named plaintiff in the late 1960s asked questions of Mary as to the family business, she was told that the first defendant was 'in control now'.
I have already referred to evidence that in 1972 Mary had told the third named plaintiff the first defendant was 'developing the land' representing the Sunset Beach Development through a company of his, United. There is further evidence of the first defendant's role in the group of companies of which United formed a part, and which, as I have indicated, included the third defendant, in a brochure of United published in about 1973.
That brochure says this about United, among other things
The United Development Corporation group of Companies has grown from a family concern, localised in one of WA's busiest ports, to a profitable diversified corporate body with headquarters at U.D.C. House in the heart of Perth.
It all started in Geraldton in 1918 when our present Managing Director's grandfather opened up a small retail butcher's shop.
This pattern of operation was set until his son Mr Mick Waller took over the firm and built it into a meat exporting and abattoir business while still retaining a small chain of retail butcher shops in the Geraldton district until his death.
Mr B Waller was appointed Managing Director in 1968 and has subsequently implemented a diversification programme, which launched the Corporation into the mining, home building and development fields.
That brochure says this about the first defendant, among other things:
Mr Waller started as a successor to his father who had expanded a very successful enterprise in Geraldton. Before taking the reins as Managing Director, he worked extensively in each facet of the Corporation, and gained groundfloor working knowledge of all diversified interests. This experience has proved invaluable in day to day and long term administration. Today, as Chairman of the Group, Mr Waller is aware of his responsibility to use the firm foundation established by his grandfather and father to ensure continued success.
Finally, there is the evidence to which I have already referred that some time after turning twenty one, the first named plaintiff asked his mother about his 'inheritance', and she told him he should go to see the first defendant. There is also evidence, in the fourth named plaintiff's affidavit, that at some time, apparently in the late 1960s, she asked her mother 'why everyone except Barry seemed to get nothing out of the business', to which Mary had replied with words to the effect 'Barry's in control now, if you want anything, go and see him'. When she did go to see him, Barry said to her words to the effect she was 'not entitled to anything'.
There was considerable argument addressed to me about the significance of this body of evidence concerning the family business and inquiries about interests in it being referred to the first defendant. It was put to me for the defendants that this evidence simply went to the first defendant's management of the family business, which was of course a different matter from the management of the estate of the deceased. For the plaintiffs it was put to me that this was evidence that Mary had delegated to the first defendant both the exercise of any power over the family business associated with the shares in the business held by the estate of the deceased as well as the other aspects of the role of administrator at least of those assets of the estate of the deceased. In my view, given the evidence from the first and fourth named plaintiffs just referred to, the plaintiffs' position is to be preferred, for the purposes of the application before me.
It is true that I do not have evidence to the last effect from all of the plaintiffs, at least in respect of the period before the November 1973 deed. Further, as pointed out by counsel for the defendants, I have no affidavit from the second named plaintiff. In respect of her, I have the evidence in the form of the letter from her to the first and second defendants in which she confirmed the transfer of shares by her to the first defendant to which I have previously referred. However, that lack of evidence from the second named plaintiff does not in view of the other evidence I have referred to prevent me from drawing the inference I have just referred to. That inference is one of the management by the first defendant of the estate of the deceased in respect of the shares in the family business held by the estate.

The present application

The application before me was brought by originating summons dated and filed 9 July 2007.
By the summons the plaintiffs claim an order for pre-action discovery under Rules of the Supreme Court O 26A r 4 of the following classes of documents said to be within the possession, custody or power of the defendants:
1.asset registers pertaining to each of the third defendant, GA and Waller & Son which disclose the assets held by them for the period 1959 to 1974;
2.share registers pertaining to each of the third defendant, GA and Waller & Son for the period 1959 to 1974;
3.the taxation returns and financial statements for:
a.the third defendant for the period 1959 to 1974 inclusive;
b.GA and Waller & Son for the period 1959 to the date they were deregistered;
4.all valuations in respect of assets owned by the third defendant, GA and Waller & Son that were undertaken in the period 1959 to 1974;
5.all valuations obtained in respect of the value of the shares of those companies having regard to the net asset backing of those shares;
6.all valuations with respect to the shares owned by the deceased in the third defendant, GA and Waller & Son;
7.all documentation or correspondence or notes prepared by the first defendant or exchanged between him and Mary Stevens relating to the affairs of the third defendant, GA and Waller & Son and the distribution of the estate of the deceased, including communications with the companies' accountants for the period 1959 to 1974;
8.any documentation held by the first defendant evidencing distributions from Mary Stevens in respect of the estate of the deceased for the period 1959 to 30 November 1973;
9.any documentation or correspondence prepared by the first defendant or Mary relating to the distribution of the estate of the deceased or in the dealing of the assets of the companies the third defendant, GA and Waller & Son 'in which significant share holdings' were held by the estate of the deceased;
10.an offer and acceptance document for the purchase of certain shares in the companies third defendant, GA and Waller & Son between the second defendant and Mary made 23 July 1973;
11.the original of a deed of family arrangement made between the plaintiffs, Mary and the first and second defendants dated 30 November 1973; and
12.all documentation or correspondence passing between the first defendant and Parker & Parker concerning the entry into the deed of family arrangement referred to in [11] and the offer and acceptance document referred to in [10].

The applicable law

Rules of the Supreme Court O 26A r 4, which came into force on 26 October 1996, reads in material part as follows:
(1)This Rule applies if a person who may have a cause of action against a person whose description has been ascertained ('the potential party') wants -
(a)to commence proceedings against the potential party; or
…
but the person, after reasonable enquiries, has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings.
(2)If there are reasonable grounds for believing that the potential party had, has, or is likely to have had or to have, possession of documents that may assist in making the decision, the person may apply for an order under this Rule.
(3)The application shall be supported by an affidavit and a copy of both shall be served on the potential party.
(4)On the application the Court may order the potential party to give discovery of all documents that are or have been in the potential party's possession and that may assist the applicant in making the decision.
As will become apparent shortly there is authority on the Federal Court Rule corresponding to O 26A r 4 which has been drawn upon in the authorities in this state on the latter.
It is convenient then to set out that Federal Court Rule. It will be apparent that the wording of the Rule has much in common with, but also differs from, Rules of the Supreme Court O 26A r 4.
Federal Court Rules O 15A r 6, which came into force on 26 April 1988, reads as follows:
Where:
a)there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;
(b)after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and
(c)there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision;
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).

It will be apparent from the structure of Rules of the Supreme Court O 26A r 4 that there are a number of elements to be met before the court's discretion whether or not to make a discovery order is enlivened. As will become apparent from the authorities on O 26A r 4, the scope of the order that the court is minded to make is a part of the discretion.
The elements of O 26A r 4 that must be met before the discretion is enlivened are for my purposes sufficiently stated in Rohanna Pty Ltd v Horwath Perth (a firm) [2003] WASC 172 [3] (Sanderson M) as follows:
(1)The plaintiff must establish that it 'may have a cause of action'.
(2)This prospect must be established against a person whose description has been ascertained.
(3)The plaintiff must establish either
(a)that it 'wants' to commence proceedings against the potential party, or
(b)that it 'wants' to take proceedings against a potential party in the course of an action to which the plaintiff is a party.
(4)The plaintiff must establish that after 'reasonable enquiries' it has not been able to obtain sufficient information to decide whether or not to commence proceedings.
(5)As a necessary concomitant to (4), at the time of making the application it has not reached a decision about whether or not to take proceedings.
(6)It must establish that there are reasonable grounds for believing that the potential party has in its possession documents which may assist in making the decision.
(7)The application must be supported by affidavit which is served on the potential party.
It was not in contest before me that (2), (3)(a), (5) and (7) are satisfied in this case. In any event the satisfaction of all of except (7) is apparent from the considerable correspondence between the parties annexed to the first named plaintiff's affidavit, to some of which I return in relation to the question of costs of the present application below, while the satisfaction of (7) is apparent from the affidavits filed in support of the application.
There is a contest as to the elements (1), (4) and (6).
There also appears to be a contest as to whether or not I should exercise any discretion I find enlivened.
I deal with the application by reference to those four issues.

Have the plaintiffs established they 'may' have a cause of action?

What appears to be the most recent statement of the approach to be taken to this element is in Ray Mullins & Sons Pty Ltd v Skycorp Investments Pty Ltd [2005] WASC 142 [20] and [21] (Newnes M), which relates to O 26A r 4(1)(b). However, I consider the statement is also relevant to O 26A r 4(1)(a), which is the limb under which the present application is brought. I note also that the authorities on which the learned master principally relies, McCarthy v Dolpag [2000] WASCA 106 (on O 26A r 4(1)(a)), and Malouf v Malouf [1999] FCA 710 (on Federal Court Rule O 15A r 6), related to applications of the sort before me.
In Mullins [20] and [21] the following appears:
The relevant principles to be applied on an application under O 26A r 4(1)(b) are set out in McCarthy v Dolpang [sic] Pty Ltd … at [13] and Malouf v Malouf … at [16]. In short, the rule permits 'fishing' to be engaged in where an application is bona fide and it should be given the fullest scope its language reasonably allows in order to enable parties to commence litigation only after careful consideration. But the rule is a serious invasion of privacy and confidentiality, and the scope for its possible misuse is wide. The Court will therefore exercise caution before making an order under this rule and will only do so where it is reasonably necessary to achieve the proper administration of justice.
To that end, an applicant must put before the Court evidence to show objectively that there is reasonable cause to believe the applicant either has, or may have, a right to relief against the respondent. It is not relevant what an applicant might think or hope or believe the documents might show, but on the evidence there must be a reasonable prospect that an action could be revealed by the material in the possession of the other party. Accordingly, the mere assertion of a cause of action is not sufficient, and nor is conjecture or suspicion, or the mere possibility that a cause of action may exist: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679; St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 at 154.
I will return to Dolpag [13] as that passage was reproduced in a further decision of the Full Court on O 26A r 4 below.
There are two further points about the present element that have been referred to in the authorities on the Federal Court Rule O 15A r 6 and that both parties appeared to accept for the purposes of this application. These I can conveniently take from the most recent authority on that rule cited to me, Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216, which refers to, among other authorities, Harris v Newcastle‑upon-Tyne Health Authority [1989] 2 All ER 273, 277 on a corresponding rule of the High Court, to which I will have cause to return.
In Dartberg [44] in material part Middleton J says this:
If the cause of action on which an application for preliminary discovery is based could not succeed, is bound to fail, is ill-founded or is doomed to fail, then discovery ought not be ordered: Bradley v Eagle Star Insurance Co Ltd [1989] 1 All ER 961 at 963 to 964; Harris vNewcastle‑upon-Tyne Health Authority … at 277. If the potential cause of action would not survive an application for summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 ('Federal Court Act'), then discovery ought not to be ordered.
Further, as indicated in Dartberg [84] the evidence required to satisfy this element does not have to make out a prima facie case. See also Imperial Chemical Industries [20] (Graham J).
The plaintiffs refer to two causes of action they 'may have' against the defendants.
One is founded on the liability of the first defendant under both limbs of the rule in Barnes v Addy (1874) LR 9 Ch App 244 (the rule in Barnes), about which there is the recent High Court authority of Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 236 ALR 209.
The other is founded on the liability of the first defendant as an administrator de son tort in respect of the estate of the deceased.
The defendants say that there is insufficient evidence before the court to establish 'objectively there is reasonable cause to believe the applicant has, or may have, a right to relief' (Mullins [21]) against them.
In any event, the defendants say, there are defences to liability which mean any such cause of action 'could not succeed, is bound to fail, … or doomed to fail'. Those defences to liability are of a limitation kind; there is also reference to any such proceedings by the plaintiffs being struck out as an abuse of process.
There are further matters, having to do with the effect, if any, of the 1973 deed on the causes of action the plaintiffs refer to, to which I will need to refer.
I turn now to the causes of action on which the plaintiffs rely.

A cause of action by reference to the rule in Barnes?

The rule in Barnes is stated in Farah as follows, [111] - [113] (Gleeson CJ, Gummow, Heydon, Callinan, Crennan JJ); it receives further elaboration later in the judgment.
The 'rule in Barnes' stated: In Barnes [Barnes at 251–2] Lord Selborne LC said:
'Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.'
The form of liability referred to in the first part of the last sentence is often called the 'first limb' of Barnes, and the form of liability referred to in the second part of the last sentence is often called the 'second limb'. In Barnesitself, the Court of Appeal in Chancery (Lord Selborne LC, James and Mellish LJJ) upheld the decision of Wickens VC [Barnes v Addy (1873) 28 LT (NS) 398] that two solicitors, Mr Preston and Mr Duffield, had not received any trust property and had no knowledge of any dishonest and fraudulent design to make them parties to the breach of trust by the sole trustee. It was insufficient that Mr Preston had been alive to the danger of the course of appointing a sole trustee and that Mr Duffield had prepared the appointment of that trustee.
It has become common to describe the first limb as involving 'knowing receipt' and the second limb as involving 'knowing assistance'. Lord Selborne LC did not use the expression 'knowing receipt'. It seems to have been employed first in 1966 by the editors of Snell's Principles of Equity. [R E Megarry and P V Baker (eds), Snell's Principles of Equity, 26th ed, Sweet & Maxwell, London, 1966, p 202; cf 25th ed (same editors), 1960, p 173] Even then, it was only introduced by inserting under the pre‑existing heading 'Receipt of Trust Property by Stranger to Trust' a new subheading, 'Knowing Receipt or Dealing'. However, in 1972 Brightman J adopted the expression in Karak Rubber Co Ltd v Burden (No 2). [[1972] 1 WLR 602 at 632–3; [1972] 1 All ER 1210 at 1234–5 (Karak Rubber)]. He said that the labels 'knowing receipt or dealing' and 'knowing assistance' employed by Snell were 'an admirable shorthand description of their different natures'. Those labels have been commonly used since then. In contrast, Lord Selborne LC's expression was 'receive and become chargeable'. [Barnesat 251]. Persons who receive trust property become chargeable if it is established that they received it with notice of the trust.
In recent times it has been assumed, but rarely if at all decided, that the first limb applies not only to persons dealing with trustees, but also to persons dealing with at least some other types of fiduciary. [For example, in DPC Estates Pty Ltd v Grey and Consul Development Pty Ltd [1974] 1 NSWLR 443 at 459–60 (DPC Estates), Jacobs P assumed that if property were received by a stranger from a fiduciary in breach of fiduciary duty, the first limb applied. See also El Ajou v Dollar Land Holdings Plc [1994] 2 All ER 685 at 700 (El Ajou) per Hoffmann LJ. Since the appellants did not contend that the first limb was incapable of applying on the ground that neither Farah nor Mr Elias was a trustee, the correctness of this assumption need not be examined.
It seems clear from this statement, or at least from the authorities referred to in Farah [112], that the rule in Barnes extends to persons dealing with or assisting trustees who are not agents in any strict sense: see Karak Rubber Co Ltd v Burden (No 2) [1972] 1 All ER 1210, 1234 ‑ 1235 (Brightman J); and see Heydon J D and Leeming M J, Jacobs' Law of Trusts in Australia (7th ed, 2006) [1334].
However, it is not clear from this statement, or from others in Farah, whether or not either limb of the rule in Barnes can give rise to liability for persons dealing with administrators in respect of disposal of the assets of the estate.
Administrators, like other personal representatives, have a position that is not on all fours with that of a trustee, in respect of an estate in the course of administration: in particular 'no legatee, devisee or next‑of‑kin has any beneficial interests in the assets being administered': see In re Hayes' Will Trusts [1971] 1 WLR 758 at 764 ‑ 765 (the quotation is from 764), referring to Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694, 707, 708: the passage from Hayes at 764 - 765 is quoted in Halfhide v Beaven [2003] NSWSC 1207 [42] (Barrett J), a case concerning an administrator of an estate with a will and codicil annexed who disposed of assets of the estate to a third party.
However, as both Halfhide [42] and the passage from Hayes there quoted indicate, the personal representative is subject to 'fiduciary duties' or 'constraints' in relation to the estate being administered. At the same time, it is not altogether clear to me whether or not that is sufficient within Farah to make receipt, by a third party from the administrator, of assets of the estate, where that receipt is the result of a breach of such duties of the administrator, receipt of property for which the third party with the requisite knowledge may be liable under the first limb of the rule in Barnes, or for which the third party who provided the requisite assistance with knowledge may be liable under either the first or the second limb of the rule in Barnes.
However, where the personal representative holds the assets of the estate freed of administration and merely for distribution, the position of the administrator and the next-of-kin is it would seem rather more akin to if not identical with that a trustee and beneficiary: Livingston 708. In this case, Mary's position in respect of the assets of the estate reached by the dates of the transactions referred to in the recitals to the 1973 deed might reasonably be understood by reference to the deed and the period of time that had elapsed since the death of the deceased and the grant of letters of administration in respect of the estate of the deceased as that of such a personal representative. Of course, one of the matters the present application is directed to (as I understood the application) is obtaining information as to the position reached in the administration, and the role of the first defendant in relation to that administration.
In any event, the rule in Barnes was treated as applicable to persons dealing with administrators disposing of the assets of what appears to have been an estate in course of administration to a third party in Halfhide [52] and [53]. There it was found that the assets were disposed of in breach of the duty of the administrator to sell the assets of the estate to the best advantage of the estate they could: see [44] - [49]. In assessing whether or not the duty had been breached, regard should be had to how an ordinary prudent vendor of their own property would sell it: [44] - [51]. In Halfhide, however, no liability under the rule in Barnes was found, as the person to whom the administrator sold the property was 'in no way' aware of the particular breach of the administrator in that case.
I also note the reference to the first limb of the rule possibly applying to persons dealing with at least some types of fiduciaries in Farah [113], although of course the matter appears to be left open there. See also Kalls Enterprises Pty Ltd (In Liq) v Baloglow [2007] NSWCA 191; (2007) 63 ACSR 557 (NSWCA) [152] - [159] (on persons dealing with directors acting in breach of their fiduciary duties).
I consider that for the purposes of proceedings such as these I should conclude that the rule in Barnes is at least arguably applicable to persons dealing with administrators in the position of Mary in respect of property like the shares in this case.
Is there reasonable cause to believe that the applicant may have a right to relief by virtue of the first or the second limb of the rule in Barnes?
On the statement of the rule above, and my review of the authorities, in this case that would require that the applicants put forward sufficient matter to show that Mary might have breached her duties of a fiduciary kind as an administrator, and that the defendants might be liable to the plaintiffs under either the first or the second limb of the rule.
I take the law to be that administrators, like executors, have the duty of getting in the testator's estate, preserving its properties, discharging its liabilities and distributing the resulting net assets: In re Hayes' Will Trusts at 764 - 765 (on executors), quoted in Halfhide [42] (Barrett J). Such distribution would be in accordance with the provisions of the Administration Act 1903 (WA) s 14 as it stood at the date of the death of the deceased. In this I am satisfied on those authorities, as appears to have been put to me by senior counsel for the plaintiffs, that the administrator must act in the interests of the estate, rather than any other interest, such as that of one among several of the next‑of‑kin. See in particular the duty of the administrator to sell the assets of the estate to the best advantage of the estate the administrator which was considered in Halfhide and to which I referred above.
What such a duty entails is a matter of some nicety: see the discussion of the scope of the fiduciary duties of a guardian of infant wards, in Clay v Clay [2001] HCA 9; (2001) 202 CLR 410 [46] ‑ [58] (Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ). However, it seems to me that, where an estate has reached the point of distribution, of which there is some evidence here as I have indicated, it would be a breach of that duty for the administrator to leave to one of the next of kin the completion of that task, including decisions as to the taking by that person of what portion of the benefit of the residual estate, and for the administrator to do so with the intention of benefiting that person. The conduct in leaving the matter as described, with the result for the plaintiffs under the sales referred to in the 1973 deed I have described, would seem to me to be capable of being described as a 'dishonest and fraudulent design' as well as a breach of the duty of the administrator to which I have referred, at least as the quoted phrase is understood in equity: see Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373, 396 (Gibbs J), referring to Selangor United Rubber Estates Ltd v Cradock [No 3] [1968] 1 WLR 1555, 1580 - 1582 (Ungoed‑Thomas J).
Senior counsel for the applicants put to me, as I understand his argument, that Halfhide and the authorities it refers to shows also that an administrator must, at least in the circumstances of this case, subject to the employment of appropriate agents, and obtaining their advice, act personally, and not defer to the advice of a person in the position of the first defendant or indeed any other person in the administration of the estate. In addition, senior counsel put to me that an administrator in such circumstances must obtain suitable professional advice in order to ascertain the value of all of such assets as the shares held by the deceased in GA, Waller & Son and the third defendant, and then sell the shares for cash for a price consistent with that advice, or at least at the best price that could reasonably obtained in the circumstances then prevailing, and not later than when the last of the next‑of‑kin reached 21 years of age.
However, those authorities in my view do not, clearly at least, establish those further propositions. At the same time, in my view I do not need to reach a conclusion on whether such propositions might indeed derive support from those or other sources. That is because it seems to me that it is sufficient for the purposes of this application to consider whether or not there is a sufficient reason to believe Mary might have acted as I have indicated.
It seems to me that there is 'evidence to show objectively there is reasonable cause to believe' that Mary might have so acted, in the evidence in the 1973 deed of the prices at which the holdings of the shares of the first to fourth named plaintiffs were sold to the first and second defendants, relative to the balance sheet evidence as to the net asset values of those shares as at 30 June 1974, when that evidence is viewed with the evidence of Mary's reliance on the first defendant in relation to matters to do with the estate and the family business in her referring the first and fourth named plaintiffs to him in such matters in the period before the 1973 deed.

It is true that, when it is closely read, I do not appear to have evidence from the 1973 deed of when, and at what price, the fifth named plaintiff had sold her shares to the first and second defendants. Nor, as I have previously indicated, do I have evidence of Mary directing the second, third and fifth named plaintiffs to the first defendant in matters to do with the estate of the deceased, at least in the period before the 1973 deed. Further, the balance sheet evidence of the net asset value of the shares is, in relation to the earliest sale for which the 1973 deed does provide evidence as to its date, for a time some 3 1/2 years later.
However, there is in the 1973 deed evidence of equality of consideration for sales by the first to fourth named plaintiffs, while the affidavit of the fifth named plaintiff indicates she did not 'knowingly' sell her part of the deceased's business to the first or the second defendant for $15,000, and she had no recollection of signing the 1973 deed; while subsequently, in 1975, when she asked Mary for some money, and was referred by Mary to the first defendant, she received a cheque from United in the amount of $15,000.
It does not seem to me (as I have previously indicated) that it is necessary to show evidence from all of the plaintiffs that each was directed to the first defendant in matters to do with the estate of the deceased: it is sufficient there is evidence that Mary directed some of them to him, so as to show (for my purposes) the allocation to the first defendant of matters of the administration of the estate of the deceased at least in respect of its assets in the form of interests in the business the deceased formerly conducted.
As to the balance sheet evidence as to value of the shares sold, I note that the evidence of net assets in the later balance sheets up to and including the last of which I have evidence, as at 30 June 1986, is of progressively lower net asset values, for each of the plaintiffs' former holdings of 1,245 shares, than that for 30 June 1974, with an exception as at 30 June 1977, when that net asset value went up over the value as at 30 June 1976. The lowest such value over that period, the value as at 30 June 1986, was $11,787, and the lowest value over the three year period after 30 June 1974 to 30 June 1977, being that as at 30 June 1976, was $17,662.
It is true, as counsel for the defendants pressed on me, that the value most proximate in time to the earliest of the transactions referred to in the 1973 deed (in 1971) is distant from it by some 3 1/2 years. However, I consider that, in view of the body of data to which I have referred, I have evidence (for the purposes of proceedings such as these) of a significant value disparity, not only for the latest of those transactions (sales to the first named and second named plaintiffs, in 1973) but also for the earliest. Whether in fact such a value disparity in the case of any of the transactions will or will not appear when any further material of the kind sought in the present application is made available is of course a different matter.
I should add that the sale price obtained in or about 2005 of what appears to have been residual land from the Sunset Beach Development is also a different matter. I do not consider that it is evident that price, of $10,450,000 previously referred to, obtained more than 30 years after the transactions in question here, provides evidence of a significant value disparity for my purposes. However, I do not consider I need to go further into that matter, in view of my conclusion on the other evidence I have referred to.
It is important that I note that I am making a determination of the sort indicated, that is to say, whether or not I have sufficient evidence to provide reasonable cause to believe the applicant has, or may have, a right to relief. There is a separate matter to consider in relation to that evidence, that of 'reasonable enquiries'. I return to it below.
Further, there is the matter of the discretion to be exercised in this area, to which in due course I will also return.
The evidence to which I have referred is, with the terms of the 1973 deed and the evidence of the response of the first defendant to the inquiries of him made by the fourth named plaintiff after Mary directed her to him, also, it seems to me, sufficient for the purpose indicated to establish a reasonable cause to believe, not only that there might have been the breach referred to, but also that the breach might have been part of dishonest and fraudulent design, and that the first and second defendants, and the third defendant through the first defendant as its guiding mind, might have knowingly assisted in the breach. That is, Mary might have sought to advance the interests of the first and second defendants with a view also to advancing her own interests, in receiving a release and indemnity of the sort provided in the 1973 deed, by allocating to the first defendant the aspect of the administration of the estate of the deceased to which I have referred, and the first, second and third defendants might have been aware of this and assisted her in this enterprise.
In reaching that last mentioned conclusion for my purposes, it is important I note that it is one of a provisional kind. My purposes here relate to whether or not the plaintiffs might have a cause of action under the second limb of Barnes against the defendants. I have borne in mind the assessment that should be used to test an allegation of such seriousness: Farah [170]. However, I consider I must do so also bearing in mind my purposes as I have described them. I consider I have sufficient evidence for those purposes in the material I previously referred to as to leaving the matter of the administration of the estate of the deceased as described with the result as described.
On the same analysis, at least the first and second defendants might have knowingly received or became chargeable with the property (the shares) in a transaction that might have been in breach of Mary's duty as I have described that breach.
It is perhaps a closer question whether or not the defendants or any of them might have procured a breach by Mary of the sort indicated. There is authority, to which reference is made in Farah [161], that a third party who 'had knowingly induced or immediately procured breaches of duty by a trustee where the trustee had acted with no improper purpose' might 'be treated as a participant in a breach of trust'. In view of my previous conclusions I do not need to explore this possibility further.

A cause of action by reference to the duties of an 'administrator de son tort'?

I take the law as to the present cause of action to be as stated in Nolan v Nolan [2004] VSCA 109 [19] - [20] (Ormiston JA), [83] (Chernov and Eames JJA) (footnotes omitted):
So far as claims under the general law that a person is an executor de son tort are concerned, it may be conceded that in certain cases the mere assertion of rights of ownership or possession over chattels or land has apparently been taken as sufficient to amount to the exercise of control as an executor. Likewise it has been said that asserting rights over even small and inexpensive chattels can amount to the relevant exercise of control. Careful consideration will show, however, that it is not the value of the property affected which is important, but the inferences which are properly to be drawn from the act in question. In the case of executorship it is the assertion of a power to act on behalf of the estate which has been significant, for the object of the rule had nothing to do with the law of trusts but was designed primarily so that creditors of the estate of a deceased person could find somebody who would be responsible for the deceased's debts. As is said in Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (18th & 6th eds respectively, 2000) … :
'Where a person does an act characteristic of an executor and is not a complete stranger, the natural inference to be drawn is that he is named as executor in a will which he has not yet proved; and third parties should be able to rely on this assumption.'
The other principle referred to … by the learned authors there expressed is that 'no-one should be permitted, by refraining from taking out probate or administration, to obtain possession of the deceased's property free from his liabilities'. In many of the cases, essentially those decided before probate jurisdiction was taken from the ecclesiastical courts, the estate was relatively small and no attempt had been made by any person to obtain probate or letters of administration. In the absence of such an application and grant, dealing with the deceased's property might fairly lead creditors to infer that the intermeddler had indeed obtained an appropriate grant, a matter which was, until jurisdiction was given to non-ecclesiastical courts, often difficult to establish because of the large number of diocesan courts which might exercise jurisdiction: see FC Hutley, 'The Executor De Son Tort in the Law of New South Wales'. …
The essence of a claim against such a person was, and I believe still is (subject to s 28 of the Administration of Estates Act), that the person has purported to act as an executor or administrator of a deceased's estate, thereby leading others to believe that he or she has the power to deal with the estate and its assets. As is said in Bacon's Abridgment …, even apparently slight acts 'are the only indicia by which creditors can know against whom to bring their actions'. Any action had necessarily to be brought against such a person as ostensible personal representative of the relevant estate who was then liable, but only to the extent of the assets with which he or she had purported to deal. As the authorities demonstrate, even minor acts of dealing with property interests were sufficient to constitute a person an executor de son tort, but only if it could be inferred that the person was purporting to act in that role. Some of the language of the earlier cases and textbooks was not always entirely clear in this respect, largely, I believe, because it was well known that liability would attach only if the person could be seen as holding himself out in one way or another as an executor or administrator. Careful examination of those authorities, nevertheless, emphasises the necessary connection, howsoever slight the dealing with actual property might be in the first instance. Moreover the authorities made clear that if there had been in fact a grant of probate or letters of administration, then a mere attempt later to obtain the property of a deceased and even purporting to act as executor or administrator, would not ordinarily clothe that person with the responsibilities of an executor de son tort, because there was then a person who might be sued properly in that role as liable for the debts and other liabilities of the estate. Likewise it was seen that that person might sue in the ordinary way for recovery of any property over which some other person might seek to exercise control.
There is authority that the term 'administrator de son tort' is incorrect: rather, the term 'executor de son tort' is correctly used, whether a deceased died testate or intestate: Martyn J R and Caddick N, Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (19th ed, 2008) [8‑16]. However, I will continue to follow the usage in the heading, as it appears to have been accepted usage before me, and appears not to create any difficulties of analysis of the relevant law.
It also seems to be the case that a person may become an administrator de son tort even after administration has been granted; however, the conclusion that a person has become such will not (at the least) be as readily arrived at: see Nolan [20] (then 'even purporting to act as executor or administrator, would not ordinarily clothe that person with the responsibilities of an executor de son tort'). However, it seems that a person who makes an 'express claim to act as executor' or does 'some act equivalent to such a claim will even at this stage become liable as executor de son tort': Williams, Mortimer and Sunnucks [8-26]; and see Nolan [21] (quotation from Godolphin's The Orphan's Legacy).
I have already referred to the evidence of Mary referring the first and fourth named plaintiffs to the first defendant and of the first defendant's response to the fourth named plaintiff's inquiry of him. I have also referred to the evidence that the first defendant gave the instructions for the preparation of the 1973 deed. For my purposes, I consider that this body of evidence represents reasonable cause to believe the first defendant, at least, might have made such an express claim or done such an act as to make him an administrator de son tort, at least in respect of the interest of the estate of the deceased in the third defendant.
Counsel for the defendant pressed on me that there was no evidence that the first defendant had had any property of the estate of the deceased 'vested' in him. However, I was not referred to any authority requiring this for a person to be made out to be a personal representative de son tort. True it is that mere possession of assets of an estate is not sufficient for that purpose: Pollard v Jackson (1994) 67 P & CR 327 (CA). However, possession or control of assets of the estate involving conduct of the sort I have described would on the same authority appear to be sufficient without any requirement for a vesting of the property concerned in the person in question.
Further, it seems to me that the provision for receipt of shares by the second defendant as part of the arrangement the subject of the 1973 deed, and the position of the first defendant in the management of the third defendant, provides reasonable cause to believe that the second and third defendants might have been parties to the claims or actions in question so as to make them liable also: see Williams, Mortimer and Sunnucks [8-28] (parties to the intermeddling).
It may be that words or acts insufficient for the purpose of making a person an administrator de son tort after the grant of administration may nonetheless have that effect, because of an old Imperial Act still part of the law in this State. That statute is An Act against Fraudulent Administration of Intestates' Goods 1601 43 Eliz I cap 8 s II. The precise effect of that statute, which has been replaced in most states, including Victoria, is obscure: see the discussion in Nolan [32] - [35]. For the purposes of these proceedings, I do not consider I need to address those matters, in view of my previous conclusion.
An administrator de son tort is 'commonly' said to be subject to all of the liabilities of an administrator, although there appear to be some qualifications to this position: Williams, Mortimer and Sunnucks [8-33]. It appears that the duties of those in the position of an administrator de son tort do not, for example, include the duty to get in assets: Williams, Mortimer and Sunnucks [8-33]. However, in respect of the assets under the control of such an administrator, it seems to me there is no reason to conclude that that person, and those parties to that person's conduct in the relevant respect, are not subject to the duty to act in the interests of the estate to which I earlier referred. There is in my view a reasonable cause to believe the shares the subject of the 1973 deed might have been such assets.
I turn now to consider the submissions of the parties made to me with respect to the defences to any cause of action on this or the preceding basis.

What is the effect, if any, of the 1973 deed on these causes of action?

I should note that there was no argument put to me that, if there were a reasonable cause to believe the plaintiffs may have a right to relief of the sorts just considered, the 1973 deed itself was a defence to such a right. It will be recalled the 1973 deed was a release and indemnity for Mary alone, and it seems to me that the other principal operative provision of the 1973 deed, quoted above, for the transfer of the shares provided for in the 1973 deed to be in 'complete satisfaction' of the plaintiffs' and the first defendant's claims for 'any interest' in the estate of the deceased, should be read in that light. It was not put to me that the release or indemnity had an effect on the first defendant.
Accordingly, I put aside the matters, put to me in the written submissions for the plaintiffs, of whether or not the 1973 deed was ineffective as a deed because of the way in which some of its signatures were witnessed, or was ineffective as a simple contract at least as regards one of the plaintiffs because of the form of consideration provided for her agreement, or was liable to be set aside as an unconscionable transaction or as an unfair family arrangement under the doctrine referred to in On v On [2002] NTSC 18 [86] (Martin CJ) and the authority referred to there.

Is any such action 'bound to fail, doomed to fail' for reasons of limitation of actions kinds?

I consider the correct approach to this question, in what are interlocutory proceedings, is set out in Harris 277 (Kerr LJ); and see 278 (Mann LJ) and 279 (Sir John Megaw). That case was an appeal against a refusal to order pre-trial discovery under Supreme Court Act 1981 (Imp) s 33(2), where the refusal had been on the basis that a limitation defence would be taken and that the plaintiff had 'virtually no prospect of succeeding' under the relevant provisions of the Limitation Act 1980 (Imp).
Kerr LJ had previously set out (at 275) the following passage from Dunning v Board of Governors of the United Liverpool Hospitals [1973] 2 All ER 454 at 460 (James LJ):
In order to take advantage of the section [ie s 31 of the Administration of Justice Act 1970], the wording of which is no different from that of s 33(2) of the 1981 Act the applicant for relief must disclose the nature of the claim he intends to make and show not only the intention of making it but also that there is a reasonable basis for making it. Ill-founded, irresponsible and speculative allegations or allegations based merely on hope, would not provide a reasonable basis for an intended claim in subsequent proceedings.
Kerr LJ later said this (at 277):
The main point argued by counsel for the plaintiff was that it is always wrong for the court to pay any regard to the prospects of a limitation defence succeeding, and therefore to the prospects of an action being doomed to failure, on an application of this nature. I would not accept an extreme submission on those lines. If it is plain beyond doubt that a defence of limitation will be raised and will succeed, then it seems to me that the court must be entitled to take that matter into account. It would then say that no responsible counsel would advise the institution of proceedings and that there would accordingly be no likelihood of proceedings taking place. That would oust the jurisdiction under s 33(2) of the 1981 Act. Or it would say in such a case that, even if an action were to be instituted in the face of the limitation defence, it would be a waste of time and costs to order discovery because the action would be ill-founded, irresponsible, speculative or otherwise within the spirit of the passage from the judgment of James LJ in Dunning v Board of Governors of United Liverpool Hospitals … which I have read. …
… But I would accept that in the normal run of cases, even where a defence of limitation has a strong prospect of success, like here, it is very difficult for a court, on limited material, before pleadings and discovery, to conclude at that stage that the situation is such that the proposed action is bound to fail and therefore frivolous, vexatious or otherwise ill-founded. So in general I would accept the submission of counsel that issues relevant to limitation should not enter into consideration on applications for pre-trial discovery.

Accordingly, I consider that the requirement for 'reasonable enquiries' of the sort required to meet O 26A r 4(1).

Have the plaintiffs established that the defendants had, have or are likely to have had or to have possession of documents that may assist?

Counsel for the defendants, as I understood his submission, put the application of this element to the present case in terms of the requirement that there be an appropriate linkage between the cause or causes of action the plaintiffs might be found to have established for present purposes, and the orders sought. Counsel put it to me that such a linkage had not been established in this case. I did not understand his submissions to be that there are no reasonable grounds to believe the defendants did not have and had not had any of the documents sought.
I consider that the element does indeed require such a linkage, expressed as O 26A r 4(2) does. I consider that such a linkage has been shown in this case, however. The documents sought by orders 1 to 12 in my view relate to matters which go to the causes of action which I consider the plaintiffs have shown there is reason to believe they may have. I return to the orders and their relationship to those of causes of action in somewhat more detail under the heading of the exercise of my discretion in this case, below.

Should I exercise my discretion under O 26A r 4, and, if so, how?

It follows that that, in my view, my discretion to make an order under O 26A r 4 has been enlivened.
I must then consider whether or not to exercise that discretion, including the scope of any order I should make.
What appears to be the leading statement of the approach to be taken to the discretion under the WA Rule is Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33 [81] - [83] (Steytler J): see also [23] (Malcolm CJ) and [24] (Wallwork J):
As was pointed out by the primary Judge, the view has been expressed that O 26A r 4(1) is less restrictive than equivalent rules elsewhere in Australia, as all that is required to attract its operation is that a person 'may' have a cause of action (see Cohen v Walthamstow Pty Ltd, unreported; SCt of WA (Sanderson M); Library No 980148; 30 March 1998).
While it is true that the rule, in this State, uses the word 'may', that does not mean that, in any case in which the applicant asserts a possible cause of action against some other person, no matter how speculative or remote, discovery will be ordered. In McCarthy v Dolpag Pty Ltd … at [13] Anderson and Scott JJ said:
'There is no doubt that caution must be exercised before making an order and that such orders should not be made as a matter of course. They should only be made when reasonably necessary to achieve the proper administration of justice: Tipperary Developments Pty Ltd v Western Australia [1999] WASC 62; (1999) 21 WAR 250, per Parker J at 24; O'Sullivan v Herdmans Ltd [1987] 3 All ER 129 at 135 - 136. It must be remembered that discovery "constitutes a very serious invasion of privacy and confidentiality [and] the process should not be allowed to place upon a litigant any harsher or more oppressive burden than is strictly required": Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 308 per Lord Keith of Kinkel; and this is a fortiori the position where the discovery is sought before action and is for the purpose of determining whether or not there is an issue to litigate.'
A Court, in considering whether or not to exercise the discretion afforded it by the section, or, to put it differently, in considering whether or not the order is reasonably necessary to achieve the proper administration of justice, will ordinarily take into account a range of factors. Without attempting to be exhaustive, these will usually include such things as the likelihood that a cause of action of the kind suggested will be found to exist, the nature and significance of that potential cause of action, the likely effect, on the person against whom discovery is sought, of the making of an order of the kind contended for, whether there is any other adequate means, available to the intending plaintiff, of obtaining the information which it seeks, the nature and confidentiality of the documents proposed to be obtained, the possible significance of the information contained within those documents to the decision whether or not to commence the contemplated proceedings, whether the applicant is able to compensate the potential party for its cost of complying with the order and whether there is any evidence of bad faith on the part of the applicant.
In my view I should exercise my discretion to make the orders sought, subject to a point I reach below.
I must begin by considering from Dolpag the need for caution in making orders of the kind sought in the present proceedings. That caution it appears to me should inform the account I take of the matters I reach next.
I consider there is a not insignificant likelihood of one or other of the causes of action referred to being found to exist. This is in view of the evidence which I consider provides the reasonable cause to believe the plaintiffs may have those causes of action. At the same time, however, it is not possible to say that any value disparity will not disappear after at least some of the further information sought is obtained. Or it might appear there was no breach of duty by Mary of the sort I have referred to, or that the defendants did not participate in any dishonest or fraudulent design by her or know of any breach of duty by her, or that the first defendant's conduct in relation to the estate of the deceased was not of a sort that would make him an administrator de son tort. It may also become apparent from that further information and the inquiries to which it might lead that the difficulties in establishing such a cause of action after the periods of time involved in this case make it likely any proceedings would be successfully resisted on one of the grounds which I have earlier considered.
I also consider the nature and significance of the causes of action in this case are sufficient for me to contemplate making the orders of the kind sought in these proceedings. There would appear, from the family context to those causes of action (involving as they do a form of accounting for the estate of the deceased), the value disparity to which I have referred, and the developments with which the third defendant was associated both before and after the 1973 deed, likely to be substantial financial interests at stake in any proceedings on the causes of action to which I have referred.
The likely effect on the defendants must also be considered, as well as the nature and confidentiality of the documents proposed to be obtained.
I put aside questions of privilege, which it seems to me would obtain in relation to orders of the kind sought here as they would in other discovery contexts. This may be of particular significance to order 12 (documentation or correspondence passing between the first defendant and the law firm which prepared the 1973 deed concerning entry into it and the 23 July 1973 transaction).
While there is no indication that obtaining the documents the subject of the orders has the potential to disrupt the conduct of the business and affairs of the defendants, I do not doubt that the discovery sought would engage very serious privacy and confidentiality interests of theirs. The documents sought would include ones that might be considered to be of a particularly sensitive kind in what appear to be closely held companies. I have in mind particularly orders 4 to 6 (covering asset and share valuations for the third defendant, GA and Waller & Son); and orders 7 and 9 (concerning the conduct of the affairs of those companies). This should at the very least affect the terms of any orders I make on the present application.
At the same time, I must also note the interests of the plaintiffs subsumed under the consideration of the nature and significance of the causes of action in this case to which I have previously referred.
I have already indicated that in my view there are likely no other adequate means, available to the intending plaintiffs, of obtaining the information which they seek to obtain, at least as to the financial position of the third defendant. That view would apply also to the information sought as to the financial positions of GA and Waller & Son. This view would cover order 3, as well as orders 5 and 6 (valuations of shares). In view of the change in the nature of the family business of the deceased, to real estate development, it would also cover orders 1 and 4 (assets and asset valuations). I also consider this view would extend to order 1 (share registers), because of the derivation of asset values of shares that information that order might yield would then permit. This view would also apply to order 10 and aspects of order 12 (so far as they concern the terms of the 23 July 1973 transaction), because of the information they might yield as to the value of the shares in the third defendant, GA and Waller & Son at that time.
I consider that, although the matter is not quite as clear, the view that there are likely no other adequate means, available to the intending plaintiffs, of obtaining the information which they seek to obtain, also applies to the orders 7, 8, 9 and 11 (those four orders going to documentation, correspondence or notes, as the case may be, concerning the affairs of the third defendant, GA and Waller & Son and distributions, actual and proposed, of the estate of the deceased). The information being sought there would appear to go to the involvement of the first defendant in the administration of the estate of the deceased. At the same time I note there appears to be a substantial measure of overlap between orders 7, 8 and 9, with respect to documentation relevant to the administration of the estate of the deceased; nor is the scope of the second part of order 9 altogether apparent to me. I return to these matters shortly.
It will be clear by now that in my view the possible significance of the information contained within those documents to the decision whether or not to commence the contemplated proceedings is high.
So far as the ability of the plaintiffs to compensate the defendants for their cost of complying with the order are concerned, I have considered this matter on the assumption the plaintiffs would be required to make such compensation. Below I examine that assumption. On it, I consider there is no material before me sufficient for me to determine that the plaintiffs would be unable so to compensate the defendants. True it is the first named plaintiff deposes to a past inability to conduct the proceedings against the defendant. However, I consider that the matter of the compensation in question here is of a different order as the ability of the plaintiffs to conduct these proceedings tends to indicate.
I do not consider there is any evidence of bad faith in this application, in the sense of the use of these proceedings to secure an unfair advantage over the defendants. For what I consider an example of a case where that might have been involved, see Malouf.
I have also considered whether there are any other aspects of the proceedings here or the evidence before me which would go to how I should exercise my discretion. In particular, I have considered whether or not the 1973 deed should be seen as having been executed so as to bring finality to the affairs of the Waller family in the respects which the present proceedings might cause to be re‑opened. In my view, given the matters to do with the circumstances at or about the time the 1973 deed was executed to which I have previously referred as well as the terms of the 1973 deed, I do not consider its existence is telling against the execution of my discretion to make the orders sought here.
However, as I have previously indicated, it seems to me that the character of my discretion also extends to the terms of the orders I make. It is evident from the quotation from Dolpag in Central Exchange above that the matter of discretion is relevant not only to whether or not to make any orders but also as to the terms of such orders, and in particular I should be careful to ensure the burden placed on the defendants is not harsher or more oppressive than is strictly required.
In argument before me counsel for the defendants had conceded that, if I had concluded my discretion was enlivened, including that the relevant linkage existed between the cause or causes of action and the orders sought existed, and (I took it) I was minded to exercise my discretion to make the orders after allowing for the caution to be exercised in this area, then he had no submissions to make as to the terms of the orders. In my view the nature of the orders sought is such that they may be viewed as no harsher or more oppressive than is strictly required, in the sense of proceedings under O 26A r 4 referred to in Dolpag [13]. However, the concession by counsel for the defendants was except for the matter of privilege, in relation to order 12, to which I have earlier referred as matter any such order should save.
I consider, however, that there is a measure of overlap between orders 7, 8 and 9, as well as another aspect of order 9, on which I require further submissions. I have already referred to the overlap. As to the other aspect of order 9, this relates to the significance of the qualification to the second part of that order, requiring any documentation or correspondence 'that are within the possession, custody or power of the defendants … prepared by the first defendant or his mother … in the dealing of the assets of the companies GFD [the third defendant], GA and Waller & Son in which significant share holdings were held by the Estate of the Deceased'. I have emphasised the qualification in question. It does not appear in order 7, first part, with which order 9 particularly overlaps. Its import is not clear to me, and would appear to create difficulties of compliance for the defendants.
In the crafting of the final orders in the present application, I would expect to hear from the parties on the matters I have just raised and any others they wish to put to me consistently with these reasons.

The questions as to costs

Before me there was substantial argument addressed to the question of costs. That argument concerned two matters.
One concerned the costs of the application itself. The argument here was principally devoted to whether or not I should make an order for costs by reference to what was put to me by both sides as the failure of the other properly to confer on the present application for the purposes of Rules of the Supreme Court O 59 r 9. However, the argument also raised the question of the proper approach to an order for the costs of an application under O 26A r 4(1)(a) absent any question of non-compliance with O 59 r 9.
The other matter as to costs was what order I should make under the power as to the costs of compliance with any order for discovery I made, which I took to go as well to the matter of security as to costs. The power of the court to make orders of both sorts is specified in O 26A r 7, which reads as follows:
(1)An order made under this Order may be made on the condition that the applicant give security for the costs and expenses of the person against whom the order is made, both in respect of the application and of complying with the order and with this Order.
(2)On an application under this Order the Court may make orders as to the costs and expenses -
(a)of any person in respect of the application; and
(b)of a person against whom an order is made in respect of complying with the order and with this Order.
With respect to the costs of the application, it was strongly argued by both parties that the other had not consulted in the manner called for by O 59 r 9. Extensive reference was made in written submissions and oral argument to the considerable correspondence between the solicitors for the plaintiffs and the solicitors for the defendants, which I took to be that represented by the annexures 'J' to 'Z' to the first named plaintiff's affidavit, beginning with a letter dated 20 October 2006 from the former to the latter and concluding with a letter dated 18 July 2007 also from the former to the latter. The memorandum of conferral dated 9 July 2007 referred to all of the correspondence up to the letter dated 5 April 2007 from the solicitors for the plaintiffs to the solicitors for the defendants, as well as a telephone conversation between Mr Solomon of the latter and Mr Curwood of the former on 18 June 2007.
For the plaintiffs, it was said that the defendants through their solicitors had consistently failed to respond 'in a rational way' to the submissions in the correspondence from the solicitors for the plaintiffs as to their possible cause or causes of action, the former using what was characterised as very strong language. I was referred to language included in the letter dated 23 October 2006 from the solicitors for the defendants to the solicitors for the plaintiffs that the 'causes of action asserted' in the letter dated 20 October 2006 from the latter to the former were 'fictional and delusional, as well as statute-barred' while the 20 October 2006 letter also contained 'serious defects of analysis not presently deserving of detailed response'. There was also particular reference to language used in the letter dated 7 March 2007 from the solicitors for the defendants to the solicitors for the plaintiffs concerning the argument set out in the letter of the latter dated 23 February 2007, relating to Limitation Act s 47 and Soar among other authorities. In the letter dated 7 March 2007 the solicitors for the defendants described that argument as 'so hopeless that, if you pursue a pre‑action discovery application based on it, it will result in us seeking an order for indemnity costs payable by you personally'.
For the defendants, it was said that the plaintiffs through their solicitors had failed to raise arguments in their correspondence that formed the subject of some of their submissions before the court (as to the unconscionability of the 1973 deed), and had failed to engage with the submissions in the correspondence from the solicitors for the defendants as to the various causes of action put up by the solicitors for the plaintiffs. This was particularly in view of the way the question raised by the letter dated 20 October 2006 from the solicitors for the plaintiffs as to what had happened to the estate of the deceased was answered by the 1973 deed, which was provided under cover of the letter in reply dated 23 October 2006 from the solicitors for the defendants to the solicitors for the plaintiffs.
Both parties referred me for the correct approach to O 59 r 9 in a case such as this one to the now well known statement in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2006] WASC 161 [4], [5] (Martin CJ), as follows:
In far too many cases, the Rule is complied with in form rather than substance. That is because too often the representatives of the parties consider that the exchange of furious correspondence is an adequate substitute for meaningful conferral in relation to the substance of the interlocutory dispute. This case provides an unfortunate example of that phenomenon.
For my part, I favour an approach to the construction of the Rule which would lead to the conclusion that it has not been substantively complied with unless and until legal representatives of the parties, with authority to resolve the particular interlocutory dispute in question, have orally conferred in respect of the substantive issues that arise in relation to that dispute, either by telephone or by meeting face to face. It follows that any legal representative who declines or refuses to participate in such a process of conferral, without good cause, is at risk of being ordered to pay the costs which flow from that refusal personally. There may, of course, be cases in which a departure from this approach to the application of O 59 r 9 is justified, but, in my view, those cases will be exceptional.

In this case I was not informed of the character of the telephone conversation on 18 June 2007, other than by the letter dated 9 July 2007 from the solicitors for the defendants to the solicitors for the plaintiffs in which the following appears, among other things:
So far as conferral prior to your clients' foreshadowed application is concerned, you have not responded to our letter dated 10 April 2007 other than your assertion on the telephone on 18 June 2007 that there is probably no chance of further narrowing issues by conferral. On reviewing the file, we do not consider that response is adequate conferral with respect to the outstanding matters requiring conferral and referred to in our letter dated 10 April 2007.
I note from the letter dated 10 April 2007 referred to that there is a listing of matters, including matters in the letter dated 5 April 2007 from the solicitors for the plaintiffs to the solicitors for the defendants by way of response to theirs dated 7 March 2007. Those matters are characterised as ones the letter of 5 April 2007 had not dealt with or had dealt with insufficiently to sustain the submissions in that letter.
The concluding paragraphs of the letter of 10 April 2007 are as follows:
In the circumstances, we assume that your letter dated 5 April 2007 contains all that your clients are able to put forward by way of conferral with respect to the issues raised in our letter dated 7 March 2007. In the circumstances, there are no arguable causes of action based on 'manifest inadequacy of consideration' or actionable conduct by Mr Barry Waller as administrator de son tort of the estate of the late Mr AG Waller which would justify an order being made in favour of your clients for pre-action discovery.
Should your clients now proceed with an application for pre-action discovery, failure to properly confer in accordance with Order 59 Rule 9 will be an additional ground of opposition to those already articulated by us.
I note that the correspondence annexed to the first named plaintiff's affidavit extends over 155 pages (including annexures to that correspondence), of which the correspondence referred to in the memorandum of conferral represented 88 pages. The course of that correspondence as I have read it appears to be one of identification by the solicitors for the plaintiffs of a range of causes of action, a range affected most significantly by the production of the 1973 deed. I was not directed to any one of these causes of action from which in that correspondence the solicitors for the plaintiffs resiled, nor could I identify any such. However, not all of the matters raised there were raised in the present hearing.
On this material I conclude that the conversation of 18 June 2007 represented an exchange that was the culmination of this lengthy process.
It does not seem to me in the face of this body of material I am in a position to conclude, either that no conferral occurred, on one side or the other, or that the conferral that did occur did not contribute to some narrowing of the issues raised in the present hearings. Indeed, on the material before me I conclude the contrary.
I do not consider that a lack of conferral is necessarily represented by a failure in writing to address arguments of law or fact raised by the other party against bases for claim advanced in the correspondence. Nor do I consider that a failure to confer is represented by repeated probing of the basis for the position put forward by the other side for the application they propose to make.
In this case there was a dialogue between the parties with a view to avoiding the need for a hearing such as the present, and in any event narrowing the issues between them. That that dialogue (as I am prepared to find) did not involve consistent engagement on a significant portion of the arguments the defendants raised against the plaintiffs' bases for claim so advanced did not prevent that dialogue, to the extent it culminated in a meaningful exchange in the telephone conversation of 18 June 2007, as it appeared to, being conferral within Youlden.
It follows that I consider the requirements of O 59 r 9 were met.
I should add that undoubtedly there were in this case elements of the sort of 'furious' correspondence to which Youlden refers. The tone of some of the correspondence is in my view regrettable in terms of the extent to which it appears less than conducive to providing the best or even a good opportunity for an agreed avoidance of the need for a hearing, or of a narrowing of the issues at one. However, it does not seem to me that, in view of the way the correspondence on both sides continued over some time and in some detail, culminating in the telephone conversation referred to, I should view that 'furious' correspondence as a 'substitute for meaningful conferral in relation to the substance of the interlocutory dispute'.
I should then approach the matter of the costs of the present application unaffected by claims that either side failed to confer.
It appears to be accepted in this jurisdiction that, in the ordering of discovery from a potential party (under O 26A r 4), as well as a non-party (O 26A r 5), the respondent is not a party to a 'normal civil suit' and 'hence the normal rules as to costs do not necessarily apply': Civil Procedure in Western Australia (5 March 2008) [26A.7.1] (source of quotation).
The only discussion of the approach under Rules of the Supreme Court O 26A r 7 that the court might follow to the costs of a successful application for discovery from a potential party that I have been able to find is the discussion in Kim Riley in his capacity as Trustee of the Ker Trust v Jubilee Gold Mines NL [2000] WASC 114 (Sanderson M). That discussion, with the learned Master's discussion of the costs of compliance and security for costs, is as follows, at [18] - [20]:
In relation to costs, the plaintiff should pay the costs of the application. Although the application has been successful, it is the plaintiff who is seeking an indulgence from the Court. The defendant should not be obliged to consent to a discovery order which amounts to a serious invasion of its rights without the sanction of the Court. In other words, the defendant has not acted unreasonably in declining to give discovery, and it should be entitled to the costs of responding to the application.
As regards the cost of providing discovery, in my view those costs should be reserved. If the plaintiff does not commence proceedings, the costs of giving discovery ought be the defendant's, and they ought be awarded on an indemnity basis. There is no reason in those circumstances why the defendant should be out of pocket. If, however, the plaintiff does commence proceedings, the discovery provided by the defendant will reduce the time taken and the costs incurred in providing discovery in the action. In those circumstances, an order for costs in the cause or that costs be reserved would, in my view, be appropriate.
There is also a question of security for costs of giving discovery. That is a matter covered by O 26A r 7. In my view, it would be appropriate for security to be provided by the plaintiff, either by deposit with the Court or by bank guarantee. There appears to be some confusion as to precisely what costs will be incurred by the defendant in giving discovery. It did not prove possible to resolve this issue during the course of the hearing. I will hear further submissions on this issue and in relation to all of the orders I have foreshadowed.
I return below to the matters of the costs of compliance with the orders here and security for costs.
The approach to the costs of the application in Riley has points of similarity with that to the costs under the Federal Court Rule O 15A r 11 of the application in C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 (Gyles J) against a potential party under O 15A r 6: r 11 is similar to but not identical with Rules of the Supreme Court O 26A r 7.
I particularly note from C7 [50] and [51]:
That leaves costs. C7 has succeeded in large measure. On the other hand, the relief which it will obtain is effectively that which was offered prior to the hearing. C7 points out that the offers were all conditional and this required the principal issue to be heard and determined. However, the principal condition imposed was that a claim for the documents in para4 not be pursued. In the event, I have not ordered that those documents be produced. Nonetheless, the respondents have continued to contend that no order should be made. It needs to be borne in mind that this is an extraordinary jurisdiction. It provides for compulsory access to the private affairs of members of the community in order that somebody else can determine if they have a case against that party and the threshold set by O15A r6(a) is not very high. There is much to be said for the view that a respondent in these circumstances is entitled to put the applicant to proof except in a clear case. Some judges have been disposed to make orders which, to a greater or lesser extent, leave costs to be determined after the result of preliminary discovery and inspection is known, and even to depend upon, to some extent, the fate of the litigation which ensues. I am not persuaded of the merit of that approach. An application pursuant to O15A is a discrete application and may never lead anywhere. There is no reason why a party which is out of pocket because of costs should await some indefinite future event.
Taking all things into account, in my opinion the proper order in the present case is that the applicant pay 50% of the costs of each of the first to eighth respondents to the application. In the event that proceedings do eventuate and the applicant succeeds, then it may be arguable that the applicant should be compensated in those proceedings for the burden of this costs order (and perhaps for its own costs). That, however, would be a matter for the trial judge in that proceeding.
In my preliminary view, the approach in Riley as to the costs of the application is appropriate, at least in this case, where the defendants' resistance to providing the discovery sought was reasonable, as the length of the discussion of the arguments against making any orders under the Western Australian rule would in my view tend to indicate. Whether it would be appropriate in any other case is not a matter I need to address here.
However, I will hear further submissions on the matter of the costs of the application.
I turn then to the matter of the costs of compliance. Here the only discussion of the approach under the O 26A r 7 that the court might follow to the costs of compliance by a potential party with an order for discovery from that party, apart from that in Riley, that I have been able to find is in Swancross Corporation Pty Ltd v The Minister For Planning And Infrastructure For The State Of Western Australia [2004] WASC 259 (Sanderson M) [6]. That paragraph appears to reiterate the learned Master's views in Riley with slightly greater elaboration as follows:
It is worth mentioning at this point that I have taken the view that, as a general rule, a non-party who provides discovery ought be fully indemnified for the costs of doing so: Jovista Pty Ltd v FAI General Insurance Co Ltd[1999] WASC 44. This is certainly the case where the party from whom discovery is sought is not a party to the action and it is never intended that it should be a party to any action. In the case of a potential party, there is, I think, a case for reserving costs until the party seeking discovery has decided whether or not it will issue proceedings. If proceedings are issued, then the costs of giving discovery can be swallowed up in the overall costs of the action. But if proceedings are not issued, then there is no reason why the party giving discovery should not be fully indemnified for its costs.
The approach in Riley to the costs of compliance of a potential party is also in accord with the approach to those costs the learned Master indicated he favoured in Davis v Sagar Pty Ltd (Unreported, WASC, Library No 980443, 10 August 1998) 14.
In my preliminary view that would seem to be the correct approach in this case.
However, again I will hear from the parties as to the costs of compliance with the orders for discovery in this case.
As to the matter of security for costs, I note the discussion of this matter in Riley which is in accord with the fuller discussion of the matter in Davis 11 which is as follows:
Finally, r7 provides for the costs both of the application and for the costs of the discovery process itself. In my view, this is the sting in the tail of O26A. It is this rule which provides the protection to a potential party or a non-party. So far as a potential party and a non-party are concerned, if an applicant wants to obtain the privilege of discovery then it should pay for that privilege. In my view it should be a rare case where security is not ordered. It also seems to me appropriate to order security for the actual or real cost of giving discovery. This necessitates the potential party or the non-party producing some affidavit evidence of what the discovery process is likely to cost. Further, as part of any order made, it seems to me appropriate to allow the potential party or the non-party to return to court to have the security topped up if the costs of providing the discovery are more than the security ordered to that point of time. In short, I am of the opinion that the party giving the discovery ought be fully indemnified for the costs of doing so.
In my preliminary view that approach to the matter of security for costs would be appropriate in this case.
However, as with the previous matters of costs, I will hear from the parties as to security for costs in this case.

The orders in this case

It follows that the plaintiffs' application has been successful, and that I will hear from the parties as to the orders to be made in this case, as I have indicated.
I should add that particularly if an order as to the costs of compliance with the orders for discovery is made in the terms I have indicated then it would be appropriate to ensure there is a liberty to apply which would allow for the matter of those costs to be returned to.

Holder	Shares
First named plaintiff	400
Second named plaintiff	400
Third named plaintiff	400
Fourth named plaintiff	400
Fifth named plaintiff	400
First defendant	5,801