Welker v Rinehart (No 9)

[2012] NSWSC 839

Supreme Court

New South Wales

Medium Neutral Citation:

Welker v Rinehart (No 9) [2012] NSWSC 839

Hearing dates:

9 May 2012, written submissions 11 May 2012

Decision date:

25 July 2012

Jurisdiction:

Equity Division

Before:

Brereton J

Decision:

The First Defendant produce the document sought

Catchwords:

PRACTICE & PROCEDURE - Notice to produce documents - Uniform Civil Procedure Rules r 21.10(1)(a) - whether document or thing referred to

PRACTICE & PROCEDURE - Notice to produce documents - application to set aside - defect in form - whether substantial compliance with rule is sufficient - UCPR r 21.10

PRACTICE & PROCEDURE - Notice to produce documents - application to set aside - whether time for compliance is reasonable - UCPR r 21.11

Legislation Cited:

(NSW) Uniform Civil Procedure Rules 2005, r 21.10, r 21.11(1), r 34.1
(NSW) Civil Procedure Act 2005, s 68

Cases Cited:

Welker v Rinehart [2012] NSWSC 588
Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 977

Category:

Procedural and other rulings

Parties:

Hope Rinehart Welker (First plaintiff)
John Langley Hancock (Second plaintiff)
Bianca Hope Rinehart (Third plaintiff)
Gina Hope Rinehart (First Defendant)
Ginia Hope Frances Rinehart (Second defendant)

Representation:

Counsel:
Dr A Bell SC w Mr DFC Thomas (Plaintiffs)
Mr S Rushton SC w Mr C Bova (First defendant)
Mr W Flynn (Second defendant)
Solicitors:
Johnson Winter & Slattery (Plaintiffs)
Corrs Chambers Westgarth (First defendant)
Gadens (Second defendant)

File Number(s):

2011/285907

Judgment

1. On 9 May 2012 the First Defendant obtained leave to file in court, returnable instanter, a motion seeking orders setting aside paragraphs 3, 4 and 5 of a notice to produce served by the Plaintiffs dated 7 May 2012. The First Defendant did not take objection to, and complied with, paragraphs 1 and 2 of the Notice. After hearing counsel for the Plaintiffs, I concluded that paragraphs 4 and 5 should be set aside and so ordered [Welker v Rinehart [2012] NSWSC 588]. Counsel for the First Defendant sought additional time to present argument in respect of paragraph 3, and directions were made for written submissions in that respect.

1. Paragraph 3 of the notice to produce calls for production of "the PwC advice" referred to in paragraph 18(iii) and 23 (i) of the Defence. The relevant references in paragraph 18(iii) are as follows:

18. In answer to paragraph 18 the first defendant:

...

(iii) admits subparagraph 18(iv) and says further that the substance of the advice of PricewaterhouseCoopers (PwC) was set out in the 3 September letter which must have been read by the beneficiaries;

(iv) admits subparagraph 18(v) and says further that the 3 September letter stated that the first defendant made available the PwC letter for inspection by the beneficiaries and did not distribute it directly to the beneficiaires (who were overseas) in accordance with the request of PwC;

...

1. Paragraph 18 of the Statement of Claim, to which that defence responds, is relevantly as follows:

The 3 September letter:

...

(iv) stated that the First Defendant had sought and received advice from the trust's tax advisors, Pricewaterhouse Coopers ("PWC");

(v) stated that PWC were not willing for their advice to be copied and distributed to the Plaintiffs and Second Defendant;

...

1. Paragraph 23 of the Defence is relevantly as follows:

23. In response to paragraph 23 the first defendant:

...

(ii) says in answer to subparagraph 23(i):

...

(i) denies that the third plaintiff had any entitlement to be provided with a copy of the PwC advice and says that in any event PwC were not willing for their advice to be distributed to the beneeficiaries and further that, in any event, the substance of the advice was included in the 3 September letter;

1. Paragraph 23 of the statement of claim relevantly asserts that, by email dated 4 September 2011 to Mr Newberry, the Third Plaintiff sought "preliminary information" including, inter alia, "the advice of PWC as it related to the beneficiaires of the trust".

1. The applicable principles are set out in the judgment of 9 May [Welker v Rinehart [2012] NSWSC 588]. But in this respect, in my view, the Defence contains a direct allusion to a document, being the PwC advice mentioned in paragraph 18(iii); this is confirmed by paragraphs 18(iv), and 23(ii)(i). It is beside the point that paragraph 18(iv) is not specifically mentioned in the Notice; that paragraph serves to confirm that the PwC advice is in written form.

1. The First Defendant submitted that paragraph 3 of the Notice should be set aside for additional reasons, related to its form. The complaint was that the Notice was issued in Form 24 (which applies to notices issued under UCPR r 34.1), as opposed to Form 19 (which applies to notices issued under r 21.10). While the differences between rule 34.1 and rule 21.10 are material, those differences do not depend on the use of the correct form. Here, the Notice made clear that it relied on r 21.10, and in terms it complied with that rule: it was a notice served by party A (the plaintiffs) on party B (the first defendant) requiring the latter to produce documents of the type described in subrule (a). That the notice calls for production to the court (rather than explicitly for inspection) is in effect a specification, authorised by r 21.10(2), of a time (and place) for production, namely 9 May 2012 (at the Court). There was substantial compliance with the requirements of r 21.10 and a reasonable recipient could not have been misled as to the power that was invoked. Use of the incorrect form does not invalidate a clearly conveyed invocation of the relevant rule, and does not deprive the notice of the quality of substantial compliance with r 21.10.

1. Finally, there was an objection that the two days allowed for production was not reasonable. Rule 21.11(1) provides that, unless the Court otherwise orders, party B must "within a reasonable time after being served with a notice to produce", produce for party A's inspection such of the documents specified in the notice as are in its possession. For that purpose, 14 days or longer is taken to be reasonable unless party B establishes to the contrary, whereas less than 14 days is taken to be less than reasonable unless party A establishes to the contrary.

1. A notice is not invalid because it specifies less than 14 days, or because time is unreasonable as to some of the documents being sought [Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 977]. In the context of this litigation, a requirement to produce the single document referred to in paragraph 3 of the Notice should have been capable of easy compliance (especially as the First Defendant maintains that it has been available for inspection for months). In the context of this particular document, I am satisfied that the time permitted (about 2 days) was reasonable in the circumstances. In any event, whatever the position was on 9 May, 14 days has now well and truly passed.

1. Finally, none of these formal objections were originally taken - consistently with the circumstance that the application to set aside was made in respect of part only, and not the whole, of the Notice.

Order

1. Accordingly, I decline to set aside paragraph 3 of the notice.

1. In order to give effect to this outcome and to avoid further disputation about copies, I propose to make the following order:

(1) Order pursuant to (NSW) Civil Procedure Act 2005, s 68, that the First Defendant produce to the Court on 12 September 2012 the document referred to in paragraph 3 of the Plaintiffs' Notice to Produce dated 7 May 2012;

(2) Order that by 1 August 2012 the First Defendant serve on the Plaintiffs a copy of the said document.

1. As each of the parties has had an approximately equal measure of success in respect of the First Defendant's motion filed on 9 May 2012, costs of that motion will be costs in the proceedings.

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