Woodley v Woodley [No 2]
[2015] WASC 274
•31/07/15
WOODLEY -v- WOODLEY [No 2] [2015] WASC 274
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 274 | |
| Case No: | CIV:2080/2013 | ON THE PAPERS | |
| Coram: | BEECH J | 31/07/15 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| B | |||
| PDF Version |
| Parties: | TERRY RAY WOODLEY ROSS MAXWELL WOODLEY |
Catchwords: | Practice and procedure Discovery Application for further and better discovery Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 26 r 6 |
Case References: | Roe v The State of Western Australia [2013] WASC 130 Westraint Resources Pty Ltd v BHP Iron Ore Pty Ltd [No 4] [2009] WASC 17 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : WOODLEY -v- WOODLEY [No 2] [2015] WASC 274 CORAM : BEECH J HEARD : ON THE PAPERS DELIVERED : 31 JULY 2015 FILE NO/S : CIV 2080 of 2013 BETWEEN : TERRY RAY WOODLEY
- Plaintiff
AND
ROSS MAXWELL WOODLEY
Defendant
Catchwords:
Practice and procedure - Discovery - Application for further and better discovery - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 26 r 6
Result:
Application refused
Category: B
Representation:
Counsel:
Plaintiff : No appearance
Defendant : No appearance
Solicitors:
Plaintiff : In person
Defendant : MDS Legal
Case(s) referred to in judgment(s):
Roe v The State of Western Australia [2013] WASC 130
Westraint Resources Pty Ltd v BHP Iron Ore Pty Ltd [No 4] [2009] WASC 17
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60
- BEECH J:
Introduction
1 The plaintiff applies for further and better discovery of 14 categories of documents. For the reasons that follow, I would not make any order for further and better discovery.
2 One of the main questions arising in relation to an application for further discovery is whether the categories of documents sought relate to a matter in question. Whether a category relates to a matter in question is to be assessed by reference, among other things, to the pleadings. Consequently, it is convenient to begin with an outline of the plaintiff's pleaded claim.
Statement of claim
3 In essence, the plaintiff claims that the farming property known as 'the Coronation Road Property' was, in equity, his property, and that he is entitled to the proceeds of its sale.
4 The plaintiff and defendant are brothers. The defendant and his parents were registered proprietors as joint tenants of the Coronation Road Property from August 1968 until 2010. Both of the parties' parents have died; their father on 9 January 2010 and their mother on 31 July 2011.
5 The plaintiff pleads that:
(a) the Coronation Road Property was acquired in 1968 by a partnership, then constituted by his father, his mother and the defendant;1
(b) in 1977 the partnership was dissolved;2
(c) although the Coronation Road Property remained registered in all three of their names, it was agreed between the defendant and his parents that the Coronation Road Property would be beneficially owned by the parents as part of their farming partnership, while the defendant would be entitled to another property, known as 'the Camarri Property'.3
6 The plaintiff's claims are founded on promises that he says were made to him by his parents over a period of 18 years from about 1992 until 2010.4 The plaintiff pleads that on the faith of those promises he contributed his labour and made financial contributions to maintaining and improving the Coronation Road Property.5 Detailed particulars of the labour and financial contributions are set out in Annexure A. The plaintiff pleads that he acted to his detriment in reliance on his parents' promises in various respects, including by making these contributions.6
7 The parties' father died on 9 January 2010. The plaintiff pleads that by transfer dated 13 May 2010 his mother transferred to the defendant 50% of her interest in the Coronation Road Property for consideration stated as being the 'love and affection' of the defendant.7
8 The plaintiff pleads that by 20 October 2010 the defendant was the sole registered proprietor of the Coronation Road Property.8
9 Although not expressly pleaded, it is necessarily implicit in the statement of claim that by no later than 20 October 2010 a survivorship application relating to the interest of the father had been lodged, resulting in that interest passing by survivorship to the mother and to the defendant. As I have said, the plaintiff pleads that his mother transferred 50% of her interest in the Coronation Road Property to the defendant. That does not explain how, as the plaintiff pleads, by 20 October 2010 the defendant was registered proprietor of the entire interest in the Coronation Road Property. However, for present purposes, nothing turns on that.
10 Paragraph 25 of the statement of claim pleads that:
At all material times from 1992 onwards the defendant was aware and/or had constructive knowledge of and/or has become aware that:
(a) between the years of 1992 and 2010 the plaintiff had made significant contributions to the Coronation Road Property, incurred expenditure and devoted considerable time and effort to improving and managing the Coronation Road Property;
(b) upon dissolution of the partnership with his parents, and the payment to him of his partnership benefits in 1977, he no longer held an entitlement to claim an interest in the Coronation Road Property;
(c) [the parents] had said to the plaintiff that the plaintiff would inherit the [Coronation Road Property] and that in reliance thereon the plaintiff had made the contributions pleaded in paragraph (a) hereof.
11 The plaintiff further pleads that:
(1) on 11 February 2013, he lodged a caveat claiming an interest in the Coronation Road Property;9
(2) on 20 April 2013, the defendant entered into a contract of sale to sell the Coronation Road Property for $720,000;10
(3) by agreement, it was ordered, in effect, that the caveat be discharged and the entitlement to the proceeds of the sale of the Coronation Road Property be determined in substantive proceedings to be commenced.11
12 The plaintiff pleads that the defendant committed fraud on his mother by creating a false belief as to the true nature of the transfer from her to him and surrounding events.12 The particulars of that allegation refer to communications between the defendant and his mother in the period January 2010 to April 2010. The particulars also refer to cattle said to have been removed by the defendant from the Coronation Road Property and sold by him without him properly accounting for the proceeds.
13 Paragraph (y) of the particulars under par 35 states that the defendant concealed the true extent of his financial situation from his mother. That allegation is in turn particularised. The particulars refer to various companies of which the defendant is said to have been a director and shareholder, including Markim Holdings Pty Ltd (Markim), Rushwood Pty Ltd and Roseline Pty Ltd (Roseline). It is said that Markim has 'since' sold a part or all of its operations in order to satisfy creditors. It is also said that '[a]t various times a number of financing arrangements were in place including commercial loans, liens, [and] fixed and floating charges'.13
14 The plaintiff further pleads that the defendant caused loss and damage to him by selling the Coronation Road Property for $720,000 when its value was $980,000.14
The plaintiff's application
15 The plaintiff applies for orders in the following terms:
1. Without prejudice to the right of any party to seek or obtain orders for further discovery, the defendant shall by 4 August 2015 give discovery in respect of, but not limited to, the following documents:
(a) The Financial Statements and Income Tax Return and/or Amended Income Tax Return, inclusive of all supporting schedules, for the period 1 July 2006 to 30 June 2014 inclusive for Markim Holdings Pty Ltd As Trustee for The Woodley Unit Trust Trading As Barrier Reef Live Cray(s).
(b) The Financial Statements and Income Tax Return and/or Amended Income Tax Return, inclusive of all supporting schedules, for the period 1 July 2006 to 30 June 2014 inclusive for Roseline Nominees Pty Ltd As Trustee for The Woodley Family Trust.
(c) The Financial Statements and Income Tax Return and/or Amended Income Tax Return, inclusive of all supporting schedules, for the period 1 July 2006 to 30 June 2014 inclusive for Rushwood Holdings Pty Ltd.
(d) The 2006 - 2014 inclusive Personal Income Tax Return and/or Amended Income Tax Return for the defendant such that any depreciation schedules, interest deduction schedules, rental statements, business schedules, livestock trading schedules, other schedules forming part of the main or supplementary section of the Income Tax Return and carried forward notes are provided in an un-redacted form.
(e) Notice of Assessment and/or Amended Notice of Assessment as issued by the Australian Taxation Office for the years ended 30th June 2006 to 30th June 2014 inclusive including the primary Production Averaging Rebate or Complimentary Tax Calculations of the defendant.
(f) General ledger printouts of Markim Holdings Pty Ltd As Trustee for The Woodley Unit Trust Trading As Barrier Reef Live Cray(s) for the years ended 30th June 2006 to 30th June 2014 inclusive.
(g) General ledger printouts of Roseline Nominees Pty Ltd As Trustee for The Woodley Family Trust for the years ended 30th June 2006 to 30th June 2014 inclusive.
(h) The Australian Taxation Office Integrated Client Account for Markim Holdings Pty Ltd As Trustee for The Woodley Unit Trust Trading As Barrier Reef Live Crays for the period 1st July 2006 to 30th June 2014 inclusive.
(i) The defendants Centrelink or any other application for a pension or annuity from 2010 to present.
(j) The Contract of Sale, earnout arrangement or such similar document for the sale or part sale of the business known as Barrier Reef Live Cray(s) including any equipment sold with the business.
(k) Any document pertaining to a penalty, fine or settlement of an issue in dispute with the Australian Taxation Office or government regulatory authority, state or federal for the period 2006 - 2014.
(l) Any document pertaining to the settling of a dispute with a trade union or body representing employees and/or contractors.
(m) Superannuation Fund Annual Statements for the period 1 July 2006 to 30 June 2014.
(n) Invoices and/or Tax Invoices and/or Receipts for the purpose of the following items as listed on the 30/6/2011 Depreciation Schedule for Markim Holdings Pty Ltd As Trustee for the Woodley Unit Trust Trading As Barrier Reef Live Cray
(i) Asset A093 28/3/2006 Trailer $10,909.
(ii) Asset 105 12/1/2007 Wahoo Pro Cray 5T & Fittings $48,645.
(iii) Asset A109 6/3/2007 Trailer $40,909.
(iv) Asset A112 31/05/2007 2nd Hand Vehicle - Pacific Toyota $22,000.
(v) Asset A113 27/3/2007 Boat - 'Carribean' $122,137.
(vi) Asset A114 27/3/2007 Boat Trailer $16,250.
(vii) Asset A116 4/8/2007 Quintrex Dart $2,013.
(viii) Asset A124 1/2/2008 Ford F250 $75,000.
(ix) Asset A165 9/12/2010 Fishing Boat - Top Gun M&H No 2842 $189,000.
16 Principles relevant to an application for further and better discovery were summarised by Master Newnes in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd15 as follows:
In determining whether to make an order for further discovery, the Court must have reasonable grounds for being fairly certain that there are other relevant documents which ought to have been discovered: Beecham Group Pty Ltd v Bristol Myers Co [1979] VR 273. The Court must be able to infer from the nature of the document in question that it is relevant; it will not speculate as to its relevance. Relevance may either appear from the nature of the document or its contents, and if the latter then there must be a prima facie case as to the contents before an order for further discovery will be made: Astra-National Productions Ltd v Neo-Art Productions Ltd [1928] WN 218 at 219. Where an application is made in respect of a document referred to in a document already discovered (the relevance of the latter being conceded by its discovery) it is generally reasonable to assume, in the absence of a contrary indication in the document discovered, that the document referred to is relevant: see Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co [1882] 11 QBD 55; Kent Coal Concessions Ltd v Duguid [1910] 1 KB 904 at 915 and the discussion in PDM Australia Pty Ltd v Kellogg Overseas Corporation & Ors, unreported; SCt of WA; Library No 6646; 26 March 1987 at [5 - 14].
In determining whether a document relates to a matter in question, and, therefore, whether it ought to have been discovered, the test is that set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (supra) as follows:
'It seems to me that every document relates to matters in question in the action which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in words "either directly or indirectly" because it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance its own case or to damage the case of its adversary, if it is a document which may fairly lead to a chain of inquiry, which may have either of those two consequences.'
The matters in issue are to be determined by reference to the pleadings: Mulley v Manifold (1959) 103 CLR 341 per Menzies J at 345. But regard must also be had to the conduct and admissions of the parties and the nature of the action: Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178 at 186.
It is also important to bear in mind that there is not a strict entitlement to an order for discovery, including an order for further discovery: Kent Coal Concessions Ltd v Duguid (supra) at 910. Moreover, amendments to the Rules in more recent times, including the introduction of O 1 r 4B and O 26 r 7, emphasise the need to have regard to the timely and cost effective disposal of the action in the exercise of the discretion to order discovery.
17 In the exercise of the discretion to grant further discovery, the court should have regard, among other things, to the likely relevance and importance of the documents sought in relation to the issues in the proceeding, and the likely time, cost and inconvenience of searching for and disclosing those documents.16
18 As Martin CJ observed in Roe v The State of Western Australia,17 the nature and extent of the apparent relevance of the documents that are sought will be a significant consideration in the exercise of the discretion as to whether to order further and better discovery. Satisfaction of the low threshold of relevance in the Peruvian Guano sense will not necessarily justify an exercise of this discretion. A claim to a broader ambit of discovery must be justified by an assessment of whether the cost and delay involved in the broader ambit is proportionate to the forensic benefit likely to be derived from it. This assessment must be made in the context of the value, importance and complexity of the subject matter of the litigation.
The plaintiff's submissions and affidavit
19 The nub of the plaintiff's position is that further and better discovery should be given so that the plaintiff can 'ventilate his position that the defendant, his family and his associated entities were under financial distress at or about the time prior to, time of and subsequent to the transfer and at the time of the sale [of the Coronation Road Property]'.18 The documents sought are said to be relevant to establishing a motive for the fraud alleged by the plaintiff in relation to the transfer of 13 May 2010, and also to the circumstances of the sale in 2013.19 The plaintiff submits that the documents he seeks should be discovered to enable him to follow relevant lines of enquiry relating to his allegation of fraud.20
20 The defendant receives income as a beneficiary of a family trust, the trustee of which, Markim, operates a crayfishing business in Queensland.21 The plaintiff asserts, in his affidavit22 and in his submissions,23 that the defendant can manipulate and has manipulated the accounting systems for Markim and Roseline, over which he has almost total control. Consequently, the plaintiff says that he cannot be expected to rely upon the financial records provided by the defendant when their integrity is open to doubt.
21 The plaintiff claims that the defendant and his son have been involved in significant tax evasion,24 including in relation to the tax returns that have been provided by way of discovery to the plaintiff.25
22 In his affidavit26 and in his submissions27 the plaintiff contends that the defendant and the defendant's son entered into a 'dramatic' sell off of real estate in the period from September 2012 to April 2013. The plaintiff's affidavit asserts that the defendant's son, Mark, sold two properties in Dunsborough in that period, during which the defendant and his wife also sold a property in Dunsborough. Further, in the same period, Markim, as trustee for the Woodley Unit Trust, sold its crayfishing business to M G Kailis Pty Ltd. The plaintiff says that the sale of the Coronation Road Property on 20 April 2013 is to be seen in this context. He asserts that the sale was 'purely to raise funds desperately need[ed] to satisfy creditors'.28
The disposition of the application
23 I am not persuaded that discovery and production of the documents sought by the plaintiff is in the interests of the just, timely and cost effective disposal of the action.
24 The likely forensic benefit to be derived from the sweeping range of categories sought by the plaintiff must be assessed in the light of the documents that have already been discovered by the defendant. The defendant has already discovered the financial accounts and income tax returns for the Woodley Unit Trust and the Woodley Family Trust for each of the financial years ending 30 June 2009, 2010 and 2011, as well as the defendant's personal income tax returns for those financial years. The defendant has also discovered a number of documents concerning the sale of the Coronation Road Property, including the documents relating to the listing price, and those relating to any valuation of the property prior to sale.29
25 The plaintiff submits that '[p]reliminary investigation based upon the limited selective documents provided by the defendant does indeed suggest a high degree of financial distress leading to fraudulent behaviour by the defendant'.30 That submission is mere assertion. I do not accept it. Nothing in the contents of the documents discovered by the defendant provides any encouragement to the plaintiff's assertion that the defendant's poor financial position in or around May 2010 provided a motive for him to defraud his mother in relation to the transfer of her interest in the Coronation Road Property.
26 Similarly, the plaintiff's evidence and submission that the defendant has manipulated the accounting systems of Markim and Roseline are also mere assertion without any identified foundation in primary facts. They do not sustain any order for further discovery.
27 In my view, the plaintiff's claim that the documents already discovered are insufficient, and that all of the documents in the categories sought for the period 1 July 2006 to 30 June 2014 should be discovered is founded on nothing more than assertion or speculation. The documents already provided are a more than adequate response to the plaintiff's claim that documents relating to the defendant's financial circumstances at the time of the alleged fraud and transfer should be discovered. Insofar as the plaintiff's claim to further discovery is founded on the alleged motive for fraud, in my view there is insufficient prospect of a forensic benefit of any significance to justify the expense and delay that would be involved in the discovery and production of the various additional categories sought.
28 The plaintiff's allegations of tax fraud are merely assertive in character.31 If those allegations are connected to the issues in this case at all, the connection is remote and founded upon speculation. The allegations of tax fraud do not provide any adequate foundation for any order for further discovery.
29 I am not persuaded that anything in the plaintiff's submissions or affidavit relating to the sale of the Coronation Road Property justifies an order for discovery of the further categories sought.
30 The plaintiff submits that the defendant has 'produced no creditable evidence' to deny:
(a) the claims of fraud; or
(b) the claims of tax evasion.32
31 More generally, the plaintiff submits that, given that the defendant has not led evidence to rebut the various allegations made in the plaintiff's affidavit, the court should accept and act on those allegations.33 I do not accept those submissions. In my view, for the purposes of this application it was not incumbent on the defendant to respond by way of evidence to the sweeping allegations of wrongdoing made by the plaintiff, especially given the assertive character of those allegations.
32 Further, in relation to categories (i), (k) and (l), the plaintiff has not satisfied me that there are reasonable grounds to be fairly certain that the documents within that category exist.34
Conclusion
33 For the reasons I have given, I would dismiss the application.
34 Costs should follow the event, and should be fixed and payable forthwith. The parties should confer as to an amount for costs and, failing agreement, should file submissions as to the amount within 7 days.
1 Statement of Claim [3] - [5].
2 Statement of Claim [7].
3 Statement of Claim [8] - [10].
4 Statement of Claim [13].
5 Statement of Claim [14].
6 Statement of Claim [22].
7 Statement of Claim [18].
8 Statement of Claim [20(c)].
9 Statement of Claim [28].
10 Statement of Claim [29].
11 Statement of Claim [31].
12 Statement of Claim [35].
13 Statement of Claim [35(y)(iv)].
14 Statement of Claim [41].
15Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 [3] - [6].
16Westraint Resources Pty Ltd v BHP Iron Ore Pty Ltd [No 4] [2009] WASC 17 [13] (Le Miere J).
17Roe v The State of Western Australia [2013] WASC 130 [10] - [13].
18 Plaintiff's submissions dated 15 June 2015 [9].
19 Plaintiff's submissions [37].
20 Plaintiff's submissions [15], [38]; Plaintiff's reply submissions dated 7 July 2015 [3].
21 Affidavit of Terry Ray Woodley sworn 15 June 2015 [1].
22 Affidavit of Terry Ray Woodley [17].
23 Plaintiff's submissions [29].
24 Affidavit of Terry Ray Woodley [19] - [25]; Plaintiff's submissions [19].
25 Affidavit of Terry Ray Woodley [24] - [25].
26 Affidavit of Terry Ray Woodley [44].
27 Plaintiff's submissions [30].
28 Affidavit of Terry Ray Woodley [54].
29 Affidavit of Joseph Michael Burke sworn 3 July 2015 Annexures JMB 1, JMB 2.
30 Plaintiff's submissions [17].
31 See, for example, affidavit of Terry Ray Woodley [18] - [25]; Plaintiff's submissions [18] - [22].
32 Plaintiff's submissions [23] - [24].
33 Plaintiff's reply submissions [4] - [5].
34 See affidavit of Joseph Michael Burke sworn 3 July 2015 [12].
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