Woods Bagot Pty Ltd v Stapledon - [2005] SASC 346

Supreme Court of South Australia
(Civil: Application)
WOODS BAGOT PTY LTD AND ORS v STAPLEDON AND ANOR
Judgment of The Honourable Justice Perry (ex tempore)
9 September 2005
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS - DISCOVERY OF DOCUMENTS - ORDERS FOR FURTHER AND BETTER DISCOVERY
Application for leave to appeal to the Supreme Court from the order of a District Court judge who in turn determined an appeal from the decision of a District Court master on an application for further and better discovery of documents - consideration of question whether discovery of documents could be ordered as to elements of the plaintiffs' claim which arose after the proceedings had been commenced - consideration of approach to appeals on questions of practice and procedure - held that a second appeal on such a matter would only rarely be entertained, and then only if the case raised a point of law of difficulty and general importance or to avoid a manifest injustice - leave refused.
District Court Act 1991 s 43(2)(a) and s 43(2)(b); SCR r 46A.12 and r 96A.02, referred to.
Rediffusion (Hong Kong) Ltd v AG (Hong Kong) [1970] AC 1136; Cairns, Australian Civil Procedure (Thompson Law Book Co) 6th edition 2005; Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421; Eshelbury v Federated European Bank [1932] 1 KB 423; Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1993) 10 WAR 233; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; Re Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318; Glenauchen Pty Ltd v Circuit Finance Pty Ltd [2001] SASC 61 (Full Court); Harris Scarfe Ltd (Receivers & Managers Appointed (In Liquidation) and Ors v Ernst & Young (Reg) and Ors (No 2) [2005] SASC 168; Harris Scarfe Ltd (Receivers & Managers Appointed) (In Liquidation) and Ors v Ernst & Young (Reg) and Ors [2005] SASC 255 (Full Court); Andrew Garrett Wine Resorts Pty Ltd and Anor v National Australia Bank Ltd (No 3) [2005] SASC 171; Star Petroleum v Pertsinidis (1993) 172 LSJS 340, considered.

WOODS BAGOT PTY LTD AND ORS v STAPLEDON AND ANOR
[2005] SASC 346
Civil

PERRY J. (ex tempore) This is an application for leave to appeal to this Court from the judgment and orders made by a judge of the District Court, who, in turn, determined an appeal from an interlocutory order of a master of the District Court. The order of the master dealt with an application brought by the plaintiffs to the action, who sought orders, amongst other things, for further and better discovery of documents.
The order of the master was an interlocutory judgment within the meaning of the District Court Act 1991 (“the Act”). The appeal from the master to a single judge of the District Court was brought pursuant to s 43(2)(a) of the Act.
Clearly enough, the judgment of the single judge who heard and determined the appeal from the master retained the character of an interlocutory judgment. It follows that, pursuant to s 43(2)(b) of the Act, any appeal would lie to a single judge of this Court.
Furthermore, pursuant to SCR r 96A.02, the right of appeal to this Court is conditioned by the requirement imposed by that rule for the proposed appellant to obtain either a certificate from a judge of the District Court answering to the requirements laid down in that rule, or the leave of this Court.
No certificate has been given by a judge of the District Court. It follows that to proceed with the proposed appeal, it is incumbent upon the applicants, who are the defendants to the District Court proceedings, to obtain leave.
Pursuant to SCR r 96A.02(2), such leave may be granted by a single judge. Ordinarily, an application for such leave is dealt with ex parte. However, on 2 September 2005, I ordered that the applicants give notice of the application to the respondents, and that the application proceed inter partes.
In the proceedings, the plaintiffs (the present respondents)) claim that, following their retirement from the position of directors and after they ceased to be shareholders in the first and second defendants, they were entitled to receive from the first and second defendants certain payments, described as supplementary superannuation, extra supplementary superannuation and payments by way of a buy-back of shares. The plaintiffs claim to be entitled to the payments pursuant to an agreement entitled “The Woods Bagot Group Shareholders’ Alliance - Version 3” (“the agreement”). They claim certain specific moneys to be due and payable pursuant to the agreement, calculated to the month in which the proceedings were issued, namely, March 2003.
In addition, they seek declarations that the first and second defendants are obliged to pay to them certain further sums of money specified in the statement of claim, said to fall due on the 1st of each quarter, commencing 1 April 2003, calculated to certain dates, being 1 July 2005 in one instance, and in the other instance, 1 July 2006.
In their amended defence, the defendants plead that any obligation that might otherwise have been imposed upon the first two defendants to make payments of the kind sought by the applicants was subject to the first two defendants, or at least the group within which the first two defendants were part, having the ability to make the payments, without, in the opinion of the auditors, jeopardising their financial viability.
The plaintiffs justified their application for further and better discovery, at least in part, on the footing that they were entitled to discovery of personal bank statements of the third to tenth defendants, and any other documents evidencing or recording receipt of payments by them under the agreement. The plaintiffs argued that such documents were relevant to the issue, which undoubtedly would be raised in the proceedings, as to the ability of the first two defendants to make the payments sought.
The master sitting at first instance declined to make an order acceding to that part of the application for further and better discovery, but his decision in that respect was reversed on the appeal to a judge of the District Court.
In particular, she ordered discovery of the personal bank statements and other documentary evidence recording the receipt by such of the defendants who had not so far provided the documents, of all payments under the agreement since the retirement of the plaintiffs “to the present time”, which no doubt was the date of her order, namely, 11 August 2005.
The gist of the application for leave to appeal on this issue is that, according to the arguments advanced by the applicants, the plaintiffs cannot be entitled to discovery of documents evidencing payments beyond the date upon which the proceedings were issued. This is on the footing that any claim for payments said to arise after that date could not be sustained in the proceedings, and could only properly be limited to a cause of action existing at the time the proceedings were instituted.
In my view, that argument is misconceived.
As I have already explained, apart from the direct money claims, the statement of claim specifically seeks a declaration as to the plaintiffs’ entitlement to payments calculated from the institution of the proceedings to dates in the future. If they prove that entitlement, there is no reason why they should not be granted a declaration in the terms sought.
The jurisdiction to grant a declaration is very wide and its exercise may not be associated with a cause of action.[1]
[1] Authorities relevant to that proposition are Rediffusion (Hong Kong) Ltd v AG (Hong Kong) [1970] AC 1136, cited in Cairns, Australian Civil Procedure (Thompson Law Book Co) 6th edition 2005 at 620. Generally, see Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 per Gibbs J at 435 et seq.
Here, the plaintiffs adopted the perfectly normal and regular procedure of claiming the money amounts which had fallen due up to the date of issue of the proceedings, and sought a declaration as to their entitlement thereafter. This was completely unexceptional. The arguments against the entitlement of the plaintiffs to present the case in that way are, in my view, entirely misconceived.
At the same time, I recognise that proof of the capacity of the first two defendants to pay the amounts in question and the first two defendants’ financial viability for any period after the trial may be a difficult, if not impossible, exercise. However, one of the two periods in question has already expired, and at the rate the action is proceeding, the other period is likely to expire before trial.
At all events, dealing with that question would clearly be a matter for the trial judge.
In any event, once the periods have expired, there would appear to be no reason why an amendment of the claim should not then be permitted to claim the amounts which may be said to have by then fallen due, being amounts which have fallen due after the proceedings have been instituted. SCR r 46A.12 specifically authorises such a course. That rule is obviously designed to overcome the difficulty identified in cases such as Eshelbury v Federated European Bank[2] and Water Authority of Western Australia v AIL Holdings Pty Ltd No 2.[3]
[2] [1932] 1 KB 423.
[3] (1993) 10 WAR 233.
The applicants also seek leave to appeal against another part of the order of the judge of the District Court which was to the effect that the defendants make discovery of various financial communications between the first two defendants and a financier. In my view, no reason has been demonstrated to interfere with that part of the District Court judge’s decision.
Mr Ross-Smith for the applicants put forward an argument that essentially was directed to demonstrating that the reasoning followed by the judge in making that part of the order was wrong. But he was unable to identify any question of principle which would justify intervention by this Court on that aspect of the matter. Neither do I think that any question of general importance arose.
Although I have so far indicated that, in my view, on the merits the application must fail, I point out that this is an attempt to re-argue by a second appeal the decision of a master on a point of practice and procedure.
As Mr Livesey for the respondents submitted, this Court, and indeed all superior courts, have set their face against entertaining appeals of this kind. Indeed, there is a long line of authorities[4] in which courts have emphasised that even in the case of first appeal against a decision relating to practice and procedure, the court is generally reluctant to interfere.
[4] See, for example, Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177, Re Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318 at 323, Glenauchen Pty Ltd v Circuit Finance Pty Ltd [2001] SASC 61 (Full Court), Harris Scarfe Ltd (Receivers & Managers Appointed) (In Liquidation) and Ors v Ernst & Young (Reg) and Ors (No 2) [2005] SASC 168 per Bleby J at [1]-[14], Harris Scarfe Ltd (Receivers & Managers Appointed) (In Liquidation) and Ors v Ernst & Young (Reg) and Ors [2005] SASC 255 (Full Court) at [17] per Perry J, Andrew Garrett Wine Resorts Pty Ltd and Anor v National Australia Bank Ltd (No 3) [2005] SASC 171 at [10] per Gray J, and Star Petroleum v Pertsinidis (1993) 172 LSJS 340 per Perry J.
Lengthy reasons for their decision were given by both the master and the judge. They canvassed a number of decisions of this Court dealing with the scope of the rules as to discovery. Since 2000, those rules have been recast so as to oblige discovery only of documents which are directly relevant to any issue raised by the pleadings.
The principles on which the court approaches the question of discovery under the amended rules have been clearly established, and I could find no fault with the exposition of those principles by either the master or the judge in question. Indeed, Mr Ross-Smith did not advance any argument that they had misconceived the principles which by now have clearly been laid down.
As I have said, it would have to be an extraordinary case which could possibly justify a second appeal, being an appeal to this Court from the District Court, on a matter of practice and procedure. Leave to appeal in such a case could only be granted if the case gave rise to a point of law of difficulty and general importance, or to avoid a manifest injustice.
The circumstances in which it would be proper to give leave to appeal in such a case will necessarily be very rare indeed. Even a first appeal on a matter of practice and procedure is, as I have indicated, heavily circumscribed.
The applicants have not made out a case for leave to appeal to this Court.
I add that in my view, interlocutory processes are best dealt with by the court in which the trial is to be held.
Before parting with the matter I point out that the action was commenced in 2003. The papers which have come to this Court in the wake of the present application, demonstrate the expenditure up to now of a good deal of time and resources on interlocutory matters of dubious substance.
I can only urge those responsible for managing the case in the District Court, to endeavour to ensure that it is brought to trial without further delay, and without further interlocutory sparring.
The order is that the application for leave to appeal is dismissed.
[AFTER HEARING THE PARTIES ON COSTS]
I order that the applicants pay the respondents’ costs of and incidental to the application for leave to appeal, to be taxed. Certify for counsel.