Hodgson v Inverell Properties Limited HC Auckland CIV 2009-485-2343
[2010] NZHC 1838
•29 September 2010
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2009-485-2343
BETWEEN CHRISTINA AILSA MCLEAN HODGSON
Plaintiff
ANDINVERELL PROPERTIES LIMITED Defendant
Hearing: 21 September 2010
Appearances: P. Sills - Counsel for Plaintiff
C.S. Chapman - Counsel for Defendant
Judgment: 29 September 2010 at 3.30 pm
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 29 September 2010 at
3.30 pm under r 11.5 of the High Court Rules.
Solicitors: Carson Fox, Solicitors, PO Box 37403, Parnell, Auckland
Brandons, Solicitors, PO Box 36, Wellington
CAM HODGSON V INVERELL PROPERTIES LIMITED HC WN CIV-2009-485-2343 29 September 2010
Introduction
[1] The plaintiff (“Mrs Hodgson”) is a shareholder in the defendant company, Inverell Properties Limited (“Inverell”). She has brought a claim for relief under s
174 of the Companies Act 1993, which allows shareholders to apply for an order against a company if they consider the company’s affairs have been, or are likely to be, conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial to them. Mrs Hodgson claims that she (and her husband George Hodgson (“Mr Hodgson”)) are being excluded from the management of Inverell and that, in order to escape that position, she must sell her shares.
[2] There are presently two applications before the Court, Mrs Hodgson’s application for further and better discovery and Inverell’s application for further particulars of the statement of claim. Both applications are opposed.
Background
[3] Inverell was incorporated in 1970. Mr Hodgson, Mrs Hodgson’s husband, was a director of Inverell until he resigned on 4 November 2006. Mr Malcolm Fraser (“Mr Fraser”) has been the sole director of Inverell since. Mrs Hodgson claims that it was understood at the time that she and her husband would continue to participate in the management of Inverell and any major decisions regarding the company’s affairs.
[4] Mrs Hodgson currently holds about 35 per cent of shares in Inverell. Mr and Mrs Hodgson are now both elderly and reside in a rest home. They have each appointed their son-in-law, Mr Andre du Plessis, as their attorney in order that he may look after their affairs.
[5] In August 2009, Mrs Hodgson asked Inverell to pay for a share valuation and to purchase her shares, but without a minority discount. The request was declined. She then commenced the present proceedings with the intention of obtaining an order for sale of her shares. The overall argument appears to be that Inverell is a quasi-partnership, and that the plaintiff’s exclusion from participation in the company has been oppressive or prejudicial in terms of s 174. Mrs Hodgson claims
that Inverell has failed to comply with its obligations to her. In particular she pleads that the company has failed to:
•provide to her financial information and information regarding the company’s activities, within a reasonable time or at all, upon request;
•consult her regarding important and substantial transactions, which may be major transactions under the Companies Act 1993;
•consult her regarding proposed payments made to third parties other than on an arm’s length basis, including a management termination fee of $450,000.00 to V A Draper & Co Limited, of which Mr Fraser is the director and majority shareholder;
• give proper notice of the 2007 Annual General Meeting of
Shareholders;
• properly adopt the Annual Accounts and Balance Sheet in the 2007
Annual General Meeting of Shareholders; and
•keep proper accounts for the company and its wholly owned subsidiaries and comply with audit requirements.
[6] Inverell denies these allegations, and opposes Mrs Hodgson’s application under s 174.
Interrelationship between the Applications
[7] There is substantial disagreement between the parties as to whether particular discovery should be provided before further particulars are given, or whether discovery should follow further particularisation. Given that this is a matter that has seemed to assume some importance in this case, I will briefly set out the parties’ submissions before considering the respective applications in more detail.
[8] There can be little doubt that the general purpose of pleadings is to define the issues and to limit discovery to the issues raised by the pleadings. Inverell’s submission, therefore is that pleading widely so as to maximise the ambit of discovery, with or without the intention of pleading more precisely later, is wrong. Reference is made to Yorkshire Provident Life Assurance Company v Gilbert & Rivington [1895] 2 QB 148 to support this proposition that it is a legitimate function of particulars to limit and define the issues to be tried, and as to which discovery is required.
[9] Mrs Hodgson, on the other hand, submits that in a case such as this one, it is appropriate for particulars to follow discovery because the particulars sought by Inverell are within the knowledge of the company. She submits that Inverell’s primary reason for requiring further particulars at this stage appears to be to limit the scope of discovery that it is required to carry out. Although Mrs Hodgson accepts that discovery already given by Inverell to date does allow her to provide additional particulars of her claim, she argues that the documents now sought by way of further discovery will enable her to provide even further details of the claim. She submits that, to the extent that further particulars may be required, those particulars relate to Inverell’s conduct, and that conduct is presently better known to Inverell and its officers than to her.
[10] A number of authorities were referred to that appear to support the proposition that, in particular circumstances, it is appropriate for discovery to be completed before further particulars are required. In Ross v Blakes Motors Limited [1952] 2 All ER 689, for example, the Court held that the practice of refusing particulars until after discovery was a matter of discretion to be exercised in all the circumstances of the case. In that case, the Court considered that the discretion was properly exercised, having regard to the evidence, and to the circumstance that the defendants knew the facts, whereas the plaintiff did not. The Court noted that it was “good practice and good sense that where the defendant knows the facts and the plaintiffs do not, the defendant should give discovery before the plaintiffs deliver particulars” (at 695).
[11] The matter was also considered in some detail in Carter Holt Harvey Limited v Paper Reclaim Limited HC Auckland CIV-2004-404-5739, 23 May 2005. There, Associate Judge Abbott accepted that particulars should follow discovery because the particulars being sought essentially related to, or depended on, information that was or ought to have been provided by the defendant, which was more within the knowledge of the defendant than of the plaintiff. Associate Judge Abbott could see no merit in ordering the plaintiff to provide what were likely to be relatively limited particulars of what was currently within its knowledge, before providing further particulars following discovery.
[12] The position is aptly summarised in McGechan on Procedure at HR5.21.05:
Logically, particulars should be supplied before discovery of documents, as particulars define the questions at issue in the proceedings, and thus the scope of discovery. However, a practice has developed under which allegations are pleaded in general terms accompanied by a statement that particulars will be given following discovery (ie discovery by the other party). A special situation exists both in England and New Zealand where an applicant for particulars has knowledge of the issues involved which the party from whom particulars are sought does not have. In such a situation, particulars should not be ordered until after discovery by the former: Ross v Blakes Motors Ltd [1951] 2 All ER 689 (CA); Hickson v Scales (1900) 19 NZLR 202; Sullivan v Harris (1906) 8 GLR 650.
[13] Inverell maintains here that the proposition that discovery should precede particulars is “an invitation to pleading at a general level, usually leading to demands for extensive and largely unbound discovery”. It submits that it should be the exception and not the norm, and that in this case particulars are capable of being given by Mrs Hodgson prior to further discovery.
[14] I accept Inverell’s submission that discovery should not ordinarily precede particulars. However, having regard to the parties’ applications, I am of the view that there are here some instances in which it would be appropriate for particulars to follow discovery because effectively the particulars are more within the knowledge of Inverell than of Mrs Hodgson. Nevertheless, it is my view that it would not be appropriate to make such an order in those situations where the plaintiff’s overall allegations are not sufficiently clear to allow for meaningful discovery. In these instances, as will become apparent later, orders for further particulars are to be made before further discovery is to occur.
Application for Further Particulars
[15] Inverell seeks further particulars of the statement of claim pursuant to rr 5.21 and 5.26 High Court Rules it says so it is properly informed of Mrs Hodgson’s case. It submits that Mrs Hodgson is required to focus her case on the facts that entitle her to the level of participation and information that she alleges; the nature and extent of that entitlement; what company conduct has occasioned or is likely to occasion oppression, unfair discrimination or unfair prejudice; and to identify the precise nature of that oppression, unfair discrimination and/or unfair prejudice.
[16] Moreover, Inverell submits that precise pleading is then required in order to define the issues that are intended to be raised and that can be raised under s 174
Companies Act 1993, in order that admissions as to discrete matters that are not in dispute may be provided, and thus to avoid wasting time, trouble and expense on issues that are not actually in dispute or are irrelevant to Mrs Hodgson’s case. Inverell argues that a properly particularised statement of claim will enable it to understand, consider and, if appropriate, address Mrs Hodgson’s remaining complaints.
[17] Mrs Hodgson opposes the request for particulars on the grounds that, to the extent possible at the time of filing, her statement of claim sufficiently informs the Court and Inverell of the factual situation, and that it is appropriate that discovery be completed before further particulars are provided. Mrs Hodgson also submits that Inverell’s requests in reality amount to requests for evidence.
[18] Rule 5.26 provides that a statement of claim must show the general nature of the plaintiff’s claim, and that it must “give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff's cause of action”. In Farrell v Secretary of State for Defence [1980] 1 All ER 166 at 173, the House of Lords noted that the purpose of pleadings was “to define the issues, and thereby to inform the parties in advance of the case they have to meet and so enable them to take steps to deal with it”.
[19] In Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998, the
Court of Appeal described the importance of pleadings in the following way:
It has become fashionable in some quarters to regard the pleadings as being of little importance. There was an echo of that approach in the implicit suggestion floated in this case that exchange of briefs of evidence before trial might be seen as curing any lack of particularity in the pleadings. Any such view is misguided. Pleadings which are properly drawn and particularised are, in a case of any complexity, if not in all cases, an essential road map for the Court and the parties. They are the documents against which the briefs of evidence are or should be prepared. They are the documents which establish parameters of the case, not the briefs of evidence.
…What we are saying is that both the Court and opposite parties are entitled to be advised of the essential basis of a claim or defence, and all necessary ingredients of it, so that subsequent processes and the trial itself can be conducted against recognisable boundaries. Neither the Court nor opposite parties should be placed in the position of having to deal with a proposition of whose substance adequate notice has not been given in the pleadings.
[20] The Court of Appeal also suggested that pleadings are intended to “supply an outline of the case advanced, sufficient to enable a reasonable degree of pre-trial briefing and preparation”, and that discovery and interrogatories are not a substitute for pleading.
[21] Generally, inability to give particulars properly required is no excuse, unless “the party seeking particulars knows that the party from whom particulars are sought does not have them, and the Court considers the former is not genuinely embarrassed by the lack of particulars, or that the particulars sought were within the knowledge of the requesting party”: McGechan on Procedure at HR 5.21.06. Inverell submits that to assert baldly that particulars need not be given because they are within the knowledge of the requesting party is fallacious, as in most cases, the particulars would be within the knowledge of the requesting party only if the matter alleged in the pleading is true. Inverell here refers to Greystoke Industries Limited v Jones HC Auckland CP No 175/95, 6 May 1996, where Master Kennedy-Grant said:
The defendant may, and presumably does, know what he did. But that is not the question. The question is, What is he alleged to have done?
[22] In Public Trustee v Mahar HC Wellington CP No 818/88, 7 February 1990, Neazor J noted at 4:
... it is no objection to a request for particulars of a pleading that knowledge of the matter is in the hands of the opposing party; nor that the defendants are trying to bind the plaintiff to a definite story. The purpose of the statement of claim is to give notice of what the plaintiff alleges so that the defendant knows what has to be met, is not taken by surprise at trial, and can prepare evidence within the framework of the issues raised and defined by the statement of claim ...
[23] In response to Mrs Hodgson’s submission that some or all of the particulars requested amount to evidence, Inverell refers to Weddel New Zealand Limited v The Liquidators of New Zealand Meat Marketing Corporation HC Wellington CP No
700/92, 23 March 1993, where McGechan J noted that:
The requirement is not in itself a mere matter of evidence. Any requirement for particularity does carry with it an evidential element, as with the statement of fact required of the party inevitably there will be an at least implicit revelation of likely evidence to support that fact.
[24] Inverell submits broadly here that none of the particulars sought may be rejected as matters within the company’s knowledge or as seeking evidence rather than particulars of allegations.
[25] An application for particulars must invariably be determined by reference to the nature of the allegations that are made. Mrs Hodgson refers to Thomas v H W Thomas Ltd [1984] 1 NZLR 686 at 693-694, as outlining the nature of applications under s 174 Companies Act 1993:
The statutory concern is directed to instances or courses of conduct amounting to an unjust detriment to the interests of a member or members of the company. It follows that it is not necessary for a complainant to point to any actual irregularity or to an invasion of his legal rights or to a lack of probity or want of good faith towards him on the part of those in control of the company.
...
In the same way it is the unfairly detrimental effect of the conduct of the company on the interests of the complaining member which brings into play the just and equitable subs (2) of s 209. That detriment may be to the financial interests of the member as a member or it may be conduct which is adverse to his interests in other capacities, as where, for example, he is excluded from management participation in the company.
[26] Exclusion from participation in a company can form the basis of a s 174 claim based either on oppressive or unfairly prejudicial conduct: Re Environmental Products (NZ) Ltd (2005) 9 NZCLC 263,779 at [47]. Oppressive conduct of a “quasi partner” has been found to have occurred in, for example, Holden v Architectural
Finishes Ltd (1996) 7 NZCLC 260,976 and Re Environmental Products (NZ) Ltd. In the latter case, the Court held that the failure of certain shareholders to respond to requests for an audit of the company’s financial position, and the failure to make available primary records to enable proper accounting to take place, was unfairly prejudicial to other shareholders. In Cameron v Cropmark Seeds Ltd HC Christchurch CIV-2009-409-1993, 7 December 2009 at [74], the Court described a quasi partnership as including the following three elements (referring to Ebrahimi v Westbourne Galleries Ltd [1972] 2 All ER 492 at 500):
… (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence — this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be “sleeping” members), of the shareholders shall participate in the conduct of the business; (iii) restriction on the transfer of the members’ interest in the company — so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.
[27] The particulars sought here by Inverell fall into the following categories, and
Iwill consider each of these categories in turn: (a) Shareholding
(b) Employment of Mr Fraser
(c) Alleged acts of exclusion from management
(d)Alleged failure to keep proper accounts and comply with audit requirements
(e) Alleged oppression, discrimination and prejudice
(f) Alleged inability to obtain share valuation information
Shareholding – paras 5, 6, 8, 9
[28] Inverell submits that, if the shareholding from time to time is material to Mrs Hodgson’s case, then it is entitled to know what she says the shareholding was. It argues that Mrs Hodgson must be in a position to plead how many shares she had from time to time, particularly now that she has had discovery of Inverell’s own share records. Moreover, Inverell submits that it is fallacious to argue that the shareholding is a matter within the knowledge of Inverell, because neither the
company nor the Court knows whether the defence pleading as to Mrs Hodgson’s shareholding is actually in dispute.
Paragraph 5
[29] Paragraph 5 of the statement of claim pleads that a building was erected on land developed by Inverell and used as a sales outlet for Pyramid Concrete Products Limited (“Pyramid”). It is claimed that Mrs Hodgson and her husband owned the majority of shares in Pyramid (subpara (a)), and that the remaining shares were owned by Mr Kenneth Lowe (“Mr Lowe”) (subpara (b)).
[30] Inverell asks that Mrs Hodgson specify the period during which the shares were held, and the shareholding held by her, her husband and Mr Lowe from time to time during that period.
[31] Mrs Hodgson opposes the request on the basis that the particulars sought are not necessary to give fair notice of her cause of action, and that it is a request for evidence. She maintains that para 5 pleads to the issue of Inverell’s history, and that it was established as part of the business operated by Mr Hodgson and Mr Lowe as partners. She submits that sufficient details are included in para 5 to give notice that she alleges such a partnership. Moreover, she argues that details of the precise shareholdings would constitute evidence of the more general assertion that Mr and Mrs Hodgson owned the majority of shares in Pyramid, while Mr Lowe owned the remaining shares.
[32] I agree with Mrs Hodgson’s general submission that it is unnecessary here to particularise the exact shareholding in Pyramid to give sufficient notice of her case, which appears to be a broad assertion that, because land held by Inverell was used by Pyramid, Inverell operated as a quasi-partnership between Mr and Mrs Hodgson and Mr Lowe. However, I consider that the plaintiff has failed to provide sufficient particulars of time, and that she should have pleaded the period of time within which she and Mr Hodgson held the majority of shares in Pyramid and Mr Lowe held the remaining shares.
Paragraph 6
[33] Paragraph 6 pleads that Inverell continued to carry on business as developers and issued further shares to Mrs Pat Fraser (the mother of Mr Fraser), and that Mrs Fraser was a minority shareholder and did not contribute to the running of the business.
[34] Inverell asks that Mrs Hodgson specify the date/s of each share issue and the number of shares issued on each occasion, and that further details be provided of the period of Mrs Fraser’s minority shareholding, the number of shares held by Mrs Fraser from time to time during that period and the number of shares held by all other shareholders from time to time during the same period.
[35] Mrs Hodgson argues that the particulars are not necessary to give fair notice of her cause of action, because Inverell has in fact pleaded to this allegation in detail in its statement of defence, and it is clear, therefore, that the particulars are within the knowledge of Inverell rather than within her own knowledge. She further submits that it is a request for evidence, on the basis that details of the precise shareholding are evidence of the allegation that Mrs Fraser was a minority shareholder.
[36] The shareholding in Inverell is clearly put in issue by Mr Hodgson in her statement of claim, particularly in paras 8 and 9 (see below). Furthermore, it seems that the shareholding in Inverell is of relevance to her claim that the company operated as a quasi-partnership. The existence of a quasi-partnership, in turn, appears to provide the foundation for Mrs Hodgson’s claim that she is entitled to the level of participation and information that she alleges. It would also be desirable to achieve some clarity whether Inverell’s claims as to shareholding in paras 6, 8, 9 of its statement of defence are materially disputed, given that they appear to be in direct conflict with the general assertions contained in the relevant paragraphs of the statement of claim. Overall, I consider that particulars of shareholdings form a necessary ingredient of Mrs Hodgson’s cause of action as currently pleaded.
[37] In these circumstances, further details of Mrs Hodgson’s and other shareholders’ shareholdings in Inverell are necessary, from the date of incorporation
to the present. It is not suggested that Mrs Hodgson is not in possession of this information. It follows that the plaintiff should, so far as she is able to, provide details of shareholding by each shareholder in Inverell from incorporation, including dates and the extent of the shareholding.
Paragraph 8
[38] Paragraph 8 claims that Mrs Hodgson was the major shareholder in Inverell until the early 1980s.
[39] Inverell asks that Mrs Hodgson specify her shareholding and the shareholding of all other shareholders in the company from time to time since incorporation until the date in the 1980s referred to.
[40] Mrs Hodgson again submits that the particulars are not necessary to give fair notice of her cause of action, that the particulars are within the knowledge of Inverell, and that the request is a request for evidence. But, for those reasons outlined at [36] and [37] above, I am satisfied that clarity on these shareholding claims is required, and the further particulars requested by Inverell should, so far as Mrs Hodgson is able to do so, be provided.
[41] This request for particulars is already included in the proposed order described at [37].
Paragraph 9
[42] Paragraph 9 claims that Mrs Hodgson and her husband intended to always have a majority shareholding in Inverell, and that it is not known to her or her husband how they came to hold less than 50 per cent of the shares.
[43] Inverell asks that Mrs Hodgson specify when and in what quantity she and her husband respectively were issued shares by Inverell (including at the date of incorporation); what shares they each held in the company from time to time from the date of incorporation to the present; from whom, when and in what quantities they purchased shares; and to whom, when and in what quantities they sold shares.
[44] Mrs Hodgson again submits that the particulars are not necessary to give fair notice of her cause of action, that the particulars are within the knowledge of Inverell, and that the request is a request for evidence.
[45] Again, for the reasons outlined at [36] and [37] above, I am satisfied that clarity on these shareholding claims is required, and the further particulars requested by Inverell should, as far as Mrs Hodgson is able to do so, be provided.
[46] This request for particulars is also already included in the proposed order described at [37].
Employment of Mr Fraser – para 11
[47] Paragraph 11 pleads that Mr Fraser was employed by Inverell to assist with the affairs of the company in the early 1980s. As I have noted above, Mr Fraser is the son of Mrs Fraser. It is also pleaded that he is the son-in-law of Mr Lowe. Inverell submits that the purpose of para 11 is not immediately apparent, and that it is unclear whether para 11 is actually relevant to Mrs Hodgson’s claim. Nevertheless, Inverell argues that it must assume that the nature of Mr Fraser’s employment is in some way material to the case, and it is entitled to know what Mrs Hodgson says the nature of his employment was.
[48] In particular, Inverell asks that Mrs Hodgson specify the date from which Mr Fraser was employed, the representative of the company who engaged Mr Fraser, the positions held by Mr Fraser from time to time and the nature of his duties from time to time. It submits that the plaintiff must be in a position to give these particulars, because, at relevant times, Mr Hodgson was the sole director and Mrs Hodgson was a significant shareholder.
[49] Mrs Hodgson submits that she is not required to prove the factual allegation in para 11 in order to make out her claim. She further argues that, in any event, the information sought is clearly within the knowledge of Inverell, and Inverell has pleaded to para 11 in detail in its statement of defence. For Inverell, it is submitted that it is no answer to say that the information is within the knowledge of the
company, “because that assumes that the parties are ad idem on the nature of Mr
Fraser’s duties”.
[50] I agree with Inverell that para 11 is not sufficiently specific and that the date and the nature of Mr Fraser’s employment should be particularised. It is unclear how Mr Fraser’s employment fits into the plaintiff’s cause of action, but the defendant is entitled to be advised of the essential facts underlying the plaintiff’s assertions.
Alleged acts of exclusion from management - para 15
[51] In paragraph 15 of her statement of claim, Mrs Hodgson claims that she has been excluded from the management of Inverell in a range of ways.
[52] Inverell submits that the matters alleged in para 15 are clearly an important part of Mrs Hodgson’s case, but that it cannot possibly know the case it has to meet from the particulars provided. In response, Mrs Hodgson contends that the particulars sought are not necessary to give fair notice of her cause of action and that the request is a request for evidence.
[53] Inverell seeks further particulars in respect of:
• the allegation contained in Particular (a) that the company has failed to provide financial information to the plaintiff, within a reasonable time or at all, upon request.
Inverell submits that it is fundamental that, if a party alleges that he or she requested something but did not receive it, particulars of the request and the inadequacy of the response be given so that the other person knows what the allegation is.
Inverell asks that Mrs Hodgson specify the date of each request for financial information; precisely the information requested on each occasion; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such
documents; to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said; and to the extent that the requested information was provided the date or dates on which it was provided.
In my view, these further particulars are material to sufficiently inform Inverell of the plaintiff’s case. The request is not a request for evidence, as Mrs Hodgson maintains, but falls squarely within the particulars required by r 5.26.
• the allegation contained in Particular (b) that the company has failed to provide information regarding the company’s activities to the plaintiff, within a reasonable time or at all, upon request.
Inverell asks that Mrs Hodgson specify the date of each request for information regarding the company’s activities; precisely the information requested on each occasion; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such documents; and to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said; and to the extent that the information was provided the date or dates on which it was provided.
As with Particular (a), I conclude that these further particulars are material to sufficiently inform Inverell of the plaintiff’s case and should be provided as material falling within the terms of r 5.26.
• the allegation contained in Particular (c) that the company has failed to consult Mrs Hodgson regarding important and substantial transactions.
Inverell asks that Mrs Hodgson specify the date and details of each important transaction about which the company was required to consult the plaintiff and the nature of the consultation required.
Inverell submits that the allegation is “so vague as to be embarrassing”. It argues that it cannot adequately prepare its defence unless it knows which of its transactions are alleged by Mrs Hodgson to be “important transactions”. Moreover, Inverell maintains that such particularisation must occur before further discovery can be provided, and submits that the plaintiff may simply amend the pleadings if further transactions are found in the course of preparation for trial.
In response, Mrs Hodgson maintains that the allegation relates to the conduct of Inverell, which is within the knowledge of Inverell rather than hers, and that further particulars may be provided following discovery. Mrs Hodgson argues that she is unable to particularise, without further discovery, the dates and details of the transactions. She also asserts that she is unable to further specify the time frame within which such transactions may have occurred. She argues that her husband, Mr Hodgson apparently was not kept informed of all matters while he was a director of the company, and that she is reluctant, therefore, to narrow the scope of the allegation to transactions that took place after 4 November
2006, which was the date of Mr Hodgson’s resignation. For example, Mrs Hodgson says that she does not believe that she was provided with adequate information in relation to the liquidation in June 2006 of Zebra Resources Limited, a subsidiary of Inverell.
Mrs Hodgson also submits that the meaning of “important and substantial transactions” has been refined in correspondence between the parties as transactions that would result in Inverell or its subsidiaries (a) changing the nature of its business and/or its investment strategies; (b) acquiring or relinquishing assets that are significant in the context of that company’s, and/or the group’s, financial position; and (c) accepting significant liabilities.
Inverell submits that a “formula” of this nature still would not be sufficient to inform it or the court of the transactions which are the subject of the complaint. I agree. There can be no question that Mrs Hodgson must provide further particulars as to the date and details of each important transaction relied upon. In addition, it would be helpful if Mrs Hodgson specified the nature of the consultation that she argues was required of Inverell. The particulars requested are necessary to define the issues between the parties and to enable Inverell to take steps to deal with the plaintiff’s case. In my view, the only issue here is whether Inverell should first be asked to provide particular discovery. I will come back to this matter at a later stage.
• the allegation contained in Particular (d) that the company has failed to consult the plaintiff regarding proposed payments made to third parties other than on an arm’s length basis, including a management termination fee of $450,000.00 to V A Draper & Co Limited, of which Mr Fraser is the director and majority shareholder.
Inverell again submits that this allegation is simply too wide. It argues that the word “including” has no place in a pleading, as no party may reserve to itself a free hand to run a case at trial that has not been foreshadowed with specificity in the pleadings. Reference is made here to McGechan J’s statement in The New Zealand Maori Council v Latimer HC Wellington CP No 942/88, 1 August 1989 at 4 that “[a] plaintiff must state its case, not say this is some of the case and you may be told more later”.
Inverell asks that Mrs Hodgson specify the date and details of each proposed payment to third parties other than at arm’s length about which the company was required to consult the plaintiff and the nature of the consultation required.
Again in response, Mrs Hodgson submits that the allegation relates to the conduct of Inverell, which is within the knowledge of Inverell rather than herself, and that further particulars may be provided following discovery.
In my view, there is no material difference between this request and the request relating to Particular (c), and the same considerations apply. I conclude therefore that Inverell is entitled to the particulars sought, subject to a possible condition that particular discovery be provided first.
Alleged failure to keep proper accounts and comply with audit requirements - para
16
[54] Paragraph 16 of the statement of claim pleads that Inverell has failed to comply with its obligations in relation to the plaintiff. In Particular (c), outlined in this paragraph, it is alleged that the company and its wholly owned subsidiaries have failed to keep proper accounts and comply with audit requirements.
[55] On this, Inverell asks that Mrs Hodgson provide further particulars as to:
• which of the company, Inverell and its wholly owned subsidiaries have failed to keep proper accounts and the extent of that failure giving the financial years in respect of which the allegation is made;
• which of the company and its wholly owned subsidiaries have failed to comply with audit requirements, the extent of that failure and giving the financial years in respect of which the allegation is made.
[56] Again, it is submitted that the allegation of a failure to keep proper accounts is “embarrassingly vague”. Inverell argues that the pleading leaves it guessing whether the complaint is as to delays in producing the accounts, or as to the adequacy of the accounts that were in fact available.
[57] In relation to the alleged failure to comply with audit requirements, it appears that the parties may have reached agreement on the auditing of accounts for the financial years ending 2008 and 2009. Inverell submits, however, that it is unclear
from para 16 if those are the only years in respect of which complaint is made, or whether there are other allegations of a failure to comply with audit requirements.
[58] In my view, further particulars are required here. It is not evident from para
16 how Inverell and its subsidiaries are alleged to have failed in their obligations to keep proper accounts and to comply with audit requirements. The general assertion of such failures in para 16(c) is not sufficient to enable Inverell to prepare its defence, or to allow the trial to be conducted against recognisable boundaries. Again, however, there may be an issue here whether discovery should be provided before further particulars are required.
Alleged oppression, discrimination and prejudice - para 17
[59] Paragraph 17 claims that “[a]s a result, the affairs of the Company have been, are being, and are likely to continue to be, conducted in a manner that has been, is, and is likely to be oppressive, unfairly discriminatory and/or unfairly prejudicial to the plaintiff”.
[60] Inverell seeks further particulars as to the nature and effect of the oppression alleged; the nature and effect of the discrimination alleged; and the nature and effect of the prejudice alleged.
[61] Inverell submits that para 17 is simply a repetition of s 174 and does not provide any information about the acts that Mrs Hodgson claims constitute oppression, discrimination or prejudice. It argues that the nature and extent of any oppression is at the heart of this case, and that the success of the case and the remedy that would be imposed depend on what, if any, oppression is established.
[62] In response, Mrs Hodgson contends that these particulars sought are not necessary to give fair notice of her cause of action and that the request is a request for evidence.
[63] I accept the plaintiff’s submission here that para 17 does not require further particularisation so as to give fair notice of her cause of action. In my view, the
material words in this context are “[a]s a result”. The plaintiff appears to claim, therefore, that s 174 is engaged because the conduct alleged in paras 15 and 16 in itself led to oppression or prejudice in accordance with that section. Although that ends this matter here, if, however, Mrs Hodgson is intending to rely on any other circumstances to support her allegations of oppression and unfair discrimination or prejudice, these circumstances should be particularised.
Alleged inability to obtain share valuation information - para 18
[64] Paragraph 18 of the statement of claim pleads that Mrs Hodgson has been unable to obtain information from Inverell to assess a fair value for her shares.
[65] Inverell requires that Mrs Hodgson specify what information she has requested from the company; the date or dates on which that information was requested; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such documents; and to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said.
[66] Inverell submits that this is a standard request for particulars of an insufficiently particularised allegation of a communication. Mrs Hodgson responds that the particulars sought are not necessary to give fair notice of her cause of action and that the request is a request for evidence.
[67] I consider that the particulars sought by Inverell are needed to inform the defendant and the Court of all the facts that form the basis of the plaintiff’s allegation that she was unable to obtain information from Inverell to assess a fair value for her shares. As I see it, the request is not a pure request for evidence, but simply seeks to establish the factual foundation for Mrs Hodgson’s allegation. An order is to follow.
Application for Discovery
[68] Turning now to Mrs Hodgson’s discovery application, in this she applies for further and better discovery of three categories of documents: accountant’s files, Inverell’s activities, and significant contracts. Although other categories of documents were initially included in the application, Mr Sills, counsel for Mrs Hodgson, clarified at the hearing before me that discovery of those documents was no longer sought in light of confirmation by Inverell that they did not exist.
[69] Addressing the discovery application generally, Inverell submits that the orders sought are outside the scope of r 8.24, which provides that a judge may order further particular discovery if it appears that there are grounds for believing that a party has not discovered one or more documents or a group of documents that should have been discovered. Rule 8.18 of the High Court Rules provides that an affidavit of documents must list documents that are or have been in that party’s control, and that relate to a matter in question in the proceeding. The test as to whether a document relates to a question in the proceeding is set out in Compagnie Financière et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 63:
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 the words ‘either directly or indirectly’ because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary if it is a document which may fairly lead him to a train of inquiry which may have either of those two consequences.
[70] The concept of relevance is an expansive one: M v L [1999] 1 NZLR 747 at
750.
[71] Inverell contends that an order for discovery under r 8.24 requires the documents sought to be described with some particularity, as the issue of relevance must be addressed in deciding the application, and the only decision required of a party in complying with the order is whether it falls within the description of the documents specified in the order. Inverell here refers to the following passage in McGechan on Procedure at 8.24.03(2):
(2) This is a form of particular discovery and the documents sought must be described with some specificity. The description “accounting and other records” was held on earlier wording of the rule referring to “documents or class of documents” to be insufficient: AMP v Architectural Windows Ltd (above). In NZ Railways Corp v Auckland RC (1990) 3 PRNZ 332 (CA), the Court of Appeal said that documents which had come into existence after the decision under challenge could neither be excluded as a class nor discovered as a class.
[72] In AMP v Architectural Windows Ltd [1986] 2 NZLR 190, Chilwell J expressed the view that the description “Accounting and other documents” was insufficiently particular. He considered that “[i]t may be true that ‘Accounting documents’ describe a class of document”, but that the term provided insufficient information “to pick that class out for the purposes of the rules for particular discovery” (at 201-202). Chilwell J noted further that discovery should not be used as a “fishing expedition”, whereby one party seeks “to obtain information or documents … in order to discover a cause of action different from that pleaded or in order to discover circumstances which may or may not support a baseless or speculative cause of action” (at 196).
[73] Mrs Hodgson however, maintains here that the documents relate to matters in question in the proceeding, namely the extent to which she was entitled to participate in the management of Inverell; whether she has been excluded from the management of the company; and whether Inverell has failed to comply with its obligations in relation to her. I turn now to consider the particular documents for which the discovery order is sought.
Accountant’s files
[74] Mrs Hodgson submits that the company’s accountants, Munro Benge, have files relating to Inverell and its subsidiaries, and that these documents are relevant to the allegation that Inverell has failed to keep proper accounts and comply with audit requirements.
[75] Reference is made to s 10 Financial Reporting Act 1993, which requires directors to ensure that financial statements for the relevant company are completed within five months from that company’s balance date. Mrs Hodgson submits that timing is therefore an issue in relation to the preparation of accounts and that, to
date, no documents have been discovered that disclose when the accountants were instructed, and for what purpose.
[76] It is further submitted that the files would also be relevant to the alleged failure to consult Mrs Hodgson regarding payments to third parties other than on an arm’s length basis. As an example, the plaintiff refers to the payment of $450,000.00 to V A Draper Limited by Downtown Self Storage Limited, a subsidiary of Inverell. She submits that the accountant’s files for Downtown Self Storage Limited are relevant to the circumstances in which provision for the payment was made in the accounts, and the reasons why it is no longer included (it appears that Inverell has decided not to make the payment after all). It is convenient to note here Inverell’s assertion that the accounts dealing with that payment were in fact the accounts for Olean Holdings Limited (another subsidiary company), which were prepared in house.
[77] Inverell objects to discovering these documents on the basis that the accountant’s files are irrelevant. It notes that copies of all available accounts have already been provided to Mrs Hodgson, and says that it will also provide her with copies of audited accounts as they become available.
[78] Inverell submits that, on the face of it, a vast amount of material would be included in the order as sought by Mrs Hodgson, such as copies of communications between Inverell and the accountant; transactional data; individual accounts prepared by the company for itself and its subsidiaries; notes and working papers, and copies of the Downtown Self Storage Limited accounts and group accounts as and when the accountant completes them. Inverell further submits, however, that it may be inferred from Mrs Hodgson’s submissions that she only seeks discovery of first, the accountant’s instructions as being relevant to the complaint of a failure to keep proper accounts and secondly, anything relating to the provision for a payment to V A Draper & Co Limited.
[79] Inverell complains that it is unclear from the pleadings whether Mrs Hodgson’s allegation that the company failed to keep proper accounts concerns the delays in producing accounts or the adequacy of the accounts that were in fact
available. As clarified by counsel for Mrs Hodgson’s reference to s 10 of the Financial Reporting Act 1993 in his submission, at least part of the complaint appears to be that the accounts were not completed within five months of the balance date. Inverell submits that this particular complaint would have almost certainly been admitted with respect to accounts for Downtown Self Storage Limited, with the result that much time and effort could have been saved on this aspect of discovery. So far as Downtown Self Storage Limited is concerned, Inverell proposes that the discovery application be adjourned until the complaint is specifically pleaded.
[80] I accept Inverell’s submission that the plaintiff’s request is too broad: see AMP v Architectural Windows Ltd. The plaintiff has not provided any real reasons why entire accountant’s files must be discovered and are relevant to her claim. As clarified at the hearing of this application, the request comprises all of Munro Benge’s files for Inverell since the firm was instructed, which was in 2006 or 2007. It is not limited to the financial accounts prepared by Munro Benge, the discoverability of which does not appear to be in dispute.
[81] Mrs Hodgson refers to two matters in particular that she contends justify discovery of the files: the issue of timing as to accounting instructions given, and the alleged failure to consult Mrs Hodgson regarding payments to third parties other than at arm’s length. With respect to timing, I accept that instructions by Inverell to the accountants regarding the preparation of accounts would be of relevance, but it is difficult to see why discovery of the entire files is needed.
[82] Similarly, with respect to the latter issue, in my view, Mrs Hodgson’s request is somewhat misconceived, as her pleading regarding these particular transactions can hardly justify discovery of all accountant’s files. Nevertheless, I accept that it is not unduly burdensome to require discovery of all documents on the accountant’s files that relate to payments that were not at arm’s length. It seems that this category of documents would be sufficiently narrow and well defined so as to confine discovery to “relevant” documents. I also consider that discovery, to the extent that the documents have not already been made available, should occur prior to further particularisation of para 15(d) of the statement of claim. This is one instance in which it is appropriate to make orders “in reverse”, because the particulars are more
within the knowledge of Inverell than Mrs Hodgson, and the nature of the allegation is already sufficiently clear to allow for meaningful discovery.
[83] Apart from these two matters, however, it is unclear how the accountant’s files relate to Mrs Hodgson’s general allegation that Inverell failed to keep proper accounts and did not comply with audit requirements. It appears that Mrs Hodgson is in possession of the accounts prepared by Munro Benge to the extent that they are currently available. I have no doubt that Mrs Hodgson is entitled to request Inverell’s accounting records, as “information” under s 178 Companies Act 1993 – see Brookers Companies and Securities Law CA 194.09. That said, a reasonable argument must exist that the documents to provide this information if relevant should be provided on discovery to a shareholder.
[84] However, there is no reason why Mrs Hodgson should not be able to further particularise the nature of her allegations before additional discovery is provided of documents other than accounting records. This is not a case where the particulars sought depend on information held by Inverell, although further particulars will no doubt come to light once relevant documents are discovered. Mrs Hodgson, must have some idea why she claims that Inverell failed to keep proper accounts and did not comply with audit requirements. If she does not, and intends to use discovery as a tool to verify a base-less and vague suspicion, then her request must be treated as a pure “fishing expedition”.
[85] For these reasons, it is my view that Ms Hodgson should provide further particulars to the extent that this is possible, to clarify the nature of her allegations, before the scope of discovery of the accountant’s files is finally determined. I do envisage, however, that at least some further discovery may well be needed, including discovery of instructions, and I reserve leave to Mrs Hodgson to seek orders to that effect if required.
Inverell’s activities
[86] Mrs Hodgson seeks discovery of documents relating to Inverell’s activities, “particularly those relating to the decision making process in the running of
important and substantial transactions”. Examples of the type of documents sought are documents relating to the sale of Downtown Self Storage Limited, the purchase of $700,000.00 ING shares, and the company’s Forex trading.
[87] Mrs Hodgson submits that the meaning of “important and substantial transactions” has been refined in correspondence between the parties to cover transactions that would result in Inverell or its subsidiaries (a) changing the nature of its business and/or its investment strategies; (b) acquiring or relinquishing assets that are significant in the context of that company’s, and/or the group’s, financial position; and (c) accepting significant liabilities. Because Mrs Hodgson is unable or unwilling at this stage to narrow the scope of her allegation, she also does not agree to limiting discovery to documents that came into existence within a particular period of time, or after her husband, Mr Hodgson, resigned as a director.
[88] Inverell objects to discovery on the basis that the category of documents sought is too wide in scope and inappropriate, as the category catches everything that the company has done since incorporation in 1970. It submits that the appropriate course is for proper particularisation of the statement of claim. Mrs Hodgson, on the other hand, argues that the category of documents is not too wide so as to make compliance with the request oppressive, as she maintains all of Inverell’s documents have already been delivered to its solicitors.
[89] It appears that Inverell does not deny that the four transactions referred to by the plaintiff occurred. Documents relating to these transactions it is said have already been discovered. However, Inverell submits that it is unclear how further discovery is going to be relevant to the issue of consultation with respect to these four matters. It seems that discovery would not be relevant to those particular transactions, but might disclose further transactions which Mrs Hodgson claims required consultation.
[90] In my view, it is clear that the description “documents relating to the company’s activities, in particular documents relating to the decision making process surrounding important and substantial transactions” is too broad. In general, these documents would appear to be relevant to the allegation that Inverell failed to provide information regarding the company’s activities upon request, but even more
so to the claim that Inverell failed to consult Mrs Hodgson about important and substantial transactions. Again, the issue arises whether Mrs Hodgson should be required to particularise para 15(c) prior to discovery, so as to properly limit Inverell’s broad discovery obligations.
[91] On the one hand, it seems to me that Mrs Hodgson should be entitled to discovery before providing further particulars, because the very basis of her claim is that she was not consulted on matters of importance, with the result that, unlike Inverell, she might not be aware of some or most of the transactions. On the other hand, the particulars that are currently provided in para 15(c) as I see it do not sufficiently inform Inverell of the nature of Mrs Hodgson’s allegation so as to impose a reasonable limit on discovery. In particular, there is some uncertainty surrounding the type of transactions that Mrs Hodgson alleges she should have been informed or consulted about.
[92] In the circumstances here, in my view a reasonably workable option appears to be to make certain staged orders as to further particularisation and discovery of documents relating to “important and substantial transactions”, on a basis I will outline at [96] to [98] following. This is to include “significant contracts” (see [95]).
Significant contracts
[93] Discovery is also sought of “[s]ignificant contracts entered into by the defendant and/or its subsidiaries”. Mrs Hodgson refers to the management contract between Downtown Self Storage Limited and VA Draper Limited as an example.
[94] Inverell submits that there is no written management contract with V A Draper Limited and that, if Mrs Hodgson is complaining that she should have been but was not consulted about the company entering into that arrangement, then she should plead that complaint.
[95] Inverell also submits that the request is really a subset of the request for documents relating to the company’s activities. I agree (see [92] above).
[96] The only real issue in relation to timing of the orders to be made here appears to arise in the context of the applications for further particulars and discovery relating to “important and substantial transactions”. In my view, a distinction can be drawn between the two types of transactions that Mrs Hodgson appears to be relying on: transactions that would result in Inverell (or its subsidiaries) “changing the nature of its business and/or its investment strategies”, and transactions that would result in Inverell (or its subsidiaries) acquiring or relinquishing significant assets or liabilities. It seems to me that the former category of transactions would be relatively well defined if it was to be limited to transactions “changing the nature of (Inverell’s) business”, and that it would not be unreasonable to require Inverell to disclose those documents without further particularisation.
[97] The difficulty as I see it with respect to the second category of transactions is that it is unclear what Mrs Hodgson considers to be “significant” assets or liabilities, and that an order for discovery in those terms would thus be too broad. In my judgment, this situation can be remedied in two ways. First, given that financially “significant” transactions should appear in the accounts, and given also that most of the accounts, as I understand it, have been made available to Mrs Hodgson and her husband, she might in fact be in a position to particularise these transactions without further discovery. However, to the extent that Mrs Hodgson is unable to do so, she should further define what she considers to be “significant” assets or liabilities, possibly by specifying a minimum percentage of overall assets and liabilities.
[98] On that basis, Mrs Hodgson would be required to provide these further particulars at the same time as Inverell is required to provide particular discovery relating to transactions that changed or would change the nature of its business. Once these orders are complied with, Inverell would be required to provide discovery of all documents relating to transactions involving “significant” assets or liabilities as particularised. As I have noted at [92] above, this presents a reasonably workable option in this case. Orders to this effect are to follow.
[99] For the reasons outlined above, Inverell’s application for further particulars and Mrs Hodgson’s particular discovery application each succeed in part.
[100] Orders on each application are to follow and, given my discussion above as to the proper timing of each particular order, the specific sequence of events which is to occur is set out. Necessarily, the time for compliance with those orders will be rather short, given that, first, on 10 August 2010, this proceeding was set down for a four day trial commencing just over two months away on 6 December 2010, and secondly, before me counsel advised this matter is also to be the subject of a mediation on 12 October 2010 before Mr Sharp.
Orders
[101] Further Particulars
As to Inverell’s further particulars application, by 6 October 2010 the plaintiff Mrs Hodgson is to:
(a)Give further particulars of para 5 of her statement of claim as far as she is able to as to the period of time during which the plaintiff and Mr Hodgson held the majority shares in Pyramid and Mr Lowe held the remaining shares;
(b)Give further particulars of paras 6, 8 and 9 of her statement of claim, as far as she is able to, of Mrs Hodgson’s and the other shareholders’ shareholdings in Inverell from the date of its incorporation to the present, including first, dates and the extent of the shareholdings and secondly so far as Mrs Hodgson and her husband are concerned, from whom, when and in what quantities she and her husband purchased shares in Inverell and to whom, when and in what quantities they sold shares in Inverell;
(c) Give further particulars of para 11 of her statement of claim as far as she is able to as to the relevant dates and the nature of Mr Fraser’s employment;
(d)Give further particulars of para 15(a) of her statement of claim, as to the date of each request for financial information; the information requested on each occasion; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such documents; to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said; and to the extent that the requested information was provided the date or dates on which it was provided;
(e)Give further particulars of para 15(b) of her statement of claim, as to the date of each request for information regarding the company’s activities; the information requested on each occasion; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such documents; and to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said; and to the extent that the information was provided the date or dates on which it was provided;
(f)Give further particulars of para 15(c) of her statement of claim, as far as she is able to, as to the date and details of each important transaction about which Inverell was required to consult the plaintiff and the nature of the consultation required; or, to the extent that the plaintiff is unable to give such particulars, specify the minimum value of such transactions in terms of percentage of overall assets or liabilities;
(g)Give further particulars of para 16 of her statement of claim, as far as she is able to, as to Inverell’s and/or its subsidiaries’ failure to keep proper accounts and the extent of that failure, giving the financial years in respect of which the allegation is made; and as to Inverell’s and/or its subsidiaries’ failure to comply with audit requirements and the extent of that failure, giving the financial years in respect of which the allegation is made;
(h)Give further particulars of para 17 of her statement of claim, as to any other circumstances that are relied on to allege oppression and unfair discrimination or prejudice; and
(i)Give further particulars of para 18 of her statement of claim, as to the date or dates on which that information was requested; by whom on behalf of the plaintiff the request was made; to whom on behalf of the company the request was addressed; to the extent that the request is contained or recorded in writing the identity of all such documents; and to the extent that the request was made orally, the circumstances and place where the request was made, the names of the persons present and the gist of what was said.
[102] Discovery
As to Mrs Hodgson’s particular discovery application:
(a)By 6 October 2010 the defendant Inverell is first, to file and serve an affidavit in terms of r 8.24 stating whether the documents noted at [102](a)(i) and (ii) below are or have been in Inverell’s control and if they have been but are no longer in Inverell’s control, Inverell’s best knowledge and belief as to when those documents ceased to be in Inverell’s control, and who now has control of them; and secondly, (also by 6 October 2010) is to provide those documents to Mrs Hodgson or her counsel for inspection:
(i)All documents relating to transactions that resulted or would result in Inverell or its subsidiaries changing the nature of its business; and
(ii)All documents relating to payments by Inverell to third parties that were not at arms length.
(b)By 13 October 2010, and once the plaintiff, Mrs Hodgson, has provided further particulars in accordance with [101](f) above, the defendant Inverell is first, to file and serve an affidavit in terms of r
8.24 stating whether the documents noted at [102](b)(i) below are or have been in Inverell’s control and if they have been but are no longer in Inverell’s control, Inverell’s best knowledge and belief as to when those documents ceased to be in Inverell’s control, and who now has control of them; and secondly, (also by 13 October 2010) is to provide those documents to Mrs Hodgson or her counsel for inspection:
(i)All remaining documents relating to each important transaction that is particularised at para 15(c), and/or whose value exceeded the specified amount/percentage of overall assets of liabilities.
[103] Further Particulars
By 13 October 2010, and once the defendant, Inverell, has provided particular discovery in accordance with [102](a) above, the plaintiff, Mrs Hodgson, is to:
(i)give further particulars of para 15(d) of her statement of claim, as to the date and details of each proposed payment to third parties other than at arm’s length about which Inverell was required to consult the plaintiff and the nature of the consultation required.
[104] Leave
Leave is reserved to Mrs Hodgson to seek further orders for discovery of accounting records once [101](g) has been complied with, provided any such application is made promptly.
Costs
[105] Costs are reserved. If the parties, both of whom have succeeded to a cetain extent in their present applications, are unable to agree on any questions of costs that arise, they may file memoranda (sequentially) on the costs issue and, in the absence of either party indicating they wish to be heard on the matter, I will decide costs on the basis of the material before the Court.
‘Associate Judge D.I. Gendall’
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