Belsart Pty Ltd v Man Po Holdings

Court of Appeal (Vic)|1998-11-12|Before: WINNEKE, P., BROOKING and CHERNOV, JJ.A.

The applicant, and would-be appellant, Belsart Pty Ltd, is the plaintiff in an action brought against Man Po Holdings (Australia) Ltd, formerly known as Collings Ltd, and alleged by the plaintiff to be "the parent company of the Collings group, a commercial property, sales and management business".

Some members of the Collings group appear to have fallen upon hard times. The applicant alleges that between December 1991 and January 1993 it lent four sums of money to the respondent, as I shall call the former Collings Ltd, on the basis that, although the individual sums might be, as they were in fact, paid by the applicant to other members of the Collings group at the direction of the respondent, each loan would be a loan to the respondent, which would accordingly be liable as borrower to repay the loans to the applicant.

The writ seems to have been filed on 11 May 1998.

On 20 July the applicant's solicitors filed a subpoena for production pursuant to the new procedure introduced by r.42.10 of Chapter I of the Rules of Court, a rule introduced by S.R. No.137 of 1997. This subpoena was addressed to Mr Brian Jameson of KPMG Peat Marwick, the auditor of the Collings group at the time of the alleged loans, and it required production of the documents to the Prothonotary on or before 3 August 1998. Since the practice of this Court is that, in general, lengthy reasons for decision are not given in disposing of applications for leave to appeal, I do not stay to summarize the provisions of r.42.10.

Mr Jameson did not object to production or inspection of any of the documents produced by him to the Prothonotary, but the respondent's solicitors notified the Prothonotary that it objected to the inspection of the documents by the applicant, and the Prothonotary referred the subpoena to Beach, J., sitting in the Practice Court, for the hearing and determination of the objection.

Before Beach J. counsel for the respondent by both oral and written submissions sought to have the subpoena set aside and in the alternative to have the objection upheld. Beach J. in a considered decision set aside the subpoena by order made on 31 August 1998.

The applicant, recognizing that leave to appeal was needed, applied for leave on 18 September 1998, on which day the Court referred the application into the November list for hearing.

I do not propose to discuss, or even to summarize in brief terms, the arguments put forward in the applicant's written outline of submissions in support of the view that the decision of Beach J. was wrong or at least attended with doubt. We have not found it necessary to hear oral argument on this point, for it is clear that even if the decision of Beach J. was wrong, the applicant has failed to establish that it will suffer substantial injustice if the decision is allowed to stand.

His Honour's view in a nutshell was that the subpoena sought to obtain discovery of documents and that the applicant had adopted the wrong procedure by filing a subpoena under r.42.10 instead of applying for discovery from a non-party under r.32.07.

Mr Walker has sought to persuade us in his oral argument and written outline of submissions that this decision, if wrong, will result in substantial injustice to the applicant in what is described in the outline as "the search for evidence and preparation of its case for trial". This is said by counsel to be loss of the benefit of collecting relevant documentary evidence from a witness by a process intended to be more expeditious than the procedure under r.32.07 and loss of the forensic advantage in the early collection of documentary evidence and early pursuit of a train of inquiry, without the necessity of contending with an opposing party over issues of relevance and admissibility.

The applicant's solicitor's affidavit in support of the application for leave to appeal puts forward these considerations:

"(a) the early identification of issues in the proceeding and the opportunity of the parties to evaluate the evidence in the lead up to the mediation and trial may be delayed pending either a successful application by the Plaintiff pursuant to Order 32.07 or the need to issue a Subpoena to produce these documents at the trial of this proceeding. This is particularly so where a Defendant's Defence consists in large part of bare denials; (b) the Plaintiff and KPMG (and possibly the Defendant) will be forced to duplicate work and incur further costs in making and responding to an application for non-party discovery pursuant to Rule 32.07. This is undesirable where the documents have already been collated and delivered to the Prothonotary;"

The affidavits show that there is no particular urgency about this action, and it is accepted by counsel that it would be possible to employ r.32.07 so as to obtain in time for the trial and in time for the mediation the documents in question and give them proper consideration and take any appropriate steps. Some of the documents in question are, indeed, already in the procession of the applicant's solicitors. Mr Walker concedes that all the documents produced on subpoena would have to be discovered on an application under r.32.07 and, of course, his client has very satisfactory evidence now that the documents which have been produced on subpoena are in the possession of the auditors.

In my view the present decision, leading as it does only to the need for the applicant to invoke a different interlocutory procedure which will serve its purpose without any great additional expenditure of time and money, makes this just the sort of case in which interlocutory appeals are to be discouraged. Substantial injustice is not shown. Had this appeal not been sought to be taken - and unfortunately the proposed appeal has necessitated two applications to this Court and the preparation of the appeal for argument if leave is granted - the applicant could in the meantime at, I should have thought, a smaller expense have had heard and determined an application under r.32.07.

Mr Walker argued that even if no substantial injustice had been shown, the points said to arise were of such importance that leave should be given to enable them to be determined. I am quite unpersuaded by this argument. This case is, for more reasons than one, not an appropriate one for determination of the questions which Mr Walker says he wishes to agitate.

To dispose of the matter in the way which I propose should not be taken as suggesting that a prima facie case of error on the part of Beach, J. has been made out. We have not heard oral argument on the point, but my present impression is that his Honour was right to set the subpoena aside.

I would dismiss the application and, since the order of this Court of 18 September is expressed to grant a stay pending the hearing and determination of the appeal, an event which will never take place, I would in addition bring that stay to an end.

The formal order of the Court will be that the application for leave to appeal is dismissed.

The dismissal of that application will bring to an end the stay granted by this Court on 18 September of this year.

The Court will order that the applicant pay the costs of the application including the costs reserved on 18 September. Those costs will include the costs of preparing the argument for the appeal.

At a glance

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Judgment (21 paragraphs)

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Cases Cited (1)