DR & DE Holdings Pty Ltd v Marchant

Categories of discovery

1. Notwithstanding the terms of the motion, originally filed, the categories for discovery have been amended to confine the category and/or the dates that define the periods during which the documents are said to have existed or been created. The third iteration of categories for which discovery is sought, in the amended terms, is as follows: [10] "Categories for discovery as against the Defendant Troy Marchant 1. All documents relating to the acquisition of a 10X Business from 10X Limited in or about May 2009 including documents prepared in contemplation of its acquisition including feasibility studies, business plans, analyses, emails to and from employees of 10X Limited, notes, note book or diary entries or file notes. 2. All documents recording communication or correspondence between the defendant and directors, agents or employees of 10X Limited. 3. All reports prepared by the defendant for the 10X Business including operation reports, including weekly operation reports and work in progress reports for time and cost billing for 10X from 1 January 2009 to date and excel spreadsheets. 4. Time sheet reports for 10X from 1 January 2009 to date for all staff that worked for 10X, whether solely or jointly with Robson Partners. 5. All employment agreements between the 10X Business and staff members employed between 1 January 2009 and 30 June 2018. 6. All employment agreements between Robson Business Coaching Pty Ltd and staff members employed between 1 January 2009 and 30 June 2018. 7. Copies of all tax returns or amended tax returns lodged by the defendant for financial years ending 30 June 2009, 30 June 2010, 30 June 2011, 30 June 2012, 30 June 2013, 30 June 2014, 30 June 2015. 8. Copies of all notices of assessment/amended notices of assessment and ATO portal for the defendant for the financial years ending 30 June 2009, 30 June 2010, 30 June 2011, 30 June 2012, 30 June 2013, 30 June 2014, 30 June 2015. 9. Documents recording any financial transaction or arrangement between the plaintiff and the 10X Business. 10. Documents, including minutes, file notes and notes (spirax note book or diary entries) recording any financial transaction or arrangement between Robson Business Coaching Pty Ltd and the 10X Business during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014. 11. Documents, including minutes, file notes and notes spirax note books, recording business conducted at 10X Business meetings during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014 between any or all of the following persons: a. David Robson b. David Evers c. Troy Marchant d. Nicola Robson 12. All emails relating to the 10X Business sent or received during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014 between any or all of the following persons: a. David Robson b. David Evers c. Troy Marchant d. Nicola Robson 13. All emails relating to the provision of finance/loan advances between DR & DE Holdings Pty Limited (previously Robson Consulting Group Pty Limited) and the defendants and/or the 10X Partnership sent or received during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014. 14. All spreadsheets (including excel spreadsheets) prepared for the 10X Business including profit and loss forecasts, balance sheets, budgets from 1 January 2009 to date. 15. All draft and final financial accounts for the 10X Business from 1 January 2009 to date. 16. All ledgers prepared for the 10X Business from 1 January 2009 to date. 17. All documents relating to the defendant's right to or interest (including any interest of an entity in which the defendant is a director or has an interest as a shareholder or is a beneficiary) to dividends of Countplus Pty Ltd and/or interest in the RCG Unit Trust. Categories for discovery as against the Second Cross-Defendant David Evers 18. All documents relating to the acquisition of a 10X Business from 10X Limited in or about May 2009 including documents prepared in contemplation of its acquisition including feasibility studies, business plans, analyses, emails to and from employees of 10X Limited, notes, note book or diary entries or file notes. 19. All documents recording communication or correspondence between the defendant and directors, agents or employees of 10X Limited. 20. All reports prepared by the defendant for the 10X Business including operation reports, including weekly operation reports and work in progress reports for time and cost billing for 10X from 1 January 2009 to date and excel spreadsheets. 21. Time sheet reports for 10X from 1 January 2009 to date for all staff that worked for 10X, whether solely or jointly with Robson Partners. 22. All employment agreements between the 10X Business and staff members employed between 1 January 2009 and 30 June 2018. 23. All employment agreements between Robson Business Coaching Pty Ltd and staff members employed between 1 January 2009 and 30 June 2018. 24. Copies of all tax returns or amended tax returns lodged by the second cross-defendant for financial years ending 30 June 2009, 30 June 2010, 30 June 2011, 30 June 2012, 30 June 2013, 30 June 2014, 30 June 2015. 25. Copies of all notices of assessment/amended notices of assessment and ATO portal for the second cross-defendant for the financial years ending 30 June 2009, 30 June 2010, 30 June 2011, 30 June 2012, 30 June 2013, 30 June 2014, 30 June 2015. 26. Documents recording any financial transaction or arrangement between the plaintiff and the 10X Business. 27. Documents, including minutes, file notes and notes (spirax note book or diary entries) recording any financial transaction or arrangement between Robson Business Coaching Pty Ltd and the 10X Business during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014. 28. Documents, including minutes, file notes and notes spirax note books, recording business conducted at 10X Business meetings during the periods March 2009 to 30 September 2011 and 1 April 2014 to September 2014 between any or all of the following persons: a. David Robson b. David Evers c. Troy Marchant d. Nicola Robson 29. All emails relating to the 10X Business sent or received during the period March 2009 to 30 September 2011 and 1 April 2014 to September 2014 between any or all of the following persons: e. David Robson f. David Evers g. Troy Marchant h. Nicola Robson 30. All emails relating to the provision of finance/loan advances between DR & DE Holdings Pty Limited (previously Robson Consulting Group Pty Limited) and the defendants and/or the 10X Partnership sent or received during the period March 2009 to 30 September 2011 and 1 April 2014 to September 2014. 31. All spreadsheets (including excel spreadsheets) prepared for the 10X Business including profit and loss forecasts, balance sheets, budgets from 1 January 2009 to date. 32. All draft and final financial accounts for the 10X Business from 1 January 2009 to date. 33. All ledgers prepared for the 10X Business from 1 January 2009 to date. 34. All documents relating to the defendant's right to or interest (including any interest of an entity in which the defendant is a director or has an interest as a shareholder or is a beneficiary) to dividends of Countplus Pty Ltd and/or interest in the RCG Unit Trust."

Principles

1. The process of discovery originates from the Courts of Chancery. The Uniform Civil Procedure Rules 2005 (NSW) (hereinafter "UCPR"), and, before that, the Supreme Court Rules 1970 (NSW), allow the power to order discovery to be exercised in common law proceedings. Historically, it became a remedy under the common law after the promulgation of the Common Law Procedure Act 1854 (UK). [11]
2. The general rule is that discovery can issue only between the parties to an action, but that term now includes cross-defendants.
3. In New South Wales, the common law courts were granted the power to order discovery by s 102 of the Common Law Procedure Act 1899 (NSW). [12]
4. The history of the inherent power to order discovery, at least in the courts of equity, was outlined by Young J (as his Honour then was) in McLean v Burns Philp Trustee Co Pty Ltd. [13] The inherent power to order discovery generally depended upon the existence of an arguable cause of action or bona fide claim [14] and satisfaction of the Court that discovery is reasonably necessary to allow the claim to be determined on its merits. In modern times, the order for discovery is governed by the provisions of the Rules of Court, and, since 2005, the UCPR.
5. Pursuant to the terms of UCPR, r 21.2, the Court may order discovery of documents in categories or by sample; by reference to the relevance of one or more facts in issue; by description of the nature of the document and period; or any other matter the Court thinks appropriate. Since the promulgation of UCPR, in its current form, general discovery is not permitted, except by order of the Court, which will issue only in exceptional circumstances.
6. The term "facts in issue" has the same or similar meaning as the determination of relevance under the Evidence Act 1995 (NSW). [15] In that sense, discovery is available for documents that may directly or indirectly affect the assessment of the probability of the existence of a fact in issue in the proceeding. However, discovery of documents is not limited to those documents that would be admissible in evidence. [16]
7. In determining that which is directly or indirectly relevant, the relevance must be rational, but, otherwise, the scope of discovery should not be limited unduly. Rather, discovery should be allowed for all documents that may, together with other documents, allow a party better to present its case or better to defeat the case presented against it. The general descriptor used is: any documents that may "throw light on the case" are subject to an order for discovery. [17]
8. However, unlike determinations of relevance for the purpose of the Evidence Act, the credibility of the witness is not generally regarded as a fact in issue for the purpose of discovery. [18]
9. Most relevantly for the proceedings presently before the Court and subject to these reasons for judgment, previously, particularly in equity, discovery would not be ordered until the pleadings had closed. Part of the reasoning process for that limitation is that, until the pleadings have closed, it is impossible (or may be very difficult) for a court to determine those facts that are in issue.
10. While, the effect of the UCPR is that discovery may be granted at any time, the general practice remains that, until a court is able to determine the proper limits of the facts in issue in proceedings, discovery ought not to be granted. That would usually occur at the close of pleadings, but there may be other bases upon which the facts in issue may be determined. [19]
11. The foregoing statement of general practice does not, of necessity, deal with preliminary discovery, a discussion of which is unnecessary for the purpose of the present proceedings. Further, in equity proceedings, there is a practice that discovery will not be granted until after the affidavits have been filed or the evidence otherwise disclosed. [20]
12. There are aspects of these proceedings that, in large measure, reflect equity proceedings. Nevertheless, the proceedings are commenced and being prosecuted in the Common Law Division and the Practice Note relating to disclosure in the Equity Division does not, technically, apply.
13. Having set out that issue, the Court is required to exercise the discretion as to whether to order discovery in accordance with the provisions of the Civil Procedure Act 2005 (NSW) and, in particular, s 56 of the Civil Procedure Act and following. Section 56 of the Civil Procedure Act requires the Court, parties and legal practitioners to facilitate the just, quick and cheap resolution of the real issues in dispute. The real issues in dispute are defined by the pleadings.
14. The requirement on the Court to facilitate the just, quick and cheap resolution of the real issues in the proceedings does not involve an exercise of discretion that is inconsistent with the Court exercising its discretion judicially and bearing in mind the necessity to facilitate a just outcome. Further, the facilitation of the primary purpose prescribed by s 56 of the Civil Procedure Act ought not to involve a concept of punishment. [21]
15. The discretion involves the balancing of perfect justice, on the one hand, with case management and proportionality of costs on the other. The balance between a "just" result and a result that facilitates the "quick and cheap" resolution of the real issues can often be a difficult evaluative process.

Evidence

1. The plaintiff's application for discovery was, as earlier stated, the subject of Motion. As already indicated, the categories for discovery against the defendant and against the second cross-defendant were annexed to the Motion and the plaintiff relied, in support of that Motion, on the Affidavit of John Finney, affirmed 14 May 2020. That Affidavit is largely formal and sets out correspondence between the parties relating to discovery and the failure to agree to discovery.
2. The defendant relies upon the Affidavit of Stuart Latham, affirmed 28 May 2020 ("Latham Affidavit"). It sets out a procedural history. The cross-defendant relies on the Affidavit of Michelle Aitken sworn 2 June 2020 ("Aitken Affidavit").
3. The plaintiff commenced proceedings on 9 February 2017 in the District Court. The matter was transferred to this Court as a result of the realisation that the District Court may not have had jurisdiction to make orders in the sum claimed.
4. On 11 December 2018, the matter came, for the first time, before the Registrar of this Court, who issued orders for the serving of Affidavits by the second cross-defendant and directed the parties to "confer" as to the filing of a proposed Amended Defence.
5. On 5 February 2019, the Registrar made orders by consent that the defendant have leave to file an Amended Defence, which included a Limitation Act [22] point. Further directions were made at regular intervals, usually, but not always, by consent. The matter was heard by Wright J, on 25 June 2019, after which his Honour made orders that the second cross-defendant to the first cross-claim have leave to file a Second Cross-Claim, it seems, in part, based on submissions relating to the risk of a multiplicity of proceedings.
6. On 3 July 2019, the Registrar issued directions setting a time by which particulars would be requested and answered and, on 16 August 2019, listed the matter for hearing with an estimate of four days. The matter is listed for hearing before the Court, as presently constituted, commencing 24 August 2020.
7. The Latham Affidavit makes clear that the plaintiff did not press for an order for discovery on 16 August, when the matter was set for hearing and was allocated the dates. The matter was raised by the plaintiff, on 9 April 2020, by which time, according to the Affidavit, the defendant's preparations for the final hearing were well underway.
8. Essentially, the Affidavit of Mr Latham sets out the procedural history, otherwise before the Court; complains about the delay and the lack of explanation for delay in bringing the Motion for discovery; and, in particular, refers to the delay beyond 16 August 2019, when the matter was listed for hearing some 12 months' later.
9. Over and above the foregoing, the Court is aware, from the Court file, that, on 21 May 2020, the matter was listed before the Registrar, who made orders for the defendant and second cross-defendant to file and serve evidence by 1 June 2020; and the plaintiff to file and serve any evidence in reply and written submissions by 8 June 2020; all of which was in relation to the Notice of Motion filed 15 May 2020. Apart from that order relating to evidence on the Motion, the pleadings and evidence had been complete.

Defendant's and Cross-Defendant's Submissions

1. The defendant submits that the plaintiff is subject to the principles of election or waiver and can no longer seek discovery. Further, if the Court is against the defendant on each of the election or waiver or estoppel, the last of which is also the subject of submissions and a basis for the earlier two, the categories for discovery, in the submission of the defendant, fail the statutory test of "must not be specified in more general terms than the Court considers to be justified in the circumstances". [23]
2. The categories of discovery have gone through three iterations. The first iteration, attached to the Notice of Motion as originally filed, proposed categories that were far more general than the categories now sought. Those were amended and a second iteration issued. Before the Court at the time of the hearing, there was a third iteration which sets out the categories that the plaintiff pursues against each of the defendant and the second cross-defendant.
3. The major thrust of the second cross-defendant's submissions is to object to the categories, in the amended document, which are described in categories 24, 25, 27, 28 and 29 of Annexure B to the Notice of Motion, as amended. [24] The objections to the categories in 24 and 25, which seek personal tax records, seems to be based upon the proposition that the second cross-defendant has no dispute with the plaintiff that the partnership was a partnership of individuals and, therefore, the category does not relate to a fact in issue between the plaintiff and the second cross-defendant. The objection to Category 27 is, similarly, in part based upon there being no issue as between the plaintiff and the second cross-defendant that Robson Business Coaching Pty Ltd is not the agent of the 10X Business.
4. The documents under Category 28 are said to be sought on the basis that they may be relevant to the issue of whether loan agreements were entered into and the terms and parties to those loan agreements. The category is objected to on the basis that that the documents sought, are not so confined. The submission of the second cross-defendant is that the description of the documents is not confined to the terms and parties of loan agreements but, rather, seeks documents recording "any business" conducted at "10X Business meetings".
5. Further, the second cross-defendant complains that it is not clear what constitutes a "10X Business meeting" or indeed what amounts to "business".
6. Category 29 is in similar terms to that which is described in Category 28. It is said to be relevant to the same issue in the proceedings, in the same way as that which is sought under Category 28.
7. Again, the second cross-defendant complains as to the onerous nature of the search for communication, which will require trawling through email servers. The second cross-defendant maintains that the burden of trawling through those email servers should not fall on the second cross-defendant. The second cross-defendant maintains that Category 30 achieves the same purpose in a more targeted and less oppressive manner.
8. The defendant to the principal proceedings, apart from the objections on the basis of election, estoppel and waiver, objects to various categories on the basis that they seek discovery for a nine-year period, which is a reference to the second iteration of the categories. The defendant objects to Categories 3, 4, 5, 6, 7, 8 and 15, on that basis. In relation to Categories 10, 11, 12, 13, 15 and 17 of the second iteration of categories, the defendant submits that the request is even more problematic in that there is no date range limiting the proposed categories.

Waiver

1. The defendant relies on its letter of 15 August 2019 which, in turn, referred to the plaintiff's letter of 14 August 2019. In the course of the defendant's response, the defendant informed the plaintiff that he "does not consent to an order for discovery in the terms proposed. Aside from any other issue, the categories for discovery as described are a fishing expedition, with no attempt apparently made to concentrate on obtaining disclosure relevant to issues in the proceedings."
2. The letter of 15 August 2019 continued to point out that the matter was listed the next day for the purpose of allocating hearing dates and the proposition for discovery would prolong the proceedings, which had already been delayed by a "series of earlier interlocutory processes", since the proceedings were first commenced in February 2017.
3. The foregoing does not take into account the transfer from the District Court to the Supreme Court, but the importance of the letter, from the perspective of the defendant, is that, following from that letter, the plaintiff's stated desire to seek and obtain an order for discovery was not pursued, until now.
4. In correspondence between Counsel and the solicitors which is annexed to the Aitken Affidavit, and upon which the second cross-defendant relies, Counsel refers to proceedings before the Registrar on 3 July 2019 and the fact that Counsel for the plaintiff, apart from the Short Minutes of Orders, raised the question of discovery, without seeking any orders at that point in time. The note from Counsel cites the Registrar expressing "dismay that the plaintiff is raising discovery now".
5. The foreshadowing of a possible application for discovery, follows communication from the solicitors for the plaintiff to Ms Aitken, by email, dated 3 July 2019 and informing Ms Aitken that the plaintiff would be "seeking discovery orders before the matter is set down for hearing".
6. It is the foregoing foreshadowing of discovery in mid-2019 and the failure to agitate for discovery that is, essentially, relied upon by both the defendant and the second cross-defendant to submit that the plaintiff has waived its right to seek and obtain discovery and/or is estopped from now seeking discovery.
7. As is made clear in a number of cases, a party has no real "right" to obtain discovery; the power to order discovery is discretionary. [25] Thus, the defendant and second cross-defendant submit that the delay and the waiver and/or estoppel, or discretionary elements arising from the waiver and/or estoppel, ought to result in the Court not exercising the discretion in favour of the plaintiff. The defendant, in particular, raises the principles explained by the High Court in Agricultural & Rural v Gardiner. [26] The defendant relies, in particular, on the following passage at [60]: "Circumstances in which there is an election between inconsistent rights are radically different from some others in which there is said to be a waiver of rights. In particular, it is important to distinguish cases of election between competing rights from the very different setting for this Court's last extended consideration of issues of 'waiver' in The Commonwealth v Verwayen. In that case the Commonwealth obtained leave, belatedly, to amend its defence to plead a statute of limitations as an answer to the plaintiff's claim for damages for personal injury. In response to that plea, the plaintiff asserted that the Commonwealth had waived the limitations defence or was estopped from relying upon it. This Court divided in opinion about whether the Commonwealth could rely on the limitations defence. The majority of the Court (Deane, Dawson, Toohey and Gaudron JJ) held that the Commonwealth was not free to dispute its liability to the plaintiff. Deane J and Dawson J each rested that conclusion in estoppel; Toohey J and Gaudron J each concluded that the Commonwealth had waived its right to rely on a limitations defence. But the conclusions reached by both Toohey J and Gaudron J about waiver depended upon considerations founded in the nature of the adversarial litigious process. So Gaudron J said that 'a party to litigation will be held to a position previously taken (that position having been intentionally taken with knowledge) if, as a result of that earlier position, the relationship of the parties has changed'. And as her Honour pointed out, the roots of the doctrine applied in her decision were to be identified in 'fair dealing in the conduct of litigation [and] promoting the finality of litigation'. Likewise, Toohey J emphasised that the 'waiver' at issue in Verwayen was 'waiver as it exists within the adjudicative process' [original emphasis] and that '[w]ithin the adjudicative process at any rate, it is enough that the defendant "renounces" a defence which is available to him and which is there for his benefit.' It was on this footing that both Toohey J and Gaudron J concluded that the Commonwealth had waived the right to plead a limitations defence." (Footnotes omitted.)
8. In the foregoing passage, the High Court discussed its judgment in Verwayen. [27]
9. The difficulty in applying the principles in either Verwayen or Agricultural Finance is that each of them concerned very different circumstances to an interlocutory order in the course of litigation. Dealing with Agricultural Finance first, the High Court points out that "waiver", as a term, can be used in a variety of situations, which tend to blur the precise use of the term in contractual circumstances such as that which were presently before the Court. [28] As made clear by the majority, waiver is a term that, if it were necessary to be used, ought to be used with great caution. By and large, on the analysis of the majority, waiver is an imprecise term used for what ordinarily should be considered either as an election or as estoppel.
10. In that respect, election requires a party to choose between inconsistent rights. When considering waiver by election, one must look to the words and conduct of the promisee in waiving the right. [29] As the High Court has said: "the true nature of 'election' is the confrontation of the person electing with two mutually exclusive courses of action between which a choice must be made, for example, to terminate or keep a contract on foot." (Footnotes omitted.) [30]
11. As to the application of waiver by estoppel, there are only limited circumstances where that can occur. Estoppel arises when conduct of a party (namely, by representation, by an act, or, in the case of circumstances where there is a duty to act, by acquiescence) is relied upon by the other party to the contract or conduct rendering it unconscionable (or inequitable) to assert facts or rights inconsistent with the conduct. [31]
12. Acquiescence involves a standing by, so as to induce the other party to believe that there is assent to the wrong. [32] It applies similar principles to promissory estoppel. [33] But a party is not estopped from asserting rights merely by doing nothing to assert them.
13. Alternatively, to arrive at the conclusion that there has been waiver by estoppel, the Court must look to some aspect that would make it unconscionable for the plaintiff to insist upon its rights (here, rights has the inclusive meaning of the capacity to obtain discovery) in the proceedings. This will usually relate to identifying a change in position or a detriment that has been suffered by the promisee. [34] Thus, in the present circumstances, the opposing parties are unable to show conduct to their detriment in reliance upon the alleged representation or waiver said to have been effected by not pursuing discovery in or about May 2019.
14. Reliance on Verwayen creates its own difficulty. In Verwayen, there was no High Court majority as to the ratio of the judgment.
15. The Commonwealth had made representations as to its policy and intention relating to its reliance upon the limitation of action available to it. Some of the judges of the Court accepted that the representations conveyed an implied promise by the Commonwealth that it would not seek to raise those defences and viewed it as a promissory estoppel.
16. Others on the High Court took the view that the original Defence, filed by the Commonwealth, reflected a deliberate and informed decision, which created the relationship of admitted tortfeasor and wronged plaintiff and entitled the plaintiff to an assessment of the damages. In the plurality judgment, [35] their Honours characterised this as a new relationship based upon common assumption.
17. None of the judges decided Verwayen on the basis of estoppel by convention, because the parties had not raised estoppel by convention during the course of the proceedings. Ultimately, in Verwayen, the limitation period had long since expired.
18. It was possible, if not common, for defendants to waive the limitation period and, after the original Defence was filed, the parties proceeded, to the detriment of the plaintiff, to prepare the proceedings for hearing on the basis that the limitation period would not apply, only for the defendant to raise the limitation period issue at, or shortly before, the hearing. As a consequence, there was conduct by the defendant to his detriment, based on the representation that discovery would not be sought, which was capable of giving rise to an estoppel.
19. Further, in Verwayen, in order for the Commonwealth to amend its Defence to raise the limitation period, it was necessary to obtain the leave of the Court. For reasons which are not explained adequately, the plaintiff did not raise the issues associated with estoppel and waiver at the point in time when the Court, being the trial court, was required to deal with the leave to amend. One would suspect that the arguments which ultimately found favour in the High Court would have been far more easily resolved by utilising them as a discretionary basis for the refusal of leave to amend.
20. The foregoing should not be seen as a criticism of the reasons for judgment in Verwayen, even if a judge, in my position in the judicial hierarchy, were brave enough so to do. On the contrary, the result in Verwayen is unsurprising and unremarkable. The only point arising from the foregoing is that for the defendant and second cross-defendant to rely upon the judgments of the High Court in Verwayen to oppose an order for discovery, on the basis that discovery was foreshadowed but not pursued 12 months earlier, is a very long bow.
21. Interlocutory proceedings and the judgments that arise from them are rarely, if ever, binding on the parties prior to final judgment, in the sense that the parties are usually free to re-agitate the issues decided or to seek to quash orders already made. Even if discovery had been agitated and the plaintiff had lost the application, it would not ordinarily preclude the plaintiff from again seeking discovery and subsequently obtaining it. There may be, for discretionary reasons, a requirement to show changed circumstances, but the agitation of such an application on an earlier occasion, even if unsuccessful, does not, as a matter of law, or equity, preclude a subsequent application.
22. In short, I am not satisfied that when the Court is dealing with an interlocutory process related to the preparation of the proceedings, the doctrines and principles associated with estoppel by convention, estoppel by conduct or waiver would preclude a subsequent or later application, unless the other parties has acted to their detriment in a manner that was irreversible or unable to be compensated. Having determined that the application for discovery orders is not precluded, the Court is required to deal with the matter as a matter of discretion and each of the issues of delay and the failure to agitate discovery when it first occurred to the plaintiff, are matters that the Court is entitled to take into account in determining whether to grant or refuse the Motion.

Merits

1. Much of the criticism of the form of the discovery and its onerous character was based upon the original categories sought in the plaintiff's Motion or on the second iteration of them. The final iteration is significantly narrower than the categories sought in the initial application and narrower than the categories sought in the second iteration.
2. The plaintiff has abandoned Categories 1, 2, 9, 14 and 16 in relation to the defendant. The plaintiff has also abandoned Categories 18, 19, 26, 31 and 33 of the categories sought against the second cross-defendant.
3. The starting point is that there is an issue in the proceedings as to the legal relationship between the parties and the proper identity of the parties to the partnership. This has already been outlined, briefly, in the background above.
4. Because the parties to the partnership did not reduce that partnership arrangement to writing, it is necessary for the Court to determine whether a partnership existed; who are the parties to the partnership, if it did exist; and what were the terms of the partnership, as part of the process of determining the entity that borrowed and the entity that lent the monies that are the subject of the suit. Where the term "entity" is used in the preceding sentence, it is intended to include individuals as well as corporations and/or trusts, even though a trust is not, strictly, an entity.
5. The categories as narrowed in the third iteration are not, except in certain categories, said to be onerous. The degree to which those categories are onerous is said to arise from the requirement to search 9 or 9½ years of documentation. However, with the exception of Categories 3, 4, 5, 6, 15, 17, 20, 21, 22, 23, 32 and 34, the period has now been limited to the period ending approximately 2014 or 2015.
6. Neither the defendant nor the second cross-defendant adduce material that suggests that the trial date will be lost if the orders for discovery were issued. As a consequence, the final resolution of the real issues between the parties can be resolved as expeditiously as otherwise would be the case, whether or not the Court orders discovery. There is certainly no suggestion otherwise.
7. The documents sought in Category 4 will be limited to the documents from 1 January 2009 to 30 June 2015. Categories 5 and 6 will not be so limited, as, it seems that there are few documents in that category and that they would be either readily available or quickly ascertained as to whether or not they would be unavailable.
8. It seems to me that the complaint that reports and tax returns do not inform the enquiry as to the parties to the loan is valid, but it will inform the understanding of the parties as to the entities involved in the business undertaking and, indirectly, is or may be relevant to the determination of the parties to the loan and the other enquiries before the Court. It would certainly "throw light" on the issues.
9. In relation to Category 15, that category will be allowed, but not in relation to source documents and only for the period 1 January 2009 - 30 June 2015. In relation to the equivalent categories of discovery against the second cross-defendant, the same limitations as the Court has imposed above will be applied to those categories, the necessary changes being made.
10. Otherwise, it seems, balancing against the onus on the defendant and second cross-defendant, the capacity of the plaintiff to bring before the Court the material that amounts to the surrounding circumstances to the making of the oral agreements is necessary, so as to inform the determination of the parties to the partnership and the terms of that partnership, which, in turn, will determine or assist in determining the parties to the loan agreement and the party or parties required to repay the loan.
11. In the foregoing, I use the term "necessary" in the sense that it ought to be used in dealing with the power of a Court. [36] In that sense, the order for discovery is reasonably required or legally ancillary to the accomplishment of the specific remedies. It is not confined to that which is essential. In so doing, the Court is ensuring the facilitation of a just outcome and is not prejudicing the facilitation of the quick and cheap resolution of the real issues in the proceedings.
12. As a consequence of the foregoing, the Court will grant orders for discovery in the terms sought in the third-iteration, as amended by the Court in the foregoing paragraphs. An issue arises as to costs.
13. There are two competing interests. First, the foregoing is, effectively, an indulgence granted by the Court to the plaintiff and the plaintiff should have acted with greater expedition. On the other hand, the plaintiff has been successful in its application, or largely successful, and costs, ordinarily, ought to follow the event.
14. Bearing those two issues in mind and taking into account that this is an interlocutory step and no costs would be payable, unless the Court were to order otherwise, until the conclusion of the substantive proceedings, the Court will order that the costs be the plaintiff's costs in the cause.
15. The Court directs the plaintiff to provide a minute of the order arising from the foregoing reasons for judgment and to provide same to the Associate to Rothman J within two working days of the date of these reasons for judgment.

Endnotes

1. Amended Statement of Claim filed 21 May 2018 ("ASOC"), at [2A]-[5].
2. ASOC at [4].
3. ASOC at [5] and [12].
4. ASOC at [13].
5. Amended Defence filed 26 February 2019 ("AD").
6. Marchant Affidavit at [27]-[32].
7. AD at [18].
8. ASOC at [13].
9. AD at [8] and [9]; Marchant Affidavit at [136].
10. For clarity the Categories have been recited with the tracked changes for deletions marked but additions are in ordinary font.
11. Lyell v Kennedy (1883) 8 App Cas 217 at 223 and 233.
12. Smith's Weekly Publishing Co Ltd v Sunday Times Newspaper Co Ltd (1923) 31 CLR 552; [1923] HCA 9.
13. (1985) 2 NSWLR 623 at 643-646.
14. Idoport Pty Ltd v National Australia Bank Ltd [2004] NSWSC 695, per Einstein J.
15. Evidence Act 1995 (NSW) ss 55 and 56.
16. Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55; O'Rourke v Darbishire [1920] AC 581; Ferguson v Mackaness Produce Pty Ltd [1970] 2 NSWR 66.
17. Hutchinson v Glover (1875) 1 QBD 138; Idoport Pty Ltd v National Australia Bank (3) [1999] NSWSC 1026.
18. See generally UCPR, r 21.1(2).
19. Latec Finance Pty Ltd v Jury [1960] NSWR 321.
20. Practice Note SC Eq 11, Clause 4.
21. See Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230, and at first instance: Cassar v Hans Pet Constructions Pty Ltd [2008] NSWSC 1386.
22. Limitation Act 1969 (NSW).
23. UCPR r 21.2(2) and see Hunter New England Local Health District v Munters Pty Ltd [2018] NSWSC 788 at [18]-[19].
24. See second cross-defendant's written submissions at [5]-[21].
25. Woodley v Woodley (No 4) [2017] WASC 360 at [23]; Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 at [6].
26. Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57.
27. Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39.
28. Agricultural and Rural Finance Pty Ltd v Gardiner, supra, at [100].
29. Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305; [1920] HCA 64.
30. Victoria v Sutton (1998) 195 CLR 291 at 306, [40]; [1998] HCA 56.
31. See Ken Handley, Estoppel by Conduct and Election (2006, 2nd ed., Sweet & Maxwell); Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; [2008] NSWSC 159; John W Carter, Carter on Contract (2002, Butterworths) [7-200]-[7-210].
32. Goldsworthy v Brickell [1987] Ch 378 at 410.
33. Ken Handley, Estoppel by Conduct and Election (2006, 2nd ed., Sweet & Maxwell) at 195-196.
34. Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 657; [1937] HCA 58.
35. Deane, Gaudron and McHugh JJ.
36. Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 July 2020