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[2013] WASC 78
Supreme Court of WA
2013-03-13
Allanson J
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : SINGH -v- FRIEDMAN [2013] WASC 78
Practice and procedure - Discovery - Categories of documents - Relevance - Turns on own facts
Rules of the Supreme Court 1971 (WA), O 1 r 4B, O 4A r 2, O 26 r 7(3)
1 ALLANSON J: The parties have dealt with the process of discovery by each proposing categories of documents to be discovered, rather than seeking an order for general discovery. The court has power under Rules of the Supreme Court 1971 (WA) O 4A r 2 and O 26 r 7(3), to order discovery in the manner sought. The court may also order that discovery be given at some specified future stage of the action, or that discovery be given in stages.
2 The defendants' proposed categories have been agreed. Mr Singh proposed that the defendants give discovery of 57 specified categories of documents. The parties have agreed many of them, but the balance (just over half) remains in dispute. The parties filed submissions on the disputed categories with the decision to be made on the papers.
3 A party does not have a strict entitlement to an order for discovery: Kent Coal Concessions Ltd v Duguid [1910] 1 KB 904, 910; Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [2005] WASC 60 [6]. The power to order discovery is discretionary. The discretion is to be exercised having regard to the timely and cost effective disposal of litigation: Corporate Systems Publishing Pty Ltd v Lingard [No 3] [2008] WASC 1 [7]; Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [6]. On the other hand, discovery has been described as promoting the ascertainment of truth in litigation and as an essential part of the proper administration of justice: Hamersley Iron Pty Ltd v Lovell (1998) 19 WAR 316, 321. Subject to the rules of privilege, there is a 'public interest in having available all evidence relevant to the issues in litigation': Carter v Managing Partner, Northmore Hale Davy & Leake [1995] HCA 33; (1995) 183 CLR 121, 128. The ultimate test is whether the discovery is necessary for fairly disposing of the proceedings: Science Research Council v Nasse [1979] UKHL 9; [1980] AC 1028, 1065.
4 Relevance is not the only factor the court must consider in the exercise of the discretion to order discovery. But whether a document relates to a matter in question in the proceedings remains the descriptive criterion in O 26 of what documents should be discovered. To determine whether a class of documents may be relevant, the court should consider the pleadings, together with the conduct and admissions of the parties and the nature of the action: Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd [5].
5 The submissions of each party refer to matters of fact, although neither has filed evidence in this application. The written submissions lodged on behalf of Mr Singh, apparently drawing on Mr Singh's knowledge from the period he was in partnership with the defendants, describe the way in which particular files were managed within the firm. At times they go further. For example, par 51 of Mr Singh's submissions asserts that Law Hire Pty Ltd, a company associated with the partnership, 'undertook share trading as a result of monies borrowed from the NAB on the recommendation of Kevin Healy & Associates, former accountants of the firm'. That is not to be found in the pleadings, and is not the subject of evidence. There are other examples.
6 The defendants rely, at times, on the potential burden of discovery and whether it is disproportionate. In deciding whether to order discovery, the court must consider how best to attain the objects set out in O 1 r 4B, and must consider the cost to the parties and whether the discovery sought is proportionate to the value, importance and complexity of the subject matter in dispute, and the financial position of the parties. In the absence of evidence, save for those instances where the description of the documents supports an inference regarding the burden of compliance, it is difficult for the court to make a proper assessment of proportionality.
7 I have tried, where possible, to draw reasonable inferences where that permitted a particular point to be determined. I have had to stand some matters over for later consideration should the parties wish to adduce evidence. Otherwise, in the absence of evidence, I must resort primarily to the pleadings and the apparent relevance of the documents described to the issues that are pleaded.
8 Mr Singh practised in partnership with Mr Friedman and Mr Lurie from on or about 1 March 1996 to 30 June 2010. There was no written partnership agreement. Mr Singh gave the defendants notice of his intention to resign from the partnership on 29 March 2010, the notice to take effect from 30 June 2010. See pars 4 to 8.
9 The parties had a meeting on 29 March 2010. Mr Singh says they agreed certain matters (in a Purchase Agreement), including that:
10 Mr Singh further claims that, on or about 14 July 2010 or early August 2010, he and the defendants agreed a process for determining the value of his onethird share in the partnership: par 11. This process called for the appointment of two valuers, each to give a valuation of the partnership (the Valuation Agreement). In effect, the parties would accept the average of the two valuations.
11 The parties jointly appointed and briefed FMRC Pty Ltd (FRMC) and Pickup Investigative Accounting and Forensics Pty Ltd (Pickup). Each valuer provided a valuation of the partnership. Pickup provided two values: $5,777,263, adopting work in progress values applied by Mr Friedman; and $7,767,419, adopting work in progress values provided by Mr Singh. FMRC provided a report valuing the partnership at $2,203,495. In April 2011, FMRC produced a revised report that valued the partnership at $6,827,704: pars 12 to 15.
12 Mr Singh alleges that the defendants breached the Valuation Agreement and the Purchase Agreement by rejecting the valuations. He says that the defendants repudiated the Valuation Agreement and that he has refused to accept that repudiation. He has suffered loss and damage: pars 16 to 29.
13 In the alternative, Mr Singh pleads that the defendants have continued to conduct the affairs of the partnership from 1 July 2010, with the use of his share of the partnership assets, without winding up the partnership or otherwise accounting to him: pars 22 to 24.
14 There are additional claims which substantially widen the issues in dispute.
15 First, Mr Singh claims that the defendants breached a term of the partnership agreement, that he and the defendants would devote themselves and their time and attention to the practice of the law in partnership and the conduct and management of the partnership during the ordinary business hours that law firms carry on business, namely all working days during the course of the year between the hours of at least 7.00 am and 6.00 pm: par 26.
16 He says the defendants breached that term by conducting share trading, and property and other investments during office hours, instead of performing work for the partnership. He names 25 entities (par 27.1), including trusts and superannuation funds, through which the defendants pursued their personal interests. Mr Singh specifically alleges that upon collapse of the value of their shares, property and other investment portfolios, the defendants spent 'a significant amount of time taking advice, negotiating and drafting an agreement with the Australian Taxation Office (ATO) to provide for payment of tax by way of instalments, attempting to sell their investments shares and refinancing with banks'.
17 By reason of that conduct, Mr Singh says that he suffered loss and damage. Specific allegations include that the defendants failed to meet fee targets; and Mr Singh was obliged to attend to matters of supervision and management which would otherwise have been performed by the defendants, and which prevented him from achieving his own fee targets. He alleges that the income of the partnership was less than it should have been, and his profit entitlement and the capital of the partnership were diminished: par 28.
18 Second, Mr Singh alleges that the defendants breached s 40(1) of the Partnership Act 1985 (WA) by, without his consent, using an employee of the partnership (Ms Colleen Radich) to act in respect of the defendants' personal interests. Specific allegations include that the defendants caused the partnership to employ additional accounts staff to assist Ms Radich, increased the salary to Ms Radich and paid her bonuses, and diverted partnership resources to their personal matters: par 31. He alleges that he suffered loss and damage to the extent of onethird of the financial cost: par 32.
19 Finally, Mr Singh pleads matters which relate to funding agreements later entered into between Mr Singh and the partnership.
20 The defendants agree that on 29 March 2010, they agreed with Mr Singh that they would take over the partnership and operate the firm: see par 3 of the defence and counterclaim. They say the agreement 'extended to' five corporations (the FLSD Entities) which had performed 'various integral activities related to the Partnership'. I am concurrently managing actions for the winding up of three of those corporations: in two of them, Mr Singh seeks winding up as a director and shareholder; in the other, the plaintiff (and director and shareholder) is his wife. I have been told that the other two corporations no longer trade.
21 The defendants also agree that the parties agreed to obtain valuations from the two valuers, and jointly appointed FMRC and Pickup. But the defendants say that the valuers were appointed 'to assist [the parties] to determine a value of the plaintiff's share in the Partnership by valuing the Partnership as at 30 June 2010' (pars 5 and 6). They deny the Valuation Agreement alleged by Mr Singh and deny that they have repudiated it.
22 The defendants agree, or at least they say that they have previously acknowledged, that Mr Singh is entitled to a taking of final accounts with respect of the partnership, and to be paid a third of the net value of the partnership as at 30 June 2010: par 15.
24 The defendants deny the contractual terms alleged by Mr Singh in par 6 of the statement of claim: par 18. They admit that they conducted share trading and other investments, and monitored their portfolios from time to time. They deny that they did so in breach of the partnership agreement and deny each of the specific matters alleged against them in that regard: par 19.
25 The defendants deny that Mr Singh suffered loss and damage, and each of Mr Singh's particular allegations regarding fee targets, supervision, and management of the practice carried on by the partnership.
26 The defendants admit that Ms Radich assisted them from time to time with respect to matters personal to them, but deny that they breached s 40(1) of the Partnership Act. They deny each of the allegations regarding work done by Ms Radich: par 23.
27 Alternatively, the defendants plead that Mr Singh knew of the matters he now alleges, and by not raising any objection he acquiesced in such conduct or waived any breach as now alleged.
28 The defendants allege that Mr Singh breached his duties to the partnership in relation to work that he undertook on behalf of particular clients, Sugiarso and Mimi Wong and their related entities (defined in par 44 as 'the Wongs'). As part of these allegations, they refer to unbilled work in progress in respect of work for the Wongs 'in the order of $134,000' at 30 June 2010 (defined as 'WIP'): par 45.
29 The defendants say that in breach of his duties to the partnership Mr Singh had not at 30 June 2010:
30 As a consequence, the defendants have suffered loss and damage.
31 To Mr Singh's knowledge, the WIP was included in the work in progress figures provided to FMRC and Pickup for the purpose of the valuations: par 47.
32 The defendants further allege that Mr Singh failed to diligently attend to the business of the partnership by:
33 The defendants say that as a consequence they have suffered loss and damage. They do not characterise or give particulars of that loss and damage, but it would normally be measured by loss of income to, or a reduction in the value of, the partnership.
34 Mr Singh filed a reply and defence to counterclaim. With one exception, the issues raised and joined do not add to the issues relevant to Mr Singh's application for discovery. The exception relates to item 50, discussed below.
35 The plaintiffs' lawyers prepared a schedule of proposed discovery categories as the basis for conferral. Within that schedule, documents are grouped under particular headings.
36 The scope of some of these categories is affected by definitions for the purposes of the schedule. 'Documents' is defined to include 'backups of multiple software'. 'Correspondence' includes correspondence to and from any person if the correspondence was sent from or received by a defendant. And 'Defendant' includes 'persons related to each Defendant being each Defendant's spouse, children and parents'. This extended definition of defendant appears to have been overlooked at times in the description of categories of documents.
37 The first of the disputed documents appear in the schedule under the heading 'Valuations'. Most of this group is not disputed. It includes documents provided to the two valuers for the purposes of their valuation reports (item 7). The two disputed categories are items 10 and 11:
Documents that evidence how the First Defendant achieved the work in progress figure of $1,925,755 provided to Pickup and
Documents that evidence how the Plaintiff achieved the work in progress figure of $2,589,140 provided to Pickup.
I assume that each item intends to describe documents relied on by the parties in providing information to Pickup.
38 Mr Singh submits that, on the plea in par 47 of the counterclaim, the work in progress figures provided to the experts are in issue.
39 The defendants' allegations relating to work in progress are more specific. The defendants do not put in issue all work in progress figures provided to the valuers. They refer to that particular unbilled work, defined in par 45 as WIP. The category of documents sought in categories 10 and 11 go beyond what is in issue in the pleading. The request may be capable of refinement, but the present description of the category is too wide.
40 As a further matter, the description of the documents in item 11 poses a particular problem in requiring the defendants to identify documents which evidence how Mr Singh achieved his work in progress figure. I would not order discovery in those terms.
41 I am not satisfied that it is appropriate to order discovery of the documents in categories 10 and 11.
42 These items are together described as file summaries.
File lists for each of the financial years ending 30 June 2004 to 30 June 2012.
Fee Summary by 'Matter Type' for the financial years ending 1 July 2004 to 30 June 2012.
Monthly and annual file lists from 1 January 2005 to 30 June 2012 for 'Mr Archive'.
Monthly and annual file lists from 1 January 2005 to 30 June 2012 for 'Mr Risk'.
43 The breach of contract plea alleges that by reason of those breaches 'the income of the Partnership was less than would otherwise have been the case thereby diminishing the plaintiff's profit entitlement and capital in the Partnership': statement of claim par 28.3. That claim is denied by the defendants: defence par 20.
44 The defendants plead by counterclaim that by reason of Mr Singh's breach of his duties to the partnership they have, in effect, been unable to properly render accounts to the Wongs and have suffered loss and damage to the extent that if they are liable to make payment by reference to the valuations made by the valuers, or any of them, 'that liability is greater than it would have been had the WIP not been included in them': counterclaim par 48.3. That plea puts the valuations in issue, but only to the limited extent of the defined WIP.
45 Perhaps more significantly, the defendants plead that Mr Singh breached his duties to the partnership by failing to diligently supervise employed practitioners, resulting in a reduction of the work they did and the time they recorded being chargeable to clients.
will enable an assessment of the file load of each of the parties. He submits they are relevant to whether the defendants failed to devote time and attention to the conduct of the business of the partnership, as well as to the allegation by the defendants that Mr Singh failed to diligently supervise work done and time spent by various employed legal practitioners. He further submits that Mr Risk and Mr Archive files contain information relevant to the calculation and write off of work in progress at 30 June 2010.
47 The items in the schedule are, at times, cryptic for someone with no knowledge of the business and its records. Mr Risk and Mr Archive summon images of characters by Roger Hargreaves, rather than the less fanciful world of business records. I assume that the items listed are records of the business and will contain that information regarding fee earner, matter type, and potential productivity.
48 The defendants say the categories sought are too broad. They have agreed that they will discover documents 'directly relevant to' the pleas that they failed to devote time and attention to the conduct of the business of the partnership (par 27), used the partnership for their own interests by directing Ms Radich to act in respect of their personal interests (pars 30 and 31), and caused Mr Singh to suffer loss and damage (par 32). The defendants' position is that following that discovery, Mr Singh could apply for specific discovery, if necessary, under O 26 r 6.
49 The defendants accept that these documents would be relevant upon the taking of accounts but submit that discovery should be deferred to that stage. At this stage of the proceedings, discovery should be confined to documents that are directly relevant.
50 Direct relevance is not the test for discovery. The defendants, in relation to these items, make no claim that the burden of compliance would be excessive. I see no reason to depart from the test set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55, 63.
51 There are issues raised by both parties regarding the comparative file load of the partners, the breach of duties to manage and supervise employed solicitors, and (on the defendants' plea) the extent of time and work written off by the practitioners supervised by Mr Singh. The documents, at least for the period up to the end of the partnership on 30 June 2010, may be relevant to the proof of liability and not just the valuation of the partnership.
52 I am also satisfied that the pleas of breach of contract, in both claim and counterclaim, put in issue the value of the partnership. Each party alleges conduct by the other that has caused loss to the partnership. For that reason, I do not accept the defendants' submission that value will only arise as an issue at the time of taking of accounts.
53 Discovery should be ordered of these categories of documents for the period of the partnership, that is, for documents to 30 June 2010.
54 I accept that documents relating to the period after 30 June 2010 may be relevant to valuation of the partnership at the date the partnership ceased, and to each party's allegation of loss and damage. I cannot, on the papers, be satisfied of the extent to which documents after 30 June 2010 will be relevant. It is probably a matter of evidence.
55 I will, for the present, order discovery for the period to 30 June 2010. To the extent that later documents are relevant to the proof of value at the date of dissolution of the partnership, the parties may be able to agree those documents. Otherwise, if this category remains in dispute, an order for discovery of them may await the stage of preparation of expert reports on value, and evidence about the documents needed by the experts to properly arrive at their opinions.
57 Items 21 and 22 (for the period to 30 June 2010) are, in my opinion, discoverable for the same reasons as the items discussed for categories 17 to 20.
58 Items 23 and 24 are concerned with payments to the five FLSD Entities. Mr Singh submits that the interentity payments need to be taken into account in the overall value of the firm. The defendants repeat their submission that, at this stage, the value of the firm is not in issue.
59 For the reasons given above, I believe that value is now in issue. Whether the documents in items 23 and 24 are relevant to value is not something I can assume. Again the relevance of those documents can, if necessary, be the subject of evidence.
60 Mr Singh supports the relevance of the cash receipt books between January 2010 and 30 June 2012 on three bases:
61 With respect, I cannot see how these documents are relevant to any issue that has been pleaded, save to the extent that they may be relevant to assessing the value of the firm and Mr Singh's partnership interest at the time the partnership ceased.
62 With regard to item 26, Mr Singh submits that each year there was a difference between the profit at the end of each year and the amount actually received by each partner from the firm and its related entities. He says that in several years the actual drawings received exceeded the distribution of profits. If Mr Singh wishes to rely on those factual matters to establish the potential relevance of the documents in item 26, he will need to go into evidence. In addition, Mr Singh submits that these documents are relevant to the assessment of each partner's onethird share in the partnership if the valuation of the firm is undertaken on an ongoing concern basis. Again, I am being asked to assume matters that I do not know and are not in evidence. I am prepared to order the discovery of documents which are relevant to the proper assessment of the value of the firm. If the parties do not agree that particular categories of documents are relevant, the question will need to be determined by evidence.
63 The documents in item 27 are said to include files handled, work in progress, disbursements and other financial information relating to the status of files for the period up to 30 June 2010, and are relevant to proof of the allegations of breach by the defendants in failing to devote time and attention to the conduct of the business of the partnership. The documents up to 30 June 2010 are relevant to the breach alleged. Those after the dissolution of the partnership are not apparently relevant.
From 1 January 2000 to 30 June 2010 (except as otherwise stated below), the following Documents in respect of each entity listed in paragraph 27.1 of the Consolidated Statement of Claim:
64 Item 32 cannot be divorced from the documents also sought in items 34, 36, part of 39, 40, 55, and 56. In several instances there are overlaps.
65 The plea regarding these entities is found in pars 26 and 27 of the statement of claim, in which Mr Singh alleges that the defendants breached their obligation to devote their time and attention to the partnership by carrying on their share trading, property investment and other investment during business hours. The defendants admit that they undertook share and other trading activities, although not that they did so instead of performing legal work or management of the partnership. The matter in issue is whether the defendants carried out their personal investment business in breach of their obligations, contractual or otherwise, to the partnership and, to the extent work was carried out by Ms Radich, using the resources of the partnership.
66 The only argument put forward in support of so farreaching a category of discovery is that the information will disclose the activities undertaken and assist in the valuation of time lost to the partnership.
68 As to the third of these objections, discovery (if ordered) would extend only to documents in the defendants' possession, custody or power. The objection does not affect whether discovery ought to be ordered of documents that are within their possession.
69 The other two objections have substance. It may be that within the extremely broadly expressed categories in item 32 there are specific categories of documents which are relevant to the proof of the allegations in pars 26 and 27. But the documents which Mr Singh seeks far exceed those which may be relevant. That is particularly so when five of the categories extend beyond the period of Mr Singh's partnership with the defendants.
70 Further, in this instance, the inference arises from the extent of the discovery (both the categories of documents sought and the period covered) that it would be a considerable burden.
71 In refusing discovery at this stage I do not preclude the defendant from seeking more specific discovery of documents which can be demonstrated to be sufficiently relevant to the pleaded allegations.
72 Items 34 and 36 set out widely described categories of documents relating to the defendants' property dealings and share trading. Item 40 refers to documents connected with any debts, liabilities, claims and compromises with any creditor or financial institution. Item 55 is for tax invoices and other bills from accountants relating to the defendants' personal matters. Item 56 is specific to file folders and records of Mr Lurie's 'personal matters', but is not otherwise specific. In my opinion, the same reasons apply and the same result is produced for each of these items.
List of lever arch and other files and folders retained by Mrs Colleen Radich relating to the Defendants 'personal matters' from 1 January 2000 to 30 June 2010.
73 Mr Singh submits that the documents sought are relevant to the specific allegation of the breach of the partnership agreement by the use of Ms Radich for matters not related to the business. The defendants submit that a list of such documents is irrelevant.
74 Reading the plaintiff's submissions, I infer that he does not seek discovery of a list, but discovery of the files and folders. He submits that these documents 'evidence the activities undertaken by the defendants on their own private affairs'. I doubt that is a reference to a list.
75 The use of the word 'retained' creates another uncertainty. It may refer to those files and folders Ms Radich held at 30 June 2010, or to all files and folders which she held during the 10 year period specified in the category. If it relates only to documents held in 2010, the burden of discovery is not obviously great. It is simply a listing of lever arch and other files and folders. If the latter, the burden of identifying any file or folder held by Ms Radich over a 10 year period may be disproportionate, having regard to the potential relevance of the document. The defendants did not make any submissions regarding burden, apparently on the basis that Mr Singh was simply seeking a list.
76 This item needs to be stood over for clarification in further argument if necessary.
Telephone accounts and bills containing itemised lists of telephone calls from 1 January 2000 to 30 June 2010.
77 Again there is some interpretation required. I assume the request is for accounts and bills of telephone lines of the partnership. Mr Singh submits these documents are relevant to showing the extent of trading and personal activity attended to by and on behalf of the defendants, including by Ms Radich. The plaintiff foreshadows analysis and comparison of these documents with other documents relating to the financial and time recording of each defendant, presumably over a 10 year period. That burden, of course, falls on the plaintiff and not on the defendants.
78 The defendants submit the category is too broad and burdensome. On the material currently available to the court, I can make no realistic assessment of the burden of discovery sought in this category. The firm may hold telephone bills over that period, they may be held in a discrete location and readily accessible. I do not know, and can make no realistic assessment of the burden of discovering them. I propose to hold this matter over to give the defendants the opportunity to put on evidence regarding burden if that is their objections.
NAB Documents relating to guarantees, overdrafts, releases and bills facilities from 1 July 2009 to 31 May 2011, with copies of monthly statements for each facility, including documents seeking the Plaintiff's consent to rollover the NAB Facilities and NAB Rollover Facilities to 31 December 2010.
79 These are pleaded to be relevant to the interim agreements and the considerations for those agreements. The plaintiff's submissions do not say how. And, on the face of the documents, I can not determine what the relevance is. The plaintiff seeks relief with regard only to the third and fourth agreements. With regard to the first and second interim agreements they seek only a declaration that they were made. It is not in issue that Mr Singh was released as a guarantor of the National Australia Bank's facilities in May 2011. It may be that, later in the proceedings, there will be some greater definition of issues relating to the interim agreements. On my understanding of the issues currently raised in the pleadings, I can not see the basis for an order for discovery.
From 1 January 2000 to 30 June 2011, Documents and Correspondence relating to 'personal interests' of each Defendant including:
80 The third, fourth and fifth dot points (items 39.3, 39.4 and 39.5 in the plaintiff's schedule) are directly relevant to the pleaded breach of the partnership agreement. Documents relevant to those allegations should be discovered.
81 The other items are subject to the same consideration as item 32; in many cases they overlap. Discovery will not be ordered.
In relation to the 'related entities', Correspondence, Documents and records relating to and in connection with debts and liabilities and claims and compromises with or by: Australian Taxation Office; National Australia Bank; Macquarie Bank; any other creditor.
82 Mr Singh submits these documents will disclose whether the property and share trading of the defendants 'impacted on any of the FLSD related entities'. The pleading relating to those entities is very limited. I am not satisfied that the impact of the defendants' trading or other conduct on those entities is a matter arising on the pleadings.
Any documents, including emails, file notes or letters that relate to the 11 complaints against the non-personal injury sections of the firm (supervised by the First Defendant).
84 In his reply and defence to counterclaim, Mr Singh asserts that there were about 11 complaints against the nonpersonal injury sections of the partnership, those sections supervised by Mr Friedman: reply par 19.4. This allegation is in response to the plea in the counterclaim that Mr Singh failed to diligently supervise and conduct a particular matter in breach of his duty to diligently attend to the business of the partnership. I am not sure whether the allegation is not simply titfortat. It is unrelated to any relief that Mr Singh seeks against the defendants, and irrelevant to the defence of the specific allegation made against him.
85 The defendants have agreed they will give discovery of the complaints. I can see no sufficient relevance of the other documents to any matter that is required to be resolved in these proceedings. I decline to order discovery of them.
In relation to the 'related entities' (SJN Pty Ltd, Somah Pty Ltd , Lawdebt Pty Ltd, Law Hire Pty Ltd, RCC Law Pty Ltd, MCC Pty Ltd), from 1 January 2008 to 30 June 2010, each entities internal financial records including general ledgers, trial balances, profit and loss records and records of income, expenses, payments and distributions.
86 Mr Singh submits that the defendants' pleading that the agreement made at the meeting on 29 March 2010 extended to the 'related entities' means that the value of each of these entities is in issue as part of the overall value of the partnership. He further says that the documents are relevant to the value of the liabilities and overdraft of the firm following his resignation, and will 'enable tracking the relevant financial transactions and inter-entity payments prior to and subsequent of the Plaintiff's resignation'. The plaintiff originally sought these documents for the period from 1 January 2000 to 30 June 2010, but has limited its request in response to the defendants' claim that it was unduly burdensome.
87 The defendants submit that the documents relate to issues that will be relevant upon the taking of accounts, should the partnership be wound up, and discovery is not now required.
88 Unfortunately, although I feel that I should, I do not understand the arguments put on behalf of Mr Singh. The plea relating to the related entities is very limited.
89 In the circumstances, I must stand this item over for further argument should Mr Singh wish to pursue it. I am aware from my management of the related Corporations Act matters that Mr Singh is a shareholder and director of two of the related entities, and his wife is a shareholder and director of the third. The other two do not trade. It is surprising that discovery is required, and opposed, in relation to the financial records of a company of which he is a director.
Each Defendants personal income tax returns from 1 July 2000 to 30 June 2012.
90 Mr Singh's submission in support of this category is that the income of each defendant will disclose the level of activity and time spent on all businesses, thus going to proof of the alleged breach of contract. The category sought, on that basis, is far too expansive. I am not satisfied that, on the case pleaded, the defendants' personal income tax records are relevant. This is so for the period of the partnership, and even more so for the two years following the dissolution of the partnership.
91 The next item, item 54, overlaps because of the extended definition of defendant in the plaintiff's schedule of proposed discovery categories. In item 54, Mr Singh seeks personal income tax returns for the family members of each defendant in so far as they evidence any distribution to family members from the entities. I doubt that these documents are in the possession, custody or power of either Mr Friedman or Mr Lurie, and thus discoverable by them. In any event, I am not satisfied that they are relevant.
'Matter transaction reports' for 'Mr Risk' and 'Mr Archive' from 1 January 2005 to 30 January 2012.
92 Mr Singh submits that these reports are similar to the balance reports in item 27, and disclose time recorded, disbursements, trust funds and other financial information in connection with each of the files. If that is so, they should be discovered on the same basis as item 27. Again, I would restrict the period of discovery to the period of the partnership.
93 Accordingly I would order discovery of the following items, for documents up to 30 June 2010 only:
(1995) 183 CLR 121
(1998) 19 WAR 316