Thompson v Lane

1. The interlocutory application be dismissed.
2. The costs of and incidental to the interlocutory application be the Trustee's costs in the proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

LOGAN J: 1 By an application filed on 14 April 2021, Ms Emma Narelle Cathryn Thompson (Ms Thompson), a bankrupt, has made application pursuant to s 153B(1) and (2) of the Bankruptcy Act 1996 (Cth) for an order that her bankruptcy be annulled pursuant to that section on the grounds that her debtor's petition ought not to have been presented and ought not to have been accepted by the Official Receiver and that a sequestration order made on 1 July 2020 should not have been made. 2 That application has been hitherto case managed by another judge, but more recently allocated to my docket. The annulment application has been set down for hearing on Monday 2 August 2021. In the course of preparing her case in respect of the annulment application, Ms Thompson formed the view that she was entitled pursuant to r 20.31(1) of the Federal Court Rules 2011 (Cth) to the production of particular documents mentioned in an affidavit of her trustee in bankruptcy, Mr Morgan Gerard James Lane, filed on 15 July 2021. 3 The notice is in these terms: 1. The Report prepared by the Costs Assessor, Mr Glenn Walter identified as dated 23 April 2021 on Table 6 page 13 of the Affidavit; including all Attachments identified on page 18 of the Report 2. The instructions to prepare a Report and all documents comprising the Brief provided to the Costs Assessor, Mr Glenn Walter 3. All documents, supporting documents, communications, notes of meetings/conversations with persons and all other information pertaining to preliminary assessments and determinations of; a) the Notes 1 to 15 recorded on the Tables 1, 2A, 3, 4, 5 and 6 on pages 8 to 13 of the Affidavit; b) the sale of 16 Aaron Avenue, Hawthorne and the proceeds of the sale, including the Settlement Statement identified on Table 3 on page 10 of the Affidavit, including all communications with Mills Oakley; c) the amounts in the "Preliminary Assessment" column on Table 6 on page 13 of the Affidavit; d) the amount of $820,479.50 in paragraph 14 of the Affidavit; e) the preliminary assessment of the amount of $651,252.68 in paragraph 16 of the Affidavit; f) the amount of $593,249.40 in paragraph 17(a), the amount of $98,371.75 in paragraph 17(b) and the amount of $140,274.96 in paragraph 17(c) of the Affidavit; g) the amounts identified on Table 5 on page 12 of the Affidavit; noting that the amounts of $186,221 and $40,000 and $500 are not identified in any document previously filed in this proceeding and total to approximately one third of the total amount shown in Table 5; h) the amount of $38,500 of legal fees on Table 1 on page 8 of the Affidavit, including how the amount is reasonable and necessary, and what benefit will be provided to the Bankrupt Estate from same; i) relied upon for failing to take step(s) in the proceedings identified in paragraph 8 to 13 of the Affidavit and all other proceedings that were afoot on 1 July 2020 and identified in the Affidavit of Morgan Lane sworn 4 May 2021. 4 Rule 20.31 is in these terms: 20.31 Notice to produce document in pleading or affidavit (1) A party (the first party) may serve on another party (the second party) a notice to produce, in accordance with Form 39, for the inspection of any document mentioned in a pleading or affidavit filed by the second party. (2) The second party must, within 4 days after being served with the notice to produce, serve the first party with a notice: (a) stating: (i) a time, within 7 days after service of the notice, when the document may be inspected; and (ii) a place where the document may be inspected; or (b) stating: (i) that the document is not in the second party's control; and (ii) to the best of the second party's knowledge - where the document is and in whose control it is; or (c) claiming that the document is privileged and stating the grounds of the privilege. (3) If the second party does not comply with paragraph (2) (a) or (b) or claims that the document is privileged, the first party may apply to the Court for an order for production for inspection of the document. Note Control is defined in the Dictionary 5 Rule 20.31(1) is buttressed by r 20.31(3). That concerns the making of an application to the Court for an order for the production for inspection of documents the subject of a notice, which have not been produced as required by the notice. 6 Ms Thompson has made such an application. By that application, she seeks an order for the production for inspection of: The documents … identified in the Respondent's affidavit sworn 15 July 2021 but are not Exhibited to the affidavit and were not provided to the Applicant in response to the Applicant providing a Form 39 to the Respondent's solicitor. 7 The focus, therefore, of the present interlocutory application is on whether Ms Thompson is entitled to an order for the production of the documents as set out in her notice to produce. The trustee by his solicitor submitted that, on the true construction of r 20.31, the trustee had produced or would shortly produce such documents as he was obliged to in terms of that rule, having regard to his affidavit and the notice to produce. A creditor, being the Body Corporate for Arila Lodge CTS 14237, which is a respondent party to the annulment application, also appeared by its solicitor but did not make any substantive submission in relation to the merits of the interlocutory application. In effect, the role adopted was that of a watching brief. 8 As it happens, r 20.31 has a lengthy provenance. That provenance is revealed by a judgment of Moore J in respect of a predecessor rule, O 15 r 10, in the previous Federal Court Rules - see King v GIO Australia Holdings Ltd [2001] FCA 1487 (King v GIO Holdings). In King v GIO Holdings, at [10] - [16], inclusive, Moore J helpfully summarises the provenance of the rule and judgments bearing upon its construction: 10 This leads to a consideration of the second issue which concerns the notice to produce. On 22 June 2001 the applicant's solicitors served a notice to produce on the second respondent. The notice was served under O 15 r 10 of the Federal Court Rules. That rule provides: "(1) Where a pleading or affidavit filed by a party refers to a document, any other party may, by notice to produce served on him require him to produce the document for inspection. (2) Where a notice to produce a document is served on a party under sub-rule (1), he shall, within 4 days after that service, serve on the party requiring production a notice - (a) appointing a time within 7 days after service of the notice under this sub-rule when, and a place where, the document may be inspected; (b) claiming that the document is privileged from production and sufficiently stating the grounds of the privilege; or (c) stating that the document is not in his possession, custody or power and stating to the best of his knowledge information and belief where the document is and in whose possession, custody or power it is." 11 One of the matters alleged against the second respondent in the applicant's statement of claim is that it did not have reasonable grounds for making representations of the type summarised in [2] above. In its defence, the second respondent has pleaded: "38. In relation to paragraph 38: 38.1 save as pleaded in paragraph 36.1 of this Defence denies that Grant Samuel made any of the representations alleged in paragraph 36; 38.2 says that Grant Samuel had reasonable grounds for making the statements made by it in the Grant Samuel Report, such reasonable grounds being based upon the information provided by GIO, advice provided by PricewaterhouseCoopers and its related entities and its own analysis, enquiry and review as set out in the Grant Samuel Report, including the matters particularised. PARTICULARS (a) Grant Samuel obtained financial and other information provided by GIO including: (i) historical financial information in the form of audited accounts for GIO Insurance Limited for the years ending 1994, 1995, 1996, 1997 and 1998; (ii) forecasts and budgets of future revenues, expenditures and profits prepared by management of GIO Re and reviewed by PricewaterhouseCoopers Securities Pty Limited; [Category 1] (iii) the opinions and judgement of management of GIO Re; [Category 2] (iv) provisioning models for GIO Re for the financial years ending 1997 and 1998; [Category 3] (v) a discounted cash flow valuation model prepared by GIO Re management. [Category 4] (b) PricewaterhouseCoopers had been GIO's auditors for many years and had audited its annual accounts for 1992-1998 and reviewed its provisioning including for the financial years ending 1997 and 1998. [Category 5] (c) PricewaterhouseCoopers Securities Pty Limited had been retained to conduct a review and did conduct a review of the GIO profit forecasts for the year ending 30 June 1999, including the forecasts for the GIO reinsurance business. [Category 6] (d) Grant Samuel retained PricewaterhouseCoopers Actuarial Services Pty Limited to review and it did review the valuation model provided by GIO Re management and advised on the key assumptions of that model by reference to its experience in the reinsurance industry generally and GIO's reinsurance business in particular, including advice as to whether the assumptions regarding loss ratios for the year ending 30 June 1999 contained in that model were consistent with GIO Re's recent loss experience. [Category 7] (e) Grant Samuel reasonably relied on such information and advice provided by GIO and PricewaterhouseCoopers and its associated entities. (f) Grant Samuel conducted its own analysis, enquiry and review and applied its own methodology and judgement to the assessment of the value of GIO Re and its opinion as to whether the varied takeover offers were fair and/or reasonable. [Category 8]" The bold italicised notation refers to categories of documents referred to in the correspondence between the solicitors. 12 It can be seen from O 15 r 10(1) that a notice may be served under that rule creating an obligation to respond when, relevantly, "a pleading … refers to a document". In relation to categories 1, 2, 5, 6, 7 and 8 there is an issue concerning whether the pleading "refers" to a document. 13 There appears to be limited authority on this question. In Smith v Harris (1883) 48 LT 869 the pleadings spoke of "invoices, letters, bill heads, and brands on casks". A notice was served seeking the production of those documents. The application was resisted by the plaintiff on the basis that the rule operated only on documents which were identified in the pleadings or particularly described. Chitty J rejected this submission (as it related to the invoices, letters and bill heads) and concluded: "It is said, that that is only a general reference to documents, but, in my opinion, that is both a general reference and also a special reference to each and every bill head and each and every letter; because the plaintiff, instead of setting out each document separately, refers to them compendiously, but that is no reason why inspection should not be allowed." 14 A little over a century later a similar issue arose in Dubai Bank Limited v Galadari & Ors (No 2) [1990] 2 All ER 738. The proceedings involved an allegation of fraud and the diversion of funds into the assets of several defendants. One of the assets was a property in London. An affidavit was sworn in the proceedings dealing with the acquisition of the property for the benefit of a trust. A notice was served seeking production of documents purportedly referred to in the affidavit. One issue in the proceedings was whether the affidavit had referred to documents. 15 The Court of Appeal first addressed the purpose of the rule permitting the service of a notice. Their Lordships said: "Rules of court substantially corresponding with Ord 24, r 10 and the rules ancillary to it have been in force for over 100 years. Lindley LJ in Quilter v Heatly (1883) 23 Ch D 42 at 50 drew a distinction between these rules and the general rules as to the discovery of documents. He said: 'These rules were evidently intended to give the opposite party the same advantage as if the documents referred to had been fully set out in the pleadings.' While this statement explains the general purposes of the rules, it does not explain what test is to be applied in determining whether or not an assertion in a pleading or affidavit involves a 'reference to [a] document' within the meaning of Ord 24, r 10. Though the rule has existed for such a long time, there appears to be remarkably little authority on the point." The Court of Appeal referred to the judgment of Chitty J in Smith v Harris (supra) and then identified the problem they confronted in the following terms: "The problem arises in applying [the approach of Lindley J] in a case where, though the assertion made in the affidavit or pleading does not specifically mention a document or class of documents, it gives the reader strong grounds, perhaps even sure grounds, for supposing that a document must exist." Their Lordships rejected a submission that the rule was satisfied by reference by inference and said: "We revert to the example of the assertion 'Blackacre was conveyed by A to B'. We cannot accept the broad submission by counsel for the plaintiff summarised above. It seems to us to involve reading the phrase 'reference is made to any document' as including reference by inference. This we do not regard as the natural and ordinary meaning of the phrase. To our minds, the phrase imports the making of a direct allusion' to a document or documents." The Court rejected an approach that would involve inference and conjecture. 16 Their Lordships referred to a judgment of Lawton LJ in Marubeni Corp v Alafouzos [1986] CA Transcript 996. In that matter an affidavit had referred to the plaintiff "obtain(ing) outside Japanese legal advice" and counsel for the plaintiff had conceded that the advice was almost certainly contained in a document. However Lawton LJ held that there had been no reference to a document in the affidavit. Their Lordships said: "In our judgment, a mere opinion that on the balance of probabilities, a transaction referred to in a pleading or affidavit must have been effected by a document, does not give the court jurisdiction to make an order under Ord 24, r 10, unless the pleading or affidavit makes direct allusion to the document or class of documents in question." 9 As can be seen from the survey offered by Moore J, the origins of the present rule may be traced to the post-Judicature Acts practice of the High Court of Justice for England and Wales. In Quilter v Heatly (1883) 23 Ch D 42, at 50, Lindley LJ observed of the then English rules that: These rules were evidently intended to give the opposite party the same advantage as if the documents referred to had been fully set out in the pleadings. 10 As is also apparent from his Honour's survey, very early in the history of the rules, as the judgment of Chitty J in Smith v Harris (1883) 48 LT 869 reveals, an expansive view was taken of what constituted a "mention" or "reference" to a document in a pleading or affidavit. Even so, as the course of subsequent authorities set out in this summary reveals, a mere inference that there probably is a document is not sufficient to constitute a "mention" or "reference" to a document. 11 A helpful example of this understanding of rules equivalent to this Court's r 20.31(1) is to be found in a judgment of MA Wilson J in GSM (Operations) Pty Ltd v Suwenda [2010] QSC 33 (GSM (Operations) v Suwenda), the reference to which I am indebted to the trustee's solicitor. In that case, her Honour was called upon to determine whether an order for production should be made in respect of "a copy of the opinions" as referred to in an affidavit, and as sought, by notice served under r 222 of Queensland's Uniform Civil Procedure Rules 1999 (Qld). Her Honour surveyed like authorities to those considered by Moore J in King v GIO Holdings. Her Honour concluded in respect of the particular paragraph of the affidavit concerned, that it: [C]ontains a direct allusion to opinions but not a direct allusion to a document containing opinions. Accordingly, her Honour considered that r 222 was not engaged. 12 It is necessary to distinguish an application under r 20.31 for production from an application for production of documents which have been discovered by a party. The more submissions progressed and without, in any way, voicing disrespect for Ms Thompson, I rather thought that she had understandably, for a litigating person, conflated the reach of r 20.31 with the requirement which can form upon a party if discovery is ordered for discovery of documents directly relevant to issues in a proceeding. 13 Approaching then, the question of whether or not production should be ordered, by reference the authorities summarised by Moore J in King v GIO Holdings and exemplified in GSM (Operations) v Suwenda, the view I have reached in respect of the documents, and the view that I have reached in respect of the production requirement set out in the notice to produce, is as follows. 14 As to paragraph 1, the trustee has produced the report prepared by the cost assessor, Mr Glenn Walter. He has also produced some of the attachments and so I was informed today, after attention was drawn to this by Ms Thompson, that not all attachments had been produced, and he will forthwith produce such attachments as have not already been produced. The trustee is an officer of the court in the administration of a bankruptcy. That particular role was manifest in terms of the frank concession made on his behalf as to the particular omission. I do not doubt that the production will occur forthwith and without the need for any formal order. 15 As to paragraph 2 of the notice, the trustee mentions in his affidavit having briefed a cost assessor. It is also apparent from the cost assessor's report, as produced, that that brief must have been in writing. However, the word "mentioned" in the rule must be applied in terms of its settled understanding: there is an allusion in the affidavit to a briefing, but not to a document. The case, in my view, is at one with that considered and ruled upon by MA Wilson J in GSM (Operations) v Suwenda. That being so, there is no requirement under r 20.31 which is engaged. 16 It is now necessary to consider the various categories specified in paragraph 3 of the notice to produce. The initial focus, as paragraph 3A makes apparent, is upon notes to tables, which are annexed to the trustee's affidavit. A submission was made on behalf of the trustee that the annexures did not fall within the terms of r 20.31. I do not accept that submission. The annexed tables were but a convenient way of incorporating particular statements and detail instead of setting out that detail in the text of the affidavit itself. 17 So I approach the application on the basis that the mention, if it be that, of a document in an annexed table does fall within the terms of r 20.31. In fairness to the trustee, I should also record that he approached his task, as he understood it, on the basis that even if the rule were applicable to the tables, that he had produced all that was required. 18 Looking at table 1 in the first instance, one sees in note 1: Pre-appointment tax refund received from the ATO. That is a reference to a payment. It may well be that there is a document, but the reference, or the mention, is of a payment, not of a document. It falls outside the terms of r 20.31. Notes 2 and 3 to table 1 refer to other tables, and with containing calculations. The tables themselves are the documents which are mentioned. And they have already, obviously, been provided by way of annexure to the affidavit, itself. Note 4 mentions a calculation as per table 4. This, again, has already been provided. 19 Note 5 refers to the advice from the cost assessor, which has been produced, or as to some inadvertently omitted annexures, will very shortly be produced. There is no need further to consider note 5. Note 6 mentions a figure in respect of work in progress, not a document. Note 7 mentions table 6. The document, therefore, is the table already produced by way of annexure to an affidavit. Note 8 mentions a figure. It is a mention in respect of work in progress. It is not a mention of a document. Note 9 directs attention to table 5, a breakdown of unsecured creditors. Once again, the mention is of a table, which has already been produced by way of annexure to an affidavit. 20 Turning to table 2A, note 1 is a mention of two property appraisals by Belly Property and Ray White, dated 6 July 2020. That document has been produced. Note 2 is but an expression of opinion by the trustee. There is no mention of a document. Notes 3 and 4 are, again, estimates made by the trustee. But there is no mention of a document. Note 5 is a reference to note 3, already dealt with. The same is applicable to note 6. Note 7 is but an estimate containing no mention of a document other than table 2B, which has already been produced by way of annexure to an affidavit. 21 As for table 2B, note 1 is, once again, but an estimate, with the only mention of a document being table 2A, already produced by way of annexure to an affidavit. The same may be said in respect of note 2, which contains mention only of table 6 as a document. Once again, table 6 has already been produced by way of annexure to an affidavit. 22 As to table 3, note 1 does mention a document, being a settlement statement dated 18 January 2021, in respect of the premises at 16 Aaron Avenue, Hawthorne. That document has been produced. Note 2 contains a reference to note 1, and thus a reference to the already produced settlement statement. The same conclusion must be made in respect of notes 3, 4, 5, 6, and 7, each of which contain the annotation "see note 1". The additional annotation in respect of note 5 is "divisible asset payable by ATO to bankrupt estate (disputed)". That is not a mention of a document in terms of r 20.31, only an expression by way of clarification by the trustee. 23 The notes to table 3 also contain an unnumbered comment in respect of the balance in these terms: "Advised by Mills Oakley for amount paid to Suncorp." In respect of that particular annotation, once again, the conclusion reached by MA Wilson J in GSM (Operations) v Suwenda is directly analogous. There is a reference to an advice, but not to a document containing that advice. 24 Table 4, note 1 is an expression of opinion by the trustee in respect of whether the body corporate debt is likely to meet the definition of permitted deductions of a secured creditor. There is no mention of a document. Note 2 is in these terms: "Property sold mortgagee in possession. Only balance for bankrupt estate subject to ARC." This is an explanatory note only by the trustee. It does not mention a document. 25 Note 1 to table 5 directs attention to table 6. To that extent, it does mention a document, but that document is already produced by way of annexure to the affidavit of the trustee. The balance of note 1 to table 5 is "Total of Preliminary Assessment figures from Fixed Costs Orders and Costs Orders to be assessed (less Claims Q and R treated as priority costs)". The costs orders concerned have already been produced. They are documents mentioned. Note 2 is in these terms: "Based on Statement of Affairs estimate." That does, in my view, contain a mention of a document, namely the statement of affairs. But the statement of affairs is the bankrupt's own document. In any event it is already in her possession. 26 Note 1 to table 6 is in these terms: "Preliminary assessment from Paragraph 8 of Glenn Walter cost assessors advice dated 23 April 2021 [sic]." That document has been produced. Note 2 is but a statement of present position in these terms: "Preliminary assessment has not been conducted at this time. Amount claimed used." Note 3 is a reference to note 2, and therefore not a mention of a document. Note 4 is in like terms to note 1, thus whilst it mentions a document, that document has been produced. 27 Notes 5, 6, and 7 contain references to note 2, and need not be further considered because their fate is governed by that already mentioned in respect of note 2. The same may be said in respect of notes 8, 9, 10, 11, 12, 13, and 14 of table 6, each of which are "see note 2". Note 15 is "Preliminary assessment from cost estimates provided by Federal Court on 15 June 2021". In my view, that is a mention of documents, being cost estimates. However, as I understand it, those estimates have already been produced. 28 As to paragraph 3B of the notice to produce, the settlement statement concerned has, as I understand it, been produced. Whilst one might expect that a sale of real property would entail documentation, those documents are not mentioned in the trustee's affidavit. Rule 20.31 is not, therefore, engaged. That these were sought exemplifies, in my view, a conflation of what may have been the subject of an application for discovery with the terms of r 20.31. 29 The preliminary assessment referred to in paragraph 3C is nothing more than an assessment by the trustee. Insofar as it has manifested itself in documentary form, its manifestation or mention is in the table itself. The same may be said in respect of the preliminary assessment referred to in paragraph 3E. It is but an assessment which has manifested itself in the figure specified by the trustee. Paragraph 3D is but a figure which is deposed to in the affidavit. Once again, there may well be particular documents which have informed the trustee, but they are not mentioned in the affidavit. The same may be said in respect of the amounts to which reference is made in paragraphs 3F, 3G and 3H of the notice to produce. 30 Paragraph 3I is a little difficult, with respect, to comprehend, but appears to be in the nature of an application for discovery. In any event, there is no "mention" in the affidavit of documents within the meaning to be given to r 20.31 to which 3I is applicable. 31 What necessarily follows from the foregoing is that insofar as r 20.31 was engaged at all, the documents mentioned in the trustee's affidavit either have been produced or will forthwith and without any need for a court order be produced. It follows the necessary consequence, therefore, is that the application must be dismissed. 32 In my view, as to costs, had there been better precision in terms of exactly what was sought and an understanding as to the reach of r 20.31, this application would have been unnecessary. It is quite obvious to me that the trustee has approached his responsibilities in terms of production under the notice responsibly, as have his solicitors. In respect of costs, the order, therefore, is that the costs of and incidental to the interlocutory application be the trustee's costs in the proceedings. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Logan.