Venacom Pty Ltd v Morgan Brooks Pty Ltd

Powell v Wilson and McKinnon (1908) VLR 574 CASES CITED : James v Davis (1883) 9 VLR L140 Vaughan v Dawson [2005] NSWSC 33

Venacom Pty Limited - Plaintiff/Respondent Morgan Brooks Pty Limited T/A Morgan Brooks Group - First Defendant/Applicant Dominic Cincotta - Second Defendant PARTIES : Pacific Furniture Pty Limited - Third Defendant Thomas Sendro - Fourth Defendant ACN 067 567 702 Pty Limited - Fifth Defendant Heperu Pty Limited - Sixth Defendant Kirisi Holdings Pty Limited - Seventh Defendant

COUNSEL : B Burke - Plaintiff/Respondent

SOLICITORS : McCabe Terrill Lawyers - Plaintiff/Respondent R Aulsebrook - Director of First Defendant/Applicant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

5966/03 VENACOM PTY LIMITED v MORGAN BROOKS PTY LIMITED JUDGMENT - Ex Tempore 1 HIS HONOUR: This is the hearing of an Amended Notice of Motion filed 6 December 2005. One of the orders which it seeks is that an order made by the Registrar on 18 October 2005 be discharged under Rule 45.19 of the Uniform Civil Procedure Rules 2005. That Rule is the one which permits the Court to review a decision of the Registrar. The order of 18 October 2005 which is referred to is an order which requires the giving of further discovery in relation to three categories of documents, namely: "1. All documents relating to:- (a) product profiles; (b) rate sheets; (c) information sheets, In respect of all financial products on offer by Morgan Brooks Pty Limited or the Morgan Brooks Group during the period 1 January 2000 to 30 December 2003. 2. All documents relating to the establishment, maintenance and amendment of any website owned by Morgan Brooks Pty Limited or the Morgan Brooks Group (including but not limited to documents evidencing amendments to such site(s) concerning Mr Dominic Cincotta or any company associated with him, the Morgan Brooks' Double Bay office and the Morgan Brooks' Coffs Harbour Office) from the date of the establishment of such website(s) to the date on which Mr Dominic Cincotta's name was last displayed on such website(s). 3. All documents relating to any professional indemnity insurance held by Mr Dominic Cincotta, ACN 067 567 702 Pty Limited or Morgan Brooks Pty Limited or the Morgan Brooks Group from 1 January 2000 to 30 December 2003." 2 There has previously been an order for discovery in this matter. The order for discovery was one which required the production of documents identified by reference to some 28 categories. After lengthy disputes about the adequacy of compliance with that order for discovery, a supplementary discovery was made by the first defendant on or shortly before 23 September 2005. The first defendant accepted that that supplementary discovery was sufficient compliance with the order which had been made. 3 Inspection of documents produced in that supplementary discovery lead the first defendant to wish to acquire documents which fell within the first category referred to in the order of 18 October 2005. The order of 18 October 2005 is one which the Registrar made in the absence of Mr Aulsebrook, the director of the first defendant, who is appearing for the first defendant in the proceedings. Mr Aulsebrook had, it seems, been delayed in getting to Court that day, and arrived soon after the orders had been made. 4 In support of the application to set the orders aside, Mr Aulsebrook has sworn an affidavit on 3 November 2005, concerning which he says that items 1 and 2 of the additional categories in relation to which documents are sought "The documents have already been discovered". 5 When no evidence is produced to me to suggest that this statement is incorrect, and when the affidavit was read and Mr Aulsebrook was not cross-examined with material put to him which might be the basis for suggesting that the statements were incorrect, I am not persuaded that there is a sufficient basis for the ordering of supplementary discovery in relation to items 1 and 2. 6 Thus, I shall set aside the order of 18 October 2005 insofar as it relates to the discovery of the first two categories of documents. 7 The issues in the case between the plaintiff and the first defendant turn, at least to some extent, on the scope of the actual, and the ostensible, authority of Mr Dominic Cincotta, who operated a business, which the plaintiff says was a branch of the first defendant, and through which a representative of the plaintiff made investments. The plaintiff alleges that there were various irregularities in the investment which was made, that it has suffered loss, and that the first defendant is liable by reason of Mr Cincotta having been its agent, or having ostensible authority to act on its behalf. 8 The way in which Mr Burke, for the plaintiff, puts the relevance of the third category of documents is that, in the ordinary course of running a business involving the provision of financial services, professional indemnity insurance would be involved, and documents such as an insurance proposal, or an insurance policy itself, could give information about the authority of people to act on behalf of the organisation, and, perhaps, the internal structure of the organisation. In my view, that contention is correct, and a sufficient basis of relevance has been shown for the third category of documents. 9 It may be that there have been some communications concerning professional indemnity insurance which are the subject of either client legal privilege, or some other form of privilege, but if that is so, it is always possible for the claim for privilege to be made in the drawing up of the list of discovered documents. I also bear in mind that the period of time which is referred to, running over four years, is not particularly great, and that the volume of documentation involved is not likely to be large. I leave the order on foot insofar as it relates to the third category of documents. 10 Even though the proceedings are ones which were begun in 2003, they have not yet reached the stage of the plaintiff's evidence-in-chief having been filed. That is in part because a former director of the plaintiff has died, and the plaintiff is particularly dependent upon discovery to be able to prove its case. As well, there have been disputes about discovery which have taken some time to resolve. 11 The defendant's Amended Notice of Motion seeks an order that the Court determine that the first defendant has complied with its obligation pursuant to discovery in the matter. Given that discovery is something concerning which there are ongoing obligations, it is not possible for that order to be made: Uniform Civil Procedure Rule 21.6. 12 The third order which is sought in the Amended Notice of Motion is for the plaintiff to provide to the first defendant answers to certain interrogatories. I have been taken through the interrogatories with some care. The principles upon which interrogatories are required to be drafted include that they take the form of questions which could be asked of a witness in the witness box in evidence-in-chief: Powell v Wilson and McKinnon (1908) VLR 574, James v Davis (1883) 9 VLR L140. It may be that some of the interrogatories which are in issue fail to meet that test, because they seek to have an answer to a question which asks what is the mental state of a corporation at a particular time. However, I will not make the decision concerning interrogatories on that basis, or on the basis of any other deficiencies there might be in individual interrogatories. Under Uniform Civil Procedure Rule 22.1(4) the Court is not to make an order for interrogatories unless the Court is satisfied that the order is necessary at the time it is made. In my view, when the plaintiff's evidence-in-chief has not been put on, it is premature for any interrogatories at all to be delivered. Thus, I decline to make order 3 in the Amended Notice of Motion. 13 The fourth order which was sought was an order for the Court to reinstate the matter to the expedition list. The correct procedure for seeking to get a matter into the expedition list is by taking out a Notice of Motion which is returnable on a Friday before the expedition judge, and which is accompanied by an affidavit which gives the basis for expedition, containing information of the kind described in Vaughan v Dawson [2005] NSWSC 33. The present Notice of Motion is not the procedurally appropriate way of getting a matter into the expedition list, and for that reason I decline to make Order 4 in the Amended Notice of Motion. 14 The orders of the Court are that Order 1 made on 18 October 2005 be discharged insofar as it requires discovery of categories 1 and 2 of the annexure to that order. * * * * * * * * * * 15 The plaintiff seeks costs of the Notice of Motion. It contends that the Notice of Motion has substantially failed, in that the only reason why orders 1 and 2 were set aside was because of the statement in Mr Aulsebrook's affidavit that the documents have already been provided. 16 I do not regard that as a reason for regarding the Notice of Motion as not having succeeded to some extent. The primary focus of the application as initially put by Mr Aulsebrook was the discovery aspect of it. Concerning that, each party has had a measure of success. I order that each party bear their own costs of the Notice of Motion. **********

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