Commercial Tenancy (Retail Shops) Agreements Act 1985

Rules of the Supreme Court O 4A r 1, O 4B r 1, O 27 r 1

Konings v Naylor [1964] QR 235

Potter's Sulphide Ore Treatment Ltd v The Sulphide Corp Ltd [1911] HCA 35; (1911) 13 CLR 101

Simpson v Midalco, unreported; SCt of WA; Library No 6637; 19 March 1987

Stanfield Properties v National Westminster Bank plc [1983] 1 WLR 568

SWF Hoists and Industrial Equipment Pty Ltd v SGIC (1990) ATPR 41-045

1 MASTER SANDERSON: This is the defendant's application for leave to administer interrogatories for answer by the plaintiff and the third party. Under the provisions of O 27 r 1, leave is required before any party may interrogate. Both the plaintiff and the third party oppose the defendant's application on similar grounds. Before dealing with the defendant's application in detail it is necessary first to say something of the facts.

2 On or about 13 July 1989 the plaintiff and the defendant entered into a deed of variation ("the Deed") of a lease in respect of certain premises situated in Northbridge. The Deed contained a clause whereby the plaintiff covenanted to pay the defendant the sum of $120,000. It is further alleged that there was an oral agreement to the effect that the plaintiff would pay a further $80,000 direct to a construction firm in relation to certain work to be carried out on the leased premises.

3 The Deed was drafted by the third party. The third party is a firm of solicitors who were instructed by the plaintiff. Oddly, for a transaction of this nature, the defendant did not instruct its own solicitors. The plaintiff says, by its statement of claim, that the $200,000 was in fact "key money". Under the provisions of the Commercial Tenancy (Retail Shops) Agreements Act 1985 a landlord cannot claim key money. The plaintiff seeks to recover the amount that it has paid.

4 Against this claim, the defendant raises one defence and a number of counterclaims. The defendant says that the payment of $200,000 properly understood was not key money at all. It says that the payment related to discharge of the plaintiff's obligations to carry out certain work on the leased premises. By its counterclaim the defendant says that the plaintiff engaged in misleading and deceptive conduct. It is said that if, as the plaintiff contends, the $200,000 payment is key money then the plaintiff was aware of the fact that the payment ran counter to the statute. By not saying anything to the defendant the plaintiff represented by silence that such a payment could be made and the defendant was induced to enter into the Deed by virtue of this representation. It is further said that if the Deed, properly construed, is a lease then it does not accurately reflect the intention of the parties as they were acting under a mutual mistake. They therefore say the Deed should be rectified. Further, and again in the alternative, it is pleaded that if there was no mutual mistake there was unilateral mistake on the part of the defendants. As the plaintiffs knew of the defendant's mistaken belief, the court can rectify the Deed.

5 The third party was at all material times acting for the plaintiff in the transaction which has given rise to this action. It is pleaded that the defendant did not obtain any independent legal advice as to the terms of the Deed. While it is not pleaded that the third party was actually retained by the defendant, it is pleaded that in the circumstances, the third party was effectively acting for the defendant and this gave rise to certain fiduciary duties and, presumably, tortious duties. It is said that if the plaintiff is able to obtain a refund of the $120,000 paid by the plaintiff to the defendant pursuant to the Deed, the defendant is entitled to recover this amount from the third party. The third party denies that it is liable to the defendant as alleged, or at all.

6 The writ in this matter was issued in October 1991. Almost nine years later the parties are still wrestling over interlocutory matters. The case is hardly complex and it might reasonably have been expected that the trial would have been long since concluded and judgment delivered. Reading the file, it is not at all clear who or what is responsible for the extraordinary delay in bringing the matter before the court. However, it is possible to make two points. First, the plaintiff has been inactive for long periods of time. Nothing happened on the file between 28 February 1992 and August 1993. After filing a notice of intention to proceed in August 1993 the plaintiff then did nothing further until a further notice of intention to proceed was lodged on 7 November 1994. Effectively, then, three years were lost by the plaintiff's inaction. Secondly, it is apparent from the file that virtually every interlocutory step taken by the parties has resulted in a pitched battle. So far as I can ascertain from the Court file, it appears that issues of discovery have only just been finally resolved. It has not been possible for me, based upon the material available, to make any assessment of who is responsible for the lengthy interlocutory process. In the circumstances, I could not sheet home to either party responsibility for dragging out this action.

7 Before dealing with this application in particular, I should say something generally about interrogatories and their use in litigation as it is conducted in this Court. I can do no better, with respect, than quote what was said by Owen J in Dalecoast Pty Ltd v Monisse [1999] WASCA 103 (at [5] and [6]):

"It is often the case that the benefit to be obtained from delivering interrogatories is far outweighed by the inconvenience and expense to the other party in having to answer them. As a mechanism for understanding the case which a party has to meet that have, at least to some extent, been replaced by the pre-trial exchange of witness statements which is ordered in most cases. The standard form of pre-trial documents orders means that a party will seldom go to trial not knowing what documents it has to prove strictly.

These are developments that have occurred in recent times and the present regulatory framework for interrogatories has to be seen against that background. In the 1996 amendments to the Rules of the Supreme Court there was a significant change to the regime for interrogatories. It is now necessary to obtain leave before any interrogatories are administered. ... The leave regime is administered with case management principles in mind. Considerable thought needs to be given to whether it really is necessary to administer interrogatories consistent with the principles enshrined in O 1 r 4B. If they are considered necessary, great thought must go in to framing them so that they achieve the objective for which they are designed without putting the other party to unnecessary trouble and expense. They must cover the ground that the party concerned wants to cover. ... "

8 Both the plaintiff and the third party made essentially the same objections to the proposed interrogatories, although there was a slight difference between the questions to be asked of each of them. Their first objection was based upon delay. It was submitted that the case had been running for nine years and the pleadings had been substantially settled since 1996. While it was conceded that certain further interlocutory steps had been taken over the past four years, it was said that this did not alter the fact that the application for leave to administer interrogatories should have been made long before now. In the circumstances, so it was submitted, it was too late and leave ought not be granted.

9 This submission depended, at least in part, upon the comments of Master Bredmeyer in Irvine v The State of Western Australia [1999] WASC 224. The learned Master said (at [1]):

"No special time is fixed by O 27 of the Rules of the Supreme Court for the administration of interrogatories, nevertheless they should be administered reasonably promptly after the close of pleadings and after discovery. That is to comply with the court's goal of eliminating delays in the interlocutory processes of the court as set out in O 4A."

10 The defendants for their part submitted that the application had been made at the first reasonable opportunity. They submitted that up until late 1999 the pleadings were not finally settled and discovery had not been complete. They indicated that they had at various case management conferences foreshadowed interrogatories but they were concerned that they would have only one opportunity to administer interrogatories and they wanted to be sure that everything that needed to be covered was covered. They pointed to the comments of Owen and Templeman JJ in the Dalecoast case (supra) to the effect that, generally speaking, only one set of interrogatories would be permitted.

11 I have dealt with the delay in this matter earlier in these reasons. It is difficult to ascertain from the court file and from the evidence led in support of this application where the fault lies with respect to the delay in progressing the action. In my view, the cautious approach adopted by the defendant in waiting until all, or virtually all, interlocutory matters have been resolved before applying for leave to issue interrogatories is appropriate. It is true that much time has passed and it might well have been possible to make this application earlier than it was made. But I am not satisfied in the circumstances that the delay is so lengthy as to provide a basis for the refusal of leave.

12 The second submission put by the plaintiff and the third party was broadly that the interrogatories were unnecessary. As part of that submission, it was said that the interrogatories themselves were objectionable and for that reason ought not be permitted. To deal with this submission it is necessary to say something of the interrogatories themselves. I do not propose to detail each and every one of the proposed interrogatories. But a flavour of the questions proposed can be seen by quoting the first interrogatory in the minute relating to the plaintiff. The interrogatory is in the following terms:

"1. Look at the attached copy letter from Entertainment Enterprises Pty Ltd to Mr P Conti dated 27 June 1990 (document number 1.34 in the defendant's discovery), and the statements therein.

1.1 Did the plaintiff receive the advice referred to in that letter?

1.2 If the answer to the preceding interrogatory is in the affirmative:

1.2.2 Was the advice in writing, or oral, or partly written and partly oral?

1.2.3 From what law firm did the plaintiff receive the advice?

1.2.4 Name the natural person or persons who gave the advice.

1.2.5 What was the substance of the advice and in the event the advice was written or partly in writing, identify the document or documents in which the writing was contained."

13 The letter referred to is a letter from Entertainment Enterprises, a trading entity of the plaintiff, to Mr P Conti an agent of the defendant. Relevantly, it reads as follows:

"As raised in our previous discussions where we expressed our feelings that the charging of a premium for the Extension of Lease at Network was unreasonable, we have received advice that the payment is illegal under the Commercial Tenancy Retail Shops Agreement Act.

In view of this, I believe we should meet to discuss this matter further and therefore would appreciate your call at your earliest convenience."

14 It can hardly be said that any of the questions asked in that interrogatory are inadmissible. However, what the three subsequent questions go on to ask is a series of questions relating to the advice itself. The issue as to whether these interrogatories are proper interrogatories is quite complex. It involves consideration of the issue of privilege, whether that privilege is waived either expressly or by implication and whether, if there is a waiver, it applies to all or some of the legal advice provided by the third party to the plaintiff.

15 It is clear that whenever an application is made for leave to administer interrogatories, a draft of the proposed interrogatories ought be filed with the application. This allows an assessment to be made of the issues to which the interrogatories are directed and also allows some assessment to be made of whether or not the interrogatories themselves are reasonable or likely to result in objections. But, in my view, it is inappropriate to go into a detailed assessment of whether or not the interrogatories ought be answered. After all, once the interrogatories are delivered, it is open to a party to either answer them or object to them. The answers or objections are provided on oath. The considerations that apply if an application is made to compel a party to answer raise different issues from the issues raised on an application for leave to administer the interrogatories. Case management principles are of concern in an application for leave to administer, while it is difficult to see their relevance in an application to compel answers. On that basis a detailed exhaustive examination of the interrogatories is, in my view, inappropriate on an application such as this.

16 But that still leaves the question of what purpose will be served by these interrogatories. The answer, I think, is very little. It is general practice in this Court for parties to exchange witness statements prior to trial: see, generally, Practice Direction No 4 of 1995, Witness Statements. There is no reason to expect that, in this case, there would not be an order for exchange of witness statements. No submission to the contrary was made by the defendant's counsel. What that effectively means is that well before trial the defendant will know what evidence the plaintiff and the third party will lead in relation to the Deed and the circumstances in which it was signed. Moreover, the plaintiff is the party who will almost certainly have the right to begin. Of course, this is a matter which will finally be determined by the trial Judge, but there is nothing in the material presently before the court which suggests that the defendant would have the right to begin. That ensures the plaintiff's witnesses will be called first. Counsel for the defendant will have the opportunity to cross-examine the plaintiff's witnesses and explore all of the matters covered by these interrogatories. It is difficult to see what advantage, either in savings of time or cost, that would be occasioned by the administration of these interrogatories. In my view, they will not in any way limit the issues before the court.

17 Furthermore, if leave is given to administer these interrogatories it is inevitable that the plaintiff and the third party will object to answering all or some parts of the interrogatories. It is not difficult to see why objection would be taken and it is by no means certain that objection would not be justified. I make no final determination on that question. The point is that if these interrogatories are administered it will provide yet another round of interlocutory proceedings which will further delay the resolution of this case. In my view, this is one of those clear cases where the imperatives to be found in r 1 O 4A and O 4B lead to the conclusion that my discretion ought be exercised against allowing the defendant to administer these interrogatories.

18 Leave will be refused. The defendant's chamber summons will be dismissed. The defendant should pay the costs of the plaintiff and the third party, including the reserved costs, in any event.