Carsburg Earthmoving Pty Ltd v Geroff & Ors [2007] QDC 136

DISTRICT COURT OF QUEENSLAND CITATION: Carsburg Earthmoving Pty Ltd v Geroff & Ors [2007] QDC 136 PARTIES: CARSBURG EARTHMOVING PTY LTD ACN 010 213 117 Appellant V PETER GEROFF as liquidator of LINT PTY LTD (In Liquidation) ACN 068 503 211 Respondent FILE NO/S: BD 453/2007 DIVISION: Appellate PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court of Queensland, Brisbane DELIVERED ON: 28 June 2007 DELIVERED AT: Brisbane HEARING DATE: 21 June 2007 JUDGE: Alan Wilson SC, DCJ ORDER: Appeal allowed CATCHWORDS: PRACTICE AND PROCEDURE – DISCLOSURE – LISTS OF DOCUMENTS – RELEVANCE OF DOCUMENTS – action by liquidator to set aside payment by insolvent company as a preference – disclosure by liquidator – whether disclosure excessive – whether liquidator’s list of documents discloses large numbers of irrelevant documents Uniform Civil Procedure Rules, rr 5, 211, 212, 214, 223; Form 19 Cases considered: Gillies v Dibbetts [2001] 1 Qd R 596 Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102 Walker v Poole (1882) 21 Ch D 835 COUNSEL: M Steele for appellant G J Handran for respondent SOLICITORS: Forbes Dowling for appellant Tucker & Cowen for respondent -- 1 of 4 -- 2 [1] The appellant, Carsburg Earthmoving, is the defendant in proceedings in the Magistrates Court at Brisbane brought by the respondent, Mr Geroff, alleging that a payment of $16,578.84 in July 2002 made to Carsburg by Lint Pty Ltd, of which Mr Geroff is the liquidator, was an unfair preference. [2] On 18 December 2006 Mr Geroff filed an application in the Magistrates Court seeking an order that the defendant’s signature on a Request for Trial Date be dispensed with; on 15 January 2007 Carsburg Earthmoving filed an application attacking Mr Geroff’s disclosure in the matter. After a hearing on 19 January 2007 the learned Magistrate dismissed Carsburg’s application, allowed Mr Geroff’s, and ordered that Carsburg pay Mr Geroff’s costs fixed at $835. This is an appeal by Carsburg from that decision. [3] The proceedings in the Magistrates Court were commenced by claim on 8 April 2005. The pleadings were subsequently amended but, had closed around February 2006. On 14 November 2005 Mr Geroff delivered his list of documents. Thereafter the parties’ lawyers exchanged correspondence in which Carsburg attacked the form of the list, and Mr Geroff defended it. In September 2006 Carsburg refused to sign a Request for Trial Date until Mr Geroff complied with what it said was his proper duty of disclosure. The applications before the learned Magistrate followed. [4] At the heart of Carsburg’s complaint was the submission that Mr Geroff’s List of Documents (which runs to 78 pages) did not comply with the UCPR because his disclosure, it is said, has not been undertaken in a manner compliant with r 211(1), which provides: Duty of disclosure 211 (1) a party to a proceeding has a duty to disclosure to each other party each document – (a) in the possession or under the control of the first party; and (b) directly relevant to an allegation in issue in the pleadings. … [5] The term ‘directly relevant’ in r 211(1)(b) has been held to mean ‘something which tends to prove or disprove the allegation in issue’1 . Rule 214 provides that a party performs the duty by delivering a List of Documents ‘to which the duty relates’. While it is a proper method to refer to large numbers of documents in bundles, provided each is properly identified2 , the rules plainly cast an onus upon the party preparing a List to consider the question of direct relevance. [6] Rule 212 confirms this emphasis upon relevance by excluding certain classes of documents. So, too, does Form 19 (‘List of Documents’) which commences with the words: The following is a list of the documents directly relevant to the allegations or matters in question in this proceeding which you are in the possession or control of … (emphasis added). 1 Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102, at 105 2 Walker v Poole (1882) 21 Ch D 835 -- 2 of 4 -- 3 [7] The list of documents filed on Mr Geroff’s behalf has, at p 4, a heading ‘E. MISCELLANEOUS “CRITICAL” DOCUMENTS’; and, at p 21, another heading ‘F. MISCELLANEOUS “NON-CRITICAL” DOCUMENTS’. The only item under the second heading refers to an attached ‘Listing of Books and Records’ containing 57 numbered pages. Those pages contain lists under headings referable to box numbers with barcodes. Their presence, Carsburg contends, shows the task of determining relevance in terms of the rule has simply not been undertaken and Mr Geroff has wrongly attempted to fulfil the obligation by doing nothing more than itemising every document he has, regardless of relevance. [8] A perusal of the 57 page list tends to support this contention, in that there are many documents the relevance of which is not apparent – and which, on their face, would appear to be irrelevant. While the liquidation of a company may often be the product of a myriad causes, the particulars set out in paragraph 8 of Mr Geroff’s statement of claim, unsurprisingly relating relevant parts of the company’s financial history, define the issues relatively clearly. Only documents touching the issues raised there would apparently fall within the parameters of relevance for the purposes of r 211(1)(b). [9] There are, however, several aspects of Mr Geroff’s List suggesting it has gone far beyond that. First, the vast bulk and array of material disclosed carries an implication that the exercise of considering and culling documents, required by the rule as part of the process of determining relevance, has not been properly undertaken. [10] Secondly, the very use of the subheadings set out earlier imputes something less than the correct focus upon relevance in the preparation of the List. The meaning of the words ‘critical’ and ‘non-critical’ is not made clear. It seems likely the former is intended to suggest documents which might be directly relevant, but the latter certainly connotes something less than relevance. By themselves, these headings also persuasively imply that the exercise has not been properly undertaken in terms of the rule. [11] Thirdly, the description of many of the bundles and boxes themselves also suggests it is improbable their contents have any relevance to the company’s financial condition at the time of the payment to Carsburg. [12] Her Honour’s reasons for refusing any relief were, it seems, based upon an assumption that Carsburg could work out what it needed by inspecting all the documents in Mr Geroff’s List; she said: … therefore the Court accepts that there is some scope and sufficient scope for the defendant to be able to identify what is directly relevant to the issues in question.3 With respect, that reverses the onus under the rule and unfairly places it upon the recipient of the List. No doubt her Honour was mindful of the need to advance the claim without undue delay or expense, but the result is to pass costs to Carsburg when, in the first instance, any expense and effort associated with sorting the documents and determining relevance should be Mr Geroff’s. If successful in the action he will, of course, recover some of that expense in costs. 3 Transcript Previtera, Magistrate, 19 January 2007, at p3, ll 31 -- 3 of 4 -- 4 [13] Carsburg’s application before the learned Magistrate sought relief pursuant to r 223, but on its face that rule is primarily directed toward claims of inadequate or incomplete, rather than excessive disclosure. Rules 211-214 provide for the form and manner of discovery, with r 214(1)(a) requiring that a party deliver a list of documents to which the duty in r 211 relates. Before the learned Magistrate, and on appeal, the matter was argued in a way referable to those rules and, although Counsel for the respondent raised the appellant’s reliance upon r 223 in its Notice of Appeal, I do not think there is any disadvantage in determining the matter by reference to the correct, applicable rules. This is a proceeding in the Magistrates Court and the rules ought to be applied in the way encouraged by r 5(2) – i.e., with the objective of avoiding undue delay, expense and technicality and facilitating the purposes of the rules themselves. [14] Rule 5 also of course contains an implied exhortation to parties to proceed expeditiously and Counsel for Mr Geroff pointed to Carsburg’s long delay in bringing this application, and the fact that it only did so after the plaintiff sought to dispense with a Request for Trial Date. That is so, but the parties spent 12 months exchanging letters about the defendant’s List, and responsibility for the delay is not unilateral. [15] It was also said, for the respondent, that deficiencies in his List are only minor. It is true the claim is not one involving a large sum of money and has been brought in the Magistrates Court. While r 5 has been used in a wide variety of circumstances, it does not give an ‘… imprimatur to the blithe conduct of litigation without regard to what are quite basic and well known requirements’4 . Here, it cannot be allowed to operate in a way which permits one party to ignore its obligations under the disclosure rules by, in effect, passing the duty of deciding what is relevant to the recipient of the List. That, with respect, is the error into which the learned Magistrate was led. [16] For these reasons the appeal will be allowed and Mr Geroff ordered to file and serve a List of Documents complying with his obligations under r 211 within a specified period. [17] The conclusion that the Carsburg’s application for a proper List should have been upheld at first instance means that the respondent’s application about the Request for Trial Dates should have been refused; it was precipitate, until proper disclosure had been given. The costs awarded to the respondent should also, it follows, be the subject of a reversing order. [18] The decision on the appeal will, then, be that the order of the learned Magistrate of 1 January 2007 is set aside. The plaintiff should deliver a further List of Documents within a nominated period. A new costs order should be made both in the Magistrates Court, and here (including an order referable to that of his Honour Judge McGill SC made on 28 February 2007, when the orders made in favour of the plaintiff in the Magistrate Court were stayed pending the outcome of this appeal, and the costs of that application to his Honour were reserved). 4 Gillies v Dibbetts [2001] 1 Qd R 596 per Wilson J at [28] -- 4 of 4 --