Chamberlain Nominees Pty Ltd v Klazema & Anor [2006] QDC 133

1 [2006] QDC 133 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No BD559 of 2004 CHAMBERLAIN NOMINEES PTY LTD (ACN 010 069 557) Plaintiff and RICHARD KLAZEMA and GILLIAN MAREE WILLIS First Defendant Second Defendant BRISBANE ..DATE 26/04/2006 ORDER CATCHWORDS: Uniform Civil Procedure Rules r 161, r 163, r 223, r 225 - court declines to make self-executing orders to apply in the event of non-compliance, with orders it did make for particulars and disclosure WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. -- 1 of 13 -- 26042006 T26/PAF23 M/T CMS46/2006 (Robin DCJ) 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: The Court makes an order in terms of the initialled draft supplied by Mr Gynther, representing the plaintiff/applicant. The changes made to the draft are to extend by two weeks the date suggested in his paragraph 3; to extend by five weeks the date suggested in his paragraphs 4 and 5; to delete guillotine or, more correctly, self-executing orders which would have led to the striking out of the second defendant's amended defence, counterclaim and set-off, accompanied by leave to the plaintiff to enter judgment if particulars were not supplied or if documents were not disclosed and made available for inspection by the dates indicated. It is anticipated that in respect of disclosure, which is the subject of the longer enlargement of the suggested periods, there may be difficulties encountered by the second defendant who is the respondent to the application. Accordingly she is granted liberty to apply to seek more time which presumably would only be done on the basis of all reasonable efforts having been made by her to obtain the documents in question. The underlying circumstances are that the second defendant, represented by Ms Muir, and the first defendant, who has been released from the action, became tenants from the plaintiff of shop premises which were used as a pet shop. The five year term of the lease which was of a shop at Cleveland expired around 2001, but the second defendant remained in possession as a monthly tenant. -- 2 of 13 -- 26042006 T27/DEP 7 M/T CMS46/2006 (Robin DCJ) 3 ORDER 1 10 20 30 40 50 60 It seems that she and the former first defendant were partners in a joint venture which also operated a pet shop at Springwood. The former first defendant looked after that one. The second defendant looked after Cleveland. From 1999 or thereabouts, the second defendant appears to have been running Cleveland on her own. Another gentleman who appeared to be involved in the circumstances in a commercial way is Mr Scott Chalmers, according to the second defendant's affidavit (a good deal of surgery upon which occurred by agreement of counsel to delete substantial parts of it to which Mr Gynther took objection). The affidavit indicates that Mr Chalmers' tasks included construction of aquariums for use in the business and overseeing commercial operations of it which extended to "maintenance of certain financial books and records". One Jock McLaughlin was said to have been brought in by Mr Chalmers to provide accountancy services and Ms Willis says she "was required and did deliver all the business records to McLaughlin on a weekly basis.". She says she doesn't know the whereabouts of any of those three gentlemen, which is severely embarrassing her in the provision of documents in which the plaintiff is interested. It has sued for unpaid rent and outgoings in respect of the premises and, as often happens, been met with a counter claim -- 3 of 13 -- 26042006 T27/DEP 7 M/T CMS46/2006 (Robin DCJ) 4 ORDER 1 10 20 30 40 50 60 which overtops its own claim of $168,209.56 as at 17th of February 2004 when the claim was filed. The counterclaim, which is not even mentioned in the title of the current document is really picking up a set-off pleaded at great length in the defence. There was an original "Notice of Intention to defend and counterclaim and set-off" filed on the 17th of March 2004. The current "defence" was filed on the 14th of March 2006. It is a document running to 68 pages, a good deal of which is made up of particulars which had formerly been supplied by a solicitor's letter of 16th March 2005 pursuant to an order for particulars made by Judge McGill on the 7th of June 2004. Mr Gynther says that the letter left outstanding one subject of particulars which apparently was attended to when the amended defence was filed. As a matter of form it was responding to an amended statement of claim filed on the 3rd of February 2006 which describes the plaintiff's claim as at 17 February 2004 as $173,994.67. Mr Gynther accepts that the plaintiff is proceeding on a new request for particulars, rather than following up his Honour's order under rule 163. The complaints made against the plaintiff in the defence are various. They contain allegations that parts of the plaintiff's claim are unsustainable, for example, outgoings allegedly not referrable to either the demised premises or the common property for services such as gardening, and complaints made, by way of example only, of the claim for rates being -- 4 of 13 -- 26042006 T28/ALC22 M/T CMS46/2006 (Robin DCJ) 5 ORDER 1 10 20 30 40 50 60 inflated because of the plaintiff's failure to pay rates by the discount date offered by the local authority. Mr Gynther indicates that there are answers to assertions of this kind, for example in the terms of the lease document. Other complaints relate to the condition of the premises including lack of lighting on late night shopping evenings which either inhibited or precluded the second defendant's trading. She says she lost $149,000 in this regard, without being specific as to whether that is a gross or net figure. She complains of physical deficiencies in the promises which she says were the plaintiff's responsibility, which led to ingress of water, damage to her stock and the like. She complains of rent increases aggregating $155,000, of fixtures being "damaged" or "dumped" and of losses on various fixtures, including "gondolas", the nature of which is a matter of mystery to the Court and Mr Gynther and, indeed, even Ms Muir. Although, as a matter of form, the plaintiff is seeking particulars of particulars, in my opinion the plaintiff's request for particulars is a proper one. It is entitled to be informed fully as to the case the second defendant wishes to present, and where there are claims that result from calculations, such as that in relation to late night trading, of the basis of those calculations. In the ordinary case that may well require disclosure and production of documents which, here, the second defendant would have rather than the plaintiff. -- 5 of 13 -- 26042006 T31/ALC22 M/T CMS46/2006 (Robin DCJ) 6 ORDER 1 10 20 30 40 50 60 In respect of the application for an order for provision of particulars, the objections advanced are that the particulars given in the lengthy pleading are sufficient (which I would dispute along with Mr Gynther) and that the request is either "oppressive" (with which I would not agree) or a request for the evidence by which the second defendant's case is to be proved at trial. The general contention, that there is no scope for the plaintiff to be surprised at trial, I cannot agree with. So far as the request for particulars being a request for evidence is concerned, that traditional basis for refusing particulars which is related to the rule or practice against pleading evidence is, it seems to me, much less potent than it might have been in former times. I recently noted the appropriateness of recognising cases where that approach was not appropriate in Kettering Pty Ltd v Noosa Shire Council [2006] QPEC 024 at paragraph [9] and would respectfully agree with the comments of Byrne J justifying the modern approach which he explains eloquently in terms of informing the parties adequately in NRNQ (a limited partnership) v MEQ Nickel Pty Ltd [1991] 2 QdR 592. The requested particulars ought to be the subject of an order under rule 161 that they be supplied. In respect of disclosure, as indicated the Court has gone along with the time suggested by Ms Muir although Mr Gynther would not necessarily be happy with that, having sought a much shorter period. -- 6 of 13 -- 26042006 T31/ALC22 M/T CMS46/2006 (Robin DCJ) 7 ORDER 1 10 20 30 40 50 60 So far as disclosure is concerned, in my opinion, once again the plaintiff is entitled to the order sought. It relates to taxation returns for the second defendant and relevant partnerships, "financial documents and statements" and documents "in respect of the acquisition, purchase or replacement of items set out in paragraph 24 of the amended defence counterclaim and set-off comprising invoices (tax invoices if dated after 1st July 2000), delivery dockets, order forms, cheque butts and bank statements". On the face of it, that is an unexceptional request in a claim of the present kind where a litigant complains of disappointment in the performance of her business which is being laid at the landlord's door. I have not mentioned yet claims based on section 52 of the Trade Practices Act and an unparticularised one in "deceit" which perhaps covers the same territory. There has been dispute between the parties at earlier stages as to whether the second defendant has the requisite amount of control in respect of documents which are not in her own possession, to create a duty to disclose them. The material is, as her counsel described it, "scanty", from the point of the view of the Court being persuaded that there might be difficulties in the way of gaining access to anything the three gentlemen mentioned might have or might have had. The situation is made more complex because it seems that receivers appointed to a law firm which acted for Miss Willis in a partnership dispute may now be in possession of some -- 7 of 13 -- 26042006 T31/ALC22 M/T CMS46/2006 (Robin DCJ) 8 ORDER 1 10 20 30 40 50 60 documents which were used in aborted proceedings she instituted seeking relief by way of an accounting. There is no longer any dispute in relation to possession or control issues, it being accepted that, on the face of things, as a matter of law the second defendant has the requisite control. Whether or not that will prove to be control which can be exercised in practice remains to be seen, is something which the second defendant has not put to the test but which, in my opinion, she will have to put to the test in the short term rather than the longer term. She is certainly better placed than would be the plaintiff to pursue such documents by third party disclosure or like processes. This is not necessarily a case in which failure to disclose would harm the second defendant rather than the plaintiff, on the basis that she would be precluded from using at trial documents not disclosed. It may be that if the documents were disclosed they would help the plaintiff rather than her which presumably is why the plaintiff is so interested in pursuing them. To accommodate the difficulties which the second defendant might face, a long period has been allowed for the making of disclosure under rule 223. The nature of what is sought is such that it would be wrong for the Court to require evidence that the documents (of a kind one would assume to exist in relation to a business) do exist or have existed. -- 8 of 13 -- 26042006 T31/ALC22 M/T CMS46/2006 (Robin DCJ) 9 ORDER 1 10 20 30 40 50 60 The most difficult part of the application concerns the self- executing orders Mr Gynther sought. Those can lead to difficulties as KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd (1985) 2 QdR 13 illustrates. The difficulty there was resolved by application by the Full Court of the then equivalent of Rule 668. Matters arising after order. The proceeding as it stands is such that as presently advised I think it would be too strong a thing to strike out the second defendant's pleading for failure to supply particulars, or failure to make disclosure. As observed, hers is a lengthy pleading replete with detail, and I say that without disputing the plaintiff's contention that there are aspects in which it reasonably seeks more detail and more documents than it has had to date. The second defendant's set-off/counterclaim strikes me as one which in principle she ought to be allowed to proceed with. If sanctions were to become appropriate because of non- compliance with orders of the Court, it seems to me that those would be more targeted sanctions which might, as Mr Gynther now suggests, be in the form of the striking out of identified parts of the pleading. They might even be in the form of orders disentitling the second defendant from relying on particular aspects of her pleading (less than whole paragraphs) which have not been particularised as ordered. The Court does not get to interesting considerations along -- 9 of 13 -- 26042006 T32/KLN16 M/T CMS46/2006 (Robin DCJ) 10 1 10 20 30 40 50 60 those lines today. I would think they apply to failure to disclose as well as to failure to particularise. It might be worth recording views I expressed in the argument in testing the plaintiff's proposition that the whole pleading or even parts of the set-off might be struck out for failure to produce documents. It related to the Thursday night trading. It is my view that in principle it ought to be open to the second defendant to pursue that claim whether she discloses documents in relation to it or not. In principle I would think she could provide evidence of herself or more likely other pet shop operators in comparable businesses of the level of Thursday night trading in Cleveland or comparable areas. I am at a loss to understand why failure to disclose documents ought to shut her out of pursuing a set- off along those lines. That is not to say that the plaintiff's not entitled to know how she calculates the claim presently quantified at $149,000. Mr Gynther is undoubtedly correct that from time to time Judges do make orders for particulars under Rule 161 which incorporate a self-executing component. In my own experience that is occasionally done by consent when respondents are perhaps excessively optimistic about what they might be able to achieve. If one looks at Rule 163, however, it is clumsily expressed from the point of view of conferring on the Court a clear jurisdiction to include in an order for -- 10 of 13 -- 26042006 T33/DEP 7 M/T CMS46/2006 (Robin DCJ) 11 ORDER 1 10 20 30 40 50 60 particulars, when it is made under Rule 161, an order about the consequences of non-compliance - especially if it is the dire one proposed here of the plaintiff obtaining judgment on its large claim. In KGK, which involved earlier Rules, of course, there was no self-executing component in the original order for discovery. That component was part of a subsequent order following non- compliance with the original one. It seems to me the effect of the UCPR regarding disclosure, is similar when one looks at Rule 225. The things the Court may order are potentially very strong, including under paragraph 2(b) "a judgment or other order against the party required [but failing] to disclose the document." In circumstances such as the present, if it ultimately emerged on suitable evidence that there were insuperable practical difficulties in the way of disclosure, one would not expect the consequence to be a judgment against the second defendant in respect of the proceeding, anyway. It is inappropriate for the Court to speculate too far today. There will be an order in terms of the draft which I have initialled and described in part. MR GYNTHER: Your Honour, can I ask you to just pick up the order. There's a couple of corrections that my learned friend and I detected----- HIS HONOUR: Sure. -- 11 of 13 -- 26042006 T33/DEP 7 M/T CMS46/2006 (Robin DCJ) 12 ORDER 1 10 20 30 40 50 60 MR GYNTHER: -----that we made over lunch. HIS HONOUR: Sure. I'd like this in the transcript, too. MR GYNTHER: We made them over lunch and we discussed them this morning that your Honour had an earlier draft which I apprehend you still have. If you turn to page 3----- HIS HONOUR: Yes. MR GYNTHER: -----and it's order number 4. HIS HONOUR: Yes. MR GYNTHER: Sorry, order number 3, sorry. Let me start again. Order number 4(a) firstly. HIS HONOUR: Yes. MR GYNTHER: That's the one that reads "Taxation Returns for the second defendant.". HIS HONOUR: Yes. Yes. MR GYNTHER: The words I think in your version extend at the end of that paragraph to "June 2003". HIS HONOUR: Yes. MR GYNTHER: That's incorrect and can come out and instead----- HIS HONOUR: So----- MR GYNTHER: -----in that last line, "June 1997, June 1998 and June 1999.". HIS HONOUR: -----so, I put an "and" in between 1998 and June and I'll cross out----- MR GYNTHER: "June"----- HIS HONOUR: -----what comes after "1999". MR GYNTHER: That's correct. HIS HONOUR: Yes. MR GYNTHER: And then in paragraph (b), if your Honour looks to the third line there, in your draft the present date is "2001". HIS HONOUR: Yes. MR GYNTHER: That should read "2000". BENCH: All right, I'll change that. -- 12 of 13 -- 26042006 T33/DEP 7 M/T CMS46/2006 (Robin DCJ) 13 ORDER 1 10 20 30 40 50 60 MR GYNTHER: That's all, your Honour. HIS HONOUR: Thank you. Thanks, Mr Gynther, Ms Muir. ----- -- 13 of 13 --