CSR Ltd v Casaron Pty Ltd & Ors [2003] QSC 126

State Reporting Bureau jf£X8]©SC i£6 Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MACKENZIE J REVISED COPIES ISSUED State Reporting Bureau Date: 9 April, 2003 No S6708 of 2001 CSR LIMITED ACN 000 001 276 Plaintiff and CASARON PTY LTD ACN 077 155 429 First Defendant and PETER JOHN DANCE Second Defendant and ELIZABETH ANN DANCE Third Defendant BRISBANE ..DATE 25/03/2003 JUDGMENT 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 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 9 -- HIS HONOUR: This is an application for leave to object to notices of non-party disclosure and ultimately to set them aside in proceedings by the plaintiff for recovery of a debt. 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) The application was rested upon UCPR 245 and, in particular, rule 245(2) and (4). For the purpose of considering the matter in the context of rule 245(4), it is not necessary to express a view for the purpose of disposing of the matter on subparagraphs (4) (b) or (f) . It seems to me that the matter is ultimately resolved irrespective of that in the context of subparagraph (c) of rule 245(4). 10 In the case of the former, that is to say rule 245(4)(b) , it would involve a degree of prediction about what may come to light that is beyond my capabilities. In relation to 30 subparagraph (f) of rule 245(4), mere likelihood that production of documents would prejudice a defendant's prospects of success in a trial conducted with regard to the rules of evidence would obviously not be a valid basis for objection. The underlying claim against the third defendant is as guarantor of a debt of the first defendant. The third defendant pleads inter alia that she: 50 • is a person of limited legal and business knowledge; • did not understand the purported effect of the transaction; 2 JUDGMENT -- 2 of 9 -- 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) • did not gain from performance of the contract guaranteed by her; • was the wife of the controller of the business of the first defendant in whom she might repose trust and confidence in business matters • that the plaintiff knew or ought to have known that that person, her husband, may not have fully and accurately explained the purport and effect of the transaction to her as indeed she alleged he did not. The state of her knowledge of business matters at the relevant time and, in particular, the nature of a guarantee is therefore a critical issue. It is something that, in the absence of an admission or other direct evidence, can only be proved by inference from facts demonstrating the degree of her experience or direct knowledge of transactions of the same kind or her sophistication generally in regard to business matters . Evidence that prior to the time of the transaction in issue she had engaged in other transactions directly relevant to the issue would clearly be of significance and, more importantly, direct relevance. Evidence that she had had the nature of a guarantee explained to her previously would probably be devastating to her case. To that end, the plaintiff had issued notices of non-party disclosure to a variety of non-parties reciting the nature of 1 10 20 30 40 50 80 3 JUDGMENT -- 3 of 9 -- 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) the defence and asking for a variety of documents which are described as: (a) any and all documents relevant to the allegation that the third defendant was and is a person of limited legal and business knowledge; (b) any and all documents relevant to the allegation that the third defendant did not understand the purport and effect of the transaction described; (c) any and all documents relevant to the allegation that the third defendant gained no gain from the performance of the contract allegedly guaranteed by her; and (d) all and any documents signed, created or delivered relevant to the allegation that the third defendant may repose trust and confidence in her husband in matters of business . It can be seen from those recitations that the expressions used in the categories mirror the pleadings. The plaintiff had previously sought further disclosure against the third defendant herself of a variety of information with regard to transactions of a similar kind entered into by her and her educational and business experience generally in more specific terms than in the present application. i 10 30 50 60 4 JUDGMENT -- 4 of 9 -- 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) Justice Moynihan dismissed the application on several grounds, * one of which was that the application cast the net too wide and would be oppressive given the way the issue was confined. Another was that documents in relation to activities after the date of the relevant transaction be required to be produced. 10 The judgment was in respect of disclosure by a party but did not involve any exposition of principle inconsistent with the notion that documentary evidence relating to the third defendant's state of knowledge of the nature of the 20 transaction would not be disclosable as long as what was requested was sufficiently described and was not oppressive in extent. The same principle, in my view, would apply to non- party disclosure. 30 It was accepted by Mr Sullivan that it was not necessary for specific documents to be nominated in the notice and that a sufficiently defined class of documents would not be objectionable. He pointed to the analogy or similarity between the process formerly known as subpoena duces tecum and 40 a notice of non-party disclosure and submitted that similar grounds of objection should apply. It is unnecessary to fully explore that issue in the present application which, as I have said, focuses upon UCPR 245(2) and (4). To state, as I have earlier, the categories of documents requested of the non-parties in this case is to demonstrate, without the need for further explanation, that the documents are not sufficiently described for the purposes of an 50 ■Si 5 JUDGMENT -- 5 of 9 -- 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) application of this kind. The way in which the requirement is expressed also requires the non-parties to exercise a considerable degree of judgment as to what is relevant in the proceeding . Mr Sullivan also pointed out that the notice refers to documents relevant to the allegation which is not strictly in accordance with the rule which has direct relevance as its criterion. Subject to the issue of the applicant's standing, it seems to me that the notices should be set aside. As to standing, UCPR 245(2) seems to be intended to ensure that a person who may be affected by a notice has the right to object to the production of documents mentioned in the notice if the Court gives leave to do so. In my view, consistently with the intent of the rule apparent from rule 245(4), it would extend to a party if the notice required production of documents relating to them that went beyond what may be required to be produced under the rules. I would only make two general observations. One is that the right of a party to object to a notice given by another party to a non-party who may or may not be disposed to object is subject to leave being given and must be closely confined to ensure that it does not become a standard ploy in litigation. It is not the purpose of giving a right to object to a party to enable that party to quarantine evidence which may otherwise be admissible for the purpose of the other party establishing part of its case. The second is that, as a 1 10 30 50 6 JUDGMENT -- 6 of 9 -- 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) general proposition, in a case where documents are described by reference to a class, a notice of non-party disclosure would be more likely to survive objection based on rule 245(4)(c) if it described documents by reference to contents demonstrating relevance to an issue than if it defined the class by reference to a tendency to prove facts relating to an issue, relevance to it or the inference to be ultimately drawn. Drawing such a notice would require attention to detail and accurate conceptualisation but the more specific the description the better the chance of surviving objection would be . In reaching this conclusion, I have had regard to the usual authorities relied on under preceding rules relating to this area of the law including particularly Lebon v. Lake Placid Resort Pty Ltd 1995 1 Queensland Reports 24 and Hoare v. Spork 1999 QSC 173 and the cases referred to in those cases. With regard to standing, I was also referred to Botany Bay Instrumentation and Control Pty Ltd v. Stewart (1984) 3 NSWLR 98. In the result therefore, I would grant the third defendant leave pursuant to rule 245(2) to object to the production of documents pursuant to the 14 notices of non-party disclosure issued on the 7th of March 2003 and itemised in the application . 1 10 20 30 40 50 7 JUDGMENT 60 -- 7 of 9 -- 1 Although the application is strictly one for leave to object, the parties wish the matter to be finally disposed of forthwith if it was a case where I was disposed to grant leave . The orders will therefore be that: (1) I grant leave to the applicant to object; (2) I dispense with the requirement in rule 246 and order that the matter of the validity of the objection be determined instanter; (3) I order that the 14 notices of non-party disclosure issued by the plaintiff to the persons and entities referred to in paragraphs (a) to (n) of paragraph (1) of the application be set aside. With regard to costs, there is a bias in the rules in favour of each party bearing its own costs (rule 247(3)). However, the merits of the objector's objection and the public interest in efficient and informed conduct of the litigation are factors which may permit of departure from the general rule. The vice exposed in the application was that in light of the third, defendant's success before Justice Moynihan, the plaintiff sought to obtain relevant information from other sources but failed to define what it was seeking sufficiently descriptively. As opposed to that, it is not realistic to 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) 10 30 56 8 JUDGMENT 80 -- 8 of 9 -- exclude the possibility that sufficiently defined notices may lead to the disclosure of relevant evidence. In the circumstances, I am not persuaded that there are any circumstances where I should depart from the ordinary rule enshrined in the rules as to costs and therefore I make no order as to costs. 25032003 T1-2/JLP15 M/T 1/2003 (Mackenzie J) 1 10 20 30 40 50 9 JUDGMENT 80 -- 9 of 9 --