DISTRICT COURT OF QUEENSLAND

[2000] QDC 440

1. [1]
   In this matter there were two applications.

2. [2]
   The first in point of time was an application by the plaintiff filed on 15 June 2000 purporting to be made pursuant to Rule 306 of the Uniform Civil Procedure Rules 1999 (UCPR), that the first and second third parties be granted leave to withdraw their notice of intention to defend filed 20 January 2000,  that “the solicitors acting for the first and second third parties be granted leave to withdraw” and that the requirement that a request for trial date be signed by all parties pursuant to Rule 469(3) UCPR be dispensed with.

3. [3]
   The second in point of time was an application by the first and second defendants filed on 19 July 2000 for:

1)an order that the solicitors on the record for the plaintiff and for the first third party and the second third party be ordered to disclose all documents relevant to allegations in issue in the pleadings in particular:

1. (a)
   all documents and records relevant to transactions and dealings on behalf of the plaintiff and on behalf of the first third party relating to land at Lot 65 on RP817375 County of Canning Parish of Mooloolah contained in title reference 18689094;

2. (b)
   that part of the solicitors on the record for the plaintiff file and documents relevant to the current proceedings prior to 25 November 1997;

2)an order that the plaintiff disclose all other documents and records relevant and ancillary to the plaintiff’s acquisition of Lot 65 from the first third party and another including all documents relevant to the plaintiffs holding of the land in a trustee capacity;

3)an order that the plaintiff disclose the identity of the plaintiff’s accountants and financial advisers consulted by the plaintiff in the period between 1 April 1996 and 25 November 1997;

4)for leave to deliver request for further and better particulars if required after further disclosure;

5)for leave to deliver further requests to the plaintiff pursuant to Rules 443 and 444 of UCPR and to make an application to the court prior to the execution of request for trial date on the defendant’s behalf.

4. [4]
   The only parts of this application proceeded with were those set out in Paragraphs 1)(a) and (b), 2) and 3) above.

The proceeding

5. [5]
   The plaintiff’s claim was for a declaration that the first and second defendants hold the duplicate certificate of title contained in title reference 18689094 pertaining to Lot 65 on RP 817375 (the land) as constructive trustees for the benefit of the plaintiff, for an order that the defendants, their servants and agents be restrained from withholding possession of the said duplicate certificate of title from the plaintiff and in the alternative damages flowing from the defendant’s wrongful possession of the duplicate certificate of title.

6. [6]
   According to the plaintiff’s statement of claim issued 1 May 1998:

1)the plaintiff at all material times, was the registered proprietor of the land and was the mother of Glen Joseph Theodore (the first third party);

2)at all material times the defendant’s were the proprietors of a business called Air Monitoring Services (the business) which in about July 1996 they agreed to sell to the first third party for $66500;

3)the contract of sale contained a clause requiring the first third party to procure the lodgment with the vendors solicitors on or before the date for completion of the unencumbered title deed to the land and a mortgage over the land in favour of the vendor such mortgage to be prepared by the vendor’s solicitors at the cost of the purchaser and to be unregistered while the purchaser complied with the obligations on its part contained in the contract of sale;

4)the first third party requested the plaintiff provide the land as security to secure a loan which he proposed to obtain from the ANZ Bank at Maroochydore.  The plaintiff gave the duplicate certificate to the first third party for the purpose of delivering it to the ANZ Bank as security for the proposed loan;

5)without the plaintiff’s authority the first third party delivered it to the solicitors then acting for the vendors.  The delivery was not made pursuant to any document executed by the plaintiff and was not made pursuant to or in furtherance of any mortgage or guarantee agreed to be given by the plaintiff;

6)the defendants failed to return the duplicate certificate to the plaintiff.

7. [7]
   The defendant’s entry of appearance defence and counterclaim issued on 17 June 1998:

1)admitted the plaintiff is the registered proprietor of the land and the mother of the first third party;

2)alleged that at all material times the first third party was the servant or agent of the plaintiff acting within the scope of his actual or apparent authority;

3)alleged that during the course of negotiations pre-contract:

1. (a)
   the second third party proposed that it would pay the purchase price of the business by certain instalments;

2. (b)
   the plaintiff, the first third party and the second third party represented to the defendants that on or before settlement of the contract of sale the second third party would procure the lodgment with the solicitors for the defendants of the unencumbered certificate of title to the land and a mortgage thereover in favour of the defendants such mortgage to remain unregistered while the second third party complied with its contractual obligation;

3. (c)
   the first third party would approach the plaintiff and obtain her signature to a guarantee and mortgage and her consent to the delivery of the duplicate certificate;

4)alleged that prior to the date the plaintiff alleges she gave the duplicate certificate of title to the first third party, the solicitors for the defendants forwarded a deed of guarantee and mortgage in favour of the defendants for execution by the plaintiff to the plaintiff;

5)alleged that on 18 July 1996, the second third party procured the lodgment with the solicitors for the defendant of the duplicate certificate of title to the land and those solicitors have retained it in safe custody on behalf of the defendants;

6)alleged the defendants were not aware delivery of the duplicate certificate was made without the authority of the plaintiff, was not made pursuant to any document executed by the plaintiff and was not made pursuant to or in furtherance of any mortgage or guarantee agreed to be given by the plaintiff;

7)alleged that the plaintiff, the first third party and second third party thereby represented that the plaintiff agreed to lodge with the defendants’ solicitors the unencumbered certificate of title of the land and thereby mortgage the land in favour of the defendants and would execute a mortgage over the land in favour of the defendants;

8)said that if it was the case the first third party was not authorised by the plaintiff to lodge the duplicate certificate with the defendants’ solicitors, the plaintiff is estopped from denying the mortgage and from seeking the relief claimed in the plaint; alternatively the plaintiff ratified the act of the first third party in depositing the duplicate certificate by providing her solicitors with a copy of the deed of guarantee and indemnity and related mortgage and advising that those documents were being executed by her in support of a loan by way of vendor finance being given to the first third party by the defendants; alternatively the plaintiff acquiesced in the deposit of the duplicate certificate and the mortgage of the land and is precluded by laches from bringing and maintaining the action in the plaint in that despite knowledge of the deposit of the duplicate certificate she took no step to advise the defendants of any want of authority on the part of the first third party until 25 November 1997 when her solicitors wrote to the solicitors for the defendants; alternatively lodgment of the duplicate certificate with the defendants by the second third party was conduct that was misleading or deceptive or likely to mislead or deceive within the meaning of section 52 of the Trade Practices Act 1974 and has resulted in loss or damage caused to the defendants and the plaintiff was directly or indirectly knowingly concerned in or a party to that conduct;

9)alleged that the second third party failed to pay instalments due under the contract of sale and say that judgment has been entered against the second third party in the sum of $51536.40, no part of which has been satisfied by the second third party.

The plaintiff’s application

8. [8]
   Rule 306 UCPR provides “a party may withdraw the party’s notice of intention to defend at any time with the court’s leave or the consent of the other parties”.

9. [9]
   Rule 303 provides:

1. (1)
   A party who represents another person in a proceeding may discontinue or withdraw only with the court’s leave.

2. (2)
   A party who discontinues or withdraws or the party’s solicitor must certify in a notice of discontinuance or withdrawal that the party does not represent another person in the proceeding.

10. [10]
    In support of the application by the plaintiff, a Mr Alan Taylor, a principal of the firm Alan Taylor & Associates Solicitors, gave evidence by affidavit that he acted for the plaintiff in the present proceedings. The plaintiff provided him with initial instructions on or about 9 August 1997, concerning a deed of guarantee and mortgage. He provided the plaintiff with preliminary advice and with further written and verbal advice upon receipt of material from the defendants solicitors. Prior to and since the issue of the present proceedings he has provided further advice to the plaintiff. Privilege is claimed with respect to the advices provided to the plaintiff.

11. [11]
    In further support of the plaintiff’s application a solicitor working at Alan Taylor & Associates, a Mr Rafty who has had the conduct of the plaintiff’s claim since January 2000 gave evidence by affidavit. According to Mr Rafty the solicitors for the plaintiff were pressing the solicitors for the defendants for their entry of appearance and defence. The defendant solicitors wanted to bring in the first and second third party and were delaying filing and serving an entry of appearance and defence until they had served third party notices. In October 1998 advice was given to the defendants’ solicitors about the whereabouts of the first third party and that the second third party could be served by post. In a letter dated 9 November 1998 the plaintiff offered to except service on behalf of the first third party. He sometimes lived at her address. On 3 December 1998, 31 March 1999 and 14 April 1999 letters were written to the defendant’s solicitors requesting the defence be served. Eventually on 19 April 1999, the plaintiff was served. In August 1999, a request for trial date was sent to the defendant’s solicitors and in November 1999 and January and February 2000 requests were made of those solicitors for the return of the signed request.

12. [12]
    In fact an entry of appearance defence and counterclaim and third party notices were filed on 17 June 1998. It is not disputed the plaintiff was not served until 19 April 1999.

13. [13]
    Mr Rafty’s affidavit disclosed that he took over the file on or about 18 January 2000. On perusing the file, mislead by the plaintiff’s offer to accept service on behalf of the first third party, he mistakenly formed a view that his firm acted for the first and second third parties. Acting under that mistake, he took the view that a notice of intention to defend on behalf of the first third party and the second third party needed to be filed. He drafted and filed these on behalf of both third parties on or about 18 January 2000. On or about 22 February 2000 he was advised by Mr Taylor that the firm did not act for either third party. He immediately advised the defendant solicitors and requested the notice of intention to defend be withdrawn. The defendants have not agreed to that course.

14. [14]
    By filing and serving notice of intention to defend and defence on behalf of the first and second third party indicating that the solicitors for the plaintiff were acting for the first and second third parties, those solicitors have become solicitors on the record for the first and second third parties even though according to Mr Rafty, the first and second third parties had not given instructions to file the notice of intention to defend.

15. [15]
    The orders sought by the plaintiff cannot be made under Rule 306 and 303. The notices of intention to defend were not the plaintiff’s notices. The error Mr Rafty has sworn to was on the part of the solicitors. Any application to withdraw can only be by the solicitors.

16. [16]
    I have some difficulty reconciling that Mr Rafty filed a notice of intention to defend on behalf of the third parties together with a defence which consisted of non-admissions and denials of allegations in the defendants counterclaim when no instructions were held on behalf of the first and second third parties to do so. Apart from or perhaps because of that lack of instructions the requirements of Rule 166 UCPR were ignored.

17. [17]
    On the material before me, in all the circumstances it seems to me appropriate to order that the notice of intention to defend and defence of the first and second third parties be struck out and that the solicitors on the record for the first and second third parties be given leave to withdraw from the record.

The defendant’s application

18. [18]
    Under the now repealed rules the affidavit or list of documents was conclusive unless a party wishing to challenge it could bring themself within one of the recognised grounds of challenge. Briefly the insufficiency of the affidavit or list had to appear from the pleadings of the discovering party, from the affidavit or list itself, from any source that amounted to an admission of the existence of a discoverable document or from showing that the party who made the affidavit or list misconceived the case or the law: Birmingham & Midland Motor Omnibus Co v. L & NW Railway (1913) 3 KB 850 at 858; Mulley v. Manifold (1959 – 60) 103 CLR 341; Beecham Group Ltd v. Bristol Myers Co (1979) VR 273.  There was also a rule providing for an order requiring a party to an action to state upon affidavit whether any specific document to be specified in the application was or had at any time been in the other party’s possession or power and if so what had become of it: see Rule 191 of the repealed District Court Rules.  In Mulley v. Manifold this rule was said to:

“permit an application for further discovery based upon the filing of an affidavit that there may have been some particular undiscovered documents in the possession of the other party which related to a matter in question in the proceeding…the mere existence of the documents does not provide the basis for ordering a further affidavit in general terms”.

19. [19]
    Rule 211 of UCPR now creates the duty of disclosure. The duty is to disclose each document “directly relevant to an allegation in issue in the pleadings”. Disclosure is the delivery or production of documents in accordance with Part 1 Chapter 7 of UCPR: Rule 210.

20. [20]
    Rule 214 UCPR sets out how the duty of disclosure is performed. It is by delivery of a list of the documents to which the duty relates and of the documents in relation to which privilege is claimed; in other words all documents directly relevant to an issue disclosed in the pleadings whether there is a claim of privilege to all or any of them or not and indicating to which of them (if any) there is a claim of privilege. The duty also requires delivery to a party at that party’s request of copies of any of the documents disclosed other than ones for which privilege is claimed.

21. [21]
    The description of the documents in the list must be sufficient for the court to “see that the documents referred to are produced if required”: Taylor v. Batten (1878) 4 QBD 85 at 88, and for the opposing party to determine whether to inspect a document or require a copy of it.  It should not go so far as to provide such particulars that the other party can discover indirectly the content of the document and so defeat a claim of privilege regarding the document: see the judgment of Williams J in Braegrove Pty Ltd v. Bendrich (1993) 2 QdR 239.  A claim of privilege does not relieve from the duty to disclose the existence of a document in the list of documents.  By privileged, is meant that it is not liable to be produced to the opposing party.

22. [22]
    Rules 223 and 225 of the UCPR provide power to a court to order disclosure. Rule 225 also provides for the consequences of non-disclosure.

23. [23]
    Under UCPR the court may order disclosure of a document or class of documents or order a party to file and serve an affidavit stating that a specified document or class of documents does not exist or has never existed or stating the circumstances in which a specific document or class of documents ceased to exist or passed out of possession or control of a party:

• if there are special circumstances and the interests of justice require it; or

–    an objective likelihood the duty to disclose has not been complied with; or

–    an objective likelihood a specified document or class of documents exists or existed and has passed out of the possession or control of a party: Rule 223 (1), (2) and (4).

• it appears there is:

24. [24]
    Whilst the Court’s power is not so limited in this area as under the repealed rules, there must be special circumstances and the interests of justice must require it or the “objective likelihood” test must be satisfied. The use of the phrase “an objective likelihood” requires something more than the assertion of a belief by an opposing party in the existence of a discloseable document. There must be sufficient objective material put before the court to satisfy it of the likelihood.

25. [25]
    Matters in issue in the pleadings are:

1)the plaintiff’s assertion that she provided the duplicate certificate to the first third party for the purpose of delivery to the ANZ Bank as security for a loan;

2)the plaintiff’s assertion that she gave the first third party no authority to deliver the title deed to the vendor’s solicitors;

3)the plaintiff’s assertion that she did not execute or agree to execute any document which required delivery of the title deed to the vendor’s solicitors;

4)the defendants’ assertion that at all material times, the first third party was the servant or agent of the plaintiff acting within the scope of his actual or apparent authority.

5)the defendant’s assertion that in or about June 1996 during negotiations for the sale and purchase of the business the plaintiff and the first and second third parties represented to the defendants that on or before settlement of the contract the second third party would procure the lodgment with the defendant’s solicitors of the unencumbered certificate of title and a mortgage over the land which was to remain unregistered while the second third party complied with its contractual obligations.

6)the defendant’s assertion that before the date the plaintiff gave the certificate of title to the first third party, a deed a guarantee and mortgage in favour of the defendant’s was forwarded to the plaintiff for her execution.

7)the defendants’ assertion that they were not aware that the delivery of the title deed was made without the authority of the plaintiff.

8)the defendant’s assertion that the plaintiff ratified the deposit of the title deed by the first third party with the defendant’s solicitors by providing her solicitors with a copy of the deed of guarantee and indemnity and related mortgage and advising that those documents were being executed by her in support of a loan by way of vendor finance being given to the first third party by the defendants;

9)the defendants’ assertion that the plaintiff acquiesced in the deposit of the certificate of title in that she took no step to advise the defendants of any want of authority on the part of the first third party until 25 November 1997 when her solicitors wrote to the solicitors for the defendants.

26. [26]
    Since the decision of the High Court in Esso Australia Resources Ltd v. Commissioner of Taxation (2000) 74 ALJR 339, the common law in Australia is that legal professional privilege attaches to communications if the dominant purpose of the communication was to give or obtain legal advice or to obtain legal services including with reference to litigation that is actually taking place or was in the contemplation of the client.

Disclosure of documents relating to dealings between the plaintiff and the first third party with respect to the land including all documents relevant to the plaintiff’s holding of that land in a trustee capacity. 

27. [27]
    In pursuing this aspect of the application the defendants rely upon the following matters:

1)a solicitor Mr Klar, who acted on behalf of the defendants with respect to the sale of the business in an affidavit read on the application said that the first third party had told him that the land had been put into the plaintiff’s name to defeat a claim by the first third party’s former wife in matrimonial proceedings.

2)an affidavit by a solicitor Mr Murphy who has the carriage of the action for the defendants which discloses that searches at the Department of Natural Resources have revealed that the solicitors on the record for the plaintiff acted for the first third party in the transfer of the land from an unrelated third party to the first third party and another in June 1994.  The stated consideration was $56,000.  They also acted for the plaintiff in the transfer of the land from the first third party and another to the plaintiff and executed that transfer on behalf of the plaintiff.  The transfer was executed on 10 November 1995 and was registered on 29 November 1995.  The stated consideration was $40,000.  They lodged application for title to the land on behalf of the plaintiff.  They lodged a release of an ANZ Bank mortgage over the land for registration.  The mortgage had been granted by the first third party and another over the land.  The release was executed on 29 November 1995.

28. [28]
    The only way in which the documents referred to could be directly relevant to an allegation in issue in the pleadings is if they went to show the capacity in which the plaintiff held title to the land so that control of the land was with the first third party rather than with the plaintiff or went to show that the plaintiff intended the duplicate certificate be lodged with the defendants’ solicitors or went to show that the plaintiff was aware the duplicate certificate was lodged with the defendants’ solicitors and deliberately lay by.

The documents of the solicitors on the record for the plaintiff relevant to the current proceedings prior to 25 November 1997.

29. [29]
    A list of documents from the plaintiff dated 9 July 2000 was filed on 15 June 2000. It discloses amongst other things letters from the plaintiff’s solicitors to the defendants’ solicitors dated 12 August 1996 and 25 November 1997.

30. [30]
    The letter of 12 August 1996 read as follows:

“We act for Marie Margaret Theodore who has asked us to consider the terms of a deed of guarantee and indemnity and related mortgage.  We understand that these documents are being granted in support of a loan by way of vendor finance being given to her son, Glen Theodore by your above client.

The documentation refers to the contract for its terms and unfortunately our client does not have access to the contract.  Please supply a copy of the contract to enable us to advise our client as to her responsibilities and liabilities.”

31. [31]
    The letter of 25 November 1997 read as follows:

“We refer to your letter of 23 September 1996 in connection with the above matter.

We understand that our client at no time consented to the granting of a guarantee or a mortgage in favour of your clients.  We understand however that you are holding her title deed as some form of equitable mortgage.

…

We demand that the title deed be returned to our client within 7 days.”

32. [32]
    Mr Murphy’s affidavit exhibited correspondence between the solicitors for the plaintiff and the solicitors for the defendants between the two dates referred to above. On 23 September 1996 the solicitors for the defendants responded to the letter from the solicitors of the plaintiff dated 12 August 1996 as follows:

“We acknowledge receipt of your correspondence of the 12^th ultimo…

As requested we attach a photocopy of the relevant contract of sale for your assistance.  We look forward to return of the executed deeds of guarantee and indemnity and collateral mortgage.”

33. [33]
    Those solicitors wrote again on 13 March 1997 referring to previous correspondence and noting that they were awaiting a response to the letter of 23 September 1996. The letter continued:

“ We advise that we already hold the duplicate certificate of title reference 18689094 registered in the name of your above client pending return of the executed deeds of guarantee and indemnity and collateral mortgage documentation.”

34. [34]
    On 17 March 1997 the plaintiff’s solicitors responded as follows:

“We thank you for your letter of 13 March 1997.

Our client is not particularly keen to grant the deed of guarantee and indemnity in the mortgage.  Since Mr Theodore has been in possession of the business for some time, your clients may consider it appropriate to waive those requirements if all the obligations are being met as scheduled.”

35. [35]
    As is apparent some of these letters were not in the list of documents I have referred to. I am unable to understand why some were listed and others not listed.

36. [36]
    It should be apparent the list of documents I have referred to is inadequate to discharge the duty of disclosure. The duty should be discharged as I have indicated herein.

37. [37]
    I order the plaintiff perform the duty of disclosure by delivering to the defendants a list of the documents to which the duty relates and the documents in relation to which privilege from disclosure is claimed.

38. [38]
    The application by the plaintiff that a signed request for trial date be dispensed with, is dismissed.

39. [39]
    The solicitors for the plaintiff are ordered to pay the defendant’s costs if any, of the application brought by the plaintiff filed 15 June 2000.

The identity of the accountants and financial advisers consulted by the plaintiff between 1 April 1996 and 25 November 1997.

40. [40]
    There is a letter from the first third party to the defendants’ solicitors exhibited to Mr Murphy’s affidavit which advised of an appointment with the ANZ Bank “to gain approval for the re-worked proposal which satisfies my mother’s accountants…As new proposal involves a mortgage being taken over vacant land…”

41. [41]
    It is at least likely the letter is referring to the land. Assuming that to be the case no basis is advanced why I should order the disclosure of the name of the plaintiff’s accountants. I have set out above the duty of disclosure which rests upon the parties. The plaintiff must comply with that duty. I will not make the order sought.

42. [42]
    I order the costs of the defendant’s application be the defendant’s costs in the cause.