Swanston & Associates v Shrapnel Downing & Elks
[2004] QDC 224
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- Unreported Judgment
- Swanston & Associates v Shrapnel Downing & Elks[2004] QDC 224
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Swanston & Associates v Shrapnel Downing & Elks[2004] QDC 224
Swanston & Associates v Shrapnel Downing & Elks[2004] QDC 224
DISTRICT COURT OF QUEENSLAND
CITATION: | Swanston & Associates v. Shrapnel Downing & Elks [2004] QDC 224 |
PARTIES: | Linda Roberta Swanston t/a Swanston & Associates (Appellant). Shrapnel Downing and Elks a Firm (Respondent) |
FILE NO/S: | 211 / 04 |
DIVISION: | District Court |
PROCEEDING: | Application for leave to appeal an order from the Magistrates Court |
ORIGINATING COURT: | Magistrates Court |
DELIVERED ON: | 30 July 2004 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 23 July 2004 |
JUDGE: | K.S. Dodds, DCJ |
ORDER: | Leave to appeal granted - Appeal Allowed – Magistrates orders set aside |
CATCHWORDS: | APPEAL – Duty of disclosure, whether order of magistrate ordering the disclosure of documents in default, the striking out of the applicant’s counterclaim and for costs was excessive. Cases Cited: Graham v. Roberts and Muller 1986 StR Q 459 Legislation Cited: S. 45 Magistrates Court Act 1921; Rules 222 – 225 Uniform Civil Procedure Rules |
COUNSEL: | Mr S. Blaxland (Appellant) Mr A Macklin (Respondent) |
SOLICITORS: | Swanston & Associates Lawyers (Appellant) Warren Gardiner & Co Solicitors (Respondent) |
- [1]This was an application for leave to appeal an interlocutory order made by a magistrate on 8 June 2004 in which he ordered:
-a defendant deliver to or produce for the inspection of the plaintiff within 14 days specified documents;
-the plaintiff file a reply and answer to the defendant’s defence and counterclaim within 14 days of the defendant’s compliance with the order
-in the event the defendant failed to comply with the order her counterclaim be struck out
-the defendant pay the costs of the application.
- [2]I granted leave and made other orders. These reasons relate to those orders and to the appeal.
- [3]Section 45 of the Magistrates Court Act 1921 provides for appeals from judgments or orders of a Magistrates Court to the District Court. There is a right of appeal by a party dissatisfied with the … “order of a Magistrates Court in an action in which the amount involved is more than $5,000.00”. In Graham v. Roberts and Muller 1986 StR Q 459 an action for negligence when there was a claim and counterclaim arising out of the same accident, Hanger J held that the amount involved was the total of the amounts in the claim and the counterclaim. Similar reasoning applies in this case. In any event the applicant’s counterclaim involved in excess of $5,000.00.
- [4]In this case leave was sought and was granted. If it was necessary to grant leave I consider an important principle of law or justice was involved. There was an unjustified use of a guillotine order with the serious consequences which may follow. Secondly and additionally the order involved documents to which the duty of disclosure did not apply.
- [5]The only record of the Magistrate’s decision on the court file was a note on a bench sheet under date 8/6/04 purporting to be made by a registrar. It simply recorded “Decision delivered by registrar”.
No handwritten or typed copy of the Magistrate’s decision or orders were on the court file at the time of hearing the appeal. The reasons and / or orders had apparently been read out to the parties by the registrar. I gave leave to the respondent’s solicitor, who I was informed had noted down the reasons, to file and serve an affidavit putting his account before me. He has done this. In the meantime subsequent to the hearing of the appeal an unsigned typed copy of what was said to be the Magistrate’s reasons and orders was forwarded to the court file.
- [6]What appears to have been done on 8 June was not in accordance with the rules contained in Chapter 16 of the Uniform Civil Procedure Rules (UCPR). It was to say the least, unsatisfactory. No point however was taken about it by either party. Both seem to have proceeded on the basis that the magistrate’s purported orders were enforceable.
- [7]The defendant / applicant is a solicitor of the Supreme Court of Queensland.
- [8]The pleadings and the material in the application before the Magistrate discloses that the plaintiff / respondent is a firm of accountants. On 15 March 2004 the respondent sued the applicant claiming $4,114.00 for professional costs and GST. It asserted the costs were for work the applicant engaged it to do for her, preparing tax returns and accounting work for the year ending 30 June 2002 and for which it had rendered an account on 15 July 2003. On 23 January 2004 the applicant notified it the account was in dispute. On 2 February 2004 the respondent requested particulars of matters in dispute. No reply was received. On 12 February 2004 and 23 February 2004 the respondent’s solicitors wrote to the applicant making demand for payment. No reply was received. On 31 March 2004 the applicant defended. She filed a defence and counterclaim alleging she had retained the respondent as her accountants for accountancy related services including tax and business planning and advice, trust account audits and the preparation of financial statements and income tax returns relevant to both herself and her practice. She alleged the respondent was negligent in a number of particularised ways in discharging its responsibilities in the financial years ending 30 June 2001 and 30 June 2002 resulting in loss and damage to her in the amount of $5,250.00 having engaged new accountants after terminating the respondent’s retainer on the 15th of September 2003. She counterclaimed for $5,250.00 damages for negligence and for breach of contract. Alternatively, she claimed a set off of the respondent’s claim and $1,136.00 damages for negligence and for breach of contract. Regarding her lack of response to the letters referred to in the plaint, she asserted the relevant particulars of the respondent’s negligence and breach of duty were summarised in her letter of the 8th of September 2003 terminating the respondent’s retainer.
- [9]On the 19th of May 2004 the respondent made application to the magistrates court for orders:
-That the appellant file and serve a list of documents requested by the respondent’s solicitor under cover of his letter of 19 April 2004 “pursuant to Rule 223 UCPR (Uniform Civil Procedure Rules) and thereafter within 7 days produce the documents to the plaintiff’s solicitors for inspection …”
-That the requirement on the part of the respondent to file and serve a reply and answer to the applicant’s defence and counterclaim be stayed until 14 days after the date of inspection of the documents
-That in default of compliance with the orders sought the applicant’s counterclaim be struck out.
-For costs.
- [10]In support of the application the respondent produced three letters written by its solicitor to the applicant to which the applicant did not respond. It contended that the respondent was unable to plead to the applicant’s counterclaim without the disclosure sought before pleading. It asserted the respondent no longer had in its possession or control its file relating to the applicant’s tax affairs and needed to inspect the file for the alleged work and services rendered by the applicant’s new accountants.
- [11]The letters referred to were firstly one of 19th April 2004. In that letter an error in the statement of claim was pointed out and it was asserted that to enable the respondent to plead to the defence and counterclaim it first required disclosure. It continued “we accordingly give notice pursuant to civil procedure rule 222 that the plaintiff requires an inspection of the following documents”. It then listed the documents the subject of the magistrate’s order.
- [12]On 21st April 2004 the respondent solicitors wrote requesting a response to their letter of the 19th of April 2004. Failing that the letter indicated they would have no alternative other than to give a formal notice under the rules in preparation for an application to the court for an order for disclosure.
- [13]By letter dated 23rd April 2004 the respondent’s solicitors wrote a Rule 444 letter. The complaint referred to therein was that the applicant had failed to respond to the respondent’s request for disclosure pursuant to Rule 222. The relief sought was an order the applicant file and serve a list of documents requested by the respondent and produce them for inspection, in default the applicant’s defence and counterclaim be struck out and for costs.
- [14]The applicant filed an affidavit in the application. In it she pointed out the 14 day period for the respondent to file a reply and answer had expired on 1 May 2004 and that no reply and answer had been filed and served. She had not been served with any application for leave to file the reply and answer out of time. She asserted the pleadings had not closed but this was incorrect. Rule 169 UCPR. She said that the duty of disclosure was satisfied by delivery of a list of documents 28 days after the close of pleadings and that she would comply with her duty of disclosure. She then asserted that Rule 222 had no application because none of the documents referred to in the letter of 19 April 2004 were made mention of in her defence and counterclaim. This was not entirely correct as mention was made in Paragraph 2.8 thereof of the amended tax return for financial year ended 30 June 2002 and the financial statements and tax return for the financial year ended 30 June 2003. She also asserted that the respondent had retained all its working papers correspondence and files relating to its work for the applicant and in due course she would expect disclosure of those documents.
- [15]The duty of disclosure is set out in Rule 211 of the UCPR. It is ongoing until a proceeding is decided. It is of such documents in the possession or under the control of another party directly relevant to an issue in the pleadings. Disclosure is by delivery of a list of documents to another party and at another parties request delivery of copies of the documents. Relevantly here, except where an order for disclosure is made before close of pleadings the time for delivery of the list of documents is 28 days after the close of pleadings. Rule 214.
- [16]Rule 222 provides that a party may, by written notice require another party in whose pleadings particulars or affidavits mention is made of a document, to produce the document for inspection, and for copies of that document to be made.
- [17]Rule 223 (3) provides that “the court may order the delivery production or inspection of a document or class of documents for disclosure-
(a)be provided; or
(b)not be provided; or
(c)be deferred”.
- [18]Rule 223 (3) thus confers power to the court to order delivery, production or inspection of documents for disclosure. Relevantly here that is of those documents which are directly relevant to an allegation in issue in the pleadings.
- [19]Rule 223 (1) and (2) confer power to challenge another party’s disclosure. An application may be made to the court to order disclosure by delivery or production for inspection of documents or a class of documents and to 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 of the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of the party. In contradistinction to Rule 223 (3) the orders provided for in Rules 223 (1) and (2) may only be made if there are special circumstances and the interests of justice require it, or it appears there is an objective likelihood the duty to disclose has not been complied with or a specified document or class of documents exists or existed and has passed out of the possession or control of a party.
- [20]Rule 225 deals with consequences of non – disclosure. Rule 225 (2) provides for an application to the court for inter alia
“(b)a judgment or other order against the party required to disclose the documents; or
(c)an order that the document be disclosed in the way and within the time stated in the order”,
if the other party does not disclose a document “under this part”, in other words, as required by the duty of disclosure or an order of a court under Part 1 of Chapter 7 UCPR.
Rule 225(3) confers power on a court to include in an order pursuant to (c) above, consequences for failing to comply with the order.
- [21]In my opinion, the orders made by the magistrate which mirrored the entirety of the application went too far despite the applicant’s tardiness in responding to the respondents solicitors’ correspondence. Firstly, the applicant is a solicitor of the Supreme Court of Queensland in practice on the Sunshine Coast. Secondly on the face of it she has a genuine dispute with the respondent. There is no sensible reason exposed in the material justifying any other conclusion . Thirdly, she appears to have been of the opinion that her duty of disclosure under UCPR had not crystalised. There was no reason to doubt that she would perform the duty when, as she saw it, it arose. Fourthly, documents in her possession or under her control directly relevant to an allegation in issue in the pleadings would include the tax returns prepared by the respondent for the financial years ending 30 June 2001 and 30 June 2002, the financial statements prepared by the respondent for the financial year ending 30 June 2002, the amended tax return for the financial year ending 30 June 2002 prepared by her new accountants and the financial statements and income tax returns for the financial year ending 30 June 2003prepared by her new accountants. They did not include working papers of Account Development Corporation Pty Ltd relating to the amended income tax return, or the time sheets of Account Development Corporation detailing how costs had been allocated. These latter documents were not shown to be in her possession or under her control. They are not her documents. Disclosure of such documents is available under Part 2 of Chapter 7 UCPR.
- [22]I am unable to see there was any basis for making what has been called a “guillotine” order in this case. An order for proper disclosure before the filing and serving of a reply was all that was called for if it was adjudged appropriate. There was no reason to doubt the applicant would have obeyed the court’s lawful order. In any event, the provisions of Part 2 of Chapter 10 of the UCPR were available if a lawful order was not obeyed.
- [23]I have said an order for proper disclosure was all that was called for if it was adjudged appropriate. So far as the purported reasons of the magistrate may be relied upon, they suggest that he considered whether it was necessary to order the disclosure sought before close of pleadings. He appears to have considered there were special circumstances.
- [24]There is no question the magistrate could order disclosure before close of pleadings. In all such cases some reason must be shown to except a case from the requirement in the rules that the duty of disclosure is to be discharged after close of pleadings. This is because the duty of disclosure is with respect to documents relating to an allegation or matter in issue.
- [25]The appeal is allowed. The magistrate’s orders are set aside. Whilst it is not a part of the orders in this appeal, the appellant should promptly attend to the disclosure of those documents to which the duty relates identified herein.