IC Pipes Pty Limited v DGS Trading Pty Limited [2022] NSWSC 951

Supreme Court New South Wales

Medium Neutral Citation: IC Pipes Pty Limited v DGS Trading Pty Limited [2022] NSWSC 951 Hearing dates: 15 July 2022 Date of orders: 15 July 2022 Decision date: 15 July 2022 Jurisdiction: Equity - Applications List Before: Kunc J Decision: Notice to produce set aside in part Catchwords: CIVIL PROCEDURE — Discovery — Practice Note SC Eq 11 — Exceptional circumstances warranting disclosure before evidence exchanged Legislation Cited: Civil Procedure Act NSW (2005) Practice Note SC Eq 11 Category: Procedural rulings Parties: I C Pipes Pty Ltd (ACN 101269961) (Plaintiff)

DGS Trading Pty Ltd (ACN 631111898) (First Defendant) Sam Blanch (Second Defendant) Blanch Consulting Services Pty Led (Third Defendant) Jacqualine McGee (Fourth Defendant) Representation: Counsel:

J Granger (Plaintiff)

S Blanch (Self-represented – Second and Third Defendants)

Solicitors:

Bartier Perry (Plaintiff) File Number(s): 2020/327509 Publication restriction: No

EX TEMPORE JUDGMENT (REVISED) 1. The Court has before it today in the Applications List two notices of motion. One is brought by the plaintiff, the other by the second and third defendants. 2. The substantive proceedings brought by the plaintiff against the second and third defendants are, in summary, a claim that the second defendant (Mr Blanch) through his consulting company, the third defendant, raised invoices which Mr Blanch is alleged to have known were for services that had not in fact been provided. 3. The first defendant is in liquidation. The fourth defendant has filed brief written submissions and asked to be excused from appearing today. I considered those submissions in chambers. The matters today were not of direct relevance to the fourth defendant (other than the possibility that the Court might dismiss the proceedings on the second and third defendant's motion, a matter to which I will come). I gave leave to the fourth defendant not to appear today. 4. The first motion concerns a notice to produce issued by the second and third defendants in January 2022. The proceedings have been transferred from the District Court and I am hearing paragraph 2 of the plaintiff's notice of motion originally filed in the District Court seeking to set aside a number of paragraphs of the notice to produce. There are a large number of paragraphs which have been dealt with. My specific reasons in relation to individual paragraphs will appear from the transcript. However, for the purposes of these formal reasons, I record that there were essentially two reasons why the Court set aside the various categories. 5. The first is based on the fact that the pleadings have not closed and the second and third defendant's evidence has not been filed. The plaintiff was given leave before the proceedings were transferred from the District Court to file a further amended statement of claim. Directions have been made in this Court for the second and third defendants to file their defence. Those directions have not been complied with. 6. Yesterday, the second defendant, Mr Blanch, who appeared for himself and his company today (no point was taken about the latter), emailed to the plaintiff's solicitors a document described as "defence to amended statement of claim". However, as Ms J Granger of Counsel, who appeared today for the plaintiff demonstrated, Mr Blanch has not, in fact, dealt with the new allegations in the further amended statement of claim in his document. Mr Blanch accepts that he has, by oversight, omitted to do so. Therefore, the pleadings have not closed. Furthermore, while the other parties have filed their evidence, Mr Blanch and the third defendant have not. 7. The constraint in Practice Note SC EQ 11 on disclosure in matters in the Equity Division is well known: "4. The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure. 5. There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings. 6. Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out; the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings; the classes of documents in respect of which disclosure is sought; and the likely cost of such disclosure." 1. There was no dispute that decisions of the Court have held that the Practice Note applies as much to a notice to produce as it does to discovery. 2. Mr Blanch, by his submissions in Court today, has amply demonstrated that he is able to plead his defence by reference to material already within his possession or at least his knowledge. He has not made out any reason that would meet the test of exceptional circumstances for disclosure to be provided before the pleadings have closed and the evidence is otherwise on. In those circumstances, applying the Practice Note, Mr Blanch and his company are not entitled to the material which he has sought and to which objection has been taken by the plaintiff. 3. The second reason is that in any event, at least as presently advised, all of the categories which I have struck out do not appear to be relevant to a fact in issue insofar as Mr Blanch has sought to explain why he needs the various documents. I emphasise that my determination of that question is obviously interlocutory. I have told Mr Blanch that my decision today does not mean that when the pleadings have closed and the evidence has all been put on, that he will not then be able to make further application for that material if he can demonstrate a proper basis for being entitled to it. His present difficulty is that given the pleadings have not closed and all the evidence has not been filed, he has been unable to show how any of the material to which objection has been taken is relevant to a fact in issue. 4. The plaintiff is no doubt well aware of its obligations under s 56 of the Civil Procedure Act NSW (2005). If, once all those steps have been completed, Mr Blanch is able to demonstrate a proper basis for any of the material which is presently objected to, then I am confident the plaintiff will approach the matter appropriately without the need for further interlocutory applications. 5. In so far as the question of costs is concerned, the plaintiff seeks its costs of paragraph 2 of its motion. Costs follow the event and prima facie it is entitled to those costs. Mr Blanch has submitted that the material sought by the paragraphs that will be struck out is all important material which he requires and that it would be unjust for him to pay the costs of paragraph 2 of the motion. 6. I did give some consideration to whether, at this stage, the appropriate costs order would be for the plaintiff to have its costs in the cause. However, I accept Ms Granger's submission that Mr Blanch and the third defendant have failed today, and that there is no guarantee that any of the objected material will ever be able to be shown to be relevant to the proceedings. I therefore see no reason to depart from the usual outcome, namely that Mr Blanch and the third defendant should pay the plaintiff's costs of paragraph 2 of the motion. I will make that order in due course. 7. The hearing turned to Mr Blanch and the third defendant's motion of 6 April 2022 which sought a number of orders to the effect that the proceedings should be dismissed summarily and for other similar relief, Mr Blanch informed the Court that he had decided that he no longer wished to press the motion. I told Mr Blanch that I was prepared to hear any argument that he wanted to put in support of the motion. However, he confirmed that he did not oppose the motion being dismissed to give effect to his decision. Ms Granger sought her client's costs of the motion. Mr Blanch said he was unable to proffer any reason why he and the third defendant should not pay those costs. Accordingly, that motion will be dismissed with costs. 8. The formal orders of the Court are: 1. Set aside paragraphs 1 to 4, 6, 7, 8, 15 to 19, 20 to 25, 26, 27 to 34, 40, 41, 43, 45 and 46 of the notice of motion issued on behalf of the second and third defendants dated 20 January 2022. 2. The second and third defendants are to pay the plaintiffs' costs of paragraph 2 of their notice of motion originally filed in the District Court on 14 February 2022. 3. Dismiss the second and third defendants' notice of motion filed 6 April 2022. 4. Order the second and third defendants to pay the plaintiff's costs of the second and third defendants' notice of motion filed 6 April 2022.