Gosford Quarries Limited & 3 Ors v Roy Lovell Gough & 4 Ors [1999] NSWSC 537

New South Wales Supreme Court CITATION : Gosford Quarries Limited & 3 Ors v Roy Lovell Gough & 4 Ors [1999] NSWSC 537 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 1619/97 HEARING DATE(S) : 1 June 1999 JUDGMENT DATE : 1 June 1999

Gosford Quarries Limited (P1) Gosford Quarries (Projects) Pty Limited (P2) Gosford Quarries (NSW) Pty Limited (P3) Sandstones of Australia Pty Limited (P4) PARTIES : Roy Lovell Gough (D1) George Proudman (D2) Capricorn Stone Products Pty Limited (D3) Cheryl Kay Gough (D4) Robin Elizabeth Helene Oliver (D5) JUDGMENT OF : Master McLaughlin

COUNSEL : Mr. A Spencer (P) Mr. J. D. Smith (D) SOLICITORS : Snelgrove & Partners (P) Greaves Wannan & WIlliams (D) CATCHWORDS : DECISION :

SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Tuesday, 1 June 1999

1619/97 GOSFORD QUARRIES LIMITED & 3 ORS -v- ROY LOVELL GOUGH & 4 ORS JUDGMENT

1 MASTER: By notice of motion filed 13 April 1999 the plaintiffs, Gosford Quarries Limited, Gosford Quarries Projects Pty Ltd, Gosford Quarries NSW Pty Ltd and Sandstones of Australia Pty Ltd, seek orders that the various defendants give discovery in relation to the classes of documents referred to in the schedules to the notice of motion. 2 The hearing before me has been confined to the discovery which the plaintiffs say should be made by the first and third defendants and by the fourth and fifth defendants. The application for discovery is brought pursuant to the provisions of Part 23 of the Supreme Court Rules and, in particular, rule 3 of that part. 3 I have during the course of the submissions by Counsel for the plaintiffs and by Counsel for the first and third defendants and the fourth and fifth defendants, indicated at least my provisional view concerning the various documents in relation to which the plaintiffs seek discovery from those defendants. In respect to discovery by the first and third defendants in accordance with Schedule 1 annexed to the notice of motion those defendants agree to discovery with respect to items (v) and (vi). They oppose discovery in the terms sought in respect to the other items. 4 It is submitted on behalf of the defendants that the material sought in items (i), (ii) and (iii) is too wide and that it is material (which except, for example, in item (i) in relation to timing) which does not go to matters in issue between the parties and that the financing of the purchases referred to in items (ii) and (iii) is not relevant to the issues between the parties. 5 I am satisfied, however, that the entirety of the material sought in items (i), (ii) and (iii) should be discovered by the first and second defendants. 6 Again, it is submitted on behalf of those defendants that item (iv) is too wide. The plaintiffs agree that the word "written" should appear in the final line of that item before the words "service contract". Subject to the insertion of that word, I am of the view that the defendants should make discovery of the material in that item. 7 I have already recorded that the defendants are agreeable to make discovery in respect to items (v) and (vi). 8 The defendants submit that whilst the discovery should be made of the diary or diaries referred to in item (vii), the period is too wide. I am in agreement that it is too wide. It seems to me that the commencing date for that material should be the date of tender of the earliest project, being the Sydney Cove Redevelopment Authority Project dated 1 January 1991. Although the defendants have submitted that the final date should be the end of 1996, that being the end of the period when competition business appears to have been obtained, I, nevertheless, am in agreement with the submission made on behalf of the plaintiffs in relation not merely to this item but to various other items, that the defendants have not put on affidavit evidence addressing matters in issue with specificity, but rely essentially upon the express denials made in their defence. 9 In those circumstances therefore I consider that the final date should be the date of the commencement of the present proceedings, which is 7 March 1997. 10 Item (viii) as to dates will follow item (vii). I have already, during submissions, expressed the view that the plaintiffs are not entitled to item (xi). That item is premature, since it is relevant to relief in the nature of an account of profits. It is necessary at the substantive hearing for the plaintiffs to establish only that they have suffered loss; it is not necessary for them to condescend into details of the calculation of that loss. It is in respect to that calculation that item (ix) may ultimately become relevant. Accordingly, the plaintiffs are not entitled to item (ix). 11 I have already indicated in respect to item (x) that that item should be limited as to time, being to the commencement of the proceedings on 7 March 1997, and also should be limited to the various projects referred to in the statement of claim. It has been submitted on behalf of the defendants that item (x) should also be limited to the involvement of the second defendant. I have already adverted to the fact that the defendants have not put on any affidavit evidence which would allow that question of involvement to be asserted with a degree of specificity. In those circumstances, therefore, I am not disposed to limit item (x) in the way in which the defendants submit. It will be limited only as to the projects and as to the date in the manner to which I have already referred. 12 Item (xi) relates to the cause of action in conversion. I am in agreement with the submission of the defendants that the time period is far too wide. It should be limited to commence at a date some time before the first delivery; that delivery appears to have occurred in about mid-1992. The defendants suggest 1 March 1992. The plaintiffs, however, point to the fact that once again the areas of dispute in this regard are not defined in the pleadings and that no affidavits have been filed in this regard by the defendants, and they suggest that a more appropriate date is 1 January 1991. I am in agreement with that submission. So the commencement date in respect to item (xi) will be 1 January 1991. 13 The final date will be 31 December 1993, having regard to the fact that the last delivery was made on 14 December 1993. 14 Item (xii) will follow item (xi) so far as dates are concerned. 15 Item (xiii) should be subject to a time limit. It has been submitted on behalf of the defendants that the commencing time limit should be the date of the commencement of negotiations between the plaintiffs and the third defendant in October 1993. However, it would appear that the first defendant in his affidavit evidence referred to having some prior knowledge of the tests. In those circumstances, I consider that it would be appropriate that the commencing date should be 1 January 1993. 16 The final date was submitted on behalf of the defendants to be the date of completion of the sale of the shares on 19 October 1994. But it would appear that tests were continuing for about a year after the date of that sale of shares before appropriate results were obtained. Therefore the final date for item (xiii) should be 31 December 1995. 17 As to item (xiv), the defendants submitted that that item should be limited to the involvement of the second defendant, since that item is relevant to the cause of action in unlawful interference. For the reasons in relation to item (x), upon which I rejected a similar submission by the defendants, I do not consider that item (xiv) should be limited to the involvement of the second defendant. 18 In respect to Schedule 2 and the various items sought by the plaintiffs to be discovered by the fourth and fifth defendants, items (i), (ii) and (iii) will, for the reasons which I expressed in relation to the first and third defendants, be ordered to be discovered by the fourth and fifth defendants. 19 Item (iv) should be limited as to time. The appropriate time, in my view, should commence on 1 October 1993 and should be limited to conclude on 1 December 1994, for the reasons referred to during the course of submissions. 20 Although it was submitted on behalf of the fourth and fifth defendants in respect to item (v) that the fifth defendant is in effect a stranger to the claim in relation to which this item is sought and should, therefore, not be required to make discovery, nevertheless it appears that, to the extent that there is a cause of action asserted against her of having knowingly participated in a breach by the first defendant of his fiduciary duty, the material sought in item (v) in relation to vendors under the purchase is a matter in which the fifth defendant should, in my view, be required to make discovery. Accordingly, I propose to order as in item (v), omitting therefrom the words "the second defendant and". 21 The plaintiffs no longer seek the material in items (vi) and (vii) of the schedule. 22 I propose to stand this matter over to an appropriate time, or date, to allow the parties to bring in a written document reflecting the results which I have just expressed. 23 I stand the matter over to Wednesday 2 June 1999 for the bringing in of short minutes and for argument as to costs. **********