Re Estref Abduramanoski and Zera Abduramanoski and Aidan Nominees Pty Ltd As Trustee of the Aidin City Centre Markets Unit Trust (Cross Claimant) v Aidan Nominees Pty Ltd As Trustee of the Aidan City Centre Markets Unit Trust; Bindook Pty Ltd; Estref [1987] FCA 389 (2 November 1987)

FEDERAL COURT OF AUSTRALIA

Re: ESTREF ABDURAMANOSKI AND ZERA ABDURAMANOSKI and AIDAN NOMINEES PTY LTD as
Trustee for the AIDIN CITY CENTRE MARKETS UNIT TRUST (Cross Claimant)
And: AIDAN NOMINEES PTY LTD as Trustee for the AIDAN CITY CENTRE MARKETS UNIT
TRUST; BINDOOK PTY LTD; ESTREF ABDURAMANOSKI AND ZERA ABDURAMANOSKI (First
Cross Respondents); PATRICK EDWARD MULLALLY AND JUDITH MARGARET MULLALLY
(Third Parties to the First Respondent's Cross Claim) and BINDOOK PTY LTD
(Second Cross Respondent)
No. WAG 129 of 1986
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

PRACTICE AND PROCEDURE - interrogatories - application for leave to interrogate - historical background to leave requirement - practice of leave application - criteria - necessity and utility - flexibility of procedure - use of draft interrogatories - determination of leave and objections at one hearing - alternative short statement of issues - interrogatory by way of request for particulars - interrogatories as to implications.

Federal Court Rules O.16 r.1

Australian High Court and Federal Court Practice (CCH) Vol.1 5-501

Bray's Law of Discovery and Digest (1885)

Aste v Stumore (1883) 13 QBD 326

Tye v Willoughby (1894) 38 Sol Jo 338

Codd v Delop (1906) WN 57, 78

Conde v 2KY Broadcasters Pty Ltd (1982) 2 NSWLR 221

Nella v Kingia Pty Ltd (No. WAG 18 of 1983 unrep. French J. 4/9/87)

HEARING

PERTH
2:11:1987

Counsel for the Applicant: Ms C. Tan

Solicitors for the Applicant: Dwyer Durack

No appearance for First Respondent

Counsel for the Second Respondent: Mr S. Scott

Solicitors for the second Respondent: Stables & Co.

Counsel for the Third Parties to the First Respondents Cross claim: Mr R.E. Birmingham

Instructed by: Marks Healy & Sands

ORDER

The first respondent do by the 16 November 1987 provide to the applicants the further and better particulars of defence and counterclaim as ordered by this Court on 24 June 1987.

The first respondent do allow the applicants to inspect documents numbered 61 on the first respondent's List of Documents by 16 November 1987.

The applicants have leave to interrogate the second respondents in accordance with interrogatories 5 to 12 inclusive, 17, 18, 19, 21 and 23 of their draft interrogatories filed 22 October 1987.

The applicant have leave to administer interrogatories to the third parties in accordance with interrogatories 7 to 13 inclusive, 16, 19 except (b)(iii), 23, 24 except (b)(iii), 25, 26 except (b)(iii), 27 except (c), 29, 30 except (b)(iii), 31, 33 except (c)(iii), 34 except (c)(iii) of the draft interrogatories filed 22 October 1987.

The third parties have leave to administer interrogatories to the applicants in accordance with the draft interrogatories filed 28 October 1987. In each case in which leave to interrogate has been granted the party responding do file and deliver its answers on or before 23 November 1987.

The question of the applicant's interrogatories to the first respondent and the first respondent's interrogatories to the applicant be dealt with on 23 November 1987 at 9.30 am. The directions hearing be relisted for 1 December 1987 at 9 am.

The costs of 29 October and 2 November 1987 be in the cause.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

DECISION

In January 1984 Estref and Zera Abduramanoski operated a take-away food business known as "Chicken Hut" at the Glendalough Shopping Centre.

2. Aidan Nominees Pty Ltd ("Aidan") was at the time sub-lessee of basement premises at 726 Hay Street, Perth at which the Aidan City Centre Market was conducted.

3. On 17 January, Mr and Mrs Abduramanoski signed an offer to lease a stall on the Aidan premises from which they intended to operate another "Chicken Hut" business.

4. These proceedings arise out of false pre-contractual representations said to have been made to them by Aidan's agent, Bindook Pty Ltd ("Bindook"), acting through its employee, Eric Hamer.

5. The effect of the alleged representations was that the applicants would be able to sell at the Aidan market centre the same range of food stuffs, including cool drinks, which they were selling at the Glendalough business.

6. Following the acceptance of their Offer to Lease and after taking legal advice, the applicants signed an under-lease, paid a premium of $16,000.00, fitted out premises at the market and commenced operating the business.

7. On 17 February solicitors for Aidan wrote to tell them that they were not permitted to sell cool drinks from their stall.

8. The company contended that the sale of cool drinks was in breach of the terms of the under-lease and that they had been told this at the outset by Hamer.

9. That message was also said to have been conveyed in various discussions with the male applicant by one of the company's employees, David Sherar.

10. In March 1984 an interlocutory injunction restraining the applicants from selling cool drinks in the centre was granted by the Supreme Court. A permanent injunction was granted on 15 May. It was set aside on 31 May to give the applicants leave to defend.

11. On about 22 January 1985 Aidan terminated the under-lease and, according to the applicants, entered the premises and seized equipment and money thereon.

12. The applicants claimed as against Aidan and Bindook damages for contravention of s.52 of the Trade Practices Act 1974.

13. They also set up other causes of action against Aidan in respect of the alleged representation that they would be able to sell cool drinks from the premises, characterising it as a collateral warranty and, alternatively, as a term imported into the under-lease.

14. Fraud and negligent misstatement are also raised on substantially the same material.

15. The applicants further seek orders that the under-lease be set aside or declared void ab initio under s.87 of the Trade Practices Act 1974.

16. Aidan has cross-claimed for unpaid rent and damages for repudiation of the under-lease.

17. It has also cross-claimed against its former agent, Bindook, for an indemnity in respect of the applicants' claim.

18. The applicants have instituted third party proceedings by way of a cross-claim against the solicitors whom they engaged to give advice on the terms of the proposed under-lease.

19. They received advice, so they allege, that the terms of the under-lease were in order and could be signed by them. It is said that the solicitors were negligent in failing to advise them that the terms of the under-lease would not permit the sale of cool drinks.

20. They also claim that the solicitors failed to advise that the under-lease could be rescinded or to tell the applicants of the risks of merely withholding rent.

21. Proceedings have now reached the stage where pleadings are closed and discovery has been given.

22. By way of further directions the applicants seek leave to interrogate Bindook and their former solicitors. Drafts of the proposed interrogatories have been filed in Court.

Leave to Interrogate

23. Before a party to proceedings in this Court may administer interrogatories, it has to obtain the leave of the Court to do so. That requirement is imposed by O.16 r.1 which provides:-

"1. The Court may, in its discretion, give leave to any
party to file and serve upon any other party, within the
period limited by the Court for this purpose, a notice
requiring the party served to answer interrogatories
relating to any matter in question between the
interrogating party and the party served."

24. Although the requirement for leave was only introduced in the rules of this Court in 1986, it has existed under the English Rules of the Supreme Court since 1883. Its genesis in those Rules was explained by Bowen LJ in Aste v Stumore (1883) 13 QBD 326 at 329:-

"Before the Judicature Acts on one side of the law was
the system of Chancery which had applied the principles
of discovery very widely. Upon the other side was the
common law with commercial cases between rich litigants;
... In the Common Law Courts there was not the same view
taken as to interrogatories and the discovery of
documents as in Chancery; there was more difficulty in
getting interrogatories allowed. The Judicature Acts
were passed, and under them every Court was bound to do
complete justice, and, for good or for evil, a new
system of discovery at common law was introduced; they
placed a more perfect, but most expensive, machinery in
the hands of every person. Notwithstanding all the
advantages introduced by the Judicature Acts, they were
followed by a great increase of interlocutory
proceedings; and it became an object of great importance
to prevent the power of discovery being used where it
was not really wanted. In order to check unnecessary
expenditure, the Rules of the Supreme Court, 1883, have
now provided that except in cases of fraud or breach of
trust, interrogatories are not to be administered
without the leave of the Court."

25. It is evident from the judgment of Brett MR in the same case that the leave requirement could not be circumvented by the consent of the parties:-

"The Rules of the Supreme Court, 1883, were made by the
judges, and what I understand the view of the Rule
Committee to have been been is, that they ought to
protect the parties litigant against themselves, even
although it should be said that they consented to
interrogatories such as I have mentioned." (at 329)

26. Against this background and the recent introduction of a leave requirement into the Federal Court Rules, there is a nice irony in the contemporary commentary which refers to the absence of such a requirement in the High Court Rules as "a modern innovation", and a change which was "clearly an improvement", speeding up the pre-trial period and easing the burden of the court - Australian High Court and Federal Court Practice (CCH) Vol. 1 5-501.

27. The leave given under the English Rules (R.S.C. O.31 r.1) was not to administer specific interrogatories but to interrogate generally. Bray's Law of Discovery and Digest (1885) at 92 describes the practice on applications for leave as follows:-

"It is sufficient therefore if the applicant state the
nature of the action, the issues involved and the
general scope and object of the proposed
interrogatories; if upon that statement it appears that
they would be irrelevant, or that the matters intended
to be inquired after are scandalous or come under any of
the objections enumerated in rules 6 and 7 the judge
will exercise his discretion by refusing to allow any
interrogatories to be administered in order to avoid
expense. It is not therefore necessary before the
hearing of the application to serve the other party with
a copy of the proposed interrogatories. All that the
judge has to do is to see that it is a fit case for
interrogating, that the general character of the
proposed interrogatories is not improper, and that it is
not sought to administer them for the mere purpose of
annoyance and worry: where these conditions are
satisfied, if the interrogatories can possibly be in any
degree relevant, the order will be made: the party will
not be tied down to any specific interrogatories
although he must interrogate only as to the particular
points he has put forward, and if he interrogates as to
other matters it will be at the peril of having his
interrogatories struck out... This practice leaves it
open to the judge on any subsequent application under
rule 7 to strike out...any particular interrogatories,
or under rule 6 to relieve the party from answering
them..."

28. It is not part of the function of the court on a leave application to settle the interrogatories, but to decide whether they should be permitted. - Tye v Willoughby (1894) 38 Sol. Jo. 338; Codd v Delop (1906) WN 57, 78.

29. The discretion conferred by O.16 r.1 is broad and it is inappropriate to suggest a code of criteria for its exercise.

30. The purpose underlying it is clear enough however and that is to enable the court to regulate the availability of the facility of interrogation.

31. That regulation will have regard to a variety of factors, but in particular the necessity for and utility of the proposed interrogatories to the fair and expeditious conduct of the proceedings.

32. The factors that may be taken into account at the leave stage are necessarily wider than the grounds of objection to the provision of particular interrogatories set out in O.16 r.6(3), although these may include considerations which would arise under that sub-rule. There is, I think, room for flexibility in practice.

33. It is plainly not necessary that draft interrogatories be filed for the purpose of an application for leave under O.16 r.1. However where they are filed and it is convenient to the parties and the Court to do so, both the question of leave and the question whether particular interrogatories are objectionable under O.16 r.6(3) can be dealt with contemporaneously.

34. Otherwise the procedure outlined by Bray (supra) is sufficient. That is to say, the party seeking leave provides orally or on a short minute an outline of the general scope and object of the proposed interrogatory.

35. The Court can then determine on criteria, including those which I have outlined above, whether leave should be granted and objection to particular interrogatories, should it arise, can be taken in the answers and dealt with separately. Against that background it is now necessary to turn to the application presently before the Court.

Applicants' Interrogatories for the Second Respondent

36. The nature of the discretion to grant or withhold leave to interrogate under O.16 r.1 does not, in my opinion, require the provision of elaborate reasons for its exercise in particular cases. I therefore give no more than a brief indication of views in respect of the draft interrogatories submitted by the applicants.

37. In my opinion leave to interrogate should be given in respect of proposed interrogatories 5 to 12 inclusive, 17, 18, 19, 21, 22(a) and 23.

38. I decline to grant such leave in respect of interrogatory 1 which has the form of a request for particulars. Such interrogatories should only be permitted in exceptional cases - Conde v 2KY Broadcasters Pty Ltd (1982) 2 NSWLR 221; Nella v Kingia Pty Ltd (No. WAG 18 of 1983 unrep. French J. 4/9/87).

39. Interrogatories 2, 3 and 4 relate to visits made to the applicants at Glendalough by Hamer. They concern matters directly within the applicants' own knowledge and in which they can give direct evidence which, if uncontradicted, would no doubt stand. If it is to be contradicted, the answers will be of little assistance in this case.

40. While these interrogatories may be unobjectionable in form, they are unlikely to involve any saving in costs or expedition of the case. In this respect the applicants already have sufficient information to enable them to conduct their case and leave to interrogate will be refused.

41. Interrogatories 13, 14, 15 and 16 relate to the exchange of business cards between the applicants and Hamer. They again concern matters within the direct knowledge of the applicants which may be the subject of oral testimony, will not save costs and are unlikely to affect the applicants' ability to conduct their case.

42. There is an additional difficulty with interrogatory 14 that is common to a number of other subsequent interrogatories. It asks whether Hamer requested the applicants to give him any of their business cards and asks, inter alia, whether such request was made by implication. I would need to be persuaded of the propriety of an interrogatory which asks its addressee about implications. These may be matters of pleading and inferences from proven facts. They do not, at least in the present case, constitute a proper subject for interrogation.

43. Interrogatory 20 asks whether Hamer advised the applicants about the content and legal effect of documents signed by them. Insofar as it asks whether such advice was given "by implication", I would not allow it. Insofar as it relies upon oral or written advice, it is a matter on which the applicants are able to give evidence themselves and in respect of which I do not consider resort to the interrogatory process justified.

44. Accordingly, I am not satisfied that interrogatory 22 is necessary.

Applicants' Interrogatories for Examination of the Third Parties

45. I decline to give leave with respect to numbers 1 to 6 inclusive of these draft interrogatories.

46. Although generally unobjectionable in form, they do not seem to me to be calculated to materially assist in the conduct of the applicants' case. They appear to address issues within the knowledge of the applicants and able to be proven by their own direct testimony or otherwise of secondary importance.

47. Leave will be given to administer interrogatories in the form of those numbered 7 to 13 inclusive in the draft.

48. Interrogatories 14 and 15 address the question of the solicitor's knowledge of the acceptance of the offer to lease which preceded the signing of the under-lease.

49. The solicitor's knowledge of the acceptance or otherwise of the applicants' offer to lease prior to the signing of the under-lease, does not bear directly upon any issue raised on the pleadings. It is not alleged that in the light of such an awareness the solicitors should have taken some step which they failed to do.

50. The solicitors rely upon the existence of a binding agreement to enter the under-lease as part of their defence. But that is a matter which does not depend upon their state of mind. Leave is declined in respect of interrogatories 14 and 15.

51. Interrogatory 16 relates to steps taken by the solicitors to ascertain whether or not the applicants were in truth legally bound to enter into the under-lease. I have some hesitation about this interrogatory in relation to the pleadings but I am prepared to give leave with respect to it.

52. Interrogatories 17 and 18 are sweeping in their coverage which extends to the "dates of all conferences or discussions which the third parties had with the applicants or any one of them or any one on behalf of the applicants concerning the business and the under-lease". I am not satisfied that these interrogatories address issues raised on the pleadings with sufficient precision to warrant the grant of leave.

53. Leave is granted with respect to interrogatory 19 which asks whether the third parties provided any advice to the applicants about the under-lease before they signed it. The leave will extend to para.(b) of interrogatory 19 except insofar as it seeks details of advice "by implication".

54. I am not satisfied that interrogatories 20, 21 and 22 are justified. Interrogatory 20 asks a rather rhetorical question as to the solicitors' awareness that the applicants would be relying upon advice provided to them. The question is artificial in character. In most circumstances where the provision of legal acceptance of legal advice is proven, an awareness by the provider of the advice that its recipient would be relying upon it could be readily inferred.

55. I do not understand why interrogatory 21 is included in the draft. It asks whether the solicitors requested the applicants to seek a second opinion in relation to either the under-lease or the business. It does not appear to bear any relationship to any issue raised on the pleadings.

56. Similarly, interrogatory 22 asking whether the solicitors had provided any disclaimers of responsibility or legal skill does not address any issue arising on the pleadings. There is no suggestion in the defence of reliance upon any disclaimer. Leave is denied in respect of interrogatories 21 and 22.

57. Interrogatory 23 will be allowed, as will interrogatory 24 except for sub-para. (b)(iii) which inquires after implied communication by the applicants to their solicitors of the fact that Aidan had told them before they entered the transaction that they would be able to sell at City Centre Markets all the items that they had sold at their shop in Glendalough.

58. Interrogatory 25 will be allowed, as will interrogatory 26 except for sub-para. (c)(iii) which also addresses questions of implication.

59. Similarly interrogatory 27, with the exception of para. (c), will be allowed.

60. Interrogatory 28 asks whether the solicitors had asked the applicants why they were of the view that they would be able to sell cool drinks in their business. This is a matter which is within the direct knowledge of the applicants, and a matter on which they can give testimony and in respect of which the conduct of their case is not materially assisted by the administration of interrogatories.

61. Interrogatory 29 will be permitted and interrogatory 30 except for sub-para.(b)(iii) relating to implied advice.

62. Leave will also be given for interrogatory 31, but interrogatory 32, which relates to the conduct by the solicitors of other proceedings on behalf of the applicants, deals with matters within the knowledge of the applicants. Their case is not, in my opinion, materially advanced by it.

63. I give leave to administer interrogatory 33 except for 33(c)(iii), which again deals with advice by implication. Similarly interrogatory 34 will be permitted except in relation to sub-para. (c)(iii) dealing with the client advice.

Interrogatories of the Third Parties for the Applicants

64. These interrogatories are comparatively brief and, subject to any objections which may be taken to any of them, I am prepared to grant leave for them to be administered.

65. I will now hear the parties as to consequential directions.