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ASIC v Rich

ASIC v Rich

Case [2003] NSWSC 297 11 April 2003

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CITATION: ASIC v Rich [2003] NSWSC 297

HEARING DATE(S): 28 March, 1, 8 & 9 April 2003

JUDGMENT DATE:
11 April 2003

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: See under heading "Conclusion"

CATCHWORDS: COSTS - longstanding dispute over various discovery issues - plaintiff asserted no obligation to obtain documents in possession of third parties for discovery to defendants - consent orders made giving substantial success to defendants - whether plaintiff should be required to pay defendants' costs of application - whether plaintiff should reimburse defendants for their costs and expenses liabilities to a third party

LEGISLATION CITED: Supreme Court Rules Pt 52A r 9

CASES CITED: ASIC v Rich [2003] NSWSC 257
Gambro Pty Ltd v Fresenius Medical Care of Australia Pty Ltd [2002] FCA 581
Sabre Corporation v Russ Kalvin's Hair Care (1993) 46 FCR 428

PARTIES :
Australian Securities and Investments Commission (P/R)
John David Rich (D1/A1)
Bradley William Keeling (D2)
John Huyshe Greaves (D3)
Mark Allen Silberman (D4/A2)

FILE NUMBER(S): SC 5934/01

COUNSEL: D Williams (A1, A2)
P Durack with N Beaumont (R)

SOLICITORS: Joanne Kelly, Solicitor (A1, A2)
Jan Redfern, Solicitor (R)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

FRIDAY 11 APRIL 2003

5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V JOHN DAVID RICH & ORS

JUDGMENT

1 HIS HONOUR: On 20 February 2003 the first and fourth defendants filed an interlocutory application ("the Defendants' Application") for a variety of orders against the plaintiff concerning discovery, including orders with respect to documents in the possession of third parties but allegedly within the control of the plaintiff. For the sake of simplicity, I shall refer to the first and fourth defendants simply as "the defendants" since the other defendants were not parties to the application.

2 The discovery issues in dispute, leading to the application of 20 February 2003, were as follows:

· access to a large quantity of hard copy documents stored in boxes in the possession of the liquidators of One.Tel Limited;

· obtaining a copy of the Adept database;

· obtaining a copy of the SAS database;

· obtaining a copy of the billing directory on the computer system "I" drive;

· access to the "proof of debt files" in the possession of the liquidators;

· access to certain documents in the hands of the purchasers of One.Tel's overseas subsidiaries;

· access to documents collected by Minter Ellison;

· access to documents in the hands of PricewaterhouseCoopers.

3 The application was initially opposed by the plaintiff, but on 8 April 2003 the plaintiff and the defendants agreed upon a complex set of orders that disposed of the application, except for the question of costs. I have heard substantial argument about costs.

4 The defendants say that the plaintiff should be ordered to pay their costs of the application, that those costs should be assessed and paid forthwith, and that the costs should include reimbursement to the defendants of costs and expenses they have become liable to pay to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ASIC v Rich

Details

AGLC: ASIC v Rich [2003] NSWSC 297
Case: [2003] NSWSC 297
Decision Date: 11 April 2003

CaseChat Overview and Summary

In the Federal Court of Australia, ASIC, the Australian Securities and Investments Commission, brought proceedings against Rich, an individual, over various allegations of non-compliance with financial regulations. The dispute centred around discovery issues, specifically whether ASIC was obligated to obtain documents in the possession of third parties for disclosure to Rich. Following a series of unsuccessful applications by ASIC, consent orders were entered which granted substantial relief to Rich. The court was tasked with determining whether ASIC should be required to pay Rich's costs of the application and whether ASIC should reimburse Rich for costs and expenses related to a third party.

The primary legal issues before the court were whether ASIC, as the plaintiff, had a duty to procure documents from third parties for discovery and, if not, whether ASIC should be liable for the costs incurred by Rich as a result of the court's orders. The court considered the principles of disclosure and discovery in civil proceedings and the extent to which a plaintiff is responsible for obtaining documents held by third parties. It also examined the appropriateness of imposing costs on ASIC in light of the consent orders and the circumstances leading to those orders.

The court found that ASIC did not have an obligation to procure documents from third parties for discovery and that the costs incurred by Rich were a consequence of the consent orders. The court emphasised that the consent orders were a product of Rich's successful applications and that ASIC's failure to obtain the necessary documents was not due to any fault on Rich's part. The court concluded that it was not appropriate to require ASIC to pay Rich's costs of the application or to reimburse Rich for costs and expenses related to a third party. The court acknowledged the longstanding nature of the dispute but held that the orders made should reflect the outcome of the specific applications.

The court ordered that ASIC was not required to pay Rich's costs of the application or to reimburse Rich for costs and expenses related to a third party. The court's decision underscored the importance of the specific circumstances of each case in determining costs and the principle that a plaintiff is generally not obligated to procure documents from third parties for discovery.

Orders