Aurora Stone Pty Ltd v Abou-Merhi
[2007] WADC 177
•8 OCTOBER 2007
AURORA STONE PTY LTD -v- ABOU-MERHI [2007] WADC 177
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 177 | |
| Case No: | CIV:1486/2006 | 16 SEPTEMBER 2007 | |
| Coram: | REGISTRAR KINGSLEY | 8/10/07 | |
| PERTH | |||
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application to revoke order dismissed. Application to limit scope of order successful. | ||
| PDF Version |
| Parties: | AURORA STONE PTY LTD ANTOINE ABOU-MERHI UNIVERSAL STONE |
Catchwords: | Practice Discovery from non party Contention that documents commercially sensitive Application to revoke order, or have scope of order limited |
Legislation: | Nil |
Case References: | Index Group of Companies Pty Ltd v Nolan [2002] FCA 608 Mobil Oil Australia and Anor v Guina Developments Pty Ltd and Anor [1996] 2 VR 34 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
ANTOINE ABOU-MERHI
Defendant
UNIVERSAL STONE
Third Party
Catchwords:
Practice - Discovery from non party - Contention that documents commercially sensitive - Application to revoke order, or have scope of order limited
Legislation:
Nil
(Page 2)
Result:
Application to revoke order dismissed. Application to limit scope of order successful.
Representation:
Counsel:
Plaintiff : Mr P Patterson
Defendant : No Appearance
Third Party : Mr K Ko
Solicitors:
Plaintiff : Taylor Smart
Defendant : Fiocco's Lawyers
Third Party : Brickhills
Case(s) referred to in judgment(s):
Index Group of Companies Pty Ltd v Nolan [2002] FCA 608
Mobil Oil Australia and Anor v Guina Developments Pty Ltd and Anor [1996] 2 VR 34
(Page 3)
1 REGISTRAR KINGSLEY: On 30 March 2007 I made orders that Universal Stone (WA) Pty Ltd ("Universal Stone") and Hiyam Abou-Merhi make discovery of specified documents. Universal Stone and Abou-Merhi are not parties to this action. The application for third party discovery was supported by an affidavit of Paul Victor Shedade sworn 27 February 2007.
2 Mr Shedade deposed that Universal Stone is a company in direct competition with Aurora Stone the plaintiff in this action. Mr Shedade deposed that in his belief Universal Stone was being run by the defendant despite the fact that the defendant is not a director of the company. The defendant's wife Hiyam Abou-Merhi is the current director of Universal. Mr Shedade also deposed that a director of Universal Stone was a former employee of the plaintiff although Mr Shedade does say that the former employee has fallen out with the defendant and his wife and is no longer a director and/or employee of Universal Stone.
3 The plaintiff's action against the defendant relates to a deed of settlement and release made in or about January 2006. The deed of settlement contained a restrictive covenant that the defendant agreed that he would not, on his own account, or jointly with, or on behalf of, any other person firm or company, directly or indirectly, persuade or attempt to persuade, or counsel any employee of the plaintiff, to terminate their employment, any past or present client of the plaintiff, to cease doing business with the plaintiff, or any past or present client to award any new work, assignment project or account of the plaintiff. The plaintiff alleges the defendant has breached the expressed term referred to, and that Universal Stone has engaged in the supply and installation of stone product in competition with the plaintiff within a 15 kilometre radius of the Perth General Post Office.
4 On the basis of Mr Shedade's affidavit orders were made requiring discovery of documents. On 28 June 2007 an application was made by Universal Stone WA Pty Ltd and Hiyam Abou-Merhi that the order for non-party discovery be revoked, or alternatively that the order for non-party discovery be varied. The variation limits the extent of discovery in that inspection be limited only to the solicitors for the plaintiff.
5 Order 26 r 16 provides that any order made under O 26 may, on sufficient cause shown, be revoked or varied by subsequent order.
(Page 4)
6 The affidavit of Hiyam Abou-Merhi sworn 28 June 2007 deposes to the fact that she has no knowledge of how the legal process works and that the defendant in this action is her husband. Her husband is represented by solicitors Fiocco's Lawyers. She was aware of the summons but thought it was an issue concerned solely with her husband in the action. Whilst she was aware of the hearing on 30 March 2007 neither she nor a representative of the company attended the hearing.
7 The plaintiff deposes that if she had fully understood the issue she would have taken legal advice and instructed separate solicitors to oppose the order sought in the chamber summons for non-party discovery.
8 There is nothing in the affidavit of Hiyam Abou-Merhi to persuade me that the order for discovery ought to be revoked. The requirement under O 26A r 5 Rules of the Supreme Court is that if there are reasonable grounds for believing that a person who is not a party to the action has possession of documents that relate to any matter in question then an order may be made. The phrase relating to any matter in question means all documents which might throw any light upon the question in issue in the proceedings. Certainly the order must be limited to documents that only need to be discovered and the summons must provide the non-party with a high degree of certainty as to what exactly must be discovered. The affidavit of Mr Shedade in support of the chamber summons laid the ground for an order and detailed the document sought with certainty. I am therefore of the opinion that there is no basis for revoking the order.
9 Hiyam Abou-Merhi goes on to depose that the plaintiff and the company Universal Stone are in direct competition in the business of supplying and installing stone products. Hiyam Abou-Merhi deposed that the business is very small and closed and is highly competitive amongst its suppliers. In addition, Hiyam Abou-Merhi deposes that the class of documents sought by the plaintiff are highly confidential and commercially sensitive some of which involved trade secrets and the internal marketing practices and pricing procedures adopted by the company.
10 Hiyam Abou-Merhi also deposes that she considers some documents are irrelevant to the issues in the action. For example, she deposes that some documents focus on the company's operations of its business and do not establish whether there has been any association between the company and her husband during the period 6 January 2006 to 5 January 2007 which is the issue in the action. In reality of course the association between the defendant and Universal Stone may be established by other
(Page 5)
- means but the significant issue is the accounting of profits during that period. If the documents go to that issue then of course they are relevant.
11 There is authority for the proposition that where there are concerns about commercial confidentiality that discovery may be limited to the legal representatives and any expert if one is engaged (Index Group of Companies Pty Ltd v Nolan [2002] FCA 608). In Mobil Oil Australia and Anor v Guina Developments Pty Ltd and Anor [1996] 2 VR 34 the Court of Appeal held that a Judge erred in holding, without having inspected the documents and without the benefit of cross-examination of deponents for the successful tenderers, that the fears against a competitor gaining a significant advantage from inspection of the document were not sufficient to outweigh the competing interest in full and proper disclosure of all relevant document. In that case the documents sought were being obtained from a party to the action. In this matter it is a non-party who is being ordered to disclose documents. In my opinion the non-party is entitled to the protection of the Court in what the non-party says are commercially sensitive documents. The balance in my opinion in protecting the non-party's rights can be achieved by limiting discovery to the party's solicitor and any independent expert.
12 I will hear from counsel as to the form of orders and as to costs.
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