Australian Securities and Investments Commission v Australian Property Custodian Holdings Limited (Receivers and Managers appointed) (in liquidation) (Controllers appointed)

The Australian Securities and Investments Commission (ASIC) filed proceedings against Australian Property Custodian Holdings Limited (APCH) in the Federal Court and the Supreme Court of Victoria. The Federal Court proceedings were to recover pecuniary penalties against APCH's directors, and the Supreme Court proceedings were brought to obtain compensation for investors. The directors of APCH argued that the documents used to defend the Federal Court proceedings should also be used in the Supreme Court proceedings to avoid duplication and to manage costs and efficiency. The Objectors, who were third parties, argued against this, stating that allowing the use of the same documents could breach the implied undertaking.

The legal issues before the court were whether the documents used in the Federal Court proceedings could also be used in the Supreme Court proceedings, and if so, whether the implied undertaking should be modified to allow this. The court considered the overarching purpose of facilitating the just resolution of disputes according to law, as quickly, inexpensively, and efficiently as possible. The court also considered the difficulty faced by the defendants' lawyers in compartmentalising their knowledge of the documents to avoid inadvertently breaching the implied undertaking.

The court decided that the considerations of efficiency and cost, as well as the difficulty faced by the defendants' lawyers, supported a modification of the implied undertaking. The court found that the documents relevant to the Federal Court proceedings were likely to be relevant to the Supreme Court proceedings, given the close relationship between the two proceedings. The court noted that the Objectors did not contest the relevance of the discovered documents to the Compensation Proceeding. The court's preliminary view was that the implied undertaking should be modified to allow the defendants' lawyers to prepare their clients' defences to both proceedings in a practical and efficient way.

The court adjourned the application to allow the parties to further consider the modification of the implied undertaking. The court noted that setting out its preliminary views would likely be of assistance to the parties on the resumed application. The court did not make any final orders in this decision but indicated that it would consider the modification of the implied undertaking on the resumed application.