Austructures Pty Ltd & Anor v Makin & Anor - [2016] VSC 289

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2014 03514

AUSTRUCTURES PTY LTD	First Plaintiff
PAGES HIRE CENTRE (NSW) PTY LTD	Second Plaintiff
-and-
VICTOR ROGER MAKIN	First Defendant
RODER HTS HOCKER GMBH	Second Defendant

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 September 2015
DATE OF JUDGMENT:	26 May 2016
CASE MAY BE CITED AS:	Austructures Pty Ltd & Anor v Makin & Anor
MEDIUM NEUTRAL CITATION:	[2016] VSC 289	(First revision: 25 October 2021)

DISCOVERY ― Discovery of documents ― Commercial litigation ― Alleged defection by companies’ employee and director and diversion of business opportunities to third party ― Alleged removal of documents and erasure of computerised information before departure ― Plaintiffs having little available to discover by plaintiffs ― Approach to discovery ― Utility of orders for particular discovery ― Supreme Court (General Civil Procedure Rules) 2015 r 29.08.

DISCOVERY ― Discovery of documents ― Computerised information ― Alleged destruction of stored information by alleged fiduciary ― Evidence of no ‘back-up’ and inability to recover data ― Application seeking discovery of computer ― Computer not a document ― Not appropriate to order affidavit of document management ― Civil Procedure Act s 55B ― Intended field of operation.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C R Northrop	Matthew Shaw & Assoc (as town agents for Grope Hamilton Lawyers)
For the Defendants	Mr S Parmenter	Minter Ellison

HIS HONOUR:

The defendants have challenged the adequacy of the plaintiffs’ discovery of documents. They have applied to the Court, in various ways, to compel the plaintiffs to discover properly, or, to give particular discovery of a type or class of documents as described by them in 24 categories. Secondly, apart from an attack on adequacy, the defendants also seek orders under s 55 of the Civil Procedure Act (which gives the Court power to give directions on discovery as it considers necessary or appropriate) and s 55B of the Act (which empowers the Court to direct a party to give an affidavit of document management). They assert the plaintiffs have failed to undertake appropriate and sufficient searches for potentially discoverable documents.

As pleaded, the case involves allegations of serious deceptive conduct and breach of fiduciary obligations. The plaintiffs’ case is that first defendant Victor Roger Makin was a director of the first plaintiff and the general manager of the second plaintiff. The line of business was the manufacture and sale of corporate marquee and structures for major events. In 2005, the first plaintiff made an exclusive distributorship agreement with the second defendant (‘Roder’) to distribute such products in Australia. That agreement was later terminated by Roder in January 2007. Makin then resigned his association with the plaintiffs, and in May 2007 became Roder’s general manager. The case seems to be that Makin allowed the distributorship agreement obtained in favour of his employer to be terminated so that he could personally benefit by then resigning and joining the other…

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.

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Details

Case: [2016] VSC 289
Decision Date: 26 May 2016

CaseChat Overview and Summary

Austructures Pty Ltd & Anor v Makin & Anor was a commercial dispute about alleged breaches of fiduciary duty, breach of contract, and misleading and deceptive conduct. The plaintiffs, Austructures Pty Ltd and Pages Hire Centre (NSW) Pty Ltd, alleged that Victor Roger Makin, a former director and employee, had breached his fiduciary obligations, misused his position, and caused them to suffer losses by diverting business opportunities to a third party. The defendants, Victor Roger Makin and Roder HTS Hocker GmbH, denied the allegations and contested the adequacy of the discovery process. The case involved complex issues of document preservation, document management, and the burden of proof in commercial litigation. The Court considered the pleadings, affidavits, and expert evidence to determine the scope and extent of discovery. The Court found that there were grounds for a belief that relevant documents existed and ordered the plaintiffs to provide further discovery in certain categories. The Court also rejected the defendants' application for orders to compel the plaintiffs to provide an affidavit of document management or to inspect a computer that had been 'cleaned' of information. The Court emphasised the importance of proportionality, relevance, and utility in the discovery process and avoided imposing excessive or unnecessary burdens on the parties.

Orders