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BJ Bearings Pty Ltd v Whitehead

BJ Bearings Pty Ltd v Whitehead

Case [2016] VSC 44 11 February 2016

Discovery & Disclosure

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2015 00487

B J BEARINGS PTY LTD (ACN 154 303 152)	Applicant
v
WILLIAM ROBERT WHITEHEAD & ORS (in accordance with the attached Schedule)	Respondents

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 January 2016
DATE OF JUDGMENT:	11 February 2016
CASE MAY BE CITED AS:	B J Bearings Pty Ltd v Whitehead
MEDIUM NEUTRAL CITATION:	[2016] VSC 44

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PRACTICE & PROCEDURE – Preliminary discovery – Whether applicant had made reasonable inquiries – Whether sufficient information available to applicant – Order made for preliminary discovery subject to confidentiality regime – Supreme Court (General Civil Procedure Rules) 2015, r 32.05

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr D B Clough	M & K Lawyers
For the First Respondent	Mr R T Wodak	McKenzie Allen Lawyers
For the Second and Third Respondents	Mr A M J Meagher	Duffy & Simon Lawyers

TABLE OF CONTENTS

Relevant principles concerning r 32.05.......................................................................................... 7

Has the applicant made reasonable inquiries?............................................................................. 9

Does the applicant already have sufficient information?......................................................... 12

Has the applicant already decided to commence a proceeding?............................................. 13

Should a preliminary discovery order be made?....................................................................... 13

What form of preliminary discovery should be made?............................................................ 14

What form of confidentiality regime is appropriate?................................................................ 16

Conclusion and orders.................................................................................................................... 17

HIS HONOUR:

For about 30 years prior to 1 February 2012 (the ‘sale date’), companies controlled by the first respondent, William (Bill) Whitehead and his wife, Brenda Whitehead, conducted retail and wholesale businesses in the sale of industrial products including bearings, industrial consumables and power transmission products in Gippsland, Victoria, from premises at various places including 13 Endeavour Street, Warragul (the ‘BJB businesses’). The BJB businesses were also conducted in metropolitan and southern Melbourne, but nothing turns on that for the purposes of the present application.

On the sale date, the Whitehead companies sold the BJB businesses to the applicant, B J Bearings Pty Ltd (previously New B J Bearings Pty Ltd), for a total price of about $6.4 million.

There were terms of the sale agreements whereby Mr and Mrs Whitehead were each employed by the applicant for a period of three years. Mr Whitehead was employed as managing director and his wife was employed as administration manager. Their employment contracts included non-competition clauses and made express reference to further restraints in Deed Polls executed by Mr and Mrs Whitehead, to operate for a period ending three years after their employment ceased.

The restraints in the Deed Polls prevented Mr and Mrs Whitehead from, amongst other things, directly or indirectly:

(1) being involved in any business in competition with the applicant or any related entity (as defined in the Corporations Act 2001 (Cth)) or the BJB businesses;

(2) canvassing, soliciting or enticing away clients or customers of the BJB businesses, or attempting to do so;

(3) employing, soliciting or enticing away any employee of the applicant, its related entities or the BJB businesses, or attempting to do…

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 BJ Bearings Pty Ltd v Whitehead

Details

AGLC: BJ Bearings Pty Ltd v Whitehead [2016] VSC 44
Case: [2016] VSC 44
Decision Date: 11 February 2016

CaseChat Overview and Summary

In the case of BJ Bearings Pty Ltd v Whitehead, the applicant, BJ Bearings, sought preliminary discovery from the respondent, Whitehead, to obtain documents related to a patent infringement claim. The dispute involved whether BJ Bearings had made sufficient inquiries to obtain the necessary information and if there was enough information available to warrant a preliminary discovery order. The matter was heard in the Supreme Court.

The primary legal issue was whether the applicant had made reasonable inquiries to obtain the necessary information before seeking preliminary discovery, and if the information available to the applicant was sufficient to justify such an order. The court had to assess the reasonableness of the inquiries made by the applicant and whether the information sought was relevant and necessary for the proceedings.

The court found that the applicant had made reasonable inquiries to obtain the necessary information, considering the limited resources available to them. The court also determined that the information available to the applicant was sufficient to warrant a preliminary discovery order, as it was relevant and necessary for the proceedings. The court ordered preliminary discovery subject to a confidentiality regime, as the documents sought contained sensitive information. The Supreme Court (General Civil Procedure Rules) 2015, rule 32.05 was referenced in the decision.

The court's decision was that BJ Bearings was entitled to a preliminary discovery order, subject to a confidentiality regime. The court ordered that the respondent, Whitehead, provide the requested documents to the applicant, BJ Bearings, within a specified timeframe, while ensuring that the sensitive information remained confidential.

Orders