C21 Pty Ltd (Trustee) v Hou (No 3) - [2023] FedCFamC2G 162

Federal Circuit and Family Court of Australia
(DIVISION 2)
C21 Pty Ltd (Trustee) v Hou (No 3) [2023] FedCFamC2G 162

File number(s): SYG 2055 of 2021

Judgment of: JUDGE MANOUSARIDIS

Date of judgment: 3 March 2023

Catchwords: INTELLECTUAL PROPERTY – Practice and procedure – applications for discovery – whether certain categories of documents ought to be discovered – orders for discovery made.

Legislation: Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 14.02(2)(b)

Cases cited: C21 Pty Ltd (Trustee) v Hou [2022] FedCFamC2G 527

Division: General

Number of paragraphs: 23

Date of hearing: 2 March 2023

Place: Sydney

Counsel for the Applicant: Mr C McMeniman, by video

Solicitor for the Applicant: Gilbert + Tobin

Counsel for the Respondents: Mr L Merrick, by video

Solicitor for the Respondents: MGA Lawyers
ORDERS

SYG 2055 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
C21 PTY LTD ATF THE RAMADAN FAMILY TRUST (ABN 65 592 475 152)

Applicant

AND:
KATE HOU

First Respondent

HIBI DESIGN PTY LTD (ACN 654 588 717)

Second Respondent

order made by:

JUDGE MANOUSARIDIS

DATE OF ORDER:

3 March 2023

THE COURT ORDERS THAT:
1.Subject to order 2, pursuant to r 14.02(2)(b) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules), by 16 March 2023 the respondents give verified discovery of the documents falling within categories 1-6 described in the document titled “Applicant’s proposed discovery categories” (Applicant’s Categories).
2.For the purposes of order 1 “documents” has the meaning given to “document” in the Applicant’s Categories, except that the following is substituted for paragraph (c) of that definition:
does not include any affidavit (including all documents annexed or exhibited to such affidavit) filed by the applicant or by the respondents;

3.Pursuant to r 14.02(2)(b) of the GFL Rules, by 16 March 2023 the applicant give verified discovery of the documents falling within category 16 described in the document titled “Documents and Classes of Discoverable Documents Sought from the Applicant” (Respondents’ Categories).

THE COURT NOTES THAT:
4.The parties will confer with a view to the respondents formulating a clearer description of the documents falling with category 20 of the Respondents’ Categories, and the applicant including in the verified discovery required by order 3 documents that fall within the clearer description.

THE COURT ORDERS THAT:
5.The costs of the applications in relation to discovery are reserved.

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
introduction

At 9:30 am on 3 March 2023 I…

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: [2023] FedCFamC2G 162
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the case of C21 Pty Ltd (Trustee) v Hou (No 3) involved a dispute concerning discovery of documents between the applicant and the respondents. This matter was before the court for the determination of objections to proposed categories of documents sought in the discovery process. The primary focus was on resolving disagreements over specific categories of documents that the parties could not agree upon after discussions and negotiations.

The legal issues the court needed to address were whether certain categories of documents were too broad or otherwise objectionable, and if the respondents' objections to these categories were valid. The applicant sought the discovery of nine categories of documents, while the respondents sought 29 categories. After negotiations, the parties remained in dispute regarding categories 1-6 of the applicant’s proposed categories and categories 16 and 20 of the respondents' proposed categories.

The court evaluated the objections raised by the respondents, particularly focusing on the inclusion of the phrase “or referring to” in categories 1 and 2. The respondents argued that this phrase rendered the categories impermissibly broad and suggested substituting it with “or demonstrating the use of.” However, the court disagreed, finding that the phrase “or referring to” actually limited the scope of the search for documents, rather than broadening it. The court also noted that there was no evidence to support the respondents' claim that the search would impose an unfair burden, and it was unable to appreciate how the search for referring documents would involve significantly more effort than searching for recording documents.

Ultimately, the court ruled in favor of the applicant, allowing the discovery of the contested categories as proposed, except for those categories that were resolved by consent or where the court found the respondents’ objections valid on other grounds. The final orders reflected the court's decisions on the allowable categories of documents for discovery.

Orders

Orders of the court

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Background

Background to the litigation

At 9:30 am on 3 March 2023 I pronounced orders in relation to a dispute I heard on 2 March 2023 about discovery, noting that I would publish my reasons later. These are my reasons. background In reasons for judgment I published on 29 June 2022 I described the causes of action the applicant maintains against the respondents in this proceeding, and the defences the respondents have filed.[1] These reasons for judgment assume familiarity with that description.[1] C21 Pty Ltd (Trustee) v Hou [2022] FedCFamC2G 527, at [3]-[6] On 22 November 2022 I made orders in chambers by consent that the parties exchange proposed categories of discovery, they confer and notify each other of the categories not agreed to, and to make any interlocutory applications for discovery and affidavits within the time specified in the orders. On 25 January 2023 the parties exchanged proposed categories of discovery. The applicant sought the discovery of the nine categories of documents described in a document titled “Applicant’s proposed discovery categories” (Applicant’s Categories). The respondents sought the discovery of the 29 categories of documents described in a document titled “Documents and Classes of Discoverable Documents Sought from the Applicant” (Respondents’ Categories). The parties conferred about their respective categories of documents, but were unable to agree on some of them. The respondents objected to all but categories 7 and 8 of the Applicant’s Categories. In the course of the hearing counsel indicated that the parties had resolved the dispute in relation to category 9 of the Applicant’s Categories. The applicant, on the other hand, objected to a number of the Respondents’ Categories but by the conclusion of the hearing the parties remained in dispute only in relation to categories 16 and 20. These reasons for judgment, therefore, deal with the disputes in relation to categories 1-6 of the Applicant’s Categories and categories 16 and 20 of the Respondents’ Categories.Applicant’s categoriesCategories 1 and 2 Categories 1 and 2 describe classes of documents by reference to their recording or referring to the matters described in categories 1 and 2. The respondents object to the inclusion of “or referring to”. The respondents submit the words “or referring to” render the categories impermissibly broad. The respondents submit the documents should be qualified by the words “or demonstrating the use of”. I do not agree that the words “or referring to” impermissibly broaden the categories of documents. On the contrary the words “or referring to” limit the location and disclosure of documents that are described in categories 1 and 2. Counsel for the respondents submitted that requiring the respondents to discover not only documents that record, but also documents that refer to, the documents described in categories 1 and 2 would unfairly burden the respondents. There is no evidence on the basis of which I could assess this submission. I am in any event unable to appreciate how a search on any electronic device for documents that relate to a particular subject would involve materially more effort than conducting a search on the same electronic device for documents that record the same subject.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	SYG 2055 of 2021
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	3 March 2023
Catchwords:	INTELLECTUAL PROPERTY – Practice and procedure – applications for discovery – whether certain categories of documents ought to be discovered – orders for discovery made.
Legislation:	Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 14.02(2)(b)
Cases cited:	C21 Pty Ltd (Trustee) v Hou [2022] FedCFamC2G 527
Division:	General
Number of paragraphs:	23
Date of hearing:	2 March 2023
Place:	Sydney
Counsel for the Applicant:	Mr C McMeniman, by video
Solicitor for the Applicant:	Gilbert + Tobin
Counsel for the Respondents:	Mr L Merrick, by video
Solicitor for the Respondents:	MGA Lawyers

SYG 2055 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	C21 PTY LTD ATF THE RAMADAN FAMILY TRUST (ABN 65 592 475 152) Applicant
AND:	KATE HOU First Respondent HIBI DESIGN PTY LTD (ACN 654 588 717) Second Respondent

order made by:	JUDGE MANOUSARIDIS
DATE OF ORDER:	3 March 2023