Clifford v Vegas Enterprises Pty Ltd - [2009] FCA 1204

FEDERAL COURT OF AUSTRALIA
Clifford v Vegas Enterprises Pty Ltd [2009] FCA 1204
PRACTICE AND PROCEDURE - applications by respondents for discovery of Family Court documents - evidence provided that documents exist and are relevant to these proceedings - continuing discovery on oath ordered
Trade Practices Act 1974 (Cth) s 52, s 82, s 82(1)
Corporations Act 2001 (Cth) s 1041H
Fair Trading Act 1987 (WA) s 10
Federal Court Rules O 15, O 15 r2(3), O 15 r 8
Harman v Secretary of State for Home Department [1983] AC 280
Geneva Finance Ltd (Receiver and Manager Appointed) v Boys [2001] WASC 348
Hearne v Street (2008) 235 CLR 125
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10
Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349
British American Tobacco Services v Cowell [2003] 8 VR 573
Australian Securities and Investments Commission v Marshall Bell Hawkins Ltd [2003] FCA 833
Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2008] FCA 391
Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576
Griffiths v Duggan (No 2) [2008] VSC 230
Patrick v Capital Finance Pty Ltd (No 4) [2003] FCA 436
Murex Diagnostics Australia Pty Ltd v Chiron Corporation (No 2) (1995) 62 FCR 424
Mulley v Manifold (1959) 103 CLR 341
PHILIP GEORGE CLIFFORD v VEGAS ENTERPRISES PTY LTD (ACN 009 078 148), RODNEY DESMOND HART and GEOFFREY BRIAN BACKSHALL; VEGAS ENTERPRISES PTY LTD; PHILIP GEORGE CLIFFORD and LAVAN LEGAL (A FIRM)
WAD 28 of 2009
BARKER J
26 OCTOBER 2009
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 28 of 2009

BETWEEN:
PHILIP GEORGE CLIFFORD
Applicant

VEGAS ENTERPRISES PTY LTD
Cross-Claimant

AND:
VEGAS ENTERPRISES PTY LTD (ACN 009 078 148)
First Respondent

RODNEY DESMOND HART
Second Respondent

GEOFFREY BRIAN BACKSHALL
Third Respondent

PHILIP GEORGE CLIFFORD
First Cross-Respondent

LAVAN LEGAL (A FIRM)
Second Cross-Respondent

JUDGE:

BARKER J

DATE OF ORDER:

8 SEPTEMBER 2009

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.By Friday 11 September 2009, the parties give continuing discovery on oath including:
1.1all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the acquisition in December 2006 by the applicant or Sheraz Pty Ltd of shares in the first respondent (Shares) including the events leading up to the acquisition of the Shares; and
1.2all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the value of the Shares.

2.The parties to lodge a minute of proposed programming orders by Thursday 10 September 2009 at 4pm.
3.Costs are reserved on the discovery application.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 28 of 2009

BETWEEN:
PHILIP…

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: [2009] FCA 1204
Decision Date: 8 SEPTEMBER 2009

CaseChat Overview and Summary

In the matter of Clifford v Vegas Enterprises Pty Ltd, the dispute centres around the discovery of documents related to the acquisition and valuation of shares in Vegas Enterprises. The respondents, Vegas Enterprises Pty Ltd and another, sought to discover documents from the Family Court proceedings between the applicant and another party. The application was before the Federal Court, where the respondents argued that the documents in question were directly relevant to the issues being litigated. The applicant, Clifford, opposed the discovery, contending it was a fishing exercise.

The central legal issue before the court was whether the documents sought through discovery from the Family Court proceedings were relevant and necessary for the resolution of the current proceedings. The respondents contended that the documents were pertinent to the applicant's investment in Vegas, the valuation of the shares, and various other matters disclosed in the Family Court. They argued that the documents would provide insight into the applicant's financial dealings, the process of share acquisition, and the valuation methodologies employed. The applicant, on the other hand, argued that the request was overly broad and not pertinent to the current case.

The court examined the affidavits and transcripts provided by the respondents, which detailed the contents of the Family Court proceedings and the relevance of the documents to the current litigation. The court found that the documents, particularly the applicant's affidavit and expert reports, were directly related to the matters in dispute. The court dismissed the applicant's argument that the discovery request was a fishing exercise, emphasizing the clear relevance of the documents to the issues at hand.

In conclusion, the court granted the respondents' application for discovery, ordering the applicant to provide all relevant documents and evidence from the specified Family Court proceedings. The court reserved the question of costs and directed the parties to propose programming orders. The final orders required the applicant to disclose all relevant documents by a specified date and mandated the lodging of proposed programming orders by a set deadline, with costs reserved on the discovery application.

Orders

Orders of the court

1. By Friday 11 September 2009, the parties give continuing discovery on oath including:

1.1 all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the acquisition in December 2006 by the applicant or Sheraz Pty Ltd of shares in the first respondent (Shares) including the events leading up to the acquisition of the Shares; and

1.2 all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the value of the Shares.

2. The parties to lodge a minute of proposed programming orders by Thursday 10 September 2009 at 4pm.

3. Costs are reserved on the discovery application.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In his reply to the substituted defences the applicant says Sheraz currently holds 416,902 shares in the capital of Vegas on trust for him. He also pleads to other factual matters concerning the alleged representations. EVIDENCE RELATING TO DOCUMENTS FOR WHICH DISCOVERY IS SOUGHT In these circumstances, the respondents seek discovery for materials produced at/or resulting from the Family Court proceedings involving the applicant that relate to the value of the shares in Vegas held by Sheraz. In support of their applications, the respondents filed affidavit evidence. Ms Kailee Michelle Brown, solicitor, deposed in an affidavit sworn 17 August 2009, and filed on behalf of Vegas, that through Mr Geoff Backshall, Chief Executive Officer of Vegas, she was informed and believed that Mr Backshall was subpoenaed to give evidence in the Family Court proceedings regarding the applicant's shareholding in the first respondent, that the applicant filed evidence regarding his investment in Vegas and that the Family Court made orders in respect of the applicant's shareholding in Vegas. Mr Rodney Desmond Hart, the second respondent in the proceedings and a director of Vegas, deposed in an affidavit sworn 25 August 2009 that he believed that "affidavit and other similar materials, evidence and documents in the Family Court are relevant to matters in issue in the within proceedings and are presently in or have been in the possession, custody or power of the applicant". Mr Hart deposed that the applicant gave evidence in an affidavit in the Family Court concerning the process by which he came to acquire an interest in shares in Vegas and his subsequent involvement in Vegas and dealt with issues concerning: a)how the applicant funded his purchase of shares in Vegas; b)how he paid for the shares; c)the due diligence he conducted and advice obtained;d)allegations of pre-investment representations made by Vegas;e)his pre-investment knowledge of the Vegas business and of the "Rusty brand" and how he obtained that knowledge;f)his pre-investment understanding of Vegas' ability to obtain the global master licence for the "Rusty brand" and the royalty stream associated with this licence;g)the valuation methodology that was applied to his share purchase in Vegas; and h)information in relation to Vegas' net profit, royalties and dividends for 2002 to 2006 inclusive. Mr Anthony David Bereyne, partner of Jackson McDonald, who has the conduct of this matter on behalf of the second and third respondents, in an affidavit sworn on 7 September 2009, deposed that on 2 September 2009 the Family Court gave leave for the respondents to rely upon Family Court transcripts in these proceedings. Mr Bereyne attached to his affidavit copies of transcript of the proceedings and minutes of proposed orders filed by the applicant in the Family Court proceedings. In written and oral submissions the second and third respondent's took the Court to transcripts of the proceedings in the Family Court, which highlighted the existence of the applicant's trial affidavit discussed in Mr Hart's affidavit, the lengthy cross‑examination conducted in relation to the affidavit, and the existence of an expert report which the applicant obtained in relation to the capacity for shares in Vegas to be valued that he had sought, unsuccessfully, to tender in the hearing of Family Court proceedings.APPLICANT’S GROUNDS OF OPPOSITION

Decision

Reasons for decision

BARKER J

I am satisfied that the Family Court documents, in particular the affidavit evidence filed by the applicant in the Family Court proceedings, relate to the issues in question in this case. The submission by the applicant that this is a "fishing exercise" is without merit. In my view, the documents the subject of the discovery application, are directly relevant to a matter in issue in this proceeding.CONCLUSION The respondents have provided evidence to suggest that the Family Court documents exist and that they are relevant to these proceedings. The Court is therefore satisfied that continuing discovery on oath of all relevant documents should be given, including:(a)all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the acquisition in December 2006 by the applicant or Sheraz Pty Ltd of shares in the first respondent (Shares) including the events leading up to the acquisition of the Shares; and (b)all documents and evidence filed in the Family Court of Australia proceedings PTW 5416 of 2006 between the applicant and Ms Corsbie relating to the value of the Shares. The question of costs in relation to both these applications is reserved. I would also order that the parties lodge a minute of proposed programming orders by Thursday 10 September 2009 at 4pm.

Ratio Decidendi

Legal Principle Established

Established by: BARKER J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 28 of 2009

JUDGE:	BARKER J
DATE OF ORDER:	8 SEPTEMBER 2009
WHERE MADE:	PERTH