Conco Systems Inc v Hunter Industrial Services Pty Ltd

[1998] FCA 1137

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 992  of  1996

BETWEEN:

CONCO SYSTEMS INC
Applicant

AND:

HUNTER INDUSTRIAL SERVICES PTY LIMITED
First Respondent

SPECIALISED OVERHAUL SERVICE PTY LIMITED
Second Respondent

RICO PTY LIMITED
Third Respondent

ROY INGLIS
Fourth Respondent

KEVIN MASTIN
Fifth Respondent

DYLAN MARK CARTER
Sixth Respondent

TALBOT CARTER
Seventh Respondent

GRAHAM HUBERT SMITH
Eight Respondent

JUDGE:	EMMETT J
DATE:	21 AUGUST 1998
PLACE:	SYDNEY

THE COURT ORDERS THAT:

1. The eighth respondent make available to counsel for the applicant a copy of exhibit GHS2 on the basis that counsel will retain personal custody of that document, will not copy it and will limit access to the legal advisers of the applicant. 

1. The notice of motion of 14 August 1998 be otherwise dismissed.

1. The notice of motion filed on 24 July 1998 be stood over to 2 October 1998. 

THE COURT DIRECTS THAT:

1. Any further affidavits intended to be relied on in support of the notice of motion of 24 July 1998 be filed and served no later than 25 September 1998.

1. The applicant's solicitors write to the 8th respondent furnishing details of the manner in which it is said that order 4 of 11 February 1998 has been complied with.

1. The 2nd and 8th respondents, if they wish to complain about failure to comply with any directions to date, do so by filing a notice of motion seeking appropriate relief which may be made returnable on 2 October 1998. 

1. The solicitor for the applicant write to Mr Smith setting out details of the manner in which it is said that Order 4 made on 11 February 1998 was complied with.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 992  of  1996

BETWEEN:

CONCO SYSTEMS INC
Applicant

AND:

HUNTER INDUSTRIAL SERVICES PTY LIMITED
First Respondent

SPECIALISED OVERHAUL SERVICE PTY LIMITED
Second Respondent

RICO PTY LIMITED
Third Respondent

ROY INGLIS
Fourth Respondent

KEVIN MASTIN
Fifth Respondent

DYLAN MARK CARTER
Sixth Respondent

TALBOT CARTER
Seventh Respondent

GRAHAM HUBERT SMITH
Eight Respondent

JUDGE:	EMMETT J
DATE:	21 AUGUST 1998
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:   I have before me two notices of motion filed on behalf of the 8th and 2nd respondents.  In the first motion the second respondent (“the Company”) seeks the Court's leave pursuant to Order 9 rule 1 (3) for the proceedings to be defended on behalf of the Company by the 8th respondent (“Mr Smith”).  Mr Smith is a director and shareholder of the Company.  The only other director and shareholder is the Mr Smith’s son.  I have sworn evidence before me that the other shareholder consents to the 8th respondent, Mr Graham  Smith, defending the proceedings on behalf of the Company.

It is undesirable for litigation to be conducted on behalf of companies where the litigation is complex both as to factual and legal matters.  A list of issues was produced some months ago indicating a degree of complexity in these proceedings.  However, I am satisfied that Mr Smith, although he clearly has no familiarity with the procedures of the Court, has the capacity to deal with the proceedings at least on an interlocutory basis.  That is not to say that his knowledge is sufficient to ensure that matters proceed efficiently and swiftly.  Nevertheless, I am satisfied that he has the capacity at least to understand the issues that might arise and to listen to things that might be said to him either by the Court or by other parties.

However, I would only be prepared to permit Mr Smith to conduct the proceedings on behalf of the Company on the basis that the Company is not in a position to afford the costs of legal representation any further.  The Company was represented by legal advisers when the matter first came before me.  I do not have full evidence as to the circumstances which led to the withdrawal of that retainer.

The evidence before me at the moment indicates that the Company has shareholders' funds of $342 as at 30 June 1997.  I have no information as to the financial progress of the Company since then.  It is relevant to note that the financial position of the Company improved from 30 June 1996 where there was a deficiency of shareholders’ funds.  I have no evidence at all as to the financial position of the shareholders or those who are associated with them and from whom financial assistance might have been forthcoming.

In the circumstances, I consider that it is appropriate to give the Company the opportunity to file up to date evidence as to the financial position of the Company and the financial position of its shareholders.  If I am satisfied that the proceedings could not be defended on behalf of the Company if Mr Smith is not permitted to do so then I am satisfied that it is an appropriate case for the exercise of discretion to give leave for Mr Smith to appear and to represent the Company in the proceedings for the time being.

However there is a cross-claim which has been filed by the Company.  To date I have not been addressed in any detail on the issues which are likely to be raised by the cross-claim nor is there any suggestion that the impecuniosity of the Company, if in fact that is the case, is a result of the matters complained of in the cross-claim.  In the absence of any evidence as to that matter I would not be disposed to permit the cross-claim to be conducted otherwise than through legally qualified persons.  In the circumstances, I propose to stand over the motion for further hearing and to give the Company the opportunity of filing further evidence along the lines which I have indicated.

The second motion concerns confidentiality of exhibits to an affidavit sworn by Mr Smith.  On the last occasion when the matter was before me on 31 July 1998 I directed that access to exhibits GHS1 and GHS2 to Mr Smith's affidavit of 26 May 1998 be limited to the legal advisers of the applicant.  It is not totally clear whether access has yet been furnished.  The real issue, however, is not so much access as the desire on the part of the applicant's legal advisers to obtain a copy of the material.  That is resisted by Mr Smith on the basis that the material is highly sensitive and confidential.

Rather than embark on an inquiry as to the nature of the material and whether it is truly sensitive it seems to me that the interests of justice will be adequately served if I direct that Mr Smith make available to counsel for the applicant a copy of the exhibit on the basis that counsel will retain personal custody of the exhibit, will not make any copies of it, and will maintain the confidentiality which I directed on the last occasion, namely, that access be limited to the legal advisers of the applicant at this stage.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett

Associate:

Dated:             21 August 1998

Counsel for the Applicant:	G.O. Blake
Solicitor for the Applicant:	Eakin McCaffery Cox
Date of Hearing:	21 August 1998
Date of Judgment:	21 August 1998