Crisp v G.S.F Australia Pty Ltd

[2006] FCA 1258

FEDERAL COURT OF AUSTRALIA

In the matter of Foodlife Inventory Holdings Pty Ltd (in liq);

Crisp v G.S.F Australia Pty Ltd [2006] FCA 1258

IN THE MATTER OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717)

GLENN ANTHONY CRISP (IN HIS CAPACITY AS LIQUIDATOR OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717) v G.S.F AUSTRALIA PTY LTD (ACN 006 582 303)
VID 955 OF 2005

YOUNG J
8 SEPTEMBER 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 955 OF 2005

IN THE MATTER OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717)

BETWEEN:	GLENN ANTHONY CRISP (IN HIS CAPACITY AS LIQUIDATOR OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717) Plaintiff
AND:	G.S.F AUSTRALIA PTY LTD (ACN 006 582 303) Defendant

JUDGE:	YOUNG J
DATE OF ORDER:	8 SEPTEMBER 2006
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Leave is granted to the plaintiff to file in Court the affidavit of Tracey Pauline Rothwell sworn 8 September 2006.

2.The defendant make discovery of documents in categories 1, 2, 4, 5, 6, 7, 10, 11, 12, 13, 14, 15, 16 and 17 as set forth in Exhibit TPR3 to the affidavit of Tracey Pauline Rothwell sworn 30 August 2006 by Monday 25 September 2006.

3.The defendant pay 75% of the plaintiff’s costs of the hearing this day.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 955 OF 2005

IN THE MATTER OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717)

BETWEEN:	GLENN ANTHONY CRISP (IN HIS CAPACITY AS LIQUIDATOR OF FOODLIFE INVENTORY HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 078 176 717) Plaintiff
AND:	G.S.F. AUSTRALIA PTY LTD (ACN 006 582 303) Defendant

JUDGE:	YOUNG J
DATE:	8 SEPTEMBER 2006
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. I have before me an application seeking an order for discovery of documents in accordance with the categories listed in Exhibit TPR-3 to the affidavit of Tracey Pauline Rothwell, sworn 30 August 2006.  Only four categories are in contention, namely categories 3, 4, 8 and 9. 

2. The proceeding is brought under s 588FA(1) of the Corporations Act 2001 (Cth) by the liquidator of Foodlife Inventory Holdings Pty Ltd (‘Foodlife’) for the recovery of alleged preference payments. The alleged preference payments were made by Foodlife to the defendant, G.S.F Australia Pty Ltd (‘GSF’), between 9 May 2002 and 5 June 2002.

3. Category 3 seeks discovery of documents in the following category:

   ‘Any letters, facsimiles, emails, records of meetings or other alike documents relating to any claims or complaints made by Tricon in relation to quality, delivery or service of product by G.S.F to it from the period 1 May 2002 to date whereby G.S.F was the supplier to Tricon “direct to store.’

4. The documents relate to claims or complaints made by another entity, Tricon International Ltd (‘Tricon’), in relation to the quality, delivery or service of products supplied directly by GSF to Tricon in the period after 1 May 2002.  I am not satisfied that it is appropriate to order discovery in category 3.  The documents are sought essentially to test the credit of witnesses proposed to be called by GSF, it seems, who refer to complaints that were made by Foodlife to GSF about GSF supplies to Foodlife in the period prior to 1 May 2002.  In my opinion, the relevance (if any) of the documents is remote in the extreme and goes only to a collateral issue of credit. 

5. Categories 8 and 9 are also in contention.  Both categories relate to communications between Abbott Tout, solicitors, and GSF, in the period from 23 May 2003 to 15 December 2005.  The documents in question therefore post-date the relevant period of the alleged preferences.  There is no evidence before me that GSF obtained any advice from Abbott Tout concerning either the definition of insolvency or the effect of a statutory demand in the period during which the preferences were allegedly paid.

6. The only relevance of Abbot Tout on the material before me would seem to arise from statements in the affidavits of Michael Chan (‘Chan’) sworn 9 December 2005, and Kenneth Dixon (‘Dixon’) sworn 9 December 2005, to the effect that GSF obtained advice from Abbott Tout as to the test for insolvency.  That advice was obtained well after May or June 2002, when GSF became aware that Foodlife had been placed in liquidation.  I am not satisfied that categories 8 and 9 relate to any matter in issue in the proceedings; if they go to anything, they go to a question of credit alone.

7. On the other hand, I am satisfied that category 4 is an appropriate category for discovery.  Category 4 reads as follows:

   ‘Any letters, facsimiles, emails, records of meetings, tenders, spreadsheets, powerpoint presentations or other alike document[s] from the period 1 September 2001 to 1 May 2002 relating to:

   a.a scoping study undertaken by G.S.F to supply goods to Tricon “direct to store”;

   b.any proposal from Tricon or made by G.S.F evidencing or forming part of the negotiations of supply by G.S.F of goods to Tricon “direct to store”;

   c.that business which was then supplied by [Foodlife] but was proposed to be supplied by G.S.F to Tricon;

   d.the decision by Tricon and G.S.F to enter in to an agreement with each other for supply direct to store G.S.F’

8. Category 4 relates to documents in the period 1 September 2001 to 1 May 2002, which is in the lead up to and during the period of the alleged preference payments.  The documents relate to GSF’s investigation of a proposal that they would replace Foodlife as the direct supplier of foodstuffs to Tricon.

9. The affidavits of Chan and Dixon identify that transaction as being a very substantial one which affected the business of Foodlife.  Their evidence suggests they made an assessment as to the importance of that lost business to Foodlife.  In my opinion, it is sufficiently relevant to the matters in issue in this proceeding that discovery should be ordered in accordance with category 4.

10. Accordingly, I will make an order that the defendant, GSF, make discovery of documents in categories 1, 2, 4, 5, 6, 7 and 10 to 17, as set forth in Exhibit TPR-3 to the affidavit of Tracey Pauline Rothwell, sworn 30 August 2006, such discovery to be made by  25 September 2006.

11. I will also order that the defendant pay 75 per cent of the plaintiff's costs of the hearing this day.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.

Associate:

Dated:        20 September 2006

Counsel for the Plaintiff:	G Meehan
Solicitor for the Plaintiff:	Rothwell Lawyers
Counsel for the Defendant:	C Fenwick, solicitor for the Defendant
Solicitor for the Defendant:	Hall & Wilcox as agents for Abbott Tout
Date of Hearing:	8 September 2006
Date of Judgment:	8 September 2006