FEDERAL COURT OF AUSTRALIA
Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 4) [2019] FCA 453
File number: VID 1157 of 2017 Judge: O’CALLAGHAN J Date of judgment: 2 April 2019 Legislation: Federal Court of Australia Act 1976 (Cth) Cases cited: Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7
Specsavers Pty Ltd v Optical Superstore Pty Ltd (No 4) [2012] FCA 652
Date of hearing: On the papers Date of last submissions: 18 March 2019 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: No catchwords Number of paragraphs: 27 Counsel for the Applicant/First Cross-Defendant: Mr M W Wise QC with Ms N J Hickey Solicitor for the Applicants/First Cross-Defendant: K & L Gates
Counsel for the First and Sixth Respondents/Cross-Claimant: Dr S B McNicol QC with Mr A N McRobert Solicitor for the First and Sixth Respondents/Cross-Claimant: Norton Rose Fulbright
Counsel for the Second and Eighth Respondents: Mr M S Osborne QC with Mr T P Warner Solicitor for the Second and Eighth Respondents: Mills Oakley
Counsel for the Seventh Respondent: Dr W A Rothnie Solicitor for the Seventh Respondent: Hall and Wilcox
ORDERS
VID 1157 of 2017 BETWEEN: DIRECTED ELECTRONICS OE PTY LTD
Applicant
AND: OE SOLUTIONS PTY LTD
First Respondent
HANHWA AUS PTY LTD
Second Respondent
HAN HWA HIGHTECH AUSTRALIA PTY LTD (and others named in the Schedule)
Third Respondent
AND BETWEEN: JOHNNY MENESES
Cross-Claimant
AND: DIRECTED ELECTRONICS OE PTY LTD (and others named in the Schedule)
First Cross-Defendant
JUDGE:
O’CALLAGHAN J
DATE OF ORDER:
2 APRIL 2019
THE COURT ORDERS THAT:
1.The first, second, sixth and eighth respondents pay the costs of the applicant in respect of the applications.
2.The applicant and the seventh respondent bear their own costs of the application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’CALLAGHAN J:
On 6 March 2019, I delivered reasons and made orders to refuse privilege claims by the second and eighth respondents (the Lee Parties, or Hanhwa Parties), and the first and sixth respondents (the Meneses Parties) in respect of certain documents of which the applicant (Directed) sought inspection: Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 3) [2019] FCA 285 (the privilege decision). These reasons should be read with the privilege decision.
The parties were then invited to make submissions as to costs. All parties have filed written submissions, and I will deal with the matter on the papers.
The findings in the privilege decision
The Meneses Parties resisted inspection by Directed of 111 documents which they claimed were subject to the privilege against self-incrimination and 3031 documents which they claimed were subject to the privilege against exposure to civil penalties. Mr Meneses was the sole director and employee of the first…
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- Case
- [2019] FCA 453
- Decision Date
CaseChat Overview and Summary
The legal issues the court was required to decide included whether the party claiming privilege had demonstrated that each document was properly a document of the relevant individual and not a corporation, whether a single director of a company could claim privilege against self-incrimination in respect of company documents, and whether different legal principles applied to documents seized during a search and those discovered independently. Additionally, the court had to determine whether the documents had a real and appreciable tendency to incriminate or expose the respondents to civil penalties.
The court reasoned that the Meneses Parties and the Lee Parties failed to demonstrate that the relevant documents were properly their individual documents and not those of the corporations. Therefore, their claims of privilege were unsuccessful. The court also held that a single director of a company could not claim privilege against self-incrimination for company documents, rejecting any exception to section 187 of the Evidence Act 1995 (Cth). Regarding Mr Mills, the court granted him a certificate under section 128A(7) of the Evidence Act, allowing him to resist the inspection of his documents. Consequently, Mr Mills and Directed were ordered to bear their own costs in relation to his claim for privilege.
In conclusion, the court ordered that the first, second, sixth and eighth respondents pay the costs of Directed Electronics OE Pty Ltd in respect of the applications, while Directed and Mr Mills were to bear their own costs of the application concerning Mr Mills' claim for privilege. This decision underscores the importance of demonstrating the proper ownership of documents and the limitations on claiming privilege for corporate documents.
Orders
Orders of the court
1. The first, second, sixth and eighth respondents pay the costs of the applicant in respect of the applications.
2. The applicant and the seventh respondent bear their own costs of the application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Directed submits that Mr Mills’ attempt to prevent Directed from inspecting relevant documents failed, and that he should consequently pay Directed’s costs. Consideration In my view, as to the Meneses and Lee Parties, Directed should have its costs of the applications. The onus was on the parties claiming privilege to make good their claims, and for the reasons I gave, they did not do so because they did not satisfy me that they had demonstrated that each of the relevant documents was a document of the relevant individual. It was always necessary for them to have done so. And, in circumstances where Directed necessarily could never have known whether they had done that or not, the fact that Directed may have been seen to have given more emphasis to other submissions from time to time during the (protracted) hearing, it seems to me, is beside the point. In my view, Directed has been wholly successful in respect of the Meneses Parties, and there are no special circumstances to justify deviating from the usual rule. For the same reason, I do not accept the Lee Parties’ submission that Directed’s costs should be costs in the cause between it and the Lee Parties with respect to the secret commission claims or that they be discounted so that Directed recover 50% of their costs of the privilege decision whatever the outcome of that trial. The fact of the matter is that, on the view I took of it, the privilege claims failed. The position as to Mr Mills is different. There is merit in the respective contentions that Mr Mills and Directed make. On the one hand, it is the case that Mr Mills sought to rely on the common law and adopted submissions made by the other respondents in that regard. And it is true that it was only on the fourth day that counsel for Mr Mills made it clear that his client in fact had no objection to Directed inspecting the documents, provided that he was given a certificate under s 128A. On the other hand, Mr Mills was successful in obtaining the orders he sought under s 128A. On balance, in my view, the fairest result in those circumstances is that Mr Mills and Directed should bear their own costs in relation to Mr Mills’ claim for privilege.