Dorajay Pty Ltd v Aristocrat Leisure Limited

[2004] FCA 1113

FEDERAL COURT OF AUSTRALIA

Dorajay Pty Ltd v Aristocrat Leisure Limited [2004] FCA 1113

DORAJAY PTY LIMITED V ARISTOCRAT LEISURE LIMITED
N362 OF 2004

STONE J
25 AUGUST 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 362 OF 2004

BETWEEN:	DORAJAY PTY LIMITED APPLICANT
AND:	ARISTOCRAT LEISURE LIMITED RESPONDENT
JUDGE:	STONE J
DATE OF ORDER:	25 AUGUST 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The documents referred to in Category 5 of Annexure A to the orders of 7 April 2004 be discovered in tranches 2 and 3 of discovery referred to in order 5 of the orders of 6 July 2004.

2.The Respondent pay the applicant’s costs of this application.

3.The notice of motion filed by the respondent on 21 April 2004 for security for costs be dismissed with no order as to costs.

4.The proceeding be listed for further directions on 20 October 2004.

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	N 362 OF 2004

BETWEEN:	DORAJAY PTY LIMITED APPLICANT
AND:	ARISTOCRAT LEISURE LIMITED RESPONDENT

JUDGE:	STONE J
DATE:	25 AUGUST 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 17 August 2004 the applicant in this proceeding filed a notice of motion, which, insofar as it is still pressed, relates to a dispute about the respondent's compliance with orders for discovery made on 7 April 2004, Annexure A which lists categories of documents to be discovered by the respondent.  The present dispute relates to category 5 which is as follows:

   ‘All documents relating to the termination of the employment of the Chief Executive Officer in April 2003 which relate to any failure to fully inform the Board of Directors of the respondent, or the ASX, of information that would have a material effect on the price or value of the respondents shares, or the likelihood of the respondent to meet its profit forecasts.’

2. There are three issues here.  First is whether the discovery order of 7 April was subsumed by comprehensive orders for discovery that I made on 6 July; the second raises the proper meaning of the phrase, ‘relating to’ in category 5; and third, there is an ancillary issue, namely whether there is any utility in the present motion. 

3. The discovery orders made on 6 July are very comprehensive and while I accept that the categories for discovery set out in the orders of 6 July were made in contemplation of those in the orders of 7 April, I do not accept that the later orders were intended to subsume the earlier orders.  In this regard I note that the orders of 7 April required the discovery that was the subject of those orders to be completed by 6 May 2004 and that when the later orders were made there was no application to vacate the earlier orders.

4. It may well be, as the respondent submits, that there is some overlap between the categories for discovery listed in the two sets of orders, nevertheless I am not persuaded that this overlap is so extensive as to warrant the conclusion that there is no longer any utility in the orders made in April. 

5. This brings me to the question of the meaning of the description in category 5 and, in particular, the words, ‘relating to’.  My understanding of the background to the formulation of this category is that the employment of the Chief Executive Officer of the respondent company was terminated for reasons that may include the failure to inform referred to in category 5.  Category 5 has been drafted to expressly negative any requirement for the respondent to discover documents that relate to any ground of termination and instead is limited to documents relating to the termination on the basis of the failure to inform. 

6. According to the applicant, the documents that are required under category 5 are all documents that relate to the ‘failure to inform’ ground of termination of the Chief Executive Officer's employment.  The dispute between the parties is as to the ambit of this requirement.

7. The respondent said that category 5 includes only documents that were relied on by the Board in making its decision to terminate and those documents that refer to the termination.  The applicant submitted that the phrase, ‘relating to’ should be interpreted broadly and referred me to the words of McHugh J in O'Grady v The Northern Queensland Company Limited (1990) 169 CLR 356 at 376 where his Honour says:

   ‘The prepositional phrase “in relation to” is indefinite. But, subject to any contrary indication derived from its context or drafting history, it requires no more than a relationship, whether direct or indirect between two subject matters.’

8. I see no reasons why this meaning is not apposite in this case.  In my view, the respondent’s interpretation is unduly narrow and I do not accept it.  I see no reason to interpolate the concept of reliance into category 5.  It follows that I accept the applicant’s submission that documents relating to the termination on the specified ground may well include documents that were not relied on by the Board possibly even including documents that were created after the Board’s decision was made. 

9. For these reasons I propose to order that the documents referred to in category 5 of Annexure A to the order for discovery made on 7 April 2004, be discovered in the second and third tranches of discovery referred to in order 5 of the orders made for discovery on 6 July 2004.  I see no reason why the costs should not follow the result in this case and, therefore, order that the respondent pay the applicant’s costs of the motion.

10. The parties have advised that they have come to an agreement concerning an application for security for costs made by the respondent and, at their request, I also order that the notice of motion for security for costs filed by the respondent on 21 April 2004 be dismissed with no order as to costs.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Associate:

Dated:            30 August 2004

Counsel for the Applicant:	Dr KP Hanscombe SC
Solicitor for the Applicant:	Maurice Blackburn Cashman
Counsel for the Respondent:	Mr MJ Darke
Solicitor for the Respondent:	Allens Arthur Robinson
Date of Hearing:	25 August 2004
Date of Judgment:	25 August 2004