Eenjes, H. v Oakbrand Pty Ltd

[1990] FCA 176

1767

JUDGMENT NO ........ ........ .....

C A T C H W O R D S

PRACTICE AND PROCEDURE - Anton Pillar order - preliminary discovery not effective - basis of Court's power to make order - whether order sought accepted incident of superior courts' jurisdiction - whether order sought "appropriate".

Federal Court of Australia Act 1976, s.23

Harm Eenjes & Anor
v. oakbrand Pty Ltd & Ors

Qld G6 of 1989

PINCUS J.

BRISBANE

1 8 APRIL 1990

CS- ,

RECEIVED
3 -MAY 1990
FEDERAL COURT OF

AUSTRALIA PRINCIPAL

REGISTRY

IN THE FEDERAL COURT OF AUSTRALIA	1
QUEENSLAND DISTRICT REGISTRY	1 QLD G6 of 1989

GENERAL DIVISION 1

BETWEEN: HARM EENJES

First Applicant

AND: H.T. EENJES PTY LTD

Second Applicant

AND: OAKBRAND PTY LTD

First Respondent

AND:  DESMOND RAY NITCHELL and PATRICIA MARY NITCHELL

Second Respondents

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	18 APRIL 1990
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.	(a)	The second respondents permit such persons not exceeding three in number (at least one of whom shall be a member or employee of the Applicants' solicitors) as may be nominated in writing by the applicants' solicitors to enter within 7 days the premises of the second respondents at 539 mains Road, Sunnybank, Brisbane, in the State of Queensland or such parts thereof as shall be occupied or used by the second respondents at any hour between 8 o'clock in the forenoon and 9 o'clock in the evening for the purposes referred to in sub-paragraph (c) hereof;
(b)	William George Benham of 5 Pineneedle Place, Sunnybank Hills, Brisbane, in the State of Queensland permit such persons not exceeding three in number (at least one of whom shall be a member or employee of the applicantsr solicitors) as may be nominated in writing by the applicants' solicitors to enter within seven days the premises hereinafter referred to or such parts thereof as shall be occupied or used by the said WILLIAM GEORGE BENHAM at any hour between 8 o'clock in the forenoon and 9 o'clock in the eveniny for the purposes referred to in sub-paragrapl~ (c) hereof; that is to say:-

(i)  the premises of the said WILLIAM GEORGE BENHAM at 5 Pineneedle Pace, Sunnybank

=in the State of Queensland; and

(ii) the premises of the firm of Benham &
CO, Chartered Accountants, at 444 Logan
Road, Stones Corner in the State of
Queensland;

(C) The purposes referred to in sub-paragraphs (a)

and (b) hereof are -
To inspect all documents to be found at the
premises hereinbefore referred to, pertaining
to the business and affairs of the first

respondent being:-

(i)	the Company Register of the first respondent consisting of the aemorandum and Articles of Association, Certificate of Incorporation, Minutes of Meetings of Directors and Shareholders, Consents, Share Transfer, Allotment Journals, Particulars of Directors, Secretaries and Other Officers;
(ii)	cheque butts, bank statements, and duplicate copy bank deposit books pertaining to any account held by the

first respondent with any trading bank;

(iii) contracts and conveyancing documents
including correspondence with
solicitors for the first respondent and
searches conducted by solicitors for
the first respondent pertaining to the
business of Gem Bait and Tackle;

(iv)  cash register print-outs for the business of Gem Bait and Tackle;

(V) records of summary of takings for the

business of Gem Bait and Tackle;

(vi) cash books for the business of Gem Bait and Tackle;

(vii)  debtorsr ledgers for the business of Gem Bait and Tackle;

(viii)	wages records of employees and tax stamp sheets and group tax records for the business of Gem Bait and Tackle;
(ix)	trading invoices, statements and accounts for the business of Gem Bait and Tackle;

(X) stock, debtor and creditor details in

respect of the business of Gem Bait and

Tackle;

(xi)	any other business records howsoever described pertaining to the business of Gem Bait and Tackle;
(xii)	income tax returns, copy income tax returns, and drafts and working papers prepared or apparently prepared for the purpose of completing income tax returns for the first respondent;

(xiii)  all other accounting records howsoever described of the first respondent;

(xiv) all working papers and other documents
relating to or connected with the
financial affairs of the first
respondent;

(XV) all correspondence or copies o f

correspondence passing between the
first respondent or the second
respondent and the said WILLIAM GEORGE

BENHAM relating to the financial

of the first respondent; and

(xvi)  statutory declaration forms or copies thereof required by the Commissioner

for Stamps in relation to the sale of

shares in the first respondent, and all
drafts thereof or other working papers
prepared or apparently prepared for the
purpose of completing such
declarations;

(d) That, upon the undertaking of the applicants'
solicitors referred to in sub-paragraph (e)
hereof, the said solicitors shall be at
liberty to -

(i)  seize all or any of the documents referred to in sub-paragraph (c) hereof;

(ii)  remove such documents or any of them to the offices of the applicants'

!

solicitors, or to such other secure
place under the control of the
applicants1 solicitors as may be

convenient; and

(iii) make copies or cause copies to be made
of the said documents or any part
thereof;

(e) That the applicants' solicitors shall be at
liberty to perform the acts and things
referred to in sub-paragraphs (a), (b) and (d)
hereof of their undertaking -

(i)	upon entering the premises referred to in sub-paragraph (a) hereof, to present to the second respondents or either of them (or, if they are not then present at those premises, to the person apparently in charge thereof) a sealed copy of this order together with a signed original copy of the nomination in writing of the applicants' solicitors;
(ii)	upon entering each of the premises referred to in sub-paragraph (b) hereof, to present to the said WILLIAM GEORGE BENHAM (or, if they are not then present at those premises, to the person apparently in charge thereof) a sealed copy of this Order together with a signed original copy of the nomination in writing of the applicants1 solicitors;

(iii) upon complying with the undertakings contained in sub-paragraphs (1) and

( 2 1 , to proceed no further with the

inspection of any documents to be found

at such premises, or with any of the

other acts and things provided for in
sub-paragraph (d) hereof, until the
second respondents, the said WILLIAM
GEORGE BENHAM or the person apparently
in charge of such premises (as the case
may be) shall have had a reasonable
oppottunity, if he or she so desires,
to obtain legal advice;

(iv)	to hold any documents seized or removed in accordance with sub-paragraph (d) hereof in safe-keeping;
( V )	not to use such document for any purpose save for the purposes of this action without leave of the Court; and
(vi)	to deliver-up such documents to the Court, to the person or persons from whom the same were seized, or to such other person as the Court may direct, in accordance with any direction which this Court may from time to time make in relation thereto.

2.    The costs of and incidental to this application, and of any steps taken by the applicants or their solicitors in the performance or execution of the orders made in paragraphs 1 be reserved to the trial of this action or earlier order.

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

l

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY	1	QLD G6 Of 1989
GENERAL	DIVISION	1

BETWEEN: HARM EENJES

First Applicant

AND: H.T. EENJES PTY LTD

Second Applicant

AND: OAKBRAND PTY LTD

First Respondent

AND:  DESMOND RAY MITCHELL and PATRICIA MARY MITCHELL

Second Respondents

PINCUS J. 18 APRIL 1990

REASONS FOR JUDGMENT

This is an application made by notice of motion for an

Anton Pillar order. The applicants have claimed, in the principal

proceeding, damages for breach of s.52 of the Trade Practices Act	1974 and fraud on the basis that the takings of a business
purchased were misrepresented. The representation relied on is a written one, consisting in a profit and loss statement, and the applicants say that the profit earned in a period after takeover was only about half that represented; they claim that the business was run in the same way as before, and that the profit and loss statement must have been erroneous.

l ',

The applicants attempted to obtain access to the records of the business sold by way of preliminary discovery - i.e. before pleading. Although orders were made which were intended to achieve the result the applicants desired, they have not been effective in practice. Mr D.R. Mitchell, one of the second respondents, gave evidence that he and his wife were directors of the first respondent (the vendor of the business) until 15 December 1988 when all the shares in the first respondent were sold to a Mr and Mrs Cummings. Mr Mitchell said the relevant documents were "given to the possession or control" of Mr and Mrs Cummings. He was cross-examined on that affidavit and gave rather unsatisfactory evidence. The line he took was that all inquiries should be directed to his accountant, Mr Benham. Mr Mitchell said he did not know at what price the company was sold and that Mr Benham would have to be asked about that. He did not think that Mr and Mrs Cummings had paid anything and said that he had given away the company in question (the first respondent) together with others. He seemed unable to explain why this had been done except that it was a "good commercial decision" and "the company had been trading for so long, and it was of no further use to me". At

another point in his evidence, he appeared to imply that the	company had been sold to avoid the trouble of contiriuing to put in
returns.
M Benham made an affidavit to the effect that the records in question "passed from the control of the second respondents to" Mr and Mrs Cummings.
Mr Cummings has not filed an affidavit but has delivered one to the solicitors for the applicants to the effect that he

I

thinks Mr Benham has the documents. The end result is that after considerable effort and expense, the applicants are not much further advanced; no one suggests that there were no records, but the persons who might be expected to have them appear to be unable or unwilling to disclose their whereabouts. Another matter which concerns the applicants is that Mr Cummings' affidavit may be taken to imply an opinion that if the documents are demanded of Mr Benham, they may be destroyed.

~t is contended that in these circumstances the Court may and should make an order of the Anton Pillar type. Such orders have been made in divorce proceedings: -- Emanuel v. Emanuel [l9821 1 WLR 669 and to facilitate execution: Distributori Automatici Italia SpA v. Holford General Trading CO Ltd [l9851 3

A ~ ~ E R 750.

There was some discussion as to the basis of this Court's power to make such an order as is sought. It appears to me that the proper foundation is s.23 of the Federal Court of Australia Act 1976:

"The Court has power, in relation to matters in

which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate".

The limits of that provision were explained, at least in part, by the High Court in Jackson v. Sterling Industries Ltd (1987) 162 CLR 612. It appears that s.23 does not extend to "the creation and enforcement of rights in addition to those for the

l

protection or enforcement of which the jurisdiction of the Court is invoked" (619). However "novelty of form is no objection to validity of" an order in the nature of a Mareva injunction (621) and presumably the same applies to an Anton Pillar order.

The basic difficulty about construction of s.23 is that the orders and writs therein referred to are not expressly limited to orders and writs of the kind which have hitherto been granted either in the United Kingdom or in this country; the limitation is merely appropriateness. Nevertheless, in applying s.23, it appears that the central question must be whether the order sought is "an accepted incident of the jurisdiction of superior courts" (622). The statutory test of appropriateness is not displaced, but must be applied keeping in mind what has come to be accepted as within the power of superior courts generally.

But to come directly to the statutory test, it is in my opinion appropriate to make the orders which have been sought. After a considerable amount of time and effort, the applicants have been unable to obtain the documents, the obtaining of which

was the purpose of the order for discovery. It does not appear to

me that the making of the orders sought is likely to cause such inconvenience to the second respondents or Mr Benham as to outweigh the benefit likely to be obtained.

I certify that this and the thlee

preceding pages are a true copy of the
reasons for judgment herein of His Honour

Mr. Justice 1

Counsel for the applicants:	Mr A.J.H. Morris
Solicitors for the applicants:	Cooper Grace and Ward
Date of Hearing:	18 April 1990