Foody v Horewood & Ors
[2007] VSCA 184
•29 August 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 7242 of 1999
| ANDREW EMMETT FOODY | |
| Applicant | |
| v. | |
| TIMOTHY FREDERICK HOREWOOD, EDWARD FREDERICK HORE and MUSASHI PTY LTD (ACN 006 809 203) | Respondents |
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APPLICATION ON SUMMONS
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JUDGES: | CHERNOV and ASHLEY JJA |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 29 August 2007 |
DATE OF JUDGMENT: | 29 August 2007 |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 184 |
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PRACTICE AND PROCEDURE – Confidential documents produced pursuant to subpoena pending appeal – Court order permitting counsel to examine documents – Appellant not permitted access – Appeal dismissed – Refusal to admit documents as further evidence – Refusal based on legal principles – Application for leave to appeal pending in High Court – Application by appellant for variation of confidentiality order to enable access to documents – Substance of documents sufficiently disclosed in Court’s reasons – Solicitor’s lien claimed over documents – Application refused.
| APPEARANCES: | Counsel | Solicitors |
| The Applicant in person | ||
| For the Respondents | Mr P W Almond QC with Mr S R Horgan | Rigby Cooke |
| For Interested Party | Mr T J McLean | Fetter Gdanski |
CHERNOV JA
ASHLEY JA:
The applicant, Andrew Emmett Foody, applies by summons dated 16 July 2007 for variation of the confidentiality order made by this Court, on 1 February 2007, in this proceeding that relates to documents that were subpoenaed on his behalf from the respondents, and for consequential orders. The application is supported by the applicant's affidavit sworn 16 July 2007 and submissions of 30 July 2007 and those to which we will refer shortly.
The proceeding was essentially concerned with the applicant's claim that, as a shareholder of the third respondent, Musashi Pty Ltd, he was the subject of oppressive conduct by the first and second respondents, who were the directors and primary shareholders of the company, in their management of its affairs. After a lengthy and complex trial, the trial judge ordered on 1 July 2004 that the first and second respondents purchase the applicant's shares in the third respondent, valued as at 30 June 2002.
The applicant appealed against that decision on the primary basis that his Honour undervalued his shares, inter alia, by valuing them as at 30 June 2002, whereas the proper date of valuation, it was said, was 22 September or 30 June 2003. Until late 2006, nearly all of the interlocutory steps were conducted by him in person. On 1 February 2007, by his senior and junior counsel, the applicant sought leave of the Court to issue subpoenas to the respondents to produce documents relating to the sale of the business of the third respondent to Nestlé Australia Pty Ltd and some related companies ("Nestlé"). It was claimed that the documents would demonstrate error by his Honour in his valuation of the applicant's shares. In the result, on 1 February 2007, this Court gave the applicant leave to issue the subpoenas and ordered that only his counsel and solicitors have leave to inspect the documents and only on a confidential basis. Liberty to apply was expressly reserved to the parties, (but no application was made pursuant to the leave reserved until after our judgment).
Consequently, the applicant's legal advisers inspected the documents and, from those that were produced, compiled three folders of documents that they said were relevant to their contention that his Honour erred on the valuation question. Thus, at the hearing of the appeal the Court had before it only some of the documents that were subpoenaed and in respect of which the respondents have always claimed confidentiality, a claim that was not challenged by the applicant. It was the applicant's principal case on appeal that the new material showed that his Honour must have undervalued the company and, thus, the applicant's shares in it, given that the material established that in July 2005 the business and assets of the company were sold to Nestlé for approximately $28 million, whereas his Honour's valuation was based on evidence that valued the company between $4.3 and $11.9 million as at 30 June 2002 and between $6 million and $14.4 million as at 30 June 2003.
On 21 June 2007 this Court dismissed the applicant's appeal. In the course of its reasons, it explained that it refused to exercise its discretion under r 64.22(3) of the Rules of the Supreme Court to admit the proposed new evidence, essentially because it did not necessarily demonstrate falsification of any basic assumption that was made by the primary judge in relation to the value of the company or that his Honour otherwise relevantly erred in this respect. Moreover, we said that the new evidence did not establish that his Honour's valuation was made on the basis of a common assumption about a matter of relevance that was proved to have been wrong. In determining this matter, the Court applied what it considered were the relevant principles on this issue as stated in Orr v Holmes,[1] Greater Wollongong City Council v Cowan,[2] Atkins v National Australia Bank Ltd,[3] Mulholland v Mitchell,[4] Doherty v Liverpool District Hospital[5] and Mobilio v Balliotis.[6] When the Court handed down its reasons, the applicant, then appearing for himself, made an application to vary the suppression order made by the Court on 1 February 2007, such as to enable him to view the subpoenaed documents. The application was refused because the applicant's solicitors in the appeal were still on the record, although liberty was reserved to the applicant to renew his application if that situation were to change. On 16 July 2007 the applicant filed the abovementioned summons by which he seeks orders that would give him access to the subpoenaed documents. On 19 July 2007 he filed an application in the High Court of Australia for special leave to appeal against the Court's decision of 21 June 2007. The application was supported by an affidavit sworn by him that day. We note for completeness that the applicant has terminated the retainer of his former solicitors and counsel by letter dated 13 July 2007.
[1](1948) 76 CLR 632.
[2](1995) 93 CLR 435.
[3](1994) 34 NSWLR 155.
[4][1971] AC 666.
[5](1991) 22 NSWLR 284.
[6][1998] 3 VR 833.
The proposed grounds of the special leave application relevantly include ground 3, which claims that this Court erred in holding that the new evidence should not be admitted, and ground 4, which contends that the Court erred in making the orders on 1 February 2007 such as to exclude the applicant from examining the relevant documents. We note, however, that ground 4 seeks to attack the order of 1 February 2007, notwithstanding that the application for special leave to appeal is from the orders disposing of the appeal made on 21 June 2007.
It seems that the applicant intends to argue before the High Court that this Court erred in not admitting the documents into evidence, and that the confidentiality order of February 2007 that limited the right to inspection of the subpoenaed documents to his legal advisers denied him natural justice because it prevented him from fully instructing his solicitors and counsel in relation to the fresh evidence. Without inspecting the documents, he contends, he cannot substantiate his claims that the new evidence ought to have been admitted and that the suppression of the information from him may have harmed his case. In his affidavit in support of his summons, the applicant states that he believes that the confidentiality order has prevented him from assisting and contributing in the preparation of the appeal. He further says in his affidavit that, in the course of the hearing of the appeal, he gained the impression that the material and evidence originally before the trial judge had been falsified by the respondents but, because of the suppression orders, he could not discuss the details of this with his counsel. "In the above circumstances", he says, he seeks the abovementioned variation of the confidentiality order.
The application was opposed by the respondents. In his affidavit sworn 23 July 2007, their solicitor, Benjamin Harold Wyatt, confirms the respondents' claim as to the confidentiality of the subpoenaed documents and points out, correctly, we think, that the documents that were produced to the Court pursuant to the subpoenas, and to which the applicant now seeks access, are not co-extensive with the documents that the applicant sought to adduce as fresh evidence in the appeal. Thus he says that the documents produced to the Court pursuant to the subpoenas include several correspondence files of the respondents' solicitors containing draft documents, photocopy of motor vehicle transfers, equipment leases and assignments. The documents also include privileged documents containing legal advice to the first respondent produced in a sealed envelope marked "Privileged and Confidential, Not to be Inspected". The documents that the applicant sought to adduce as fresh evidence on the hearing of the appeal were, as we have mentioned, a sub-set of three folders of documents compiled by the applicant's legal advisers after inspection of the subpoenaed documents.
The essential question before us is whether it can reasonably be said that unless the applicant has access to all, or even some, of the subpoenaed documents, he would be prejudiced in his special leave application that is based on the claim that this Court erred in not admitting into evidence the three volumes of documents. We consider that no such prejudice would arise if the applicant did not have access to the subpoenaed documents. We say this because, as earlier explained, the basis of the Court's refusal to exercise its discretion to admit the documents into evidence was that, on the basis of the legal principles stated in the abovementioned authorities, the documents in the three folders given to the Court did not demonstrate legal error by the trial judge as was contended for on behalf of the applicant on the appeal. In any event, the documents in the three volumes on which the applicant’s counsel principally relied in the appeal are sufficiently described in the Court's reasons to enable the applicant to argue for such legal error on our part as he may consider appropriate. Moreover, the applicant rejected the offer made by the respondents' solicitors in their letter of 14 August 2007, an offer that was renewed by them during the hearing of the applicant's summons this morning, to make available to him, albeit on a confidential basis, copies of the documents to which reference was made in the Court's reasons provided they were returned to them after the High Court hearing. The applicant told us that he rejected this offer because he wanted access to all the subpoenaed documents, or at least to those contained in the three folders to which reference has been made.
Another difficulty in making the documents available to the applicant, including those in respect of which he paid photocopying fees charged by the Registry ($942), is that his former solicitors claim a lien over all the copied documents for their unpaid fees and those of counsel, said to be in the order of $80,000. According to the affidavit of counsels’ instructing solicitor in the appeal, she is personally liable for counsels’ fees and may be forced to refinance her house in order to pay them. In light of the solicitors’ claim we granted them leave to be heard on the applicant's summons, a step that was not opposed by the applicant. We also granted his former solicitors leave, pursuant to rule 23.03(4), to file a Notice of Ceasing to Act as Solicitors, pursuant to rule 23.03(1), and we were assured by their counsel that this would be done by them shortly.
We consider that there is much force in the claim of the applicant's former solicitors that none of the documents in question which were effectively produced by them should be released to him unless he first pays their claimed sum into court. But this question does not have to be resolved now because, as we have said, we are satisfied that the applicant would not be relevantly prejudiced in his proposed claim
to the High Court that this Court erred in not admitting the abovementioned documents into evidence by not having access to the copied subpoenaed documents.
We also think there is no merit in the applicant's argument that, because he did not have access to the documents he seeks, he was precluded from assisting his counsel during the hearing of the appeal. As the respondents point out, the applicant's counsel and solicitors did not think it appropriate or necessary for him to see the documents for the purpose of conducting the appeal, given that no application was made to the Court pursuant to the leave reserved to vary the confidentiality orders. We also think there is no merit in the claim that the respondent had, or may have, falsified some of the material and evidence that was before the trial judge. No basis for that assertion has been produced to us.
We mention for completeness that, during this morning's hearing, the applicant handed to the Court and the parties, by way of a further submission, his unsworn affidavit which seeks to dispute aspects of the claim by his former solicitors as to his admitted failure to pay their fees and those of counsel. This is not a matter, however, that can be resolved on this application, but we felt compelled to tell the applicant during this morning's hearing that, in so far as this material contains allegations of incompetence or impropriety by senior counsel in the conduct of the applicant’s appeal, we emphatically reject it. Counsel put the applicant's case on appeal as well as it could have been put, and he did so helpfully to the Court and, in the best traditions of the Bar, in the interests of his client. The applicant's case was rejected by us only because, in our view, it was without merit.
For these brief reasons, we refuse to make the orders sought in the applicant's summons, which we think should be dismissed.
The orders of the Court are:
1. Fetter Gdanski have leave to file a Notice of Ceasing to Act pursuant to rule 20.03.
2. Fetter Gdanski have leave to be heard on the applicant's summons dated 16 July 2007.
3. The applicant's summons of 16 July 2007 be dismissed with costs of the respondents and of the former solicitors for the applicant.
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