Forbes Engineering (Asia) Pte Limited v Forbes

FEDERAL COURT OF AUSTRALIA
Forbes Engineering (Asia) Pte Limited v Forbes [2007] FCA 67
FORBES ENGINEERING (ASIA) PTE LIMITED (COMPANY NO 1997 020 35N) AND FORBES ENGINEERING HOLDINGS (AUSTRALIA) PTY LIMITED (ACN 010 832 023) v MARK FORBES AND KAREN LEE FORBES
NSD 636 OF 2005
COLLIER J
5 FEBRUARY 2007
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

NSD 636 OF 2005

BETWEEN:

FORBES ENGINEERING (ASIA) PTE LIMITED (COMPANY NO 1997 020 35N)
First Applicant

FORBES ENGINEERING HOLDINGS (AUSTRALIA) PTY LIMITED (ACN 010 832 023)
Second Applicant

AND:

MARK FORBES
First Respondent

KAREN LEE FORBES
Second Respondent

JUDGE:

COLLIER J

DATE OF ORDER:

5 FEBRUARY 2007

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.Pursuant to Order 15A rule 8 of the Federal Court Rules, Deloitte Touche Tohmatsu make discovery to the respondents of all documents in its possession relating to the financial affairs of Forbes Engineering Holdings Australia Pty Ltd (ACN 010 832 023) concerning the years ending 31 December 1997, 1998 and 1999, within 21 days hereof.
2.The respondents or their nominees be authorised to inspect and makes copies of any documents so disclosed.
3.Deloitte Touche Tohmatsu be given three (3) days liberty to apply.
4.The costs of and incidental to this application be reserved.

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

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

NSD 636 OF 2005

BETWEEN:

FORBES ENGINEERING (ASIA) PTE LIMITED (COMPANY NO 1997 020 35N)
First Applicant

FORBES ENGINEERING HOLDINGS (AUSTRALIA) PTY LIMITED (ACN 010 832 023)
Second Applicant

AND:

MARK FORBES
First Respondent

KAREN LEE FORBES
Second Respondent

JUDGE:

COLLIER J

DATE:

5 FEBRUARY 2007

PLACE:

BRISBANE

REASONS FOR JUDGMENT

By application filed 18 January 2007, the respondents have applied to the court for the following orders:
1.An order pursuant to O 15A r 8 of the Federal Court Rules that Deloitte Touche Tohmatsu make discovery to the respondents of all documents in its possession relating to the financial affairs of Forbes Engineering Holdings (Australia) Pty Limited (ACN 010 832 023) concerning the years ending 31 December 1997, 1998 and 1999.
2.The respondents or their nominees be authorised to inspect and make copies of any documents so disclosed.
3.The respondents’ costs of and incidental to the application, including any costs incurred in relation to the disclosure by Deloitte Touche Tohmatsu, be the respondents’ costs in the proceeding.
4.Such further or other order or direction as this Honourable Court deems appropriate.
While the respondents in the substantive matter are applicants to this application, I shall for convenience continue to refer to them as “the respondents”. Similarly I shall for convenience continue to refer to the applicants to the substantive matter as “the applicants”.
The orders sought in respect of non-party discovery by Deloitte Touche Tohmatsu (“Deloittes”) are pursuant to O 15A r 8 Federal Court Rules.
As made clear by Mr Wardrobe on behalf of the applicants this morning, the applicants have not taken a position in this matter. Further, although I understand that Deloittes were served with a copy of the application which is currently before me on 29 January 2007, there is no appearance by Deloittes in Court this morning.
As is clear from numerous cases including Re La Rosa ex parte Norgard (unreported, French J, 26 October 1992), the power of the court under O 15A r 8 is not to be exercised routinely. Further, as explained by Burchett J in Richardson Pacific Ltd v Fielding (1990) 26 FCR 188 at 189 the court has traditionally adopted a policy of not burdening unduly a non-party to litigation in a matter comparable with the burden which is necessarily assumed by a party.
However in this case I am satisfied that an order for non-party discovery against Deloittes pursuant to O 15A r 8 is appropriate. The reasons I take this view are:
1.There is no suggestion by either party to this application, nor apparently from Deloittes who had the opportunity to appear this morning, that the material sought does not exist.
2.The respondents appear to have made numerous endeavours to obtain the material sought from the applicants. I note in particular the affidavit of Ms Tanja Mitic of Merthyr Law affirmed 18 January 2007. Mr Anderson also said this morning that an affidavit of Mr Poh Kiat sworn 18 December 2006 contained evidence to that effect, however I understand that that affidavit has not been filed with the Court. Nevertheless, I note Ms Mitic’s affidavit.
3.The respondents submit, and this is not disputed by the applicants, that there is good reason to believe that Deloittes have the relevant material.
4.The material sought by the respondents appears to be relevant source documentation which is required by an expert witness, Mr Lytras, to complete his expert report for the respondents. I note Mr Lytras’ affidavit, affirmed 18 January 2007 to this effect.
5.The documents sought do not speak of a fishing exercise by the respondents or an onerous obligation on Deloittes. The material relates to the financial affairs of the applicants during 1997, 1998 and 1999. There was no submission by the applicants that the orders sought are too broad or that the material sought is irrelevant.
In view of the non-appearance of Deloittes this morning, in making this order I am prepared to give Deloittes three days liberty to apply.
Finally in relation to costs, the respondents have sought an order that their costs of and incidental to this application, including any costs incurred in relation to the discovery of documents by Deloittes, be the respondents’ costs in the proceeding. However as was conceded by the respondents this morning, documents within the scope of the order include internal documents of Deloittes, being material outside the power of the applicants to discover. Accordingly, in my view it is appropriate to reserve the costs of this application at this stage.
I note that no time frame for discovery of this material has been sought by the respondents and I am prepared to hear submissions on this point now.
ORDERS
1.Pursuant to Order 15A rule 8 of the Federal Court Rules Deloitte Touche Tohmatsu make discovery to the respondents of all documents in its possession relating to the financial affairs of Forbes Engineering Holdings Australia Pty Ltd (ACN 010 832 023) concerning the years ending 31 December 1997, 1998 and 1999, within 21 days hereof.
2.The respondents or their nominees be authorised to inspect and makes copies of any documents so disclosed.
3.Deloitte Touche Tohmatsu be given three (3) days liberty to apply.
4.The costs of and incidental to this application be reserved.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.
Associate:
Dated: 6 February 2007

Solicitor for the Applicant: Jackson Smith

Counsel for the Respondent: R Anderson

Solicitor for the Respondent: Merthyr Law

Date of Hearing: 5 February 2007

Date of Judgment: 5 February 2007

Forbes Engineering (Asia) Pte Limited, a Singaporean entity, filed an application against Forbes, an Australian company, and Deloitte Touche Tohmatsu, an accounting firm, in the Federal Court of Australia. The dispute centred on the discovery of certain financial documents concerning Forbes Engineering Holdings Australia Pty Ltd, specifically for the years 1997, 1998, and 1999. The applicants sought the documents to assist in their broader litigation strategy against Forbes and its associated entities. The primary legal issue before the court was whether the applicants were entitled to compel the accounting firm to disclose the specified documents. The court needed to determine whether the documents fell within the scope of the discovery application and if the applicants had a sufficient connection to the documents to warrant their disclosure.

The court considered the principles of discovery in the Federal Court of Australia and the relevance of the documents to the ongoing litigation. It was noted that the discovery of documents should be allowed if the documents are relevant to the issues in the case and if the applicant has a sufficient connection to the documents. The court also highlighted the importance of maintaining a balance between the right to discovery and the protection of confidential information. After weighing these considerations, the court ruled that the applicants were entitled to the discovery of the specified documents. The court found that the documents were relevant to the issues in the case and that the applicants had a sufficient connection to warrant their disclosure. Consequently, the court ordered Deloitte Touche Tohmatsu to provide the requested documents to the applicants within 21 days and authorised the applicants or their nominees to inspect and copy the disclosed documents. The court also granted Deloitte Touche Tohmatsu a short period to apply for leave to appeal the decision, and reserved the costs of the application.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	NSD 636 OF 2005

JUDGE:	COLLIER J
DATE OF ORDER:	5 FEBRUARY 2007
WHERE MADE:	BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	NSD 636 OF 2005

JUDGE:	COLLIER J
DATE:	5 FEBRUARY 2007
PLACE:	BRISBANE

Solicitor for the Applicant:	Jackson Smith
Counsel for the Respondent:	R Anderson
Solicitor for the Respondent:	Merthyr Law
Date of Hearing:	5 February 2007
Date of Judgment:	5 February 2007