Hadid, Albert v Lenfest Communications Inc

[1996] FCA 944

IN THE FEDERAL COURT OF AUSTRALIA  )
  )
NEW SOUTH WALES DISTRICT REGISTRY  )     No NG 36 of 1995
  )
GENERAL DIVISION                  )

BETWEEN:ALBERT HADID

Applicant

AND:LENFEST COMMUNICATIONS INC

First Respondent

H.F. LENFEST also known as GERRY LENFEST

Second Respondent

BAIN CAPITAL MARKETS LIMITED

Third Respondent

WAYNE BURT

Fourth Respondent

AUSTRALIS MEDIA LIMITED
  Fifth Respondent

RODNEY PRICE
  Sixth Respondent

AND:LENFEST COMMUNICATIONS INC

Cross-Claimant

ALBERT HADID
  Cross-Respondent

CORAM:    HILL J
PLACE:    SYDNEY
DATED:    16 OCTOBER 1996

REASONS FOR JUDGMENT

Before the Court is a notice of motion brought by Mr Hadid for leave of the Court to use documents discovered by the respondents in these proceedings, and for the purposes of proceedings number 50226 of 1995 before the Supreme Court of New South Wales in its commercial division.  The Supreme Court
proceedings are listed for hearing on Monday, 21 October 1996.  In them, Mr Hadid seeks a declaration of the existence between Mr Hadid and Australis Media Limited ("Australis") of an agreement between them and an order that that agreement be specifically enforced.  The agreement alleged is an agreement under which Australis is said to have agreed to provide to Mr Hadid the use of two pay television channels to be transmitted by MDS transmission and/or any other medium of transmission, including satellite or pay television, under certain terms and conditions.

The dispute in the Supreme Court is complicated because Mr Hadid and Mr Burt (who is a party to the proceedings before this Court) dispute the terms of a large number of conversations and agreements said to have taken place or have been made between them.  The negotiations said to give rise to the alleged contract are negotiations that took place during the process pursuant to which licences known as A and B licences were ultimately awarded.

The issues of fact in the case before this Court are likewise complicated.  I have in other judgments made reference to them.  It suffices to say here that the case for Mr Hadid now alleges conspiracy and fraud on the part of the respondents.  The essence of Mr Hadid's case is that he was misled into believing that there was no purchaser for the shares or assets of New World Communications, and on that
basis was moved to sell his shares for some $13 million in circumstances where virtually immediately after that sale a transaction took place between the purchaser of his shares and others involving the resale of them for a sum almost ten times greater.

The general principles to be applied in determining whether leave should be given to use material discovered in one proceedings in the course of another proceeding, are well established.  In Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 110 ALR 685, Wilcox J gave leave for certain material to be used. In the course of his Honour's judgment, his Honour discussed the test that had been raised in Crest Homes PLC v Marks [1987] AC 829 (a case which reaffirmed the decision of the House of Lords in Home Office v Harman [1983] 1 AC 280) that leave should be given only in special circumstances. The test of special circumstances had previously been considered by Burchett J in Holpitt Pty Limited v Varimu Pty Limited (1991) 29 FCR 576 and also by Lockhart J in Sweetman v Australian Thoroughbred Finance Pty Ltd (unreported, 23 July 1992).

In Holpitt, Burchett J said (at 579):

"In my opinion, the court's duty, in an applicant [sic] of this kind, is to consider whether the applicant has shown some circumstance which takes the matter out of the ordinary course, according to which production of documents pursuant to
an obligation to make discovery involves the implied undertaking to the court; and, if so, whether an exercise of the court's discretion in favour of the application would be in the interests of justice."

His Honour pointed out that in various contexts the words "for special reasons" do not express a particularly high threshold.  They merely may be used to serve to distinguish the usual case from one which is taken out of the ordinary.  In the present case, the documents sought to be used are documents discovered by Australis and/or Lenfest.  They are within a fairly confined area.  In essence, they are all documents which relate to what is referred to in the proceedings in this court as "Project Midsummer".

One of the uses proposed to be made by those documents is a use of them for the purpose of cross-examining, inter alia, Dr Burt.  It may well be asked whether a use of material merely for the purposes of attacking the credit of a witness might constitute a special circumstance.  Certainly, if nothing more took place I might have been inclined to refuse leave.  However, it is argued by senior counsel that the material in question is relevant to the central issue in the Supreme Court case itself, namely, the issue of whether a contract was made in conversations between Mr Hadid and Mr Burt.

It is difficult sitting in this Court in anticipation of proceedings in the Supreme Court to form a view whether material will or will not go beyond merely attacking credit, but go to an issue in the case.  It seems to me that if responsible counsel is of the view that the material is necessary for use for the purpose of the resolution of an actual issue in the case, that that is sufficient to take the case out of the ordinary to use the test adopted initially by Burchett J and followed since by Lockhart J, Wilcox J, and indeed myself in Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 57 FCR 360.

In these circumstances, I am of the view that leave should be granted to the applicant to use the documents discovered by Mr Lenfest, Lenfest Communications Inc, Bain Capital Markets Ltd and Australia Media Ltd in the present proceedings, as detailed in the schedule to the notice of motion, in the Supreme Court of New South Wales Commercial Division for the purposes of the proceedings in that Court identified in the motion, and I would so order.  I make no order as to costs.

I certify that this and the
preceding four (4) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Justice Hill.

Associate:

Date:  4 November 1996

Counsel and Solicitors      C Einstein QC with N Cotman

for Applicant:              instructed by Corrs Chambers Westgarth

Counsel and Solicitors      R Smith instructed by

for First and Second        Clayton Utz

Respondents:

Solicitors for Third        M Williams of Phillips Fox

and Fourth Respondents:

Solicitors for Fifth        M Tirabosco of

and Sixth Respondents:      Atanaskovic Hartnell

Date of Hearing:            16 October 1996

Date Judgment Delivered:         16 October 1996