Haggarty v RX Plastics Pty Ltd

Case [2025] FCA 536

FEDERAL COURT OF AUSTRALIA

Haggarty v RX Plastics Pty Ltd [2025] FCA 536  

File number(s): QUD 336 of 2023
Judgment of: MEAGHER J
Date of judgment: 23 May 2025
Catchwords:

PRACTICE AND PROCEDURE – Interlocutory application – Amendment of pleadings – Leave to amend – Amended defence – Withdrawal of admissions

PRACTICE AND PROCEDURE – Interlocutory application – Discovery – Documents – Relevance – Delay
Legislation:

Corporations Act 2001 (Cth) ss 233(1)(d), 233(1)(e)

Federal Court of Australia Act 1976 (Cth) s 37M

Federal Court Rules 2011 (Cth) rr 16.53(1), 20.13(1), 20.14, 20.15, 20.20, 26.11, 26.11(2)(b)

Cases cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Bridging Capital Holdings Pty Ltd v Self Directed Super Funds Pty Ltd [2024] FCA 985

Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261

Dye v Commonwealth Securities Lty (No 2) (2010) 63 AILR 101-302

Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327

Kaplan v State of Victoria (No 2) [2022] FCA 679

London City Equities Ltd v Excelsior Capital Ltd [2025] FCA 285

Selvaratnam v St George (No 2) [2021] FCA 486
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 74
Date of hearing: 21 May 2025
Counsel for the Applicants: Mr D D Keane KC appeared with Mr B O’Sullivan
Solicitor for the Applicants: Results Legal Solutions
Counsel for the Respondents: Mr B O’Donnell KC appeared with Ms J Sargent
Counsel for the Respondents: Piper Alderman

ORDERS

QUD 336 of 2023
BETWEEN:

MR JUSTIN THOMAS HAGGARTY (IN HIS PERSONAL CAPACITY AND AS TRUSTEE FOR THE JUSTIN HAGGARTY BLOODLINE TRUST)

First Applicant

MR DARREN GEOFFREY HAGGARTY (IN HIS PERSONAL CAPACITY AND AS TRUSTEE FOR THE DARREN HAGGARTY BLOODLINE TRUST)

Second Applicant

MR CAMPBELL JAMES CRADDOCK

Third Applicant
AND:

R.X. PLASTICS PTY LTD ACN 009 787 688

First Respondent

SIMPLY ON LINE PTY LTD ACN 120 276 306

Second Respondent

MR SCOTT JON HAGGARTY (IN HIS PERSONAL CAPACITY AND AS TRUSTEE FOR THE SCOTT HAGGARTY BLOODLINE TRUST) (and others named in the Schedule)

Third Respondent

ORDER MADE BY:

MEAGHER J

DATE OF ORDER:

23 MAY 2025

THE COURT ORDERS THAT:

1.The application for further discovery, dated 14 May 2025, is dismissed.

2.The respondents’ application for leave to amend defence and leave to withdraw admissions, dated 15 May 2025, is allowed.

3.Within 3 working days of the date of these orders, the parties are to provide to the court:

(a) a minute of agreed orders; or, as the case may be,

(b) competing minutes of orders together with supporting written submissions of no more than five pages,

that are, in either case, proposed to give effect to the court’s reasons for judgment.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

MEAGHER J
INTRODUCTION

  1. This matter concerned two interlocutory applications.

  2. The first interlocutory application was made pursuant to rr 20.13(1) and…

Continue reading Haggarty v RX Plastics Pty Ltd

Sign in free to access the full text

Details
AGLC
Haggarty v RX Plastics Pty Ltd [2025] FCA 536
Case
[2025] FCA 536
Decision Date

CaseChat Overview and Summary

The applicants, Haggarty, brought an action against RX Plastics Pty Ltd and others, seeking relief under the Corporations Act 2001 (Cth) to compel the respondents to purchase their shares, alleging oppressive conduct and breaches of fiduciary duties. The case was before the Federal Court, which had previously made orders for discovery and set the trial date. The applicants sought further discovery of certain documents, including an audited remuneration report, audited financial report, and directors' report of RX Plastics, as well as financial records of the JPJ Haggarty Trust. They alleged that these documents were necessary to address issues of alleged oppressive conduct and potential breaches of Division 7A of the Corporations Act.

The court had to determine whether to grant the applicants' request for further discovery and whether to allow the respondents leave to amend their defence and withdraw certain admissions. The court considered the procedural history of the case, including delays and extensions of time for compliance with discovery orders. It also noted that the applicants had not sought discovery earlier and that the trial was imminent. The court weighed the utility of the requested documents against the countervailing considerations of delay and the burden on the respondents. Ultimately, the court found that the utility of the documents did not outweigh these considerations and dismissed the application for further discovery.

The court allowed the respondents' application for leave to amend their defence and withdraw certain admissions. The applicants had not made submissions regarding costs, so the court ordered that costs would follow the event. The court directed the parties to provide either a minute of agreed orders or, if necessary, competing minutes of orders with supporting written submissions within three working days. The case highlights the importance of timely discovery requests and the court's discretion in balancing the utility of documents against the broader procedural context of the case.

Orders

Orders of the court

1. The application for further discovery, dated 14 May 2025, is dismissed.

2. The respondents’ application for leave to amend defence and leave to withdraw admissions, dated 15 May 2025, is allowed.

3. Within 3 working days of the date of these orders, the parties are to provide to the court:

(a) a minute of agreed orders; or, as the case may be,

(b) competing minutes of orders together with supporting written submissions of no more than five pages,

that are, in either case, proposed to give effect to the court’s reasons for judgment.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In their amended originating application, the applicants seek, amongst other things, an order pursuant to s 233(1)(d) or (e) of the Corporations Act 2001 (Cth), which would compel the first, and/or third, and/or fourth respondent to purchase the applicants’ shares in R.X. Plastics, given that:the value of the shares include an amount to be determined by the Court to compensate or allow for the conduct of the first respondent’s affairs contrary to the interests of the members as a whole and/or oppressive to, unfairly prejudicial to, or unfairly discriminatory against the applicants … PROCEDURAL BACKGROUND On 18 December, Downes J made orders for discovery. By way of orders dated 5 April 2024 (April Orders), her Honour timetabled the matter to trial and set it down for a seven-day trial, commencing on 2 December 2024. The parties corresponded with respect to discovery. The last correspondence occurred on 27 February 2024 by way of a letter from Piper Alderman, the solicitors for the third to sixth respondents, sent to Results Legal, the solicitors of the applicants. This letter is annexed to the affidavit of Ms Paris Galea, dated 8 May 2025. That letter was in response to the applicants’ correspondence of 8 February 2024. Relevantly, Piper Alderman’s letter addressed concerns raised by Results Legal with respect to documents in categories 5 – 10 of discovery and referred to “other discovery matters”. However, there is no further correspondence before the Court regarding discovery. Indeed, on 8 March 2024, the applicants filed affidavits attesting to discovery. On 15 March 2024, the respondents filed affidavits attesting to discovery. Throughout the process of bringing the matter to trial, the parties have required extensions of time to comply with various of the April Orders. As a result, on 8 November 2024, I made orders (November Orders) vacating the original trial dates. By the orders, I set down the matter for a seven-day trial, commencing 9 June 2025. The November Orders timetabled the matter to the new trial dates. The parties also required extensions of time to comply with various of the November Orders. On 5 May 2025, the respondents’ solicitors received a letter from Mr Michael McDonnell, the Principal of Results Legals, the applicants’ solicitors. The letter is annexed to the affidavit of Ms Paris Galea, dated 20 May 2025. Relevantly, that letter alleged that the respondents had failed to disclose:·“an audited remuneration report of the directors of RX Plastics for the year ended 30 June 2024”;·“an audited financial report and directors report of RX Plastics for the year ended 30 June 2024”; and ·“financial records of the JPJ Haggarty Trust”. With respect to the financial records of the JPJ Haggarty Trust, the applicants suggested that:We also note that financial records of the JPJ Haggarty Trust have not been provided to our clients. As you are aware, the Company loaned funds to the JPJ Haggarty Trust which our clients allege were onerous and are therefore an instance of your clients’ oppressive conduct. We would expect the financial records of the JPJ Haggarty Trust to show what the loans from the Company were used for, which would in turn be relevant to how those funds might have been put to use by the Company had the loans not been made.Further, our clients hold concerns that the Division 7A loans may not be genuine, in that more money may have flowed through the Company then to the JPJ Haggarty Trust, which may be a breach of Division 7A. We expect the JPJ Haggarty financial records to shed light on this issue.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MEAGHER J
Considering the procedural history of this matter, the correspondence between the parties, the failure of the applicants to raise an application for discovery sooner, the imminent commencement of the trial and the unduly high burden upon the respondents, I am disinclined to grant the relief sought in the applicant’s discovery application. The utility of the documents does not outweigh these countervailing considerations. CONCLUSION The application for further discovery, dated 14 May 2025, is dismissed. The respondents’ application for leave to amend defence and leave to withdraw admissions is allowed. As no submissions were made with respect to costs, I will make orders that costs follow the event.

Ratio Decidendi

Legal Principle Established

Established by: MEAGHER J

Full text does not contain this section.