FEDERAL COURT OF AUSTRALIA
Hillier v Martin (No 4) [2021] FCA 710
File number: SAD 113 of 2020 Judgment of: CHARLESWORTH J Date of judgment: 25 June 2021 Date of publication of reasons: 29 June 2021 Catchwords: PRACTICE AND PROCEDURE – discovery – parties in dispute as to the ownership structure of a business – applicant asserting the business assets are held on trust pursuant to a joint venture in specified shares – respondent asserting the business is held pursuant to a discretionary trust – respondent’s defence putting the applicant to proof on his claims – respondent denying the applicant’s entitlement to damages and equitable compensation including for breach of trust – applicant alleging the respondent is in default of an order for standard discovery in respect of a database of information accessible by way of accounting software – whether the database is a discoverable document – information in the database directly relevant to facts in issue, including the quantification of remedies – whether the whole of the database should be produced
PRACTICE AND PROCEDURE – application by a prospective additional respondent for an adjournment of proceedings – prospective respondent having as a director the respondent in the proceedings – whether an adjournment of a discovery application between existing parties is necessary to afford procedural fairness to the prospective respondent – whether the prospective respondent has had sufficient knowledge to intervene in the proceedings in circumstances where both directors of the prospective respondent are to be attributed with knowledge of every step taken and in circumstances where the order for standard discovery was consented to by one of its two directors – adjournment application dismissed
Legislation: Evidence Act 1995 (Cth)
Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Federal Court Rules 2011 (Cth) rr 1.34, 4.01, 20.14, 20.15, 20.16, 20.17, 20.32
Trustee Act 1936 (SA)
Cases cited: Ammerlaan v The Distillers Co (Bio-Chemicals) Ltd (1992) 58 SASR 164
Austal Ships Pty Ltd (ACN 079 160 679) v Incat Australia Pty Ltd (ACN 051 556 855) [2009] FCA 368
Harris Scarfe Ltd (in liq) v Ernst & Young (No 4) (2005) 93 SASR 300
Hillier v Martin (No 2) [2021] FCA 509
Hillier v Martin (No 3) [2021] FCA 709
Home Office v Harman [1983] 1 AC 280
Kyocera Mita Australia Pty Ltd v Mitronics Corporation Pty Ltd [2005] FCA 242
Lane v Channel 7 Adelaide Pty Ltd [2003] SASC 391
Mulley v Manifold (1959) 103 CLR 341
Sony Music Entertainment (Australia) Ltd v University of Tasmania (No 1) (2003) 129 FCR 472
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 89 Date of hearing: 25 June 2021 Counsel for the Applicant: Mr R Whitington QC with Mr O’Leary Solicitor for the Applicant: Sykes Bidstrup Counsel for the Respondent: Mr…
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- AGLC
- Hillier v Martin (No 4) [2021] FCA 710
- Case
- [2021] FCA 710
- Decision Date
CaseChat Overview and Summary
The primary legal issues the Court had to decide were whether the database in question was a discoverable document and, if so, whether the entire database should be produced. The Court also had to consider an application by Nordburger Operations Pty Ltd, of which Ms. Martin is a director, for an adjournment of the proceedings. The prospective additional respondent argued that an adjournment of the discovery application was necessary to afford procedural fairness. However, the Court found that the prospective respondent had sufficient knowledge to intervene in the proceedings, given that both directors of the prospective respondent were attributed with knowledge of every step taken, and that the order for standard discovery had been consented to by one of its two directors.
In its judgment, the Court held that the database in question was a discoverable document as it contained information directly relevant to the facts in issue. The Court also determined that the whole of the database should be produced, as the information was necessary for the quantification of remedies. Regarding the adjournment application, the Court found that the prospective additional respondent had not demonstrated a sufficient reason for an adjournment and dismissed the application. The Court then proceeded to make orders on the discovery application, including that Nordburger Operations Pty Ltd be granted leave to be represented by Mr. Martin for the sole purpose of making submissions in support of an application that the proceedings be adjourned, and that the application for an adjournment be dismissed.
The Court made several orders regarding the discovery of documents, including that the respondent file an amended list of documents and produce them for inspection by way of electronic access to a read-only version. The Court also granted liberty to apply and extended the time for making an application for leave to appeal from an order made in the case.
Orders
Orders of the court
1. Nordburger Operations Pty Ltd be granted leave to be represented by Mr Thomas Martin for the sole purpose of making submissions in support of an application that the proceedings be adjourned.
2. The application for an adjournment made by Nordburger Operations Pty Ltd is dismissed.
3. Pursuant to the order in paragraph 8 of the orders made on 10 December 2020 the following documents are discoverable:
all Xero programmes and files implemented and maintained, since 2013, in relation to the Nordburger businesses conducted at:
168 The Parade Norwood;
259 Port Road Hindmarsh;
179 Glen Osmond Road Fewville;
31 Moonta Street Adelaide;
(the Xero programmes and files); and
to the extent that the Xero programmes and files referred to above do not identify the income, assets and liabilities of the trust or trusts (trust information) under the control of the Respondent in relation to which the Applicant is a beneficiary or eligible beneficiary, such electronic files in read only format) within the possession, power or control of the Respondent that does contain that trust information.
4. On or before 28 June 2021 the first respondent, Victoria Martin, is to file an amended list of documents in compliance with r 20.16 and r 20.17 of the Federal Court Rules 2011 (Cth) giving discovery of the documents referred to in order 3.
5. On or before 12 July 2021 the first respondent, Victoria Martin, is to produce for inspection the documents referred to in order 3 by way of electronic access to a read only version of the documents, such access to be facilitated by the provision of log in access to software that facilitates readable access to the materials.
6. The first respondent, Victoria Martin, has liberty to apply to vary the order in paragraph 5 to the extent that it defines the means by which production of the documents is to be given, such leave to be exercised by 5 July 2021.
7. Liberty to apply.
8. The costs applications referred to in the Note to these orders be listed for mention mentioned at the next case management hearing.
9. There be a further case management hearing at 8:45am (ACST) on 4 August 2021.
10. Pursuant to r 35.13 Federal Court Rules 2011 (Cth) the time for making an application for leave to appeal from an order made today be extended to 14 days following the provision of written reasons for the order in question.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
By his interlocutory application dated 17 June 2021, the applicant sought leave to file an amended statement of claim in the form of annexure JH59 to his affidavit sworn on 17 June 2021. The amendment application was allowed (subject to conditions) for reasons given orally on 24 June 2021. A written record of the judgment on that application has since been published as Hillier v Martin (No 3) [2021] FCA 709 (Hillier No 3). Among the orders made on that application was an order that the applicant have leave to make certain amendments to his prayer for relief, that leave being conditioned by a requirement that the applicant first have leave to join Nordburger Operations Pty Ltd as a party. Also among the applications listed for hearing on 24 June 2021 was an interlocutory application filed by the applicant on 18 March 2021 seeking orders to the effect that the respondent give discovery of specified documents in accordance with an order for standard discovery made on 10 December 2020 (discovery application). Operations has two directors, the respondent Ms Victoria Martin and her husband Mr Thomas Martin. Between 28 November 2019 and 6 December 2020 the respondent was the sole director. The materials presently before the Court indicate that Mr Martin has been a co-director from 7 December 2020. Both directors were present at the hearing of the amendment application, Ms Martin through her solicitor and Senior Counsel and Mr Martin as an observer. Following the delivery of ex tempore reasons on the amendment application, Counsel for the respondent informed the Court that he had been retained to appear for Operations. Counsel informed the Court that he was instructed to consent to an order granting the applicant leave to join Operations as a party. The Court granted that leave. The leave granted to the applicant to make the relevant amendments and to join Operations as a party was to be exercised on or before 28 June 2021. As at 25 June 2021 that leave had not yet been exercised. It was ultimately exercised on 28 June 2021. Operations became a party on that day. After making orders on the amendment application, the Court proceeded to hear argument on the discovery application. Judgment was reserved on that application late in the day on 24 June 2021. The parties were informed that judgment on that application would be delivered on 25 June 2021 at 2.15pm. The Court indicated to the respondent’s Counsel that it would be for Operations to apply to reopen argument if it asserted any right to be heard on the discovery application. At the time set down for the delivery of judgment, Counsel for the respondent announced an appearance only for the respondent and not for Operations. Mr Martin then made an application for an order that Operations be granted leave to be represented at the hearing by a non-lawyer (namely himself): see r 1.34 and r 4.01(2) of the Federal Court Rules 2011 (Cth). After hearing submissions, that leave was granted for the sole purpose of permitting Operations to apply for an adjournment so as to defer the delivery of judgment on the discovery application (adjournment application). The adjournment application was dismissed. The Court then proceeded to make orders on the discovery application.