Hillier v Martin (No 6)

Case [2021] FCA 1009

FEDERAL COURT OF AUSTRALIA

Hillier v Martin (No 6) [2021] FCA 1009

File number: SAD 113 of 2020
Judgment of: CHARLESWORTH J
Date of judgment: 24 August 2021
Catchwords: PRACTICE AND PROCEDURE – orders for discovery and production of a document – production order stayed by orders made on an application for leave to appeal – application for leave to appeal subsequently dismissed – whether the order staying the operation of the production order should be revoked – where the respondent party to whom the production order is directed does not oppose the lifting of the stay – where another respondent opposes the lifting of the stay – no proper basis demonstrated for the continuation of the stay
Legislation:

Corporations Act 2001 (Cth) ss 9, 198F, 290

Federal Court Rules 2011 (Cth) rr 1.35, 4.01, 17.01, 20.14, 41.11

Legal Practitioners Act 1981 (SA)

Cases cited:

Hillier v Martin [2021] FCA 269

Hillier v Martin (No 2) [2021] FCA 509

Hillier v Martin (No 3) [2021] FCA 709

Hillier v Martin (No 4) [2021] FCA 710

Hillier v Martin (No 5) [2021] FCA 949

Martin v Hillier (No 2) [2021] FCA 958

Division: General Division
Registry: South Australia
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 54
Date of hearing: 23 August 2021
Counsel for the Applicant: Mr R Whitington QC with Mr O’Leary
Solicitor for the Applicant: Sykes Bidstrup
Counsel for the First Respondent: Mr Ower SC
Solicitor for the First Respondent: Norman Waterhouse
Counsel for the Second Respondent: Mr T Martin
Counsel for the Third Respondent: The Third Respondent did not appear

ORDERS

SAD 113 of 2020
BETWEEN:

JAMES HILLIER

Applicant
AND:

VICTORIA MARTIN

First Respondent

NORDBURGER OPERATIONS PTY LTD

Second Respondent

ERIK VARI PTY LTD

Third Respondent

ORDER MADE BY:

CHARLESWORTH J

DATE OF ORDER:

24 AUGUST 2021

THE COURT ORDERS THAT:

1.The stay imposed by the order in paragraph 7 of the orders made on 12 July 2021 in proceedings SAD137/2021 (as varied on 15 July 2021) is lifted.

2.The order in paragraph 5 of the orders made on 25 June 2021 be varied so as to substitute the words “on or before 12 July 2021” with the words “at or before 4.30 pm on 27 August 2021”.

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


REASONS FOR JUDGMENT

CHARLESWORTH J

  1. On 12 and 15 July 2021 the Court made orders in appeal proceedings SAD137/2021 having the effect that an order for production I made in this action on 25 June 2021 (the production order) be stayed until further order.  The production order was made consequent upon orders for further and better discovery made against the first respondent, Mrs Victoria Martin, on the same day.

  2. The orders in relation to discovery were as follows:

    3.Pursuant to the order in paragraph 8 of the orders made on 10 December 2020 the following documents are discoverable:

    (a)all Xero programmes and files implemented…

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AGLC
Hillier v Martin (No 6) [2021] FCA 1009
Case
[2021] FCA 1009
Decision Date

CaseChat Overview and Summary

In the matter of Hillier v Martin (No 6), the Federal Court was called upon to determine whether an order staying the operation of a production order should be revoked. The application arose out of an ongoing dispute between Mr Hillier and Mrs Martin, with Nordburger Operations Pty Ltd, of which Mrs Martin is a director, also being a party to the proceedings. The primary issue before the court was whether the stay on the production order should be lifted given that Mrs Martin did not oppose the lifting of the stay, while Nordburger Operations Pty Ltd did.

The court considered the arguments presented by both sides. Mr Hillier sought the revocation of the stay on the production order, arguing that there was no proper basis for the continuation of the stay given that Mrs Martin did not oppose the lifting. Nordburger Operations Pty Ltd opposed the lifting of the stay on the grounds that the documents were in their sole and exclusive legal ownership, they had not been heard on the discovery application, and the Federal Court Rules required an application to be made in accordance with the Rules of Court before any order for discovery or production could be made. The court found that the submissions advanced by Nordburger Operations Pty Ltd did not provide a sufficient basis for the continuation of the stay, particularly given that Mrs Martin did not oppose the lifting.

The court concluded that the stay on the production order should be lifted and made orders accordingly. The court varied the time for Mrs Martin to comply with the production order to 4.30 pm on 26 August 2021, noting that no party had suggested that a period of two days was insufficient for compliance. The court did not consider the substantive merits of Nordburger Operations Pty Ltd’s defence at trial but focused on the procedural aspects of the application. The court's decision was based on the principle that the absence of opposition to the lifting of the stay by Mrs Martin, coupled with the lack of a proper basis for the continuation of the stay, warranted the revocation of the stay on the production order.

Orders

Orders of the court

1. The stay imposed by the order in paragraph 7 of the orders made on 12 July 2021 in proceedings SAD137/2021 (as varied on 15 July 2021) is lifted.

2. The order in paragraph 5 of the orders made on 25 June 2021 be varied so as to substitute the words “on or before 12 July 2021” with the words “at or before 4.30 pm on 27 August 2021”.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Given that the original contention concerning possession of the Xero database was not ultimately pressed (at least for now), Mr Martin did not identify any question of fact that could have been the subject of additional affidavit evidence in any event.CONCLUSION The discovery order was made in the adjudication of an interlocutory dispute between Mr Hillier and Mrs Martin. That Mrs Martin does not oppose the lifting of the stay weighs heavily in favour of making the order sought. I do not accept the submissions that have been advanced by Mr Martin as Operations’ representative. To the extent that I have been invited by Mr Martin to consider the substantive merits of Operations’ foreshadowed defence at trial, I have not done so. I will make orders substantially to the effect sought by Mr Hillier, including an order varying the time for Mrs Martin to comply with the production order. No party has suggested that a period of two days is insufficient for compliance. Accordingly, the time for compliance will be varied to 4.30 pm on 26 August 2021.

Ratio Decidendi

Legal Principle Established

The second respondent, Nordburger Operations Pty Ltd, is a company of which Mrs Martin is a director. Operations became a party in the circumstances described in Hillier v Martin (No 5) [2021] FCA 949 (Hillier No 5). The other director is her husband Mr Thomas Martin. On 13 August 2021 Mr Martin filed a notice of address for service naming himself as the company’s lawyer for the purpose of r 4.01(2) of the Rules. By an email to my Associate dated 18 August 2021, Mr Martin expressed opposition to the orders sought by Mr Hillier relevantly in the following terms:…The second respondent does not consent to, and will oppose, the orders sought by the applicant, on the following grounds:1.the second respondent is the sole and exclusive legal owner of the documents sought for production;2. the documents are in the control of the second respondent;3. the documents are not in the control of the first respondent;4. the second respondent was not heard on the discovery application;5. the Federal Court Rules state, at FCR 20.13, that(3)An application [for discovery] may not be made until 14 days after all respondents have filed:(a) a defence; or(b)an affidavit in response to the affidavit accompanying the originating application.6.accordingly, any order for discovery or production by the second respondent ought to await the close of pleadings, and ought to first require an application to be duly made in accordance with the Rules of Court, upon which the second respondent is allowed to be heard;7.no urgency has been identified such as to warrant departure from the usual course provided for under the Rules of Court, or to give precedence to the discovery sought by the applicant, ahead of other parties’ discovery, before all respondents have filed a defence; and8.the second respondent is obtaining legal advice and representation in relation to the issue of discovery, and the proceedings generally.… I have dispensed with the requirements of r 17.01 of the Rules in respect of Mr Hillier’s application and I now determine it. At the commencement of oral argument on 23 August 2021, Counsel for Mr Hillier foreshadowed a challenge to Operations’ asserted entitlement to be represented by Mr Martin (a lawyer who does not presently hold a practising certificate issued under the Legal Practitioners Act 1981 (SA)). Counsel told the Court that disputes about Operations’ legal representation could be agitated at another time and ought not present an impediment to the hearing proceeding on that day. To avoid any future argument as to Operations’ legal representation at the hearing, I made an order that, to the extent necessary, Operations be granted leave to be represented by Mr Martin for the purpose of the argument. Some of the background to these proceedings is set out in the earlier judgments of the Court in Hillier v Martin [2021] FCA 269 (Hillier v Martin), Hillier v Martin (No 2) [2021] FCA 509, Hillier v Martin (No 3) [2021] FCA 709, Hillier No 4 and Hillier No 5. Before proceeding further, it is necessary to repeat some salient parts of the background to the extent that it informs the present application.