James Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP (No 6)

[2020] NSWSC 1046

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

James Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP (No 6) [2020] NSWSC 1046

Hearing dates:

On the papers

Date of orders:

7 August 2020

Decision date:

10 August 2020

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

First and second defendants released from express and Harman undertaking

Catchwords:

CIVIL PROCEDURE – Harman undertaking – express undertaking concerning use of documents – where applicants propose to commence proceedings – where applicants in possession of documents for purpose of these proceedings that they wish to use in contemplated proceedings – whether special circumstances shown

Legislation Cited:

Corporations Act 2001 (Cth)

Cases Cited:

Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP (No 3) [2019] NSWSC 1759

Harman v Secretary of State for the Home Department [1983] 1 AC 280

Haswell v Commonwealth of Australia [2020] FCA 915

Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3

Category:

Procedural and other rulings

Parties:

James Angelis as trustee for the Angelis Family Trust (First Plaintiff/Respondent)
Pemba Capital Partners Fund I Partnership, LP (First Defendant/Applicant)
Pemba Capital Partners Pty Ltd as trustee for the Castlereagh St (Swan) Co-Investment Trust (Second Defendant/Applicant)

Representation:

Counsel:
P Flynn SC and E Bathurst (First and Second Defendants/Applicants)

Solicitors:
Norton Rose Fulbright (Plaintiffs)
Herbert Smith Freehills (First and Second Defendants)

File Number(s):

2019/201647

Judgment

1. I delivered my primary judgment in these proceedings on 10 December 2019. [1] These reasons assume familiarity with that judgment. I shall use the same abbreviations.

   1. Angelis as trustee for the Angelis Family Trust v Pemba Capital Partners Fund I Partnership, LP (No 3) [2019] NSWSC 1759.

2. Pemba intends to commence proceedings in the Corporations List against Mr Angelis, Mr Dutt and Coverforce seeking orders requiring those parties to provide information pursuant to ss 233(1)(j) and 247A(1) of the Corporations Act 2001 (Cth), and cll 3.3 and 6.2(f) of the 2012 Shareholders’ Agreement.

3. In anticipation of so doing, Pemba seeks to be released from express undertakings it has given, and from its implied Harman undertaking, in relation to 12 identified documents to which it has had access in these proceedings. [2]

   2. Harman v Secretary of State for the Home Department [1983] 1 AC 280.

4. Pemba submits that the making of such an order will efficiently progress the proposed proceedings, as it will avoid Pemba having to avail itself of the Court’s compulsory processes to seek documents to which it already has access.

5. If Pemba is released from these undertakings it will undertake to use the documents only for the purpose of the proposed proceedings, and not to disclose them to any third party with the exception of any court-appointed forensic accountant until the determination of the proposed proceedings or further order of court.

6. The Angelis Parties, without admissions, neither consent nor oppose to Pemba being so released.

7. The documents the subject of Pemba’s application comprise:

1. a draft and the final budget for Coverforce for FY20;

2. affidavit and expert report material filed in these proceedings but not read or tendered;

3. certain documents produced for the purposes of the reference I ordered on 16 June 2020 of certain questions to the Hon RC McDougall QC for enquiry and report; and

4. the transcript of the cross-examination of Mr Dutt before Mr McDougall QC.

8. As to the reference to Mr McDougall, the report is now to hand and is to be adopted without contest. Once that occurs, Mr McDougall’s report itself will not be the subject of any Harman undertaking. [3]

   3. For example, see Haswell v Commonwealth of Australia [2020] FCA 915 at [21] (Lee J).

9. Nonetheless, it seems likely that adjectival information before Mr McDougall QC, and the transcript of Mr Dutt’s cross-examination would remain subject to the Harman undertaking.

10. In order that a party be released from the Harman undertaking, special circumstances must be shown. [4]

    4. For example, Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3 at [31] (Branson, Sunderberg and Allsop JJ).

11. The requirement for “special circumstances” does not mean that extraordinary factors must be demonstrated. However, good reason is required.

12. In my opinion, there is good reason in this case to make the orders sought by Pemba.

13. First, Pemba is the majority shareholder of the proprietor of some or all of the documents in question.

14. Second, the documents sought are specified, are limited in scope and are evidently relevant to the proposed proceedings.

15. Third, the release from the undertaking will facilitate the just, quick and cheap resolution of the proposed proceedings for the reasons set out at [4] above.

16. It is for those reasons, on 7 August 2020, I noted Pemba’s undertaking as set out at [5] above and made the following orders:

1. An order that the First and Second Defendants are released from the express undertaking given by the First and Second Defendants' legal representatives on 4 November 2019 with respect to the documents listed in rows 1 and 2 of Annexure A to the affidavit of Leon Chung affirmed on 3 August 2020, to the extent necessary to allow the First and Second Defendants to use those documents in, and for the purposes of, the proceedings they intend to commence against the First and Second Plaintiffs, and the Sixth Defendant as referred to in paragraph 23 of the affidavit of Leon Chung affirmed on 3 August 2020 (the Contemplated Proceedings).

2. An order that the First and Second Defendants have leave to use in, and for the purposes of, the Contemplated Proceedings, the documents listed in rows 1 through 12 of Annexure A to the affidavit of Leon Chung affirmed on 3 August 2020.

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Endnotes

Amendments

11 August 2020 - Case name now includes "(No 6)"