JF Yandle & Co Pty Ltd v CSN Pty Ltd
[1999] FCA 820
•10 JUNE 1999
J F Yandle & Co Pty Ltd v CSN Pty Ltd [1999] FCA 820
J F Yandle & Co Pty Ltd v CSN Pty Ltd [1999] FCA 820
J F YANDLE & CO PTY LIMITED v
CSN PTY LIMITED T/A CSN AUSTRALIA & ORS
NG 982 OF 1998
HILL J
10 JUNE 1999
SYDNEY
Harman v the Secretary of State for the Home Department [1983] 1 AC 280 cited
Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773 cited
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 982 OF 1998 BETWEEN: J F YANDLE & CO PTY LIMITED (ACN 008 895 038)
Applicant
AND: CSN PTY LIMITED T/A CSN AUSTRALIA (ACN 062 077 909)
Respondent
CSN PTY LIMITED T/A CSN AUSTRALIA
(ACN 062 077 909)
Cross-Claimant
ENGINEERED PRODUCTS GROUP PTY LIMITED
T/A AUSTRALIAN HYDRAULICS COMPANY
(ACN 074 384 884)
First Cross-Respondent
LYCO INDUSTRIES PTY LIMITED (ACN 006 797 575)
Second Cross-Respondent
JUDGE: HILL J DATE OF ORDER: 10 JUNE 1999 WHERE MADE: SYDNEY
THE COURT ORDERS THAT:
1. That each of Peter John King, John Michael Healey, Stephen Lee Pint and Mark Andrew Atkinson trading as Healey Pint be removed as parties to these proceedings.
2. That each of Peter John King, John Michael Healey, Stephen Lee Pint and Mark Andrew Atkinson trading as Healey Pint be treated as respondents to a motion in these proceedings.
3. That each of Peter John King, John Michael Healey, Stephen Lee Pint and Mark Andrew Atkinson trading as Healey Pint be restrained until further order from themselves, their servants or agents, disclosing or otherwise using any document discovered in the proceeding or produced in answer to matters produced or for production or subpoena issued in these proceedings or any information obtained from such documents for any purpose other than for the purpose of these proceedings as presently constituted without first obtaining the leave of the Court or unless documents have been admitted into evidence without orders as to confidentiality.
4. Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 982 OF 1998 BETWEEN: J F YANDLE & CO PTY LIMITED (ACN 008 895 038)
Applicant
AND: CSN PTY LIMITED T/A CSN AUSTRALIA (ACN 062 077 909)
Respondent
CSN PTY LIMITED T/A CSN AUSTRALIA
(ACN 062 077 909)
Cross-Claimant
ENGINEERED PRODUCTS GROUP PTY LIMITED
T/A AUSTRALIAN HYDRAULICS COMPANY
(ACN 074 384 884)
First Cross-Respondent
LYCO INDUSTRIES PTY LIMITED
(ACN 006 797 575)
Second Cross-Respondent
JUDGE: HILL J DATE: 10 JUNE 1999 PLACE: SYDNEY
EX TEMPORE REASONS FOR JUDGMENT
1 On 2 June 1999 Lehane J made orders joining Mr Peter John Long, the principal of the firm of solicitors Peter Long and Co, together with Mr Healey and Mr Pint and Mr Atkinson, partners in a firm of solicitors known as Healey Pint, as third cross-respondents to the present proceedings.
2 His Honour also made orders restraining these persons effectively from making use of certain information which they were said to have obtained on subpoena from an insurer of the respondent. The gravamen of the complaint that had been made to his Honour was that the two firms of solicitors had used information in breach of the ordinary implied undertaking not to use information obtained inter alia from a subpoena for a purpose other than the litigation in which the subpoena was issued. There was said to be fear that that conduct would continue.
3 One must say that given that the circumstances were known to the applicants on 14 May 1999 and given correspondence which has been tendered to me dated 21 May which referred to a claim in relation to another item of equipment, not being the subject matter of the proceedings, namely a Megaseeder, it is hard to see that the matter should have proceeded ex parte.
4 It seems that these were not matters that his Honour was made aware of and in the circumstances those orders, which in any event only continued till today, should of necessity be set aside. However, that does not mean that the application made today for similar orders can not be heard and decided.
5 The parties do not seem to be in any real doubt as to the basic legal principles, both as to what I might call the Harman v the Secretary of State for the Home Department principle ([1983] 1 AC 280) on the one hand and the general principles by which interlocutory relief would be granted; namely the need for there to be an arguable issue and also for consideration to be given to where the balance of convenience lies and, of course, consideration too to any other discretionary matter that might be relevant to the question of whether relief should be granted or not, such as delay or failure to disclose relevant factual material in a prior ex parte application for relief.
6 The present proceedings are, as I am reminded by counsel, representative proceedings. They say, in essence, that the lead applicant purchased an item of equipment called an Alfarm Series A630 six row cultivator bar ("the A630") from the respondent, that it was represented to be able to do its particular job, but that it failed miserably in doing so and as a result loss was suffered. The case is put in a number of different ways, but, in essence, that is the substance of it. There is no doubt that the proceedings brought by the applicant and, indeed, the class of representative persons is those persons who purchased from the respondent the A630 in circumstances where that performed inadequately or badly, and they suffered loss.
7 As presently framed the proceedings would not permit the applicant or for that matter any member of the representative class from raising other damages that might have been suffered by purchasing other items of equipment such as a seeder from the respondent. It is not necessary to decide whether it would be possible to amend the current proceedings to do that. I suspect if there are persons in that category they would be better advised to commence different proceedings, but that is not a matter I have really considered in detail.
8 In response to the evidence put against him, an affidavit was produced from Mr Long. Senior counsel for the respondent then objected to that affidavit being read. It was said that notice of it had only been received by the solicitors on Tuesday and by counsel yesterday and that Mr Long should have been made available for cross-examination and/or other evidence prepared to deal with what Mr Long says. I accepted, because the present proceedings are no more than interlocutory, the affidavit.
9 Mr Long's affidavit builds upon the affidavit of Ms Houston which was also filed. She apparently perused the documents obtained on subpoena from the insurers of the respondent and did so for the purpose of putting forward names and addresses of persons who might become members of the class from the representative proceedings. If she was cross-examined the evidence might be different but for present purposes I should accept it as correct. She says that she did so not for the purpose of using the names for some other and illegitimate purpose but for the purpose effectively of circulating these people with material relating to the current proceedings.
10 Mr Long says that Ms Houston submitted to him a draft and it is that draft in its final form which has really given rise to the current proceedings. In the draft reference is made to the fact that some members had experienced difficulties with another product manufactured by the respondent known as the Megaseeder and suggested that damages could be claimed on their behalf in respect of that matter in the proceedings.
11 Obviously, there is no problem about the information that has been subpoenaed being used for the purposes of calling together persons who are members of the class as presently designated to participate in the class action. The question really is whether there is an arguable issue that the information was used for another purpose as well, namely to get together people who might either in these proceedings but in amended form or perhaps otherwise claim damages for the Megaseeder.
12 Senior counsel for the solicitors submitted that so long as the persons approached were effectively persons in the class connected with the present proceedings the use of the information to expand those proceedings to cover another item of equipment would not contravene the principle. He uses as an analogy the case where proceedings were originally brought for damages as a result of a defective part and subpoena evidence or otherwise demonstrates that it was some other part that was defective. Clearly, enough there could be no harm in using the subpoenaed material for that purpose. With respect to counsel I do not think the analogy is a very good one. A better analogy is proceedings brought by a person for a defective car and later proceedings brought after inspection of documents for some other item being defective not being the car, for example, a trailer.
13 Counsel for the solicitors submitted that the present application was in essence in aid of a potential citation for contempt where no charge has yet has been made. He submitted I should not entertain the application in vacuum when I do not know what the ultimate relief will be.
14 I do agree with another submission by senior counsel that the solicitors should not be parties to the present proceedings. They are merely parties to a motion brought in the proceedings. However, I do not think much turns upon that. In one sense it is rather like the case of Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773 where a motion was brought in the proceedings to recover costs from the solicitor who had, so the judge at first instance found, commenced proceedings alleging fraud where no factual matter was available and indeed for a purpose which was not for vindication of a legal right on the part of the applicant.
15 I do not think that it is necessary at this stage for the respondent to particularise the contempt which might occur if the information was used in the way in which it might be. It is a bit difficult for me to see how one could particularise a contempt which has not yet occurred. As far as I understand it, it is not yet said that any contempt has occurred.
16 Mr Long also said in his affidavit and again it seems to me this is a matter that on a final hearing the parties would wish a real finding of fact to be made, that he had all the information about the Megaseeder prior to the material being subpoenaed. If he did, obviously he has a perfectly good defence but I could not make any findings one way or the other about that matter at this stage.
17 The form of the orders granted by Lehane J and sought to be removed today leaves room for some criticism, apart from the fact that the relevant information that may not be used seems potentially wider than it need be. Clauses 2.3, 2.4 and 2.5 are potentially too wide and could restrain the solicitors from proceeding properly to represent their clients in the present proceedings.
18 Counsel for the solicitors proffered an undertaking, which has been marked for identification "A". It substantially repeats the general law with, I think, really only one amendment which I suggested, which was refused, namely that the information obtained could not be used for a purpose other than for the purpose of the proceedings as presently constituted. The reluctance, apparently, to accept the words "as presently constituted" stems from the fact that one might infer that the solicitors wished to use the material to expand the current proceedings. It is hard to infer otherwise.
19 Senior counsel, however, for the solicitors stressed upon me that there could not be in any event a breach of the implied undertaking. One difficulty, of course, in trying to assess that submission is that there is no application before the Court to change the proceedings as presently constituted. It is rather difficult to postulate how substantial that change would be. Ultimately it seems to me there is an arguable issue between the parties. Provided the injunction does not restrict in any way the solicitors from carrying out their obligations in respect to the current proceedings there can be no prejudice to them and the balance of convenience would be in favour of an injunction being granted.
20 I propose to grant an injunction effectively in the form of the undertaking in MFI "A", with some marginal exceptions which I will indicate in a moment. The orders I would make will be as follows.
1. That each of Mr Long, Mr Healey and Mr Pint and Mr Atkinson cease to be parties to the proceedings.
21 I note that the respondent gives the usual undertakings as to damages in the form applicable in the Supreme Court of New South Wales. The remaining orders will be:
2. That each of Peter John King, John Michael Healey, Stephen Lee Pint and Mark Andrew Atkinson trading as Healey Pint be treated as respondents to a motion in these proceedings.
3. That each of Peter John King, John Michael Healey, Stephen Lee Pint and Mark Andrew Atkinson trading as Healey Pint be restrained until further order from themselves, their servants or agents, disclosing or otherwise using any document discovered in the proceeding or produced in answer to matters produced or for production or subpoena issued in these proceedings or any information obtained from such documents for any purpose other than for the purpose of these proceedings as presently constituted without first obtaining the leave of the Court or unless documents have been admitted into evidence without orders as to confidentiality.
4. Costs are reserved.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill J.
Associate:
Dated: 10 June 1999
DATE OF HEARING: 10 June 1999
DATE OF DECISION: 10 June 1999
PLACE: SYDNEY
#DATE 10:06:1999
Appearances
Counsel for the Applicant: L G Foster SC, C Moore
Solicitor for the Applicant: Peter Long & Co
Counsel for the First Respondent: B A Coles QC, J G Duncan
Solicitor for the First Respondent: Mallesons Stephen Jaques
Counsel for the First Cross-Respondent: R J Weber
Solicitor for the First Cross-Respondent: Moray & Agnew
Counsel for the Second Cross-Respondent: J M Aferas
Solicitor for the Second Cross-Respondent: Sprusons Solicitors acting as agents for
Davies Collison Cave Solicitors
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