Leigh-Mardon Pty Ltd v Titan Corporation Ltd

[1996] FCA 976

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY  No VG 346 of 1993
GENERAL DIVISION

B E T W E E N :
  LEIGH-MARDON PTY LTD
  Applicant
A N D :
  TITAN CORPORATION LTD AND OTHERS
  Respondents
COURT:         NORTHROP J
PLACE:          MELBOURNE
DATE:  6 NOVEMBER 1996

REASONS FOR JUDGMENT

On 19 April 1996, in dealing with a motion for third party discovery against the Commonwealth Bank of Australia, the Court gave reasons for ordering third party discovery but refrained from making an order in relation to what was paragraph (j) in the motion then before the Court.  It was pointed out that the Court was in error in referring to "key stroke" in relation to paragraph (j) which was, in truth, dealing with the issue of reliance.

The Court refrained from making an order then in relation to what was contained in paragraph (j) of the motion but indicated it would consider the matter further, if necessary, if further material were before the Court or the matter could not be resolved in any other way.  The matter has not been resolved.  The respondents have been unable to ascertain whether there are these documents, which are sought to be discovered, in existence.  They could not get copies of them from other sources of discovery and the matter is now back before the Court.

The principles of law to be applied in cases of this kind are referred to in the reasons given on 19 April 1996.  It has been argued on behalf of the Commonwealth Bank that a wide range of documents is sought by discovery, although limited in some respects, and that in truth, this constitutes a fishing expedition to try and find out just what, if anything, there was.

The problem arises from the fact that, Mr Besley who is the Chairman of the Commonwealth Bank, is also on the Board of Amcor, a parent company of the purchasers of the business and that there is material before the Court which suggests that there may have been some knowledge of allegations of overcharging by the respondents, or the relevant company of the respondents, in its contract with the Commonwealth Bank before the contract was entered into on 1 January 1993 and the date upon which settlement took place on 31 May 1993 and that Mr Besley knew of this. What is sought to be established is a chain, by reference to documents, which could lead to evidence suggesting that there was no reliance by the present applicant insofar as the Commonwealth Bank was concerned because the Commonwealth Bank knew of the true position and therefore there being no breach of contract between the Commonwealth Bank and the relevant respondent company since the applicants had not relied upon the conduct of the respondent. 

In my opinion there is sufficient material before the Court to justify the making of an order for third party discovery. Although the dates are extensive, namely 1 January 1993 to 29 March 1996, which was the date of the motion for the third party discovery, it is relevant to consider that there may be documents in existence, either now in the possession of the bank or at some time in the past in the possession of the bank, which could have a bearing on the question of the knowledge and understanding by the bank in relation to the contracts and could lead to the issue of reliance by the applicants on any conduct by the respondents in relation to the contract between the respondent or one of them and the Commonwealth Bank. Paragraphs (i), (ii) and (v) of the relevant paragraph (j) of the motion, in my opinion, are matters in which the Commonwealth Bank should be required to put on oath whether there are any such documents in existence and who has possession of them now, or if they are not in the possession of the Commonwealth Bank, who has had them in the past. This could lead the respondents to establish a defence, if any, based upon the question of reliance.

In those circumstances the Court makes orders in the form of the minutes which have been handed to me and which I will initial and place on the Court file.  There is included an order that the respondents pay the reasonable costs and expenses, on a solicitor and own client basis, of the bank in relation to its compliance with the orders specified in paragraph (1) of the orders I am about to make.  Accordingly, the orders are made in conformity with these minutes which I will initial and place on the Court file.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R M Northrop.

Associate:

Date:

ATTACHMENT

Solicitors for the applicant:                   Maddock Lonie & Chisholm

Solicitors for the First, Second,
Fifth to Eighth, Tenth and

Eleventh respondents:              Jerrard & Stuk

Date of hearing:  6 November 1996