McAssey v Nemo (BC) HoldCo

[2020] NSWSC 1893

Supreme Court

New South Wales

Medium Neutral Citation:

McAssey & Anor v Nemo (BC) HoldCo & Anor [2020] NSWSC 1893

Hearing dates:

21 December 2020

Date of orders:

21 December 2020

Decision date:

21 December 2020

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Directions made; see [19]

Catchwords:

CIVIL PROCEDURE - application for Court endorsement of proposed §1782 application under Title 28 of the United States Code -

Legislation Cited:

United States Code (US) Title 28 §1782

Cases Cited:

Jones v Treasury Wine Estates Ltd [2016] FCAFC 59; (2016) 241 FCR 111

Lavecky v Visa Inc [2017] FCA 454

Category:

Procedural and other rulings

Parties:

Brendan Joseph McAssey (First Plaintiff)
JFTT Pty Ltd as trustee for Joseph Family Trust (Second Plaintiff)
Nemo (BC) HoldCo Pty Ltd (First Defendant)
Nemo (BC) Cayman, LP acting through its general partner Bain Capital Investors, LLC (Second Defendant)

Representation:

Counsel:
C R C Newlinds SC with N Bender (Plaintiffs)
T Boyle (First Defendant)
R May (Second Defendant)

Solicitors:
Arnold Bloch Liebler (Plaintiffs)
Allen Overy (First Defendant)
Quinn Emmanuel (Second Defendant)

File Number(s):

2020/140985

Judgment

1. These proceedings are listed for hearing for four weeks commencing on 22 February 2021.

2. I am dealing with this matter as Commercial List Duty Judge.

3. By notice of motion filed on 17 December 2020, the McCassey Parties apply for an order approving their making an application under §1782 of Title 28 of the United States Code to the United States District Court in the District of Massachusetts for the issue of a subpoena directed to Bain Capital LP, a limited partnership located at 200 Clarendon Street in Boston.

4. I have made directions to ready that matter for hearing by the Equity Vacation Judge on 11 January 2021.

5. I publish these reasons to explain why I did not proceed to deal with the matter myself today.

6. §1782 of Title 28 of the United States Code is entitled “Assistance to foreign and international tribunals and litigants before such tribunals”. Amongst other things, §1782 authorises the District Court for a Federal District to order that person who resides in that district, or is there to be “found”, to give testimony; or a statement; or to produce documents for use in a foreign proceeding.

7. The McCassey parties propose to apply for an order that Bain Capital LP to produce documents for the purpose of these proceedings. It appears clear that Bain Capital LP s to be “found” in Massachusetts.

8. It is not necessary to obtain an order from the foreign court in order for the US Court to make an order for production under §1782. However, since Jones v Treasury Wine Estates Ltd [1] a practice has developed in the Federal Court of Australia whereby that court’s approval is sought prior to the making of a §1782 application.

   1. [2016] FCAFC 59; (2016) 241 FCR 111

9. The practice has developed that an application for approval of that nature is sought on notice to the parties to the local proceedings, with the object of avoiding the possibility of an application for an anti-suit injunction. The practice also permits the court to exercise supervision over its own processes.

10. My attention has been drawn to Perram J’s consideration of the principles to be applied in such an application in his Honour’s judgment in Lavecky v Visa Inc [2017] FCA 454.

11. In that case, his Honour said:[2]

    2. At [19].

“Whilst it is unwise to be definitive about these matters in advance, the following matters are likely to be germane to a consideration of whether to endorse an application made under procedures such as § 1782:

(1) What is the importance of the material to be sought under the procedure to the applicant’s case?

(2) Are there other methods available for obtaining it?

(3) Does the material sought impinge upon or undermine some important procedural limitation in this jurisdiction such as, for example, the unwillingness of the Court to permit fishing expeditions or, perhaps, the general unwillingness of this Court to order depositions?

(4) What is the cost involved in the process for the parties before this Court?

(5) Is that cost a proportionate burden having regard to the significance of the material?

(6) Is the proposed proceeding under § 1782 in the District Court frivolous or obviously doomed to fail?

(7) How long might the applications take to resolve and what impact might they have upon the timely preparation of the matter before this Court for trial?

(8) Is there any need to impose conditions upon the endorsement so as to address any issues arising from (1)-(7) above?”

12. The proposed Bain LP subpoena calls for the production of three categories of documents.

13. The first category calls for documents relating to the determination by the first defendant, Nemo (BC) HoldCo Pty Ltd (“Holdco”) of the “Fair Market Value” of its shares pursuant to cl 6.1(b) of an “Earn Out Deed” entered into between the McCassey parties, HoldCo and the second defendant, Nemo (BC) Cayman LP (“Bain SPV”) on 31 October 2016. The board of HoldCo purportedly determined that Fair Market Value as nil.

14. The second and third categories call, in general terms, for the production of documents relating to any transaction or potential transaction involving what the parties have referred to as the “Bambini Childcare Group”.

15. The application for approval was foreshadowed only after close of business last Thursday 17 December 2020. Evidence in support of the application was served then, with further evidence served late yesterday, Sunday 20 December 2020.

16. The matter generally was listed for directions before Hammerschlag J on 18 December 2020.

17. His Honour listed the Notice of Motion of 17 December 2020 before me today for directions.

18. Both HoldCo and Bain SPV seek time to get advice from United States lawyers and, possibly, to adduce evidence in on the application. Although I see applications such as this as being very much matters for the Court, rather than for the defendants, I was not prepared to determine the motion today over the defendants’ objection and without giving the defendants time to prepare whatever material they wish to marshal in response to the application.

19. I have directed HoldCo and Bain SPV to serve any evidence and submissions by 8 January 2021 and, as I have said, stood the matter over to the Equity Vacation Judge on 11 January 2021. It may be that the parties will then agree that the matter may be decided on the papers.

20. These directions do not prevent the McCassey Parties from proceeding with the foreshadowed application in the United States. I am not suggesting they take that course; that is a matter for them.

21. But the fact that they have, by the notice of motion, sought leave, the exigencies arising from the time of year, the proximity of the hearing date and the defendants’ application for time to respond to the motion may well be matters relevant to any later consideration of whether approval might be given nunc pro tunc. Those matters would also the relevant an application that might in the meantime be made for an anti-suit injunction.

Endnotes

Decision last updated: 21 December 2020