McCasker v Omad (NT) Pty Ltd (No 2) - [2023] NTSC 25

CITATION:McCasker v OMAD (NT) Pty Ltd (No 2) [2023] NTSC 25
PARTIES:McCASKER, Raymond Henry
v

OMAD (NT) PTY LTD
(ACN 128 898 135)

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT exercising Territory jurisdiction
FILE NO:2022-02046-SC
DELIVERED:  8 March 2023
HEARING DATES:  31 January 2023, 9 February 2023,

16 February 2023, written submissions on costs 22 February 2023
JUDGMENT OF:  Huntingford A/AsJ

CATCHWORDS:
PRACTICE AND PROCEDURE – Discovery - Application for non-party discovery – documents produced for Family Court proceedings – implied undertaking not to use documents for other purpose – application not made by party to Family Court proceedings – whether court in separate proceeding can and should order disclosure – express undertaking by solicitor – application granted for limited number of documents – costs in the proceeding
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Hearne v Street (2008) 235 CLR 125
Murray Pest Management Pty Ltd v A & J Bilske Pty Ltd [2009] NTSC 68
Family Law Act 1975 (Cth) s 121
Federal Circuit Court Rules 2001 (Cth)
FederalCircuit and Family Court of Australia (Family Law) Rules (Cth)
Supreme Court Rules 1987 (NT) r 29.02, 32.07, 63.18, 77.01
REPRESENTATION:
Counsel:
Plaintiff:C Ford
Defendant:P Morgan and F Kepert
Solicitors:
Plaintiff:De Silva Hebron
Defendant:Tsoukalis Lawyers
Judgment category classification:    B
Judgment ID Number:  Hun2304
Number of pages:  26

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
McCasker v OMAD (NT) Pty Ltd (No 2) [2023] NTSC 25

No. 2022-02046-SC

BETWEEN:

RAYMOND HENRY MCCASKER
Plaintiff

AND:

OMAD (NT) PTY LTD
(ACN 128 898 135)
Defendant

CORAM: HUNTINGFORD A/AsJ
REASONS FOR DECISION
(Delivered 8 March 2023)
Introduction

On 16 February 2023 I made orders in relation to the plaintiff’s application for non-party discovery, with reasons to be delivered later. These are those reasons. I also invited submissions as to the costs of the application, and this is also a decision on that issue.
By summons filed 16 January 2023 the plaintiff sought, pursuant the Supreme Court Rules 1987 (NT) (SCR), orders for discovery and non-party discovery in relation to the defendant and Damien Paul O’Brien respectively.
As explained further below, the plaintiff also made application, so far as necessary, for orders relieving the plaintiff and his solicitor from certain express and implied undertakings.
Mr O’Brien is the sole director and shareholder of the defendant. The defendant and Mr O’Brien opposed the making of the orders sought by the plaintiff.
The plaintiff relies upon the summons and pleadings, the affidavits of David Robert John De Silva promised 16 January and 8 February 2023 and 17 August 2022 (in particular annexures DDS-a and DDS 7 – 16), paragraph 1 and annexures DPO 18 – 21 of the affidavit of Damian Paul O’Brien promised 20 October 2022, and annexure AJW-2 of the affidavit of Anthony John West promised 20 October 2022. The defendant relies upon the affidavit of John Tsoukalis sworn 25 January 2023. No objection was taken to any of the evidence for the purpose of this application.
Background and evidence
The background to the primary dispute is set out at paragraphs [3] to [8] of my reasons for decision in McCasker v Omad (NT) Pty Ltd [2023] NTSC 1. For current purposes, it is sufficient to record that until 3 May 2022 the plaintiff leased to the defendant premises upon which the defendant operated a bar and restaurant known as the “Virginia Tavern”.
The facts relevant to this interlocutory application are not in dispute. Commencing in 2020, Mr O’Brien was involved in a family law property proceeding with his ex-wife, Ms H, which commenced in the Federal Circuit Court in 2020 and was transferred to the Family Court in April 2021 (‘the family law proceeding’). On 23 March 2020, an order was made by consent in the family law proceeding appointing various experts as “court experts”[1] to value the assets of Mr O’Brien and Ms H. At that time the defendant operated two businesses, the Virginia Tavern and a separate licensed premises trading as the “Coolalinga Tavern”. Both businesses were valued for the family law proceeding.
Six valuations were produced pursuant to the order of 23 March 2020. They are described as: HVAS valuation report 14 October 2020; HVAS valuation report 30 September 2021; HVAS addendum report 1 February 2022; Grant Thornton report 9 April 2021; Affidavit of A Heath 2 February 2022; Affidavit J Box 4 February 2022; and HVAS addendum report 1 February 2022.
At the resumption of argument on the summons on 9 February 2023, counsel for the defendant and Mr O’Brien, with the agreement of counsel for the plaintiff (who had not seen the documents), asked me to consider the family law valuation documents, and I have done so.

Family law valuation raised in this dispute

The family law proceeding was settled on the day it was scheduled for trial and, as a result, none of the valuation reports became evidence in that proceeding.
Sometime before 19 April 2022, Ms H advised the plaintiff in this proceeding that there was a valuation prepared for the family law proceeding and that it valued Mr O’Brien’s interest in the Virginia Tavern at $125,000. The plaintiff passed this information to his solicitor. On 19 April 2023 Mr De Silva wrote to the defendant’s solicitor, Mr Tsoukalis:
We understand your client had the tavern valued as part of his family law proceedings earlier this year. On our understanding the business inclusive of the plant and equipment plus four (4) months trading was valued at $125,000. Based upon this valuation, our client offers to purchase the plant and equipment for $100,000.[2]
On 27 April 2022 Mr Tsoukalis wrote to Mr De Silva making a counter offer of $100,000 for the plant and equipment excluding the gaming machines, and $1,088,100 for the gaming machines and the associated license (GM244) and authorisations (entitlements).[3]
On 3 May 2022 Mr Tsoukalis wrote to Mr De Silva in relation to the reference to the family law valuation. The letter confirmed that there was a report saying that it “was not produced by or on behalf of our client but by a jointly appointed independent expert”. Mr Tsoukalis then asserted that the document was the subject of a “Harman undertaking”, which had been breached, and that there had been a “potential” breach of s 121 of the Family Law Act 1975 (Cth). The letter demanded return of any physical copies of the document, deletion of any electronic copies and an agreement to refrain from making “any reference to those documents going forward including in any expert valuation procedure brought under the lease” and threatened consideration of “proceedings with respect to the breaches”.[4]
On 3 May 2022 Mr De Silva wrote to Mr Tsoukalis advising that neither he nor his client had a copy of the family law valuation.[5] On 6 May 2022 Mr Tsoukalis replied, stating:
We now request that you confirm to us within 7 days that going forward you will not refer to (a) the expert valuation report from the Family Court proceedings or information derived from that report and (b) any other documents (or information derived from those documents) which were required to be produced by my client for the purpose of those proceedings.
Failure to comply with this request will require my client to consider initiating proceedings against you and your client with respect to the breaches.
Further, we note that section 121 of the Family Court Act [sic] does not require that a party be in possession of documents in order for that section to be breached.
On 6 May 2022 Mr De Silva wrote to Mr Tsoukalis:
The information from the family law proceeding is confined to there being a valuation obtained as to the business and the quantum as communicated to you. We are unaware of any expert report being produced.
The information we have referred to is completely unverified. We do not intend relying upon that information nor will we refer to it again in this matter. Realistically by regards to the terms of the lease it is unnecessary for us to do so irrespective of the Harman principle.
I trust that is the end of the issue.
Otherwise I have been quite unwell having tested positive for Covid on Tuesday and have not been at work. My client is also overseas. As such we are presently not in a position to respond to your client’s offer and anticipate we will do so in the latter part of next week.[6]
At the time that Mr De Silva sent the email of 6 May 2022, this proceeding, which was filed on 17 August 2022, had not commenced.
Discovery between the parties
An order dispensing with discovery, subject to any application for particular discovery, was made by consent on 5 September 2022. Consequently, no list of documents was filed by either party. On 31 January 2023, after initial argument on this summons, and in light of then apparent uncertainty as to the nature or status of the documents on the part of the defendant, particularly as to possession, and concerned that the defendant may not have had a full opportunity to consider its position, I ordered that the defendant file and serve a list of documents verified by affidavit by 7 February 2023. The defendants list of documents filed 7 February 2023 does not include the family law valuations. In submissions, the defendant indicated that it has never had possession of those documents, noting that they were prepared for litigation in which the only parties were Mr O’Brien and Ms H.
Non-party discovery
The plaintiff seeks an order for non-party discovery pursuant to r 32.07 of the SCR. The rule states:
On the application of a party to a proceeding the Court may order that a person who is not a party and in respect of whom it appears that he has or is likely have or has had or is likely to have had in his possession a document which relates to a question in the proceeding shall make discovery to the applicant of any such document.
“Question” is defined in r 1.09 as:
Question
means a question, issue or matter for determination by the Court, whether of fact or law or of fact and law, raised by the pleadings or otherwise at any stage of a proceeding by the Court, by a party or by a person, not a party, who has a sufficient interest.
The principles governing applications for non-party discovery were not in dispute.
The family law valuations and the “Harman Undertaking”
Where a document is produced under compulsion in relation to a proceeding in a court, the document, and the information which is contained in it, is subject to an “implied undertaking” that it will not be used for any collateral purpose. This principle is often referred to as a “Harman undertaking” from the leading English case of Harman v Secretary of State for the Home Department[7]. In Australia it is sometimes referred to as the Hearne v Street[8] undertaking after the High Court of Australia case in which Hayne, Heydon and Crennan JJ described the principle:
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits [footnotes omitted].[9]
Although commonly referred to as an implied undertaking, the Hearne v Street principle is a substantive legal obligation.[10] The undertaking is owed to the relevant court by parties to proceedings, but also attaches to any other person who subsequently comes into possession of the relevant information knowing its source. Breach of a Hearne v Street obligation may, depending upon the circumstances, be punishable as a contempt of court.
As pointed out in Hearne v Street,[11] the common law protection is often reproduced and strengthened in rules of court. Rule 14.11 of the Federal Circuit Court Rules 2001,[12] and r 13.07A of the Family Law Rules 2004 were in force at the time of the family law proceeding. The obligation pursuant to r 13.07A of the Family Law Rules applied to any person who inspected or copied a document in relation to a case, whether under the rules or an order. That obligation has been held to apply to an affidavit filed in a proceeding.[13]
The plaintiff argues that no implied undertaking attaches to the information contained in the family law valuations because they were not produced under a “relevant compulsion”. He submits that compulsion involves a situation where the party has no choice but to produce the information. The plaintiff points to the fact that the reports were prepared pursuant to an order made by consent by experts jointly appointed by agreement between the parties.
Although the passage cited above from Hearne v Street makes it clear that the range of documents to which the implied undertaking can apply is broad, recent decisions have emphasised the importance of compulsion in deciding whether particular information is subject to the implied undertaking. Dr Ford, for the plaintiff, referred to the Victorian Court of Appeal decision in R v Silverstein.[14] In upholding the primary judge’s decision dismissing a charge of contempt based on an alleged breach of the implied undertaking, the Court of Appeal noted that the affidavits which had been disclosed were filed by the applicants in support of interlocutory applications in the Magistrates Court. Although Magistrate’s Court rules required the affidavits to be filed, the Court of Appeal agreed with the primary judge that there was no compulsion to make the applications and therefore the information in the affidavits was not subject to the implied undertaking.[15]
The family law valuations were prepared pursuant to a court order for appointment of a “single expert”.[16] The order was made pursuant to

r 15.09 of the Federal Circuit Court Rules 2001 (Cth) which provided that the court may appoint an expert either at the request of a party or on its own motion to “inquire into and report on a question arising in the proceeding”. Pursuant to r 15.10 the report of a court expert was delivered to the Registrar who then sent copies to the parties. The order for the provision of the expert report was made in the context of ongoing proceedings in the Federal Circuit Court, the rules of which required “full and frank disclosure” in relation to financial matters.[17] That disclosure included all income and business interests and would clearly have included information relevant to the shares of Mr O’Brien in the defendant and therefore the value of the defendant’s businesses.[18]
The experts’ reports contain both expert opinion and the information supplied by Mr O’Brien and his former wife on which those opinions are based. Once an order for the expert reports was made, the parties had no option but to provide all necessary information. In my view the information provided by the parties and reproduced in the experts’ reports is protected by the Hearne v Street obligation, as restated in the relevant rules of court. The inherent confidentiality of the information, which the plurality in Hearne v Street referred to,[19] points to that result.
Confidential information as evidence on the interlocutory application
The Hearne v Street obligation prevents disclosure or use of the contents of documents, not the fact of their existence. It has been held that the principle does not prevent a party filing an affidavit stating whether documents of a particular class are in their possession, providing that the contents are not disclosed.[20] On that basis, although I have found that the Hearne v Street obligation applied to the contents of the family law valuations, their existence is a fact outside its scope.
The application for non-party discovery referred to the existence of the family law valuation and the valuation amount of $125,000. The valuation amount is an expert opinion, and its disclosure does not, of itself, reveal any information which was provided under compulsion. If I decided that disclosure of the valuation amount may have involved breach of a Hearne v Street obligation, one option would be to prevent the plaintiff relying upon it in relation to this application.
However, evidence as to the existence of documents of a particular class is sufficient to satisfy the first limb of the test for non-party discovery in this case, without disclosure of their content. Therefore, it is unnecessary for me to decide whether the monetary amount communicated was information which was subject to the implied undertaking.
Question in the proceeding
I turn now to the second issue, namely, whether the family law valuations are relevant in the sense required by r 32.07 of the SCR. The test for non-party discovery is no stricter than the test for discovery between parties.[21] In Murray Pest Management Pty Ltd v A & J Bilske Pty Ltd, Luppino M described the test of relevance, in relation to particular discovery under

r 29.08, this way:
What is a matter relating to a question raised by the pleadings is well established at common law. Compagnie Financiere du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 is the oft cited authority. Succinctly, this states that documents to be discovered are not only those required to be put in evidence to prove or disprove any matter in question but relates also to matters in the action which it is reasonable to suppose contain information which may directly or indirectly either advance a party’s case or damage the case of the other, or may lead to a train of enquiry which may have either of those consequences. [22]
The value of the plant and equipment is a question raised on the pleadings. The parties agree that by clause 22.6(c) of the Lease the sale price of the plant and equipment is the market value for sale as part of a business.[23]
The plaintiff claims[24] that the defendant has repudiated, or alternatively breached, the contract for purchase of the gaming machines by insisting that the price for the plant and equipment included a figure for the entitlements, and that therefore the plaintiff is was entitled to rescind. If the Court finds that the plaintiff is obliged to purchase the gaming machines, there is a dispute as to whether the value of the gaming machines includes the value of any license or authorisation to operate them.[25]
Irrespective of any outcome in relation to the gaming machines, the value of the other plant and equipment, which the plaintiff does not dispute he is obliged to purchase, is a question for determination in this proceeding.[26]
The defendant indicates that it intends to rely at the trial on the evidence of Mr West, a certified practicing valuer. Mr West has provided a valuation[27] of the plant and equipment “as part of a business”, meaning that the assets are valued on the basis that “the entity is a going concern and the assets being valued are in-situ”.[28]
HVAS valuation 14 October 2020
This report values the defendant’s business of the Virginia Tavern on the basis that it was sold as a going concern as at 14 October 2020. There are two scenarios considered, with and without a lease extension. The methodology is described as the “capitalisation of adjusted net profit approach”.
The defendant and Mr O’Brien argued that this (and all of the family law valuations) cannot be relevant in this proceeding because they were not made “pursuant to clause 22.6 of the Lease”. They point out that the valuations were by a different valuer, for a different purpose, and that a different methodology is used.

As Mr West explains in his report, plant and equipment can be valued in different ways.[29] Mr West’s valuation of the plant and equipment was “as part of a business”. The valuation of the business by HVAS was as a “going concern”. At section 2.3 at page 13 of the HVAS report the author defines “market value going concern” as:
The value of all tangible assets, such as land and buildings, plant, furniture, equipment and other chattels, and all intangible assets, such as goodwill and licence, in the hands of the purchaser acquiring them as part of the business for they are designed and used.
The valuation of the Virginia Tavern as a going concern would be expected to include as one of its elements the value of the defendant’s plant and equipment. This is confirmed by the reference at page 26 of the HVAS report which states that the valuation:
includes all items of plant, machinery equipment, partitions, furniture and other such items which may be been installed (by the occupant/operation) or are used in connection with the enterprise carried on within the property.
Therefore, the HVAS valuation of 14 October 2020, is likely to be capable of, directly or indirectly, bearing upon the defendant’s case because it relates to the same business, must include consideration of the same assets (namely the plant and equipment including the gaming machines), and was prepared less than 19 months before the termination of the lease.
The HVAS valuation has attached to it various documents, including a letter of instruction. In my view, these documents are necessary to properly understand the report and are therefore part of it. I have considered that the HVAS report does, as the defendant and Mr O’Brien say, touch on some matters which are not likely to be in issue in this proceeding. However, I consider that it would be impractical, and likely to cause unnecessary confusion, and potentially injustice to both parties, if those annexures to the report were removed or redacted.
HVAS valuation 30 September 2021
This document is also a valuation of the Virginia Tavern. Its purpose is to update the previous valuation of 14 October 2020 by assessing the market value of the leasehold interest in the Virginia Tavern as at 30 September 2021. The valuation methodology is the same as the earlier valuation. The business is valued as a going concern and includes the value of plant, furniture and equipment and other chattels, together with intangible assets.[30] At page 26 of the report the same statement referred to at [39] above in relation to the 14 October 2020 report states that the valuation includes all items of plant and equipment. The relevance of the plant and equipment to this valuation is confirmed at page 55 where the author writes:
The adopted Leasehold Value effectively represents an allocation for the written down value of plant and equipment noting much of the plant and equipment is over 10 years old and has negligible added value.
The 30 September 2021 HVAS valuation addresses the question of the approach to the valuation of the gaming machines directly at page 50. The defendant and Mr O’Brien submitted that this material could go no further than a “chain of inquiry” type relevance, which is insufficient. I do not agree. The material goes to the existence of a different approach to the valuation of gaming machines, and is potentially relevant to quantum.
For essentially the same reasons as in relation to the valuation of 14 October 2020, the HVAS valuation of 30 September 2021 is relevant.
HVAS addendum report 1 February 2022
The HVAS valuation of 14 October 2022 valued the business of the Virginia Tavern based on two scenarios. The updated valuation of 30 September 2021 considered only “scenario A”, in which the lease expired on 3 May 2022. The HVAS addendum of 1 February 2022 is directed to the value of the Virginia Tavern business assuming a lease extension. On its own, this letter is of little relevance to the value of the plant and equipment. However, it enables a proper comparison between the opinions given by HVAS as at the two dates, a matter not included in the updated report of 30 September 2021. It is therefore relevant on the basis that it fills a “gap” in the 30 September 2021 report.
Affidavit of A Heath 2 February 2022
This is an affidavit made by Mr Heath of HVAS on 2 February 2022 and filed in the family law proceeding. The affidavit is mainly formal, however it annexes Mr Heath’s valuation of the Coolalinga Tavern (the other business run by the defendant) as at 30 September 2021. There are a few references to the Virginia Tavern in this document. Mr Heath refers at paragraph 5 of the affidavit to having instructions to value the Virginia Tavern but the valuations dated 14 October 2020 and 30 September 2021 referred to above are not annexed.
In the annexed valuation of the Coolalinga Tavern dated 30 September 2021, there are references at pages 61 and 62 to the Virginia Tavern and to the gaming machines. However, those references respond to questions raised as to the value of the gaming machines in the letter from Broun Burreket and Abrahams solicitors of 29 January 2022. That letter is also annexed to the 20 September 2021 HVAS valuation of the Virginia Tavern, and the comments in the Coolalinga Tavern valuation are identical to those in the Virginia Tavern report. The Coolalinga Tavern valuation does not offer any other opinion or information relevant to the value of the plant and equipment or the gaming machines (or their entitlements) at the Virginia Tavern. The information it contains is, with the minor exception of the material also included in the September 2021 HVAS valuation, irrelevant to any question in this proceeding.
Grant Thornton Report 9 April 2021 and affidavit of Joseph Box 4 February 2022
Mr Joseph Box is an associate of the Institute of Chartered Accountants and a partner of the firm known as Grant Thornton, Chartered Accountants in Brisbane. He was instructed as a single expert, in accordance with the orders of the Federal Circuit Court, to provide a valuation of Mr O’Brien’s equity (shares) in the defendant and Ms H’s interests in the companies in which she was involved. Mr Box produced two reports. The first dated 9 April 2021 and the second updated report of 4 February 2022 which is annexed to his affidavit of the same date.
In preparing his reports, Mr Box relied upon the valuations of the Virginia Tavern and Coolalinga Tavern prepared by Mr Heath of HVAS. He did not, except in one small but important respect, make any comment as to the plant and equipment, or the gaming machines, or their entitlements at the Virginia Tavern. As stated above, the HVAS valuation of the Virginia Tavern is said to include plant and equipment. However, it also stipulates that the value is of a “leasehold interest”. As the definition of “leasehold interest” in the HVAS reports seems to exclude plant and equipment, Mr Box confirmed that issue with Mr Heath. To give context and understanding, pages 20 and 21 of the report of 4 February 2022 are relevant. The remainder of the document is not relevant.
Other documents sought
The application for non-party discovery sought all communications, instructions, drafts and associated documents. I have considered the list produced by Ms Kepert in her submissions on behalf of the defendant and Mr O’Brien. The most important documents which are required to understand the HVAS reports, and which are relevant on that basis, are those annexed to the reports. There is one exception; the annexures to the letter described at Ms Kepert’s submissions numbered 2.14 are not included in the report. I think that those annexures, particularly the letter from Sovereign Lending the contents of which are directly referred to in the HVAS report, are relevant.
Discretionary factors
For the reasons set out above, the discretion to order non-party discovery is enlivened. A range of discretionary factors must be considered. The application was made at a late stage in the proceeding. However, counsel for the plaintiff indicated that the trial would be unlikely to be affected, in the sense of additional experts being required, as a result of discovery being ordered. Case management principles are relevant to the discretion to order discovery and assume particular importance with respect documents which are, at best, likely to be ancillary to the HVAS reports. It is therefore appropriate to confine the non-party discovery to the documents I have assessed as most relevant, bearing in mind the stage of the proceeding, the risk of delay and escalating costs.
Mr O’Brien is the sole director and controlling mind of the defendant, and is therefore a person integrally involved in this proceeding. In addition, it seems that there is little practical difficulty, or cost, in making discovery, particularly if it is confined to the relevant documents I have identified above. Based on those factors it seems that there is little to no prejudice to Mr O’Brien.
The fact that the documents are subject to the Hearne v Street obligation is relevant in relation to the exercise of the discretion. Information subject to the implied undertaking owed to one court may nonetheless be subject to orders for discovery and production in different proceedings in another court, without the need to first apply to the original court for a discharge of the undertaking.[31] In Esso Australia Resources Ltd v Plowman,[32] Mason CJ, with whom Dawson and McHugh JJ agreed, said:
No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, e.g. discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.
I carefully considered the submissions of Mr O’Brien and the defendant, particularly as to the nature of the proceedings for which the documents were created and the expectation of confidentiality which attaches by virtue of the implied undertaking and r 6.04 of the Family Court Rules 2021 (Cth).
I have also considered whether there is any unfairness to the defendant or Mr O’Brien attaching to the way in which the information was received. I was concerned that it is inappropriate that any action in breach of the obligation or the rules of the Family Court should be seen to be sanctioned, even indirectly, as a result of any order made by this Court. However, those consideration must be weighed against the need to ensure that this Court is able to adjudicate the dispute having available all relevant material.[33]
The express undertaking
The defendant alleges that Mr De Silva, by his email referred to in paragraph [15] above, gave an express undertaking that he would not refer to the family law valuations. While not admitted for all purposes, for the purpose of this application, the parties agreed that I should proceed as if such an undertaking were given.
In considering whether the plaintiff and his lawyers should be released from the express undertaking I have taken the following matters into account:
(a)There was no suggestion that Mr De Silva or the plaintiff had breached the undertaking at any time since 6 May 2022;
(b)The undertaking was given three months prior to the commencement of this proceeding;
(c)The undertaking was given upon prompting by a letter which in my view erroneously asserted a “potential” breach of s 121 of the Family Law Act 1975 (Cth), and overstated the breadth of the Hearne v Street obligation in so far as mere existence of the documents was concerned;
(d)The undertaking is not of the sort upon which the defendant, or Mr O’Brien, has, or could have, relied to their detriment. For that reason, it is unlikely that an injunction would have been granted, had the undertaking not been given;
(e)The argument which was ventilated in this application as to the discovery of the documents and the relevance, if any, of the implied undertaking could have been had at any time, irrespective of whether an undertaking was given or not; and
(f)The undertaking was given at a time when the solicitor involved was unwell and under some pressure.
As indicated above, I made orders requiring Mr O’Brien to discover the documents elaborated. Continuing adherence to the purported express undertaking is inconsistent with those orders, so far as the particular documents to be discovered are concerned.
This is one of those situations where a practical approach, rather than a technical focus upon complicated legal principles, is appropriate. The defendant is correct to say that solicitors’ undertakings are not given lightly and are fundamental to the operation of the legal system. If he is held to the undertaking, Mr De Silva may find himself in a position where he would find it difficult to continue to act for the plaintiff. This would be likely to increase the cost and delay to both parties given the proximity of the trial. To put the matter beyond doubt, I ordered that Mr De Silva, his firm, and the plaintiff, should be released from the express undertaking to the extent necessary to facilitate my orders as to non-party discovery. I regard this order as incidental to the order for non-party discovery and in making it I rely upon the inherent power of the Court and r 77.01(a) of the SCR.
Sufficiency of the defendant’s discovery
The plaintiff also makes complaint as to the sufficiency of the defendant’s discovery in accordance with the affidavit of discovery filed and served on 1 February 2023, particularly as to valuations of the Virginia Tavern said to have been relied upon by Mr O’Brien in sourcing finance in 2020-2022. The affidavit of David De Silva of 8 February 2023 refers to Mr O’Brien purchasing, in his personal name, real estate in 2020.
However, there is no evidence that there was any valuation of the business of the Virginia Tavern for the purpose of Mr O’Brien purchasing the property. It is supposition. While I can understand the plaintiff’s interest, the inquiry is very close to fishing. The only possible relevance could be on a “train of inquiry” basis, which is insufficient.
Given the proximity of the hearing and the lack of compelling evidence that the documents either exist or are relevant, I decline to make any further orders in that respect.
Costs
I received submissions as to costs and by agreement the parties requested that I determine that issue on the papers.
The usual position pursuant to r 63.18 of the SCR is that costs of an interlocutory application are costs in the cause.
The plaintiff was successful in this application in that orders for discovery have been made, although not in relation to all of the documents which were sought. The subsequent application for additional discovery from the defendant, which took up very little time at the hearing, was unsuccessful. The response of the defendant, and Mr O’Brien, to the plaintiff’s application was, initially, somewhat unclear. However, on the second occasion on which the matter was argued, after the defendant had had the opportunity to consider the issue of discovery more fully, the approach of both respondents was very constructive.
In the circumstances, it is appropriate that the question of costs be dealt with in accordance with r 63.18, that is, they shall be costs in the proceeding.
By agreement these reasons are to be forwarded to counsel by email.

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[1] Federal Circuit Court Rules 2001 (Cth) r 15.09.

[2] Affidavit David De Silva 16 January 2023 paragraph [6].

[3] DDS-24 affidavit David De Silva 16 January 2023.

[4] DDS-26 affidavit David De Silva 16 January 2023.

[5]DDS-27 affidavit David De Silva 16 January 2023

[6] DDS-28.

[7] [1983] 1 AC 280.

[8](2008) 235 CLR 125 (‘Hearne’).

[9] Ibid 154-155 (Hayne, Heydon and Crennan JJ).

[10]Ibid 131 (Gleeson CJ), 157-160 (Hayne, Heydon and Crennan JJ).

[11] Ibid 155-156.

[12]
The Federal Circuit Court Rules 2001 and the Family Law Rules 2004 were replaced by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) which contains provisions to the same effect, see

r 6.04 and Schedule 1, clause 4(7). Rule 6.04 has been held to be a restatement of the Hearne v Street obligation: Adair v Adair (2021) 64 Fam LR 533 at 536 (‘Adair’).

[13] Adair (n 12) 537.

[14][2020] VSCA 233.

[15] Above, n 15, [85].

[16]Federal Circuit Court Rules 2001 (Cth) r 15.09 (at the time) and Family Law Rules 2004 (Cth) r 15.46.

[17] Federal Circuit Court Rules (n 17) r 24.03.

[18] See also: Family Law Rules 2004 (Cth), rr 13.04, 15.45, 14.48.

[19] Hearne (n 8) 158-160 (Hayne, Heydon and Crennan JJ).

[20] Clifford v Vegas Enterprises Pty Ltd [2009] FCA 1204, [28] citing with approval Geneva Finance Ltd (Receiver and Manager Appointed v Boys [2001] WASC 348, [29]–[30].

[21] It was argued that the test for non-party discovery is not as strict. However, on the facts of this matter it is unnecessary to consider that question.

[22] [2009] NTSC 68, [7]. His Honour went on to note r 29.02(3) which states that a party is not required to discover a document which is relevant only because it may lead to a train of inquiry.

[23] See paragraph [50] Amended Statement of Claim (ASOC) and paragraph [60] of the Amended Defence and Counterclaim (ADACC).

[24]ASOC [30]–[39], [45]–[48], [52]–[56], [58]–[59]. Disputed by the defendant in particular at ADACC [47], [52], [59], [61]–[65].

[25] ASOC [51], ADACC [29]–[32], [59].

[26]ASOC [39]; ADACC [32], [67]; Amended Reply and Defence to Counterclaim (ARADCC) [12].

[27] Annexures AJW 2 to affidavit of Anthony John West 20 October 2022.

[28]Annexure AJW-2 p. 9, affidavit Anthony West dated 20 October 2022.

[29] AJW annexure 2, p 7 under heading “valuation methodology”.

[30] HVAS 30 September 2021, p 13.

[31]Elfar v Commonwealth of Australia [2022] FCA 1402, [69]-[71].

[32](1995) 183 CLR 10, 33.

[33] Bondelmonte v Bondelmonte [2017] FamCA 924, [83] – [89]