Merim Proprietary Limited v The Oaktower Partnership Proprietary Limited
[2007] FCA 1383
•29 August 2007
FEDERAL COURT OF AUSTRALIA
Merim Proprietary Limited v The Oaktower Partnership Proprietary Limited [2007] FCA 1383
PRACTICE AND PROCEDURE – Subpoena duces tecum
Federal Court Rules O 27 r 4
Trade Practices Act 1974 (Cth)
Corporations Act 2001 (Cth)MERIM PTY LTD & ANOR v THE OAKTOWER PARTNERSHIP PTY LTD & ANOR
VID 641 OF 2007HEEREY J
29 AUGUST 2007
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 641 OF 2007
BETWEEN:
MERIM PTY LTD & ANOR
ApplicantsAND:
THE OAKTOWER PARTNERSHIP PTY LTD & ANOR
Respondents
JUDGE:
HEEREY J
DATE OF ORDER:
29 AUGUST 2007
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Pursuant to O 27 r 4:
(a)the words “to date” in each of paragraphs 1, 2, 4, 5, 8, 10 and 11 of the schedule to the subpoena (“the subpoena”) issued by the Applicants and dated 23 July 2007 and addressed to Golden Circle Ltd (“Golden Circle”) are set aside and replaced with the words “to the date of the subpoena”;
(b)the words “1 September 2006” in each of paragraphs 1 and 2 of the schedule to the subpoena are set aside and replaced with the words “1 November 2006”;
(c)paragraph 9 of the schedule to the subpoena is set aside;
(d)the words “concerning any meeting or dealings with grower/shareholders
of the Company or” in paragraph 11 of the schedule to the subpoena are set aside.
2.Golden Circle produce documents pursuant to paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 10 and 11 of the schedule to the subpoena by producing to the Registry by 12 noon on 3 September 2007:
(a)copies redacted as Golden Circle contends they should be redacted;
(b)in unredacted form.
3.Until further order of the Court inspection of the documents produced pursuant to paragraph 2 above is restricted to solicitors and/or counsel representing the Applicants and upon the execution, filing and service on Minter Ellison, solicitors for Golden Circle, of the confidentiality undertakings in the form of Annexure “A” to this Order.
4.Until further order of the Court inspection of the documents produced pursuant to paragraph 2 above is restricted to solicitors and/or counsel representing the Respondents and upon the execution, filing and service on Minter Ellison, solicitors for Golden Circle, of the confidentiality undertakings in the form of Annexure “A” to this Order.
5.The Applicants have liberty to apply, upon provision of not less than 48 hours written notice to Minter Ellison, solicitors for Golden Circle, for orders or directions that:
(a)inspection of the documents produced pursuant to paragraph 2 above be permitted by persons other than solicitors and/or counsel representing the Applicants without the execution of a confidentiality undertaking;
(b)any part or the whole of any redaction of any document by Golden Circle produced pursuant to paragraph 2 above be unmasked.
6.Golden Circle’s Motion by Notice dated 14 August 2007 is otherwise dismissed.
7.The costs of Golden Circle’s Motion dy Notice dated 14 August 2007 are reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 641 OF 2007
BETWEEN:
MERIM PTY LTD & ANOR
ApplicantsAND:
THE OAKTOWER PARTNERSHIP PTY LTD & ANOR
Respondents
JUDGE:
HEEREY J
DATE:
29 AUGUST 2007
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Golden Circle Limited (the Company) has brought a motion seeking to set aside a subpoena duces tecum issued by the applicants. The company says the subpoena is too wide, fishing and unfairly prejudicial.
This proceeding was commenced by the applicants Merim Pty Ltd and Mr Peter Yunghanns on 17 July 2007. Mr Yunghanns is a director of Merim. In the statement of claim it is alleged that Merim holds approximately 5.9 per cent of the issued share capital in the company. It is further alleged that on 18 May 2007 Merim made an offer to acquire a minority interest of ordinary shares in the Company at a price of 65 cents per share. I was told in the course of argument that while the offer in its terms expired on 30 June 2007 Merim remains willing and able to acquire further shares.
The statement of claim further alleges that in or about late May 2007 the Company retained the respondents The Oaktower Partnership Pty Ltd and Mr Oliver Klotz a director of Oaktower to provide corporate advisory services to it “with a view to persuading shareholders not to sell their shares in the Company to Merim.” The specifics of the allegation are as follows:
Particulars of the retainer are unknown to the Applicants save to say that at a meeting of shareholders of the Company held on 1 June 2007 at Beerwah in Queensland the Board of the Company introduced Klotz to those present so that he may handle the “Yunghanns issue”. Further particulars will be provided following discovery.
It is then alleged that on about 1 June 2007 Oaktower by its servant or agent Klotz represented to a meeting of a group of shareholders of the Company in the presence of the Board of Directors of the Company that (a) Merim and Yunghanns intended to and would decimate the grower/shareholders of the Company by making the Company purchase fruit from overseas; (b) if Merim and Yunghanns acquired further shares in the Company then they would cause the Company to stop purchasing produce from local growers and (c) Merim and Yunghanns had caused Sunbeam Foods Limited to stop buying produce locally and to by all fruit from overseas.
The statement of claim alleges that the statements made at the 1 June 2007 meeting were misleading and deceptive and in contravention of the Trade Practices Act 1974 (Cth) and the Corporations Act 2001 (Cth).
At the time of the hearing of the motion no defence had been filed, but at an earlier directions hearing I was informed that the respondents deny the alleged statements were made. An application for an interlocutory injunction is currently on foot.
Part of the background to this case is that the Company is considering alternatives for major financial restructuring. An extraordinary general meeting has been called for 24 September 2007. The meeting will also deal with motions for the removal of some directors.
I turn first to some preliminary matters. First, as to confidentiality, counsel for the applicants told the court that counsel and solicitors for the applicants will give an undertaking as to confidentiality in the form of the schedule annexed to these reasons.
Secondly, as to redaction, the Company does not dispute the validity of the subpoena in relation to categories 3, 6 and 7, subject to redaction of irrelevant material. Insofar as other categories are found to be valid, the Company may also seek to redact portions of documents. After discussion with counsel, I indicated that I will deal with this question on the basis that I will be provided with redacted and unredacted versions of documents otherwise liable to be produced. I will give a preliminary ruling as to what redaction should be accepted. Mr Corbett for the applicants will have the opportunity to make submissions on the proposed redactions. He will be given the unredacted versions, subject, of course, to the confidentiality undertaking.
Thirdly, many of the categories of documents in the subpoena speak of documents during a period from a particular date “to date”. Mr Corbett accepts that the better date is the date of the issue of the subpoena, namely 23 July 2007. The terms of the subpoena should be amended accordingly.
Categories 3, 6 and 7 are not in dispute and read as follows:
3.Any original or copy presentation or report prepared by Oaktower or Klotz and presented to the Board of Directors of the Company by Oaktower or Klotz regarding or recording information in respect of the financial performance of, valuation, or earnings of Sunbeam Foods Limited during the period from 1 September 2006 to date.
6. All notes, memorandum, correspondence, reports, minutes or other documents recording a meeting of the Board of Directors of the Company with shareholders of the Company held at the Beerwah RSL in Queensland on or about 1 June 2007.
7.All notes, memorandum, correspondence, reports, minutes or other documents passing between the Company and Oaktower or the Company and Klotz regarding a meeting of the Board of Directors of the Company with shareholders of the Company held at Beerwah RSL in Queensland on about 1 June 2007 including but not limited to any document created after that date recording what was said at that meeting.
Categories 1 and 2 are:
1.Any original or copy letter of offer, retainer, consultancy agreement, services agreement or other document recording the terms of engagement between Golden Circle Limited (“the Company”) and Oaktower Partnership Pty Ltd (“Oaktower”) for the provision of consulting, advisory or valuation services by Oaktower to the Company during the period from 1 September 2006 to date.
2.Any original or copy letter of offer, retainer, consultancy agreement, services agreement or other document recording the terms of engagement between the Company and Mr. Oliver Klotz (“Klotz”) for the provision of consulting, advisory or valuation services by Klotz to the Company during the period from 1 September 2006 to date.
In my opinion, the terms of any retainer are relevant as going to the likelihood or otherwise of Mr Klotz making the alleged statements.
It was said that the commencement date of 1 September 2006 for these categories was too early given that the Merim offer was not made until 18 May 2007.
The applicants filed an affidavit by Mr John Cook who was the Chief Executive Officer of the Company from 1 March 2006 until 6 April 2007. He deposes that “in about November 2006” the Company retained Oaktower to advise on a possible acquisition of a firm called P & N Foods. Mr Klotz was the director of Oaktower responsible for providing the advice to the Company. In the course of his work on this retainer, Mr Klotz advised the Board of the Company regarding other recent comparable sales of food businesses, including Sunbeam Foods. The matter is not put any more precisely than that, but I think it would be reasonable if the commencing date of the period in categories 1 and 2 was altered to 1 November 2006.
Categories 4 and 5 are:
4.Any original copy deed of indemnity, confidentiality agreement, indemnity agreement, undertaking or other agreement between the Company and Oaktower or the Company and Klotz regarding the provision of information to grower/shareholders of the Company by Oaktower or Klotz in respect of the offer to acquire shares in the Company made by Merim Pty Ltd on 18 May 2007.
5.Any original copy deed of indemnity, indemnity agreement, undertaking or other agreement between the Company and Oaktower or the Company and Klotz regarding the provision of information to grower/shareholders of the Company by Oaktower or Klotz in respect of the financial performance of, or the acquisition of goods for re-supply by Sunbeam Foods Limited.
In my view, the arrangements between Mr Klotz and the Company as to his dealings with shareholders in connection with the Merim offer provide the immediate background to the meeting of 1 June and may provide documents which tend to show the likelihood or otherwise of Mr Klotz making the alleged statements.
Category 8 is as follows:
8.Any original or copy letter, memo or note recording any instructions or directions given by the Company to Oaktower or Klotz regarding the offer by Merim Pty Ltd to acquire shares in the Company during the period from about 18 May 2007 to date.
The instructions given by the Company to Oaktower and Mr Klotz may show what Mr Klotz was to do or not do in relation to the alleged purpose of defeating the Merim offer and thus would bear on the probability or otherwise of him making the alleged statements.
Category 9 is as follows:
9.Any original or copy letter, memo, minute, note, paper or report recording any advice given to the Company by Oaktower or Klotz regarding their dealings with shareholders of the Company given during the period from 18 May 2007 to date.
I think this is too wide. It is unrelated to the Merim offer or Sunbeam or the meeting.
Category 10 is as follows.
10.Any original or copy letter, memo, minute, note, time sheet, invoice, paper or report recording or in respect of any advice given to the Company by Oaktower or Klotz regarding the Company’s dealings with Merim Pty Ltd or Mr. Peter Yunghanns during the period from 18 May 2007 to date.
I think this is sufficiently related to the Merim offer.
Category 11, with the additions of letters (a) after the word “Klotz,” and (b) after the word “or” in the fourth line reads as follows:
11.Any original or copy minute, report, memo, note or board paper recording or containing any briefing given to the Board of Directors of the Company by Oaktower or Klotz (a) concerning any meeting or dealings with grower/shareholders of the Company or (b) relating to the offer to acquire shares in the Company made by Merim Pty Ltd during the period 18 May 2007 to date.
I think 11(a) is too wide. It is not related to the Merim offer or Sunbeam or the meeting, but otherwise category 11 is valid.
It was put by Mr Austin on behalf of the Company that categories 6 and 7 catch documents relating to what happened at the meeting. If the document did not come into existence before 1 June or does not record what happened at the meeting, it could not be said to be relevant.
It often happens that categories in a subpoena overlap. A particular document may fall within two or more categories. This is not necessarily fatal. In the present case documents “recording” or “regarding” the meeting may not quite catch some other documents which, perhaps in an indirect way, throw light on the probabilities of what happened. An example is the document dealing with the nature of The Oaktower Partnership’s retainer.
The Court orders that:
1.Pursuant to O 27 r 4:
(a)the words “to date” in each of paragraphs 1, 2, 4, 5, 8, 10 and 11 of the schedule to the subpoena (“the subpoena”) issued by the Applicants and dated 23 July 2007 and addressed to Golden Circle Ltd (“Golden Circle”) are set aside and replaced with the words “to the date of the subpoena”;
(b)the words “1 September 2006” in each of paragraphs 1 and 2 of the schedule to the subpoena are set aside and replaced with the words “1 November 2006”;
(c)paragraph 9 of the schedule to the subpoena is set aside;
(d)the words “concerning any meeting or dealings with grower/shareholders
of the Company or” in paragraph 11 of the schedule to the subpoena are set aside.
2.Golden Circle produce documents pursuant to paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 10 and 11 of the schedule to the subpoena by producing to the Registry by 12 noon on 3 September 2007:
(a)copies redacted as Golden Circle contends they should be redacted;
(b)in unredacted form.
3.Until further order of the Court inspection of the documents produced pursuant to paragraph 2 above is restricted to solicitors and/or counsel representing the Applicants and upon the execution, filing and service on Minter Ellison, solicitors for Golden Circle, of the confidentiality undertakings in the form of Annexure “A” to this Order.
4.Until further order of the Court inspection of the documents produced pursuant to paragraph 2 above is restricted to solicitors and/or counsel representing the Respondents and upon the execution, filing and service on Minter Ellison, solicitors for Golden Circle, of the confidentiality undertakings in the form of Annexure “A” to this Order.
5.The Applicants have liberty to apply, upon provision of not less than 48 hours written notice to Minter Ellison, solicitors for Golden Circle, for orders or directions that:
(c)inspection of the documents produced pursuant to paragraph 2 above be permitted by persons other than solicitors and/or counsel representing the Applicants without the execution of a confidentiality undertaking;
(d)any part or the whole of any redaction of any document by Golden Circle produced pursuant to paragraph 2 above be unmasked.
6.Golden Circle’s Motion by Notice dated 14 August 2007 is otherwise dismissed.
7.The costs of Golden Circle’s Motion by Notice dated 14 August 2007 are reserved.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate:
Dated: 29 August 2007
Counsel for the Applicant: P Corbett Solicitor for the Applicant: Strongman & Crouch Counsel for the Respondent: E Ruddle Solicitor for the Respondent: Holman Webb Counsel for Golden Circle Limited: H N G Austin Solicitor for Golden Circle Limited: Minter Ellison Lawyers Date of Hearing: 29 August 2007 Date of Judgment: 29 August 2007 SCHEDULE
CONFIDENTIALITY UNDERTAKING
1.I, [insert name], [Counsel / Solicitor] of [Insert address] undertake to the Court and to Golden Circle Limited that, unless required by law or permitted by Court Order, I will not without the prior written consent of Golden Circle Limited:
1.1Disclose directly or indirectly the documents (the Documents) produced pursuant to the subpoena dated 23 July 2007 issued at the request of the applicants or any copies made thereof under clause 1.3 below or any part of their content to any person other than the persons described in paragraph 3 below.
1.2Use directly or indirectly the Documents or any copies made thereof under clause 1.3 below or any part of their content for any purpose other than the conduct of Federal Court Proceeding No. VID 641 of 2007 and any appeals therefrom (collectively, the proceedings).
1.3Make any copies of the Documents or any part thereof other than for the purpose of the conduct of the proceedings.
2.I further undertake to the Court and Golden Circle Limited that, within 28 days of the conclusion of the proceedings, I will destroy all copies of the Documents in my possession, power or control or give them to the solicitors for Golden Circle Limited.
3.The persons to whom I may disclose the Documents are the solicitors or barristers retained by the applicants in the proceedings listed in Annexure “1” who Golden Circle Limited has agreed may receive the Documents and who have first signed a Confidentiality Undertaking relating to the Documents on the same terms and conditions as set out in herein.
Dated: 2007
Signed ……….…………………………………….
Annexure 1
Applicants' Legal Advisors APPLICANTS' LEGAL ADVISORS
Mr Leslie Glick, Senior Counsel
Room 1803
Owen Dixon Chambers West
525 Lonsdale Street
MELBOURNE VIC 3000Mr Phillip Corbett, Counsel
Room 0407
Joan Rosanove Chambers
550 Lonsdale Street
MELBOURNE VIC 3000Mr Andrew Joseph, Solicitor
Strongman & Crouch Solicitors
4th floor, Bank House
11 Bank Place
MELBOURNE VIC 3000RESPONDENT’S LEGAL ADVISORS
David Forbes, Counsel
Room 620
Owen Dixon Chambers West
525 Lonsdale Street
MELBOURNE VIC 3000
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