Mirabela Nickel Ltd (in Liquidation) (Receivers and Managers Appointed) v Mining Standards International Pty Ltd [No 6]
[2023] WASC 125
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MIRABELA NICKEL LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) -v- MINING STANDARDS INTERNATIONAL PTY LTD [No 6] [2023] WASC 125
CORAM: HILL J
HEARD: 19 APRIL 2023
DELIVERED : 19 APRIL 2023
PUBLISHED : 19 APRIL 2023
FILE NO/S: CIV 1806 of 2019
BETWEEN: MIRABELA NICKEL LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
First Plaintiff
MIRABELA INVESTMENTS PTY LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
Second Plaintiff
MARTIN MADDEN, SCOTT DAVID HARRY LANGDON AND RICHARD SCOTT TUCKER as joint and several receivers and managers of MIRABELA NICKEL LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
Third Plaintiff
MARTIN MADDEN, SCOTT DAVID HARRY LANGDON AND RICHARD SCOTT TUCKER as joint and several receivers and managers of MIRABELA INVESTMENTS PTY LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)
Fourth Plaintiff
AND
MINING STANDARDS INTERNATIONAL PTY LTD
Defendant
Catchwords:
Practice and procedure - Application for leave to use pleadings and discovered documents in other proceedings - Substantive legal obligation not to disclose documents for a collateral purpose - Whether special circumstances - Turns on own facts
Legislation:
Competition and Consumer Act 2010 (Cth) Sch 2
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | S C Wong |
| Second Plaintiff | : | S C Wong |
| Third Plaintiff | : | SC Wong |
| Fourth Plaintiff | : | S C Wong |
| Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Clayton Utz |
| Second Plaintiff | : | Clayton Utz |
| Third Plaintiff | : | Clayton Utz |
| Fourth Plaintiff | : | Clayton Utz |
| Defendant | : | Russells |
Case(s) referred to in decision(s):
Mirabela Nickel (in liquidation) (Receivers and Managers appointed) v Mining Standards International Pty Ltd [No 5] [2023] WASC 62
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
HILL J:
By an amended application filed 18 April 2023, the plaintiffs seek leave to use certain documents filed or produced by the defendant in these proceedings for the purposes of proceedings commenced by the defendant in the Queensland registry of the Federal Court of Australia, being proceedings QUD 355 of 2021 (Federal Court proceedings). The defendant did not seek to be heard on the application and did not appear at the hearing.
In support of the application, the plaintiffs filed a book of materials containing the documents which they seek to use, and the pleadings in the Federal Court Proceedings. The plaintiffs also filed a detailed outline of submissions.
At the conclusion of the hearing, I made orders in the terms sought by the plaintiffs and said that I would subsequently publish reasons for my decision. These are those reasons.
These proceedings
On 8 May 2019, the plaintiffs commenced these proceedings against the defendant. The primary issue in these proceedings was whether the first and second plaintiffs had validly terminated an asset sale agreement of November 2017 between the plaintiffs, Mirabela Mineração do Brasil Ltda (MMB), and the defendant (Agreement). On 3 March 2023, I delivered my reasons for decision in respect of this matter.[1]
[1] Mirabela Nickel (in liquidation) (Receivers and Managers appointed) v Mining Standards International Pty Ltd [No 5] [2023] WASC 62.
As summarised in my earlier reasons, 10 issues required determination in these proceedings namely:[2]
[2] Mirabela Nickel (in liquidation) (Receivers and Managers appointed) v Mining Standards International Pty Ltd [No 5] [35].
(a)On a proper construction of the Agreement, what was the date by which the defendant was required to execute binding finance agreements for an amount equal to the consideration under the Agreement (Finance Condition)?
(b)Did the parties agree to extend the date for satisfaction of the Finance Condition until 22 November 2017?
(c)Is MSI estopped from denying the date the Agreement was exchanged was 1 November 2017?
(d)Did the Receivers agree to provide MSI with 24 hours' notice prior to terminating the Agreement? If so, are the receivers estopped from issuing the notice of termination?
(e)Did Mr Tucker on behalf of the plaintiffs make false and misleading statements as to whether the plaintiffs intended to terminate the Agreement and whether they were in discussions with other parties?
(f)Was the termination of the Agreement founded upon unconscionable or inequitable conduct by the Receivers by asserting a right to terminate under cl 2.5 of the Agreement which they knew or must have known to be false?
(g)Were the Receivers in breach of cl 2.6 of the Agreement? If so, did this disentitle them from exercising any right to terminate the Agreement?
(h)Was the notice of termination issued by the Receivers on 22 November 2017 valid?
(i)Did MSI elect to accept the Receivers' termination of the Agreement?
(j)Did MSI release the Receivers from any claim it might otherwise have by reason of cl 9.1 of the Agreement?
The Federal Court proceedings
In 2021, MSI commenced the Federal Court proceedings against Atlantic Nickel Mineração Ltda, which was previously known as MMB. On 13 April 2023, MMB filed a cross‑claim in the Federal Court Proceedings against, amongst others, the third and fourth plaintiffs in these proceedings (Receivers).
It is clear from the pleadings filed in the Federal Court proceedings that the claim by MSI against MMB also arises out of the Agreement. In the Federal Court proceedings, MSI contends that:
(a)in breach of cl 2.6 of the Agreement, the Receivers solicited an offer from Appian Capital Advisory LLP;
(b)notice was required to be provided to MSI before the Receivers could terminate the MSI Sale Agreement;
(c)Mr Tucker engaged in conduct that was false and misleading by stating to Mr Milbourne: 'There are categorically no other offers on the table' and 'I am not looking to terminate'; and
(d)the Receivers failed to provide reasonable assistance to MSI as required by the Agreement in that:
(i)the Receivers hindered MSI from satisfying the Finance Condition; and
(ii)the Receivers, together with the first and second plaintiffs in these proceedings, failed to comply with their obligations under cl 2.2 of the Agreement.
MMB has filed a defence to MSI's claim, denying any liability to MSI. In its defence, MMB pleads that the Federal Court proceedings are an abuse of process (including by reference to these proceedings) and says no binding agreement was reached between the parties.
At the same time, MMB filed a cross‑claim against MSI, Mr Milbourne and the Receivers. In the cross‑claim, MMB relevantly pleads against the Receivers that:
(a)if a binding Agreement was entered into and the Receivers are found to have acted unconscionably in contravention of s 21 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law), the Court should make an order pursuant to s 237(b) of the Australian Consumer Law that the Receivers be liable for and pay MSI's loss and damage; and
(b)if the claims alleged by MSI in its Amended Statement of Claim dated 18 March 2022 against MMB are made out, then MMB is a person who has suffered loss or damage because of the Receivers' conduct by reason of its exposure to the claim for compensation made by MSI and:
(i)any liability of the Receivers and of MMB to MSI is co‑ordinate liability, arises from common interests and common burdens, of the same nature and to the same extent; and
(ii)it is inequitable for the Receivers not to be obliged to contribute to MSI's loss and damage.
Documents which are sought
The plaintiffs seek orders for leave to use the following documents filed or produced in these proceedings in the Federal Court proceedings:
(a)iterations of the pleadings filed by MSI which were not relied upon at trial; and
(b)documents discovered by the defendant in these proceedings.
Legal principles
The relevant legal principles were recently summarised by the Court of Appeal in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd in the following terms:[3]
[3] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 [69] ‑ [76].
Where one party to litigation is compelled, by reason of a rule or 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 the documents or information for any purpose other than that for which they are given, unless they are received into evidence. This principle applies to a range of material, including discovered documents, answers to interrogatories and documents produced on subpoena.
Traditionally, the obligation not to disclose was described as an implied undertaking. However, properly understood it is an obligation of substantive law.
Discovery is an invasion of the privacy and confidentiality of a litigant's affairs. The rationale for the imposition of the obligation in relation to discovered documents is to ensure that privacy and confidentiality are not invaded more than is necessary for the purpose of doing justice. The same rationale applies with equal force in the context of the production of documents on subpoena, as this is also an invasion of the privacy and confidentiality of the affairs of the subpoena recipient.
The power to dispense with or modify the Harman obligation is not freely exercised, but will be exercised if there are special circumstances.
In a passage in Liberty Funding Pty Ltd v Phoenix Capital Ltd that has been cited with approval many times, the Full Court of the Federal Court said as follows:
The notion of 'special circumstances' does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.
Among the considerations that may be relevant to the exercise of the discretion are:
(a)the nature of the document;
(b)the circumstances under which the document came into existence;
(c)the attitude of the author of the document and any prejudice the author may sustain;
(d)whether the document existed before the litigation, or was created for that purpose and therefore expected to enter the public domain;
(e)the nature of the information in the document, in particular whether it contains personal data or commercially sensitive information;
(f)the circumstances in which the document came into the hands of the applicant; and
(g)the likely contribution of the document to achieving justice in another proceeding.
The last of these considerations has been recognised as being the most important. There is a public interest in ensuring that all relevant material is before a court to enable it to discharge its function. It has been said that special circumstances will fairly readily be found where it is established that the use of documents discovered in proceedings is reasonably required for the purpose of doing justice between the parties in other proceedings.
In the context of documents produced on discovery, it has been observed that, in weighing up the competing public interests, the importance of the public interest in the preservation of the confidentiality of discovered documents must be kept squarely in mind. Similarly, in the present case the private and public interest in protecting the confidentiality of a person's private documents produced under compulsion to a court must be kept in mind. (citations omitted)
Disposition
It is not in dispute that the plaintiffs are bound by the substantive obligation not to use the pleadings filed by the defendant which were not relied upon at trial, nor documents obtained on discovery in these proceedings for any purpose other than these proceedings. It is also not in dispute that the plaintiffmust not use these documents or the information contained in them unless given leave to do so by this court.
I am satisfied on the information before me that the obligation applies to the documents the subject of this application, apart from those documents discovered by the defendant which became exhibits at the trial. Documents which were tendered at trial are no longer covered by the substantive obligation. At the hearing, counsel for the plaintiffs accepted that the documents discovered by the defendant, which had been tendered at trial, were no longer subject to the substantive obligation and that it was appropriate to exclude these documents from the orders sought.
For the following reasons, I am satisfied there are special circumstances in this case which make it appropriate to grant leave to the plaintiffs to use the documents, which are the subject of this application, in the Federal Court proceedings.
First, the documents which the plaintiffs seek to use are clearly identified and set out in the application.
Second, the documents which are sought to be used have been filed in proceedings between the plaintiffs and the defendant. The defendant and the Receivers are also parties to the Federal Court proceedings.
Third, there is a significant overlap between the subject matter of these proceedings and the Federal Court proceedings. In particular, both actions arise out of and concern the Agreement. It is also noteworthy that MMB has alleged the Federal Court proceedings is an abuse of process because of, among other reasons, these proceedings.
Fourth, there is no assertion that the information in these documents is confidential.
Fifth, the pleadings which were the subject of this application were prepared for the purposes of litigation. For this reason, the defendant must have anticipated at that time that the pleading would be relied upon at trial. If this had occurred, the plaintiffs would have been able to use the pleadings for purposes other than these proceedings.
Sixth, in respect of the documents discovered by the defendant, the defendant does not object to the application and did not seek to be heard in opposition to the orders sought. In addition, there is no evidence that the use of these documents will cause any harm or prejudice to the defendant in the Federal Court proceedings.
Seventh, there is a public interest in the information within the documents in these proceedings, which relate to matters that will be raised in the Federal Court proceedings, being available to the plaintiffs in that action. The public interest in the court having all relevant information before it outweighs the defendant's privacy and interest in the documents the subject of this application not being used for purposes other than these proceedings.
Conclusion
For these reasons, at the conclusion of the hearing, I made orders that the plaintiffs have leave to use the documents the subject of this application in the Federal Court proceedings.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
19 APRIL 2023
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