Pancontinental Mining Ltd v Coopers & Lybrand (Securities) Ltd

[1995] FCA 204

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA     )
NEW SOUTH WALES DISTRICT REGISTRY     )     No G 180 of 1995
GENERAL DIVISION  )

BETWEEN:

PANCONTINENTAL MINING LIMITED (ACN 009 712 092)
  Applicant

AND:

COOPERS & LYBRAND (SECURITIES) LIMITED (ACN 003 311 617)
                   First Respondent

RENISON GOLDFIELDS
CONSOLIDATED LIMITED
                  Second Respondent

GOLDFIELDS LIMITED
                   Third Respondent

PETER CORNELL
                  Fourth Respondent

ROBERT CHARLES WICHT AND OTHERS TRADING AS COOPERS & LYBRAND
                   Fifth Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:30 March 1995

REASONS FOR JUDGMENT

There is before me a motion for a variation in undertakings in writing which were given to the Court on 27 March 1995 (but which bear date 24 March 1995) by Ian Warwick Levy and Robert James Dougall ("Messrs Levy and Dougall").  In the proceedings the applicant ("Pancon") seeks "preliminary discovery" pursuant to Order 15A of the Federal Court Rules.  In short, Pancon seeks to make out a case that it has or may have a right to obtain relief in respect of breach of an obligation to keep confidential, certain financial and other information relating to it, which came to the knowledge of the fourth respondent ("Mr Cornell") during a period from mid February 1993 to May 1993.  Mr Cornell is apparently currently a partner of the fifth respondent ("C & L").  During the period referred to, the first respondent ("C & L (S)"), which was then and is associated with C & L, was providing services to Pancon in connection with a valuation of Pancon.  The services were apparently provided pursuant to a written contract between Pancon and C & L (S) the terms of which included an obligation of confidence.

During a subsequent period from about June 1994 to February 1995, Mr Cornell was "seconded" to the second respondent ("RGC"), the parent company of the third respondent ("Goldfields").

Currently there is litigation between Pancon and Goldfields in this Court (No NG 3114 of 1995) ("the Part A proceedings") in which Pancon seeks to restrain Goldfields from despatching to Pancon's shareholders a Part A statement under the Corporations Law in connection with proposed takeover offers by Goldfields for all the issued share capital of Pancon.  Pancon believes that Mr Cornell may have disclosed to RGC and/or to Goldfields, information relating to Pancon which he acquired subject to the obligation of confidence back in February-May 1993 when he was working for C & L (S) on the valuation of Pancon.

On 27 March 1995, the parties to the present proceedings reached a temporary accommodation without admissions.  This involved consent orders for production of documents by the respondents to Pancon's solicitors and to two of its officers, Messrs Levy and Dougall, upon their written undertakings both bearing date 24 March 1995.  By those undertakings, Messrs Levy and Dougall undertook not to disclose information obtained by them from the documents produced by the respondents for inspection, except to each other, to Mr J F H Collins of Clayton Utz, the solicitor having the carriage of these proceedings on behalf of Pancon, and to counsel retained by Pancon in these present proceedings.

What is now sought is that the range of persons to whom they should be at liberty to disclose such information be enlarged to include counsel and the solicitor involved in the Part A proceedings, and  Messrs Orchard and Moore, who, I understand, are expert witnesses engaged by Pancon in the Part A proceedings.

There is no affidavit in support of the present motion.  What is put by Mr Collins is that counsel and the solicitor and expert witnesses involved in the Part A proceedings should have the opportunity, they being closely familiar with those proceedings, of considering the information derived by Messrs Levy and Dougall from the documents which have been progressively produced to them in these present proceedings, before Tamberlin J delivers judgment tomorrow afternoon in the Part A proceedings, so that if thought fit, an application may be made on behalf of Pancon to his Honour for leave to re-open and lead further evidence in
those proceedings. 

It is not put that any particular documents have been sighted which would in fact make any difference in the Part A proceedings.  Messrs Levy and Dougall have had or are taken to have had the opportunity of discussing the documents which have been produced to them with Mr Collins and with counsel briefed in these present proceedings who are, only in a general way, familiar with the issues in the Part A proceedings.  The point is, that Messrs Levy and Dougall have not had the opportunity of discussing them with counsel, solicitor and expert witnesses involved in the Part A proceedings.

Mr F M Douglas QC, senior counsel for RGC and Goldfields, has made a number of submissions in opposition to the motion.  Those submissions are supported by Mr R S Hollo, solicitor, who appears for C & L (S), Mr Cornell and C & L.  Mr Douglas points out that the field of contest within which the Part A proceedings have been fought, has been clearly delineated, that documents have been produced by his clients in those proceedings, and that there has already been substantial delay in the dispatch of his client's Part A Statement to Pancon's shareholders.  He has made other submissions as well.

Without any evidence and without anything further than what has been submitted by Mr Collins from the bar table, it seems to me that a case is not made out for a variation of the undertakings previously given.  It is true that Pancon does not have the benefit of having had the documents in question or the information contained in them considered by the legal advisers and expert witnesses who are most familiar with the issues in the Part A proceedings.  However, as Mr Collins fairly concedes, inspection may reveal nothing and it would perhaps be a rather exceptional case where an application to re-open and lead further evidence would be expected to be made. 

On the basis of what has been put, I am not persuaded that it would be an appropriate exercise of discretion to sanction a variation of the existing undertakings so as, in effect, to enable documents which have been produced for one purpose in these proceedings, namely to reveal whether Pancon has a cause of action for breach of confidence, to be used in order to alter the parameters of the contest in the Part A proceedings.

It remains a possibility, although I do not mean to give any encouragement, that if Pancon, having considered its position, is able to put on evidence urgently directed to the matters to which I have referred, it could re-apply.  In the circumstances I dismiss the motion with costs.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:6 April 1995.

Heard:       30 March 1995

Place:       Sydney

Decision:     30 March 1995

Appearances:  Mr J F H Collins of Clayton Utz appeared for the applicant.

Mr R S Hollo of Mallesons Stephen Jaques appeared for the 1st, 4th and 5th respondents.

Mr F M Douglas QC with Mr I Jackman of counsel instructed by Allen Allen & Hemsley appeared for the 2nd and 3rd respondents.